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                                                                    Exhibit 10.1

STATE OF GEORGIA      )
                      )
COUNTRY OF RICHMOND   )



                      KEY OFFICER COMPENSATION AGREEMENT
                      ----------------------------------

        THIS AGREEMENT made and entered into as of the 1/st/ day of January
2000, between Georgia Bank & Trust Company of Augusta, a banking corporation
organized and existing under the laws of the State of Georgia (hereinafter
called the "Bank") and R. Daniel Blanton, a salaried employee of the Bank
(hereinafter called the "Executive"), pursuant to a duly authorized resolution
of the Compensation Committee of the Board of Directors of the Bank.

        In consideration of the mutual covenants hereafter set forth, the good
and valuable services to be rendered by the Executive to the Bank commencing on
the date of this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:

        1.    EMPLOYMENT.
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                    The Bank hereby agrees to employ the Executive, and the
              Executive hereby agrees to work for the Bank, on the terms and
              conditions hereinafter set forth subject to the general
              supervision and direction of the Bank.

        2.    TITLE AND DUTIES OF POSITION.
              ----------------------------

                    The Executive shall have the title of President - Chief
              Executive Officer for Georgia Bank & Trust Company of Augusta, and
              Georgia Bank Financial Corporation ("GBFC"), and in this capacity,
              the Executive shall be required to perform all the duties and
              discharge all of the responsibilities which are described and
              detailed in the attached position description (see Schedule 1).

                    The Executive agrees to devote his full and exclusive time,
              effort and attention to the performance of his duties and to
              devote his best efforts and skills exclusively to the business and
              interests of the Bank and perform all duties required by this
              Agreement and as designated by the board of Directors of the Bank.
              The Executive agrees to hold such corporate offices with the Bank
              to which the Executive is from time-to-time elected and to
              discharge all duties imposed upon the Executive as set forth in
              the bylaws of the Bank. With the consent of the Board of directors
              of the Bank, the Executive may serve as a member of the Board of
              Directors of another company, or companies.

        3.    TERMS OF AGREEMENT.
              ------------------

                    The term of this Agreement shall commence as of the date of
              this Agreement and shall terminate on December 31, 2002. This
              contract shall be renewed for additional terms of three (3) years
              each upon the approval of the Compensation Committee of the Bank.
              Such approval shall occur on or before December 31/st/ of each
              year, and shall be acknowledged by the Compensation Committee
              recording the same in its meeting minutes. In the event the
              Compensation Committee fails to renew the term of this Agreement
              prior to December 31 of any year, the term of this Agreement shall
              expire on December 31, two (2) years later.

        4.    COMPENSATION.
              ------------

              a.    Base Salary. The Bank agrees that, as of the effective date
                    -----------
                    of this Agreement, it shall pay the Executive an annual base
                    salary of $140,0000.00 ("Base Salary"), which shall be paid
                    in equal semi-monthly installments. During the term of this
                    Agreement, the Bank shall review the Executive's Base Salary
                    annually and shall advise the Executive on or before
                    February 28/th/ of each year of any adjustment in salary,
                    with such adjustment, if any,
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                    retroactive to January 1/st/. It is anticipated that the
                    first salary review will occur no later than February 28,
                    2000 for the period beginning January 1, 2000.

              b.    Annual Incentive Compensation. Effective January 1, 2000 for
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                    the year ending December 31, 2000 and successive years under
                    this Agreement, it is the intention of the Bank to provide
                    the Executive with an annual incentive compensation award
                    ("Annual Incentive Compensation"), in addition to Base
                    Salary, in recognition of the efforts and production
                    achieved by the Executive. The amount of the Annual
                    Incentive Compensation to be paid to the Executive is to be
                    determined by the Compensation Committee of the Board of
                    Directors within two months after the end of each fiscal
                    year.

              c.    Stock Appreciation Rights and Incentive Stock Option. The
                    ----------------------------------------------------
                    Executive shall be eligible to participate in the Executive
                    Long-Term Incentive Plan adopted by Georgia Bank Financial
                    Corporation. The Executive has been previously awarded Stock
                    Appreciation Rights. Subsequent awards will be determined
                    annually by the Compensation Committee of the Board of
                    Directors.

              d.    Incentive Compensation - Change of Control. In the event of
                    ------------------------------------------
                    a change of control of the Bank as defined herein, Executive
                    shall be entitled (in addition to the benefits set forth
                    hereinabove) upon closing of the transaction effecting such
                    change of control to a cash payment of an amount equivalent
                    to two times the Executive's average base salary plus cash
                    bonuses paid during the last five (5) years (minus such
                    federal and state income tax withholding and social security
                    taxes as may be applicable to the Bank under federal or
                    state law) as a result of such financial transaction.

                           The payments provided for in this section shall be
                    payable by the Bank only to the extent that such payments
                    are deductible by the Bank and are not rendered non-
                    deductible by Section 280G(b)(1) of the Internal Revenue
                    Code of 1996 as amended. The cash payment provided for in
                    this section shall be paid by the Bank not later than ten
                    (10) days after the date of closing of the transaction
                    effecting the change of control of the Bank.

                    For the purpose of this section, "change of control" of the
                    Bank shall mean:

                    (i)   Any transaction, whether by merger, consolidation,
                    asset sale, tender offer, reverse stock split or otherwise,
                    which results in the acquisition or beneficial ownership, as
                    such term is defined under rules and regulations promulgated
                    under the Securities Exchange Act of 1934, as amended, by a
                    person or entity or any group of persons or entities acting
                    in concert, of 50% or more of the outstanding shares of
                    common stock of the GBFC.

                    (ii)  the sale of all or substantially all of the assets of
                    the Bank and/or GBFC.

                    (iii) approval by the shareholders of the GBFC of a plan of
                    liquidation of the GBFC or the Bank.

              e.    Non-qualified Defined Benefit Plan, with minimum monthly
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                    benefit at retirement age of 65 of $10,000. This benefit
                    shall remain an obligation of the Bank and its successors,
                    and shall be fully funded to age 65 regardless of a "change
                    of control" referred to in Section 6(d) hereinbelow or
                    continued employment of the Executive after the "change of
                    control."

              f.    Other. The Executive shall be eligible to participate in the
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                    Group Medical and Life Insurance Plan, 401K Savings Plan,
                    and Cafeteria Plan, if and to the extent that such are
                    provided to all Bank employees. In the event of a "change of
                    control", the Executive has the option to take a reduced
                    benefit at early retirement, or defer to age 65 as defined
                    in the Non-qualified Defined Contribution Retirement Plan.
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        5.    REIMBURSEMENT OF BUSINESS EXPENSES.
              ----------------------------------

                    The Executive shall be reimbursed for all necessary business
              expenses, including payment of membership dues at the Augusta
              Country Club, and monthly dues of a civic club. The Executive
              shall also be provided an automobile for personal and business use
              commensurate with his position.

        6.    TERMINATION OF EMPLOYMENT.
              -------------------------

              a.    Death or Permanent Disability of Executive. In the event
                    ------------------------------------------
                    that the employment of the Executive shall be terminated by
                    reason of the death or permanent disability of the
                    Executive, then the Bank shall pay to the Executive's estate
                    (or beneficiary designated by the Executive in a written
                    notice to the Bank in the event of the Executive's death) or
                    to the Executive (in the event of permanent disability) an
                    amount equal to six months of the Executive's then current
                    Base Salary. Further, all cash amounts, if any, previously
                    earned and voluntarily or automatically deferred under the
                    Annual Incentive Compensation arrangement shall become 100%
                    vested and payable under the terms of such deferral
                    agreement(s). The term "permanent disability" as used in
                    this Agreement means the inability of the Executive to
                    perform the duties specified in this Agreement for three
                    hundred sixty (360) consecutive calendar days.

              b.    Discharge for Cause or Voluntary Termination by Executive.
                    ---------------------------------------------------------
                    The Executive may be discharged by the Bank for just cause;
                    in which event this Agreement and all of the rights and
                    obligations of the parties, unless otherwise provided, shall
                    forthwith terminate. The term "just cause", as used in this
                    Agreement, shall mean a substantial and objective act of
                    misfeasance or nonfeasance by the Executive which is plainly
                    sufficient, under sound banking principles (as recognized by
                    the Georgia Department of Banking and Finance and/or the
                    Federal Deposit Insurance Corporation to the extent said
                    agencies would no longer approve the Executive to hold a
                    comparable executive position), to conclude that the
                    Executive is unfit to continue in the capacities stated in
                    this Agreement. Notwithstanding the foregoing, however, the
                    rights, obligations and duties of the parties arising by
                    virtue of Paragraph 8 (as applicable) of this Agreement
                    shall not terminate and shall nevertheless remain binding
                    upon the parties to this Agreement as independent covenants.
                    In the event of termination by the Bank for just cause, or
                    voluntary termination by the Executive, the Executive shall
                    not be entitled to any severance compensation. Cash amounts,
                    if applicable, voluntarily deferred shall be payable in
                    accordance with the terms of such deferral agreement(s). The
                    rights of the Bank and Executive under the Executive Long-
                    Term Incentive Plan shall be exercisable in accordance with
                    the terms of the respective plans and award agreements.

              c.    Discharge Without Cause. If the employment of the Executive
                    -----------------------
                    is terminated by the bank for any reason other than just
                    cause, death or permanent disability, then the Bank, its
                    successor or the successor to Georgia Bank & Trust Company
                    of Augusta, shall pay the Executive his then current Base
                    Salary for two (2) years or the remaining term of this
                    Agreement, whichever is greater, which shall be paid by the
                    Bank to the Executive in consecutive monthly installments
                    commencing on the 1st day of the month following discharge
                    of the Executive without cause. Additionally, the Bank shall
                    continue to provide, at its expense, medical coverage then
                    in force for the Executive and his family for two (2) years
                    or the remaining term of this Agreement, whichever is
                    greater. Notwithstanding the foregoing, if the Executive
                    accepts other employment within the 24 month period during
                    which the Bank has agreed to pay the Executive, the Bank
                    shall be relieved of any obligation to pay the Executive all
                    remaining unpaid monthly installments of the Base Salary and
                    medical coverage benefits. All cash amounts, if any,
                    previously earned and voluntarily deferred shall become 100%
                    vested and payable in accordance with the terms of such
                    deferral agreement(s).
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              d.    Optional Termination ("Change of Control"). In the event
                    --------------------
                    that 50% of the issued and outstanding shares of the Bank or
                    its parent, GBFC, excluding the shares set aside pursuant to
                    an incentive stock option plan, are acquired by any one
                    entity or person, or group of persons or entities acting in
                    concert which are not shareholders on the effective date of
                    this Agreement, the Executive shall have certain rights, as
                    follows. If Executive is required by the Bank, its successor
                    or the successor to GBFC to (i) relocate to a geographical
                    area more than fifty (50) miles from 3530 Wheeler Road,
                    Augusta, Georgia or (ii) accept a reduction in Total Annual
                    Compensation below the rate in effect on the Take Over Date,
                    or (iii) perform duties and occupy a position other that
                    described in Paragraph 2 above, the Bank, its successor or
                    the successor to GBFC shall pay the Executive his Total
                    Annual Compensation (at the rate in effect on the Take Over
                    Date) and continue to pay medical insurance benefits then in
                    force for the Executive and his family for a term equal to
                    two (2) years or the remaining term of this Agreement,
                    whichever is greater. In the event the Executive
                    subsequently obtains medical insurance benefits through
                    other employment during the period that such benefits are
                    provided by the Bank under this Paragraph, the Bank shall be
                    relieved of its obligation to pay for medical insurance for
                    the Executive.

        7.    AGREEMENT NOT TO COMPETE AND TO SOLICIT EMPLOYEES.
              -------------------------------------------------

                    The Executive agrees that during the period applicable in
              Paragraph 6(c) following Discharge Without Cause of his employment
              by the Bank, for whatever reason (and regardless of whether this
              contract expires or is terminated), he will not, on his own behalf
              or in the service of others, compete with the Bank within a
              twenty-five (25) mile radius of the principal office of the Bank
              located at 3530 Wheeler Road, Augusta, Richmond County, Georgia,
              and he will not, on his own behalf or in the service of others,
              solicit, divert or hire away or attempt to solicit, divert or hire
              away, to any competing business and person employed by the Bank,
              whether such employment was for a determined period or at will.

        8.    COVENANT NOT TO DISCLOSE TRADE INFORMATION.
              ------------------------------------------

                    The Executive covenants and agrees that he will not, at any
              time, or in any manner, either directly or indirectly, divulge or
              disclose to any firm, individual or institution any information
              concerning or related to the business of the Bank, including its
              customers, shareholders, manner of operation, projections,
              accounting procedures or other information pertaining to the
              business or affairs of the Bank, all of which are deemed trade
              secrets which are deemed confidential material and important.
              Further, upon termination of this Agreement, with or without
              cause, the Executive agrees that he will continue to treat as
              private and privileged all information, data, figures,
              projections, customer lists, manner of operations and identity of
              shareholders each of which is a trade secret, and will not release
              any such information to any person, firm or institution, and the
              Bank shall be entitled to an injunction by any competent Court to
              enjoin and restrain the unauthorized disclosure of such
              information. The Executive agrees that upon termination of his
              employment, with or without cause, he will surrender to the Bank,
              in good condition, any record or records pertaining to the
              operation of the Bank kept by the Executive during the course of
              his employment.

        9.    BINDING ON HEIRS, ETC.
              ---------------------

                    This Agreement shall be binding upon, and shall inure to the
              benefit of the heirs, successors and assigns of the parties.
              However, the Executive acknowledges that this contract is a
              personal service contract and the rights, duties and
              responsibilities of the Executive hereunder including the right to
              receive compensation, may not be delegated or assigned, pledged or
              hypothecated without the express written consent of the Bank.
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        10.   MODIFICATION.
              ------------

                     As to matters specifically determined and covered by this
              Agreement, this Agreement represents the complete and entire
              agreement of the parties. It is understood that the Executive
              shall have the right to be temporarily absent from employment on
              vacations, sick leave, personal emergencies or for other normal
              causes or situations as defined in the Personnel Manual. As to
              matters specifically covered and determined by this contract,
              these matters shall be modified only by subsequent written
              agreement of the parties.

        IN WITNESS WHEREOF, the parties hereto have executed, acknowledged,
sealed and delivered this Agreement the date and year first set forth above.

                                      EXECUTIVE




                                                                     (L.S.)
                                      -------------------------------------



                                      BANK
                                      Georgia Bank & Trust Company of Augusta


                                      By:

                                      As its





        Georgia Bank Financial Corporation joins in this Agreement for the sole
and exclusive purpose of assenting to the provisions of Paragraph 4(c)
pertaining to Executive Long-Term Incentive Plan adopted by Georgia Bank
Financial Corporation and Paragraph 6(d) pertaining to Optional Termination.

                                      Georgia Bank Financial Corporation


                                      By:

                                      As its

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                                  Schedule 1

GEORGIA BANK FINANCIAL CORPORATION
                        Position Description- President/Chief Executive Officer


                                    SUMMARY

        The President/CEO is the Chief Executive Officer and responsible for the
overall leadership and strategic direction of the holding company, Georgia Bank
Financial Corporation.

        The President/CEO is accountable to the Board of Directors for the
conduct of holding company affairs. He shall provide information that accurately
reflects the condition and status of the holding company, and as appropriate,
deliver information that allows the Board of Directors to monitor the operations
of the holding company.

DUTIES

        Assure the continued operation of the holding company, as parent company
to the Bank, in a safe and sound manner consistent with regulatory expectations.

        Consult with the Executive Committee and the Board of Directors to
develop, as necessary, long range strategic planning for the holding company.
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GEORGIA BANK & TRUST COMPANY
                    Position Description- President/Chief Executive Officer


SUMMARY

        The President/CEO is the Chief Executive Officer and responsible for the
overall leadership and strategic direction of the affairs of Georgia Bank &
Trust Company.

        The President/CEO is accountable to the Board of Directors for the
financial performance and regulatory condition of the Bank. He shall provide
information to the Board of Directors that accurately reflects the condition of
the Bank, and as appropriate, deliver information that allows the Board of
Directors to monitor the operations of the Bank.

DUTIES

        Maintain a position of leadership within the Bank and retain an
effective management team to provide for the successful and profitable operation
of the Bank.

        Monitor overall asset quality to minimize the risk of loan losses and
resulting impacts on the profitability of the Bank.

        Assure compliance with all regulatory requirements for the continued
operation of the Bank in a safe and sound manner consistent with regulatory
expectations and the avoidance of regulatory criticism or actions.

        Function as Chairman of the Bank's Operating Committee composed of
senior management.

        Establish and maintain a position of leadership in the civic and
business community that enhances the visibility of the Bank projects the
commitment of the Bank to the welfare and continued growth of the community.

        Consult with the Executive Committee and the Board of Directors to
develop, as necessary long range strategic planning for the Bank.

        Work with various committees of the Board and the Board of Directors to
recommend and implement policy changes necessary to fulfill duties outlined
above.

        Build and maintain relationships with other bankers by participating in
trade association activities.

        The fulfillment of these duties is intended to result in the successful
and profitable operation of the Bank, thereby protecting and increasing the
value of shareholders interests.