The accompanying notes are an integral part of these condensed consolidated balance sheets.

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

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

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

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

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

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The consolidated financial statements include SNB Bancshares, Inc. (the Company) and its wholly-owned subsidiaries, Security Bank of Bibb County (formerly Security National Bank), located in Macon, Georgia and Security Bank of Houston County (formerly Crossroads Bank of Georgia), located in Perry, Georgia (the Banks). The financial statements of Security Bank of Bibb County include its wholly-owned subsidiary, Fairfield Financial Services, Inc. since its formation on August 1, 2000. All intercompany accounts have been eliminated in consolidation.

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 113, Accounting for Derivative Instruments and Hedging Activities, which establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheets as either an asset or liability measured at its fair value. The statement requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria is met. Special accounting for qualifying hedges allows a derivative's gain and losses to offset related results on the hedged item in the statements of income, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. In June 1999, the FASB issued SFAS No. 137, Accounting for Derivative Instruments and Hedging A ctivities-Deferral of the Effective Date of FASB Statement No. 133, which delays the original effective date of SFAS No. 133 until fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities an Amendment of FASB Statement No. 133, which addresses a limited number of issues causing implementation difficulties for certain entities that apply Statement 133. The derivative statements have had no material effect on the financial position and results of operations of SNB.

On July 20, 2001 the FASB issued SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. These statements make significant changes to the accounting for business combinations, goodwill, and intangible assets. SFAS No. 141 eliminates the pooling-of-interests method of accounting for business combinations with limited exceptions for combinations initiated prior to July 1, 2001. In addition, it further clarifies the criteria for recognition of intangible assets separately from goodwill. This statement is effective for business combinations completed after June 30, 2001.

SFAS No. 142 discontinues the practice of amortizing goodwill and indefinite-lived intangible assets and initiates an annual review for impairment. Impairment would be examined more frequently if certain indicators are encountered. Intangible assets with a determinable useful life will continue to be amortized over that period. The Banks are required to adopt the provisions of SFAS No. 142 effective January 1, 2002. It is anticipated that the adoption of SFAS No. 142 will not have a material effect on the Company's financial statements.

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Reportable segments are business units which offer different products and services and require different management and marketing strategies. Management of SNB Bancshares, Inc. considers that all banking operations are essentially similar within each of its subsidiaries and that there are no reportable operating segments. However, fee income from mortgage loans originated and sold to investors increased significantly with the July 2000 acquisition of Fairfield Financial Services, Inc. (Fairfield). Consolidated other income for the year ended June 30, 2002, includes approximately $4,000,000 of Fairfield fee income. Such income may fluctuate significantly with increases or decreases in mortgage rates.

The financial information included herein is unaudited; however, such information reflects all adjustments which are, in the opinion of management, necessary to fairly state the financial position and results of operations for the interim periods presented.

Loans as of June 30, 2002 are comprised of the following:

Loans are generally reported at principal amount less unearned interest and fees. Impaired loans are recorded under Statement of Financial Accounting Standards (SFAS) No. 114, Accounting by Creditors for Impairment of a Loan and SFAS No. 118, Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosures. Impaired loans are loans for which principal and interest are unlikely to be collected in accordance with the original loan terms and, generally, represent loans delinquent in excess of 90 days which have been placed on nonaccrual status and for which collateral values are less than outstanding principal and interest. Small balance, homogeneous loans are excluded from impaired loans. Generally, interest payments received on impaired loans are applied to principal. Upon receipt of all loan principal, additional interest payments are recognized as interest income on the cash basis.

Other nonaccrual loans are loans for which payments of principal and interest are considered doubtful of collection under original terms but collateral values equal or exceed outstanding principal and interest.

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Statement of Financial Accounting Standards No. 128 establishes standards for computing and presenting basic and diluted earnings per share. Basic earnings per share is calculated and presented based on income available to common stockholders divided by the weighted average number of shares outstanding during the reporting periods. Diluted earnings per share reflects the potential dilution that would occur if warrants and options were exercised and converted into common stock. The following presents earnings per share for the three and six months ended June 30, 2002 under the requirements of SFAS 128:

The assumed exercise of stock options is included in the diluted earnings per share computation using the treasury stock method and assuming an average market price for SNB Bancshares, Inc. stock of $13.61 and $11.15 for the three- and six-month periods. SNB's stock is quoted on the NASDAQ market under the symbol SNBJ.

SNB adopted the provisions of Statement of Financial Accounting Standards No. 142 as of January 1, 2002 and, accordingly, ceased amortization of goodwill. If net income for the three-month and six-month periods of 2001 were adjusted to exclude goodwill amortization, reported net income would be $1,069,000 and $1,983,000, respectively. There would be no effect on basic or diluted earnings per share.

The allowance method is used in providing for losses on loans. Accordingly, all loan losses decrease the allowance and all recoveries increase it. The provision for loan losses is based on factors which, in management's judgment, deserve current recognition in estimating possible loan losses. Such factors considered by management include growth and composition of the loan portfolio, economic conditions and the relationship of the allowance for loan losses to outstanding loans.

An allowance for loan losses is maintained for all impaired loans. Provisions are made for impaired loans upon changes in expected future cash flows or estimated net realizable value of collateral. When determination is made that impaired loans are wholly or partially uncollectible, the uncollectible portion is charged off.

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The Bank records investment securities under Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity Securities. In accordance with the provisions of SFAS 115, the Bank elected to classify securities individually as either available for sale or held to maturity. Securities classified as held to maturity are recorded at amortized cost. Those classified as available for sale are adjusted to market value through a tax-effected increase or reduction in stockholders' equity.

Investment securities as of June 30, 2002 are summarized as follows:

Unrealized holding gains, net of tax, on securities available for sale in the amount of $771,000 have been charged to stockholders' equity as of June 30, 2002.

Other borrowed money is comprised of the following as of June 30, 2002:

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Maturities of line-of-credit and all FHLB advances for each of the ensuing years are as follows:

Brokered deposits are third-party time deposits placed by or through the assistance of a deposit broker. As of June 30, 2002, SNB had $41,623,000 in brokered deposits compared to $34,947,000 at December 31, 2001.

In 1999, the board of directors of SNB Bancshares, Inc. adopted an additional incentive stock option plan which authorized the granting to certain officers and key employees rights to purchase 125,000 shares of common stock at a price representing the market value of the stock at the date of the option grant. In May 1999, 73,500 options were granted at the price of $18.50 per share and 10,000 options were granted at $17.94 per share in September 1999. An additional 25,500 options were granted at $13.00 in August 2000 under the same plan. The terms of the 1999 incentive stock option plan are essentially the same as the 1996 incentive stock option plan.

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During the first quarter of 2002, the board of directors of SNB Bancshares, Inc. adopted a performance based incentive stock option plan. Under this plan 105,000 options were granted in May 2002 at $19.51 per share. The vesting schedule for these options is two tiered. Options in the first tier are vested over three years based on a 12 percent increase in diluted earnings per share over the base year diluted earnings per share of $1.03 each year. If the maximum diluted earnings per share of $1.45 is reached during the three-year period, the vested shares are doubled. Under the second tier, additional shares are vested for two executive officers based on the same requirements except the diluted earnings per share must increase 15 percent a year to a maximum of $1.57 during the three-year period. The first year of vesting for this plan is based on the Company's performance for 2001.

A summary of option transactions for the six months ended June 30, 2002 follows:

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For the six months ended June 30, 2002, other comprehensive income is comprised of the following:

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SNB is a Georgia corporation formed to act as a bank holding company for Security Bank of Bibb County (formerly Security National Bank )("SB-Bibb") under the federal Bank Holding Company Act of 1956, as amended, and the bank holding company laws of Georgia. SNB was incorporated on February 10, 1994 at the instruction of management of SB-Bibb. At a special meeting of the stockholders of SB-Bibb on August 2, 1994, the stockholders of SB-Bibb voted in favor of a plan reorganization and agreement of merger pursuant to which SB-Bibb became a wholly-owned subsidiary of SNB. The reorganization was effective on September 30, 1994, as a result of which the shares of common stock of SB-Bibb then issued and outstanding were converted into shares of the common stock of SNB. SB-Bibb has operated as a wholly-owned subsidiary of SNB since that time, although the functions and business of SB-Bibb, its board of directors, staff and physical office locations underwent no changes as a result of the reorg anization.

SB-Bibb is a state-chartered bank that engages in the commercial banking business primarily in Bibb County, Georgia. SB-Bibb commenced operations on November 4, 1988. The bank operates seven full service banking offices and one limited service office in Macon, Georgia. On March 1, 1999, the bank converted its banking charter from a national to a state charter, and changed its name from Security National Bank to Security Bank of Bibb County.

On August 8, 1998, SNB acquired a 100 percent interest in Crossroads Bancshares, Inc., the parent holding company of Crossroads Bank of Georgia in Perry and Warner Robins, Georgia. The two companies merged in a pooling of interests stock swap transaction and, accordingly, all prior financial information shown below has been restated as if this business combination had always existed. The parent company of Crossroads Bank was subsequently dissolved. On June 3, 1999, Crossroads Bank changed its name to Security Bank of Houston County ("SB-Houston") and now operates as a wholly-owned subsidiary of SNB, with four full service banking offices in Perry and Warner Robins.

On July 31, 2000, SB-Bibb purchased the assets of Group Financial Southeast (dba Fairfield Financial) in a business combination accounted for as a purchase. The assets were placed in a newly formed subsidiary of SB-Bibb incorporated as Fairfield Financial Services, Inc. ("Fairfield"). The purchase transaction involved a combination of SNB stock and cash consideration. Fairfield is a well-established real estate mortgage lending company with a number of production locations throughout Georgia and the Southeast, including offices in Macon, Columbus, Warner Robins, Richmond Hill, Stockbridge, Fayetteville, Rincon and St. Simons Island. The Company functions as a subsidiary of SB-Bibb.

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Substantially all of the business of SNB is conducted through its two subsidiary banks. Both banks offer a full range of lending services including the specialized Fairfield mortgage subsidiary, deposit products, Internet banking, automated teller machines, safe deposit boxes, credit cards, night depositories, and other services for the convenience of its customers, who mainly reside in Bibb and Houston Counties. As of June 30, 2002, SNB had 243 employees on a full-time equivalent basis.

SNB's net income for the three-month and six-month periods ended June 30, 2002 was $1,369,000 or $0.40 diluted earnings per share and $2,698,000 or $0.78 diluted earnings per share respectively, compared to $1,052,000 or $0.31 and $1,950,000 or $0.58 in the same three-month and six-month periods of the preceding year. The increase in net income for the three months and six months ended June 30, 2002 primarily relates to SNB repricing deposits at lower rates as a result of the declining interest rate environment during 2001.

The Company recorded an annualized return on average assets of 1.08 percent for the six-month period ended June 30, 2002 compared to 0.94 percent for the same period in 2001. Return on average equity of 14.89 percent was recorded for the six-month period ended June 30, 2002, compared to 12.22 percent for the same period in 2001.

At June 30, 2002, the Company had total assets of $512 million compared to $505 million at December 31, 2001. At June 30, 2001, the Company had total assets of $436 million compared to $410 million at December 31, 2000. Total interest-earning assets increased $3.6 million or 0.78 percent to $470 million at June 30, 2002 from $466 million at December 31, 2001.

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Total deposits increased $24.3 million or 6.48 percent from $375.1 million at December 31, 2001 to $399.4 million at June 30, 2002. This increase is due to an increase in interest-bearing deposits of $31.7 million or 10.43 percent offset by a decrease in noninterest-bearing deposits of $7.4 million or 10.33 percent over the same time period. The increase in interest-bearing deposits is due to a $6.7 million increase in brokered deposits as well as a transfer of money from the stock market into safer investments by customers.

Other borrowed money amounted to $70 million as of June 30, 2002, a decrease of 22.39 percent since December 31, 2001 when other borrowed money totaled $90.2 million. Borrowings from the Federal Home Loan Bank (FHLB) amounted to $54.4 million or 77.7 percent of total other borrowed money as of June 30, 2002. Management utilized the majority of these borrowings to fund additional loan requests.

At June 30, 2002, total equity was $37.3 million or 7.29 percent of total assets compared to $34.8 million or 6.89 percent of total assets as of December 31, 2001. Total equity increased primarily due to the retention of net income during the period, net of dividends paid. The growth in equity outpaced the growth in assets during this period, resulting in an increase in equity ratios.

The annualized net interest margin of the Company, net interest income divided by average earning assets, was 4.33 percent for the six-month period ended June 30, 2002 compared to 4.10 percent for the same six-month period of the proceeding year. The increase in the net interest margin resulted primarily from the decrease in interest paid on deposits and other borrowed money.

Total interest income decreased to $8.1 million and $16.1 million for the three- and six-month periods ended June 30, 2002, respectively, from $8.6 million and $17.0 million during the comparable prior year periods, respectively. The decrease is largely due to the repricing of some loans at lower rates offset by an increase in average loans.

Total interest expense decreased 31.74 percent and 31.53 percent for the three and six months ended June 30, 2002, respectively, compared to the prior periods ended June 30, 2001. Again, this decrease was due to the favorable rate environment which allowed SNB to reprice interest-bearing liabilities at lower rates compared to the same periods in the prior year.

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The following table presents the effective yields and costs of funds for the six-month periods ended June 30:

Average Balance Sheets

The following table provides a detailed analysis of the changes in interest income and interest expense due to changes in rate and volume for the six months ended June 30, 2002 compared to the six months ended June 30, 2001.

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• PART I, ITEM 2 (CONTINUED)

(1) Changes in net interest income for the periods, based on either changes in average balances or changes in average rates for interest-earning assets and interest-bearing liabilities, are shown on this table. During each year there are numerous and simultaneous balance and rate changes; therefore, it is not possible to precisely allocate the changes between balances and rates. For the purpose of this table, changes that are not exclusively due to balance changes or rate changes have been attributed to rates.

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Noninterest income for the three and six months ended June 30, 2002 totaled $2.9 million and $6 million, respectively, compared to $2.5 million and $5 million for the comparable prior periods. Mortgage origination fees for the six months ended June 30, 2002 totaled $3.9 million compared to $3.2 million for the comparable prior period. This increase was a direct result of the impressive performance of Fairfield Financial.

Noninterest expenses increased $1.6 million or 17.8 percent for the second quarter of 2002 over the same period in 2001. The increase correlates with the increase in mortgage origination fees as the salaries are commission driven. Other noninterest expense increased over the same period in 2001 due to an increase in the valuation allowance on other real estate of $149,000.

Income tax expense totaled $834,000 and $1.5 million for the three- and six-month periods ended June 30, 2002, compared to $604,000 and $1.1 million for the comparable prior periods, respectively. These amounts resulted in the effective tax rates of 34 percent for 2002 and 2001.

The Federal Reserve Board measures capital adequacy for bank holding companies by using a risk-based capital frame-work and by monitoring compliance with minimum leverage ratio guidelines. The minimum ratio of total risk-based capital to risk-adjusted assets is 8 percent at June 30, 2002, of which 4 percent must be Tier 1 capital. Security Bank of Bibb County and Security Bank of Houston County's total risk-based capital ratios were 10.20 percent and 10.31 percent, respectively, and the Tier 1 risk-based capital ratios were 9.17 percent and 9.23 percent, respectively.

In addition, the Federal Reserve Board has established minimum leverage ratio guidelines for bank holding companies. Those guidelines provide for a minimum leverage ratio of 3 percent for financial institutions that meet certain criteria, including that they maintain the highest regulatory rating. All other financial institutions are required to maintain a leverage ratio of 4 percent. Bibb and Houston's leverage ratios were 6.34 percent and 8.02 percent, respectively.

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				Page
(a)		Exhibits Included Herein and Incorporated by Reference:
		3(a) -Articles of Incorporation -Filed as Exhibit 3.2 to the Registrant's Registration Statement on Form S-4 (File No. 333-49977) Filed with the Commission on April 13, 1999 and Incorporated Herein		N/A
		3(b) -Bylaws -Filed as Exhibit 3.2 to the Registrant's Registration Statement on Form S-4 (File No. 333-49977), Filed with the Commission on April 13, 1999 and Incorporated Herein		N/A
		11 -Statement Re Computation of Per Share Earnings		Attachment
(b)		Reports on Form 8-K
		No reports on Form 8-K have been filed by the registrant during the quarter ended June 30, 2002.

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• SIGNATURES