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

1

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

2

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

3

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

4

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; Security Bank of Houston County (formerly Crossroads Bank of Georgia), located in Perry, Georgia (the Banks) and Security Bank Corporation Statutory Trust I. 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 April 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 145, which rescinded Statement Nos. 4, 44 and 64 and amended Statement No. 13, Accounting for Leases. Statement 145 eliminates the requirement to classify gains and losses from an early extinguishment of debt as an extraordinary item. These provisions of the Statement were effective for the Company's fiscal year beginning January 1, 2003, and have not had a significant impact on the Company's financial position or results of operations.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. The Statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue 94-3. The Board decided to address the accounting and reporting for costs associated with exit or disposal activities because entities increasingly are engaging in exit and disposal activities, and certain costs associated with those activities were recognized as liabilities at a plan (commitment) date under issue 94-3 that did not meet the definition of a liability in FASB concepts Statement No. 6, Elements of Financial Statements. The provisions of this Statement were effective for exit or disposal activities initiated after December 31, 2002. The adoption of SFAS No. 146 did not have a significant impact on the Company's financial position or results of operations.

In October 2002, the FASB issued SFAS No. 147, Acquisitions of Certain Financial Institutions, an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9. This Statement clarified that an acquisition that meets the definition of a business should be accounted for as a business combination; otherwise, the acquisition of a less-than-whole financial institution (often referred to as a branch acquisition) should be accounted for as an acquisition of net assets that does not result in the recognition of goodwill. In the event that the Company were to acquire branch operations that did not meet the definition of a business from another institution in the future, the excess purchase price, if any, over book value, would result in an amortizing intangible asset rather than goodwill. The adoption of SFAS No. 147 is not expected to have a significant impact on the Company.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure. This Statement amends FASB No. 123, Accounting for Stock-Based Compensation. The purpose of this Statement is to provide alternative methods of transition for companies that voluntarily change to the fair value-based method of accounting for stock-based employees compensation. The disclosure requirements of FASB 123 are also amended to include disclosure in quarterly financial statements of compensation expense calculated in accordance with FASB No. 123.

5

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 March 31, 2003 includes approximately $2,600,000 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 March 31, 2003 are comprised of the following:

Loans are generally reported at principal amount less unearned interest and fees. Impaired loans are recorded under 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.

Fees and incremental direct costs associated with the loan origination process are deferred and amortized using the straight-line method as adjustments to yield over the respective loan terms.

6

SFAS 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 months ended March 31, 2003 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 $26.4339 for the three-month period ended March 31, 2003. SNB's stock is quoted on the NASDAQ market under the symbol SNBJ.

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.

7

8

Investment securities as of March 31, 2003 are summarized as follows:

Unrealized holding gains, net of tax, on securities available for sale in the amount of $868,000 have been charged to stockholders' equity as of March 31, 2003.

Other borrowed money is comprised of the following as of March 31, 2003:

9

Maturities of 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 March 31, 2003, SNB had $30,518,000 in brokered deposits compared to $36,783,000 at December 31, 2002.

During 1996, the board of directors of SNB Bancshares, Inc. adopted the 1996 incentive stock option plan which authorizes 81,250 shares to be granted to certain officers and key employees. In May 1996, the board of directors granted key officers the right to purchase 81,250 shares of common stock at the price of $9.00, as adjusted for stock splits, representing the market value of the stock at the date of the option grant. Option holders may exercise in accordance with a vesting schedule beginning with 20 percent the first year and increasing 20 percent for each year thereafter such that 100 percent of granted options may be exercised by the end of the fifth year. Unexercised options expire at the end of the tenth year.

10

In 1999, the board of directors of SNB Bancshares, Inc. adopted another incentive stock option plan which authorizes 125,000 shares to be granted to certain officers and key employees. Those officers and key employees are granted the right to purchase 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 an additional 10,000 options were granted at $17.94 per share in September 1999.

An additional 25,500 options were granted at $13.00 per share in August 2000 under this same plan. The terms of the 1999 incentive stock option plan are essentially the same as the 1996 incentive stock option plan.

A summary of option transactions for the three months ended March 31, 2003 follows:

11

For the three months ended March 31, 2003, other comprehensive income is comprised of the following:

12

On July 31, 2000, Security Bank of Bibb County 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 Security Bank of Bibb County incorporated as Fairfield Financial Services, Inc. Fairfield Financial is primarily engaged in residential real estate mortgage lending in the state of Georgia. The results of operations of Fairfield Financial are included in the accompanying financial statements since the date of acquisition. The initial purchase price approximated $1.4 million, which consists of approximately $1.0 million in cash and 32,345 shares of SNB Bancshares stock valued at $388,140 at closing. The initial cost of the acquisition exceeded the fair value of the assets of Fairfield Financial by $988,000. The excess is recorded as goodwill and was amortized on the straight-line method over 10 years through December 31, 2001. As a result of the issua nce of SFAS No. 142, the goodwill is no longer amortized but is reviewed for impairment.

On October 25, 2002, SNB Bancshares, Inc. executed a definitive agreement to acquire all outstanding shares of the Bank of Gray located in Gray (Jones County), Georgia. The stockholders of the Bank of Gray will receive $15,000,000 in cash and 1,571,000 common shares of the Company in a business combination accounted for as a purchase. As of March 31, 2003, the Bank of Gray has total assets and deposits approximating $237,000,000 and $211,000,000, respectively. The acquisition has been approved by all regulatory authorities but is subject to stockholder approval. The vote on the merger will be held at the Company's annual meeting on May 29, 2003. Assuming stockholder approval, the transaction is scheduled to close on May 30, 2003.

During the fourth quarter of 2002, the Company formed a subsidiary whose sole purpose was to issue $18,000,000 in Trust Preferred Securities through a pool sponsored by FTN Financial Capital Markets. The Trust Preferred Securities have a maturity of 30 years and are redeemable after five years with certain exceptions. At March 31, 2003, the floating-rate securities had a 4.53 percent interest rate, which will reset quarterly at the three-month LIBOR rate plus 3.25 percent. The Trust Preferred Securities are recorded as a liability on the balance sheets, but, subject to certain limitations, qualify as Tier 1 capital for regulatory capital purposes. The proceeds from the offering were used to retire holding company debt and to fund the proposed acquisition of the Bank of Gray (see Note 11).

13

The following narrative presents management's discussion and analysis of SNB Bancshares, Inc. and Subsidiaries (SNB's) financial condition and results of operations as of and for the three-month periods ended March 31, 2003 and 2002. The historical financial statements of SNB are set forth elsewhere herein. This discussion should be read in conjunction with those financial statements and the other financial information included in this report.

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 reorgani zation.

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 eight 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 was 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, Fayetteville, Rincon and St. Simons Island. The Company functions as a subsidiary of SB-Bibb.

14

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 March 31, 2003, SNB had 242 employees on a full-time equivalent basis.

SNB's net income for the three-month period ended March 31, 2003 was $1,569,000 or $0.45 diluted earnings per share compared to $1,329,000 or $0.39 in the same three-month period of the preceding year. The increase in net income for the three months ended March 31, 2003 primarily relates to the growth in the loan portfolio coupled with the Company's success in maintaining net interest margins.

SNB recorded an annualized return on average assets 1.14 percent for the three-month period ended March 31, 2003 compared to 1.08 percent for the same period in 2002. Return on average equity of 15.56 percent was recorded for the three-month period ended March 31, 2003, compared to 15.03 percent for the same period in 2002.

At March 31, 2003, SNB had total assets of $568 million compared to $581 million at December 31, 2002. The decrease is due to a decrease in cash and due from banks. Total interest-earning assets decreased only $4 million or .76 percent to $522 million at March 31, 2003 from $526 million at December 31, 2002.

Cash and due from banks decreased approximately $12 million or 39.60 percent to $18.3 million at March 31, 2003 from $30.3 million at December 31, 2002. Federal funds sold decreased by $2.8 million to $465,000 at March 31, 2003 from $3.3 million at December 31, 2002. These decreases are most evident in the analysis of SNB's cash flows from financing activities, which reports cash outflows of $14.4 million.

Investment securities have decreased $15.6 million or 31.01 percent since December 31, 2002 when investment securities totaled $50.3 million. As of March 31, 2003, investment securities were $34.7 million. While continuing to strategically manage the Company's interest rate sensitive assets and liabilities, management has shifted more assets from the investment portfolio to accommodate the increased loan demand. SNB's investment in securities is largely centered in U.S. Government Agency securities.

15

Loans receivable, excluding loans held for sale, were $455.9 million at March 31, 2003, an increase of $17.5 million or 3.99 percent from $438.4 million at December 31, 2002. The Company continues to experience good growth in its loan portfolio, particularly in the Real Estate-Construction loans. Loans held for sale decreased $2.3 million from $36.0 million at December 31, 2002 to $33.7 million at March 31, 2003.

The Company's total nonperforming assets were $6.9 million or 1.21 percent of total assets at March 31, 2003 compared to $6.3 million or 1.08 percent at December 31, 2002. Nonperforming loans increased $647,000 or 14.85 percent from $4.4 million at December 31, 2002 to approximately $5.0 million at March 31, 2003. The amount of other real estate owned that was held by the Company on March 31, 2003 amounted to $1,886,000, a decrease of $17,000 or .89 percent since December 31, 2002. The balance in Other Real Estate primarily consists of one individual loan for $2,258,000 offset by a valuation allowance of $751,000. The Company has currently accepted a contract on this property with an expected closing date of September, 2003.

16

Other borrowed money amounted to $67.9 million as of March 31, 2003, a decrease of 11.24 percent since December 31, 2002 when other borrowed money totaled $76.5 million. Borrowings from the Federal Home Loan Bank (FHLB) totaled $61.6 million or 90.72 percent of total other borrowed money as of March 31, 2003. The increase in cash, as a result of the issuance of trust preferred securities during the fourth quarter of 2002, was used to reduce borrowed money from the FHLB during the first quarter of 2003.

At March 31, 2003, total equity was $41.6 million or 7.33 percent of total assets compared to $39.5 million or 6.80 percent of total assets as of December 31, 2002. Total equity increased primarily due to the retention of net income during the period, net of dividends paid.

The net interest margin of SNB which is net interest income divided by average-earning assets was 4.34 percent for the first three months of 2003 compared to 4.26 for the first three months of 2002. SNB has been successful in maintaining its margins despite the downward pressure on margins in the industry as a whole. SNB's success is the result of the Company's effective use of external debt and noncore deposits, coupled with renewed marketing efforts to grow local low-cost core deposits.

Total interest income increased to $8.3 million for the three-month period ended March 31, 2003 from $8.0 million during the comparable prior year period. The increase is primarily due to a 16 percent increase in average loans net of loans held for sale for the first quarter of 2003 compared to the first quarter of 2002.

Total interest expense decreased 11.17 percent for the three months ended March 31, 2003 compared to the prior period ended March 31, 2002. This decrease was due to the favorable rate environment which allowed SNB to reprice interest-bearing liabilities at lower rates compared to the same period in the prior year. The Federal Reserve reduced rates 50 basis points on November 5, 2002 to an unprecedented level.

17

The following table presents the effective yields and costs of funds for the three-month period ended March 31:

Average Balance Sheets

18

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 three months ended March 31, 2003 compared to the three months ended March 31, 2002.

19

Noninterest income for the three months ended March 31, 2003 totaled $4.0 million compared to $3.1 million for the comparable prior period. Mortgage origination fees for the three months ended March 31, 2003 totaled $2.6 million compared to $2.1 for the comparable prior period. This increase was a direct result of the continued strong performance of Fairfield Financial. Service charges on deposits increased 40.11 percent or $288,000 compared to the prior period, primarily in fees generated from our courtesy overdraft product for protection from bounced checks.

Noninterest expenses increased $1.2 million or 21.42 percent for the first quarter of 2003 over the same period in 2002. Salaries and employee benefits represent $838,000 of this increase. Fairfield salaries and employee benefits accounted for $458,000 of the increase in salaries and employee benefits. The increase correlates with the increase in mortgage origination fees as the salaries are commission driven. Other increases to salaries and employee benefits are the result of staffing of the new location in Brunswick, Georgia as well as annual salary increases.

Income tax expense totaled $887,000 for the three-month period ended March 31, 2003, compared to $698,000 for the comparable prior period. These amounts resulted in the effective tax rates of 36 percent and 34 percent for 2003 and 2002, respectively.

20

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.