Gainesville Bank & Trust

Alan Wayne is the first cousin of Scott Wayne, who is Senior Vice President of Gainesville Bank & Trust and President of the Bank of Athens division of Gainesville Bank & Trust and Eddie Wayne, who is Senior Vice President and Corporate Lending Officer of Mountain State Bank. All related party transactions are subject to review by the full Board of Directors. We believe that the terms for all related party transactions are at least as favorable as those that could be obtained from a third party. Nasdaq Listing Standards Rule 4350(h) requires the Company to conduct an appropriate review of all related party transactions for potential conflict of interest situations on an ongoing basis and further requires all such transactions to be approved by the Company s Audit Committee or another independent body of the Board of Directors. The term related party transaction is generally defined as any transaction (or series of related transactions) in which the Company is a participant and the amount involved exceeds $120,000, and in which any director, director nominee, or executive officer of the Company, any holder of more than 5% of the outstanding voting securities of the Company, or any immediate family member of the foregoing persons will have a direct or indirect interest. The term includes most financial transactions and arrangements, such as loans, guarantees and sales of property, and remuneration for services rendered (as an employee, consultant or otherwise) to the Company.

Mr. Hamby has been the Executive Vice President and Chief Financial Officer of the Company and Gainesville Bank & Trust since 2001. From 1996 to 2001, he served as Senior Vice President of the Company and Gainesville Bank & Trust, and from 1995 to 1996, he served as Vice President and Accounting Manager of Gainesville Bank & Trust. Mr. Hamby has served on the Boards of First National Bank of the South since October 2003 and First National Bank of Gwinnett since March 2005.