<PAGE>

                                                                    EXHIBIT 13.1

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                          CONSOLIDATED FINANCIAL REPORT

                                DECEMBER 31, 2005

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                          CONSOLIDATED FINANCIAL REPORT
                                DECEMBER 31, 2005

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                          PAGE
                                                                                          ----
<S>                                                                                       <C>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM...............................       1

FINANCIAL STATEMENTS

     CONSOLIDATED BALANCE SHEETS......................................................       2
     CONSOLIDATED STATEMENTS OF INCOME................................................       3
     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME..................................       4
     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY..................................       5
     CONSOLIDATED STATEMENTS OF CASH FLOWS............................................       6
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.......................................    7-28
</TABLE>

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS
INTEGRITY BANCSHARES, INC.
ALPHARETTA, GEORGIA

            We have audited the accompanying consolidated balance sheets of
INTEGRITY BANCSHARES, INC. AND SUBSIDIARY as of December 31, 2005 and 2004, and
the related consolidated statements of income, comprehensive income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 2005. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

            In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Integrity Bancshares, Inc. and subsidiary as of December 31, 2005 and 2004, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2005, in conformity with U.S. generally
accepted accounting principles.

            We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the effectiveness of
Integrity Bancshares, Inc. and subsidiary's internal control over financial
reporting as of December 31, 2005, based on criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) and our report dated January 27, 2006
expressed an unqualified opinion on management's assessment of the effectiveness
of Integrity Bancshares, Inc. and subsidiary's internal control over financial
reporting and an unqualified opinion on the effectiveness of Integrity
Bancshares, Inc. and subsidiary's internal control over financial reporting.

                                        /s/ MAULDIN & JENKINS, LLC

Atlanta, Georgia
January 27, 2006

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                   2005            2004
                                                               -------------  --------------
<S>                                                            <C>            <C>
                             ASSETS

Cash and due from banks                                        $   5,068,295  $    1,274,711
Interest-bearing deposits in banks                                    66,786         287,962
Federal funds sold                                                 6,243,000               -
Securities available for sale                                     73,923,900      47,927,833
Restricted equity securities, at cost                                889,300       1,232,600

Loans                                                            651,778,460     385,905,782
Less allowance for loan losses                                     5,612,162       3,433,130
                                                               -------------  --------------
          Loans, net                                             646,166,298     382,472,652

Premises and equipment                                            11,864,983       8,608,095
Other assets                                                       8,852,516       4,371,460
                                                               -------------  --------------

          TOTAL ASSETS                                         $ 753,075,078  $  446,175,313
                                                               =============  ==============

          LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Deposits:

    Noninterest-bearing                                        $  13,046,167  $    9,331,768
    Interest-bearing                                             661,397,590     363,940,483
                                                               -------------  --------------
           Total deposits                                        674,443,757     373,272,251
    Federal funds purchased                                                -       4,279,000
    Other borrowings                                               6,186,000      21,186,000
    Other liabilities                                              6,326,137       3,883,236
                                                               -------------  --------------
          TOTAL LIABILITIES                                      686,955,894     402,620,487
                                                               -------------  --------------

Commitments and contingencies

Stockholders' equity:

    Common stock, no par value, 50,000,000 shares authorized;
        14,361,542 and 6,385,638 shares issued,  respectively     56,991,897      39,932,171
    Retained earnings                                             10,143,755       3,821,403
    Accumulated other comprehensive loss                          (1,016,468)       (198,748)
                                                               -------------  --------------

          TOTAL STOCKHOLDERS' EQUITY                              66,119,184      43,554,826
                                                               -------------  --------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 753,075,078  $  446,175,313
                                                               =============  ==============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                  YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

<TABLE>
<CAPTION>
                                                       2005             2004             2003
                                                   -------------   ---------------   -------------
<S>                                                <C>             <C>               <C>
INTEREST INCOME:

    Loans, including fees                          $  41,379,076   $    20,830,692   $  13,252,859
    Securities                                         2,709,786         1,593,333         878,336
    Federal funds sold                                    62,170            27,906          49,201
    Deposits in banks                                      5,015             3,700           9,736
                                                   -------------   ---------------   -------------
          TOTAL INTEREST INCOME                       44,156,047        22,455,631      14,190,132
                                                   -------------   ---------------   -------------

INTEREST EXPENSE:

    Deposits                                          17,293,051         6,943,923       4,781,147
    Federal funds purchased and other borrowings       1,391,202           627,188         183,465
                                                   -------------   ---------------   -------------
          TOTAL INTEREST EXPENSE                      18,684,253         7,571,111       4,964,612
                                                   -------------   ---------------   -------------

          NET INTEREST INCOME                         25,471,794        14,884,520       9,225,520
PROVISION FOR LOAN LOSSES                              3,566,212         2,627,348       2,488,209
                                                   -------------   ---------------   -------------
          NET INTEREST INCOME AFTER PROVISION
             FOR LOAN LOSSES                          21,905,582        12,257,172       6,737,311
                                                   -------------   ---------------   -------------

OTHER INCOME:

    Service charges on deposit accounts                   61,009            54,781          63,858
    Other operating income                               701,393           557,948         125,740
                                                   -------------   ---------------   -------------
          TOTAL OTHER INCOME                             762,402           612,729         189,598
                                                   -------------   ---------------   -------------

OTHER EXPENSES:

    Salaries and employee benefits                     7,214,234         4,581,670       2,522,914
    Equipment and occupancy expenses                   1,722,280         1,098,100         584,236
    Other operating expenses                           3,720,845         2,402,075       1,563,469
                                                   -------------   ---------------   -------------
          TOTAL OTHER EXPENSES                        12,657,359         8,081,845       4,670,619
                                                   -------------   ---------------   -------------

          INCOME BEFORE INCOME TAXES                  10,010,625         4,788,056       2,256,290

INCOME TAXES                                           3,688,273         1,775,674         462,377
                                                   -------------   ---------------   -------------

          NET INCOME                               $   6,322,352   $     3,012,382   $   1,793,913
                                                   =============   ===============   =============

BASIC EARNINGS PER SHARE                           $        0.45   $          0.28   $        0.23
                                                   =============   ===============   =============

DILUTED EARNINGS PER SHARE                         $        0.42   $          0.26   $        0.23
                                                   =============   ===============   =============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                  YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                  2005           2004          2003
                                                              -------------  ------------  ------------
<S>                                                           <C>            <C>           <C>
NET INCOME                                                    $   6,322,352  $  3,012,382  $  1,793,913

OTHER COMPREHENSIVE INCOME:

    Unrealized losses on securities available-for-sale:

        Net unrealized holding losses arising during period,
net of tax of $479,730, $155,280, and $38,580, respectively        (817,720)     (261,694)     (205,591)
                                                              -------------  ------------  ------------

COMPREHENSIVE INCOME                                          $   5,504,632  $  2,750,688  $  1,588,322
                                                              =============  ============  ============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

<TABLE>
<CAPTION>
                                                  COMMON STOCK                         ACCUMULATED
                                          ------------------------      RETAINED          OTHER           TOTAL
                                                         AMOUNT         EARNINGS      COMPREHENSIVE   STOCKHOLDERS'
                                           SHARES        PAID-IN        (DEFICIT)     INCOME (LOSS)      EQUITY
                                          ---------   -------------   -------------   -------------   -------------
<S>                                       <C>         <C>             <C>             <C>             <C>
BALANCE, DECEMBER 31, 2002                1,428,658   $  14,534,954   $    (984,892)  $     268,537   $  13,818,599
    Net income                                    -               -       1,793,913               -       1,793,913
    Issuance of common stock                414,866       4,563,538               -               -       4,563,538
    Stock compensation expense                    -          90,945               -               -          90,945
    Purchase and retirement of treasury
      stock                                 (14,081)       (168,972)               -               -       (168,972)
    3-for-2 common stock split              914,714            (162)               -               -           (162)
    Other comprehensive loss                      -               -               -        (205,591)       (205,591)
                                          ---------   -------------   -------------   -------------   -------------
BALANCE, DECEMBER 31, 2003                2,744,157      19,020,303         809,021          62,946      19,892,270
    Net income                                    -               -       3,012,382               -       3,012,382
    Issuance of common stock              1,512,935      20,309,609               -               -      20,309,609
    Stock compensation expense                    -         602,259               -               -         602,259
    3-for-2 common stock split            2,128,546               -               -               -               -
    Other comprehensive loss                      -               -               -        (261,694)       (261,694)
                                          ---------   -------------   -------------   -------------   -------------
BALANCE, DECEMBER 31, 2004                6,385,638      39,932,171       3,821,403        (198,748)     43,554,826
    Net income                                    -               -       6,322,352               -       6,322,352
    Issuance of common stock                795,133      15,744,996               -               -      15,744,996
    Stock compensation expense                    -       1,159,512               -               -       1,159,512
    Tax benefit from exercise of stock
     options                                                155,218                                         155,218
    2-for-1 common stock split            7,180,771
    Other comprehensive loss                      -               -               -        (817,720)       (817,720)
                                          ---------   -------------   -------------   -------------   -------------
BALANCE, DECEMBER 31, 2005               14,361,542   $  56,991,897   $  10,143,755   $  (1,016,468)  $  66,119,184
                                         ==========   =============   =============   =============   =============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                    2005               2004               2003
                                                               ---------------   ----------------   ---------------
<S>                                                            <C>               <C>                <C>
OPERATING ACTIVITIES
    Net income                                                 $     6,322,352   $      3,012,382   $     1,793,913
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation and software amortization                         571,115            429,654           316,528
        Provision for loan losses                                    3,566,212          2,627,348         2,488,209
        Stock compensation                                           1,159,512            602,259            90,945
        Deferred income taxes                                       (1,321,872)          (531,655)       (1,161,311)
        Increase in interest receivable                             (2,114,063)          (842,526)         (441,639)
        Increase in interest payable                                 1,239,945            940,688           122,865
        Increase (decrease) in income taxes payable                    861,026         (1,701,759)        1,609,705
        Gain on sale of other real estate                                    -           (190,024)                -
        Gain on sale of premises and equipment                        (412,500)          (147,923)                -
        Net other operating activities                                 671,956            436,326          (448,532)
                                                               ---------------   ----------------   ---------------
              Net cash provided by operating activities             10,543,683          4,634,770         4,370,683
                                                               ---------------   ----------------   ---------------

INVESTING ACTIVITIES
    Net (increase) decrease in interest-bearing deposits in
      banks                                                            221,176           (174,008)          416,021
    Net (increase) decrease in federal funds sold                   (6,243,000)         2,439,000        (2,439,000)
    Proceeds from maturities of securities available-for-sale       14,650,628         15,283,233        18,199,327
    Purchases of securities available-for-sale                     (41,944,145)       (36,425,538)      (35,168,445)
    (Purchases) redemption of restricted equity securities             343,300           (582,600)         (300,000)
    Net increase in loans                                         (267,259,858)      (152,033,595)     (110,930,930)
    Proceeds from sale of other real estate                                  -          2,693,669                 -
    Proceeds from sale of premises and equipment                             -          4,996,500                 -
    Purchase of premises, equipment and software                    (4,155,702)        (2,333,013)       (5,620,401)
                                                               ---------------   ----------------   ---------------
            Net cash used in investing activities                 (304,387,601)      (166,136,352)     (135,843,428)
                                                               ---------------   ----------------   ---------------

FINANCING ACTIVITIES
    Net increase in deposits                                       301,171,506        141,494,529       111,644,422
    Net increase (decrease) in federal funds purchased              (4,279,000)        (5,721,000)        6,885,000
    Net proceeds (repayments) from other borrowings                (15,000,000)         5,000,000         9,000,000
    Net proceeds from exercised stock options                          750,645                  -                 -
    Net proceeds from sale of common stock                          14,994,351         20,309,609         4,563,376
    Purchase of treasury stock                                               -                  -          (168,972)
                                                               ---------------   ----------------   ---------------
            Net cash provided by financing activities              297,637,502        161,083,138       131,923,826
                                                               ---------------   ----------------   ---------------

Net increase (decrease) in cash and due from banks                   3,793,584           (418,444)          451,081

Cash and due from banks at beginning of year                         1,274,711          1,693,155         1,242,074
                                                               ---------------   ----------------   ---------------

Cash and due from banks at end of year                         $     5,068,295   $      1,274,711   $     1,693,155
                                                               ===============   ================   ===============

SUPPLEMENTAL DISCLOSURE

    Cash paid for:

         Interest                                              $    17,444,308   $      6,630,423   $     4,841,747

         Income taxes                                          $     4,149,119   $      4,009,088   $        13,983
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        NATURE OF BUSINESS

            Integrity Bancshares, Inc. (the "Company") is a bank holding company
            whose principal activity is the ownership and management of its
            wholly-owned subsidiary, Integrity Bank (the "Bank"). The Bank is a
            commercial bank located in Alpharetta, Fulton County, Georgia with
            additional full service branches located in Roswell, Georgia and
            Smyrna, Georgia. The Bank also has loan production offices located
            in Lawrenceville, Georgia and Cumming, Georgia. The Bank provides a
            full range of banking services in its primary market area of Fulton
            County and the surrounding counties of the metro Atlanta area. These
            services include providing loans to customers in our primary service
            area who may have credit needs outside of this area. The Bank
            occasionally purchases loan participations from local and non-local
            banks resulting in loans collateralized by properties not located in
            our primary service area.

        BASIS OF PRESENTATION AND ACCOUNTING ESTIMATES

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

            In preparing the consolidated financial statements in accordance
            with accounting principles generally accepted in the United States
            of America, management is required to make estimates and assumptions
            that affect the reported amounts of assets and liabilities and the
            disclosure of contingent assets and liabilities as of the balance
            sheet date and the reported amounts of revenues and expenses during
            the reporting period. Actual results could differ from those
            estimates.

            Material estimates that are particularly susceptible to significant
            change in the near term relate to the determination of the allowance
            for loan losses, the valuation of foreclosed real estate, deferred
            taxes, stock compensation, and contingent assets and liabilities.
            The determination of the adequacy of the allowance for loan losses
            is based on estimates that are susceptible to significant changes in
            the economic environment and market conditions. In connection with
            the determination of the estimated losses on loans and the valuation
            of foreclosed real estate, management obtains independent appraisals
            for significant collateral.

        CASH, DUE FROM BANKS AND CASH FLOWS

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

            The Bank is required to maintain reserve balances in cash or on
            deposit with the Federal Reserve Bank, based on a percentage of
            deposits. The total of those reserve balances was approximately
            $305,000 and $316,000 at December 31, 2005 and 2004, respectively.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        SECURITIES

            Securities are classified as available for sale and recorded at fair
            value with unrealized gains and losses excluded from earnings and
            reported in other comprehensive income, net of the related deferred
            tax effect. Equity securities, including restricted equity
            securities without a readily determinable fair value, are reported
            at cost.

            The amortization of premiums and accretion of discounts are
            recognized in interest income using the interest method over the
            life of the securities. Realized gains and losses, determined on the
            basis of the cost of specific securities sold, are included in
            earnings on the settlement date. Declines in the fair value of held
            to maturity and available-for-sale securities below their cost that
            are deemed to be other than temporary are reflected in earnings as
            realized losses. In estimating other-than-temporary impairment
            losses, management considers (1) the length of time and the extent
            to which the fair value has been less than cost, (2) the financial
            condition and near-term prospects of the issuer, and (3) the intent
            and ability of the Company to retain its investment in the issuer
            for a period of time sufficient to allow for any anticipated
            recovery in fair value.

        LOANS

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

            Nonrefundable loan fees and loan origination costs on loans are
            deferred and amortized over the estimated life of the loans using a
            method which approximates a level yield.

            The accrual of interest on loans is discontinued when, in
            management's opinion, the borrower may be unable to meet payments as
            they become due, unless the loan is well-secured. All interest
            accrued but not collected for loans that are placed on nonaccrual or
            charged off is reversed against interest income, unless management
            believes that the accrued interest is recoverable through the
            liquidation of collateral. Interest income on nonaccrual loans is
            recognized on the cost-recovery method, until the loans are returned
            to accrual status. Loans are returned to accrual status when all the
            principal and interest amounts are brought current and future
            payments are reasonably assured.

            A loan is considered impaired when it is probable, based on current
            information and events, the Company will be unable to collect all
            principal and interest payments due in accordance with the
            contractual terms of the loan agreement. Impaired loans are measured
            by either the present value of expected future cash flows discounted
            at the loan's effective interest rate, the loan's obtainable market
            price, or the fair value of the collateral if the loan is collateral
            dependent. The amount of impairment, if any, and any subsequent
            changes are included in the allowance for loan losses. Interest on
            accruing impaired loans is recognized as long as such loans do not
            meet the criteria for nonaccrual status.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            The Company sells and purchases participations in certain loans to
            unrelated financial institutions. Any gain or loss is determined and
            recognized at the time the sale or purchase is consummated. The
            amount of gain or loss recognized on the sale or purchase of a
            specific loan is equal to the percentage resulting from determining
            the fair value of the portion of the loan sold or purchased relative
            to the fair value of the entire loan. The Company recognized no
            gains or losses on the sale or purchase of participations, nor did
            it recognize servicing right assets or liabilities as of and for the
            years ended December 31, 2005 or 2004, respectively, because the
            servicing fees received or paid approximate adequate compensation.

        ALLOWANCE FOR LOAN LOSSES

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

            The allowance is an amount that management believes will be adequate
            to absorb estimated losses relating to specifically identified
            loans, as well as probable credit losses inherent in the balance of
            the loan portfolio, based on an evaluation of the collectibility of
            existing loans and prior loss experience. This evaluation also takes
            into consideration such factors as changes in the nature and volume
            of the loan portfolio, overall portfolio quality, review of specific
            problem loans, concentrations and current economic conditions that
            may affect the borrower's ability to pay. This evaluation does not
            include the effects of expected losses on specific loans or groups
            of loans that are related to future events or expected changes in
            economic conditions. While management uses the best information
            available to make its evaluation, future adjustments to the
            allowance may be necessary if there are any significant changes in
            economic conditions. In addition, regulatory agencies, as an
            integral part of their examination process, periodically review the
            Company's allowance for loan losses, and may require the Company to
            make additions to the allowance based on their judgment about
            information available to them at the time of their examinations.

            The allowance consists of specific, general and unallocated
            components. The specific component relates to loans that are
            classified as either doubtful, substandard or special mention. For
            such loans that are also classified as impaired, an allowance is
            established when the discounted cash flows (or collateral value or
            observable market price) of the impaired loan is lower than the
            carrying value of that loan. The general component covers
            non-classified loans and is based on historical experience adjusted
            for qualitative factors. An unallocated component is maintained to
            cover uncertainties that could affect management's estimate of
            probable losses. The unallocated component of the allowance reflects
            the margin of imprecision inherent in the underlying assumptions
            used in the methodologies for estimating specific and general losses
            in the portfolio.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        PREMISES AND EQUIPMENT

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

                   Buildings                          40 years
                   Equipment                          3-7 years

        OTHER REAL ESTATE OWNED

            Other real estate owned represents properties acquired through or in
            lieu of loan foreclosure and is initially recorded at the lower of
            cost or fair value less estimated costs to sell. Any write-down to
            fair value at the time of transfer to other real estate owned is
            charged to the allowance for loan losses. Costs of improvements are
            capitalized, whereas costs relating to holding other real estate
            owned and subsequent adjustments to the value are expensed. The
            Company had no other real estate owned at either December 31, 2005
            or 2004.

        INCOME TAXES

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

        EARNINGS PER SHARE

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

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        STOCK-BASED COMPENSATION

            The Company has two stock-based employee compensation plans, which
            are described more fully in Note 7. The Company accounts for those
            plans under the recognition and measurement principles of APB
            Opinion No. 25, Accounting for Stock Issued to Employees, and
            related Interpretations. For fixed stock options, no stock-based
            employee compensation cost is reflected in net income, as all fixed
            options granted under those plans had an exercise price equal to the
            market value of the underlying stock on the date of grant. For
            variable stock options, stock-based compensation amounted to
            $1,159,512, $602,259 and $90,945 for the years ended December 31,
            2005, 2004 and 2003, respectively.

            The following table illustrates the effect on net income and
            earnings per share if the Company had applied the fair value
            recognition provisions of FASB Statement No. 123, Accounting for
            Stock-Based Compensation, to stock-based employee compensation.

<TABLE>
<CAPTION>
                                                                  YEARS ENDED DECEMBER 31,
                                                             2005           2004          2003
                                                         ------------   ------------   -----------
<S>                                                      <C>            <C>            <C>
Net income, as reported                                  $  6,322,352   $  3,012,382   $ 1,793,913
Difference between stock-based employee
      compensation expense determined under fair value
      based method and APB No. 25 for all awards,
      net of  tax                                             (39,719)       230,673      (228,377)
                                                         ------------   ------------   -----------
Pro forma net income                                     $  6,282,633   $  3,243,055   $ 1,565,536
                                                         ============   ============   ===========
Earnings per share:

   Basic - as reported                                   $       0.45   $       0.28   $      0.23
                                                         ============   ============   ===========
   Basic - pro forma                                     $       0.45   $       0.30   $      0.21
                                                         ============   ============   ===========
   Diluted - as reported                                 $       0.42   $       0.26   $      0.23
                                                         ============   ============   ===========
   Diluted - pro forma                                   $       0.42   $       0.28   $      0.20
                                                         ============   ============   ===========
</TABLE>

            In December 2004, the FASB published Statement No. 123 (revised
            2004), "Share-Based Payment" ("FAS 123(R)" or the "Statement"). FAS
            123(R) requires that the compensation cost relating to share-based
            payment transactions, including grants of employee stock options, be
            recognized in financial statements. That cost will be measured based
            on the fair value of the equity or liability instruments issued. FAS
            123(R) covers a wide range of share-based compensation arrangements
            including stock options, restricted share plans, performance-based
            awards, share appreciation rights, and employee share purchase
            plans. FAS 123(R) is a replacement of FASB Statement No. 123,
            Accounting for Stock-Based Compensation, and supersedes APB Opinion
            No. 25, Accounting for Stock Issued to Employees, and its related
            interpretive guidance (APB 25).

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            The effect of the Statement will be to require entities to measure
            the cost of employee services received in exchange for stock options
            based on the grant-date fair value of the award, and to recognize
            the cost over the period the employee is required to provide
            services for the award. FAS 123(R) permits entities to use any
            option-pricing model that meets the fair value objective in the
            Statement. The Company will be required to apply FAS 123(R) as of
            the beginning of its first interim period that begins after December
            15, 2005, which will be the quarter ending March 31, 2006.

            FAS 123(R) allows two methods for determining the effects of the
            transition: the modified prospective transition method and the
            modified retrospective method of transition. Under the modified
            prospective transition method, an entity would use the fair value
            based accounting method for all employee awards granted, modified,
            or settled after the effective date. As of the effective date,
            compensation cost related to the nonvested portion of awards
            outstanding as of that date would be based on the grant-date fair
            value of those awards as calculated under the original provisions of
            Statement No. 123; that is, an entity would not remeasure the
            grant-date fair value estimate of the unvested portion of awards
            granted prior to the effective date. An entity will have the further
            option to either apply the Statement to only the quarters in the
            period of adoption and subsequent periods, or apply the Statement to
            all quarters in the fiscal year of adoption. Under the modified
            retrospective method of transition, an entity would revise its
            previously issued financial statements to recognize employee
            compensation cost for prior periods presented in accordance with the
            original provisions of Statement No. 123.

            The Company will elect the modified prospective transition method.
            Under this method, the Company estimates that the adoption of FAS
            123(R) will require the Company to record approximately $981,000 of
            stock compensation expense in the year ended December 31, 2006
            related to employee options issued and outstanding at December 31,
            2005. The impact of this Statement on the Company in fiscal 2007 and
            beyond will depend upon various factors, among them being the
            Company's future compensation strategy. The pro forma compensation
            costs presented in the table above and in prior filings for the
            Company have been calculated using a Black-Scholes option pricing
            model and may not be indicative of amounts which should be expected
            in future years.

        STOCK SPLIT

            The Company declared a two-for-one stock split on November 2, 2005,
            in the form of a common stock dividend. The stock split was payable
            on December 12, 2005 to shareholders of record as of the close of
            business on November 28, 2005. All per share figures included in the
            accompanying financial statements have been adjusted to reflect this
            stock split, as well as the three-for-two stock split which occurred
            in January, 2005.

        COMPREHENSIVE INCOME

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

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.  SECURITIES AVAILABLE FOR SALE

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

<TABLE>
<CAPTION>
                                                   GROSS          GROSS
                                  AMORTIZED     UNREALIZED      UNREALIZED       FAIR
                                     COST          GAINS          LOSSES         VALUE
                                -------------   -----------   -------------   ------------
<S>                             <C>             <C>           <C>             <C>
DECEMBER 31, 2005:
EQUITY SECURITIES               $     690,000   $         -   $           -   $    690,000
MORTGAGE-BACKED SECURITIES         74,846,798        27,040      (1,639,938)    73,233,900
                                -------------   -----------   -------------   ------------
                                $  75,536,798   $    27,040   $  (1,639,938)  $ 73,923,900
                                =============   ===========   =============   ============

December 31, 2004:
Equity securities               $     690,000   $         -   $           -   $    690,000
Mortgage-backed securities         47,553,281       161,284        (476,732)    47,237,833
                                -------------   -----------   -------------   ------------
                                $  48,243,281   $   161,284   $    (476,732)  $ 47,927,833
                                =============   ===========   =============   ============
</TABLE>

         The market value of securities is based on quoted market values and is
         significantly affected by the interest rate environment. At December
         31, 2005, all unrealized losses in the securities portfolio were for
         debt securities. From the December 31, 2005 tables above, 44 out of 53
         securities purchased from U.S. Government sponsored corporations,
         including mortgage-backed securities, contained unrealized losses. The
         amortized cost and fair value of these securities at December 31, 2005
         was $66,924,700 and $65,284,762, respectively. At December 31, 2005, 26
         of the 44 securities with unrealized losses have been in a continuous
         unrealized loss position for less than twelve months, and 18 securities
         with unrealized losses have been in a continuous unrealized loss
         position for more than 12 months. These unrealized losses are
         considered temporary because of acceptable investment grades on each
         security and the repayment sources of principal and interest are
         government backed.

         The following table shows the gross unrealized losses and fair value of
         securities, aggregated by category and length of time that securities
         have been in a continuous unrealized loss position at December 31,
         2005.

<TABLE>
<CAPTION>
                                LESS THAN 12 MONTHS           12 MONTHS OR MORE                    TOTAL
                            ----------------------------   --------------------------   -----------------------------
                                FAIR         UNREALIZED        FAIR        UNREALIZED       FAIR         UNREALIZED
                                VALUE          LOSSES          VALUE         LOSSES         VALUE          LOSSES
                            -------------   ------------   -------------   ----------   -------------   -------------
<S>                         <C>             <C>            <C>             <C>          <C>             <C>
DESCRIPTION OF SECURITIES:
Mortgage-backed
   securities               $  43,274,798   $   (853,476)  $  22,009,964   $ (786,462)  $  65,284,762   $  (1,639,938)
                            =============   ============   =============   ==========   =============   =============
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.  SECURITIES AVAILABLE FOR SALE (CONTINUED)

         At December 31, 2004, all unrealized losses in the securities portfolio
         were for debt securities. From the December 31, 2004 tables above, 20
         out of 36 securities purchased from U.S. Government sponsored
         corporations, including mortgage-backed securities, contained
         unrealized losses. The amortized cost and fair value of these
         securities at December 31, 2004 was $28,998,122 and $28,521,390,
         respectively. At December 31, 2004, 17 of the 20 securities with
         unrealized losses were in a continuous unrealized loss position for
         less than twelve months, and 3 securities with unrealized losses were
         in a continuous unrealized loss position for more than 12 months. These
         unrealized losses were considered temporary because of acceptable
         investment grades on each security and the repayment sources of
         principal and interest are government backed.

         The following table shows the gross unrealized losses and fair value of
         securities, aggregated by category and length of time that securities
         have been in a continuous unrealized loss position at December 31,
         2004.

<TABLE>
<CAPTION>
                                LESS THAN 12 MONTHS           12 MONTHS OR MORE                    TOTAL
                            ----------------------------   --------------------------   -----------------------------
                                FAIR         UNREALIZED        FAIR        UNREALIZED       FAIR         UNREALIZED
                                VALUE          LOSSES          VALUE         LOSSES         VALUE          LOSSES
                            -------------   ------------   -------------   ----------   -------------   -------------
<S>                         <C>             <C>            <C>             <C>          <C>             <C>
DESCRIPTION OF SECURITIES:
Mortgage-backed
   securities               $  25,444,054   $   (401,015)  $   3,077,336   $  (75,717)  $  28,521,390   $    (476,732)
                            =============   ============   =============   ==========   =============   =============
</TABLE>

         Securities with a carrying value of $5,401,855 and $7,755,002 at
         December 31, 2005 and 2004, respectively, were pledged to secure public
         deposits and for other purposes required or permitted by law.

         The Company had no gains and losses on sales of securities for the
         years ended December 31, 2005, 2004, or 2003.

NOTE 3.  LOANS

         The composition of loans is summarized as follows:

<TABLE>
<CAPTION>
                                            DECEMBER 31,
                                 --------------------------------
                                      2005             2004
                                 --------------   ---------------
<S>                              <C>              <C>
Commercial                       $   46,295,635   $    11,180,514
Real estate - construction          384,989,612       214,104,492
Real estate - mortgage              219,374,433       160,100,751
Consumer installment and other        1,426,619           614,249
                                 --------------   ---------------
                                    652,086,299       386,000,006
Deferred loan fees                     (307,839)          (94,224)
Allowance for loan losses            (5,612,162)       (3,433,130)
                                 --------------   ---------------
Loans, net                       $  646,166,298   $   382,472,652
                                 ==============   ===============
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3.  LOANS (CONTINUED)

         Changes in the allowance for loan losses are as follows:

<TABLE>
<CAPTION>
                                                    YEARS ENDED DECEMBER 31,
                                              2005             2004           2003
                                          -------------   -------------   ------------
<S>                                       <C>             <C>             <C>
Balance, beginning of year                $   3,433,130   $   3,572,984   $  1,104,912
  Provision for loan losses                   3,566,212       2,627,348      2,488,209
  Loans charged off                          (1,442,451)     (2,841,802)       (20,137)
  Recoveries of loans previously charged
    off                                          55,271          74,600              -
                                          -------------   -------------   ------------
Balance, end of year                      $   5,612,162   $   3,433,130   $  3,572,984
                                          =============   =============   ============
</TABLE>

         The total recorded investment in impaired loans consisting solely of
         loans on nonaccrual status was $1,651,746 and $779,362 at December 31,
         2005 and 2004, respectively. There were no impaired loans that had
         related allowances determined in accordance with SFAS No. 114,
         Accounting by Creditors for Impairment of a Loan, at December 31, 2005,
         2004 and 2003. The average recorded investment in impaired loans for
         2005, 2004 and 2003 was $1,127,053, $2,138,069 and $273,498,
         respectively. Interest income recognized for cash payments received on
         impaired loans was not material for the years ended December 31, 2005,
         2004 and 2003, respectively.

         There were no loans past due ninety days or more and still accruing
         interest at December 31, 2005, 2004 or 2003.

         In the ordinary course of business, the Company has granted loans to
         certain related parties, including executive officers, directors and
         their affiliates. The interest rates on these loans were substantially
         the same as rates prevailing at the time of the transaction and
         repayment terms are customary for the type of loan. Changes in related
         party loans for the year ended December 31, 2005 are as follows:

<TABLE>
<S>                                    <C>
Balance, beginning of year             $    8,848,894
    Advances                               11,874,263
    Repayments                             (8,796,322)
                                       --------------
Balance, end of year                   $   11,926,835
                                       ==============
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4.  PREMISES AND EQUIPMENT

         Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                   DECEMBER 31,
                                        ---------------------------------
                                             2005               2004
                                        --------------     --------------
<S>                                     <C>                <C>
Land                                    $    4,145,780     $    2,987,514
Building                                     4,770,443          4,548,403
Construction in progress                     1,707,171                  -
Equipment                                    2,626,482          1,999,822
                                        --------------     --------------
                                            13,249,876          9,535,739
Accumulated depreciation                    (1,384,893)          (927,644)
                                        --------------     --------------
                                        $   11,864,983     $    8,608,095
                                        ==============     ==============
</TABLE>

         In 2003, the Company purchased from a director of the Company, an
         administrative building adjacent to its main office building at a cost
         of $2.6 million. In August, 2004 the Company sold to an unrelated party
         the administrative building and related improvements, with a book value
         of $2.9 million, for $5.0 million cash in a sale-leaseback transaction.
         A five year non-renewable operating lease on the building was entered
         into between the Bank and the buyer, with minimum annual lease payments
         of $560,000. The resulting $2.1 million gain on sale was deferred and
         is being recognized over the life of the lease. The unamortized balance
         of $1,512,375 and $1,924,875 of the deferred gain is included in other
         liabilities at December 31, 2005 and 2004, respectively.

         The Company has a loan production office in Lawrenceville, Georgia in
         which office space is leased. A one-year non-renewable operating lease
         was entered into in November, 2004. Extended for a period of six
         months, this lease expires April 11, 2006. In 2005, the Company entered
         into a contract with a business controlled by another director of the
         Company to construct an additional branch banking facility in Duluth
         (Gwinnett County), Georgia. The full-service branch was under
         construction at December 31, 2005, and is scheduled to open in early
         2006, replacing the loan production office. There were also two
         expansion projects under way at December 31, 2005 to build out
         additional space in the above administrative building and the Roswell
         branch. The same business that was building the Duluth office was also
         completing these projects. As of December 31, 2005, the total estimated
         costs to complete these two projects and the Duluth office were
         $790,000.

         The Company has a loan production office in Cumming, Georgia in which
         office space is leased. A one-year non-renewable operating lease was
         entered into in August, 2005. A full-service branch is scheduled to be
         built in 2006.

         Rental expense was $595,575, $202,539, and $0 for the years ended
         December 31, 2005, 2004 and 2003, respectively.

         Future minimum lease payments as of December 31, 2005 are as follows:

<TABLE>
<S>                                                        <C>
2006                                                       $       579,150
2007                                                               560,000
2008                                                               560,000
2009                                                               364,100
                                                           ---------------
                                                           $     2,063,250
                                                           ===============
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5.  DEPOSITS

         The aggregate amount of time deposits in denominations of $100,000 or
         more at December 31, 2005 and 2004 was $135,473,297 and $54,779,254,
         respectively. The scheduled maturities of time deposits at December 31,
         2005 are as follows:

<TABLE>
<S>                                                        <C>
2006                                                       $   441,363,927
2007                                                            32,735,841
2008                                                            10,043,250
2009                                                               112,732
2010                                                             3,886,469
                                                           ---------------
                                                           $   488,142,219
                                                           ===============
</TABLE>

         At December 31, 2005, total time deposits included $150,585,785 of
         brokered deposits, all of which were acquired during 2005. There were
         no brokered deposits at December 31, 2004.

         Overdraft demand deposits reclassified to loans totaled $2,688 and
         $1,160 at December 31, 2005 and 2004, respectively.

NOTE 6.  OTHER BORROWINGS

         Other borrowings consist of the following:

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    --------------------------
                                                                       2005           2004
                                                                    -----------   ------------
<S>                                                                 <C>           <C>
Advance from Federal Home Loan Bank with interest at the
   overnight federal funds rate (2.44% at December 31,
   2004), due December 16, 2005.                                    $         -   $ 15,000,000
Floating rate junior subordinated debentures, interest payable
   quarterly at the three month LIBOR plus 2.85%, due December
    17, 2033.                                                         6,186,000      6,186,000
                                                                    -----------   ------------
                                                                    $ 6,186,000   $ 21,186,000
                                                                    ===========   ============
</TABLE>

         The Company has a line of credit with the Federal Home Loan Bank that
         was $60 million at December 31, 2005. Any advances from the Federal
         Home Loan Bank are collateralized with certain qualifying loans of
         approximately $104 million, mortgage-backed securities of $5.4 million,
         and Federal Home Loan Bank stock of $889,000. The Company also had
         available unused lines of credit with various financial institutions
         totaling $69 million at December 31, 2005. There were no other advances
         outstanding at December 31, 2005 or 2004.

         In 2003, the Company formed a wholly-owned grantor trust to issue
         cumulative trust preferred securities to the public. The grantor trust
         has invested the proceeds of the trust preferred securities in junior
         subordinated debentures of the Company. The trust preferred securities
         can be redeemed prior to maturity at the option of the Company on or
         after December 17, 2008. The sole assets of the grantor trust are the
         Junior Subordinated Deferrable Interest Debentures of the Company (the
         "Debentures") held by the grantor trust. The Debentures have the same
         interest rate (three month LIBOR plus 2.85%, floating) as the trust
         preferred securities. The Company has the right to defer interest
         payments on the Debentures at any time or from time to time for a
         period not exceeding 20 consecutive quarters provided that no extension
         period may extend beyond the stated maturity of the related Debentures.
         During any such extension period, distributions on the trust preferred
         certificates would also be deferred.

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

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7.  STOCK-BASED COMPENSATION

         At December 31, 2005, the Company had two stock-based compensation
         plans, one for directors and one for employees. The director plan
         reserves 585,000 shares of common stock and the employee plan reserves
         1,650,000 shares of common stock for the granting of stock options. The
         options are exercisable in accordance with vesting schedules determined
         by the Board of Directors.

<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                                ------------------------
                                               2005                        2004                    2003
                                   --------------------------   ------------------------   -------------------
                                                 WEIGHTED-                     Weighted-             Weighted-
                                                  AVERAGE                       Average               Average
                                                  EXERCISE                     Exercise              Exercise
                                    SHARES         PRICE         Shares          Price     Shares     Price
                                   ---------   --------------   ---------      ---------   -------   ---------
<S>                                <C>         <C>              <C>            <C>         <C>       <C>
(Employee Plan)
Outstanding at beginning of year   1,313,564   $         2.93     780,624      $    2.45         -   $       -
   Granted (below market)             79,510             2.45     226,940           2.45         -           -
   Granted (at market)               257,000            12.36     306,000           4.50   780,624        2.45
   Exercised                        (241,002)            2.66           -              -         -           -
   Terminated                              -                -           -              -         -           -
                                   ---------                    ---------                  -------
Outstanding at end of year         1,409,072   $         4.67   1,313,564      $    2.93   780,624   $    2.45
                                   =========                    =========                  =======

Options exercisable at year-end      417,352   $         3.40     404,320      $    2.76   171,404   $    2.45
                                   =========                    =========                  =======
Weighted-average fair value of
 options granted during the year               $         6.72                  $    3.28             $     .77

</TABLE>

         Information pertaining to employee options outstanding at December 31,
         2005 is as follows:

<TABLE>
<CAPTION>
                        OPTIONS OUTSTANDING            OPTIONS EXERCISABLE
                 -----------------------------------  ----------------------
                                WEIGHTED-
                                AVERAGE    WEIGHTED-               WEIGHTED-
                               REMAINING    AVERAGE                 AVERAGE
    RANGE OF        NUMBER    CONTRACTUAL   EXERCISE     NUMBER     EXERCISE
EXERCISE PRICES  OUTSTANDING     LIFE        PRICE    EXERCISABLE    PRICE
---------------  -----------  -----------  ---------  -----------  ---------
<S>              <C>          <C>          <C>        <C>          <C>
      $2.45         871,076    4.91 years  $    2.45    275,712    $    2.45
       4.50         280,996    8.63 years       4.50    125,004         4.50
  11.00 - 14.50     257,000    9.63 years      12.36     16,636        11.00
                 -----------                          -----------
                  1,409,072    6.51 years       4.67    417,352         3.40
                 ===========                          ===========
</TABLE>

         The stock option agreement for the Company's President grants him the
         option to purchase shares of the Company's stock equal to five per cent
         of outstanding common stock at a fixed price of $2.45 per share. Shares
         granted under the agreement totaled 79,510, 226,940, and 411,625 for
         the years ended December 31, 2005, 2004 and 2003, respectively. 321,448
         of the options which were granted at the inception of the agreement are
         considered fixed options and vest in various portions through 2006. The
         remaining 396,627 options and any future options granted under the
         agreement are considered variable options and vest and may only be
         exercised on April 15, 2008. In 2005, the agreement was modified to
         change the vesting period and the expiration date of the variable
         options to April 2008 from January 2012. All stock compensation expense
         recognized in the statements of income relate to the variable stock
         options granted under this agreement.

<PAGE>

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7.  STOCK-BASED COMPENSATION (CONTINUED)

<TABLE>
<CAPTION>
                                                                YEARS ENDED DECEMBER 31,
                                                                ------------------------
                                               2005                        2004                    2003
                                   --------------------------   ------------------------   -------------------
                                                 WEIGHTED-                     WEIGHTED-             WEIGHTED-
                                                  AVERAGE                       AVERAGE               AVERAGE
                                                  EXERCISE                     EXERCISE              EXERCISE
                                    SHARES         PRICE         SHARES          PRICE     SHARES     PRICE
                                   ---------   --------------   ---------      ---------   -------   ---------
<S>                                <C>         <C>              <C>            <C>         <C>       <C>
(Director Plan)
Outstanding at beginning of year     495,000   $         2.45     495,000      $    2.45         -   $       -
   Granted (at market)                88,000            11.00           -              -   495,000        2.45
   Exercised                         (45,000)            2.45           -              -         -           -
   Terminated                              -                -           -              -         -           -
                                   ---------                    ---------                  -------
Outstanding at end of year           538,000   $         3.85     495,000      $    2.45   495,000   $    2.45
                                   =========                    =========                  =======

Options exercisable at year-end      538,000   $         3.85     495,000      $    2.45   495,000   $    2.45
                                   =========                    =========                  =======
Weighted-average fair value of
options granted during
the year                                       $         5.80                  $       -             $     .77
</TABLE>

         Information pertaining to director options outstanding at December 31,
         2005 is as follows:

<TABLE>
<CAPTION>
                        OPTIONS OUTSTANDING            OPTIONS EXERCISABLE
                 -----------------------------------  ----------------------
                                WEIGHTED-
                                AVERAGE    WEIGHTED-               WEIGHTED-
                               REMAINING    AVERAGE                 AVERAGE
    RANGE OF        NUMBER    CONTRACTUAL   EXERCISE     NUMBER     EXERCISE
EXERCISE PRICES  OUTSTANDING     LIFE        PRICE    EXERCISABLE    PRICE
---------------  -----------  -----------  ---------  -----------  ---------
<S>              <C>          <C>          <C>        <C>          <C>
     $2.45         450,000     7.16 years  $    2.45    450,000    $    2.45
     11.00          88,000     9.38 years      11.00     88,000        11.00
                   -------                              -------
                   538,000     7.52 years       3.85    538,000         3.85
                   =======                              =======
</TABLE>

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

<TABLE>
<CAPTION>
                                    YEARS ENDED DECEMBER 31,
                                   2005        2004        2003
                                 --------    --------    --------
<S>                              <C>         <C>         <C>
Dividend yield                    0.00%       0.00%       0.00%
Expected life                    10 YEARS    10 YEARS    10 YEARS
Expected volatility               30.40%      0.01%       0.01%
Risk-free interest rate           4.25%       4.52%       3.82%
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.  EMPLOYEE BENEFIT PLAN

         The Company has a 401(k) retirement plan covering substantially all
         employees. Contributions to the plan charged to expense amounted to
         $191,075, $104,132 and $43,450 for the years ended December 31, 2005,
         2004 and 2003, respectively.

NOTE 9.  INCOME TAXES

         Income tax expense consists of the following:

<TABLE>
<CAPTION>
                                                              YEARS ENDED DECEMBER 31,
                                               -----------------------------------------------------
                                                     2005                 2004               2003
                                               --------------       -------------     --------------
<S>                                            <C>                  <C>               <C>
Current                                        $    5,010,145       $   2,307,329     $    1,623,688
Deferred                                           (1,321,872)           (531,655)          (781,612)
Change in valuation allowance                               -                   -           (379,699)
                                               --------------       -------------     --------------
               Income tax expense              $    3,688,273       $   1,775,674     $      462,377
                                               ==============       =============     ==============
</TABLE>

         The Company's income tax differs from the amounts computed by applying
         the federal income tax statutory rates to loss before income taxes. A
         reconciliation of the differences is as follows:

<TABLE>
<CAPTION>
                                                              YEARS ENDED DECEMBER 31,
                                                     2005                 2004             2003
                                               --------------       -------------     --------------
<S>                                            <C>                  <C>               <C>
Income tax at statutory federal rate           $    3,404,056       $   1,627,939     $      767,139
   State taxes                                        319,025             144,432             70,257
   Change in valuation allowance                            -                   -           (379,699)
   Other items                                        (34,808)              3,303              4,680
                                               --------------       -------------     --------------
Income tax expense                             $    3,688,273       $   1,775,674     $      462,377
                                               ==============       =============     ==============
</TABLE>

         The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                               ---------------------------------
                                                    2005                2004
                                               --------------       ------------
<S>                                            <C>                  <C>
Deferred tax assets:
   Preopening and organization expenses        $           --       $     44,985
   Deferred gain on sale-leaseback                    584,975            726,368
   Deferred loan fees                                 119,070             35,556
   Loan loss reserves                               1,808,175            902,494
   Stock compensation                                 716,617            261,586
   Nonaccrual loan interest                            52,041              1,721
   Securities available for sale                      596,430            116,700
                                               --------------       ------------
                                                    3,877,308          2,089,410
                                               --------------       ------------

Deferred tax liabilities:
   Depreciation                                       259,057            272,761
                                               --------------       ------------
Net deferred taxes                             $    3,618,251       $  1,816,649
                                               ==============       ============
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10.  EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER 31,
                                                    2005            2004           2003
                                               --------------   ------------   ------------
<S>                                            <C>              <C>            <C>
Basic Earnings Per Share:
   Weighted average common shares outstanding      14,050,847     10,809,936      7,717,584
                                               ==============   ============   ============

   Net income                                  $    6,322,352   $  3,012,382   $  1,793,913
                                               ==============   ============   ============

   Basic earnings per share                    $         0.45   $       0.28   $       0.23
                                               ==============   ============   ============

Diluted Earnings Per Share:
   Weighted average common shares outstanding      14,050,847     10,809,936      7,717,584
   Net effect of the assumed exercise of stock
    options based on the treasury stock method
      using average market prices for the year        910,700        742,740        232,992
                                               --------------   ------------   ------------
   Total weighted average common shares and
      common stock equivalents outstanding         14,961,547     11,552,676      7,950,576
                                               ==============   ============   ============

   Net income                                  $    6,322,352   $  3,012,382   $  1,793,913
                                               ==============   ============   ============

   Diluted earnings per share                  $         0.42   $       0.26   $       0.23
                                               ==============   ============   ============
</TABLE>

NOTE 11. COMMITMENTS AND CONTINGENCIES

         LOAN COMMITMENTS

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

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

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                               ----------------------------------
                                                     2005               2004
                                               ----------------    --------------
<S>                                            <C>                 <C>
Commitments to extend credit                   $    220,048,484    $   82,948,327
Standby letters of credit                             1,396,042         1,689,625
                                               ----------------    --------------
                                               $    221,444,526    $   84,637,952
                                               ================    ==============
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11. COMMITMENTS AND CONTINGENCIES (CONTINUED)

            Commitments to extend credit are agreements to lend to a customer as
            long as there is no violation of any condition established in the
            contract. 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 amount of collateral obtained, if deemed necessary
            by the Company upon extension of credit, is based on management's
            credit evaluation of the party. Collateral held varies, but may
            include accounts receivable, inventory, property and equipment,
            residential real estate and income-producing commercial properties.

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

            At December 31, 2005 and 2004, the carrying amount of liabilities
            related to the Company's obligation to perform under financial
            standby letters of credit was insignificant. The Company has not
            been required to perform on any financial standby letters of credit,
            and the Company has not incurred any losses on financial standby
            letters of credit for the years ended December 31, 2005 and 2004.

         EMPLOYMENT AGREEMENTS

            The Company has an employment agreement with its president with an
            initial term of five years that requires an annual salary of
            $160,000. The president's annual salary as of December 31, 2005 is
            $360,000. The agreement is automatically extended for an additional
            year on the initial termination date and each anniversary
            thereafter. The president is entitled to receive an annual salary
            increase and is eligible for incentives and performance bonuses as
            may be determined by the Company's Board of Directors.

            The Company also has an employment agreement with one other officer
            calling for an annual salary of $100,000. The officer's annual
            salary as of December 31, 2005 was $135,000. This agreement has the
            same annual salary increase, incentive and performance bonus
            provisions as does the president's employment agreement.

         CONTINGENCIES

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

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12. CONCENTRATIONS OF CREDIT

            The Company originates primarily commercial, commercial real estate,
            residential real estate, and consumer loans to customers in Fulton
            County and surrounding counties. The ability of the majority of the
            Company's customers to honor their contractual loan obligations is
            dependent on the economy in these areas.

            Ninety-three percent of the Company's loan portfolio is secured by
            real estate, of which a substantial portion is secured by real
            estate in the Company's primary market area. Accordingly, the
            ultimate collectibility of the loan portfolio is susceptible to
            changes in market conditions in the Company's primary market area.

            The Company, as a matter of policy, does not generally extend credit
            to any single borrower or group of related borrowers in excess of
            25% of the Bank's statutory capital, or approximately $15,000,000.

NOTE 13. REGULATORY MATTERS

            The Bank is subject to certain restrictions on the amount of
            dividends that may be declared without prior regulatory approval. At
            December 31, 2005, approximately $3,756,000 of dividends could be
            declared without regulatory approval.

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

            Quantitative measures established by regulation to ensure capital
            adequacy require the Company and Bank to maintain minimum amounts
            and ratios of Total and Tier I capital to risk-weighted assets, as
            defined, and of Tier I capital to average assets, as defined.
            Management believes, as of December 31, 2005 and 2004, the Company
            and Bank met all capital adequacy requirements to which they are
            subject.

            As of December 31, 2005, the most recent notification from the
            Federal Deposit Insurance Corporation categorized the Bank as well
            capitalized under the regulatory framework for prompt corrective
            action. To be categorized as well capitalized, the Bank must
            maintain minimum Total risk-based, Tier I risk-based, and Tier I
            leverage ratios as set forth in the following table. There are no
            conditions or events since that notification that management
            believes have changed the Bank's category. Prompt corrective action
            provisions are not applicable to bank holding companies.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13. REGULATORY MATTERS (CONTINUED)

         The Company and Bank's actual capital amounts and ratios are presented
         in the following table:

<TABLE>
<CAPTION>
                                                                                           TO BE WELL
                                                                   FOR CAPITAL          CAPITALIZED UNDER
                                                                     ADEQUACY           PROMPT CORRECTIVE
                                                ACTUAL               PURPOSES           ACTION PROVISIONS
                                         ------------------    --------------------    ------------------
                                          AMOUNT      RATIO      AMOUNT     RATIO        AMOUNT     RATIO
                                         ---------    -----    ---------    -------    ----------   -----
                                                             (DOLLARS IN THOUSANDS)
                                         ----------------------------------------------------------------
<S>                                      <C>          <C>      <C>          <C>        <C>          <C>
DECEMBER 31, 2005:

  TOTAL CAPITAL TO RISK WEIGHTED ASSETS
      CONSOLIDATED                       $  78,747    10.60%   $  59,408       8%      $   74,260      10%
      BANK                               $  76,655    10.35%   $  59,247       8%      $   74,059      10%
  TIER I CAPITAL TO RISK WEIGHTED
   ASSETS
      CONSOLIDATED                       $  73,135     9.85%   $  29,704       4%      $   44,556       6%
      BANK                               $  71,044     9.59%   $  29,623       4%      $   44,435       6%
  TIER I CAPITAL TO AVERAGE ASSETS
      CONSOLIDATED                       $  73,135    10.06%   $  29,082       4%      $   36,352       5%
      BANK                               $  71,044     9.80%   $  28,999       4%      $   36,248       5%

December 31, 2004:

  Total Capital to Risk Weighted Assets
      Consolidated                       $  53,186    12.50%   $  34,029       8%      $   42,537      10%
      Bank                               $  51,615    12.18%   $  33,909       8%      $   42,387      10%
  Tier I Capital to Risk Weighted
   Assets
      Consolidated                       $  49,753    11.70%   $  17,015       4%      $   25,522       6%
      Bank                               $  48,182    11.37%   $  16,955       4%      $   25,432       6%
  Tier I Capital to Average Assets
      Consolidated                       $  49,753    11.62%   $  17,121       4%      $   21,401       5%
      Bank                               $  48,182    11.30%   $  17,052       4%      $   21,315       5%
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

         The following methods and assumptions were used by the Company in
         estimating the fair value of its financial instruments.

         CASH, DUE FROM BANKS AND INTEREST-BEARING DEPOSITS IN BANKS: The
         carrying amounts of cash, due from banks and interest-bearing deposits
         in banks approximate fair values.

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

         LOANS: The carrying amount of variable-rate loans that reprice
         frequently and have no significant change in credit risk approximates
         fair value. The fair value of fixed-rate loans is estimated based on
         discounted contractual cash flows, using interest rates currently being
         offered for loans with similar terms to borrowers with similar credit
         quality. The fair value of impaired loans is estimated based on
         discounted contractual cash flows or underlying collateral values,
         where applicable.

         DEPOSITS: The carrying amount of demand deposits, savings deposits, and
         variable-rate certificates of deposit approximates fair value. The fair
         value of fixed-rate certificates of deposit is estimated based on
         discounted contractual cash flows using interest rates currently being
         offered for certificates of similar maturities.

         FEDERAL FUNDS PURCHASED AND OTHER BORROWINGS: The carrying amount of
         variable rate borrowings, federal funds purchased, and securities sold
         under repurchase agreements approximate fair value. The fair value of
         fixed rate other borrowings are estimated based on discounted
         contractual cash flows using the current incremental borrowing rates
         for similar type borrowing arrangements.

         ACCRUED INTEREST: The carrying amounts of accrued interest approximate
         their fair values.

         OFF-BALANCE SHEET INSTRUMENTS: The carrying amount of commitments to
         extend credit and standby letters of credit approximates fair value.
         The carrying amount of the off-balance sheet financial instruments is
         based on fees charged to enter into such agreements.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

         The carrying amount and estimated fair value of the Company's financial
         instruments were as follows:

<TABLE>
<CAPTION>
                                           DECEMBER 31, 2005                    December 31, 2004
                                   --------------------------------   ----------------------------------
                                      CARRYING           FAIR             Carrying            Fair
                                       AMOUNT            VALUE             Amount             Value
                                   --------------   ---------------   ----------------   ---------------
<S>                                <C>              <C>               <C>                <C>
Financial assets:
   Cash, due from banks and
   interest- bearing deposits
    in banks                       $    5,135,081   $     5,135,081   $      1,562,673   $     1,562,673
   Federal funds sold                   6,243,000         6,243,000                  -                 -
   Securities                          74,813,200        74,813,200         49,160,433        49,160,433
   Loans                              646,166,298       645,746,165        382,472,652       380,047,054
   Accrued interest receivable          3,937,756         3,937,756          1,823,693         1,823,693

Financial liabilities:
   Deposits                           674,443,757       674,056,559        373,272,251       373,840,499
   Federal funds purchased                      -                 -          4,279,000         4,279,000
   Other borrowings                     6,186,000         6,186,000         21,186,000        21,186,000
   Accrued interest payable             2,539,311         2,539,311          1,299,366         1,299,366
</TABLE>

NOTE 15. SUPPLEMENTAL FINANCIAL DATA

         Components of other operating expenses in excess of 1% of revenue are
         as follows:

<TABLE>
<CAPTION>
                                                YEARS ENDED DECEMBER 31,
                                   --------------------------------------------------
                                        2005             2004              2003
                                   --------------   ---------------   ---------------
<S>                                <C>              <C>               <C>
Board of Director fees             $      540,570   $       379,500   $       122,000
Data processing                           573,864           368,421           279,425
Consulting fees                           462,494           120,747           200,044
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16. PARENT COMPANY FINANCIAL INFORMATION

         The following information presents the condensed balance sheets as of
         December 31, 2005 and 2004 and statements of income and cash flows of
         Integrity Bancshares, Inc. for each of the years in the three-year
         period ended December 31, 2005.

                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                     2005              2004
                                                                --------------    ---------------
<S>                                                             <C>               <C>
ASSETS
   Cash                                                         $       55,200    $       227,321
   Interest-bearing deposits in banks                                   53,470             53,129
   Investment in subsidiary                                         70,027,935         47,983,460
   Securities available for sale                                       690,000            690,000
   Other assets                                                      1,496,253            800,716
                                                                --------------    ---------------

              TOTAL ASSETS                                      $   72,322,858    $    49,754,626
                                                                ==============    ===============

LIABILITIES

   Other borrowings                                             $    6,186,000    $     6,186,000
   Other liabilities                                                    17,674             13,800
                                                                --------------    ---------------

              TOTAL LIABILITIES                                      6,203,674          6,199,800
                                                                --------------    ---------------

STOCKHOLDERS' EQUITY                                                66,119,184         43,554,826
                                                                --------------    ---------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $   72,322,858    $    49,754,626
                                                                ==============    ===============
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16. PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                          2005              2004              2003
                                                    ---------------     -------------    --------------
<S>                                                 <C>                 <C>              <C>
INCOME:
    DIVIDEND INCOME FROM SUBSIDIARY                 $       250,000     $           -    $            -
    INTEREST INCOME                                          11,437             8,817             1,419
                                                    ---------------     -------------    --------------
  TOTAL INCOME                                              261,437             8,817             1,419
                                                    ---------------     -------------    --------------

EXPENSES:
     STOCK COMPENSATION                                   1,159,512           602,259            90,945
     INTEREST                                               401,195           288,675            34,232
     OTHER                                                  402,300           212,521            83,079
                                                    ---------------     -------------    --------------
  TOTAL EXPENSES                                          1,963,007         1,103,455           208,256
                                                    ---------------     -------------    --------------

           LOSS BEFORE INCOME TAX BENEFITS AND
            UNDISTRIBUTED INCOME OF SUBSIDIARY           (1,701,570)       (1,094,638)         (206,837)

     INCOME TAX BENEFITS                                   (761,727)         (413,070)         (118,110)
                                                    ---------------     -------------    --------------

           LOSS BEFORE EQUITY IN UNDISTRIBUTED

            INCOME OF SUBSIDIARY                           (939,843)         (681,568)          (88,727)

     EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARY         7,262,195         3,693,950         1,882,640
                                                    ---------------     -------------    --------------

           NET INCOME                               $     6,322,352     $   3,012,382    $    1,793,913
                                                    ===============     =============    ==============
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16. PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                     2005               2004              2003
                                                                ---------------   ---------------   ---------------
<S>                                                             <C>               <C>               <C>
OPERATING ACTIVITIES
   Net income                                                   $     6,322,352   $     3,012,382   $     1,793,913
   Adjustments to reconcile net income to net
      cash used in operating activities:
   Equity in undistributed income of subsidiary                      (7,262,195)       (3,693,950)       (1,882,640)
   Stock compensation                                                 1,159,512           602,259            90,945
   Deferred income taxes                                               (441,659)         (211,015)          (63,943)
   (Increase) decrease in income tax receivable                        (118,012)         (250,496)           48,440
   Net other operating activities                                        23,226            24,433          (148,334)
                                                                ---------------   ---------------   ---------------

         NET CASH USED IN OPERATING ACTIVITIES                         (316,776)         (516,387)         (161,619)
                                                                ---------------   ---------------   ---------------

INVESTING ACTIVITIES

   Net (increase) decrease in interest-bearing deposits in                 (341)             (321)          305,128
   banks
   Investment in subsidiary                                         (15,600,000)      (20,000,000)      (10,100,000)
   Purchase of securities available for sale                                  -                 -          (690,000)
                                                                ---------------   ---------------   ---------------

         NET CASH USED IN INVESTING ACTIVITIES                      (15,600,341)      (20,000,321)      (10,484,872)
                                                                ---------------   ---------------   ---------------

FINANCING ACTIVITIES

   Net proceeds from other borrowings                                         -                 -         6,000,000
   Proceeds from exercise of stock options                              750,645                 -                 -
   Net proceeds from sale of common stock                            14,994,351        20,309,609         4,563,376
   Purchase of treasury stock                                                 -                 -          (168,972)
                                                                ---------------   ---------------   ---------------

         NET CASH PROVIDED BY FINANCING ACTIVITIES                   15,744,996        20,309,609        10,394,404
                                                                ---------------   ---------------   ---------------

Net decrease in cash                                                   (172,121)         (207,099)         (252,087)

Cash at beginning of year                                               227,321           434,420           686,507
                                                                ---------------   ---------------   ---------------

Cash at end of year                                             $        55,200   $       227,321   $       434,420
                                                                ===============   ===============   ===============
</TABLE>