EXHIBIT 13.1

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                         CONSOLIDATED FINANCIAL REPORT

                               DECEMBER 31, 2003

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


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, 2003 and 2002, and
the related consolidated statements of income, comprehensive income,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.


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


            In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Integrity Bancshares, Inc. and subsidiary as of December 31, 2003 and 2002, and
the results of their operations and their cash flows for the years then ended,
in conformity with accounting principles generally accepted in the United States
of America.

                                                /s/ MAULDIN & JENKINS, LLC
                                               -------------------------------

Atlanta, Georgia
February 27, 2004

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                       ASSETS                             2003             2002
                       ------
                                                     ---------------  ---------------

<S>                                                  <C>              <C>
Cash and due from banks                              $    1,693,155   $    1,242,074
Interest-bearing deposits in banks                          113,954          529,975
Federal funds sold                                        2,439,000                -
Securities available for sale                            27,202,502       10,400,395
Restricted equity securities, at cost                       650,000          350,000

Loans                                                   238,918,989      128,008,196
Less allowance for loan losses                            3,572,984        1,104,912
                                                     ---------------  ---------------
          Loans, net                                    235,346,005      126,903,284

Premises and equipment                                    9,599,777        4,266,025
Other assets                                              2,703,802          672,332
                                                     ---------------  ---------------

          TOTAL ASSETS                               $  279,748,195   $  144,364,085
                                                     ===============  ===============

       LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Deposits:
    Noninterest-bearing                              $    9,141,024   $    4,654,407
    Interest-bearing                                    222,636,698      115,478,893
                                                     ---------------  ---------------
           Total deposits                               231,777,722      120,133,300
    Federal funds purchased                              10,000,000        3,115,000
    Other borrowings                                     16,000,000        7,000,000
    Other liabilities                                     2,078,203          297,186
                                                     ---------------  ---------------
          TOTAL LIABILITIES                             259,855,925      130,545,486
                                                     ---------------  ---------------

Commitments and contingencies

Stockholders' equity
    Common stock, no par value, 10,000,000 shares
      authorized; 2,744,157 and 2,142,987 shares
      issued, respectively                               19,020,303       14,534,954
    Retained earnings (deficit)                             809,021         (984,892)
    Accumulated other comprehensive income                   62,946          268,537
                                                     ---------------  ---------------

          TOTAL STOCKHOLDERS' EQUITY                     19,892,270       13,818,599
                                                     ---------------  ---------------

          TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY                                               $  279,748,195   $  144,364,085
                                                     ===============  ===============
</TABLE>


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                         2003             2002
                                                   -----------------  --------------

INTEREST INCOME:
<S>                                                <C>                <C>
    Loans, including fees                          $     13,252,859   $   6,133,986
    Taxable securities                                      878,336         652,314
    Federal funds sold                                       49,201          25,788
    Deposits in banks                                         9,736           2,819
                                                   -----------------  --------------
          TOTAL INTEREST INCOME                          14,190,132       6,814,907
                                                   -----------------  --------------

INTEREST EXPENSE:
    Deposits                                              4,781,147       2,762,442
    Federal funds purchased, securities sold
      under repurchase agreements and other
      borrowings                                            183,465         121,336
                                                   -----------------  --------------
          TOTAL INTEREST EXPENSE                          4,964,612       2,883,778
                                                   -----------------  --------------

          NET INTEREST INCOME                             9,225,520       3,931,129
PROVISION FOR LOAN LOSSES                                 2,488,209         712,658
                                                   -----------------  --------------
          NET INTEREST INCOME AFTER PROVISION
             FOR LOAN LOSSES                              6,737,311       3,218,471
                                                   -----------------  --------------

OTHER INCOME:
    Service charges on deposit accounts                      63,858          45,289
    Other operating income                                  125,740          42,228
                                                   -----------------  --------------
          TOTAL OTHER INCOME                                189,598          87,517
                                                   -----------------  --------------

OTHER EXPENSES:
    Salaries and employee benefits                        2,522,914       1,443,942
    Equipment and occupancy expenses                        584,236         322,242
    Other operating expenses                              1,563,469         715,080
                                                   -----------------  --------------
          TOTAL OTHER EXPENSES                            4,670,619       2,481,264
                                                   -----------------  --------------

          INCOME BEFORE INCOME TAXES                      2,256,290         824,724

INCOME TAXES                                                462,377               -
                                                   -----------------  --------------

          NET INCOME                               $      1,793,913   $     824,724
                                                   =================  ==============



BASIC EARNINGS PER SHARE                           $           0.70   $        0.43
                                                   =================  ==============


DILUTED EARNINGS PER SHARE                         $           0.68   $        0.43
                                                   =================  ==============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                               INTEGRITY BANCSHARES, INC.
                                     AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                         YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                    2003            2002
                                                                 ------------   ------------

<S>                                                              <C>            <C>
NET INCOME                                                       $  1,793,913   $    824,724

OTHER COMPREHENSIVE INCOME:

    Unrealized gains (losses) on securities available-for-sale:

        Net unrealized holding gains (losses) arising during
          period, net of tax of $38,580 and $0, respectively         (205,591)       258,101
                                                                 ------------   ------------


COMPREHENSIVE INCOME                                             $  1,588,322   $  1,082,825
                                                                 ============   ============

</TABLE>


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                   INTEGRITY BANCSHARES, INC.
                         AND SUBSIDIARY

         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
             YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>

                                                                                                          ACCUMULATED
                                                     COMMON STOCK                                         OTHER
                                           ------------------------------   RETAINED EARNINGS             COMPREHENSIVE
                                             SHARES      AMOUNT PAID-IN     (DEFICIT)                     INCOME
                                           -----------  -----------------  ------------------------    ---------------------

<S>                                         <C>         <C>                <C>                         <C>
BALANCE, DECEMBER 31, 2001                  1,072,029   $     10,623,384   $            (1,809,616)    $             10,436
    Net income                                      -                  -                   824,724                        -
    Issuance of common stock                  356,629          3,922,919                         -                        -
    Stock issue costs                               -            (11,349)                        -                        -
    Sale of treasury stock                          -                  -                         -                        -
    Other comprehensive income                      -                  -                         -                  258,101
                                           -----------  -----------------  ------------------------    ---------------------
BALANCE, DECEMBER 31, 2002                  1,428,658         14,534,954                  (984,892)                 268,537
    Net income                                      -                                    1,793,913                        -
    Issuance of common stock                  414,866          4,563,538                         -                        -
    Stock compensation expense                      -             90,945                         -                        -
    Purchase and retirement of treasury
stock                                         (14,081)          (168,972)                        -                        -
    3-for-2 common stock split                914,714               (162)                        -                        -
    Other comprehensive loss                        -                  -                         -                 (205,591)
                                           -----------  -----------------  ------------------------    ---------------------
BALANCE, DECEMBER 31, 2003                  2,744,157   $     19,020,303   $               809,021     $             62,946
                                           ===========  =================  ========================    =====================

<CAPTION>



                                                     TREASURY STOCK                       TOTAL
                                           --------------------------------               EQUITY
                                            SHARES          COST                       STOCKHOLDERS'
                                           ---------       -----------------       ----------------------

<S>                                           <C>          <C>                     <C>
BALANCE, DECEMBER 31, 2001                    6,795        $        (74,745)       $           8,749,459
    Net income                                    -                       -                      824,724
    Issuance of common stock                      -                       -                    3,922,919
    Stock issue costs                             -                       -                      (11,349)
    Sale of treasury stock                   (6,795)                 74,745                       74,745
    Other comprehensive income                    -                       -                      258,101
                                           ---------       -----------------       ----------------------
BALANCE, DECEMBER 31, 2002                        -                       -                   13,818,599
    Net income                                    -                       -                    1,793,913
    Issuance of common stock                      -                       -                    4,563,538
    Stock compensation expense                    -                       -                       90,945
    Purchase and retirement of treasury
stock                                             -                       -                     (168,972)
    3-for-2 common stock split                    -                       -                         (162)
    Other comprehensive loss                      -                       -                     (205,591)
                                           ---------       -----------------       ----------------------
BALANCE, DECEMBER 31, 2003                        -        $              -        $          19,892,270
                                           =========       =================       ======================

</TABLE>




SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

                           INTEGRITY BANCSHARES, INC.
                                 AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                             2003              2002
                                                        ----------------  ---------------
OPERATING ACTIVITIES
<S>                                                     <C>               <C>
    Net income                                          $     1,793,913   $      824,724
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation and software amortization                  316,528          178,796
        Provision for loan losses                             2,488,209          712,658
        Stock compensation                                       90,945                -
        Deferred income taxes                                (1,161,311)          (6,983)
        Increase in interest receivable                        (441,639)        (337,471)
        Increase in interest payable                            122,865           88,490
        Increase in income taxes payable                      1,609,705            6,983
        Net other operating activities                         (448,532)         (14,976)
                                                        ----------------  ---------------

              Net cash provided by operating activities       4,370,683        1,452,221
                                                        ----------------  ---------------

INVESTING ACTIVITIES
    Net (increase) decrease in interest-bearing
      deposits in banks                                         416,021         (358,473)
    Net increase in federal funds sold                       (2,439,000)               -
    Proceeds from maturities of securities
      available-for-sale                                     18,199,327        4,667,036
    Purchases of securities available-for-sale              (35,168,445)      (5,010,237)
    Purchases of restricted equity securities                  (300,000)        (100,000)
    Net increase in loans                                  (110,930,930)     (84,045,389)
    Purchase of premises and equipment                       (5,620,401)      (1,219,488)
                                                        ----------------  ---------------

            Net cash used in investing activities          (135,843,428)     (86,066,551)
                                                        ----------------  ---------------

FINANCING ACTIVITIES
    Net increase in deposits                                111,644,422       78,890,952
    Net increase in federal funds purchased                   6,885,000        1,316,000
    Net decrease in securities sold under repurchase
      agreements                                                      -       (1,000,000)
    Net proceeds from other borrowings                        9,000,000        2,000,000
    Net proceeds from sale of common stock                    4,563,376        3,911,570
    Sale (purchase) of treasury stock                          (168,972)          74,745
                                                        ----------------  ---------------

            Net cash provided by financing activities       131,923,826       85,193,267
                                                        ----------------  ---------------

Net increase in cash and due from banks                         451,081          578,937

Cash and due from banks at beginning of year                  1,242,074          663,137
                                                        ----------------  ---------------

Cash and due from banks at end of year                  $     1,693,155   $    1,242,074
                                                        ================  ===============

SUPPLEMENTAL DISCLOSURE
    Cash paid for:
         Interest                                       $     4,841,747   $    2,795,288

         Income taxes                                   $        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 a
            branch located in Roswell, Georgia. The Bank provides a full range
            of banking services in its primary market area of Fulton County and
            the surrounding counties.

            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, 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.

<PAGE>

            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
            $352,000 and $228,000 at December 31, 2003 and 2002, respectively.

            SECURITIES

            Debt securities that management has the positive intent and ability
            to hold to maturity are classified as held to maturity and recorded
            at amortized cost. Securities not classified as held to maturity 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.

<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            SECURITIES (CONTINUED)

            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.

            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 costs incurred for loans are deferred
            and recognized in income 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>

            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. Losses are recognized at the
            time the loan is identified as held for sale and the loan's carrying
            value exceeds its fair value. 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, 2003 or 2002, 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.

<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            ALLOWANCE FOR LOAN LOSSES (CONTINUED)

            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.

            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.

                        Building                40  years
                        Equipment               3-7 years

<PAGE>

            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 $202,870 and $0 in other real estate owned at December
            31, 2003 and 2002, respectively.

            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.

<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            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.

            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 $90,945
            and $0 for the years ended December 31, 2003 and 2002, respectively.
            Options granted to the Company's president are considered variable
            because the number of options granted is based on the outstanding
            number of shares of common stock multiplied by 5%.

            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.

                                                         YEARS ENDED DECEMBER
                                                                          31,
                                                         ----------------------
                                                            2003        2002
                                                         -----------  ---------

            Net income, as reported                      $ 1,793,913  $ 824,724
            Deduct: Total stock-based employee
            compensation
                 expense determined under fair value
                 based  method for all awards, net of
                 related tax effects                        (228,377)       -
                                                         -----------  ---------
            Pro forma net income                         $ 1,565,536  $ 824,724
                                                         ===========  =========
            Earnings per share:
              Basic - as reported                        $      0.70  $    0.43
                                                         ===========  =========
              Basic - pro forma                          $      0.61  $    0.43
                                                         ===========  =========
              Diluted - as reported                      $      0.68  $    0.43
                                                         ===========  =========
              Diluted - pro forma                        $      0.59  $    0.43
                                                         ===========  =========

<PAGE>

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            RECENT ACCOUNTING STANDARDS

            In November 2002, the Financial Accounting Standards Board ("FASB")
            issued Interpretation No. 45, "Guarantor's Accounting and Disclosure
            Requirements for Guarantees, Including Indirect Guarantees of
            Indebtedness of Others, an interpretation of FASB Statements No. 5,
            57, and 107 and a rescission of FASB Interpretation No. 34". The
            interpretation elaborates on the disclosures to be made by a
            guarantor in its interim and annual financial statements about its
            obligations under guarantees issued. It also clarifies that a
            guarantor is required to recognize, at inception of a guarantee, a
            liability for the fair value of the obligation undertaken in issuing
            a guarantee. The initial recognition and initial measurement
            provisions of the interpretation are applicable to guarantees issued
            or modified after December 31, 2002. The disclosure requirements in
            the interpretation are effective for financial statements of interim
            or annual periods ending after December 15, 2002. The adoption of
            the interpretation did not have a material effect on the Company's
            financial condition or results of operations.

            In December 2002, the FASB issued Statement No. 148, "Accounting for
            Stock-Based Compensation - Transition and Disclosure, an amendment
            of FASB Statement No. 123". The Statement amends Statement No. 123,
            "Accounting for Stock-Based Compensation", to provide alternative
            methods of transition for a voluntary change to the fair value
            method of accounting for stock-based employee compensation. In
            addition, the statement amends the disclosure requirements of
            Statement No. 123 to require prominent disclosures in both annual
            and interim financial statements about the method of accounting for
            stock-based compensation and the effect on reported results of
            operations. The disclosure requirements of the statement are
            required for fiscal years ending after December 15, 2002 and interim
            periods beginning after December 15, 2002. The Company has not
            adopted Statement No. 123 for accounting for stock-based
            compensation as of December 31, 2003; however all required
            disclosures of Statement No. 148 are included above under the
            heading "Stock-Based Compensation".

            In January 2003, the FASB issued Interpretation No. 46,
            "Consolidation of Variable Interest Entities, an interpretation of
            ARB No. 51", and on December 24, 2003, the FASB issued FASB
            Interpretation No. 46 (Revised December 2003), "Consolidation of
            Variable Interest Entities" which replaced FIN 46. The
            interpretation addresses consolidation by business enterprises of
            variable interest entities. A variable interest entity is defined as
            an entity subject to consolidation according to the provisions of
            the interpretation. The revised interpretation provided for special
            effective dates for entities that had fully or partially applied the
            original interpretation as of December 24, 2003. Otherwise,
            application of the interpretation is required in financial
            statements of public entities that have interests in special-purpose
            entities, or SPEs, for periods ending after December 15, 2003.
            Application by public entities, other than small business issuers,
            for all other types of variable interest entities (i.e., non-SPEs)
            is required in financial statements for periods ending after March
            15, 2004. Application by small business issuers to variable interest
            entities other than SPEs is required at various dates in 2004 and
            2005. The Company has determined that the revised provisions require
            deconsolidation of subsidiary trusts which issued trust preferred
            securities. The Company plans to adopt these revised provisions in
            the first quarter of 2004. The interpretations did not have a
            material effect on the Company's financial condition or results of
            operations.

<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            RECENT ACCOUNTING STANDARDS (CONTINUED)

            In May 2003, the FASB issued Statement No. 150, "Accounting for
            Certain Financial Instruments with Characteristics of both
            Liabilities and Equity". The statement establishes standards for how
            an issuer classifies and measures certain financial instruments with
            characteristics of both liabilities and equity. The statement
            requires that an issuer classify a financial instrument that is
            within its scope as a liability. Many of those instruments were
            previously classified as equity. The statement is effective for
            financial instruments entered into or modified after May 31, 2003,
            and otherwise is effective at the beginning of the first interim
            period beginning after June 15, 2003. The adoption of the statement
            did not have a material effect on the Company's financial condition
            or results of operations.

            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.


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, 2003:
EQUITY SECURITIES      $     690,000   $          --    $          --    $     690,000
MORTGAGE-BACKED           26,410,976         212,892         (111,366)      26,512,502
SECURITIES
                       -------------   -------------    -------------    -------------
                       $  27,100,976   $     212,892    $    (111,366)   $  27,202,502
                       =============   =============    =============    =============
  December 31, 2002:
  Mortgage-backed
  securities           $  10,131,858   $     268,537    $          --    $  10,400,395
                       =============   =============    =============    =============
</TABLE>

            In 2003, the FASB Emerging Issues Task Force released Issue 03-01,
            The Meaning of Other-Than-Temporary Impairment and Its Application
            to Certain Investments. The issue requires disclosure of certain
            information about other than temporary impairments in the market
            value of securities. The market value of securities is based on
            quoted market values and is significantly affected by the

<PAGE>

            interest rate environment. At December 31, 2003, all unrealized
            losses in the securities portfolio were for debt securities. From
            the December 31, 2003 tables above, 7 out of 28 securities purchased
            from U.S. Government agencies and Government sponsored corporations,
            including mortgage-backed securities, contained unrealized losses.
            The amortized cost and fair value of these securities at December
            31, 2003 was $9,221,258 and $9,109,892, respectively. All securities
            with an unrealized loss at December 31, 2003 have been in a
            continuous unrealized loss position for less than twelve 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.

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.     SECURITIES (CONTINUED)

            Securities with a carrying value of $2,604,294 and $6,837,618 at
            December 31, 2003 and 2002, 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, 2003 or 2002.


NOTE 3.     LOANS

            The composition of loans is summarized as follows:

                                                        DECEMBER 31,
                                             ------------------------------
                                                 2003              2002
                                             -------------    -------------

            Commercial                       $  16,071,000    $  11,751,000
            Real estate - construction         123,882,000       51,715,000
            Real estate - mortgage              98,401,000       63,940,000
            Consumer installment and other         723,417          855,812
                                             -------------    -------------
                                               239,077,417      128,261,812
            Deferred loan fees                    (158,428)        (253,616)
            Allowance for loan losses           (3,572,984)      (1,104,912)

                                             -------------    -------------
            Loans, net                       $ 235,346,005    $ 126,903,284
                                             =============    =============

            Changes in the allowance for loan losses are as follows:

<TABLE>
<CAPTION>
                                                        YEARS ENDED DECEMBER 31,
                                                       --------------------------
                                                          2003           2002
                                                       -----------    -----------

<S>                                                    <C>            <C>
            Balance, beginning of year                 $ 1,104,912    $   392,254
              Provision for loan losses                  2,488,209        712,658
              Loans charged off                            (20,137)            --
              Recoveries of loans previously charged            --             --
            off
                                                       -----------    -----------
            Balance, end of year                       $ 3,572,984    $ 1,104,912
                                                       ===========    ===========
</TABLE>

            The total recorded investment in impaired loans consisting solely of
            loans on nonaccrual status was $2,868,700 and $0 at December 31,
            2003 and 2002, 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,
            2003 and 2002. The average recorded investment in impaired loans for
            2003 and 2002 was $273,498 and $0, respectively. Interest income
            recognized for cash payments received on impaired loans was not

<PAGE>

            material for the years ended December 31, 2003 and 2002,
            respectively.

            There were no loans past due ninety days or more and still accruing
            interest at December 31, 2003 and 2002.

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3.     LOANS (CONTINUED)

            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, 2003
            are as follows:

             Balance, beginning of year                $ 5,242,356
                 Advances                                2,933,540
                 Repayments                             (2,102,461)
                                                       -----------
             Balance, end of year                      $ 6,073,435
                                                       ===========


NOTE 4.     PREMISES AND EQUIPMENT

            Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                                 DECEMBER 31
                                                        ----------------------------
                                                            2003            2002
                                                        ------------    ------------

<S>                                                     <C>             <C>
             Land                                       $  4,242,445    $  1,733,292
             Building                                      4,540,906       1,939,270
             Construction in progress, estimated cost         68,356         126,716
             to complete $1,075,000
             Equipment                                     1,324,942         774,917
                                                        ------------    ------------
                                                          10,176,649       4,574,195
             Accumulated depreciation                       (576,872)       (308,170)
                                                        ------------    ------------
                                                        $  9,599,777    $  4,266,025
                                                        ============    ============
</TABLE>

            In 2003, the Company purchased from a director of the Company, an
            office building adjacent to its main office building at a cost of
            $2,600,000. The Company has also entered into a contract with a
            business controlled by another director of the Company to construct
            additional branch banking facilities in Cobb County, Georgia at a
            cost of $1,097,000. The Company also paid $819,000 to this business
            for construction of other branch banking facilities.

<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, 2003 and 2002 was $25,967,784 and
            $27,760,579, respectively. The scheduled maturities of time deposits
            at December 31, 2003 are as follows:

              2004                                     $102,217,693
              2005                                        1,537,259
              2006                                          180,861
              2007                                               --
              2008                                           12,313
                                                       ------------
                                                       $103,948,126
                                                       ============

            Overdraft demand deposits reclassified to loans totaled $9,222 and
            $2,152 at December 31, 2003 and 2002, respectively.


NOTE 6.     OTHER BORROWINGS

            Other borrowings consist of the following:

<TABLE>
<CAPTION>
                                                                    DECEMBER 31,
                                                             ------------------------
                                                                2003          2002
                                                             -----------   -----------
<S>                                                          <C>           <C>
             Advance from Federal Home Loan Bank with
             interest at the
                three-month LIBOR flat (1.202% at December
             31, 2003),
                due September 2, 2004                        $ 5,000,000   $        --
             Advance from Federal Home Loan Bank with
             interest at the
                three-month LIBOR flat (1.221% at December
             31, 2003),
                due December 8, 2004                           5,000,000            --
             Advance from Federal Home Loan Bank with
             interest at the
                three-month LIBOR flat (1.45% at December
             31, 2002),
                due September 2, 2003                                 --     5,000,000
             Advance from Federal Home Loan Bank with
             interest at the
                three-month LIBOR flat (1.46% at December
             31, 2002),
                due September 30, 2003                                --     2,000,000
             Floating rate junior subordinated debentures,
             interest payable
                quarterly at the three month LIBOR plus
             2.85%,
                due December 17, 2033                          6,000,000            --
                                                             -----------   -----------
                                                             $16,000,000   $ 7,000,000
                                                             ===========   ===========
</TABLE>

<PAGE>

            The Company's advances from the Federal Home Loan Bank are
            collateralized with certain qualifying loans of approximately $44
            million, mortgage-backed securities of $2.6 million, and Federal
            Home Loan Bank stock of $650,000.

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.     OTHER BORROWINGS (CONTINUED)

            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.

            The Company has available unused lines of credit with various
            financial institutions totaling $18,388,400 at December 31, 2003.
            There were no other advances outstanding at December 31, 2003 or
            2002.


NOTE 7.     STOCK-BASED COMPENSATION

            At December 31, 2003, the Company has two stock-based employee
            compensation plans, one for directors and one for employees. The
            director plan reserves 195,000 shares of common stock and the
            employee plan reserves 450,000 shares of common stock for the
            granting of stock options. The options are exercisable over a ten
            year period in accordance with vesting schedules determined by the
            Board of Directors.

<PAGE>

                                                      YEAR ENDED
                                                   DECEMBER 31, 2003
                                                  -------------------
                                                            WEIGHTED-
                                                            AVERAGE
                                                            EXERCISE
                                                  SHARES      PRICE
                                                  -------   ---------
             (Employee Plan)
             Outstanding at beginning of year          --   $      --
               Granted (fixed)                    123,000        7.33
               Granted (variable)                 137,208        7.33
               Exercised                               --   $      --
               Terminated                              --   $      --
                                                            ---------
             Outstanding at end of year           260,208   $    7.33
                                                            =========

             Options exercisable at year-end       57,135   $    7.33
                                                            =========
             Weighted-average fair value of
             options
                granted during the year                     $    2.31

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7.     STOCK-BASED COMPENSATION (CONTINUED)

            Information pertaining to employee options outstanding at December
            31, 2003 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>        <C>
                  $7.33           260,208   9.50 years  $   7.33     57,135     $  7.33
</TABLE>

            Other pertinent information related to the options is as follows:

                                                       YEAR ENDED
                                                    DECEMBER 31, 2003
                                                 -----------------------
                                                              WEIGHTED-
                                                               AVERAGE
                                                               EXERCISE
                                                   SHARES       PRICE
                                                 ----------   ----------

             (Director Plan)
             Outstanding at beginning of year            --   $       --
               Granted                              165,000         7.33
               Exercised                                 --           --
               Terminated                                --           --
                                                 ----------
             Outstanding at end of year             165,000   $     7.33
                                                 ==========

             Options exercisable at period-end      165,000   $     7.33
                                                 ==========
             Weighted-average fair value of
             options
                granted during the year                       $     2.31

            Information pertaining to director options outstanding at December
            31, 2003 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>         <C>
                   $7.33          165,000   9.50 years   $   7.33    165,000    $   7.33
</TABLE>

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7.     STOCK-BASED COMPENSATION (CONTINUED)

            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:

                                                        YEAR ENDED
                                                        DECEMBER 31,
                                                    ----------------------
                                                            2003
                                                    ----------------------

                 Dividend yield                             0.00%
                 Expected life                            10 years
                 Expected volatility                        0.01%
                 Risk-free interest                         3.82%
                 rate


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
            $43,450 and $0 for the years ended December 31, 2003 and 2002,
            respectively.


NOTE 9.     INCOME TAXES

            Income tax expense consists of the following:

                                                        YEARS ENDED
                                                        DECEMBER 31,
                                                 --------------------------
                                                    2003           2002
                                                 -----------    -----------

             Current                             $ 1,623,688    $   407,291
             Deferred                               (781,612)      (103,035)
             Change in valuation allowance          (379,699)      (304,256)
                                                 -----------    -----------
                            Income tax expense   $   462,377    $        --
                                                 ===========    ===========

            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:

                                                         YEARS ENDED
                                                         DECEMBER 31,
                                                    ----------------------
                                                      2003         2002
                                                    ---------    ---------

             Income tax at statutory federal rate   $ 767,139    $ 280,406
               State taxes                             70,257       30,997
               Change in valuation allowance         (379,699)    (304,256)
               Other items                              4,680       (7,147)
                                                    ---------    ---------
             Income tax expense                     $ 462,377    $      --
                                                    =========    =========

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9.     INCOME TAXES (CONTINUED)

            The components of deferred income taxes are as follows:
                                                           DECEMBER 31,
                                                      -----------------------
                                                         2003         2002
                                                      ----------   ----------

             Deferred tax assets:
               Preopening and organization expenses   $   98,966   $  152,948
               Net operating loss carryforward                --        1,174
               Deferred loan fees                         59,784       95,704
               Loan loss reserves                      1,109,733      170,788
               Stock compensation                         34,319           --
               Nonaccrual loan interest                   12,322           --
               Other                                          --        1,522
                                                      ----------   ----------
                                                       1,315,124      422,136
             Valuation allowance                              --     (278,326)
                                                      ----------   ----------
                                                       1,315,124      143,810
                                                      ----------   ----------

             Deferred tax liabilities:
               Depreciation                              146,830       35,454
               Securities available for sale              38,580      101,373
                                                      ----------   ----------
                                                         185,410      136,827
                                                      ----------   ----------

             Net deferred taxes                       $1,129,714   $    6,983
                                                      ==========   ==========

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,
                                                               ----------------------
                                                                 2003          2002
                                                               ----------   ----------
<S>                                                             <C>          <C>
             Basic Earnings Per Share:
               Weighted average common shares outstanding       2,572,528    1,898,390
                                                               ==========   ==========

               Net income                                      $1,793,913   $  824,724
                                                               ==========   ==========

               Basic earnings per share                        $     0.70   $     0.43
                                                               ==========   ==========

             Diluted Earnings Per Share:
               Weighted average common shares outstanding       2,572,528    1,898,390
               Net effect of the assumed exercise of stock
                  options based on the treasury stock method
                  using average market prices for the year         77,664           --
                                                               ----------   ----------
               Total weighted average common shares and
                  common stock equivalents outstanding          2,650,192    1,898,390
                                                               ==========   ==========

               Net income                                      $1,793,913   $  824,724
                                                               ==========   ==========

               Diluted earnings per share                      $     0.68   $     0.43
                                                               ==========   ==========
</TABLE>

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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,
                                                           -----------------------
                                                              2003           2002
                                                           -----------   -----------

<S>                                                        <C>           <C>
             Commitments to extend credit                  $59,576,118   $32,941,203
             Standby letters of credit                         492,690       328,940
                                                           -----------   -----------
                                                           $60,068,808   $33,270,143
                                                           ===========   ===========
</TABLE>

            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

<PAGE>

            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, 2003 and 2002, 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, 2003 and 2002.

            EMPLOYMENT AGREEMENTS

            The Company has entered into an employment agreement with its
            president with an initial term of five years that requires an annual
            salary of $160,000. 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 to incentives and performance bonuses as
            may be determined by the Company's Board of Directors.

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11.    COMMITMENTS AND CONTINGENCIES (CONTINUED)

            EMPLOYMENT AGREEMENTS (CONTINUED)

            The Company has also entered into employment agreements with three
            other officers calling for annual salaries totaling $340,000. These
            agreements have the same annual salary increase, incentive and
            performance bonuses 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.


NOTE 12.    CONCENTRATIONS OF CREDIT

            The Company originates primarily commercial and 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 lesser of statutory capital or net assets as defined, or
            approximately $5,875,000.


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, 2003, approximately $941,000 of dividends could be
            declared without regulatory approval.

<PAGE>

            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, 2003 and 2002, the Company
            and Bank met all capital adequacy requirements to which they are
            subject.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 13.    REGULATORY MATTERS (CONTINUED)

            As of December 31, 2003, the most recent notification from the
            Federal Deposit Insurance Corporation categorized the Bank as well
            capitalized under the regulatory framework for prompt corrective
            action. To be categorized as well capitalized, the Bank must
            maintain minimum Total risk-based, Tier 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.

            The Company was not subject to consolidated capital requirements as
            of December 31, 2002 due to asset size. 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, 2003:
               TOTAL CAPITAL TO RISK
               WEIGHTED ASSETS
                  CONSOLIDATED                $  29,186       10.88%   $  21,468           8%   $  26,835          10%
                  BANK                        $  27,834       10.41%   $  21,393           8%   $  26,741          10%
               TIER I CAPITAL TO RISK
               WEIGHTED ASSETS
                  CONSOLIDATED                $  25,829        9.63%   $  10,734           4%   $  16,101           6%
                  BANK                        $  24,488        9.16%   $  10,697           4%   $  16,045           6%

<PAGE>

               TIER I CAPITAL TO
               AVERAGE ASSETS
                  CONSOLIDATED                $  25,829        9.71%   $  10,635           4%   $  13,294           5%
                  BANK                        $  24,488        9.26%   $  10,578           4%   $  13,223           5%

             December 31, 2002 (Bank only):
               Total Capital to Risk          $  13,610        9.65%   $  11,287           8%   $  14,109          10%
               Weighted Assets
               Tier I Capital to Risk         $  12,506        8.86%   $   5,643           4%   $   8,465           6%
               Weighted Assets
               Tier I Capital to              $  12,506        9.67%   $   5,173           4%   $   6,466           5%
               Average Assets
</TABLE>

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.

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14.    FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

            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, 2003              December 31, 2002
                                      ---------------------------   ---------------------------
                                        CARRYING        FAIR          Carrying        Fair
                                         AMOUNT         VALUE          Amount         Value
                                      ------------   ------------   ------------   ------------
<S>                                   <C>            <C>            <C>            <C>
             Financial assets:
               Cash, due from banks
               and interest-
                 bearing deposits     $  1,807,109   $  1,807,109   $  1,772,049   $  1,772,049
                 in banks
               Federal funds sold        2,439,000      2,439,000             --             --
               Securities               27,852,502     27,852,502     10,750,395     10,750,395
               Loans                   235,346,005    240,013,338    126,903,284    129,033,375
               Accrued interest            981,167        981,167        539,528        539,528
               receivable

             Financial liabilities:
               Deposits                231,777,722    232,089,284    120,133,300    120,313,943
               Federal funds            10,000,000     10,000,000      3,115,000      3,115,000
               purchased
               Other borrowings         16,000,000     16,000,000      7,000,000      7,000,000
               Accrued interest            358,678        358,678        235,813        235,813
               payable
</TABLE>


NOTE 15.    SUPPLEMENTAL FINANCIAL DATA

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

                                                 YEARS ENDED DECEMBER 31,
                                                 ------------------------
                                                    2003          2002
                                                 ----------   -----------

                  Consulting fees                $  200,044   $   55,559
                  Data processing                   199,182      109,833

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 16.    PARENT COMPANY FINANCIAL INFORMATION

            The following information presents the condensed balance sheets
            as of December 31, 2003 and 2002 and statements of income and
            cash flows of Integrity Bancshares, Inc., Inc. for the years
            ended December 31, 2003 and 2002.

<TABLE>
<CAPTION>
                                     CONDENSED BALANCE SHEETS

                                                             2003           2002
                                                          -----------   -----------
<S>                                                       <C>           <C>
             ASSETS
               Cash                                       $   434,420   $   686,507
               Interest-bearing deposits in banks              52,808       357,936
               Investment in subsidiary                    24,551,205    12,774,156
               Securities available for sale                  690,000            --
               Other assets                                   221,819            --
                                                          -----------   -----------

                      TOTAL ASSETS                        $25,950,252   $13,818,599
                                                          ===========   ===========

             LIABILITIES
               Other borrowings                           $ 6,000,000   $        --
               Other liabilities                               57,982            --
                                                          -----------   -----------

                      TOTAL LIABILITIES                     6,057,982            --
                                                          -----------   -----------

             STOCKHOLDERS' EQUITY                          19,892,270    13,818,599
                                                          -----------   -----------

             TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $25,950,252   $13,818,599
                                                          ===========   ===========
</TABLE>

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 16.    PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)


                                  CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                           2003            2002
                                                        -----------    -----------
<S>                                                     <C>            <C>
             INTEREST INCOME                            $     1,419    $     8,227

             EXPENSE, other                                 208,256         12,921
                                                        -----------    -----------

                    INCOME BEFORE INCOME TAX BENEFITS
                    AND
                      UNDISTRIBUTED INCOME OF              (206,837)        (4,694)
                      SUBSIDIARY

                  INCOME TAX BENEFITS                      (118,110)            --
                                                        -----------    -----------

                    LOSS BEFORE EQUITY IN
                    UNDISTRIBUTED
                      INCOME OF SUBSIDIARY                  (88,727)        (4,694)

                  EQUITY IN UNDISTRIBUTED INCOME OF       1,882,640        829,418
             SUBSIDIARY
                                                        -----------    -----------

                    NET INCOME                          $ 1,793,913    $   824,724
                                                        ===========    ===========
</TABLE>

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 16.    PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)


                               CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                   2003                       2002
                                                               ------------               ------------
<S>                                                            <C>                        <C>
             OPERATING ACTIVITIES
               Net income                                      $  1,793,913               $    824,724
               Adjustments to reconcile net income to net
                 cash used in operating activities:
                 Equity in undistributed income of               (1,882,640)                  (829,418)
                 subsidiary
                 Net other operating activities                     (72,892)                        --
                                                               ------------               ------------

                   NET CASH USED IN OPERATING ACTIVITIES           (161,619)                    (4,694)
                                                               ------------               ------------

             INVESTING ACTIVITIES
               Net decrease in interest-bearing deposits in         305,128                     57,027
               banks
               Investment in subsidiary                         (10,100,000)
               Purchase of securities available for sale           (690,000)                        --
                                                               ------------               ------------

                   NET CASH USED IN INVESTING ACTIVITIES        (10,484,872)
                                                               ------------               ------------

             FINANCING ACTIVITIES
               Net proceeds from other borrowings                 6,000,000                         --
               Net proceeds from sale of common stock             4,563,376                  3,911,570
               Sale (purchase) of treasury stock                   (168,972)                    74,745
                                                               ------------               ------------

                   NET CASH PROVIDED BY FINANCING ACTIVITIES     10,394,404                  3,986,315
                                                               ------------               ------------

             Net increase (decrease) in cash                       (252,087)                   638,648

             Cash at beginning of year                              686,507                     47,859
                                                               ------------               ------------

             Cash at end of year                               $    434,420               $    686,507
                                                               ============               ============
</TABLE>


NOTE 17.    COMMON STOCK OFFERING

            The company filed a registration statement on Form SB-2 with the
            Securities and Exchange Commission in the first quarter of 2004 to
            issue up to 1,500,000 shares of common stock to the general public.
            The offering price is $13.50 per share, with a 100 share ($1,350)
            minimum purchase and a 5,000 share ($67,500) maximum purchase.