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

                                       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, 2005.

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


<PAGE>
                            CHEROKEE BANKING COMPANY



================================================================================

<TABLE>
<CAPTION>
                                      INDEX
                                      -----

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

PART I.       FINANCIAL INFORMATION

    ITEM 1 - FINANCIAL STATEMENTS

             CONSOLIDATED BALANCE SHEET (UNAUDITED) AT MARCH 31, 2005 . . . . . . . . .  4

             CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) FOR THE
               THREE MONTHS ENDED MARCH 31, 2005 AND 2004 . . . . . . . . . . . . . . .  5

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 . . . . . . . . . . .  6

             CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE
               THREE MONTHS ENDED MARCH 31, 2005 AND 2004 . . . . . . . . . . . . . . .  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



================================================================================

                                INDEX (CONTINUED)
                                -----------------

<TABLE>
<CAPTION>
                                                                                  PAGE NO.
                                                                                  --------

PART II.     OTHER INFORMATION
<S>          <C>                                                                  <C>

    ITEM 1 - LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

    ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. . . . . . . . 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, 2005
                                   (UNAUDITED)

                                  Assets
                                  ------
<S>                                                            <C>
Cash and due from banks                                        $  3,835,135
Federal funds sold                                                1,509,000
                                                               -------------

    Cash and cash equivalents                                     5,344,135

Interest-bearing deposits at other financial institutions         1,114,716
Investment securities available-for-sale                         43,813,485
Restricted equity securities, at cost                             1,077,550
Loans, net                                                       92,333,033
Premises and equipment, net                                       5,104,614
Accrued interest receivable and other assets                      4,028,402
                                                               -------------

                                                               $152,815,935
                                                               =============

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

Deposits:
  Demand                                                       $ 16,271,857
  Money market and NOW accounts                                  61,104,990
  Savings                                                         6,042,514
  Time                                                           25,878,674
  Time over $100,000                                             20,256,190
                                                               -------------
    Total deposits                                              129,554,225

Advances from the Federal Home Loan Bank                          8,500,000
Accrued interest payable and other liabilities                      986,281
                                                               -------------

    Total liabilities                                           139,040,506
                                                               -------------

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                                                 919,614
  Accumulated other comprehensive loss                             (872,515)
                                                               -------------

    Total stockholders' equity                                   13,775,429
                                                               -------------

                                                               $152,815,935
                                                               =============
<FN>
See accompanying notes to unaudited consolidated financial statements.
</TABLE>


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

                        CONSOLIDATED STATEMENTS OF EARNINGS
                FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
                                    (UNAUDITED)


                                                              2005         2004
                                                           -----------  ----------
<S>                                                        <C>          <C>
Interest income:
  Interest and fees on loans                               $1,489,532   $  977,897
  Interest and dividends on investment securities             417,345      452,053
  Interest on federal funds sold                                9,576       12,512
  Interest on interest-bearing deposits
    at other financial institutions                             7,373          628
                                                           -----------  ----------
      Total interest income                                 1,923,826    1,443,090

Interest expense:
  Interest on money market and NOW accounts                   169,986      105,995
  Interest on savings and time deposits                       354,956      205,079
  Interest on other borrowings                                113,801       78,628
                                                           -----------  ----------
      Total interest expense                                  638,743      389,702

      Net interest income                                   1,285,083    1,053,388

Provision for loan losses                                      97,699      106,590
                                                           -----------  ----------
      Net interest income after provision for loan losses   1,187,384      946,798
                                                           -----------  ----------

Other income:
  Service charges on deposit accounts                         196,010      112,405
  Mortgage origination fees                                    59,255       66,604
  Investment security (losses) gains , net                    (12,996)       4,268
  Other income                                                 72,859       52,595
                                                           -----------  ----------
      Total other income                                      315,128      235,872
                                                           -----------  ----------

Other expenses:
  Salaries and employee benefits                              619,433      594,982
  Occupancy and equipment                                     121,225      123,566
  Other operating                                             459,718      408,688
                                                           -----------  ----------
      Total other expenses                                  1,200,376    1,127,236
                                                           -----------  ----------

      Earnings before income taxes                            302,136       55,434

Income tax expense                                             97,098       19,831
                                                           -----------  ----------

      Net earnings                                         $  205,038   $   35,603
                                                           ===========  ==========

Basic earnings per share                                   $     0.17   $     0.03
                                                           ===========  ==========

Diluted earnings per share                                 $     0.15   $     0.03
                                                           ===========  ==========
<FN>
See accompanying notes to unaudited consolidated financial statements.
</TABLE>


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

               CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
                 FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
                                    (UNAUDITED)


                                                                 2005       2004
                                                              ----------  ---------
<S>                                                           <C>         <C>

Net earnings                                                  $ 205,038   $ 35,603
                                                              ----------  ---------

Other comprehensive (loss) income, net of tax:
  Unrealized holding (losses) gains on investment securities
    available-for-sale, net of income taxes
    of ($276,334) and $178,093                                 (450,861)   290,572
  Reclassification adjustment for losses (gains) on sale of
    investment securities available-for-sale, net of
    income taxes of ($4,938) and $1,622                           8,058     (2,646)
                                                              ----------  ---------
      Total other comprehensive (loss) income                  (442,803)   287,926
                                                              ----------  ---------

      Comprehensive (loss) income                             $(237,765)  $323,529
                                                              ==========  =========
<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, 2005 AND 2004
                                          (UNAUDITED)

                                                                        2005          2004
                                                                   ------------  -------------
<S>                                                                <C>           <C>
Cash flows from operating activities:
Net earnings                                                         $205,038       $35,603
  Adjustments to reconcile net earnings to net
    cash provided by operating activities:
    Provision for loan losses                                           97,699        106,590
    Depreciation, amortization and accretion                            85,408         88,979
    Investment security losses (gains), net                             12,996         (4,268)
    Change in:
      Accrued interest receivable and other assets                    (134,331)       (95,211)
      Accrued interest payable and other liabilities                   142,266        101,682
                                                                   ------------  -------------

        Net cash provided by operating activities                      409,076        233,375
                                                                   ------------  -------------

Cash flows from investing activities:
  Proceeds from  calls and maturities of investment
    securities available-for-sale                                    1,452,840      2,830,809
  Proceeds from sales of investment securities available-for-sale    1,863,298      8,807,013
  Purchases of investment securities available-for-sale                      -    (13,724,809)
  Purchases of restricted equity securities                            (58,800)             -
  Net change in loans                                               (8,491,135)    (6,579,600)
  Purchase of premises and equipment                                   (22,228)      (427,805)
                                                                   ------------  -------------

        Net cash used in investing activities                       (5,256,025)    (9,094,392)
                                                                   ------------  -------------

Cash flows from financing activities:
  Net change in deposits                                            14,260,077     23,753,724
  Net change in federal funds purchased                             (8,858,000)    (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                    5,402,077     22,877,929
                                                                   ------------  -------------

Net change in cash and cash equivalents                                555,128     14,016,912

Cash and cash equivalents at beginning of period                     4,813,723      4,371,985
                                                                   ------------  -------------

Cash and cash equivalents at end of period                         $ 5,368,851   $ 18,388,897
                                                                   ============  =============
<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,
          2005  and  for  the  interim periods ended March 31, 2005 and 2004 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,  2004,  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 at and for the
          period  ended  December  31, 2004 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  the  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, 2005 and 2004 presented in
          the  financial  statements  were  calculated  as  follows:

<TABLE>
<CAPTION>
          FOR THE QUARTER ENDED MARCH 31, 2005:                          PER
                                                    NET      COMMON     SHARE
                                                 EARNINGS    SHARES    AMOUNT
                                                 ---------  ---------  --------
<S>                                              <C>        <C>        <C>
          Basic earnings per share               $ 205,038  1,242,515  $   .17
          Effect of stock options and warrants           -    115,474     (.02)
                                                 ---------  ---------  --------
          Diluted earnings per share             $ 205,038  1,357,989  $   .15
                                                 =========  =========  ========
</TABLE>

<TABLE>
<CAPTION>
          FOR THE QUARTER ENDED MARCH 31, 2004:                          PER
                                                    NET      COMMON     SHARE
                                                 EARNINGS    SHARES    AMOUNT
                                                 ---------  ---------  --------
<S>                                              <C>        <C>        <C>
          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
                                                 =========  =========  ========
</TABLE>

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,  2005  and  2004.


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


NOTE 4.  STOCK-BASED  COMPENSATION  (CONTINUED)

<TABLE>
<CAPTION>
                                                                   2005     2004
                                                                 --------  -------
<S>                                                              <C>       <C>
          Net earnings as reported                               $205,038  $35,603
          Deduct:  Total stock-based employee compensation
            expense determined under fair-value based method
            associated with previous grants vesting, net of tax     9,963    7,822
                                                                 --------  -------

          Pro forma net earnings                                 $195,075  $27,781
                                                                 ========  =======

          Basic earnings per share:

            As reported                                          $    .17  $   .03
                                                                 ========  =======

            Pro forma                                            $    .16  $   .02
                                                                 ========  =======

          Diluted earnings per share:

            As reported                                          $    .15  $   .03
                                                                 ========  =======

            Pro forma                                            $    .14  $   .02
                                                                 ========  =======
</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,  2005  compared to December 31, 2004 and our results of operations
          for the three months ended March 31, 2005 compared to the three months
          ended  March  31,  2004.  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,  2005,  net  interest  income totaled
$1,285,000  as  compared  to  $1,053,000  for the same period in 2004.  Interest
income  from  loans,  including fees increased $512,000 or 52% to $1,490,000 for
the  three  months ended March 31, 2005.  The increase in net interest income is
due  to  the  continued overall growth in the volume of interest earning assets.
The  net interest margin realized on earning assets and the interest rate spread
were  3.73%  and 3.48%, respectively, for the three months ended March 31, 2005.
The net interest margin and interest spread for the three months ended March 31,
2004  were  3.96%  and  3.84%,  respectively.

For  the  quarter  ended  March  31, 2005, interest income totaled $1,924,000 as
compared  to $1,443,000 for the same period in 2004.  Interest expense increased
from  $390,000  for  the  quarter  ended March 31, 2004 to $639,000 for the same
period  in  2005.

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 the same.

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 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, 2005, 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>
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 $98,000 for the three months ended
March  31,  2005  as  compared  to $107,000 for the three months ended March 31,
2004.  The total loan portfolio increased by approximately $8,491,000 during the
three  months  ended  March  31, 2005 as compared to $6,580,000 during the three
months  ended  March 31, 2004.  The allowance for loan losses was 1.26% of gross
loans at March 31, 2005 as compared to 1.42% 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 of our net
income  and,  possibly,  our  capital.

OTHER INCOME

Other  income  for  the  three  months  ended March 31, 2005 totaled $315,000 as
compared to $236,000 for the three months ended March 31, 2004.  The increase in
other  income  was  primarily  due  to an increase in service charges on deposit
accounts  of  $84,000 during 2005 as compared to the same period in 2004, and an
increase  in  other  income  of $20,000.  The growth in service charge income is
directly attributable to the overdraft privilege program that was implemented in
the  fourth  quarter  of  2004.  The  increase  in  other  income  is  primarily
attributable to the receipt of a $14,000 premium related to the sale by PULSE of
its  EFT  network,  of which the Bank is a member, to a competitor. The increase
was  partially  offset  by a decrease in mortgage origination fees of $7,000 and
losses  on sales of investment securities of $13,000 compared to gains of $4,000
during  the  same  period  in  2004.

OTHER EXPENSE

Total  other expense for the three months ended March 31, 2005 was $1,200,000 as
compared  to $1,127,000 for the same period in 2004.  Salaries and benefits, the
largest  component of other expense, totaled $619,000 for the three months ended
March 31, 2005, compared to $595,000 for the same period a year ago.  Salary and
benefits  expense  increased  due  to  normal increases in salaries and employee
benefits.  Other  operating  expenses  were  $460,000 for the three months ended
March  31,  2005  as  compared  to $409,000 for the three months ended March 31,
2004.  The increase in other expense is primarily due to the continued growth of
the  Bank.


                                       13
<PAGE>
INCOME TAXES

Income  tax  expense  for  the  three  months  ended March 31, 2005 and 2004 was
$97,000  and  $20,000, respectively.  The effective tax rate was 32% and 36% for
the  three  months ended March 31, 2005 and 2004, respectively.  The decrease in
the  effective  tax  rate  during  the  first  quarter  of  2005  is  primarily
attributable  to the recording of $20,000 of income tax credits related to state
training  incentives.

NET EARNINGS

The  combination  of  the above factors resulted in net earnings of $205,000 for
the  three  months ended March 31, 2005 compared to $36,000 for the three months
ended  March  31,  2004.  Basic earnings per share was $.17 for the three months
ended  March  31,  2005  compared  to  $.03  for  the  same  period  in  2004.

Diluted  earnings  per share were $.15 for the three months ended March 31, 2005
compared  to diluted earnings per share of $.03 in the same period in 2004.  The
dilutive  effect  of the Company's outstanding options and warrants was $.02 per
share  during  the three months ended March 31, 2005.  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 2005, total assets increased $5,307,000 or 4%,
when  compared  to December 31, 2004.  The most significant growth in assets was
federal  funds  sold  and  net loans, which increased $1,509,000 and $8,393,000,
respectively,  during  the first three months of 2005.  Total deposits increased
$14,260,000  or  12%,  from  the  December  31, 2004 amount of $115,294,000, and
comprised  the  majority  of  the  growth  in  total  liabilities.

INVESTMENT SECURITIES

Investment  securities  available-for-sale decreased $4,052,000 from $47,865,000
at  December  31,  2004  to $43,813,000 at March 31, 2005.  Proceeds from sales,
calls  and  maturities  of  investment securities were used to fund loan growth.
All  of  the  Bank's  marketable  investment  securities  were  designated  as
available-for-sale  at  March  31,  2005.

PREMISES AND EQUIPMENT

Premises  and  equipment,  net  of depreciation, totaled $5,105,000 at March 31,
2005.  The  decrease  of $55,000 from the December 31, 2004 amount of $5,160,000
was  due  to  additions  of  $22,000,  net  of  depreciation expense of $77,000.

LOANS

Gross  loans totaled $93,510,000 at March 31, 2005, an increase of $8,496,000 or
10%  since  December  31,  2004.  The  largest  increase  in  loans  was in real
estate-construction  loans,  which increased $3,929,000 or 13% to $29,605,000 at
March  31,  2005.  Balances  within  the major loans receivable categories as of
March  31,  2005  and  December  31,  2004  are  as  follows:


                                       14
<PAGE>
<TABLE>
<CAPTION>
                                       MARCH 31,   DECEMBER 31,
                                         2005          2004
                                      -----------  -------------
<S>                                   <C>          <C>
          Real estate - construction  $29,605,098  $  25,676,400
          Real estate - mortgage       15,501,463     14,210,709
          Commercial and industrial    45,340,116     41,997,789
          Consumer and other            3,063,462      3,129,361
                                      -----------  -------------
                                      $93,510,139  $  85,014,259
                                      ===========  =============
</TABLE>

RISK  ELEMENTS  IN  THE  LOAN  PORTFOLIO

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

<TABLE>
<CAPTION>
                                                      MARCH 31,   DECEMBER 31,
                                                        2005         2004
                                                     ----------  -------------
<S>                                                  <C>         <C>
          Loans:  Nonaccrual loans                   $        -  $      16,000
          Accruing loans more than 90 days past due  $        -  $           -
</TABLE>

Activity in the allowance for loan losses for the period from January 1, 2005 to
March  31,  2005  is  as  follows:

<TABLE>
<CAPTION>
<S>                                                             <C>
          Balance, January 1,                                   $ 1,074,662
          Provision for loan losses for the period                   97,699
          Net loans (charged off) recovered for the period            4,745
                                                                ------------
          Balance, end of period                                $ 1,177,106
                                                                ============
          Gross loans outstanding, end of period                $93,510,139
                                                                ============
          Allowance for loan losses to gross loans outstanding         1.26%
                                                                ============
</TABLE>

DEPOSITS

At March 31, 2005, total deposits increased by $14,260,000, or 12% from December
31,  2004.  Noninterest-bearing  demand  deposits  increased  $826,000 or 5% and
interest-bearing  deposits  increased  $13,434,000  or  13%.

Balances  within  the major deposit categories as of March 31, 2005 and December
31,  2004  are  as  follows:

<TABLE>
<CAPTION>
<S>                                                  <C>           <C>
                                                       MARCH 31,     DECEMBER 31,
                                                         2005           2004
                                                     ------------  -------------

          Noninterest-bearing demand deposits        $ 16,271,857  $  15,445,889
          Interest-bearing demand deposits             61,104,990     55,158,217
          Savings deposits                              6,042,514      4,506,941
          Certificates of deposit $100,000 and over    20,256,190     14,428,709
          Other time deposits                          25,878,674     25,754,392
                                                     ------------  -------------
                                                     $129,554,225  $ 115,294,148
                                                     ============  =============
</TABLE>


                                       15
<PAGE>
LIQUIDITY

The  Company's  liquidity  needs  include  the  funding  of  loans, purchases of
operating assets, and repayment of liabilities.  Liquidity needs are met 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 loans-to-total borrowed funds ratio,
which  was  at  68%  at  March  31,  2005  and  74%  at  December  31,  2004.

Although  the Bank's loan portfolio is diversified, a substantial portion of the
loan  portfolio  is collateralized by improved and unimproved real estate and is
dependent  upon  the  local  real  estate  market.

We  have  also  obtained  lines  of credit available with correspondent banks to
purchase  federal  funds.  At  March  31,  2005,  unused lines of credit totaled
$16,400,000.

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 stand-by
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.  Stand-by  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, 2005:

<TABLE>
<CAPTION>
<S>                                     <C>
          Commitments to extend credit  $20,979,000
          Standby letters of credit     $   423,000
</TABLE>

CAPITAL RESOURCES

Total  shareholders'  equity  decreased from $14,013,000 at December 31, 2004 to
$13,775,000  at  March 31, 2005.  The decrease of $238,000 was due to a decrease
of  $443,000  in  the  fair  value of securities available-for-sale, net of tax,
which  was  partially  offset  by  net  earnings  for  the  period  of $205,000.

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


                                       16
<PAGE>
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,
2005:

<TABLE>
<CAPTION>
<S>                                         <C>
  Tier 1 capital (to risk-weighted assets)  11.71%
  Total capital (to risk-weighted assets)   12.76%
  Tier 1 capital (to total average assets)   8.70%
</TABLE>

As  of  March 31, 2005, the Company had approximately $1,448,000 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.

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, 2005, 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, 2005,
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  its subsidiary is a party or of which any of their property is the
          subject.

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

          None.

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   -  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, 2005                  BY:   /s/Dennis W. Burnette
       ------------                      ------------------------------------
                                         Dennis W. Burnette
                                         President, Chief Executive Officer
                                         And Director


DATE:  May 12, 2005                  BY:   /s/A.R. Roberts, III
       ------------                      -------------------------------------
                                         A.R. Roberts, III
                                         Chief Financial Officer,
                                         Chief Operations Officer and Director


                                       19
<PAGE>