EXHIBIT 13
 FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED FINANCIAL REPORT
DECEMBER 31, 2009
 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




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##### 



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




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##### 



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




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##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2009 AND 2008
 2009
    
    
    2008AssetsCash and due from banks
    
    $
    15,752,900
    
    
    $
    8,858,796Interest-bearing deposits in banks
    
    
    68,547,359
    
    
    
    11,042,345Federal funds sold
    
    
    
    
    
    
    722,000Securities available-for-sale, at fair value
    
    
    44,955,347
    
    
    
    71,764,629Restricted equity securities, at cost
    
    
    2,694,000
    
    
    
    2,053,400Loans
    
    
    612,213,063
    
    
    
    683,177,685Less allowance for loan losses
    
    
    12,879,081
    
    
    
    11,013,996Loans, net
    
    
    599,333,982
    
    
    
    672,163,689Premises and equipment
    
    
    37,045,578
    
    
    
    37,898,122Foreclosed assets
    
    
    13,740,602
    
    
    
    6,041,163Accrued interest receivable
    
    
    2,929,608
    
    
    
    3,880,284Other assets
    
    
    7,201,231
    
    
    
    6,961,193Total assets
    
    $
    792,200,607
    
    
    $
    821,385,621Liabilities and Stockholders EquityLiabilitiesDeposits:Noninterest-bearing
    
    $
    37,663,983
    
    
    $
    34,959,706Interest-bearing
    
    
    697,125,137
    
    
    
    702,131,988Total deposits
    
    
    734,789,120
    
    
    
    737,091,694Other borrowings
    
    
    22,000,000
    
    
    
    16,750,000Accrued interest payable
    
    
    531,655
    
    
    
    953,088Other liabilities
    
    
    502,237
    
    
    
    777,044Total liabilities
    
    
    757,823,012
    
    
    
    755,571,826Stockholders equityPreferred
stock, par value $0; 10,000,000 shares authorized; 0 shares issued and outstanding
    
    
    
    
    
    
    Common
stock, par value $0; 100,000,000 shares authorized; 13,993,233 and 12,492,206 shares issued and outstanding,
respectively
    
    
    77,440,952
    
    
    
    71,907,920Accumulated deficit
    
    
    (42,741,631
    )
    
    
    (5,692,364
    )Accumulated other comprehensive loss
    
    
    (321,726
    )
    
    
    (401,761
    )Total stockholders equity
    
    
    34,377,595
    
    
    
    65,813,795Total liabilities and stockholders equity
    
    $
    792,200,607
    
    
    $
    821,385,621
 See notes to consolidated financial statements.
 F-3




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##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
 2009
    
    
    2008
    
    
    2007Interest income:Loans, including fees
    
    $
    36,530,624
    
    
    $
    40,729,021
    
    
    $
    41,969,780Taxable securities
    
    
    1,901,410
    
    
    
    3,136,147
    
    
    
    3,219,131Nontaxable securities
    
    
    528,717
    
    
    
    618,372
    
    
    
    416,903Federal funds sold
    
    
    15,767
    
    
    
    126,649
    
    
    
    1,203,009Other interest income
    
    
    223,146
    
    
    
    124,759
    
    
    
    188,864Total interest income
    
    
    39,199,664
    
    
    
    44,734,948
    
    
    
    46,997,687Interest expense:Deposits
    
    
    17,571,722
    
    
    
    23,529,667
    
    
    
    25,135,423Other borrowings
    
    
    518,907
    
    
    
    478,208
    
    
    
    57,963Total interest expense
    
    
    18,090,629
    
    
    
    24,007,875
    
    
    
    25,193,386Net interest income
    
    
    21,109,035
    
    
    
    20,727,073
    
    
    
    21,804,301Provision for loan losses
    
    
    32,170,357
    
    
    
    8,914,368
    
    
    
    2,353,244Net interest income (loss) after
provision for loan losses
    
    
    (11,061,322
    )
    
    
    11,812,705
    
    
    
    19,451,057Other income:Service charges on deposit accounts
    
    
    2,099,632
    
    
    
    2,212,795
    
    
    
    1,869,988Mortgage origination fees
    
    
    1,053,285
    
    
    
    1,272,446
    
    
    
    1,343,204Net gain on sale of securities available for sale
    
    
    782,441
    
    
    
    726,419
    
    
    
    33,851Net gain on sale of premises and equipment
    
    
    
    
    
    
    182,305
    
    
    
    Other operating income
    
    
    269,677
    
    
    
    231,626
    
    
    
    190,563Total other income
    
    
    4,205,035
    
    
    
    4,625,591
    
    
    
    3,437,606Other expenses:Salaries and employee benefits
    
    
    11,419,261
    
    
    
    13,382,578
    
    
    
    12,830,241Equipment and occupancy expenses
    
    
    3,259,375
    
    
    
    3,335,624
    
    
    
    2,861,536Net loss on sale of foreclosed assets
    
    
    798,840
    
    
    
    216,840
    
    
    
    215,218Write down on foreclosed assets
    
    
    2,029,695
    
    
    
    1,185,528
    
    
    
    148,275Foreclosed asset expenses
    
    
    1,626,000
    
    
    
    244,078
    
    
    
    55,478FDIC insurance premiums
    
    
    2,229,052
    
    
    
    501,160
    
    
    
    300,012Other operating expenses
    
    
    5,185,360
    
    
    
    5,607,187
    
    
    
    5,002,341Total other expenses
    
    
    26,547,583
    
    
    
    24,472,995
    
    
    
    21,413,101Net income (loss) before income taxes
    
    
    (33,403,870
    )
    
    
    (8,034,699
    )
    
    
    1,475,562Income tax expense (benefit)
    
    
    3,645,397
    
    
    
    (2,959,764
    )
    
    
    (579,506
    )Net income (loss)
    
    
    (37,049,267
    )
    
    
    (5,074,935
    )
    
    
    2,055,068Basic earnings (losses) per share
    
    $
    (2.82
    )
    
    $
    (0.41
    )
    
    $
    0.17Diluted earnings (losses) per share
    
    $
    (2.82
    )
    
    $
    (0.41
    )
    
    $
    0.16Cash dividends per share
    
    $
    
    
    
    $
    
    
    
    $
    
 See notes to consolidated financial statements.
 F-4




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##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
 2009
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    (37,049,267
    )
    
    $
    (5,074,935
    )
    
    $
    2,055,068Other comprehensive income (loss):Reclassification adjustment for net gains on sales of securities
included in net income, net of tax of $297,328, $276,039
and $12,863 respectively
    
    
    (485,113
    )
    
    
    (450,380
    )
    
    
    (20,988
    )Net unrealized holding gains on securities available for sale
arising during period, net of tax of $346,382, $73,242,
and $30,580 respectively
    
    
    565,148
    
    
    
    119,502
    
    
    
    376,781Other comprehensive income (loss)
    
    
    80,035
    
    
    
    (330,878
    )
    
    
    355,793Comprehensive income (loss)
    
    $
    (36,969,232
    )
    
    $
    (5,405,813
    )
    
    $
    2,410,861
 See notes to consolidated financial statements.
 F-5




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
 AccumulatedCommon Stock
    
    
    
    
    
    
    Other
    
    
    TotalAt Amount
    
    
    Accumulated
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Paid In
    
    
    Deficit
    
    
    Loss
    
    
    EquityBalance, 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
    )
    
    
    66,789,942Net loss
    
    
    
    
    
    
    
    
    
    
    (5,074,935
    )
    
    
    
    
    
    
    (5,074,935
    )Stock compensation expense
    
    
    
    
    
    
    357,980
    
    
    
    
    
    
    
    
    
    
    
    357,980Exercise of stock options
    
    
    52,184
    
    
    
    279,690
    
    
    
    
    
    
    
    
    
    
    
    279,6904 for 3 stock split
    
    
    2,078
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock
    
    
    253,332
    
    
    
    3,799,981
    
    
    
    
    
    
    
    
    
    
    
    3,799,981Purchase of fractional shares
    
    
    (532
    )
    
    
    (7,985
    )
    
    
    
    
    
    
    
    
    
    
    (7,985
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (330,878
    )
    
    
    (330,878
    )Balance, December 31, 2008
    
    
    12,492,206
    
    
    
    71,907,920
    
    
    
    (5,692,364
    )
    
    
    (401,761
    )
    
    
    65,813,795Net loss
    
    
    
    
    
    
    
    
    
    
    (37,049,267
    )
    
    
    
    
    
    
    (37,049,267
    )Stock compensation expense
    
    
    
    
    
    
    267,351
    
    
    
    
    
    
    
    
    
    
    
    267,351Exercise of stock options
    
    
    37,122
    
    
    
    130,093
    
    
    
    
    
    
    
    
    
    
    
    130,093Issuance of common stock
    
    
    1,463,905
    
    
    
    5,123,668
    
    
    
    
    
    
    
    
    
    
    
    5,123,668Excess tax benefit from stock options
exercised
    
    
    
    
    
    
    11,920
    
    
    
    
    
    
    
    
    
    
    
    11,920Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,035
    
    
    
    80,035Balance, December 31, 2009
    
    
    13,993,233
    
    
    $
    77,440,952
    
    
    $
    (42,741,631
    )
    
    $
    (321,726
    )
    
    $
    34,377,595
 See notes to consolidated financial statements.
 F-6




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##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
 2009
    
    
    2008
    
    
    2007OPERATING ACTIVITIESNet income (loss)
    
    $
    (37,049,267
    )
    
    $
    (5,074,935
    )
    
    $
    2,055,068Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:Depreciation
    
    
    1,934,328
    
    
    
    1,970,154
    
    
    
    1,589,113Amortization and accretion of securities
    
    
    201,649
    
    
    
    19,348
    
    
    
    19,149Provision for loan losses
    
    
    32,170,357
    
    
    
    8,914,368
    
    
    
    2,353,244Writedowns of foreclosed assets
    
    
    2,029,696
    
    
    
    1,185,528
    
    
    
    148,275Stock compensation expense
    
    
    267,351
    
    
    
    357,980
    
    
    
    153,420Deferred taxes
    
    
    4,197,872
    
    
    
    (2,086,277
    )
    
    
    (1,405,879
    )Net gain on sale of securities available-for-sale
    
    
    (782,441
    )
    
    
    (726,419
    )
    
    
    (33,851
    )Net gain loss on sale of foreclosed assets
    
    
    798,840
    
    
    
    216,840
    
    
    
    216,473Net gain on sale of premises and equipment
    
    
    
    
    
    
    (182,305
    )
    
    
    (43,147
    )Decrease in income taxes payable
    
    
    857,613
    
    
    
    (1,199,487
    )
    
    
    (824,380
    )(Increase) decrease in interest receivable
    
    
    950,676
    
    
    
    844,529
    
    
    
    (845,541
    )Decrease in interest payable
    
    
    (421,433
    )
    
    
    (191,607
    )
    
    
    (118,075
    )Increase in FDIC prepaid assessment
    
    
    (5,476,743
    )
    
    
    (4,289
    )
    
    
    (3,613
    )Excess tax benefit from stock options exercised
    
    
    (11,920
    )
    
    
    
    
    
    
    (80,104
    )Net other operating activities
    
    
    (130,720
    )
    
    
    (1,257,352
    )
    
    
    561,956Net cash (used in) provided by operating activities
    
    
    (464,142
    )
    
    
    2,786,076
    
    
    
    3,742,108INVESTING ACTIVITIES(Increase) decrease in interest-bearing deposits in banks
    
    
    (57,505,014
    )
    
    
    (10,976,328
    )
    
    
    11,162,035Purchases of securities available for sale
    
    
    (51,187,310
    )
    
    
    (48,099,626
    )
    
    
    (44,124,181
    )Proceeds from maturities of securities available for sale
    
    
    20,141,730
    
    
    
    10,090,611
    
    
    
    28,671,358Proceeds from sales of securities available for sale
    
    
    58,564,741
    
    
    
    47,149,764
    
    
    
    5,162,699(Purchases) redemptions of restricted equity securities
    
    
    (640,600
    )
    
    
    (1,011,600
    )
    
    
    300,900Decrease in federal funds sold
    
    
    722,000
    
    
    
    19,283,000
    
    
    
    33,363,000Net (increase) decrease in loans
    
    
    21,589,788
    
    
    
    (154,422,127
    )
    
    
    (135,390,668
    )Purchase of premises and equipment
    
    
    (1,081,784
    )
    
    
    (6,417,974
    )
    
    
    (8,978,454
    )Proceeds from sale of foreclosed assets
    
    
    8,843,171
    
    
    
    972,519
    
    
    
    1,462,937Proceeds from sale of premises and equipment
    
    
    
    
    
    
    1,018,997
    
    
    
    217,088Additions to other real estate owned
    
    
    (301,583
    )
    
    
    (303,824
    )
    
    
    (3,125
    )Net cash used in investing activities
    
    
    (854,861
    )
    
    
    (142,716,588
    )
    
    
    (108,156,411
    )FINANCING ACTIVITIESNet increase (decrease) in deposits
    
    
    (2,302,574
    )
    
    
    121,855,335
    
    
    
    118,543,857Net increase in (repayments of) other borrowings
    
    
    5,250,000
    
    
    
    16,750,000
    
    
    
    (15,000,000
    )Net decrease in federal funds purchased and repurchase
agreements
    
    
    
    
    
    
    
    
    
    
    (1,027,230
    )Proceeds from sale of common stock
    
    
    5,123,668
    
    
    
    3,799,981
    
    
    
    Proceeds from exercise of stock options
    
    
    130,093
    
    
    
    279,690
    
    
    
    586,270Purchase of fractional shares of common stock
    
    
    
    
    
    
    (7,985
    )
    
    
    Excess tax benefit from stock options exercised
    
    
    11,920
    
    
    
    
    
    
    
    80,104Net cash provided by financing activities
    
    
    8,213,107
    
    
    
    142,677,021
    
    
    
    103,183,001Net increase (decrease) in cash and due from banks
    
    
    6,894,104
    
    
    
    2,746,509
    
    
    
    (1,231,302
    )Cash and due from banks, beginning of period
    
    
    8,858,796
    
    
    
    6,112,287
    
    
    
    7,343,589Cash and due from banks, end of period
    
    $
    15,752,900
    
    
    $
    8,858,796
    
    
    $
    6,112,287
 F-7




---



##### 



2009
    
    
    2008
    
    
    2007SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during period for:Interest
    
    $
    18,108,555
    
    
    $
    24,282,364
    
    
    $
    25,505,142Income taxes
    
    $
    
    
    
    $
    336,000
    
    
    $
    1,650,753NONCASH TRANSACTIONSFinanced sales of foreclosed assets
    
    $
    4,520,663
    
    
    $
    1,354,337
    
    
    $
    61,711Loans transferred to foreclosed assets
    
    $
    23,590,226
    
    
    $
    8,140,367
    
    
    $
    3,055,071
 See notes to consolidated financial statements.
 F-8




---



##### 



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




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Premises and Equipment
  Land improvements
    
    10-15 yearsBuildings
    
    30-40 yearsEquipment
    
    3-10 years
 Foreclosed Assets
   Income Taxes
   F-11




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Earnings (Losses) Per Share
  Stock-Based Compensation
   Comprehensive Income (Loss)
  Recent Accounting Pronouncements
  F-12




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
       Reclassification
  F-13




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 2. REGULATORY OVERSIGHT, CAPITAL ADEQUACY, OPERATING LOSSES AND MANAGEMENTS PLANS
  Regulatory Oversight & Capital Adequacy
  
    
    Achieving and maintaining a minimum Tier 1 Leverage Ratio of 8%; and
    
    Planning for the scheduled reduction of certain classified assets; and
    
    No cash dividends may be paid without prior regulatory approval.
   Operating Losses
   F-14




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Liquidity
   NOTE 3. SECURITIES AVAILABLE FOR SALE
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDecember 31, 2009:Debt securities:U.S. Government-sponsored
enterprises (GSEs)
    
    $
    1,500,000
    
    
    $
    
    
    
    $
    (16,406
    )
    
    $
    1,483,594Mortgage-backed securities GSE residential
    
    
    35,043,311
    
    
    
    215,528
    
    
    
    (294,669
    )
    
    
    34,964,170State, county and municipals
    
    
    6,389,224
    
    
    
    18,909
    
    
    
    (309,052
    )
    
    
    6,099,081Corporate securities
    
    
    2,541,724
    
    
    
    
    
    
    
    (133,222
    )
    
    
    2,408,502Total debt securities
    
    $
    45,474,259
    
    
    $
    234,437
    
    
    $
    (753,349
    )
    
    $
    44,955,347December 31, 2008:Debt securities:U.S.
Government sponsored Enterprises (GSEs)
    
    $
    20,478,647
    
    
    $
    647,993
    
    
    $
    
    
    
    $
    21,126,640Mortgage-backed securities GSE residential
    
    
    34,199,020
    
    
    
    696,568
    
    
    
    (76,228
    )
    
    
    34,819,360State, county and municipals
    
    
    15,187,226
    
    
    
    2,170
    
    
    
    (1,648,137
    )
    
    
    13,541,259Corporate securities
    
    
    2,547,738
    
    
    
    7,500
    
    
    
    (277,868
    )
    
    
    2,277,370Total debt securities
    
    $
    72,412,631
    
    
    $
    1,354,231
    
    
    $
    (2,002,233
    )
    
    $
    71,764,629
  F-15




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Amortized
    
    
    FairCost
    
    
    ValueAfter ten years
    
    $
    10,430,948
    
    
    $
    9,991,177Mortgage-backed securities
    
    
    35,043,311
    
    
    
    34,964,170$
    45,474,259
    
    
    $
    44,955,347
   Years Ended December 31,2009
    
    
    2008
    
    
    2007Gross gains
    
    $
    969,620
    
    
    $
    752,075
    
    
    $
    33,851Gross loss
    
    
    (187,179
    )
    
    
    (25,656
    )
    
    
    Net realized gains
    
    $
    782,441
    
    
    $
    726,419
    
    
    $
    33,851
 Temporarily Impaired Securities
  December 31, 2009Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. Government-sponsored
enterprises (GSEs)
    
    $
    1,483,594
    
    
    $
    (16,406
    )
    
    $
    
    
    
    $
    
    
    
    $
    1,483,594
    
    
    $
    (16,406
    )Mortgage-backed securities GSE residential
    
    
    24,022,030
    
    
    
    (294,669
    )
    
    
    
    
    
    
    
    
    
    
    24,022,030
    
    
    
    (294,669
    )State, county and municipals
    
    
    1,236,523
    
    
    
    (22,342
    )
    
    
    2,445,005
    
    
    
    (286,710
    )
    
    
    3,681,528
    
    
    
    (309,052
    )Corporate securities
    
    
    930,000
    
    
    
    (70,000
    )
    
    
    1,478,502
    
    
    
    (63,222
    )
    
    
    2,408,502
    
    
    
    (133,222
    )Total temporarily impaired securities
    
    $
    27,672,147
    
    
    $
    (403,417
    )
    
    $
    3,923,507
    
    
    $
    (349,932
    )
    
    $
    31,595,654
    
    
    $
    (753,349
    )
 December 31, 2008Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. Government-sponsored
enterprises (GSEs)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Mortgage-backed securities GSE residential
    
    
    6,336,827
    
    
    
    (73,011
    )
    
    
    971,055
    
    
    
    (3,217
    )
    
    
    7,307,882
    
    
    
    (76,228
    )State, county and municipals
    
    
    12,365,148
    
    
    
    (1,492,817
    )
    
    
    888,316
    
    
    
    (155,320
    )
    
    
    13,253,464
    
    
    
    (1,648,137
    )Corporate securities
    
    
    1,269,870
    
    
    
    (277,868
    )
    
    
    
    
    
    
    
    
    
    
    1,269,870
    
    
    
    (277,868
    )Total temporarily impaired securities
    
    $
    19,971,845
    
    
    $
    (1,843,696
    )
    
    $
    1,859,371
    
    
    $
    (158,537
    )
    
    $
    21,831,216
    
    
    $
    (2,002,233
    )
 F-16




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     NOTE 4. LOANS
  December 31,2009
    
    
    2008Commercial and industrial
    
    $
    43,997,976
    
    
    $
    49,640,782Real estate  construction
    
    
    147,741,641
    
    
    
    202,523,075Real estate  mortgage:Secured by farmland
    
    
    17,054,608
    
    
    
    12,699,336Secured by 1-4 family residential properties
    
    
    180,401,840
    
    
    
    182,965,713Secured by multi-family properties
    
    
    40,175,914
    
    
    
    46,136,304Secured by owner-occupied non-farm non-residential
properties
    
    
    83,656,713
    
    
    
    61,397,143Secured by other non-farm non-residential properties
    
    
    76,777,596
    
    
    
    97,647,787Loans for agricultural/farmers
    
    
    619,169
    
    
    
    1,997,204Installment loans to individuals
    
    
    21,890,645
    
    
    
    28,367,914612,316,102
    
    
    
    683,375,258
 F-17




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 December 31,2009
    
    
    2008Deferred loan fees and costs
    
    
    (103,039
    )
    
    
    (197,573
    )Allowance for loan losses
    
    
    (12,879,081
    )
    
    
    (11,013,996
    )Loans, net
    
    $
    599,333,982
    
    
    $
    672,163,689
  Years Ended December 31,2009
    
    
    2008
    
    
    2007Balance, beginning of year
    
    $
    11,013,996
    
    
    $
    6,267,211
    
    
    $
    5,244,200Provision for loan losses
    
    
    32,170,357
    
    
    
    8,914,368
    
    
    
    2,353,244Loans charged off
    
    
    (30,393,140
    )
    
    
    (4,245,515
    )
    
    
    (1,388,685
    )Recoveries of loans
previously charged off
    
    
    87,868
    
    
    
    77,932
    
    
    
    58,452Balance, end of year
    
    $
    12,879,081
    
    
    $
    11,013,996
    
    
    $
    6,267,211
    As of and for the Years Ended December 31,2009
    
    
    2008
    
    
    2007Impaired loans with a valuation allowance
    
    $
    8,893,845
    
    
    $
    15,713,361
    
    
    $
    2,174,606Impaired loans without a valuation allowance
    
    
    40,953,118
    
    
    
    21,147,998
    
    
    
    425,060Total impaired loans
    
    $
    49,846,963
    
    
    $
    36,861,359
    
    
    $
    2,599,666Valuation allowance related to impaired loans
    
    $
    1,033,903
    
    
    $
    2,386,612
    
    
    $
    406,184Total non-accrual loans
    
    
    48,720,377
    
    
    
    36,861,359
    
    
    
    2,284,269Total loans past due ninety days or more and
still accruing
    
    
    
    
    
    
    
    
    
    
    Average investment in impaired loans
    
    
    33,705,870
    
    
    
    10,878,804
    
    
    
    1,153,702
    F-18




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Balance, beginning of year
    
    $
    16,120,716Advances
    
    
    6,017,592Repayments
    
    
    (5,373,887
    )Changes in related parties
    
    
    (534,713
    )Balance, end of year
    
    $
    16,229,708
 NOTE 5. FORECLOSED ASSETS
  Years Ended December 31,2009
    
    
    2008Balance, beginning of year
    
    $
    6,041,163
    
    
    $
    1,326,196Additions
    
    
    23,590,226
    
    
    
    8,140,367Disposals
    
    
    (8,843,171
    )
    
    
    (972,519
    )Internally financed sales
    
    
    (4,520,663
    )
    
    
    (1,354,337
    )Capitalized costs
    
    
    301,583
    
    
    
    303,824Writedowns and losses
    
    
    (2,828,536
    )
    
    
    (1,402,368
    )Balance, end of year
    
    $
    13,704,602
    
    
    $
    6,041,163
  Years Ended December 31,2009
    
    2008
    
    2007Net loss (gain) on sales
    
    $
    798,840
    
    
    $
    216,840
    
    
    $
    215,218Writedowns
    
    
    2,029,696
    
    
    
    1,185,528
    
    
    
    148,275Other expenses, net of rental income
    
    
    1,626,000
    
    
    
    244,078
    
    
    
    Total expenses related to foreclosed assets
    
    $
    4,454,536
    
    
    
    1,646,446
    
    
    
    363,493
 NOTE 6. PREMISES AND EQUIPMENT
  December 31,2009
    
    
    2008Land and land improvements
    
    $
    8,954,260
    
    
    $
    8,915,260Buildings
    
    
    27,195,916
    
    
    
    24,574,243Construction and equipment installation in progress
    
    
    73,764
    
    
    
    2,172,629Equipment
    
    
    7,444,670
    
    
    
    6,951,30043,668,610
    
    
    
    42,613,432Accumulated depreciation
    
    
    (6,623,032
    )
    
    
    (4,715,310
    )$
    37,045,578
    
    
    $
    37,898,122
  F-19




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Leases
   2010
    
    $
    30,0002011
    
    
    12,500$
    42,500
 NOTE 7. DEPOSITS
  2010
    
    $
    319,986,7372011
    
    
    80,733,0162012
    
    
    19,673,1132013
    
    
    4,530,1402014
    
    
    6,060,241$
    430,983,247
  NOTE 8. OTHER BORROWINGS
  December 31,2009
    
    
    2008Fixed rate credit at 2.95% due March 23, 2011 repaid March 2009
    
    $
    
    
    
    $
    5,000,000Fixed rate credit at 4.055% due July 31, 2012 repaid March 2009
    
    
    
    
    
    
    1,750,000Fixed rate credit at 3.47% due March 23, 2013 repaid March 2009
    
    
    
    
    
    
    5,000,000Fixed rate credit at 3.83% due March 23, 2015 repaid March 2009
    
    
    
    
    
    
    5,000,000Fixed rate credit at 1.43% due November 4, 2011
    
    
    10,000,000
    
    
    
    Fixed rate credit at 2.34% due November 18, 2013
    
    
    7,000,000
    
    
    
    Fixed rate credit at 3.04% due November 4, 2014
    
    
    5,000,000
    
    
    
    $
    22,000,000
    
    
    
    16,750,000
 F-20




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 9. COMMON STOCK
 Private Placement Offering
   Weighted-AverageExerciseNumber
    
    
    PriceWarrants outstanding, beginning of year
    
    
    
    
    
    $
    Granted
    
    
    365,950
    
    
    
    3.50Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Warrants outstanding, end of year
    
    
    365,950
    
    
    $
    3.50Exercisable, end of year
    
    
    365,950
    
    
    $
    3.50
 NOTE 10. EMPLOYEE BENEFIT PLANS
 4 01(k) Retirement Plan
  Incentive Stock Option Plan
  F-21




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Years ended December 31,2009
    
    
    2008
    
    
    2007Dividend yield
    
    
    
    
    
    
    0
    %
    
    
    0
    %Expected life
    
    
    
    
    
    6.5 years
    
    6.5 yearsRisk-free interest rate
    
    
    
    
    
    
    2.9
    %
    
    
    4.31 to 4.96
    %Expected volatility/weighted
average expected volatility
    
    
    
    
    
    
    24
    %
    
    
    24
    %
  Years Ended December 31,2009
    
    
    2008
    
    
    2007Weighted-
    
    
    
    
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseNumber
    
    
    Price
    
    
    Number
    
    
    Price
    
    
    Number
    
    
    PriceOptions outstanding, beginning of year
    
    
    1,295,739
    
    
    $
    6.90
    
    
    
    1,293,275
    
    
    $
    6.45
    
    
    
    1,304,320
    
    
    $
    5.46Granted
    
    
    
    
    
    
    
    
    
    
    55,167
    
    
    
    15.00
    
    
    
    137,067
    
    
    
    14.60Exercised
    
    
    (22,366
    )
    
    
    3.58
    
    
    
    (69,018
    )
    
    
    4.78
    
    
    
    (122,813
    )
    
    
    4.77Forfeited
    
    
    (54,952
    )
    
    
    10.75
    
    
    
    (19,685
    )
    
    
    7.44
    
    
    
    (25,299
    )
    
    
    7.90Options outstanding, end of year
    
    
    1,182,420
    
    
    $
    6.78
    
    
    
    1,259,739
    
    
    $
    6.90
    
    
    
    1,293,275
    
    
    $
    6.45Exercisable, end of year
    
    
    1,071,047
    
    
    $
    6.26
    
    
    
    999,277
    
    
    $
    5.86
    
    
    
    829,562
    
    
    $
    5.07
     F-22




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 11. INCOME TAXES
  Years Ended December 31,2009
    
    
    2008
    
    
    2007Current
    
    $
    (552,474
    )
    
    $
    (873,487
    )
    
    $
    826,373Deferred
    
    
    (12,092,546
    )
    
    
    (2,086,277
    )
    
    
    (381,692
    )Change in valuation allowance
    
    
    16,290,417
    
    
    
    
    
    
    
    (1,024,187
    )Income tax expense (benefit)
    
    $
    3,645,397
    
    
    $
    (2,959,764
    )
    
    $
    (579,506
    )
  Years Ended December 31,2009
    
    
    2008
    
    
    2007Tax provision at federal
statutory rate
    
    $
    (11,357,314
    )
    
    $
    (2,731,797
    )
    
    $
    501,691State income taxes (benefit)
    
    
    (1,229,680
    )
    
    
    (220,198
    )
    
    
    (35,154
    )Change in valuation allowance
    
    
    16,290,417
    
    
    
    
    
    
    
    (1,024,188
    )Nondeductible expenses
    
    
    9,758
    
    
    
    46,578
    
    
    
    40,566Stock compensation
    
    
    90,899
    
    
    
    121,713
    
    
    
    52,163Tax free interest
    
    
    (158,683
    )
    
    
    (176,060
    )
    
    
    (112,229
    )Other
    
    
    
    
    
    
    
    
    
    
    (2,355
    )Income tax expense (benefit)
    
    $
    3,645,397
    
    
    $
    (2,959,764
    )
    
    $
    (579,506
    )
  December 31,2009
    
    
    2008Deferred tax assets:Loan loss reserves
    
    $
    4,740,055
    
    
    $
    3,987,288Net operating loss
    
    
    11,378,424
    
    
    
    Pre-opening expenses
    
    
    6,710
    
    
    
    7,370Deferred loan fees
    
    
    38,883
    
    
    
    74,555Securities available for sale
    
    
    197,187
    
    
    
    246,241Contributions
    
    
    6,914
    
    
    
    3,598Non-accrual loan interest
    
    
    
    
    
    
    45,086Reserve for repossessed assets
    
    
    472,022
    
    
    
    431,14116,840,195
    
    
    
    4,795,279Deferred tax liabilities:Depreciation
    
    
    352,591
    
    
    
    353,522Valuation allowance
    
    
    (16,290,417
    )
    
    
    Net deferred taxes
    
    $
    197,187
    
    
    $
    4,441,757
 F-23




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 12. EARNINGS (LOSSES) PER SHARE
  Years Ended December 31,2009
    
    2008
    
    2007Basic earnings (losses) per share:Weighted average common shares outstanding
    
    
    13,154,350
    
    
    
    12,297,893
    
    
    
    12,124,152Net income (loss)
    
    $
    (37,049,267
    )
    
    $
    (5,074,935
    )
    
    $
    2,055,068Basic earnings (losses) per share
    
    $
    (2.82
    )
    
    $
    (.41
    )
    
    $
    .17Diluted earnings (losses) per share:Weighted average common shares outstanding
    
    
    13,154,350
    
    
    
    12,297,893
    
    
    
    12,124,152Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the year
    
    
    
    
    
    
    
    
    
    
    765,001Total weighted average common shares and
common stock equivalents outstanding
    
    
    13,154,350
    
    
    
    12,297,893
    
    
    
    12,889,153Net income (loss)
    
    $
    (37,049,267
    )
    
    $
    (5,074,935
    )
    
    $
    2,055,068Diluted earnings (losses) per share
    
    $
    (2.82
    )
    
    $
    (.41
    )
    
    $
    .16
  NOTE 13. COMMITMENTS AND CONTINGENCIES
 Loan Commitments
   F-24




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 December 31,2009
    
    
    2008Commitments to extend credit
    
    $
    34,397,240
    
    
    $
    52,381,387Letters of credit
    
    
    308,077
    
    
    
    957,485$
    34,705,317
    
    
    $
    53,338,872
       Contingencies
  Employee Agreements
  F-25




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 14. CONCENTRATIONS OF CREDIT
    NOTE 15. REGULATORY MATTERS
     F-26




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 To Be WellFor Capital
    
    
    Capitalized UnderAdequacy
    
    
    Prompt CorrectiveActual
    
    
    Purposes
    
    
    Action ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(Dollars in Thousands)As of December 31, 2009:Total Capital to Risk Weighted AssetsConsolidated
    
    $
    42,310
    
    
    
    7.01
    %
    
    $
    48,282
    
    
    
    8
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    41,699
    
    
    
    6.91
    %
    
    $
    48,282
    
    
    
    8
    %
    
    $
    60,353
    
    
    
    10
    %Tier 1 Capital to Risk Weighted AssetsConsolidated
    
    $
    34,700
    
    
    
    5.75
    %
    
    $
    24,141
    
    
    
    4
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    34,089
    
    
    
    5.65
    %
    
    $
    24,141
    
    
    
    4
    %
    
    $
    36,212
    
    
    
    6
    %Tier 1 Capital to Average AssetsConsolidated
    
    $
    34,700
    
    
    
    4.37
    %
    
    $
    31,781
    
    
    
    4
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    37,438
    
    
    
    4.29
    %
    
    $
    31,781
    
    
    
    4
    %
    
    $
    39,725
    
    
    
    5
    %As of December 31, 2008:Total Capital to Risk Weighted AssetsConsolidated
    
    $
    71,777
    
    
    
    10.67
    %
    
    $
    53,804
    
    
    
    8
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    70,932
    
    
    
    10.55
    %
    
    $
    53,790
    
    
    
    8
    %
    
    $
    67,237
    
    
    
    10
    %Tier 1 Capital to Risk Weighted AssetsConsolidated
    
    $
    63,338
    
    
    
    9.42
    %
    
    $
    26,902
    
    
    
    4
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    62,495
    
    
    
    9.29
    %
    
    $
    26,895
    
    
    
    4
    %
    
    $
    40,342
    
    
    
    6
    %Tier 1 Capital to Average AssetsConsolidated
    
    $
    63,338
    
    
    
    7.65
    %
    
    $
    33,099
    
    
    
    4
    %
    
    $
    N/A
    
    
    
    N/ABank
    
    $
    62,495
    
    
    
    7.55
    %
    
    $
    33,099
    
    
    
    4
    %
    
    $
    41,374
    
    
    
    5
    %
 NOTE 16. FAIR VALUE OF ASSETS AND LIABILITIES
 Determination of Fair Value
   F-27




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Fair Value Hierarchy
       Cash and cash equivalents and interest-bearing deposits in banks
  Securities Available for Sale:
 Restricted equity securities:
 Loans:
 F-28




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Foreclosed Assets:
 Deposits:
 Other Borrowings:
 Accrued Interest:
  December 31, 2009(In Thousands)Quoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsDecember 31, 2009
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalAssets measured on a recurring basis:Available for sale securities
    
    $
    
    
    
    $
    44,955
    
    
    $
    
    
    
    $
    44,955Total assets at fair value
    
    $
    
    
    
    $
    44,955
    
    
    $
    
    
    
    $
    44,955
 December 31, 2008(In Thousands)Quoted Prices in
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsDecember 31, 2009
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalAssets measured on a recurring basis:Available for sale securities
    
    $
    
    
    
    $
    71,765
    
    
    $
    
    
    
    $
    71,765Total assets at fair value
    
    $
    
    
    
    $
    71,765
    
    
    $
    
    
    
    $
    71,765
  F-29




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 As of December 31, 2009(In Thousands)Fair Value Measurements UsingQuoted Prices
    
    
    Significantin Active
    
    
    Other
    
    
    SignificantMarkets for
    
    
    Observable
    
    
    UnobservableIdentical Assets
    
    
    Inputs
    
    
    Inputs
    
    
    Total Gains(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    (Losses)Impaired loans
    
    $
    
    
    
    $
    24,665
    
    
    $
    24,452
    
    
    $
    (19,256
    )Foreclosed assets
    
    
    
    
    
    
    5,165
    
    
    
    8,575
    
    
    
    (1,251
    )Total
    
    $
    
    
    
    $
    29,830
    
    
    $
    33,027
    
    
    $
    (20,507
    )
 As of December 31, 2008(In Thousands)Fair Value Measurements UsingQuoted Prices
    
    
    Significantin Active
    
    
    Other
    
    
    SignificantMarkets for
    
    
    Observable
    
    
    UnobservableIdentical Assets
    
    
    Inputs
    
    
    Inputs
    
    
    Total Gains(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    (Losses)Impaired loans
    
    $
    
    
    
    $
    6,765
    
    
    $
    31,860
    
    
    $
    (2,387
    )Foreclosed assets
    
    
    
    
    
    
    841
    
    
    
    5,200
    
    
    
    (1,186
    )Total
    
    $
    
    
    
    $
    7,606
    
    
    $
    37,060
    
    
    $
    (3,573
    )
   December 31, 2009
    
    
    December 31, 2008Carrying
    
    
    
    
    
    
    CarryingAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair Value(In Thousands)
    
    
    (In Thousands)Financial Assets:Cash and cash equivalents
    
    $
    84,300
    
    
    $
    84,300
    
    
    $
    20,623
    
    
    $
    20,623Securities available-for-sale
    
    
    44,955
    
    
    
    44,955
    
    
    
    71,764
    
    
    
    71,764Restricted equity securities
    
    
    2,694
    
    
    
    2,694
    
    
    
    2,053
    
    
    
    2,053Loans, net
    
    
    599,334
    
    
    
    596,516
    
    
    
    672,164
    
    
    
    667,130Accrued interest receivable
    
    
    3,104
    
    
    
    3,104
    
    
    
    3,880
    
    
    
    3,880Financial Liabilities:Deposits
    
    $
    734,789
    
    
    $
    739,833
    
    
    $
    737,092
    
    
    $
    741,079Other borrowings
    
    
    22,000
    
    
    
    21,243
    
    
    
    16,750
    
    
    
    17,010Accrued interest payable
    
    
    532
    
    
    
    532
    
    
    
    953
    
    
    
    953
 F-30




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 17.
    
    SUPPLEMENTAL FINANCIAL DATA
  Years Ended December 31,2009
    
    
    2008
    
    
    2007Data processing
    
    $
    1,582,362
    
    
    $
    1,509,704
    
    
    $
    1,198,749Legal fees  loan related
    
    
    550,408
    
    
    
    71,853
    
    
    
    32,977
 NOTE 18.
    
    PARENT COMPANY FINANCIAL INFORMATION
  CONDENSED BALANCE SHEETS
 2009
    
    
    2008AssetsCash
    
    $
    619,770
    
    
    $
    729,263Investment in subsidiary
    
    
    33,767,076
    
    
    
    64,971,194Other assets
    
    
    750
    
    
    
    173,336Total assets
    
    $
    34,387,595
    
    
    $
    65,873,793LiabilitiesOther liabilities
    
    $
    10,000
    
    
    $
    59,998Stockholders equity
    
    
    34,377,595
    
    
    
    65,813,795Total liabilities and stockholders equity
    
    $
    34,387,595
    
    
    $
    65,873,793
 CONDENSED STATEMENTS OF OPERATIONS
 2009
    
    
    2008
    
    
    2007Expenses:Other operating expenses
    
    $
    421,804
    
    
    $
    438,061
    
    
    $
    350,821Loss before income tax expense (benefit)
    
    
    (421,804
    )
    
    
    (438,061
    )
    
    
    (350,821
    )Income tax expense (benefit)
    
    
    7,370
    
    
    
    (165,306
    )
    
    
    (193,377
    )Loss before equity in income of subsidiary
    
    
    (429,174
    )
    
    
    (272,755
    )
    
    
    (157,444
    )Equity in income (loss) of subsidiary
    
    
    (36,620,093
    )
    
    
    (4,802,180
    )
    
    
    2,212,512Net income (loss)
    
    $
    (37,049,267
    )
    
    $
    (5,074,935
    )
    
    $
    2,055,068
 F-31




---



##### 



FGBC BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED STATEMENTS OF CASH FLOWS
 2009
    
    
    2008
    
    
    2007OPERATING ACTIVITIESNet income (loss)
    
    $
    (37,049,267
    )
    
    $
    (5,074,935
    )
    
    $
    2,055,068Adjustments to reconcile net income (loss) to
net cash used in operating activities:Equity in (income) loss of subsidiary
    
    
    36,620,093
    
    
    
    4,802,180
    
    
    
    (2,212,512
    )Excess tax benefit from stock options exercised
    
    
    (11,920
    )
    
    
    
    
    
    
    (80,104
    )Net other operating activities
    
    
    134,508
    
    
    
    19,819
    
    
    
    (63,055
    )Net cash used in operating activities
    
    
    (306,586
    )
    
    
    (252,936
    )
    
    
    (300,603
    )INVESTING ACTIVITIESInvestment in subsidiary
    
    
    (5,068,587
    )
    
    
    (5,220,760
    )
    
    
    Net cash used in investing activities
    
    
    (5,068,587
    )
    
    
    (5,220,760
    )
    
    
    FINANCING ACTIVITIESProceeds from sale of common stock
    
    
    5,123,668
    
    
    
    3,799,981
    
    
    
    Proceeds from exercise of stock options
    
    
    142,013
    
    
    
    279,690
    
    
    
    506,166Excess tax benefit from stock options exercised
    
    
    11,920
    
    
    
    
    
    
    
    80,104Purchase of fractional shares of common stock
    
    
    
    
    
    
    (7,985
    )
    
    
    Net cash provided by financing activities
    
    
    5,265,681
    
    
    
    4,071,686
    
    
    
    586,270Net increase (decrease) in cash
    
    
    (109,493
    )
    
    
    (1,402,010
    )
    
    
    285,667Cash at beginning of year
    
    
    729,263
    
    
    
    2,131,273
    
    
    
    1,845,606Cash at end of year
    
    $
    619,770
    
    
    $
    729,263
    
    
    $
    2,131,273
 F-32