##### 



EXHIBIT 13
 FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED FINANCIAL REPORT
DECEMBER 31, 2007
 TABLE OF CONTENTS
 PageREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    F-1FINANCIAL STATEMENTSConsolidated balance sheets
    
    F-3Consolidated statements of operations
    
    F-4Consolidated statements of comprehensive income (loss)
    
    F-5Consolidated statements of stockholders equity
    
    F-6Consolidated statements of cash flows
    
    F-7Notes to consolidated financial statements
    
    F-9




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors
FGBC Bancshares, Inc.
Franklin, Georgia
    Internal Control  Integrated Framework ,
  
 F-1




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors
FGBC Bancshares, Inc.
Franklin, Georgia
 Internal Control  Integrated Framework .
    Internal
Control  Integrated Framework .
   
 F-2




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2007 AND 2006
 2007
    
    
    2006AssetsCash and due from banks
    
    $
    6,112,287
    
    
    $
    7,343,589Interest bearing deposits in banks
    
    
    66,017
    
    
    
    11,228,052Federal funds sold
    
    
    20,005,000
    
    
    
    53,368,000Securities available for sale, at fair value
    
    
    80,731,983
    
    
    
    70,114,808Restricted equity securities, at cost
    
    
    1,041,800
    
    
    
    1,342,700Loans
    
    
    539,709,171
    
    
    
    408,642,096Less allowance for loan losses
    
    
    6,267,211
    
    
    
    5,244,200Loans, net
    
    
    533,441,960
    
    
    
    403,397,896Premises and equipment
    
    
    34,286,994
    
    
    
    27,071,594Other assets
    
    
    8,947,469
    
    
    
    5,543,664Total assets
    
    $
    684,633,510
    
    
    $
    579,410,303Liabilities and Stockholders EquityDeposits:Noninterest-bearing
    
    $
    31,526,232
    
    
    $
    24,101,011Interest-bearing
    
    
    583,710,127
    
    
    
    472,591,491Total deposits
    
    
    615,236,359
    
    
    
    496,692,502Other borrowings
    
    
    
    
    
    
    15,000,000Securities sold under repurchase agreements
    
    
    
    
    
    
    1,027,230Other liabilities
    
    
    2,607,209
    
    
    
    3,131,284Total liabilities
    
    
    617,843,568
    
    
    
    515,851,016Commitments and contingenciesStockholders equityCommon stock, par value $0; 100,000,000 shares
authorized;
12,185,144 and 9,046,748 shares issued and
outstanding, respectively
    
    
    67,478,254
    
    
    
    66,658,460Accumulated deficit
    
    
    (617,429
    )
    
    
    (2,672,497
    )Accumulated other comprehensive loss
    
    
    (70,883
    )
    
    
    (426,676
    )Total stockholders equity
    
    
    66,789,942
    
    
    
    63,559,287Total liabilities and stockholders equity
    
    $
    684,633,510
    
    
    $
    579,410,303
 See Notes to Consolidated Financial Statements.
 F-3




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
 2007
    
    
    2006
    
    
    2005Interest income:Loans, including fees
    
    $
    41,969,780
    
    
    $
    29,763,430
    
    
    $
    12,967,840Taxable securities
    
    
    3,219,131
    
    
    
    2,034,072
    
    
    
    1,247,064Nontaxable securities
    
    
    416,903
    
    
    
    265
    
    
    
    Federal funds sold
    
    
    1,203,009
    
    
    
    1,187,808
    
    
    
    216,380Other interest income
    
    
    188,864
    
    
    
    121,327
    
    
    
    5,947Total interest income
    
    
    46,997,687
    
    
    
    33,106,902
    
    
    
    14,437,231Interest expense:Deposits
    
    
    25,135,423
    
    
    
    15,116,060
    
    
    
    6,260,298Other borrowings
    
    
    57,963
    
    
    
    720,378
    
    
    
    32,309Total interest expense
    
    
    25,193,386
    
    
    
    15,836,438
    
    
    
    6,292,607Net interest income
    
    
    21,804,301
    
    
    
    17,270,464
    
    
    
    8,144,624Provision for loan losses
    
    
    2,353,244
    
    
    
    2,740,843
    
    
    
    1,814,746Net interest income after
provision for loan losses
    
    
    19,451,057
    
    
    
    14,529,621
    
    
    
    6,329,878Other income:Service charges on deposit accounts
    
    
    1,869,988
    
    
    
    1,378,399
    
    
    
    1,069,669Mortgage origination fees
    
    
    1,343,204
    
    
    
    1,101,211
    
    
    
    551,572Gain on sale of securities available
for sale
    
    
    33,851
    
    
    
    
    
    
    
    Other operating income
    
    
    190,563
    
    
    
    77,926
    
    
    
    72,505Total other income
    
    
    3,437,606
    
    
    
    2,557,536
    
    
    
    1,693,746Other expenses:Salaries and employee benefits
    
    
    12,830,241
    
    
    
    10,716,964
    
    
    
    5,365,633Occupancy and equipment expenses
    
    
    2,861,536
    
    
    
    2,024,908
    
    
    
    1,247,405Other operating expenses
    
    
    5,721,324
    
    
    
    4,079,154
    
    
    
    2,275,613Total other expenses
    
    
    21,413,101
    
    
    
    16,821,026
    
    
    
    8,888,651Net income before income taxes
    
    
    1,475,562
    
    
    
    266,131
    
    
    
    (865,027
    )Income tax expense (benefit)
    
    
    (579,506
    )
    
    
    
    
    
    
    Net income
    
    $
    2,055,068
    
    
    $
    266,131
    
    
    $
    (865,027
    )Basic earnings per share
    
    $
    0.17
    
    
    $
    0.02
    
    
    $
    (0.12
    )Diluted earnings per share
    
    $
    0.16
    
    
    $
    0.02
    
    
    $
    (0.12
    )
 See Notes to Consolidated Financial Statements.
 F-4




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
 2007
    
    
    2006
    
    
    2005Net income
    
    $
    2,055,068
    
    
    $
    266,131
    
    
    $
    (865,027
    )Other comprehensive income (loss):Reclassification adjustment for gains on sales of securities
included in net income, net of tax of $12,863
    
    
    (20,988
    )
    
    
    
    
    
    
    Net unrealized holding gains (losses) on securities
available for sale arising during period, net of
tax benefits of $30,580 in 2007
    
    
    376,781
    
    
    
    476,217
    
    
    
    (520,353
    )Other comprehensive income (loss)
    
    
    355,793
    
    
    
    476,217
    
    
    
    (520,353
    )Comprehensive income (loss)
    
    $
    2,410,861
    
    
    $
    742,348
    
    
    $
    (1,385,380
    )
 See Notes to Consolidated Financial Statements.
 F-5




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005
 AccumulatedCommon Stock
    
    
    
    
    
    
    Other
    
    
    TotalAt Amount
    
    
    Accumulated
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Paid In
    
    
    Deficit
    
    
    Loss
    
    
    EquityBalance, December 31, 2004
    
    
    2,159,662
    
    
    $
    17,433,275
    
    
    $
    (2,073,601
    )
    
    $
    (382,540
    )
    
    $
    14,977,134Net loss
    
    
    
    
    
    
    
    
    
    
    (865,027
    )
    
    
    
    
    
    
    (865,027
    )Stock compensation expense
    
    
    
    
    
    
    106,138
    
    
    
    
    
    
    
    
    
    
    
    106,1384.25 for 3 stock split
    
    
    1,118,746
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase of fractional shares
    
    
    (253
    )
    
    
    (3,173
    )
    
    
    
    
    
    
    
    
    
    
    (3,173
    )Issuance of common stock
    
    
    3,459,755
    
    
    
    43,246,949
    
    
    
    
    
    
    
    
    
    
    
    43,246,949Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (520,353
    )
    
    
    (520,353
    )Balance, December 31, 2005
    
    
    6,737,910
    
    
    
    60,783,189
    
    
    
    (2,938,628
    )
    
    
    (902,893
    )
    
    
    56,941,668Net income
    
    
    
    
    
    
    
    
    
    
    266,131
    
    
    
    
    
    
    
    266,131Stock compensation expense
    
    
    
    
    
    
    66,735
    
    
    
    
    
    
    
    
    
    
    
    66,7355 for 4 stock split
    
    
    1,684,478
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase of fractional shares
    
    
    (115
    )
    
    
    (1,660
    )
    
    
    
    
    
    
    
    
    
    
    (1,660
    )Issuance of common stock
    
    
    526,371
    
    
    
    5,295,739
    
    
    
    
    
    
    
    
    
    
    
    5,295,739Exercise of stock options
    
    
    98,104
    
    
    
    514,457
    
    
    
    
    
    
    
    
    
    
    
    514,457Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476,217
    
    
    
    476,217Balance, December 31, 2006
    
    
    9,046,748
    
    
    
    66,658,460
    
    
    
    (2,672,497
    )
    
    
    (426,676
    )
    
    
    63,559,287Net income
    
    
    
    
    
    
    
    
    
    
    2,055,068
    
    
    
    
    
    
    
    2,055,068Stock compensation expense
    
    
    
    
    
    
    153,420
    
    
    
    
    
    
    
    
    
    
    
    153,420Exercise of stock options
    
    
    92,110
    
    
    
    586,270
    
    
    
    
    
    
    
    
    
    
    
    586,2704 for 3 stock split
    
    
    3,046,286
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Excess tax benefit from stock
options exercised
    
    
    
    
    
    
    80,104
    
    
    
    
    
    
    
    
    
    
    
    80,104Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    355,793
    
    
    
    355,793Balance, December 31, 2007
    
    
    12,185,144
    
    
    $
    67,478,254
    
    
    $
    (617,429
    )
    
    $
    (70,883
    )
    
    $
    66,789,942
 See Notes to Consolidated Financial Statements.
 F-6




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
 2007
    
    
    2006
    
    
    2005OPERATING ACTIVITIESNet income
    
    $
    2,055,068
    
    
    $
    266,131
    
    
    $
    (865,027
    )Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation
    
    
    1,589,113
    
    
    
    887,459
    
    
    
    484,550Amortization and accretion of securities
    
    
    19,149
    
    
    
    76,091
    
    
    
    121,829Provision for loan losses
    
    
    2,353,244
    
    
    
    2,740,843
    
    
    
    1,814,746Write-down of foreclosed assets
    
    
    148,275
    
    
    
    
    
    
    
    Stock compensation expense
    
    
    153,420
    
    
    
    66,735
    
    
    
    106,138Deferred taxes
    
    
    (1,405,879
    )
    
    
    (689,257
    )
    
    
    (14,103
    )Gain on sale of securities available for sale
    
    
    (33,851
    )
    
    
    
    
    
    
    (Gain) loss on sale of foreclosed assets
    
    
    216,473
    
    
    
    (9,200
    )
    
    
    (Gain) loss on sale of premises and equipment
    
    
    (43,147
    )
    
    
    25,237
    
    
    
    (4,757
    )Contribution of premises and equipment
    
    
    
    
    
    
    
    
    
    
    171,839Increase (decrease) in income taxes payable
    
    
    (824,380
    )
    
    
    660,754
    
    
    
    14,103Excess tax benefit from stock options exercised
    
    
    (80,104
    )
    
    
    
    
    
    
    Increase in interest receivable
    
    
    (845,541
    )
    
    
    (2,043,599
    )
    
    
    (873,458
    )Increase (decrease) in interest payable
    
    
    (118,075
    )
    
    
    803,407
    
    
    
    175,638Net other operating activities
    
    
    558,343
    
    
    
    727,027
    
    
    
    97,404Net cash provided by operating activities
    
    
    3,742,108
    
    
    
    3,511,628
    
    
    
    1,228,902INVESTING ACTIVITIES(Increase) decrease in interest bearing deposits in financial
institutions
    
    
    11,162,035
    
    
    
    (11,164,145
    )
    
    
    (63,907
    )Purchases of securities available for sale
    
    
    (44,124,181
    )
    
    
    (52,439,052
    )
    
    
    (10,464,141
    )Proceeds from maturities of securities available for sale
    
    
    28,671,358
    
    
    
    22,539,854
    
    
    
    6,815,423Proceeds from sales of securities available for sale
    
    
    5,162,699
    
    
    
    
    
    
    
    (Purchases) redemptions of restricted equity securities
    
    
    300,900
    
    
    
    (528,800
    )
    
    
    (813,900
    )Net (increase) decrease in federal funds sold
    
    
    33,363,000
    
    
    
    (47,252,000
    )
    
    
    (6,116,000
    )Net increase in loans
    
    
    (135,390,668
    )
    
    
    (145,972,890
    )
    
    
    (129,058,807
    )Purchase of premises and equipment
    
    
    (8,978,454
    )
    
    
    (14,845,236
    )
    
    
    (5,889,357
    )Proceeds from sale of foreclosed assets
    
    
    1,462,937
    
    
    
    276,663
    
    
    
    32,000Proceeds from sale of premises and equipment
    
    
    217,088
    
    
    
    42,060
    
    
    
    13,680Additions to other real estate owned
    
    
    (3,125
    )
    
    
    (25,673
    )
    
    
    Net cash used in investing activities
    
    
    (108,156,411
    )
    
    
    (249,369,219
    )
    
    
    (145,545,009
    )FINANCING ACTIVITIESNet increase in deposits
    
    
    118,543,857
    
    
    
    237,900,925
    
    
    
    91,551,259Net proceeds from (repayments of) other borrowings
    
    
    (15,000,000
    )
    
    
    5,000,000
    
    
    
    9,973,500
 F-7




---



##### 



2007
    
    
    2006
    
    
    2005Net increase (decrease) in federal funds purchased and
repurchase agreements
    
    
    (1,027,230
    )
    
    
    1,027,230
    
    
    
    (297,000
    )Excess tax benefit from stock options exercised
    
    
    80,104
    
    
    
    
    
    
    
    Proceeds from exercise of stock options
    
    
    586,270
    
    
    
    514,457
    
    
    
    Proceeds from sale of common stock
    
    
    
    
    
    
    5,295,739
    
    
    
    43,246,949Purchase of fractional shares of common stock
    
    
    
    
    
    
    (1,660
    )
    
    
    (3,173
    )Net cash provided by financing activities
    
    
    103,183,001
    
    
    
    249,736,691
    
    
    
    144,471,535Net increase (decrease) in cash and due from banks
    
    
    (1,231,302
    )
    
    
    3,879,100
    
    
    
    155,428Cash and due from banks, beginning of year
    
    
    7,343,589
    
    
    
    3,464,489
    
    
    
    3,309,061Cash and due from banks, end of year
    
    $
    6,112,287
    
    
    $
    7,343,589
    
    
    $
    3,464,489SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during period for:Interest
    
    $
    25,505,142
    
    
    $
    15,216,081
    
    
    $
    6,123,567Income taxes
    
    $
    1,650,753
    
    
    $
    28,503
    
    
    $
    NONCASH TRANSACTIONSFinanced sales of foreclosed assets
    
    $
    61,711
    
    
    $
    117,500
    
    
    $
    Loans transferred to foreclosed assets
    
    $
    3,055,071
    
    
    $
    822,012
    
    
    $
    38,000
 See Notes to Consolidated Financial Statements.
 F-8




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESNature of Business
   Basis of Presentation
    Cash, Due from Banks and Cash Flows
   Securities
  F-9




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Securities (Continued)
   Loans
    Allowance for Loan Losses
  F-10




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Allowance for Loan Losses (Continued)
    Premises and Equipment
  Land improvements
    
    10-15 yearsBuildings
    
    30-40 yearsEquipment
    
    3-10 years
 Foreclosed Assets
  F-11




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Income Taxes
 Accounting for Income Taxes.
 Earnings (Losses) Per Share
  Stock-Based Compensation
 Accounting for Stock Issued to
Employees Accounting for Stock-Based Compensation Share-Based
Payment
 F-12




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Stock-Based Compensation (Continued)
   December 31,2005Net loss, as reported
    
    $
    (865,027
    )Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards
    
    
    297,556Pro forma net loss
    
    $
    (1,162,583
    )Losses per share:Basic - as reported
    
    $
    (0.12
    )Basic - pro forma
    
    $
    (0.16
    )Diluted - as reported
    
    $
    (0.12
    )Diluted - pro forma
    
    $
    (0.16
    )
 Comprehensive Income (Loss)
  Recent Accounting Pronouncements
  F-13




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Recent Accounting Pronouncements (Continued)
  The Fair Value Option for
Financial Assets and Financial Liabilities  Including an Amendment of FASB
Statement No. 115. Accounting for Certain Investments in Debt
and Equity Securities
 Business
Combinations.
 Noncontrolling Interests in
Consolidated Financial Statements  An Amendment of ARB No. 51.
 F-14




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 2.
    
    SECURITIES AVAILABLE FOR SALE
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDecember 31, 2007:U.S. Government sponsored
agency securities
    
    $
    30,173,685
    
    
    $
    335,021
    
    
    $
    (18,618
    )
    
    $
    30,490,088Mortgage-backed securities
    
    
    32,714,986
    
    
    
    77,262
    
    
    
    (158,763
    )
    
    
    32,633,485State, county and municipals
    
    
    15,381,303
    
    
    
    
    
    
    
    (341,173
    )
    
    
    15,040,130Corporate securities
    
    
    2,576,336
    
    
    
    10,646
    
    
    
    (18,702
    )
    
    
    2,568,280$
    80,846,310
    
    
    $
    422,929
    
    
    $
    (537,256
    )
    
    $
    80,731,983December 31, 2006:U.S. Government sponsored
agency securities
    
    $
    49,673,653
    
    
    $
    71,186
    
    
    $
    (209,462
    )
    
    $
    49,535,377Mortgage-backed securities
    
    
    19,957,492
    
    
    
    19,372
    
    
    
    (307,773
    )
    
    
    19,669,091State, county and municipals
    
    
    910,340
    
    
    
    
    
    
    
    
    
    
    
    910,340$
    70,541,485
    
    
    $
    90,558
    
    
    $
    (517,235
    )
    
    $
    70,114,808
    F-15




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 2.
    
    SECURITIES AVAILABLE FOR SALE (Continued)
 December 31, 2007Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. Government sponsored agencies
    
    $
    
    
    
    $
    
    
    
    $
    4,724,448
    
    
    $
    (18,618
    )
    
    $
    4,724,448
    
    
    $
    (18,618
    )Mortgage-backed securities
    
    
    6,535,438
    
    
    
    (17,285
    )
    
    
    11,731,101
    
    
    
    (141,478
    )
    
    
    18,266,539
    
    
    
    (158,763
    )State, county and municipals
    
    
    14,138,153
    
    
    
    (332,882
    )
    
    
    901,977
    
    
    
    (8,291
    )
    
    
    15,040,130
    
    
    
    (341,173
    )Corporate securities
    
    
    1,007,500
    
    
    
    (18,702
    )
    
    
    
    
    
    
    
    
    
    
    1,007,500
    
    
    
    (18,702
    )Total temporarily impaired securities
    
    $
    21,681,091
    
    
    $
    (368,869
    )
    
    $
    17,357,526
    
    
    $
    (168,387
    )
    
    $
    39,038,617
    
    
    $
    (537,256
    )
 December 31, 2006Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. Government sponsored agencies
    
    $
    21,431,538
    
    
    $
    (33,163
    )
    
    $
    13,814,309
    
    
    $
    (176,299
    )
    
    $
    35,245,847
    
    
    $
    (209,462
    )Mortgage-backed securities
    
    
    6,650,521
    
    
    
    (15,640
    )
    
    
    8,001,470
    
    
    
    (292,133
    )
    
    
    14,651,991
    
    
    
    (307,773
    )Total temporarily impaired securities
    
    $
    28,082,059
    
    
    $
    (48,803
    )
    
    $
    21,815,779
    
    
    $
    (468,432
    )
    
    $
    49,897,838
    
    
    $
    (517,235
    )
  Amortized
    
    
    FairCost
    
    
    ValueDue in less than one year
    
    $
    4,747,555
    
    
    $
    4,733,508Due from one to five years
    
    
    19,718,737
    
    
    
    19,977,786Due from five to ten years
    
    
    4,655,874
    
    
    
    4,712,771After ten years
    
    
    19,009,158
    
    
    
    18,674,433Mortgage-backed securities
    
    
    32,714,986
    
    
    
    32,633,485$
    80,846,310
    
    
    $
    80,731,983
  F-16




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 3.
    
    LOANS
  December 31,2007
    
    
    2006Commercial and agricultural
    
    $
    47,362,775
    
    
    $
    42,405,199Real estate  construction
    
    
    163,206,168
    
    
    
    114,528,258Real estate  other
    
    
    299,218,661
    
    
    
    225,119,010Consumer
    
    
    30,136,470
    
    
    
    26,858,734539,924,074
    
    
    
    408,911,201Deferred loan fees and costs
    
    
    (214,903
    )
    
    
    (269,105
    )Allowance for loan losses
    
    
    (6,267,211
    )
    
    
    (5,244,200
    )Loans, net
    
    $
    533,441,960
    
    
    $
    403,397,896
  Years Ended December 31,2007
    
    
    2006
    
    
    2005Balance, beginning of year
    
    $
    5,244,200
    
    
    $
    3,193,806
    
    
    $
    1,705,435Provision for loan losses
    
    
    2,353,244
    
    
    
    2,740,843
    
    
    
    1,814,746Loans charged off
    
    
    (1,388,685
    )
    
    
    (750,093
    )
    
    
    (353,052
    )Recoveries of loans previously charged off
    
    
    58,452
    
    
    
    59,644
    
    
    
    26,677Balance, end of year
    
    $
    6,267,211
    
    
    $
    5,244,200
    
    
    $
    3,193,806
 Accounting by Creditors for
Impairment of a Loan
  Balance, beginning of year
    
    $
    7,152,036Advances
    
    
    8,847,405Repayments
    
    
    (1,711,159
    )Changes in related parties
    
    
    191,675Balance, end of year
    
    $
    14,479,957
 F-17




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 4.
    
    PREMISES AND EQUIPMENT
  December 31,2007
    
    
    2006Land and land improvements
    
    $
    7,676,883
    
    
    $
    7,386,006Buildings
    
    
    18,429,720
    
    
    
    7,913,746Construction and equipment installation in
progress, estimated cost to complete
$4,035,930 in 2007
    
    
    4,955,956
    
    
    
    8,942,344Equipment
    
    
    6,103,869
    
    
    
    4,230,84137,166,428
    
    
    
    28,472,937Accumulated depreciation
    
    
    (2,879,434
    )
    
    
    (1,401,343
    )$
    34,286,994
    
    
    $
    27,071,594
   Leases
   2008
    
    $
    79,9432009
    
    
    44,2502010
    
    
    45,0002011
    
    
    21,875$
    191,068
 NOTE 5.
    
    DEPOSITS
  F-18




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 5.
    
    DEPOSITS (Continued)
 2008
    
    $
    384,879,3482009
    
    
    17,784,2092010
    
    
    9,776,0652011
    
    
    5,508,1352012
    
    
    1,630,285$
    419,578,042
  NOTE 6.
    
    SECURITIES SOLD UNDER REPURCHASE AGREEMENTS
  NOTE 7.
    
    OTHER BORROWINGS
  December 31,2007
    
    
    2006Adjustable rate advance from Federal Home Loan Bank

(5.45% at December 31, 2006) repaid in 2007
    
    $
    
    
    
    $
    5,000,000Adjustable rate advance from Federal Home Loan Bank

(5.45% at December 31, 2006) repaid in 2007
    
    
    
    
    
    
    5,000,000Adjustable rate advance from Federal Home Loan Bank

(5.45% at December 31, 2006) repaid in 2007
    
    
    
    
    
    
    5,000,000$
    
    
    
    $
    15,000,000
  F-19




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 8.
    
    STOCK-BASED COMPENSATIONStock Options
   Years Ended December 31,2007
    
    2006
    
    2005Weighted-
    
    
    
    
    
    Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Exercise
    
    
    
    
    
    ExerciseNumber
    
    Price
    
    Number
    
    Price
    
    Number
    
    PriceOptions outstanding, beginning of year
    
    
    1,304,320
    
    
    $
    5.46
    
    
    
    1,403,008
    
    
    $
    5.19
    
    
    
    798,351
    
    
    $
    3.39Granted
    
    
    137,067
    
    
    
    14.60
    
    
    
    89,167
    
    
    
    8.75
    
    
    
    713,859
    
    
    
    6.93Exercised
    
    
    (122,813
    )
    
    
    4.77
    
    
    
    (130,806
    )
    
    
    3.93
    
    
    
    
    
    
    
    Forfeited
    
    
    (25,299
    )
    
    
    7.90
    
    
    
    (57,049
    )
    
    
    7.45
    
    
    
    (109,201
    )
    
    
    3.39Options outstanding, end of year
    
    
    1,293,275
    
    
    
    6.45
    
    
    
    1,304,320
    
    
    
    5.46
    
    
    
    1,403,008
    
    
    
    5.19Exercisable, end of year
    
    
    829,562
    
    
    
    5.07
    
    
    
    723,516
    
    
    
    4.46
    
    
    
    394,716
    
    
    
    3.63
  Years endedDecember 31,2007
    
    
    2006Dividend yield
    
    
    0
    %
    
    
    0
    %Expected life
    
    6.5 years
    
    6.5 yearsRisk-free interest rate
    
    4.31% to 4.96%
    
    4.29% to 4.95%Expected
volatility/weighed average expected volatility
    
    
    24
    %
    
    
    24
    %
  F-20




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 8.
    
    STOCK-BASED COMPENSATION (Continued)Stock Options (Continued)
  NOTE 9.
    
    KEY PERSON STOCK PURCHASE PLAN
  NOTE 10.
    
    401(k) RETIREMENT PLAN
  NOTE 11.
    
    INCOME TAXES
  Years Ended December 31,2007
    
    
    2006
    
    
    2005Current
    
    $
    826,373
    
    
    $
    689,257
    
    
    $
    321,684Deferred
    
    
    (381,692
    )
    
    
    (569,149
    )
    
    
    (677,986
    )Change in valuation allowance
    
    
    (1,024,187
    )
    
    
    (120,108
    )
    
    
    356,302Income tax expense
    
    $
    (579,506
    )
    
    $
    
    
    
    $
    
 F-21




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 11.
    
    INCOME TAXES (Continued)
  Years Ended December 31,2007
    
    
    2006
    
    
    2005Tax provision at statutory federal rate
    
    $
    501,691
    
    
    $
    90,484
    
    
    $
    (294,109
    )State income taxes
    
    
    (35,154
    )
    
    
    (44,027
    )
    
    
    (39,198
    )Change in valuation allowance
    
    
    (1,024,187
    )
    
    
    (120,108
    )
    
    
    356,302Nondeductible expenses
    
    
    40,566
    
    
    
    51,033
    
    
    
    19,622Stock compensation
    
    
    52,163
    
    
    
    22,690
    
    
    
    Tax free interest
    
    
    (112,229
    )
    
    
    (72
    )
    
    
    Fair value of property contributed
in excess of cost
    
    
    
    
    
    
    
    
    
    
    (30,867
    )Surtax exemption
    
    
    
    
    
    
    
    
    
    
    (11,750
    )Other
    
    
    (2,356
    )
    
    
    
    
    
    
    Income tax expense
    
    $
    (579,506
    )
    
    $
    
    
    
    $
    
  December 31,2007
    
    
    2006Deferred tax assets:Loan loss reserves
    
    $
    2,089,604
    
    
    $
    1,672,965Pre-opening expenses
    
    
    50,778
    
    
    
    102,736Deferred loan fees
    
    
    81,095
    
    
    
    101,549Securities available for sale
    
    
    43,444
    
    
    
    162,137Contributions
    
    
    
    
    
    
    39,812Nonaccrual loan interest
    
    
    31,257
    
    
    
    Reserve for repossessed assets
    
    
    55,953
    
    
    
    2,352,131
    
    
    
    2,079,199Deferred tax liabilities:Depreciation
    
    
    199,448
    
    
    
    189,515Valuation allowance
    
    
    
    
    
    
    1,186,324Net deferred taxes
    
    $
    2,152,683
    
    
    $
    703,360
 F-22




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 12.
    
    EARNINGS (LOSSES) PER SHARE
  Years Ended December 31,2007
    
    
    2006
    
    
    2005Basic earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,124,152
    
    
    
    11,770,479
    
    
    
    7,095,891Net income (loss)
    
    $
    2,055,068
    
    
    $
    266,131
    
    
    $
    (865,027
    )Basic earnings (losses) per share
    
    $
    .17
    
    
    $
    .02
    
    
    $
    (0.12
    )Diluted earnings (losses) per share:Weighted average common shares outstanding
    
    
    12,124,152
    
    
    
    11,770,479
    
    
    
    7,095,891Net effect of the assumed exercise of stock
Options based on the treasury stock method
using average market prices for the year
    
    
    765,001
    
    
    
    512,353
    
    
    
    Total weighted average common shares and
common stock equivalents outstanding
    
    
    12,889,153
    
    
    
    12,282,832
    
    
    
    7,095,891Net income (loss)
    
    $
    2,055,068
    
    
    $
    266,131
    
    
    $
    (865,027
    )Diluted earnings (losses) per share
    
    $
    .16
    
    
    $
    .02
    
    
    $
    (0.12
    )
 NOTE 13.
    
    COMMITMENTS AND CONTINGENCIESLoan Commitments
   December 31,2007
    
    
    2006Commitments to extend credit
    
    $
    62,064,418
    
    
    $
    67,460,136Letters of credit
    
    
    1,403,833
    
    
    
    702,213$
    63,468,251
    
    
    $
    68,162,349
 F-23




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 13.
    
    COMMITMENTS AND CONTINGENCIES (Continued)Loan Commitments (Continued)
      Contingencies
  Employee Agreements
  F-24




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 14.
    
    CONCENTRATIONS OF CREDIT
    NOTE 15.
    
    REGULATORY MATTERS
     F-25




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 15.
    
    REGULATORY MATTERS (Continued)
  To Be WellFor Capital
    
    Capitalized UnderAdequacy
    
    Prompt CorrectiveActual
    
    Purposes
    
    Action ProvisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in Thousands)As of December 31, 2007:Total Capital to Risk Weighted AssetsConsolidated
    
    $
    73,128
    
    
    
    13.38
    %
    
    $
    43,711
    
    
    
    8
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    70,863
    
    
    
    12.97
    %
    
    $
    43,700
    
    
    
    8
    %
    
    $
    54,625
    
    
    
    10
    %Tier 1 Capital to Risk Weighted
AssetsConsolidated
    
    $
    66,861
    
    
    
    12.24
    %
    
    $
    21,856
    
    
    
    4
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    64,596
    
    
    
    11.83
    %
    
    $
    21,850
    
    
    
    4
    %
    
    $
    32,775
    
    
    
    6
    %Tier 1 Capital to Average AssetsConsolidated
    
    $
    66,861
    
    
    
    9.88
    %
    
    $
    27,063
    
    
    
    4
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    64,596
    
    
    
    9.55
    %
    
    $
    27,063
    
    
    
    4
    %
    
    $
    33,828
    
    
    
    5
    %As of December 31, 2006:Total Capital to Risk Weighted AssetsConsolidated
    
    $
    69,230
    
    
    
    16.08
    %
    
    $
    34,436
    
    
    
    8
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    67,395
    
    
    
    15.66
    %
    
    $
    34,436
    
    
    
    8
    %
    
    $
    43,045
    
    
    
    10
    %Tier 1 Capital to Risk Weighted AssetsConsolidated
    
    $
    63,986
    
    
    
    14.86
    %
    
    $
    17,218
    
    
    
    4
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    62,151
    
    
    
    14.44
    %
    
    $
    17,218
    
    
    
    4
    %
    
    $
    25,827
    
    
    
    6
    %Tier 1 Capital to Average AssetsConsolidated
    
    $
    63,986
    
    
    
    11.63
    %
    
    $
    22,008
    
    
    
    4
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    62,151
    
    
    
    11.30
    %
    
    $
    22,008
    
    
    
    4
    %
    
    $
    27,510
    
    
    
    5
    %
 NOTE 16.
    
    FAIR VALUE OF FINANCIAL INSTRUMENTS
 Disclosures
about Fair Values of Financial Instruments,
 F-26




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 16.
    
    FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
  Cash, Due From Banks, Interest Bearing Deposits in Banks, and Federal Funds Sold:
 Securities:
 Loans:
 Deposits:
 Securities Sold Under Repurchase Agreements:
 Other Borrowings:
 Accrued Interest:
 Off-Balance Sheet Instruments:
  December 31,2007
    
    2006Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    ValueFinancial assets:Cash, due from banks, interest
bearing deposits in banks,
and federal funds sold
    
    $
    26,183,304
    
    
    $
    26,183,304
    
    
    $
    71,939,641
    
    
    $
    71,939,641Securities available for sale
    
    
    80,731,983
    
    
    
    80,731,983
    
    
    
    70,114,808
    
    
    
    70,114,808Restricted equity securities
    
    
    1,041,800
    
    
    
    1,041,800
    
    
    
    1,342,700
    
    
    
    1,342,700Loans
    
    
    533,441,960
    
    
    
    533,238,880
    
    
    
    403,397,896
    
    
    
    401,632,224Accrued interest receivable
    
    
    4,724,813
    
    
    
    4,724,813
    
    
    
    3,879,272
    
    
    
    3,879,272Financial liabilities:Deposits
    
    
    615,236,359
    
    
    
    617,932,115
    
    
    
    496,692,502
    
    
    
    497,641,544Securities sold under repurchase agreement
    
    
    
    
    
    
    
    
    
    
    1,027,230
    
    
    
    1,027,230Other borrowings
    
    
    
    
    
    
    
    
    
    
    15,000,000
    
    
    
    15,000,000Accrued interest payable
    
    
    1,144,695
    
    
    
    1,144,695
    
    
    
    1,262,770
    
    
    
    1,262,770
 F-27




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 17.
    
    SUPPLEMENTAL FINANCIAL DATA
  Years Ended December 31,2007
    
    2006
    
    2005Data processing
    
    $
    1,198,749
    
    
    $
    872,050
    
    
    $
    556,567Contributions
    
    
    18,334
    
    
    
    18,973
    
    
    
    185,255Directors fees
    
    
    523,924
    
    
    
    193,375
    
    
    
    
 NOTE 18.
    
    PARENT COMPANY FINANCIAL INFORMATION
  CONDENSED BALANCE SHEETS
 2007
    
    
    2006AssetsCash
    
    $
    2,131,273
    
    
    $
    1,845,606Investment in subsidiary
    
    
    64,525,511
    
    
    
    61,723,681Other assets
    
    
    143,158
    
    
    
    52,302Total assets
    
    $
    66,799,942
    
    
    $
    63,621,589LiabilitiesDue to subsidiary
    
    $
    
    
    
    
    Other liabilities
    
    
    10,000
    
    
    
    62,302Total liabilities
    
    
    10,000
    
    
    
    62,302Stockholders equity
    
    
    66,789,942
    
    
    
    63,559,287Total liabilities and stockholders equity
    
    $
    66,799,942
    
    
    $
    63,621,589
 F-28




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 18.
    
    PARENT COMPANY FINANCIAL INFORMATION (Continued)
 CONDENSED STATEMENTS OF OPERATIONS
 2007
    
    
    2006
    
    
    2005Expenses:Interest
    
    $
    
    
    
    $
    
    
    
    $
    1,539Stock compensation
    
    
    
    
    
    
    
    
    
    
    106,138Other operating expenses
    
    
    350,821
    
    
    
    136,851
    
    
    
    84,921Total expenses
    
    
    350,821
    
    
    
    136,851
    
    
    
    192,598Loss before income taxes
    
    
    (350,821
    )
    
    
    (136,851
    )
    
    
    (192,598
    )Income tax expense (benefit)
    
    
    (193,377
    )
    
    
    
    
    
    
    Loss before equity in income (loss)
of subsidiary
    
    
    (157,444
    )
    
    
    (136,851
    )
    
    
    (192,598
    )Equity in income (loss) of subsidiary
    
    
    2,212,512
    
    
    
    402,982
    
    
    
    (1,125,445
    )Net income (loss)
    
    $
    2,055,068
    
    
    $
    266,131
    
    
    $
    (1,318,043
    )
  F-29




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 18.
    
    PARENT COMPANY FINANCIAL INFORMATION (Continued)
 CONDENSED STATEMENTS OF CASH FLOWS
 2007
    
    
    2006
    
    
    2005OPERATING ACTIVITIESNet income (loss)
    
    $
    2,055,068
    
    
    $
    266,131
    
    
    $
    (1,318,043
    )Adjustments to reconcile net income (loss) to
net cash used in operating activities:Equity in (income) loss of subsidiary
    
    
    (2,212,512
    )
    
    
    (402,982
    )
    
    
    1,125,445Stock compensation
    
    
    
    
    
    
    
    
    
    
    106,138Net other operating activities
    
    
    (143,159
    )
    
    
    (11,000
    )
    
    
    20,451Net cash used in operating activities
    
    
    (300,603
    )
    
    
    (147,851
    )
    
    
    (66,009
    )INVESTING ACTIVITIESInvestment in subsidiary
    
    
    
    
    
    
    (11,900,000
    )
    
    
    (28,500,000
    )Net cash used in investing activities
    
    
    
    
    
    
    (11,900,000
    )
    
    
    (28,500,000
    )FINANCING ACTIVITIESProceeds from sale of common stock
    
    
    
    
    
    
    5,295,739
    
    
    
    36,680,337Proceeds from exercise of stock options
    
    
    586,270
    
    
    
    514,457
    
    
    
    Purchase of fractional shares of common stock
    
    
    
    
    
    
    (1,660
    )
    
    
    (3,173
    )Repayment of other borrowings
    
    
    
    
    
    
    
    
    
    
    (26,500
    )Net cash provided by financing activities
    
    
    586,270
    
    
    
    5,808,536
    
    
    
    36,650,664Net increase (decrease) in cash
    
    
    285,667
    
    
    
    (6,239,315
    )
    
    
    8,084,655Cash at beginning of year
    
    
    1,845,606
    
    
    
    8,084,921
    
    
    
    266Cash at end of year
    
    $
    2,131,273
    
    
    $
    1,845,606
    
    
    $
    8,084,921
 NOTE 19.
    
    COMMON STOCK SPLIT
  F-30