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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended: March 31, 2007



| ̈ | Transition report under Section 13 or 15(d) of the Exchange Act
|- | ---------------------------------------------------------------

For the transition period from  to

Commission file number: 001-33014



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LOGO

OMNI FINANCIAL SERVICES, INC.

(Exact name of Registrant as Specified in Its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Georgia                                                        |  | 58-1990666                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)

Six Concourse Parkway, Suite 2300

Atlanta, Georgia 30328

(Address of Principal Executive
Offices)

(770) 396-0000

(Registrants Telephone Number)



---

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 the past 90 days:    Yes ̈No  x

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈Accelerated
filer ̈Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes ̈No  x

State the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: At April 30, 2007, 11,352,307 shares of the registrants common stock were
outstanding.



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##### Table of Contents

TABLE OF CONTENTS



|         |  |                                                                                                              |  |        
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  | -------
|         |  |                                                                                                              |  | PAGE   
|PART I   |  |                                                                                                              |  |        
|         |  |                                                                                                             
|Item 1.  |  | Financial Statements                                                                                         |  |        
|         |  |                                                                                                             
|         |  | Condensed Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006                             |  | 3      
|         |  |                                                                                                             
|         |  | Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2007 and 2006               |  | 4      
|         |  |                                                                                                             
|         |  | Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2007 and 2006 |  | 5      
|         |  |                                                                                                             
|         |  | Condensed Consolidated Statements of Shareholders Equity for the Three Months Ended March 31, 2007 and 2006 |  | 6      
|         |  |                                                                                                             
|         |  | Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006           |  | 7      
|         |  |                                                                                                             
|         |  | Notes to Unaudited Consolidated Financial Statements                                                         |  | 8 - 15 
|         |  |                                                                                                             
|Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 16 - 33
|         |  |                                                                                                             
|Item 3.  |  | Quantitative and Qualitative Disclosures about Market Risk                                                   |  | 34 - 35
|         |  |                                                                                                             
|Item 4.  |  | Controls and Procedures                                                                                      |  | 35 - 36
|         |  |                                                                                                             
|PART II  |  |                                                                                                              |  |        
|         |  |                                                                                                             
|Item 1.  |  | Legal Proceedings                                                                                            |  | 37 - 38
|         |  |                                                                                                             
|Item 1A. |  | Risk Factors                                                                                                 |  | 38     
|         |  |                                                                                                             
|Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                  |  | 38     
|         |  |                                                                                                             
|Item 3.  |  | Defaults upon Senior Securities                                                                              |  | 38     
|         |  |                                                                                                             
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                          |  | 38     
|         |  |                                                                                                             
|Item 5.  |  | Other Information                                                                                            |  | 38     
|         |  |                                                                                                             
|Item 6.  |  | Exhibits                                                                                                     |  | 39     



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##### Table of Contents

Note: Throughout this report, unless the context indicates otherwise, references to Omni, Omni
Financial Services, the company, we, us, and our mean the combined business of Omni Financial Services, Inc. and its consolidated subsidiaries, and references to the bank mean our
banking subsidiary, Omni National Bank.

CAUTIONARY STATEMENT REGARDING

FORWARD-LOOKING STATEMENTS

This Report contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of 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 those described below under Item 1A- Risk Factors and the following:



| |  |  | significant increases in competitive pressure in the banking and financial services industries;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | changes in the interest rate environment which could reduce anticipated or actual margins;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | changes in political conditions or the legislative or regulatory environment;
| | - |  | -----------------------------------------------------------------------------



| |  |  | general economic conditions, either nationally or regionally and especially in our primary service area or in discrete locations within our market areas, becoming
less favorable than expected resulting in, among other things, a deterioration in credit quality;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes occurring in business conditions and inflation;
| | - |  | -------------------------------------------------------



| |  |  | changes in technology;
| | - |  | ----------------------



| |  |  | changes in monetary and tax policies;
| | - |  | -------------------------------------



| |  |  | the level of allowance for loan loss;
| | - |  | -------------------------------------



| |  |  | the rate of delinquencies and amounts of charge-offs;
| | - |  | -----------------------------------------------------



| |  |  | the rates of loan growth and the lack of seasoning of our loan portfolio;
| | - |  | -------------------------------------------------------------------------



| |  |  | adverse changes in asset quality and resulting credit risk-related losses and expenses;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | loss of consumer confidence and economic disruptions resulting from terrorist activities;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | changes in the securities markets and in the overall availability of financing including brokered or other deposits; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------



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

We undertake no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events, or
otherwise.



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Part I. Financial Information



|Item 1. | Financial Statements
|------- | --------------------

OMNI FINANCIAL SERVICES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

MARCH 31, 2007 AND DECEMBER 31, 2006



|                                                                                                                                            |  |                |             |   |                   |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                                                                                                            |  | March 31, 2007 |             |   | December 31, 2006 |  
|                                                                                                                                            |  | (unaudited)    |             |   |                   |  
|ASSETS                                                                                                                                      |  |                |             |   |                   |   |             |  
|Cash and due from banks, including required cash reserves of $974,000 and $896,000                                                          |  | $              | 5,041,610   |   |                   | $ | 5,874,453   |  
|Interest-bearing deposits in other financial institutions                                                                                   |  |                | 722,355     |   |                   |   | 319,961     |  
|Federal funds sold                                                                                                                          |  |                | 8,432,000   |   |                   |   | 16,341,000  |  
|                                                                                                                                            |  |                |             |   |                   |   |             |  
|Total cash and cash equivalents                                                                                                             |  |                | 14,195,965  |   |                   |   | 22,535,414  |  
|Investment securities available-for-sale                                                                                                    |  |                | 136,784,297 |   |                   |   | 134,553,978 |  
|Other investments                                                                                                                           |  |                | 5,152,800   |   |                   |   | 4,836,100   |  
|Loans, net of allowance for loan losses of $ 7,575,764 and $6,646,212                                                                       |  |                | 562,379,221 |   |                   |   | 494,813,672 |  
|Loans held-for-sale                                                                                                                         |  |                | 6,382,403   |   |                   |   | 9,635,243   |  
|Other real estate owned                                                                                                                     |  |                | 5,237,959   |   |                   |   | 3,377,719   |  
|Premises and equipment, net                                                                                                                 |  |                | 17,162,212  |   |                   |   | 10,707,034  |  
|Goodwill                                                                                                                                    |  |                | 4,753,887   |   |                   |   | 4,753,887   |  
|Cash surrender value of life insurance policies                                                                                             |  |                | 1,213,236   |   |                   |   | 1,201,275   |  
|Accrued interest receivable and other assets                                                                                                |  |                | 18,099,993  |   |                   |   | 16,349,659  |  
|                                                                                                                                            |  |                |             |   |                   |   |             |  
|                                                                                                                                            |  | $              | 771,361,973 |   |                   | $ | 702,763,981 |  
|                                                                                                                                            |  |                |             |   |                   |   |             |  
|LIABILITIES & STOCKHOLDERS EQUITY                                                                                                          |  |                |             |   |                   |   |             |  
|Deposits:                                                                                                                                   |  |                |             |   |                   |   |             |  
|Demand                                                                                                                                      |  | $              | 44,474,774  |   |                   | $ | 49,380,211  |  
|Savings and money market                                                                                                                    |  |                | 45,642,353  |   |                   |   | 36,993,065  |  
|Time deposits less than $100,000                                                                                                            |  |                | 240,945,487 |   |                   |   | 218,750,720 |  
|Time deposits equal to or greater than $100,000                                                                                             |  |                | 280,728,327 |   |                   |   | 239,545,676 |  
|                                                                                                                                            |  |                |             |   |                   |   |             |  
|Total deposits                                                                                                                              |  |                | 611,790,941 |   |                   |   | 544,669,672 |  
|Federal Home Loan Bank borrowings                                                                                                           |  |                | 57,500,000  |   |                   |   | 57,500,000  |  
|Junior subordinated debentures                                                                                                              |  |                | 20,620,000  |   |                   |   | 20,620,000  |  
|Escrow accounts, accrued interest payable and other liabilities                                                                             |  |                | 7,969,523   |   |                   |   | 7,627,223   |  
|                                                                                                                                            |  |                |             |   |                   |   |             |  
|Total liabilities                                                                                                                           |  |                | 697,880,464 |   |                   |   | 630,416,895 |  
|Common stock, par value $1.00; 25,000,000 shares authorized: 11,351,428 and 11,348,928 shares issued; 11,334,807 and 11,332,307
outstanding |  |                | 11,351,428  |   |                   |   | 11,348,928  |  
|Additional paid-in capital                                                                                                                  |  |                | 54,601,917  |   |                   |   | 54,567,172  |  
|Retained earnings                                                                                                                           |  |                | 8,182,279   |   |                   |   | 7,296,572   |  
|Accumulated other comprehensive loss                                                                                                        |  |                | (554,028    | ) |                   |   | (765,499    | )
|Treasury stock, at cost; 16,621 shares                                                                                                      |  |                | (100,087    | ) |                   |   | (100,087    | )
|                                                                                                                                            |  |                |             |   |                   |   |             |  
|Total shareholders equity                                                                                                                  |  |                | 73,481,509  |   |                   |   | 72,347,086  |  
|                                                                                                                                            |  |                |             |   |                   |   |             |  
|                                                                                                                                            |  | $              | 771,361,973 |   |                   | $ | 702,763,981 |  
|                                                                                                                                            |  |                |             |   |                   |   |             |  

The accompanying notes are an integral part of these consolidated financial statements.



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OMNI FINANCIAL SERVICES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006



|                                                        |  |             |            |   |      |   |            |  
|------------------------------------------------------- |  | ----------- | ---------- | - | ---- | - | ---------- | -
|                                                        |  | 2007        |            |   | 2006 |  
|                                                        |  | (Unaudited) |           
|Interest income:                                        |  |             |            |  
|Interest and fees on loans                              |  | $           | 14,305,013 |   |      | $ | 8,570,770  |  
|Interest on investment securities                       |  |             |            |   |      |   |            |  
|Tax exempt                                              |  |             | 355,060    |   |      |   | 341,653    |  
|Taxable                                                 |  |             | 1,306,286  |   |      |   | 931,250    |  
|Other interest and dividend income                      |  |             | 169,844    |   |      |   | 81,737     |  
|                                                        |  |             |            |   |      |   |            |  
|Total interest and dividend income                      |  |             | 16,136,203 |   |      |   | 9,925,410  |  
|                                                        |  |             |            |   |      |   |            |  
|Interest expense:                                       |  |             |            |   |      |   |            |  
|Deposits                                                |  |             | 6,759,306  |   |      |   | 3,327,277  |  
|Federal Home Loan Bank and other borrowings, long term  |  |             | 583,581    |   |      |   | 709,580    |  
|Federal funds purchased and other short-term borrowings |  |             | 19,774     |   |      |   | 51,294     |  
|Junior subordinated debentures                          |  |             | 387,171    |   |      |   | 348,714    |  
|                                                        |  |             |            |   |      |   |            |  
|Total interest expense                                  |  |             | 7,749,832  |   |      |   | 4,436,865  |  
|                                                        |  |             |            |   |      |   |            |  
|Net interest income                                     |  |             | 8,386,371  |   |      |   | 5,488,545  |  
|Provision for loan losses                               |  |             | 985,779    |   |      |   | 225,000    |  
|                                                        |  |             |            |   |      |   |            |  
|Net interest income after provision for loan losses     |  |             | 7,400,592  |   |      |   | 5,263,545  |  
|                                                        |  |             |            |   |      |   |            |  
|Noninterest income:                                     |  |             |            |   |      |   |            |  
|Service charges on deposit accounts                     |  |             | 157,996    |   |      |   | 136,214    |  
|Gain on sale of loans                                   |  |             | 98,324     |   |      |   | 480,307    |  
|Gains (losses) on sale of investment securities, net    |  |             | (1,129     | ) |      |   | 1,576      |  
|Other income                                            |  |             | 380,543    |   |      |   | 225,674    |  
|                                                        |  |             |            |   |      |   |            |  
|Total noninterest income                                |  |             | 635,734    |   |      |   | 843,771    |  
|                                                        |  |             |            |   |      |   |            |  
|Noninterest Expense:                                    |  |             |            |   |      |   |            |  
|Salaries and employee benefits                          |  |             | 3,005,848  |   |      |   | 2,040,168  |  
|Occupancy and equipment                                 |  |             | 775,297    |   |      |   | 641,127    |  
|Professional fees                                       |  |             | 331,883    |   |      |   | 264,624    |  
|Other real estate owned expense                         |  |             | 375,767    |   |      |   | 33,144     |  
|Communication expense                                   |  |             | 184,430    |   |      |   | 145,788    |  
|Advertising and marketing                               |  |             | 155,152    |   |      |   | 138,940    |  
|Other                                                   |  |             | 1,063,731  |   |      |   | 885,199    |  
|                                                        |  |             |            |   |      |   |            |  
|Total noninterest expense                               |  |             | 5,892,108  |   |      |   | 4,148,990  |  
|                                                        |  |             |            |   |      |   |            |  
|Income before income taxes                              |  |             | 2,144,218  |   |      |   | 1,958,326  |  
|Income tax expense (benefit)                            |  |             | 691,770    |   |      |   | (3,050,328 | )
|                                                        |  |             |            |   |      |   |            |  
|Net income                                              |  | $           | 1,452,448  |   |      | $ | 5,008,654  |  
|                                                        |  |             |            |   |      |   |            |  
|Proforma Data: (1)                                      |  |             |            |   |      |   |            |  
|Net income:                                             |  |             |            |   |      |   |            |  
|As reported                                             |  | $           | 1,452,448  |   |      | $ | 5,008,654  |  
|Adjustment for change in tax status                     |  |             |           |   |      |   | (3,691,407 | )
|                                                        |  |             |            |   |      |   |            |  
|Adjusted net income                                     |  | $           | 1,452,448  |   |      | $ | 1,317,247  |  
|                                                        |  |             |            |   |      |   |            |  
|Earnings per common share                               |  |             |            |   |      |   |            |  
|Basic                                                   |  | $           | 0.13       |   |      | $ | 0.67       |  
|Diluted                                                 |  | $           | 0.13       |   |      | $ | 0.66       |  
|                                                        |  |            
|Proforma Earnings per common share: (1)                 |  |             |            |   |      |   |            |  
|Basic earnings per share                                |  | $           | 0.13       |   |      | $ | 0.18       |  
|Diluted earnings per share                              |  | $           | 0.13       |   |      | $ | 0.17       |  
|                                                        |  |            
|Weighted average common shares outstanding:(2)          |  |             |            |   |      |   |            |  
|Basic                                                   |  |             | 11,333,807 |   |      |   | 7,228,782  |  
|Diluted                                                 |  |             | 11,496,696 |   |      |   | 7,393,122  |  

---

|(1) | Net income for March 31, 2006 has been adjusted to reflect the $3.69 million tax credit related to our conversion from an S-Corporation to a C-Corporation, recognized on
January 1, 2006.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | March 31, 2006 adjusted for the 2 for 1 reverse stock split that occurred in May 2006.
|--- | --------------------------------------------------------------------------------------

The accompanying notes are an integral part of these consolidated financial statements.



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OMNI FINANCIAL SERVICES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)



|                                                                                                                                               |  |      |           |      |   |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- | - | --------- | -
|                                                                                                                                               |  | 2007 |           | 2006 |  
|Net income                                                                                                                                     |  | $    | 1,452,448 |      | $ | 5,008,654 |  
|                                                                                                                                               |  |      |           |      |   |           |  
|Other comprehensive (loss) income:                                                                                                             |  |      |           |      |   |           |  
|Unrealized holding gains (losses) on investment securities available-for-sale arising during the period, net of taxes of $128,962 and
$283,361 |  |      | 210,770   |      |   | (463,111  | )
|Reclassification adjustment for (gains) losses realized on sales of investment securities, net of taxes of $(428) and $598                     |  |      | 701       |      |   | (978      | )
|                                                                                                                                               |  |      |           |      |   |           |  
|Other comprehensive (loss) income                                                                                                              |  |      | 211,471   |      |   | (464,089  | )
|                                                                                                                                               |  |      |           |      |   |           |  
|Total comprehensive income                                                                                                                     |  | $    | 1,663,919 |      | $ | 4,544,565 |  
|                                                                                                                                               |  |      |           |      |   |           |  

The accompanying notes are integral part of these consolidated financial statements.



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OMNI FINANCIAL SERVICES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)



|                                                                          |  |              |  |                          |            |                  |   |            |               |   |            |                                            |  |   |          |   |  |   |            |   |  |   |            |  
|------------------------------------------------------------------------- |  | ------------ |  | ------------------------ | ---------- | ---------------- | - | ---------- | ------------- | - | ---------- | ------------------------------------------ |  | - | -------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                                          |  | Common Stock |  | AdditionalPaid-InCapital |            | RetainedEarnings |   |            | TreasuryStock |   |            | AccumulatedOtherComprehensiveIncome (Loss) |  |   | Total    |  
|                                                                          |  | Shares       |  | Amount                   |            |                  |   |            |              
|Beginning Balance, January 1, 2006                                        |  | 7,242,612    |  | $                        | 7,242,612  |                  | $ | 13,724,927 |               | $ | 9,421,731  |                                            |  | $ | (100,000 | ) |  | $ | (1,207,532 | ) |  | $ | 29,081,738 |  
|Reclassification of retained earnings upon change in tax status           |  |              |  |                          |            |                  |   | 9,421,731  |               |   | (9,421,731 | )                                          |  |   |          |   |  |   |            |   |  |   |           |  
|Net income                                                                |  |              |  |                          |            |                  |   |            |               |   | 5,008,654  |                                            |  |   |          |   |  |   |            |   |  |   | 5,008,654  |  
|Issuance of common stock                                                  |  | 250,366      |  |                          | 250,366    |                  |   | 2,124,939  |               |   |            |                                            |  |   |          |   |  |   |            |   |  |   | 2,375,305  |  
|Cash distributions to shareholders ($.028 per common share)               |  |              |  |                          |            |                  |   |            |               |   | (424,221   | )                                          |  |   |          |   |  |   |            |   |  |   | (424,221   | )
|Change in net unrealized loss on investment securities available-for-sale |  |              |  |                          |            |                  |   |            |               |   |            |                                            |  |   |          |   |  |   | (464,089   | ) |  |   | (464,089   | )
|                                                                          |  |              |  |                          |            |                  |   |            |               |   |            |                                            |  |   |          |   |  |   |            |   |  |   |            |  
|Ending Balance, March 31, 2006                                            |  | 7,492,978    |  | $                        | 7,492,978  |                  | $ | 25,271,597 |               | $ | 4,584,433  |                                            |  | $ | (100,000 | ) |  | $ | (1,671,621 | ) |  | $ | 35,577,387 |  
|                                                                          |  |              |  |                          |            |                  |   |            |               |   |            |                                            |  |   |          |   |  |   |            |   |  |   |            |  
|Beginning Balance, January 1, 2007                                        |  | 11,348,928   |  | $                        | 11,348,928 |                  | $ | 54,567,172 |               | $ | 7,296,572  |                                            |  | $ | (100,087 | ) |  | $ | (765,499   | ) |  | $ | 72,347,086 |  
|Net income                                                                |  |              |  |                          |            |                  |   |            |               |   | 1,452,448  |                                            |  |   |          |   |  |   |            |   |  |   | 1,452,448  |  
|Employee options exercised                                                |  | 2,500        |  |                          | 2,500      |                  |   | 14,250     |               |   |            |                                            |  |   |          |   |  |   |            |   |  |   | 16,750     |  
|Stock compensation expense                                                |  |              |  |                          |            |                  |   | 20,495     |               |   |            |                                            |  |   |          |   |  |   |            |   |  |   | 20,495     |  
|Cash distributions to shareholders ($.05 per common share)                |  |              |  |                          |            |                  |   |            |               |   | (566,741   | )                                          |  |   |          |   |  |   |            |   |  |   | (566,741   | )
|Change in net unrealized loss on investment securities available-for-sale |  |              |  |                          |            |                  |   |            |               |   |            |                                            |  |   |          |   |  |   | 211,471    |   |  |   | 211,471    |  
|                                                                          |  |              |  |                          |            |                  |   |            |               |   |            |                                            |  |   |          |   |  |   |            |   |  |   |            |  
|Ending Balance, March 31, 2007                                            |  | 11,351,428   |  | $                        | 11,351,428 |                  | $ | 54,601,917 |               | $ | 8,182,279  |                                            |  | $ | (100,087 | ) |  | $ | (554,028   | ) |  | $ | 73,481,509 |  
|                                                                          |  |              |  |                          |            |                  |   |            |               |   |            |                                            |  |   |          |   |  |   |            |   |  |   |            |  

The accompanying notes are an integral part of these consolidated financial statements



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##### Table of Contents

OMNI FINANCIAL SERVICES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)



|                                                                                              |  |      |             |   |      |   |             |  
|--------------------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                                                                              |  | 2007 |             |   | 2006 |  
|Cash flows from operating activities:                                                         |  |      |             |   |      |   |             |  
|Net income                                                                                    |  | $    | 1,452,448   |   |      | $ | 5,008,654   |  
|Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |  |      |             |   |      |   |             |  
|Depreciation, amortization and accretion                                                      |  |      | 297,312     |   |      |   | 260,039     |  
|Provision for loan losses                                                                     |  |      | 985,779     |   |      |   | 225,000     |  
|Gain on sale of other real estate                                                             |  |      | (86,770     | ) |      |   | (28,215     | )
|Gain on sale of premises and equipment                                                        |  |      | (6,065      | ) |      |   | (43,738     | )
|Gain on sale of loans                                                                         |  |      | (98,324     | ) |      |   | (480,307    | )
|Originations of warehouse loans held for sale                                                 |  |      | (55,727,264 | ) |      |   | (50,219,395 | )
|Sales of warehouse loans                                                                      |  |      | 58,980,104  |   |      |   | 54,004,446  |  
|Deferred tax asset recognized on conversion to C-corporation                                  |  |      |            |   |      |   | (3,691,407  | )
|Stock compensation expense recorded                                                           |  |      | 20,495      |   |      |   |            |  
|Investment securities losses (gains), net                                                     |  |      | 1,129       |   |      |   | (1,576      | )
|Change in:                                                                                    |  |      |             |   |      |   |             |  
|Accrued interest receivable and other assets                                                  |  |      | (1,885,288  | ) |      |   | (684,549    | )
|Escrow accounts, accrued interest payable and other liabilities                               |  |      | 655,465     |   |      |   | 2,472       |  
|                                                                                              |  |      |             |   |      |   |             |  
|Net cash provided by operating activities                                                     |  |      | 4,589,021   |   |      |   | 4,351,424   |  
|                                                                                              |  |      |             |   |      |   |             |  
|Cash flows from investing activities (net of effect of acquisitions):                         |  |      |             |   |      |   |             |  
|Proceeds from maturities, calls, and paydowns of investment securities available-for-sale     |  |      | 5,746,286   |   |      |   | 6,031,977   |  
|Purchases of investment securities available-for-sale                                         |  |      | (7,963,154  | ) |      |   | (19,716,449 | )
|Purchases of other investments                                                                |  |      | (1,014,200  | ) |      |   | (1,785,200  | )
|Proceeds from sales of other investments                                                      |  |      | 697,500     |   |      |   | 810,000     |  
|Net change in loans                                                                           |  |      | (70,241,944 | ) |      |   | (43,844,037 | )
|Proceeds from sale of other real estate                                                       |  |      | 25,790      |   |      |   | 124,744     |  
|Purchase of other real estate investments                                                     |  |      | (10,321     | ) |      |   | (1,725      | )
|Proceeds from sale of premises and equipment                                                  |  |      |            |   |      |   | 44,738      |  
|Purchase of premises and equipment                                                            |  |      | (6,739,705  | ) |      |   | (129,393    | )
|                                                                                              |  |      |             |   |      |   |             |  
|Net cash used in investing activities                                                         |  |      | (79,499,748 | ) |      |   | (58,465,345 | )
|                                                                                              |  |      |             |   |      |   |             |  
|Cash flows from financing activities (net of effect of acquisitions):                         |  |      |             |   |      |   |             |  
|Net change in deposits                                                                        |  |      | 67,121,269  |   |      |   | 25,259,140  |  
|Proceeds from Federal Home Loan Bank borrowings                                               |  |      | 40,500,000  |   |      |   | 34,500,000  |  
|Repayments of Federal Home Loan Bank borrowings                                               |  |      | (40,500,000 | ) |      |   | (18,000,000 | )
|Net change in federal funds purchased                                                         |  |      |            |   |      |   | 5,648,000   |  
|Proceeds from exercise of options                                                             |  |      | 16,750      |   |      |   |            |  
|Proceeds from issuance of common stock                                                        |  |      |            |   |      |   | 2,375,305   |  
|Cash dividends to shareholders                                                                |  |      | (566,741    | ) |      |   | (424,221    | )
|                                                                                              |  |      |             |   |      |   |             |  
|Net cash provided by financing activities                                                     |  |      | 66,571,278  |   |      |   | 49,358,224  |  
|                                                                                              |  |      |             |   |      |   |             |  
|Net change in cash and cash equivalents                                                       |  | $    | (8,339,449  | ) |      | $ | (4,755,697  | )
|Cash and cash equivalents at beginning of period                                              |  |      | 22,535,414  |   |      |   | 10,415,055  |  
|                                                                                              |  |      |             |   |      |   |             |  
|Cash and cash equivalents at end of period                                                    |  | $    | 14,195,965  |   |      | $ | 5,659,358   |  
|                                                                                              |  |      |             |   |      |   |             |  
|Supplemental cash flow information and noncash disclosures:                                   |  |      |             |   |      |   |             |  
|Cash paid during the period for interest                                                      |  | $    | 7,094,367   |   |      | $ | 3,978,995   |  
|Cash paid during the period for taxes                                                         |  | $    | 183,710     |   |      | $ |            |  
|Loans transferred to other real estate                                                        |  | $    | 8,611,721   |   |      | $ | 1,181,441   |  
|Other real estate sales financed by Bank                                                      |  | $    | 6,624,949   |   |      | $ | 1,224,978   |  

The accompanying notes are an integral part of these consolidated financial statements



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OMNI FINANCIAL SERVICES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(1)Summary of Significant Accounting Policies and Activities

Organization

Omni Financial Services, Inc. (the Company) is incorporated in the state of Georgia as a
bank holding company. The Company provides a full range of banking services to commercial and consumer customers through its wholly owned subsidiary, Omni National Bank (the Bank) and the Banks wholly owned subsidiaries. The
Company has operations in metropolitan Atlanta and Dalton, Georgia; Fayetteville, High Point and Parkton, North Carolina; Tampa, Florida; and Chicago, Illinois; with its corporate headquarters in Atlanta, Georgia. The Company also has loan
production offices in Atlanta and Dalton, Georgia; Charlotte, North Carolina; Birmingham, Alabama; Philadelphia, Pennsylvania; and Dallas, Texas. The Bank is chartered and regulated by the Office of the Comptroller of the Currency.

Basis of Presentation

The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiary, the Bank, as well as the consolidated subsidiaries of the Bank. All intercompany accounts and transactions have been eliminated in consolidation. The accounting principles followed by the
Company and its subsidiary, and the method of applying these principles, conform with accounting principles generally accepted in the United States of America. Certain financial information for prior periods have been reclassified to conform to
current period presentation, with no impact on net income or net assets for any prior period.

Interim Financial Information

The accompanying unaudited consolidated financial statements as of March 31, 2007 and 2006 have been prepared in condensed format, and therefore do not include all
of the information and footnotes required by generally accepted accounting principles for complete financial statements.

The information furnished in
these interim statements reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for each respective period presented. Such adjustments are of a normal recurring nature. The results of
operations in the interim statements are not necessarily indicative of the results that may be expected for any other period or for the full year. The interim financial information should be read in conjunction with the Companys audited
financial statements.

Use of Estimates

In preparing
the consolidated financial statements, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual
results could differ. The allowance for loan losses, the fair value of stock based compensation awards and fair values of financial instruments are particularly subject to change in the near term.

Stock Compensation Plan

In December 2004, the Financial Accounting
Standards Board (FASB) issued SFAS No. 123 (revised 2004), Share-Based Payment, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus
on transactions in which an entity obtains employee services in share-based payment transactions. This Statement is a revision to Statement 123 and APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation
guidance.

This Statement requires measurement of the cost of employee services received in exchange for stock compensation based on the grant date fair
value of the employee stock options. Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company adopted this Standard on January 1, 2006 under the prospective transition
method. Under that method, the Company recognizes compensation



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costs for any new grants of share-based awards made after the effective date or if existing awards are modified after the effective date.

Prior to adoption of this Standard the Company employee stock options were valued using the minimum value method and compensation expense for stock options were reported
using the intrinsic method.

Net Earnings per Common Share

The Company is required to report earnings per common share with and without the dilutive effects of potential common stock issuances from instruments such as options, convertible securities and warrants on the face of the statements of
earnings.

Basic earnings per common share are based on the weighted average number of common shares outstanding during the period while the effects of
potential common shares outstanding during the period are included in diluted earnings per share. Additionally, The Company must reconcile the amounts used in the computation of both basic earnings per share and diluted earnings
per share. Anti-dilutive stock options have not been included in the diluted earnings per share calculations. Anti-dilutive shares for March 31, 2007 and 2006 were 237,000 and 0, respectively.

Earnings per common share amounts for the three month periods ended March 31, 2007 and 2006 are as follows:



|                                              |  |                        |           |                          |            |                |   |       |  
|--------------------------------------------- |  | ---------------------- | --------- | ------------------------ | ---------- | -------------- | - | ----- | -
|                                              |  | NetEarnings(Numerator) |           | CommonShare(Denominator) |            | PerShareAmount |  
|For the Three Months Ended March 31, 2007     |  |                        |           |                          |            |                |   |       |  
|Basic earnings per share                      |  | $                      | 1,452,448 |                          | 11,333,807 |                | $ | 0.13  |  
|Effect of dilutive securities  stock options |  |                        |          |                          | 162,889    |                | $ |      |  
|                                              |  |                        |           |                          |            |                |   |       |  
|Diluted earnings per share                    |  | $                      | 1,452,448 |                          | 11,496,696 |                | $ | 0.13  |  
|                                              |  |                        |           |                          |            |                |   |       |  
|For the Three Months Ended March 31, 2006     |  |                        |           |                          |            |                |   |       |  
|Basic earnings per share                      |  | $                      | 5,008,654 |                          | 7,228,782  |                | $ | 0.67  |  
|Effect of dilutive securities  stock options |  |                        |          |                          | 164,340    |                | $ | (0.01 | )
|                                              |  |                        |           |                          |            |                |   |       |  
|Diluted earnings per share                    |  | $                      | 5,008,654 |                          | 7,393,122  |                | $ | 0.66  |  
|                                              |  |                        |           |                          |            |                |   |       |  

Proforma earnings per common share amounts for the three month periods ended March 31, 2007 and 2006 are as
follows:



|                                              |  |                        |           |                          |            |                |   |       |  
|--------------------------------------------- |  | ---------------------- | --------- | ------------------------ | ---------- | -------------- | - | ----- | -
|                                              |  | NetEarnings(Numerator) |           | CommonShare(Denominator) |            | PerShareAmount |  
|For the Three Months Ended March 31, 2007     |  |                        |           |                          |            |                |   |       |  
|Basic earnings per share                      |  | $                      | 1,452,448 |                          | 11,333,807 |                | $ | 0.13  |  
|Effect of dilutive securities  stock options |  |                        |          |                          | 162,889    |                | $ |      |  
|                                              |  |                        |           |                          |            |                |   |       |  
|Diluted earnings per share                    |  | $                      | 1,452,448 |                          | 11,496,696 |                | $ | 0.13  |  
|                                              |  |                        |           |                          |            |                |   |       |  
|For the Three Months Ended March 31, 2006     |  |                        |           |                          |            |                |   |       |  
|Basic earnings per share                      |  | $                      | 1,317,247 |                          | 7,228,782  |                | $ | 0.18  |  
|Effect of dilutive securities  stock options |  |                        |          |                          | 164,340    |                | $ | (0.01 | )
|                                              |  |                        |           |                          |            |                |   |       |  
|Diluted earnings per share                    |  | $                      | 1,317,247 |                          | 7,393,122  |                | $ | 0.17  |  
|                                              |  |                        |           |                          |            |                |   |       |  

Income Taxes

The Company, with the consent of its shareholders prior to January 1, 2006, elected to be taxed under the Internal Revenue Code as an S Corporation. The Companys shareholders terminated the S Corporation election effective
January 1, 2006, and we now pay corporate income taxes. In connection with that election, a deferred tax asset was



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established which resulted in an income tax benefit of $3,691,407 on the consolidated statement of earnings for the three month period ended March 31,
2006.

We use assumptions and estimates in determining income taxes payable or refundable for the current year, deferred income tax liabilities and assets
for events recognized differently in our financial statements and income tax returns, and income tax benefit or expense. Determining these amounts requires analysis of certain transactions and interpretation of tax laws and regulations. Management
exercises judgment in evaluating the amount and timing of recognition of resulting tax liabilities and assets. These judgments and estimates are reevaluated on a continual basis as regulatory and business factors change. No assurance can be given
that either the tax returns submitted by us or the income tax reported on the financial statements will not be adjusted by either adverse rulings by the United States Tax Court, changes in the tax code, or assessments made by the Internal Revenue
Service. We are subject to potential adverse adjustments, including, but not limited to, an increase in the statutory federal or state income tax rates, the permanent non-deductibility of amounts currently considered deductible either now or in
future periods, and the dependency on the generation of future taxable income, including capital gains, in order to ultimately realize deferred income tax assets.

Reverse Stock Split

On April 18, 2006, the Companys Board of Directors approved a one-for-two reverse stock split of the
Companys common stock to shareholders of record on May 1, 2006. The result is a proportional decrease in the number of the Companys shares outstanding from 14.49 million to 7.2 million as of March 31, 2006. All share
and per share information has been retroactively adjusted to reflect the reverse stock split.

Initial Public Stock Offering

In September 2006, the Companys registration statement on Form S-1 relating to the initial public offering of shares of the Companys common stock was declared
effective. The Company signed an underwriting agreement on September 28, 2006, pursuant to which the underwriters agreed to purchase 3,350,000 shares of common stock (with an option to purchase 502,500 shares to cover over-allotments) on a firm
commitment basis and closed the transaction on October 4, 2006. The Company issued 3,852,500 shares and received offering proceeds of $33.0 million (net of offering costs of $1.0 million) in October 2006.

Recent Accounting Pronouncements

SFAS No. 156 (FASB 156),
Accounting for Servicing of Financial Assets  An Amendment of FASB Statement No. 140.

In March of 2006, the FASB issued
Statement No. 156, Accounting for Servicing of Financial Assets-an amendment of FASB Statement No. 140. This Statement provides the following: 1) revised guidance on when a servicing asset and servicing liability should be recognized; 2)
requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable; 3) permits an entity to elect to measure servicing assets and servicing liabilities at fair value each reporting
date and report changes in fair value in earnings in the period in which the changes occur; 4) upon initial adoption, permits a onetime reclassification of available-for-sale securities to trading securities for securities which are identified as
offsetting the entitys exposure to changes in the fair value of servicing assets or liabilities that a servicer elects to subsequently measure at fair value; and 5) requires separate presentation of servicing assets and servicing liabilities
subsequently measured at fair value in the statement of financial position and additional footnote disclosures. This standard is effective as of the beginning of an entitys first fiscal year that begins after September 15, 2006. The
Company adopted this standard as of January 1, 2007. The adoption of this statement did not have a material impact on the Companys consolidated financial position or results of operations.

FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109, Accounting for Income
Taxes.

In July 2006, the FASB issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income TaxesAn
Interpretation of FASB Statement No. 109 (FIN 48). This Interpretation creates a single model to address uncertainty in tax positions and clarifies the accounting for income taxes by prescribing the minimum recognition



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threshold a tax position is required to meet before being recognized in the financial statements. FIN 48 also provides guidance on derecognition,
measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 utilizes a two-step approach for evaluating tax positions. Recognition (step one) occurs when an enterprise concludes that a tax
position, based solely on its technical merits, is more likely than not to be sustained upon examination. Measurement (step two) is only addressed if step one has been satisfied (i.e., the position is more likely than not to be sustained).

Under step two, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, which is more likely than not
to be realized on ultimate settlement. FIN 48 is effective for fiscal years beginning after December 15, 2006.

The Company adopted the provisions of
FIN 48 on January 1, 2007, and determined there was no need to make an adjustment to retained earnings due to adoption of this Interpretation. The Company has no unrecognized tax benefits and does not anticipate any increase in unrecognized
benefits during 2007 relative to any tax positions taken prior to January 1, 2007. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is the Companys policy to record such accruals in
its income taxes accounts; no such accruals exist as of January 1, 2007. The Company and its subsidiaries file a consolidated U.S. federal income tax return, as well as filing various returns in the states where its banking offices are located.
These returns are subject to examination by taxing authorities for all years after 2002.

SFAS No. 155, Accounting for Certain Hybrid
Financial Instruments-an amendment to FASB Statements No. 133 and 140.

In February 2006, the Financial Accounting Standards Board (FASB)
issued Statement No. 155, Accounting for Certain Hybrid Financial Instruments-an amendment to FASB Statements No. 133 and 140. This Statement permits fair value re-measurement for any hybrid financial instruments, clarifies which
instruments are subject to the requirements of Statement No. 133, and establishes a requirement to evaluate interests in securitized financial assets and other items. The new standard is effective for financial assets acquired or issued after
the beginning of the entitys first fiscal year that begins after September 15, 2006. The Company adopted the provision of this standard on January 1, 2007 and the adoption of this standard did not have any impact on its consolidated
financial position or results of operations.

SFAS No. 157, Fair Value Measurements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157). While SFAS 157
formally defines fair value, establishes a framework for measuring fair value and expands disclosure about fair value measurements, it does not require any new fair value measurements. SFAS 157 applies under other accounting pronouncements that
require or permit fair value measurements. SFAS 157 is required to be adopted effective January 1, 2008 and the Company does not presently anticipate any significant impact on its consolidated financial position, results of operations or cash
flows.

SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement
No. 115.

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement No.159, The Fair Value Option for
Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This
Statement is expected to expand the use of fair value measurement, which is consistent with the Boards long-term measurement objectives for accounting for financial instruments. SFAS 159 is effective as of the beginning of an entitys
first fiscal year that begins after November 15, 2007, with early adoption permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement
No. 157, Fair Value Measurements. The Company does not presently anticipate any significant impact on its consolidated financial position, results of operations or cash flows.



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FASB Issue No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement
Split-Dollar Life Insurance Arrangements.

In September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-4, Accounting for
Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements. This issue requires that a liability be recorded during the service period when a split-dollar life insurance agreement continues
after participants employment or retirement. The required accrued liability will be based on either the post-employment benefit cost for the continuing life insurance or based on the future death benefit depending on the contractual terms of
the underlying agreement. This issue is effective for fiscal years beginning after December 15, 2007. The Company has not completed its evaluation of the impact of adoption of EITF 06-4.

FASB Issue No. 06-5, Accounting for Purchases of Life InsuranceDetermining the Amount That Could Be Realized in Accordance with FASB Technical
Bulletin No. 85-4 (Accounting for Purchases of Life Insurance).

In September 2006, the FASB Emerging Issues Task Force finalized Issue
No. 06-5, Accounting for Purchases of Life InsuranceDetermining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4 (Accounting for Purchases of Life Insurance). This issue requires that a
policyholder consider contractual terms of a life insurance policy in determining the amount that could be realized under the insurance contract.

It also
requires that if the contract provides for a greater surrender value if all individual policies in a group are surrendered at the same time, that the surrender value be determined based on the assumption that policies will be surrendered on an
individual basis. Lastly, the issue discusses whether the cash surrender value should be discounted when the policyholder is contractually limited in its ability to surrender a policy. This issue is effective for fiscal years beginning after
December 15, 2006. The adoption of this issue on January 1, 2007 did not have any affect on the Companys consolidated financial statements.

(2)Loans

The Company grants loans and extensions of credit to individuals and entities principally in its general trade area of
metropolitan Atlanta and Dalton, Georgia; Birmingham, Alabama; Chicago, Illinois; Tampa, Florida; Fayetteville, High Point, Charlotte, and Greensboro, North Carolina; Philadelphia, Pennsylvania; and Dallas, Texas. A substantial portion of the
Companys loan portfolio is collateralized by improved and unimproved real estate and is dependent upon the real estate market.

Loans secured by
first mortgages on 1-4 family residences, multifamily residences and commercial real estate totaling approximately $54.0 million and $69.1 million were pledged as collateral for outstanding FHLB advances as of March 31, 2007 and
December 31, 2006, respectively.

Major classifications of loans at March 31, 2007 and December 31, 2006 are summarized as follows:



|                                |  |                |             |                   |   |            
|------------------------------- |  | -------------- | ----------- | ----------------- | - | -----------
|                                |  | March 31, 2007 |             | December 31, 2006
|Real estate  construction      |  | $              | 74,531,497  |                   | $ | 61,767,736 
|Community redevelopment         |  |                | 156,862,533 |                   |   | 132,161,743
|Commercial real estate          |  |                | 199,595,314 |                   |   | 184,014,559
|Residential real estate         |  |                | 19,226,160  |                   |   | 20,254,071 
|Commercial and industrial       |  |                | 119,188,485 |                   |   | 102,017,512
|Consumer                        |  |                | 2,345,522   |                   |   | 2,374,536  
|                                |  |                |             |                   |   |            
|Total loans                     |  |                | 571,749,511 |                   |   | 502,590,157
|Less: Allowance for loan losses |  |                | 7,575,764   |                   |   | 6,646,212  
|Deferred loan fees, net         |  |                | 1,794,526   |                   |   | 1,130,273  
|                                |  |                |             |                   |   |            
|Total net loans                 |  | $              | 562,379,221 |                   | $ | 494,813,672
|                                |  |                |             |                   |   |            



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Changes in the allowance for loan losses are summarized as follows:



|                                             |  |                                  |           |   |                                           |   |           |                                   |  |   |           |  
|-------------------------------------------- |  | -------------------------------- | --------- | - | ----------------------------------------- | - | --------- | --------------------------------- |  | - | --------- | -
|                                             |  | Three Months EndedMarch 31, 2007 |           |   | At or for the Year EndedDecember 31, 2006 |   |           | Three Months Ended March 31, 2006 | 
|Balance at beginning of period               |  | $                                | 6,646,212 |   |                                           | $ | 4,791,221 |                                   |  | $ | 4,791,221 |  
|Provision for loan losses                    |  |                                  | 985,779   |   |                                           |   | 2,583,000 |                                   |  |   | 225,000   |  
|Credits charged off                          |  |                                  | (90,788   | ) |                                           |   | (787,396  | )                                 |  |   | (39,312   | )
|Recoveries on credits previously charged-off |  |                                  | 34,561    |   |                                           |   | 59,387    |                                   |  |   | 16,016    |  
|                                             |  |                                  |           |   |                                           |   |           |                                   |  |   |           |  
|Balance at end of period                     |  | $                                | 7,575,764 |   |                                           | $ | 6,646,212 |                                   |  | $ | 4,992,925 |  
|                                             |  |                                  |           |   |                                           |   |           |                                   |  |   |           |  

(3)Stock Option Plan

The following table summarizes the Companys stock option plan activity for the three months ended March 31, 2007:



|                            |  |         |   |  |                                     |       |                                                     |     |                            |   |          
|--------------------------- |  | ------- | - |  | ----------------------------------- | ----- | --------------------------------------------------- | --- | -------------------------- | - | ---------
|                            |  | Options |   |  | Weighted-AverageExercisePrice/Share |       | Weighted-AverageRemainingContractual Life(in years) |     | AggregateIntrinsicValue(1)
|OutstandingJanuary 1, 2007 |  | 442,603 |   |  | $                                   | 6.10  |                                                     |     |                            |   |          
|Granted                     |  | 180,500 |   |  |                                     | 10.74 |                                                     |     |                            |   |          
|Exercised                   |  | (2,500  | ) |  |                                     | 6.74  |                                                     |     |                            |   |          
|Forfeited                   |  |        |   |  |                                     |      |                                                     |     |                            |   |          
|                            |  |         |   |  |                                     |       |                                                     |     |                            |   |          
|OutstandingMarch 31, 2007  |  | 620,603 |   |  | $                                   | 7.45  |                                                     | 7.5 |                            | $ | 1,414,975
|                            |  |         |   |  |                                     |       |                                                     |     |                            |   |          
|ExercisableMarch 31, 2007  |  | 402,353 |   |  | $                                   | 5.73  |                                                     | 7.1 |                            | $ | 1,617,459
|                            |  |         |   |  |                                     |       |                                                     |     |                            |   |          

---

|(1) | Based on closing price of $9.75 per share on March 30, 2007(the last trading day of March).
|--- | -------------------------------------------------------------------------------------------

Stock compensation expense for the three months ended March 31, 2007 and 2006 was $20,496 and $0, respectively. Subsequent to its adoption of SFAS No. 123(R) ,Share Based Payments, the
Company is only required to apply the provisions for estimating the fair value of options prospectively to new options awarded or existing options modified. The Company adopted SFAS No. 123(R) on January 1, 2006 and there were no options
awarded or modified during the three month period ended March 31, 2006.

Unrecognized stock based compensation expense related to stock options for
2007 and beyond is estimated as follows:



|                    |  |   |        
|------------------- |  | - | -------
|2007                |  | $ | 88,167 
|2008                |  |   | 117,044
|2009                |  |   | 117,044
|2010 and thereafter |  |   | 237,609

The cost is expected to be recognized over a weighted-average period of 4.7 years.

(4)Commitments

The Company is a party to financial instruments
with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees,
elements of credit risk in excess of the amount



13



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##### Table of Contents

recognized in the balance sheet. The contractual amounts of those instruments reflect the extent of involvement the Company has in particular classes of
financial instruments.

The Companys exposure to credit loss, in the event of non-performance by the other party to the financial instrument for
commitments to extend credit and standby letters of credit, is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet
instruments. In most cases, the Company requires collateral to support financial instruments with credit risk. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash
requirements.

At March 31, 2007 and December 31, 2006, the Company had commitments to extend credit of approximately $23,072,555 and
$17,645,365, respectively. At March 31, 2007 and December 31, 2006, the Company had standby letters of credit outstanding of approximately $15,000 and $35,000, respectively.

At March 31, 2007 we had approximately $7,076,127 in fixed rate commitments with interest rates that ranged from 8.25% to 18.0% with maturities ranging from six months to ten months. We had approximately
$15,996,428 in variable rate commitments that had not expired as of March 31, 2007. The loans underlying the commitments ranged in interest rates from 8.25% to 25.0% with maturities of six months to fifteen years.

At December 31, 2006 we had approximately $3,643,000 in fixed rate commitments with interest rates that ranged from 6.0% to 11.0% with maturities ranging from eight
months to eight years. We had approximately $14,002,365 in variable rate commitments that had not expired as of December 31, 2006. The loans underlying the commitments ranged in interest rates from 5.0% to 18.0% with maturities of six months to
fifteen years.

(5)Taxes

Omni, with the consent
of its shareholders prior to January 1, 2006, elected to be taxed under the Internal Revenue Code as an S Corporation. The Companys shareholders terminated the S Corporation election effective January 1, 2006, and the Company now pay
corporate income taxes. On January 1, 2006, In connection with the terminated election, a deferred tax asset was established which resulted in an income tax benefit of $3,691,407 on the consolidated statement of earnings for the three month
period ended March 31, 2006.

Income tax expense was as follows:



|                             |  |                                  |           |  
|---------------------------- |  | -------------------------------- | --------- | -
|                             |  | Three Months EndedMarch 31, 2007 |          
|Current expense:             |  |                                  |           |  
|Federal                      |  | $                                | 939,738   |  
|State                        |  |                                  | 121,643   |  
|                             |  |                                  |           |  
|                             |  |                                  | 1,061,381 |  
|Deferred expense (benefit) : |  |                                  |           |  
|Federal                      |  |                                  | (311,465  | )
|State                        |  |                                  | (58,146   | )
|                             |  |                                  |           |  
|                             |  |                                  | (369,611  | )
|                             |  |                                  |           |  
|Total expense                |  | $                                | 691,770   |  
|                             |  |                                  |           |  



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##### Table of Contents

Effective tax rate differs from federal statutory rate of 34% applied to income before income taxes due to the following:



|                                                        |  |                                  |         |  
|------------------------------------------------------- |  | -------------------------------- | ------- | -
|                                                        |  | Three Months EndedMarch 31, 2007 |        
|Federal statutory rate times financial statement income |  | $                                | 729,034 |  
|Effect of:                                              |  |                                  |         |  
|Tax-exempt income                                       |  |                                  | (94,895 | )
|State taxes, net of federal benefit                     |  |                                  | 75,232  |  
|State tax credit, net of federal benefit                |  |                                  | (33,985 | )
|Other                                                   |  |                                  | 16,384  |  
|                                                        |  |                                  |         |  
|Total expense                                           |  | $                                | 691,770 |  
|                                                        |  |                                  |         |  

Quarter-end deferred tax assets and liabilities were due to the following:



|                                                     |  |                |          
|---------------------------------------------------- |  | -------------- | ---------
|                                                     |  | March 31, 2007
|Deferred tax assets:                                 |  |                |          
|Allowance for loan losses                            |  | $              | 2,857,924
|Other real estate owned                              |  |                | 268,304  
|Non-accrual loans                                    |  |                | 89,734   
|Accrued expenses                                     |  |                | 415,341  
|Net operating loss carryover                         |  |                | 1,759,590
|Net unrealized loss on securities available for sale |  |                | 82,924   
|                                                     |  |                |          
|Total Assets                                         |  | $              | 5,473,817
|Deferred tax liabilities:                            |  |                |          
|Premises and equipment                               |  | $              | 39,502   
|Aquired intangibles                                  |  |                | 65,292   
|Leased asset depreciation                            |  |                | 1,143,492
|Other                                                |  |                | 46,843   
|                                                     |  |                |          
|Total Liabilities                                    |  | $              | 1,295,129
|                                                     |  |                |          
|Net deferred income tax asset                        |  | $              | 4,178,688
|                                                     |  |                |          

At March 31, 2007, the Company had net operating loss carry forwards for federal and state tax purposes of
approximately $4,704,000 which expire at various dates from 2014 to 2024.



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Application of Critical Accounting Policies

We have adopted various accounting policies that govern the application
of accounting principles generally accepted in the United States of America and with general practices within the banking industry in the preparation of our financial statements. Our significant accounting policies are described in footnote 1 to our
audited consolidated financial statements as of December 31, 2006.

Certain accounting policies involve significant judgments and assumptions by us
that have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical policies. The judgment and assumptions we use are based on historical experience and other factors, which we
believe to be reasonable under the circumstances. Because of the nature of the judgment and assumptions we make, actual results could differ from these judgments, estimates, and or differences that could have a material impact on the carrying values
of our assets and liabilities and our results of operations.

Allowance for Loan Losses. The allowance for loan losses is a valuation allowance for
probable losses incurred in the loan portfolio. Our allowance for loan loss methodology incorporates a variety of risk considerations in establishing an allowance for loan loss that we believe is adequate to absorb losses in the existing portfolio.
Such analysis addresses our historical loss experience, delinquency and charge-off trends, collateral values, changes in nonperforming loans, and other considerations. Management monitors local trends to anticipate future delinquency potential on a
quarterly basis. In addition to ongoing internal loan reviews and risk assessment, management utilizes an independent loan review firm to provide advice on the appropriateness of the allowance for loan losses.

The allowance for loan losses is increased by the provision for loan losses charged to expense and reduced by loans charged off, net of recoveries. Provisions for loan
losses are provided on both a specific and general basis. Specific allowances typically relate to criticized and classified loans where the expected/anticipated loss may be measurable. General valuation allowances are based on portfolio segmentation
by loan type and collateral type, with a further evaluation of various factors noted above. We incorporate our internal loss history into the allowance calculation.

At least annually, we review the assumptions and formulae by which additions are made to the specific and general valuation allowances for loan losses in an effort to refine such allowance in light of the current
status of the factors described above. The total loan portfolio is thoroughly reviewed at least quarterly for satisfactory levels of general and specific reserves.

Although we believe the levels of the allowances as of March 31, 2007 and December 31, 2006 were adequate to absorb probable losses in the loan portfolio, a decline in local or national economic or other factors could result in
increasing losses that cannot be reasonably estimated at this time.

Income Taxes. For years prior to January 1, 2006, the Company, with the consent
of its shareholders, elected to be taxed under the Internal Revenue Code as an S Corporation. As an S Corporation we did not record a provision for income taxes. Instead, our shareholders separately accounted for their pro rata share of the
Companys taxable income. The Companys shareholders terminated the S Corporation election effective January 1, 2006, and we now pay corporate income taxes. We use assumptions and estimates in determining income taxes payable or
refundable for the current year, deferred income tax liabilities and assets for events recognized differently in our financial statements and income tax returns, and income tax benefit or expense. Determining these amounts requires analysis of
certain transactions and interpretation of tax laws and regulations. Management exercises judgment in evaluating the amount and timing of recognition of resulting tax liabilities and assets. These judgments and estimates are reevaluated on a
continual basis as regulatory and business factors change. No assurance can be given that either the tax returns submitted by us or the income tax reported on the financial statements will not be adjusted by either adverse rulings by the United
States Tax Court, changes in the tax code, or assessments made by the Internal Revenue Service. We are subject to potential adverse adjustments, including, but not limited to, an increase in the statutory federal or state income tax rates, the
permanent non-deductibility of amounts currently considered deductible either now or in future periods, and the dependency on the generation of future taxable income, including capital gains, in order to ultimately realize deferred income tax
assets.



16



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##### Table of Contents

Management Overview

The Companys net interest margin for the three month period ended March 31, 2007 was 4.87% as compared to 4.74% for the same time period in 2006. The increase in the net interest margin is due to an increase of $225.4 million in
average earning assets while average interest-bearing liabilities increased $184.4 million. This equates to average interest-earning assets growth of 48.6% compared to average interest-bearing liabilities growth of 42.8%. The efficiency in the use
of interest-bearing liabilities was primarily made possible by the stock offering cash infusion in the fourth quarter of 2006. Additionally the increase of $10.2 million or 42.0% over the prior year quarter-end in noninterest-bearing deposits
further reduced our reliance on interest-bearing liabilities.

The main driver of the increase in interest-earning assets was the 58.8% growth in average
loans from $335.3 million for the first quarter (Q1) 2006 to $532.5 for the first quarter (Q1) 2007. The overall loan yield increased 53 basis points from 10.13% for Q1 2006 to 10.66% for Q1 2007. Adding to the increase in margin was growth of $20.3
million in the investment portfolio, the yield for which increased 50 basis points from 4.46% for the quarter ended March 31, 2006 to 4.96% for the same time period in 2007. See Results of Operations for the Three Months Ended March 31,
2007 and 2006Net Interest Income and Net Interest Margin.

On a linked-quarter basis for the quarter ended March 31, 2007 compared to the
quarter ended December 31, 2006 the yield on earning assets increased by twenty basis points from 9.23% to 9.43%, while the cost of interest-bearing liabilities increased only twelve basis points from 4.99% to 5.11%. Similarly, net interest
margin increased five basis points to 4.87% for the quarter ended March 31, 2007 compared to 4.82% for the quarter ended December 31, 2006. The Company continues to focus on asset and liability management to increase net interest margin by
pursuing lower cost funding sources and by increasing loan yield by further changing the mix of loan products to higher yielding loans.



17



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##### Table of Contents

The following table sets forth unaudited selected financial data as of or for the current period and the previous five
quarters, including the three month period ended March 31, 2006. This data should be read in conjunction with the consolidated financial statements and the notes thereto and the information contained herein (Dollars in thousands, except share
data).



|                                                    |  |                             |            |   |      |   |           |               |  |   |              |   |  |               |           |   |               |   |           |   |  |   |           |  
|--------------------------------------------------- |  | --------------------------- | ---------- | - | ---- | - | --------- | ------------- |  | - | ------------ | - |  | ------------- | --------- | - | ------------- | - | --------- | - |  | - | --------- | -
|                                                    |  | Three Months EndedMarch 31, |            |   | 2006 |   |           | 2005          | 
|                                                    |  | 2007                        |            |   | 2006 |   |           | FourthQuarter |  |   | ThirdQuarter |   |  | SecondQuarter |           |   | FourthQuarter |  
|Share Data                                          |  |                             |            |   |      |   |           |               |  |   |              |   |  |               |           |   |               |   |           |   |  |   |           |  
|Weighted average shares outstandingbasic           |  |                             | 11,333,807 |   |      |   | 7,228,782 |               |  |   | 11,301,437   |   |  |               | 7,549,192 |   |               |   | 7,476,366 |   |  |   | 6,550,502 |  
|Weighted average shares outstandingdiluted         |  |                             | 11,496,696 |   |      |   | 7,393,122 |               |  |   | 11,472,870   |   |  |               | 7,713,775 |   |               |   | 7,638,883 |   |  |   | 6,657,988 |  
|Book value at quarter end                           |  | $                           | 6.48       |   |      | $ | 4.76      |               |  | $ | 6.38         |   |  | $             | 5.07      |   |               | $ | 4.80      |   |  | $ | 4.02      |  
|Tangible book value at quarter end                  |  | $                           | 5.97       |   |      | $ | 3.98      |               |  | $ | 5.87         |   |  | $             | 4.30      |   |               | $ | 4.03      |   |  | $ | 3.22      |  
|Basic earnings per share/Pro Forma(1)               |  | $                           | 0.13       |   |      | $ | 0.18      |               |  | $ | 0.13         |   |  | $             | 0.19      |   |               | $ | 0.19      |   |  | $ | 0.14      |  
|Diluted earnings per share/Pro Forma(1)             |  | $                           | 0.13       |   |      | $ | 0.17      |               |  | $ | 0.13         |   |  | $             | 0.19      |   |               | $ | 0.19      |   |  | $ | 0.14      |  
|Basic earnings per share/GAAP                       |  | $                           | 0.13       |   |      | $ | 0.67      |               |  | $ | 0.13         |   |  | $             | 0.19      |   |               | $ | 0.20      |   |  | $ | 0.20      |  
|Diluted earnings per share/GAAP                     |  | $                           | 0.13       |   |      | $ | 0.66      |               |  | $ | 0.13         |   |  | $             | 0.19      |   |               | $ | 0.19      |   |  | $ | 0.20      |  
|Cash dividends declared (2)                         |  | $                           | 0.05       |   |      | $ | 0.058     |               |  | $ | 0.04         |   |  | $             | 0.04      |   |               | $ | 0.04      |   |  | $ | 0.027     |  
|Performance Ratios:                                 |  |                             |            |   |      |   |           |               |  |   |              |   |  |               |           |   |               |   |           |   |  |   |           |  
|Return on average assets/Pro Forma (1) (3)          |  |                             | 0.79       | % |      |   | 1.06      | %             |  |   | 0.88         | % |  |               | 0.93      | % |               |   | 1.01      | % |  |   | 0.79      | %
|Return on average equity/Pro Forma (1) (3)          |  |                             | 7.94       | % |      |   | 15.32     | %             |  |   | 8.20         | % |  |               | 15.46     | % |               |   | 15.87     | % |  |   | 15.19     | %
|Return on average tangible equity/Pro Forma (1) (3) |  |                             | 8.63       | % |      |   | 18.45     | %             |  |   | 8.93         | % |  |               | 18.32     | % |               |   | 18.96     | % |  |   | 20.00     | %
|Yield on earning assets (3)                         |  |                             | 9.43       | % |      |   | 8.62      | %             |  |   | 9.23         | % |  |               | 9.14      | % |               |   | 9.14      | % |  |   | 8.39      | %
|Cost of interest-bearing liabilities (3)            |  |                             | 5.11       | % |      |   | 4.17      | %             |  |   | 4.99         | % |  |               | 4.92      | % |               |   | 4.53      | % |  |   | 3.64      | %
|Net interest Margin (3)                             |  |                             | 4.87       | % |      |   | 4.74      | %             |  |   | 4.82         | % |  |               | 4.55      | % |               |   | 4.88      | % |  |   | 4.94      | %
|Efficiency ratio                                    |  |                             | 65.30      | % |      |   | 65.52     | %             |  |   | 66.87        | % |  |               | 56.93     | % |               |   | 59.90     | % |  |   | 70.74     | %
|Return on average assets/GAAP (3)                   |  |                             | 0.79       | % |      |   | 4.03      | %             |  |   | 0.88         | % |  |               | 0.91      | % |               |   | 1.01      | % |  |   | 1.13      | %
|Return on average equity/GAAP (3)                   |  |                             | 7.94       | % |      |   | 58.27     | %             |  |   | 8.20         | % |  |               | 15.01     | % |               |   | 15.87     | % |  |   | 21.82     | %
|Return on average tangible equity/GAAP (3)          |  |                             | 8.63       | % |      |   | 70.14     | %             |  |   | 8.93         | % |  |               | 17.79     | % |               |   | 18.96     | % |  |   | 28.72     | %
|Credit Quality Ratios:                              |  |                             |            |   |      |   |           |               |  |   |              |   |  |               |           |   |               |   |           |   |  |   |           |  
|Allowance for loan losses                           |  | $                           | 7,576      |   |      | $ | 4,993     |               |  | $ | 6,646        |   |  | $             | 6,236     |   |               | $ | 5,544     |   |  | $ | 4,791     |  
|Oreo                                                |  | $                           | 5,228      |   |      | $ | 1,153     |               |  | $ | 3,378        |   |  | $             | 2,250     |   |               | $ | 1,787     |   |  | $ | 1,179     |  
|Nonperforming loans                                 |  | $                           | 6,453      |   |      | $ | 4,725     |               |  | $ | 5,171        |   |  | $             | 4,900     |   |               | $ | 5,172     |   |  | $ | 4,984     |  
|Nonperforming assets                                |  | $                           | 11,681     |   |      | $ | 5,878     |               |  | $ | 8,549        |   |  | $             | 7,150     |   |               | $ | 6,959     |   |  | $ | 6,163     |  
|Allowance for loan losses to loans                  |  |                             | 1.33       | % |      |   | 1.34      | %             |  |   | 1.33         | % |  |               | 1.33      | % |               |   | 1.32      | % |  |   | 1.46      | %
|Nonperforming assets to gross loans and OREO        |  |                             | 2.02       | % |      |   | 1.57      | %             |  |   | 1.69         | % |  |               | 1.52      | % |               |   | 1.64      | % |  |   | 1.87      | %
|Nonperforming assets to total assets                |  |                             | 1.51       | % |      |   | 1.11      | %             |  |   | 1.22         | % |  |               | 1.11      | % |               |   | 1.19      | % |  |   | 1.29      | %
|Net charge-offs                                     |  | $                           | 56         |   |      | $ | 23        |               |  | $ | 307          |   |  | $             | 224       |   |               | $ | 174       |   |  | $ | 388       |  
|Net charge-offs to average loans (3)                |  |                             | 0.04       | % |      |   | 0.03      | %             |  |   | 0.25         | % |  |               | 0.20      | % |               |   | 0.18      | % |  |   | 0.49      | %
|Average Balances:                                   |  |                             |            |   |      |   |           |               |  |   |              |   |  |               |           |   |               |   |           |   |  |   |           |  
|Loans outstanding                                   |  | $                           | 532,484    |   |      | $ | 335,310   |               |  | $ | 478,135      |   |  | $             | 444,411   |   |               | $ | 391,073   |   |  | $ | 317,547   |  
|Total assets                                        |  | $                           | 733,377    |   |      | $ | 496,738   |               |  | $ | 664,093      |   |  | $             | 614,764   |   |               | $ | 562,571   |   |  | $ | 467,114   |  
|Interest-earning assets                             |  | $                           | 689,098    |   |      | $ | 463,674   |               |  | $ | 625,543      |   |  | $             | 578,964   |   |               | $ | 524,924   |   |  | $ | 438,710   |  
|Deposits                                            |  | $                           | 566,420    |   |      | $ | 360,651   |               |  | $ | 506,274      |   |  | $             | 463,363   |   |               | $ | 398,959   |   |  | $ | 343,057   |  
|Tangible shareholders equity                        |  | $                           | 67,324     |   |      | $ | 28,563    |               |  | $ | 65,105       |   |  | $             | 31,350    |   |               | $ | 29,843    |   |  | $ | 18,383    |  
|Shareholders equity                                |  | $                           | 73,113     |   |      | $ | 34,384    |               |  | $ | 70,901       |   |  | $             | 37,153    |   |               | $ | 35,658    |   |  | $ | 23,829    |  

---

|(1) | Adjusted to reflect the $3.69 million tax credit related to our conversion from an S-Corporation to a C-Corporation, recognized on January 1, 2006, and a combined Federal and
state tax rate of 38% for the periods in 2005 that we operated as an S-Corporation.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Cash dividends for 2005 periods does not include the tax portion distributed to stockholders to cover potential tax liabilities as an S-Corporation.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Annualized.
|--- | -----------



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##### Table of Contents

Primary Factors in Evaluating Financial Condition and Results of Operations

As a bank holding company, we focus on several factors in evaluating our financial condition and results of operations, including:



| |  |  | Return on Average Equity, or ROAE;
| | - |  | ----------------------------------



| |  |  | Asset Quality;
| | - |  | --------------



| |  |  | Asset and Deposit Growth; and
| | - |  | -----------------------------



| |  |  | Operating Efficiency.
| | - |  | ---------------------

In the calculation of the
ratios below, current period results and historical results are reflected. Net income for the three month comparative period ended March 31, 2006 has been reduced by the $3.69 million tax credit benefit recorded to derive proforma net income
for the three months ended March 31, 2006.

Return on Average Equity. Net income for the three months ended March 31, 2007 was $1.5 million
compared to pro forma net income of $1.3 million for the three months ended March 31, 2006, an increase of 10.3%. ROAE was 7.94% for the three months ended March 31, 2007 compared to pro forma ROAE of 15.32% for the three months ended
March 31, 2006. Net income on a GAAP basis for the three months ended March 31, 2006 was $5.0 million and ROAE was 58.27%. The decrease in ROAE is directly related to the $34.4 million increase in average equity of which $33.0 million was
from the public offering. The increase in equity resulted in the denominators used in calculating certain ratios to increase which has resulted in reduced ratios for the current quarter. As the proceeds for the offering are utilized in the growth of
the business it is expected that the ratios will, over time, increase and return to historical levels.

Asset Quality. For all banks and bank holding
companies, asset quality plays a significant role in the overall financial condition of the institution and results of operations. We measure asset quality in terms of nonperforming loans and assets as a percentage of gross loans and assets, and net
charge-offs as a percentage of average loans. Nonperforming assets include loans past due 90 days or more and still accruing, non-accrual loans and OREO. Net charge-offs are calculated as the difference between charged-off loans and recovery
payments received on previously charged-off loans. As of March 31, 2007, nonperforming assets were $11.7 million compared to $8.5 million at December 31, 2006. Nonperforming assets as a percentage of total assets were 1.51% as of
March 31, 2007 compared to 1.22% as of December 31, 2006, an increase of 29 basis points.

As of March 31, 2007, other real estate owned was
$5.2 million compared to $3.4 million at December 31, 2006. Non-performing assets as a percentage of gross loans and OREO was 2.02% as of March 31, 2007, compared to 1.69% as of December 31, 2006.

The increase in nonperforming assets is partially attributable to the impact of an accelerated economic downturn in two Georgia markets, Griffin and Macon. The Company
has curtailed lending in these markets. The economic downturn in these two markets as well as the general downturn in the residential real estate market has caused increased delinquencies and has required us to foreclose on properties which we are
currently in the process of selling.

Asset Growth. The ability to produce loans and generate deposits is fundamental to our asset growth. Our assets and
liabilities are comprised primarily of loans and deposits, respectively. Total assets increased $68.6 million or 9.8% to $771.4 million as of March 31, 2007 from $702.8 million as of December 31, 2006. Gross loans grew $68.5 or 13.7% to
$570.0 million as of March 31, 2007 from $501.5 million as of December 31, 2006. Total deposits increased $67.1 million or 12.3% to $611.8 million as of March 31, 2007 from $544.7 million as of December 31, 2006.

Operating Efficiency. Operating efficiency is measured in terms of how efficiently income before income taxes is generated as a percentage of revenue. Our efficiency
ratio (non-interest expenses divided by the sum of net interest income and non-interest income) was 65.30% for the three months ended March 31, 2007 and 65.52% for the three months ended March 31, 2006. The increase in net interest income
was tempered with a corresponding increase in expenses primarily associated with growing our infrastructure.



19



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##### Table of Contents

Effects of Economic Trends

Over the past three to six months the market has seen several subprime lenders declare bankruptcy and discontinue operations, while other lenders have put more stringent underwriting criteria in place. The changes in underwriting standards
has reduced the number of real estate borrowers who can find financing in the marketplace and has reduced the number of properties sold and refinanced. The number of properties on the market has increased and there has been some downward pressure on
the selling prices of new and existing homes and also in the sales market values of existing properties, which are utilized as comparisons to value real estate collateral.

While the marketplace downturn has not affected us directly since we are not a large provider of long term financing to the residential marketplace, it has affected the ability of some of our borrowers who look to
sell their real estate investments which have been renovated using loans provided by us.

The impact of the described changes in the economy as a whole and
the real estate marketplace, specifically, could have a negative impact on our ability to maintain or grow our loan levels and could also have a negative impact on the values of the collateral underlying our loans. The impact of these could limit
growth in interest income and also could cause an increase in expenses associated with collecting on loans or foreclosing on real estate collateral. The potential impact on the Company would be dependent on the duration and depth of the real estate
market downturn which will also be affected by the financial market response in assisting in correcting the problems that have affected the market, including providing accommodations to borrowers in default or who are experiencing financial
difficulty.

Results of Operations

Three
Months Ended March 31, 2007 Compared to Three Months ended March 31, 2006



|                                                    |  |                              |            |      |                               |            |   |  |         |  
|--------------------------------------------------- |  | ---------------------------- | ---------- | ---- | ----------------------------- | ---------- | - |  | ------- | -
|                                                    |  | Three months Ended March 31, |            |      | PercentageIncrease/(Decrease) |           
|                                                    |  | 2007                         |            | 2006 |                               |            |   | 
|Consolidated Statement of Earnings Data:            |  |                              |            |      |                               |            |   |  |         |  
|Interest income                                     |  | $                            | 16,136,203 |      | $                             | 9,925,410  |   |  | 62.57   | %
|Interest expense                                    |  |                              | 7,749,832  |      |                               | 4,436,865  |   |  | 74.67   | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Net interest income                                 |  |                              | 8,386,371  |      |                               | 5,488,545  |   |  | 52.80   | %
|Provision for loan losses                           |  |                              | 985,779    |      |                               | 225,000    |   |  | 338.12  | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Net interest income after provision for loan losses |  |                              | 7,400,592  |      |                               | 5,263,545  |   |  | 40.60   | %
|Noninterest income                                  |  |                              | 635,734    |      |                               | 843,771    |   |  | -24.66  | %
|Noninterest expense                                 |  |                              | 5,892,108  |      |                               | 4,148,990  |   |  | 42.01   | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Income before income taxes                          |  |                              | 2,144,218  |      |                               | 1,958,326  |   |  | 9.49    | %
|Income tax expense                                  |  |                              | 691,770    |      |                               | (3,050,328 | ) |  | -122.68 | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Net income                                          |  | $                            | 1,452,448  |      | $                             | 5,008,654  |   |  | -71.00  | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Earnings per sharebasic                            |  | $                            | 0.13       |      | $                             | 0.67       |   |  | -80.60  | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Earnings per sharediluted                          |  | $                            | 0.13       |      | $                             | 0.66       |   |  | -80.30  | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Proforma Data:                                      |  |                              |            |      |                               |            |   |  |         |  
|Net income:                                         |  |                              |            |      |                               |            |   |  |         |  
|As reported                                         |  | $                            | 1,452,448  |      | $                             | 5,008,654  |   |  | -71.00  | %
|Adjustment for S-Corp conversion                    |  |                              |           |      |                               | 3,691,407  |   |  | -100.00 | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Proforma net income                                 |  | $                            | 1,452,448  |      | $                             | 1,317,247  |   |  | 10.26   | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Basic earnings per share                            |  | $                            | 0.13       |      | $                             | 0.18       |   |  | -27.78  | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  
|Diluted earnings per share                          |  | $                            | 0.13       |      | $                             | 0.17       |   |  | -23.53  | %
|                                                    |  |                              |            |      |                               |            |   |  |         |  



20



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##### Table of Contents

Net income after taxes for the three months ended March 31, 2007 decreased 71.0% to $1.5 million from $5.0 million
for the three months ended March 31, 2006. The prior year had included a tax credit of $3.7 million that was recognized in January of 2006 for the conversion from an S-Corp to a C-Corp. Proforma net income increased $135,000 or 10.3% due
primarily to an increase in net interest income of $2.9 million, offset by an increase in the provision for loan losses of $760,000, a decrease in non-interest income of $208,000 and an increase in noninterest expense of $1.7 million. The increase
in noninterest expenses was primarily driven by the growth of the infrastructure to support our growth with increases of $966,000 in salary and benefits, $134,000 in premises and equipment, $67,000 in professional fees, $343,000 in OREO expense and
$179,000 in other noninterest expense. Basic and diluted earnings per share decreased from $0.67 and $0.68 per share at March 31, 2006 to $0.13 per share for the three months ended March 31, 2007 compared to basic and diluted proforma
earnings per share of $0.18 and $0.17 for the same period in 2006, a decrease of 27.8%.

Net Interest Income and Net Interest Margin.

Interest income for the three months ended March 31, 2007 increased $6.2 million, or 62.6% to $16.1 million compared to $9.9 million for the three months ended
March 31, 2006. Interest expense for the three months ended March 31, 2007 increased $3.3 million, or 74.7% to $7.7 million compared to $4.4 million for the three months ended March 31, 2006. The increase in interest income was
partially offset by the increases in interest expense due to a 44 basis point increase in the LIBOR rate since March 31, 2006, since the inverted yield curve has caused interest expense on deposits and borrowings to increase at a faster rate
than yields on loans and investments.

Average Balances and Average Interest Rates. The 52.8% increase in net interest income for the three months ended
March 31, 2007 compared to the same period in 2006 was due to an increase in interest income of $6.2 million, reflecting the effect of an increase of $225.4 million in average interest-earning assets which was funded primarily through an
increase of $195.7 million or 58.1% in average interest-bearing deposits.

The average yield on our interest-earning assets was 9.43% for the three months
ended March 31, 2007, compared to 8.62% for the same period in 2006, an increase of 81 basis points or 9.4%. The increase in the yield on our interest-earning assets is a result of an increase in market rates causing repricing on our adjustable
rate loans and new loans originated at higher interest rates due to the higher interest rate environment for the three months ended March 31, 2007 versus the same period in 2006.

The cost of our average interest-bearing liabilities increased 94 basis points to 5.11% for the three months ended March 31, 2007, from 4.17% for the three months ended March 31, 2006, which is a result of
higher rates paid on deposit accounts, Federal funds purchased, and junior subordinated debt. The average rate on our interest-bearing deposits increased 114 basis points or 28.4% from 4.01% for the three months ended March 31, 2006, to 5.15%
for the three months ended March 31, 2007, reflecting increases in general market rates and also a more competitive interest rate environment. Our average rate on total deposits (including non-interest bearing deposits) increased 87 basis
points or 22.3% from 3.90% for the three months ended March 31, 2006, to 4.77% for the same period in 2007.

Our interest margin increased 13 basis
points or 2.7% to 4.87% for the three months ended March 31, 2007 from 4.74% for the same period in 2006. The increase was driven by the increased volume and yield in our loan portfolio, an increase in the average balance of non-interest
bearing deposits and a reduction in borrowings since FHLB borrowings were repaid with proceeds from our initial public offering during the fourth quarter of 2006.



21



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##### Table of Contents

The following table sets forth balance sheet items on a daily average basis for the three months ended March 31,
2007 and 2006 and presents the daily average interest rates earned on assets and the daily average interest rates paid on liabilities for such periods. Non-accrual loans have been included in the average loan balances. The securities are all
classified as available for sale. Securities available for sale are carried at amortized cost for purposes of calculating the average rate received on securities. Yields on tax-exempt securities are not computed on a tax equivalent basis.



|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|---------------------------------------- |  | ---------------------------- | ----------- | - | -------- | - | ----------- |  | ----- | -------------- |  | - | ----------- | - | ----------- | - | --------- |  | ----- | -
|                                         |  | Three Months Ended March 31, |            
|                                         |  | 2007                         |             |   | 2006     |  
|                                         |  | AverageBalance               |             |   | Interest |   | AverageRate |  |       | AverageBalance |  |   | Interest    |   | AverageRate |  
|Earning Assets                           |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Securities                               |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Taxable                                  |  | $                            | 104,169,559 |   |          | $ | 1,386,279   |  | 5.32  | %              |  | $ | 85,411,916  |   |             | $ | 1,000,114 |  | 4.68  | %
|Tax-exempt                               |  |                              | 36,305,141  |   |          |   | 355,059     |  | 3.91  |                |  |   | 34,783,254  |   |             |   | 341,654   |  | 3.93  |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Total securities                         |  |                              | 140,474,700 |   |          |   | 1,741,338   |  | 4.96  |                |  |   | 120,195,170 |   |             |   | 1,341,768 |  | 4.46  |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Fed funds sold                           |  |                              | 6,360,778   |   |          |   | 84,705      |  | 5.40  |                |  |   | 708,500     |   |             |   | 7,789     |  | 4.46  |  
|Interest-bearing deposits                |  |                              | 385,149     |   |          |   | 5,147       |  | 5.42  |                |  |   | 470,047     |   |             |   | 5,083     |  | 4.39  |  
|Loans held for sale                      |  |                              | 9,393,668   |   |          |   | 214,003     |  | 9.24  |                |  |   | 6,990,294   |   |             |   | 142,706   |  | 8.28  |  
|Loans                                    |  |                              | 532,483,699 |   |          |   | 14,091,010  |  | 10.66 |                |  |   | 335,310,062 |   |             |   | 8,428,064 |  | 10.13 |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Total earning assets                     |  |                              | 689,097,994 |   |          |   | 16,136,203  |  | 9.43  | %              |  |   | 463,674,073 |   |             |   | 9,925,410 |  | 8.62  | %
|                                         |  |                              |             |   |          |  
|Non-earning Assets                       |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Cash and due from banks                  |  |                              | 5,239,734   |   |          |   |             |  |       |                |  |   | 5,233,804   |   |             |   |           |  |       |  
|Allowance for loan losses                |  |                              | (7,015,918  | ) |          |   |             |  |       |                |  |   | (4,852,052  | ) |             |   |           |  |       |  
|Bank-owned life insurance                |  |                              | 1,205,208   |   |          |   |             |  |       |                |  |   | 1,166,479   |   |             |   |           |  |       |  
|Other assets, including loans in process |  |                              | 44,850,160  |   |          |   |             |  |       |                |  |   | 31,515,281  |   |             |   |           |  |       |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Total assets                             |  | $                            | 733,377,178 |   |          |   |             |  |       |                |  | $ | 496,737,585 |   |             |   |           |  |       |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Interest Bearing Liabilities             |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Interest-bearing demand deposits         |  |                              | 6,929,825   |   |          |   | 3,464       |  | 0.20  | %              |  |   | 7,347,874   |   |             |   | 3,258     |  | 0.18  | %
|Money market and savings accounts        |  |                              | 39,504,185  |   |          |   | 459,118     |  | 4.65  |                |  |   | 10,653,612  |   |             |   | 55,147    |  | 2.07  |  
|Time Deposits                            |  |                              | 486,029,507 |   |          |   | 6,296,724   |  | 5.25  |                |  |   | 318,751,744 |   |             |   | 3,268,872 |  | 4.16  |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Total interest-bearing deposits          |  |                              | 532,463,517 |   |          |   | 6,759,306   |  | 5.15  |                |  |   | 336,753,230 |   |             |   | 3,327,277 |  | 4.01  |  
|Fed funds purchased and other borrowings |  |                              | 1,401,643   |   |          |   | 19,774      |  | 5.71  |                |  |   | 4,329,100   |   |             |   | 51,294    |  | 4.81  |  
|FHLB borrowings                          |  |                              | 60,483,333  |   |          |   | 583,582     |  | 3.91  |                |  |   | 68,850,000  |   |             |   | 709,580   |  | 4.18  |  
|Junior subordinated debt                 |  |                              | 20,620,000  |   |          |   | 387,170     |  | 7.51  |                |  |   | 20,620,000  |   |             |   | 348,714   |  | 6.76  |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Total interest-bearing liabilities       |  |                              | 614,968,493 |   |          |   | 7,749,832   |  | 5.11  | %              |  |   | 430,552,330 |   |             |   | 4,436,865 |  | 4.17  | %
|                                         |  |                              |             |   |          |  
|Non-interest Bearing Liabilities         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Noninterest demand deposits              |  |                              | 34,456,956  |   |          |   |             |  |       |                |  |   | 24,265,932  |   |             |   |           |  |       |  
|Other liabilities                        |  |                              | 10,821,501  |   |          |   |             |  |       |                |  |   | 7,536,385   |   |             |   |           |  |       |  
|Shareholders equity                     |  |                              | 73,130,228  |   |          |   |             |  |       |                |  |   | 34,382,938  |   |             |   |           |  |       |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Total liabilities & shareholders equity |  | $                            | 733,377,178 |   |          |   |             |  |       |                |  | $ | 496,737,585 |   |             |   |           |  |       |  
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Net interest income and margin           |  |                              |             |   |          | $ | 8,386,371   |  | 4.87  | %              |  |   |             |   |             | $ | 5,488,545 |  | 4.74  | %
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  
|Net interest spread                      |  |                              |             |   |          |   |             |  | 4.32  | %              |  |   |             |   |             |   |           |  | 4.45  | %
|                                         |  |                              |             |   |          |   |             |  |       |                |  |   |             |   |             |   |           |  |       |  



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##### Table of Contents

Net Interest Income. Net interest income can be analyzed in terms of changing interest rates and changing volume. The
table below demonstrates the relative impact on net interest income of changes in the volume of earning assets and interest-bearing liabilities and changes in rates earned and paid by us on such assets and liabilities. For purposes of this table,
non-accrual loans have been included in the average loan balances.



|                          |  |                                       |           |   |        |   |           |       |  |   |           |  
|------------------------- |  | ------------------------------------- | --------- | - | ------ | - | --------- | ----- |  | - | --------- | -
|                          |  | Three months ended March 31, 2007     |          
|                          |  | Increase (Decrease) Due to changes in |          
|                          |  | Rate                                  |           |   | Volume |   |           | Total | 
|Interest on securities:   |  |                                       |           |   |        |   |           |       |  |   |           |  
|Taxable securities        |  | $                                     | 148,035   |   |        | $ | 238,130   |       |  | $ | 386,165   |  
|Tax-exempt securities     |  |                                       | (1,472    | ) |        |   | 14,877    |       |  |   | 13,405    |  
|Fed funds sold            |  |                                       | 1,985     |   |        |   | 74,931    |       |  |   | 76,916    |  
|Interest-bearing deposits |  |                                       | 273       |   |        |   | (209      | )     |  |   | 64        |  
|Loans held for sale       |  |                                       | 17,979    |   |        |   | 53,318    |       |  |   | 71,297    |  
|Loans                     |  |                                       | 188,612   |   |        |   | 5,474,334 |       |  |   | 5,662,946 |  
|                          |  |                                       |           |   |        |   |           |       |  |   |           |  
|Total interest income     |  |                                       | 355,412   |   |        |   | 5,855,381 |       |  |   | 6,210,793 |  
|Interest Expense:         |  |                                       |           |   |        |   |           |       |  |   |           |  
|Interest checking         |  |                                       | 372       |   |        |   | (166      | )     |  |   | 206       |  
|Savings and money market  |  |                                       | 76,556    |   |        |   | 327,415   |       |  |   | 403,971   |  
|Time deposits             |  |                                       | 1,011,604 |   |        |   | 2,016,248 |       |  |   | 3,027,852 |  
|Fed funds purchased       |  |                                       | 12,170    |   |        |   | (43,690   | )     |  |   | (31,520   | )
|FHLB borrowings           |  |                                       | (43,377   | ) |        |   | (82,621   | )     |  |   | (125,998  | )
|Junior subordinated debt  |  |                                       | 38,456    |   |        |   | 0         |       |  |   | 38,456    |  
|                          |  |                                       |           |   |        |   |           |       |  |   |           |  
|Total interest expense    |  |                                       | 1,095,781 |   |        |   | 2,217,186 |       |  |   | 3,312,967 |  
|                          |  |                                       |           |   |        |   |           |       |  |   |           |  
|Net increase (decrease)   |  | $                                     | (740,369  | ) |        | $ | 3,638,195 |       |  | $ | 2,897,826 |  
|                          |  |                                       |           |   |        |   |           |       |  |   |           |  

The increase in the net interest margin is due to an increase of $225.4 million in average earning assets while
average interest-bearing liabilities increased $184.4 million. This equates to average interest-earning assets growth of 48.6% compared to average interest-bearing liabilities growth of 42.8%.

The results reflected a 58.8%, or $197.2 million, growth in average loans from $335.3 million at March 31, 2006 to $532.5 at March 31, 2007 with an overall
loan yield increase of 53 basis points from 10.13% at March 31, 2006 to 10.66% at March 31, 2007. We also experienced growth of $20.3 million in the investment portfolio, the yield for which increased 52 basis points from 4.46% for the
quarter ended March 31, 2006 to 4.96% for the same time period in 2007. Interest income increased $6.2 million for the period ended March 31, 2007 compared to March 31, 2006, while interest expense increased $3.3 million due to the
$184.4 million increase in average interest bearing liabilities. The efficiency in the use of interest-bearing liabilities was primarily made possible by the stock offering cash infusion in the fourth quarter of 2006 as well as the increase of $10.2
million or 42.0% in noninterest-bearing deposits.

Provision for Loan Losses

We have established an allowance for loan losses through a provision for loan losses charged as an expense on our statement of income. We review our loan portfolio periodically to evaluate our outstanding loans
and to measure both the performance of the portfolio and the adequacy of the allowance for loan losses. Please see the discussion below under Financial ConditionProvision and Allowance for Loan Losses for a description of the
factors we consider in determining the amount of the provision we expense each period to maintain this allowance. The table below describes the detail of the provision.



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|                                                |  |                                     |           |   |      |   |           |  
|----------------------------------------------- |  | ----------------------------------- | --------- | - | ---- | - | --------- | -
|                                                |  | For the Three Months EndedMarch 31, |          
|                                                |  | 2007                                |           |   | 2006 |  
|Allowance for loan losses:                      |  |                                     |           |   |      |   |           |  
|Balance at beginning of year                    |  | $                                   | 6,646,212 |   |      | $ | 4,791,221 |  
|Provisions charged to operating expenses        |  |                                     | 985,779   |   |      |   | 225,000   |  
|Total Recoveries                                |  |                                     | 34,561    |   |      |   | 16,016    |  
|Total Charged-off                               |  |                                     | (90,788   | ) |      |   | (39,312   | )
|                                                |  |                                     |           |   |      |   |           |  
|Net charge-offs                                 |  |                                     | (56,227   | ) |      |   | (23,296   | )
|                                                |  |                                     |           |   |      |   |           |  
|Balance at end of period                        |  | $                                   | 7,575,764 |   |      | $ | 4,992,925 |  
|                                                |  |                                     |           |   |      |   |           |  
|Net charge-offs to average loans outstanding(1) |  |                                     | 0.04      | % |      |   | 0.03      | %
|Allowance for loan losses to gross loans        |  |                                     | 1.33      | % |      |   | 1.34      | %

---

|(1) | Annualized
|--- | ----------

Noninterest Income

The following table sets forth information related to our noninterest income.



|                                          |  |                             |         |   |      |   |        
|----------------------------------------- |  | --------------------------- | ------- | - | ---- | - | -------
|                                          |  | Three months endedMarch 31,
|                                          |  | 2007                        |         |   | 2006
|Service charges on deposit accounts       |  | $                           | 157,996 |   |      | $ | 136,214
|Gain on sale of loans                     |  |                             | 98,324  |   |      |   | 480,307
|Investment securities (losses) gains, net |  |                             | (1,129  | ) |      |   | 1,576  
|Other income                              |  |                             | 380,543 |   |      |   | 225,674
|                                          |  |                             |         |   |      |   |        
|Total noninterest income                  |  | $                           | 635,734 |   |      | $ | 843,771
|                                          |  |                             |         |   |      |   |        

Noninterest income for the three months ended March 31, 2007 was $636,000, a decrease of $208,000 or 24.6%
compared to noninterest income of $844,000 for the same period in 2006. The decrease for the three months ended March 31, 2007 is due to the $382,000 decrease in gain on sale of loans which is the result of lower production in SBA loans as
compared to the same period in 2006 as well as the timing of the sale of the originated SBA loans in 2007. Loans originated have not been marketed or the property is under construction and the related loan cannot be sold until construction is
completed. Offsetting the decrease was an increase of $22,000 or 16.0% in service charges on deposit accounts which is a result of the growth in the number of deposit accounts which generated increased service charges and miscellaneous charges
associated with those accounts, such as ATM fees and wire fees and $155,000 or 68.6% in other noninterest income.

Other noninterest income increased by
$155,000 or 68.6% to $381,000 for the three months ended March 31, 2007 as compared to $226,000 for the same period in 2006. The increase was made up of increases in rental income of $40,000 which was primarily due to $33,000 for the rent of
assets leased to third parties, $53,000 in insurance commissions associated with the higher volume of redevelopment lending, and $42,000 in miscellaneous income. The same period last year included a gain on the sale of fixed assets of $48,000 and a
gain of sale of OREO of $38,000.

Noninterest Expense

The following table sets forth information related to our noninterest expense.



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|                                |  |                              |           |      |   |          
|------------------------------- |  | ---------------------------- | --------- | ---- | - | ---------
|                                |  | Three months ended March 31,
|                                |  | 2007                         |           | 2006
|Salaries and employee benefits  |  | $                            | 3,005,848 |      | $ | 2,040,168
|Occupancy and equipment         |  |                              | 775,297   |      |   | 641,127  
|Professional fees               |  |                              | 331,883   |      |   | 264,624  
|Other real estate owned expense |  |                              | 375,767   |      |   | 33,144   
|Telecommunications              |  |                              | 184,430   |      |   | 145,788  
|Advertising and marketing       |  |                              | 155,152   |      |   | 138,940  
|Office suppplies                |  |                              | 85,941    |      |   | 66,842   
|Other                           |  |                              | 977,790   |      |   | 818,357  
|                                |  |                              |           |      |   |          
|Total noninterest expense       |  | $                            | 5,892,108 |      | $ | 4,148,990
|                                |  |                              |           |      |   |          

Noninterest expense for the three months ended March 31, 2007 increased by $1.7 million or 42.0% to $5.9
million as compared to $4.2 million for the three months ended March 31, 2006 due to growth of the infrastructure to support the growth of the business. Contributing to the $1.7 million growth was an increase of $966,000 or 47.3%, in salaries
and benefits, which experienced a full-time employee head count increase of 41 or 28.3% from 145 at the end of March 31, 2006 to 186 at the end of March 31, 2007. Additionally there was an increase of $134,000 in occupancy and equipment
expense related to a new office in Philadelphia, PA, and additional office space in Tampa, FL and Seekonk, Massachusetts which caused rent expense to increase $46,000. Also driving the increase in occupancy and equipment expense was a $79,000
increase in depreciation expense associated with computers, buildings, autos, and equipment.

Adding to the increase in noninterest expense was an increase
of $343,000 in OREO expense due to the foreclosure on properties in two deteriorating markets and a $203,000 write down on two OREO properties, a $67,000 increase in professional fees, which consisted of an increase of $54,000 in legal fees and
$41,000 in other professional services which related primarily to charges for loan collateral review and recovery planning for the data network. Offsetting these increases were decreases in consulting fees of $21,000 which in March 2006 was related
to the conversion of our core processing system and $8,000 in accounting fees. Other noninterest expense increased $159,000 which was primarily driven by an increase of $42,000 in travel expense and $68,000 in expenses associated with the filing of
SEC reports and annual meeting reports and materials.

Provision for Income Taxes

Income tax expense can be analyzed as a percentage of net income before income taxes. The following discussion sets forth information related to our income tax expense for the three-month periods ended
March 31, 2007 and 2006.

The following table sets forth information related to our income tax expense for the three months ended March 31, 2007
and 2006.



|                               |  |                                     |           |   |      |   |           |  
|------------------------------ |  | ----------------------------------- | --------- | - | ---- | - | --------- | -
|                               |  | For the Three Months EndedMarch 31, |          
|                               |  | 2007                                |           |   | 2006 |  
|Net income before income taxes |  | $                                   | 2,144,218 |   |      | $ | 1,958,326 |  
|Provision for income taxes     |  |                                     | 691,770   |   |      |   | 640,672   |  
|Effective income tax rate      |  |                                     | 32.26     | % |      |   | 32.72     | %

The decrease in the effective income tax rate from the quarter ended March 31, 2006, to the same period in
2007, reflects the tax benefit of a state tax credit purchased in the fourth quarter of 2006. If the credit is not included, the effective tax income rate would have been 34.6%.



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##### Table of Contents

Financial Condition

Investments

On March 31, 2007, and December 31, 2006, our investment securities portfolio of $136.8 million and $134.5 million,
respectively, represented approximately 17.7% and 19.1%, respectively, of total assets. As of March 31, 2007, and December 31, 2006, we were invested in U.S. Treasuries, U.S. Government agency securities, mortgage-backed securities,
municipal securities, and other securities which include state bonds and a preferred debt security (Dollars in thousands).



|                            |  |                |         |                   |   |               |  |            |         |  |   |        
|--------------------------- |  | -------------- | ------- | ----------------- | - | ------------- |  | ---------- | ------- |  | - | -------
|                            |  | March 31, 2007 |         | December 31, 2006
|                            |  | AmortizedCost  |         | Fair Value        |   | AmortizedCost |  | Fair Value
|U.S. Treasuries             |  | $              | 6,955   |                   | $ | 6,845         |  | $          | 6,950   |  | $ | 6,811  
|U.S. Government agencies    |  |                | 58,121  |                   |   | 57,986        |  |            | 53,299  |  |   | 52,933 
|Mortgage-backed securities  |  |                | 31,382  |                   |   | 29,404        |  |            | 32,863  |  |   | 32,331 
|Municipal obligations       |  |                | 33,436  |                   |   | 33,902        |  |            | 39,507  |  |   | 39,944 
|Other                       |  |                | 8,647   |                   |   | 8,647         |  |            | 2,535   |  |   | 2,535  
|                            |  |                |         |                   |   |               |  |            |         |  |   |        
|Total investment securities |  | $              | 138,541 |                   | $ | 136,784       |  | $          | 135,154 |  | $ | 134,554
|                            |  |                |         |                   |   |               |  |            |         |  |   |        

We also maintain certain equity investments required by law that are included in the consolidated balance sheets
as other investments. The carrying amounts of these investments as of March 31, 2007, and December 31, 2006, consisted of the following (Dollars in thousands):



|                             |  |                |       |                   |   |      
|---------------------------- |  | -------------- | ----- | ----------------- | - | -----
|                             |  | March 31, 2007 |       | December 31, 2006
|Federal Reserve Bank stock   |  | $              | 1,295 |                   | $ | 1,295
|Federal Home Loan Bank stock |  | $              | 3,858 |                   | $ | 3,541

No ready market exists for these stocks and they have no quoted market value. However, the issuer has
historically redeemed these stocks at par value. Accordingly, we believe the carrying amounts are a reasonable estimate of fair value. Dividends are paid on these stocks on a quarterly basis.

Loans

Our gross loans, including deferred loan fees, on a
consolidated basis as of March 31, 2007 and December 31, 2006 were $570.0 million and $501.5 million, respectively. Our community redevelopment portfolio experienced the largest volume increase, with a $24.7 million, or 18.7%, increase for
the three months ended March 31, 2007 as compared to the year ended December 31, 2006. Our overall growth in loans is consistent with our focus and strategy to grow our loan portfolio by focusing on geographic markets which we believe have
attractive growth prospects.



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##### Table of Contents

The following table sets forth the amount of loans outstanding by type of loan at the end of each of the periods
indicated.



|                                |  |                |             |                   |   |            
|------------------------------- |  | -------------- | ----------- | ----------------- | - | -----------
|                                |  | March 31, 2007 |             | December 31, 2006
|Real estateconstruction        |  | $              | 74,531,497  |                   | $ | 61,767,736 
|Community redevelopment         |  |                | 156,862,533 |                   |   | 132,161,743
|Commercial real estate          |  |                | 199,595,314 |                   |   | 184,014,559
|Residential real estate         |  |                | 19,226,160  |                   |   | 20,254,071 
|Commercial and industrial       |  |                | 119,188,485 |                   |   | 102,017,512
|Consumer                        |  |                | 2,345,522   |                   |   | 2,374,536  
|                                |  |                |             |                   |   |            
|Total loans                     |  |                | 571,749,511 |                   |   | 502,590,157
|Less: Allowance for loan losses |  |                | 7,575,764   |                   |   | 6,646,212  
|Deferred loan fees, net         |  |                | 1,794,526   |                   |   | 1,130,273  
|                                |  |                |             |                   |   |            
|Net Loans                       |  | $              | 562,379,221 |                   | $ | 494,813,672
|                                |  |                |             |                   |   |            

The table below presents the balance of our community redevelopment loan portfolio by location at March 31,
2007 and December 31, 2006 (Dollars in thousands).



|             |  |                |         |                   |   |        
|------------ |  | -------------- | ------- | ----------------- | - | -------
|             |  | March 31, 2007 |         | December 31, 2006
|Atlanta      |  | $              | 93,029  |                   | $ | 79,887 
|Charlotte    |  |                | 6,133   |                   |   | 7,031  
|Birmingham   |  |                | 10,781  |                   |   | 8,947  
|Tampa        |  |                | 15,701  |                   |   | 14,465 
|Chicago      |  |                | 26,843  |                   |   | 21,457 
|Philadelphia |  |                | 4,375   |                   |   | 375    
|             |  |                |         |                   |   |        
|Total        |  | $              | 156,862 |                   | $ | 132,162
|             |  |                |         |                   |   |        

The following table presents the volume of originations in our community redevelopment portfolio by location. The
dollar amount and number of loans originated are presented for the periods ending March 31, 2007 and December 31, 2006 (Dollars in thousands).



|             |  |                     |        |                   |     |        |   |        |  |    
|------------ |  | ------------------- | ------ | ----------------- | --- | ------ | - | ------ |  | ---
|             |  | Three Months Ended,
|             |  | March 31, 2007      |        | December 31, 2006
|             |  | Amount              |        | Number            |     | Amount |   | Number
|Atlanta      |  | $                   | 34,911 |                   | 283 |        | $ | 31,612 |  | 251
|Birmingham   |  |                     | 3,643  |                   | 68  |        |   | 3,267  |  | 63 
|Charlotte    |  |                     | 2,086  |                   | 16  |        |   | 2,997  |  | 25 
|Chicago      |  |                     | 9,648  |                   | 67  |        |   | 8,612  |  | 56 
|Philadelphia |  |                     | 4,096  |                   | 25  |        |   | 374    |  | 4  
|Tampa        |  |                     | 6,056  |                   | 46  |        |   | 3,536  |  | 32 
|             |  |                     |        |                   |     |        |   |        |  |    
|Total        |  | $                   | 60,440 |                   | 505 |        | $ | 50,398 |  | 431
|             |  |                     |        |                   |     |        |   |        |  |    



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Nonaccrual, Past Due and Restructured Loans

Loans are placed on nonaccrual status when (a) the loan is in default of principal or interest for a period in excess of 90 days, unless the loan is both well secured and in the process of collection;
(b) the prospects for payment in full of principal or interest is in doubt; or (c) the borrower is in bankruptcy or receivership. Management may elect to continue accrual of interest when the estimated net realizable value of collateral is
sufficient to cover the principal balances and accrued interest and the loan is in the process of collection. Amounts received on nonaccrual loans generally are applied against principal prior to the recognition of any interest income.

At March 31, 2007 the level of nonaccrual loans increased $1.4 million or 27.3% over December 31, 2006 from $5.0 million to $6.4 million. The
increase was due to adding a net of 25 loans to the nonaccrual category. The new additions were primarily driven by loans collateralized by real estate located in Griffin and Macon, Georgia.

Other Real Estate Owned Properties. Our other real estate owned as of March 31, 2007 and December 31, 2006, was $5.2 million and $3.4 million,
respectively. As of March 31, 2007, $4.4 million of our other real estate owned were properties taken as collateral for community redevelopment loans. The increase in OREO was primarily attributable to the increased foreclosures in two of our
community redevelopment markets, Griffin and Macon, Georgia. The increased foreclosures are due to the downturn in the overall real estate market.

Non-Performing Assets. Non-performing assets increased $3.1 million, or 37.6%, from $8.5 million at December 31, 2006 to $11.7 million at March 31, 2007. The increase is associated with the $1.8 million, or 54.8%, increase in
other real estate owned and the $1.3 million increase in nonaccrual loans. Non-performing assets as a percentage of total assets increased 29 basis points from 1.22% at December 31, 2006 to 1.51% as of March 31, 2007. The increase in
nonperforming assets is partially attributable to the impact of an accelerated economic downturn in two Georgia markets, Griffin and Macon. The Company has curtailed lending in these markets. The economic downturn in these two markets as well as the
general downturn in the residential real estate market has caused increased delinquencies and has required us to foreclose on properties which we are currently in the process of selling.

The following table summarizes nonaccrual loans, accruing loans contractually past due 90 days or more, and restructured loans as defined by Statement of Financial Accounting Standards No. 15. (Dollars in
thousands).



|                                                                                    |  |                                         |        |   |                                        |      |       |   |      |   |       |      |  |   |       |   |  |   |       |  
|----------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | - | -------------------------------------- | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                                                                                    |  | For the ThreeMonths EndedMarch 31, 2007 |        |   | At or for the Years Ended December 31, |     
|                                                                                    |  |                                         | 2006   |   |                                        | 2005 |       |   | 2004 |   |       | 2003 | 
|Total nonaccrual loans                                                              |  | $                                       | 6,355  |   |                                        | $    | 4,992 |   |      | $ | 4,832 |      |  | $ | 1,795 |   |  | $ | 1,194 |  
|Loans past due 90 days or more and still accruing                                   |  |                                         | 98     |   |                                        |      | 179   |   |      |   | 152   |      |  |   | 1     |   |  |   | 263   |  
|Restructured loans                                                                  |  |                                         |       |   |                                        |      |      |   |      |   |      |      |  |   |      |   |  |   |      |  
|                                                                                    |  |                                         |        |   |                                        |      |       |   |      |   |       |      |  |   |       |   |  |   |       |  
|Total non-performing loans                                                          |  |                                         | 6,453  |   |                                        |      | 5,171 |   |      |   | 4,984 |      |  |   | 1,796 |   |  |   | 1,457 |  
|Other real estate owned (OREO)                                                      |  |                                         | 5,228  |   |                                        |      | 3,378 |   |      |   | 1,179 |      |  |   | 660   |   |  |   | 440   |  
|                                                                                    |  |                                         |        |   |                                        |      |       |   |      |   |       |      |  |   |       |   |  |   |       |  
|Total non-performing assets                                                         |  | $                                       | 11,681 |   |                                        | $    | 8,549 |   |      | $ | 6,163 |      |  | $ | 2,456 |   |  | $ | 1,897 |  
|                                                                                    |  |                                         |        |   |                                        |      |       |   |      |   |       |      |  |   |       |   |  |   |       |  
|Non-performing loans to gross loans                                                 |  |                                         | 1.13   | % |                                        |      | 1.03  | % |      |   | 1.52  | %    |  |   | 0.79  | % |  |   | 0.94  | %
|Non-performing assets to gross loans and OREO                                       |  |                                         | 2.02   | % |                                        |      | 1.69  | % |      |   | 1.87  | %    |  |   | 1.08  | % |  |   | 1.22  | %
|Non-performing assets to total assets                                               |  |                                         | 1.51   | % |                                        |      | 1.22  | % |      |   | 1.29  | %    |  |   | 0.77  | % |  |   | 0.89  | %
|Interest income received on nonaccrual loans                                        |  | $                                       |       |   |                                        | $    |      |   |      | $ |      |      |  | $ |      |   |  | $ |      |  
|Interest income that would have been recorded under the original terms of the loans |  | $                                       | 875    |   |                                        | $    | 740   |   |      | $ | 534   |      |  | $ | 179   |   |  | $ | 227   |  



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##### Table of Contents

The following table summarizes nonperforming assets by product. (Dollars in thousands).



|                          |  |                |        |                                      |      |  
|------------------------- |  | -------------- | ------ | ------------------------------------ | ---- | -
|                          |  | March 31, 2007 |        | NPAs as aPercentage of Loansand OREO |     
|Real estateconstruction  |  | $              | 261    |                                      | 0.05 | %
|Community redevelopment   |  |                | 7,940  |                                      | 1.37 | %
|Commercial real estate    |  |                | 2,344  |                                      | 0.40 | %
|Residential real estate   |  |                | 425    |                                      | 0.07 | %
|Commercial and industrial |  |                | 676    |                                      | 0.12 | %
|Consumer                  |  |                | 35     |                                      | 0.01 | %
|                          |  |                |        |                                      |      |  
|Non Performing Assets     |  | $              | 11,681 |                                      | 2.02 | %
|                          |  |                |        |                                      |      |  

Allowance for Loan Losses

Like all financial institutions, we must maintain an adequate allowance for loan losses. The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against
the allowance for loan losses when we believe that collectibility of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance. The allowance is an amount that we believe will be adequate to absorb probable incurred
losses on existing loans that may become uncollectible based on evaluation of the collectibility of loans and prior credit loss experience, together with the other factors noted above.

Our allowance for loan loss methodology incorporates several quantitative and qualitative risk factors used to establish the appropriate allowance for loan loss at each reporting date. Quantitative factors include our
historical loss experience, delinquency and charge-off trends, collateral values, changes in non-performing loans, and other factors. Qualitative factors include the economic conditions of our operating markets and the state of certain industries.
Specific changes in the qualitative factors are based on perceived risk of similar groups of loans classified by collateral type, purpose and terms. An internal four-year loss history is also incorporated into the allowance.

While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in
economic or other conditions. Management periodically reviews the assumptions and formulae used in determining the allowance and makes adjustments if required to reflect the current risk profile of the portfolio. The allowance consists of specific
and general components. In most cases the specific allowance relates to criticized and classified loans. The general allowance covers non-classified loans and is based on historical loss experience adjusted for the various qualitative and
quantitative factors listed above.

The following table summarizes the activity in our allowance for loan losses for the periods indicated (Dollars in
thousands).



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##### Table of Contents

|                                                           |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|---------------------------------------------------------- |  | ----------------------------------- | ----- | - | -------------------------------------- | - | ----- | ---- |  | - | ----- | - |  | ---- | ----- | - | ---- | - | ----- | - |  | - | ----- | -
|                                                           |  | For the Three MonthsEnded March 31, |       |   | At or For the Years Ended December 31, |  
|                                                           |  | 2007                                |       |   | 2006                                   |   |       | 2006 |  |   | 2005  |   |  | 2004 |       |   | 2003 |  
|Allowance for loan losses:                                 |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|Balance at beginning of year                               |  | $                                   | 6,646 |   |                                        | $ | 4,791 |      |  | $ | 4,791 |   |  | $    | 3,463 |   |      | $ | 2,204 |   |  | $ | 1,737 |  
|Provisions charged to operating expenses                   |  |                                     | 986   |   |                                        |   | 225   |      |  |   | 2,583 |   |  |      | 1,264 |   |      |   | 1,451 |   |  |   | 705   |  
|Recoveries of loans previously charged-off:                |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|Real estateconstruction                                   |  |                                     |      |   |                                        |   |      |      |  |   |      |   |  |      | 6     |   |      |   |      |   |  |   |      |  
|Community redevelopment                                    |  |                                     |      |   |                                        |   |      |      |  |   |      |   |  |      | 21    |   |      |   |      |   |  |   |      |  
|Commercial real estate                                     |  |                                     |      |   |                                        |   |      |      |  |   |      |   |  |      | 12    |   |      |   | 13    |   |  |   | 5     |  
|Residential real estate                                    |  |                                     |      |   |                                        |   |      |      |  |   | 3     |   |  |      |      |   |      |   |      |   |  |   |      |  
|Commercial and industrial                                  |  |                                     | 33    |   |                                        |   | 9     |      |  |   | 40    |   |  |      | 3     |   |      |   | 3     |   |  |   | 3     |  
|Consumer                                                   |  |                                     | 1     |   |                                        |   | 7     |      |  |   | 16    |   |  |      | 4     |   |      |   | 30    |   |  |   | 7     |  
|                                                           |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|Total Recoveries                                           |  | $                                   | 34    |   |                                        | $ | 16    |      |  | $ | 59    |   |  | $    | 46    |   |      | $ | 46    |   |  | $ | 15    |  
|Loans charged-off:                                         |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|Real estateconstruction                                   |  |                                     |      |   |                                        |   |      |      |  |   |      |   |  |      | 97    |   |      |   |      |   |  |   | 1     |  
|Community redevelopment                                    |  |                                     | 43    |   |                                        |   | 16    |      |  |   | 309   |   |  |      | 166   |   |      |   | 117   |   |  |   | 75    |  
|Commercial real estate                                     |  |                                     |      |   |                                        |   | 23    |      |  |   | 251   |   |  |      | 120   |   |      |   | 5     |   |  |   |      |  
|Residential real estate                                    |  |                                     |      |   |                                        |   |      |      |  |   | 2     |   |  |      |      |   |      |   |      |   |  |   |      |  
|Commercial and industrial                                  |  |                                     | 47    |   |                                        |   |      |      |  |   | 163   |   |  |      | 271   |   |      |   | 102   |   |  |   |      |  
|Consumer                                                   |  |                                     |      |   |                                        |   |      |      |  |   | 62    |   |  |      | 46    |   |      |   | 14    |   |  |   | 177   |  
|                                                           |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|Total Charged-off                                          |  |                                     | 90    |   |                                        |   | 39    |      |  |   | 787   |   |  |      | 700   |   |      |   | 238   |   |  |   | 253   |  
|Net charge-offs                                            |  |                                     | 56    |   |                                        |   | 23    |      |  |   | 728   |   |  |      | 654   |   |      |   | 192   |   |  |   | 238   |  
|                                                           |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|Allowance for loan losses acquired in business combination |  |                                     |       |   |                                        |   |       |      |  |   |      |   |  |      | 718   |   |      |   |      |   |  |   |      |  
|                                                           |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|Balance at end of period                                   |  | $                                   | 7,576 |   |                                        | $ | 4,993 |      |  | $ | 6,646 |   |  | $    | 4,791 |   |      | $ | 3,463 |   |  | $ | 2,204 |  
|                                                           |  |                                     |       |   |                                        |   |       |      |  |   |       |   |  |      |       |   |      |   |       |   |  |   |       |  
|Net charge-offs to average loans outstanding               |  |                                     | 0.04  | % |                                        |   | 0.03  | %    |  |   | 0.17  | % |  |      | 0.23  | % |      |   | 0.10  | % |  |   | 0.18  | %
|Allowance for loan losses to gross loans                   |  |                                     | 1.33  | % |                                        |   | 1.34  | %    |  |   | 1.33  | % |  |      | 1.46  | % |      |   | 1.53  | % |  |   | 1.42  | %



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Deposits

Deposits
have historically been the primary source of funding our asset growth. As of March 31, 2007, total deposits were $611.8 million, compared to $544.7 million as of December 31, 2006. The increase in total deposits was driven by our growth in
certificates of deposit, which includes both retail and brokered time deposits. As of March 31, 2007, certificates of deposit were $521.7 million, compared to $458.3 million as of December 31, 2006. As of the same dates, brokered time
deposits, which are included in the total certificates of deposit balance, represent $352.8 million (57.7% of deposits) and $296.0 million (54.3% of deposits), respectively. Non-interest bearing deposits were $36.4 million on March 31, 2007 and
$42.7 million on December 31, 2006.

Major classifications of deposits at March 31, 2007 and December 31, 2006 are summarized as follows:



|                                     |  |                |             |                   |   |                   |  |        |  
|------------------------------------ |  | -------------- | ----------- | ----------------- | - | ----------------- |  | ------ | -
|                                     |  | March 31, 2007 |             | December 31, 2006 |   | Percentage Change | 
|Interest checking                    |  | $              | 8,026,216   |                   | $ | 6,653,617         |  | 20.63  | %
|Savings and money market             |  |                | 45,642,353  |                   |   | 36,993,065        |  | 23.38  | %
|Time                                 |  |                | 168,835,009 |                   |   | 162,293,149       |  | 4.03   | %
|Brokered time                        |  |                | 352,838,805 |                   |   | 296,003,247       |  | 19.20  | %
|                                     |  |                |             |                   |   |                   |  |        |  
|Total interest-bearing deposits      |  |                | 575,342,383 |                   |   | 501,943,078       |  | 14.62  | %
|Non-interest bearing demand deposits |  |                | 36,448,558  |                   |   | 42,726,594        |  | -14.69 | %
|                                     |  |                |             |                   |   |                   |  |        |  
|Total deposits                       |  | $              | 611,790,941 |                   | $ | 544,669,672       |  | 12.32  | %
|                                     |  |                |             |                   |   |                   |  |        |  

Junior Subordinated Debentures

In order to manage our capital position more efficiently, we have relied on trust preferred securities issued by our wholly-owned subsidiaries, Omni Statutory Trust II, Omni Statutory Trust III, and Omni Statutory
Trust IV. In 2003, 2004 and 2005 we issued, through these subsidiaries, trust preferred securities representing a preferred beneficial interest in our unsecured junior subordinated debentures. The trust preferred securities qualify as Tier I capital
under Federal Reserve guidelines within certain limitations. In each case, the proceeds from the issuance of the trust preferred securities and the common securities of the trust were used to purchase our junior subordinated debentures, which carry
a floating rate of interest adjusted every three months to the 3-Month LIBOR. At March 31, 2007, the 3-Month LIBOR rate was 5.35%. The junior subordinated debentures mature on the 30-year anniversary of their issuance and cannot generally be
called prior to the five-year anniversary of the date of issuance. The following table sets forth the principal terms of the junior subordinated debentures as of the date indicated.



|                         |  |                |  |                               |            |                         |        |                          |      
|------------------------ |  | -------------- |  | ----------------------------- | ---------- | ----------------------- | ------ | ------------------------ | -----
|Trust Name               |  | Issuance Date  |  | Principal Amount of Debenture |            | Spread to 3-month LIBOR |        | 03/31/2007 Interest Rate
|Omni Statutory Trust II  |  | March 26, 2003 |  | $                             | 5,155,000  |                         | +3.15% |                          | 8.50%
|                         |  |                |  |                              
|Omni Statutory Trust III |  | June 17, 2004  |  | $                             | 5,155,000  |                         | +2.7%  |                          | 8.05%
|                         |  |                |  |                              
|Omni Statutory Trust IV  |  | March 17, 2005 |  | $                             | 10,310,000 |                         | +1.9%  |                          | 7.25%

In accordance with FASB Interpretation No. 46, Omni Statutory Trust II, Omni Statutory Trust III and Omni
Statutory Trust IV (the Trusts) are not consolidated with the Company. Accordingly, the Company does not report the securities issued by the Trusts as liabilities, and instead reports as liabilities the junior subordinated debentures
issued by the Company and held by the Trusts. The Trust Preferred Securities are recorded as junior subordinated debentures on the balance sheets, but are subject to certain limitations to qualify for Tier 1 capital for regulatory capital purposes.



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Capital Resources

Current risk-based regulatory capital standards generally require banks and bank holding companies to maintain three minimum capital ratios. Tier 1 risk-based capital ratio compares Tier 1 or core capital, which
consists principally of common equity, and risk-weighted assets for a minimum ratio of at least 4%. Tier 1 leverage ratio compares Tier 1 capital to adjusted total assets for a minimum ratio of at least 4%. Total risk-based capital ratio compares
total capital, which consists of Tier 1 capital, certain forms of subordinated debt, and a portion of the allowance for loan losses, to risk-weighted assets for a minimum ratio of at least 8%. Risk-weighted assets are calculated by multiplying the
balance in each category of assets by a risk factor, which ranges from zero for cash assets and certain government obligations to 100% for some types of loans, and adding the products together.

The following table provides a comparison of our risk-based capital ratios and leverage ratios to the minimum regulatory requirements for the periods indicated.



|                                       |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|-------------------------------------- |  | ------ | ------ | ----- | ------------------------------------ | - | ------ | --------------------------------------------------------------------- | ------ |  | ---- | ------ |  | ----- | ------ |  | ----- | -
|                                       |  | Actual |        |       | For Capital AdequacyPurposes Minimum |   |        | To Be Well Capitalized UnderPrompt Corrective ActionProvision
Minimum |       
|                                       |  | Amount |        | Ratio |                                      |   | Amount |                                                                       | Ratio  |  |      | Amount |  | Ratio |       
|As of March 31, 2007                   |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Tier 1 Capital to average assets       |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Bank                                   |  | $      | 54,611 |       | 7.53                                 | % |        | $                                                                     | 29,016 |  | 4.00 | %      |  | $     | 36,271 |  | 5.00  | %
|Consolidated                           |  | $      | 87,086 |       | 10.69                                | % |        | $                                                                     | 29,032 |  | 4.00 | %      |  |       | N/A    |  | N/A   |  
|Tier 1 Capital to risk weighted assets |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Bank                                   |  | $      | 54,611 |       | 8.82                                 | % |        | $                                                                     | 24,757 |  | 4.00 | %      |  | $     | 37,136 |  | 6.00  | %
|Consolidated                           |  | $      | 87,086 |       | 14.20                                | % |        | $                                                                     | 24,694 |  | 4.00 | %      |  |       | N/A    |  | N/A   |  
|Total Capital to risk weighted assets  |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Bank                                   |  | $      | 63,935 |       | 10.37                                | % |        | $                                                                     | 49,514 |  | 8.00 | %      |  | $     | 61,893 |  | 10.00 | %
|Consolidated                           |  | $      | 94,410 |       | 15.39                                | % |        | $                                                                     | 44,389 |  | 8.00 | %      |  |       | N/A    |  | N/A   |  
|As of December 31, 2006                |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Tier 1 Capital to average assets       |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Bank                                   |  | $      | 50,406 |       | 7.71                                 | % |        | $                                                                     | 26,150 |  | 4.00 | %      |  | $     | 32,689 |  | 5.00  | %
|Consolidated                           |  | $      | 86,038 |       | 13.11                                | % |        | $                                                                     | 26,256 |  | 4.00 | %      |  |       | N/A    |  | N/A   |  
|Tier 1 Capital to risk weighted assets |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Bank                                   |  | $      | 50,406 |       | 8.95                                 | % |        | $                                                                     | 22,522 |  | 4.00 | %      |  | $     | 33,784 |  | 6.00  | %
|Consolidated                           |  | $      | 86,038 |       | 15.62                                | % |        | $                                                                     | 22,036 |  | 4.00 | %      |  |       | N/A    |  | N/A   |  
|Total Capital to risk weighted assets  |  |        |        |       |                                      |   |        |                                                                       |        |  |      |        |  |       |        |  |       |  
|Bank                                   |  | $      | 59,052 |       | 10.49                                | % |        | $                                                                     | 45,046 |  | 8.00 | %      |  | $     | 56,307 |  | 10.00 | %
|Consolidated                           |  | $      | 92,684 |       | 16.82                                | % |        | $                                                                     | 44,071 |  | 8.00 | %      |  |       | N/A    |  | N/A   |  

The Bank and the Company met all capital adequacy requirements to which we are subject as of March 31, 2007
and December 31, 2006. The Bank is also considered well capitalized as of the same dates (the well capitalized category does not apply to holding companies).

Contractual Obligations and Off-Balance Sheet Arrangements

We routinely enter into contracts for services in the
conduct of ordinary business operations which may require payment for services to be provided in the future and may contain penalty clauses for early termination of the contracts. To meet the financing needs of our customers, we are also parties to
financial instruments with off-balance sheet risk including commitments to extend credit and standby letters of credit. We have also committed to irrevocably and unconditionally guarantee the following payments or distributions with respect to the
holders of preferred securities to the extent that Omni Statutory Trust II, Omni Statutory Trust III, and Omni Statutory Trust IV have not made such payments or distributions: (1) accrued and unpaid distributions, (2) the redemption price,
and (3) upon a dissolution or termination of the trust, the lesser of the liquidation amount and all accrued and unpaid distributions and the amount of assets of the trust remaining available for distribution.

We do not believe that these off-balance sheet arrangements have or are reasonably likely to have a material effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity,



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capital expenditures, or capital resources. However, there can be no assurance that such arrangements will not have a future effect.

Liquidity and Interest Rate Sensitivity

Liquidity represents the
ability of a company to convert assets into cash or cash equivalents without significant loss, and the ability to raise additional funds by increasing liabilities. Liquidity management involves monitoring our sources and uses of funds in order
to meet our day-to-day cash flow requirements while maximizing profits. Liquidity management is made more complicated because different balance sheet components are subject to varying degrees of management control. For example, the timing
of maturities of our investment portfolio is fairly predictable and subject to a high degree of control at the time investment decisions are made. However, net deposit inflows and outflows are far less predictable and are not subject to the
same degree of control.

At March 31, 2007, our liquid assets amounted to $14.2 million, or 1.8% of total assets, respectively. Our investment
securities at March 31, 2007 amounted to $141.9 million, or 18.4% of total assets. Investment securities traditionally provide a secondary source of liquidity since they can be converted into cash in a timely manner. However, most of these
securities are pledged against outstanding debt. Therefore, the related debt would need to be repaid prior to the securities being sold in order for these securities to be converted to cash.

Our ability to maintain and expand our deposit base and borrowing capabilities serves as our primary source of liquidity. We plan to meet our future cash needs
through the liquidation of temporary investments and the generation of deposits. In addition, we will receive cash upon the maturity and sale of loans and the maturity of investment securities. In addition, we maintain federal funds
purchased lines of credit with correspondent banks totaling $42.5 million. We are also a member of the Federal Home Loan Bank of Atlanta, from which applications for borrowings can be made for leverage purposes. The FHLB requires that
securities, qualifying mortgage loans, and stock of the FHLB owned by the bank be pledged to secure any advances from the FHLB. The unused borrowing capacity currently available from the FHLB at March 31, 2007 was $41.3 million, based on
the banks $3.8 million investment in FHLB stock, as well as qualifying mortgages and pledged securities available to secure any future borrowings.

We believe that our existing stable base of core deposits, borrowings from the FHLB, short-term repurchase agreements, and proceeds we received from our secondary offering will enable us to successfully meet our long-term liquidity needs.



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|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Market
risk is the risk of loss from adverse changes in market prices and rates, which principally arises from interest rate risk inherent in our lending, investing, deposit gathering, and borrowing activities. Other types of market risks, such as
foreign currency exchange rate risk and commodity price risk, do not generally arise in the normal course of our business.

We actively monitor and manage
our interest rate risk exposure principally by measuring our interest sensitivity gap, which is the positive or negative dollar difference between assets and liabilities that are subject to interest rate repricing within a given period
of time. Interest rate sensitivity can be managed by repricing assets or liabilities, selling securities available for sale, replacing an asset or liability at maturity, or adjusting the interest rate during the life of an asset or
liability. Managing the amount of assets and liabilities repricing in this same time interval helps to hedge the risk and minimize the impact on net interest income of rising or falling interest rates. We generally would benefit from
increasing market rates of interest when we have an asset-sensitive gap position and generally would benefit from decreasing market rates of interest when we are liability-sensitive.

Approximately 45.96% of our loans were variable rate loans at March 31, 2006 and we were asset sensitive during the three months ended March 31, 2007. As of March 31, 2007, we expect to remain asset
sensitive for 2007. The ratio of cumulative gap to total earning assets after 12 months was 11.4% because $81.7 million more assets will reprice in a 12 month period than liabilities. However, our gap analysis is not a precise indicator of
our interest sensitivity position. The analysis presents only a static view of the timing of maturities and repricing opportunities, without taking into consideration that changes in interest rates do not affect all assets and liabilities
equally. For example, rates paid on a substantial portion of core deposits may change contractually within a relatively short time frame, but those rates are viewed by us as significantly less interest-sensitive than market- based rates such as
those paid on noncore deposits. Net interest income may be affected by other significant factors in a given interest rate environment, including changes in the volume and mix of interest-earning assets and interest-bearing liabilities.

Interest rate risk is addressed by our Asset Liability Management Committee, or ALCO, which is comprised of senior management. The ALCO monitors interest
rate risk by analyzing the potential impact on the net economic value of equity and net interest income from potential changes in interest rates, and consider the impact of alternative strategies or changes in balance sheet structure. We manage our
balance sheet in part to maintain the potential impact on economic value of equity and net interest income within acceptable ranges despite changes in interest rates.

Our exposure to interest rate risk is reviewed on at least a quarterly basis by the ALCO and our board of directors. Interest rate risk exposure is measured using interest rate sensitivity analysis to determine our
change in economic value of equity in the event of hypothetical changes in interest rates. If potential changes to net economic value of equity and net interest income resulting from hypothetical interest rate changes are not within the limits
established by our board of directors, the board of directors may direct management to adjust the asset and liability mix to bring interest rate risk within board-approved limits.

Net Interest Income Simulation

In order to measure interest rate risk at March 31, 2007, we used a simulation
model to project changes in net interest income that result from forecasted changes in interest rates. This analysis calculates the difference between net interest income forecasted using a rising and a falling interest rate scenario and net
interest income using a base market interest rate. The income simulation model includes various assumptions regarding the re-pricing relationships for each of our products. Many of our assets are floating rate loans, which are assumed to re-price
immediately, and proportional to the change in market rates, depending on their contracted index. Our non-term deposit products re-price more slowly, usually changing less than the change in market rates and at our discretion.

This analysis indicates the impact of changes in net interest income for the given set of rate changes and assumptions. It assumes the balance sheet remains static and
that its structure does not change over the course of the year. It does not account for all factors that impact this analysis, including changes by management to mitigate the impact of interest rate changes or secondary impacts such as changes to
our credit risk profile as interest rates change.



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Furthermore, loan prepayment rate estimates and spread relationships change regularly. Interest rate changes create
changes in actual loan prepayment rates that will differ from the market estimates incorporated in this analysis. Changes that vary significantly from the assumptions may have significant effects on our net interest income. For the rising and
falling interest rate scenarios, the base market interest rate forecast was increased and decreased over twelve months by 200 and 100 basis points, respectively. At March 31, 2007, our net interest margin exposure related to these hypothetical
changes in market interest rates was within the current guidelines we have established. The results of our analysis are set forth below: (Dollars in thousands)



|                       |  |                           |        |                           |       |  
|---------------------- |  | ------------------------- | ------ | ------------------------- | ----- | -
|Interest Rate Scenario |  | AdjustedNetInterestIncome |        | PercentageChangefrom Base |      
|Up 200 basis points    |  | $                         | 37,374 |                           | 5.19  | %
|Up 100 basis points    |  | $                         | 36,465 |                           | 2.63  | %
|Base                   |  | $                         | 35,529 |                           |      | %
|Down 100 basis points  |  | $                         | 34,704 |                           | -2.32 | %
|Down 200 basis points  |  | $                         | 33,854 |                           | -4.71 | %

Economic Value of Equity

We measure the impact of market interest rate changes on the net present value of estimated cash flows from our assets, liabilities and off-balance sheet items, defined as economic value of equity, using a simulation
model. This simulation model assesses the changes in the market value of interest rate sensitive financial instruments that would occur in response to an instantaneous and sustained increase or decrease (shock) in market interest rates. At
March 31, 2007, our economic value of equity exposure related to these hypothetical changes in market interest rates was within the current guidelines we have established. The following table sets forth our projected change in economic value of
equity as a result of certain immediate increases or decreases in interest rates at March 31, 2007.



|                       |  |               |        |                           |       |   |                          |      |  
|---------------------- |  | ------------- | ------ | ------------------------- | ----- | - | ------------------------ | ---- | -
|Interest Rate Scenario |  | EconomicValue |        | PercentageChangefrom Base |       |   | Percentageof TotalAssets |     
|Up 200 basis points    |  | $             | 54,973 |                           | 0.0   | % |                          | 7.40 | %
|Up 100 basis points    |  | $             | 55,738 |                           | 1.4   | % |                          | 7.30 | %
|Base                   |  | $             | 54,946 |                           |      | % |                          | 7.20 | %
|Down 100 basis points  |  | $             | 51,020 |                           | -7.1  | % |                          | 6.60 | %
|Down 200 basis points  |  | $             | 45,794 |                           | -16.7 | % |                          | 5.90 | %

The computation of prospective effects of hypothetical interest rate changes are based on numerous assumptions,
including relative levels of market interest rates, asset prepayments and deposit decay, and should not be relied upon as indicative of actual results. Further, the computations do not contemplate any actions we may undertake in response to changes
in interest rates. Actual amounts may differ from the projections set forth above in the event that market conditions vary from the underlying assumptions.



|Item 4. | Controls and Procedures.
|------- | ------------------------

Based on their evaluation as of the end
of the period covered by this report, the Company, under the supervision and with the participation of our management, including its Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design
and operation of the Companys disclosure controls and procedures as defined in Exchange Act Rule 13a  15(e). The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future
events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2007, our disclosure controls and procedures were effective to ensure that information required to be disclosed by



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the Company in reports that it files under the Securities Exchange Act of 1934 is reported within the time periods specified under Securities and Exchange
Commission rules. Additionally, they concluded that the Companys disclosure controls and procedures were effective in ensuring that information required to be disclosed in such reports is accumulated and communicated to management, including
the Chief Executive Officer and Chief Financial Officer, in time to allow timely decisions regarding required disclosures.

There were no changes in
internal controls over financial reporting or, to managements knowledge, in other factors during the quarter ended March 31, 2007 that have materially affected or are reasonably likely to materially affect these controls subsequent to the
date of the evaluation.



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Part II. Other Information



|Item 1. | Legal Proceedings
|------- | -----------------

We were named as a defendant in litigation
involving Georgia Community Bank, which we acquired in 2005. While the plaintiffs had initially dismissed us from the litigation in May of 2006, they have since filed a motion seeking leave to add the Bank as a party-defendant.

On October 24, 2005, two shareholders of Georgia Community Bancshares, Inc., the former parent of Georgia Community Bank, filed a proposed class action against,
among others, Georgia Community Bancshares, Georgia Community Bank and ourselves for fraud under the Georgia Securities Act of 1973, as amended and the Georgia Racketeer Influenced and Corrupt Organizations Act, common law fraud, negligence and
breach of fiduciary duty. The action is entitled Gage, et al. v. Georgia Community Bank, Inc., et al., Civil Action No. 2005CV107863, Superior Court of Fulton County, State of Georgia. The complaint alleged that, prior to our acquisition of
Georgia Community Bank, defendants committed fraud in the sale of Georgia Community Bancshares stock to the plaintiffs and to members of the proposed class and committed other wrongful acts and omissions regarding loans to insiders to fund their
purchases of Georgia Community Bancshares stock.

The complaint alleged, incorrectly, that we merged with Georgia Community Bank and assumed all of its
liabilities, including liability for the claims alleged in the complaint. In fact, we purchased all of Georgia Community Banks stock from Georgia Community Bancshares, caused Georgia Community Bank to be converted into a national bank and
merged it into our subsidiary bank, Omni National Bank. We do not believe there is a good faith basis for contending that we assumed Georgia Community Banks liabilities.

After the action was filed, we were not initially served with process. In discussions with plaintiffs counsel, we asserted that neither we nor Omni National Bank has any liability for the claims alleged in the
complaint, that Omni National Bank owns any claims against Georgia Community Banks officers and directors for any breach of their fiduciary duties to Georgia Community Bank and that we will assert ownership of those claims, if the plaintiffs
proceed with the litigation against us.

Our counsel accepted service of the complaint on our behalf on April 3, 2006. On April 18, 2006, our
counsel served the plaintiffs and their counsel with written notice of our intent to file claims for abusive litigation pursuant to O.C.G.A. § 51-7-80 et seq. and for frivolous litigation pursuant to O.C.G.A. § 9-15-14 against the
plaintiffs, their counsel and each counsels firm if they failed to withdraw, abandon, discontinue or dismiss the complaint against us within 30 days of our notice. Subsequently, on May 3, 2006, plaintiffs voluntarily dismissed the action
and all claims therein as to us without prejudice. The action is still pending against the remaining defendants.

On December 4, 2006, plaintiffs
filed a motion seeking leave of court to amend the complaint to add the Bank as a party-defendant, alleging in their proposed amended complaint that the Bank, as the successor in interest to GCB assumed liability in the merger for the
plaintiffs claims against GCB. The court has not yet ruled on this motion. The Company and the Bank believe that they have no liability for any of the claims alleged in the complaint and intend to defend the action vigorously if the plaintiffs
proceed with any claims in the action against either or both of them.

Our subsidiary bank through its merger with Georgia Community Bank, which was a
federally-chartered savings bank, may have assumed obligations under 12 C.F.R. § 545.121 to indemnify those defendants who were officers and directors of Georgia Community Bank for their costs of defense if they prevail on the merits as to the
claims against them in that capacity. However, if they do not prevail on the merits, any indemnification for judgments, settlements or defense costs would require affirmative action by the board of directors of Omni National Bank and would require a
finding by the board that those former Georgia Community Bank officers and directors were acting for a purpose that they could have reasonably believed was in the best interest of Georgia Community Bank or its shareholders. Based on our knowledge of
the allegations of the complaint, and Georgia Community Banks history, its financial circumstances at the time of our acquisition, and their causes, there does not appear to be a substantial likelihood that the board of Omni National Bank
would be able to reach such a finding.

Georgia Community Bancshares maintained director and officer liability insurance with Federal Insurance Company,
with aggregate policy limits of $1,000,000. Omni National Bank may have succeeded to Georgia



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Community Banks rights under the policy and may be entitled to coverage either in its own right or if it were required to indemnify former Georgia
Community Bank officers and directors for the defense costs they incur in the action. Since the coverage limits are low, it is possible that the policy will be depleted and there may not be any coverage remaining under the policy to reimburse Omni
National Bank for any defense costs it incurs or indemnification payments it makes. If the director and officer defendants reach a settlement with the plaintiffs, it is likely that the insurance company and the officers and directors will ask us to
participate. We will consider cooperating in the settlement, but do not intend to contribute to it financially.

Fraud Loss. In December 2005, we
identified a $1.0 million loss in our warehouse lending program as a result of a defalcation. In late 2005, we wired $1.0 million to a closing agent identified by one of our loan participation partners for the purchase of three loans, with such
funds to be held in escrow pending closing of the acquisition. Our loan participation partner fraudulently obtained the loans and the closing agent may have participated in that fraud and/or fraudulently disbursed the funds without proper authority.
In connection with this fraud, we took a charge of $1.0 million against earnings in 2005.

Our loan participation partner ceased doing business shortly
after the fraud was discovered, and its three principals were investigated by federal authorities and have all pled guilty to various federal offenses. At the time the business closed, there were insufficient funds in its accounts to cover
Omnis losses, and various other financial institutions had also been similarly defrauded by our loan participation partner. We have pursued, and continue to pursue multiple actions to recover the funds. On May 9, 2007, Omni received
$357,174.00 in funds recovered from the loan participation partners bank accounts, which funds had been frozen when the business closed and were traceable to amounts received by the closing agent from Omni and another lender who had recovered
custody of the funds in accordance with a previous court ruling. Through litigation and negotiation with the other lender, we were able to obtain a share of the recovered funds. Recovery of any further funds above the noted award remains
uncertain.

Other. We are involved in no other material legal proceedings, other than ordinary routine litigation incidental to our business. Our
management does not believe that such legal proceedings, individually or in the aggregate, are likely to have a material adverse effect on our results of operations, cash flows or financial condition.



|Item 1A. | Risk Factors
|-------- | ------------

In addition to the information contained in this
report, you should consider the factors discussed in under the heading Risk Factors in the Companys Form 10-K Annual Report dated December 31, 2006, which was filed with the SEC on March 21, 2007. These factors could
materially affect our business, financial condition or future results. The risks described in such Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to management or that it currently
deems to be immaterial also may materially adversely affect the Companys business, financial condition and/or operating results.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

The
Company did not issue any unregistered equity securities or repurchase any of its equity securities during the quarter ended March 31, 2007.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|Item 5. | Other Information
|------- | -----------------

None.



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|Item 6. | Exhibits
|------- | --------

(a) Exhibits



|     |  |                                                                                                                                                                      
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of Principal Executive Officer Pursuant to 13a-14(a) of the Securities Act of 1934.                                                                    
|     | 
|31.2 |  | Certification of Principal Financial Officer Pursuant to 13a-14(a) of the Securities Act of 1934.                                                                    
|     | 
|32.1 |  | Certification of Principal Executive and Financial Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 14, 2007



OMNI FINANCIAL SERVICES, INC.By:

/s/ Constance E. PerrineConstance E. PerrineExecutive Vice President and Chief Financial Officer




40