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      MARCH 31, 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 May 12, 2004.

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

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


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

                                      INDEX
                                      -----

                                                                        PAGE NO.
                                                                        --------
<S>                                                                     <C>

PART I.     FINANCIAL INFORMATION

   ITEM 1 - FINANCIAL STATEMENTS

            CONSOLIDATED BALANCE SHEET (UNAUDITED) AT MARCH 31, 2004 . . . .   4

            CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) FOR THE
               THREE MONTHS ENDED MARCH 31, 2004 AND 2003. . . . . . . . . .   5

            CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003. . . . . .   6

            CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE
               THREE MONTHS ENDED MARCH 31, 2004 AND 2003. . . . . . . . . .   7

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) . . . . .   8

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

   ITEM 3.- CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . .  17
</TABLE>


<PAGE>
                            CHEROKEE BANKING COMPANY


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

<TABLE>
<CAPTION>
                                INDEX (CONTINUED)
                                -----------------

                                                                        PAGE NO.
                                                                        --------
PART II.    OTHER INFORMATION
<S>                                                                     <C>
   ITEM 1 - LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . .       18

   ITEM 2 - CHANGES IN SECURITIES . . . . . . . . . . . . . . . . . . .       18

   ITEM 3 - DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . .       18

   ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . .       18

   ITEM 5 - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . .       18

   ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K. . . . . . . . . . . . . .       18

   SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       19
</TABLE>


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

ITEM 1.   FINANCIAL STATEMENTS

                            CHEROKEE BANKING COMPANY
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2004
                                   (UNAUDITED)

                            Assets
                            ------


<S>                                                              <C>
Cash and due from banks                                          $  4,607,897
Federal funds sold                                                 13,781,000
                                                                 ------------

          Cash and cash equivalents                                18,388,897

Interest-bearing deposits                                             100,000
Investment securities available-for-sale                           50,636,305
Other investments                                                     675,350
Loans, net                                                         63,256,222
Premises and equipment, net                                         5,262,992
Accrued interest receivable and other assets                        2,927,289
                                                                 ------------
                                                                 $141,247,055
                                                                 ============

             Liabilities and Stockholders' Equity
             ------------------------------------

Deposits:
    Demand                                                       $ 16,628,698
    Money market and NOW accounts                                  71,413,767
    Savings                                                         3,214,025
    Time                                                           20,770,197
    Time over $100,000                                              6,362,650
                                                                 ------------
          Total deposits                                          118,389,337

Advances from the Federal Home Loan Bank                            8,500,000
Accrued interest payable and other liabilities                        401,792
                                                                 ------------

          Total liabilities                                       127,291,129
                                                                 ------------
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                    13,737,886
    Retained earnings                                                 191,284
    Accumulated other comprehensive income                             26,756
                                                                 ------------

          Total stockholders' equity                               13,955,926
                                                                 ------------
                                                                 $141,247,055
                                                                 ============
<FN>

See  accompanying  notes  to  unaudited  consolidated  financial  statements.
</TABLE>


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

                          CONSOLIDATED STATEMENTS OF INCOME
                  FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                     (UNAUDITED)


                                                                  2004       2003
                                                               ----------  ----------
<S>                                                            <C>         <C>
Interest income:
    Interest and fees on loans                                 $  977,897  $  784,535
    Interest and dividends on investment securities               452,053     363,026
    Interest on federal funds sold                                 12,512       8,943
    Interest on interest-bearing deposits                             628       2,730
                                                               ----------  ----------
          Total interest income                                 1,443,090   1,159,234
                                                               ----------  ----------

Interest expense:
    Interest on money market and NOW accounts                     105,995     115,484
    Interest on savings and time deposits                         205,079     232,066
    Interest on other borrowings                                   78,628      69,916
                                                               ----------  ----------
          Total interest expense                                  389,702     417,466
                                                               ----------  ----------

          Net interest income                                   1,053,388     741,768

Provision for loan losses                                         106,590      50,801
                                                               ----------  ----------
          Net interest income after provision for loan losses     946,798     690,967
                                                               ----------  ----------

Other income:
    Service charges on deposit accounts                           112,405      99,559
    Mortgage origination fees                                      66,604      56,327
    Investment security gains, net                                  4,268      35,197
    Other income                                                   52,595      38,003
                                                               ----------  ----------
          Total other income                                      235,872     229,086
                                                               ----------  ----------

Other expenses:
    Salaries and employee benefits                                594,982     455,410
    Occupancy and equipment                                       123,566      84,093
    Other operating                                               408,688     294,037
                                                               ----------  ----------
          Total other expenses                                  1,127,236     833,540
                                                               ----------  ----------

          Earnings before income taxes                             55,434      86,513

Income tax expense                                                 19,831      31,361
                                                               ----------  ----------

          Net earnings                                         $   35,603  $   55,152
                                                               ==========  ==========

Basic earnings per share                                       $     0.03  $     0.07
                                                               ==========  ==========

Diluted earnings per share                                     $     0.03  $     0.06
                                                               ==========  ==========
<FN>

See accompanying notes to unaudited consolidated financial statements.
</TABLE>


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

                         CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                       FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                           (UNAUDITED)


                                                                               2004      2003
                                                                            ---------  ---------
<S>                                                                         <C>        <C>
Net earnings                                                                $ 35,603   $ 55,152
                                                                            ---------  ---------
Other comprehensive income, net of tax:
    Unrealized holding gains on investment securities
        available-for-sale, net of income taxes of $178,093 and $60,480      290,572    120,499
    Reclassification adjustment for gains on sale of investment securities
        available-for-sale, net of income taxes of $1,622 and $13,375         (2,646)   (21,822)
                                                                            ---------  ---------
          Total other comprehensive income                                   287,926     98,677
                                                                            ---------  ---------

          Comprehensive income                                              $323,529   $153,829
                                                                            =========  =========
<FN>

See accompanying notes to unaudited consolidated financial statements.
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>
                                    CHEROKEE BANKING COMPANY

                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                       FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
                                           (UNAUDITED)


                                                                          2004          2003
                                                                     -------------  ------------
<S>                                                                  <C>            <C>
Cash flows from operating activities:
    Net earnings                                                     $     35,603   $    55,152
    Adjustments to reconcile net eanrings to net
        cash provided by operating activities:
        Provision for loan losses                                         106,590        50,801
        Depreciation, amortization and accretion                           88,979        51,343
        Investment security gains, net                                     (4,268)      (35,197)
        Change in:
           Accrued interest receivable and other assets                   (95,211)      (51,989)
           Accrued interest payable and other liabilities                 101,682        24,578
                                                                     -------------  ------------

              Net cash provided by operating activities                   233,375        94,688
                                                                     -------------  ------------
Cash flows from investing activities:
    Proceeds from  calls and maturities of investment
        securities available-for-sale                                   2,830,809     3,402,835
    Proceeds from sales of investment securities available-for-sale     8,807,013     3,485,066
    Purchases of investment securities available-for-sale             (13,724,809)   (7,126,719)
    Net change in loans                                                (6,579,600)   (3,169,716)
    Purchase of premises and equipment                                   (427,805)      (27,020)
                                                                     -------------  ------------

          Net cash used in investing activities                        (9,094,392)   (3,435,554)
                                                                     -------------  ------------
Cash flows from financing activities:
    Net change in deposits                                             23,753,724     1,933,057
    Net change in federal funds purchased                              (5,864,000)            -
    Repayment of other borrowings                                      (1,000,000)            -
    Proceeds from issuance of common stock                              6,020,000             -
    Stock issuance costs                                                  (31,795)            -
                                                                     -------------  ------------

          Net cash provided by financing activities                    22,877,929     1,933,057
                                                                     -------------  ------------

Net change in cash and cash equivalents                                14,016,912    (1,407,809)

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

Cash and cash equivalents at end of period                           $ 18,388,897   $10,175,832
                                                                     =============  ============
<FN>

See accompanying notes to unaudited consolidated financial statements.
</TABLE>


                                        7
<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 March 31,
          2004  and  for  the  interim periods ended March 31, 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
          Form  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  for  loan  losses.


                                      -8-
<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 quarters ended March 31, 2004 and 2003 presented in
          the  financial  statements  were  calculated  as  follows:

                                                   NET     COMMON    PER SHARE
          FOR THE QUARTER ENDED MARCH 31, 2004:  INCOME    SHARES      AMOUNT
                                                 -------  ---------  ----------

          Basic earnings per share               $35,603  1,166,811  $      .03
          Effect of stock options and warrants         -     89,845           -
                                                 -------  ---------  ----------
          Diluted earnings per share             $35,603  1,256,656  $      .03
                                                 =======  =========  ==========

                                                   NET    COMMON    PER SHARE
          FOR THE QUARTER ENDED MARCH 31, 2003:  INCOME   SHARES     AMOUNT
                                                 -------  -------  -----------
          Basic earnings per share               $55,152  812,515  $      .07
          Effect of stock options and warrants         -   41,231        (.01)
                                                 -------  -------  -----------
          Diluted earnings per share             $55,152  853,746  $      .06
                                                 =======  =======  ===========

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  periods  ended  March  31,  2004  and  2003.


                                      -9-
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 4.   STOCK-BASED COMPENSATION (Continued)

<TABLE>
<CAPTION>
                                                        2004     2003
                                                       -------  -------
<S>                                                    <C>      <C>
     Net earnings as reported                          $35,603  $55,152
     Deduct:  Total stock-based employee compensation
        expense determined under fair-value based
        method for all awards, net of tax                7,111    4,396
                                                       -------  -------
     Pro forma net earnings                            $28,492  $50,756
                                                       =======  =======
     Basic earnings per share:

        As reported                                    $   .03  $   .07
                                                       =======  =======

        Pro forma                                      $   .02  $   .07
                                                       =======  =======
     Diluted earnings per share:

        As reported                                    $   .03  $   .06
                                                       =======  =======

        Pro forma                                      $   .02  $   .06
                                                       =======  =======
</TABLE>


                                      -10-
<PAGE>
                            CHEROKEE BANKING COMPANY


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 March
          31,  2004  compared to December 31, 2003 and our results of operations
          for the three months ended March 31, 2004 compared to the three months
          ended  March  31,  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  three  months  ended  March  31,  2004,  net  interest  income totaled
$1,053,000 as compared to $742,000 for the same period in 2003.  Interest income
from  loans,  including fees increased $193,000 or 25% to $978,000 for the three
months  ended March 31, 2004.  The increase in net interest income is due to the
continued overall growth in the volume of interest earning assets and a decrease
in the overall cost of funds. The net interest margin realized on earning assets
and  the  interest rate spread were 3.96% and 3.84%, respectively, for the three
months  ended  March  31, 2004.  The net interest margin and interest spread for
the  three  months  ended  March  31,  2003  were 3.57% and 3.32%, respectively.

For  the  quarter  ended  March  31, 2004, interest income totaled $1,443,000 as
compared  to $1,159,000 for the same period in 2003.  Interest expense decreased
from  $417,000  for  the  quarter  ended March 31, 2003 to $390,000 for the same
period  in  2004.

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 timely made.  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 the same.

Net  interest  income  is  the  primary  component of net earnings for financial
institutions.  Net  interest  income  is affected by the timing and magnitude of
repricing  of 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 March 31, 2004, the Bank, as measured by Gap,
is  in  an  asset  sensitive  position.

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.


                                      -12-
<PAGE>
INTEREST  RATE  SENSITIVITY  AND  ASSET  LIABILITY  MANAGEMENT,  CONTINUED

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  management.  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 $107,000 for the three months ended
March 31, 2004 as compared to $51,000 for the three months ended March 31, 2003.
The  total loan portfolio increased by approximately $6,580,000 during the three
months  ended  March  31, 2004 as compared to $3,088,000 during the three months
ended March 31, 2003.  The allowance for loan losses was 1.42% of gross loans at
March  31,  2004.  We  believe  that the allowance for loan losses is  adequate.
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.  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  in  our  net  earnings  and,  possibly,  our  capital.

OTHER  INCOME

Other  income  for  the  three  months  ended March 31, 2004 totaled $236,000 as
compared to $229,000 for the three months ended March 31, 2003.  The increase in
other income was primarily due to an increase in mortgage origination income and
service  charges on deposit accounts, partially offset by a decrease in gains on
sale  of  investment  securities  during  2004 as compared to the same period in
2003.

OTHER  EXPENSES

Total other expenses for the three months ended March 31, 2004 was $1,127,000 as
compared  to  $834,000  for the same period in 2003.  Salaries and benefits, the
largest component of other expenses, totaled $595,000 for the three months ended
March  31, 2004, compared to $455,000 for the same period a year ago. Salary and
benefits  expense increased due to the hiring of additional employees. Occupancy
expenses  were $124,000 for the three months ended March 31, 2004 as compared to
$84,000  for  the  three  months  ended  March 31, 2003. The increase is related
primarily  to  the  opening of a new banking facility in South Canton in January
2004.  Other  operating  expenses were $409,000 for the three months ended March
31,  2004  as  compared  to  $294,000 for the three months ended March 31, 2003.
These  increases  in other expenses are due to the continued growth of the Bank.


                                      -13-
<PAGE>
INCOME TAXES

The  income  tax  expense for the three months ended March 31, 2004 and 2003 was
$20,000 and $31,000, respectively.  The effective tax rate was 36% for the three
months  ended  March  31,  2004  and  2003.

NET EARNINGS

The combination of the above factors resulted in net earnings of $36,000 for the
three months ended March 31, 2004 compared to $55,000 for the three months ended
March  31,  2003.  Basic  earnings per share was $.03 for the three months ended
March  31,  2004  compared  to  $.07  for  the  same  period  in  2003.

Diluted  earnings  per share were $.03 for the three months ended March 31, 2004
compared  to diluted earnings per share of $.06 in the same period in 2003.  The
dilutive  effect  of the Company's outstanding options and warrants was $.01 per
share  during  the three months ended March 31, 2003.  The Company's options and
warrants  had  no  dilutive  effect  in  the  quarter  ended  March  31,  2004.

ASSETS AND LIABILITIES

During  the  first  three  months of 2004, total assets increased $23,303,000 or
20%,  when compared to December 31, 2003.  The most significant growth in assets
was  federal  funds  sold  and  net  loans,  which  increased  $13,781,000  and
$6,474,000, respectively, during the first three months of 2004.  Total deposits
increased  $23,754,000 or 25%, 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 increased $2,541,000 from $48,096,000
at  December  31,  2003 to $50,636,000 at March 31, 2004.  This increase was the
result  of  excess  deposits  being  invested  in securities.  All of the Bank's
marketable  investment securities were designated as available-for-sale at March
31,  2004.

PREMISES AND EQUIPMENT

Premises  and  equipment,  net  of depreciation, totaled $5,263,000 at March 31,
2004.  The  increase of $354,000 from the December 31, 2003 amount of $4,909,000
was  due  to  additions  of  $428,000,  net  of depreciation expense of $74,000.

LOANS

Gross  loans totaled $64,165,000 at March 31, 2004, an increase of $6,580,000 or
11%  since  December  31,  2003.  The  largest  increase  in  loans  was in real
estate-construction  loans,  which increased $4,446,000 or 28% to $20,601,000 at
March  31,  2004.  Balances  within  the major loans receivable categories as of
March  31,  2004  and  December  31,  2003  are  as  follows:

                                           March 31,   December 31,
                                             2004          2003
                                          -----------  -------------
      Real estate - construction          $20,600,513  $  16,154,111
      Real estate - mortgage                8,018,644      8,423,916
      Commercial and industrial            32,443,314     30,017,333
      Consumer and other                    3,102,406      2,989,302
                                          -----------  -------------
                                          $64,164,877  $  57,584,662
                                          ===========  =============


                                      -14-
<PAGE>
RISK ELEMENTS IN THE LOAN PORTFOLIO

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

                                                 March 31,   December 31,
                                                    2004         2003
                                                 ----------  -------------
      Loans:  Nonaccrual loans                   $   22,000  $           -
      Accruing loans more than 90 days past due  $        -  $           -

Activity in the allowance for loan losses for the period from January 1, 2004 to
March  31,  2004  is  as  follows:

      Balance, January 1,                                   $   802,065
      Provision for loan losses for the period                  106,590
      Net loans (charged off) recovered for the period                -
                                                            ------------
      Balance, end of period                                $   908,655
                                                            ============
      Gross loans outstanding, end of period                $64,164,877
                                                            ============
      Allowance for loan losses to gross loans outstanding         1.42%
                                                            ============

DEPOSITS

At March 31, 2004, total deposits increased by $23,754,000, or 25% from December
31,  2003.  Noninterest-bearing  demand deposits increased $3,286,000 or 25% and
interest-bearing  deposits  increased  $20,468,000 or 25% over December 31, 2003
totals.

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

                                                  March 31,    December 31,
                                                     2004          2003
                                                 ------------  -------------
      Noninterest-bearing demand deposits        $ 16,628,698  $  13,342,450
      Interest-bearing demand deposits             71,413,767     52,394,310
      Savings deposits                              3,214,025      2,438,973
      Certificates of deposit $100,000 and over     6,362,650      6,351,371
      Other time deposits                          20,770,197     20,108,509
                                                 ------------  -------------
                                                 $118,389,337  $  94,635,613
                                                 ============  =============

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 50% at March 31, 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.


                                      -15-
<PAGE>
LIQUIDITY, CONTINUED

We  have  also  obtained  lines  of credit available with correspondent banks to
purchase  federal  funds.  At  March  31,  2004,  unused lines of credit totaled
$8,840,000.

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 that 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 March 31, 2004:

     Commitments to extend credit         $     19,837,000
     Standby letters of credit            $        373,000


CAPITAL RESOURCES

Total  shareholders'  equity  increased  from $7,644,000 at December 31, 2003 to
$13,956,000  at  March  31,  2004.  The  increase  of  $6,312,000 was due to net
earnings for the period of $36,000, an increase of $288,000 in the fair value of
securities  available-for-sale,  net  of tax, and proceeds from our common stock
offering  of $6,020,000, net of stock issue costs of $32,000. 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.

On  October  21,  2003,  the  Company  awarded  a  10%  stock  dividend  to  its
shareholders  of  record  as  of  October 7, 2003.  73,857 shares were issued in
connection  with this stock dividend.  All share and per share amounts have been
restated  to  reflect this stock dividend as if it had occurred at the beginning
of  the  earliest  period  presented.


                                      -16-
<PAGE>
CAPITAL RESOURCES, CONTINUED

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%.

The following table summarizes the Bank's risk-based capital ratios at March 31,
2004:

     Tier 1 capital (to risk-weighted assets)             9.98%
     Total capital (to risk-weighted assets)             15.26%
     Tier 1 capital (to total average assets)            14.22%

As  of  March 31, 2004, the Company had approximately $1,530,000 in unencumbered
cash  that  could  be  contributed to the Bank if necessary.  The Bank's capital
ratios,  on  an  unconsolidated basis, 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  March  31, 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 three-months ended March 31, 2004
that  have  materially  affected, or are reasonably likely to materially affect,
the  Company's  internal  control  over  financial  reporting.


                                      -17-
<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.   CHANGES IN SECURITIES

          (a)  Not applicable.
          (b)  Not applicable.
          (c)  The  Company  closed  its  secondary  offering of common stock on
               March  23,  2004, having sold 430,000 shares at a per share price
               of  $14.00,  resulting in total gross proceeds of $6,020,000. The
               offering  was  exempt from registration under Section 3(a)(11) of
               the  Securities  Act  of  1933,  as amended, and was conducted in
               accordance  with  SEC Rule 147. The proceeds of the offering will
               primarily  be  used to provide additional working capital for the
               Bank.
          (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 AND REPORTS ON FORM 8-K

          (a)  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
          (b)  Reports  on  Form  8-K:

               None.


                                      -18-
<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:  May 12, 2004                BY:   /s/ Dennis W. Burnette
       ------------                    --------------------------------------
                                       Dennis W. Burnette
                                       President, Chief Executive Officer and
Director


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


                                      -19-
<PAGE>