UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X] Annual Report Pursuant To Section 13 Or 15(d) of The Securities Exchange Act
    Of 1934 For The Fiscal Year December 31, 2000 Or

[ ] Transition Report Pursuant To Section 13 Or 15 (D) Of The Securities
    Exchange Act Of 1934
    For the Transition Period from ___________ to ________________

                        Commission file number 333-86371

                          Coastal Banking Company, Inc.
                       ----------------------------------
             (Exact name of registrant as specified in its charter)

           South Carolina                                 58-2455444
           --------------                    ----------------------------------
          (State of Incorporation)          (I.R.S. Employer Identification No.)

     36 Sea Island Parkway
          Beaufort, S.C.                                           29901
    -----------------------------------------                 ---------------
    (Address of principal executive offices)                    (Zip Code)

                                  843-522-1228
                              -------------------------
                               (Telephone Number)

                                 Not Applicable
                     --------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

           Securities registered pursuant to Section 12(b) of the Act: None
     Securities registered pursuant to Section 12(g) of the Act: Common Stock

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for past 90 days.
Yes  X          No
    ---           ---

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

         The issuer's loss for its most recent fiscal year was $249,183. As of
March 15, 2001, 948,281 shares of Common Stock were issued and outstanding.

         The estimated aggregate market value of the Common Stock held by
non-affiliates of the Company on March 15, 2001 is $5,930,248. This calculation
is based upon an estimate of the fair market value of the Common Stock of $8.00
per share, which was the price of the last trade of which management is aware
prior to this date.

         Transitional Small Business Disclosure Format. (Check one): Yes   No X
                                                                       --    --

                   DOCUMENTS INCORPORATED BY REFERENCE

     Company's 2000 Annual Report and the Company's Proxy Statement for the
                  2001 Annual Meeting of Shareholders

<PAGE>


ITEM 1.    DESCRIPTION OF BUSINESS

     This Report contains statements which constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and the
Securities Exchange Act of 1934. These statements are based on many assumptions
and estimates and are not guarantees of future performance. Our actual results
may differ materially from those projected in any forward-looking statements, as
they will depend on many factors about which we are unsure, including many
factors which are beyond our control. The words "may," "would," "could," "will,"
"expect," "anticipate," "believe," "intend," "plan," and "estimate," as well as
similar expressions, are meant to identify such forward-looking statements.
Potential risks and uncertainties include, but are not limited to:

o        significant increases in competitive pressure in the banking and
         financial services industries;

o        changes in the interest rate environment which could reduce anticipated
         or actual margins;

o        changes in political conditions or the legislative or regulatory
         environment;

o        general economic conditions, either nationally or regionally and
         especially in primary service area, becoming less favorable than
         expected resulting in, among other things, a deterioration in credit
         quality;

o        changes occurring in business conditions and inflation;

o        changes in technology;

o        changes in monetary and tax policies;

o        changes in the securities markets; and

o        other risks and uncertainties detailed from time to time in our filings
         with the Securities and Exchange Commission.

GENERAL

     Coastal Banking Company, Inc. was incorporated to operate as a bank holding
company pursuant to the Federal Bank Holding Company Act of 1956 and the South
Carolina Banking and Branching Efficiency Act, and to purchase 100% of the
issued and outstanding stock of Lowcountry National Bank, an association
organized under the laws of the United States, to conduct a general banking
business in Beaufort County, South Carolina.

     On November 1, 1999, we commenced our initial public offering and sold
870,000 shares of our common stock at $10 per share and on December 2, 1999, we
issued 78,821 additional shares for a total of 948,281 shares of common stock.
The offering raised $8,909,624 net of estimated underwriting discounts and
commissions. We used approximately $6,700,000 of the proceeds to capitalize the
bank. Our directors and officers purchased 202,000 shares of common stock in the
offering. Upon purchase of the shares, we issued stock warrants to the
organizers to purchase up to additional 202,000 shares of common stock. The
warrants, which are represented by separate warrant agreements, vest over a
three year period beginning December 2, 2000 and will be exercisable in whole or
in part during the ten year period following that date.

      On May 10, 2000, we opened the bank. The principal activity of the bank is
to provide banking services to domestic markets, principally in Beaufort County,
South Carolina.

MARKETING FOCUS

         The bank focuses on the local community, emphasizing personal service
to individuals and businesses in Beaufort County. Our primary service area
includes a large portion of Beaufort County, excluding Hilton Head. Our target
market primarily conssits of individuals and small- to medium-sized businesses
who desire a consistent and professional relationship with a local banker. We
encourage relationships with individuals and companies in his area


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<PAGE>

to more effectively market the service of the bank. We offer a personal banking
relationship to our customers that is not available through larger banks.

LOCATION AND SERVICE AREA

         Our primary service area consists of the portion of Beaufort County
within a 20 mile radius (specifically excluding Hilton Head Island) of our main
office. This area covers a large portion of Beaufort County, including Beaufort,
Bluffton, Burton, Callawassie Island, Coosaw, Dataw Island, Harbor Island,
Hunting Island, Fripp Island, Ladys Island, Port Royal, Spring Island, St.
Helena Island, and the rapidly growing Sun City, which is expected to contain
8,900 homes upon completion. More particularly, the service area for deposits
for the bank is within a five mile radius of our main office, with the 20 mile
radius primarily utilized for loan generation opportunities.

LENDING ACTIVITIES

         GENERAL. We emphasize a range of lending services, including real
estate, commercial, and consumer loans to individuals and small- to medium-sized
businesses and professional firms that are located in or conduct a substantial
portion of their business in the bank 's market area. We compete for these loans
with competitors who are well established in the Beaufort County area and have
greater resources and lending limits. As a result, we may have to charge lower
interest rates to attract borrowers.

         LOAN APPROVAL AND REVIEW. The bank `s loan approval policies provide
for various levels of officer lending authority. When the amount of aggregate
loans to a single borrower exceeds an individual officer's lending authority,
the loan request will be considered and approved by an officer with a higher
lending limit or the directors' loan committee. Loans in excess of the
directors' loan committee's limits must be approved by the full board of
directors. The bank will not make any loans to any director, officer, or
employee of the bank unless the loan is approved by the board of directors of
the bank and is made on terms not more favorable to such person than would be
available to a person not affiliated with the bank. The bank currently intends
to adhere to Federal National Mortgage Association and Federal Home Loan
Mortgage Corporation guidelines in its mortgage loan review process, but may
choose to alter this policy in the future. The bank currently intends to sell
its mortgage loans on the secondary market, but may choose to hold them in the
portfolio in the future.

         LENDING LIMITS. The bank 's lending activities are subject to a variety
of lending limits imposed by federal law. In general, the bank is subject to a
legal limit on loans to a single borrower equal to 15% of the bank 's capital
and unimpaired surplus. Different limits may apply in certain circumstances
based on the type of loan or the nature of the borrower, including the
borrower's relationship to the bank. These limits will increase or decrease as
the bank's capital increases or decreases. Based upon the capitalization of the
bank with $6,700,000, the bank has a self-imposed loan limit of $804,000, which
represents 80% of our anticipated legal lending limit of $1,005,000. These
initial limits may drop as we expect to incur losses, and therefore have less
capital, in first several years of operations. Unless the bank is able to sell
participations in its loans to other financial institutions, the bank will not
be able to meet all of the lending needs of loan customers requiring aggregate
extensions of credit above these limits.

         REAL ESTATE AND MORTGAGE LOANS. We estimate that loans secured by first
or second mortgages on real estate will make up 63% of the bank's loan
portfolio. These loans will generally fall into one of three categories:
commercial real estate loans, construction and development loans, or residential
real estate loans. Each of these categories is discussed in more detail below,
including their specific risks. Home equity loans are not included because they
are classified as consumer loans, which are discussed below. Interest rates for
all categories may be fixed or adjustable, and will more likely be fixed for
shorter-term loans. The bank generally charges an origination fee for each loan.

         Real estate loans are subject to the same general risks as other loans.
They are particularly sensitive to fluctuations in the value of real estate,
which is generally the underlying security for real estate loans. Fluctuations
in the value of real estate, as well as other factors arising after a loan has
been made, could negatively affect a borrower's cash flow, creditworthiness, and
ability to repay the loan.

         We have the ability to originate real estate loans for sale into the
secondary market. We can limit our interest rate and credit risk on these loans
by locking the interest rate for each loan with the secondary investor and
receiving the investor's underwriting approval prior to originating the loan.


                                       3
<PAGE>

o        COMMERCIAL REAL ESTATE LOANS. Commercial real estate loans generally
         have terms of five years or less, although payments may be structured
         on a longer amortization basis. We evaluate each borrower on an
         individual basis and attempt to determine its business risks and credit
         profile. We attempt to reduce credit risk in the commercial real estate
         portfolio by emphasizing loans on owner-occupied office and retail
         buildings where the loan-to-value ratio, established by independent
         appraisals, does not exceed 80%. We generally require that debtor cash
         flow exceed 115% of monthly debt service obligations. We typically
         review all of the personal financial statements of the principal owners
         and require their personal guarantees. These reviews generally reveal
         secondary sources of payment and liquidity to support a loan request.

o        CONSTRUCTION AND DEVELOPMENT REAL ESTATE LOANS. We offer adjustable and
         fixed rate residential and commercial construction loans to builders
         and developers and to consumers who wish to build their own home. The
         term of construction and development loans generally is limited to
         eighteen months, although payments may be structured on a longer
         amortization basis. Most loans will mature and require payment in full
         upon the sale of the property. Construction and development loans
         generally carry a higher degree of risk than long term financing of
         existing properties. Repayment depends on the ultimate completion of
         the project and usually on the sale of the property. Specific risks
         include:

                 o        cost overruns;
                 o        mismanaged construction;
                 o        inferior or improper construction techniques;
                 o        economic changes or downturns during construction;
                 o        a downturn in the real estate market;
                 o        rising interest rates which may prevent sale of the
                          property; and
                 o        failure to sell completed projects in a timely manner.

         We attempt to reduce risk by obtaining personal guarantees where
possible, and by keeping the loan-to-value ratio of the completed project below
specified percentages. We also may reduce risk by selling participations in
larger loans to other institutions when possible.

o        RESIDENTIAL REAL ESTATE LOANS. Residential real estate loans generally
         have longer terms up to 30 years. We offer fixed and adjustable rate
         mortgages. We have limited credit risk on these loans as most are sold
         to third parties soon after closing.

         COMMERCIAL LOANS. The bank makes loans for commercial purposes in
various lines of businesses. Commercial loans are generally considered to have
greater risk than first or second mortgages on real estate because they may be
unsecured, or if they are secured, the value of the security may be difficult to
assess and more likely to decrease than real estate.

         Equipment loans typically will be made for a term of five years or less
at fixed or variable rates, with the loan fully amortized over the term and
secured by the financed equipment and with a loan-to-value ratio of 80% or less.
We focus our efforts on commercial loans less than $500,000. Working capital
loans typically have terms not exceeding one year and usually are secured by
accounts receivable, inventory, or personal guarantees of the principals of the
business. For loans secured by accounts receivable or inventory, principal
typically be repaid as the assets securing the loan are converted into cash, and
in other cases principal typically be due at maturity. Asset based lending,
leasing, and factoring will be offered through third party vendors who can
handle the paper work and servicing and generally assume most of the credit
risk. Trade letters of credit, standby letters of credit, and foreign exchange
will be handled through a correspondent bank as agent for the bank.

         We offer small business loans utilizing government enhancements such as
the Small Business Administration's 7(a) program and SBA's 504 programs. These
loans typically are partially guaranteed by the government, which may help to
reduce the bank 's risk. Government guarantees of SBA loans will not exceed 80%
of the loan value and will generally be less.

         The well established banks in the Beaufort County area will make
proportionately more loans to medium to large-sized businesses than we will.
Many of the bank's anticipated commercial loans likely will be made to small- to


                                       4
<PAGE>

medium-sized businesses which may be less able to withstand competitive,
economic, and financial conditions than larger borrowers.

         CONSUMER LOANS. The bank makes a variety of loans to individuals for
personal and household purposes, including secured and unsecured installment
loans and revolving lines of credit. Installment loans typically carry balances
of less than $50,000 and are amortized over periods up to 60 months. Consumer
loans may be offered on a single maturity basis where a specific source of
repayment is available. Revolving loan products typically require monthly
payments of interest and a portion of the principal. Consumer loans are
generally considered to have greater risk than first or second mortgages on real
estate because they may be unsecured, or if they are secured, the value of the
security may be difficult to assess and more likely to decrease than real
estate.

         We also offer home equity loans. Our underwriting criteria for and the
risks associated with home equity loans and lines of credit generally are the
same as those for first mortgage loans. Home equity lines of credit will
typically have terms of 15 years or less, will typically carry balances less
than $125,000, and may extend up to 100% of the available equity of each
property.

DEPOSIT SERVICES

         We offer a full range of deposit services that are typically available
in most banks and savings and loan associations, including checking accounts,
commercial accounts, savings accounts, and other time deposits of various types,
ranging from daily money market accounts to longer-term certificates of deposit.
The transaction accounts and time certificates will be tailored to our primary
market area at rates competitive to those offered in the Beaufort County area.
In addition, we intend to offer certain retirement account services, such as
IRAs. We intend to solicit these accounts from individuals, businesses,
associations, organizations, and governmental authorities.

OTHER BANKING SERVICES

The bank offers other bank services including drive up ATMs, safe deposit boxes,
traveler's checks, direct deposit, U.S. Savings Bonds, and banking by mail. The
bank is associated with the Plus and Cirrus ATM networks, which may be used by
its customers throughout Beaufort County and other regions. We believe that by
being associated with a shared network of ATMs, we will be better able to serve
our customers and will be able to attract customers who are accustomed to the
convenience of using ATMs, although we do not believe that maintaining this
association will be critical to our success. We intend to begin offering these
services shortly after opening the bank. We do not expect the bank to exercise
trust powers during its first year of operation

MARKET SHARE

         As of June 30, 2000, total deposits in the bank's primary service area
were approximately $18.3 million, which represented a 19.8% deposit growth rate
from 1999. Our plan over the next five years is to grow our deposit base to $56
million. Of course, we cannot be sure that these deposit growth rates will
continue, or that we will accomplish this objective.

EMPLOYEES

         As of March 1 2001, the bank has 12 employees, and we have 0 employees.


                                       5
<PAGE>


                           SUPERVISION AND REGULATION

Both the company and the bank are subject to extensive state and federal banking
laws and regulations which impose specific requirements or restrictions on and
provide for general regulatory oversight of virtually all aspects of operations.
These laws and regulations are generally intended to protect depositors, not
shareholders. The following summary is qualified by reference to the statutory
and regulatory provisions discussed. Changes in applicable laws or regulations
may have a material effect on our business and prospects. Beginning with the
enactment of the Financial Institution Report Recovery and Enforcement Act in
1989 and following with the FDIC Improvement Act in 1991, numerous additional
regulatory requirements have been placed on the banking industry in the past
several years, and additional changes have been proposed. Our operations may be
affected by legislative changes and the policies of various regulatory
authorities. We cannot predict the effect that fiscal or monetary policies,
economic control, or new federal or state legislation may have on our business
and earnings in the future.

GRAMM-LEACH-BLILEY ACT

         On November 4, 1999, the U.S. Senate and House of Representatives each
passed the Gramm-Leach-Bliley Act, previously known as the Financial Services
Modernization Act of 1999. The Act was signed into law by President Clinton on
November 12, 1999. Among other things, the Act repeals the restrictions on banks
affiliating with securities firms contained in sections 20 and 32 of the
Glass-Steagall Act. The Act also permits bank holding companies to engage in a
statutorily provided list of financial activities, including insurance and
securities underwriting and agency activities, merchant banking, and insurance
company portfolio investment activities. The Act also authorizes activities that
are "complementary" to financial activities.

         The Act is intended, in part, to grant to community banks certain
powers as a matter of right that larger institutions have accumulated on an ad
hoc basis. Nevertheless, the Act may have the result of increasing the amount of
competition that we face from larger institutions and other types of companies.
In fact, it is not possible to predict the full effect that the Act will have on
us. From time to time other changes are proposed to laws affecting the banking
industry, and these changes could have a material effect on our business and
prospects.

         The Gramm-Leach-Bliley Act also contains provisions regarding consumer
privacy. These provisions require financial institutions to disclose their
policy for collecting and protecting confidential information. Customers
generally may prevent financial institutions from sharing personal financial
information with nonaffiliated third parties except for third parties that
market an institution's own products and services. Additionally, financial
institutions generally may not disclose consumer account numbers to any
nonaffiliated third party for use in telemarketing, direct mail marketing, or
other marketing to the consumer.

COASTAL BANKING COMPANY

         The company owns the outstanding capital stock of the bank, and
therefore it is considered to be a bank holding company under the federal Bank
Holding Company Act of 1956 and the South Carolina Banking and Branching
Efficiency Act.

         THE BANK HOLDING COMPANY ACT. Under the Bank Holding Company Act, the
company is subject to periodic examination by the Federal Reserve and required
to file periodic reports of its operations and any additional information that
the Federal Reserve may require. Our activities at the bank and holding company
level are limited to:

         o    banking and managing or controlling banks;
         o    furnishing services to or performing services for its
              subsidiaries; and
         o    engaging in other activities that the Federal Reserve determines
              to be so closely related to banking and managing or controlling
              banks as to be a proper incident thereto.

         INVESTMENTS, CONTROL, AND ACTIVITIES. With certain limited exceptions,
the Bank Holding Company Act requires every bank holding company to obtain the
prior approval of the Federal Reserve before:

         o   acquiring substantially all the assets of any bank;

                                       6
<PAGE>

         o    acquiring direct or indirect ownership or control of any voting
              shares of any bank if after the acquisition it would own or
              control more than 5% of the voting shares of such bank (unless it
              already owns or controls the majority of such shares); or
         o    merging or consolidating with another bank holding company.

         In addition, and subject to certain exceptions, the Bank Holding
Company Act and the Change in Bank Control Act, together with regulations
thereunder, require Federal Reserve approval prior to any person or company
acquiring "control" of a bank holding company. Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities of a bank holding company. Control is rebuttably presumed to exist if
a person acquires 10% or more, but less than 25%, of any class of voting
securities and either the company has registered securities under Section 12 of
the Securities Exchange Act of 1934 or no other person owns a greater percentage
of that class of voting securities immediately after the transaction. The
company's common stock is registered under the Securities Exchange Act of 1934.
The regulations provide a procedure for challenge of the rebuttable control
presumption.

         Under the Bank Holding Company Act, a bank holding company is generally
prohibited from engaging in, or acquiring direct or indirect control of more
than 5% of the voting shares of any company engaged in nonbanking activities
unless the Federal Reserve Board, by order or regulation, has found those
activities to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto. Some of the activities that the Federal
Reserve Board has determined by regulation to be proper incidents to the
business of a bank holding company include:

         o making or servicing loans and certain types of leases;
         o engaging in certain insurance and discount brokerage activities;
         o performing certain data processing services;
         o acting in certain circumstances as a fiduciary or investment or
           financial adviser;
         o owning savings associations; and
         o making investments in certain corporations or projects designed
           primarily to promote community welfare.

         The Federal Reserve Board imposes certain capital requirements on the
company under the Bank Holding Company Act, including a minimum leverage ratio
and a minimum ratio of "qualifying" capital to risk-weighted assets. These
requirements are described below under "Capital Regulations." Subject to its
capital requirements and certain other restrictions, the company is able to
borrow money to make a capital contribution to the bank, and these loans may be
repaid from dividends paid from the bank to the company. Our ability to pay
dividends will be subject to regulatory restrictions as described below in
"Greenville First Bank - Dividends." The company is also able to raise capital
for contribution to the bank by issuing securities without having to receive
regulatory approval, subject to compliance with federal and state securities
laws.

         SOURCE OF STRENGTH; CROSS-GUARANTEE. In accordance with Federal Reserve
Board policy, the company is expected to act as a source of financial strength
to the bank and to commit resources to support the bank in circumstances in
which the company might not otherwise do so. Under the Bank Holding Company Act,
the Federal Reserve Board may require a bank holding company to terminate any
activity or relinquish control of a nonbank subsidiary, other than a nonbank
subsidiary of a bank, upon the Federal Reserve Board's determination that such
activity or control constitutes a serious risk to the financial soundness or
stability of any subsidiary depository institution of the bank holding company.
Further, federal bank regulatory authorities have additional discretion to
require a bank holding company to divest itself of any bank or nonbank
subsidiary if the agency determines that divestiture may aid the depository
institution's financial condition.

         SOUTH CAROLINA STATE REGULATION. As a bank holding company registered
under the South Carolina Banking and Branching Efficiency Act, we are subject to
limitations on sale or merger and to regulation by the South Carolina Board of
Financial Institutions. Prior to acquiring the capital stock of a national bank,
we are not required to obtain the approval of the Board, but we must notify them
at least 15 days prior to doing so. We must receive the Board's approval prior
to engaging in the acquisition of banking or nonbanking institutions or assets,
and we must file periodic reports with respect to our financial condition and
operations, management, and intercompany relationships between the company and
its subsidiaries.


                                       7
<PAGE>

LOWCOUNTRY NATIONAL BANK

         The bank operates as a national banking association incorporated under
the laws of the United States and subject to examination by the Office of the
Comptroller of the Currency. Deposits in the bank are insured by the FDIC up to
a maximum amount, which is generally $100,000 per depositor subject to
aggregation rules.

         The Office of the Comptroller of the Currency and the FDIC regulates or
monitors virtually all areas of the bank 's operations, including:

          o     security devices and procedures;
          o     adequacy of capitalization and loss reserves;
          o     loans;
          o     investments;
          o     borrowings;
          o     deposits;
          o     mergers;
          o     issuances of securities;
          o     payment of dividends;
          o     interest rates payable on deposits;
          o     interest rates or fees chargeable on loans;
          o     establishment of branches;
          o     corporate reorganizations;
          o     maintenance of books and records; and
          o     adequacy of staff training to carry on safe lending and deposit
                gathering practices.

         The Office of the Comptroller of the Currency requires the bank to
maintain specified capital ratios and imposes limitations on the bank's
aggregate investment in real estate, bank premises, and furniture and fixtures.
The Office of the Comptroller of the Currency will also require the bank to
prepare quarterly reports on the bank's financial condition and to conduct an
annual audit of its financial affairs in compliance with its minimum standards
and procedures.

         Under the FDIC Improvement Act, all insured institutions must undergo
regular on site examinations by their appropriate banking agency. The cost of
examinations of insured depository institutions and any affiliates may be
assessed by the appropriate agency against each institution or affiliate as it
deems necessary or appropriate. Insured institutions are required to submit
annual reports to the FDIC, their federal regulatory agency, and their state
supervisor when applicable. The FDIC Improvement Act directs the FDIC to develop
a method for insured depository institutions to provide supplemental disclosure
of the estimated fair market value of assets and liabilities, to the extent
feasible and practicable, in any balance sheet, financial statement, report of
condition or any other report of any insured depository institution. The FDIC
Improvement Act also requires the federal banking regulatory agencies to
prescribe, by regulation, standards for all insured depository institutions and
depository institution holding companies relating, among other things, to the
following:

         o        internal controls;
         o        information systems and audit systems;
         o        loan documentation;
         o        credit underwriting;
         o        interest rate risk exposure; and
         o        asset quality.

         National banks and their holding companies which have been chartered or
registered or have undergone a change in control within the past two years or
which have been deemed by the Office of the Comptroller of the Currency or the
Federal Reserve Board to be troubled institutions must give the Office of the
Comptroller of the Currency or the Federal Reserve Board thirty days' prior
notice of the appointment of any senior executive officer or director. Within
the 30 day period, the Office of the Comptroller of the Currency or the Federal
Reserve Board, as the case may be, may approve or disapprove any such
appointment.



                                       8
<PAGE>

         DEPOSIT INSURANCE. The FDIC establishes rates for the payment of
premiums by federally insured banks and thrifts for deposit insurance. A
separate Bank Insurance Fund and Savings Association Insurance Fund are
maintained for commercial banks and savings associations with insurance premiums
from the industry used to offset losses from insurance payouts when banks and
thrifts fail. In 1993, the FDIC adopted a rule which establishes a risk-based
deposit insurance premium system for all insured depository institutions. Under
this system, until mid-1995 depository institutions paid to Bank Insurance Fund
or Savings Association Insurance Fund from $0.23 to $0.31 per $100 of insured
deposits depending on its capital levels and risk profile, as determined by its
primary federal regulator on a semiannual basis. Once the Bank Insurance Fund
reached its legally mandated reserve ratio in mid-1995, the FDIC lowered
premiums for well-capitalized banks, eventually eliminating premiums for
well-capitalized banks, with a minimum semiannual assessment of $1,000. However,
in 1996 Congress enacted the Deposit Insurance Funds Act of 1996, which
eliminated even this minimum assessment. It also separated the Financial
Corporation assessment to service the interest on its bond obligations. The
amount assessed on individual institutions, including the bank, by Financial
Corporation assessment is in addition to the amount paid for deposit insurance
according to the risk-related assessment rate schedule. Increases in deposit
insurance premiums or changes in risk classification will increase the bank's
cost of funds, and we may not be able to pass these costs on to our customers.

         TRANSACTIONS WITH AFFILIATES AND INSIDERS. The bank is subject to the
provisions of Section 23A of the Federal Reserve Act, which places limits on the
amount of loans or extensions of credit to, or investments in, or certain other
transactions with, affiliates and on the amount of advances to third parties
collateralized by the securities or obligations of affiliates. The aggregate of
all covered transactions is limited in amount, as to any one affiliate, to 10%
of the bank's capital and surplus and, as to all affiliates combined, to 20% of
the bank's capital and surplus. Furthermore, within the foregoing limitations as
to amount, each covered transaction must meet specified collateral requirements.
Compliance is also required with certain provisions designed to avoid the taking
of low quality assets.

         The bank is subject to the provisions of Section 23B of the Federal
Reserve Act which, among other things, prohibits an institution from engaging in
certain transactions with certain affiliates unless the transactions are on
terms substantially the same, or at least as favorable to such institution or
its subsidiaries, as those prevailing at the time for comparable transactions
with nonaffiliated companies. The bank will be subject to certain restrictions
on extensions of credit to executive officers, directors, certain principal
shareholders, and their related interests. Such extensions of credit (i) must be
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with third parties
and (ii) must not involve more than the normal risk of repayment or present
other unfavorable features.

         DIVIDENDS. A national bank may not pay dividends from its capital. All
dividends must be paid out of undivided profits then on hand, after deducting
expenses, including reserves for losses and bad debts. In addition, a national
bank is prohibited from declaring a dividend on its shares of common stock until
its surplus equals its stated capital, unless there has been transferred to
surplus no less than one-tenth of the bank's net profits of the preceding two
consecutive half-year periods (in the case of an annual dividend). The approval
of the Office of the Comptroller of the Currency is required if the total of all
dividends declared by a national bank in any calendar year exceeds the total of
its net profits for that year combined with its retained net profits for the
preceding two years, less any required transfers to surplus.

         BRANCHING. National banks are required by the National Bank Act to
adhere to branch office banking laws applicable to state banks in the states in
which they are located. Under current South Carolina law, the bank may open
branch offices throughout South Carolina with the prior approval of the Office
of the Comptroller of the Currency. In addition, with prior regulatory approval,
the bank will be able to acquire existing banking operations in South Carolina.
Furthermore, federal legislation has been passed which permits interstate
branching. The law permits out-of-state acquisitions by bank holding companies,
interstate branching by banks if allowed by state law, and interstate merging by
banks.

         COMMUNITY REINVESTMENT ACT. The Community Reinvestment Act requires
that, in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve, the FDIC, or the Office of the
Comptroller of the Currency, shall evaluate the record of each financial
institution in meeting the credit needs of its local community, including low
and moderate income neighborhoods. These factors are also considered in
evaluating mergers, acquisitions, and applications to open a branch or facility.
Failure to adequately meet these criteria could impose additional requirements
and limitations on the bank.

                                       9
<PAGE>


         OTHER REGULATIONS. Interest and other charges collected or contracted
for by the bank are subject to state usury laws and federal laws concerning
interest rates. The bank's loan operations are also subject to federal laws
applicable to credit transactions, such as:

         o        the federal Truth-In-Lending Act, governing disclosures of
                  credit terms to consumer borrowers;
         o        the Home Mortgage Disclosure Act of 1975, requiring financial
                  institutions to provide information to enable the public and
                  public officials to determine whether a financial institution
                  is fulfilling its obligation to help meet the housing needs of
                  the community it serves;
         o        the Equal Credit Opportunity Act, prohibiting discrimination
                  on the basis of race, creed or other prohibited factors in
                  extending credit;
         o        the Fair Credit Reporting Act of 1978, governing the use and
                  provision of information to credit reporting agencies;
         o        the Fair Debt Collection Act, governing the manner in which
                  consumer debts may be collected by collection agencies; and
         o        the rules and regulations of the various federal agencies
                  charged with the responsibility of implementing such federal
                  laws.

The deposit operations of Lowcountry National Bank also are subject to:

         o        the Right to Financial Privacy Act, which imposes a duty to
                  maintain confidentiality of consumer financial records and
                  prescribes procedures for complying with administrative
                  subpoenas of financial records; and
         o        the Electronic Funds Transfer Act and Regulation E issued by
                  the Federal Reserve Board to implement that act, which governs
                  automatic deposits to and withdrawals from deposit accounts
                  and customers' rights and liabilities arising from the use of
                  automated teller machines and other electronic banking
                  services.

         CAPITAL REGULATIONS. The federal bank regulatory authorities have
adopted risk-based capital guidelines for banks and bank holding companies that
are designed to make regulatory capital requirements more sensitive to
differences in risk profiles among banks and bank holding companies and account
for off-balance sheet items. The guidelines are minimums, and the federal
regulators have noted that banks and bank holding companies contemplating
significant expansion programs should not allow expansion to diminish their
capital ratios and should maintain ratios in excess of the minimums. We have not
received any notice indicating that either the company or the bank is subject to
higher capital requirements. The current guidelines require all bank holding
companies and federally-regulated banks to maintain a minimum risk-based total
capital ratio equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1
capital includes common shareholders' equity, qualifying perpetual preferred
stock, and minority interests in equity accounts of consolidated subsidiaries,
but excludes goodwill and most other intangibles and excludes the allowance for
loan and lease losses. Tier 2 capital includes the excess of any preferred stock
not included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred stock, and
general reserves for loan and lease losses up to 1.25% of risk-weighted assets.

         Under these guidelines, banks' and bank holding companies' assets are
given risk-weights of 0%, 20%, 50%, or 100%. In addition, certain off-balance
sheet items are given credit conversion factors to convert them to asset
equivalent amounts to which an appropriate risk-weight applies. These
computations result in the total risk-weighted assets. Most loans are assigned
to the 100% risk category, except for first mortgage loans fully secured by
residential property and, under certain circumstances, residential construction
loans, both of which carry a 50% rating. Most investment securities are assigned
to the 20% category, except for municipal or state revenue bonds, which have a
50% rating, and direct obligations of or obligations guaranteed by the United
States Treasury or United States Government agencies, which have a 0% rating.

         The federal bank regulatory authorities have also implemented a
leverage ratio, which is equal to Tier 1 capital as a percentage of average
total assets less intangibles, to be used as a supplement to the risk-based
guidelines. The principal objective of the leverage ratio is to place a
constraint on the maximum degree to which a bank holding company may leverage
its equity capital base. The minimum required leverage ratio for top-rated
institutions is 3%, but most institutions are required to maintain an additional
cushion of at least 100 to 200 basis points.


                                       10
<PAGE>


         The FDIC Improvement Act established a new capital-based regulatory
scheme designed to promote early intervention for troubled banks which requires
the FDIC to choose the least expensive resolution of bank failures. The new
capital-based regulatory framework contains five categories of compliance with
regulatory capital requirements, including "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized," and
"critically undercapitalized." To qualify as a "well capitalized" institution, a
bank must have a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of
no less than 6%, and a total risk-based capital ratio of no less than 10%, and
the bank must not be under any order or directive from the appropriate
regulatory agency to meet and maintain a specific capital level. Initially, we
will qualify as "well capitalized."

     Under the FDIC Improvement Act regulations, the applicable agency can treat
an institution as if it were in the next lower category if the agency determines
(after notice and an opportunity for hearing) that the institution is in an
unsafe or unsound condition or is engaging in an unsafe or unsound practice. The
degree of regulatory scrutiny of a financial institution increases, and the
permissible activities of the institution decreases, as it moves downward
through the capital categories. Institutions that fall into one of the three
undercapitalized categories may be required to do some or all of the following:

      o  submit a capital restoration plan;
      o  raise additional capital;
      o  restrict their growth, deposit interest rates, and other activities;
      o  improve their management;
      o  eliminate management fees; or
      o  divest themselves of all or a part of their operations.

Bank holding companies controlling financial institutions can be called upon to
boost the institutions' capital and to partially guarantee the institutions'
performance under their capital restoration plans.

         These capital guidelines can affect us in several ways. If we grow at a
rapid pace, our capital may be depleted too quickly, and a capital infusion from
the holding company may be necessary which could impact our ability to pay
dividends. Our capital levels will initially be more than adequate; however,
rapid growth, poor loan portfolio performance, poor earnings performance, or a
combination of these factors could change our capital position in a relatively
short period of time.

         The FDIC Improvement Act requires the federal banking regulators to
revise the risk-based capital standards to provide for explicit consideration of
interest rate risk, concentration of credit risk, and the risks of untraditional
activities. We are uncertain what effect these regulations would have.

         Failure to meet these capital requirements would mean that a bank would
be required to develop and file a plan with its primary federal banking
regulator describing the means and a schedule for achieving the minimum capital
requirements. In addition, such a bank would generally not receive regulatory
approval of any application that requires the consideration of capital adequacy,
such as a branch or merger application, unless the bank could demonstrate a
reasonable plan to meet the capital requirement within a reasonable period of
time.

         ENFORCEMENT POWERS. The Financial Institution Report Recovery and
Enforcement Act expanded and increased civil and criminal penalties available
for use by the federal regulatory agencies against depository institutions and
certain "institution-affiliated parties." Institution-affiliated parties
primarily include management, employees, and agents of a financial institution,
as well as independent contractors and consultants such as attorneys and
accountants and others who participate in the conduct of the financial
institution's affairs. These practices can include the failure of an institution
to timely file required reports or the filing of false or misleading information
or the submission of inaccurate reports. Civil penalties may be as high as
$1,000,000 a day for such violations. Criminal penalties for some financial
institution crimes have been increased to 20 years. In addition, regulators are
provided with greater flexibility to commence enforcement actions against
institutions and institution-affiliated parties. Possible enforcement actions
include the termination of deposit insurance. Furthermore, banking agencies'
power to issue cease-and-desist orders were expanded. Such orders may, among
other things, require affirmative action to correct any harm resulting from a
violation or practice, including restitution, reimbursement, indemnification or
guarantees against loss. A financial institution may also be ordered to restrict
its growth, dispose of certain assets, rescind agreements or contracts, or take
other actions as determined by the ordering agency to be appropriate.


                                       11
<PAGE>


         EFFECT OF GOVERNMENTAL MONETARY POLICIES. Our earnings are affected by
domestic economic conditions and the monetary and fiscal policies of the United
States government and its agencies. The Federal Reserve Bank's monetary policies
have had, and are likely to continue to have, an important impact on the
operating results of commercial banks through its power to implement national
monetary policy in order, among other things, to curb inflation or combat a
recession. The monetary policies of the Federal Reserve Board have major effects
upon the levels of bank loans, investments and deposits through its open market
operations in United States government securities and through its regulation of
the discount rate on borrowings of member banks and the reserve requirements
against member bank deposits. It is not possible to predict the nature or impact
of future changes in monetary and fiscal policies.


                                       12
<PAGE>




ITEM 2.    DESCRIPTION OF PROPERTY

         The bank is located at 36 Sea Island Parkway in Beaufort, South
Carolina. We purchased 2.33 acres of land with an existing 58,000 square foot
building located thereon for $900,000. Extensive renovations were required in
order to convert the existing building into a banking facility at a cost of
approximately 1.2 million dollars.


ITEM 3.    LEGAL PROCEEDINGS.

         None.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.


         No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         In response to this Item, the information contained on page 39 of the
company's annual report to shareholders for the year end December 31, 2000 is
incorporated herein by reference.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

         In response to this Item, the information contained on pages 7 through
17 of the company's annual report to shareholders for the year end December 31,
2000 is incorporated herein by reference.

ITEM 7.    FINANCIAL STATEMENTS

         In response to this Item, the information contained on pages 19 through
37 of the company's annual report to shareholders for the year end December 31,
2000 is incorporated herein by reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE


         None.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT


         In response to this Item, the information contained on pages 3 through
5 of our Proxy Statement for the Annual Meeting of Shareholders to be held on
May 15, 2001 is incorporated herein by reference.

ITEM 10.   EXECUTIVE COMPENSATION

         In response to this Item, the information contained on page 6 of our
Proxy Statement for the Annual Meeting of Shareholders to be held on May 15,
2001 is incorporated herein by reference.

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         In response to this Item, the information contained on page 7 of our
Proxy Statement for the Annual Meeting of Shareholders to be held on May 15,
2001 is incorporated herein by reference.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In response to this Item, the information contained on page 9 of our
Proxy Statement for the Annual Meeting of Shareholders to be held on May 15,
2001 is incorporated herein by reference.


                                       13
<PAGE>

ITEM 13.EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a)      The following documents are filed as part of this report:

1.1     Form of Underwriting agreement between the company and Edgar M. Norris
         & Co., Inc. (incorporated by reference to Exhibit 1.1 of the
         Registration Statement on Form SB-2, File No. 333-86371)

3.1.     Articles of Incorporation (incorporated by reference to Exhibit 3.1 of
         the Registration Statement on Form SB-2, File No. 333-86371).

3.2      Amended and Restated Articles of Incorporation (incorporated by
         reference to Exhibit 3.1 of the Registration Statement on Form SB-2,
         File No. 333-86371).

3.3.     Bylaws (incorporated by reference to Exhibit 3.3 of the Registration
         Statement on Form SB-2, File No. 333-86371).

4.1.     See Exhibits 3.1, 3.2, and 3.3 for provisions in the company's Articles
         of Incorporation and Bylaws defining the rights of holders' of the
         common stock (incorporated by reference to Exhibits 3.1 and 3.2 of the
         Registration Statement on Form SB-2, File No. 333-86371).

4.2.     Form of certificate of common stock (incorporated by reference to
         Exhibit 4.2 of the Registration Statement on Form SB-2, File No.
         333-86371).

5.1.     Opinion Regarding Legality (incorporated by reference to Exhibit 5.1 of
         the Registration Statement on Form SB-2, File No. 333-86371).

10.1     Employment Agreement dated August 12, 1999 between the company and
         Randolph Kohn (incorporated by reference to Exhibit 10.1 of the
         Registration Statement on Form SB-2, File No. 333-86371).

10.2     Purchase and Sale dated February 2, 1999, between Lowcountry National
         Bank and Sterling Graydon and Helene Dowling (incorporated by reference
         to Exhibit 10.2 of the Registration Statement on Form SB-2, File No.
         333-86371).

10.3     Line of Credit Agreement with The Banker's Bank dated April 1, 1999
         (incorporated by reference to Exhibit 10.3 of the Registration
         Statement on Form SB-2, File No. 333-86371).

10.5     Form of Stock Warrant Agreement (incorporated by reference to Exhibit
         10.8 of the Registration Statement on Form SB-2, File No. 333-86371).

13.1     Company's 2000 Annual Report

21       Subsidiaries of Registrant

(b)      Reports on Form 8-K

         The Company did not file any reports on Form 8-K during the fourth
quarter of 1999.


                                       14
<PAGE>


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"), the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         COASTAL BANKING COMPANY, INC.

Date:   March  29, 2001              By: /s/ Randolph C. Kohn
       ------------------                ---------------------------------------
                                         President and Chief Executive Officer

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Randolph C. Kohn, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to this Annual Report on Form 10-KSB, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>

Signature                                            Title                              Date
---------                                            -----                              ----

<S>                                      <C>                                  <C>
/s/ Marjorie Trask Gray
----------------------------------
Marjorie Trask Gray, DMD                             Director                            March 29, 2001


/s/ Dennis O. Green
----------------------------------
Dennis O. Green, CPA                                 Director, Vice-                    March 29, 2001
                                                     Chairman of the Board

/s/ Mark B. Heles
----------------------------------
Mark B. Heles                                        Director                           March 29, 2001


/s/ J. Phillip Hodges
----------------------------------
J. Phillip Hodges, Jr.                               Director                           March 29, 2001


/s/ James W. Holden
----------------------------------
James W. Holden, Jr., DVM                            Director                            March 29, 2001


/s/ Ladson F. Howell
----------------------------------
Ladson F. Howell                                     Director                            March 29, 2001
                                                     Chairman of the Board

/s/ James C. Key
----------------------------------
James C. Key                                         Director                           March 29, 2001


                                       15
<PAGE>





/s/ Randolph C. Kohn
----------------------------------
Randolph C. Kohn                                     Director, President and            March 29, 2001
                                                     Chief Executive Officer

/s/ Ron Lewis
----------------------------------
Ron Lewis                                            Director                           March 29, 2001


/s/ Charlie T. Lovering
----------------------------------
Charlie T. Lovering                                  Senior Vice President              March 29, 2001
                                                     and Chief Financial Officer

/s/ Lila N. Meeks
----------------------------------
Lila N. Meeks                                        Director                           March 29, 2001


/s/ Robert B. Pinkerton
----------------------------------
Robert B. Pinkerton                                  Director                           March 29, 2001


/s/ John M. Trask
----------------------------------
John M. Trask, III                                   Director                           March 29, 2001


/s/ Matt A. Trumps
----------------------------------
Matt A. Trumps                                       Director                           March 29, 2001
</TABLE>

                                       16
<PAGE>



                                  EXHIBIT INDEX

Exhibit
Number                     Description
------                     -----------

1.1      Form of Underwriting agreement between the company and Edgar M. Norris
         & Co., Inc. (incorporated by reference to Exhibit 1.1 of the
         Registration Statement on Form SB-2, File No. 333-86371)

3.1.     Articles of Incorporation (incorporated by reference to Exhibit 3.1 of
         the Registration Statement on Form SB-2, File No. 333-86371).

3.2      Amended and Restated Articles of Incorporation (incorporated by
         reference to Exhibit 3.1 of the Registration Statement on Form SB-2,
         File No. 333-86371).

3.3.     Bylaws (incorporated by reference to Exhibit 3.3 of the Registration
         Statement on Form SB-2, File No. 333-86371).

4.1.     See Exhibits 3.1, 3.2, and 3.3 for provisions in the company's Articles
         of Incorporation and Bylaws defining the rights of holders' of the
         common stock (incorporated by reference to Exhibits 3.1 and 3.2 of the
         Registration Statement on Form SB-2, File No. 333-86371).

4.2.     Form of certificate of common stock (incorporated by reference to
         Exhibit 4.2 of the Registration Statement on Form SB-2, File No.
         333-86371).

5.1.     Opinion Regarding Legality (incorporated by reference to Exhibit 5.1 of
         the Registration Statement on Form SB-2, File No. 333-86371).

10.1     Employment Agreement dated August 12, 1999 between the company and
         Randolph Kohn (incorporated by reference to Exhibit 10.1 of the
         Registration Statement on Form SB-2, File No. 333-86371).

10.2     Purchase and Sale dated February 2, 1999, between Lowcountry National
         Bank and Sterling Graydon and Helene Dowling (incorporated by reference
         to Exhibit 10.2 of the Registration Statement on Form SB-2, File No.
         333-86371).

10.3     Line of Credit Agreement with The Banker's Bank dated April 1, 1999
         (incorporated by reference to Exhibit 10.3 of the Registration
         Statement on Form SB-2, File No. 333-86371).

10.5     Form of Stock Warrant Agreement (incorporated by reference to Exhibit
         10.8 of the Registration Statement on Form SB-2, File No. 333-86371).

13       Company's 2000 Annual Report

21       Subsidiaries of Registrant