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, 1999
                                       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 333-83851

                        Greenville First Bancshares, Inc.
                -----------------------------------------------
             (Exact name of registrant as specified in its charter)

      South Carolina                                  58-2459561
---------------------------                -----------------------------
(State of Incorporation)                 (I.R.S. Employer Identification No.)

112 Haywood Road

Greenville , S.C.                                         29607
----------------------------                       --------------------
(Address of principal executive offices)            (Zip Code)

                                  864-679-9000
                      ------------------------------------
                               (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 $534,329.  As of
March 15, 2000, 1,150,000 shares of Common Stock were issued and outstanding.

         The aggregate  market value of the Common Stock held by  non-affiliates
of the Company on March 15, 2000 is $6,623,250.  This  calculation is based upon
an  estimate of the fair  market  value of the Common  Stock of $7.50 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 Proxy Statement
<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

     Greenville  First  Bancshares,  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 Greenville First Bank, an association  organized
under the laws of the United States,  to conduct a general  banking  business in
Greenville, South Carolina.

     Since our inception on February 22, 1999, we have engaged in organizational
and pre-opening  activities  necessary to open the bank. On October 26, 1999, we
sold 1,100,000 shares of our common stock at $10 per share in our initial public
offering, and on November 30, 1999, we sold 50,000 additional shares pursuant to
the  underwriters'  over-allotment  option  for a total of  1,150,000  shares of
common stock. The offering raised $10,646,700 net of underwriting  discounts and
commissions.  Our directors and executive  officers  purchased 266,900 shares of
common stock in this offering. Upon purchase of these shares, the Company issued
stock warrants to the organizers to purchase up to an additional  129,950 shares
of common stock.

     On January  10,  2000,  we opened the bank.  Of the net  proceeds  from the
offering,  we used  $8,500,000  to  capitalize  the bank.  The bank's funds were
applied  primarily  to provide  funds for the  bank's  investments  and  lending
operations,  for leasing our temporary and permanent facilities,  for furnishing
and equipping the bank, and for other general corporate purposes.

Marketing Focus

      The bank is the first independent bank organized in the City of Greenville
in over ten years. Because there are few locally owned banks left in Greenville,
we believe we offer a unique  banking  alternative  for the market by offering a
higher level of customer service and a management team more focused on the needs
of the  community  than most of


                                       2
<PAGE>

our  competitors.  We  believe  that  this  approach  will  be  enthusiastically
supported  by the  community.  The bank  uses the  theme  "Welcome  to  Hometown
Banking," and it actively  promotes it in our target market.  While the bank has
the ability to offer a breadth of products  similar to large banks, we emphasize
the client  relationship.  We believe that the proposed  community  focus of the
bank will succeed in this market,  and that the area will react favorably to the
bank's emphasis on service to small  businesses,  individuals,  and professional
concerns.  We plan to take advantage of existing contacts and relationships with
individuals and companies in this area to more  effectively  market the services
of the bank.

Location and Service Area

         Our primary service area consists of Greenville County, South Carolina.
We expect  initially to draw a large percentage of our business from the central
portion of Greenville County,  within a ten mile radius of our main office. This
principal  service  area is bounded by  Rutherford  Road to the north,  Poinsett
Highway to the west,  Mauldin Road and Butler Road to the south,  and Highway 14
and Batesville Road to the east. Included in this area is the highest per capita
income tract in the county.  Our expansion  plans include the development of two
"service centers" located along the periphery of our service area. These service
centers  will extend the market  reach of our bank,  and they will  increase our
personal service delivery capabilities to all of our customers.

Lending Activities

         General.  We  emphasize  a range of lending  services,  including  real
estate, commercial, and equity- line 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 Greenville  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 officers' loan committee.  The officers' loan committee has lending
limits,  and any loans in excess of this  lending  limit will be approved by the
directors'  loan  committee.  The bank does 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
generally adheres to Federal National Mortgage Association and Federal Home Loan
Mortgage  Corporation  guidelines in its mortgage loan review  process,  but may
alter this policy in the future. The bank currently intends to sell its mortgage
loans into 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
$8.5 million,  the bank has a  self-imposed  loan limit of $1.2  million,  which
represents 78% of our anticipated legal lending limit of $1.2 million.  However,
these limits will drop as we expect to incur  losses,  and  therefore  have less
capital,  in the 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 50% 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 will generally charge 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


                                       3
<PAGE>

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.

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 also 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 are limited to
         eighteen  months,  although  payments  may be  structured  on a  longer
         amortization  basis. Most loans 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 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.

         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 helps to
reduce the bank's risk.  Government guarantees of SBA loans do not exceed 80% of
the loan value and are generally less.

         The  well  established   banks  in  the  Greenville  County  area  make
proportionately more loans to medium to large-sized businesses than we can. Many
of the bank's  commercial  loans are made to small- to  medium-sized  businesses
which  may be less  able  to  withstand  competitive,  economic,  and  financial
conditions than larger borrowers.

                                       4
<PAGE>


         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 be amortized  over  periods up to 60 months.  Consumer
loans are  offered  with 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 will  generally be
the  same as those  for  first  mortgage  loans.  Home  equity  lines of  credit
typically  have terms of 15 years or less,  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  are  tailored to our primary
market area at rates competitive to those offered in the Greenville County area.
In addition,  we offer certain  retirement  account  services,  such as IRAs. We
solicit   these   accounts   from   individuals,    businesses,    associations,
organizations, and governmental authorities.

Other Banking Services

         The bank offers  other bank  services  including  safe  deposit  boxes,
traveler's checks,  direct deposit, U.S. Savings Bonds, and banking by mail. The
bank to is associated with the Honor,  Cirrus,  and Master-Money,  ATM networks,
which are available to its customers  throughout the country. We believe that by
being  associated with a shared network of ATMs, we are better able to serve our
customers  and  are  able  to  attract  customers  who  are  accustomed  to  the
convenience  of using ATMs,  although we do not believe  that  maintaining  this
association  is critical to our success.  We intend to begin  offering  Internet
services  in the second  quarter of 2000.  We do not expect the bank to exercise
trust powers during its first year of operation.

Market Share

         As of June 30, 1999,  total deposits in the bank's primary service area
were almost $5.3 billion,  which represented a 5% deposit growth rate from 1998.
Our plan over the next five years is to grow our deposit  base to $100  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 15, 2000,  the bank had 14 employees and the company has no
full-time employees.

                           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
national 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.


                                       5
<PAGE>


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 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 national
banking industry, and these changes could have a material effect on our business
and  prospects.  We cannot predict the nature or the extent of the effect on our
business and earnings of fiscal or monetary policies,  economic controls, or new
federal or state legislation.

Greenville First Bancshares, Inc.

         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;
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:

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<PAGE>


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.

Greenville First 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 regulate or
monitor 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;

                                       7
<PAGE>

         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  requires  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.

         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,


                                       8
<PAGE>

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 is 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 is able to  acquire  existing  banking  operations  in South  Carolina.
Furthermore,  federal  legislation  has been  passed  which  permits  interstate
branching.  The new  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.

         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 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 the 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

                                       9
<PAGE>


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.

         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.

                                       10
<PAGE>


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 currently are 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.

         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.

         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.


                                       11

<PAGE>



Item 2.    Description of Property
----------------------------------

         The company's main office is located at 112 Haywood Road in Greenville,
South Carolina. We intend to lease the main office for approximately $25,000 per
month for 20 years.  We are  currently  operating  out of a  temporary  facility
located  on the site of our main  office,  and we  intend to  complete  our main
office in the fourth quarter of 2000.

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.
-------------------------------------------------------------------

         Since our public  offering on October 26,  1999,  our common  stock has
been quoted on the OTC Bulletin  Board under the symbol  "GVBK." Our articles of
incorporation  authorize us to issue up to 10,000,000 shares of common stock, of
which 1,150,000  shares,  for a total of  $11,500,000,  were sold in the initial
public  offering  and  are  outstanding  as  of  March  15,  2000.  We  have  46
shareholders  of record.  To date, we have not paid cash dividends on our common
stock. We currently intend to retain earnings to support  operations and finance
expansion  and  therefore  do  not  anticipate  paying  cash  dividends  in  the
foreseeable future.

         The following table sets forth the high and low sales price information
as quoted on the OTC Bulletin Board during the period indicated since our common
stock began trading publicly in October, 1999.

                                                  Stock Price
                                                ---------------
                                            High              Low

1999

Fourth Quarter                              $10.50            $8.75

         All of our  outstanding  shares of common  stock are  entitled to share
equally in dividends from funds legally  available when, and if, declared by the
Board of Directors.

         (b) Pursuant to Commission  Rule 463, we are obligated to report on the
use of proceeds from our initial public offering. The information provided below
is given as of December 31, 1999.

                  (1)      Our  registration  statement on Form SB-2 (File No.
                           333-83851) was declared  effective by the Commission
                           on October 26, 1999.

                  (2)      The offering commenced on October 26, 1999.

                  (3)      The offering closed on October 29, 1999 upon the sale
                           of 1,100,000 shares the company had registered.

                  (4)      (i)     On November  30, 1999,  the  underwriter
                                   exercised  its  over-allotment   option  and
                                   purchased an  additional  50,000  securities
                                   that the company had registered.

                           (ii)    Wachovia Securities, Inc., served as
                                   underwriter for the offering.

                           (iii)   Common stock was the only class of
                                   securities registered in the offering.

                                       12
<PAGE>


                           (iv)     We also registered warrants for our common
                                    stock which we have granted to our
                                    organizers.

                           (v)      1,519,950  shares  of our  common  stock was
                                    registered,  of which 1,150,000  shares were
                                    sold. Warrants to purchase 139,950 shares of
                                    our  common  stock for $10.00 per share were
                                    also registered in the offering.  We granted
                                    to our  organizers  warrants  to  purchase a
                                    total of 129,950 shares of common stock. The
                                    warrants  granted  to  our  organizers  were
                                    based on shares they purchased.

                           (vi)     We   incurred   approximately   $841,500  in
                                    expenses (including  underwriters discounts)
                                    in   connection   with  the   issuance   and
                                    distribution  of  the  common  stock  in the
                                    offering.  All of these  expenses  were paid
                                    directly   or   indirectly   to  persons  or
                                    entities  other  than  directors,  officers,
                                    persons   owning   10%   or   more   of  our
                                    securities, or affiliates.

                           (vii)    Our net  proceeds  after  deducting  the
                                    total expenses described above were
                                    $10,646,700.

                           (viii)   Through December 31, 1999, $5,856 of the net
                                    proceeds of the  offering  were  invested in
                                    cash,    $10,024,645    were   invested   in
                                    investments  and related  accrued  interest,
                                    $111,192  in  property  and   equipment  and
                                    $534,329  was  used  to  pay  organizational
                                    costs.  On October  29,  1999,  the  company
                                    invested  $8,500,000  in the bank as initial
                                    operating capital.  None of the net proceeds
                                    have been paid  directly  or  indirectly  to
                                    directors,  officers,  persons owning 10% or
                                    more  of  our  securities,  and  affiliates,
                                    except for an aggregate of $233,325  paid as
                                    salaries  to our  officers  and  the  bank's
                                    officers.

                           (ix)     The use of proceeds described above does not
                                    represent a material  change from the use of
                                    proceeds disclosed in the prospectus for the
                                    offering.

                                       13
<PAGE>


Item 6.  Management's Discussion and Analysis of Results of Operation
---------------------------------------------------------------------

     Forward-Looking Statements

     The following is a discussion of the  Company's  financial  condition as of
and for the period ended  December 31, 1999.  These  comments  should be read in
conjunction with the Company's condensed  consolidated  financial statements and
accompanying footnotes appearing in this report.

Financial Condition

     The company was  organized  on February  22, 1999.  The  company's  initial
principal  activities have been related to its  organization,  the conducting of
its  initial  public  offering,  obtaining  approvals  from  the  Office  of the
Comptroller of the Currency and FDIC of its  application to charter the bank and
to obtain deposit  insurance,  and obtaining  approvals from the Federal Reserve
Board for the company to acquire control of the bank.

     At December 31, 1999,  the company had total assets of  $10,141,693.  These
assets  consisted  principally  of cash of  $5,856,  short-term  investments  of
$9,777,872,  accrued  interest  of  $246,773,  and  property  and  equipment  of
$111,192.  Property and  equipment  consists  primarily of  improvements  to the
bank's current main office site and computer equipment.  The company has entered
into an operating lease for the property of its commercial bank office for $500.
Future  plans are to construct  its main  building on this site and to lease the
building and property for approximately $25,000 per month for 20 years.

     The company's  liabilities  at December 31, 1999 were $29,322 and consisted
of accounts payable of $11,322 and accrued expenses of $18,000.  The company had
shareholders' equity of $10,112,371.

     The company had a net loss of $255,579 for the three months ended  December
31,  1999,  or a pro forma net loss of $.22 per share for the three months ended
December 31, 1999 based on the actual shares of 1,150,000 which were outstanding
as a result of the offering that was completed on October 29, 1999.  The company
also incurred a net loss of $534,329 from inception  through  December 31, 1999,
or a pro forma net loss of $.46 per share since inception. These losses resulted
from expenses incurred in connection with activities related to the organization
of the company and the bank. These activities  included  preparing and filing an
application  with the OCC and the FDIC to charter the bank and to obtain deposit
insurance,  preparing an application with the Federal Reserve Board for approval
of the  company to acquire  the bank,  responding  to  questions  and  providing
additional  information to the OCC, the FDIC,  and the Federal  Reserve Board in
connection  with the  application  process,  preparing a prospectus and filing a
registration statement with the Securities and Exchange Commission,  selling the
company's  common  stock,  meetings and  discussions  among  various  organizers
regarding various preopening issues,  hiring qualified personnel to work for the
bank,  conducting public relation  activities on behalf of the bank,  developing
prospective  business  contacts for the bank and the  company,  and taking other
actions necessary for a successful bank opening.  Because the company was in the
organization  stage, it had no operations  other than earnings from the proceeds
from the public stock offering from which to generate revenues.

     During 1999, a total of $10,646,700 was used to capitalize the company.  Of
this amount,  $8,500,000  was used to capitalize the bank and the remainder will
be used to pay organization expenses of the company and provide working capital,
including  additional future capital for investment in the bank, if needed.  The
company  believes this amount will be  sufficient to fund the  activities of the
bank in its initial stages of operations.  The company believes that income from
the  operations  of the bank will be  sufficient  to fund the  activities of the
company on an ongoing basis; however,  there can be no assurance that either the
bank or the company will achieve any particular level of profitability.


                                       14

<PAGE>




Item 7.  Financial Statements
-----------------------------


                          INDEX TO FINANCIAL STATEMENTS
                FOR THE PERIOD FROM FEBRUARY 22, 1999 (INCEPTION)
                            THROUGH DECEMBER 31, 1999



Report of Independent Public Accountant..............................F-2

Balance Sheet........................................................F-3

Statement of Operations..............................................F-4

Statement of Changes in Organizers' Deficit..........................F-5

Statement of Cash Flows..............................................F-6

Notes to Financial Statements...................................F-7- F-9



                                       F-1

<PAGE>




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



The Directors
Greenville First Bancshares, Inc.
Greenville, South Carolina

           We have audited the  accompanying  balance sheet of Greenville  First
Bancshares,  Inc. (a development  stage  enterprise) as of December 31, 1999 and
the related  statements of operations,  changes in organizers'  deficit and cash
flows for the period from February 22, 1999 (date of inception) through December
31, 1999.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

           In our opinion,  the financial  statements  referred to above present
fairly,  in all material  respects,  the financial  position of Greenville First
Bancshares,  Inc. (a development  stage  enterprise) as of December 31, 1999 and
the results of its  operations  and its cash flows for the period from  February
22,  1999  through  December  31, 1999 in  conformity  with  generally  accepted
accounting principles.

/s/ Elliott, Davis & Company, LLP
February 25, 2000



                                       F-2
<PAGE>
<TABLE>
<CAPTION>


                        GREENVILLE FIRST BANCSHARES, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                                  BALANCE SHEET
                                DECEMBER 31, 1999

                                     ASSETS



<S>                                                                      <C>
ASSETS
   Cash and cash equivalents                                                $         5,856
   Federal funds sold                                                             1,460,000
   Investments                                                                    8,317,872
   Accrued interest                                                                 246,773
   Property and equipment                                                           111,192
                                                                            ---------------
       Total assets                                                         $    10,141,693
                                                                            ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

   Accounts payable                                                         $        11,322
   Accrued expenses                                                                  18,000
                                                                            ---------------
Total liabilities                                                                    29,322
                                                                            ---------------

STOCKHOLDERS' EQUITY

   Preferred stock, par value $.01 per share, 10,000,000 shares
     authorized, no shares issued-
   Common stock, par value $.01 per share, 10,000,000 shares
     authorized, 1,150,000 issued                                                    11,500
   Additional paid-in capital                                                    10,635,200
   Retained deficit accumulated during the development stage                       (534,329)
                                                                            ---------------
       Total stockholders' equity                                                10,112,371
                                                                            ---------------
       Total liabilities and stockholders' equity                           $    10,141,693
                                                                            ===============
</TABLE>



    The accompanying notes are an integral part of this financial statement.


                                      F-3
<PAGE>

                        GREENVILLE FIRST BANCSHARES, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                             STATEMENT OF OPERATIONS
            For the period from February 22, 1999 (date of inception)
                            through December 31, 1999

INTEREST INCOME                                              $        92,676


EXPENSES

   Salaries and payroll taxes                                        336,877
   Professional fees                                                 120,014
   Marketing                                                          32,371
   Application                                                        27,850
   Insurance                                                          10,960
   Interest                                                           12,049
   Occupancy                                                          13,001
   Office Supplies                                                    28,081
   Membership dues and subscriptions                                  16,879
   Telephone                                                           6,737
   Other                                                              22,186
                                                             ---------------
       Total expenses                                                627,005
                                                             ---------------
       Loss before provision for income taxes                       (534,329)

PROVISION FOR INCOME TAXES                                                 -
                                                             ---------------
       Net loss                                              $      (534,329)
                                                             ===============




    The accompanying notes are an integral part of this financial statement.

                                      F-4

<PAGE>

<TABLE>
<CAPTION>


                        GREENVILLE FIRST BANCSHARES, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                   STATEMENT OF CHANGES IN ORGANIZERS' DEFICIT
            For the period from February 22, 1999 (date of inception)
                            through December 31, 1999



                                                                                             Retained
                                                                                               deficit
                                                                                             accumulated
                                                 Common stock             Additional          during the
                                            -------------------------       paid-in          development
                                              Shares      Amount            capital             stage          Total
                                            ---------    ------------    ------------      --------------      -----
<S>                                       <C>           <C>          <C>              <C>                  <C>
Proceeds from the sale of stock (net
   of offering expenses of $854,110)             11,500   $    11,500   $   10,635,200   $               -  $  10,646,700

Net loss                                              -             -                -            (534,329)      (534,329)
                                            -----------   -----------   --------------   -----------------  -------------

Balance, December 31, 1999                       11,500   $    11,500   $   10,635,200   $        (534,329) $  10,112,371
                                            ===========   ===========   ==============   =================  =============


                                      F-5
</TABLE>

    The accompanying notes are an integral part of this financial statement.


<PAGE>


                        GREENVILLE FIRST BANCSHARES, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                             STATEMENT OF CASH FLOWS
            For the period from February 22,1999 (date of inception)
                            through December 31, 1999

NET CASH USED FOR PRE-OPERATING ACTIVITIES

   Net loss                                                          $(534,329)
   Changes in operating liabilities increasing cash                     29,322
                                                               ---------------
         Net cash used for pre-operating activities                   (505,007)
                                                               ---------------


INVESTING ACTIVITIES

   Increase in federal funds sold                                   (1,460,000)
   Purchase of securities                                          (18,464,645)
   Maturity of securities                                            9,900,000
   Purchase of property and equipment                                 (111,192)
                                                               ----------------
         Net cash used for investment activities                   (10,135,837)
                                                               ---------------


FINANCING ACTIVITIES

   Proceeds from borrowings on line of credit                          400,000
   Repayment of borrowings on line of credit                          (400,000)
   Proceeds from sale of stock                                      10,646,700
                                                               ---------------
         Net cash provided by financing activities                  10,646,700
                                                               ---------------
         Net increase in cash                                            5,856


CASH AND CASH EQUIVALENTS,  FEBRUARY 22, 1999

   (date of inception)                                                       -
                                                               ---------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                       $         5,856
                                                               ===============


     The accompanying notes are an integral part ofthis financial statement.


                                      F-6
<PAGE>


                        GREENVILLE FIRST BANCSHARES, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES

     Greenville  First  Bancshares,  Inc. (the  "Company")  is a South  Carolina
corporation  organized  for the  purpose  of owning and  controlling  all of the
capital stock of Greenville First Bank (in organization) (the "Bank").  The Bank
is a national  bank under the laws of the United  States  located in  Greenville
County, South Carolina. The company received approval from both the FDIC and the
OCC on January 7, 2000. The Bank began operations on January 10, 2000.

     The Company as of December 31, 1999 was a development  stage  enterprise as
defined by Statement of Financial  Accounting  Standard No. 7,  "Accounting  and
Reporting by Development Stage Enterprises", as it devotes substantially all its
efforts  to  establishing  a  new  business.  The  Company's  planned  principal
operations  had not  commenced  and  revenue  has not been  recognized  from the
planned principal operations.

     On October 26, 1999, the Company sold 1,100,000  shares of its common stock
at $10 per share and on November  30, 1999 sold 50,000  additional  shares for a
total of 1,150,000  shares.  The offering  raised  $10,647,000  net of estimated
underwriting  discounts and commissions and offering expenses. The directors and
executive  officers of the Company  purchased  266,900 shares of common stock at
$10 per share,  for a total of  $2,660,000.  Upon purchase of these shares,  the
Company  issued  stock  warrants to the  organizers  to  purchase up  additional
129,950 shares of common stock. The Company used $8.5 million of the proceeds to
capitalize the Bank.

Year-end

   The Company has adopted a fiscal year ending on December  31,  effective  for
   the  period  ending  December  31,  1999.  A minimal  amount of  transactions
   occurring  prior to the Company's  incorporation  have been combined in these
   financial statements for ease of presentation.

Estimates

   The financial  statements  include  estimates and assumptions that effect the
   Company's  financial  position and results of  operations  and  disclosure of
   contingent  assets and  liabilities.  Actual  results could differ from these
   estimates.

Statement of cash flows

   For purposes of reporting cash flows,  cash and cash  equivalents are defined
   as those  amounts  included in the balance  sheet  caption "Cash and Due from
   Banks." Cash and cash equivalents  have an original  maturity of three months
   or less.

Investment securities

   The Company  accounts for investment  securities in accordance  with SFAS No.
   115, "Accounting for Certain Investments in Debt and Equity Securities".  The
   statement requires investments in equity and debt securities to be classified
   into three categories:

1.     Available  for  sale  securities:  These  are  securities  which  are not
       classified  as either held to maturity  or as trading  securities.  These
       securities are reported at fair market value. Unrealized gains and losses
       are   reported,   net  of  income  taxes,   as  separate   components  of
       shareholders' equity (accumulated other comprehensive loss).

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACTIVITIES, Continued

2.     Held to maturity  securities:  These are investment  securities which the
       Company  has the  ability  and  intent  to  hold  until  maturity.  These
       securities are stated at cost,  adjusted for amortization of premiums and
       the accretion of discounts.


                                      F-7
<PAGE>

                       GREENVILLE FIRST BANCSHARES, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS

                                   (Continued)

3.     Trading  securities:  These  are  securities  which are  bought  and held
       principally  for the  purpose  of  selling  in the near  future.  Trading
       securities  are  reported at fair market  value,  and related  unrealized
       gains and losses are recognized in the income statement.  The Company has
       no trading securities.

       Gains or losses on dispositions of investment securities are based on the
       differences  between the net proceeds and the adjusted carrying amount of
       the securities sold, using the specific identification method.

Organization costs

   Organization costs include incorporation,  legal and consulting fees incurred
   in connection with establishing the Company.  In accordance with Statement of
   Position  (SOP)  98-5,  "Reporting  on the  Costs  of  Start-Up  Activities,"
   organization costs are expensed when incurred.

Income taxes

  Income taxes are provided for the tax effects of transactions  reported in the
  financial  statements  and consist of taxes  currently due plus deferred taxes
  related  primarily to differences  between the financial  reporting and income
  tax bases of assets and  liabilities.  At December 31, 1999, no taxable income
  has been generated and therefore,  no tax provision has been included in these
  financial statements.

NOTE 2 - FEDERAL FUNDS SOLD

           When the  Company's  cash  reserves  are in  excess  of the  required
amount,  it may lend excess to other  banks on a daily  basis.  At December  31,
1999, federal funds sold amounted to $1,460,000.

NOTE 3 - INVESTMENT SECURITIES

           The amortized costs and fair value of investment securities available
for sale as of December 31, 1999 are as follows:

                                              Amortized             Fair
                                                  cost              value
                                             ----------             -----
   Federal agencies
     Due within one year                     $ 8,317,872            $ 8,317,872


NOTE 4 - LINE OF CREDIT

       The Company had  available  at December  31, 1999 a line of credit from a
correspondent  bank  for  short-term  borrowings  equal  to 25  percent  of  the
Company's capital.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

       The  Company has entered  into a 12-month  operating  lease for a modular
unit to  temporarily  serve as its  commercial  bank office.  The lease requires
monthly payments of approximately $5,880.

                                      F-8

<PAGE>

                        GREENVILLE FIRST BANCSHARES, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5 - COMMITMENTS AND CONTINGENCIES, Continued

       The Company has also entered into an operating  lease for the property of
its  temporary  bank office for $500.  Future  plans are to  construct  its main
building  on an  adjacent  site and to  lease  the  building  and  property  for
approximately  $25,000  per month  for 20 years.  The  Company  entered  into an
agreement for  preparation  of site for the  temporary  facility at an estimated
cost of $75,000. This cost will be amortized over one year.

       The Company has entered into an employment  agreement  with its president
and chief executive officer that includes a three year compensation term, annual
bonus, incentive program, stock option plan and a one-year non-compete agreement
upon early termination.

       The  Company has  entered  into an  agreement  with a data  processor  to
provide ATM services, item processing and general ledger processing.  Components
of this contract  include  minimum  charges based on volume and include  initial
setup costs of approximately $87,400 per year.

       The Company has entered into a 36 month  operating lease on an automobile
that is used by the Company's president and chief executive officer. The monthly
payments are $620. At December 31, 1999 thirty-three lease payments remained.

NOTE 6 - RELATED PARTY TRANSACTIONS

       One of the  directors of the Company  prepared the site for the temporary
bank office and owns the land where the Company will lease the land and building
for use as its main office (Note 5).


                                      F-9

<PAGE>


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 page 10 of our
Proxy  Statement for the Annual  Meeting of  Shareholders  to be held on May 11,
2000 is incorporated herein by reference.

Item 10.  Executive Compensation
--------------------------------

         In response to this Item,  the  information  contained on page 8 of our
Proxy Statement for the Annual Meeting of Shareholders to be held on May11, 2000
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 10 of our
Proxy  Statement for the Annual  Meeting of  Shareholders  to be held on May 11,
2000 is incorporated herein by reference.

Item 12.  Certain Relationships and Related Transactions
--------------------------------------------------------

         In response to this Item, the  information  contained on page 10 of our
Proxy  Statement for the Annual  Meeting of  Shareholders  to be held on May 11,
2000 is incorporated herein by reference.

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 Greenville First Bancshares and
         Wachovia  Securities  (incorporated  by reference to Exhibit 1.1 of the
         Registration Statement on Form SB-2, File No. 333-83851).

3.1.     Articles of  Incorporation,  as amended  (incorporated  by reference to
         Exhibit  3.1 of the  Registration  Statement  on Form  SB-2,  File  No.
         333-83851).

3.2.     Bylaws  (incorporated  by reference to Exhibit 3.2 of the  Registration
         Statement on Form SB-2, File No. 333-83851).

4.1.     See  Exhibits  3.1  and  3.2  for   provisions  in   Greenville   First
         Bancshares's  Articles of Incorporation  and Bylaws defining the rights
         of holders of the common  stock  (incorporated  by reference to Exhibit
         4.1 of the Registration Statement on Form SB-2, File No. 333-83851).

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.
         333-83851).

5.1.     Opinion Regarding Legality (incorporated by reference to Exhibit 5.1 of
         the Registration Statement on Form SB-2, File No. 333-83851).

10.1.    Employment  Agreement  dated July 27,  1999  between  Greenville  First
         Bancshares and Art Seaver (incorporated by reference to Exhibit 10.1 of
         the Registration Statement on Form SB-2, File No. 333-83851).

10.2.    *Lease  Agreement  incorporated by reference  between  Greenville First
         Bank and Halton Properties, LLC, formerly Cothran Properties, LLC

10.3     Data  Processing   Services  Agreement  dated  June  28,  1999  between
         Greenville  First  Bancshares and the Intercept Group  (incorporated by
         reference to Exhibit 10.3 of the  Registration  Statement on Form SB-2,
         File No. 333-83851).


                                       16
<PAGE>

10.4     Form of Stock Warrant  Agreement  (incorporated by reference to Exhibit
         10.4 of the Registration Statement on Form SB-2, File No. 333-83851).

10.5     Promissory  Note  dated  February  22,  1999  from   Greenville   First
         Bancshares,  Inc.  in favor of John J.  Meindl,  Jr.  (incorporated  by
         reference to Exhibit 10.5 of the  Registration  Statement on Form SB-2,
         File No. 333-83851).

10.6     *Standard Form of Agreement between  Greenville First Bancshares,  Inc.
         and AMI Architects

27.1     *Financial Data Schedule (for electronic filing purposes)

-----------------------------
         *Filed herewith

(b)      Reports on Form 8-K

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



                                       17
<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.

                                      GREENVILLE FIRST BANCSHARES, INC.


Date:   March 28, 2000                By:  /s/ R. Arthur Seaver, Jr.
       --------------------------          -------------------------------------
                                           President and Chief Executive Officer

         KNOW  ALL MEN BY THESE  PRESENTS,  that  each  person  whose  signature
appears  below  constitutes  and  appoints R. Arthur  Seaver,  Jr., 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.

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

/s/ James M. Austin
----------------------------
James M. Austin, III              Chief Financial Officer,      March 29, 2000
                                  Principal Financial and
                                  Accounting Officer

-----------------------------
Andrew B. Cajka                   Director                      March --, 2000


/s/ Mark A. Cothran
----------------------------
Mark A. Cothran                   Director                      March 29, 2000

/s/ Leighton M. Cubbage
----------------------------
Leighton M. Cubbage               Director                      March 29, 2000


/s/ Tecumseh Hooper
----------------------------
Tecumseh Hooper, Jr.              Director                      March 29, 2000

/s/ Rudolph G. Johnston
------------------------------
Rudolph G. Johnstone, III, M.D.   Director                      March 29, 2000

/s/ Keith J. Marrero
----------------------------
Keith J. Marrero                  Director                      March 29, 2000


                                       18
<PAGE>

/s/ James B. Orders
----------------------------
James B. Orders, III              Director, Chairman            March 29, 2000


/s/ William B. Sturgis
----------------------------
William B. Sturgis                Director                      March 29, 2000

/s/ R. Arthur Seaver
----------------------------
R. Arthur Seaver, Jr.             Director, Chief Executive     March 29, 2000
                                  Officer and President
                                  (principal executive officer)
/s/ Fred Gilmer
----------------------------
Fred Gilmer, Jr.                  Director, Senior Vice-        March 29, 2000
                                  President


                                       19

<PAGE>

                                  EXHIBIT INDEX

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

1.1      Form of Underwriting  Agreement between Greenville First Bancshares and
         Wachovia  Securities  (incorporated  by reference to Exhibit 1.1 of the
         Registration Statement on Form SB-2, File No. 333-83851).

3.1.     Articles of  Incorporation,  as amended  (incorporated  by reference to
         Exhibit  3.1 of the  Registration  Statement  on Form  SB-2,  File  No.
         333-83851).

3.2.     Bylaws  (incorporated  by reference to Exhibit 3.2 of the  Registration
         Statement on Form SB-2, File No. 333-83851).

4.1.     See  Exhibits  3.1  and  3.2  for   provisions  in   Greenville   First
         Bancshares's  Articles of Incorporation  and Bylaws defining the rights
         of holders of the common  stock  (incorporated  by reference to Exhibit
         4.1 of the Registration Statement on Form SB-2, File No. 333-83851).

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.
         333-83851).

5.1.     Opinion Regarding Legality (incorporated by reference to Exhibit 5.1 of
         the Registration Statement on Form SB-2, File No. 333-83851).

10.1.    Employment  Agreement  dated July 27,  1999  between  Greenville  First
         Bancshares and Art Seaver (incorporated by reference to Exhibit 10.1 of
         the Registration Statement on Form SB-2, File No. 333-83851).

10.2.    *Lease Agreement between Greenville  First Bank and Halton Properties,
         LLC, formerly Cothran Properties, LLC

10.3     Data  Processing   Services  Agreement  dated  June  28,  1999  between
         Greenville  First  Bancshares and the Intercept Group  (incorporated by
         reference to Exhibit 10.3 of the  Registration  Statement on Form SB-2,
         File No. 333-83851).

10.4     Form of Stock Warrant  Agreement  (incorporated by reference to Exhibit
         10.4 of the Registration Statement on Form SB-2, File No. 333-83851).

10.5     Promissory  Note  dated  February  22,  1999  from   Greenville   First
         Bancshares,  Inc.  in favor of John J.  Meindl,  Jr.  (incorporated  by
         reference to Exhibit 10.5 of the  Registration  Statement on Form SB-2,
         File No. 333-83851).

10.6     *Standard Form of Agreement between  Greenville First Bancshares,  Inc.
         and AMI Architects

27.1     *Financial Data Schedule (for electronic filing purposes)


----------------------------------

         *Filed herewith