U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

                                   (MARK ONE)
[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                     FOR FISCAL YEAR ENDED DECEMBER 31, 2000

[ ]       TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

              FOR THE TRANSITION PERIOD FROM _________ TO _________

                    COMMISSION FILE NUMBER          000-24137

                            GATEWAY BANCSHARES, INC.

                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

               GEORGIA                                          58-2202210
               -------                                       ----------------
     (STATE OR OTHER JURISDICTION OF                         (I.R.S. EMPLOYER
     INCORPORATION OR ORGANIZATION)                          IDENTIFICATION NO.)

     5102 ALABAMA HIGHWAY, P.O. BOX 129, RINGGOLD, GEORGIA         30736
     -----------------------------------------------------         -----
     (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                    (ZIP CODE)

                                (706) - 965-5500
                  --------------------------------------------
                (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities  registered  pursuant to Section 12(g) of the Act:  COMMON STOCK, PAR
VALUE  $5.00

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  past  90  days.  Yes  [X]  No  [ ]

Check  if  disclosure of delinquent filers in response to Item 405 of Regulation
S-B  is  not contained in this form, and no disclosure will be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB.  [ ]

State issuer's revenues for its most recent fiscal year: $8,757,164

Aggregate  market  value  of the voting stock held by non-affiliates computed by
reference to the price at which the stock was sold, or the average bid and asked
prices of such stock, as of a specified date within the past 60 days: $8,148,576
AS  OF  FEBRUARY  19,  2001

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as of the latest practicable date. 679,048 AS OF MARCH 15, 2001

Transitional  Small  Business  Disclosure  format  (check  one):  Yes [ ] No [X]

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders for the fiscal year ended December
31,  2000  are  incorporated  by  reference  into Part II. Portions of the Proxy
Statement for the Annual Meeting of Shareholders, scheduled to be held April 19,
2001,  are  incorporated  by  reference  into  Part  III.


<PAGE>
<TABLE>
<CAPTION>
                                             TABLE OF CONTENTS

                                                                                                       PAGE
<S>                                                                                                    <C>
PART I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
    ITEM 1.     DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
    ITEM 2.     DESCRIPTION OF PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21
    ITEM 3.     LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21
    ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . . . . . . . .    21
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    22
    ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS . . . . . . . .    22
    ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS    22
    ITEM 7.     FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    22
    ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.    22
PART III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    23
    ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT . . . . . . . . . . . . . . . . . .    23
    ITEM 10.    EXECUTIVE COMPENSATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    23
    ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  . . . . . . . . . . .    23
    ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS  . . . . . . . . . . . . . . . . . . .    23
    ITEM 13.    EXHIBITS AND REPORTS ON FORM 10-KSB . . . . . . . . . . . . . . . . . . . . . . . . .    23
</TABLE>

                                        i
<PAGE>
                                     PART I


ITEM  1.  DESCRIPTION  OF  BUSINESS


                                   THE COMPANY

     Gateway  Bancshares,  Inc.  (the  Company)  was  incorporated  as a Georgia
business  corporation on October 3, 1995, to serve as a bank holding company for
Gateway  Bank & Trust (the Bank). The Bank began operations in April 1997 and is
the  sole  subsidiary  of  the  Company.

     The  Company's  principal  business  is the ownership and management of the
Bank.  The  Company  was organized to facilitate the Bank's ability to serve its
customers'  requirements  for  financial services. The holding company structure
provides flexibility for expansion of the Company's banking business through the
possible  acquisition  of  other  financial  institutions  and  the provision of
additional  capital to the Bank. For example, the Company may assist the Bank in
maintaining  its required capital ratios by borrowing money and contributing the
proceeds  of  that  debt  to  the  Bank  as  primary  capital.


                                    THE BANK


GENERAL

     The  Bank  was  chartered  as a Georgia bank on December 11, 1995 and began
business on April 21, 1997 as a full-service commercial bank. The Bank's lending
services  include  consumer  loans to individuals, commercial loans to small- to
medium-sized  businesses  and real estate-related loans. The Bank offers a board
array  of  competitively  priced  deposit  services  such  as  regular checking,
interest  checking,  savings  accounts  and  various  types  of  certificates of
deposit.  To complement its lending and deposit services, the Bank also provides
official  bank  checks  and  money orders, MasterCard and Visa credit cards, ATM
cards,  safe  deposit boxes, traveler's checks, bank-by-mail, bank-by-telephone,
direct  deposit  of payroll and Social Security checks, U.S. Savings Bonds, wire
transfer  of  funds  and  a  night  depository.


PHILOSOPHY

     The  Bank's  philosophy  is  to  emphasize  prompt  and responsive personal
service  to  residents  of,  and  small-  to  medium-sized businesses located in
Ringgold  and  Fort Oglethorpe, Georgia, as well as other communities located in
Catoosa  County.  We believe this philosophy helps the Bank to attract customers
and  acquire  market  share  controlled  by  other financial institutions in the
Bank's  market  area.  We  believe that the Bank offers residents in Catoosa and
surrounding  counties  the  benefits associated with a locally owned and managed
bank.  The  Bank's  active  call  program  allows  its officers and directors to
promote  the Bank by personally describing the products, services and philosophy
of  the Bank to both existing customers and new business prospects. In addition,
both  the  Chief  Executive Officer and Chief Financial Officer of the Bank have
substantial  banking  experience in Catoosa County, which facilitates the Bank's
efforts  to  provide  products  and  services  designed to meet the needs of the
Bank's  customer  base.  The Bank's directors are active members of the business
communities  in  Ringgold  and around Catoosa County, and their continued active
community  involvement provides them with an opportunity to promote the Bank and
its  products  and  services.


MARKET  AREA  AND  COMPETITION

     The  Bank's  main  office  is located in Ringgold, Georgia. During 2000 the
Bank  opened  a branch in Fort Oglethorpe, Georgia. The Bank draws a majority of
its  business  from  its  primary market area, Catoosa County, Georgia. The Bank
also  focuses  its  marketing  efforts  on  the  adjacent counties of Walker and
Whitfield  in  Georgia  and  Hamilton County in Tennessee. The Bank competes for
deposits  and  loan  customers with other financial institutions whose resources
are  equal  to  or  greater  than  those  available to the Bank and the Company.
According  to  information  provided  by  the FDIC, as of June 30, 2000, Catoosa
County  was  served  by  eight  commercial banks with a total of 13 offices. The
total deposits within Catoosa County for these institutions were $589 million as
of June 30, 2000. The information provided by the FDIC indicates that the Bank's
deposit market share in Catoosa County was 14.5% as of June 30, 2000. We believe
our  local ownership and management as well as our focus on personalized service
helps  us  to  compete  with  the  other  institutions  in  our  market  area.


                                        1
<PAGE>
LOAN  PORTFOLIO

     LENDING  POLICY. The Bank was established to support Catoosa County and the
immediately-surrounding counties of Walker and Whitfield in Georgia and Hamilton
County  in  Tennessee.  Consequently,  the  Bank aggressively seeks creditworthy
loans  within  a  limited  geographic area. The Bank's primary lending functions
include  consumer  loans  to  individuals  and  commercial  loans  to small- and
medium-sized  businesses  and professional concerns. In addition, the Bank makes
real  estate-related  loans,  including  construction  loans for residential and
commercial  properties,  and  primary  and  secondary  mortgage  loans  for  the
acquisition or improvement of personal residences. The Bank's policy is to avoid
concentrations  of  loans  to  a  single  industry  or based on a single type of
collateral.

     REAL  ESTATE  LOANS.  The  Bank's  real  estate  loans consist primarily of
single-family  residential  construction  loans  for  one-to-four  unit  family
structures.  The Bank requires a first lien position on the land associated with
the  construction  project  and  will offer these loans to professional building
contractors  and  homeowners.  Loan disbursements require on-site inspections to
assure  the  project  is on budget and that the loan proceeds are being used for
the  construction  project  and  not  being  diverted  to  another  project. The
loan-to-value  ratio  for  such  loans  is predominantly 75% of the lower of the
as-built  appraised  value  or  project cost, and may be a maximum of 80% if the
loan  is  amortized. Loans for construction can present a high degree of risk to
the lender, depending upon, among other things, whether the builder can sell the
home  to  a buyer, whether the buyer can obtain permanent financing, whether the
transaction  produces  income in the interim and the nature of changing economic
conditions.

     CONSUMER  LOANS. The Bank's consumer loans consist primarily of installment
loans  to  individuals  for  personal,  family and household purposes, including
loans  for automobiles, home improvements and investments. Risks associated with
consumer  loans  include,  but  are  not  limited  to,  fraud,  deteriorated  or
non-existing  collateral,  general  economic  downturn  and  customer  financial
problems.

     COMMERCIAL  LOANS.  The  Bank's  commercial lending is directed principally
toward  small- to medium-sized businesses whose demand for funds fall within the
legal  lending limits of the Bank. This category of loans includes loans made to
individual,  partnership  or  corporate borrowers, and obtained for a variety of
business  purposes  including  providing  funds  for working capital, equipment,
property  expansion  and  inventory.  Risks  associated  with these loans can be
significant  and  include,  but  are not limited to, fraud, bankruptcy, economic
downturn, deteriorated or non-existing collateral and changes in interest rates.

     INVESTMENTS.  In  addition  to  loans,  the  Bank  makes  other investments
primarily  in  obligations  of the United States or obligations guaranteed as to
principal  and interest by the United States, other taxable securities and other
obligations  of  states  and  municipalities.  During  fiscal year 2000, average
investment  securities comprised approximately 22.9% of the Bank's total average
assets,  with  average  net  loans  comprising approximately 70.9% of the Bank's
average  total  assets. The Bank also engages in federal funds transactions with
its principal correspondent banks and anticipates it will primarily act as a net
seller of funds. The sale of federal funds amounts to a short-term loan from the
Bank  to  another  bank.

     DEPOSITS.  The  Bank offers a wide range of commercial and consumer deposit
accounts,  including  checking  accounts,  money  market  accounts, a variety of
certificates of deposit, and individual retirement accounts. The primary sources
of  deposits  are  residents  of, and businesses and their employees located in,
Catoosa  County,  and  to a lesser extent, Walker County and Whitfield County in
Georgia and Hamilton County in Tennessee. Deposits are obtained through personal
solicitation by the Bank's officers and directors, direct mail solicitations and
advertisements published in the local media. To attract deposits the Bank offers
a  broad  line of competitively priced deposit products and services. The Bank's
deposit-related  services  include  ATM  cards,  direct  deposit,  bank-by-mail,
bank-by-telephone,  wire  transfer  of  funds  and  a  night  depository.

     ASSET  AND  LIABILITY  MANAGEMENT.  The  objective of the Bank's assets and
liabilities  management  is  to  provide  a satisfactory and consistent level of
profitability  within  the  framework  of  established  cash,  loan, investment,
borrowing  and  capital  policies.  Certain  Bank  officers  are responsible for
developing  and  monitoring  policies  and  procedures  that  ensure  acceptable
composition  of  the  asset/liability mix. Management's overall philosophy is to
support  asset  growth  primarily through growth of core deposits, which include
deposits  of  all categories made by individuals, partnerships and corporations.
Management  seeks  to  invest  the  largest  portion  of  the  Bank's  assets in
consumer/installment,  commercial  and  construction  loans.


                                        2
<PAGE>
     The  Bank's  asset/liability mix is monitored to control interest-sensitive
assets  and liabilities so as to minimize the impact of substantial movements in
interest  rates  on  the  Bank's  earnings.


                                    EMPLOYEES

     At  December 31, 2000, the Company and its subsidiary employed 34 full-time
employees  and  two  part-time employees. The Company considers its relationship
with  its  employees  to  be  excellent.


                        SELECTED STATISTICAL INFORMATION

     The  following  tables set forth certain statistical information and should
be  read  in  conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations incorporated by reference in this Report and
the  Company's  consolidated  financial  statements  and  notes  thereto  also
incorporated by reference in this Report. The average statistical data presented
in  this  report  are  generally  based  on  daily  average  balances.

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY; INTEREST RATES AND
INTEREST  DIFFERENTIAL

     The  table  below  shows,  for  the  periods  indicated,  the daily average
balances  outstanding  for  the  major categories of interest earning assets and
interest  bearing  liabilities,  and the average interest rate earned or paid on
these  assets  or  liabilities. The yields were calculated by dividing income or
expense  by  the  average  balance  of  the corresponding assets or liabilities.

   AVERAGE BALANCES, INTEREST INCOME/EXPENSE AND YIELDS/RATES TAXABLE EQUIVALENT
                              BASIS (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                   Year Ended December 31, 2000      Year Ended December 31,
                                                  ------------------------------  ----------------------------
                                                   Average    Income/    Yield/    Average   Income/   Yield/
                                                   Balance    Expense     Rate     Balance   Expense    Rate
                                                  ---------  ---------  --------  ---------  --------  -------
<S>                                               <C>        <C>        <C>       <C>        <C>       <C>
ASSETS
  Interest-earning  assets:
    Loans, net of unearned income(1)              $ 68,003   $  6,729      9.90%  $ 51,119   $  4,866    9.52%
    Investment securities:
      Taxable                                       21,698      1,398      6.44%    23,373      1,439    6.16%
      Non-taxable(2)                                   225         11      4.89%       148          7    4.73%
                                                  ---------  ---------  --------  ---------  --------  -------
        Total investment securities                 21,923      1,409      6.43%    23,521      1,446    6.15%
    Fed funds sold                                     868         59      6.80%       608         31    5.10%
                                                  ---------  ---------  --------  ---------  --------  -------
        Total interest-earning assets               90,794      8,197      9.03%    75,248      6,343    8.43%
                                                             ---------  --------             --------  -------
  Non interest-earning assets:
    Cash and due from banks                          2,128                           2,070
    Premises and equipment                           2,531                           1,784
    Accrued interest and other assets                1,258                             929
    Allowance for loan losses                         (827)                           (536)
                                                  ---------                       ---------

Total assets                                      $ 95,884                         $79,495
                                                  =========                       =========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Interest-bearing liabilities:
    Demand deposits                               $  9,198   $    286      3.11%  $  8,261   $    283    3.43%
    Savings deposits                                15,328        683      4.46%    15,064        685    4.55%
    Time deposits                                   55,133      3,348      6.07%    41,688      2,353    5.64%
                                                  ---------  ---------  --------  ---------  --------  -------
                                                    79,659      4,317      5.42%    65,013      3,321    5.11%
    Other short-term borrowings                      2,506        203      8.10%     1,833        103    5.62%
                                                  ---------  ---------  --------  ---------  --------  -------
        Total interest-bearing liabilities          82,165      4,520      5.50%    66,846      3,424    5.12%
                                                             ---------  --------             --------  -------

  Non interest-bearing liabilities:
    Demand deposits                                  5,960                           5,963
    Accrued interest and other liabilities             547                             494
  Stockholders' equity                               7,212                           6,192
                                                  ---------                       ---------

Total liabilities and stockholders' equity        $ 95,884                        $ 79,495
                                                  =========                       =========

Net interest income/net interest spread                         3,677       3.53%               2,919    3.31%
                                                             ---------  ---------            --------  -------

Taxable equivalent adjustment:
  Loans                                                             -                              -
  Investment securities                                             5                             16
                                                             ---------                       --------
    Total taxable equivalent adjustment                             5                             16
                                                             ---------                       --------
Net interest income/net yield on earning assets              $  3,682       4.05%            $  2,935    3.88%
                                                             =========  =========            ========  =======

<FN>
(1)  Average  loans  include  nonaccrual  loans.  All  loans  and  deposits  are
     domestic.
(2)  Tax  equivalent  adjustments  have  been based on an assumed tax rate of 34
     percent,  and do not give effect to the disallowance for federal income tax
     purpose  of  interest expense related to certain tax-exempt earning assets.
</TABLE>


                                        3
<PAGE>
     The  following  table sets forth, for the years ended December 31, 2000 and
1999, a summary of the changes in interest income and interest expense resulting
from  changes  in  interest rates and in changes in the volume of earning assets
and  interest-bearing  liabilities,  segregated  by  category. The change due to
volume  is  calculated  by  multiplying the change in volume by the prior year's
rate.  The change due to rate is calculated by multiplying the change in rate by
the  prior  year's  volume.  The  change attributable to both volume and rate is
calculated  by  multiplying  the change in volume by the change in rate. Figures
are  presented  on  a  taxable  equivalent  basis.

                         RATE/ VOLUME VARIANCE ANALYSIS

<TABLE>
<CAPTION>
                                                               Change                      Interest                 Variance (1)
                                            Average Volume    in Volume   Average Rate  Income/Expenses  Variance   Attributed To
                                          ------------------  --------  ---------------  --------------  -------  ----------------
                                                                2000-                                     2000-
                                            2000      1999      1999     2000     1999    2000    1999    1999     Volume    Rate
                                          --------  --------  --------  -------  ------  ------  ------  -------  --------  ------
<S>                                       <C>       <C>       <C>       <C>      <C>     <C>     <C>     <C>      <C>       <C>
Interest-earning assets:
   Loans, net of unearned income(1)       $68,003   $51,119   $16,884     9.90%   9.52%  $6,729  $4,866  $1,863   $ 1,662   $ 201
   Investment securities:
    Taxable                                21,698    23,373    (1,675)    6.44%   6.16%   1,398   1,439     (41)     (105)     64
     Non-taxable(2)                           225       148        77     4.89%   4.73%      11       7       4         4       -
                                          --------  --------  --------  -------  ------  ------  ------  -------  --------  ------
       Total investment securities         21,923    23,521    (1,598)    6.43%   6.15%   1,409   1,446     (37)     (101)     64
    Fed funds sold                            868       608       260     6.80%   5.10%      59      31      28        16      12
                                          --------  --------  --------  -------  ------  ------  ------  -------  --------  ------

       Total interest-earning assets      $90,794   $75,248   $15,546     9.03%   8.43%   8,197   6,343   1,854     1,577     277
                                          ========  ========  ========  =======  ======  ------  ------  -------  --------  ------

Interest-earning liabilities:
   Deposits:
    Demand                                $ 9,198   $ 8,261   $   937     3.11%   3.43%     286     283       3        30     (27)
    Savings                                15,328    15,064       264     4.46%   4.55%     683     685      (2)       12     (14)
    Time                                   55,133    41,688    13,445     6.07%   5.64%   3,348   2,353     995       805     190
                                          --------  --------  --------  -------  ------  ------  ------  -------  --------  ------
      Total interest-earning deposits      79,659    65,013    14,646     5.42%   5.11%   4,317   3,321     996       847     149
  Other short-term borrowings               2,506     1,833       673     8.10%   5.62%     203     103     100        46      54
                                          --------  --------  --------  -------  ------  ------  ------  -------  --------  ------

      Total interest-bearing liabilities  $82,165   $66,846   $15,319     5.50%   5.12%   4,520   3,424   1,096       893     203
                                          ========  ========  ========  -------  ------  ------  ------  -------  --------  ------

Net interest income/net interest spread                                   3.53%   3.31%  $3,677  $2,919   $ 758   $   684   $   74
                                                                        =======  ======  ======  ======  =======  ========  ======

 Net yield on earning assets                                              4.05%   3.88%
                                                                        =======  ======
<FN>

(1)  The  change  in  interest due to both rate and volume has been allocated to
     volume  and  rate changes in proportion to the relationship of the absolute
     dollar  amounts  of  the  change  in  each.
</TABLE>


                                        4
<PAGE>
INVESTMENT  PORTFOLIO

     The  carrying amount of investment securities at the end of the year is set
forth  in  the  following  table.


                              INVESTMENT PORTFOLIO

                                     December 31,
                                  ----------------
                                   2000     1999
                                  -------  -------
                                   (in thousands)

Securities available for sale:
   U.S. Government agencies       $11,254  $ 5,670
   Mortgage-backed securities       8,377    9,865
   Other securities                   839      479
                                  -------  -------
                                  $20,470  $16,014
                                  =======  =======

Securities held to maturity:
   U.S. Government agencies       $ 4,500  $ 4,505
   Municipal securities               225      225
                                  -------  -------
                                  $ 4,725  $ 4,730
                                  =======  =======


                                        5
<PAGE>
     Average  taxable  securities were 99 percent of the portfolio in 2000 which
reflects  management's  intent  to  maximize  investment  yields.


     The  maturities  and weighted average yields of the investments in the 2000
portfolio  of  investment  securities  are  presented  below.

<TABLE>
<CAPTION>
                                                 Investment Portfolio Maturity Schedule
                                  ------------------------------------------------------------------
                                                               Maturing
                                  ------------------------------------------------------------------
                                                    After One But   After Five But
                                      Within           Within           Within            After
                                     One Year        Five Years        Ten Years        Ten Years
                                  ---------------  ---------------  ---------------  ---------------
                                  Amount   Yield   Amount   Yield   Amount   Yield   Amount   Yield
                                  -------  ------  -------  ------  -------  ------  -------  ------
<S>                               <C>      <C>     <C>      <C>     <C>      <C>     <C>      <C>
                                                             (in thousands)
Securities available for sale:
   U.S. Government agencies       $ 4,476   6.45%  $ 3,567   6.05%  $ 3,224   6.20%  $     -   0.00%
   Mortgage-backed securities           -   0.00%        -   0.00%    1,101   5.77%    7,263   6.39%
   Other securities                     -   0.00%        -   0.00%        -   0.00%      839   6.28%
                                  -------  ------  -------  ------  -------  ------  -------  ------
                                  $ 4,476   6.45%  $ 3,567   6.05%  $ 4,325   6.09%  $ 8,102   6.37%
                                  =======  ======  =======  ======  =======  ======  =======  ======

   Total available for sale       $20,470   6.27%
                                  =======  ======

Securities held to maturity:
   U.S. Government agencies       $     -   0.00%  $ 2,501   6.20%  $ 1,999   6.40%  $     -   0.00%
   Municipal securities                 -   0.00%        -   0.00%        -   0.00%      225   4.75%
                                  -------  ------  -------  ------  -------  ------  -------  ------
                                  $     -   0.00%  $ 2,501   6.20%  $ 1,999   6.40%  $   225   4.75%
                                  =======  ======  =======  ======  =======  ======  =======  ======

  Total held to maturity          $ 4,725   6.21%
                                  =======  ======
</TABLE>


                                        6
<PAGE>
     There  were  no  securities  held  by the Company, whose aggregate value on
December  31, 2000 exceeded ten percent of the Company's shareholders' equity at
that  date.


LOAN  PORTFOLIO

     The  following table shows the classification of loans by major category at
December  31,  2000  and  1999.

                                 TYPES OF LOANS

<TABLE>
<CAPTION>
                                     December 31, 2000   December 31, 1999
                                   -------------------  -------------------
                                             Percent              Percent
                                    Amount   of Total    Amount   of Total
                                   --------  ---------  --------  ---------
                                                (in thousands)
<S>                                <C>       <C>        <C>       <C>
Commercial and industrial         $ 21,142       29.2%  $15,330       24.5%
Real estate-construction             7,310       10.1%    7,222       11.5%
Real estate-other                   34,308       47.4%   31,372       50.1%
Consumer                             9,602       13.3%    8,576       13.7%
Other loans                              1        0.0%       64        0.1%
                                   --------  ---------  --------  ---------
                                    72,363      100.0%   62,564      100.0%
                                             =========            =========
Less: allowance for loan losses       (930)                (701)
                                   --------             --------

Net loans                          $71,433              $61,863
                                   ========             ========
</TABLE>


                                        7
<PAGE>
     The  Company  has  no loans to finance leveraged buy-outs. In addition, the
Company  has  avoided exposure to lesser developed country (LDC) debt, having no
LDC  loans  in  its  portfolio.

     The  following table provides maturities of certain loan classifications at
December  31,  2000 and 1999 and an analysis of these loans maturing in over one
year.


              SELECTED LOAN MATURITY AND INTEREST RATE SENSITIVITY

<TABLE>
<CAPTION>
                                                                         Rate Structure for Loans
                                           Maturity                       Maturing Over One Year
                             -------------------------------------------  ----------------------
                                         Over One
                                            Year                       Predetermined  Floating or
                             One Year     Through    Over Five            Interest    Adjustable
                              or Less   Five Years     Years      Total     Rate         Rate
                             ---------  -----------  ----------  -------  ---------  -----------
<S>                          <C>        <C>          <C>         <C>      <C>        <C>
                                                        (in thousands)
Commercial and industrial    $  13,838  $     6,627  $      677  $21,142  $   3,703  $     3,601

Real estate-construction         7,237           73           -    7,310         37           36
                             ---------  -----------  ----------  -------  ---------  -----------

                             $  21,075  $     6,700  $      677  $28,452  $   3,740  $     3,637
                             =========  ===========  ==========  =======  =========  ===========
</TABLE>


                                        8
<PAGE>
NONPERFORMING  ASSETS

     The following table presents information concerning outstanding balances of
nonperforming  assets  at  December  31,  2000  and  1999.

<TABLE>
<CAPTION>
                                       2000     1999
                                     -------  -------
<S>                                  <C>      <C>
                                      (in thousands)
Nonaccruing loans                    $    94  $   145
Loans past due 90 days or more           202       39
Restructured loans                         -        -
                                     -------  -------
Total nonperforming loans                296      184
Other real estate                        138      138
                                     -------  -------
Total nonperforming assets           $   434  $   322
                                     =======  =======

Ratios:
Loan loss allowance to
  total nonperforming assets          2.1429   2.1777
                                     =======  =======
Total nonperforming loans to total
  loans (net of unearned interest)    0.0041   0.0029
                                     =======  =======
Total nonperforming assets
  to total assets                     0.0040   0.0036
                                     =======  =======
</TABLE>


                                        9
<PAGE>
     The  Company  stops  accruing  interest income and recognizes interest on a
cash basis when any commercial, industrial or real estate loan is past due as to
principal or interest and the ultimate collection of either is in doubt. Accrual
of  interest  income on consumer installment loans is suspended when any payment
of  principal  or interest, or both, is more than ninety days delinquent. When a
loan  is  placed  on  a nonaccrual basis any interest previously accrued but not
collected  is reversed against current income unless the collateral for the loan
is  sufficient  to  cover the accrued interest or a guarantor assures payment of
interest.

     There  has been no significant impact on the Company's financial statements
as a result of the provisions of Statement of Financial Accounting Standards No.
114,  "Accounting  by  Creditors  for  Impairment  of  a  Loan," or Statement of
Financial  Accounting Standards No. 118, "Accounting by Creditors for Impairment
of  a  Loan  -  Income  Recognition  and  Disclosures."


PROVISION  FOR  LOAN  LOSSES,  NET  CHARGE-OFFS  AND  ALLOWANCE  FOR LOAN LOSSES

     The  provision for loan losses, which is charged to operations, is based on
the  growth  of  the  loan portfolio, the amount of net loan losses incurred and
management's estimation of potential future losses based on an evaluation of the
risk  in  the  loan  portfolio.  Management  believes  that  the $930,473 in the
allowance  for  loan  losses  at  December 31, 2000 (1.29% total net outstanding
loans  at  that  date) was adequate to absorb known risks in the portfolio based
upon  the  Company's  historical experience. No assurance can be given, however,
that  increased  loan volume, adverse economic conditions or other circumstances
will  not  result  in  increased  losses  in  the  Company's  loan  portfolio.

     The  following  table  sets  forth  certain information with respect to the
Company's  loans,  net of unearned income, and the allowance for loan losses for
the  years  ended  December  31,  2000  and  1999.


                         SUMMARY OF LOAN LOSS EXPERIENCE

<TABLE>
<CAPTION>
                                                    2000      1999
                                                  --------  --------
<S>                                               <C>       <C>
                                                    (in thousands)
Allowance for loans losses at beginning of year   $   701   $   366

Total loans charged-off, consumer loans              (127)     (114)
Recoveries on loans previously charged off              1         -
                                                  --------  --------
Net loans charged off                                (126)     (114)
                                                  --------  --------

Provision for loan losses                             355       449
                                                  --------  --------

Allowance for loan losses at end of  period       $   930   $   701
                                                  ========  ========

Loans, net of unearned income, at end of period   $72,363   $62,564
                                                  ========  ========

Average loans, net of unearned income,
  outstanding for the period                      $68,003   $51,119
                                                  ========  ========

Ratios:
  Allowance at end of period to loans, net of
    unearned income                                  1.29%     1.12%
  Allowance at end of period to average loans,
    net of unearned income                           1.37%     1.37%
  Net charge-offs to average loans, net of
    unearned income                                  0.19%     0.22%
  Net charge-offs to allowance at end of period     13.55%    16.26%
  Recoveries to prior year charge-offs               0.88%     0.00%
</TABLE>


                                        10
<PAGE>
     In  assessing  adequacy,  management  relies  predominantly  on its ongoing
review  of  the  loan  portfolio,  which is undertaken both to ascertain whether
there  are  probable  losses  which  must  be charged off and to assess the risk
characteristics  of  the  portfolio  in  the  aggregate.  This review takes into
consideration  the  judgments  of  the  responsible  lending officers and senior
management,  and  also  those  of  bank regulatory agencies that review the loan
portfolio  as  part  of  the  regular  bank  examination  process.

     In  evaluating  the  allowance,  management  also  considers  the loan loss
experience  of  Gateway  Bancshares, Inc. and subsidiary, the amount of past due
and  nonperforming  loans,  current  and anticipated economic conditions, lender
requirements  and  other  appropriate  information.

     Management  allocated  the reserve for loan losses to specific loan classes
as  follows:


                     ALLOCATION OF ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
                                           Year Ended          Year Ended
                                        December 31, 2000   December 31, 1999
                                       ------------------  ------------------
                                                 Percent            Percent
                                        Amount   of Total   Amount   Of Total
                                       -------  ---------  -------  ---------
                                                   (in thousands)
<S>                                    <C>      <C>        <C>      <C>
Domestic loans (1):
  Commercial and industrial            $   540      58.1%  $   373      53.2%
  Real estate-construction and other       158      17.0%      220      31.4%
  Consumer                                 232      24.9%      108      15.4%
                                       -------  ---------  -------  ---------
                                       $   930     100.0%  $   701     100.0%
                                       =======  =========  =======  =========
</TABLE>

(1)   The  Company  had  no  foreign  loans.


                                        11
<PAGE>
DEPOSITS

     The  Company's  primary  source  of  funds  is  derived  from its deposits.
Continued  enhancement  of  existing  products and emphasis upon better customer
service  fuels  the  growth  in  the deposit base. Emphasis has been placed upon
attracting  consumer  deposits.  With  the  new Fort Oglethorpe branch opened in
2000,  the Company's intends to expand its consumer base in order to continue to
fund  asset  growth.

     The  average  amounts of and the average rate paid on each of the following
categories  of  deposits  for  the years ended December 31, 2000 and 1999 are as
follows:


                                             2000             1999
                                     ------------------  ----------------
                                           (amounts in thousands)

                                     Average             Average
                                      Amount     Rate     Amount    Rate
                                     --------  --------  -------  -------
Noninterest-bearing demand deposits  $  5,960    0.00%    $5,963    0.00%
                                     --------            -------
Demand                                  9,198     3.11%    8,261    3.43%
Savings                                15,327     4.46%   15,064    4.55%
Time deposits                          55,133     6.07%   41,688    5.64%
                                     --------            -------

   Total interest-bearing deposits     79,658     5.42%   65,013    5.11%
                                     --------            -------

   Total average deposits            $ 85,618     5.04%  $70,976    4.68%
                                     ========            =======


                                        12
<PAGE>
     The  two  categories  of  lowest  cost  deposits  comprised  the  following
percentages  of  total  deposits during 2000: average noninterest-bearing demand
deposits  -  7.0  percent;  and  average interest-bearing demand deposits - 10.7
percent.  Of  total  time  deposits,  approximately  39.4  percent  were  large
denomination certificates of deposit. The maturities of the time certificates of
deposit  and  other  time  deposits of $100,000 or more issued by the Company at
December  31,  2000  are  summarized  in  the  table  below.

                        MATURITIES OF LARGE TIME DEPOSITS

                                      Time
                                    Deposits
                                 ---------------
                                 (in thousands)

Three months or less            $         6,185
Over three through six months             2,506
Over six through twelve months            9,136
Over twelve months                        3,887
                                ---------------
  Total                         $        21,714
                                ===============


                                        13
<PAGE>
RETURN  ON  EQUITY  AND  ASSETS

     The following table summarizes certain financial ratios for the Company for
the  years  ended  December  31,  2000  and  1999.

                                          2000   1999
                                         ------  -----

Return on average assets                 0.87%  0.64%
Return on average equity                11.54%  8.16%
Dividend payout ratio                    0.00%  0.00%
Average equity to average assets ratio   7.52%  7.79%


                                        14
<PAGE>
                           SUPERVISION AND REGULATION

     Both  the  Company  and the Bank are subject to extensive state and federal
banking  regulations  that  impose  restrictions  on  and  provide  for  general
regulatory  oversight of their operations.  These laws are generally intended to
protect depositors and not shareholders.  The following discussion describes the
material  elements  of  the  regulatory  framework  that  applies  to  us.

THE  COMPANY

     Since  the  Company owns all of the capital stock of the Bank, it is a bank
holding  company  under  the  federal  Bank  Holding  Company Act of 1956.  As a
result,  the  Company  is primarily subject to the supervision, examination, and
reporting  requirements  of  the Bank Holding Company Act and the regulations of
the  Federal  Reserve.

     ACQUISITIONS  OF  BANKS.  The  Bank Holding Company Act requires every bank
holding  company  to  obtain  the  Federal  Reserve's  prior  approval  before:

     -    Acquiring direct or indirect ownership or control of any voting shares
          of  any  bank if, after the acquisition, the bank holding company will
          directly  or  indirectly  own  or  control  more than 5% of the bank's
          voting  shares;

     -    Acquiring  all  or  substantially  all  of  the assets of any bank; or

     -    Merging  or  consolidating  with  any  other  bank  holding  company.

     Additionally,  the  Bank  Holding  Company  Act  provides  that the Federal
Reserve  may not approve any of these transactions if it would result in or tend
to  create a monopoly or, substantially lessen competition or otherwise function
as  a  restraint  of  trade,  unless the anticompetitive effects of the proposed
transaction  are  clearly  outweighed  by  the  public  interest  in meeting the
convenience  and  needs  of  the community to be served.  The Federal Reserve is
also  required  to  consider  the  financial and managerial resources and future
prospects  of the bank holding companies and banks concerned and the convenience
and needs of the community to be served.  The Federal Reserve's consideration of
financial  resources  generally  focuses on capital adequacy, which is discussed
below.

     Under  the  Bank  Holding  Company  Act,  if  adequately  capitalized  and
adequately  managed,  the  Company  or any other bank holding company located in
Georgia  may  purchase  a  bank  located  outside  of  Georgia.  Conversely,  an
adequately  capitalized  and  adequately  managed  bank  holding company located
outside  of  Georgia  may purchase a bank located inside Georgia.  In each case,
however,  restrictions  may be placed on the acquisition of a bank that has only
been  in  existence  for  a  limited  amount of time or will result in specified
concentrations  of  deposits.

     For  example,  Georgia  law prohibits a bank holding company from acquiring
control  of  a  financial institution until the target financial institution has
been  incorporated  for  five  years.  As  a result, no bank holding company may
acquire  control  of  the  Company until after the fifth anniversary date of the
Bank's  incorporation.

     CHANGE  IN  BANK  CONTROL.  Subject to various exceptions, the Bank Holding
Company  Act  and  the  Change  in  Bank  Control  Act,  together  with  related
regulations,  require  Federal  Reserve  approval prior to any person or company
acquiring "control" of a bank holding company.  Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company.  Control is rebuttably presumed to exist
if  a person or company acquires 10% or more, but less than 25%, of any class of
voting  securities  and  either:

     -    The bank holding company has registered securities under Section 12 of
          the  Securities  Act  of  1934;  or

     -    No  other  person  owns  a  greater percentage of that class of voting
          securities  immediately  after  the  transaction.


Our  common stock  is registered under the Securities Exchange Act of 1934.  The
regulations  provide  a  procedure  for  challenge  of  the  rebuttable  control
presumption.

     PERMITTED  ACTIVITIES.  Since  we have not qualified or elected to become a
financial  holding  company,  we are generally prohibited under the Bank Holding
Company  Act,  from  engaging in or acquiring direct or indirect control of more
than  5% of the voting shares of any company engaged in any activity other than:


                                        15
<PAGE>
     -    Banking  or  managing  or  controlling  banks;  and


     -    An  activity  that  the  Federal  Reserve  determines to be so closely
          related  to  banking  as  to  be  a proper incident to the business of
          banking.

     Activities  that  the Federal Reserve has found to be so closely related to
banking  as  to  be  a  proper  incident  to  the  business  of banking include:


     -    Factoring  accounts  receivable;

     -    Making,  acquiring,  brokering  or  servicing  loans and usual related
          activities;

     -    Leasing  personal  or  real  property;

     -    Operating  a  non-bank  depository  institution,  such  as  a  savings
          association;

     -    Trust  company  functions;

     -    Financial  and  investment  advisory  activities;

     -    Conducting  discount  securities  brokerage  activities;


     -    Underwriting  and  dealing  in government obligations and money market
          instruments;

     -    Providing  specified  management consulting and counseling activities;

     -    Performing  selected  data  processing  services and support services;

     -    Acting  as  agent or broker in selling credit life insurance and other
          types  of  insurance  in  connection  with  credit  transactions;  and

     -    Performing  selected  insurance  underwriting  activities.

     Despite  prior  approval,  the  Federal  Reserve  may  order a bank holding
company or its subsidiaries to terminate any of these activities or to terminate
its  ownership  or  control  of  any  subsidiary when it has reasonable cause to
believe that the bank holding company's continued ownership, activity or control
constitutes  a  serious risk to the financial safety, soundness, or stability of
it  or  any  of  its  bank  subsidiaries.

     Generally,  if  the  Company  qualifies  and  elects  to become a financial
holding  company,  it  may  engage in activities that are financial in nature or
incidental or complementary to financial activity.  The Bank Holding Company Act
expressly  lists  the  following  activities  as  financial  in  nature:

     -    Lending,  trust  and  other  banking  activities;

     -    Insuring,  guaranteeing,  or  indemnifying  against  loss  or harm, or
          providing  and  issuing  annuities, and acting as principal, agent, or
          broker  for  these  purposes,  in  any  state;

     -    Providing  financial,  investment,  or  advisory  services;

     -    Issuing  or  selling  instruments  representing  interests in pools of
          assets  permissible  for  a  bank  to  hold  directly;

     -    Underwriting,  dealing  in  or  making  a  market  in  securities;

     -    Other  activities  that  the  Federal  Reserve  may determine to be so
          closely related to banking or managing or controlling banks as to be a
          proper  incident  to  managing  or  controlling  banks;


                                        16
<PAGE>
     -    Foreign  activities  permitted  outside  of  the  United States if the
          Federal  Reserve  has  determined  them to be usual in connection with
          banking  operations  abroad;

     -    Merchant  banking  through  securities  or  insurance  affiliates; and

     -    Insurance  company  portfolio  investments.

     To  qualify  to  become a financial holding company, the Bank and any other
depository  institution  subsidiary  of the Company must be well capitalized and
well  managed  and  must  have  a  Community Reinvestment Act rating of at least
satisfactory.  Additionally, the Company must file and election with the Federal
Reserve  to  become  a  financial  holding  company and must provide the Federal
Reserve  with  30 days written notice prior to engaging in a permitted financial
activity.  Although  we  are  eligible  to  elect  to become a financial holding
company,  we  currently  have  no  plans  to  make  such  an  election.

     SUPPORT  OF  SUBSIDIARY  INSTITUTIONS.Under  Federal  Reserve  policy,  the
Company is expected to act as a source of financial strength for the Bank and to
commit  resources  to  support  the Bank.  This support may be required at times
when,  without this Federal Reserve policy, the Company might not be inclined to
provide it.  In addition, any capital loans made by the Company to the Bank will
be  repaid  only  after its deposits and various other obligations are repaid in
full.  In  the  unlikely event of the Company's bankruptcy, any commitment by it
to  a federal bank regulatory agency to maintain the capital of the Bank will be
assumed  by  the  bankruptcy  trustee  and  entitled  to  a priority of payment.

THE  BANK

     Since  the  Bank is a commercial bank chartered under the laws of the State
of  Georgia,  it  is  primarily  subject  to  the  supervision,  examination and
reporting  requirements  of  the  FDIC and the Georgia Department of Banking and
Finance.  The  FDIC  and  Georgia  Department  of  Banking and Finance regularly
examine  the  Bank's  operations and have the authority to approve or disapprove
mergers,  the  establishment  of  branches  and similar corporate actions.  Both
regulatory  agencies have the power to prevent the continuance or development of
unsafe  or  unsound banking practices or other violations of law.  Additionally,
the  Bank's  deposits  are insured by the FDIC to the maximum extent provided by
law.  The  Bank  is  also  subject  to  numerous  state and federal statutes and
regulations  that  affect  its  business,  activities  and  operations.

     BRANCHING.  Under  current  Georgia  law,  the Bank may open branch offices
throughout  Georgia with the prior approval of the Georgia Department of Banking
and  Finance.  In addition, with prior regulatory approval, the Bank may acquire
branches  of existing banks located in Georgia.  The Bank and any other national
or  state-chartered bank generally may branch across state lines by merging with
banks  in  other states if allowed by the applicable states' laws.  Georgia law,
with  limited exceptions, currently permits branching across state lines through
interstate  mergers.

     Under  the  Federal  Deposit  Insurance  Act, states may "opt-in" and allow
out-of-state  banks  to  branch  into their state by establishing a new start-up
branch  in  the  state.  Currently,  Georgia has not opted-in to this provision.
Therefore,  interstate  merger  is  the only method through which a bank located
outside  of Georgia may branch into Georgia.  This provides a limited barrier of
entry  into  the  Georgia  banking  market,  which protects us from an important
segment  of  potential competition.  However, because Georgia has elected not to
opt-in,  our  ability to establish a new start-up branch in another state may be
limited.  Many  states  that have elected to opt-in have done so on a reciprocal
basis,  meaning  that  an  out-of-state bank may establish a new start-up branch
only  if  their  home  state  has  also  elected to opt-in.  Consequently, until
Georgia changes its election, the only way we will be able to branch into states
that  have  elected  to  opt-in on a reciprocal basis will be through interstate
merger.

     PROMPT  CORRECTIVE  ACTION.  The  Federal  Deposit  Insurance  Corporation
Improvement  Act  of  1991  establishes  a system of prompt corrective action to
resolve  the  problems  of  undercapitalized financial institutions.  Under this
system, the federal banking regulators have established five capital categories,
well  capitalized,  adequately  capitalized,  undercapitalized,  significantly
undercapitalized  and critically undercapitalized, in which all institutions are
placed.  The  federal  banking  agencies  have  also specified by regulation the
relevant  capital  levels  for each of the categories.  At December 31, 2000, we
qualified  for  the  well-capitalized  category.


                                        17
<PAGE>
      Federal banking regulators are required to take some mandatory supervisory
actions  and  are authorized to take other discretionary actions with respect to
institutions  in  the  three  undercapitalized  categories.  The severity of the
action  depends  upon  the  capital category in which the institution is placed.
Generally,  subject  to a narrow exception, the banking regulator must appoint a
receiver  or conservator for an institution that is critically undercapitalized.

     An  institution  in  any  of the undercapitalized categories is required to
submit an acceptable capital restoration plan to its appropriate federal banking
agency.  A  bank  holding  company  must  guarantee that a subsidiary depository
institution  meets its capital restoration plan, subject to various limitations.
The  controlling holding company's obligation to fund a capital restoration plan
is limited to the lesser of 5% of an undercapitalized subsidiary's assets at the
time  it  became  undercapitalized  or  the  amount  required to meet regulatory
capital  requirements.  An  undercapitalized  institution  is  also  generally
prohibited  from  increasing  its  average  total  assets,  making acquisitions,
establishing  any branches or engaging in any new line of business, except under
an accepted capital restoration plan or with FDIC approval. The regulations also
establish  procedures for downgrading an institution to a lower capital category
based  on  supervisory  factors  other  than  capital.

     FDIC  INSURANCE  ASSESSMENTS.  The FDIC has adopted a risk-based assessment
system  for  insured  depository  institutions that takes into account the risks
attributable  to  different  categories  and  concentrations  of  assets  and
liabilities.  The  system  assigns  an  institution  to  one  of  three  capital
categories:  (1)  well  capitalized;  (2)  adequately  capitalized;  and  (3)
undercapitalized.  These  three  categories  are  substantially  similar  to the
prompt corrective action categories described above, with the "undercapitalized"
category  including  institutions  that  are  undercapitalized,  significantly
undercapitalized,  and  critically undercapitalized for prompt corrective action
purposes.  The  FDIC  also  assigns  an  institution to one of three supervisory
subgroups  based  on  a  supervisory  evaluation  that the institution's primary
federal  regulator provides to the FDIC and information that the FDIC determines
to  be  relevant  to the institution's financial condition and the risk posed to
the  deposit  insurance funds.  Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In  addition,  the  FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the  late  1980s  as part of the government rescue of the thrift industry.  This
assessment  rate  is  adjusted  quarterly  and  is set at 1.96 cents per $100 of
deposits  for  the  first  quarter  of  2001.

     The  FDIC  may  terminate  its  insurance  of deposits if it finds that the
institution  has  engaged  in  unsafe  and unsound practices, is in an unsafe or
unsound  condition  to  continue operations, or has violated any applicable law,
regulation,  rule,  order  or  condition  imposed  by  the  FDIC.

     COMMUNITY  REINVESTMENT ACT.  The Community Reinvestment Act requires that,
in  connection  with  examinations  of  financial  institutions  within  their
respective  jurisdictions,  the  Federal  Reserve or the FDIC shall evaluate the
record  of  each  financial institution in meeting the credit needs of its local
community,  including  low  and  moderate-income neighborhoods.  These facts are
also  considered in evaluating mergers, acquisitions, and applications to open a
branch  or  facility.  Failure  to  adequately  meet these criteria could impose
additional requirements and limitations on the Bank.  Since our aggregate assets
are not more than $250 million, under the Gramm-Leach-Bliley Act, we are subject
to  a  Community  Reinvestment  Act  examination only once every 60 months if we
receive an outstanding rating, once every 48 months if we receive a satisfactory
rating  and as needed if our rating is less than satisfactory.  Additionally, we
must  publicly  disclose the terms of various Community Reinvestment Act-related
agreements.

     OTHER  REGULATIONS.  Interest and other charges collected or contracted for
by the Bank are subject to state usury laws and federal laws concerning interest
rates. The Bank's loan operations are also subject to federal laws applicable to
credit  transactions,  such  as:

     -    The  federal  Truth-In-Lending  Act,  governing  disclosures of credit
          terms  to  consumer  borrowers;

     -    The  Home  Mortgage  Disclosure  Act  of  1975,  requiring  financial
          institutions  to  provide  information to enable the public and public
          officials  to  determine whether a financial institution is fulfilling
          its  obligation  to  help  meet  the housing needs of the community it
          serves;

     -    The  Equal  Credit  Opportunity Act, prohibiting discrimination on the
          basis  of race, creed or other prohibited factors in extending credit;

     -    The Fair Credit Reporting Act of 1978, governing the use and provision
          of  information  to  credit  reporting  agencies;

     -    The  Fair  Debt Collection Act, governing the manner in which consumer
          debts  may  be  collected  by  collection  agencies;  and


                                        18
<PAGE>
     -    The rules and regulations of the various federal agencies charged with
          the  responsibility  of  implementing  these  federal  laws.


The deposit operations of the Bank are subject to:

-    The  Right  to  Financial  Privacy  Act,  which  imposes a duty to maintain
     confidentiality of consumer financial records and prescribes procedures for
     complying  with  administrative  subpoenas  of  financial  records;  and


-    The  Electronic  Funds  Transfer Act and Regulation E issued by the Federal
     Reserve  to  implement  that  act,  which  govern automatic deposits to and
     withdrawals  from  deposit  accounts  and customers' rights and liabilities
     arising  from  the  use  of  automated teller machines and other electronic
     banking  services.

CAPITAL  ADEQUACY

     The  Company  and the Bank are required to comply with the capital adequacy
standards  established  by  the Federal Reserve, in the case of the Company, and
the FDIC and Georgia Department of Banking and Finance, in the case of the Bank.
The  Federal  Reserve  has  established  a  risk-based and a leverage measure of
capital  adequacy  for bank holding companies.  Since the Company's consolidated
total  assets  are  less  than $150 million, under the Federal Reserve's capital
guidelines, our capital adequacy is measured on a bank-only basis, as opposed to
a  consolidated  basis.  The  Bank  is  also  subject to risk-based and leverage
capital  requirements  adopted  by  the FDIC, which are substantially similar to
those  adopted  by  the  Federal  Reserve  for  bank  holding  companies.

     The  risk-based  capital  standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and bank
holding  companies,  to  account for off-balance-sheet exposure, and to minimize
disincentives  for  holding  liquid assets.  Assets and off-balance-sheet items,
such  as  letters of credit and unfunded loan commitments, are assigned to broad
risk  categories,  each  with  appropriate  risk weights.  The resulting capital
ratios  represent  capital  as  a  percentage  of total risk-weighted assets and
off-balance-sheet  items.

     The  minimum  guideline  for  the  ratio  of total capital to risk-weighted
assets is 8%.  Total capital consists of two components, Tier 1 Capital and Tier
2  Capital.  Tier  1  Capital generally consists of common shareholders' equity,
minority  interests  in  the  equity  accounts  of  consolidated  subsidiaries,
qualifying  noncumulative  perpetual  preferred  stock,  and a limited amount of
qualifying  cumulative  perpetual  preferred  stock,  less  goodwill  and  other
specified  intangible  assets.  Tier  1  Capital  must  equal  at  least  4%  of
risk-weighted  assets.  Tier  2 Capital generally consists of subordinated debt,
other  preferred  stock  and  hybrid  capital  and a limited amount of loan loss
reserves.  The  total  amount  of  Tier  2  Capital is limited to 100% of Tier 1
Capital.  At  December  31,  2000  our  ratio  of total capital to risk-weighted
assets  was  10.2%  and  our ratio of Tier 1 Capital to risk-weighted assets was
9.2%.

     In  addition,  the  Federal  Reserve has established minimum leverage ratio
guidelines  for  bank holding companies.  These guidelines provide for a minimum
ratio  of  Tier  1  Capital to average assets, less goodwill and other specified
intangible  assets,  of  3%  for  bank  holding  companies  that  meet specified
criteria,  including  having  the highest regulatory rating and implementing the
Federal  Reserve's  risk-based  capital measure for market risk.  All other bank
holding  companies  generally  are  required  to maintain a leverage ratio of at
least  4%.  At  December  31, 2000, our leverage ratio was 8.5%.  The guidelines
also  provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without reliance on intangible assets.  The
Federal  Reserve  considers  the  leverage ratio and other indicators of capital
strength  in  evaluating  proposals  for  expansion  or  new  activities.

     The  Bank  and  the  Company  are  also  both  subject  to leverage capital
guidelines  issued  by  the  Georgia  Department  of  Banking and Finance, which
provide  for  minimum  ratios  of  Tier  1  capital  to  total  assets.

     Failure  to  meet  capital  guidelines could subject a bank or bank holding
company  to  a  variety of enforcement remedies, including issuance of a capital
directive,  the  termination  of deposit insurance by the FDIC, a prohibition on
accepting brokered deposits, and certain other restrictions on its business.  As
described  above,  significant  additional  restrictions  can  be  imposed  on
FDIC-insured  depository  institutions  that  fail  to  meet  applicable capital
requirements.  See  "-Prompt  Corrective  Action."


                                        19
<PAGE>
PAYMENT  OF  DIVIDENDS

     The  Company  is  a  legal entity separate and distinct from the Bank.  The
principal  source  of  the  Company's  cash  flow,  including  cash  flow to pay
dividends to its shareholders, is dividends that the Bank pays to it.  Statutory
and  regulatory  limitations  apply  to  the  Bank's payment of dividends to the
Company  as  well  as to the Company's payment of dividends to its shareholders.

     If,  in the opinion of the federal banking regulator, the Bank were engaged
in  or  about  to  engage  in an unsafe or unsound practice, the federal banking
regulator  could  require,  after notice and a hearing, that it cease and desist
from  its  practice.  The  federal  banking  agencies have indicated that paying
dividends  that deplete a depository institution's capital base to an inadequate
level  would  be  an  unsafe  and  unsound  banking practice.  Under the Federal
Deposit  Insurance Corporation Improvement Act of 1991, a depository institution
may not pay any dividend if payment would cause it to become undercapitalized or
if  it  already is undercapitalized.  Moreover, the federal agencies have issued
policy  statements  that  provide  that bank holding companies and insured banks
should  generally  only  pay  dividends  out of current operating earnings.  See
"-Prompt  Corrective  Action"  above.

     The  Georgia  Department  of  Banking and Finance also regulates the Bank's
dividend  payments  and  must approve dividend payments that would exceed 50% of
the  Bank's net income for the prior year.  Our payment of dividends may also be
affected  or  limited  by  other  factors,  such  as the requirement to maintain
adequate  capital  above  regulatory  guidelines.

     At  December  31,  2000, the Bank was able to pay approximately $415,755 in
dividends  to  the  Company  without  prior  regulatory  approval.

RESTRICTIONS  ON  TRANSACTIONS  WITH  AFFILIATES

     The  Company  and  the Bank are subject to the provisions of Section 23A of
the  Federal  Reserve  Act.  Section  23A  places  limits  on  the  amount  of:

-    Loans  or  extensions  of  credit  to  affiliates;

-    Investment  in  affiliates;

-    The  purchase  of  assets  from  affiliates,  except  for real and personal
     property  exempted  by  the  Federal Reserve;

-    Loans  or  extensions  of  credit  to  third  parties collateralized by the
     securities  or  obligations  of  affiliates;  and

-    Any  guarantee,  acceptance  or  letter  of  credit  issued on behalf of an
     affiliate.

     The  total amount of the above transactions is limited in amount, as to any
one  affiliate, to 10% of a bank's capital and surplus and, as to all affiliates
combined, to 20% of a bank's capital and surplus.  In addition to the limitation
on  the  amount  of these transactions, each of the above transactions must also
meet specified collateral requirements.  The Company must also comply with other
provisions  designed  to  avoid  the  taking  of  low-quality  assets.

     The  Company and the Bank are also subject to the provisions of Section 23B
of  the  Federal  Reserve Act which, among other things, prohibit an institution
from  engaging in the above transactions with affiliates unless the transactions
are on terms substantially the same, or at least as favorable to the institution
or its subsidiaries, as those prevailing at the time for comparable transactions
with  nonaffiliated  companies.

     The  Bank  is  also  subject to restrictions on extensions of credit to its
executive  officers,  directors,  principal  shareholders  and  their  related
interests.  These  extensions  of  credit  (1) must be made on substantially the
same  terms, including interest rates and collateral, as those prevailing at the
time  for  comparable  transactions with third parties, and (2) must not involve
more  than  the  normal risk of repayment or present other unfavorable features.


                                        20
<PAGE>
PRIVACY

     Financial  institutions  are  required  to  disclose  their  policies  for
collecting  and  protecting  confidential  information.  Customers generally may
prevent  financial  institutions  from  sharing  nonpublic  personal  financial
information  with nonaffiliated third parties except under narrow circumstances,
such as the processing of transactions requested by the consumer.  Additionally,
financial  institutions  generally  may not disclose consumer account numbers to
any nonaffiliated third party for use in telemarketing, direct mail marketing or
other  marketing  to  consumers.

PROPOSED  LEGISLATION  AND  REGULATORY  ACTION

     New  regulations  and  statutes  are  regularly  proposed  that  contain
wide-ranging  proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions.  We cannot predict whether
or in what form any proposed regulation or statute will be adopted or the extent
to  which  our  business  may  be  affected  by  any  new regulation or statute.

EFFECT  OF  GOVERNMENTAL  MONETARY  POLICIES

     Our  earnings are affected by domestic economic conditions and the monetary
and  fiscal  policies  of  the  United  States government and its agencies.  The
Federal Reserve Bank's monetary policies have had, and are likely to continue to
have,  an  important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to
curb  inflation  or  combat  a  recession.  The monetary policies of the Federal
Reserve  affect  the  levels of bank loans, investments and deposits through its
control over the issuance of United States government securities, its regulation
of  the  discount rate applicable to member banks and its influence over reserve
requirements to which member banks are subject.  We cannot predict the nature or
impact  of  future  changes  in  monetary  and  fiscal  policies.

ITEM  2.  DESCRIPTION  OF  PROPERTIES

     The  Company's  corporate  office and the Bank's main office are located at
5102  Alabama  Highway, Ringgold, Georgia. The main office property is leased by
the  Bank.  In  November  2000  the  Bank  opened a branch office located at 769
Battlefield  Parkway,  Fort Oglethorpe, Georgia. The Fort Oglethorpe property is
owned  by  the  Bank.

     On  August  9,  1995,  the  organizers of the Company entered into a Ground
Lease  (the  "Lease Agreement") to lease vacant property located at 5102 Alabama
Highway  for  20  years  with options to renew the lease for additional 10 years
thereafter.  The  maximum  term is fifty years but may be limited to forty years
under  specified  circumstances.  The annual rental for the first three years of
the  lease  term was $20,480. Annual rent for subsequent years will be increased
each  year  by the increase in the Consumer Price Index as set forth in The Wall
Street  Journal  or other nationally recognized publication. The annual rent for
2000  was  $21,958.

     A director of the Company is a co-owner of the main office property. In the
opinion  of  the  organizers,  the terms of this Lease Agreement are at least as
favorable  to  the  Company  as  terms  available  from unrelated third parties.

     The  main  office  in Ringgold is a two-story building consisting of 12,000
square  feet.  The  Fort Oglethorpe branch is a one-story building consisting of
4,200  square  feet.

     Other  than  normal  real estate commercial lending activities of the Bank,
the  Company generally does not invest in real estate, interests in real estate,
real  estate  mortgages,  or  securities  of  or  interests in persons primarily
engaged  in  real  estate  activities.

ITEM  3.  LEGAL  PROCEEDINGS

     There  are  no material pending legal proceedings to which the Company is a
party  or  of  which  any  of its properties are subject; nor are there material
proceedings  known  to  the  Company  to  be  contemplated  by  any governmental
authority;  nor  are there material proceedings known to the Company, pending or
contemplated,  in  which  any  director,  officer  or affiliate or any principal
security  holder  of  the Company or any associate of any of the foregoing, is a
party  or  has  an  interest  adverse  to  the  Company.

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

None.


                                        21
<PAGE>
                                     PART II


ITEM  5.  MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The  response  to  this  Item is partially included in the Company's Annual
Report  to  Shareholders  at  page  34  and is incorporated herein by reference.

     The Company has not sold any unregistered shares of its Common Stock, $5.00
par  value,  during  2000  or  1999.

     In  1999  the  Company  granted  options  to purchase 171,850 shares of its
Common Stock, $5.00 par value, to selected officers and directors of the Company
and  the  Bank  as compensation for their services. Each of the options vests in
equal  20%  annual  increments.  During  2000  options  for  5,000  shares  were
forfeited,  leaving options for 166,850 shares outstanding at December 31, 2000.
At  December 31, 2000 options for 33,370 shares are exercisable. Each option has
a maximum term of ten years. The exercise price of each of the options is $12.00
per  share.  Since  the options were only granted to officers and directors, the
option  grants did not involve a public offering, and therefore were exempt from
registration  under  Section  4(2)  of  the  Securities  Act  of  1933.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

     The  response  to  this  Item is included in the Company's Annual Report to
Shareholders  under  the  heading,  "Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results of Operations," at pages 1 through 11, and is
incorporated  herein  by  reference.

ITEM  7.  FINANCIAL  STATEMENTS

     The  following  financial  statements  are included in the Company's Annual
Report  to  Shareholders  at pages 13 through 33, and are incorporated herein by
reference.

     Report  of  Independent  Certified  Public  Accountants

     Financial  Statements

          Consolidated  Balance  Sheets  as  of  December  31,  2000  and  1999

          Consolidated  Statements  of  Income  for the years ended December 31,
          2000  and  1999

          Consolidated  Statements  of  Changes  in Stockholders' Equity for the
          years  ended  December  31,  2000  and  1999

          Consolidated Statements of Cash Flows for the years ended December 31,
          2000  and  1999

          Notes  to  Consolidated  Financial  Statements


ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE

     The  response  to  this  item is included in the Company's Annual Report to
Shareholders  under  the  heading  "Management's Statement of Responsibility for
Financial  Information,"  on  page  12, and is incorporated herein by reference.


                                        22
<PAGE>
                                    PART III

ITEM  9.  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

     The  responses  to  this Item are included in the Company's Proxy Statement
for  the  Annual  Meeting of Shareholders to be held   April 19, 2001, under the
following  headings,  and  are  incorporated  herein  by  reference.

          Proposal  One:  Election of Directors - Director Nominees," at page 3;

          "Executive  Officers,"  at  page  5;

          "Section  16(a) Beneficial Ownership Reporting Compliance," at page 9.


ITEM  10.  EXECUTIVE  COMPENSATION

     The  responses  to  this Item are included in the Company's Proxy Statement
for  the  Annual  Meeting  of  Shareholders to be held April 19, 2001, under the
heading,  "Compensation,"  at  pages 5 through 6, and are incorporated herein by
reference.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

     The  responses  to  this Item are included in the Company's Proxy Statement
for  the  Annual  Meeting  of  Shareholders  to be held April 19, 2001 under the
headings,  "Security Ownership of Certain Beneficial Owners," at pages 7 through
8,  and  are  incorporated  herein  by  reference.


ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  responses  to  this Item are included in the Company's Proxy Statement
for  the  Annual  Meeting  of  Shareholders to be held April 19, 2001, under the
headings,  "Certain  Relationships  and  Related  Transactions,"  at page 9, and
"Compensation,"  at pages 5 through 6, and are incorporated herein by reference.


                                        23
<PAGE>
ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)  Exhibits


Exhibit
Number   Exhibit
-------  -------

    3.1  Articles of Incorporation. (1)

    3.2  Bylaws. (1)

    4.1  Instruments Defining the Rights of Security Holders. See
         Articles of Incorporation at Exhibit 3.1 hereto and
         Bylaws at Exhibit 3.2 hereto.

   10.1  Ground Lease Agreement by and between Gateway
         Bancshares, Inc. and Ringgold Mining and Manufacturing
         Company, dated as of May 1, 1996. (2)

   10.3  Gateway Bancshares, Inc. 1999 Stock Option Plan. (3)

   10.4  Loan and Stock Purchase Agreement by and between
         Gateway Bancshares, Inc. and Gilmer County Bank dated
         June 20, 2000. (4)

   13.1  Gateway Bancshares, Inc. 2000 Annual Report to
         Shareholders. Except with respect to those portions
         specifically incorporated by reference into this Report,
         the Company's 2000 Annual Report to Shareholders is not
         deemed to be filed as part of this Report.

   21.1  Subsidiaries of Gateway Bancshares, Inc. (5)

   24.1  Power of Attorney (appears on the signature pages to
         this Annual Report on 10-KSB).

(b)  Reports  on  Form  8-K  filed  in  the  fourth  quarter  of  2000:  None

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

(1)  Incorporated herein by reference to exhibit of same number in the Company's
     Registration  Statement  on  Form  SB-2,  Registration  No. 33-80855, filed
     December  20,  1995.

(2)  Incorporated herein by reference to exhibit of same number in the Company's
     Quarterly  Report  on Form 10-QSB for the quarter ended September 30, 1996.


(3)  Incorporated  herein  by  reference  to  Appendix  A of the Company's Proxy
     Statement  for  the  Meeting  of Shareholders to be held on April 15, 1999,
     filed  under  cover  of  Schedule  14A.

(4)  Incorporated herein by reference to exhibit 10.1 in the Company's Quarterly
     Report  on  Form  10-QSB  for  the  quarter  ended  June  30,  2000.

(5)  Incorporated herein by reference to exhibit of same number in the Company's
     Annual  Report  on  Form  10-KSB  for  the  year  ended  December 31, 1997.


                                        24
<PAGE>
                                   SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of  1934,  the  Registrant  has duly caused this Report to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized.


                                       GATEWAY  BANCSHARES,  INC.

                                       By:  /s/  Robert  G.  Peck
                                          -------------------------------------
                                           Robert  G.  Peck
                                           President and Chief Executive Officer

                                       Date:  March 15, 2001


                                POWER OF ATTORNEY

KNOW  ALL MEN BY THESE PRESENTS, that each person whose signature appears on the
signature  page to this Report constitutes and appoints Robert G. Peck and Harle
B.  Green,  and  each of them, his true and lawful attorneys-in-fact and agents,
with  full  power  of  substitution and resubstitution, for him and in his name,
place,  and  stead, in any and all capacities, to sign any and all amendments to
this Report, and to file the same, with all exhibits hereto, and other documents
in  connection  herewith  with  the Securities and Exchange Commission, granting
unto  said  attorneys-in-fact  and  agents  and  each  of  them,  full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might  or  could  do  in  person,  hereby ratifying and confirming all that said
attorneys-in-fact  and  agents  or  any  of  them, or their or his substitute or
substitutes,  may  lawfully  do  or  cause  to  be  done  by  virtue  hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has  been  signed below by the following persons on behalf of the Registrant and
in  the  capacities  and  on  the  dates  indicated.


Signature                                Title                   Date
---------------------------  -----------------------------  --------------

/s/ Jack Joseph Babb         Director                       March 15, 2001
---------------------------
Jack Joseph Babb


/s/ William H.H. Clark       Director                       March 15, 2001
---------------------------
William H.H. Clark


/s/ Patricia Yvonne Cochran  Director                       March 15, 2001
---------------------------
Patricia Yvonne Cochran


/s/ Jeannette Wilson Dupree  Director                       March 15, 2001
---------------------------
Jeannette Wilson Dupree


/s/ Harle B. Green           Director, Chief Financial      March 15, 2001
---------------------------  Officer (Principal Financial
Harle B. Green               And Accounting Officer)


/s/ Ernest Kresch            Director                       March 15, 2001
---------------------------
Ernest Kresch


/s/ Robert G. Peck           Director, President            March 15, 2001
---------------------------  Chief Executive Officer
Robert G. Peck


/s/ Danny Ray Jackson        Director                       March 15, 2001
---------------------------
Danny Ray Jackson


/s/ James Arthell Gray       Director                       March 15, 2001
---------------------------
James Arthell Gray, Sr.


                                        25
<PAGE>
                                  EXHIBIT INDEX


Exhibit
Number   Exhibit
-------  -------

    3.1  Articles of Incorporation. (1)

    3.2  Bylaws. (1)

    4.1  Instruments Defining the Rights of Security Holders.
         See Articles of Incorporation at Exhibit 3.1 hereto
         and Bylaws at Exhibit 3.2 hereto.

   10.1  Ground Lease Agreement by and between Gateway
         Bancshares, Inc. and Ringgold Mining and
         Manufacturing Company, dated as of May 1, 1996. (2)

   10.3  Gateway Bancshares, Inc. 1999 Stock Option Plan. (3)

   10.4  Loan and Stock Purchase Agreement by and between
         Gateway Bancshares, Inc. and Gilmer County Bank dated
         June 20, 2000. (4)

   13.1  Gateway Bancshares, Inc. 2000 Annual Report to
         Shareholders. Except with respect to those portions
         specifically incorporated by reference into this
         Report, the Company's 2000 Annual Report to
         Shareholders is not deemed to be filed as part of
         this Report.

   21.1  Subsidiaries of Gateway Bancshares, Inc. (5)

   24.1  Power of Attorney (appears on the signature pages to
         this Annual Report on 10-KSB).

(1)  Incorporated herein by reference to exhibit of same number in the Company's
     Registration  Statement  on  Form  SB-2,  Registration  No. 33-80855, filed
     December  20,  1995.

(2)  Incorporated herein by reference to exhibit of same number in the Company's
     Quarterly  Report  on Form 10-QSB for the quarter ended September 30, 1996.

(3)  Incorporated  herein  by  reference  to  Appendix  A to the Company's Proxy
     Statement  for  the  Meeting  of Shareholders to be held on April 15, 1999,
     filed  under  cover  of  Schedule  14A.

(4)  Incorporated herein by reference to exhibit 10.1 in the Company's Quarterly
     Report  on  Form  10-QSB  for  the  quarter  ended  June  30,  2000.

(5)  Incorporated herein by reference to exhibit of same number in the Company's
     Annual Report on Form 10-KSB for the year ended December 31, 1997.


                                        26
<PAGE>