The local economy of Georgia is historically based on manufacturing, but it has become more service-oriented in the last two decades. Median household income and per capita income for the market area are below the state and national averages, reflecting the urban nature of the market and limited availability of high paying white collar and technical jobs.As of September 2004, the market area reported an unemployment rate of 4.6%, as compared to the national average of 5.4%.

The Company’s principal business consists of attracting retail deposits from the general public and investing those funds primarily in permanent loans secured by first mortgages on owner-occupied, one- to four-family residences, multi-family residences and commercial property and a variety of consumer and commercial business loans.

The Company offers a variety of deposit accounts having a wide range of interest rates and terms, which generally include savings accounts, money market deposit and term certificate accounts and checking accounts.

The Company focuses on the commercial real estate and business needs of individuals and small to medium sized businesses in its market area.

The Company’s private bankers service high net worth individuals in its community who desire a specialized level of service.

The Company provides automobile loans to customers through long-standing relationships with a number of automobile dealerships throughout southern Georgia.

The Company operates a network of six branch offices located in Dougherty, Lee and Worth counties. Each office is staffed with knowledgeable banking professionals who strive to deliver quality service.

The Company offers investment products, life, health, disability and long-term care insurance through its brokerage department.

Staffed with experienced mortgage originators and processors, the Company’s mortgage lending department originates residential mortgage loans for portfolio, as well as for a third party, in order to meet the needs of the customers.

The general objectives of the Company investment portfolio are to provide liquidity when loan demand is high, to assist in maintaining earnings when loan demand is low and to maximize earnings while satisfactorily managing risk, including credit risk, reinvestment risk, liquidity risk and interest rate risk.

The Company’s investment securities currently consists of mortgage-backed securities, federal agency securities, mutual fund investments, state and local government securities and corporate debt securities.

The Company’s sources of funds are deposits, borrowings, payment of principal and interest on loans, interest earned on or maturation of other investment securities and funds provided from operations.

The Company offers a variety of deposit accounts to both consumers and businesses having a wide range of interest rates and terms. The Company’s deposits consist of savings and checking accounts, money market deposit accounts, NOW and demand accounts and certificates of deposit.

Deposits closed at $248.5 million at December 31, 2004, a decrease of $6.8 million, or 2.7%, from December 31, 2003.

Total borrowings amounted to $51.0 million at December 31, 2004, an increase of $11.0 million or 27.5% from December 31, 2003.

After recording net income of $3.5 million for the year and an unrealized loss on securities available for sale of $1.4 million, total equity at December 31, 2004 was $39.1 million compared to $37.0 million at December 31, 2003, representing an increase of $2.1 million, or 5.7%.