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, 2005
                                         -------------------

[_]     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, 2005:      1,858,000; no par value.

Transitional Small Business Disclosure Format        Yes [_]      No  [ X ]


<PAGE>
                     FORSYTH BANCSHARES, INC. AND SUBSIDIARY



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

                                      INDEX
                                      -----

<TABLE>
<CAPTION>
                                                                        PAGE
                                                                        ----
<S>       <C>                                                           <C>
PART I.   FINANCIAL INFORMATION

          ITEM 1.  FINANCIAL STATEMENTS

          CONSOLIDATED BALANCE SHEET - MARCH 31, 2005. . . . . . . . . . . . 3

          CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
            INCOME - THREE MONTHS ENDED MARCH 31, 2005 AND 2004. . . . . . . 4

          CONSOLIDATED STATEMENTS OF CASH FLOWS - THREE
            MONTHS ENDED MARCH 31, 2005 AND 2004. . . . . . . . . . . . . . .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
</TABLE>


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

                          ITEM 1.  FINANCIAL STATEMENTS

                     FORSYTH BANCSHARES, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2005
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)


                          ASSETS
                          ------

<S>                                                   <C>
Cash and due from banks                               $  2,687
Interest-bearing deposits in banks                         243
Federal funds sold                                       2,898
Securities available-for-sale, at fair value            26,030
Restricted equity securities                               271

Loans                                                  104,342
Less allowance for loan losses                           1,309
                                                      ---------
          Loans, net                                   103,033
                                                      ---------

Premises and equipment                                   7,343
Other assets                                             1,547
                                                      ---------

          TOTAL ASSETS                                $144,052
                                                      =========


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

DEPOSITS
    Noninterest-bearing                               $ 18,441
    Interest-bearing                                   110,632
                                                      ---------
          TOTAL DEPOSITS                               129,073
Securities sold under repurchase agreements                460
Other liabilities                                          465
                                                      ---------
          TOTAL LIABILITIES                            129,998
                                                      ---------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
    Common stock, no par value; 10,000,000 shares
     authorized, 1,858,000 issued and outstanding       10,194
    Retained earnings                                    4,019
    Accumulated other comprehensive loss                  (159)
                                                      ---------
          TOTAL STOCKHOLDERS' EQUITY                    14,054
                                                      ---------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $144,052
                                                      =========

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, 2005 AND 2004
                                     (UNAUDITED)
                               (DOLLARS IN THOUSANDS,
                               EXCEPT PER SHARE DATA)


                                                                THREE MONTHS ENDED
                                                                    MARCH 31,
                                                             -----------------------
                                                                2005         2004
                                                             -----------  ----------
<S>                                                          <C>          <C>
INTEREST INCOME
    Loans                                                    $    1,714   $    1,345
    Taxable securities                                              189          174
    Nontaxable securities                                            11           14
    Deposits in banks                                                 5            1
    Federal funds sold                                               34            6
                                                             -----------  ----------
              TOTAL INTEREST INCOME                               1,953        1,540
                                                             -----------  ----------

INTEREST EXPENSE
    Deposits                                                        613          364
    Other borrowings                                                  1            1
                                                             -----------  ----------
              TOTAL INTEREST EXPENSE                                614          365
                                                             -----------  ----------

              NET INTEREST INCOME                                 1,339        1,175
PROVISION FOR LOAN LOSSES                                            43           28
                                                             -----------  ----------
              NET INTEREST INCOME AFTER
                 PROVISION FOR LOAN LOSSES                        1,296        1,147
                                                             -----------  ----------

OTHER INCOME
    Service charges on deposit accounts                              64           70
    Gains on sales of securities available-for-sale                   -           22
    Other operating income                                          129          123
                                                             -----------  ----------
              TOTAL OTHER INCOME                                    193          215
                                                             -----------  ----------

OTHER EXPENSES
    Salaries and other employee benefits                            613          525
    Occupancy and equipment expenses                                150          125
    Other operating expenses                                        348          283
                                                             -----------  ----------
              TOTAL OTHER EXPENSES                                1,111          933
                                                             -----------  ----------

              INCOME  BEFORE INCOME TAXES                           378          429

INCOME TAX EXPENSE                                                  134          153
                                                             -----------  ----------

              NET INCOME                                            244          276
                                                             -----------  ----------

OTHER COMPREHENSIVE INCOME (LOSS)
    Unrealized gains (losses) on securities
      available-for-sale arising during period, net of tax         (189)          36
                                                             -----------  ----------

              COMPREHENSIVE INCOME                           $       55   $      312
                                                             ===========  ==========

BASIC AND DILUTED EARNINGS PER SHARE                         $     0.13   $     0.15
                                                             ===========  ==========

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, 2005 AND 2004
                                     (UNAUDITED)
                                (DOLLARS IN THOUSANDS)

                                                                     2005      2004
                                                                   --------  --------
<S>                                                                <C>       <C>
OPERATING ACTIVITIES
    Net income                                                     $   244   $   276
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation                                                    93        77
        Provision for loan losses                                       43        28
        Gain on sales of securities available-for-sale                   -       (22)
        Net other operating activities                                  74       (33)
                                                                   --------  --------

              Net cash provided by operating activities                454       326
                                                                   --------  --------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale                      (9,082)        -
    Proceeds from maturities of securities available-for-sale          740     1,162
    Proceeds from sales of securities available-for-sale                 -     4,715
    Purchases (redemption) of restricted equity securities             (30)       53
    Net (increase) decrease in interest-bearing deposits in banks       27       (55)
    Net (increase) decrease in federal funds sold                    3,192    (2,328)
    Net increase in loans                                             (704)   (1,548)
    Purchase of premises and equipment                                  (5)     (990)
                                                                   --------  --------

              Net cash provided by (used in) investing activities   (5,862)    1,009
                                                                   --------  --------

FINANCING ACTIVITIES
    Net increase (decrease) in deposits                              6,672    (3,088)
    Net increase (decrease) in securities sold under repurchase
       agreements                                                      (50)       78
    Proceeds from exercise of stock options                              -        26
                                                                   --------  --------

              Net cash provided by (used in) financing activities    6,622    (2,984)
                                                                   --------  --------

Net increase (decrease) in cash and due from banks                   1,214    (1,649)

Cash and due from banks at beginning of period                       1,473     3,617
                                                                   --------  --------

Cash and due from banks at end of period                           $ 2,687   $ 1,968
                                                                   ========  ========
</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
          31,2005  are  not necessarily indicative of the results to be expected
          for the full year.

NOTE 2.   STOCK COMPENSATION PLANS

          At  March  31,  2005,  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,
                                                       --------------------------------
                                                             2005             2004
                                                       ----------------  --------------
<S>                                                    <C>               <C>
Net income, as reported                                $            244  $          276
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                                   $            244  $          276
                                                       ================  ==============
Earnings per share:
 Basic - as reported                                   $           0.13  $         0.15
                                                       ================  ==============
 Basic - pro forma                                     $           0.13  $         0.15
                                                       ================  ==============
 Diluted - as reported                                 $           0.13  $         0.15
                                                       ================  ==============
 Diluted - pro forma                                   $           0.13  $         0.15
                                                       ================  ==============
</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,
                                                -----------------------
                                                   2005        2004
                                                ----------  -----------
<S>                                             <C>         <C>

Basic Earnings Per Share:
 Weighted average common shares outstanding      1,858,000   1,825,791
                                                ==========  ===========

 Net income                                     $  244,000  $  276,000
                                                ==========  ===========

 Basic earnings  per share                      $     0.13  $     0.15
                                                ==========  ===========

Diluted Earnings Per Share:
 Weighted average common shares outstanding      1,858,000   1,825,791
 Net effect of the assumed exercise of stock
    options based on the treasury stock method
    using average market prices for the year        39,320         490
                                                ----------  -----------
 Total weighted average common shares and
    common stock equivalents outstanding         1,897,320   1,826,281
                                                ==========  ===========

 Net income                                     $  244,000  $  276,000
                                                ==========  ===========

 Diluted earnings per share                     $     0.13  $     0.15
                                                ==========  ===========
</TABLE>


NOTE  4.     CURRENT  ACCOUNTING  DEVELOPMENTS

In  December  2004,  the  FASB  published  Statement  No.  123  (revised  2004),
"Share-Based  Payment"  ("FAS  123(R)"  or the "Statement"). FAS 123(R) requires
that  the  compensation  cost  relating  to  share-based  payment  transactions,
including  grants  of  employee  stock  options,  be  recognized  in  financial
statements.  That cost will be measured based on the fair value of the equity or
liability  instruments  issued.  FAS  123(R)  covers a wide range of share-based
compensation  arrangements  including  stock  options,  restricted  share plans,
performance-based awards, share appreciation rights, and employee share purchase
plans.  FAS  123(R)  is  a replacement of FASB Statement No. 123, Accounting for
Stock-Based  Compensation,  and  supersedes  APB  Opinion No. 25, Accounting for
Stock  Issued  to  Employees,  and  its  related interpretive guidance (APB 25).

The  effect  of the Statement will be to require entities to measure the cost of
employee services received in exchange for stock options based on the grant-date
fair  value of the award, and to recognize the cost over the period the employee
is  required  to  provide services for the award. FAS 123(R) permits entities to
use  any  option-pricing  model  that  meets  the  fair  value  objective in the
Statement.
The  Company  will  be  required  to apply FAS 123(R) as of the beginning of its
first interim period that begins after December 15, 2005, which will be the year
ending  December  31,  2006.


                                        7
<PAGE>
FAS 123(R) allows two methods for determining the effects of the transition: the
modified  prospective transition method and the modified retrospective method of
transition.  Under  the  modified prospective transition method, an entity would
use  the  fair  value  based  accounting method for all employee awards granted,
modified,  or  settled  after  the  effective  date.  As  of the effective date,
compensation  cost  related to the nonvested portion of awards outstanding as of
that  date  would  be  based  on  the  grant-date  fair value of those awards as
calculated  under  the  original  provisions  of  Statement No. 123; that is, an
entity  would  not  remeasure the grant-date fair value estimate of the unvested
portion  of awards granted prior to the effective date.  An entity will have the
further  option to either apply the Statement to only the quarters in the period
of  adoption  and  subsequent periods, or apply the Statement to all quarters in
the  fiscal  year  of  adoption.  Under  the  modified  retrospective  method of
transition, an entity would revise its previously issued financial statements to
recognize  employee  compensation cost for prior periods presented in accordance
with  the  original  provisions  of  Statement  No.  123.

Although  it  has  not  yet  completed  its study of the transition methods, the
Company believes it will elect the modified prospective transition method. Under
this  method, the Company estimates that the adoption of FAS 123(R) will require
the  Company  to  record approximately  $37,000 of stock compensation expense in
the  year  ended  December  31,  2006  related  to  employee  options issued and
outstanding  at  March  31, 2005. The impact of this Statement on the Company in
fiscal  2006  and  beyond will depend upon various factors, among them being our
future  compensation strategy. The pro forma compensation costs presented in the
table  above  and  in prior filings for the Company have been calculated using a
Black-Scholes  option  pricing  model and may not be indicative of amounts which
should  be  expected  in  future  years. No decisions have been made as to which
option-pricing  model  is  most  appropriate  for the Company for future awards.

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.


                                        8
<PAGE>
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, 2004
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.


LIQUIDITY  AND  CAPITAL  RESOURCES

We  consider  our  liquidity  to  be adequate to meet operating and loan funding
requirements  at  March  31, 2005.  At March 31, 2005, the liquidity ratio (i.e.
cash,  short-term  assets  and marketable assets divided by deposits) was 19.49%
and the loan to deposit ratio was 80.84%.   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


                                        9
<PAGE>
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            10.03%   8.34%         4.00%
Risk-based capital ratios:
    Tier I capital                 11.77    9.81          4.00
    Total capital                  12.85   10.91          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>
                               MARCH 31, 2005
                                (Dollars in
                                 Thousands)
                              ----------------
<S>                           <C>
Commitments to extend credit  $         19,160
Letters of credit                          792
                              ----------------
                              $         19,952
                              ================
</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.

FINANCIAL  CONDITION


                                       10
<PAGE>
Following  is  a  summary  of  our  balance  sheets  for  the periods indicated:

<TABLE>
<CAPTION>

                                               MARCH 31,      DECEMBER 31,
                                                  2005            2004
                                             --------------  --------------
                                                 (DOLLARS IN THOUSANDS)
                                             ------------------------------
<S>                                          <C>             <C>
Cash and due from banks                      $        2,687  $        1,473
Interest-bearing deposits in banks                      243             270
Federal funds sold                                    2,898           6,090
Securities                                           26,301          18,234
Loans, net                                          103,033         102,372
Premises and equipment                                7,343           7,431
Other assets                                          1,547           1,326
                                             --------------  --------------
                                             $      144,052  $      137,196
                                             ==============  ==============

Deposits                                     $      129,073  $      122,401
Securities sold under repurchase agreements             460             510
Other liabilities                                       465             286
Stockholders' equity                                 14,054          13,999
                                             --------------  --------------
                                             $      144,052  $      137,196
                                             ==============  ==============
</TABLE>

Total  assets  increased  by  5.00% for the first quarter of 2005.  Funds from a
$6,672,000  increase in deposits and a $3,192,000 decrease in federal funds sold
were used to increase investment securities by $8,067,000, loans by $701,000 and
cash  and  due from banks by $1,214,000.  Our loan to deposit ratio decreased to
80.84%  as  compared  to  84.67%  on  December  31,  2004.  We expect investment
securities and anticipated deposit growth 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  $55,000  due to net income of $244,000, and decreases of unrealized gains on
securities  available-for-sale,  net  of  tax,  of  $189,000.


                                       11
<PAGE>

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004

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

<TABLE>
<CAPTION>
                                THREE MONTHS ENDED
                                     MARCH 31,
                           ---------------------------
                                2005          2004
                           --------------  -----------
                              (DOLLARS IN THOUSANDS)
                           ---------------------------
<S>                        <C>             <C>
Interest income            $        1,953  $     1,540

Interest expense                      614          365
                           --------------  -----------

Net interest income                 1,339        1,175

Provision for loan losses              43           28

Other income                          193          215

Other expense                       1,111          933
                           --------------  -----------

Pretax income                         378          429

Income taxes                          134          153
                           --------------  -----------

Net income                 $          244  $       276
                           ==============  ===========
</TABLE>

Our  net  interest  income has increased by $164,000 during the first quarter of
2005  as compared to the same period in 2004.  Our net interest margin decreased
to  4.12%  during  the  first quarter of 2005 as compared to 4.41% for the first
quarter  of  2004.  Interest  income  and  expense  are  both  higher  due  to a
combination  of  increased  footings and higher interest rates. The intensifying
competition  and  recent  rise in interest rates has pushed our cost of funds to
2.26%  for  the first quarter of 2005 as compared to 1.66% for the first quarter
of  2004.  We  anticipate  the competition for deposits to remain strong for the
foreseeable  future.

The  provision for loan losses increased by $15,000 in the first quarter of 2005
when compared to the same period in 2004.  The increase is due to an increase in
potential  problem loans of $13,000 and loan growth. We incurred net charge-offs
of  $4,000  in  the  first  quarter  of 2005 as compared to $14,000 in the first
quarter  of  2004.  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


                                       12
<PAGE>
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 March
31,  2005  and  2004  is  as  follows:

<TABLE>
<CAPTION>
                                                                                  MARCH 31,
                                                                        --------------------------
                                                                             2005          2004
                                                                        ---------------  ---------
                                                                           (DOLLARS IN THOUSANDS)
                                                                        --------------------------
<S>                                                                     <C>              <C>
Non-accrual loans                                                       $             0  $       0
Loans contractually past due ninety days or more as to interest
    or principal payments and still accruing                                          0          0
Restructured loans                                                                    0          0

Potential problem loans                                                              21          8
Interest income that would have been recorded on nonaccrual
    and restructured loans under original terms                                       0          0
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 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,  2005  and  2004  is  as  follows:

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED
                                                                             MARCH 31,
                                                                   -----------------------------
                                                                         2005           2004
                                                                   ----------------  -----------
                                                                       (DOLLARS IN THOUSANDS)
                                                                   -----------------------------
<S>                                                                <C>               <C>
Average amount of loans outstanding                                $       103,871   $   82,313
                                                                   ================  ===========

Balance of allowance for loan losses at beginning of period        $         1,270   $    1,033
                                                                   ----------------  -----------

Loans charged off
    Commercial and financial                                                     0           (8)
    Real estate mortgage                                                         0            0
    Installment                                                                 (4)         (11)
                                                                   ----------------  -----------
                                                                                (4)         (19)
                                                                   ----------------  -----------

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

Net charge-offs                                                                 (4)         (14)
                                                                   ----------------  -----------

Additions to allowance charged to operating expense during period               43           28
                                                                   ----------------  -----------

Balance of allowance for loan losses at end of period              $         1,309   $    1,047
                                                                   ================  ===========

Ratio of net loans charged off during the period to
    average loans outstanding                                                  .01%         .02%
                                                                   ================  ===========
</TABLE>

Other  income  has  decreased  by  $22,000  during  the first quarter of 2005 as
compared  to  the  same  period in 2004 due to decreases in gains on the sale of
securities  by $22,000 and service charges of $6,000 offset by a $7,000 increase
in  customer  service  fees.

Other  expenses  increased  by  $178,000  during  the  first  quarter of 2005 as
compared  to  the  same  period  in  2004 due to increased salaries and employee
benefits of $88,000, increased occupancy expenses of $25,000 and increased other
operating expenses of $65,000. Salaries and employee benefits have increased due
to  annual  salary  increases,  and  the  hiring  of additional staff. Occupancy
expenses  have  increased  due to the Free Home office opening in November 2004.
Other operating expenses have increased primarily due to the additional expenses
of  promoting and operating a new branch; increased accounting and audit fees of
$29,000  due  to  costs  associated  with  compliance  with  Section  404 of the


                                       14
<PAGE>
Sarbanes-Oxley  Act; and increased data processing expense of $20,000 due to the
bank  offering  Internet  Banking  in  the  second  quarter  of  2004.

The  provision  for  income  taxes  was  $134,000  for the first quarter of 2005
(effective  tax  rate of 35.5%) as compared to $153,000 for the first quarter of
2004  (effective  tax  rate of 36%).  The decrease in amount is due to lower pre
tax  income  in  2005.

Overall, net income has decreased by $32,000 during the first quarter of 2005 as
compared  to  the  same  period  in 2004 due primarily to increased non interest
expenses and provisions for loan losses offset by 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, 2005                BY:  /s/ Timothy M. Perry
      ---------------                    --------------------------------------
                                         Timothy M. Perry, President and C.E.O.
                                         (Principal Executive Officer)


DATE:   May 11, 2005                BY:  /s/ Timothy D. Foreman
      ---------------                    --------------------------------------
                                         Timothy D. Foreman, Vice President,
                                         Secretary and Treasurer
                                         (Principal Financial and Accounting
                                         Officer)


                                       17
<PAGE>