U.
S. SECURITIES AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q








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


For the
quarterly period ended March 31,
2008





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


For the
transition period from __________ to __________





Commission
File Number: 000-53194





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 T   No
£





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


Large
accelerated filer £  Accelerated
filer £  Non-accelerated
filer £Smaller reporting companyT





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





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





May 14, 2008: 1,317,505
shares outstanding, $1.00 par value
















FREEDOM BANCSHARES, INC.


AND
SUBSIDIARY





Index








PagePart I.  Financial InformationItem 1.  Financial Statements
      (unaudited)Consolidated Balance Sheets - March 31, 2008 and December 31,
      2007
            2Consolidated Statements of Operations - Three months ended
      March 31, 2008 and 2007
            3Consolidated Statements of Comprehensive Income (Loss) - Three
      months ended March 31, 2008 and 2007
            4Consolidated Statements of Cash Flows - Three months ended
      March 31, 2008 and 2007
            5Notes to Consolidated Financial Statements
            6 -
      9Item 2.  Management's Discussion and
      Analysis
            10
      - 17Item 3. Quantitative and Qualitative Disclosures About
      Market Risk
            18Item 4.  Controls and
    Procedures
            18Part II.  Other InformationItem 1.  Legal Proceedings
            19Item 1A. Risk Factors
            19Item 2.  Unregistered Sales of Equity Securities
      and Use of Proceeds
            19Item 3.  Defaults Upon Senior
      Securities
            19Item 4.  Submission of Matters to a Vote of
      Security Holders
            19Item 5.  Other Information
            19Item 6.  Exhibits
            19Signature Page
            20Exhibit Index





Index





PART I - FINANCIAL INFORMATION


ITEM I.  FINANCIAL STATEMENTS





FREEDOMBANCSHARES, INC. AND SUBSIDIARY





CONSOLIDATED
BALANCE SHEETS


MARCH
31, 2008 AND DECEMBER 31, 2007


(Unaudited)





Assets
            
            2008
            
            
            2007Cash
      and due from banks
            
            $
            3,545,681
            
            
            $
            3,016,248Interest
      bearing deposits in banks
            
            
            62,818
            
            
            
            137,392Federal
      funds sold
            
            
            1,071,000
            
            
            
            1,113,000Securities
      available for sale, at fair value
            
            
            18,649,082
            
            
            
            16,322,944Loans,
      less allowance for loan losses of $2,534,392 and $1,616,837,
      respectively
            
            
            115,390,094
            
            
            
            116,670,671Property
      and equipment, net
            
            
            5,741,089
            
            
            
            5,830,047Federal
      Home Loan Bank stock
            
            
            1,097,600
            
            
            
            1,071,100Accrued
      interest receivable
            
            
            1,277,267
            
            
            
            1,418,985Other
      assets
            
            
            5,108,178
            
            
            
            1,581,696Total
      assets
            
            $
            151,942,809
            
            
            $
            147,162,083Liabilities and
      Stockholders' EquityLiabilities:Deposits:Noninterest-bearing
            
            $
            8,925,203
            
            
            $
            6,542,891Interest-bearing
            
            
            112,580,272
            
            
            
            108,011,123Total
      deposits
            
            
            121,505,475
            
            
            
            114,554,014Federal
      Home Loan Bank advances
            
            
            17,000,000
            
            
            
            18,500,000Accrued
      interest payable
            
            
            636,049
            
            
            
            638,728Other
      liabilities
            
            
            122,667
            
            
            
            10,329Total
      liabilities
            
            
            139,264,191
            
            
            
            133,703,071Commitments
      and contingenciesStockholders'
      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; 1,317,505 and
      1,316,005 shares issued and outstanding, respectively
            
            
            1,317,505
            
            
            
            1,316,005Additional
      paid-in capital
            
            
            12,835,958
            
            
            
            12,807,750Accumulated
      deficit
            
            
            (1,607,582
            )
            
            
            (620,327
            )Accumulated
      other comprehensive income (loss)
            
            
            132,737
            
            
            
            (44,416
            )Total
      stockholders' equity
            
            
            12,678,618
            
            
            
            13,459,012Total
      liabilities and stockholders' equity
            
            $
            151,942,809
            
            
            $
            147,162,083





See
Notes to Consolidated Financial Statements





2
 Index





FREEDOM BANCSHARES, INC. AND SUBSIDIARY





CONSOLIDATED
STATEMENTS OF OPERATIONS


THREE
MONTHS ENDED MARCH 31, 2008 AND 2007


(Unaudited)





Three
      Months Ended March 31, 2008
            
            
            Three
      Months Ended March 31, 2007Interest
      income:Loans
            
            $
            2,168,743
            
            
            $
            2,491,075Taxable
      securities
            
            
            203,137
            
            
            
            254,215Federal
      funds sold
            
            
            23,302
            
            
            
            20,661Other
            
            
            17,118
            
            
            
            28,375Total
      interest income
            
            
            2,412,300
            
            
            
            2,794,326Interest
      expense:Deposits
            
            
            1,366,526
            
            
            
            1,323,217Other
      borrowings
            
            
            179,133
            
            
            
            199,554Total
      interest expense
            
            
            1,545,659
            
            
            
            1,522,771Net
      interest income
            
            
            866,641
            
            
            
            1,271,555Provision
      for loan losses
            
            
            1,440,000
            
            
            
            91,000Net
      interest (loss) income after provision for loan losses
            
            
            (573,359
            )
            
            
            1,180,555Noninterest
      income:Service
      charges on deposit accounts
            
            
            66,502
            
            
            
            34,562Other
      operating income
            
            
            75,342
            
            
            
            38,566Total
      noninterest income
            
            
            141,844
            
            
            
            73,128Noninterest
      expenses:Salaries
      and other employee benefits
            
            
            635,553
            
            
            
            563,790Occupancy
      and equipment
            
            
            162,504
            
            
            
            146,342Other
      operating
            
            
            350,384
            
            
            
            256,069Total
      noninterest expenses
            
            
            1,148,441
            
            
            
            966,201(Loss)
      income before income taxes
            
            
            (1,579,956
            )
            
            
            287,482Income
      tax (benefit) expense
            
            
            (592,700
            )
            
            
            111,050Net
      (loss) income
            
            $
            (987,256
            )
            
            $
            176,432Basic
      (losses) earnings per share
            
            $
            (0.75
            )
            
            $
            0.14Diluted
      (losses) earnings per share
            
            
            
            
            
            $
            0.13Cash
      dividends per share
            
            $
            -
            
            
            $
            -





See
Notes to Consolidated Financial Statements





3
 Index





FREEDOM BANCSHARES, INC. AND SUBSIDIARY





CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


THREE
MONTHS ENDED MARCH 31, 2008 AND 2007


(Unaudited)





Three
      Months Ended March 31, 2008
            
            
            Three
      Months Ended March 31, 2007Net
      (loss) income
            
            $
            (987,256
            )
            
            $
            176,432Other
      comprehensive  income :Unrealized
      gains on securities available for sale,net of tax
            
            
            170,338
            
            
            
            27,465Unrealized
      gain on interest rate floor, net of tax
            
            
            6,815
            
            
            
            2,807Other
      comprehensive income
            
            
            177,153
            
            
            
            30,272Comprehensive
      (loss) income
            
            $
            (810,103
            )
            
            $
            206,704





See
Notes to Consolidated Financial Statements





4
 Index





FREEDOM BANCSHARES, INC. AND SUBSIDIARY





CONSOLIDATED
STATEMENTS OF CASH FLOWS


THREE
MONTHS ENDED MARCH 31, 2008 AND 2007


(Unaudited)





2008
            
            
            2007OPERATING
      ACTIVITIESNet
      (loss) income
            
            $
            (987,256
            )
            
            $
            176,432Adjustments
      to reconcile net income (loss) to net cash provided by operating
      activities:Amortization
      and accretion on securities
            
            
            1,112
            
            
            
            (1,370
            )Depreciation
            
            
            90,668
            
            
            
            81,066Provision
      for loan losses
            
            
            1,440,000
            
            
            
            91,000Stock
      compensation expense
            
            
            14,708
            
            
            
            9,106Gain
      on sale of foreclosed assets
            
            
            -
            
            
            
            (11,273
            )Increase
      (decrease) in interest receivable
            
            
            141,718
            
            
            
            (236,706
            )(Decrease)
      increase in interest payable
            
            
            (2,679
            )
            
            
            132,695Increase
      in other assets
            
            
            (713,737
            )
            
            
            (72,911
            )Increase
      in other liabilities
            
            
            112,338
            
            
            
            21,890Net
      cash provided by operating activities
            
            
            96,872
            
            
            
            189,929INVESTING
      ACTIVITIESPurchases
      of securities available for sale
            
            
            (4,721,340
            )
            
            
            (756,021
            )Proceeds
      from maturities and paydowns of securities available for
    sale
            
            
            2,667,725
            
            
            
            587,973(Purchase)
      redemption of Federal Home Loan Bank stock
            
            
            (26,500
            )
            
            
            61,500Net
      increase in loans
            
            
            (3,229,149
            )
            
            
            (6,834,721
            )Purchases
      of premises and equipment
            
            
            (1,710
            )
            
            
            (2,500,853
            )Proceeds
      from sale of foreclosed assets
            
            
            160,500
            
            
            
            180,590Net
      cash used in investing activities
            
            
            (5,150,474
            )
            
            
            (9,261,532
            )FINANCING
      ACTIVITIESNet
      increase in deposits
            
            
            6,951,461
            
            
            
            17,330,049Repayments
      of FHLB advances
            
            
            (1,500,000
            )
            
            
            (6,000,000
            )Proceeds
      from sale of comon stock
            
            
            15,000
            
            
            
            162,250Net
      cash provided by financing activities
            
            
            5,466,461
            
            
            
            11,492,299Net
      increase in cash and cash equivalents
            
            
            412,859
            
            
            
            2,420,696Cash
      and cash equivalents at beginning of period
            
            
            4,266,640
            
            
            
            3,633,957Cash
      and cash equivalents at end of period
            
            $
            4,679,499
            
            
            $
            6,054,653SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATIONCash
      paid for:Interest
            
            $
            1,548,338
            
            
            $
            1,390,076Taxes
            
            $
            14,008
            
            
            $
            -NONCASH
      INVESTING ACTIVITIESTransfer
      of loans to foreclosed assets
            
            $
            3,069,726
            
            
            $
            169,317Increase
      in accumulated other comprehensive income
            
            $
            (177,153
            )
            
            $
            (30,272
            )





See
Notes to Consolidated Financial Statements





5
 Index





FREEDOM BANCSHARES, INC.


AND
SUBSIDIARY








NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


March 31,
2008


(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
accounting principles generally accepted in the United States of America 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, 2008 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2008. 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, 2007.





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, 2008, there were 1,317,505 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, 2008, 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.





As of
March 31, 2008, the Company has 13,000 non-qualified stock options
outstanding.





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, 2008,
the Company had 108,300 options outstanding.





6
 Index





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
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, 2008 and December 31, 2007, cash
and cash equivalents amounted to $4,679,499 and $4,266,640,
respectively.





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 the Company and 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 assumptions  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.





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, 2008 and December 31,
2007.





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.





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.  As of March 31, 2008, no
valuation allowances were provided for deferred tax assets.





Stock-Based Compensation.At
March 31, 2008, the Company has two stock-based employee/director compensation
plans which are more fully described in Note 11 of the consolidated financial
statements in the Annual Report on Form 10-K for the year ended December 31,
2007. Effective January 1, 2006, the Company adopted the fair value recognition
provisions of Financial Accounting Standards Board (FASB) Statement No. 123(R),
Share-Based Payment,
using the modified-prospective-transition method.  Under that
transition method, compensation cost recognized in the first quarter of 2008 and
2007 includes: (a) compensation cost for all share-based payments granted prior
to, but not yet vested as of December 31, 2005, based on the grant date fair
value estimated in accordance with the original provisions of Statement 123, and
(b) compensation cost for all share-based payments granted subsequent to
December 31, 2005, based on the grant-date fair value estimated in accordance
with the provisions of Statement 123(R). The Company recorded stock-based
compensation expense of $14,708 and $9,106 for the three months ended March 31,
2008 and 2007, respectively.





7
 Index





At March
31, 2008, there was $76,708 of unrecognized compensation cost related to
stock-based payments, which is expected to be recognized over a weighted-average
period of 1.3 years.





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





NOTE 4.
            EARNINGS (LOSSES) PER
      SHARE





Basic
earnings (losses) per share are computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding. Diluted earnings
(losses) per share are computed by dividing net income (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 that are dilutive and none were included in the calculation for the
first quarter. Weighted average shares outstanding for the three months ended
March 31, 2008 and 2007 were 1,398,232 and 1,333,441, respectively.





NOTE
      5.
            FAIR
      VALUE MEASUREMENTS





On
January 1, 2008, the Company adopted SFAS No. 157, Fair Value
Measurements.  SFAS No. 157 defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value
measurements.  SFAS No. 157 applies to reported balances that are
required or permitted to be measured at fair value under existing accounting
pronouncements; accordingly, the standard does not require any new fair value
measurements of reported balances.





SFAS No.
157 emphasizes that fair value is a market-based measurement, not an
entity-specific measurement.  Therefore, a fair value measurement
should be determined based on the assumptions that market participants would use
in pricing the asset or liability.  As a basis for considering market
participant assumptions in fair value measurements, SFAS No. 157 establishes a
fair value hierarchy that distinguishes between market participant assumptions
based on market data obtained from sources independent of the reporting entity
(observable inputs that are classified within Levels 1 and 2 of the hierarchy)
and the reporting entity’s own assumptions about market participant assumptions
(unobservable inputs classified within Level 3 of the hierarchy).





Level 1
inputs utilize quoted prices (unadjusted) in active markets for identical assets
or liabilities that the Company has the ability to access. Level 2 inputs are
inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly. Level 2 inputs may include
quoted prices for similar assets and liabilities in active markets, as well as
inputs that are observable for the asset or liability (other than quoted
prices), such as interest rates, foreign exchange rates and yield curves that
are observable at commonly quoted intervals. Level 3 inputs are unobservable
inputs for the asset or liability, which are typically based on an entity’s own
assumptions, as there is little, if any, related market activity. In instances
where the determination of the fair value measurement is based on inputs from
different levels of the fair value hierarchy, the level in the fair value
hierarchy within which the entire fair value measurement falls is based on the
lowest level input that is significant to the fair value measurement in its
entirety. The Company’s assessment of the significance of a particular input to
the fair value measurement in its entirety requires judgment, and considers
factors specific to the asset or liability.





The table
below presents the Company’s assets and liabilities measured at fair value on a
recurring basis as of March 31, 2008, aggregated by the level in the fair value
hierarchy within which those measurements fall.





Quoted
      Prices in Active Markets for Identical Assets
            
            
            Significant
      Other Observable Inputs
            
            
            Significant
      Unobservable Inputs(Level 1)
            
            
            (Level 2)
            
            
            (Level 3)
            
            
            TotalAssetsInvestment
      securities available-for-sale
            
            $
            -
            
            
            $
            18,649,082
            
            
            $
            -
            
            
            $
            18,649,082Total
      assets at fair value
            
            $
            -
            
            
            $
            18,649,082
            
            
            $
            -
            
            
            $
            18,649,082





8
 Index





NOTE 6.
            RECENT ACCOUNTING
      PRONOUNCEMENTS





In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations,which
replaces SFAS 141. SFAS 141(R) establishes principles and requirements for how
the acquirer of a business recognizes and measures in its financial statements
the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree. SFAS 141(R) also provides guidance for
recognizing and measuring the goodwill acquired in the business combination and
determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. SFAS 141(R) applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. The Company believes
the adoption of SFAS 141(R) will not have a material impact on its financial
statements.





In
December 2007, the FASB issued SFAS 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51. SFAS 160
amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. In addition to the amendments to ARB
51, SFAS 160 amends SFAS No. 128, Earnings per Share; so that
earnings-per-share data will continue to be calculated the same way those data
were calculated before SFAS 160 was issued. SFAS 160 is effective for fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. The Company believes the adoption of SFAS 160 will not have a
material impact on its financial statements.





In March
2008, the FASB issued SFAS 161, Disclosures about Derivative
Instruments and Hedging Activities,an amendment to SFAS 133 intended to
improve financial reporting about derivative instruments and hedging activities
by requiring enhanced disclosures.Entities
are required to provide enhanced disclosures about (a) how and why an entity
uses derivative instruments, (b) how derivative instruments and related hedged
items are accounted for under SFAS 133 and its related interpretations, and (c)
how derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. It is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. The Company believes the adoption
of SFAS 161 will not have a material impact on its financial
statements.




9
 Index


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, 2007. 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, the
accounting for deferred income taxes and stock-based compensation are the most
critical accounting policies upon which the Company’s financial condition
depends. The allowance for loan losses, the recognition of deferred taxes, and
the assumptions related to stock-based compensation  involve the most
complex and subjective decisions and assessments that management must
make.





10
 Index





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. The allowance for loan losses is increased by charges to income and
decreased by charge-offs (net of recoveries).  Loans are charged
against the allowance for loan losses when management believes the collection of
the principal is unlikely.  The Company’s allowance for loan and lease
losses is the amount considered adequate to absorb probable losses within the
portfolio based on management’s evaluation of the size and current risk
characteristics of the loan portfolio. Such evaluation considers prior loss
experience, the risk rating distribution of the portfolios, the impact of
current internal and external influences on credit loss and the levels of
nonperforming loans. Specific allowances for loan and lease losses are
established for large impaired loans and leases on an individual basis. The
specific allowance established for these loans and leases is based on a thorough
analysis of the most probable source of repayment, including the present value
of the loan’s expected future cash flows, the loan’s estimated market value, or
the estimated fair value of the underlying collateral. General allowances are
established for loans that are classified as either special mention,
substandard, or doubtful. These loans are assigned a risk rating, and the
allocated allowance for loan losses is determined based upon the loss percentage
factors that correspond to each risk rating. Loss percentage factors are based
on the probable loss including qualitative factors. The qualitative factors
consider credit concentrations, recent levels and trends in delinquencies and
nonaccrual, and growth in the loan portfolio. The occurrence of certain events
could result in changes to the loss factors. Accordingly, these loss factors are
reviewed periodically and modified as necessary.





General
allowances are established for loans and leases that can be grouped into pools
based on similar characteristics. In this process, general allowance factors are
based on an analysis of historical charge-off experience and expected losses
given default derived from the Company’s internal risk rating process. These
factors are developed and applied to the portfolio in terms of line of business
and loan type. Adjustments are also made to the allowance for the pools after an
assessment of internal and external influences on credit quality that have not
yet been reflected in the historical loss or risk rating data. Unallocated
allowances relate to inherent losses that are not otherwise evaluated in the
first two elements. The qualitative factors associated with unallocated
allowances are subjective and require a high degree of management judgment.
These factors include the inherent imprecisions in mathematical models and
credit quality statistics, recent economic uncertainty, losses incurred from
recent events, and lagging or incomplete data.





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. As of March 31, 2008, deferred income taxes of $466,167 are included
in other assets.  Changes in the estimate about future taxable income
could significantly affect the determination of the necessity for a valuation
allowance for deferred tax assets.





Stock-based
compensation:  The assumptions used in the determination of the
fair value of stock options granted ultimately determine the recognition of
stock-based compensation expense. The short-cut method is used to determine the
expected life of the options. This method, as prescribed by SAB Topic 14.D.2,
calculates the expected term based on the midpoint between the vesting date of
the option and the end of the contractual term. Expected volatility is
determined by using a combination of a calculated value based upon expected
volatility of similar entities and on the historical volatility of the Company’s
stock. Risk-free interest rates for periods within the contractual life of the
option are based upon the U.S. Treasury yield curve in effect at the time of the
grant. Because of the need to retain capital for expected growth and past
history, the expected dividend rate is 0%. These assumptions have a significant
impact on the amount of expense recognized for stock-based
compensation.





11
 Index





Overview





We
commenced banking operations on February 17, 2004 in our primary location of
Commerce, Georgia. We have subsequently expanded geographically by adding
branches in Jefferson, Homer and Winder, Georgia.  We have grown in
assets to over $150 million as of March 31, 2008.





Financial
Condition





At March
31, 2008, total assets of Freedom Bancshares, Inc. were $151.9 million, which
included loans totaling $117.9 million and securities of $18.6
million.   Deposits at March 31, 2008 totaled $121.5 million and
other borrowings totaled $17.0 million and consist solely of advances from the
Federal Home Loan Bank of Atlanta.





Investment
securities available-for-sale totaled $18.6 million at March 31, 2008. These
investments consisted of $5.1 million in US government-sponsored agency
securities and $13.5 million in mortgage-backed securities issued by US
government-sponsored 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-sponsored 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,
2008.





Gross
loans totaled $117.9 million at March 31, 2008.  Net loans totaled
$115.4 million at March 31, 2008. The majority of our loans are secured by real
estate. Balances within the major loan categories as of March 31, 2008 are as
follows:





Composition
of Loan Portfolio


March
31, 2008





Category
            
            Amount (in thousands)
            
            
            Percent of TotalConstruction
      loans
            
            $
            57,547
            
            
            
            48.80
            %Other
      real estate loans
            
            
            46,085
            
            
            
            39.08
            %Commercial
      loans
            
            
            9,068
            
            
            
            7.69
            %Other
      loans
            
            
            5,224
            
            
            
            4.43
            %117,924
            
            
            
            100.00
            %Allowance
      for loan losses
            
            
            (2,534
            )$
            115,390





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 minimal growth in assets and liabilities during
the remainder of 2008.





Our total
equity was $12.7 million at March 31, 2008. Equity consisted of common stock and
surplus of $14.2 million, an accumulated deficit at December 31, 2007 of $620
thousand; net loss for the three months ended March 31, 2008 of $987 thousand;
unrealized gains on securities available-for-sale, net of tax, of $134 thousand;
and unrealized losses of an interest rate floor, net of tax, of $1
thousand.





Results
of Operations for the Three Months Ended March 31, 2008 and 2007





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 cumulatively profitable and to
remain profitable in the future, 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
Company’s provision for loan losses.





12
 Index





Net
losses for the first quarter of 2008 amounted to $987 thousand, or $(0.75) per
basic share.  Net income for the first quarter of 2007 amounted to
$176 thousand, or $0.14 per basic share and $0.13 per diluted
share.  Following is a brief discussion concerning our operational
results for the three-month periods ended March 31, 2008 and 2007.





The
significant loss in the first quarter was due to a provision to the allowance
for loan loss in the amount $1.4 million during the first quarter of 2008. Due
to the significant increase in non-performing loans and drops in value of real
estate in the area, management believed the increase to the allowance was
necessary to absorb future potential losses.





Interest
income, which represents interest received on interest earning assets, was $2.4
million for the first quarter of 2008 and $2.8 million for the first quarter of
2007.  Earnings were lower in 2008 due to recognition of non-accrual
loans and drop in interest rates. The cost of funds, which represents interest
paid on deposits and borrowings, was $1.55 million for the first quarter of 2008
and $1.52 million for first quarter of 2007. Cost of funds increased slightly
despite declining interest rates due to an increase in advances from Federal
Home Loan Bank.





The
following tables calculate the net yield on earning assets as of March 31, 2008
and 2007. The net yield dropped from 3.92% at March 31, 2007 to 2.48% at March
31, 2008. This drop is indicative of the results of the declining interest rates
during 2007 and the first quarter of 2008.





Net yield
on earning assets, defined as net interest income annualized, divided by average
interest earning assets, was at 2.48% for the first quarter of
2008.





(Dollars
in thousands)





Description
            
            Avg Assets/Liabilities
            
            
            Interest Income/Expense
            
            
            Yield/CostFederal
      funds sold
            
            $
            2,639
            
            
            $
            23
            
            
            
            3.49
            %Securities
            
            
            17,163
            
            
            
            203
            
            
            
            4.73
            %Loans
            
            
            118,665
            
            
            
            2,169
            
            
            
            7.31
            %Other
            
            
            1,204
            
            
            
            17
            
            
            
            5.65
            %Total
            
            $
            139,671
            
            
            
            2,412
            
            
            
            6.91
            %Money
      market/NOW accounts
            
            $
            14,526
            
            
            
            131
            
            
            
            3.61
            %Savings
            
            
            864
            
            
            
            3
            
            
            
            1.39
            %CDs
            
            
            96,676
            
            
            
            1,232
            
            
            
            5.10
            %Other
      borrowings
            
            
            17,213
            
            
            
            179
            
            
            
            4.16
            %Total
            
            $
            129,279
            
            
            
            1,545
            
            
            
            4.78
            %Net
      interest income
            
            
            
            
            
            $
            867Net
      yield on earning assets
            
            
            
            
            
            
            
            
            
            
            2.48
            %





13
 Index





Net yield
on earning assets, defined as net interest income divided by average interest
earning assets, was at 3.92% for the first quarter of 2007.





(Dollars
in thousands)





Description
            
            Avg Assets/Liabilities
            
            
            Interest Income/Expense
            
            
            Yield/CostFederal
      funds sold
            
            $
            1,566
            
            
            $
            21
            
            
            
            5.28
            %Securities
            
            
            21,228
            
            
            
            254
            
            
            
            4.79
            %Loans
            
            
            105,975
            
            
            
            2,491
            
            
            
            9.40
            %Other
            
            
            1,109
            
            
            
            28
            
            
            
            10.24
            %Total
            
            $
            129,878
            
            
            
            2,794
            
            
            
            8.61
            %Money
      market/NOW accounts
            
            $
            8,426
            
            
            
            67
            
            
            
            3.20
            %Savings
            
            
            839
            
            
            
            3
            
            
            
            1.42
            %CDs
            
            
            94,528
            
            
            
            1,253
            
            
            
            5.30
            %Other
      borrowings
            
            
            15,428
            
            
            
            200
            
            
            
            5.17
            %Total
            
            $
            119,221
            
            
            
            1,523
            
            
            
            5.11
            %Net
      interest income
            
            
            
            
            
            $
            1,271Net
      yield on earning assets
            
            
            
            
            
            
            
            
            
            
            3.92
            %





For the
first quarter of 2008, non-interest income amounted to $142
thousand,  or 0.09% of average assets. For the first quarter of 2007,
non-interest income amounted to $73 thousand or 0.02% of average assets. Because
the Company is in a competitive market, it prices its services very
competitively in order to maintain and grow deposits. The majority of the
increase is due to the addition of income from mortgage originations which
earned the Company approximately $35 thousand in fees during the first quarter
of 2008.





The
Company adopted the fair value recognition provisions of FASB Statement No. 123
(R), Share Based
Payment effective January 1, 2006, using the modified-
prospective-transition method.The Company did not grant any options in the first
quarter of 2008.  No modifications were made to outstanding options
and warrants and there have been no significant changes to valuation
methodologies or assumptions. There have not been any significant changes in the
quantity, types or terms of instruments used in share-based payment programs. At
March 31, 2008, total compensation cost related to nonvested awards not yet
recognized is approximately $77 thousand which is expected to be recognized over
a weighted average period of 1.3 years.





The
income tax benefit for the first quarter of 2008 was $593 thousand as compared
to an expense of $111 thousand for first quarter of 2007.  The amounts
provided take into account all share-based compensation expense recognized for
which an income tax benefit will not be received.





Asset
Quality





The
allowance for loan losses at March 31, 2008 was $2.5 million, or 2.15% of total
loans compared to $1.6 million, or 1.37% at December 31, 2007 and $1.3 million
or 1.17% at March 31, 2007. The increase in the allowance from prior periods is
due primarily to an additional $1.4 million loan loss provision taken in the
first quarter of 2008 to provide the Company with an adequate reserve.
Management has closely monitored the portfolio and has been proactive in working
problem assets. The portfolio is monitored on a weekly basis by management and
the allowance is analyzed quarterly. 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.





14
 Index





Net
charge-offs have been $523 thousand for the first quarter of 2008 as compared to
$4.5 thousand for the first quarter of 2007. The increased provision and net
charge-off amounts reflect a deterioration in credit conditions as a result of
the slowing residential real estate market. Should real estate conditions
continue to worsen, the Company may experience additional charge-offs. The
following table summarizes the allowance for loan losses for the three months
ended March 31, 2008 and 2007.





Three
      months ended March 31,2008
            
            
            2007(Dollars
      in thousands)Average
      amount of loans outstanding
            
            $
            118,665
            
            
            $
            105,975Allowance
      for loan losses, beginning of period
            
            $
            1,617
            
            
            $
            1,195Less
      charge-offs:Real
      estate
            
            
            520
            
            
            
            --Consumer
            
            
            6
            
            
            
            6Total
      charge-offs
            
            
            526
            
            
            
            6Plus
      recoveriesReal
      estate
            
            
            --
            
            
            
            --Consumer
            
            
            3
            
            
            
            1Total
      recoveries
            
            
            3
            
            
            
            1Net
      charge-offs
            
            
            523
            
            
            
            5Plus
      provision for loan losses
            
            
            1,440
            
            
            
            91Allowance
      for loan losses, end of period
            
            $
            2,534
            
            
            $
            1,281Net
      charge-offs to average loans (annualized)
            
            
            1.76
            %
            
            
            0.02
            %





The
accrual of interest on impaired loans is discontinued when, in management’s
opinion, the borrower may be unable to meet payments as they become
due.  When interest accrual is discontinued, all unpaid accrued
interest is reversed.  Interest income is subsequently recognized only
to the extent cash payments are received.  Loans are returned to
accrual status when all the principal and interest amounts contractually due are
reasonably assured of repayment within a reasonable time frame.





The
following table is a summary of the Companys’ nonaccrual loans at March 31, 2008
and March 31, 2007. The table show an increase in nonaccrual loans from $758
thousand at March 31, 2007 to $8.8 million at March 31, 2008.





March 31, 2008Nonaccrual Loans
            
            
            Past Due 90 Days – Still
      AccruingReal
      estate loans
            
            $
            8,750
            
            
            $
            --Commercial
      loans
            
            
            14
            
            
            
            --Consumer
      loans
            
            
            31
            
            
            
            --Total
            
            $
            8,795
            
            
            $
            --








March 31, 2007Nonaccrual Loans
            
            
            Past Due 90 Days – Still
      AccruingReal
      estate loans
            
            $
            669
            
            
            $
            --Commercial
      loans
            
            
            89
            
            
            
            --Consumer
      loans
            
            
            --
            
            
            
            --Total
            
            $
            758
            
            
            $
            --





15
 Index





Management
meets weekly to discuss various plans for the reduction of  nonaccrual
loans. In addition to nonaccrual loans, the Company has foreclosed assets which
is also considered a non-performing asset. As of March 31, 2008, the Company had
$3.7 million in other real estate compared to $882 thousand at December 31,
2007. Foreclosed assets are written down to the lower of the carrying principal
amount or the fair market value as determined by an appraisal when transferred
to foreclosed assets.





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, 2008 financial statements evidence a satisfactory
liquidity position as total cash and cash equivalents amounted to approximately
$4.7 million, representing 3.08% of total assets.





Investment
securities available-for-sale, which amounted to $18.6 million, or 12.27% of
total assets at March 31, 2008, 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, 2008, we had access to unused lines
of credit totaling $2.0 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, 2008 we had advances outstanding of $17.0 million. We had access to
additional advances up to $13.2 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 $13.5 million at December 31, 2007 to $12.7
million at March 31, 2008. The decrease is due to net loss for the first quarter
of 2008 of $987 thousand, an after-tax increase of $170 thousand in the fair
value of securities available-for-sale, an after tax increase in the fair value
of an interest rate floor of $7 thousand, an increase in surplus from the
recognition of stock compensation expense of $15 thousand, and proceeds of $15
thousand received from the sale of 1,500 shares of common stock due to stock
options being exercised.





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, 2008.





16
 Index





The
following table summarizes our risk-based capital ratios at March 31,
2008:





Freedom Bank March 31,
      2008
            
            
            Freedom Bancshares, Inc. March 31,
      2008
            
            
            Regulatory RequirementLeverage
      ratio
            
            
            8.13
            %
            
            
            8.32
            %
            
            
            4.0
            %Tier
      1 Risk weighted ratio
            
            
            9.27
            %
            
            
            9.49
            %
            
            
            4.0
            %Tier
      2 Risk weighted ratio
            
            
            10.53
            %
            
            
            10.75
            %
            
            
            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 capital ratios are
in excess of 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.





17
 Index





Part
      I.
            Financial
      Information


Item3.
            Quantitative
      and Qualitative Disclosures about Market
Risk





Pursuant
to the revised disclosure requirements for smaller reporting companies effective
February 4, 2008, no disclosure under this Item is required.





Part
      I.
            Financial
      Information


Item4.
            Controls
      and Procedures





The
Company’s Chief Financial Officer has evaluated the Company’s disclosure
controls and procedures as of the end of the period reported, and concluded that
these controls and procedures are effective.  There have been no
significant changes in internal controls or in other factors that could
significantly affect these controls subsequent to the date of this
evaluation.





Disclosure
controls and procedures are the Company’s controls and other procedures that are
designed to ensure that information it is required to disclose in the reports it
files under the Exchange Act 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 include, without
limitation, controls and procedures designed to ensure that information the
Company is required to disclose in the reports that it files under the Exchange
Act is accumulated and communicated to management, including the principal
executive and financial officers, as appropriate, to allow timely decisions
regarding required disclosure.





The
design of any system of controls and procedures is based in part upon certain
assumptions about the likelihood of future events.  There can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.





18
 Index





FREEDOM
BANCSHARES, INC.


AND
SUBSIDIARY





Part II.
            Other
      Information








Item1.
            Legal
      Proceedings





None.





Item1A.
            Risk
    Factors





In
addition to the other information set forth in this report, you should carefully
consider the factors discussed in “Part I, Item 1A.  Risk Factors” in
our Annual Report on Form 10-K for the year ended December 31, 2007, which could
materially affect our business, financial condition or future
results.  The risks described in our Annual Report on Form 10-K are
not the only risk facing our Company.  Additional risks and
uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our business, financial
condition and/or operating results.





Item2.
            Unregistered Sales of Equity
      Securities and Use of
Proceeds





None.





Item3.
            Defaults Upon Senior
      Securities





None.





Item4.
            Submission of Matters to a Vote
      of Security Holders





None.





Item5.
            Other
      Information





None.





Item6.
            Exhibits





Number
            Description





31.1
            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 1350, as adopted pursuant to Rule
      15d-14(b) under the Securities Exchange Act of
  1934.


32.2
            Certification of Chief Financial
      Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Rule
      15d-14(b) under the Securities Exchange Act of
  1934.





19
 Index





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
      14, 2008
            /s/
      Vincent D. CaterPresident
      and Chief Executive Officer(Principal
      Executive Officer)May
      14, 2008
            /s/
      Jennifer S. WethingtonChief
      Financial Officer(Principal
      Accounting Officer)






20