**U.
S. SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
D.C. 20549**





**FORM
10-QSB**








x
    Quarterly
      Report Under Section 13 or 15(d) of the Securities Exchange Act of
      1934


For
      the quarterly period ended**March
      31, 2005**





 ̈
    Transition
      Report under Section 13 or 15(d) of the Securities Exchange Act of
      1934


For
      the transition period from __________ to
__________




**Commission
File Number: 333-102971** ****





Freedom
      Bancshares, Inc.


(Exact
name of small business issuer as specified in its charter)





**Georgia**
    
    **06-1671382**(State
      of Incorporation)
    
    (IRS
      Employer Identification No.)


**3165
      Maysville Road, Commerce, GA 30529**(Address
      of principal executive offices)
 
 
 **(706)
      423-2500**(Issuer’s
      telephone number)


N/A


(Former
name, former address and former fiscal year, if changed since last
report)








Check
whether the issuer: (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the past 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  ̈








State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of





**May
13, 2005: 947,789 shares outstanding, $1.00 par value**








Transitional
Small Business Disclosure Format Yes  ̈ No x

















**FREEDOM
BANCSHARES, INC.**


**AND
SUBSIDIARY**









**Index**





PART
      I.
    FINANCIAL INFORMATIONItem
      1.
    Financial Statements (Unaudited)Consolidated Balance Sheets - March 31, 2005 and
      December 31, 2004Consolidated
      Statements of Operations and Comprehensive Loss -Three
      months ended March 31, 2005 and March 31, 2004Consolidated
      Statements of Cash Flows -Three
      months ended March 31, 2005 and March 31, 2004Notes to Consolidated Financial
    StatementsItem
      2.
    Management’s Discussion and AnalysisItem
      3.
    Controls and ProceduresPART
      II.
    OTHER INFORMATIONItem
      1.
    Legal ProceedingsItem
      2.
    Unregistered Sales of Equity Securities and Use of
      ProceedsItem
      3.
    Defaults Upon Senior SecuritiesItem
      4.
    Submission of Matters to a Vote of Security
      HoldersItem
      5.
    Other InformationItem
      6.
    ExhibitsSignature PageExhibit
      Index





2




**CONSOLIDATED BALANCE SHEETS**
 **MARCH
31, 2005 AND DECEMBER 31, 2004**
 **(Unaudited)**
 
 **Assets**
    
    **2005**
    
    **2004**Cash
      and due from banks-noninterest bearing
    
    $
    1,577,715
    
    $
    646,307Cash
      and due from banks-interest bearing
    
    
    147,002
    
    
    1,695,094Federal
      funds sold
    
    
    2,898,968
    
    
    2,067,254Total
      cash and cash equivalents
    
    
    4,623,685
    
    
    4,408,655Securities
      available-for-sale, at fair value
    
    
    12,656,208
    
    
    8,768,221Loans
    
    
    41,796,900
    
    
    34,849,122Less
      allowance for loan losses
    
    
    (605,000
    )
    
    (515,000
    )Loans,
      net
    
    
    41,191,900
    
    
    34,334,122Property
      and equipment, net
    
    
    2,421,606
    
    
    2,142,519Federal
      Home Loan Bank Stock
    
    
    303,200
    
    
    249,200Interest
      receivable
    
    
    415,486
    
    
    334,032Other
      assets
    
    
    196,991
    
    
    68,642$
    61,809,076
    
    $
    50,305,391**Liabilities
      and Stockholders' Equity****Deposits**Noninterest-bearing
    
    $
    2,021,074
    
    $
    2,577,646Interest-bearing
    
    
    48,043,759
    
    
    36,631,137**Total
      deposits**
    
    
    50,064,833
    
    
    39,208,783Other
      borrowings
    
    
    4,500,000
    
    
    3,700,000Interest
      payable
    
    
    88,128
    
    
    49,813Other
      liabiliites
    
    
    107,967
    
    
    67,552**Total
      liabilities**
    
    
    54,760,928
    
    
    43,026,148**Commitments
      and contingencies****Stockholders'
      equity**Preferred
      stock, no par value; 2,000,000 shares authorized;no
      shares issued and outstanding
    
    
    -
    
    
    -Common
      stock, $1.00 par value, 10,000,000 shares authorized;947,789
      and 947,789 shares issued and outstandingat
      March 31, 2004 and December 31, 2004, respectively
    
    
    947,789
    
    
    947,789Paid-in
      capital
    
    
    8,226,243
    
    
    8,226,243Accumulated
      deficit
    
    
    (1,960,619
    )
    
    (1,863,589
    )Accumulated
      other comprehensive income
    
    
    (165,264
    )
    
    (31,200
    )**Total
      stockholders' equity**
    
    
    7,048,148
    
    
    7,279,243$
    61,809,076
    
    $
    50,305,391
  ****See
Notes to Consolidated Financial Statements****


3




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **PartI. Financial
Information**
 **Item
1.Financial
Statements**
 **CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS**
 **THREE
MONTHS ENDED MARCH 31, 2005 AND 2004**
 **(Unaudited)**
 
 **Three
      Months**
    
    **Three
      Months****Ended
      March 31,**
    
    **Ended
      March 31,****2005**
    
    **2004****Interest
      income**Loans
    
    $
    675,155
    
    $
    75,637Taxable
      securities
    
    
    106,443
    
    
    -Federal
      funds sold
    
    
    10,965
    
    
    14,306792,563
    
    
    89,943**Interest
      expense**Deposits
    
    
    291,009
    
    
    5,218Other
      borrowings
    
    
    31,897
    
    
    -**Total
      interest expense**
    
    
    322,906
    
    
    5,218**Net
      interest income (expense)**
    
    
    469,657
    
    
    84,725**Provsion
      for loan losses**
    
    
    95,000
    
    
    100,000**Net
      interest income (expense)****after
      provision for loan losses**
    
    
    374,657
    
    
    (15,275
    )**Other
      income**Service
      charges on deposit accounts
    
    
    11,670
    
    
    140Other
      operating income
    
    
    12,116
    
    
    723**Total
      other income**
    
    
    23,786
    
    
    863**Other
      expenses**Salaries
      and other employee benefits
    
    
    279,479
    
    
    168,952Occupancy
      and equipment expenses
    
    
    66,192
    
    
    18,212Data
      processing
    
    
    43,283
    
    
    14,280Legal
      and professional fees
    
    
    26,435
    
    
    2,479Advertising
      and public relations
    
    
    21,369
    
    
    14,223Regulatory
      fees and assessments
    
    
    5,374
    
    
    5,150Other
      operating expenses
    
    
    53,342
    
    
    75,977**Total
      other expenses**
    
    
    495,474
    
    
    299,273**Loss
      before income taxes**
    
    
    (97,030
    )
    
    (313,685
    )**Income
      tax expense**
    
    
    -
    
    
    -**Net
      loss**
    
    
    (97,030
    )
    
    (313,685
    )**Other
      comprehensive loss**Unrealized
      losses on securities available-for-sale
      arising during the period, net of tax
    
    
    (134,064
    )
    
    -**Comprehensive
      loss**
    
    $
    (231,094
    )
    $
    (313,685
    )**Basic
      losses per share**
    
    $
    (0.10
    )
    $
    (0.35
    )**Diluted
      losses per share**
    
    $
    (0.10
    )
    $
    (0.35
    )**Cash
      dividends per share**
    
    $
    -
    
    $
    -


**See
Notes to Consolidated Financial Statements**




4




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **PartI. Financial
Information**
 **Item
1.Financial
Statements**
  **CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **THREE
MONTHS ENDED MARCH 31, 2005 AND 2004**
 **(Unaudited)**
  **2005**
    
    **2004****OPERATING
      ACTIVITIES**Net
      loss
    
    $
    (97,030
    )
    $
    (313,685
    )Adjustments
      to reconcile net loss to net cashused
      in operating activites:Amortiztion
      and accretion on Securities
    
    
    3,098
    
    
    -Depreciation
    
    
    34,770
    
    
    8,383Provision
      for loan losses
    
    
    90,000
    
    
    100,000Increase
      in interest receivable
    
    
    (81,454
    )
    
    (21,874
    )Increase
      in interest payable
    
    
    38,315
    
    
    2,652Increase
      (Decrease) in accounts payable and accruals
    
    
    40,414
    
    
    (37,163
    )Increase
      in other assets
    
    
    (38,973
    )
    
    (122,920
    )Net
      cash used in operating activities
    
    
    (10,860
    )
    
    (384,607
    )**INVESTING
      ACTIVITIES**Purchases
      of securities available for sale
    
    
    (4,375,792
    )
    
    (1,632,634
    )Payments
      received on securities
    
    
    261,267
    
    
    -Net
      increase in loans
    
    
    (6,947,778
    )
    
    (6,298,963
    )Purchases
      of premises and equipment
    
    
    (313,857
    )
    
    (134,730
    )Purchases
      of premises and equipment
    
    
    (54,000
    )
    
    -Net
      cash used in investing activities
    
    
    (11,430,160
    )
    
    (8,066,327
    )**FINANCING
      ACTIVITES**Net
      increase in deposits
    
    
    10,856,050
    
    
    6,336,576Proceeds
      from FHLB advances
    
    
    800,000
    
    
    -Proceeds
      from sale of common stock
    
    
    -
    
    
    1,153,250Net
      cash provided by financing activities
    
    
    11,656,050
    
    
    7,489,826Net
      decrease in cash and cash equivalents
    
    
    215,030
    
    
    (961,108
    )Cash
      and cash equivalents at beginning of period
    
    
    4,408,655
    
    
    6,864,347Cash
      and cash equivalents at end of period
    
    $
    4,623,685
    
    $
    5,903,239**SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION**Cash
      paid for:Interest
    
    $
    284,591
    
    $
    2,566
 **See
Notes to Consolidated Financial
Statements**


5


****
 **FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **PartI. Financial
Information**
 **Item
1.Financial
Statements**
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 March 31,
2005
 (Unaudited)




NOTE
      1.
    BASIS
      OF PRESENTATION





The
financial information contained herein is unaudited. Accordingly, the
information does not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements,
however, such information reflects all adjustments (consisting solely of normal
recurring adjustments), which are, in the opinion of management, necessary for a
fair statement of results for the interim periods.





Operating
results for the three-month period ended March 31, 2005 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2005. These statements should be read in conjunction with the financial
statements and footnotes thereto included in the annual report for the year
ended December 31, 2004.





NOTE
      2.
    SUMMARY
      OF ORGANIZATION





Freedom
Bancshares, Inc., Commerce, Georgia (the “Company”), is a one-bank holding
company with respect to its subsidiary bank, Freedom Bank of Georgia, Commerce,
Georgia (the “Bank”). Prior to the Company’s incorporation on January 17, 2003,
a group of organizers formed FB Investors, LLC (the “LLC”) to facilitate in the
initial process of organizing and forming both the Company and the Bank.
Although the LLC was officially organized November 12, 2002, it had commenced
operations on October 2, 2002, the date of inception. On January 24, 2003, the
LLC’s Board of Directors assigned and transferred all of the assets and
liabilities of the LLC to the Company. Accordingly, all assets, liabilities,
rights, revenues and expenses acquired, incurred or undertaken by the LLC from
inception, October 2, 2002, have been transferred to the Company.





The
Company’s articles of incorporation authorize its Board of Directors, without
further action by the shareholders, to issue up to 10.0 million shares of its
$1.00 par value per share common stock (“Common Stock”). Each share entitles its
owners to one vote and shareholders have no preemptive, cumulative voting or
conversion rights. As of March 31, 2005, there were 947,789 shares of the
Company’s Common Stock issued and outstanding.





The
Company’s articles of incorporation also authorize its Board of Directors to
issue up to 2.0 million shares of its zero par value per share preferred stock
(“Preferred Stock”). The Company’s Board of Directors may, without further
action by the shareholders, direct the issuance of Preferred Stock for any
proper corporate purpose with preferences, voting powers, conversion rights,
qualifications, special or relative rights and privileges which could adversely
affect the voting power or other rights of shareholders of Common Stock. As of
March 31, 2005, no shares of the Company’s Preferred Stock were issued or
outstanding.





In
connection with the Company’s formation and Offering, 184,140 stock warrants
were awarded to the Company’s organizers. Each warrant entitles its owner to
purchase one share of Common Stock for a price of $10.00. The warrants vest in
one-third annual increments over a three-year period beginning on the one-year
anniversary of the date that the Company first issued its common stock. Warrants
are exercisable for a period of no more than ten years from February 17, 2004,
or no more than ninety days after a warrant holder ceases to be either a
director or senior executive of the Company, whichever period is
shorter.





6




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 **Item
1.Financial
Statements**
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 March 31,
2005
 (Unaudited)





The
Company originally reserved up to 80,000 shares of Common Stock for issuance
under a stock incentive option plan. On May 20, 2004 the shareholders of the
Company approved an amendment to the stock incentive option plan increasing the
number of shares of Common Stock available under the plan to 160,000 shares. The
plan is administered by the Company’s Personnel and Compensation Committee (the
“Committee”). The Committee has the authority to award stock options to eligible
persons, to determine exercise price, expiration date, forfeiture or termination
provisions, and all other administrative responsibilities. As of March 31, 2005,
the Company had 93,800 options outstanding.





The
Company ceased to be a development stage enterprise as defined by the Financial
Accounting Standards Board Statement No. 7, “Accounting and Reporting by
Development Stage Enterprises,” as it commenced principal operations on February
17, 2004.





NOTE
      3.
    SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES





*Basis
of Accounting.* The
accounting and reporting policies of the Company conform to accounting
principles generally accepted in the United States of America. In preparing the
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets, liabilities, shareholders’ equity
(deficit) and net income (loss). Actual results may differ significantly from
those estimates. The Company uses the accrual basis of accounting by recognizing
revenues when they are earned and expenses in the period incurred, without
regard to the time of receipt or payment of cash.





*Cash
and Cash Equivalents.* Cash
refers to cash that is held at an unrelated financial institution. Cash
equivalents refers to financial instruments that are almost as liquid as cash,
such as federal funds sold. At March 31, 2005 and December 31, 2004, cash and
cash equivalents amounted to $4,623,685 and $4,408,655,
respectively.





*Property
and Equipment.* Furniture
and equipment are stated at cost, net of accumulated depreciation. Land is
carried at cost. Depreciation is computed using the straight-line method over
the estimated useful lives of the related assets. Maintenance and repairs are
charged to operations, while major improvements are capitalized. Upon
retirement, sale or other disposition of property and equipment, the cost and
accumulated depreciation are eliminated from the accounts and gain or loss is
included in operations. The Company had no capitalized lease obligations at
March 31, 2005 and December 31, 2004.





*Income
Taxes.* Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date. In
the event the future tax consequences of difference between the financial
reporting bases and the tax bases of the assets and liabilities result in
deferred tax assets, an evaluation of the probability of being able to realize
the future benefits indicated by such asset is required. A valuation allowance
is provided for the portion of the deferred tax asset when it is more likely
than not that some portion or all of the deferred tax asset will not be
realized.





7




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 **Item
1.Financial
Statements**
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 March 31,
2005
 (Unaudited)


In
assessing the realizability of the deferred tax assets, management considers the
scheduled reversals of deferred tax liabilities, projected future taxable
income, and tax planning strategies.





*Stock-Based
Compensation.* The
Company follows Accounting Principles Board Opinion No. 25, *Accounting
for Stock Issued to Employees* (“APB
25”), and related interpretation, in accounting for its proposed options and
warrants rather than the alternative fair value accounting allowed by Statement
of Financial Accounting Standards No. 123, *Accounting
for Stock-Based Compensation* (“SFAS
123”). APB 25 provides that the compensation expense relative to the
Company’s options and warrants is measured based on the intrinsic value of the
option/warrant. SFAS 123 requires companies that continue to follow APB 25
to provide a pro-forma disclosure of the impact of applying the fair value
method of SFAS 123. The following table illustrates the effect on net loss and
losses per share if the Company had applied the fair value recognition
provisions of SFAS Statement No. 123, *Accounting
for Stock-Based Compensation* , to
stock-based employee compensation.




**Three
      Months Ended March 31,****2005**
    
    **2004**Net
      loss, as reported
    
    **$**
    **(97,030**
    **)**
    $
    (313,865
    )Deduct:
      Total stock-based employee compensation expense
      determined under fair value based method
      for all awards, net of related tax effects
    
    
    **(****119,946**
    **********)**
    
    -Pro
      forma net loss
    
    **$**
    **(216,976**
    **)**
    $
    (313,865
    )Losses
      per share:Basic
      - as reported
    
    **$**
    **(0.10**
    **)**
    $
    (0.35
    )Basic
      - pro forma
    
    **$**
    **(0.21**
    **)**
    $
    (0.35
    )Diluted
      - as reported
    
    **$**
    **(0.10**
    **)**
    $
    (0.35
    )Diluted
      - pro forma
    
    **$**
    **(0.21**
    **)**
    $
    (0.35
    )


*Statement
of Cash Flows.* The
statement of cash flows was prepared using the indirect method. Under this
method, net loss was reconciled to net cash flows from pre-operating activities
by adjusting for the effects of short-term assets and liabilities.





NOTE
      4.
    RECENT
      ACCOUNTING PRONOUNCEMENTS





In
December 2004, the Financial Accounting Standards Board (FASB) issued FASB
Statement No. 123 (revised 2004) (FAS 123(R)), *Share-Based
Payment* . FAS
123(R) establishes standards for the accounting for transactions in which an
entity exchanges its equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for goods or
services that are based on the fair value of the entity’s equity instruments or
that may be settled by the issuance of those equity instruments. FAS 123(R)
focuses primarily on accounting for transactions in which an entity obtains
employee services in share-based payment transactions such as the issuance of
stock options in exchange for employee services. FAS 123(R) does not change the
accounting guidance for share-based payment transactions with parties other than
employees provided in FAS 123 as originally issued and EITF Issue No. 96-18,
“Accounting for Equity Instruments That Are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services.” FAS 123(R) does
not address the accounting for employee share ownership plans, which are subject
to AICPA SOP 93-6, *Employers’
Accounting for Employee Stock Ownership Plans* . Public
entities that file as small business issuers will be required to apply FAS
123(R) in the first interim or annual reporting period that begins after
December 15, 2005.




8




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 **Item
1.Financial
Statements**
  NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 March 31,
2005
 (Unaudited)




In March
2005, the Securities and Exchange Commission’s (SEC or Commission) Office of the
Chief Accountant and its Division of Corporation Finance announced the release
of Staff Accounting Bulletin No. 107 (SAB 107), “Share-Based Payment,” in
response to frequently asked questions and to provide the SEC staff’s views
regarding the application of FAS 123(R). SAB 107 provides interpretive guidance
related to the interaction between FAS 123(R) and certain SEC rules and
regulations; addresses the staff’s views on the subject of valuation of
share-based payment transactions for public companies; and reiterates the
importance of disclosures related to share-based payment transactions in the
consolidated financial statements filed with the SEC.





NOTE
      5.
    LOSSES
      PER SHARE





Basic
losses per share are computed by dividing net loss by the weighted average
number of shares of common stock outstanding. Diluted losses per share are
computed by dividing net loss by the sum of the weighted average number of
shares of common stock outstanding and potential common shares. Potential common
shares consist of stock options and stock warrants. Weighted average shares
outstanding and potential common shares for the three months ended March 31,
2005 and March 31, 2004 were 1,009,580 and 907,406, respectively.




9






**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 Item 2.Management's Discussion and
Analysis


The
following discussion and analysis provides information which management believes
is relevant to an assessment and understanding of the Company’s results of
operations and financial condition. This discussion should be read in
conjunction with the financial statements and accompanying notes appearing in
this report.





**SPECIAL
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS**





This
Report contains statements which constitute forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and the Securities
Exchange Act of 1934. These statements are based on many assumptions and
estimates and are not guarantees of future performance. Our actual results may
differ materially from those projected in any forward-looking statements, as
they will depend on many factors about which we are unsure, including many
factors which are beyond our control. The words “may,” “would,” “could,” “will,”
“expect,” “anticipate,” “believe,” “intend,” “plan,” and “estimate,” as well as
similar expressions, are meant to identify such forward-looking statements.
Potential risks and uncertainties include, but are not limited to:





·
    significant
      increases in competitive pressure in the banking and financial services
      industries;


·
    changes
      in the interest rate environment which could reduce anticipated or actual
      margins;


·
    changes
      in political conditions or the legislative or regulatory environment;


·
    general
      economic conditions, either nationally or regionally and especially in our
      primary service area, becoming less favorable than expected resulting in,
      among other things, a deterioration in credit
quality;


·
    changes
      occurring in business conditions and
inflation;


·
    changes
      in technology;


·
    changes
      in monetary and tax policies;
 
  ·
    the level of allowance for loan
loss;
 
  ·
    the rate of delinquencies and amounts of
      charge-offs;
 
  ·
    the rates of loan growth;
 
  ·
    adverse changes in asset quality and resulting credit
      risk-related losses and expenses;
 
  ·
    changes in the securities markets;
and


·
    other
      risks and uncertainties detailed from time to time in our filings with the
      Securities and Exchange Commission.





**Critical
Accounting Policies**





We have
adopted various accounting policies which govern the application of accounting
principles generally accepted in the U.S. in the preparation of financial
statements. The Company’s significant accounting policies are described in Note
1 to the Company’s consolidated financial statements as of and for the year
ended December 31, 2004. Certain accounting policies require the Company to make
significant assumptions and estimates, the use of which has a material impact on
the carrying value of certain assets and liabilities, and could potentially
result in materially different results under different assumptions and
conditions. Management believes that the allowance for loan losses is the most
critical accounting policy upon which the Company’s financial condition depends.
The allowance for loan losses involves the most complex and subjective decisions
and assessments that management must make.





10




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 Item
2.Management's Discussion and
Analysis


*Allowance
for Loan Losses* :
Arriving at an appropriate level of allowance for loan losses involves a high
degree of judgment. The Company’s allowance for loan losses provides for
probable losses based upon evaluations of known and inherent risks in the loan
portfolio. Management uses historical information of similar banks to assess the
adequacy of the allowance for loan losses as well as the prevailing business
environment; as it is affected by changing economic conditions and various
external factors, which may impact the portfolio in ways currently unforeseen.
The allowance for loan losses is increased by provisions for loan losses and by
recoveries of loans previously charged-off and reduced by loans charged-off.





The
process of reviewing the adequacy of the allowance for loan losses requires
management to make numerous judgments and assumptions about future events and
subjective judgments, including the likelihood of loan repayment, risk
evaluation, extrapolation of historical losses of similar banks, and similar
judgments and assumptions. If these assumptions prove to be incorrect,
charge-offs in future periods could exceed the allowance for loan
losses.





*Deferred
Income Taxes* :
Deferred income tax assets and liabilities are determined using the liability
(or balance sheet) method. Under this method, the net deferred tax asset or
liability is determined based on the tax effects of the differences between the
book and tax bases of the various balance sheet assets and liabilities and gives
current recognition to changes in tax rates and laws.





A
valuation allowance for deferred tax assets is required when it is more likely
than not that some portion or all of the deferred tax asset will not be
realized. In assessing the realization of the deferred tax assets, management
considers the scheduled reversals of deferred tax liabilities, projected future
taxable income (in the near-term based on current projections), and tax planning
strategies.





The operating
results of the Company and its subsidiary are included in consolidated income
tax returns.





**Overview**





On
February 17, 2004, we opened for business in a temporary facility at 3165
Maysville Road, Commerce, Georgia. We subsequently broke ground for construction
of our permanent facility, which we opened on November 22, 2004. This facility
is a 6,350-square-foot, full-service banking facility.





After
receiving approval from the Georgia Department of Banking and Finance, on May 1,
2004 we opened a Loan Production Office in Jefferson, Georgia at 167 Lee Street.
During the fourth quarter of 2004, we applied for and received permission from
our regulators to replace this office with a full service branch facility to be
located at 1057 Winder Highway in Jefferson. During the first quarter of 2005 we
renovated a leased facility at that address to serve as our branch office.
Subsequently, on April 18, 2005 we closed the office at 167 Lee Street and
opened for business at 1057 Winder Highway.





**Financial
Condition**





At March
31, 2005, total assets of Freedom Bancshares, Inc. were $61,809,076. Deposits at
March 31, 2005 totaled $50,064,833. At March 31, 2005, loans totaled
$41,796,900; securities totaled $12,656,208; and federal funds sold totaled
$2,898,968. At March 31, 2005, other borrowings totaled $4,500,000. Other
borrowings consist solely of advances from the Federal Home Loan Bank of
Atlanta.





11




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 Item
2.Management's Discussion and
Analysis


Investment
securities available-for-sale totaled $12,656,208 at March 31, 2005. These
investments consisted of $3,084,295 in US agency securities and $9,571,913 in
mortgage-backed securities issued by government or government-backed agencies.
Generally, we purchase mortgage-backed securities because we believe they will
provide good income yields as well as a consistent cash flow from the monthly
mortgage payments. These cash flows are then reinvested in new loans or
additional purchases of similar securities, depending on loan demand and market
conditions. These cash flows also allow us to regularly invest at current market
rates. While we invest in traditional government agency securities on occasion,
recent market conditions have resulted in historically low yields on those
securities, so we have chosen to maximize our yields by investing in other
segments of the market. It is generally our policy to designate our marketable
investment securities as available-for-sale, and all securities were so
designated at March 31, 2005.





Gross
loans totaled $41,796,900 at March 31, 2005. Net loans totaled $41,191,900 at
March 31, 2005. The majority of our loans are secured by real estate. Balances
within the major loan categories as of March 31, 2005 were as
follows:





**Composition
of Loan Portfolio**


**March
31, 2005**





Category
    
    Amount
    
    Percent
      of
      TotalConstruction
      loans
    
    $
    13,218,923
    
    
    31.6
    %Other
      real estate loans
    
    
    23,572,311
    
    
    56.4
    %Commercial
      loans
    
    
    3,531,183
    
    
    8.5
    %Other
      loans
    
    
    1,474,483
    
    
    3.5
    %**$**
    ****41,796,900
    
    
    ****100
    ****%Allowance
      for loan losses
    
    
    ****(605,000
    ****)**$**
    ****41,191,900





We expect
to continue to fund loan growth from our deposit growth. We will also hold funds
in federal funds sold and purchase investment securities as conditions warrant
and as we identify opportunities appropriate to our overall asset and liability
strategies and goals. We expect continued growth in assets and liabilities
during the remainder of 2005.





Our total
equity was $7,048,148 at March 31, 2005. Equity consisted of proceeds of our
stock offering, which closed in 2004, of $9,477,890 which were offset by
offering expenses of $303,859; an accumulated deficit at December 31, 2004 of
$(1,863,589); a net loss for the three months ended March 31, 2005 of $(97,030);
and a decrease in market value of securities available-for-sale of
$(165,264).





**Results
of Operations for the Three Months Ended March 31, 2005 and
2004**





The
results of operations are determined by our ability to effectively manage net
interest income, control non-interest expenses, generate non-interest income and
minimize loan losses. In order for us to become profitable, we must increase the
amount of earning assets so that net interest income along with non-interest
income will be sufficient to cover normal operating expenses incurred in a
banking operation and the Bank’s provision for loan losses.





We
commenced banking operations on February 17, 2004, when our subsidiary, Freedom
Bank of Georgia, opened in a temporary facility at 3165 Maysville Road in
Commerce, Georgia. Accordingly, comparing results of operations for the
three-month periods ended March 31, 2005 with the three-month period ended March
31, 2004 could be misleading because one period (March 31, 2005) encompasses an
entire quarter of banking operations while the other (March 31, 2004) does
not.





12




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 Item
2.Management's Discussion and
Analysis


Net loss
for the three-month period ended March 31, 2005 amounted to $(97,030), or $(.10)
per share, or $(.10) per diluted share. Net loss for the three-month period
ended March 31, 2004 amounted to $(313,685), or $(.35) per share, or $(.35) per
diluted share. Following is a brief discussion concerning our operational
results for the three-month periods ended March 31, 2005 and March 31,
2004.





a.
    Interest
      income, which represents interest received on interest earning assets, was
      $792,563 for the three-month period ended March 31, 2005 and $89,943 for
      the three-month period ended March 31, 2004. The cost of funds, which
      represents interest paid on deposits and borrowings, was $322,906 for the
      three-month period ended March 31, 2005 and $5,218 for the three-month
      period ended March 31, 2004.





Annualized
net yield on earning assets, defined as net interest income annualized, divided
by average interest earning assets, was at 3.79% during the three-month period
ended March 31, 2005.





(Dollars
in thousands)


Description
    
    Avg
      Assets/Liabilities
    
    InterestIncome/Expense
    
    Yield/CostFederal
      Funds Sold
    
    $
    1,637
    
    $
    11
    
    
    2.45
    %Securities
    
    
    10,710
    
    
    107
    
    
    4.07
    %Loans
    
    
    38,107
    
    
    675
    
    
    7.19
    %Total
    
    $
    50,454
    
    $
    793
    
    
    6.37
    %Transactional
      Accounts
    
    $
    1,461
    
    $
    4
    
    
    1.22
    %Savings
    
    
    7,211
    
    
    33
    
    
    1.89
    %CDs
    
    
    32,092
    
    
    253
    
    
    3.20
    %Other
      Borrowings
    
    
    3,788
    
    
    32
    
    
    3.41
    %Total
    
    $
    44,552
    
    $
    323
    
    
    2.90
    %Net
      interest income
    
    
    
    
    $
    470Net
      yield on earning assets
    
    
    
    
    
    
    
    
    3.79
    %





Net yield
on earning assets, defined as net interest income divided by average interest
earning assets, was at 3.56% during the three-month period ended March 31, 2004.





(Dollars
in thousands)


Description
    
    Avg
      Assets/Liabilities
    
    InterestIncome/Expense
    
    Yield/CostFederal
      Funds Sold
    
    $
    5,744
    
    $
    14
    
    
    .97
    %Securities
    
    
    216
    
    
    -
    
    
    -
    %Loans
    
    
    3,603
    
    
    76
    
    
    8.44
    %Total
    
    $
    9,563
    
    $
    90
    
    
    3.76
    %Transactional
      Accounts
    
    $
    852
    
    $
    2
    
    
    .94
    %Savings
    
    
    20
    
    
    0
    
    
    .98
    %CDs
    
    
    969
    
    
    3
    
    
    1.24
    %Other
      Borrowings
    
    
    0
    
    
    0
    
    
    .00
    %Total
    
    $
    1,841
    
    $
    5
    
    
    1.09
    %Net
      interest income
    
    
    
    
    $
    85Net
      yield on earning assets
    
    
    
    
    
    
    
    
    3.56
    %




13




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 Item
2.Management's Discussion and
Analysis


b.
    For
      the three-month period ended March 31, 2005, non-interest income amounted
      to $23,786, or .16% of average assets. For the three-month period ended
      March 31, 2004, non-interest income amounted to $863 or .03% of average
      assets. Because the Bank is in a growth mode, it prices its services very
      competitively in order to grow deposits.





c.
    During
      the three-month period ended March 31, 2005, the provision for loan losses
      was $95,000. We had net charge-offs of $5,000 for the period ended March
      31, 2005. During the three-month period ended March 31, 2004, the
      provision for loan losses was $100,000. The allowance for loan losses as a
      percentage of gross loans was at 1.45% on March 31, 2005. Management
      considers the allowance for loan losses to be adequate and sufficient to
      absorb possible future losses; however, there can be no assurance that
      charge-offs in future periods will not exceed the allowance for loan
      losses or that additional provisions to the allowance will not be
      required.





**Liquidity**





Liquidity
is our ability to meet current and future obligations through liquidation or
maturity of existing assets or the acquisition of additional liabilities. Most
importantly, liquidity provides the means to fund all deposit withdrawals
immediately, while also providing for the credit needs of customers. Cash and
cash equivalents, which include cash on hand and in correspondent banks, as well
as federal funds sold to correspondent banks, are our primary sources of
liquidity. The March 31, 2005 financial statements evidence a satisfactory
liquidity position as total cash and cash equivalents amounted to approximately
$4.6 million, representing 7.48% of total assets.





Investment
securities available-for-sale, which amounted to $12.6 million, or 20.47% of
total assets at March 31, 2005, provide a secondary source of liquidity
because they can be converted into cash in a timely manner. We also have lines
of credit available with correspondent banks. These lines of credit can be
accessed to meet temporary funding needs. At March 31, 2005 we had access to
unused lines of credit totaling $5.4 million.





We draw
deposits primarily from our local market area. However, when we deem it
necessary and prudent we will access deposit markets other than the local market
for sources of funds. These deposits can include “brokered” deposits and
deposits generated from other sources, including internet sources.





Freedom
Bank of Georgia is a member of the Federal Home Loan Bank of Atlanta. The
Federal Home Loan Bank of Atlanta provides funds for real estate-related lending
and to promote home ownership. We use advances from the Federal Home Loan Bank
of Atlanta to fund loans and as a tool to manage our interest rate risk. At
March 31, 2005 we had advances outstanding of $4.5 million. We had access to
additional advances up to $3.7 million.





We
closely monitor our balance sheet and liquidity in order to maintain appropriate
levels of interest earning assets and interest bearing liabilities, so that
maturities of assets can provide adequate funds to meet customer withdrawals and
loan demand. We know of no trends, demands, commitments, events or uncertainties
that will result in or are reasonably likely to result in our liquidity
increasing or decreasing in any material way.





**Capital
Resources**





Total
shareholders’ equity decreased from $7,279,243 at December 31, 2004 to
$7,048,148 at March 31, 2005. The decrease is due to a net loss for the three
months ended March 31, 2005 of $(97,030) and an after-tax decrease of $(134,064)
in the fair value of securities available-for-sale.





14




**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 Item
2.Management's Discussion and
Analysis


The
Federal Reserve Board and bank regulatory agencies require bank holding
companies and financial institutions to maintain capital at adequate levels
based on a percentage of assets and off-balance sheet exposures, adjusted for
risk-weights ranging from 0% to 100%. Under the risk-based standard, capital is
classified into two tiers: Tier 1 capital consists of common shareholders’
equity, excluding the unrealized gain (loss) on available-for-sale securities,
minus certain intangible assets. Tier 2 capital consists of the general reserve
for loan losses subject to certain limitations. An institution’s qualifying
capital base for purposes of its risk-based capital ratio consists of the sum of
its Tier 1 and Tier 2 capital. The regulatory minimum requirements are 4% for
Tier 1 and 8% for total risk-based capital.





Banks and
bank holding companies are also required to maintain capital at a minimum level
based on total assets, which is known as the leverage ratio. The minimum
requirement for the leverage ratio is 3%, but all but the highest-rated
institutions are required to maintain ratios that are 100 to 200 basis points
above the minimum. Both the Company and the Bank exceeded their minimum
regulatory capital ratios as of March 31, 2005.





The
following table summarizes our risk-based capital at March 31, 2005:





Freedom
      BankMarch
      31, 2005
    Freedom
      Bancshares, Inc.March
      31, 2005
    Minimum
      RegulatoryRequirementLeverage ratio
    12.92%
    13.79%
    4.0%Risk weighted ratio
    16.36%
    16.14%
    8.0%





With
respect to the leverage ratio, the regulators expect a minimum of 5.0% to 6.0%
ratio for banks that are not rated CAMELS 1. Freedom Bank’s leverage ratio of
12.92% and risk-weighted ratio of 16.36% are well above the required
minimums.





**Regulatory
Matters** ****





From time
to time, various bills are introduced in the United States Congress with respect
to the regulation of financial institutions. Certain of these proposals, if
adopted, could significantly change the regulation of banks and the financial
services industry. We cannot predict whether any of these proposals will be
adopted or, if adopted, how these proposals would affect us.





We are
not aware of any current recommendation by our regulatory authorities which, if
implemented, would have a material effect on our liquidity, capital resources,
or results of operations.




15






**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part
I. Financial
Information**
 **Item3.Controls and
Pocedures**
  As of the
end of the period covered by this Quarterly Report on Form 10-QSB, our principal
executive officer and principal financial officer have evaluated the
effectiveness of our “disclosure controls and procedures.” Disclosure controls
and procedures, as defined in Rule 15d-15(e) of the Securities Exchange Act of
1934, as amended, are procedures that are designed with the objective of
ensuring that information required to be disclosed in our reports filed under
the Exchange Act, such as this Quarterly Report, is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms. Disclosure controls and procedures are
also designed with the objective of ensuring that such information is
accumulated and communicated to our management, including our chief executive
officer and chief financial officer, as appropriate to allow timely decisions
regarding required disclosure.


Our
management, including our chief executive officer and chief financial officer,
does not expect that our disclosure controls and procedures will prevent all
error and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. The design of any
system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.





Based
upon their controls evaluation, our chief executive officer and chief financial
officer have concluded that our disclosure controls and procedures are
reasonably effective.





There
have been no changes in our internal controls over financial reporting during
our first fiscal quarter that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.




16






**FREEDOM
BANCSHARES, INC.**
 **AND
SUBSIDIARY**
 **Part II. Other
Information**


**Item 1.**
    **Legal
      Proceedings**





None.





**Item 2.**
    **Unregistered
      Sales of Equity Securities and Use of
Proceeds**





None.


****


**Item 3.**
    **Defaults
      Upon Senior Securities**





None.





**Item 4.**
    **Submission
      of Matters to a Vote of Security
Holders**





None.





**Item 5.**
    **Other
      Information**





None.





**Item6.**
    **Exhibits**





Number
    Description31.1
    Certification
      of the Chief Executive Officer, pursuant to Rule 15d-14(a) under the
      Securities Exchange Act of 1934.31.2
    Certification
      of the Chief Financial Officer, pursuant to Rule 15d-14(a) under the
      Securities Exchange Act of 1934.32.1
    Certification
      of Chief Executive Officer, pursuant to 18 U.S.C. Section
    135032.2
    Certification
      of Chief Financial Officer, pursuant to 18 U.S.C. Section
    1350




17


**FREEDOM BANCSHARES, INC.**
 **AND
SUBSIDIARY**


Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




Freedom
      Bancshares, Inc.(Registrant)May 13, 2005
    /s/
      Vincent D. CaterPresident and Chief Executive
  Officer(Principal Executive Officer)May 13, 2005
    /s/ Clyde A. McArthurChief Financial Officer(Principal
      Accounting Officer)
  18