Form 10-K

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of Crescent Banking Company’s Common Stock, par value $1.00 per share, held by non-affiliates, computed by reference to the price at which the stock was last sold on June 30, 2005, as reported on the Nasdaq Capital Market (formerly the Nasdaq SmallCap Market), was $45.9 million.

The number of shares outstanding of Crescent Banking Company’s Common Stock, par value $1.00 per share, as of March 23, 2006 was 2,595,073, of which 16,668 shares were held by Crescent Banking Company as treasury stock.

Certain portions of Crescent Banking Company’s 2005 Annual Report to Shareholders for the year ended December 31, 2005 (the “Annual Report”) are incorporated by reference into this Form 10-K. Other than those portions of the Annual Report specifically incorporated by reference pursuant to Items 6 through 8 of Part II hereof, no other portions of the Annual Report shall be deemed so incorporated.

Certain portions of Crescent Banking Company’s definitive Proxy Statement for its 2006 Annual Meeting of Shareholders (the “Proxy Statement”) filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934, as amended, are incorporated by reference into this Form 10-K. Other than those portions of the Proxy Statement specifically incorporated by reference pursuant to Items 10 through 14 of Part III hereof, no other portions of the Proxy Statement shall be deemed so incorporated.

In this report, the words “the Company,” “we,” “us” and “our” refer to the combined entities of Crescent Banking Company and its wholly owned subsidiaries, Crescent Bank & Trust Company and Crescent Mortgage Services, Inc. The words “Crescent,” “Crescent Bank” and “CMS” refer to the individual entities of Crescent Banking Company, Crescent Bank & Trust Company and Crescent Mortgage Services, Inc., respectively.

Certain of the statements made or incorporated by reference in this report, including those under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere, are “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, targets, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control, and which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

All statements other than statements of historical fact are statements that may be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “target,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential,” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation:

All written or oral forward-looking statements that are made by or are attributable to us are expressly qualified in their entirety by this cautionary notice. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date of this report, or after the respective dates on which such statements otherwise are made.

In accordance with Financial Accounting Standards Board Interpretation No. 46R (FIN 46), Crescent Capital Trust I and Crescent Capital Trust II (together, the “Trusts”) are not consolidated with the Company. Accordingly, the Company does not report the securities issued by the Trusts as liabilities, and instead reports as liabilities the junior subordinated debentures issued by the Company and held by the Trusts. The Company further reports its investment in the common shares of the Trusts as other assets. The Company has fully and unconditionally guaranteed the repayment of the trust preferred securities issued by the Trusts. All of the outstanding trust preferred securities currently qualify as tier 1 capital for regulatory capital purposes.

In 2005 and 2004, the Company conducted nearly all of its business through the Bank and will continue to do so. On December 31, 2003, the Company completed the sale of its wholesale residential mortgage business conducted by CMS to Carolina Financial Corporation (“Carolina Financial”) and its subsidiary Crescent Mortgage Corporation (“CMC”). Carolina Financial and CMC are not affiliated with the Company or its subsidiaries. In connection with the sale, Carolina Financial purchased all of CMS’s mortgage loans, pipeline mortgage loans and premises and equipment and assumed all leases and liabilities related to the transferred assets. The assets were sold at their carrying value. The Company was to be paid 100% of the pre-tax income of the divested mortgage business during the first 60 days following closing as well as 30% of the pre-tax income of the divested mortgage business for the nine months following the first 60-day period. The Company received no payments from Carolina Financial for either period due to the losses experienced by CMC. The Company retained the mortgage servicing portfolio, which was approximately $25 million at December 31, 2005.

The sale of the wholesale residential mortgage business simplified the Company’s business model and allowed us to focus on our core community banking business. The Bank currently operates in some of the fastest growing counties in the United States. We have reinvested the capital previously invested in CMS in the Bank, and applied the net proceeds from the sale of the mortgage operation to support expansion through internal growth and a strategic acquisition by the Bank. As a result of the sale of our wholesale mortgage business, we expect that our financial position and performance will continue to be substantially different from our financial position and performance prior to December 31, 2003.

As of December 31, 2005, the Company had total consolidated assets of approximately $704.1 million, total deposits of approximately $580.5 million, total consolidated liabilities, including deposits, of $648.9 million and consolidated shareholders’ equity of approximately $55.2 million. The Company’s continued operations in the commercial banking segment and discontinued operations in the mortgage banking segment are discussed in more detail under “Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations.”

The Company’s principal executive offices are located at 7 Caring Way, Jasper, Georgia 30143, and the telephone number at that address is (678) 454-2266. The Company maintains an Internet website at www.crescentbank.com. The Company is not incorporating the information on that website into this report, and the website and the information appearing on the website are not included in, and are not part of, this report.

Crescent is a Georgia corporation that is registered as a bank holding company with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) under the Federal Bank Holding Company Act of 1956, as amended (the “BHC Act”), and with the Georgia Department of Banking and Finance (the “Georgia Department”) under the Financial Institutions Code of Georgia, as amended. Crescent was incorporated on November 19, 1991 to become the parent holding company of the Bank. Crescent also owns 100% of CMS.

The Company currently conducts its traditional commercial banking operations through Crescent Bank. The Bank is a Georgia banking corporation that was founded in August 1989. The Bank is a member of the Federal Deposit Insurance Corporation (the “FDIC”) and its deposits are insured by the FDIC’s Bank Insurance Fund (“BIF”). The Bank is also a member of the Federal Home Loan Bank of Atlanta.

Through the Bank, the Company provides a broad range of banking and financial services to those areas surrounding Jasper, Georgia. As its primary market area, the Bank focuses on Pickens, Bartow, Forsyth, north Fulton and Cherokee Counties, Georgia and nearby Dawson, Cobb, Walton and Gilmer Counties, Georgia, which are situated to the north of Atlanta, Georgia. The Bank’s commercial banking operations are primarily retail-oriented and aimed at individuals and small- to medium-sized businesses located within its market area. While the Bank provides most traditional banking services, its principal activities as a community bank are the taking of demand and time deposits and the making of secured and unsecured consumer loans and commercial loans to its target customers. The retail nature of the Bank’s commercial banking operations allows for diversification of depositors and borrowers, and the Bank’s management believes it is not dependent upon a single or a few customers. The Bank does not have a significant portion of commercial banking loans concentrated within a single industry or group of related industries. However, approximately 91% of the Bank’s loan portfolio is secured by commercial and residential real estate in its primary market area.

For the year ended December 31, 2005, the Company had revenues from continued operations from its commercial banking business of approximately $43.2 million and pretax income from continued operations from its commercial banking business of approximately $6.6 million. Pretax income from continuing operations represented 100% of the Company’s total pretax income for the year ended December 31, 2005. During the fiscal years 2004, 2003 and 2002, the Company had revenues from its continued operations in its commercial banking business of approximately $27.1 million, $21.5 million and $19.9 million, respectively, and pretax income from its continued operations in the commercial banking business of approximately $2.0 million, $3.4 million and $1.7 million, respectively. Pretax income from continuing operations represented approximately 1,285.5%, 12.0% and 9.1% of the Company’s total pretax income for the years ended December 31, 2004, 2003 and 2002, respectively. The Company’s commercial loan portfolio, which has experienced significant growth since 1998, represents the largest earning asset for the Company’s commercial banking operations. The Company’s portfolio grew 37% in 2003, 58% in 2004 and 37% for the year ended December 31, 2005. At December 31, 2005, the Company had total commercial loans of approximately $593.7 million. At each of December 31, 2005, 2004 and 2003, the Company’s total commercial banking assets from continuing operations were approximately $704.1 million, $513.4 million and $363.4 million, respectively.

The Company has continued to expand its business to better service its market. We completed construction of our new Adairsville, Georgia branch office in June 2005 and we concurrently closed the loan production office in Adairsville, Georgia that we had opened in May 2004 to serve this community during construction of the branch. With the opening of the new Adairsville branch, the Bank has three full service branches in Bartow County, Georgia. We completed construction of our new Cumming, Georgia branch office in January 2006 and concurrently closed our existing Cumming branch location that was being operated out of leased space in a shopping center. In the fourth quarter of 2005, we began construction on two new full service branches in Cherokee County, one located in south Cherokee County near Woodstock, Georgia and one located in Canton, Georgia. With the completion of these two branches, the Bank will have four full service branches in Cherokee County, which is one of the fastest growing counties in Georgia. In the second quarter of 2005, the Bank also opened a loan production office in Cobb County, Georgia.

On April 1, 2005, the Company and the Bank completed a merger with Futurus Financial Services, Inc. (“Futurus Financial”) and Futurus Bank, N.A., a wholly owned subsidiary of Futurus Financial. In a series of sequential mergers, Crescent Interim Corporation (“Crescent Interim”), a Georgia corporation and a newly formed, wholly owned subsidiary of the Bank, merged with and into Futurus Financial, immediately followed by the merger of Futurus Financial with and into the Bank, which was immediately followed by the merger of Futurus Bank, N.A. with and into the Bank. At the effective time of the mergers, which occurred simultaneously on the same day, but in the sequence provided for in the preceding sentence, the outstanding shares of Futurus Financial common stock were cancelled and in consideration therefor Futurus Financial shareholders received $10.00 per share in cash, and four holders of such outstanding Futurus Financial shares received a combination of cash and restricted shares of the Company’s common stock as provided in the Merger Agreement. The Bank continues to conduct the business and operations of Futurus Bank as part of Crescent Bank.

Shareholders of Futurus Financial receiving shares of the Company’s common stock in the transaction received, for each share of Futurus Financial common stock, a number of shares of the Company’s common stock equal to the quotient obtained by

dividing (x) $10.00 by (y) the average daily closing price of the Company’s common stock for the 15 consecutive trading days prior to the closing of the transaction. At April 1, 2005, the average daily closing price of the Company’s common stock was $26.45, which created a quotient of 0.3781. The shareholders of Futurus Financial receiving shares of the Company’s common stock in the transaction received an aggregate of 74,029 shares. Shareholders of Futurus Financial receiving cash in the transaction received $10.00 in cash for each share of Futurus Financial common stock cancelled in the transaction. The aggregate purchase consideration was approximately $10,155,554, including $8,164,224 in cash, $1,958,069 in common stock and $33,261 in stock options.

Futurus Financial was a one bank holding company with approximately $56 million in assets. Futurus Bank, N.A. primarily operated in north Fulton County, Georgia. The merger with Futurus Financial gave us a presence in the dynamic market of north Fulton County, as well as Walton and Cobb Counties, which is an excellent complement to our existing locations in the high growth markets of Forsyth, Cherokee, Bartow and Pickens Counties.

The Company does not consider its commercial banking operations to be seasonal in nature. The Bank makes loans to acquire and develop commercial and residential real estate. Real estate activity and values tend to be cyclical and vary over time with interest rates and economic activity.

The Company’s commercial banking business operates in highly competitive markets. The Bank competes directly for deposits in its commercial banking market with other commercial banks, savings and loan associations, credit unions, mutual funds, securities brokers, and insurance companies, locally, regionally and nationally, some of which compete with offerings by mail, telephone, computer and the Internet. In its commercial bank lending activities, the Bank competes with other financial institutions as well as consumer finance companies, mortgage companies and other lenders engaged in the business of extending credit to customers located in its market area. Interest rates, both on loans and deposits, and prices of services are significant competitive factors among financial institutions generally. Important competitive factors, such as office location, types and quality of services and products, office hours, customer service, a local presence, community reputation and continuity of personnel, among others, are and continue to be a focus of the Bank.

Many of the largest banks operating in Georgia, including some of the largest banks in the country, also have offices within the Bank’s market area. Virtually every type of competitor for business of the type served by the Bank has offices in Atlanta, Georgia, which is approximately 60 miles away from Jasper. Many of these institutions have greater resources, broader geographic markets and higher lending limits than the Company and may offer various services that the Company does not offer. In addition, these institutions may be able to better afford and make broader use of media advertising, support services, and electronic technology than the Company. To offset these competitive disadvantages, the Bank depends on its reputation as an independent and locally-owned community bank, its personal service, its greater community involvement and its ability to make credit and other business decisions quickly and locally.

At December 31, 2005, the Company had 177 full-time and 19 part-time employees. The Company considers its employee relations to be good, and it has no collective bargaining agreements with any employees.

Bank holding companies and banks are extensively regulated under both federal and state law. The following discussion summarizes certain laws rules and regulations affecting the Company and the Bank. This summary is qualified in its entirety by reference to the statutory and regulatory provisions referred to below and is not intended to be an exhaustive description of the statutes

or regulations applicable to the Company’s and the Bank’s businesses. Supervision, regulation and examination of banks by the bank regulatory agencies are intended primarily for the protection of depositors rather than holders of Company securities. Any change in applicable laws or regulations, or regulatory policies and practices, may have a material effect on the business of the Company and the Bank.

As a bank holding company registered with the Federal Reserve under the BHC Act, and with the Georgia Department of Banking and Finance under the Financial Institutions Code of Georgia, the Company is subject to supervision, examination and reporting by the Federal Reserve and the Georgia Department. Prior approval by the Federal Reserve and the Georgia Department is required for many transactions, including, without limitation, acquisitions. The Company is required to file periodic reports and other information with the Federal Reserve. The Federal Reserve examines the Company, and may examine its subsidiaries.

The BHC Act requires prior Federal Reserve approval for, among other things, the acquisition by a bank holding company of direct or indirect ownership or control of more than 5% of the voting shares or substantially all of the assets of any bank, or for a merger or consolidation of a bank holding company with another bank holding company. A bank holding company may acquire direct or indirect ownership or control of voting shares of any company that is engaged directly or indirectly in banking or managing or controlling banks or performing services for its authorized subsidiaries. A bank holding company may also engage in or acquire an interest in a company that engages in activities which the Federal Reserve has determined by regulation or order to be so closely related to banking as to be a proper incident thereto.

The Company is a legal entity separate and distinct from the Bank and its other subsidiaries. Various legal limitations restrict the Bank from lending or otherwise supplying funds to the Company or its non-bank subsidiaries. The Company and the Bank are subject to Section 23A of the Federal Reserve Act and Federal Reserve Regulation W. Section 23A defines “covered transactions,” which include extensions of credit, and limits a bank’s covered transactions with any affiliate to 10% of such bank’s capital and surplus. All covered and exempt transactions between a bank and its affiliates must be on terms and conditions consistent with safe and sound banking practices, and banks and their subsidiaries are prohibited from purchasing low-quality assets from their affiliates. Finally, Section 23A requires that all of a bank’s extensions of credit to an affiliate be appropriately secured by acceptable collateral, generally United States government or agency securities. The Company and the Bank also are subject to Section 23B of the Federal Reserve Act, which generally requires covered and other transactions among affiliates to be on terms and under circumstances, including credit standards, that are substantially the same or at least as favorable to the bank or its subsidiary as those prevailing at the time for transactions with unaffiliated companies.

Federal Reserve policy requires a bank holding company to act as a source of financial strength and to take measures to preserve and protect bank subsidiaries in situations where additional investments in a troubled bank may not otherwise be warranted. In addition, where a bank holding company has more than one bank or thrift subsidiary, each of the bank holding company’s subsidiary depository institutions are responsible for any losses to the FDIC as a result of an affiliated depository institution’s failure. As a result, a bank holding company may be required to loan money to its subsidiaries in the form of capital notes or other instruments which qualify as capital under regulatory rules. Any such loans from the holding company to its subsidiary banks likely will be unsecured and subordinated to the bank’s depositors and perhaps to other creditors of the bank.

The Gramm-Leach-Bliley Act of 1999 (the “GLB Act”) substantially revised the statutory restrictions separating banking activities from certain other financial activities. Under the GLB Act, bank holding companies that are “well-capitalized” and “well-managed,” as defined in Federal Reserve Regulation Y, that have and maintain “satisfactory” or better ratings under the Community Reinvestment Act of 1977, as amended (the “CRA”), and that meet certain other conditions, may elect to become “financial holding companies.” Financial holding companies and their subsidiaries are permitted to acquire or engage in previously impermissible activities such as insurance underwriting, securities underwriting and distribution, travel agency activities, broad insurance agency activities, merchant banking, and other activities that the Federal Reserve determines to be financial in nature or complementary thereto. In addition, under the merchant banking authority added by the GLB Act and the related Federal Reserve regulations, financial holding companies are authorized to invest in companies that engage in activities that are not financial in nature, as long as the financial holding company makes its investment with the intention of holding the investment for a limited term, does not manage the company on a day-to-day basis, and the investee company does not cross-market with any of the financial holding company’s controlled depository institutions. Financial holding companies continue to be subject to the oversight and supervision of the Federal Reserve, but the GLB Act applies the concept of functional regulation to the activities conducted by subsidiaries. For example, insurance activities would be subject to supervision and regulation by state insurance authorities. While the Company has not elected to become a financial holding company, it may to do so in the future.

As a Georgia bank whose deposits are insured by the FDIC up to the maximum amounts provided by law, the Bank is subject to regulation and examination by the Georgia Department and the FDIC. The Georgia Department and the FDIC regulate and monitor all of the Bank’s operations, including reserves, loans, mortgages, payments of dividends, interest rates and the establishment of branches. Interest and certain other charges collected or contracted for by the Bank are subject to state usury laws and certain federal laws concerning interest rates. The Bank, subject to necessary regulatory approvals, may branch anywhere in the State of Georgia.

Various statutes and contracts limit the Bank’s ability to pay dividends, extend credit or otherwise supply funds to the Company and its subsidiaries. Dividends from the Bank are expected to constitute the Company’s major source of funds for servicing Company debt and paying cash dividends on the Company’s stock. Under Georgia law, the Bank may not pay any dividends unless its paid-in capital and appropriated retained earnings, together, are equal to at least 20% of its capital stock. In addition, the Georgia Department’s prior approval of a dividend by the Bank generally is required if: (i) total classified assets at the most recent examination of the Bank exceed 80% of tier 1 capital plus the allowance for loan losses as reflected at such examination; (ii) the aggregate amount of dividends to be paid in the calendar year exceeds 50% of the Bank’s net profits, after taxes but before dividends, for the previous year; and (iii) the ratio of the Bank’s tier 1 capital to its adjusted total assets is less than 6%. The FDIC and the Georgia Department also have the general authority to limit the dividends paid by insured banks, if such payment is deemed an unsafe and unsound practice. The FDIC has indicated that paying dividends that deplete a bank’s capital base to an inadequate level would be an unsound and unsafe banking practice. Furthermore, the FDIC has the right to prevent or remedy unsafe or unsound banking practices or other violations of law. Generally, the FDIC will not permit a bank to pay dividends in excess of the current fiscal year’s net earnings, plus the net earnings from the preceding two years.

The FDIC has adopted the Federal Financial Institutions Examination Council’s (“FFIEC”) updated internal rating system used by the federal and state regulators for assessing the soundness of financial institutions on a uniform basis and for identifying those institutions requiring special supervisory attention. Each financial institution is assigned a confidential composite rating based on an evaluation and rating of six essential components of an institution’s financial condition and operations, including capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk. These ratings reflect an increased emphasis on the quality of risk management practices and the addition of a sixth component of sensitivity to market risk. For most institutions, the FDIC has indicated that market risk primarily reflects exposures to changes in interest rate. When regulators evaluate this component, consideration is expected to be given to management’s ability to identify, measure, monitor and control market risk; the institution’s size; the nature and complexity of its activities and its risk profile; and the adequacy of its capital and earnings in relation to its level of market risk exposure. Market risk is rated based upon, but not limited to, an assessment of the sensitivity of the financial institution’s earnings or the economic value of its capital to adverse changes in interest rates, foreign exchange rates, commodity prices, or equity prices; management’s ability to identify, measure and control exposure to market risk; and the nature and complexity of interest rate risk exposure arising from non-trading positions.

The GLB Act requires banks and their affiliated companies to adopt and disclose privacy policies, including policies regarding the sharing of personal information they obtain from customers with third parties. The GLB Act also permits bank subsidiaries to engage in “financial activities” through subsidiaries similar to those permitted to financial holding companies.

The Federal Reserve and the FDIC have adopted risk-based capital guidelines for bank holding companies and state banks, respectively. The guideline for a minimum ratio of capital to risk-weighted assets (including certain off- balance-sheet activities, such as standby letters of credit) is 8%. At least half of the total capital must consist of tier 1 capital, which includes common equity, retained earnings and a limited amount of qualifying perpetual preferred stock and trust preferred securities, less goodwill and intangibles. The remainder may consist of non-qualifying preferred stock, qualifying subordinated, perpetual or mandatory convertible debt, term subordinated debt and intermediate term preferred stock and up to 45% of the pretax unrealized holding gains on available-for-sale equity securities with readily determinable market values that are prudently valued, and a limited amount of any loan loss allowance (“tier 2 capital” and, together with tier 1 capital, “total capital”).

In addition, the federal bank regulatory agencies have established minimum leverage ratio guidelines for bank holding companies, national banks, and state member banks, which provide for a minimum leverage ratio of tier 1 capital to adjusted average quarterly assets (“leverage ratio”) equal to 3%, plus an additional cushion of 1.0% to 2.0% if the institution has less than the highest regulatory rating. The guidelines also provide that institutions experiencing internal growth or making acquisitions will be expected to maintain strong capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. Higher capital may be required in individual cases, depending upon a bank holding company’s or a bank’s risk profile. All bank holding companies and banks are expected to hold capital commensurate with the level and nature of their risks, including the volume and severity of their problem loans. Lastly, the Federal Reserve’s guidelines indicate that the Federal Reserve will continue to consider a “tangible tier 1 leverage ratio” (deducting all intangibles) in evaluating proposals for expansion or new activity.

The Federal Deposit Insurance Corporation Improvement Act of 1992 (“FDICIA”) requires the federal banking agencies to take “prompt corrective action” in respect of depository institutions that do not meet minimum capital requirements. FDICIA establishes five capital tiers: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, and cessation of receipt of deposits from correspondent banks. Critically undercapitalized institutions are subject to the appointment of a receiver or conservator.

The capital measures used by the federal banking regulators are the total capital ratio, tier 1 capital ratio, and the leverage ratio. Under the regulations, a national or state member bank will be (i) well capitalized if it has a total capital ratio of 10% or greater, a tier 1 capital ratio of 6% or greater, a leverage ratio of 5% or greater, and is not subject to any written agreement, order, capital directive, or prompt corrective action directive by a federal bank regulatory agency to meet and maintain a specific capital level for any capital measure, (ii) adequately capitalized if it has a total capital ratio of 8% or greater, a tier 1 capital ratio of 4% or greater, and a leverage ratio of 4% or greater (3% in certain circumstances) and does not qualify as well capitalized, (iii) undercapitalized if it has a total capital ratio of less than 8%, or a tier 1 capital ratio of less than 4% or a leverage ratio of less than 4% (3% in certain circumstances), (iv) significantly undercapitalized if it has a total capital ratio of less than 6%, or a tier 1 capital ratio of less than 3% or a leverage ratio of less than 3% or (v) critically undercapitalized if its ratio of tangible equity to total assets is equal to or less than 2%.

As of December 31, 2005, the Company had total capital and tier 1 capital ratios of approximately 10.81% and 9.77%, respectively, and the Bank had total capital and tier 1 capital ratios of approximately 10.05% and 9.00%, respectively. As of December 31, 2005, the Company had a leverage ratio of tier 1 capital to total average assets of approximately 9.08% and the Bank had a leverage ratio of tier 1 capital to total average assets of approximately 8.38%.

The Federal Reserve and the FDIC have not advised the Company or the Bank of any specific minimum leverage ratio or tangible tier 1 leverage ratio applicable to them. However, the Bank has agreed with the Georgia Department to maintain a leverage ratio of 8.0%. At December 31, 2005, the Bank’s leverage ratio was 8.38%.

The Georgia Department also expects bank holding companies and banks to maintain minimum levels of primary capital and adjusted primary capital on a consolidated basis. The Georgia Department has adopted generally the same definitions for capital adequacy as the Federal Reserve and the FDIC. Under Georgia Department policies, Georgia state banks must maintain not less than 4.5% tier 1 capital, and generally most institutions will be required to have at least 5.5% tier 1 capital. Additional capital may be required based on the Georgia Department’s consideration of the quality, type and diversification of assets, current and historical earnings, provisions for liquidity with particular emphasis on asset/liability mismatches and sensitivity to market risks in the asset portfolios, the quality of management, and the existence of other activities that may expose the institution to risk, including the degree of leverage and risk undertaken by any parent company or affiliates. Further, the Georgia Department’s policies generally require that Georgia bank holding companies maintain a tier 1 capital ratio of 4.0%, although higher ratios are required for holding companies experiencing or anticipating higher growth, and for those companies with significant financial or operational weaknesses, or higher risk profiles.

The following table sets forth certain capital information of the Company and Bank as of December 31, 2005:

We believe our outstanding trust preferred securities presently qualify as tier 1 regulatory capital under the Federal Reserve’s capital rules.

FDICIA directs that each federal banking regulatory agency prescribe standards for depository institutions and depository institution holding companies relating to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth compensation, a maximum ratio of classified assets to capital, minimum earnings sufficient to absorb losses, a minimum ratio of market value to book value for publicly traded shares, and such other standards as the federal regulatory agencies deem appropriate.

FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. Undercapitalized depository institutions are subject to growth limitations and are required to submit a capital restoration plan for approval. An acceptable capital restoration plan requires the depository institution’s parent holding company to guarantee that the institution comply with such capital restoration plan. The aggregate liability of the parent holding company is limited to the lesser of 5% of the depository institution’s total assets at the time it became undercapitalized and the amount necessary to bring the institution into compliance with applicable capital standards. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized. If the controlling holding company fails to fulfill its obligations under FDICIA and files (or has filed against it) a petition under the federal Bankruptcy Code, the claim would be entitled to a priority in such bankruptcy proceeding over third party creditors of the bank holding company.

The Bank’s deposits are primarily insured by BIF, and the Bank is subject to FDIC insurance assessments. The FDIC utilizes a risk-based deposit insurance premium scheme to determine the assessment rates for BIF-insured depository institutions. Each financial institution is assigned to one of three capital groups—“well capitalized,” “adequately capitalized” or “undercapitalized”—and further assigned to one of three subgroups within a capital group, on the basis of supervisory evaluations by the institution’s primary federal and, if applicable, state regulators and other information relevant to the institution’s financial condition and the risk posed to the applicable insurance fund. The actual assessment rate applicable to a particular institution will, therefore, depend in part upon the risk assessment classification so assigned to the institution by the FDIC. The recently enacted Federal Deposit Insurance Reform Act authorizes the FDIC to revise the manner in which it charges insured depository institutions insurance premiums.

The FDIC’s Board of Directors has continued the 2005 BIF and SAIF assessment schedule of zero to 27 basis points per annum for the first semiannual period of 2006. The Deposit Insurance Funds Act of 1996 (the “Funds Act”) authorized the Financing Corporation (“FICO”) to levy assessments on BIF-assessable deposits. Since 1999, the FICO assessment rate has been equal for BIF and SAIF-assessable deposits. The FICO assessments are set quarterly and ranged from 1.54 basis points for BIF and SAIF in the first quarter of 2004 to 1.46 basis points in the last quarter of 2004 and from 1.44 basis points in the first quarter of 2005 to 1.34 basis points in the last quarter of 2005. The FICO assessment rate for the first quarter of 2006 is 1.32 basis points.

The Bank paid $0, $0 and $41,036 in FDIC insurance premiums and $62,322, $44,785 and $43,644 in FICO assessments in 2005, 2004 and 2003, respectively.

The Company and the Bank are subject to the provisions of the CRA and the federal banking agencies’ regulations thereunder. Under the CRA, all banks and thrifts have a continuing and affirmative obligation, consistent with safe and sound operation, to help meet the credit needs for their entire communities, including low- and moderate-income neighborhoods. The CRA requires a depository institution’s primary federal regulator, in connection with its examination of the institution, to assess the institution’s record in assessing and meeting the credit needs of the community served by that institution, including low- and moderate-income neighborhoods. The regulatory agency’s assessment of the institution’s record is made available to the public. Further, such assessment is required of any institution which has applied to: (i) charter a national bank; (ii) obtain deposit insurance coverage for a newly-chartered institution; (iii) establish a new branch office that accepts deposits; (iv) relocate an office; (v) merge or consolidate with, or acquire the assets or assume the liabilities of, a federally regulated financial institution, or (vi) expand other activities, including engaging in financial services activities authorized by the GLB Act. In the case of a bank holding company applying for approval to acquire a bank or other bank holding company, or to become a “financial holding company,” the Federal Reserve will assess the records of each subsidiary depository institution of the applicant bank holding company, and such records may be the basis for denying the application. Following its most recent CRA examination, the Bank received a “satisfactory” CRA rating.

The GLB Act and federal bank regulators have made various changes to the CRA. Among other changes, CRA agreements with private parties must be disclosed and annual CRA reports must be made to a bank’s primary federal regulator. A bank holding company will not be permitted to become a financial holding company and no new activities authorized under the GLB Act may be commenced by a holding company or by a bank financial subsidiary if any of its bank subsidiaries received less than a “satisfactory” CRA rating in its latest CRA examination.

Current CRA regulations rate institutions based on their actual performance in meeting community credit needs. CRA performance is evaluated by the Federal Reserve, the Bank’s primary federal regulator, using a lending test, an investment test, and a service test. The Federal Reserve also will consider: (i) demographic data about the community; (ii) the institution’s capacity and constraints; (iii) the institution’s product offerings and business strategy; and (iv) data on the prior performance of the institution and similarly-situated lenders. The federal bank regulators recently proposed changes to their CRA regulations that would, among other things, require that evidence of discriminatory, illegal or abusive lending transactions be considered in an institution’s CRA evaluation.

The Bank is also subject to, among other things, the provisions of the Equal Credit Opportunity Act (the “ECOA”) and the Fair Housing Act (the “FHA”), both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a consumer or commercial credit or residential real estate transaction. In April 1994, the Department of Housing and Urban Development, the Department of Justice (the “DoJ”), and the federal banking agencies issued an Interagency Policy Statement on Discrimination in Lending in order to provide guidance to financial institutions in determining whether discrimination exists, how the agencies will respond to lending discrimination, and what steps lenders might take to prevent discriminatory lending practices. The DoJ has also increased its efforts to prosecute what it regards as violations of the ECOA and FHA.

The Federal Reserve, the FDIC and the Georgia Department monitor compliance with laws and regulations. Violations of laws and regulations, or other unsafe and unsound practices, may result in these agencies imposing fines or penalties, cease and desist orders, or taking other enforcement actions. Under certain circumstances, these agencies may enforce these remedies directly against officers, directors, employees and others participating in the affairs of a bank or bank holding company.

The International Money Laundering Abatement and Anti-Terrorism Funding Act of 2001 specifies new “know your customer” requirements that obligate financial institutions to take actions to verify the identity of the account holders in connection with opening an account at any U.S. financial institution. Banking regulators will consider compliance with this Act’s money laundering provisions in acting upon acquisition and merger proposals, and sanctions for violations of this Act can be imposed in an amount equal to twice the sum involved in the violating transaction, up to $1 million.

Under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, financial institutions are subject to prohibitions against specified financial transactions and account relationships as well as to enhanced due diligence and “know your customer” standards in their dealings with foreign financial institutions and foreign customers. For example, the enhanced due diligence policies, procedures, and controls generally require financial institutions to take reasonable steps –

The USA PATRIOT Act requires financial institutions to establish anti-money laundering programs, and sets forth minimum standards for these programs, including:

In addition, the USA PATRIOT Act authorizes the Secretary of the Treasury to adopt rules increasing the cooperation and information sharing between financial institutions, regulators, and law enforcement authorities regarding individuals, entities and organizations engaged in, or reasonably suspected based on credible evidence of engaging in, terrorist acts or money laundering activities. Any financial institution complying with these rules will not be deemed to have violated the privacy provisions of the GLB Act, as discussed above.

We are required to comply with various corporate governance and financial reporting requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations adopted by the SEC, the Public Company Accounting Oversight Board and Nasdaq. In particular, we will be required to include management and auditor reports on internal controls over financial reporting as part of our annual report for the year ended December 31, 2007 pursuant to Section 404 of the Sarbanes-Oxley Act. We expect to spend significant amounts of time and money on compliance with these rules. We may not be able to complete our assessment of our internal controls in a timely manner. Our failure to comply with these internal control rules may materially adversely affect our reputation, our ability to obtain the necessary certifications to our financial statements, and the values of our securities.

Banking is a business that depends on interest rate differentials. In general, the difference between the interest paid by a bank on its deposits and its other borrowings and the interest received by a bank on its loans and securities holdings constitutes the major portion of a bank’s earnings. Thus, the earnings and growth of the Company and the Bank will be subject to the influence of economic conditions generally, both domestic and foreign, and also to the monetary and fiscal policies of the United States and its agencies, particularly the Federal Reserve. The Federal Reserve regulates the supply of money through various means, including open market dealings in United States government securities, the discount rate at which banks may borrow from the Federal Reserve, and the reserve requirements on deposits. The nature and timing of any changes in such policies and their effect on the Bank cannot be predicted. In 2004 and 2005 the Federal Reserve raised the targeted federal funds rate 13 times for a total of 3.25%. In the first quarter of 2006, the Federal Reserve raised these rates by a total of 0.25%.

Congress passed the Federal Deposit Insurance Reform Act in the first quarter of 2006. Among other things, this act will merge BIF and SAIF during 2006. Deposits will remain insured up to a maximum of $100,000, but the maximum amount insured may be adjusted every five years based upon inflation. Retirement accounts will be insured for up to $250,000, and a bank that is less than adequately capitalized will not be able to accept employee benefit deposits. This law also changes the way FDIC insurance assessments and credits are calculated and authorizes the FDIC to revise the risk-based deposit insurance assessment scheme.

On January 10, 2006, the federal bank regulatory agencies released proposed guidance on Concentrations in Commercial Real Estate Lending (the “Guidance”). This proposal defines commercial real estate (“CRE”) loans as exposures secured by raw land, land development and construction (including 1-4 family residential construction), multi-family property, and non-farm nonresidential

property where the primary or a significant source of repayment is derived from rental income associated with the property (that is, loans for which 50% or more of the source of repayment comes from third party, non-affiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. Loans to REITs and unsecured loans to developers that closely correlate to the inherent risks in CRE markets would also be considered CRE loans under the Guidance. Loans on owner occupied CRE are generally excluded from the Guidance.

The requirements of the Guidance may also be triggered where a bank has had a sharp increase in CRE lending or has significant concentrations of CRE secured by a particular property type. If it is adopted, banks that become subject to the Guidance will be required to implement enhanced strategic planning, CRE underwriting policies, risk management and internal controls, portfolio stress testing, risk exposure limits, and other policies, including management compensation and incentives, to address the CRE risks. Higher allowances for loan losses and capital levels may also be appropriate.

If the Guidance is adopted as proposed, the Company believes its CRE lending would trigger the requirements of the Guidance. The Company will monitor developments and requirements as the Guidance is further considered by the regulatory agencies, but will wait until it is adopted in final form, before beginning to take any actions contemplated in the proposal.

Legislative and regulatory proposals regarding changes in banking laws and the regulation of banks, bank holding companies, thrifts and other financial institutions are being considered by the executive branch of the Federal government, Congress and various state governments, including Georgia. Other proposals pending in Congress would, among other things, allow banks to pay interest on checking accounts, permit the Federal Reserve to pay interest on deposits, and permit interstate branching on a de novo basis. Various federal oversight authorities are also reviewing the capital adequacy and riskiness of government sponsored enterprises such as Fannie Mae and Freddie Mac. Changes from such review could affect the cost and availability of such government sponsored enterprise’s services. It cannot be predicted whether any of these proposals will be adopted, and, if adopted, how these proposals will affect the Company and its subsidiaries.

Prior to the sale of our mortgage operations on December 31, 2003, the Company originated, sold and serviced mortgage loans through its subsidiary, CMS. The Company incorporated CMS as a separate subsidiary in October 1994 and it served as an approved servicer of mortgage loans sold to the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association and private investors. CMS offered wholesale mortgage banking services and provided servicing for residential mortgage loans.

In 2005 and 2004, the Company conducted nearly all of its business through the Bank and will continue to do so. On December 31, 2003, the Company completed the sale of its wholesale residential mortgage business conducted by CMS to Carolina Financial and its subsidiary CMC. Carolina Financial and CMC are not affiliated with the Company or its subsidiaries. In connection with the sale, Carolina Financial purchased all of CMS’s mortgage loans, pipeline mortgage loans and premises and equipment and assumed all leases and liabilities related to the transferred assets. The assets were sold at their carrying value. The Company was to be paid 100% of the pre-tax income of the divested mortgage business during the first 60 days following closing as well as 30% of the pre-tax income of the divested mortgage business for the nine months following the first 60-day period. The Company received no payments from Carolina Financial for either period due to the losses experienced by CMC. The Company retained the mortgage servicing portfolio, which was approximately $25 million at December 31, 2005.

The sale of the wholesale residential mortgage business simplified the Company’s business model and allowed us to focus on our core community banking business. The Bank currently operates in some of the fastest growing counties in the United States. We have reinvested the capital previously invested in CMS in the Bank, and applied the net proceeds from the sale of the mortgage operation to support expansion through internal growth and strategic acquisitions. As a result of the sale of our wholesale mortgage business, we expect that our financial position and performance will continue to be substantially different from the operations and financial results reported prior to 2004.

For the year ended December 31, 2005, the Company had no revenues or expenses from discontinued operations of its mortgage banking business. During the fiscal years 2004, 2003 and 2002, the Company had revenues from its mortgage banking business of

approximately $439,000, $53.5 million and $39.2 million, respectively, and pretax income (losses) from its mortgage banking business of approximately $(3.6) million, $24.7 million and $16.8 million, representing approximately (2,285.5)%, 88.0% and 90.9% of the Company’s total pretax income, respectively. At each of December 31, 2005 and 2004 the Company had no assets related to its mortgage banking business. At December 31, 2003, the Company’s total assets from its mortgage banking business were $3.1 million.

Crescent Bank is a community bank operating in the market area comprised of Pickens, Bartow, Forsyth, north Fulton, Cherokee, Dawson, Cobb, Walton and Gilmer Counties, Georgia. To a significant extent, our success depends on the economic conditions in these counties and, specifically, in those areas where we operate our offices. Additionally, our ability to diversify and manage economic risks is limited by the performance of these local economies. Any significant downturn in these local economies will likely affect our loan demand as well as the value of the collateral that secures these loans. Our market area is primarily retail-oriented and our operations are dependent upon local individuals and small- to medium-sized businesses. As a result, we may face greater lending and credit risks than financial institutions lending to larger, better-capitalized businesses.

In addition, any economic slowdown or recession over a prolonged period or other similar economic problems in our market area may be accompanied by reduced demand for consumer credit and declining real estate values in these areas, which may in turn result in an increased possibility of loss in the event of default. Any sustained period of decreased economic activity and increased delinquencies, foreclosures or losses could harm our growth and the results of our banking operations.

We Face Credit Risks and Our Allowance for Loan Losses May Be Insufficient

We may suffer losses because borrowers, guarantors and related parties fail to perform their obligations in accordance with the terms of their loans. We also are exposed to risks that the realizable value of collateral securing loans may be insufficient to provide a full recovery in the event a borrower defaults on a loan. A significant portion of our net income is derived from our loan portfolio. Our credit policies and underwriting and credit monitoring procedures may not be adequate and we may be unable to avoid unexpected losses that could materially harm our results of operations and financial condition. We have established an evaluation process designed to determine the adequacy of the allowance for loan losses. While this evaluation process uses historical and other objective information, the classification of loans and the establishment of loan losses is an estimate based upon experience, judgment, estimates and expectations regarding our borrowers, the economies in which we and our borrowers operate, as well as the judgments of our regulators. Accordingly, we cannot assure you that our loan loss reserves will be sufficient to absorb future loan losses.

Actual losses may exceed our estimates and we may have to increase the allowance for loan losses. This would cause us to increase our provision for loan losses, which would decrease our net income. Further, state and federal regulatory agencies, as an integral part of their examination process, review our loans and our allowance for loan losses. Regulators, when reviewing our loan portfolio, may require us to increase our allowance for loan losses, which would negatively affect our net income.

During 2005, our loan portfolio has grown by approximately $160 million, or approximately 37%. Continued rapid growth in the loan portfolio of this magnitude has the potential to strain the Bank’s administrative capabilities and may result in losses which are, at present, unidentified. Also, given the relatively young age of a large portion of our loan portfolio, there may be unidentified risk since problems related to loan collections typically do not become evident until some time after the loans are originated.

Because a Significant Portion of Our Loan Portfolio Is Secured By Real Estate, Any Negative Conditions Affecting Real Estate May Harm Our Business

Approximately 91% of our loan portfolio consists of commercial and consumer loans that are secured by various types of real estate, the value and marketability of which are sensitive to economic conditions and interest rates. In addition, these loans are subject to the risk that the local real estate markets will be overbuilt, driving down the value and marketability of the real estate that secures these loans. A decrease in collateral values could increase our costs and time of collection, as well as the amount of potential losses we may incur on loans secured by real estate.

Commercial real estate or “CRE” is cyclical and poses risks of possible loss due to concentration levels and similar risks of the asset. As of December 31, 2005, we had approximately $437.4 million in CRE loans, or approximately 73.7% of our loan portfolio. Our CRE loans have grown by approximately 49.7% since December 31, 2004. The banking regulators are giving CRE lending greater scrutiny, and may require banks with higher levels of CRE loans to implement improved underwriting, internal controls, risk management policies and portfolio stress testing, as well as possibly higher levels of allowances for possible losses and capital levels as a result of CRE lending growth and exposures.

We Have a Significant Amount of Construction Loans That Pose Additional Risks to Those Posed By Real Estate Loans Generally

Historically, our loan portfolio has included a significant number of construction loans consisting of one-to-four family residential construction loans, commercial construction loans and land loans for residential and commercial development. As of December 31, 2005, approximately 46% of our total loan portfolio was in acquisition and development and construction loans. In addition to the risk of nonpayment by borrowers, construction lending poses additional risks in that:

Any of these conditions could negatively affect our net income and our financial condition.

We Occasionally Purchase Non-Recourse Loan Participations From Other Banks Based on Information Provided By the Selling Bank

From time to time, we purchase loan participations from other banks in the ordinary course of business, usually without recourse to the selling bank. This may occur during times when we are experiencing excess liquidity in an effort to improve our profitability. When we purchase loan participations we apply the same underwriting standards as we would to loans that we directly originate and seek to purchase only loans that would satisfy these standards. We are less likely to be familiar with the borrower, and may rely to some extent on information provided to us by the selling bank and on the selling bank’s administration of the loan relationship. We therefore have less control over, and may incur more risk with respect to, loan participations that we purchase.

As a financial institution, our earnings are significantly dependent on our net interest income. Net interest income is the difference between the interest income we earn on loans, investments and other interest-earning assets and the interest expense we pay on deposits and other interest-bearing liabilities. Therefore, any change in general market interest rates, including changes resulting from changes in fiscal and monetary policies of the Federal Reserve, affects us more than non-financial institutions and can have a significant effect on our net interest income and total income. Our assets and liabilities may react differently to changes in overall market rates or conditions because there may be mismatches between the repricing or maturity characteristics of the assets and liabilities. As a result, an increase or decrease in market interest rates could have material adverse effects on our net interest margin and results of operations.

If We Are Unable to Increase Our Share of Deposits in Our Market, We May Accept Out of Market and Brokered Deposits, the Costs of Which May Be Higher than Expected

We can offer no assurance that we can maintain or increase our market share of deposits in our highly competitive service area. If we are unable to do so, we may be forced to accept increased amounts of out of market or brokered deposits. As of December 31, 2005, we had approximately $85.2 million in out of market deposits, including brokered deposits, which represented approximately 14.7% of our total deposits. Recently, the cost of out of market and brokered deposits has increased to equal or exceed the costs of deposits in our local market. In addition, the costs of out of market and brokered deposits can be volatile, and if we are unable to access these markets or if our costs related to out of market and brokered deposits increases, our liquidity and ability to support demand for loans could be adversely affected.

The commercial banking business is highly competitive. We compete with a variety of financial institutions, including the following:

Many of these competitors have much greater resources and lending limits, more diversified markets and larger branch networks, and are able to offer similar and additional services more efficiently than we can. We compete with these institutions both in attracting deposits and in making loans. We generally have to attract our customer base from other existing financial institutions and from new residents. Several of our competitors are well-established and much larger financial institutions, and we may face a competitive disadvantage as a result of our smaller size and lack of geographic diversification. Many of our non-bank competitors are not subject to the extensive regulations that we are. Any future federal or state legislation could further affect this level of competition.

Our success depends not only on competitive factors but also on state and federal regulations affecting financial services companies generally. We operate in a highly regulated environment and are subject to supervision by several governmental regulatory agencies, including the Federal Reserve, the FDIC and the Georgia Department. Regulation of the financial institutions industry has undergone extensive changes in recent years and continues to change. We cannot predict the effects of these changes, and the regulations now affecting us may be modified at any time, and could adversely affect our business. In addition, any burden that may be imposed on us by federal or state regulations may create a relative competitive disadvantage to our less regulated competitors.

We May Need Additional Capital in the Future, Which May Not Be Available to Us on Favorable Terms

Our growth may require significant additional capital in the future to, among other things, fund our operations, expand the range of our services and finance our future growth and capital adequacy. We cannot provide any assurance that, at the time we might need this additional capital, additional financing will be available on terms that are favorable to us, if at all. Our ability to obtain additional financing will be subject to a number of factors, including market conditions, our operating performance and investor sentiment. These factors may make the timing, amount, terms and conditions of additional financing unattractive to us. Our inability to raise capital on favorable terms, if at all, may impede our growth opportunities or may have an adverse effect on our business, financial condition or results of operations.

The Company’s only source of funds for the payment of principal of, and interest on, its indebtedness, as well as for the payment of dividends on our common stock, is from dividends paid by the Bank. As a result, our success and ability to pay dividends on our common stock depend upon the earnings and capital position of the Bank. The Bank’s ability to pay dividends is limited by its obligation to maintain sufficient capital and by other general restrictions on its dividends that are applicable to Georgia banks and banks that are regulated by the FDIC. Generally, a bank cannot, without prior regulatory approval, pay more dividends than its earnings for the current year or its retained earnings for the last two years. A Georgia bank may not, without prior regulatory approval, pay dividends of more than 50% of the previous year’s after-tax profits.

We May Face Risks With Respect to Current or Future Acquisitions or Mergers

In addition to our recent acquisition of Futurus Financial, we may engage in acquisitions or mergers in the future. We also from time to time receive inquiries and have discussions with potential acquirers. Any future acquisitions and mergers in which we might engage involve a number of risks to us, including:

There can be no assurance that, following any mergers or acquisitions, whether we acquire someone or are acquired, the integration efforts will be successful.

Our success depends, and is expected to continue to depend, on our executive officers. In particular, we rely on J. Donald Boggus, Jr., President and Chief Executive Officer of Crescent and the Bank, Leland W. Brantley, Jr., Chief Financial Officer of Crescent and the Bank, Anthony N. Stancil, Executive Vice President and Chief of Loan Production and A. Bradley Rutledge, Sr., Executive Vice President and Chief of Loan Administration. Our growth will continue to place significant demands on our management, and the loss of these executive officers’ services could harm our future operations.

Our Rights to Collect Interest and Take Other Actions May Be Limited by the Servicemembers’ Civil Relief Act of 2003

The United States declared “war” on terrorism and National Guard and reserve forces either have been called up or may be called up for domestic and international service. Under the Servicemembers’ Civil Relief Act of 2003, which amended and expanded the Soldiers’ and Sailors’ Civil Relief Act of 1940, a borrower who enters military service is afforded various types of relief under their loans and other obligations, including a maximum annual interest rate of 6% during the period of the borrower’s active duty status. The Act further provides that any interest in excess of 6% may not become due once the servicemember leaves active duty; any accrued interest above 6% is permanently waived. The Relief Act applies to members of the Army, Navy, Air Force, Marines, National Guard, Reserves, Coast Guard and officers of the U.S. Public Health Service assigned to active duty. Because the Relief Act applies to individuals who enter active military service after they enter into their loans, we cannot predict the effect that the Relief Act will have on our mortgage and commercial loans, if any. Under the Relief Act, we may be unable to collect the full amount of interest otherwise due on many of our loans for an indefinite period. Further, we may be unable to foreclose on these loans during, and in some cases after, the borrower’s period of active duty.

We May Incur Obligations Related to Our Discontinued Wholesale Mortgage Banking Operations

Prior to the sale of our wholesale residential mortgage banking business on December 31, 2003, we originated residential mortgage loans through our subsidiary, CMS. When we sold these loans, we made certain representations and warranties to the purchasers and insurers that we had properly originated and serviced the loans under state laws, investor guidelines and program eligibility standards. In some cases, we indemnified the purchasers for unpaid principal and interest on defaulted loans if we had breached the representations and warranties with respect to the loans that we sold. At December 31, 2005, we have approximately $6.8 million of mortgage loans where we had agreed to indemnify the purchaser against losses it might suffer. While we established a reserve based upon an estimated recourse liability at December 31, 2005 of approximately $2.9 million, this reserve was based upon historical information and certain assumptions by management. Because the Company’s highest levels of mortgage production in its history were in 2002 and 2003, we could experience an increase in our indemnification liability in the future. If the balance of indemnified loan increases significantly, then we could have to make additional provisions to the recourse liability reserve. In addition, if our recourse reserve is less than our actual indemnification obligations, we would be required to pay the indemnification obligations out of earnings, and our results of operations would be adversely affected.

During 2005, the Bank conducted its business primarily through its main offices located on an approximately two-acre site at 251 Highway 515, Jasper, Pickens County, Georgia. The Bank’s main offices are approximately 1.2 miles west of downtown Jasper and 60 miles north of metropolitan Atlanta, Georgia. The main offices are housed in a modern two-story office building owned by the Bank which contains approximately 14,200 square feet of finished space used for offices, operations and storage, six teller windows and the Bank lobby. The building also has three drive-up teller windows and an automated teller machine (“ATM”) with 24-hour-a-day access. The main office facility opened for business on January 29, 1990 with 9,200 square feet of finished space, and we added 5,000 square feet of administrative office space in 1999. The facility is considered in good condition.

The Bank owns the full service branch on Joe Frank Harris Parkway in Cartersville, Georgia. This branch was built in 2001 and 2002 and opened for business on June 24, 2002. The Cartersville building contains approximately 5,400 square feet of finished space used for offices and storage, five teller windows and the Bank lobby. The Cartersville building has three drive-up teller windows and an ATM with 24 hour-a-day access. The Bank also owns the full service branch on Towne Lake Parkway in Woodstock, Georgia. The Towne Lake building contains approximately 3,500 square feet of finished space used for offices and storage, four teller windows and the Bank lobby. The Towne Lake building has two drive-up teller windows and an ATM with 24 hour-a-day access.

The Bank also owns a 3,055 square foot building in Forsyth County in Alpharetta, Georgia, which was purchased in December of 2003 and which opened for business on April 1, 2004. The building has two drive-up teller windows and a drive-up ATM with 24 hour-a-day access. The Bank also owns a 3,600 square foot building in Bartow County in Cartersville, Georgia, which houses a branch office that opened in August 2004. The building has five teller windows in the banking lobby, three drive-up teller windows and a drive-up ATM with 24 hour-a-day access.

In 2005, the Bank also completed construction of a 3,500 square foot building in Bartow County in Adairsville, Georgia, which houses a branch office that opened in June 2005. This building has five teller windows in the banking lobby, three drive-up teller windows and a drive-up ATM with 24 hour-a-day access. The Bank concurrently closed the loan production office which was housed in leased space in Adairsville Georgia that we had opened in May of 2004 to serve the needs of this community during construction of the branch.

In 2005, the Bank obtained a branch office in Alpharetta, Georgia in Fulton County with the merger with Futurus Financial. This building contains approximately 6,600 square feet of finished space and has four teller windows in the banking lobby, two drive-up teller windows and a drive-up ATM with 24 hour-a-day access. The property on which the bank building is constructed is being leased over a period of twelve years with two additional five year options. The expiration date for the first twelve year lease period is March 9, 2012.

In January 2006, the Bank also completed construction of a 5,500 square foot branch building in Cumming, Forsyth County, Georgia. The building has five teller windows in the banking lobby, three drive-up teller windows and a drive-up ATM with 24 hour-a-day access. The Bank concurrently closed the Cumming branch location that was being operated out of leased space in a shopping center.

In addition, the Bank leases approximately 1,000 square feet for its branch office located in Marble Hill, Georgia with a lease expiration date of August 31, 2006. The Bank leases 3,200 square feet in Canton, Georgia for a full-service branch with a lease expiration date of January 31, 2009. During the first quarter of 2005, the Bank purchased a tract of land and during the fourth quarter of 2005 began construction on a new full-service branch to replace this leased branch facility in 2006. During 2004, the Bank entered into a lease agreement with an expiration date of January 28, 2006 for 2,320 square feet of office space in Canton, Georgia, for a Cherokee County loan production office. This space is currently being leased on a month to month basis until the new Canton office is completed in 2006, and the Bank will then close this loan production office. The Bank is also leasing 3,000 square feet in Cumming, Georgia for its branch office on a month to month basis. During 2005, the Bank constructed a new full-service branch to replace this leased branch facility, and will terminate this lease on March 31, 2006. Also, during 2004, the Bank entered into a lease agreement that expired on September 30, 2005 for 13,500 square feet of office space in Jasper, Georgia for executive and administrative offices. The Bank renewed this lease until January 7, 2007. During 2005, the Bank entered into a lease agreement with an expiration date of January 31, 2007 for 1,500 square feet of office space in Marietta, Georgia for a loan production office. Also, during 2005, the Bank obtained a leased space for a loan production office in Loganville, Georgia with the merger with Futurus Financial. This lease is for 1,100 square feet of office space and expires on September 9, 2006. In January 2006, the Bank entered into a lease agreement with an expiration date of December 31, 2010 for 1,200 square feet of office space in Cartersville, Georgia for a loan production office.

The Bank also leases a site for an ATM in the Big Canoe, Georgia community. The lease agreement will expire on October 31, 2011. The Big Canoe community is located in eastern Pickens and western Dawson Counties, Georgia, approximately 15 road miles east of the Bank’s main office. The Bank also leases a site for an ATM in the Bent Tree, Georgia community with a lease expiration date of September 30, 2006.

The Company and the Bank presently expect to renew each of their leases upon their respective expiration dates.

The Company and its subsidiaries are from time to time parties to various legal proceedings arising in the ordinary course of their business. Management believes, after consultation with legal counsel, that there are no proceedings threatened or pending against the Company or its subsidiaries that are likely, individually or in the aggregate, to have a material adverse effect on the consolidated financial condition or results of operations of the Company. However, no assurance can be given with respect to the ultimate outcome of any such proceedings.

We have incurred no penalties for failing to include on our tax returns any information required to be disclosed under Section 6011 of the Internal Revenue Code of 1986, as amended (the “Code”), with respect to a “reportable transaction” under the Code and that is require to be reported under Section 6707A(e) of the Code.

No matter was submitted to a vote of shareholders of the Company, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year ended December 31, 2005.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

On January 12, 1999, the Company’s Common Stock began trading on the Nasdaq SmallCap Market (now called the “Nasdaq Capital Market”) under the symbol “CSNT” at a price of $13.00 per share. On March 16, 2006, the price of the Company’s Common Stock, as quoted on the Nasdaq Capital Market, was $40.50. The following table sets forth the high and low sales price of the Company’s Common Stock on the Nasdaq Capital Market for the indicated periods.

As of March 23, 2006, there were approximately 2,595,073 shares of the Company’s Common Stock outstanding held by approximately 1,325 record holders. Of this number, the Company held 16,668 shares as treasury stock at December 31, 2005.

Cash dividends on the Bank’s common stock may only be declared and paid out of its retained earnings, and dividends may not be declared at any time at which the Bank’s paid-in capital and appropriated retained earnings do not, in combination, equal at least 20% of its capital stock account. In addition, the Georgia Department’s current rules and regulations require prior approval before cash dividends may be declared and paid if: (i) the Bank’s ratio of tier 1 capital to adjusted total assets is less than 8%; (ii) the aggregate amount of dividends declared or anticipated to be declared in that calendar year exceeds 50% of the Bank’s net profits, after taxes but before dividends, for the previous calendar year; or (iii) the percentage of the Bank’s loans classified as adverse as to repayment or recovery by the Georgia Department at the most recent regulatory examination of the Bank exceeds 80% of the Bank’s tier 1 capital plus the allowance for loan losses as reflected at such examination.

On February 16, 2006, the Company declared a quarterly dividend of $0.095 per share, which was paid on March 16, 2006 to shareholders of record on March 2, 2006, its thirty-eighth consecutive quarterly dividend.

The following table sets forth, for the Company’s last two fiscal years, the dividends per share declared and paid by the Company:

Future dividends on the Common Stock will depend upon the earnings, financial condition and capital adequacy of the Company and its subsidiaries, and their need for funds, and other relevant factors, including applicable restrictions and governmental policies and regulations. The ability of the Company to pay dividends is subject to statutory restrictions on cash dividends applicable to Georgia business corporations, in particular the requirements that, after giving effect to the dividends, the corporation be able to pay its debts as they become due in the usual course of business and that the corporation’s assets not be less than the sum of its total liabilities.

The Company does not expect to have any substantial sources of income other than dividends it may receive from the Bank.

The following table sets forth certain information regarding shares of the Company’s common stock authorized for issuance under equity compensation plans:

During the period covered by this Annual Report on Form 10-K, the Company has not sold any of its securities without registering them under the Securities Act, except as follows:

On September 30, 2005, the Company completed an offering of $8.0 million of trust preferred securities. The trust preferred securities were offered and sold to accredited investors pursuant to the exemption from registration provided by Rule 506 under the Securities Act. In that offering:

and used the proceeds from these sales to purchase the junior subordinated debentures from the Company; and

Both the junior subordinated debentures that the Company issued and the preferred capital securities that the Trust issued bear interest at a floating rate equal to the prime rate of interest as announced in the Money Rates section of The Wall Street Journal, payable quarterly on each of the last days of March, June, September and December, with a maturity of December 31, 2035. When the Company makes principal and interest payments to the Trust, as the holder of the junior subordinated debentures, the Trust, in turn, makes payments of principal and interest to holders of the preferred capital securities.

Please refer to that section of the Company’s Annual Report entitled “Selected Financial Data,” which is incorporated herein by reference. A complete copy of the Company’s Annual Report is included with this report as Exhibit 13.1.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Please refer to the section of the Company’s Annual Report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is incorporated herein by reference.

Please refer to the section of the Company’s Annual Report entitled “Quantitative and Qualitative Disclosures About Our Market Risk,” which is incorporated herein by reference.

Please refer to the section of the Company’s Annual Report entitled “Consolidated Financial Report,” which is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

As of the end of the period covered by this report, the Company’s Chief Executive Officer and the Chief Financial Officer evaluated the effectiveness of the Company’s disclosure controls and procedures in accordance with Rule 13a-15 under the Exchange Act. Based on their evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting in a timely manner the information that the Company is required to disclose in its Exchange Act reports.

There were no changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter ending December 31, 2005 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The information regarding the Company’s directors and executive officers required by this Item 10 is contained in the Company’s Proxy Statement under the captions “Proposal One—Election of Directors—General,” “—Election of Directors,” “—Information Relating to Directors, Executive Officers and Nominees,” “Additional Information Concerning the Board of Directors and Committees—Committees of the Board of Directors,” “—Independent Directors,” “—Compensation of Directors,” “Ownership of Common Stock by Directors, Executive Officers and Certain Beneficial Owners,” “Executive Compensation—Compensation Committee Interlocks,” “—Executive Compensation Summary,” and “—Change of Control Employment Agreements” and is incorporated herein by reference. Officers of the Company and the Bank are elected annually by the Company’s Board of Directors. The term “executive officer,” as used herein, means any officer who has major policy-making functions with respect to the Company, the Bank or CMS.

Information about compliance with Section 16 of the Exchange Act by the directors and executive officers of the Company is contained in the Proxy Statement under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” and is incorporated herein by reference.

The Board of Directors has adopted a Code of Conduct and Ethics applicable to all directors, officers and employees, with special provisions applicable to the Company’s Chief Executive Officer and its financial officers. A copy of the Code of Conduct and Ethics will be provided free of charge upon request to our Secretary, Crescent Banking Company, P.O. Box 668, Jasper, Georgia 30143. The Code of Conduct and Ethics complies with applicable Nasdaq and Commission requirements.

Information regarding the compensation of the Company’s executive officers is contained in the Company’s Proxy Statement under the captions “Executive Compensation—Report of the Compensation Committee,” “—Executive Compensation Summary,” “—Option/SAR Grants in Last Fiscal Year,” “—Aggregated Option/SAR Exercises in 2005 and 2005 Year-End Option/SAR Values,” “—Change of Control Employment Agreements” and “—Certain Relationship and Related Transactions” and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

Information concerning security ownership of certain beneficial owners and management is contained in the Proxy Statement under the caption “Ownership of Common Stock by Directors, Executive Officers and Certain Beneficial Owners” and is incorporated herein by reference.

Information regarding certain relationships and related transactions involving the Company and its management is contained in the Proxy Statement under the caption “Executive Compensation—Certain Relationships and Related Transactions” and is incorporated herein by reference.

With the exception of the above disclosures, and other than in the ordinary course of business, there were no transactions during 2005, nor are there any presently proposed transactions, to which the Company was or is to be a party in which any of the Company’s officers or directors had or have direct or indirect material interest.

Information regarding fees paid by the Company to, and related disclosures about, its principal accountants is contained in the Proxy Statement under the caption “Information Concerning the Company’s Independent Auditor” and is incorporated herein by reference.

The following Exhibits are attached hereto or incorporated by reference herein (numbered to correspond to Item 601(a) of Regulation S-K, as promulgated by the Securities and Exchange Commission).

PLEASE NOTE: It is inappropriate for readers to assume the accuracy of, or rely upon any covenants, representations or warranties that may be contained in agreements or other documents filed as Exhibits to, or incorporated by reference in, this report. Any such covenants, representations or warranties may have been qualified or superseded by disclosures contained in separate schedules or exhibits not filed with or incorporated by reference in this report, may reflect the parties’ negotiated risk allocation in the particular transaction, may be qualified by materiality standards that differ from those applicable for securities law purposes, and may not be true as of the date of this report or any other date and may be subject to waivers by any or all of the parties. Where exhibits and schedules to agreements filed or incorporated by reference as Exhibits hereto are not included in these exhibits, such exhibits and schedules to agreements are not included or incorporated by reference herein.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


CRESCENT BANKING COMPANY

By:		/s/ J. Donald Boggus, Jr.
		J. Donald Boggus, Jr.
		President and Chief Executive Officer

Date:		March 30, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Georgia		58-1968323
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

7 Caring Way, Jasper, Georgia		30143
(Address of Principal Executive Offices)		(Zip Code)


	Company				Bank
	Amount		Percentage		Amount		Percentage
	(Dollars in Thousands)
Risk-Based Capital:
Total Risk-Based Capital:
Actual		69,632	10.81	%		64,213	10.05	%
Minimum		51,524	8.00	%		51,121	8.00	%
Tier 1 Capital
Actual		62,920	9.77	%		57,501	9.00	%
Minimum Requirement		25,762	4.00	%		25,560	4.00	%
Leverage Ratio:
Actual	$	62,920	9.08	%	$	57,501	8.38	%
Minimum (1)		27,729	4.00	%		51,121	8.00	%(2)


	Sales Price per share of the Company’s Common Stock
Period	High		Low
2005
Fourth Quarter	$	36.45	$	33.13
Third Quarter	$	36.59	$	31.10
Second Quarter	$	30.69	$	26.20
First Quarter	$	27.65	$	25.26

2004
Fourth Quarter	$	27.26	$	25.05
Third Quarter	$	25.85	$	22.09
Second Quarter	$	27.00	$	23.05
First Quarter	$	31.78	$	24.66


Period	Dividend Per Share
2005
Fourth Quarter	$	.0950
Third Quarter	$	.0900
Second Quarter	$	.0850
First Quarter	$	.0850

2004
Fourth Quarter	$	.0850
Third Quarter	$	.0800
Second Quarter	$	.0800
First Quarter	$	.0800


	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights	(b) Weighted-average exercise price of outstanding options, warrants and rights		(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders	273,629 shares	$	24.29	148,564 options
Equity compensation plans not approved by security holders	0 shares	$	0.00	0 options
Total	273,629	$	24.29	148,564 options


Large Accelerated Filer ¨		Accelerated Filer ¨		Non-Accelerated Filer x


Exhibit Number		Description
2.1		Agreement and Plan of Reorganization, dated as of August 19, 2004 (Incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed August 23, 2004, File No. 000-20251).

3.1		Articles of Incorporation of the Company (Incorporated by reference from Exhibit 3.1 to the Company’s Registration Statement on Form S-4 dated January 27, 1992, Securities and Exchange Commission (the “Commission”) File No. 33-45254 (the “Form S-4”)).

3.2		Amendment to the Company’s Articles of Incorporation (Incorporated by reference from Exhibit 3.1 to the Company’s Registration Statement on Form S-2 filed October 26, 2001, Commission File No. 333-72300 (as amended, the “Form S-2”)).

3.3		Bylaws of the Company (Incorporated by reference from Exhibit 3.2 to the Form S-4).

10.1*		1991 Substitute Stock Option Plan (Incorporated by reference from Exhibit 10.2 to the Form S-4).

10.2*		1995 Stock Option Plan for Outside Directors (Incorporated by reference from Exhibit 10.2 to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 1995).

10.3*		1993 Employee Stock Option Plan (Incorporated by reference from Exhibit 10.3 to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 1995).

10.4*		Crescent Banking Company 2001 Non-Employee Director Stock Option Plan (Incorporated by reference from Exhibit 10.5 to the Form S-2).

10.5*		Crescent Banking Company 2001 Long-Term Incentive Plan (Incorporated by reference from Exhibit 10.6 to the Form S-2).

10.6		Warehouse Line of Credit, dated July 26, 1996, by and between Crescent Bank & Trust Company and Federal Home Loan Bank of Atlanta, including related documents (Incorporated by reference from Exhibit 10.11 to the Form S-2).

10.7		Amended and Restated Trust Agreement, dated as of November 9, 2001, by and among the Company, as Depositor, Wilmington Trust Company, as Property Trustee and Delaware Trustee, and the Administrators named therein (Incorporated by reference from Exhibit 10.12 to the Form S-2).

10.8		Junior Subordinated Indenture, dated as of November 9, 2001, by and between the Company and Wilmington Trust Company, as Trustee (Incorporated by reference from Exhibit 10.13 to the Form S-2).

10.9		Guarantee Agreement, dated as of November 9, 2001, by and between the Company, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee (Incorporated by reference from Exhibit 10.14 to the Form S-2).


Exhibit Number		Description
10.10*		Change of Control Employment Agreement, dated as of February 20, 2003, by and between Crescent Banking Company and J. Donald Boggus, Jr. (Incorporated by reference from Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002).

10.11*		Change of Control Employment Agreement, dated as of March 17, 2005, by and between Crescent Banking Company and Leland W. Brantley, Jr. (Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 22, 2005).

10.12*		Change of Control Employment Agreement, dated as of January 20, 2004, by and between Crescent Banking Company and Anthony N. Stancil (Incorporated by reference from Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004).

10.13*		Change of Control Employment Agreement, dated as of February 20, 2003 by and between Crescent Banking Company and A. Bradley Rutledge, Sr. (Incorporated by reference from Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004).

10.14*		Description of Director Compensation (Incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed December 21, 2005).

10.15*		Description of Executive Compensation arrangements (Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 21, 2005).

10.16*		Form of Crescent Banking Company Non-Qualified Stock Option Agreement under the 2001 Non-Employee Director Stock Option Plan (Incorporated by reference from Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004).

10.17*		Form of Crescent Banking Company Incentive Stock Option Agreement under the 2001 Long-Term Incentive Plan (Incorporated by reference from Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004).

10.18*		Form of Director Supplemental Retirement Plan Agreement (Incorporated by reference from Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004).

10.19*		Form of Director Life Insurance Endorsement Method Split Dollar Plan Agreement (Incorporated by reference from Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004).

10.20*		Form of Executive Supplemental Retirement Plan Agreement (Incorporated by reference from Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004).

10.21*		Form of Executive Life Insurance Endorsement Method Split Dollar Plan Agreement (Incorporated by reference from Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004).

10.22*		Change of Control Employment Agreement, dated as of November 18, 2004, by and between Crescent Banking Company and Bonnie B. Boling.

10.23		Junior Subordinated Indenture, dated as of September 30, 2005, by and between the Company and Wilmington Trust Company, as Trustee (Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 6, 2005).

10.24		Amended and Restated Trust Agreement, dated as of September 30, 2005, by and among the Company, as Depositor, Wilmington Trust Company, as Property Trustee and Delaware Trustee, and the Administrators named therein (Incorporated by reference from Exhibit 10.3 to the Company’s Current Report on Form 8-K filed October 6, 2005).

10.25		Guarantee Agreement, dated as of September 30, 2005, by and between the Company, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee (Incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 6, 2005).

11.1		Statement Regarding Computation of Per Share Earnings.

13.1		Crescent Banking Company 2005 Annual Report to Shareholders for the fiscal year ended December 31, 2005. With the exception of information expressly incorporated herein, the 2005 Annual Report to Shareholders is not deemed filed as part of this Annual Report on Form 10-K.

21.1		Subsidiaries of Crescent Banking Company.


Exhibit Number		Description
23.1		Consent of Dixon Hughes PLLC.

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


Signature	Title	Date

/s/ J. Donald Boggus, Jr. J. Donald Boggus, Jr.	President, Chief Executive Officer and Director (Principal Executive Officer)	March 30, 2006

/s/ Leland W. Brantley, Jr. Leland W. Brantley, Jr.	Chief Financial Officer (Principal Financial and Accounting Officer)	March 30, 2006

/s/ John S. Dean, Sr. John S. Dean, Sr.	Chairman of the Board of Directors	March 30, 2006

/s/ Charles Fendley Charles Fendley	Director	March 30, 2006

/s/ Charles Gehrmann Charles Gehrmann	Director	March 30, 2006

/s/ Michael W. Lowe Michael W. Lowe	Director	March 30, 2006

/s/ Cecil Pruett Cecil Pruett	Director	March 30, 2006

/s/ Janie Whitfield Janie Whitfield	Director	March 30, 2006

/s/ Nathan E. Hardwick IV Nathan E. Hardwick IV	Director	March 30, 2006


Exhibit Number		Description
10.22		Change of Control Employment Agreement, dated as of November 18, 2004, by and between Crescent Banking Company and Bonnie B. Boling.

11.1		Statement Regarding Computation of Per Share Earnings.

13.1		Crescent Banking Company 2005 Annual Report to Shareholders for the fiscal year ended December 31, 2005. With the exception of information expressly incorporated herein, the 2005 Annual Report to Shareholders is not deemed filed as part of this Annual Report on Form 10-K.

21.1		Subsidiaries of Crescent Banking Company.

23.1		Consent of Dixon Hughes PLLC.

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.