UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB


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

          For the quarterly period ended   SEPTEMBER 30, 2004
                                         -----------------------

                                       OR

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

          For the transition period from __________ to __________

                       COMMISSION FILE NUMBER:  000-30511

                            CHEROKEE BANKING COMPANY
                            ------------------------
             (Exact name of registrant as specified in its charter)


               GEORGIA                                           58-2432974
    -------------------------------                          -------------------
    (State or other jurisdiction of                           (IRS Employer
    incorporation or organization)                           Identification No.)

                 1275 RIVERSTONE PARKWAY, CANTON, GEORGIA 30114
            ---------------------------------------------------------
                    (Address of principal executive offices)

                                 (770) 479-3400
                          ---------------------------
                          (Issuer's telephone number)

                                         N/A
    ----------------------------------------------------------------------------
    (Former name, former address and former fiscal year, if changed since last
                                     report)

Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act during the past 12 months (or for such shorter
period  that  the registrant was required to file such reports) and (2) has been
subject  to  such  filing  requirements for the past 90 days.   Yes  X    No
                                                                    ----     ---

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

1,242,515 shares of common stock, no par value per share, issued and outstanding
as of November 12, 2004.

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


<PAGE>
                            CHEROKEE BANKING COMPANY


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

                                      INDEX
                                      -----

                                                                        PAGE NO.
                                                                        --------

PART I.       FINANCIAL INFORMATION

     ITEM 1 -  FINANCIAL STATEMENTS

               CONSOLIDATED BALANCE SHEET (UNAUDITED) AT
                 SEPTEMBER 30, 2004. . . . . . . . . . . . . . . . . . . . .   3

               CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE
                 THREE MONTHS AND THE NINE MONTHS ENDED
               SEPTEMBER 30, 2004 AND 2003 . . . . . . . . . . . . . . . . .   4

               CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 (LOSS) (UNAUDITED) FOR THE NINE MONTHS
                 ENDED SEPTEMBER 30, 2004 AND 2003 . . . . . . . . . . . . .   5

               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 . . .   6

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED). . . .   7

     ITEM 2 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . .  11

     ITEM 3 -  CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . .  18

PART II.       OTHER INFORMATION

     ITEM 1. - LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . .  19

     ITEM 2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS .  19

     ITEM 3. - DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . .  19

     ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . .  19

     ITEM 5. - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . .  19

     ITEM 6. - EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . .  19

     SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20


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

ITEM 1.  FINANCIAL STATEMENTS

                            CHEROKEE BANKING COMPANY
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2004
                                   (UNAUDITED)


                            ASSETS
                            ------
<S>                                                              <C>
Cash and due from banks                                          $  4,955,094
Federal funds sold                                                 14,688,000
                                                                 -------------

      Cash and cash equivalents                                    19,643,094

Interest-bearing deposits                                             100,000
Investment securities available-for-sale                           43,547,985
Other investments                                                     705,350
Loans, net                                                         77,803,268
Premises and equipment, net                                         5,202,726
Accrued interest receivable and other assets                        3,339,738
                                                                 -------------

                                                                 $150,342,161
                                                                 =============

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

Deposits:
  Demand                                                         $ 16,021,399
  Money market and NOW accounts                                    65,687,369
  Savings                                                           3,710,761
  Time                                                             24,327,252
  Time over $100,000                                               17,523,001
                                                                 -------------
      Total deposits                                              127,269,782

Advances from the Federal Home Loan Bank                            8,500,000
Accrued interest payable and other liabilities                        712,740
                                                                 -------------

      Total liabilities                                           136,482,522
                                                                 -------------

Commitments

Stockholders' equity:
  Preferred stock, no par value; 2,000,000 shares authorized;
    no shares issued and outstanding                                        -
  Common stock, no par value; 10,000,000 shares authorized;
    1,242,515 shares issued and outstanding                        13,728,330
  Retained earnings                                                   471,689
  Accumulated other comprehensive loss                               (340,380)
                                                                 -------------

      Total stockholders' equity                                   13,859,639
                                                                 -------------

                                                                 $150,342,161
                                                                 =============
</TABLE>


SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                          CHEROKEE BANKING COMPANY

                                      CONSOLIDATED STATEMENTS OF INCOME
                 FOR THE THREE MONTHS AND THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                                 (UNAUDITED)


                                                                THREE MONTHS              NINE MONTHS
                                                             ENDED SEPTEMBER 30,       ENDED SEPTEMBER 30,
                                                           ------------------------  ------------------------
                                                              2004         2003         2004        2003
                                                           -----------  -----------  -----------  -----------
<S>                                                        <C>          <C>          <C>          <C>
Interest income:
    Interest and fees on loans                             $ 1,202,505  $  816,264   $ 3,272,242  $ 2,441,318
    Interest and dividends on investment securities            421,778     435,626     1,332,953    1,173,797
    Interest on federal funds sold                               6,620       4,788        22,204       28,477
    Interest on interest-bearing deposits                          636       2,389         1,504        7,878
                                                           -----------  -----------  -----------  -----------
      Total interest income                                  1,631,539   1,259,067     4,628,903    3,651,470

Interest expense:
    Interest on money market and NOW accounts                  112,138     101,743       317,313      332,157
    Interest on savings and time deposits                      240,150     216,016       637,094      666,205
    Interest on other borrowings                                88,123      74,696       256,503      212,941
                                                           -----------  -----------  -----------  -----------
      Total interest expense                                   440,411     392,455     1,210,910    1,211,303

      Net interest income                                    1,191,128     866,612     3,417,993    2,440,167

Provision for loan losses                                       25,686      34,459       284,949      128,947
                                                           -----------  -----------  -----------  -----------
      Net interest income after provision for loan losses    1,165,442     832,153     3,133,044    2,311,220
                                                           -----------  -----------  -----------  -----------

Other income:
    Service charges on deposit accounts                        127,404     110,071       380,073      315,375
    Mortgage origination fees                                   64,417      53,418       183,845      178,273
    Investment security gains (losses), net                        101        (581)        4,462       34,616
    Other income                                                53,567      39,294       163,820      118,202
                                                           -----------  -----------  -----------  -----------
      Total other income                                       245,489     202,202       732,200      646,466
                                                           -----------  -----------  -----------  -----------

Other expenses:
    Salaries and employee benefits                             557,930     456,374     1,737,391    1,364,959
    Occupancy and equipment                                    138,156      84,781       389,381      254,370
    Other operating                                            452,528     329,956     1,298,538      910,557
                                                           -----------  -----------  -----------  -----------
      Total other expense                                    1,148,614     871,111     3,425,310    2,529,886
                                                           -----------  -----------  -----------  -----------

      Earnings before income taxes                             262,317     163,244       439,934      427,800

Income tax expense                                              59,525      37,281       123,926      128,232
                                                           -----------  -----------  -----------  -----------

      Net earnings                                         $   202,792  $  125,963   $   316,008  $   299,568
                                                           ===========  ===========  ===========  ===========

Basic earnings per share                                   $      0.16  $     0.16   $      0.28  $      0.37
                                                           ===========  ===========  ===========  ===========

Diluted earnings per share                                 $      0.15  $     0.14   $      0.26  $      0.34
                                                           ===========  ===========  ===========  ===========
</TABLE>

SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                            CHEROKEE BANKING COMPANY

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                   (UNAUDITED)


                                                           2004        2003
                                                         ----------  ----------
<S>                                                      <C>         <C>

Net earnings                                             $ 316,008   $ 299,568
                                                         ----------  ----------

Other comprehensive loss, net of tax benefit:
    Unrealized holding losses on investment securities
      available-for-sale, net of income tax benefit
      of $46,853 and $375,092                              (76,444)   (611,991)
Reclassification adjustment for gains on sale of
  investment securities available-for-sale, net
  of income taxes of $1,696 and $13,154                     (2,766)    (21,462)
                                                         ----------  ----------
      Total other comprehensive loss                       (79,210)   (633,453)
                                                         ----------  ----------

      Comprehensive  income (loss)                       $ 236,798   $(333,885)
                                                         ==========  ==========
</TABLE>

SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.


                                        5
<PAGE>
<TABLE>
<CAPTION>
                                    CHEROKEE BANKING COMPANY

                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                     FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                          (UNAUDITED)


                                                                       2004           2003
                                                                   -------------  -------------
<S>                                                                <C>            <C>
OPERATING ACTIVITIES
  Net earnings                                                     $    316,008   $    299,568
  Adjustments to reconcile net earnings to net
    cash provided by operating activities:
    Provision for loan losses                                           284,949        128,947
    Depreciation, amortization and accretion                            272,771        208,083
    Investment security gains, net                                       (4,462)       (34,616)
    Change in:
      Accrued interest receivable and other assets                     (282,026)       (91,797)
      Accrued interest payable and other liabilities                    412,630        122,824
                                                                   -------------  -------------

        Net cash provided by operating activities                       999,870        633,009
                                                                   -------------  -------------

INVESTING ACTIVITIES
  Proceeds from maturities and paydowns of
    of investment securities available-for-sale                       7,357,488     15,431,688
  Proceeds from sales of investment securities available-for-sale    15,710,937      4,124,494
  Purchases of investment securities available-for-sale             (18,686,257)   (36,516,588)
  Purchases of other investments                                        (30,000)             -
  Net change in interest-bearing deposits                                     -         99,000
  Proceeds from sale of other real estate                                     -         62,000
  Net change in loans                                               (21,305,620)    (7,875,054)
  Purchase of premises and equipment                                   (524,128)      (327,663)
                                                                   -------------  -------------

      Net cash used in investing activities                         (17,477,580)   (25,002,123)
                                                                   -------------  -------------

FINANCING ACTIVITIES
  Net change in deposits                                             32,634,169     18,147,309
  Net change in federal funds purchased                              (5,864,000)             -
  Proceeds from other borrowings                                              -      1,000,000
  Repayment of other borrowings                                      (1,000,000)             -
  Proceeds from issuance of common stock                              6,020,000              -
  Stock issuance costs                                                  (41,350)             -
                                                                   -------------  -------------

      Net cash provided by financing activities                      31,748,819     19,147,309
                                                                   -------------  -------------

Net change in cash and cash equivalents                              15,271,109     (5,221,805)

Cash and cash equivalents at beginning of period                      4,371,985     11,583,641
                                                                   -------------  -------------

Cash and cash equivalents at end of period                         $ 19,643,094   $  6,361,836
                                                                   =============  =============
</TABLE>

SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.


                                         6
<PAGE>
                            CHEROKEE BANKING COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1.   BASIS OF PRESENTATION

          Cherokee  Banking  Company,  Inc.  (the  "Company"),  a  bank  holding
          company,  owns  100% of the outstanding common stock of Cherokee Bank,
          N.A.  (the  "Bank"),  which  operates in the Canton, Georgia area. The
          Bank  opened  for  business  on  July  26,  1999.

          The  consolidated  financial  statements  include  the accounts of the
          Company  and the Bank. All intercompany accounts and transactions have
          been  eliminated  in  consolidation.

          The accompanying financial statements have been prepared in accordance
          with  the  requirements  for  interim  financial  statements  and,
          accordingly,  they  omit  disclosures,  which  would  substantially
          duplicate  those  contained  in  the  most  recent  annual  report  to
          shareholders  on Form 10-KSB. The financial statements as of September
          30, 2004 and for the interim periods ended September 30, 2004 and 2003
          are  unaudited  and,  in  the  opinion  of  management,  include  all
          adjustments  (consisting  of  normal  recurring  accruals)  considered
          necessary  for  a fair presentation. For further information, refer to
          the  financial statements and the notes included in the Company's Form
          10-KSB  for  the  period  ended  December  31, 2003, as filed with the
          Securities  and  Exchange  Commission.

NOTE 2.   CRITICAL ACCOUNTING POLICIES AND ESTIMATES

          The  Company has adopted various accounting policies, which govern the
          application  of accounting principles generally accepted in the United
          States  of America in the preparation of our financial statements. The
          Company's  significant  accounting  policies  are  described  in  the
          footnotes  to  the  consolidated  financial  statements for the period
          ended December 31, 2003 as filed with our most recent annual report on
          Form  10-KSB.

          Certain  accounting  policies  involve  significant  estimates  and
          assumptions  by  the  Company,  which  have  a  material impact on the
          carrying  value  of  certain  assets  and  liabilities.  The  Company
          considers  these  accounting  policies  to  be  critical  accounting
          policies.  The  estimates and assumptions used are based on historical
          experience  and  other  factors,  which  are believed to be reasonable
          under  the  circumstances.  Because of the nature of the estimates and
          assumptions made, actual results could differ from these estimates and
          assumptions  which  could have a material impact on carrying values of
          assets  and  liabilities  and  results  of  operations.

          The  Company believes that the allowance for loan losses is a critical
          accounting  policy  that  requires  the most significant judgments and
          estimates  used  in  preparation  of  its  consolidated  financial
          statements.  Management's  discussion  and  analysis  of  financial
          condition  and  results  of operations, as set forth in this report on
          From  10-QSB, provides further information regarding the allowance for
          loan  losses and includes a description of the Company's processes and
          methodology  for  determining  the  allowance  of  loan  losses.


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


NOTE 3.   EARNINGS PER SHARE

          Basic  earnings  per share are based on the weighted average number of
          common  shares  outstanding  during  the  period  while the effects of
          potential shares outstanding during the period are included in diluted
          earnings  per  share.  The  reconciliation  of the amounts used in the
          computation  of  both "basic earnings per share" and "diluted earnings
          per  share"  for  the quarter and nine months ended September 30, 2004
          and  2003  presented  in  the  financial statements were calculated as
          follows:

<TABLE>
<CAPTION>
          FOR THE QUARTER ENDED SEPTEMBER 30, 2004:          NET        COMMON     PER SHARE
                                                          EARNINGS      SHARES       AMOUNT
                                                         -----------  -----------  -----------
<S>                                                      <C>          <C>          <C>

          Basic earnings per share                       $   202,792    1,242,515  $      .16
          Effect of stock options and warrants                     -      104,730        (.01)
                                                         -----------  -----------  -----------
          Diluted earnings per share                     $   202,792    1,347,245  $      .15
                                                         ===========  ===========  ===========


          FOR THE QUARTER ENDED SEPTEMBER 30, 2003:          NET        COMMON     PER SHARE
                                                          EARNINGS      SHARES       AMOUNT
                                                         -----------  -----------  -----------

          Basic earnings per share                       $   125,963      812,515  $      .16
          Effect of stock options and warrants                     -       85,347        (.02)
                                                         -----------  -----------  -----------
          Diluted earnings per share                     $   125,963      897,862  $      .14
                                                         ===========  ===========  ===========


          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004:      NET        COMMON     PER SHARE
                                                          EARNINGS      SHARES       AMOUNT
                                                         -----------  -----------  -----------

          Basic earnings per share                       $   316,008    1,141,392  $      .28
          Effect of stock options and warrants                     -       96,217        (.02)
                                                         -----------  -----------  -----------
          Diluted earnings per share                     $   316,008    1,237,609  $      .26
                                                         ===========  ===========  ===========


          FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003:      NET        COMMON     PER SHARE
                                                          EARNINGS      SHARES       AMOUNT
                                                         -----------  -----------  -----------

          Basic earnings per share                       $   299,568      812,515  $      .37
          Effect of stock options and warrants                     -       71,495        (.03)
                                                         -----------  -----------  -----------
          Diluted earnings per share                     $   299,568      884,010  $      .34
                                                         ===========  ===========  ===========
</TABLE>


                                        8
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 4.   STOCK-BASED COMPENSATION

          The  Company  sponsors  stock-based  compensation  plans.  The Company
          accounts  for  these  plans  under  the  recognition  and  measurement
          principles  of  APB  Opinion  No.  25, "Accounting for Stock Issued to
          Employees",  and  related  interpretations.  No  stock-based  employee
          compensation cost is reflected in net earnings, as all options granted
          under  those  plans had an exercise price equal to the market value of
          the  underlying common stock on the date of grant. The following table
          illustrates  the  effect on net earnings and earnings per share if the
          Company had applied the fair value recognition provisions of Statement
          of  Financial  Accounting  Standards ("SFAS") No. 123, "Accounting for
          Stock-Based  Compensation",  to  stock-based employee compensation for
          the  three  and  nine  months  ended  September  30,  2004  and  2003.

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED
                                                         SEPTEMBER
                                                  ------------------------
                                                     2004        30,
                                                  -----------  -----------
<S>                                               <C>          <C>

Net earnings as reported                          $  202,792   $  125,963
Deduct:  Total stock-based employee compensation
  expense determined under fair-value based
  method for all awards, net of tax                   (7,111)      (7,111)
                                                  -----------  -----------
Pro forma net earnings                            $  195,681   $  118,852
                                                  ===========  ===========
Basic earnings per share:
  As reported                                     $      .16   $      .16
                                                  ===========  ===========
  Pro forma                                       $      .16   $      .15
                                                  ===========  ===========
Diluted earnings per share:
  As reported                                     $      .15   $      .14
                                                  ===========  ===========
  Pro forma                                       $      .15   $      .13
                                                  ===========  ===========
</TABLE>


                                        9
<PAGE>
<TABLE>
<CAPTION>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 4.   STOCK-BASED COMPENSATION (CONTINUED)


                                                     NINE MONTHS ENDED
                                                       SEPTEMBER 30,
                                                  ------------------------
                                                     2004        2003
                                                  -----------  -----------
<S>                                               <C>          <C>

Net earnings as reported                          $  316,008   $  299,568
Deduct:  Total stock-based employee compensation
  expense determined under fair-value based
  method for all awards, net of tax                  (21,333)     (15,904)
                                                  -----------  -----------
Pro forma net earnings                            $  294,675   $  283,664
                                                  ===========  ===========
Basic earnings per share:
  As reported                                     $      .28   $      .37
                                                  ===========  ===========
  Pro forma                                       $      .26   $      .35
                                                  ===========  ===========
Diluted earnings per share:
  As reported                                     $      .26   $      .34
                                                  ===========  ===========
  Pro forma                                       $      .24   $      .32
                                                  ===========  ===========
</TABLE>


                                       10
<PAGE>

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

FORWARD LOOKING STATEMENTS

The  following  is  a  discussion of our financial condition as of September 30,
2004  compared  to December 31, 2003 and our results of operations for the three
and  nine  months  ended September 30, 2004 compared to the three and nine month
periods  ended September 30, 2003.  These comments should be read in conjunction
with  our consolidated financial statements and accompanying footnotes appearing
in  this report.  This report contains "forward-looking statements" relating to,
without  limitation,  future  economic  performance,  plans  and  objectives  of
management for future operations, and projections of revenue and other financial
items  that  are  based on the beliefs of our management, as well as assumptions
made  by  and  information  currently  available  to  our management.  The words
"expect",  "estimate",  "anticipate",  and  "believe",  as  well  as  similar
expressions,  are  intended  to identify forward-looking statements.  Our actual
results  may differ materially from the results discussed in the forward-looking
statements,  and  our  operating  performance each quarter is subject to various
risks and uncertainties.  Factors that could cause actual results to differ from
those  discussed  in the forward-looking statements include, but are not limited
to:

1.   the  strength  of the U.S. economy in general and the strength of the local
     economies  in  which  operations  are  conducted;
2.   the effects of and changes in trade, monetary and fiscal policies and laws,
     including  interest  rate policies of the Board of Governors of the Federal
     Reserve  system;
3.   inflation,  interest  rate,  market  and  monetary  fluctuations;
4.   the  timely  development of and acceptance of new products and services and
     perceived  overall  value  of  these  products  and  services  by  users;
5.   changes  in  consumer  spending,  borrowing  and  saving  habits;
6.   technological  changes;
7.   acquisitions;
8.   the  ability  to  increase  market  share  and  control  expenses;
9.   the  effect  of  changes  in  laws  and  regulations  (including  laws  and
     regulations concerning taxes, banking, securities and insurance) with which
     the  Company  and  its  subsidiary  must  comply;
10.  the  effect  of  changes  in  accounting  policies and practices, as may be
     adopted  by  the  regulatory  agencies  as well as the Financial Accounting
     Standards  Board;
11.  changes  in  the  Company's  organization,  compensation and benefit plans;
12.  the costs and effects of litigation and of unexpected or adverse outcome in
     such  litigation;  and
13.  the  Company's  success  at  managing  the risks involved in the foregoing.

Forward-looking statements speak only as of the date on which they are made.  We
undertake  no  obligation  to  update  any  forward-looking statement to reflect
events or circumstances after the date on which the statement is made to reflect
the  occurrence  of  unanticipated  events.


                                       11
<PAGE>
RESULTS OF OPERATIONS

NET INTEREST INCOME

For  the  nine  months  ended  September  30,  2004, net interest income totaled
$3,418,000  as  compared  to  $2,440,000  for the same period in 2003.  Interest
income  from  loans,  including fees increased $831,000 or 34% to $3,272,000 for
the  nine  months ended September 30, 2004.  The increase in net interest income
is  due  to  the overall growth in the volume of interest earning assets, and an
increase  in  our  net  interest  margin.  The  net  interest margin realized on
earning  assets and the interest rate spread were 3.83% and 3.61%, respectively,
for the nine months ended September 30, 2004.  The net interest margin was 3.50%
and  the  net  interest spread was 3.28% for the nine months ended September 30,
2003.

For  the quarter ended September 30, 2004, interest income totaled $1,632,000 as
compared  to $1,259,000 for the same period in 2003.  Interest expense increased
to  $440,000 for the quarter ended September 30, 2003 from $392,000 for the same
period  in  2003.  The  increase  in  net  interest income is due to the overall
growth  in  interest  earning assets.  For the quarter ended September 30, 2004,
the  net  interest margin was 3.78% and the interest rate spread was 3.53%.  The
net  interest  margin  was  3.29%  and the net interest spread was 3.04% for the
quarter  ended  September  30,  2003.

INTEREST RATE SENSITIVITY AND ASSET LIABILITY MANAGEMENT

Interest  rate sensitivity measures the timing and magnitude of the repricing of
assets  compared  with  the repricing of liabilities and is an important part of
asset/liability  management  of  a  financial  institution.  The  objective  of
interest  rate  sensitivity  management  is  to  generate  stable  growth in net
interest  income,  and  to  control  the  risks  associated  with  interest rate
movements.  Management  constantly  reviews  interest rate risk exposure and the
expected  interest  rate  environment  so  that  adjustments  in  interest  rate
sensitivity  can be made timely.  Since the assets and liabilities of a bank are
primarily  monetary  in  nature  (payable  in  fixed, determinable amounts), the
performance  of  a  bank  is  affected more by changes in interest rates than by
inflation.  Interest  rates  generally  increase  as  the  rate  of  inflation
increases,  but  the  magnitude  of the change in rates may not be proportional.

Net  interest  income  is  the  primary  component  of  net income for financial
institutions.  Net  interest  income  is affected by the timing and magnitude of
repricing of assets and liabilities as well as the mix of interest sensitive and
noninterest  sensitive assets and liabilities.  "Gap" is a static measurement of
the difference between the contractual maturities or repricing dates of interest
sensitive  assets and interest sensitive liabilities within the following twelve
months.  Gap  is  an  attempt to predict the behavior of the Bank's net interest
income  in  general  terms  during  periods  of  movement in interest rates.  In
general,  if  the Bank is asset sensitive, more of its interest sensitive assets
are  expected  to  reprice  within  twelve  months  than  its interest sensitive
liabilities over the same period.  In a rising interest rate environment, assets
repricing  more  quickly  is  expected  to  enhance  net  interest  income.
Alternatively,  decreasing interest rates would be expected to have the opposite
effect  on  net interest income since assets would theoretically be repricing at
lower interest rates more quickly than interest sensitive liabilities.  Although
it  can  be  used as a general predictor, Gap as a predictor of movements in net
interest  income  has limitations due to the static nature of its definition and
due  to  its  inherent  assumption  that all assets will reprice immediately and
fully at the contractually designated time.  At September 30, 2004, the Bank, as
measured  by  Gap,  is  in  an  asset  sensitive  position.


                                       12
<PAGE>
The  Bank  also measures the actual effects that repricing opportunities have on
earnings  through  simulation  modeling,  referred  to as earnings at risk.  For
short-term  interest rate risk, the Bank's model simulates the impact of balance
sheet  strategies  on  net interest income, pre-tax income, and net income.  The
model  includes  interest  rate  ramps  to test the impact of rising and falling
interest  rates  on projected earnings.  Rates are ramped over a one-year period
and  include  a level rate scenario as the benchmark with rising and falling 200
basis  point scenarios for comparison.  The Bank determines the assumptions that
are  used  in  the  model.

In  addition to measuring the effect changes in rates will have on earnings, the
Bank  also measures the effect of interest rate changes on the economic value of
the Bank.  Economic Value of Equity is measured by calculating the present value
of  future cash flows for financial instruments on the balance sheet.  The model
utilizes  rate  shocks of rising and falling 200 basis points to compare against
the  level  benchmark  for best and worst case scenarios.  All rates are shocked
instantaneously  for  the  200  basis  point  movements.  The  purpose  of  this
measurement  is  to determine the long-term effect interest rate changes have on
the  economic  value  of  the  balance  sheet.

For  more  information  on  asset-liability  management,  see the Company's most
recent  annual  report on Form 10-KSB, as filed with the Securities and Exchange
Commission.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

The provision for loan losses is a critical accounting policy that is subject to
the  judgments  and  estimates  of  the  Bank.  The  provision  for  loan losses
represents  the  charge  to  operating  earnings  that  management  believes  is
necessary  to  maintain  the  allowance  for possible loan losses at an adequate
level.  The  provision charged to expense was $285,000 for the nine months ended
September  30,  2004 as compared to $129,000 for the nine months ended September
30, 2003 and was $26,000 for the quarter ended September 30, 2004 as compared to
$34,000  for  the  quarter  ended  September  30,  2003.  Net loans increased by
approximately  $21,021,000  during  the  nine months ended September 30, 2004 as
compared  to  $7,684,000  during  the nine months ended September 30, 2003.  The
allowance  for  loan  losses  was  1.36% of gross loans at September 30, 2004 as
compared  to  1.41%  of  gross  loans  at  September  30, 2003.  There are risks
inherent in making all loans, including risks with respect to the period of time
over  which  loans  may  be repaid, risks resulting from changes in economic and
industry  conditions,  risks inherent in dealing with individual borrowers, and,
in  the  case of a collateralized loan, risks resulting from uncertainties about
the  future value of the collateral.  We anticipate maintaining an allowance for
loan  losses  based on, among other things, historical experience, an evaluation
of  economic conditions, and regular reviews of delinquencies and loan portfolio
quality.  We  believe  that the allowance for loan losses is adequate.  However,
our  judgment  about  the  adequacy  of  the allowance is based upon a number of
assumptions  about  future  events, which we believe to be reasonable, but which
may  not prove to be accurate.  Thus, there is a risk that charge-offs in future
periods  could  exceed  the  allowance  for  loan  losses  or  that  substantial
additional  increases  in  the  allowance  for  loan  losses  could be required.
Additions to the allowance for loan losses would result in a decrease of our net
earnings  and,  possibly,  our  capital.

OTHER INCOME

Other  income  for  the nine months ended September 30, 2004 totaled $732,000 as
compared to $646,000 for the nine months ended September 30, 2003.  The increase
in  other  income  was  primarily due to increases in service charges on deposit
accounts during 2004 as compared to the same period in 2003.  Service charges on
deposit  accounts  increased  by $65,000 for the nine months ended September 30,
2004  as  compared  to  the  same  period  in  2003.


                                       13
<PAGE>
Other  income  for  the  quarter  ended  September  30, 2004 totaled $245,000 as
compared  to  $202,000  for the quarter ended September 30, 2003.  This increase
was  due  primarily  to  an  increase  in service charges on deposit accounts of
$17,000 for the quarter ending September 30, 2004 as compared to the same period
in  2003.

OTHER EXPENSES

Total other expenses for the nine months ended September 30, 2004 was $3,425,000
as compared to $2,530,000 for the same period in 2003 and was $1,149,000 for the
quarter  ended  September  30,  2004  compared to $871,000 for the quarter ended
September  30,  2003.  Salaries  and  benefits,  the  largest component of other
expense,  totaled  $1,737,000  for  the  nine  months  ended September 30, 2004,
compared  to  $1,365,000 for the same period during 2003.  Salaries and benefits
totaled  $558,000  for the quarter ended September 30, 2004 compared to $456,000
for  the  quarter  ended  September  30,  2003.  Other  operating  expenses were
$1,299,000  for the nine months ended September 30, 2004 as compared to $911,000
for  the  nine months ended September 30, 2003.  Other operating expense totaled
$453,000  for  the quarter ended September 30, 2004 compared to $330,000 for the
quarter ended September 30, 2003.  The increases in other expenses for the three
and  nine  month  periods  ended  September  30,  2004  are due primarily to the
operation  and staffing of a new branch facility that opened in January 2004, as
well  as  the  continued  growth  of  the  Bank.

INCOME TAXES

Income  tax  expense  for  the nine months ended September 30, 2004 and 2003 was
$124,000  and $128,000, respectively.  Income tax expense for the quarters ended
September  30,  2004  and  2003  was  $60,000  and  $37,000,  respectively.  The
effective  tax rate was 28% and 30% for the nine months ended September 30, 2004
and  2003,  respectively,  and  23% for each of the quarters ended September 30,
2004  and  2003.

NET EARNINGS

The  combination  of  the above factors resulted in net earnings of $316,000 for
the  nine  months ended September 30, 2004, as compared to $300,000 for the nine
months  ended  September  30,  2003.  Basic earnings per share were $.28 for the
nine  months  ended  September  30, 2004 compared to $.26 for the same period in
2003.  Net  earnings  were  $203,000  for  the  quarter ended September 30, 2004
compared to $126,000 for the same period in 2003.  Basic earnings per share were
$.16  for  the  quarter  ended  September 30, 2004 compared to $.11 for the same
period  in  2003.

Diluted  earnings  per  share were $.26 the nine months ended September 30, 2004
compared to diluted earnings per share of $.24 for the same period in 2003.  The
dilutive  effect  of the Company's outstanding options and warrants was $.02 per
share during each of the nine months ended September 30, 2004 and 2003.  Diluted
earnings  per  share were $.15 for the quarter ended September 30, 2004 compared
to  $.10  for  the quarter ended September 30, 2003.  The dilutive effect of the
Company's outstanding options and warrants was $.01 per share during each of the
quarters  ended  September  30,  2004  and  2003.


                                       14
<PAGE>
ASSETS AND LIABILITIES

During the first nine months of 2004, total assets increased $32,398,000 or 27%,
when  compared  to December 31, 2003.  The most significant growth in assets was
federal  funds  sold and net loans, which increased $14,688,000 and $21,021,000,
respectively,  during  the first nine months of 2004.  The increases were offset
by  a decrease in investment securities available-for-sale of $4,548,000.  Total
deposits  increased  $32,634,000  or  34%  from  the December 31, 2003 amount of
$94,636,000  and comprised the majority of the growth in total liabilities.  The
growth  in  deposits  was  offset  by  a  decrease in federal funds purchased of
$5,864,000  and  other  borrowings  of  $1,000,000.

INVESTMENT SECURITIES

Investment  securities  available-for-sale decreased $4,548,000 from $48,096,000
at  December 31, 2003 to $43,548,000 at September 30, 2004 as the Bank continues
to invest more of its funds in higher yielding assets such as loans.  All of the
Bank's marketable investment securities were designated as available-for-sale at
September  30,  2004.

PREMISES AND EQUIPMENT

Premises and equipment, net of depreciation, totaled $5,203,000 at September 30,
2004.  The  increase of $294,000 from the December 31, 2003 amount of $4,909,000
was  due  to  additions  of  $524,000,  net of depreciation expense of $230,000.

LOANS

Gross  loans  totaled  $78,878,000  at  September  30,  2004,  an  increase  of
$21,293,000  or  37% since December 31, 2003.  The largest increase in loans was
in  commercial  and  industrial  loans,  which  increased  $9,915,000  or 33% to
$39,932,000  at  September 30, 2004.  Balances within the major loans receivable
categories  as  of  September  30,  2004  and  December 31, 2003 are as follows:

<TABLE>
<CAPTION>
                                      SEPTEMBER 30,   DECEMBER 31,
                                           2004           2003
                                      --------------  --------------
<S>                                   <C>             <C>

          Real estate - construction  $   25,687,540  $   16,154,111
          Real estate - mortgage          10,316,319       8,423,916
          Commercial and industrial       39,932,138      30,017,333
          Consumer and other               2,941,933       2,989,302
                                      --------------  --------------
                                      $   78,877,930  $   57,584,662
                                      ==============  ==============
</TABLE>

RISK ELEMENTS IN THE LOAN PORTFOLIO

The following is a summary of risk elements in the loan portfolio:

<TABLE>
<CAPTION>
                                                     SEPTEMBER 30,   DECEMBER 31,
                                                          2004           2003
                                                     --------------  --------------
<S>                                                  <C>             <C>

          Loans:  Nonaccrual loans                   $       18,000  $            -
          Accruing loans more than 90 days past due  $            -  $            -
</TABLE>


                                       15
<PAGE>
Activity in the allowance for loan losses for the period from January 1, 2004 to
September  30,  2004  is  as  follows:

<TABLE>
<CAPTION>
<S>                                                             <C>
          Balance, January 1,                                     $802,065
          Provision for loan losses for the period                  284,949
          Net loans (charged off) recovered for the period          (12,352)
                                                                ------------
          Balance, end of period                                $ 1,074,662
                                                                ============
          Gross loans outstanding, end of period                $78,877,930
                                                                ============
          Allowance for loan losses to gross loans outstanding         1.36%
                                                                ============
</TABLE>

DEPOSITS

At  September  30,  2004  total  deposits  increased by $32,634,000, or 34% from
December  31, 2003.  Noninterest-bearing demand deposits increased $2,679,000 or
20%  and  interest-bearing  deposits  increased  $29,955,000  or  37%.

Balances  within  the  major  deposit  categories  as  of September 30, 2004 and
December  31,  2003  are  as  follows:

<TABLE>
<CAPTION>
                                                     SEPTEMBER 30,   DECEMBER 31,
                                                          2004           2003
                                                     --------------  --------------
<S>                                                  <C>             <C>

          Noninterest-bearing demand deposits        $   16,021,399  $   13,342,450
          Interest-bearing demand deposits               65,687,369      52,394,310
          Savings deposits                                3,710,761       2,438,973
          Certificates of deposit $100,000 and over      17,523,001       6,351,371
          Other time deposits                            24,327,252      20,108,509
                                                     --------------  --------------
                                                     $  127,269,782  $   94,635,613
                                                     ==============  ==============
</TABLE>


LIQUIDITY

The  Company's  liquidity  needs  include  the  funding  of  loans, purchases of
operating  assets,  and repayment of liabilities.  Liquidity needs are met by us
through  scheduled  maturities  of  loans  and investments on the asset side and
through  pricing  policies  on  the  liability side for interest-bearing deposit
accounts.  The  level  of  liquidity  is  measured by the loan-to-total borrowed
funds  ratio,  which  was  at  57% at September 30, 2004 and 53% at December 31,
2003.

Management is not aware of any significant concentrations of loans to classes of
borrowers or industries that would be affected similarly by economic conditions.
Although  the Bank's loan portfolio is diversified, a substantial portion of its
borrowers'  ability  to  honor  the  terms  of  their  loans is dependent on the
economic  conditions  in  Cherokee  County  and  surrounding  areas.

We  have  also  obtained  lines  of credit available with correspondent banks to
purchase  federal  funds.  At September 30, 2004, unused lines of credit totaled
$14,400,000.


                                       16
<PAGE>
OFF-BALANCE SHEET RISK

The  Company  is a party to financial instruments with off-balance-sheet risk in
the  normal  course  of  business  to meet the financing needs of its customers.
These  financial instruments consist of commitments to extend credit and standby
letters  of  credit.  Commitments  to  extend credit are agreements to lend to a
customer  as  long  as there is no violation of any condition established in the
contract.  Standby  letters of credit are commitments which generally have fixed
expiration  dates or other termination clauses and may require payment of a fee.
A  commitment involves, to varying degrees, elements of credit and interest rate
risk  in  excess  of the amount recognized in the balance sheets.  The Company's
exposure  to  credit  loss in the event of non-performance by the other party to
the  instrument  is  represented  by  the  contractual  notional  amount  of the
instrument.

Since  certain  commitments are expected to expire without being drawn upon, the
total  commitment amounts do not necessarily represent future cash requirements.
The Company uses the same credit policies in making commitments to extend credit
as  it  does  for  on-balance-sheet  instruments.

Collateral held for commitments to extend credit varies but may include accounts
receivable,  inventory,  property,  plant,  equipment,  and  income-producing
commercial  properties.

The  following  table  summarizes  the  Company's  off-balance-sheet  financial
instruments  whose  contract  amounts  represent credit risk as of September 30,
2004:

     Commitments to extend credit                        $     24,987,000
     Standby letters of credit                           $        443,000

CAPITAL RESOURCES

Total  shareholders'  equity  increased  from $7,644,000 at December 31, 2003 to
$13,860,000  at  September 30, 2004.  This increase of $6,215,000 was due to net
earnings  for the period of $316,000 and proceeds from our common stock offering
of  $6,020,000,  net  of  stock  issue  costs  of $41,000, partially offset by a
decrease  of  $79,000 in the fair value of securities available-for-sale, net of
tax.  The  Company  closed  its intrastate offering of common stock on March 23,
2004  having sold 430,000 shares for total proceeds of $6,020,000.  The proceeds
of the offering will primarily be used to provide additional working capital for
the  Bank.

Bank  holding companies, such as us, and their banking subsidiaries are required
by  banking regulators to meet certain minimum levels of capital adequacy, which
are  expressed  in the form of certain ratios.  Capital is separated into Tier 1
capital  (essentially  common  shareholders'  equity less intangible assets) and
Tier  2  capital  (essentially the allowance for loan losses limited to 1.25% of
risk-weighted  assets).  The  first two ratios, which are based on the degree of
credit  risk  in  our  assets, provide the weighting of assets based on assigned
risk  factors  and  include off-balance sheet items such as loan commitments and
stand-by letters of credit.  The ratio of Tier 1 capital to risk-weighted assets
must be at least 4.0% and the ratio of total capital (Tier 1 capital plus Tier 2
capital)  to  risk-weighted  assets must be at least 8.0%.  The capital leverage
ratio  supplements  the  risk-based  capital  guidelines.

Banks  and  bank  holding  companies are required to maintain a minimum ratio of
Tier  1  capital  to  adjusted  quarterly  average  total  assets  of  3.0%.


                                       17
<PAGE>
The  following table summarizes the Bank's capital ratios at September 30, 2004:

     Tier 1 capital (to risk-weighted assets)                    12.67%
     Total capital (to risk-weighted assets)                     13.74%
     Tier 1 capital (to total average assets)                     9.35%

As  of  September  30,  2004,  the  Company  had  approximately  $1,509,000  in
unencumbered  cash  that  could  be  contributed  to the Bank if necessary.  The
Bank's  capital  ratios listed above would improve if these funds were injected.

REGULATORY MATTERS

From  time  to  time, various bills are introduced in the United States Congress
with  respect  to  the  regulation  of financial institutions.  Certain of these
proposals,  if  adopted,  could significantly change the regulation of banks and
the  financial  services  industry.  We  cannot  predict  whether  any  of these
proposals  will  be adopted or, if adopted, how these proposals would affect us.
Information  regarding  laws  and  regulations  that  may  materially impact the
Company  and  the  Bank  are  incorporated herein by reference to the subsection
entitled  "Supervision  and  Regulation"  of the Company's annual report on Form
10-KSB  for  the  year  ended  December  31,  2003.

RECENT ACCOUNTING PRONOUNCEMENTS

Accounting  standards  that  have  been  issued  or  proposed  by  the Financial
Accounting  Standards Board that do not require adoption until a future date are
not  expected to have a material impact on the consolidated financial statements
upon  adoption.

ITEM  3.     CONTROLS AND PROCEDURES

At  September  30,  2004, an evaluation was performed, 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 nine months ended September 30, 2004
that  have  materially  affected, or are reasonably likely to materially affect,
the  Company's  internal  control  over  financial  reporting.


                                       18
<PAGE>
                           PART II - OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

          There  are no material, pending legal proceedings to which the Company
          or  any  of  its  subsidiaries  is  a  party  or of which any of their
          property  is  the  subject.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

          (a)  Not applicable.
          (b)  Not applicable.
          (c)  Not applicable.
          (d)  Not applicable.
          (e)  Not applicable.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          Not applicable.

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

          None.

ITEM 5.   OTHER INFORMATION

          None.

ITEM 6.   EXHIBITS

               31.1 -  Certification of Chief Executive Officer Pursuant to Rule
                       13a-14  under  the  Securities  Exchange  Act  of
                       1934, as amended
               31.2 -  Certification of Chief Financial Officer Pursuant to Rule
                       13a-14  under  the  Securities  Exchange  Act  of
                       1934, as amended
               32.1 -  Certification  pursuant  to  18  U.S.C.  Section 1350, as
                       adopted  pursuant  to  Section  906 of the Sarbanes-Oxley
                       Act of 2002


                                       19
<PAGE>
                                   SIGNATURES



          Pursuant to the requirements 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.


                                       CHEROKEE BANKING COMPANY
                                           (Registrant)



DATE:  November 12, 2004               BY: /s/DENNIS W. BURNETTE
       -----------------                   -------------------------------------
                                           Dennis W. Burnette
                                           President, Chief Executive Officer
                                           and Director


DATE:  November 12, 2004               BY: /s/A.R. ROBERTS, III
       -----------------                   -------------------------------------
                                           A.R. Roberts, III
                                           Chief Financial Officer,
                                           Chief Operations Officer and Director


                                       20
<PAGE>