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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Commission file number: 000-30805

WGNB CORP.

201 Maple Street
P.O. Box 280
Carrollton, Georgia 30112

(770) 832-3557

Indicate by check mark 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 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 [  ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

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WGNB CORP.

INDEX TO FORM 10-Q

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Part I – Financial Information

Item 1. Financial Statements

     The unaudited financial statements of WGNB Corp. (the “Company”) are set forth on the following pages. All adjustments have been made which, in the opinion of management, are necessary in order to make the financial statements not misleading.

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WGNB CORP.

Consolidated Balance Sheet

June 30, 2002
(unaudited)

See accompanying notes to consolidated financial statements.

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WGNB CORP.

Consolidated Statements of Earnings

For the Three Months Ended June 30, 2002 and 2001
(unaudited)

See accompanying notes to consolidated financial statements.

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WGNB CORP.

Consolidated Statements of Comprehensive Income

For the Three Months Ended June 30, 2002 and 2001
(unaudited)

See accompanying notes to consolidated financial statements.

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WGNB CORP.

Consolidated Statements of Earnings

For the Six Months Ended June 30, 2002 and 2001
(unaudited)

See accompanying notes to consolidated financial statements.

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WGNB CORP.

Consolidated Statements of Comprehensive Income

For the Six Months Ended June 30, 2002 and 2001
(unaudited)

See accompanying notes to consolidated financial statements.

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WGNB CORP.

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2002 and 2001
(unaudited)

See accompanying notes to consolidated financial statements.

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WGNB CORP.

Consolidated Statements of Cash Flows, continued

For the Six Months Ended June 30, 2002 and 2001
(unaudited)

See accompanying notes to consolidated financial statements.

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WGNB Corp.
Notes to Consolidated Financial Statements

June 30, 2002
(unaudited)

(1)		Basis of Presentation
		The consolidated financial statements include the accounts of WGNB Corp. (the “Company”) and its wholly-owned subsidiaries, West Georgia National Bank (the “Bank”) and West Georgia Credit Services, Inc. (the “Finance Company”). All significant inter-company accounts have been eliminated in consolidation. In some cases, certain prior period amounts have been reclassified to conform with current year presentation.
		The accompanying unaudited interim consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the Company’s financial position as of June 30, 2002, and the results of its operations and its cash flows for the six-month period then ended. All such adjustments are normal and recurring in nature. The financial statements included herein should be read in conjunction with consolidated financial statements and the related notes and the report of independent accountants included in the Company’s filing on Form 10-K which included the results of operations for the years ended December 31, 2001, 2000 and 1999.
(2)		Net Earnings Per Share
		Basic earnings per share is 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. The average market price during the year is used to compute equivalent shares.
		Reconciliation of the amounts used in the computation of both “basic earnings per share” and “diluted earnings per share” for the periods ended June 30, 2002 and June 30, 2001 are as follows:

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WGNB Corp.

Notes to Consolidated Financial Statements

June 30, 2002
(unaudited)

(2)

Net Earnings Per Share, continued

(3)		Issuance of Common Stock
		On April 10, 2002, the Company commenced a public offering of 200,000 shares of its common stock at a purchase price of $24.00 per share, or an aggregate amount of $4,800,000. The offering was conducted through the Company’s officers and directors on a best-efforts basis without compensation. The entire 200,000 shares subject to the registration statement were sold and the offering was terminated on April 23, 2002. As of June 30, 2002, the Company received net proceeds from the offering of $4,765,654, representing total offering proceeds of $4,800,000, less offering expenses of $34,346.

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Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition

     The following analysis compares WGNB Corp’s results of operations for the quarterly and six month periods ended June 30, 2002 and 2001 and reviews the important factors affecting WGNB Corp.’s financial condition at June 30, 2002 compared to December 31, 2001. These comments should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes appearing elsewhere in this report.

Forward Looking Statements

     This Report may contain certain “forward-looking statements” including statements concerning plans, objectives, future events or performance and assumptions and other statements that are not statements of historical fact. The Company cautions readers that the following important factors, among others, could cause the Company’s actual results to differ materially from the forward-looking statements contained in this Report: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, with which the Company and its subsidiaries must comply, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company’s organization, compensation and benefit plans; (iii) the effect on the Company’s competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; and (v) the effect of changes in the business cycle and downturns in local, regional or national economies. The Company cautions that the foregoing list of important factors is not exclusive.

Results of Operations

Overview

     Net earnings for the six months ended June 30, 2002 were $2.5 million, which represented an increase of $92,800 or 3.8 percent compared to the six months ended June 30, 2001. Net earnings per diluted common share increased only slightly from $.78 per share to $.79 per share when comparing the same two periods. Net earnings for the second quarter ended June 30, 2002 were $1.3 million compared to $1.2 million for the second quarter of 2001. The company’s operating results have remained consistent despite continued low interest rates and a stalling economy. The interest margin has rebounded from 4.37 percent as of December 31, 2001 to 4.93 percent as of June 30, 2002. The increase in the interest margin is primarily due to a decrease of 55 basis points in cost of funds during the same time period. However, management’s analysis continues to show that the Company’s loan loss reserve has adequately provided for any inherent risk in the loan portfolio. Mortgage origination fees attributable to continued refinancing activity has had a positive impact on earnings. Mortgage origination fee income increased by $139,000 or 48.5 percent when comparing the first six months of 2002 to 2001, and increased by $38,000 or 23.6 percent when comparing the second quarters ended June 30, 2002 and 2001.

Net Interest Income

     The Company’s year-to-date second quarter 2002 net interest margin exceeded that of the same period in 2001 by $339,000 or 4.7 percent. This is primarily attributable to growth in interest-bearing assets in excess of interest-bearing liabilities and the cost of funds for the period declining approximately 150 basis points. Based on average balances, interest-bearing assets increased by approximately $38 million while interest bearing liabilities increased approximately $31 million. The decrease in the cost of funds is attributable to the sharp decline in market interest rates over the last year and a change in the deposit mix. Average non-interest-bearing deposits have increased by $2.6 million while lower yielding transaction and savings accounts have increased by $15.5 million. Additionally, while average time deposits increased by $8 million, these new accounts were priced at the current lower yields offered by the Bank. Similar trends hold true when comparing quarterly net interest income for the second quarters ended 2002 and 2001.

     Because of the large increase in transaction accounts, the Bank has not chosen to lead the market in certificate of deposit rates. This is important because loan volume has slowed in the first six months of 2002 when compared to the same period in 2001. As rates on loans decline, they can be matched with lower costing transaction accounts rather than certificates of deposit. This has the effect of stabilizing the Company’s interest margin despite the lower interest rates earned on loans.

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Non-Interest Income and Expense

     Non-interest income for the first six months of 2002 has increased $226,000 or 11 percent when compared to the first six months of 2001. Service charges on deposit accounts has increased $106,000 or 8 percent during the first six months of 2002 compared to the first six months of 2001. This increase was due primarily to increased income from non-sufficient funds charges. Miscellaneous other income includes residential mortgage loan origination fees as well as other fees, gains and losses. The decline in market interest rates has been beneficial to the Bank’s ability to generate mortgage loan origination fees. Mortgage loan origination fees for the first six months of 2002 have outpaced the same period in 2001 by $139,000 or 49 percent.

     Non-interest income for the second quarter ended June 30, 2002 increased $114,000 or 10 percent when compared to the second quarter ended 2001. The increase was primarily attributable to a service charges on deposit accounts increase of $47,000 or 6 percent and a mortgage origination fee income increase of $38,000 or 24 percent.

     Non-interest expense increased $791,000 or 15 percent in the first two quarters of 2002 compared to the same period in 2001. Salaries and employee benefits increased $493,000, a 16 percent increase over the first six months of 2001. This increase is primarily due to increased commissions for mortgage originators, additional staff at the Douglasville branch, annual salary increases, increased group insurance costs and increased profit sharing accruals. The Bank increased its full time equivalent employee count from 131 in June of 2001 to 141 in June of 2002.

     Occupancy expenses increased $91,000 or 12 percent year-to-date from 2001 to 2002. This is attributable to a full six months of occupancy in the Bank’s Douglasville branch in the first half of 2002 (which was not the case in the first half of 2001 since the Douglasville branch did not open until July 2001). Other operating expenses increased $207,000 or 15 percent. The increase in other operating expenses is attributable to fees associated with the bounce protection program and legal and other professional fees related to business development.

     Comparing non-interest expense quarter to quarter, similar increases hold true. Total non-interest expense increased $374,000 or 14 percent comparing the second quarters ended 2002 and 2001. Salaries and benefits accounted for $191,000 of the increase and other operating expenses, including legal and professional expenses, accounted for $135,000 of the increase.

Income Taxes

     Income tax expense for the first six months of 2002 was $1.3 million compared to $1.3 million for the same period in 2001. The effective tax rate for each of the periods ended June 30, 2002 was 34 percent and 2001 was 35 percent. The reduced marginal rate is due to the purchase of state tax credits.

Provision and Allowance for Loan Losses

     The adequacy of the allowance for loan losses is determined through management’s informed judgment concerning the amount of risk inherent in the Company’s loan portfolio. This judgment is based on such factors as the change in levels of non-performing and past due loans, historical loan loss experience, borrowers’ financial condition, concentration of loans to specific borrowers and industries, estimated values of underlying collateral, and current and prospective economic conditions. The allowance for loan losses at June 30, 2002 was $3.7 million or 1.46 percent of total loans compared to $3.7 million or 1.47 percent of total loans at December 31, 2001. The Bank has begun to see some impact of the slowing economy on some borrowers’ ability to repay, however, management believes that the allowance for loan losses is adequate to absorb possible loss in the loan portfolio.

Non-Performing Assets and Past Due Loans

     Non-performing assets, comprised of real estate owned, non-accrual loans and loans for which payments are more than 90 days past due, totaled $2,854,000 at June 30, 2002 compared to $1,356,000 at June 30, 2001. Non-performing assets as a percentage of total loans and real estate owned at June 30, 2002 and June 30, 2001 were 1.1 percent and .5 percent, respectively.

     The Company has a loan review function that continually monitors selected loans for which general economic conditions or changes within a particular industry could cause the borrowers financial difficulties. The loan review function also identifies loans with high degrees of credit or other risks. The focus of loan review, as well as management, is to

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maintain a low level of non-performing assets and return current non-performing assets to earning status. Management is unaware of any known trends, events or uncertainties that will have or that are reasonably likely to have a material effect on liquidity, capital resources or operations.

Financial Condition

Overview

     Total assets were $347 million at June 30, 2002, a decrease of $2.7 million or .8 percent from December 31, 2001.

Assets and Funding

     At June 30, 2002 earning assets totaled $325 million, a decrease of $6.6 million from December 31, 2001. The mix of interest earning assets has changed slightly since the beginning of 2002. As a percentage of interest earning assets, loans increased to 78 percent and investment securities and federal funds increased to 22 percent at June 30, 2002, as compared to loans of 76 percent and investments and federal funds of 24 percent at December 31, 2001. The primary reason for the change in the mix is a decrease in federal funds of $10 million resulting from a decrease in total deposits of more than $9 million.

     At June 30, 2002, interest-bearing deposits decreased $11.6 million compared to December 2001. Non-interest-bearing deposits increased $2.5 million in the first six months of 2002 while certificates of deposit decreased by $14.3 million. As previously discussed, the transition in the deposit mix is the result of the sharp decline in deposit rates. On December 31, 2001, transaction and savings accounts constituted 54 percent and certificates of deposits accounted for 46 percent of total deposits. By the end of June, 2002, transaction and savings accounts made up 57 percent and certificates of deposit amounted to 43 percent of total deposits. At June 30, 2002, deposits represented 87 percent of interest-bearing liabilities and other borrowings, including Federal Home Loan Bank advances, which represented 13 percent of the total.

Liquidity and Capital Resources

     Net cash provided by operating activities totaled $2.6 million for the six months ended June 30, 2002. Net cash used by investing activities totaling $3.9 million and consisted primarily of purchases of securities net of sales and maturities of $976,000 and a $2.8 million increase in loans outstanding. The increases in loans and purchase of securities were funded by existing cash on the balance sheet. Net cash used by financing activities was $5.6 million which was due to a decrease in total deposits of $9.1 million offset by net offering proceeds of $4.8 million. The net decrease in cash and cash equivalents for the year-to-date at June 30, 2002 was $6.8 million.

     Total stockholders’ equity at June 30, 2002 was 10.42 percent of total assets compared to 8.34 percent at December 31, 2001. The sharp increase in the capital percentage is attributed to the Company’s $4.8 million common stock offering which closed in April 2002.

     At June 30, 2002, WGNB Corp. was in compliance with various regulatory capital requirements administered by federal and state banking agencies. The following is a table representing WGNB Corp.’s consolidated Tier-1, tangible capital, and risk-based capital.