2002 Annual Report





Decatur FirstBank Group, Inc.





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Decatur First Bank Group, Inc.Table of Contents



|                                                                                      | Page
|------------------------------------------------------------------------------------- | ----
|                                                                                      |     
|To Our Shareholders                                                                   | 2   
|Selected Financial Data                                                               | 3   
|Managements Discussion and Analysis of Financial Condition and Results of Operations | 4   
|Report of Independent Certified Public Accountants                                    | 14  
|Consolidated Financial Statements                                                     | 15  
|Notes to Consolidated Financial Statements                                            | 20  
|Corporate and Shareholder Information                                                 | 33  

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 (the 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 21, 2003, the Company had 837 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 2002 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.





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To our shareholders:

Decatur First Bank turned five years old in September of 2002. Our Board of Directors and staff want you to know that we celebrated
this important milestone with a record year for the bank.

In my letter to you last year, I quoted William Seidman, who is a former chairman of the FDIC. He said, If banks
can match 2001 profit levels (in 2002), it will be a real accomplishment. Our pre-tax earnings were $879,458 in 2002 compared to $576,771 in 2001. We are very proud of this real accomplishment!

Our focus in 2002 was repositioning our balance sheet. We concentrated on increasing loans because deposit growth was much stronger than loan demand. Our loans increased 49% and our deposits increased
15%. This exceeded the growth in 2001 of 10% in deposits and 20% in loans. We are now in a good position with our loan to deposit ratio having increased from 65.68% at the end of 2001 to 84.91% at the end of 2002. Now that weve accomplished
this, well focus on growing deposits while continuing to seek good, sound loans.

What does this mean to you, our shareholder? The book value of the bank has increased from
$9.94 per share to $11.01 per share. The book value now exceeds the price our original shareholders paid for their stock. And, even better, the last sales that we are aware of were at $14.50 per share and we continue to have investors show interest
in purchasing our stock.

As we look forward to 2003, we are watching interest rates and the economy closely. There is a lot of uncertainty, but our core values will continue to
enhance the financial results of the bank. As we focus on our customers, our employees and our community, we are building a firm foundation that will support our future growth. Our business is growing and becoming more profitable as we focus on
long-term relationships  the key to a successful community bank.

You may follow our progress by viewing our web site at www.decaturfirstbank.com for the latest quarterly
numbers. For more detailed information, go to the Securities and Exchange Commission web site at www.sec.gov/cgi-bin/srch-edgar?582254289 and get all the financial details.



| |  |  | Sincerely,                   
| |  |  | -----------------------------
| |  |  |                              
| |  |  | Judy B. TurnerPresident & CEO



2



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DECATUR FIRST BANKSELECTED FINANCIAL DATA(in thousands except per share data)



|                                       |  | 2002   |        | 2001   |        | 2000   |        | 1999   |        | 1998   |      
|-------------------------------------- |  | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | -----
|                                       |  |        |        |        |        |        |        |        |        |        |      
|                                       |  |        |        |        |        |        |        |        |        |        |      
|FOR THE YEAR                           |  |        |        |        |        |        |        |        |        |        |      
|Net interest income                    |  | $      | 3,362  |        | 2,977  |        | 2,810  |        | 1,772  |        | 1,063
|Provision for loan losses              |  | 400    |        | 510    |        | 250    |        | 152    |        | 315    |      
|Noninterest income                     |  | 706    |        | 698    |        | 344    |        | 376    |        | 170    |      
|Noninterest expense                    |  | 2,789  |        | 2,589  |        | 2,436  |        | 1,880  |        | 1,487  |      
|Income taxes (benefit)                 |  | 246    |        | 220    |        | 178    |        | (411   | )      |       |      
|Net earnings (loss)                    |  | $      | 633    |        | 357    |        | 291    |        | 527    |        | (569 
|                                       |  |        |        |        |        |        |        |        |        |        |      
|PER COMMON SHARE                       |  |        |        |        |        |        |        |        |        |        |      
|Basic earnings (loss)                  |  | $      | .68    |        | .38    |        | .31    |        | .56    |        | (.60 
|Diluted earnings (loss)                |  | .66    |        | .38    |        | .30    |        | .56    |        | (.60   | )    
|Cash dividends declared                |  |       |        |       |        |       |        |       |        |       |      
|Book value                             |  | $      | 11.01  |        | 9.94   |        | 9.53   |        | 8.91   |        | 8.87 
|                                       |  |        |        |        |        |        |        |        |        |        |      
|AT YEAR END                            |  |        |        |        |        |        |        |        |        |        |      
|Loans, net                             |  | $      | 62,395 |        | 41,878 |        | 34,793 |        | 24,600 |        | 9,664
|Earning assets                         |  | 88,287 |        | 78,408 |        | 67,045 |        | 44,681 |        | 34,739 |      
|Assets                                 |  | 95,284 |        | 84,021 |        | 73,020 |        | 49,759 |        | 38,446 |      
|Deposits                               |  | 74,445 |        | 64,660 |        | 58,642 |        | 41,224 |        | 30,002 |      
|Stockholders equity                   |  | $      | 10,177 |        | 9,264  |        | 8,889  |        | 8,397  |        | 8,356
|Common shares outstanding              |  | 924    |        | 932    |        | 933    |        | 942    |        | 942    |      
|                                       |  |        |        |        |        |        |        |        |        |        |      
|AVERAGE BALANCES                       |  |        |        |        |        |        |        |        |        |        |      
|Loans                                  |  | $      | 49,293 |        | 39,215 |        | 31,440 |        | 15,867 |        | 5,847
|Earning assets                         |  | 81,304 |        | 77,794 |        | 54,420 |        | 37,744 |        | 24,898 |      
|Assets                                 |  | 86,446 |        | 83,233 |        | 59,144 |        | 40,993 |        | 27,776 |      
|Deposits                               |  | 66,455 |        | 65,468 |        | 45,926 |        | 32,804 |        | 19,019 |      
|Stockholders equity                   |  | $      | 9,626  |        | 9,250  |        | 8,573  |        | 8,123  |        | 8,620
|Weighted average shares outstanding    |  | 932    |        | 932    |        | 939    |        | 942    |        | 942    |      
|                                       |  |        |        |        |        |        |        |        |        |        |      
|KEY PERFORMANCE RATIOS                 |  |        |        |        |        |        |        |        |        |        |      
|Return on average assets               |  | .66    | %      | .43    | %      | .49    | %      | 1.29   | %      | (2.05  | )%   
|Return on average stockholders equity |  | 6.58   | %      | 3.86   | %      | 3.39   | %      | 6.49   | %      | (6.60  | )%   
|Net interest margin                    |  | 4.14   | %      | 3.83   | %      | 5.16   | %      | 4.69   | %      | 4.27   | %    
|                                       |  |        |        |        |        |        |        |        |        |        |      

3



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND 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 focuses on significant changes in the financial condition and results of operations during the years ended December 31, 2002 and 2001. This discussion and the financial information contained
herein are presented to assist the reader in understanding and evaluating our financial condition, results of operations, and future prospects and should be read as a supplement to and in conjunction with the Consolidated Financial Statements and
Related Notes.

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, may, 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 2002 was $633,000 compared to $357,000 in 2001. The increase in
net income in 2002 compared to 2001 was primarily due to the increase in net interest income. 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 $3,362,000 for the year ended December 31, 2002 compared to $2,977,000 in 2001.

The provision for loan losses in 2002 was $400,000 compared to $510,000 in 2001. 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, 2002 totaled $706,000 compared to
$698,000 in 2001. Other operating income includes services charges on deposit accounts, income from our mortgage origination affiliate and investment security gains. Declining interest rates during 2002 and 2001 provided us with an opportunity to
derive significant income from the origination of mortgage loans. Other operating expenses in 2002 were $2,789,000 compared to $2,589,000 in 2001. The largest component of other operating expenses is salaries and benefits, which totaled $1,470,000
for the year ended December 31, 2002 compared to $1,293,000 in 2001.

4



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Net Interest Income

For the years ended December 31, 2002 and 2001, net
interest income totaled $3,362,000 and $2,977,000, respectively. Interest income from loans, including fees was $3,548,000 representing a yield of 7.20% in 2002 compared to a yield of 8.74% in 2001. Significant decrease in the prime lending rate in
2002 resulted in the decrease in yield on loans. Interest expense totaled $1,451,000 for the year ended December 31, 2002 compared to $2,455,000 in 2001. The net interest margin realized on earning assets and the interest rate spread were 4.14% and
3.55%, respectively, for the year ended December 31, 2002 compared to an interest rate margin of 3.83% and interest rate spread of 2.94% in 2001.

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 2002 and 2001 and the
average rate of interest earned or paid thereon. Average balances have been derived from the daily balances throughout the period indicated.



|                                                                    |  | For the Year EndedDecember 31, 2002(Amounts
presented in thousands) |        | For the Year EndedDecember 31, 2001(Amounts
presented in thousands) |    
|------------------------------------------------------------------- |  | ------------------------------------------------------------------- | ------ | ------------------------------------------------------------------- | ---
|                                                                    |  |                                                                     |        |                                                                     |    
|                                                                    |  | AverageBalance                                                      |        | Interest                                                            |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Assets:                                                             |  |                                                                     |        |                                                                     |    
|Interest earning assets:                                            |  |                                                                     |        |                                                                     |    
|Loans (including loan fees)                                         |  | $                                                                   | 49,293 |                                                                     |    
|Investment securities                                               |  | 25,519                                                              |        | 1,131                                                               |    
|Interest-bearing deposits                                           |  | 2,164                                                               |        | 63                                                                  |    
|Federal funds sold                                                  |  | 4,328                                                               |        | 71                                                                  |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Total interest earning assets                                       |  | 81,304                                                              |        | 4,813                                                               |    
|Other non-interest earnings assets                                  |  | 5,142                                                               |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Total assets                                                        |  | $                                                                   | 86,446 |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Liabilities and stockholders equity:                               |  |                                                                     |        |                                                                     |    
|Interest-bearing liabilities:                                       |  |                                                                     |        |                                                                     |    
|Deposits:                                                           |  |                                                                     |        |                                                                     |    
|Interest-bearing demand and savings                                 |  | $                                                                   | 24,397 |                                                                     | 160
|Time                                                                |  | 27,088                                                              |        | 880                                                                 |    
|Other borrowings                                                    |  | 9,805                                                               |        | 411                                                                 |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Total interest-bearing liabilities                                  |  | 61,290                                                              |        | 1,451                                                               |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Other non-interest bearing liabilities                              |  | 15,530                                                              |        |                                                                     |    
|Stockholders equity                                                |  | 9,626                                                               |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Total liabilities and stockholders equity                          |  | $                                                                   | 86,446 |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Excess of interest-earning assets over interest bearing liabilities |  | $                                                                   | 20,014 |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Ratio of interest-earning assets to interest-bearing liabilities    |  | 133                                                                 | %      |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Net interest income                                                 |  |                                                                     |        | 3,362                                                               |    
|                                                                    |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Net interest spread                                                 |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    
|Net interest margin                                                 |  |                                                                     |        |                                                                     |    
|                                                                    |  |                                                                     |        |                                                                     |    

5



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

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.



|                                    |  | 2002 Compared to 2001Increase (decrease) due to changes in |    
|----------------------------------- |  | ---------------------------------------------------------- | ---
|                                    |  |                                                            |    
|                                    |  | Volume                                                     |    
|                                    |  |                                                            |    
|                                    |  |                                                            |    
|Interest income on:                 |  |                                                            |    
|Loans (including loan fees)         |  | $                                                          | 789
|Investment securities               |  | (312                                                       | )  
|Interest-bearing deposits           |  | 15                                                         |    
|Federal funds sold                  |  | (27                                                        | )  
|                                    |  |                                                            |    
|                                    |  | 465                                                        |    
|                                    |  |                                                            |    
|                                    |  |                                                            |    
|Interest expense on:                |  |                                                            |    
|Interest-bearing demand and savings |  | 38                                                         |    
|Time                                |  | (205                                                       | )  
|Other borrowings                    |  | 88                                                         |    
|                                    |  |                                                            |    
|                                    |  | (79                                                        | )  
|                                    |  |                                                            |    
|                                    |  |                                                            |    
|                                    |  | $                                                          | 544
|                                    |  |                                                            |    

Interest Rate Sensitivity and Asset Liability
Management

Interest rate sensitivitymeasures 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, 2002, the bank, as measured by Gap, is in a 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.

6



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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, 2002 model reflects an increase of 11% in net interest income in a 200 basis point increase in interest rates and a 17% decrease 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, 2002, 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.



|                                           |  | At December 31, 2002Maturing or Repricing in(dollars in thousands) |      
|------------------------------------------ |  | ------------------------------------------------------------------ | -----
|                                           |  |                                                                    |      
|                                           |  | Three Monthsor Less                                                |      
|                                           |  |                                                                    |      
|Interest-earning assets:                   |  |                                                                    |      
|Federal funds sold                         |  | $                                                                  | 2,966
|Investment securities                      |  |                                                                   |      
|Interest-bearing deposits                  |  | 1,750                                                              |      
|Loans                                      |  | 33,966                                                             |      
|                                           |  |                                                                    |      
|                                           |  |                                                                    |      
|Total interest-earning assets              |  | 38,682                                                             |      
|                                           |  |                                                                    |      
|                                           |  |                                                                    |      
|Interest-bearing liabilities:              |  |                                                                    |      
|Deposits:                                  |  |                                                                    |      
|Savings and demand                         |  | 26,714                                                             |      
|Time deposits                              |  | 5,145                                                              |      
|Federal Home Loan Bank advances            |  |                                                                   |      
|                                           |  |                                                                    |      
|                                           |  |                                                                    |      
|Total interest-bearing liabilities         |  | 31,859                                                             |      
|                                           |  |                                                                    |      
|                                           |  |                                                                    |      
|Interest sensitive difference per period   |  | 6,823                                                              |      
|Cumulative interest sensitivity difference |  | $                                                                  | 6,823
|                                           |  |                                                                    |      
|Cumulative difference to total assets      |  |                                                                    | 7    
|                                           |  |                                                                    |      

At December 31, 2002, the difference between the banks liabilities
and assets repricing or maturing within one year was $3,756,000. Due to an excess of liabilities repricing or maturing within one year, an increase in interest rates would cause the banks net interest income to decline.

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.

7



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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 $400,000 for the year ended December 31, 2002 as compared to $510,000 for the
year ended December 31, 2001. The decrease in the provision was due to provision made in 2001 for certain commercial loans that were subsequently charged off. The loan portfolio increased by approximately $21 million during the year ended December
31, 2002. The allowance for loan losses was 1.29% of gross loans at December 31, 2002. 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:



|                                                                                          |  | December 31,                         |    
|----------------------------------------------------------------------------------------- |  | ------------------------------------ | ---
|                                                                                          |  |                                      |    
|                                                                                          |  | 2002                                 |    
|                                                                                          |  |                                      |    
|                                                                                          |  | (Amounts are presented in thousands) |    
|Balance at beginning of year                                                              |  | $                                    | 595
|Charge-offs:                                                                              |  |                                      |    
|Commercial                                                                                |  | 26                                   |    
|Real estate  construction                                                                |  | 157                                  |    
|Real estate  mortgage                                                                    |  |                                     |    
|Consumer                                                                                  |  | 5                                    |    
|                                                                                          |  |                                      |    
|                                                                                          |  |                                      |    
|Total charge-offs                                                                         |  | 188                                  |    
|                                                                                          |  |                                      |    
|Recoveries                                                                                |  |                                      |    
|Commercial                                                                                |  |                                     |    
|Real estate  construction                                                                |  |                                     |    
|Real estate  mortgage                                                                    |  |                                     |    
|Consumer                                                                                  |  | 5                                    |    
|                                                                                          |  |                                      |    
|                                                                                          |  |                                      |    
|Total recoveries                                                                          |  | 5                                    |    
|                                                                                          |  |                                      |    
|                                                                                          |  |                                      |    
|Net charge-offs (recoveries)                                                              |  | 183                                  |    
|                                                                                          |  |                                      |    
|Additions charged to operations                                                           |  | 400                                  |    
|                                                                                          |  |                                      |    
|                                                                                          |  |                                      |    
|Balance at end of year                                                                    |  | $                                    | 812
|                                                                                          |  |                                      |    
|Ratio of net charge-offs during the period to average loans outstanding during
the period |  |                                      | .37
|                                                                                          |  |                                      |    

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, 2002 and 2002 (amounts are presented in thousands):



|                                                             |  | December 31, |   
|------------------------------------------------------------ |  | ------------ | --
|                                                             |  |              |   
|                                                             |  | 2002         |   
|                                                             |  |              |   
|                                                             |  |              |   
|Other real estate and repossessions                          |  | $            | 45
|Accruing loans 90 days or more past due                      |  |             |   
|Non-accrual loans                                            |  | 121          |   
|Interest on non-accrual loans which would have been reported |  |              | 12

8



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Nononinterest Income and Expense

Noninterest income for the year ended
December 31, 2002 totaled $706,000 as compared to $698,000 for the year ended December 31, 2001. This increase in noninterest income was primarily due to an increase in service charges on deposit accounts. Service charges on deposit accounts grew as
the number of accounts increased in 2002 as compared to 2001.

Total noninterest expense for the year ended December 31, 2002 was $2,789,000 as compared to $2,589,000 for the
same period in 2001. Salaries and benefits, the largest component of noninterest expense, totaled $1,470,000 for the year ended December 31, 2002, compared to $1,293,000 for the same period a year ago. Salary and benefits expense primarily increased
due to the addition of employees in 2002 and normal salary increases. Other operating expenses were $1,040,000 for the year ended December 31, 2002 as compared to $957,000 for the year ended December 31, 2001. This increase in noninterest expense
was due to the continued growth of the bank.

Income taxes

For the year ended December 31, 2002, we
recognized income tax expense of $246,000 compared to income tax expense of $220,000 in 2001. Our effective income tax rate was approximately 28% in 2002 and 38% in 2001. Our effective tax rate decreased in 2002 due to the addition of non-taxable
investments added to the investment portfolio.

Financial Condition

Total assets
increased $11,263,000, or 13% from December 31, 2002 to December 31, 2001. The primary source of growth in assets was net loans, which increased $20,517,000 or 49%, during the year ended December 31, 2002. Investment securities available-for-sale
decreased $6,769,000 from December 31, 2001 to $20,582,000 at December 31, 2002. This decrease in investment securities available-for-sale was the result of the loan growth. Total deposits increased $9,785,000, or 15% during 2002.

Interest-Earning Assets

Loans

Gross loans totaled $63,208,000 at December 31, 2002, an increase of $20,735,000 or 49% since December 31, 2001. The largest increase in loans was in real estate-mortgage loans, which increased $14,899,000 or 57% to $40,905,000 at December
31, 2002. The majority of these loans are owner occupied commercial buildings. Real estate-construction loans increased $5,833,000 during 2002. Balances within the major loans receivable categories as of December 31, 2002 and December 31, 2001 are
as follows:



|                           |  | 2002       |            |    |    | 2001       |            |    |           
|-------------------------- |  | ---------- | ---------- | -- | -- | ---------- | ---------- | -- | ----------
|                           |  |            |            |    |    |            |            |    |           
|Commercial and financial   |  | $          | 10,914,521 |    | 17 | %          | 11,142,289 |    | 26        
|Real estate - mortgage     |  | 40,905,257 |            | 65 | %  | 26,005,923 |            | 61 | %         
|Real estate - construction |  | 8,746,849  |            | 14 | %  | 2,913,723  |            | 7  | %         
|Consumer                   |  | 2,641,326  |            | 4  | %  | 2,410,904  |            | 6  | %         
|                           |  |            |            |    |    |            |            |    |           
|                           |  | $          | 63,207,953 |    |    | 100        | %          |    | 42,472,839
|                           |  |            |            |    |    |            |            |    |           

As of December 31, 2002, maturities of loans in the indicated
classifications were as follows:



|              |  | Real Estate |           
|------------- |  | ----------- | ----------
|              |  | Commercial  |           
|              |  |             |           
|Maturity      |  |             |           
|              |  |             |           
|Within 1 year |  | $           | 5,256,451 
|1 to 5 years  |  | 4,685,347   |           
|Over 5 years  |  | 972,723     |           
|              |  |             |           
|Totals        |  | $           | 10,914,521
|              |  |             |           

9



---

As of December 31, 2002, the interest terms of loans in the indicated classification for the indicated maturity ranges are as follows (amounts are presented
in thousands):



|                           |  | Fixed InterestRates |           | Variable InterestRates |         | Total     |          
|-------------------------- |  | ------------------- | --------- | ---------------------- | ------- | --------- | ---------
|                           |  |                     |           |                        |         |           |          
|                           |  |                     |           |                        |         |           |          
|Commercial                 |  |                     |           |                        |         |           |          
|1 to 5 years               |  | $                   | 4,088,431 |                        | 596,916 |           | 4,685,347
|Over 5 years               |  | 848,798             |           | 123,925                |         | 972,723   |          
|                           |  |                     |           |                        |         |           |          
|Real estate  construction |  |                     |           |                        |         |           |          
|1 to 5 years               |  | 434,658             |           | 888,303                |         | 1,322,961 |          
|                           |  |                     |           |                        |         |           |          
|                           |  |                     |           |                        |         |           |          
|                           |  | $                   | 5,371,887 |                        |         | 1,609,144 |          
|                           |  |                     |           |                        |         |           |          

Investment Securities

Investment securities available-for-sale decreased to $20,582,000 at December 31, 2002 from $27,351,000 at December 31, 2001. This decrease was the result of sales of investments during 2002 to fund loan growth. All of
the banks marketable investment securities were designated as available-for-sale at December 31, 2002.

The following table presents the investments by category at December
31, 2002 and 2001:



|                                  |  | 2002           |        | 2001                |      
|--------------------------------- |  | -------------- | ------ | ------------------- | -----
|                                  |  |                |        |                     |      
|                                  |  | Amortized Cost |        | EstimatedFair Value |      
|                                  |  |                |        |                     |      
|                                  |  |                |        |                     |      
|United States government agencies |  | $              | 7,037  |                     | 7,296
|State, county and municipals      |  | 6,849          |        | 7,030               |      
|Mortgage-backed                   |  | 6,168          |        | 6,256               |      
|                                  |  |                |        |                     |      
|                                  |  |                |        |                     |      
|                                  |  | $              | 20,054 |                     |      
|                                  |  |                |        |                     |      

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)



|                                |  | USGovernmentAgencies |       | WeightedAverageYields |   | StateCounty andMunicipals |   | WeightedAverageYields |   | MortgaegBackedSecurities |  | WeightedAverageYields |      
|------------------------------- |  | -------------------- | ----- | --------------------- | - | ------------------------- | - | --------------------- | - | ------------------------ |  | --------------------- | -----
|                                |  |                      |       |                       |   |                           |   |                       |   |                          |  |                       |      
|                                |  |                      |       |                       |   |                           |   |                       |   |                          |  |                       |      
|Maturities at December 31, 2002 |  |                      |       |                       |   |                           |   |                       |   |                          |  |                       |      
|                                |  |                      |       |                       |   |                           |   |                       |   |                          |  |                       |      
|Within 1 year                   |  | $                    |      |                       |  |                           | $ |                      |   |                         |  | $                     |     
|After 1 through 5 years         |  | 6,533                |       | 4.38                  | % | 1,221                     |   | 3.60                  | % | 1,049                    |  | 4.25                  | %    
|After 5 through 10 years        |  | 763                  |       | 4.71                  | % | 3,909                     |   | 4.31                  | % | 5,071                    |  | 4.46                  | %    
|After 10 years                  |  |                     |       |                      |   | 1,900                     |   | 3.84                  | % | 136                      |  | 5.28                  | %    
|                                |  |                      |       |                       |   |                           |   |                       |   |                          |  |                       |      
|                                |  |                      |       |                       |   |                           |   |                       |   |                          |  |                       |      
|Totals                          |  | $                    | 7,296 |                       |   |                           | $ | 7,030                 |   |                          |  | $                     | 6,256
|                                |  |                      |       |                       |   |                           |   |                       |   |                          |  |                       |      

10



---



Deposits

At December 31, 2002 total deposits increased by $9,786,000, or 15% from December 31, 2001. Noninterest-bearing demand deposits increased $1,803,000 or 12% and interest-bearing deposits increased $7,982,000 or 16%.

Balances within the major deposit categories as of December 31, 2002 and December 31, 2001 as follows:



|                                    | 2002 |            | 2001 |           
|----------------------------------- | ---- | ---------- | ---- | ----------
|                                    |      |            |      |           
|Noninterest-bearing demand deposits | $    | 16,446,422 |      | 14,642,748
|Interest-bearing demand deposits    |      | 24,825,981 |      | 23,201,847
|Savings deposits                    |      | 1,888,421  |      | 1,353,884 
|Time                                |      | 17,855,247 |      | 16,074,104
|Time over $100,000                  |      | 13,429,247 |      | 9,387,020 
|                                    |      |            |      |           
|                                    |      |            |      |           
|                                    | $    | 74,445,318 |      | 64,659,603
|                                    |      |            |      |           

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



|                                    |  | December 31,                         |       
|----------------------------------- |  | ------------------------------------ | ------
|                                    |  |                                      |       
|                                    |  | 2002                                 |       
|                                    |  |                                      |       
|                                    |  | (Amounts are presented in thousands) |       
|                                    |  | Amount                               |       
|                                    |  |                                      |       
|                                    |  |                                      |       
|Noninterest-bearing demand          |  | $                                    | 14,970
|Interest-bearing demand and savings |  | 24,397                               |       
|Time deposits                       |  | 27,088                               |       
|                                    |  |                                      |       
|                                    |  |                                      |       
|Totals                              |  | $                                    | 66,455
|                                    |  |                                      |       

Maturities of time certificates of deposit of $100,000 or more
outstanding at December 31, 2002, are summarized as follows (Amounts are presented in thousands):



|Within 3 months           |  | $     | 1,343  | 
|------------------------- |  | ----- | ------ | 
|After 3 through 6 months  |  | 1,732 |       
|After 6 through 12 months |  | 2,789 |       
|After 12 months           |  | 7,565 |       
|                          |  |       |       
|                          |  |       |       
|Total                     |  | $     | 13,429 | 
|                          |  |       |        | 

Capital Resources

Total shareholders equity increased from $9,264,000 at December 31, 2001 to $10,177,000 at December 31, 2002. This increase was attributable to net earnings for the period and an increase of $377,000 in the fair
value of securities available-for-sale, net of tax, partially offset by purchases of treasury stock totaling $108,000.

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. The ratio of Tier 1 capital to risk-weighted assets must be at least 4.0% and the ratio of total capital (Tier 1

11



---

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, 2002:



|Tier 1 capital (to risk-weighted assets) |  | 11.2 | %
|---------------------------------------- |  | ---- | -
|Total capital (to risk-weighted assets)  |  | 12.3 | %
|Tier 1 capital (to total average assets) |  | 9.6  | %

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.

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, 2002:



|Commitments to extend credit |  | $ | 15,967,000 | 
|---------------------------- |  | - | ---------- | 
|Standby letters of credit    |  | $ | 22,000     | 

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 surrounding areas.

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 $6,700,000.

Cash and cash equivalents as of December 31,
2002 decreased $3,926,000 from December 31, 2001. Cash provided by operating activities totaled $1,363,000 in 2002, while inflows from financing activities totaled $10,008,000, which were attributable to net deposit increases and proceeds from
Federal Home Loan Bank Advances, partially offset by repayment of other borrowings.

During 2002, investing activities used $15,298,000. Investing activities included net loans
made to customers of approximately $20,918,000, purchases of investment securities available-for-sale of $17,023,000 and purchases of premises and equipment of $661,000, partially offset by maturities and sales of investment securities
available-for-sale of approximately $24,160,000.

12



---

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 its 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.



|                                 |  | 2002  |   | 2001  |  
|-------------------------------- |  | ----- | - | ----- | -
|                                 |  |       |   |       |  
|Net income to:                   |  |       |   |       |  
|Average stockholders equity     |  | 6.58  | % | 3.86  | %
|Average assets                   |  | .66   | % | .43   | %
|Dividends to net income          |  |      |   |      |  
|Average equity to average assets |  | 11.14 | % | 11.11 | %

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.

13



---



Porter Keadle Moore,LLP

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of DirectorsDecatur First Bank Group, Inc.

We have audited the accompanying consolidated balance sheets of Decatur First Bank Group, Inc. and subsidiary as of December 31, 2002 and 2001, 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, 2002. These financial statements are the responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of Decatur First Bank Group, Inc. and subsidiary as of December 31, 2002 and 2001 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America.



/s/
PORTER KEADLE MOORE, LLP

Atlanta, GeorgiaJanuary 31, 2003

14



---

DECATUR FIRST BANK GROUP, INC.

Consolidated Balance Sheets

December 31, 2002 and 2001



|                                                                                             |  | 2002       |            | 2001       |           
|-------------------------------------------------------------------------------------------- |  | ---------- | ---------- | ---------- | ----------
|                                                                                             |  |            |            |            |           
|Assets                                                                                       |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|Cash and due from banks, including reserve requirements of $508,000 and $490,000             |  | $          | 2,427,343  |            |           
|Federal funds sold                                                                           |  | 2,966,000  |            | 6,655,000  |           
|                                                                                             |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|Cash and cash equivalents                                                                    |  | 5,393,343  |            | 9,319,632  |           
|                                                                                             |  |            |            |            |           
|Interest-bearing deposits                                                                    |  | 1,750,318  |            | 2,194,331  |           
|Investment securities available-for-sale                                                     |  | 20,582,054 |            | 27,350,563 |           
|Other investments                                                                            |  | 593,509    |            | 329,775    |           
|Loans, net                                                                                   |  | 62,395,446 |            | 41,877,560 |           
|Premises and equipment, net                                                                  |  | 2,423,991  |            | 1,951,923  |           
|Accrued interest receivable and other assets                                                 |  | 2,145,027  |            | 997,166    |           
|                                                                                             |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|                                                                                             |  | $          | 95,283,688 |            | 84,020,950
|                                                                                             |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|Liabilities and Shareholders
Equity                                                         |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|Deposits:                                                                                    |  |            |            |            |           
|Demand                                                                                       |  | $          | 16,446,422 |            | 14,642,748
|Money market and NOW accounts                                                                |  | 24,825,981 |            | 23,201,847 |           
|Savings                                                                                      |  | 1,888,421  |            | 1,353,884  |           
|Time                                                                                         |  | 17,855,247 |            | 16,074,104 |           
|Time over $100,000                                                                           |  | 13,429,247 |            | 9,387,020  |           
|                                                                                             |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|Total deposits                                                                               |  | 74,445,318 |            | 64,659,603 |           
|                                                                                             |  |            |            |            |           
|Other borrowings                                                                             |  | -         |            | 4,650,000  |           
|Federal Home Loan Bank advances                                                              |  | 9,980,000  |            | 5,000,000  |           
|Accrued interest payable and other liabilities                                               |  | 680,901    |            | 447,068    |           
|                                                                                             |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|Total liabilities                                                                            |  | 85,106,219 |            | 74,756,671 |           
|                                                                                             |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|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;                                    |  |            |            |            |           
|944,687 and 943,960 shares issued in 2002 and 2001, respectively                             |  | 4,723,435  |            | 4,719,800  |           
|Additional paid-in capital                                                                   |  | 4,692,452  |            | 4,686,094  |           
|Retained earnings                                                                            |  | 692,693    |            | 59,429     |           
|Treasury stock, at cost; 20,500 and 12,000 shares, in 2002 and 2001,
respectively            |  | (258,500   | )          | (151,000   | )         
|Accumulated other comprehensive income (loss)                                                |  | 327,389    |            | (50,044    | )         
|                                                                                             |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|Total shareholders equity                                                                   |  | 10,177,469 |            | 9,264,279  |           
|                                                                                             |  |            |            |            |           
|                                                                                             |  |            |            |            |           
|                                                                                             |  | $          | 95,283,688 |            |           
|                                                                                             |  |            |            |            |           

See accompanying notes to consolidated financial statements.


15



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DECATUR FIRST BANK GROUP, INC.

Consolidated Statements of Earnings

For the Years Ended December 31, 2002, 2001 and 2000



|                                                    |  | 2002      |           | 2001      |         | 2000      |        
|--------------------------------------------------- |  | --------- | --------- | --------- | ------- | --------- | -------
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Interest income:                                    |  |           |           |           |         |           |        
|Interest and fees on loans                          |  | $         | 3,547,850 |           |         | 3,428,035 |        
|Interest on investment securities:                  |  |           |           |           |         |           |        
|Taxable                                             |  | 900,455   |           | 1,570,546 |         | 1,120,942 |        
|Nontaxable                                          |  | 230,967   |           | 147,256   |         |          |        
|Other interest                                      |  | 134,294   |           | 286,969   |         | 242,852   |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Total interest income                               |  | 4,813,566 |           | 5,432,806 |         | 4,563,193 |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Interest expense:                                   |  |           |           |           |         |           |        
|Interest on money market and NOW accounts           |  | 146,472   |           | 299,245   |         | 393,927   |        
|Interest on savings and time deposits               |  | 894,282   |           | 1,735,073 |         | 1,106,323 |        
|Other                                               |  | 410,717   |           | 421,398   |         | 252,769   |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Total interest expense                              |  | 1,451,471 |           | 2,455,716 |         | 1,753,019 |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Net interest income                                 |  | 3,362,095 |           | 2,977,090 |         | 2,810,174 |        
|                                                    |  |           |           |           |         |           |        
|Provision for loan losses                           |  | 400,000   |           | 510,000   |         | 250,000   |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Net interest income after provision for loan losses |  | 2,962,095 |           | 2,467,090 |         | 2,560,174 |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Other income:                                       |  |           |           |           |         |           |        
|Service charges on deposit accounts                 |  | 390,254   |           | 312,013   |         | 205,425   |        
|Gain on sale of loans                               |  |          |           |          |         | 65,571    |        
|Gain on sale of securities                          |  | 119,349   |           | 184,536   |         |          |        
|Other income                                        |  | 196,789   |           | 201,662   |         | 73,214    |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Total other income                                  |  | 706,392   |           | 698,211   |         | 344,210   |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Other expenses:                                     |  |           |           |           |         |           |        
|Salaries and employee benefits                      |  | 1,469,693 |           | 1,293,331 |         | 1,220,852 |        
|Occupancy and equipment                             |  | 279,142   |           | 338,251   |         | 292,303   |        
|Other operating                                     |  | 1,040,194 |           | 956,948   |         | 922,497   |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Total other expenses                                |  | 2,789,029 |           | 2,588,530 |         | 2,435,652 |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Earnings before income taxes                        |  | 879,458   |           | 576,771   |         | 468,732   |        
|                                                    |  |           |           |           |         |           |        
|Income tax expense                                  |  | 246,194   |           | 219,551   |         | 178,118   |        
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Net earnings                                        |  | $         | 633,264   |           | 357,220 |           | 290,614
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Basic earnings per share                            |  | $         | .68       |           | .38     |           | .31    
|                                                    |  |           |           |           |         |           |        
|                                                    |  |           |           |           |         |           |        
|Diluted earnings per share                          |  | $         | .66       |           |         | .38       |        
|                                                    |  |           |           |           |         |           |        

16



---

DECATUR FIRST BANK GROUP, INC.

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2002, 2001 and 2000



|                                                                                                                |  | 2002       |   | 2001     |   | 2000    | 
|--------------------------------------------------------------------------------------------------------------- |  | ---------- | - | -------- | - | ------- | 
|                                                                                                                |  |            |   |          |   |         | 
|                                                                                                                |  |            |   |          |   |         | 
|Net earnings                                                                                                    |  | $633,264   |   | 357,220  |   | 290,614 | 
|                                                                                                                |  |            |   |          |   |         | 
|                                                                                                                |  |            |   |          |   |         | 
|Other comprehensive income, net of tax:                                                                         |  |            |   |          |   |         | 
|Unrealized gains on investment securities available-for-sale:                                                   |  |            |   |          |   |         | 
|Unrealized gains arising during the period, net of tax of $276,682, $89,606 and $195,791,
respectively          |  | 451,429    |   | 146,199  |   | 319,448 | 
|Reclassification adjustment for gains included in net earnings, net of tax of
$45,353 and $70,124, respectively |  | (73,996    | ) | (114,412 | ) |        | 
|                                                                                                                |  |            |   |          |   |         | 
|                                                                                                                |  |            |   |          |   |         | 
|Total other comprehensive income, net of tax                                                                    |  | 377,433    |   | 31,787   |   | 319,448 | 
|                                                                                                                |  |            |   |          |   |         | 
|                                                                                                                |  |            |   |          |   |         | 
|Total comprehensive income                                                                                      |  | $1,010,697 |   | 389,007  |   | 610,062 | 
|                                                                                                                |  |            |   |          |   |         | 

17



---

DECATUR FIRST BANK GROUP, INC.

Consolidated Statements of Changes in Shareholders Equity

For the Years Ended December 31, 2002, 2001 and 2000



|                                                                            |  | CommonStock |  | AdditionalPaid-inCapital |  | RetainedEarnings(AccumulatedDeficit) |   | TreasuryStock |   | AccumulatedOtherComprehensiveIncome (Loss) |   | Total      |  
|--------------------------------------------------------------------------- |  | ----------- |  | ------------------------ |  | ------------------------------------ | - | ------------- | - | ------------------------------------------ | - | ---------- | -
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Balance, December 31, 1999                                                  |  | $4,712,945  |  | 4,674,924                |  | (588,405                             | ) | (1,600        | ) | (401,279                                   | ) | 8,396,585  |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Issuance of common stock                                                    |  | 2,065       |  | 3,234                    |  |                                     |   |              |   |                                           |   | 5,299      |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Sale of treasury stock, 140 shares                                          |  |            |  | 220                      |  |                                     |   | 1,600         |   |                                           |   | 1,820      |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Purchase of treasury stock, 10,000 shares                                   |  |            |  |                         |  |                                     |   | (125,000      | ) |                                           |   | (125,000   | )
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Change in unrealized gain/loss on securities available for sale, net of
tax |  |            |  |                         |  |                                     |   |              |   | 319,448                                    |   | 319,448    |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Net earnings                                                                |  |            |  |                         |  | 290,614                              |   |              |   |                                           |   | 290,614    |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Balance, December 31, 2000                                                  |  | 4,715,010   |  | 4,678,378                |  | (297,791                             | ) | (125,000      | ) | (81,831                                    | ) | 8,888,766  |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Issuance of common stock                                                    |  | 4,790       |  | 7,716                    |  |                                     |   |              |   |                                           |   | 12,506     |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Purchase of treasury stock, 2,000 shares                                    |  |            |  |                         |  |                                     |   | (26,000       | ) |                                           |   | (26,000    | )
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Change in unrealized gain/loss on securities available for sale, net of tax |  |            |  |                         |  |                                     |   |              |   | 31,787                                     |   | 31,787     |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|Net earnings                                                                |  |            |  |                         |  | 357,220                              |   |              |   |                                           |   | 357,220    |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  
|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 |  
|                                                                            |  |             |  |                          |  |                                      |   |               |   |                                            |   |            |  



See accompanying notes to consolidated financial
statements.

18



---

DECATUR FIRST BANK GROUP, INC.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2002, 2001 and 2000



|                                                                                           |  | 2002        |           | 2001        |           | 2000        |           
|------------------------------------------------------------------------------------------ |  | ----------- | --------- | ----------- | --------- | ----------- | ----------
|                                                                                           |  |             |           |             |           |             |           
|Cash flows from operating activities:                                                      |  |             |           |             |           |             |           
|Net earnings                                                                               |  | $           | 633,264   |             |           | 357,220     |           
|Adjustments to reconcile net earnings to net cash provided by operating
activities:        |  |             |           |             |           |             |           
|Depreciation, amortization and accretion                                                   |  | 284,886     |           | 117,307     |           | 179,987     |           
|Provision for loan losses                                                                  |  | 400,000     |           | 510,000     |           | 250,000     |           
|Provision for stock awards                                                                 |  | 9,993       |           | 12,506      |           | 5,299       |           
|Provision for deferred income taxes (benefit)                                              |  | (609        | )         | 50,676      |           | 157,235     |           
|Gain on sale of securities                                                                 |  | (119,349    | )         | (184,536    | )         |            |           
|Change in:                                                                                 |  |             |           |             |           |             |           
|Accrued interest receivable and other assets                                               |  | (78,582     | )         | (31,118     | )         | (455,855    | )         
|Accrued interest payable and other liabilities                                             |  | 233,833     |           | (41,482     | )         | 350,607     |           
|                                                                                           |  |             |           |             |           |             |           
|                                                                                           |  |             |           |             |           |             |           
|Net cash provided by operating activities                                                  |  | 1,363,436   |           | 790,573     |           | 777,887     |           
|                                                                                           |  |             |           |             |           |             |           
|                                                                                           |  |             |           |             |           |             |           
|Cash flows from investing activities:                                                      |  |             |           |             |           |             |           
|Net change in interest-bearing deposits                                                    |  | 444,013     |           | (2,194,331  | )         |            |           
|Proceeds from calls and maturities of investment securities
available-for-sale             |  | 13,525,088  |           | 22,404,916  |           | 3,623,948   |           
|Proceeds from sales of investment securities available-for-sale                            |  | 10,634,518  |           | 25,529,715  |           |            |           
|Purchases of investment securities available-for-sale                                      |  | (17,022,909 | )         | (52,426,691 | )         | (8,577,384  | )         
|Net change in loans                                                                        |  | (20,917,886 | )         | (7,595,020  | )         | (10,442,168 | )         
|Purchase of bank owned life insurance                                                      |  | (1,300,000  | )         |            |           |            |           
|Purchase of premises and equipment                                                         |  | (660,764    | )         | (43,254     | )         | (317,586    | )         
|                                                                                           |  |             |           |             |           |             |           
|                                                                                           |  |             |           |             |           |             |           
|Net cash used by investing activities                                                      |  | (15,297,940 | )         | (14,324,665 | )         | (15,713,190 | )         
|                                                                                           |  |             |           |             |           |             |           
|                                                                                           |  |             |           |             |           |             |           
|Cash flows from financing activities:                                                      |  |             |           |             |           |             |           
|Net change in deposits                                                                     |  | 9,785,715   |           | 6,017,208   |           | 17,418,028  |           
|Net change in other borrowings                                                             |  | (4,650,000  | )         | 4,650,000   |           |            |           
|Proceeds from Federal Home Loan Bank advance                                               |  | 4,980,000   |           |            |           | 5,000,000   |           
|Purchase of treasury stock                                                                 |  | (107,500    | )         | (26,000     | )         | (125,000    | )         
|Proceeds from sale of treasury stock                                                       |  |            |           |            |           | 1,820       |           
|                                                                                           |  |             |           |             |           |             |           
|                                                                                           |  |             |           |             |           |             |           
|Net cash provided by financing activities                                                  |  | 10,008,215  |           | 10,641,208  |           | 22,294,848  |           
|                                                                                           |  |             |           |             |           |             |           
|                                                                                           |  |             |           |             |           |             |           
|Net increase (decrease) in cash and cash equivalents                                       |  | (3,926,289  | )         | (2,892,884  | )         | 7,359,545   |           
|Cash and cash equivalents at beginning of year                                             |  | 9,319,632   |           | 12,212,516  |           | 4,852,971   |           
|                                                                                           |  |             |           |             |           |             |           
|Cash and cash equivalents at end of year                                                   |  | $           | 5,393,343 |             | 9,319,632 |             | 12,212,516
|                                                                                           |  |             |           |             |           |             |           
|                                                                                           |  |             |           |             |           |             |           
|Supplemental schedule of noncash investing and financing activities:                       |  |             |           |             |           |             |           
|Change in net unrealized gain/loss on investment securities
available-for-sale, net of tax |  | $           | 377,433   |             | 31,787    |             | 319,449   
|                                                                                           |  |             |           |             |           |             |           
|Supplemental disclosures of cash flow information:                                         |  |             |           |             |           |             |           
|Cash paid during the year for interest                                                     |  | $           | 1,445,302 |             | 2,464,345 |             | 1,575,052 
|Cash paid during the year for income taxes                                                 |  | $           | 240,000   |             |           | 152,000     |           

See accompanying notes to consolidated financial statements.

19



---

DECATUR FIRST BANK GROUP, INC.

Notes to Consolidated Financial Statements

(1)Summary of Significant Accounting Policies

Basis of Presentation and Nature of OperationsThe 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.

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

Investment SecuritiesThe 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, 2002 and 2001, 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 InvestmentsOther 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
LossesLoans 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.

20



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(1)Summary of Significant Accounting Policies, continued

Loans and Allowance for
Loan Losses, continuedA 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, 2002. There were no SBA loans held for sale at
December 31, 2002 or 2001.

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.

21



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(1)Summary of Significant Accounting Policies, continued

Premises and
EquipmentPremises 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  | 

Other BorrowingsOther borrowings represent securities sold under an agreement to repurchase in 2001. These borrowings are reflected at the amount of cash received in connection with the
transaction and typically mature within 90 days of the settlement date.

Income TaxesDeferred 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 CompensationAt
December 31, 2002, the Company sponsors a stock-based compensation plan, which is described more fully in Note 9. The Company accounts for this plan under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock
Issued to Employees,and related Interpretations. No stock-based employee compensation cost is reflected in net earnings, as all options granted under those plans had an exercise price equal to
the market value of the underlying common stock on the date of grant. The effect on net earnings and earnings per share would not be material 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.

Net Earnings Per Common ShareThe 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

22



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(1)Summary of Significant Accounting Policies, continued

Net Earnings Per Common
Share, continuedare 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. Earnings per common share amounts for the years ended December 31, 2002, 2001 and 2000 are as follows:



|                                              |  | Net Earnings |             | CommonShares |               | Per Share |       
|--------------------------------------------- |  | ------------ | ----------- | ------------ | ------------- | --------- | ------
|For the Year Ended December 31, 2002          |  |              | (Numerator) |              | (Denominator) |           | Amount
|                                              |  |              |             |              |               |           |       
|                                              |  |              |             |              |               |           |       
|Basic earnings per share                      |  | $            | 633,264     |              |               | 932,352   |       
|Effect of dilutive securities  stock options |  |             |             | 20,804       |               | (.02      | )     
|                                              |  |              |             |              |               |           |       
|                                              |  |              |             |              |               |           |       
|Diluted earnings per share                    |  | $            | 633,264     |              |               | 953,156   |       
|                                              |  |              |             |              |               |           |       



|                                              |  | Net Earnings |             | CommonShares |               | Per Share |       
|--------------------------------------------- |  | ------------ | ----------- | ------------ | ------------- | --------- | ------
|For the Year Ended December 31, 2001          |  |              | (Numerator) |              | (Denominator) |           | Amount
|                                              |  |              |             |              |               |           |       
|                                              |  |              |             |              |               |           |       
|Basic earnings per share                      |  | $            | 357,220     |              |               | 932,347   |       
|Effect of dilutive securities  stock options |  |             |             | 18,469       |               |          |       
|                                              |  |              |             |              |               |           |       
|                                              |  |              |             |              |               |           |       
|Diluted earnings per share                    |  | $            | 357,220     |              |               | 950,816   |       
|                                              |  |              |             |              |               |           |       



|                                              |  | Net Earnings |             | CommonShares |               | Per Share |       
|--------------------------------------------- |  | ------------ | ----------- | ------------ | ------------- | --------- | ------
|For the Year Ended December 31, 2000          |  |              | (Numerator) |              | (Denominator) |           | Amount
|                                              |  |              |             |              |               |           |       
|                                              |  |              |             |              |               |           |       
|Basic earnings per share                      |  | $            | 290,614     |              |               | 939,220   |       
|Effect of dilutive securities  stock options |  |             |             | 16,006       |               | (.01      | )     
|                                              |  |              |             |              |               |           |       
|                                              |  |              |             |              |               |           |       
|Diluted earnings per share                    |  | $            | 290,614     |              |               | 955,226   |       
|                                              |  |              |             |              |               |           |       

Recent Accounting
PronouncementsIn June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, Accounting for Asset Retirement Obligations. SFAS No. 143 will be effective for the Company on
January 1, 2003 and addresses the accounting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company believes the adoption of SFAS No. 143 will not have a material impact on
its financial position, results of operations or liquidity.

In April 2002, the FASB issued SFAS No. 145, Rescission of Statements 4, 44, and 64,
Amendment of FASB Statement 13, and Technical Corrections. Prior to the issuance of SFAS No. 145, net gains or losses resulting from the extinguishments of debt that were included in the income statement were classified as an extraordinary
item, net of related income tax effect. Under the provisions of SFAS No. 145, these gains and losses will be classified as extraordinary items only if they meet the definition of that term- the gain or loss must be unusual in nature and infrequent
in occurrence. The Company believes the adoption of SFAS No. 143 will not have a material impact on its financial position, results of operations or liquidity.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated With Exit or Disposal Activities. SFAS No. 146, effective for affected activities occurring after December 31, 2002, addresses accounting for costs
associated with exit or disposal activities. Such costs include, but are not limited to termination benefits, contract terminations, and costs to consolidate facilities or relocate employees. The Company believes the adoption of SFAS No. 146 will
not have a material impact on its financial position, results of operations or liquidity.

23



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(2)Investment Securities

Investment securities available-for-sale at December 31,
2002 and 2001 are as follows:



|                             |  | December 31, 2002 |           
|---------------------------- |  | ----------------- | ----------
|                             |  |                   |           
|                             |  | AmortizedCost     |           
|                             |  |                   |           
|                             |  |                   |           
|U.S. Government agencies     |  | $                 | 7,037,285 
|Mortgage-backed securities   |  | 6,168,063         |           
|State, county and municipals |  | 6,848,660         |           
|                             |  |                   |           
|                             |  |                   |           
|                             |  | $                 | 20,054,008
|                             |  |                   |           

;

|                             |  | December 31, 2000 |           
|---------------------------- |  | ----------------- | ----------
|                             |  |                   |           
|                             |  | AmortizedCost     |           
|                             |  |                   |           
|                             |  |                   |           
|U.S. Government agencies     |  | $                 | 15,185,542
|Mortgage-backed securities   |  | 7,692,735         |           
|State, county and municipals |  | 4,553,002         |           
|                             |  |                   |           
|                             |  |                   |           
|                             |  | $                 | 27,431,279
|                             |  |                   |           

The amortized cost and estimated fair value of
investment securities available-for-sale at December 31, 2002, 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.



|                                                          |  | AmortizedCost |            | EstimatedFair Value |           
|--------------------------------------------------------- |  | ------------- | ---------- | ------------------- | ----------
|                                                          |  |               |            |                     |           
|U.S. Government agencies and state, county and municipals |  |               |            |                     |           
|Within 1 year                                             |  | $             |           |                     |          
|1 to 5 years                                              |  |               | 8,825,581  |                     | 9,153,904 
|5 to 10 years                                             |  |               | 3,164,351  |                     | 3,272,316 
|More than 10 years                                        |  |               | 1,896,013  |                     | 1,899,977 
|Mortgage-backed securities                                |  |               | 6,168,063  |                     | 6,255,857 
|                                                          |  |               |            |                     |           
|                                                          |  |               |            |                     |           
|                                                          |  | $             | 20,054,008 |                     | 20,582,054
|                                                          |  |               |            |                     |           

Proceeds from sales of securities available-for-sale
during 2002 and 2001 totaled approximately $10,635,000 and $25,530,000, respectively. There were no sales of securities available-for-sale in 2000. Gross gains of approximately $119,000 and $185,000 were realized on those sales during 2002 and 2001,
respectively. There were no losses realized on sales during 2002 or 2001.

Securities with a carrying value of approximately $10,681,000 and $7,593,000 as of
December 31, 2002 and 2001, respectively, were pledged to secure public deposits as required by law as well as the Federal Home Loan Bank advances.

24



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(3)Loans

Major classifications of loans at December 31, 2002 and 2001 are summarized as follows:



|                                       |  | 2002       |            | 2001       |           
|-------------------------------------- |  | ---------- | ---------- | ---------- | ----------
|                                       |  |            |            |            |           
|                                       |  |            |            |            |           
|Commercial, financial and agricultural |  | $          | 10,914,521 |            | 11,142,289
|Real estate - construction             |  | 8,746,849  |            | 2,913,723  |           
|Real estate - mortgage                 |  | 40,905,257 |            | 26,005,923 |           
|Consumer                               |  | 2,641,326  |            | 2,410,904  |           
|                                       |  |            |            |            |           
|                                       |  |            |            |            |           
|                                       |  | 63,207,953 |            | 42,472,839 |           
|                                       |  |            |            |            |           
|Less allowance for loan losses         |  | 812,507    |            | 595,279    |           
|                                       |  |            |            |            |           
|                                       |  |            |            |            |           
|                                       |  | $          | 62,395,446 |            |           
|                                       |  |            |            |            |           

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 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, 2002, 2001 and 2000 is presented below:



|                                |  | 2002     |         | 2001     |         | 2000    |        
|------------------------------- |  | -------- | ------- | -------- | ------- | ------- | -------
|                                |  |          |         |          |         |         |        
|                                |  |          |         |          |         |         |        
|Balance at beginning of year    |  | $        | 595,279 |          | 534,568 |         | 373,156
|Provision charged to operations |  | 400,000  |         | 510,000  |         | 250,000 |        
|Loans charged off               |  | (183,036 | )       | (450,159 | )       | (93,159 | )      
|Recoveries                      |  | 264      |         | 870      |         | 4,571   |        
|                                |  |          |         |          |         |         |        
|                                |  |          |         |          |         |         |        
|Balance at end of year          |  | $        | 812,507 |          |         | 595,279 |        
|                                |  |          |         |          |         |         |        

(4)Premises and Equipment

Major classifications of premises and equipment are
summarized as follows:



|                              |  | 2002      |           | 2001      |          
|----------------------------- |  | --------- | --------- | --------- | ---------
|                              |  |           |           |           |          
|                              |  |           |           |           |          
|Land                          |  | $         | 442,053   |           | 8,488    
|Building and improvements     |  | 1,933,967 |           | 1,783,967 |          
|Furniture and equipment       |  | 803,888   |           | 726,688   |          
|                              |  |           |           |           |          
|                              |  |           |           |           |          
|                              |  | 3,179,908 |           | 2,519,143 |          
|Less accumulated depreciation |  | 755,917   |           | 567,220   |          
|                              |  |           |           |           |          
|                              |  | $         | 2,423,991 |           | 1,951,923
|                              |  |           |           |           |          

Depreciation expense amounted to $189,000, $198,000
and $163,000 in 2002, 2001 and 2000, respectively.

25



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(5)Deposits

Maturities of time deposits at December 31, 2002 are as follows:



|Maturing in: |  |           |           
|------------ |  | --------- | ----------
|2003         |  | $         | 17,964,899
|2004         |  | 1,640,819 |           
|2005         |  | 932,340   |           
|2006         |  | 947,094   |           
|2007         |  | 9,799,342 |           
|             |  |           |           
|             |  | $         | 31,284,494
|             |  |           |           

(6)Other Borrowings

Other borrowings represent securities sold under agreements to
repurchase which consist of obligations of the Company to other parties. The obligations are secured by investment securities, and such collateral is held by a safekeeping agent. The maximum amount of outstanding agreements at any month-end during
2002 and 2001 totaled $5,182,000 and $5,000,000, respectively, and the daily average of such agreements totaled $2,985,000 and $2,941,000, respectively. The weighted average cost was 2.07% at December 31, 2001, while the weighted average cost during
2002 and 2001 was approximately 2.36% and 4.01%, respectively.

(7)Federal Home Loan
Bank Advances

The Federal Home Loan Bank advances at December 31, 2002 and 2001 are summarized as follows:



|                                                                       |  | 2002      |           | 2001      |  
|---------------------------------------------------------------------- |  | --------- | --------- | --------- | -
|                                                                       |  |           |           |           |  
|Advance maturing September 9, 2003. Interest is paid monthly at 2.06%. |  | $         | 4,500,000 |           | 
|Advance maturing May 6, 2008. Interest is paid monthly at 5.45%.       |  | 480,000   |           |          |  
|Advance maturing March 1, 2010. Interest is paid quarterly at 5.29%.   |  | 5,000,000 |           | 5,000,000 |  
|                                                                       |  |           |           |           |  
|                                                                       |  | $         | 9,980,000 |           |  
|                                                                       |  |           |           |           |  

The advances are collateralized by a pledge of
certain 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, 2002, 2001 and 2000 are as follows:



|                               |  | 2002 |         | 2001   |         | 2000    |       
|------------------------------ |  | ---- | ------- | ------ | ------- | ------- | ------
|                               |  |      |         |        |         |         |       
|                               |  |      |         |        |         |         |       
|Currently payable              |  | $    | 246,803 |        | 168,875 |         | 20,883
|Deferred tax expense (benefit) |  | (609 | )       | 50,676 |         | 157,235 |       
|                               |  |      |         |        |         |         |       
|                               |  | $    | 246,194 |        |         | 219,551 |       
|                               |  |      |         |        |         |         |       

26



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(8)Income Taxes,
continued

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, 2002, 2001 and 2000 are as follows:



|                                |  | 2002    |         | 2001    |         | 2000    |        
|------------------------------- |  | ------- | ------- | ------- | ------- | ------- | -------
|                                |  |         |         |         |         |         |        
|                                |  |         |         |         |         |         |        
|Pretax income at statutory rate |  | $       | 299,016 |         | 196,102 |         | 159,369
|Add (deduct):                   |  |         |         |         |         |         |        
|Tax-exempt interest income      |  | (58,078 | )       | (36,814 | )       |        |        
|Non-deductible interest expense |  | 4,911   |         | 3,113   |         |        |        
|Other                           |  | 345     |         | 57,150  |         | 18,749  |        
|                                |  |         |         |         |         |         |        
|                                |  | $       | 246,194 |         |         | 219,551 |        
|                                |  |         |         |         |         |         |        

The following summarizes the components of deferred
taxes at December 31, 2002 and 2001.



|                                                       |  | 2002    |         | 2001    |        
|------------------------------------------------------ |  | ------- | ------- | ------- | -------
|                                                       |  |         |         |         |        
|Deferred income tax assets:                            |  |         |         |         |        
|Allowance for loan losses                              |  | $       | 206,863 |         | 149,263
|Nonaccrual loan interest                               |  | 951     |         | 9,851   |        
|Pre-opening expenses                                   |  |        |         | 18,864  |        
|Operating loss carryforwards and credits               |  | 43,371  |         | 53,061  |        
|Net unrealized losses on securities available-for-sale |  |        |         | 30,672  |        
|Discount on SBA loans, net                             |  | 478     |         | 613     |        
|                                                       |  |         |         |         |        
|                                                       |  |         |         |         |        
|Total gross deferred income tax assets                 |  | 251,663 |         | 262,324 |        
|                                                       |  |         |         |         |        
|                                                       |  |         |         |         |        
|Deferred income tax liabilities:                       |  |         |         |         |        
|Premises and equipment                                 |  | 28,582  |         | 25,787  |        
|Net unrealized gains on securities available-for-sale  |  | 200,658 |         |        |        
|Other                                                  |  | 19,261  |         | 2,654   |        
|                                                       |  |         |         |         |        
|Total gross deferred tax liabilities                   |  | 248,501 |         | 28,441  |        
|                                                       |  |         |         |         |        
|Net deferred tax assets                                |  | $       | 3,162   |         |        
|                                                       |  |         |         |         |        

At December 31, 2002, the
Company had state net operating loss carryforwards for tax purposes of approximately $588,000 that will begin to expire in 2012 if not previously utilized.

(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.

27



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(9)Commitments,
continued

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.

|                                                                   |  | 2002 |            | 2001 |           
|------------------------------------------------------------------ |  | ---- | ---------- | ---- | ----------
|                                                                   |  |      |            |      |           
|Financial instruments whose contract amountsrepresent credit risk: |  |      |            |      |           
|Commitments to extend credit                                       |  | $    | 15,967,000 |      | 11,799,000
|Standby letters of credit                                          |  | $    | 22,000     |      |           
|                                                                   |  |      |            |      |           

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 $6,700,000.

(10)Employee Benefit Programs

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 $17,175 for 2002 and $10,398 for 2001. No Company contributions were made to this plan in 2000.

The Company adopted a Stock Incentive Plan in 1998 covering up to 143,000 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 2002, 2001 and 2000, the Board awarded 727, 985
and 413 shares, respectively, to certain employees based upon their tenure with the Bank under the Stock Incentive Plan. The fair value of these shares of $9,993, $12,506 and $5,299, respectively, was charged to operations upon issuance of the
shares.

A summary status of the Companys stock option plan as of December 31, 2002, 2001 and 2000, and changes during the years, are presented
below:

|                                |  | 2002   |  | 2001                         |       | 2000   |       
|------------------------------- |  | ------ |  | ---------------------------- | ----- | ------ | ------
|                                |  |        |  |                              |       |        |       
|                                |  | Shares |  | WeightedAverageExercisePrice |       | Shares |       
|                                |  |        |  |                              |       |        |       
|Outstanding, beginning of year  |  | 80,531 |  | $                            | 10.01 |        | 80,531
|Granted during the year         |  |       |  |                             |       |       |       
|                                |  |        |  |                              |       |        |       
|                                |  |        |  |                              |       |        |       
|Outstanding, end of year        |  | 80,531 |  | $                            | 10.01 |        | 80,531
|                                |  |        |  |                              |       |        |       
|                                |  |        |  |                              |       |        |       
|Options exercisable at year end |  | 64,225 |  | $                            | 10.00 |        | 48,119
|                                |  |        |  |                              |       |        |       

The weighted average remaining contractual life of these stock
options was approximately five years as of December 31, 2002.

28



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(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 2002.



|Balance at December 31, 2001 |  | $        | 422,000 | 
|---------------------------- |  | -------- | ------- | 
|New loans                    |  | 330,000  |        
|Repayments                   |  | (146,000 | )      
|                             |  |          |        
|                             |  |          |        
|Balance at December 31, 2002 |  | $        | 606,000 | 
|                             |  |          |         | 

At December 31, 2002 and 2001, deposits from
directors, executive officers and their related interests aggregated $2,760,294 and $2,759,693, respectively. These deposits were taken in the normal course of business at market interest rates.

(12)Miscellaneous Operating Expenses

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



|                  |  | 2002 |         | 2001 |         | 2000 |        
|----------------- |  | ---- | ------- | ---- | ------- | ---- | -------
|                  |  |      |         |      |         |      |        
|                  |  |      |         |      |         |      |        
|ATM surcharge     |  | $    | 72,708  |      | 67,474  |      | 32,136 
|Data processing   |  | $    | 198,277 |      | 159,487 |      | 100,072
|Professional fees |  | $    | 120,288 |      | 132,734 |      | 156,466

(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, 2002, that the Company and the Bank meet all
capital adequacy requirements to which they are subject.

As of December 31, 2002, the most recent notification from the Federal Deposit Insurance Corporation
categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier 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.

29



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(13)Regulatory Matters,
continued

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

|                          |  | Actual |            | For CapitalAdequacy Purposes |      | To Be WellCapitalized UnderPrompt
CorrectiveAction Provisions |  
|------------------------- |  | ------ | ---------- | ---------------------------- | ---- | ------------------------------------------------------------- | -
|                          |  |        |            |                              |      |                                                               |  
|                          |  | Amount |            | Ratio                        |      | Amount                                                        |  
|                          |  |        |            |                              |      |                                                               |  
|As of December 31, 2002:  |  |        |            |                              |      |                                                               |  
|Total Capital             |  |        |            |                              |      |                                                               |  
|(to Risk Weighted Assets) |  |        |            |                              |      |                                                               |  
|Consolidated              |  | $      | 10,772,000 |                              | 13.6 | %                                                             | $
|Bank                      |  | $      | 9,566,000  |                              | 12.3 | %                                                             | $
|Tier 1 Capital            |  |        |            |                              |      |                                                               |  
|(to Risk Weighted Assets) |  |        |            |                              |      |                                                               |  
|Consolidated              |  | $      | 10,085,000 |                              | 12.8 | %                                                             | $
|Bank                      |  | $      | 8,753,000  |                              | 11.2 | %                                                             | $
|Tier 1 Capital            |  |        |            |                              |      |                                                               |  
|(to Average Assets)       |  |        |            |                              |      |                                                               |  
|Consolidated              |  | $      | 10,085,000 |                              | 11.5 | %                                                             | $
|Bank                      |  | $      | 8,753,000  |                              | 9.6  | %                                                             | $
|                          |  |        |            |                              |      |                                                               |  
|As of December 31, 2001:  |  |        |            |                              |      |                                                               |  
|Total Capital             |  |        |            |                              |      |                                                               |  
|(to Risk Weighted Assets) |  |        |            |                              |      |                                                               |  
|Consolidated              |  | $      | 9,904,000  |                              | 17.1 | %                                                             | $
|Bank                      |  | $      | 8,794,000  |                              | 15.3 | %                                                             | $
|Tier 1 Capital            |  |        |            |                              |      |                                                               |  
|(to Risk Weighted Assets) |  |        |            |                              |      |                                                               |  
|Consolidated              |  | $      | 9,309,000  |                              | 16.1 | %                                                             | $
|Bank                      |  | $      | 8,199,000  |                              | 14.2 | %                                                             | $
|Tier 1 Capital            |  |        |            |                              |      |                                                               |  
|(to Average Assets)       |  |        |            |                              |      |                                                               |  
|Consolidated              |  | $      | 9,309,000  |                              | 10.8 | %                                                             | $
|Bank                      |  | $      | 8,199,000  |                              | 9.6  | %                                                             | $

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 2003, the Bank can pay dividends totaling approximately $279,000 to the Company without prior regulatory approval.

(14)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.

30



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(15)Decatur First Bank Group, Inc. (Parent
Company Only) Financial Information

Balance Sheets

December 31,
2002 and 2001



|                                         |  | 2002      |            | 2001      |          
|---------------------------------------- |  | --------- | ---------- | --------- | ---------
|                                         |  |           |            |           |          
|Assets                                   |  |           |            |           |          
|                                         |  |           |            |           |          
|Cash                                     |  | $         | 112,714    |           | 26,804   
|Federal funds sold                       |  | 2,000     |            | 92,000    |          
|Interest-bearing deposit                 |  | 102,701   |            |          |          
|Investment in Bank                       |  | 9,158,487 |            | 8,142,978 |          
|Investment securities available-for-sale |  | 740,281   |            | 942,500   |          
|Other assets                             |  | 61,286    |            | 59,997    |          
|                                         |  |           |            |           |          
|                                         |  |           |            |           |          
|                                         |  | $         | 10,177,469 |           | 9,264,279
|                                         |  |           |            |           |          
|                                         |  |           |            |           |          
|Liabilities and Shareholders
Equity     |  |           |            |           |          
|                                         |  |           |            |           |          
|Shareholders equity                     |  | $         | 10,177,469 |           | 9,264,279
|                                         |  |           |            |           |          

Statements of Earnings

For the Years Ended December 31, 2002, 2001 and 2000



|                                                                      |  | 2002    |         | 2001    |         | 2000    |        
|--------------------------------------------------------------------- |  | ------- | ------- | ------- | ------- | ------- | -------
|                                                                      |  |         |         |         |         |         |        
|Income:                                                               |  |         |         |         |         |         |        
|Interest income                                                       |  | $       | 40,889  |         | 52,548  |         | 58,396 
|                                                                      |  |         |         |         |         |         |        
|                                                                      |  |         |         |         |         |         |        
|Expenses:                                                             |  |         |         |         |         |         |        
|Salaries and employee benefits                                        |  | 9,993   |         | 12,507  |         | 5,299   |        
|Other operating                                                       |  | 49,927  |         | 49,844  |         | 61,448  |        
|                                                                      |  |         |         |         |         |         |        
|                                                                      |  |         |         |         |         |         |        
|Total expenses                                                        |  | 59,920  |         | 62,351  |         | 66,747  |        
|                                                                      |  |         |         |         |         |         |        
|                                                                      |  |         |         |         |         |         |        
|Loss before equity in undistributed earnings of Bank and income taxes |  | (19,031 | )       | (9,803  | )       | (8,351  | )      
|                                                                      |  |         |         |         |         |         |        
|Equity in undistributed earnings of Bank                              |  | 645,063 |         | 363,682 |         | 295,791 |        
|                                                                      |  |         |         |         |         |         |        
|Income tax benefit                                                    |  | 7,232   |         | 3,341   |         | 3,174   |        
|                                                                      |  |         |         |         |         |         |        
|                                                                      |  |         |         |         |         |         |        
|Net earnings                                                          |  | $       | 633,264 |         | 357,220 |         | 290,614
|                                                                      |  |         |         |         |         |         |        

31



---

DECATUR FIRST BANK GROUP, INC.

Notes
to Consolidated Financial Statements, continued

(15)Decatur First Bank Group, Inc. (Parent
Company Only) Financial Information, continued

Statements of Cash Flows

For the Years Ended December 31, 2002, 2001 and 2000



|                                                                                    |  | 2002     |         | 2001      |         | 2000     |        
|----------------------------------------------------------------------------------- |  | -------- | ------- | --------- | ------- | -------- | -------
|                                                                                    |  |          |         |           |         |          |        
|Cash flows from operating activities:                                               |  |          |         |           |         |          |        
|Net earnings                                                                        |  | $        | 633,264 |           | 357,220 |          | 290,614
|Adjustments to reconcile net earnings to net cash provided by operating
activities: |  |          |         |           |         |          |        
|Equity in undistributed earnings of Bank                                            |  | (645,063 | )       | (363,682  | )       | (295,791 | )      
|Amortization                                                                        |  |          |         |          |         | 8,007    |        
|Provision for stock awards                                                          |  | 9,993    |         | 12,506    |         | 5,299    |        
|Change in other assets                                                              |  | 5,698    |         | 6,079     |         | (3,173   | )      
|                                                                                    |  |          |         |           |         |          |        
|                                                                                    |  |          |         |           |         |          |        
|Net cash provided by operating activities                                           |  | 3,892    |         | 12,123    |         | 4,956    |        
|                                                                                    |  |          |         |           |         |          |        
|                                                                                    |  |          |         |           |         |          |        
|Cash flows from investing activities:                                               |  |          |         |           |         |          |        
|Net change in interest-bearing deposits                                             |  | (102,701 | )       |          |         |         |        
|Proceeds from sales, maturities and calls of securities
available-for-sale          |  | 202,219  |         | 1,005,384 |         |         |        
|Purchase of securities available-for-sale                                           |  |         |         | (927,475  | )       |         |        
|                                                                                    |  |          |         |           |         |          |        
|                                                                                    |  |          |         |           |         |          |        
|Net cash provided by investing activities                                           |  | 99,518   |         | 77,909    |         |         |        
|                                                                                    |  |          |         |           |         |          |        
|                                                                                    |  |          |         |           |         |          |        
|Cash flows from financing activities:                                               |  |          |         |           |         |          |        
|Purchase of treasury stock                                                          |  | (107,500 | )       | (26,000   | )       | (125,000 | )      
|Proceeds from sale of treasury stock                                                |  |         |         |          |         | 1,820    |        
|                                                                                    |  |          |         |           |         |          |        
|                                                                                    |  |          |         |           |         |          |        
|Net cash used by financing activities                                               |  | (107,500 | )       | (26,000   | )       | (123,180 | )      
|                                                                                    |  |          |         |           |         |          |        
|                                                                                    |  |          |         |           |         |          |        
|Net change in cash and cash equivalents                                             |  | (4,090   | )       | 64,032    |         | (118,224 | )      
|                                                                                    |  |          |         |           |         |          |        
|Cash and cash equivalents at beginning of year                                      |  | 118,804  |         | 54,772    |         | 172,996  |        
|                                                                                    |  |          |         |           |         |          |        
|                                                                                    |  |          |         |           |         |          |        
|Cash and cash equivalents at end of year                                            |  | $        | 114,714 |           |         | 118,804  |        
|                                                                                    |  |          |         |           |         |          |        

32



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CORPORATE AND SHAREHOLDER INFORMATION



|
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DIRECTORS

|
|
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|



|John L. Adams, Jr.                                                  |  | Merriell Autrey                             |  | James A. Baskett                                 | 
|------------------------------------------------------------------- |  | ------------------------------------------- |  | ------------------------------------------------ | 
|President & Managing BrokerClairmont Place Realty, Inc.             |  | Retired Banker                              |  | Business OwnerProlific Impressions, Inc.         | 
|                                                                    |  |                                             |  | .                                                | 
|M. Bobbie Bailey                                                    |  | John Walter Drake                           |  | William F. Floyd                                 | 
|Business OwnerEntertainment Resources, Inc.& Bailey Design Co.      |  | AttorneyMcCurdy & Candler, LLC              |  | PresidentW.F. Floyd Construction., Inc.          | 
|                                                                    |  |                                             |  |                                                  | 
|Robert E. Lanier                                                    |  | Carol Nickola                               |  | Lynn Pasqualetti                                 | 
|PresidentREL Properties, Inc.                                       |  | Chief Nursing OfficerAtlanta Medical Center |  | President and Co-OwnerHLM Accounting & Tax, Inc. | 
|                                                                    |  |                                             |  |                                                  | 
|Roger K. Quillen                                                    |  | James T. Smith, III                         |  | Kirby A. Thompson                                | 
|Attorney                                                            |  | Business OwnerRutland Contracting Co.       |  | Vice PresidentEquifax                            | 
|                                                                    |  |                                             |  |                                                  | 
|Judy B. Turner                                                      |  |                                             |  |                                                  | 
|President and Chief Executive OfficerDecatur First Bank Group, Inc. |  |                                             |  |                                                  | 
|                                                                    |  |                                             |  |                                                  | 

|
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OFFICERS AND STAFF

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OFFICERS



|Judy B. Turner                                |  | Greg M. Autrey                          |  | Ann S. Randall                    | 
|--------------------------------------------- |  | --------------------------------------- |  | --------------------------------- | 
|President and Chief Executive Officer         |  | Executive Vice President &Senior Lender |  | Executive Vice President &Cashier | 
|                                              |  |                                         |  |                                   | 
|David Senior                                  |  | Jamie Ensley                            |  | Sharon Hustedt                    | 
|Executive Vice PresidentSenior Credit Manager |  | Vice President/Commercial Lender        |  | Assistant Operations Officer      | 
|                                              |  |                                         |  |                                   | 
|Doris Shelton                                 |  | Juanita Marzette                        |  |                                   | 
|Assistant Corporate Secretary                 |  | Retail Manager                          |  |                                   | 

STAFF



|Pam Bradley                          |  | Angela Carter               |  | Jeff Ortiz                              | 
|------------------------------------ |  | --------------------------- |  | --------------------------------------- | 
|Assistant Retail Manager             |  | Teller/Customer Service     |  | Operations                              | 
|                                     |  |                             |  |                                         | 
|Cale Randall                         |  | Ron Rice                    |  | DeShante Riggins                        | 
|Customer Service Specialist          |  | Courier (Part-time)         |  | Teller / Customer Service Specialist    | 
|                                     |  |                             |  |                                         | 
|Elaine Schimmack                     |  | Jacqueline Oglesby          |  | DeShante Riggins                        | 
|Teller Manager                       |  | Customer Service Specialist |  | Customer Service Specialist (Part-time) | 
|                                     |  |                             |  |                                         | 
|Elaine Compass                       |  | Ann Turner                  |  | Renee Wilson                            | 
|Teller / Customer Service Specialist |  | Manager, Kroger             |  | Loan Administrator II                   | 
|                                     |  |                             |  |                                         | 
|LaRon Williamson                     |  |                             |  |                                         | 
|Teller (Part-time)                   |  |                             |  |                                         | 

33