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

                                   FORM 10-QSB


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

          For the quarterly period ended      MARCH 31, 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)


      ---------------------------------------------------------------------
      (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 May 11, 2004:      1,828,000;  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 - MARCH 31, 2004. . . . . . . . .   3

            CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
              INCOME - THREE MONTHS ENDED MARCH 31, 2004 AND 2003. . . .   4

            CONSOLIDATED STATEMENTS OF CASH FLOWS - THREE
              MONTHS ENDED MARCH 31, 2004 AND 2003 . . . . . . . . . . .   5

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

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

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


PART II.  OTHER INFORMATION

          ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .  16

          ITEM 5 - 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
                                 MARCH 31, 2004
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

                          ASSETS
                          ------

<S>                                                  <C>
Cash and due from banks                              $   1,968
Interest-bearing deposits in banks                         279
Federal funds sold                                       6,795
Securities available-for-sale, at fair value            18,910
Restricted equity securities                               224

Loans                                                   84,135
Less allowance for loan losses                           1,047
                                                     ----------
       Loans, net                                       83,088
                                                     ----------

Premises and equipment                                   6,237
Other assets                                             1,223
                                                     ----------

       TOTAL ASSETS                                  $ 118,724
                                                     ==========

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

DEPOSITS
    Noninterest-bearing                              $  14,776
    Interest-bearing                                    89,861
                                                     ----------
       TOTAL DEPOSITS                                  104,637
Securities sold under repurchase agreements                494
Other liabilities                                          384
                                                     ----------
       TOTAL LIABILITIES                               105,515
                                                     ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
    Common stock, no par value; 10,000,000 shares
     authorized, 1,828,000 issued and outstanding        9,923
    Retained earnings                                    3,083
    Accumulated other comprehensive income                 203
                                                     ----------
       TOTAL STOCKHOLDERS' EQUITY                       13,209
                                                     ----------

       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $118,724
                                                     ==========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>


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

                           CONSOLIDATED STATEMENTS OF INCOME
                               AND COMPREHENSIVE INCOME
                      THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                      (UNAUDITED)
                                (DOLLARS IN THOUSANDS,
                                EXCEPT PER SHARE DATA)

                                                                THREE MONTHS ENDED
                                                                     MARCH 31,
                                                             -------------------------
                                                                2004          2003
                                                             -----------  ------------
<S>                                                          <C>          <C>
INTEREST INCOME
    Loans                                                    $     1,345  $     1,233
    Taxable securities                                               174          168
    Nontaxable securities                                             14           14
    Deposits in banks                                                  1            2
    Federal funds sold                                                 6           12
                                                             -----------  ------------
         TOTAL INTEREST INCOME                                     1,540        1,429
                                                             -----------  ------------

INTEREST EXPENSE
    Deposits                                                         364          475
    Other borrowings                                                   1            -
                                                             -----------  ------------
         TOTAL INTEREST EXPENSE                                      365          475
                                                             -----------  ------------

         NET INTEREST INCOME                                       1,175          954
PROVISION FOR LOAN LOSSES                                             28           44
                                                             -----------  ------------
         NET INTEREST INCOME AFTER
             PROVISION FOR LOAN LOSSES                             1,147          910
                                                             -----------  ------------

OTHER INCOME
    Service charges on deposit accounts                               70           72
    Gains on sales of securities available-for-sale                   22            -
    Other operating income                                           123          178
                                                             -----------  ------------
         TOTAL OTHER INCOME                                          215          250
                                                             -----------  ------------

OTHER EXPENSES
    Salaries and other employee benefits                             525          504
    Occupancy and equipment expenses                                 125          139
    Other operating expenses                                         283          278
                                                             -----------  ------------
         TOTAL OTHER EXPENSES                                        933          921
                                                             -----------  ------------

         INCOME  BEFORE INCOME TAXES                                 429          239

INCOME TAX EXPENSE                                                   153           83
                                                             -----------  ------------

         NET INCOME                                                  276          156
                                                             -----------  ------------

OTHER COMPREHENSIVE INCOME (LOSS)
    Unrealized gains (losses) on securities
      available-for-sale arising during period, net of tax            36          (74)
                                                             -----------  ------------

         COMPREHENSIVE INCOME                                $       312  $        82
                                                             ===========  ============
BASIC AND DILUTED EARNINGS PER SHARE                         $      0.15  $      0.09
                                                             ===========  ============
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
                      THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                     (UNAUDITED)
                                (DOLLARS IN THOUSANDS)

                                                                     2004      2003
                                                                   --------  --------
<S>                                                                <C>       <C>
OPERATING ACTIVITIES
    Net income                                                     $   276   $   156
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation                                                    77        81
        Provision for loan losses                                       28        44
        Gain on sales of securities available-for-sale                 (22)        -
        Net other operating activities                                 (33)      (69)
                                                                   --------  --------

              Net cash provided by operating activities                326       212
                                                                   --------  --------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale                           -    (2,032)
    Proceeds from maturities of securities available-for-sale        1,162     3,059
    Proceeds from sales of securities available-for-sale             4,715         -
    Proceeds from maturities of securities held-to-maturity              -        10
    Purchases of restricted equity securities                           53       (71)
    Net increase in interest-bearing deposits in banks                 (55)       (3)
    Net increase in federal funds sold                              (2,328)   (1,822)
    Net increase in loans                                           (1,548)   (1,573)
    Purchase of premises and equipment                                (990)      (24)
                                                                   --------  --------

              Net cash provided by (used in) investing activities    1,009    (2,456)
                                                                   --------  --------

FINANCING ACTIVITIES
    Net increase (decrease) in deposits                             (3,088)    3,203
    Net increase in securities sold under repurchase agreements         78       178
    Proceeds from exercise of stock options                             26       191
                                                                   --------  --------

              Net cash provided by (used in) financing activities   (2,984)    3,572
                                                                   --------  --------

Net increase (decrease) in cash and due from banks                  (1,649)    1,328

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

Cash and due from banks at end of period                           $ 1,968   $ 3,231
                                                                   ========  ========
</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 month period ended March
          31,2004  are  not necessarily indicative of the results to be expected
          for  the  full  year.

NOTE 2.   STOCK COMPENSATION PLANS

          At  March  31,  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 MARCH 31,
                                                                -----------------------------
                                                                      2004             2003
                                                                --------------  -------------
<S>                                                             <C>             <C>
          Net income, as reported                               $          276  $         156
          Deduct: Total stock-based employee compensation
             expense determined under fair value based
             method for all awards, net of related tax effects               0              0
                                                                --------------  -------------
          Pro forma net income                                  $          276  $         156
                                                                ==============  =============
          Earnings per share:
            Basic - as reported                                 $         0.15  $        0.09
                                                                ==============  =============
            Basic - pro forma                                   $         0.15  $        0.09
                                                                ==============  =============
            Diluted - as reported                               $         0.15  $        0.09
                                                                ==============  =============
            Diluted - pro forma                                 $         0.15  $        0.09
                                                                ==============  =============
</TABLE>


                                        6
<PAGE>
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 MARCH 31,
                                                         ------------------------------
                                                              2004             2003
                                                         ---------------  -------------
<S>                                                      <C>              <C>
          Basic Earnings Per Share:
            Weighted average common shares outstanding         1,825,791      1,782,472
                                                         ===============  =============
            Net income                                   $       276,000  $     156,000
                                                         ===============  =============
            Basic earnings  per share                    $          0.15  $        0.09
                                                         ===============  =============
          Diluted Earnings Per Share:
            Weighted average common shares outstanding         1,825,791      1,782,472
            Net effect of the assumed exercise of stock
             options based on the treasury stock method
             using average market prices for the year                490              0
                                                         ===============  =============
            Total weighted average common shares and
             common stock equivalents outstanding              1,826,281      1,782,472
                                                         ===============  =============
            Net income                                   $       276,000  $     156,000
                                                         ===============  =============
            Diluted earnings per share                   $          0.15  $        0.09
                                                         ===============  =============
</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.


                                        7
<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,  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  the  words  such  as  "may,"  "will,"  "anticipate,"  "should,"  "would,"
"believe,"  "contemplate," "expect," "estimate," "continue," "may," "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.


                                        8
<PAGE>
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.


LIQUIDITY AND CAPITAL RESOURCES

We  consider  our  liquidity  to  be adequate to meet operating and loan funding
requirements  at  March  31, 2004.  At March 31, 2004, the liquidity ratio (i.e.
cash,  short-term  assets  and marketable assets divided by deposits) was 26.76%
and the loan to deposit ratio was 79.89%.   As the loan portfolio grows, we will
continue  to  monitor  liquidity  and  make  adjustments  as  deemed  necessary.
Investing  our  available  funds  in  loans  and  other  high  yielding interest
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
                                          ---------------------
                                                                   MINIMUM
                                                                  REGULATORY
                                          CONSOLIDATED    BANK    REQUIREMENT
                                          -------------  ------  ------------
<S>                                       <C>            <C>     <C>
          Leverage capital ratios                11.26%   9.40%         4.00%
          Risk-based capital ratios:
            Tier I capital                       13.41   11.22          4.00
            Total capital                        14.49   12.32          8.00
</TABLE>

During the first quarter of 2004, the Company approved a transfer of land to the
Bank  as  a capital infusion.  The land, located in Cherokee County, will be the
site  of  the  bank's  next  branch, scheduled to open in the fall of 2004.  The
Directors  also  approved  increasing the Company's investment in the bank by $1
million.  These  two  transfers to the bank will increase the Bank's capital and
allow  it  to  continue to grow for the foreseeable future while maintaining its
well  capitalized  status.

The bank has entered into a contractual relationship to build a branch office on
the  property  located  in  the  Free  Home community of Cherokee County.  It is
estimated  cost  to  build  the  branch  is  $1.4  million.

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


                                        9
<PAGE>
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>
                                             MARCH 31, 2004
                                              (Dollars in
                                               Thousands)
                                            ----------------
<S>                                         <C>
              Commitments to extend credit  $         16,693
              Letters of credit                          252
                                            ----------------
                                            $         16,945
                                            ================
</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.

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.


                                       10
<PAGE>
FINANCIAL CONDITION

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

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

Cash and due from banks                       $     1,968  $       3,617
Interest-bearing deposits in banks                    279            224
Federal funds sold                                  6,795          4,467
Securities                                         19,134         24,984
Loans, net                                         83,088         81,921
Premises and equipment                              6,237          5,324
Other assets                                        1,223            812
                                              -----------  -------------
                                              $   118,724  $     121,349
                                              ===========  =============
Deposits                                      $   104,637  $     107,725
Securities sold under repurchase agreements           494            416
Other liabilities                                     384            337
Stockholders' equity                               13,209         12,871
                                              -----------  -------------
                                              $   118,724  $     121,349
                                              ===========  =============
</TABLE>

Total  assets  declined  by  2.16%  for  the  first  quarter of 2004.  Deposits,
primarily interest bearing checking accounts, decreased by $3,088,000 during the
quarter.  Proceeds  from  sales  and  maturities  of  investment  securities  of
$5,850,000  were  used to fund loan growth of $1,167,000, increased premises and
equipment of $913,000 with the remainder being temporarily invested into federal
funds.  The  increase  in  premises  and  equipment  is  due  to the purchase of
property at the intersection of Georgia Highway 400 and Martin Road for possible
future  expansion.  Our  loan  to deposit ratio remained relatively unchanged at
79.89%  as  compared  to  December  31,  2003.  We expect federal funds sold and
investment  securities  to  provide  for  our  future  loan growth.  In order to
increase  our  deposits interest rates may have to be raised to compete with the
other  banks  in our market.  Stockholders' equity has increased by $338,000 due
to  net  income of $276,000, proceeds from the exercise of stock options raising
$26,000  and increases of unrealized gains on securities available-for-sale, net
of  tax,  of  $36,000.


                                       11
<PAGE>
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

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

<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED
                                            MARCH 31,
                               --------------------------------
                                     2004             2003
                               -----------------  -------------
                                    (DOLLARS IN THOUSANDS)
                               --------------------------------
<S>                            <C>                <C>
   Interest income             $           1,540  $       1,429

   Interest expense                          365            475
                               -----------------  -------------

   Net interest income                     1,175            954

   Provision for loan losses                  28             44

   Other income                              215            250

   Other expense                             933            921
                               -----------------  -------------

   Pretax income                             429            239

   Income taxes                              153             83
                               -----------------  -------------

   Net income                  $             276  $         156
                               =================  =============
</TABLE>


Our  net  interest  income has increased by $221,000 during the first quarter of
2004  as compared to the same period in 2003.  Our net interest margin increased
to  4.41%  during  the  first quarter of 2004 as compared to 4.14% for the first
quarter  of  2003.  The  interest  expense  decrease  is  due to certificates of
deposits  with  higher  interest rates repricing at the current market rates and
the  decline  in deposits since December 31, 2003.  This has allowed the cost of
funds  to  drop  to  1.66%.

The  provision for loan losses decreased by $16,000 in the first quarter of 2004
when  compared  to  the same period in 2003.  The decrease is due to the smaller
rate  of  loan growth as compared to the first quarter of 2003 and a decrease in
net charge offs.  We incurred net charge-offs of $14,000 in the first quarter of
2004  as  compared  to  $31,000  in  the  first quarter 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


                                       12
<PAGE>
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 March
31,  2004  and  2003  is  as  follows:

<TABLE>
<CAPTION>
                                                                                  MARCH 31,
                                                                        --------------------------
                                                                             2004          2003
                                                                        --------------  ----------
                                                                          (DOLLARS IN THOUSANDS)
                                                                        --------------------------
<S>                                                                     <C>             <C>
Non-accrual loans                                                       $            0  $       10
Loans contractually past due ninety days or more as to interest
or principal payments and still accruing                                             0         130
Restructured loans                                                                   0           0

Potential problem loans                                                              8           0
Interest income that would have been recorded on nonaccrual
and restructured loans under original terms                                          0           1
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.

In  February,  the  bank  foreclosed  on commercial property securing a past due
loan.  The  property  was placed on the bank's balance sheet at the value of the
loan,  which  was less than the appraised value.  The property is being actively
marketed.

It  is  our  policy  to  discontinue the accrual of interest income when, in the
opinion of management, collection of such 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.

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.


                                       13
<PAGE>
Information  regarding  certain  loans  and allowance for loan loss data through
March  31,  2004  and  2003  is  as  follows:

<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED
                                                                                 MARCH 31,
                                                                    ----------------------------------
                                                                           2004              2003
                                                                    ------------------  --------------
                                                                          (DOLLARS IN THOUSANDS)
                                                                    ----------------------------------
<S>                                                                 <C>                 <C>
Average amount of loans outstanding                                 $          82,313   $      71,189
                                                                    ==================  ==============
Balance of allowance for loan losses at beginning of period         $           1,033   $         885
                                                                    ------------------  --------------
Loans charged off
  Commercial and financial                                                          8              31
  Real estate mortgage                                                              0               0
  Installment                                                                      11               0
                                                                    ------------------  --------------
                                                                                   19              31
                                                                    ------------------  --------------

Loans recovered
  Commercial and financial                                                          4               0
  Real estate mortgage                                                              0               0
  Installment                                                                       1               0
                                                                    ------------------  --------------
                                                                                    5               0
                                                                    ------------------  --------------

Net charge-offs                                                                    14              31
                                                                    ------------------  --------------
Additions to allowance charged to operating expense during period                  28              44
                                                                    ------------------  --------------
Balance of allowance for loan losses at end of period               $           1,047   $         898
                                                                    ==================  ==============
Ratio of net loans charged off during the period to
  average loans outstanding                                                       .02%            .04%
                                                                    ==================  ==============
</TABLE>

Other  income  has  decreased  by  $35,000  during  the first quarter of 2004 as
compared  to  the same period in 2003 due to decreased mortgage loan origination
fees of $61,000, offset by gains of $22,000 on the sale of securities and $5,000
increase  in  customer  service  fees.

Other expenses increased by $12,000 during the first quarter of 2004 as compared
to  the  same  period in 2003 due to increased salaries and employee benefits of
$21,000,  decreased  occupancy  expenses  of  $14,000  and  an increase in other
operating expenses of $5,000.  Salaries and employee benefits have increased due
to  annual salary increases.  Occupancy expenses have decreased due to no longer
leasing  the  operations  center  and  the  old  main  office  facility  and the
discontinuation  of  the  depreciation of the mobile unit due to the sale of the
unit.  Other  operating  expenses  have  shown  no significant increase from the
prior  comparable  period.


                                       14
<PAGE>
The  provision  for  income  taxes  was  $153,000  for the first quarter of 2004
(effective tax rate of 36%) as compared to $83,000 for the first quarter of 2003
(effective  tax  rate  of 35%).  The increase in amount is due to higher pre tax
income  in  2004.

Overall,  net  income has increased by $120,000 during the first quarter of 2004
as  compared  to the same period in 2003 due primarily to increased net interest
income.

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 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          None.


ITEM 5.   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:    May 11, 2004               BY:  /s/ Timothy M. Perry
      -----------------                  --------------------------------------
                                         Timothy M. Perry, President and C.E.O.
                                         (Principal Executive Officer)


DATE:    May 11, 2004               BY:  /s/ Timothy D. Foreman
      -----------------                  --------------------------------------
                                         Timothy D. Foreman, Vice President,
                                         Secretary and Treasurer
                                         (Principal Financial and Accounting
                                         Officer)


                                       17
<PAGE>