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, 2003

[ ]     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:  $10,324,319

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:
$11,544,234  AS  OF  MARCH  4,  2004.

                    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. 652,638 AS OF MARCH 25, 2004.

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,  2003  are  incorporated  by  reference  into Part II. Portions of the Proxy
Statement for the Annual Meeting of Shareholders, scheduled to be held April 15,
2004, 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                                                                22
    ----------------------------------
    ITEM 3.  LEGAL PROCEEDINGS                                                                        22
    --------------------------
    ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                      22
    ------------------------------------------------------------
PART II.                                                                                              23
    ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                    23
    ------------------------------------------------------------------------------
    ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS    23
    ----------------------------------------------------------------------------------------------
    ITEM 7.  FINANCIAL STATEMENTS                                                                     23
    -----------------------------
    ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    ---------------------------------------------------------------------------------------------
    ITEM 8A. CONTROLS AND PROCEDURES                                                                  23
    --------------------------------
PART III                                                                                              24
    ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
    ----------------------------------------------------------------------
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                                        24
             -------------------------------------------------
    ITEM 10. EXECUTIVE COMPENSATION                                                                   24
    -------------------------------
    ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                           24
    -----------------------------------------------------------------------
    ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                           24
    -------------------------------------------------------
    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
    -----------------------------------------
    ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                   25
    -----------------------------------------------
</TABLE>


<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 a
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 broad
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,
bank-by-internet,  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, 2003, Catoosa County was served
by  nine  commercial banks with a total of 15 offices. The total deposits within
Catoosa County for these institutions were $713 million as of June 30, 2003. The
information  provided by the FDIC indicates that the Bank's deposit market share
in  Catoosa County was 17.8% as of June 30, 2003. We believe our local ownership


                                        1
<PAGE>
and  management as well as our focus on personalized service helps us to compete
with  the  other  institutions  in  our  market  area.


LOAN  PORTFOLIO

     LENDING  POLICY. The Bank was established to support Catoosa County and the
immediate-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,  securities  of  U.S. agencies, other taxable
securities  and  other  obligations  of states and municipalities. During fiscal
year  2003,  average  investment securities comprised approximately 20.9% of the
Bank's  total  average  assets,  with average net loans comprising approximately
71.5% 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,  bank-by-internet,  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


                                        2
<PAGE>
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.

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,  2003,  the  Company  and its subsidiary employed 41 full-time
employees  and  12  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.

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

                                                   Year Ended December 31, 2003   Year Ended December 31, 2002
                                                  ------------------------------  ----------------------------
                                                   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)              $103,183   $  7,362      7.13%  $ 82,598   $  6,399    7.75%
    Investment securities:
      Taxable                                       26,027        752      2.89%    26,220      1,055    4.02%
      Non-taxable(2)                                 4,160        131      3.15%     2,516         97    3.86%
                                                  ---------  ---------  --------  ---------  --------  -------
        Total investment securities                 30,187        883      2.93%    28,736      1,152    4.01%
    Fed funds sold                                   2,399         37      1.54%     2,838         46    1.62%
                                                  ---------  ---------  --------  ---------  --------  -------
        Total interest-earning assets              135,769      8,282      6.10%   114,172      7,597    6.65%
                                                             ---------  --------             --------  -------
  Non interest-earning assets:
    Cash and due from banks                          5,392                           3,537
    Premises and equipment                           3,134                           3,121
    Accrued interest and other assets                1,525                           1,142
    Allowance for loan losses                       (1,478)                         (1,111)
                                                  ---------                       ---------

Total assets                                      $144,342                        $120,861
                                                  =========                       =========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Interest-bearing liabilities:
    Demand deposits                               $ 45,592   $    808      1.77%  $ 26,015   $    373    1.43%
    Savings deposits                                17,345        312      1.80%    16,585        431    2.60%
    Time deposits                                   52,654      1,589      3.02%    53,458      1,948    3.64%
                                                  ---------  ---------  --------  ---------  --------  -------
                                                   115,591      2,709      2.34%    96,058      2,752    2.86%
    Other short-term borrowings                      7,258        174      2.40%     4,136        194    4.69%
                                                  ---------  ---------  --------  ---------  --------  -------
        Total interest-bearing liabilities         122,849      2,883      2.35%   100,194      2,946    2.94%
                                                             ---------  --------             --------  -------

  Non interest-bearing liabilities:
    Demand deposits                                 10,423                           9,900
    Accrued interest and other liabilities             626                             619
  Stockholders' equity                              10,444                          10,148
                                                  ---------                      ----------

Total liabilities and stockholders' equity        $144,342                        $120,861
                                                  =========                      ==========

Net interest income/net interest spread                         5,399      3.75%                4,651    3.71%
                                                             ---------  --------             --------  -------

Taxable equivalent adjustment:
  Loans                                                             -                               -
  Investment securities                                            67                              50
                                                             ---------                       ---------
    Total taxable equivalent adjustment                            67                              50
                                                             ---------                       ---------
Net interest income/net yield on earning assets              $  5,466      4.03%             $  4,701    4.12%
                                                             =========  ========             =========  ======
</TABLE>


                                        3
<PAGE>
(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.

The  following table sets forth, for the years ended December 31, 2003 and 2002,
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.

<TABLE>
<CAPTION>
                                   RATE/ VOLUME VARIANCE ANALYSIS

                                                                    Change                             Interest
                                              Average Volume       in Volume    Average    Rate     Income/Expenses
                                            --------------------  -----------  ---------  ------  --------------------
                                              2003       2002      2003-2002     2003      2002     2003       2002
                                            ---------  ---------  -----------  ---------  ------  --------  ----------
<S>                                         <C>        <C>        <C>          <C>        <C>     <C>       <C>
Interest-earning assets:
   Loans, net of unearned income(1)         $103,183   $ 82,598   $   20,585       7.13%   7.75%  $  7,362  $   6,399
   Investment securities:
     Taxable                                  26,027     26,220         (193)      2.89%   4.02%       752      1,055
     Non-taxable(2)                            4,160      2,516        1,644       3.15%   3.86%       131         97
                                            ---------  ---------  -----------  ---------  ------  --------  ----------
       Total investment securities            30,187     28,736        1,451       2.93%   4.01%       883      1,152
     Fed funds sold                            2,399      2,838         (439)      1.54%   1.62%        37         46
                                            ---------  ---------  -----------  ---------  ------  --------  ----------

       Total interest-earning assets        $135,769   $114,172   $   21,597       6.10%   6.65%     8,282      7,597
                                            =========  =========  ===========  =========  ======  --------  ----------

Interest-earning liabilities:
   Deposits:
     Demand                                 $ 45,592   $ 26,015   $   19,577       1.77%   1.43%       808        373
     Savings                                  17,345     16,585          760       1.80%   2.60%       312        431
     Time                                     52,654     53,458         (804)      3.02%   3.64%     1,589      1,948
                                            ---------  ---------  -----------  ---------  ------  --------  ----------
       Total interest-earning deposits       115,591     96,058       19,533       2.34%   2.86%     2,709      2,752
   Other short-term borrowings                 7,258      4,136        3,122       2.40%   4.69%       174        194
                                            ---------  ---------  -----------  ---------  ------  --------  ----------

       Total interest-bearing liabilities   $122,849   $100,194   $   22,655       2.35%   2.94%     2,883      2,946
                                            =========  =========  ===========  ---------  ------  --------  ----------

Net interest income/net interest spread                                            3.75%   3.71%  $  5,399  $   4,651
                                                                               =========  ======  ========  ==========

Net yield on earning assets                                                        4.03%   4.12%
                                                                               =========  ======


                                                            Variance (1)
                                             Variance       Attributed To
                                            -----------  -------------------
                                             2003-2002    Volume     Rate
                                            -----------  --------  ---------
<S>                                         <C>          <C>       <C>
Interest-earning assets:
   Loans, net of unearned income(1)         $      963   $ 1,498   $   (543)
   Investment securities:
     Taxable                                      (303)       (8)      (294)
     Non-taxable(2)                                 34        54        (21)
                                            -----------  --------  ---------
       Total investment securities                (269)       46       (315)
     Fed funds sold                                 (9)       (7)        (2)
                                            -----------  --------  ---------

       Total interest-earning assets               685     1,537       (860)
                                            -----------  --------  ---------

Interest-earning liabilities:
   Deposits:
     Demand                                        435       331        104
     Savings                                      (119)       19       (138)
     Time                                         (359)      (29)      (326)
                                            -----------  --------  ---------
       Total interest-earning deposits             (43)      321       (360)
   Other short-term borrowings                     (20)      103       (123)
                                            -----------  --------  ---------

       Total interest-bearing liabilities          (63)      424       (483)
                                            -----------  --------  ---------

Net interest income/net interest spread          $ 748   $ 1,113   $   (377)
                                            ===========  ========  =========

Net yield on earning assets
</TABLE>


                                        4
<PAGE>
(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.


INVESTMENT  PORTFOLIO

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

<TABLE>
<CAPTION>
                 INVESTMENT PORTFOLIO

                                    December 31,
                                  ----------------
                                   2003     2002
                                  -------  -------
<S>                               <C>      <C>
                                   (in thousands)
 Securities available for sale:
   U.S. Government agencies       $ 6,551  $ 7,493
   Mortgage-backed securities      21,397   15,257
   Municipal securities             4,736    3,554
   Corporate debt securities            -    2,548
   Other securities                 1,009      522
                                  -------  -------
                                  $33,693  $29,374
                                  =======  =======
</TABLE>


                                        5
<PAGE>
Average  taxable  securities  were  86  percent  of  the portfolio in 2003 which
reflects  management's  intent  to  maximize  investment  yields.

The  maturities  and  weighted  average  yields  of  the investments in the 2003
portfolio  of  investment  securities  are  presented  below.

<TABLE>
<CAPTION>
                                                     Investment Portfolio Maturity Schedule
                                 -------------------------------------------------------------------------------
                                                                    Maturing
                                 -------------------------------------------------------------------------------
                                       Within           After One But         After Five But          After
                                      One Year        Within Five Years      Within 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 and
     U.S. Government agencies    $   5,018   0.42%  $    1,533      3.66%  $        -     0.00%  $     -   0.00%
   Mortgage-backed securities            -   0.00%       3,849      2.77%      11,328     3.48%    6,220   3.26%
   Municipal securities                215   4.47%       2,047      3.24%       2,002     5.39%      472   4.35%
   Corporate debt securities             -   0.00%           -      0.00%           -     0.00%        -   0.00%
   Other securities                      -   0.00%           -      0.00%           -     0.00%    1,009   5.65%
                                 ---------  ------  ----------  ---------  ----------  --------  -------  ------
                                 $   5,233   0.58%  $    7,429      3.09%  $   13,330     3.77%  $ 7,701   3.64%
                                 =========  ======  ==========  =========  ==========  ========  =======  ======

   Total available for sale      $  33,693   3.09%
                                 =========  ======
</TABLE>


                                        6
<PAGE>
At  December  31, 2003, there were no securities held by the Company, except for
those  issued from U.S. Government and U.S. Government agencies, whose aggregate
value  exceeded  ten  percent  of  the  Company's  shareholders'  equity.

LOAN  PORTFOLIO

The  following  table  shows  the  classification  of loans by major category at
December  31,  2003  and  2002.

<TABLE>
<CAPTION>
                             TYPES OF LOANS

                                    December 31, 2003     December 31, 2002
                                  ---------------------  ------------------
                                              Percent             Percent
                                   Amount     of Total   Amount   of Total
                                  ---------  ----------  -------  ---------
<S>                               <C>        <C>         <C>      <C>
                                                (in thousands)

Commercial and industrial         $ 35,019        29.5%  $29,849      31.8%
Real estate-construction            18,205        15.4%    9,033       9.6%
Real estate-other                   52,828        44.6%   44,669      47.6%
Consumer                            11,949        10.1%   10,251      10.9%
Other loans                            557         0.5%       95       0.1%
                                  ---------  ----------  -------  ---------
                                   118,558       100.0%   93,897     100.0%
                                             ==========           =========
Less: allowance for loan losses     (1,665)               (1,291)
                                  ---------              --------

Net loans                         $116,893               $92,606
                                  =========              ========
</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,  2003  and  an  analysis of these loans maturing in over one year.

<TABLE>
<CAPTION>
              SELECTED LOAN MATURITY AND INTEREST RATE SENSITIVITY

                                                                           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    $  18,961  $    14,992  $    1,066  $  35,019  $     6,489   $    9,569

Real estate-construction        15,457        2,604         144     18,205        1,110        1,638
                             ---------  -----------  ----------  ---------  -----------   ----------

                             $  34,418  $    17,596  $    1,210  $  53,224  $     7,599   $   11,207
                             =========  ===========  ==========  =========  ===========   ==========
</TABLE>


                                        8
<PAGE>
NONPERFORMING  ASSETS

The  following  table  presents  information  concerning outstanding balances of
nonperforming  assets  at  December  31,  2003  and  2002.

<TABLE>
<CAPTION>
                                      2003     2002
                                     -------  -------
                                      (in thousands)
<S>                                  <C>      <C>
Nonaccruing loans                    $   148  $   111
Loans past due 90 days or more           210      185
Restructured loans                         -        -
                                     -------  -------
Total nonperforming loans                358      296
Other real estate                         86      212
                                     -------  -------
Total nonperforming assets           $   444  $   508
                                     =======  =======

Ratios:
Loan loss allowance to
  total nonperforming assets          3.7500   2.5413
                                     =======  =======
Total nonperforming loans to total
  loans (net of unearned interest)    0.0030   0.0032
                                     =======  =======
Total nonperforming assets
  to total assets                     0.0026   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 $1,664,578 in the
allowance  for  loan losses at December 31, 2003 (1.40% of 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,  2003  and  2002.

<TABLE>
<CAPTION>
                         SUMMARY OF LOAN LOSS EXPERIENCE

                                                     2003       2002
                                                   ---------  --------
                                                     (in thousands)
<S>                                                <C>        <C>
Allowance for loans losses at beginning of year    $  1,291   $   996

Total loans charged off:
  Commercial and industrial                            (168)      (39)
  Real estate                                             -         -
  Consumer                                              (97)     (110)

Recoveries on loans previously charged off               15         8
                                                   ---------  --------
Net loans charged off                                  (250)     (141)
                                                   ---------  --------

Provision for loan losses                               624       436
                                                   ---------  --------

Allowance for loan losses at end of  period        $  1,665   $ 1,291
                                                   =========  ========

Loans, net of unearned income, at end of period    $118,557   $93,897
                                                   =========  ========

Average loans, net of unearned income,
  outstanding for the period                       $103,183   $82,598
                                                   =========  ========

Ratios:
  Allowance at end of period to loans, net of
    unearned income                                   1.40%     1.37%
  Allowance at end of period to average loans,
    net of unearned income                            1.61%     1.56%
  Net charge-offs to average loans, net of
    unearned income                                   0.24%     0.17%
  Net charge-offs to allowance at end of period      15.02%    10.92%
  Recoveries to prior year charge-offs               10.07%     2.38%
</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:

<TABLE>
<CAPTION>
                                         Year Ended December 31, 2003      Year Ended December 31, 2002
                                       --------------------------------  --------------------------------
                                                           Percent                           Percent
                                           Amount          of Total          Amount          of Total
                                       ---------------  ---------------  ---------------  ---------------
<S>                                    <C>              <C>              <C>              <C>
                                                              (amounts in thousands)
Domestic Loans (1):

  Commercial and industrial            $         1,065            64.0%  $           822            63.7%
  Real estate-construction and other               267            16.0%              196            15.2%
  Consumer                                         333            20.0%              273            21.1%
                                       ---------------  ---------------  ---------------  ---------------

                                       $         1,665           100.0%  $         1,291           100.0%
                                       ===============  ===============  ===============  ===============
</TABLE>


                                       11
<PAGE>
(1)   The  Company  had  no  foreign  loans.


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. The Fort Oglethorpe branch opened in 2000, and 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, 2003 and 2002 are as
follows:

<TABLE>
<CAPTION>
                                          2003             2002
                                     ---------------  ---------------
                                           (amounts in thousands)

                                     Average          Average
                                      Amount   Rate    Amount   Rate
                                     --------  -----  --------  -----
<S>                                  <C>       <C>    <C>       <C>
Noninterest-bearing demand deposits  $ 10,423  0.00%  $  9,900  0.00%
                                     --------         --------

Demand deposits                        45,592  1.77%    26,015  1.43%
Savings deposits                       17,345  1.80%    16,585  2.60%
Time deposits                          52,654  3.02%    53,458  3.64%
                                     --------         --------

  Total interest-bearing deposits     115,591  2.34%    96,058  2.86%
                                     --------         --------

  Total average deposits             $126,014  2.15%  $105,958  2.59%
                                     ========         ========
</TABLE>


                                       12
<PAGE>
The  two  categories of lowest cost deposits comprised the following percentages
of total deposits during 2003: average noninterest-bearing demand deposits - 8.3
percent;  and  average interest-bearing demand deposits - 36.2 percent. Of total
time  deposits, approximately 33 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, 2003 are
summarized  in  the  table  below.

<TABLE>
<CAPTION>
                        MATURITIES OF LARGE TIME DEPOSITS

                                       Time
                                     Deposits
                                 ---------------
                                 (in thousands)
<S>                              <C>
Three months or less             $        10,165
Over three through six months              3,297
Over six through twelve months             3,654
Over twelve months                         3,594
                                 ---------------
   Total                         $        20,710
                                 ===============
</TABLE>


                                       13
<PAGE>
RETURN  ON  EQUITY  AND  ASSETS

The  following table summarizes certain financial ratios for the Company for the
years  ended  December  31,  2003  and  2002.

<TABLE>
<CAPTION>
                                         2003    2002
                                        ------  ------
<S>                                     <C>     <C>
Return on average assets                 1.09%   1.04%
Return on average equity                14.58%  13.14%
Dividend payout ratio                    0.00%   0.00%
Average equity to average assets ratio   7.47%   7.90%
</TABLE>


                                       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.  As a bank holding company located in Georgia, the Georgia
Department  of  Banking  and Finance also regulates and monitors all significant
aspects  of  the  Company's  operations.

     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.  Currently,  Georgia law prohibits acquisitions of
banks  that  have  been incorporated for less than three years.  As a result, no
bank  holding  company  may acquire control of the Company until after the third
anniversary  date  of  the  Bank's  incorporation.  Because  the  Bank  has been
incorporated  for  more  than three years, this limitation does not apply to the
Company  or  the  Bank.

     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 refutably 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  also provide a procedure for challenging the rebuttable presumption
of  control.


                                       15
<PAGE>
     PERMITTED  ACTIVITIES.  Generally,  bank  holding  companies are 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:

      -     banking  or  managing  or  controlling  banks;  and

      -     any  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.

     In  addition  to  the  permissible  bank  holding company activities listed
above,  a  bank  holding  company  may  qualify  and elect to become a financial
holding  company,  permitting  the  bank holding company to 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;

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


                                       16
<PAGE>
      -     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  an  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.  While  the  Company  meets  the  qualification  standards
applicable to financial holding companies, the Company has not elected to become
a  financial  holding  company  at  this  time.

     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

     The Bank is subject to extensive state and federal banking regulations that
impose  restrictions  on  and  provide  for general regulatory oversight for our
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.

     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 other categories.  At December 31, 2003,
the  Bank  qualified  for  the  "well  capitalized"  category.

     Federal  banking  regulators  are  required  to  take  various  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


                                       17
<PAGE>
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 1.54 cents per $100 of
deposits  for  the  first  quarter  of  2004.

     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 and the Company.  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.  For  example, under the Soldiers' and Sailors' Civil Relief Act of 1940,
a lender is generally prohibited from charging an annual interest rate in excess
of  6%  on any obligation for which the borrower is a person on active duty with
the  United  States  military.

     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;


                                       18
<PAGE>
      -     The Fair Debt Collection Act, governing the manner in which consumer
            debts  may  be  collected  by  collection  agencies;

      -     Soldiers'  and  Sailors'  Civil  Relief  Act  of 1940, governing the
            repayment  terms  of,  and  property  rights  underlying,  secured
            obligations  of  persons  in  military  service;  and

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

     In  addition  to  the  federal and state laws noted above, the Georgia Fair
Lending  Act  ("GAFLA") imposes restrictions and procedural requirements on most
mortgage loans made in Georgia, including home equity loans and lines of credit.
On August 5, 2003, the Office of the Comptroller of the Currency issued a formal
opinion  stating  that  the  entirety  of  GAFLA is preempted by federal law for
national  banks  and  their  operating subsidiaries.  GAFLA contains a provision
that  preempts  GAFLA  as  to  state  banks  in the event that the Office of the
Comptroller of the Currency preempts GAFLA as to national banks.  Therefore, the
Bank  is  exempt  from  the  requirements  of  GAFLA.

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.   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 and trust preferred securities,
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,  2003  our  ratio  of  total  capital  to
risk-weighted  assets was 12.2% and our ratio of Tier 1 Capital to risk-weighted
assets  was  10.9%.

     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, 2003, our leverage ratio was 8.9%.  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.


                                       19
<PAGE>
     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.  These guidelines
are substantially similar to those adopted by the Federal Reserve in the case of
the  Company  and  those  adopted  by  the  FDIC  in  the  case  of  the  Bank.

     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."

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 the Company.
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 stop or refrain
from  engaging  in  the  questioned 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,  2003, the Bank was able to pay approximately $853,045 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:

      -     a  bank's  loans  or  extensions  of  credit  to  affiliates;

      -     a  bank's  investment  in  affiliates;

      -     assets  a  bank  may  purchase  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

      -     a  bank's 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 Bank 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.


                                       20
<PAGE>
     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.

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 or when the
financial  institution  is  jointly  sponsoring  a  product  or  service  with a
nonaffiliated  third  party.  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.


CONSUMER  CREDIT  REPORTING

     On  December  4,  2003,  the  President signed the Fair and Accurate Credit
Transactions  Act (the FAIR Act), amending the federal Fair Credit Reporting Act
(the  FCRA).  These  amendments  to  the  FCRA (the FCRA Amendments) will become
effective  as  early  as  February  2004, but more likely in the third or fourth
quarter  of  2004, depending on the implementing regulations to be issued by the
Federal  Trade  Commission  and  the federal bank regulatory agencies.  The FCRA
Amendments  that deal with employee investigation will become effective on March
31,  2004.

     The FCRA Amendments include, among other things:

      -     new  requirements for financial institutions to develop policies and
            procedures  to  identify  potential  identity  theft  and,  upon the
            request  of  consumer,  place a fraud alert in the consumer's credit
            file  stating  that  consumer may be the victim of identity theft or
            other  fraud;

      -     new  consumer  notice  requirements  for  lenders  that use consumer
            report  information  in  connection  with  risk-based credit pricing
            programs

      -     for entities that furnish information to consumer reporting agencies
            (which  would  include  the  Bank),  new  requirements  to implement
            procedures  and policies regarding the accuracy and integrity of the
            furnished  information  and  regarding  the correction of previously
            furnished information that is later determined to be inaccurate; and

      -     a  new requirement for mortgage lenders to disclose credit scores to
            consumers.

The  FCRA  Amendments  also  will  prohibit  a  business  that receives consumer
information from an affiliate from using that information for marketing purposes
unless  the consumer is first provided a notice and an opportunity to direct the
business not to use the information for such marketing purposes (the "opt-out"),
subject  to  certain  exceptions.  We  do not plan to share consumer information
among  our affiliated companies for marketing purposes, except as may be allowed
under  exceptions  to the notice and opt-out requirements.  Because no affiliate
of  the  Company  is  currently  sharing  consumer  information  with  any other
affiliate  of the Company for marketing purposes, the new limitations on sharing
of  information for marketing purposes will not have a significant impact on the
Company.

     Prior  to  the  effective  date of the FCRA Amendments, the Company and its
subsidiaries  will  implement  policies  and  procedures  to comply with the new
rules.

ANTI-TERRORISM  LEGISLATION

     The  Uniting  and  Strengthening  America  by  Providing  Appropriate Tools
Required  to  Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, signed
by  the  President on October 26, 2001, imposed new requirements and limitations
on specified financial transactions and account relationships, intended to guard
against  money  laundering  and  terrorism.  Most  of  these  requirements  and
limitations  took  effect in 2002.  Additional "know your customer" rules became
effective  in  June  2003,  requiring  the  Bank  to  establish  a  customer


                                       21
<PAGE>
identification  program  under  Section 326 of the USA PATRIOT Act.  The Company
and  its  subsidiaries  implemented procedures and policies to comply with those
rules  prior  to  the  effective  date  of  each  of  the  rules.

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 financial institutions operating or doing business in the
United  States.  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  POLICES

     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  2000  the  Bank  opened  a  branch  office located at 769 Battlefield
Parkway,  Fort Oglethorpe, Georgia. The Fort Oglethorpe property is owned by the
Bank.

In  1995  the  organizers  of  the  Company  leased the 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 rent increases 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 2003 was $25,372.

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.


                                       22
<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  36  and  is  incorporated  herein  by  reference.

The  Company has not sold any unregistered shares of its Common Stock, $5.00 par
value,  during  2003.

The  following table sets forth information regarding the Company's purchases of
its  common stock during December 2003.  The Company did not purchase any of its
securities  during  October  or  November  of  2003.

<TABLE>
<CAPTION>
        SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

                                        (c)
                                    TOTAL NUMBER             (d)
                                      OF SHARES        MAXIMUM NUMBER
            (a)          (b)        PURCHASED AS       OF SHARES THAT
        TOTAL NUMBER   AVERAGE    PART OF PUBLICLY       MAY YET BE
         OF SHARES   PRICE PAID   ANNOUNCED PLANS      PURCHASED UNDER
         PURCHASED    PER SHARE   OR PROGRAMS (1)   THE PLANS OR PROGRAMS
        -----------------------------------------------------------------
<S>                <C>          <C>               <C>
        3,000      $     17.72             3,000              -
</TABLE>

          1)   In April 2003, the Company announced its tender offer to purchase
               up to 110,000 shares of its common stock at $17.72 per share. The
               tender  offer  expired on May 30, 2003. The shares represented in
               the table above were tendered for purchase under the tender offer
               prior  to  May 30, 2003. The Company did not fund the purchase of
               these  shares,  however,  until  December  2003  because  the
               certificates  evidencing  the  shares  were  lost and replacement
               certificates  were  not delivered to the Company, as required for
               payment,  until  December  2003.

In  December,  2003,  the  Company  formed  a wholly owned Connecticut statutory
trust,  Gateway  Bancshares  Statutory Trust I, (the "Trust"), which issued $3.5
million  aggregate  principal  amount  of trust preferred securities.  The trust
preferred  securities represent guaranteed preferred beneficial interests in the
Company's  junior  subordinated  deferrable  interest debentures that qualify as
Tier  I  capital  subject  to  the  limitations  under  Federal  Reserve  Board
guidelines.  The  Company owns all of the $109,000 aggregate principal amount of
the  common  securities  of  the  Trust.  The  proceeds from the issuance of the
common  securities  and the trust preferred securities were used by the Trust to
purchase  $3.6  million  of junior subordinated debentures of the Company, which
pay  interest at a floating rate equal to the three month LIBOR plus 2.85%.  The
debentures  represent  the  sole  asset  of  the  Trust.

     The trust preferred securities accrue and pay quarterly distributions based
on the liquidation value of $1,000 per capital security at a floating rate equal
to  the  three-month LIBOR plus 2.85%.  The Company has entered into contractual
agreements  which,  taken  collectively,  constitute  a  full  and unconditional
guarantee on a subordinated basis by the Company of the obligations of the Trust
under  the  trust  preferred securities.  The Company's guarantee, however, does
not  apply  if  the  Company  does not make payments on the debentures and, as a
result,  the  Trust  does not have sufficient funds to make payments.  The trust
preferred  securities are mandatorily redeemable upon maturity of the debentures
on  December  17, 2033, or upon earlier redemption of the debentures as provided
in  the indenture.  The Company has the right to redeem the debentures purchased
by  the  Trust in whole or in part, on or after December 17, 2008.  As specified
in  the  indenture, if the debentures are redeemed on or after December 17, 2008
and prior to maturity, the redemption price will be the principal amount and any
accrued  but unpaid interest.  Additionally, the Company may redeem, at any time
(and  possibly  before  December  17,  2008),  within  120  days  following  the
occurrence  of  a  change  in  banking, tax, investment company or other laws or
regulations  that  results  in  specified  changes in the treatment of the trust
preferred  securities  for  tax  or  regulatory  capital  purposes  or under the
Investment  Company  Act  of  1940.  If  the  debentures  are  redeemed prior to
December 17, 2008, the redemption price will be equal from 100% to 104.6% of the
principal  amount  plus  any  accrued  and  unpaid  interest.

      FTN  Financial Capital Markets and Keefe, Bruyette & Woods, Inc. served as
placement  agents  in  connection  with  the  issuance  of  the  trust preferred
securities and debentures and each were compensated $105,000 for their services.
Since the trust preferred securities and debentures were issued to institutional


                                       23
<PAGE>
investors  the  securities  were  exempt from registration under Rule 506 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 12, 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  15  through  40,  and  are  incorporated  herein by
reference.

      Report  of  Independent  Certified  Public  Accountants

      Financial  Statements

            Consolidated  Balance  Sheets  as  of  December  31,  2003  and 2002

            Consolidated  Statements  of Income for the years ended December 31,
            2003  and  2002

            Consolidated  Statements  of Changes in Stockholders' Equity for the
            years  ended  December  31,  2003  and  2002

            Consolidated  Statements  of Cash Flows for the years ended December
            31,  2003  and  2002

            Notes  to  Consolidated  Financial  Statements


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

Not  Applicable.

ITEM  8A.   CONTROLS  AND  PROCEDURES

An  evaluation  was  performed as of December 31, 2003 under the supervision and
with  the  participation  of  the  Company's  management,  including  the  Chief
Executive  Officer  and  Chief  Financial  Officer,  of the effectiveness of the
design and operation of the Company's disclosure controls and procedures.  Based
on  that  evaluation,  the  Company's  management, including the Chief Executive
Officer  and  Chief  Financial  Officer, concluded that the Company's disclosure
controls  and  procedures  were  effective  at  timely alerting them to material
information relating to the Company (including its consolidated subsidiary) that
is required to be included in the Company's periodic filings with the Securities
and  Exchange  Commission.  There have been no changes in the Company's internal
control  over  financial  reporting during the year ended December 31, 2003 that
have  materially  affected,  or  are reasonably likely to materially affect, the
Company's  internal  control  over  financial  reporting.


                                       24
<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 15, 2004, 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.

The Company has a Code of Ethics that is reasonably designed to deter wrongdoing
and  to  promote  honest  and  ethical  conduct,  compliance  with  applicable
governmental  laws  and regulations, the prompt internal reporting of violations
of  the code to an appropriate person identified in the code, accountability for
adherence  to  the  code,  and  full, fair, accurate, timely, and understandable
disclosure  in  reports  and documents that the Company files.  The Company will
provide  a  copy  of  the  Code of Ethics free of charge to any shareholder upon
written  request  to  the  Company.

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 15, 2004, 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

Certain responses to this Item are included in the Company's Proxy Statement for
the  Annual Meeting of Shareholders to be held April 15, 2004 under the heading,
"Security  Ownership  of  Certain  Beneficial Owners and Management," at pages 7
through  9,  and  are  incorporated  herein  by  reference.

GATEWAY  BANCSHARES,  INC.  1999  STOCK  OPTION  PLAN  INFORMATION

      The  following table sets forth information regarding the number of shares
subject  to  options  issued  and reserved for future issuance under the Gateway
Bancshares, Inc. 1999 Stock Option Plan. The Company does not maintain any other
equity  compensation  plan.

<TABLE>
<CAPTION>
                                                                                    NUMBER OF SHARES
                                              NUMBER OF                                REMAINING
                                           SECURITIES TO BE                      AVAILABLE FOR FUTURE
                                             ISSUED UPON      WEIGHTED-AVERAGE    ISSUANCE UNDER THE
                                             EXERCISE OF     EXERCISE PRICE OF      PLAN (EXCLUDES
                                             OUTSTANDING        OUTSTANDING           OUTSTANDING
                                               OPTIONS            OPTIONS              OPTIONS)
------------------------------------------------------------------------------------------------------
<S>                                        <C>               <C>                 <C>

Equity compensation plans approved by               147,750  $            12.07                 38,410
security holders

Equity compensation plans not approved by                 0                N/A                       0
security holders

Total                                               147,750  $            12.07                 38,410
</TABLE>


                                       25
<PAGE>
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 15, 2004, under the headings,
"Certain Relationships and Related Transactions," at page 9, and "Compensation,"
at  pages  5  through  6,  and  are  incorporated  herein  by  reference.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits

<TABLE>
<CAPTION>
Exhibit
Number   Exhibit
-------  -------
<S>      <C>

    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.

    4.2  Form of Amended and Restated Declaration of Trust

    4.3  Form of  Indenture Agreement

    4.4  Form of Guarantee Agreement

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

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

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

   10.4  Supplemental Executive Retirement Benefit Agreement (5)

   13.1  Gateway Bancshares, Inc. 2003 Annual Report to
         Shareholders. Except with respect to those portions
         specifically incorporated by reference into this Report,
         the Company's 2003 Annual Report to Shareholders is not
         deemed to be filed as part of this Report.

   21.1  Subsidiaries of Gateway Bancshares, Inc.

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

   31.1  Certification of the Chief Executive Officer Pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002

   31.2  Certification of the Chief Financial Officer Pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002

     32  Certification by Chief Executive Officer and Chief Financial
         Officer Pursuant to 18 U.S.C. 1350, As Adopted Pursuant
         To Section 906 of the Sarbanes-Oxley Act of 2002
<FN>

(b)  Reports on Form 8-K filed in the fourth quarter of 2003:  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.


                                       26
<PAGE>
(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,
      2002.
</TABLE>

ITEM  14.  PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES

The  information set forth in the Proxy Statement under the caption "Independent
Public  Accountants"  is  hereby  incorporated  by  reference.


                                   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 25, 2004


                                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.

<TABLE>
<CAPTION>
Signature                                Title                   Date
---------------------------  -----------------------------  --------------
<S>                          <C>                            <C>
/s/ Jack Joseph Babb         Director                       March 25, 2004
---------------------------
Jack Joseph Babb


/s/ William H.H. Clark       Director                       March 25, 2004
---------------------------
William H.H. Clark


/s/ Jeannette Wilson Dupree  Director                       March 25, 2004
---------------------------
Jeannette Wilson Dupree


                                       27
<PAGE>
/s/ Harle B. Green           Director, Chief Financial      March 25, 2004
---------------------------  Officer (Principal Financial
Harle B. Green               And Accounting Officer)


/s/ Ernest Kresch            Director                       March 25, 2004
---------------------------
Ernest Kresch


/s/ Robert G. Peck           Director, President            March 25, 2004
---------------------------  Chief Executive Officer
Robert G. Peck

/s/ Danny Ray Jackson        Director                       March 25, 2004
---------------------------
Danny Ray Jackson

/s/ James Arthell Gray       Director                       March 25, 2004
---------------------------
James Arthell Gray, Sr.
</TABLE>


                                       28
<PAGE>
<TABLE>
<CAPTION>
                                  EXHIBIT INDEX


Exhibit
Number   Exhibit
-------  -------
<S>      <C>

    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.

    4.2  Form of Amended and Restated Declaration of Trust

    4.3  Form of Indenture Agreement

    4.4  Form of Guarantee Agreement

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

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

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

   10.4  Supplemental Executive Retirement Benefit Agreements (5)

   13.1  Gateway Bancshares, Inc. 2003 Annual Report to
         Shareholders. Except with respect to those portions
         specifically incorporated by reference into this
         Report, the Company's 2003 Annual Report to
         Shareholders is not deemed to be filed as part of
         this Report.

   21.1  Subsidiaries of Gateway Bancshares, Inc.

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

   31.1  Certification of the Chief Executive Officer Pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002

   31.2  Certification of the Chief Financial Officer Pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002

     32  Certification by Chief Executive Officer and Chief Financial
         Officer Pursuant to 18 U.S.C. 1350, As Adopted Pursuant
         To Section 906 of the Sarbanes-Oxley Act of 2002
<FN>


(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,
      2002.
</TABLE>


<PAGE>