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

1

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

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 period ended September 30, 2002, includes approximately $6.3 million 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 September 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 nine months ended September 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 $19.94 and $18.65 for the three- and nine-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 nine-month periods of 2001 were adjusted to exclude goodwill amortization, reported net income would be $1,225,000 and $3,207,000, 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 September 30, 2002 are summarized as follows:

Unrealized holding gains, net of tax, on securities available for sale in the amount of $1,041,000 have been credited to stockholders' equity as of September 30, 2002.

Other borrowed money is comprised of the following as of September 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 September 30, 2002, SNB had $34,251,000 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 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 nine months ended September 30, 2002 follows:

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For the nine months ended September 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 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 September 30, 2002, SNB had 228 employees on a full-time equivalent basis.

SNB's net income for the three-month and nine-month periods ended September 30, 2002 was $1,657,000 or $0.48 diluted earnings per share and $4,355,000 or $1.26 diluted earnings per share respectively, compared to $1,208,000 or $0.36 and $3,158,000 or $0.94 in the same three-month and nine-month periods of the preceding year. The increase in net income for the three months and nine months ended September 30, 2002 primarily relates to SNB repricing deposit at lower rates as a result of the declining interest rate environment during 2001.

The Company recorded an annualized return on average assets of 1.16 percent for the nine-month period ended September 30, 2002 compared to 1.00 percent for the same period in 2001. Return on average equity of 15.89 percent was recorded for the nine-month period ended September 30, 2002, compared to 12.91 percent for the same period in 2001.

At September 30, 2002, the Company had total assets of $530 million compared to $505 million at December 31, 2001. At September 30, 2001, the Company had total assets of $451 million compared to $410 million at December 31, 2000. Total interest-earning assets increased $21 million or 4.51 percent to $487 million at September 30, 2002 from $466 million at December 31, 2001.

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The Company=s total nonperforming assets were $5.9 million or 1.10 percent of total assets at September 30, 2002 compared to $5.9 million or 1.18 percent at December 31, 2001. Nonperforming loans increased $600,000 or 18.8 percent from $3.2 million at December 31, 2001 to approximately $3.8 million at September 30, 2002. The amount of other real estate owned that was held by the Company on September 30, 2002 totaled $2 million, a decrease of $677,000 since December 31, 2001. Forty-seven percent of the balance in other real estate relates to the foreclosure on one relationship.

The following table presents the Company=s nonperforming assets as of September 30, 2002:

The Company=s net income increased 37.9 percent to $4,355,000 for the nine months ended September 30, 2002, compared to $3,158,000 recorded in the comparable prior period. The increase in net income is a result of SNB repricing liabilities at substantial savings while holding loan pricing relatively stable as well as a 24.46 percent increase in mortgage origination fees.

The Company establishes a provision for loan losses, which is charged to operations, in order to maintain the allowance for loan losses at a level which is deemed to be appropriate by management. The amount of this provision is based upon an assessment of prior loss experience, the volume and type of lending presently being conducted by the Company, industry standards, past due loans, economic conditions of the Company=s market area and other factors related to the collectability of the Company=s loan portfolio. For the three- and nine-month periods ended September 30, 2002, the provision for loan losses totaled $403,000 and $1,453,000, respectively.

Although management utilizes its best judgment in providing for inherent losses, there can be no assurance that the Company will not have to increase its provisions for loan losses in the future as a result of future increases in nonperforming loans or for other reasons which could adversely affect the Company=s results of operations. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance for loan losses based on their judgments of information that is available to them at the time of their examination.

Stockholders= equity increased to $39.1 million at September 30, 2002 due primarily to retention of earnings, net of dividends paid. Unrealized gains on investment securities available for sale net of taxes totaled $1,041,000 at September 30, 2002. It is management=s intention to continue paying a reasonable return on stockholders= investment while retaining adequate earnings to allow for continued growth.

The Federal Deposit Insurance Corporation Improvement Act (FDICIA) establishes minimum capital requirements for all depository institutions and established five capital tiers: Awell capitalized,@ Aadequately capitalized,@ Aunder-capitalized,@ Asignificantly under-capitalized@ and Acritically under-capitalized.@ FDICIA imposes significant restrictions on the operations of a bank that is not at least adequately capitalized. A depository institution=s capital tier will depend upon where its capital levels are in relation to various other capital measures that include a risk-based capital measure, a leverage ratio capital measure and other factors. Under regulations adopted, for an institution to be well capitalized, it must have a total risk-based capital ratio of at least 10 percent, a Tier 1 risk-based capital ratio of at least 6 percent and a Tier 1 leverage ratio of at least 5 percent. Also, the institution may not be subject to any specific capital order or directive.

At September 30, 2002, both of the Company=s subsidiary banks were in compliance with established guidelines.

Within these financial statements we have included certain Aforward looking statements@ concerning the future operations of the Company. It is management=s desire to take advantage of the Asafe harbor@ provisions of the Private Securities Litigation Reform Act of 1995. This statement is for the express purpose of availing the Company of the protections of such safe harbor with respect to all Aforward looking statements@ contained in our financial statements. We have used Aforward looking statements@ to describe the future plans and strategies including our expectations of the Company=s future financial results. Management=s ability to predict results or the effect of future plans and strategy is inherently uncertain. Factors that could affect results include interest rate trends, competition, the general economic climate in the middle Georgia area, the southeastern United States region and the country as a whole, loan delinquency rates, and changes in federal and state regulations. These factors should be considered in evaluating the A< /FONT>forward looking statements,@ and undue reliance should not be placed on such statements.