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    JUNE 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  August  1,  2004:  1,857,000;  no  par  value.

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


<PAGE>
                    FORSYTH BANCSHARES, INC. AND SUBSIDIARY


--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                      INDEX
                                      -----

                                                                        PAGE
                                                                        -----
<S>       <C>                                                           <C>

PART I..  FINANCIAL INFORMATION

          ITEM 1.  FINANCIAL STATEMENTS

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

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

            CONSOLIDATED STATEMENT OF CASH FLOWS - SIX
              MONTHS ENDED JUNE 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 4 - SUBMISSION OF MATTERS TO A . . . . . . . . . . . . 16-17
                     VOTE OF SECURITY HOLDERS

            ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . .17

            SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>


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

               ITEM 1.  FINANCIAL STATEMENTS

         FORSYTH BANCSHARES, INC. AND SUBSIDIARY

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

                     ASSETS
                     ------
<S>                                                     <C>
Cash and due from banks                                 $  3,343
Interest-bearing deposits in banks                           282
Federal funds sold                                        10,698
Securities available-for-sale, at fair value              15,125
Restricted equity securities                                 225

Loans                                                     86,218
Less allowance for loan losses                             1,069
                                                        --------
    Loans, net                                            85,149
                                                        --------

Premises and equipment                                     6,577
Other assets                                               1,305
                                                        --------

    TOTAL ASSETS                                        $122,704
                                                        ========


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

DEPOSITS
  Noninterest-bearing                                   $ 15,370
  Interest-bearing                                        93,034
                                                        --------
    TOTAL DEPOSITS                                       108,404
Securities sold under repurchase agreements                  517
Other liabilities                                            276
                                                        --------
    TOTAL LIABILITIES                                    109,197
                                                        --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Common stock, no par value; 10,000,000
  shares authorized, 1,857,000 issued and outstanding     10,170
  Retained earnings                                        3,333
  Accumulated other comprehensive income                       4
                                                        --------
    TOTAL STOCKHOLDERS' EQUITY                            13,507
                                                        --------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $122,704
                                                        ========

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 JUNE 30, 2004 AND 2003
                                     AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                                     (UNAUDITED)
                                              (DOLLARS IN THOUSANDS,
                                              EXCEPT PER SHARE DATA)

                                                              THREE MONTHS ENDED        SIX MONTHS ENDED
                                                                   JUNE 30,                 JUNE 30,
                                                           -----------------------  ----------------------
                                                              2004         2003       2004        2003
                                                           -----------  ----------  ---------  -----------
<S>                                                        <C>          <C>         <C>        <C>
INTEREST INCOME
  Loans                                                    $    1,386   $    1,292  $  2,731   $    2,525
  Taxable securities                                              137          164       311          332
  Nontaxable securities                                            15           15        29           29
  Deposits in banks                                                 2            4         3            6
  Federal funds sold                                                6           10        12           22
                                                           -----------  ----------  ---------  -----------
    TOTAL INTEREST INCOME                                       1,546        1,485     3,086        2,914
                                                           -----------  ----------  ---------  -----------

INTEREST EXPENSE
  Deposits                                                        370          444       734          919
  Other borrowings                                                  2            1         3            1
                                                           -----------  ----------  ---------  -----------
    TOTAL INTEREST EXPENSE                                        372          445       737          920
                                                           -----------  ----------  ---------  -----------
    NET INTEREST INCOME                                         1,174        1,040     2,349        1,994
PROVISION FOR LOAN LOSSES                                          32           46        60           90
                                                           -----------  ----------  ---------  -----------
  NET INTEREST INCOME AFTER
      PROVISION FOR LOAN LOSSES                                 1,142          994     2,289        1,904
                                                           -----------  ----------  ---------  -----------

OTHER INCOME
  Service charges on deposit accounts                              69           63       139          135
  Gains on sales of securities available-for-sale                   4            -        26            9
  Other operating income                                          154          182       277          360
                                                           -----------  ----------  ---------  -----------
    TOTAL OTHER INCOME                                            227          245       442          504
                                                           -----------  ----------  ---------  -----------

OTHER EXPENSES
  Salaries and other employee benefits                            557          555     1,082        1,059
  Occupancy and equipment expenses                                122          110       247          249
    Other operating expenses                                      303          342       586          620
                                                           -----------  ----------  ---------  -----------
    TOTAL OTHER EXPENSES                                          982        1,007     1,915        1,928
                                                           -----------  ----------  ---------  -----------

    INCOME  BEFORE INCOME TAXES                                   387          232       816          480

INCOME TAX EXPENSE                                                137           80       290          163
                                                           -----------  ----------  ---------  -----------

    NET INCOME                                                    250          152       526          317
                                                           -----------  ----------  ---------  -----------

OTHER COMPREHENSIVE INCOME (LOSS)
  Unrealized gains (losses) on securities
    available-for-sale arising during period, net of tax         (198)          23      (162)         (51)
                                                           -----------  ----------  ---------  -----------

        COMPREHENSIVE INCOME                               $       52   $      175  $    364   $      266
                                                           ===========  ==========  =========  ===========

BASIC AND DILUTED EARNINGS PER SHARE                       $     0.14   $     0.08  $   0.29   $     0.18
                                                           ===========  ==========  =========  ===========

CASH DIVIDENDS PER SHARE                                   $        -   $        -  $      -   $        -
                                                           ===========  ==========  =========  ===========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>


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

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

                                                                     2004      2003
                                                                   --------  --------
<S>                                                                <C>       <C>
OPERATING ACTIVITIES
  Net income                                                       $   526   $   317
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation                                                       155       158
    Provision for loan losses                                           60        90
    Gain on sales of securities available-for-sale                     (26)       (9)
    Net other operating activities                                    (101)     (152)
                                                                   --------  --------

      Net cash provided by operating activities                        614       404
                                                                   --------  --------

INVESTING ACTIVITIES
  Purchases of securities available-for-sale                             -    (7,272)
  Proceeds from maturities of securities available-for-sale          2,612     4,587
  Proceeds from sales of securities available-for-sale               6,734     2,792
  Proceeds from maturities of securities held-to-maturity                -        32
  Proceeds from sale (purchases) of restricted equity securities        52       (71)
  Net increase in interest-bearing deposits in banks                   (58)       (5)
  Net (increase)decrease in federal funds sold                      (6,231)    2,303
  Net increase in loans                                             (3,641)   (5,504)
  Purchase of premises and equipment                                (1,408)     (184)
                                                                   --------  --------

      Net cash used in investing activities                         (1,940)   (3,322)
                                                                   --------  --------

FINANCING ACTIVITIES
  Net increase in deposits                                             679     2,394
  Net increase in securities sold under repurchase agreements          101       212
  Proceeds from exercise of stock options                              272       297
                                                                   --------  --------

      Net cash provided by financing activities                      1,052     2,903
                                                                   --------  --------

Net decrease in cash and due from banks                               (274)      (15)

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

Cash and due from banks at end of period                           $ 3,343   $ 1,888
                                                                   ========  ========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
</TABLE>


                                        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 six month periods ended
          June  30,  2004  are  not  necessarily indicative of the results to be
          expected  for  the  full  year.


NOTE  2.  STOCK  COMPENSATION  PLANS

          At  June  30,  2004,  the  Company  has  two  a  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
                                                        JUNE 30,
                                                 ----------------------
                                                    2004        2003
                                                 ----------  ----------
<S>                                              <C>         <C>

Net income, as reported                          $      250  $      152
Deduct: Total stock-based employee compensation
    expense determined under fair value based
    method for all awards, net of tax                     0           6
                                                 ----------  ----------
Pro forma net income                             $      250  $      146
                                                 ==========  ==========
Earnings per share:
  Basic - as reported                            $      .14  $      .08
                                                 ==========  ==========
  Basic - pro forma                              $      .14  $      .08
                                                 ==========  ==========
  Diluted - as reported                          $      .14  $      .08
                                                 ==========  ==========
  Diluted - pro forma                            $      .14  $      .08
                                                 ==========  ==========
</TABLE>


                                        6
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


NOTE 2.  STOCK  COMPENSATION  PLANS  (CONTINUED)

<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                       JUNE 30,
                                                 --------------------
                                                   2004       2003
                                                 ---------  ---------
<S>                                              <C>        <C>

Net income, as reported                          $     526  $     317
Deduct: Total stock-based employee compensation
  expense determined under fair value based
  method for all awards, net of tax                      0          6
                                                 ---------  ---------
Pro forma net income                             $     526  $     311
                                                 =========  =========
Earnings per share:
  Basic - as reported                            $    0.29  $    0.18
                                                 =========  =========
  Basic - pro forma                              $    0.29  $    0.17
                                                 =========  =========
  Diluted - as reported                          $    0.29  $    0.18
                                                 =========  =========
  Diluted - pro forma                            $    0.29  $    0.17
                                                 =========  =========
</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 JUNE 30,
                                               -------------------------------
                                                     2004            2003
                                               ----------------  -------------
<S>                                            <C>               <C>

Basic Earnings Per Share:
  Weighted average common shares outstanding          1,844,253      1,804,396
                                               ================  =============

  Net income                                   $            250  $         152
                                               ================  =============

  Basic earnings  per share                    $           0.14  $        0.08
                                               ================  =============

Diluted Earnings Per Share:
  Weighted average common shares outstanding          1,844,253      1,804,396
  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              1,844,743      1,804,396
                                               ================  =============

  Net income                                   $            250  $         152
                                               ================  =============

  Diluted earnings per share                   $           0.14  $        0.08
                                               ================  =============
</TABLE>


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

NOTE 3.  EARNINGS  PER  SHARE  (CONTINUED)

<TABLE>
<CAPTION>
                                                   SIX MONTHS ENDED
                                                       JUNE 30,
                                                ----------------------
                                                   2004        2003
                                                ----------  ----------
<S>                                             <C>         <C>

Basic Earnings Per Share:
  Weighted average common shares outstanding     1,835,022   1,793,494
                                                ==========  ==========

  Net income                                    $      526  $      317
                                                ==========  ==========

  Basic earnings  per share                     $     0.29  $     0.18
                                                ==========  ==========

Diluted Earnings Per Share:
  Weighted average common shares outstanding     1,835,022   1,793,494
  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         1,835,512   1,793,494
                                                ==========  ==========

  Net income                                    $      526  $      317
                                                ==========  ==========

  Diluted earnings per share                    $     0.29  $     0.18
                                                ==========  ==========
</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,"  "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.

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  to  be adequate to meet operating and loan funding
requirements at June 30, 2004. At June 30, 2004, the liquidity ratio (i.e. cash,
short-term  assets  and marketable assets divided by deposits) was approximately
20.20%  and  the  loan  to  deposit  ratio  was approximately 79.5%. 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            11.59%   9.55%         4.00%
Risk-based capital ratios:
  Tier I capital                   13.90   11.49          4.00
  Total capital                    15.00   12.61          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>
                                     JUNE 30,
                                       2004
                              (Dollars in Thousands)
                              -----------------------
<S>                           <C>
Commitments to extend credit  $                16,306
Letters of credit                                 282
                              -----------------------
                              $                16,588
                              =======================
</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>
                                               JUNE 30,     DECEMBER 31,
                                                 2004           2003
                                             ------------  --------------
                                                (DOLLARS IN THOUSANDS)
                                             ----------------------------
<S>                                          <C>           <C>

Cash and due from banks                      $      3,343  $        3,617
Interest-bearing deposits in banks                    282             224
Federal funds sold                                 10,698           4,467
Securities                                         15,350          24,984
Loans, net                                         85,149          81,921
Premises and equipment                              6,577           5,324
Other assets                                        1,305             812
                                             ------------  --------------
                                             $    122,704  $      121,349
                                             ============  ==============

Deposits                                     $    108,404  $      107,725
Securities sold under repurchase agreements           517             416
Other liabilities                                     276             337
Stockholders' equity                               13,507          12,871
                                             ------------  --------------
                                             $    122,704  $      121,349
                                             ============  ==============
</TABLE>

Total  assets increased by 1.12% for the first six months of 2004. Proceeds from
sales  and  maturities  of investment securities of $9,398,000 were used to fund
loan  growth  of $3,264,000, increased premises and equipment of $1,253,000 with
the  remainder  temporarily  invested in 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  and beginning
construction  on  our new branch located in the Free Home community. Our loan to
deposit  ratio  has remained stable at 79.53% since December 31, 2003. CD's over
$100,000  have  increased  by approximately $5.6 million since December 31, 2003
due primarily to the acquisition of a $5 million public fund deposit with a term
of  one year and a rate of 3%. Our current federal funds, securities and deposit
balances  should  provide  the  funds  for  expected  loan growth in the future.
Stockholders'  equity  has  increased by $636,000 due to net income of $526,000,
proceeds  from  the  exercise  of  stock  options  of  $272,000 and decreases of
unrealized  gains  on  sales  of  securities  available-for-sale, net of tax, of
$162,000.

Construction  has  begun  on our new branch office in the Free Home community of
Cherokee  County.  $511,000  has  been  spent  on constructing and equipping the
facility.  We estimate we will spend approximately $900,000 more to complete and
furnish  the facility. Construction should be completed in the fourth quarter of
2004.


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

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

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

Interest income            $      1,546  $     1,485
Interest expense                    372          445
                           ------------  -----------
Net interest income               1,174        1,040
Provision for loan losses            32           46
Other income                        227          245
Other expense                       982        1,007
                           ------------  -----------
Pretax income                       387          232
Income taxes                        137           80
                           ------------  -----------
Net income                 $        250  $       152
                           ============  ===========
</TABLE>


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

Interest income            $      3,086  $     2,914
Interest expense                    737          920
                           ------------  -----------
Net interest income               2,349        1,994
Provision for loan losses            60           90
Other income                        442          504
Other expense                     1,915        1,928
                           ------------  -----------
Pretax income                       816          480
Income taxes                        290          163
                           ------------  -----------
Net income                 $        526  $       317
                           ============  ===========
</TABLE>


Our  net  interest  income has increased by $134,000 and $355,000 for the second
quarter  and  first  six  months  of 2004, respectively, as compared to the same
periods in 2003. Our net interest margin increased to 4.40% during the first six
months  of  2004  as  compared  to  4.23%  for the first six months of 2003. The
decreases  in  interest  expense and the increase in the net interest margin are
due  primarily to long term certificate of deposit and IRA products repricing at
lower  rates  while loan rates remain relatively constant. Cost of funds for the
first  six  months  of  2004  was  1.68%,  as  compared  to  2.38%  for  2003.


                                       12
<PAGE>
The  provision  for  loan losses decreased by $14,000 and $30,000 for the second
quarter  and the first six months of 2004, respectively, as compared to the same
periods  in 2003. We incurred net charge-offs of $24,000 in the first six months
of  2004  as compared to $21,000 in the first six 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 June
30,  2004  and  2003  is  as  follows:

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

Nonaccrual loans                                                        $          0  $        91
Loans contractually past due ninety days or more as to interest
  or principal payments and still accruing                                         0           28
Restructured loans                                                                 0            0
Potential problem loans                                                           49            0
Interest income that would have been recorded on nonaccrual
  and restructured loans under original terms                                      0            3
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
June  30,  2004  and  2003  is  as  follows:

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

Average amount of loans outstanding                                $     84,439   $   72,753
                                                                   =============  ===========

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)         (32)
                                                                   -------------  -----------
                                                                            (30)         (32)
                                                                   -------------  -----------

Loans recovered
  Commercial and financial                                                    4            0
  Real estate mortgage                                                        0            0
  Installment                                                                 2           11
                                                                   -------------  -----------
                                                                              6           11
                                                                   -------------  -----------

Net charge-offs                                                             (24)         (21)
                                                                   -------------  -----------

Additions to allowance charged to operating expense during period            60           90
                                                                   -------------  -----------

Balance of allowance for loan losses at end of period              $      1,069   $      954
                                                                   =============  ===========

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


Other  income has decreased by $18,000 and $62,000 during the second quarter and
first six months of 2004, respectively, as compared to the same periods in 2003.
The  decreases  are primarily due to decreased mortgage loan origination fees of
$27,000  and  $88,000  during  the  second  quarter  and  first  six  months,
respectively.  The  decrease  in  mortgage  origination fees is due to decreased
refinancing  activity.


                                       14
<PAGE>
Other  expenses  decreased  by $25,000 and $13,000 during the second quarter and
first six months of 2004, respectively, as compared to the same periods in 2003.
The  decreases  are  primarily  due to reductions in other operating expenses of
$39,000  and  $34,000,  respectively.  In  2003, we incurred $36,000 of expenses
associated  with  the  termination  of the lease of the old main facility, along
with  the  legal  expense  of  the  termination.

The  provision  for  income  taxes was $290,000 for the first six months of 2004
(effective  tax  rate of 35.5%) as compared to $163,000 for the first six months
of  2003  (effective  tax  rate  of  34%).

Overall, net income has increased by $98,000 for the second quarter and $209,000
for  the first six months of 2004, respectively, as compared to the same periods
in  2003.  The increase in net income is due to the increase net interest income
offset  by  the  decrease  in  other  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


<TABLE>
<CAPTION>
ITEM 4.                    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
<S>      <C>
          (a)  The  Annual  Meeting  of  Shareholders  was held on May 18, 2004.

          (b)  The  following  directors were elected for a term of one year and
               until  a  successor  is  duly  qualified  and  elected:

               Catherine  M.  Amos
               Jeffrey  S.  Bagley
               Danny  M.  Bennett
               Michael  P.  Bennett
               Bryan  L.  Bettis
               Talmadge  W.  Bolton
               Thomas  L.  Bower,  III
               Charles  R.  Castleberry
               Charles  D.  Ingram
               Herbert  A.  Lang,  Jr.
               John  P.  McGruder
               James  J.  Myers
               Timothy  M.  Perry
               Danny  L.  Reid
               Charles  R.  Smith
               Wyatt  L.  Willingham
               Jerry  M.  Wood
</TABLE>

          (c)  The  following  matters  were  voted  on  at  the  meeting as was
               previously  identified  in  the Proxy materials forwarded to each
               shareholder.  The shares represented at the meeting (1,159,461 or
               63.4%)  voted  as  follows:

          1.   Proposal  to  elect the 17 individuals nominated by management as
               Directors.

<TABLE>
<CAPTION>
     Director              For     Against  Abstain
     --------              ---     -------  -------
<S>                     <C>        <C>      <C>

Catherine M. Amos       1,149,461        0   10,000
Jeffrey S. Bagley       1,149,461        0   10,000
Danny M. Bennett        1,149,461        0   10,000
Michael P. Bennett      1,149,461        0   10,000
Bryan L. Bettis         1,149,461        0   10,000
Talmadge W. Bolton      1,149,461        0   10,000
Thomas L. Bower, III    1,149,461        0   10,000
Charles R. Castleberry  1,149,461        0   10,000
</TABLE>


                                       16
<PAGE>
                          PART II - OTHER INFORMATION

ITEM 4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS (CONTINUED)

<TABLE>
<CAPTION>
     Director            For     Against  Abstain
     --------            ---     -------  -------
<S>                   <C>        <C>      <C>

Charles D. Ingram     1,149,461        0   10,000
Herbert A. Lang, Jr.  1,149,461        0   10,000
John P. McGruder      1,149,461        0   10,000
James J. Myers        1,149,461        0   10,000
Timothy M. Perry      1,149,461        0   10,000
Danny L. Reid         1,149,461        0   10,000
Charles R. Smith      1,149,461        0   10,000
Wyatt L. Willingham   1,149,461        0   10,000
Jerry M. Wood         1,149,461        0   10,000
</TABLE>



ITEM 6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)  Exhibits.

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

          31.2 Certification  of  the  Chief Financial Officer, Pursuant to Rule
               13a-14(a)  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  2003.

     (b)  Reports  on  Form  8-K.

          None.


                                       17
<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:  August  13,  2004             BY:  /s/  Timothy  M.  Perry
       -----------------             -------------------------------------------
                                     Timothy  M.  Perry,  President  and  C.E.O.
                                     (Principal  Executive  Officer)


DATE:  August  13,  2004             BY:  /s/  Timothy  D.  Foreman
       -----------------             ---------------------------------------
                                     Timothy  D.  Foreman,  Vice  President,
                                     Secretary  and  Treasurer
                                     (Principal  Financial  and  Accounting
                                     Officer)


                                       18
<PAGE>