U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB
Mark One

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934

          For the quarterly period ended   SEPTEMBER 30, 2004
                                         -----------------------

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

            For the transition period from __________ to __________

                        COMMISSION FILE NUMBER: 333-10909

                            Forsyth Bancshares, Inc.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

           Georgia                                               58-2231953
-------------------------------                             --------------------
(State or other jurisdiction of                                 (IRS Employer
incorporation or organization)                               Identification No.)

            651 VETERANS MEMORIAL BOULEVARD, CUMMING, GEORGIA 30040
            -------------------------------------------------------
                    (Address of principal executive offices)

                                 (770) 886-9500
                                 --------------
                          (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 Exchange Act 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 November 1, 2004:    1,858,000; no par value.

Transitional Small Business Disclosure Format  Yes     No   X
                                                   ---     ---


<PAGE>
                    FORSYTH BANCSHARES, INC. AND SUBSIDIARY


================================================================================

                                      INDEX
                                      -----


                                                                            PAGE
                                                                            ----

PART I.     FINANCIAL INFORMATION

            ITEM 1. FINANCIAL STATEMENTS

             CONSOLIDATED BALANCE SHEET - SEPTEMBER 30, 2004 . . . . . . . .   3

             CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
                  INCOME - THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                  AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003. . . . .   4

             CONSOLIDATED STATEMENT OF CASH FLOWS - NINE
                 MONTHS ENDED SEPTEMBER 30, 2004 AND 2003. . . . . . . . . .   5

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. . . . . . . . . . .   6

            ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                      FINANCIAL CONDITION AND RESULTS OF OPERATIONS. . . . .   9

            ITEM 3. CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . .  15


PART II.    OTHER INFORMATION

            ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K. . . . . . . . . . . .  16

            SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . .  17


                                        2
<PAGE>
<TABLE>
<CAPTION>
                         PART I - FINANCIAL INFORMATION

                          ITEM 1.  FINANCIAL STATEMENTS

                     FORSYTH BANCSHARES, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2004
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

                       ASSETS
                       ------
<S>                                                       <C>
Cash and due from banks                                    $ 3,490
Interest-bearing deposits in banks                             284
Federal funds sold                                           1,412
Securities available-for-sale, at fair value                20,162
Restricted equity securities                                   225

Loans                                                       94,622
Less allowance for loan losses                               1,150
                                                          --------
      Loans, net                                            93,472
                                                          --------

Premises and equipment                                       6,867
Other assets                                                 1,288
                                                          --------
      TOTAL ASSETS                                        $127,200
                                                          ========


         LIABILITIES AND STOCKHOLDERS' EQUITY
         ------------------------------------

DEPOSITS
  Noninterest-bearing                                     $ 15,615
  Interest-bearing                                          97,134
                                                          --------
      TOTAL DEPOSITS                                       112,749
Securities sold under repurchase agreements                    357
Other liabilities                                              261
                                                          --------
      TOTAL LIABILITIES                                    113,367
                                                          --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Common stock, no par value; 10,000,000
   shares authorized, 1,858,000 issued and outstanding      10,178
  Retained earnings                                          3,533
  Accumulated other comprehensive income                       122
                                                          --------
      TOTAL STOCKHOLDERS' EQUITY                            13,833
                                                          --------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $127,200
                                                          ========
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                        3
<PAGE>
<TABLE>
<CAPTION>
                              FORSYTH BANCSHARES, INC. AND SUBSIDIARY

                                 CONSOLIDATED STATEMENTS OF INCOME
                                      AND COMPREHENSIVE INCOME
                           THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                         AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                            (UNAUDITED)
                                       (DOLLARS IN THOUSANDS,
                                       EXCEPT PER SHARE DATA)

                                              THREE MONTHS ENDED            NINE MONTHS ENDED
                                                 SEPTEMBER 30,                SEPTEMBER 30,
                                          ---------------------------  ----------------------------
                                              2004           2003           2004           2003
                                          ------------  -------------  -------------  -------------
<S>                                       <C>           <C>            <C>            <C>
INTEREST INCOME
  Loans                                   $      1,472  $      1,306   $      4,203   $      3,831
  Taxable securities                               142           179            453            511
  Nontaxable securities                             14            14             43             43
  Deposits in banks                                  2             2              5              8
  Federal funds sold                                24            11             36             33
                                          ------------  -------------  -------------  -------------
      TOTAL INTEREST INCOME                      1,654         1,512          4,740          4,426
                                          ------------  -------------  -------------  -------------

INTEREST EXPENSE
  Deposits                                         461           415          1,195          1,334
  Other borrowings                                   -             1              3              2
                                          ------------  -------------  -------------  -------------
      TOTAL INTEREST EXPENSE                       461           416          1,198          1,336
                                          ------------  -------------  -------------  -------------

      NET INTEREST INCOME                        1,193         1,096          3,542          3,090
PROVISION FOR LOAN LOSSES                           78            47            138            137
                                          ------------  -------------  -------------  -------------
      NET INTEREST INCOME AFTER
        PROVISION FOR LOAN LOSSES                1,115         1,049          3,404          2,953
                                          ------------  -------------  -------------  -------------

OTHER INCOME
  Service charges on deposit accounts               71            67            210            202
  Gains on sales of securities
  available-for-sale                                 -             -             26              9
  Other operating income                           129           192            406            552
                                          ------------  -------------  -------------  -------------
      TOTAL OTHER INCOME                           200           259            642            763
                                          ------------  -------------  -------------  -------------

OTHER EXPENSES
  Salaries and other employee benefits             551           539          1,633          1,598
  Occupancy and equipment expenses                 130           124            377            373
  Other operating expenses                         325           248            911            868
                                          ------------  -------------  -------------  -------------
      TOTAL OTHER EXPENSES                       1,006           911          2,921          2,839
                                          ------------  -------------  -------------  -------------

      INCOME  BEFORE INCOME TAXES                  309           397          1,125            877

INCOME TAX EXPENSE                                 109           139            399            302
                                          ------------  -------------  -------------  -------------

      NET INCOME                                   200           258            726            575
                                          ------------  -------------  -------------  -------------

OTHER COMPREHENSIVE INCOME (LOSS)
  Unrealized gains (losses) on securities
    available-for-sale arising
    during period, net of tax                      118          (171)           (44)          (222)
                                          ------------  -------------  -------------  -------------

      COMPREHENSIVE INCOME                $        318  $         87  $         682  $         353
                                          ============  =============  =============  =============

BASIC AND DILUTED EARNINGS PER SHARE      $       0.11   $      0.14  $        0.39  $        0.32
                                          ============  =============  =============  =============

CASH DIVIDENDS PER SHARE                  $          -  $          -  $           -  $           -
                                          ============  =============  =============  =============
</TABLE>


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                   FORSYTH BANCSHARES, INC. AND SUBSIDIARY

                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                                 (UNAUDITED)
                                           (DOLLARS IN THOUSANDS)

                                                                            2004          2003
                                                                          ---------  ---------------
<S>                                                                       <C>        <C>
OPERATING ACTIVITIES
  Net income                                                              $    726   $          575
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation                                                               234              223
    Provision for loan losses                                                  138              137
    Gain on sales of securities available-for-sale                             (26)              (9)
    Gain on sale on equipment                                                   (5)               -
    Writedown of other real estate owned                                        37                -
    Net other operating activities                                            (188)            (160)
                                                                          ---------  ---------------

      Net cash provided by operating activities                                916              766
                                                                          ---------  ---------------

INVESTING ACTIVITIES
  Purchases of securities available-for-sale                                (5,454)         (15,433)
  Proceeds from maturities of securities available-for-sale                  3,220            6,383
  Proceeds from sales of securities available-for-sale                       6,734            2,792
  Proceeds from maturities held-to-maturity                                      -               32
  Redemption (purchase) of restricted equity securities                         52              (71)
  Net increase  in interest-bearing deposits in banks                          (60)              (8)
  Net (increase) decrease in federal funds sold                              3,055           (6,973)
  Net increase in loans                                                    (12,042)          (8,568)
  Proceeds from sale of equipment                                               11                -
  Purchase of premises and equipment                                        (1,804)            (203)
                                                                          ---------  ---------------

      Net cash used in investing activities                                 (6,288)         (22,049)
                                                                          ---------  ---------------

FINANCING ACTIVITIES
  Net increase in deposits                                                   5,024           21,418
  Net increase (decrease) in securities sold under repurchase agreements       (59)             305
  Proceeds from exercise of stock options                                      280              404
                                                                          ---------  ---------------

      Net cash provided by financing activities                              5,245           22,127
                                                                          ---------  ---------------

Net increase (decrease) in cash and due from banks                            (127)             844

Cash and due from banks at beginning of period                               3,617            1,903
                                                                          ---------  ---------------

Cash and due from banks at end of period                                  $  3,490         $  2,747
                                                                          =========  ===============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                        5
<PAGE>
                    FORSYTH BANCSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


NOTE 1.   BASIS OF PRESENTATION

          The  consolidated  financial  information for Forsyth Bancshares, Inc.
          (the  "Company")  included  herein  is  unaudited;  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 period.

          The  results  of operations for the three and nine month periods ended
          September 30, 2004 are not necessarily indicative of the results to be
          expected  for  the  full  year.


NOTE 2.   STOCK COMPENSATION PLANS

          At  September  30,  2004,  the  Company  has  two stock-based employee
          compensation  plans.  The  Company  accounts for those plans under the
          recognition  and  measurement  principles  of  APB  Opinion  No.  25,
          Accounting for Stock Issued to Employees, and related Interpretations.
          No  stock-based employee compensation cost is reflected in net income,
          as  all  options granted under those plans had an exercise price equal
          to  the market value of the underlying stock on the date of grant. The
          following  table illustrates the effect on net income and earnings 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.

<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED
                                                                SEPTEMBER 30,
                                                           ----------------------
                                                              2004        2003
                                                           ----------  ----------
<S>                                                        <C>         <C>

          Net income, as reported                          $      200  $      258
          Deduct: Total stock-based employee compensation
              expense determined under fair value based
              method for all awards, net of tax                     0           0
                                                           ----------  ----------
          Pro forma net income                             $      200  $      258
                                                           ==========  ==========
          Earnings per share:
            Basic - as reported                            $     0.11  $     0.14
            Basic - pro forma                              $     0.11  $     0.14
                                                           ==========  ==========
            Diluted - as reported                                0.11  $     0.14
                                                           ==========  ==========
            Diluted - pro forma                            $     0.11  $     0.14
                                                           ==========  ==========
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 2.   STOCK COMPENSATION PLANS (CONTINUED)

                                                            NINE MONTHS ENDED
                                                             SEPTEMBER 30,
                                                           ------------------
                                                             2004      2003
                                                           --------  --------
<S>                                                        <C>       <C>

          Net income, as reported                          $    726  $    575
          Deduct: Total stock-based employee compensation
             expense determined under fair value based            0
             method for all awards, net of tax                              6
                                                           --------  --------
          Pro forma net income                             $    726  $    569
                                                           ========  ========
          Earnings per share:
          Basic - as reported                              $   0.39  $   0.32
                                                           ========  ========
          Basic - pro forma                                $   0.39  $   0.32
                                                           ========  ========
          Diluted - as reported                            $   0.39  $   0.32
                                                           ========  ========
          Diluted - pro forma                              $   0.39  $   0.32
                                                           ========  ========
</TABLE>

NOTE 3.   EARNINGS PER SHARE

          Presented below is a summary of the components used to calculate basic
          and  diluted  earnings  per  common  share.

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED
                                                                     SEPTEMBER 30,
                                                                 ----------------------
                                                                    2004        2003
                                                                 ----------------------
<S>                                                              <C>         <C>

               Basic Earnings Per Share:
                 Weighted average common shares outstanding       1,857,609   1,815,299
                                                                 ==========  ==========

                 Net income                                      $  200,000  $  258,000
                                                                 ==========  ==========

                 Basic earnings  per share                       $     0.11  $     0.14
                                                                 ==========  ==========

               Diluted Earnings Per Share:
                 Weighted average common shares outstanding       1,857,609   1,815,299
                 Net effect of the assumed exercise of stock
                   options based on the treasury stock method
                   using average market prices for the year             486           0
                                                                 ----------  ----------
                 Total weighted average common shares and
                   common stock equivalents outstanding            1,858,095  1,815,299
                                                                 ==========  ==========

                 Net income                                      $  200,000  $  258,000
                                                                 ==========  ==========

                 Diluted earnings per share                      $     0.11  $     0.14
                                                                 ==========  ==========
</TABLE>


                                        7
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


NOTE 3.   EARNINGS PER SHARE (CONTINUED)

<TABLE>
<CAPTION>
                                                                 NINE MONTHS ENDED
                                                                   SEPTEMBER 30,
                                                               ----------------------
                                                                  2004        2003
                                                               ----------------------
<S>                                                            <C>         <C>

               Basic Earnings Per Share:
                 Weighted average common shares outstanding     1,842,606   1,800,842
                                                               ==========  ==========

                 Net income                                    $  726,000  $  575,000
                                                               ==========  ==========

                 Basic earnings  per share                     $     0.39  $     0.32
                                                               ==========  ==========

               Diluted Earnings Per Share:
                 Weighted average common shares outstanding     1,842,606   1,800,842
                 Net effect of the assumed exercise of stock
                   options based on the treasury stock method
                   using average market prices for the year           486           0
                                                               ----------  ----------
                 Total weighted average common shares and
                   common stock equivalents outstanding         1,843,092   1,800,842
                                                               ==========  ==========

                 Net income                                    $  726,000  $  575,000
                                                               ==========  ==========

                 Diluted earnings per share                    $     0.39  $     0.32
                                                               ==========  ==========
</TABLE>


NOTE 4.   CURRENT ACCOUNTING DEVELOPMENTS

          There  are  no  recent accounting pronouncements that have had, or are
          expected  to  have,  a  material  effect  on  the  Company's financial
          statements.


                                        8
<PAGE>
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

The  following  is  management's  discussion and analysis of certain significant
factors  which  have  affected  the  financial position and operating results of
Forsyth  Bancshares,  Inc. and its bank subsidiary, The Citizens Bank of Forsyth
County  (the  "Bank"),  during  the  periods  included  in  the  accompanying
consolidated  financial  statements.

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

Certain of the statements made herein under the caption "Management's Discussion
and  Analysis  of  Financial  Condition  and Results of Operations" ("MD&A") are
forward-looking  statements  for  purposes  of  the  Securities  Act of 1933, as
amended  (the  "Securities  Act")  and  the  Securities Exchange Act of 1934, as
amended  (the  "Exchange Act"), and as such may involve known and unknown risks,
uncertainties  and other factors which may cause the actual results, performance
or  achievements  of  Forsyth  Bancshares,  Inc. to be materially different from
future  results,  performance  or  achievements  expressed  or  implied  by such
forward-looking  statements.  Such forward looking statements include statements
using  words  such as "may," "will," "anticipate," "should," "would," "believe,"
"contemplate,"  "expect,"  "estimate,"  "continue,"  "intend,"  or other similar
words  and  expressions  of  the  future.  Our  actual  results  may  differ
significantly  from  the results we discuss in these forward-looking statements.

These  forward-looking statements involve risks and uncertainties and may not be
realized  due  to  a  variety  of  factors,  including, without limitation:  the
effects  of  future  economic  conditions;  governmental  monetary  and  fiscal
policies, as well as legislative and regulatory changes; the risks of changes in
interest  rates  on  the level and composition of deposits, loan demand, and the
values  of  loan collateral, securities, and other interest-sensitive assets and
liabilities;  interest  rate  risks;  the  effects  of  competition  from  other
commercial  banks,  thrifts, mortgage banking firms, consumer finance companies,
credit unions, securities brokerage firms, insurance companies, money market and
other mutual funds and other financial institutions operating in our market area
and  elsewhere,  including  institutions  operating  regionally, nationally, and
internationally,  together  with  such competitors offering banking products and
services  by  mail,  telephone,  computer,  and  the  Internet.

CRITICAL ACCOUNTING POLICIES

We  have  adopted  various  accounting  policies which govern the application of
accounting principles generally accepted in the United States in the preparation
of  our financial statements.  Our significant accounting policies are described
in  the  footnotes to the consolidated financial statements at December 31, 2003
as  filed  on  our  annual  report  on  Form  10-KSB.

Certain  accounting policies involve significant judgments and assumptions by us
which  have  a  material  impact  on  the  carrying  value of certain assets and
liabilities.  We  consider  these  accounting policies to be critical accounting
policies.  The  judgments  and  assumptions  we  use  are  based  on  historical
experience  and  other  factors,  which  we  believe  to be reasonable under the
circumstances.  Because  of the nature of the judgments and assumptions we make,
actual  results could differ from these judgments and estimates which could have
a  material  impact  on  our  carrying  values of assets and liabilities and our
results  of  operations.

We  believe  the  allowance for loan losses is a critical accounting policy that
requires the most significant judgments and estimates used in preparation of our
consolidated financial statements.  Refer to the portion of this discussion that
addresses  our  allowance for loan losses for a description of our processes and
methodology  for  determining  our  allowance  for  loan  losses.


                                        9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

We  consider  our  liquidity  adequate  to  meet  operating  and  loan  funding
requirements  at September 30, 2004.  At September 30, 2004, the liquidity ratio
(i.e.  cash,  short-term  assets  and marketable assets divided by deposits) was
approximately  16.41% and the loan to deposit ratio was approximately 83.9%.  As
the  loan  portfolio  grows,  we will continue to monitor the liquidity and make
adjustments  as  deemed  necessary.  Investing  our available funds in loans and
other  high  yielding  securities  will  increase  earnings  potential.

Requirements  by banking regulators include the monitoring of risk-based capital
guidelines  for  banks  and  holding companies that are designed to make capital
requirements  more sensitive to differences in risk profiles and account for off
balance  sheet  items. We exceed the regulatory minimums on capital requirements
and  ratios.  However,  as we continue to grow and the loan portfolio increases,
these  ratios  should adjust downward. Management will monitor these amounts and
ratios  on  a continuous basis.  The minimum capital requirements and the actual
capital  ratios  on  a  consolidated  and  bank-only  basis  are  as  follows:

<TABLE>
<CAPTION>
                                                      ACTUAL
                                           ----------------------------
                                                                          REGULATORY
                                                                            MINIMUM
                                           CONSOLIDATED       BANK        REQUIREMENT
                                           -------------  -------------  -------------
<S>                                        <C>            <C>            <C>

               Leverage capital ratios           11.01 %         9.02 %         4.00 %
               Risk-based capital ratios:
                 Tier I capital                    13.10          10.76           4.00
                 Total capital                     14.19          11.87           8.00
</TABLE>

OFF-BALANCE SHEET RISK

We  are  a  party  to  financial  instruments with off-balance sheet risk in the
normal  course  of business to meet the financing needs of our customers.  These
financial  instruments  include commitments to extend credit and standby letters
of  credit.  Such  commitments  involve,  to varying degrees, elements of credit
risk  and  interest  rate risk in excess of the amount recognized in the balance
sheets.

Our exposure to credit loss in the event of nonperformance by the other party to
the financial instrument for commitments to extend credit and standby letters of
credit  is  represented  by the contractual amount of those instruments.  We use
the same credit policies in making commitments and conditional obligations as we
do  for  on-balance  sheet  instruments.  A  summary  of  our  commitments is as
follows:

<TABLE>
<CAPTION>
                                                 SEPTEMBER 30,
                                                      2004
                                             ----------------------
                                             (Dollars in Thousands)
<S>                                          <C>
               Commitments to extend credit  $               16,433
               Letters of credit                                413
                                             ----------------------
                                             $               16,846
                                             ======================
</TABLE>

Commitments  to  extend  credit  are agreements to lend to a customer as long as
there  is no violation of any condition established in the contract.  Since many
of  the  commitments  are expected to expire without being drawn upon, the total
commitment  amounts  do not necessarily represent future cash requirements.  The
amount  of  collateral  obtained,  if  deemed  necessary by us upon extension of
credit,  is  based  on  our  credit  evaluation  of  the  customer.


                                       10
<PAGE>
Standby  letters of credit are conditional commitments issued by us to guarantee
the  performance  of  a  customer to a third party.  Those letters of credit are
primarily  issued  to  support  public  and private borrowing arrangements.  The
credit  risk  involved  in  issuing letters of credit is essentially the same as
that  involved  in  extending  loans  to  customers.  Collateral  is required in
instances  which  we  deem  necessary.

FINANCIAL CONDITION

Following is a summary of our balance sheets for the periods indicated:

<TABLE>
<CAPTION>
                                                       SEPTEMBER 30,   DECEMBER 31,
                                                           2004            2003
                                                       -------------  --------------
                                                          (DOLLARS IN THOUSANDS)
                                                       -----------------------------
<S>                                                    <C>            <C>

          Cash and due from banks                      $        3,490  $       3,617
          Interest-bearing deposits in banks                      284            224
          Federal funds sold                                    1,412          4,467
          Securities                                           20,387         24,984
          Loans, net                                           93,472         81,921
          Premises and equipment                                6,867          5,324
          Other assets                                          1,388            812
                                                       --------------  -------------
                                                       $      127,200  $     121,349
                                                       ==============  =============

          Deposits                                     $      112,749  $     107,725
          Securities sold under repurchase agreements             357            416
          Other liabilities                                       261            337
          Stockholders' equity                                 13,833         12,871
                                                       --------------  -------------
                                                       $      127,200  $     121,349
                                                       ==============  =============
</TABLE>

Our total assets grew at a rate of 4.8% for the first nine months of 2004.  Loan
growth  of $11,551,000 was funded with an increase in deposits of $5,024,000 and
decreases  in  federal  funds  sold  of  $3,055,000 and investment securities of
$4,545,000.  Premises  and  equipment  have  increased  $1,543,000  due  to  the
purchase  of property at the intersection of Georgia Highway 400 and Martin Road
for  possible future expansion and the construction of our new branch located in
the  Free  Home  community.  Our  current  federal  funds  sold,  securities and
anticipated  deposit growth should provide the funds for expected loan demand in
the future.  Stockholders' equity has increased by $962,000 due to net income of
$726,000,  proceeds from the exercise of stock options of $280,000 and decreases
of  unrealized  gains  on sales of securities available-for-sale, net of tax, of
$44,000.

Construction is almost complete on our new branch in the Free Home community of
Cherokee County.  $768,000 has been spent on constructing and equipping the
facility.  We estimate we will spend approximately $650,000 more to complete and
furnish the facility.  Construction will be completed during the fourth quarter
of 2004.


                                       11
<PAGE>
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

Following is a summary of our operations for the periods indicated.

<TABLE>
<CAPTION>
                                        THREE MONTHS ENDED
                                           SEPTEMBER 30,
                                     -------------------------
                                         2004         2003
                                     ------------  -----------
                                      (DOLLARS IN THOUSANDS)
                                     -------------------------
<S>                                  <C>           <C>

          Interest income            $      1,654  $     1,512
          Interest expense                    461          416
                                     ------------  -----------
          Net interest income               1,193        1,096
          Provision for loan losses            78           47
          Other income                        200          259
          Other expense                     1,006          911
                                     ------------  -----------
          Pretax income                       309          397
          Income taxes                        109          139
                                     ------------  -----------
          Net income                 $        200  $       258
                                     ============  ===========
</TABLE>


<TABLE>
<CAPTION>
                                         NINE MONTHS ENDED
                                           SEPTEMBER 30,
                                         2004         2003
                                     ------------  -----------
                                     (DOLLARS IN THOUSANDS)
                                     -------------------------
<S>                                  <C>           <C>

          Interest income            $      4,740  $     4,426
          Interest expense                  1,198        1,336
                                     ------------  -----------
          Net interest income               3,542        3,090
          Provision for loan losses           138          137
          Other income                        642          763
          Other expense                     2,921        2,839
                                     ------------  -----------
          Pretax income                     1,125          877
          Income taxes                        399          302
                                     ------------  -----------
          Net income                 $        726  $       575
                                     ============  ===========
</TABLE>

Our  net  interest  income  has  increased by $97,000 and $452,000 for the third
quarter  and  first  nine  months of 2004, respectively, as compared to the same
periods  in  2003.  Our  net interest margin increased to 4.29% during the first
nine months of 2004 as compared to 4.23% for the first nine months of 2003.  The
quarterly  increase  in  interest  expense  is  due  to increased competition to
attract and retain deposits.  The competition for deposits may slow our earnings
growth  in  the  future.


                                       12
<PAGE>
The  provision  for  loan  losses  increased by $31,000 and $1,000 for the third
quarter  and  first  nine  months of 2004, respectively, as compared to the same
periods  in  2003.  We  incurred  net  charge-offs  of $21,000 in the first nine
months  of  2004 as compared to $29,000 in the first nine months of 2003.  Based
upon  our  evaluation  of  the loan portfolio, we believe the allowance for loan
losses  to  be  adequate  to  absorb  losses  on  existing loans that may become
uncollectible.  Our  evaluation  considers  significant  factors relative to the
credit  risk  and  loss  exposure  in the loan portfolio, including past due and
classified  loans,  historical  experience,  underlying  collateral  values, and
current  economic  conditions  that  may affect the borrower's ability to repay.
The allowance for loan losses is evaluated by segmenting the loan portfolio into
unclassified  and  classified  loans.  An allowance percentage is applied to the
unclassified  loans  to  establish  a  general  allowance  for loan losses.  The
allowance  percentage  determined  is based upon our experience specifically and
the  historical  experience  of  the  banking industry generally. The classified
loans, including impaired loans, are analyzed individually in order to establish
a specific allowance for loan losses. The total of these allowances are compared
to  the minimum allowance level range in accordance with internal policy, (1.20%
to  1.30% of total loans outstanding), with the greater amount being recorded as
the  allowance  for  loan  losses.

Information  with  respect  to  nonaccrual,  past  due and restructured loans at
September  30,  2004  and  2003  is  as  follows:

<TABLE>
<CAPTION>
                                                                             SEPTEMBER 30,
                                                                        -------------------------
                                                                            2004         2003
                                                                        ------------  -----------
                                                                         (DOLLARS IN THOUSANDS)
                                                                        -------------------------
<S>                                                                     <C>           <C>

Nonaccrual loans                                                        $         21  $        71
Loans contractually past due ninety days or more as to interest
  or principal payments and still accruing
Restructured loans                                                                 0            0
Potential problem loans                                                            0            0
Interest income that would have been recorded on nonaccrual
  and restructured loans under original terms                                      1            2
Interest income that was recorded on nonaccrual and restructured loans             0            0
</TABLE>

Potential  problem loans are defined as loans about which we have serious doubts
as  to  the  ability  of  the borrower to comply with the present loan repayment
terms  and which may cause the loan to be placed on nonaccrual status, to become
past  due  more  than  ninety  days,  or  to  be  restructured.

It  is  our  policy  to  discontinue the accrual of interest income when, in the
opinion  of  management, collection of interest becomes doubtful. This status is
accorded interest when (1) there is a significant deterioration in the financial
condition  of  the  borrower and full repayment of principal and interest is not
expected  and  (2)  the principal or interest is more than ninety days past due,
unless  the  loan  is  both  well-secured  and  in  the  process  of collection.


                                       13
<PAGE>
Loans  classified  for  regulatory  purposes  as loss, doubtful, substandard, or
special  mention that have not been included in the table above do not represent
or  result from trends or uncertainties which management reasonably expects will
materially  impact  future  operating  results,  liquidity or capital resources.
These  classified loans do not represent material credits about which management
is aware of any information which causes management to have serious doubts as to
the  ability  of  such  borrowers  to  comply  with  the  loan  repayment terms.

Information  regarding  certain  loans  and allowance for loan loss data through
September  30,  2004  and  2003  is  as  follows:

<TABLE>
<CAPTION>
                                                                        NINE MONTHS ENDED
                                                                          SEPTEMBER 30,
                                                                   --------------------------
                                                                       2004          2003
                                                                   -------------  -----------
                                                                     (DOLLARS IN THOUSANDS)
                                                                   --------------------------
<S>                                                                <C>            <C>

Average amount of loans outstanding                                $     86,453   $   74,374
                                                                   =============  ===========

Balance of allowance for loan losses at beginning of period        $      1,033   $      885
                                                                   -------------  -----------

Loans charged off
  Commercial and financial                                         $         (8)  $        0
  Real estate mortgage                                                        0            0
  Installment                                                               (22)         (41)
                                                                   -------------  -----------
                                                                            (30)         (41)
                                                                   -------------  -----------

Loans recovered
  Commercial and financial                                                    4            0
  Real estate mortgage                                                        0            0
  Installment                                                                 5           12
                                                                   -------------  -----------
                                                                              9           12
                                                                   -------------  -----------

Net charge-offs                                                             (21)         (29)
                                                                   -------------  -----------

Additions to allowance charged to operating expense during period           138          137
                                                                   -------------  -----------

Balance of allowance for loan losses at end of period              $      1,150   $      993
                                                                   =============  ===========

Ratio of net loans charged off during the period to
  average loans outstanding                                                0.03%        0.04%
                                                                   =============  ===========
</TABLE>

Other  income has decreased by $59,000 and $121,000 during the third quarter and
first  nine  months  of  2004,  respectively, as compared to the same periods in
2003.  The  quarterly  decrease  is due primarily to a decrease in mortgage loan
origination  fees  of  $69,000.  The nine month decrease is due to a decrease in
mortgage  loan  origination  fees  of  $157,000, offset by increases in gains on
sales  of  securities of $17,000, service charges on deposit accounts of $8,000,
and  other  income  of  $7,000.


                                       14
<PAGE>
Other  expenses  increased  by  $95,000 and $82,000 during the third quarter and
first  nine  months  of  2004,  respectively, as compared to the same periods in
2003.  The  quarterly  increase  is  due  to  increases in salaries and employee
benefits  of $12,000, occupancy expense of $6,000 and other operating expense of
$59,000.  The  yearly  increase  is  due  to  increases in salaries and employee
benefits  of  $35,000,  other  operating  expenses of $25,000, and occupancy and
equipment  expense of $4,000.  Salaries and employee benefits have increased due
to  increased  salaries  associated with additional employees hired to staff the
Free  Home  office  and to other annual salary increases offset by a decrease in
mortgage  commissions  paid.  Other  operating  expenses  increased  due  to the
implementation  of  internet banking and the write down of the other real estate
owned  by  the  bank  of  $37,000.

The  provision  for  income taxes was $399,000 for the first nine months of 2004
(effective tax rate of 35%) as compared to $302,000 for the first nine months of
2002  (effective  tax  rate  of  34%).

Overall, net income has decreased by $46,000 for the third quarter and increased
$163,000  for  the  first  nine months of 2004, respectively, as compared to the
same  periods in 2003.  The quarterly decrease is due to increased provision for
loan  losses  and  other  expenses.  The yearly increase is due to increased net
interest income, offset by lower mortgage loan origination fees and higher other
expenses.

We  are  not  aware of any known trends, events or uncertainties, other than the
effect  of  events  as  described  above,  that will have or that are reasonably
likely  to  have  a  material  effect  on  its  liquidity,  capital resources or
operations.  We  are  also  not  aware  of  any  current  recommendations by the
regulatory  authorities  which,  if  they  were  implemented, would have such an
effect.


ITEM 3. CONTROLS AND PROCEDURES

As  of  the  end  of  the  period  covered  by  this  report,  we carried out an
evaluation,  under  the  supervision  and  with  the  participation of our Chief
Executive  Officer  and the Chief Financial Officer, of the design and operation
of  our disclosure controls and procedures.  Based on this evaluation, our Chief
Executive and Chief Financial Officer concluded that our disclosure controls and
procedures are effective for gathering, analyzing and disclosing the information
that  we  are  required  to disclose in the reports we file under the Securities
Exchange  Act  of 1934, within the time periods specified in the SEC's rules and
forms.  Our  Chief  Executive Officer and Chief Financial Officer also concluded
that  our  disclosure  controls  and procedures are effective in timely alerting
them  to material information relating to our company required to be included in
our  periodic  SEC  filings.  In  connection  with  the new rules, we are in the
process  of  further  reviewing  and  documenting  our  disclosure  controls and
procedures,  including  our  internal  controls  and  procedures  for  financial
reporting,  and  may  from  time  to time make changes designed to enhance their
effectiveness  and  to  ensure  that  our  systems  evolve  with  our  business.

There  have  been  no  significant  changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of  this  evaluation.


                                       15
<PAGE>
                          PART II - OTHER INFORMATION


ITEM 6.   EXHIBITS AND REPORTS ON  FORM 8-K

          (a)  Exhibits.

               31.1      Certification  of the Chief Executive Officer, Pursuant
                         to  Rule 13a-14(c) under the Securities Exchange Act of
                         1934,  as  amended.

               31.2      Certification  of the Chief Financial Officer, Pursuant
                         to  Rule 13a-14(c) under the Securities Exchange Act of
                         1934,  as  amended.

               32        Certification  of the Chief Executive Officer and Chief
                         Financial  Officer, Pursuant to 18 U.S.C. Section 1350,
                         as  Adopted  Pursuant  to  Section  906  of  the
                         Sarbanes-Oxley  Act  of  2002.

          (b)  Reports  on  Form  8-K.

               None.


                                       16
<PAGE>
                                   SIGNATURES



          In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                 FORSYTH BANCSHARES, INC.
                                      (Registrant)



DATE: November 10, 2004          BY: /s/ Timothy M. Perry
                                     --------------------------------------
                                     Timothy M. Perry, President and C.E.O.
                                     (Principal Executive Officer)


DATE: November 10, 2004          BY: /s/ Timothy D. Foreman
                                     --------------------------------------
                                     Timothy D. Foreman, Vice President,
                                     Secretary and Treasurer
                                     (Principal Financial and Accounting
                                     Officer)


                                       17
<PAGE>