U.Table S.of SECURITIES AND EXCHANGE COMMISSION Contents

~~WASHINGTON,~~Securities ~~D.C.~~and ~~20549~~Exchange Commission

~~FORM~~Washington, ~~10-QSB~~ D.C. 20549

[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended June 30, 2003
[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from ____________________ to ____________________

FORM 10-Q

~~Commission~~x ~~File~~QUARTERLY ~~Number:~~REPORT ~~000-33221~~ UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~Newnan~~For ~~Coweta~~the ~~Bancshares~~quarterly period ended September 30, ~~Inc.~~ 2008

~~(Exact~~¨ ~~name~~TRANSITION ofREPORT ~~small~~UNDER ~~business~~SECTION ~~issuer~~13 asOR ~~specified~~15(d) inOF ~~its~~THE ~~charter)~~SECURITIES EXCHANGE ACT OF 1934

Georgia		58-2655471
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

From the transition period from to

~~145~~COMMISSION ~~Millard~~FILE ~~Farmer~~NUMBER: ~~Industrial~~000-33221 ~~Blvd., Newnan, GA 30263~~

~~(Address~~NEWNAN ofCOWETA ~~principal~~BANCSHARES, ~~executive~~INC. ~~offices)~~

(~~770~~Name of Small Business Issuer in Its Charter) ~~683-6222~~

(Issuer’s telephone number)


Georgia		58-2655471
(State of Incorporation)		(I.R.S. Employer Identification No.)

~~N/A~~ 145 MILLARD FARMER INDUSTRIAL BLVD.

~~(Former name~~NEWNAN, ~~former~~GEORGIA ~~address~~30263 ~~and former fiscal year, if changed since last report)~~

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

~~State~~(770) ~~the~~683-6222 ~~number of shares outstanding of each of the issuer’s classes of common equity, as of August 1, 2003: 900,000; no par value.~~

~~Transitional~~(Issuer’s ~~Small~~telephone ~~Business~~number) ~~Disclosure Format Yes [ ] No [X]~~

~~NEWNAN~~N/A ~~COWETA BANCSHARES, INC. AND SUBSIDIARY~~

~~INDEX~~ (Former name, former address and former fiscal year, if changed since last report)

	Page
Part I. Financial Information
Item 1. Financial Statements (unaudited)		3-7
Item 2. Management’s Discussion and Analysis or Plan of Operation		8-12
Item 3. Controls and Procedures		12
Part II. Other Information
Item 1. Legal Proceedings		13
Item 2. Changes in Securities and Use of Proceeds		13
Item 3. Defaults Upon Senior Securities		13
Item 4. Submission of Matters to a Vote of Security Holders		13
Item 5. Other Information		13
Item 6. Exhibits and Reports on Form 8-K		14
Signatures		15

Indicate by check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 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 x No ¨

2Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-s of the Exchange Act.

~~PART~~Large Iaccelerated –filer ~~FINANCIAL~~¨ ~~INFORMATION~~ Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company x

~~ITEM~~Indicate 1by —check ~~FINANCIAL~~mark ~~STATEMENTS~~whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

~~NEWNAN~~Number ~~COWETA~~of ~~BANCSHARES~~shares outstanding of the issuer’s sole class of common equity, ~~INC. AND~~as ~~SUBSIDIARY CONSOLIDATED~~of ~~BALANCE~~November 14, ~~SHEET JUNE~~2008: 301,006,070; ~~2003 (Unaudited) (Dollars~~no inpar ~~thousands)~~ value.

			Assets
Cash and due from banks				$	2,122
Federal funds sold					9,307
Securities available-for-sale, at fair value					6,624
Loans					79,768
Less allowance for loan losses					964
					78,804
Premises and equipment					2,708
Other assets					1,007
			Total assets	$	100,572
			Liabilities and Stockholders’ Equity
Liabilities
	Deposits
		Noninterest-bearing		$	6,617
		Interest bearing			83,737
					90,354
	Other borrowings				0
	Other liabilities				549
			Total liabilities		90,903
Commitments and contingencies
Stockholders’ equity
	Common stock, no par value; 5,000,000 shares authorized; 900,000 shares issued and outstanding				8,980
	Retained Earnings				559
	Accumulated other comprehensive income				130
			Total stockholders’ equity		9,669
			Total liabilities and stockholders’ equity	$	100,572

~~The~~NEWNAN ~~accompanying~~COWETA ~~notes~~BANCSHARES, ~~are an integral part of these financial statements~~INC.

3 AND SUBSIDIARY

~~NEWNAN~~INDEX ~~COWETA BANCSHARES, INC.~~ ~~AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (Unaudited) (Dollars in thousands, except per share amounts)~~

					Three Months		Three Months		Six Months		Six Months
					Page
					Ended June 30,		Ended June 30,		Ended June 30,		Ended June 30,
PART I. FINANCIAL INFORMATION
					2003		2002		2003		2002
Item 1.				Financial Statements
Interest income
		Consolidated Balance Sheet – September 30, 2008 (unaudited) and December 31, 2007			1
	Loans				$	1,344	$	981	$	2,554	$	1,875
		Consolidated Statements of Income and Comprehensive Income Three and Nine Months Ended September 30, 2008 and 2007 (unaudited)			2
	Taxable securities					65		93		142		177
		Consolidated Statements of Cash flow – Nine Months Ended September 30, 2008 and 2007 (unaudited)			3
	Federal funds sold					28		8		36		25
		Notes to Consolidated Financial Statements (unaudited)			4
				Total interest income		1,437		1,082		2,732		2,077
Item 2.				Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Interest expense
		Forward Looking Statements			9
	Deposits					548		415		1057		812
		Critical Accounting Policies			9
	Other borrowings					—		1		—		1
		Liquidity and Capital Resources			10
				Total interest expense		548		416		1,057		813
		Off-Balance Sheet Risk			10
				Net interest income		889		666		1,675		1,264
		Financial Condition			11
Provision for loan losses						56		61		110		142
		Results of Operations for the Three and Nine Months Ended September 30, 2008 and 2007			13
				Net interest income after provision for loan losses		833		605		1,565		1,122
Item 3.				Controls and Procedures	16
Other income
PART II. OTHER INFORMATION
	Service charges on deposit accounts					60		46		115		85
Item 1				– Legal Proceedings	17
	Gain on sale of securities available for sale					—		—		5		—
Item 2				– Unregistered Sales of Equity Securities and Use of Proceeds	17
	Other operating income					50		2		97		12
Item 3				– Defaults Upon Senior Securities	17
				Total other income		110		48		217		97
Item 4				– Submission of Matters to a Vote of Security Holders	17
Other expenses
Item 5				– Other Information	17
	Salaries and employee benefits					328		236		612		476
Item 6				– Exhibits	17
	Equipment and occupancy expenses					77		67		156		131
Signatures					18
	Data processing expenses					78		55		148		109
	Other operating expenses					161		129		309		243
				Total other expenses		644		487		1,225		959
		Income before income taxes				299		12		557		260
Income taxes						109		—		206		—
		Net income				190		166		351		260
Other comprehensive income (loss):
	Unrealized gains (losses) on securities available for sale arising during period					32		20		18		(89	)
			Comprehensive income		$	222	$	186	$	369	$	171
Basic earnings per share					$	.21	$	.18	$	.39	$	.29
Diluted earnings per share					$	.21	$	.18	$	.38	$	.28
Cash dividends per share					$	—	$	—	$	—	$	—

TheTable accompanying notes are an integral part of these financial statements. Contents

4 PART I – FINANCIAL INFORMATION

~~NEWNAN~~ITEM 1 ~~COWETA~~– ~~BANCSHARES,~~FINANCIAL ~~INC. AND SUBSIDIARY CONSOLIDATED~~ STATEMENTS ~~OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (Unaudited) (Dollars in thousands)~~

					Six Months			Six Months
					Ended June 30,			Ended June 30,
					2003			2002
OPERATING ACTIVITIES
	Net income				$	351		$	260
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation				77			74
		Provision for loan losses				110			142
		Increase in interest receivable				(8	)		(77	)
		Increase (decrease) in interest payable				(41	)		(26	)
		Net other operating activities				(81	)		(19	)
			Net cash provided by operating activities			408			354
INVESTING ACTIVITIES
	Purchase of securities available for sale					—			(3,636	)
	Proceeds from sale of securities available for sale					2,008			—
	Proceeds from maturities of securities available for sale					903			1,651
	Purchase of restricted equity securities					(128	)		(38	)
	Net decrease in interest bearing deposits at banks					1,090			—
	Net increase in federal funds sold					(9,307	)		(340	)
	Net increase in loans					(9,183	)		(9,622	)
	Purchase of premises and equipment					(113	)		(215	)
				Net cash used in investing activities		(14,730	)		(12,200	)
FINANCING ACTIVITIES
	Net increase in deposits					14,877			10,786
	Decrease in federal funds purchased					(397	)		—
				Net cash provided by financing activities		14,480			10,786
Net increase (decrease) in cash and due from banks						158			(1,060	)
Cash and due from banks at beginning of period						1,964			3,054
Cash and due from banks at end of period					$	2,122		$	1,994
SUPPLEMENTAL DISCLOSURES
	Cash paid (received) during the period for:
		Interest			$	1,098		$	839
		Income taxes			$	458		$	(22	)

NEWNAN COWETA BANCSHARES, INC.

~~The~~AND ~~accompanying~~SUBSIDIARY ~~notes are an integral part of these financial statements.~~

5 CONSOLIDATED BALANCE SHEET

~~NEWNAN COWETA BANCSHARES~~SEPTEMBER 30, ~~INC. AND~~2008 ~~SUBSIDIARY NOTES~~and TODECEMBER ~~CONSOLIDATED~~31, ~~FINANCIAL~~2007 ~~STATEMENTS (Unaudited)~~

NOTE 1.		NATURE OF BUSINESS AND BASIS OF PRESENTATION
		The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim periods.
		The results of operations for the three and six month periods ended June 30, 2003, are not necessarily indicative of the results to be expected for the full year.
NOTE 2.		CURRENT ACCOUNTING DEVELOPMENTS
		There are no recent accounting pronouncements that have had, or are expected to have, a material effect on the Company’s financial statements.
NOTE 3.		STOCK COMPENSATION PLANS
		At June 30, 2003, the Company has two stock-based compensation plans. The Company accounts for those plans under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No stock-based compensation cost is reflected in net income, as all stock options and stock warrants granted under those plans had an exercise price equal to the market value of the underlying stock on the date of grant. Stock options vest annually during June; therefore, the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS Statement No. 123, Accounting for Stock-Based Compensation, to stock-based compensation is presented in the following table. Stock warrants vested each year during December and were fully vested as of December 31, 2002.

(Unaudited)

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2003		2002		2003		2002
		(Dollars in thousands, except per share amounts)
Net income		$	190	$	166	$	351	$	260
Deduct: Total stock-based compensation expense determined under the fair value based method for all awards, net of related tax effects			24		24		24		24
Pro forma net income		$	166	$	142	$	327	$	236
Earnings per share:
	Basic – as reported	$	0.21	$	0.18	$	0.39	$	0.29
	Basic – pro forma	$	0.18	$	0.16	$	0.36	$	0.26
	Diluted – as reported	$	0.21	$	0.18	$	0.38	$	0.28
	Diluted – pro forma	$	0.18	$	0.15	$	0.36	$	0.26

(Dollars in thousands)


	September 30, 2008 (Unaudited)			December 31, 2007
Assets
Cash and due from banks	$	2,198		$	5,076
Federal funds sold		13,229			6,059
Securities available-for-sale, at fair value		17,354			21,232

Loans, net		163,977			175,708

Premises and equipment		3,815			9,448

Other real estate		19,430			12,643

Other assets		10,581			7,803

Total assets	$	230,584		$	237,969


Liabilities and Stockholders’ Equity

Liabilities
Deposits
Noninterest-bearing	$	12,341		$	13,001
Interest bearing		182,275			182,538

Total deposits		194,616			195,539

Subordinated debentures		3,093			3,093
Other borrowed funds		14,000			18,000
Other liabilities		4,862			1,736

Total liabilities		216,571			218,368

Commitments and contingencies

Stockholders’ equity
Common stock, no par value; 5,000,000 shares authorized; 1,006,070 shares issued and outstanding		12,193			12,193
Retained earnings		1,920			7,320
Accumulated other comprehensive income(loss)		(100	)		88

Total stockholders’ equity		14,013			19,601

Total liabilities and stockholders’ equity	$	230,584		$	237,969

~~NEWNAN~~The ~~COWETA~~accompanying ~~BANCSHARES,~~notes ~~INC. AND~~are ~~SUBSIDIARY NOTES~~an TOintegral ~~CONSOLIDATED~~part ~~FINANCIAL~~of ~~STATEMENTS (Unaudited)~~ these consolidated financial statements.

~~NOTE~~1 4. EARNINGS PER COMMON SHARE Basic earnings per common share are computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per common share are computed by dividing net income by the sum of the weighted average number of shares of common stock outstanding and common stock equivalents. Common stock equivalents consist of stock options and stock warrants. Below is a calculation of diluted earnings per common share for the three and six month periods ended June 30, 2003 and 2002.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2003		2002		2003		2002
	(Dollars in thousands, except per share amounts)
Net income	$	190	$	166	$	351	$	260
Weighted average common shares outstanding		900		900		900		900
Net effect of the assumed exercise of stock options and warrants based on the treasury stock method using average market price for the period		17		17		17		17
Total weighted average common shares and common stock equivalents outstanding		917		917		917		917
Diluted earnings per common share	$	0.21	$	0.18	$	0.38	$	0.28

7 NEWNAN COWETA BANCSHARES, INC.

~~Item 2. MANAGEMENT’S DISCUSSION~~ AND ~~ANALYSIS~~SUBSIDIARY ~~OR PLAN OF OPERATION~~

~~The following is our discussion and analysis of certain significant factors~~CONSOLIDATED ~~which~~STATEMENTS ~~have~~OF ~~affected~~INCOME ~~our financial position and operating results and those of our subsidiary, Newnan Coweta Bank, during the periods included in the accompanying financial statements.~~

~~SPECIAL~~THREE ~~CAUTIONARY~~AND ~~NOTICE~~NINE ~~REGARDING~~MONTHS ~~FORWARD~~ENDED ~~LOOKING~~SEPTEMBER ~~STATEMENTS~~ 30, 2008 AND 2007

~~Certain of the statements made herein under the caption “Management’s Discussion and Analysis or Plan of Operation”~~ (~~“MD&A”~~Unaudited) are forward-looking statements for purposes of the Securities Act of 1933, and the Securities Exchange Act of 1934, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Newnan Coweta Bancshares, Inc. to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward looking statements include statements using the words such as “may,” “will,” “anticipate,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “may,” and “intend,” as well as other similar words and expressions of the future. Our actual results may differ significantly from the results we discuss in these forward-looking statements.

~~These~~(Dollars forward-looking statements involve risks and uncertainties and may not be realized due to a variety of factors, including, without limitation: the effects of future economic conditions; governmental monetary and fiscal policies, as well as legislative and regulatory changes; the risks of changes in ~~interest rates on the level and composition of deposits~~thousands, ~~loan demand, and~~ ~~the~~except ~~values~~per ofshare ~~loan~~amounts) collateral, securities, and other interest-sensitive assets and liabilities; interest rate risks; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating regionally, nationally, and internationally, together with such competitors offering banking products and services by mail, telephone, computer, and the Internet.

Critical Accounting Policies


	Three Months Ended September 30, 2008			Three Months Ended September 30, 2007		Nine Months Ended September 30, 2008			Nine Months Ended September 30, 2007
Interest income

Loans	$	2,042		$	4,103	$	7,964		$	13,016
Taxable securities		237			249		774			647
Federal funds sold		39			240		165			622

Total interest income		2,318			4,592		8,903			14,285

Interest expense
Deposits		1,843			2,544		6,029			7,372
Other borrowings		144			51		474			150

Total interest expense		1,987			2,595		6,503			7,522

Net interest income		331			1,997		2,400			6,763
Provision for loan losses		5,378			260		6,383			431

Net interest income (loss) after provision for loan losses		(5,047	)		1,737		(3,983	)		6,332

Other income
Service charges on deposit accounts		76			68		210			191
Gain (loss) on sale of securities AFS		(4	)		—		1			(7	)
Gain on sale of other assets		76			—		248			—
Other operating income		153			138		534			442

Total other income		301			206		993			626

Other expenses
Salaries and employee benefits		898			973		2,829			2,890
Equipment and occupancy expenses		333			185		1,034			542
Data processing expenses		132			137		422			416
Loss on foreclosed property		81			—		208			—
Other operating expenses		458			368		1,164			882

Total other expenses		1,902			1,663		5,657			4,730

Income (loss) before income taxes		(6,648	)		280		(8,647	)		2,228
Income tax expense (benefit)		(2,410	)		107		(3,247	)		859

Net income (loss)		(4,238	)		173		(5,400	)		1,369

Other comprehensive income (loss):
Unrealized loss on securities available for sale arising during period		(48	)		74		(188	)		39

Comprehensive income (loss)		(4,286	)		247		(5,588	)		1,408

Basic earnings (loss) per share	$	(4.21	)	$	0.17	$	(5.37	)	$	1.37

Diluted earnings (loss) per share	$	(4.21	)	$	0.16	$	(5.37	)	$	1.31

Cash dividends per share	$	—		$	—	$	—		$	0.18

WeThe ~~have~~accompanying ~~adopted~~notes ~~various~~are ~~accounting~~an ~~policies~~integral ~~which~~part ~~govern the application~~ of ~~accounting~~ ~~principles~~these ~~generally accepted in the United States of America in the preparation of our financial statements. Our significant accounting policies are described in the footnotes to the~~ consolidated financial statements ~~at December 31, 2002 as filed in our annual report on Form 10-KSB~~.

~~Certain~~2 accounting policies involve significant judgments and assumptions by us, which have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments 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 judgments and assumptions we make, actual results could differ from these judgments and estimates which could have a material impact on our carrying values of assets and liabilities and our results of operations.

WeTable believe the allowance for loan losses is a critical accounting policy that requires the most significant judgments and estimates used in preparation of our consolidated financial statements. Refer to the portion of this discussion that addresses our allowance for loan losses for a description of our processes and methodology for determining our allowance for loan losses. Contents

~~Liquidity~~NEWNAN ~~and~~COWETA ~~Capital~~BANCSHARES, ~~Resources~~ INC.

~~Liquidity~~AND ~~management~~SUBSIDIARY involves the ability to match the cash flow requirements of our customers, who may be either depositors desiring to withdraw funds or borrowers requiring loan proceeds. This is accomplished by monitoring and managing the balances and maturities of loans and deposits in such a way that cash in vaults, cash held in correspondent bank accounts, and federal funds sold are sufficient to meet anticipated demand for immediate funds. We, as well as the regulatory authorities, monitor our liquidity on a periodic basis. As of June 30, 2003, our liquidity ratios were considered satisfactory.

~~Requirements by banking regulators include the monitoring of risk-based capital~~CONSOLIDATED ~~guidelines~~STATEMENTS ~~for~~OF ~~banks~~CASH ~~that~~FLOWS are designed to make capital requirements more sensitive to differences in risk profiles and account for off balance sheet items. We substantially exceeded the regulatory minimums on capital requirements and ratios as of June 30, 2003. However, as we continue to grow and the loan portfolio increases, these ratios should adjust downward. We will monitor these amounts and

8 NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007

(Unaudited) ~~ratios on a continuous basis. The minimum capital requirements and the actual capital ratios for us and the Bank as of June 30, 2003 are as follows:~~

	Actual
	Newnan			Newnan
	Coweta			Coweta			Regulatory
	Bancshares, Inc.			Bank			Requirements
Leverage capital ratio		10.01	%		9.79	%		5.00	%
Risk-based capital ratios:
Core capital		12.10			11.83			6.00
Total capital		13.31			13.04			10.00

(Dollars in thousands)

Off-Balance Sheet Risk


	Nine Months Ended September 30, 2008			Nine Months Ended September 30, 2007
OPERATING ACTIVITIES
Net income (loss)	$	(5,400	)	$	1,369
Adjustments to reconcile net income (loss) to net cash provided by (used by) operating activities:
Depreciation		189			231
Provision for loan losses		6,383			431
Amortization and accretion		(11	)		(11	)
Gain on sale of securities		(1	)		—
Gain on disposal of other real estate		(248	)		—
Loss on foreclosed properties		208			—
Decrease (increase) in interest receivable		712			(504	)
Decrease in interest payable		(382	)		(81	)
Increase (decrease) in income taxes payable		(2,846	)		107
Net other operating activities		(392	)		228

Net cash provided by (used by) operating activities		(1,788	)		1,770

INVESTING ACTIVITIES
Purchase of securities available for sale or restricted stocks		(10	)		(10,390	)
Proceeds from paydown of securities available for sale		1,249			2,032
Proceeds from sale of restricted stocks or investment securities		2,347			86
Net increase (decrease) in loans		(5,759	)		2,320
Proceeds from sale of premises and equipment		8,776			—
Purchase of land, premises and equipment		(43	)		(3,716	)
Proceeds from sale of other real estate and repossessed assets		4,444			1,810

Net cash used in investing activities		11,004			(7,858	)

FINANCING ACTIVITIES
Cash dividends paid		—			(181	)
Decrease in FHLB borrowing		(5,000	)		—
Net increase (decrease) in deposits		(924	)		5.338
Increase in Federal funds purchased		1,000			—
Proceeds for the sale of stock		—			609
Exercise of options		—			215

Net cash provided by (used by) financing activities		(4,924	)		5,981

Net increase (decrease) in cash and cash equivalents		4,292			(107	)

Cash and cash equivalents at beginning of period		11,135			12,907

Cash and cash equivalents at end of period	$	15,427		$	12,800

~~Through~~The ~~the~~accompanying ~~operations~~notes ~~of our bank, we have made contractual commitments to extend credit in the ordinary course of our business activities. These commitments~~ are ~~legally~~an ~~binding~~integral ~~agreements~~part ~~to lend money to our customers at predetermined interest rates for a specified period~~ of ~~time.~~these Atconsolidated ~~June 30,~~financial ~~2003, we had issued commitments to extend credit of $9,743,000 through various types of lending arrangements, of which all were at variable rates~~statements. We evaluate each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on our credit evaluation of the borrower. Collateral varies but may include accounts receivable, inventory, property, plant and equipment, commercial and residential real estate.

~~The~~3 ~~bank anticipates opening its first branch in fall, 2003.~~

FinancialTable Condition of Contents

~~Total~~NEWNAN ~~assets~~COWETA ~~at June 30~~BANCSHARES, ~~2003, were approximately $100,572,000 as compared to $85,932,000 as of December 31, 2002, which represents a 17~~INC.~~04%~~ increase. During the six month period ended June 30, 2003, we increased our loan portfolio by approximately $9,186,000. Our loan to deposit ratio was 88% and 93% as of June 30, 2003 and December 31, 2002, respectively. Funding for these loans was provided by new deposits totaling $14,878,000 during the six-month period ending June 30, 2003.

~~Funds~~AND inSUBSIDIARY excess of loan and other operational demands are held primarily in overnight federal funds sold and investment securities. As of June 30, 2003, we had $9,307,000 in overnight federal funds sold and $6,624,000 in investment securities. We expect to continue to purchase investment securities and overnight federal funds sold as the loan growth stabilizes and opportunities appropriate to our overall asset and liability strategies and goals present themselves. We expect continued growth in assets and liabilities during the remainder of 2003. We will monitor the growth in all categories to maintain a proper mix of types, maturities, and interest rates. We believe that our current capital level is adequate to maintain our current growth.

~~Our~~NOTES ~~capital~~TO ~~increased to $9,669,000 as of June 30, 2003 as compared to~~CONSOLIDATED ~~$9,300,000~~FINANCIAL asSTATEMENTS ~~of December 31, 2002. The increase is due to net income for the six months ended June 30, 2003 of $351,000 and unrealized gains in the securities portfolio of $18,500 for the same period.~~

~~Results~~(Unaudited) ~~of Operations for the Three and Six Months Ended June 30, 2003 and 2002~~

~~The~~NOTE ~~results of operations are determined by our ability to effectively manage net interest income, control non-interest expenses, generate non-interest income and minimize loan losses~~1. InBASIS ~~order~~OF for us to remain profitable, we must increase the amount of earning assets so that net interest income along with non-interest income is sufficient to cover normal operating expenses incurred in a banking operation and the bank’s provision for loan losses. PRESENTATION

~~Net~~The ~~income~~consolidated ~~for~~financial information ~~the~~included ~~three~~herein ~~and~~is ~~six~~unaudited; ~~month periods ended June 30~~however, ~~2003~~such ~~was~~information ~~$190,000 and~~reflects ~~$351,000,~~all ~~respectively.~~adjustments ~~Net~~(consisting ~~interest~~solely ~~income~~of ~~for~~normal ~~the~~recurring ~~three~~adjustments) and ~~six~~eliminations ~~months ended~~of ~~June 30,~~inter-company ~~2003,~~accounts ~~was $889,000~~ and $1transactions,~~675,000,~~ ~~respectively,~~ which ~~resulted~~ are, in athe ~~net~~opinion ~~interest~~of ~~margin~~management, necessary for ~~the~~a ~~three~~fair ~~and~~statement ~~six~~of ~~month~~results ~~periods~~for ~~ended~~the ~~June 30, 2003~~interim ~~of 4~~period.~~00%~~ ~~and 3.83%, respectively.~~

9The results of operations for the period ended September 30, 2008 are not necessarily indicative of the results to be expected for the full year.

~~Net~~NOTE ~~income for the three and six month periods ended June 30, 2002 was $166,000 and $260,000 respectively~~2. ~~Net~~CURRENT ~~interest~~ACCOUNTING income for the three and six months ended June 30, 2002, was $666,000 and $1,264,000, respectively, which resulted in a net interest margin for the three and six month periods ended June 30, 2002 of 4.15% and 4.11%, respectively. DEVELOPMENTS

~~The~~In ~~allocation~~September ~~to the provision for loan losses decreased by $5~~2006,~~000 and $32,000~~ ~~for~~ the ~~three~~FASB ~~and~~issued ~~six~~Statement ~~months~~of ~~ended~~Financial ~~June 30,~~Accounting ~~2003,~~Standards ~~respectively~~No. 157, asFair ~~compared~~Value ~~to the~~Measurements ~~same~~(SFAS ~~periods in 2002~~157). ~~The~~SFAS ~~decreases~~157 ~~are~~enhances ~~due~~existing toguidance ~~maintaining~~for ~~our~~measuring ~~allowance for~~assets ~~loan~~and ~~losses~~liabilities atusing afair ~~level~~value. ~~based~~Prior ~~upon~~to the ~~application~~issuance of ~~our~~SFAS ~~monthly~~157, ~~calculation~~guidance ~~of the allowance~~ for ~~loan~~applying ~~loss~~fair ~~methodology.~~value ~~The~~was ~~allowance~~incorporated ~~for~~in ~~loan loss~~several ~~methodology~~accounting ispronouncements. ~~calculated~~SFAS by157 ~~segmenting~~provides ~~the~~a ~~loan~~single ~~portfolio~~definition ~~into risk classifications. Our assignment~~ of ~~risk~~fair ~~classifications~~value, totogether ~~individual~~with ~~loans considers~~a ~~significant~~framework ~~factors~~for ~~relative~~measuring toit, ~~the~~and ~~credit~~requires ~~risk~~additional ~~and~~disclosure ~~loss~~about ~~exposure in~~ the ~~loan~~use ~~portfolio,~~of ~~including~~fair ~~past due and classified loans, historical~~value ~~experience,~~to ~~underlying~~measure ~~collateral~~assets ~~values,~~ and ~~current~~liabilities. ~~economic~~SFAS ~~conditions~~157 ~~that may~~also ~~affect~~emphasizes ~~the~~that ~~borrower’s~~fair ~~ability~~value tois ~~repay.~~a Anmarket-based ~~allowance~~measurement, ~~percentage~~not isan ~~applied to~~entity-specific ~~each~~measurement, ~~risk~~and ~~classification~~sets ~~category~~out ~~to establish~~ a ~~general~~fair ~~allowance~~value ~~for~~hierarchy ~~loan losses.~~with ~~The~~the ~~allowance~~highest ~~percentage~~priority ~~determined~~being ~~for~~quoted ~~each~~prices ~~risk~~in ~~classification~~active ismarkets. Under ~~based~~SFAS ~~upon~~157, ~~our~~fair ~~experience~~value ~~specifically~~measurements ~~and~~are ~~the~~disclosed ~~historical~~by ~~experience~~level ofwithin ~~the banking~~that ~~industry generally~~hierarchy. ~~Based~~While ~~upon~~SFAS ~~our~~157 ~~evaluation~~does ofnot ~~the~~add ~~loan~~any ~~portfolio through~~new ~~our~~fair ~~allowance~~value ~~for loan loss methodology~~measurements, weit ~~believe~~does ~~the~~change ~~allowance~~current ~~for loan~~practice. ~~losses~~Changes to bepractice ~~adequate~~include: to(1) a ~~absorb~~requirement ~~losses~~for onan ~~existing~~entity ~~loans~~to include ~~that~~its ~~may~~own ~~become uncollectible.~~credit Instanding ~~addition,~~in ~~classified~~the ~~loans,~~measurement ~~including~~of ~~impaired~~its ~~loans,~~liabilities; ~~are analyzed~~(2) a ~~individually~~modification inof ~~order~~the totransaction ~~establish~~price presumption; (3) a ~~specific~~prohibition ~~allowance~~on ~~for~~the ~~loan losses.~~use ~~The total~~ of ~~these~~block ~~allowances~~discounts ~~are~~when ~~recorded~~valuing aslarge ~~the~~blocks ~~allowance~~of securities for ~~loan~~broker-dealers and ~~losses~~investment oncompanies; and (4) a ~~monthly~~requirement ~~basis.~~to Weadjust ~~incurred~~the ~~net~~value ~~charge-offs~~ of ~~$-0-~~restricted stock for the ~~six months~~effect ~~ended~~of ~~June 30,~~the ~~2003.~~restriction ~~There~~even ~~were~~if ~~no charge-offs during~~ the ~~six~~restriction ~~months ended~~lapses ~~June 30,~~within ~~2002~~one year. The ~~allowance~~Company ~~for~~adopted ~~loan~~SFAS ~~losses~~157 ason aJanuary 1, ~~percentage~~2008 ofwhich ~~total loans~~did ~~was~~not ~~1.21%~~impact asthe Company’s offinancial ~~June 30~~condition, ~~2003~~results ~~compared~~of tooperations ~~1.22%~~or atcash ~~December 31, 2002~~flows.

~~Information~~In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an Amendment to FASB Statement No. 115. This statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with ~~respect~~the opportunity to ~~non-accrual,~~mitigate ~~past~~volatility ~~due~~in reported earnings caused by measuring related assets and ~~restructured~~liabilities ~~loans~~differently without having to apply complex hedge accounting provisions. This statement requires a business entity to report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. An ~~June~~entity may decide whether to elect the fair value option for each eligible item on its election date, subject to certain requirements described in the statement. The Company adopted SFAS 159 on January 301, ~~2003~~2008. ~~and~~The ~~2003~~Company iselected asnot ~~follows:~~to use the fair value option on any of its eligible items; therefore, the adoption of SFAS 159 did not have an impact on the Company’s financial condition, results of operations or cash flows.

	June 30,
	2003		2002
	(Dollars in Thousands)
Non-accrual loans	$	0	$	0
Loans contractually past due ninety days or more as to interest or principal payments and still accruing		16		45
Restructured loans		0		0
Loans, now current about which there are serious doubts as to the ability of the borrower to comply with loan repayment terms		0		0
Interest income that would have been recorded on non-accrual and restructured loans under original terms		0		0
Interest income that was recorded on non-accrual and restructured loans		0		0

ItTable is our policy to discontinue the accrual of interest income when, in our opinion, collection of interest becomes doubtful. We will generally discontinue the accrual of interest income when (1) there is a significant deterioration in the financial condition of the borrower and full repayment of principal and interest is not expected and (2) the principal or interest is more than ninety days past due, unless the loan is both well-secured and in the process of collection. Loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that have not been included in the table above do not represent or result from trends or uncertainties which we reasonably expect will materially impact future operating results, liquidity or capital resources. These classified loans do not represent material credits about which we are aware of any information which causes us to have serious doubts as to the ability of such borrowers to comply with the loan repayment terms.Contents

10In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interest in Consolidated Financial Statements, an amendment of ARB Statement No. 51. SFAS No. 160 amends Accounting Research Bulletin (ARB) No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, SFAS No. 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated statements of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS No. 160 is effective for the Company on January 1, 2009 and is not expected to have a significant impact on the Company’s consolidated financial statements.

~~Information~~In ~~regarding~~December ~~certain~~2007, ~~loans~~the FASB issued SFAS No. 141, Business Combinations (Revised 2007). SFAS No. 141R replaces SFAS No. 141, Business Combinations, and ~~allowance~~applies ~~for~~to ~~loan~~all ~~loss~~transactions ~~data~~and ~~through~~other ~~June~~events 30in which one entity obtains control over one or more other businesses. SFAS No. 141R requires an acquirer, ~~2003~~upon initially obtaining control of another entity, to recognize the assets, liabilities and ~~2002~~any noncontrolling interest in the acquiree at fair value as of the acquisition date. Contingent consideration is required to be recognized and measured at fair value on the date of acquisition rather than at a later date when the amount of that consideration may be determinable beyond a reasonable doubt. This fair value approach replaces the cost-allocation process required under SFAS No. 141 whereby the cost of an acquisition was allocated to the individual assets acquired and liabilities assumed based on their estimated fair value. SFAS No. 141R requires acquirers to expense acquisition-related costs as ~~follows:~~incurred rather than allocating such costs to the assets acquired and liabilities assumed, as was previously the case under SFAS No. 141. Under SFAS No. 141R, the requirements of SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, would have to be met in order to accrue for a restructuring plan in purchase accounting. Pre-acquisition contingencies are to be recognized at fair value, unless it is a noncontractual contingency that is not likely to materialize, in which case, nothing should be recognized in purchase accounting and, instead, that contingency would be subject to the probable and estimable recognition criteria of SFAS No. 5, Accounting for Contingencies. SFAS No. 141R is expected to have an impact on the Company’s accounting for business combinations closing on or after January 1, 2009.

		Six Months Ended
		June 30,
		2003			2002
		(Dollars in Thousands)
Average amount of loans outstanding		$	73,842		$	51,720
Balance of allowance for loan losses at beginning of period		$	854		$	612
Loans charged off
	Commercial and financial		0			51
	Real estate mortgage		1			0
	Installment		1			27
			2			78
Loans recovered
	Commercial and financial		0			20
	Real estate mortgage		2			0
	Installment		0			1
			2			21
Net charge-offs			0			57
Additions to allowance charged to operating expense during period			110			142
Balance of allowance for loan losses at end of period		$	964		$	697
Ratio of net loans charged off during the period to average loans outstanding			0	%		.11	%

11 Table of Contents

~~Other~~NOTE ~~income has increased by $62,000 for the three months ended June 30, 2003 as compared to the same period in 2002 due to increased service charges on deposit accounts~~3. ~~Other~~PREMISES ~~income~~AND has increased by $120,000 for the six months ended June 30, 2003 as compared to the same period in 2002 due primarily to increased mortgage origination fees. No sales of securities occurred during 2002. During the first quarter of 2003, the Bank realized $5,000 in gains on sales of securities available for sale. EQUIPMENT

~~The~~On ~~increase~~February 28, in2008, the ~~service~~Bank completed ~~charge~~a ~~income~~sale/leaseback ~~for~~transaction on the ~~three~~main office located in Newnan and the ~~six~~branches ~~month~~located ~~periods~~in ~~ended June~~Peachtree City and Tyrone. 30The purchaser/lessor is Out-Med, ~~2003~~IV asLLC, ~~compared~~whose tomembers and board of managers include three of the ~~same~~Company’s ~~period~~board inof ~~2002~~directors: Mr. Theo isD. ~~directly~~Mann, ~~related~~Mr. James toVan S. Mottola, and Mr. David LaGuardia. In total, the Bank sold and concurrently leased back land and buildings/improvements with a ~~overall~~carrying ~~growth~~amount of ~~our~~$5.47 ~~deposit~~million. Net ~~base~~proceeds ~~during~~of ~~those~~the ~~time~~sale ~~periods~~to the Bank were $8.51 million, resulting in a gain, net of transaction cost, of $3.04 million. The Bank will recognize the gain ratable over the ten year expected term of the leases.

~~Other~~NOTE ~~expenses~~4. ~~increased~~EARNINGS by(LOSS) ~~$157,000~~PER and $266,000 for the three and six months ended June 30, 2003, respectively, as compared to the same period in 2002 due primarily to increased salaries and employee benefits, additional occupancy expenses on fixed assets related to our banking facility and due to overall deposit and asset growth and other expenses associated with the Bank’s ongoing growth. SHARE

~~For~~Basic ~~the~~earnings ~~three~~per ~~and six months ended June 30, 2003, salaries and employee~~share ~~benefits~~are ~~have~~computed ~~increased~~by ~~$92,000~~dividing ~~and~~net ~~$136,000,~~income ~~respectively,~~by ~~as compared to~~ the ~~same~~ ~~periods~~weighted inaverage ~~2002 due to an increase in the~~ number of ~~full~~shares ~~time~~of ~~equivalent employees~~common tostock 25outstanding. atDiluted ~~June 30,~~earnings ~~2003~~per ~~from~~share 16are atcomputed ~~June 30,~~by ~~2002~~dividing ~~and~~net toincome ~~other~~by ~~annual salary increases. Occupancy and equipment expenses increased $10,000 and $25,000 for~~ the ~~three~~sum ~~and~~of ~~six months ended June 30, 2003, respectively, as compared to~~ the ~~same~~weighted ~~period~~average innumber ~~2002~~of ~~due~~common toshares ~~increased~~outstanding ~~costs associated with our banking facility. Data processing expenses increased $23,000~~ and ~~$39,000 for~~ ~~the~~common ~~three~~stock ~~and~~equivalents. ~~six~~Common ~~months~~stock ~~ended~~equivalents ~~June 30,~~consist ~~2003, respectively, compared to the same period in 2002 due to an increase in the volume~~ of ~~transactions~~stock ~~processed by~~options ~~our~~and ~~outside~~stock ~~data processing service provider~~warrants. ~~The~~Below ~~increase~~is ina ~~the~~calculation ~~volume~~ of ~~transactions~~ isdiluted ~~directly~~earnings ~~related~~per tocommon ~~our~~share ~~overall~~for ~~growth. Other operating expenses have increased during~~ the three and ~~six~~nine ~~months~~month periods ended ~~June~~September 30, ~~2003~~2008 ~~by $32,000~~ and ~~$66,000, respectively, as compared to the same period in 2002 due to overall deposit and asset growth and other expenses associated with the Bank’s growth~~2007.

No income taxes were accrued for the three and six months ended June 30, 2002, because of previous operating losses carried forward to date. Income taxes for the three and six months ended June 30, 2003 were accrued at $109,000 and $206,000 respectively.


	Three Months Ended September 30,					Nine Months Ended September 30,
	2008			2007		2008			2007
	(Dollars in thousands, except per share amounts)
Net income (loss)	$	(4,238	)	$	173	$	(5,400	)	$	1,369

Weighted average common shares outstanding		1,006			1,006		1,006			1,000
Net effect of the assumed exercise of stock options and warrants based on the treasury stock method using average market price for the period.		—			45		—			46

Total weighted average common shares and common stock equivalents outstanding		1,006			1,051		1,006			1,046

Diluted earnings (loss) per common share	$	(4.21	)	$	0.16	$	(5.37	)	$	1.31

We6 know of no trends, demands, commitments, events or uncertainties that should result in, or are reasonably likely to result in, our liquidity or capital resources increasing or decreasing in any material way in the foreseeable future, other than as a result of our normal operations. We are also not aware of any current recommendations by the regulatory authorities which, if they were implemented, would have such an effect.

ITEMTable 3.of Controls and Procedures Contents

~~Our~~NOTE Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures as of the end of the quarterly period covered by this Form 10-QSB and have concluded that the Company’s disclosure controls and procedures are effective5. During the second quarter of 2003 there were no changes in the Company’s internal control over financial reporting that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting. LOANS

12The composition of loans as of September 30, 2008 is summarized as follows:

PART II – OTHER INFORMATION


Commercial and Financial	$	32,584
Real Estate – Acquisition and Development		53,744
Real Estate – Construction		71,780
Real Estate – Mortgage		10,091
Consumer Installment and Other		1,846

		170,045
Deferred Loan Fees		(64	)
Allowance for Loan Losses		(6,004	)

	$	163,977

~~Item 1~~The Company originates primarily commercial, residential, and consumer loans to customers in Coweta County and surrounding counties. ~~LEGAL~~The ~~PROCEEDINGS~~ability of the majority of the Company’s customers to honor their contractual loan obligations is dependent on the economy in these areas. Eighty percent of the Company’s loan portfolio is secured by real estate, of which a substantial portion is secured by real estate in the Company’s market area.

~~None~~The following is a summary of information pertaining to impaired loans:

Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS


	Nine Months Ended September 30,
	2008		2007
	(Dollars in thousands)
Impaired Loans	$	21,221	$	12,859
Valuation Allowance		2,607		774

Net Impaired Loans	$	23,828	$	13,633

~~None~~Changes in the allowance for loan losses for the periods ended September 30, 2008 and 2007 are as follows:

Item 3. DEFAULTS UPON SENIOR SECURITIES


	2008			2007
Balance, Beginning	$	2,426		$	2,328
Provision for Loan Losses		6,383			431
Loans Charged Off		(2,854	)		(154	)
Recoveries of Loans Previously Charged Off		49			20

Balance, Ending	$	6,004		$	2,625

~~None~~ 7

Item 4.Table SUBMISSIONof OF MATTERS TO A VOTE OF SECURITY HOLDERS Contents

~~The~~NOTE ~~Company held its annual meeting of shareholders on May 28, 2003 (the “Meeting”)~~6. AtDISCLOSURES ~~the~~ABOUT ~~Meeting~~FAIR ~~the~~VALUE ~~following~~OF ~~matters~~ASSETS ~~were~~AND ~~submitted to a vote:~~ LIABILITIES

~~(i)~~Effective ~~The~~January 1, 2008, the Company’s ~~shareholders~~adopted ~~voted~~Statement onof ~~the~~Financial ~~election~~Accounting ofStandards ~~five~~No. 157, ~~Class~~Fair IIValue ~~directors~~Measurements ~~each~~(FAS to157). ~~serve~~FAS ~~for~~157 defines fair value, establishes a ~~three-year~~framework ~~term~~for measuring fair value and expands disclosures about fair value measurements. FAS 157 has been applied prospectively as of the beginning of the year.

	For		Against		Abstain
Robert E. Cordle, Jr.		583,578		650		700
Bob B. Mann, Jr.		584,178		350		400
J. Walker Moody		583,978		450		500
Donald L. Sprayberry, Jr.		583,678		850		400
Woodie T. Wood, Jr.		583,328		1,300		300

Under the standard, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. The standard clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, the standard establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. The standard describes three levels of inputs that may be used to measure fair value:

The other director whose term of office as a director continued after the meeting are Joe S. Crain, Jr. (Class I), Otis F. Jones, III (Class I), James B. Kimsey (Class I), Dennis H. McDowell, II (Class I),Melvin Samuels (Class I), Douglas T. Daviston (Class III), David LaGuardia (Class III), Theo D. Mann (Class III), James Van S. Mottola (Class III) and Jennifer J. Thomasson, (Class III).


Level 1		Quoted prices in an active market for identical assets or liabilities.

Level 2		Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially full term of the assets or liabilities.

Level 3		Unobservable inputs that are supported by little or no market activity and that are significant to their fair value of the assets and liabilities.

~~(ii) Ratification~~The following is a description of the ~~appointment~~valuation ofmethodologies ~~McNair,~~used ~~McLemore,~~for ~~Middlebrook~~instruments ~~& Company~~measured asat ~~the~~fair value ~~Company’s’~~on ~~independent~~a ~~auditor.~~recurring ~~The~~basis ~~results~~and ofrecognized in the ~~vote~~accompanying ~~were 583~~balance sheet,~~178~~ ~~votes~~as ~~cast~~well ~~“For”;~~as ~~150~~the ~~votes~~general ~~cast~~classification ~~“Against”;~~of ~~and~~such ~~1,600~~instruments ~~votes “Abstained~~pursuant to the valuation hierarchy.”

~~(iii) No~~Securities ~~other~~available-for-sale ~~business came before the shareholders.~~

~~Item 5~~Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. ~~OTHER~~Level ~~INFORMATION~~1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset based and other securities. In certain cases where level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Currently, all of the Company’s securities are considered to be Level 2 securities.

~~None~~The following is a description of the valuation methodologies used for instruments measured at fair value on a non-recurring basis and recognized in the accompanying balance sheet, as well as the general classification of such instruments pursuant to the valuation hierarchy.

13 Impaired loans

~~Item 6~~Loans measured for impairment using the practical expedients permitted by SFAS No. 114, ~~EXHIBITS~~Accounting ~~AND~~by ~~REPORTS~~Creditors ONfor ~~FORM~~Impairment ~~8-K~~of a Loan, including impaired loans measured at an observable market price (if available), or at the fair value of the loan’s collateral (if the loan is collateral dependent). Fair value of the loan’s collateral, when the loans is dependent on collateral, is determined by appraisals or independent valuation and are considered Level 3 inputs.

~~(a)~~Other ~~Exhibits~~Real Estate Owned

31.1		Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certificate of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certain assets such as other real estate owned (OREO) are measured at fair value. We believe that the fair value component in its valuation follows the provisions of SFAS No. 157. Fair values of OREO at September 30, 2008 were determined by appraisals or independent valuation and are considered Level 2 or Level 3 inputs.

~~(b) Form~~ 8-K was filed with the Securities and Exchange Commission on April 10, 2003 as required for notification of a change in the company’s auditor. McNair, McLemore, Middlebrook and Company were engaged by the company as auditor and ratified by shareholders at the annual meeting held on May 28, 2003. A Form 8-K/A was filed on April 17, 2003 relating to the same matter.

14 Table of Contents

~~SIGNATURES~~ NEWNAN COWETA BANCSHARES, INC. AND SUBSIDIARY

InITEM ~~accordance~~2. ~~with~~Management’s ~~the~~Discussion ~~requirements~~and Analysis of ~~the~~Financial ~~Exchange~~Condition ~~Act,~~and ~~the~~Results ~~registrant~~of ~~caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~ Operations

~~NEWNAN~~The ~~COWETA~~following ~~BANCSHARES,~~is ~~INC.~~management’s discussion and analysis of certain significant factors which have affected our financial position and operating results during the period included in the accompanying consolidated ~~(Registrant)~~ financial statements.

DATE August 14, 2003		BY: /s/ James B. Kimsey James B. Kimsey, President and C.E.O. (Principal Executive Officer)
DATE: August 14, 2003		BY: /s/ Ann B. Bledsoe, Sr. Ann B. Bledsoe, Sr. Vice President (Principal Financial and Accounting Officer)

Forward Looking Statements

15Certain of the statements made herein under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) are forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward looking statements include statements using the words such as “may,” “will,” “anticipate,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “may,” “intend” or other similar words and expressions of the future. Our actual results may differ significantly from the results described in these forward-looking statements.

These forward-looking statements involve risks and uncertainties and may not be realized due to a variety of factors, including, without limitation: the effects of future economic conditions; governmental monetary and fiscal policies, as well as legislative and regulatory changes; the risks of changes in interest rates on the level and composition of deposits, loan demand and the values of loan collateral, securities and other interest-sensitive assets and liabilities; interest rate risks; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet.

Critical Accounting Policies

We have adopted various accounting policies which govern the application of accounting principles generally accepted in the United States in the preparation of our financial statements. Our significant accounting policies are described in the footnotes to the consolidated financial statements at December 31, 2007, as filed in our annual report on Form 10-K.

Certain accounting policies involve significant judgments and assumptions by us which have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments 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 judgments and assumptions we make, actual results could differ from these judgments and estimates which could have a material impact on our carrying values of assets and liabilities and our results of operations.

We believe the allowance for loan losses is a critical accounting policy that requires the most significant judgments and estimates used in preparation of our consolidated financial statements. Refer to the portion of this discussion that addresses our allowance for loan losses for a description of our processes and methodology for determining our allowance for loan losses.

Liquidity and Capital Resources

We monitor our liquidity resources on an ongoing basis. Our liquidity is also monitored on a periodic basis by State and Federal regulatory authorities. As of September 30, 2008, our liquidity, as determined under guidelines established by regulatory authorities and internal policy, was satisfactory.

On September 2, 2008 we entered into a written agreement with the Federal Reserve Board and the Georgia Department of Banking and Finance to resolve issues that are impacting many banks and financial institutions. The written agreement is designed to help us get back to our traditionally high level of asset quality and financial stability by finding ways to further reduce the risk in our lending portfolio and improve the quality of our asset management. To make sure we continue to successfully meet the milestones for improvement, the agreement is supported by increased oversight by our board of directors and regular reporting to both state and federal regulators.

At September 30, 2008, the Company and bank were deemed adequately capitalized based on regulatory minimum capital requirements. The minimum capital requirements and the actual capital ratios on a consolidated and bank-only basis at September 30, 2008 were as follows:


	Actual				Minimum Regulatory
	Consolidated		Bank		Requirement
Leverage capital ratios	6.83	%	6.80	%	4.00	%
Risk-based capital ratios:
Core capital	8.31	%	8.28	%	4.00	%
Total capital	9.58	%	9.55	%	8.00	%

Off-Balance Sheet Risk

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amount recognized in the balance sheets.

Our exposure to credit loss in the event of nonperformance 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. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. A summary of our commitments is as follows:


	September 30, 2008
	(Dollars in Thousands)
Commitments to extend credit	$	11,940
Letters of credit		1,082

	$	13,022

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral is required in instances which we deem necessary.

In 2007, the Company purchased two parcels of land in Coweta County. These properties will be used to locate future branch facilities. No construction agreements exist for these properties as of September 30, 2008.

Financial Condition

Following is a summary of our balance sheets for the periods indicated:


	September 30, 2008		December 31, 2007
	(Dollars in Thousands)
Assets
Cash and due from banks	$	2,198	$	5,076
Federal funds sold		13,229		6,059
Securities		17,354		21,232
Loans, net		163,977		175,708
Premises and equipment		3,815		9,448
Other real estate		19,430		12,643
Other assets		10,581		7,803

	$	230,584	$	237,969

Liabilities and Stockholders’ Equity
Deposits	$	194,616	$	195,539
Subordinated debentures		3,093		3,093
Other borrowed funds		14,000		18,000
Other liabilities		4,862		1,736
Stockholders’ equity		14,013		19,601

	$	230,584	$	237,969

Our total assets declined by 3.10% for the nine month period ended September 30, 2008. Loans receivable were $170 million at September 30, 2008, a decrease of $8.2 million or -4.6% from the $178.2 million total at December 31, 2007. Deposit growth decreased by $0.9 million versus December 31, 2007. Our ratio of loans to deposits and all other funding sources decreased to 78.60% as of September 30, 2008 from 82.28% as of December 31, 2007 resulting from the $4.0 million reduction in other borrowed funds. During the first quarter of 2008, the Company completed a sale/leaseback transaction on the main office located in Newnan and the branches located in Peachtree City and Tyrone which resulting in Premises and Equipment decreasing in value by $5.5 million from $9.4 million as of December 31, 2007 to $3.8 million as of September 30, 2008. Net proceeds of the sale were $8.51 million, resulting in a gain, net of transaction cost, of $3.04 million. The Company is recognizing the gain ratable over the ten year expected term of the leases. The unrecognized gain is found within Other Liabilities causing the increase from December 31, 2007 to September 30, 2008.

Results of Operations For The Three and Nine Months Ended September 30, 2008 and 2007

Following is a summary of our operations for the periods indicated.


	Three Months Ended September 30,					Nine Months Ended September 30,
	2008			2007		2008			2007
	(Dollars in Thousands)
Interest income	$	2,318		$	4,592	$	8,903		$	14,285
Interest expense		1,987			2,595		6,503			7,522

Net interest income		331			1,997		2,400			6,763
Provision for loan losses		5,378			260		6,383			431
Other income		301			206		993			626
Other expense		1,902			1,663		5,657			4,730

Pretax income (loss)		(6,648	)		280		(8,647	)		2,228
Income taxes (benefit)		(2,410	)		107		(3,247	)		859

Net income (loss)	$	(4,238	)	$	173	$	(5,400	)	$	1,369

Our net interest income decreased by $1.7 million during the third quarter of 2008 as compared to the same period in 2007. Our net interest margin decreased to 1.68% during the third quarter of 2008 as compared to 3.99% during the third quarter of 2007. The decrease in net interest income is due primarily to the decreased interest rates and an increase in impaired loans as well as other real estate. The cost of funds decreased to 4.08% in the third quarter of 2008 as compared to 4.76% in the third quarter of 2007.

The provision for loan losses increased by $5,952,000 for the nine months ended September 30, 2008, respectively, as compared to the same period in 2007. There was $21.2 million in non-accrual loans as of September 30, 2008. This increase in non-accrual loans is due to management’s review of the current loan portfolio in relation to the economic conditions surrounding the bank. Loans past due ninety days or more and still accruing interest totaled $520 thousand on September 30, 2008. As of September 30, 2008, management has assessed the allowance for loan losses and believes the $6 million, or 3.7% of total net outstanding loans, is adequate to absorb risks in the portfolio. No assurance can be given, however, that increased loan volume, and adverse economic conditions or other circumstances, will not result in increased losses in our loan portfolio.

Information with respect to non-accrual, past due, restructured, and potential problem loans at September 30, 2008 and 2007 is as follows:


	September 30,
	2008		2007
	(Dollars in Thousands)
Non-accrual loans	$	21,221	$	12,859
Loans contractually past due ninety days or more as to interest or principal payments and still accruing		520		0
Restructured loans		0		45
Potential problem loans		1,951		14,960
Interest income that would have been recorded on non-accrual and restructured loans under original terms		673		122
Interest income that was recorded on non-accrual and restructured loans		1		203

It is our policy to discontinue the accrual of interest income when, in our opinion, collection of such interest becomes doubtful. We will generally discontinue the accrual of interest income when (1) there is a significant deterioration in the financial condition of the borrower and full repayment of principal and interest is not expected and (2) the principal or interest is more than ninety days past due, unless the loan is both well-secured and in the process of collection.

Loans classified for regulatory purposes as loss, doubtful, substandard or special mention that have not been included in the table above do not represent or result from trends or uncertainties which we reasonably expect will materially impact future operating results, liquidity, or capital resources. These classified loans do not represent material credits about which we are aware of any information that causes us to have serious doubts as to the ability of such borrowers to comply with the loan repayment terms

Information regarding certain loans and allowance for loan loss data for the nine months ended September 30, 2008 and 2007 is as follows:


	Nine Months Ended September 30,
	2008			2007
	(Dollars in Thousands)
Average amount of loans outstanding	$	177,584		$	186,094

Balance of allowance for loan losses at beginning of period	$	2,426		$	2,328

Loans charged off
Commercial and financial		233			150
Real estate mortgage		2,532			—
Installment		89			4

		2,854			154

Loans recovered
Commercial and financial		32			14
Real estate mortgage		16			—
Installment		1			6

		49			20

Net charge-offs		2,805			134

Additions to allowance charged to operating expense during period		6,383			431

Balance of allowance for loan losses at end of period	$	6,004		$	2,625

Ratio of net loans charged off during the period to average loans outstanding		1.58	%		0.72	%

The allowance for loan losses is maintained at a level that is deemed appropriate by management to adequately cover all known and inherent risks in the loan portfolio. Management’s evaluation of the loan portfolio includes a loan classification program. Under the program, as each loan is made, management will assign a loan grade. The loans are then classified by loan type and assigned an allowance percentage based on our specific experience and the historical experience of the banking industry in general. Loan classifications are subject to periodic review by the responsible lending officers and by senior management based upon their judgment, our loan loss experience, current economic conditions that may affect the borrower’s ability to repay, lender requirements, the underlying collateral value of the loans and other appropriate information. Management relies predominantly on this ongoing review of the loan portfolio to assess the risk characteristics of the portfolio in the aggregate and to determine adjustments, if any, to our allowance for loan losses. Based upon this ongoing review, we may identify loans that could be impaired. A loan is considered impaired when it is probable that we will be unable to collect all principal and

interest due in accordance with the contractual terms of the loan agreement. When we identify a loan as impaired, the loan is reviewed on an individual basis to determine the amount of the impairment. A specific allowance is established when the discounted cash flows, collateral value or observable market price of the impaired loan is less than the carrying value of the loan.

The Company continues to explore ways to reduce its overall exposure in these non-performing loans through various alternatives, including the potential sale of certain of the non-performing assets. Any future impact to the Company’s allowance for losses on loans in the event of such sales or other similar actions cannot be reasonably determined at this time

ITEM 3.

Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and the Principal Financial and Accounting Officer, of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer concluded that our disclosure controls and procedures are effective.

There have been no changes in the Company’s internal control over financial reporting in the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II—OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

The Company is not a party to any pending legal proceeding (nor is any property of the Company subject to any legal proceeding) other than routine litigation that is incidental to the business.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

There have been no defaults in the payment of principal, interest, a sinking or purchase fund installment, or any other default with respect to any indebtedness of the Company.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS

3.1

Articles of Incorporation of the Company (filed as Exhibit 3.1 to the Registrant’s Form 8-K12g3 previously filed with the Commission on October 11, 2001 and incorporated herein by reference)

3.2

Bylaws of the Company, as amended (filed as Exhibit 3.2 to the Registrant’s Form 8-K12g3 previously filed with the Commission on October 11, 2001 and incorporated herein by reference)

31.1

Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certificate of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certificate of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

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


NEWNAN COWETA BANCSHARES, INC.
(Registrant)

DATE: November 19, 2008	BY:	/s/ James B. Kimsey
		James B. Kimsey, President and CEO
		(Principal Executive Officer)

DATE: November 19, 2008	BY:	/s/ J. Randal McKoon
		J. Randal McKoon, Principal Financial and
		Accounting Officer

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