U.S. 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, 2007
                                                 ----------------------

[   ]   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: 000-30273

                           Chestatee Bancshares, Inc.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

Georgia                                                              58-2535333
-------------------------------------                  -------------------------
(State or other jurisdiction of                                   (IRS Employer
incorporation or organization)                              Identification No.)

                6639 Highway 53 East, Dawsonville, Georgia 30534
               ---------------------------------------------------
                    (Address of principal executive offices)

                                 (706) 216-2265
                        --------------------------------
                           (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 April 30, 2007: 3,447,381; no par value.

Transitional Small Business Disclosure Format    Yes [_]      No  [X]


<PAGE>



                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES



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

                                      INDEX

                                                                           Page

PART I.   FINANCIAL INFORMATION

          ITEM 1.  Financial Statements

          Consolidated Balance Sheet - March 31, 2007.........................3

          Consolidated Statement of Income Three Months
                   Ended March 31, 2007 and 2006..............................4

          Consolidated Statement of Comprehensive Income Three Months
                   Ended March 31, 2007 and 2006..............................5

          Consolidated Statements of Cash Flows - Three Months
                   Ended March 31, 2007 and 2006..............................6

          Notes to Consolidated Financial Statements..........................7

          ITEM 2.      Management's Discussion and Analysis of
                       Financial Condition and Results of Operations..........9

          ITEM 3.      Controls and Procedures...............................16


PART II.  OTHER INFORMATION

          ITEM 1.      Legal Proceedings.....................................17

          ITEM 6.      Exhibits and Reports on Form 8-K......................17

          Signatures.........................................................18

          Certifications.....................................................19




<PAGE>


                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES
                         PART I - FINANCIAL INFORMATION

  ITEM 1.     Financial Statements

                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2007

                                     Assets
                                     ------

Cash and due from banks                                           $   4,241,918
Interest-bearing deposits in banks                                      932,096
Federal funds sold                                                   17,967,000
Securities available-for-sale, at fair value                         18,500,641
Restricted equity securities, at cost                                   854,300

Loans                                                               264,185,135
Less allowance for loan losses                                        3,937,497
                                                                  -------------
          Loans, net                                                260,247,638
                                                                  -------------

Premises and equipment, net                                           7,200,028
Other assets                                                          4,476,539
                                                                  -------------

          Total assets                                            $ 314,420,160
                                                                  =============


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

Deposits
    Noninterest-bearing                                           $  28,766,026
    Interest-bearing                                                248,665,952
                                                                  -------------
          Total deposits                                            277,431,978
Other borrowings                                                      6,000,000
Other liabilities                                                     2,030,042
                                                                  -------------
          Total liabilities                                         285,462,020
                                                                  -------------

Commitments and contingencies

Stockholders' equity
    Common stock, no par value; 20,000,000 shares
      authorized; 3,447,381 shares issued and
      outstanding                                                    24,937,186
    Retained earnings                                                 4,169,853
    Accumulated other comprehensive loss                               (148,899)
                                                                  -------------
          Total stockholders' equity                                 28,958,140
                                                                  -------------

          Total liabilities and stockholders' equity              $ 314,420,160
                                                                  =============


                 See Notes to Consolidated Financial Statements


                                       3
<PAGE>



                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                   Three months ended March 31, 2007 and 2006

                                                            Three months ended
                                                                March 31,
                                                       -------------------------
                                                          2007          2006
                                                       ----------     ----------
Interest income
    Loans                                              $5,751,105     $4,263,774
    Taxable Securities                                    184,383        231,136
    Nontaxable Securities                                  13,050         13,050
    Federal funds sold                                    163,542        154,412
    Interest-bearing deposits in banks                      8,617         49,206
                                                       ----------     ----------
              Total interest income                     6,120,697      4,711,578
                                                       ----------     ----------

Interest expense
    Deposits                                            2,769,633      1,666,853
    Other borrowings                                       64,734         70,487
                                                       ----------     ----------
              Total interest expense                    2,834,367      1,737,340
                                                       ----------     ----------

              Net interest income                       3,286,330      2,974,238
Provision for loan losses                                 208,730         85,845
                                                       ----------     ----------
              Net interest income after
                provision for loan losses               3,077,600      2,888,393
                                                       ----------     ----------

Other income
      Service charges and fees                            186,143        203,114
      Other operating income                               56,613         39,765
                                                       ----------     ----------
              Total other income                          242,756        242,879
                                                       ----------     ----------

Other expenses
    Salaries and employee benefits                      1,296,753      1,179,250
    Occupancy and equipment expenses                      254,365        250,901
    Other operating expenses                              563,862        569,988
                                                       ----------     ----------
              Total other expenses                      2,114,980      2,000,139
                                                       ----------     ----------

              Net income before income taxes            1,205,376      1,131,133

Income tax expense                                        457,352        412,020
                                                       ----------     ----------

              Net income                                  748,024        719,113
                                                       ==========     ==========


Basic earnings per share                               $     0.22     $     0.21
                                                       ==========     ==========

Diluted earnings per share                             $     0.21     $     0.20
                                                       ==========     ==========

Cash dividends per share                               $       --     $       --
                                                       ==========     ==========


                 See Notes to Consolidated Financial Statements

                                       4

<PAGE>


                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES


                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                   Three months ended March 31, 2007 and 2006

                                                              Three months ended
                                                                  March 31,
                                                           ---------------------
                                                             2007         2006
                                                           --------     --------
Net income                                                 $748,024     $719,113

Other comprehensive income:
     Unrealized holding gains on securities
        available-for-sale arising during the
        three month period, net of tax                       53,703        3,262
                                                           --------     --------

Other comprehensive income                                   53,703        3,262
                                                           --------     --------

Comprehensive income                                       $801,727     $722,375
                                                           ========     ========


                 See Notes to Consolidated Financial Statements


                                       5

<PAGE>
<TABLE>
<CAPTION>

                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   Three months ended March 31, 2007 and 2006

                                                                         Three months ended
                                                                             March 31,
                                                                    ----------------------------
                                                                        2007             2006
                                                                    ------------    ------------
<S>                                                                 <C>             <C>
OPERATING ACTIVITIES
    Net income                                                      $    748,024    $    719,113
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation                                                     118,899         136,483
        Provision for loan losses                                        208,730          85,845
        Amortization and accretion of securities                          44,254          45,360
        Stock-based compensation expense                                  74,318          23,595
        Decrease in interest receivable                                  253,939         142,560
        Increase in interest payable                                      44,746           7,022
        Net other operating activities                                    57,606          83,651
                                                                    ------------    ------------
              Net cash provided by operating activities                1,550,516       1,243,629
                                                                    ------------    ------------

INVESTING ACTIVITIES
    Net (increase) decrease in interest-bearing deposits in banks       (183,679)         76,710
    Net increase in federal funds sold                                (5,374,000)     (5,860,000)
    Proceeds from maturities of securities available-for-sale          1,411,478       1,302,920
    Net increase restricted equity securities                            (29,700)         (8,400)
    Net increase in loans                                            (11,374,135)     (3,098,831)
    Purchase of premises and equipment                                   (22,852)        (80,290)
                                                                    ------------    ------------

              Net cash used in investing activities                  (15,572,888)     (7,667,891)
                                                                    ------------    ------------

FINANCING ACTIVITIES
    Net increase in deposits                                          14,927,695       6,853,582
    Payments on other borrowings                                      (1,000,000)     (1,500,000)
    Cash dividends paid on common stock                                 (206,777)             --
                                                                    ------------    ------------
              Net cash provided by financing activities               13,720,918      5,353,582
                                                                    ------------    ------------


Net decrease in cash and due from banks                                 (301,454)     (1,070,680)

Cash and due from banks, beginning of period                           4,543,372       4,811,307
                                                                    ------------    ------------

Cash and due from banks, end of period                              $  4,241,918    $  3,740,627
                                                                    ============    ============

</TABLE>

                 See Notes to Consolidated Financial Statements


                                       6

<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1.   BASIS OF PRESENTATION

          The consolidated financial information included herein is unaudited;
          however, such information reflects all adjustments (consisting solely
          of normal recurring adjustments) which are, in the opinion of
          management, necessary for a fair statement of results for the interim
          period.

          The results of operations for the period ended March 31, 2007 are not
          necessarily indicative of the results to be expected for the full
          year.

NOTE 2.   STOCK COMPENSATION PLANS

          At March 31, 2007, the Company has two stock-based compensation plans
          which include certain employees and directors. The Company accounts
          for these plans under FASB Statement No. 123(R), Share-Based Payment,
          using the modified-prospective-transition method. Under that
          transition method, compensation cost recognized includes: (a)
          compensation cost for all share-based payments granted prior to, but
          not yet vested as of January 1, 2006, based on the grant date fair
          value estimated in accordance with the original provisions of
          Statement 123, and (b) compensation cost for all share-based payments
          granted subsequent to January 1, 2006, based on the grant-date fair
          value estimated in accordance with the provisions of Statement 123(R).

          At March 31, 2007, there was approximately $222,672 of unrecognized
          compensation cost related to stock-based payments, which is expected
          to be recognized over a weighted-average period of 3.0 years. Stock
          based compensation expense recognized in earnings totaled $74,318 and
          $23,595 as of March 31, 2007 and 2006, respectively.

NOTE 3.   EARNINGS PER SHARE

          Presented below is a summary of the components used to calculate basic
          and diluted earnings per common share.

                                                           Three Months Ended
                                                                March 31,
                                                        ------------------------
                                                            2007         2006
                                                        ----------    ----------
Basic Earnings Per Share:
   Weighted average common shares outstanding            3,447,381     3,446,281
                                                        ==========    ==========
   Net income                                           $  748,024    $  719,113
                                                        ==========    ==========
   Basic earnings per share                             $      .22    $      .21
                                                        ==========    ==========

Diluted Earnings Per Share:
   Weighted average common shares outstanding            3,447,381     3,446,281
   Net effect of the assumed exercise of stock
      options based on the treasury stock method
      using average market prices for the year             133,673        97,230
                                                        ----------    ----------
   Total weighted average common shares and
      common stock equivalents outstanding               3,581,054     3,543,511
                                                        ==========    ==========
   Net income                                           $  748,024    $  719,113
                                                        ==========    ==========
   Diluted earnings per share                           $      .21    $      .20
                                                        ==========    ==========


                                       7
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 4.   CURRENT ACCOUNTING DEVELOPMENTS

          In September 2006, the FASB issued SFAS No. 157, "Fair Value
          Measurements." SFAS No. 157 defines fair value, establishes a
          framework for measuring fair value in generally accepted accounting
          principles (GAAP), and expands disclosures about fair value
          measurements. This statement does not require any new fair value
          measurements, but applies under other accounting pronouncements, the
          Board having previously concluded in those accounting pronouncements
          that fair value is the relevant measurement attribute. The provisions
          of this statement are effective for financial statements issued for
          fiscal years beginning after November 15, 2007, and interim periods
          within those fiscal years. The Company has not chosen to early adopt
          this standard.

          In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
          for Financial Assets and Financial Liabilities." SFAS No. 159 permits
          entities to make an irrevocable election, at specified election dates,
          to measure eligible financial instruments and certain other items at
          fair value. This statement also establishes presentation and
          disclosure requirements designed to facilitate comparisons between
          entities that choose different measurement attributes for similar
          types of assets and liabilities. The provisions of this statement are
          effective as of the beginning of the first fiscal year that begins
          after November 15, 2007. The Company has not chosen to early adopt
          this statement.




                                       8
<PAGE>




ITEM 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

The following is management's discussion and analysis of certain significant
factors which have affected the financial position and operating results of
Chestatee Bancshares, Inc. and its bank subsidiary, Chestatee State Bank, and
its non-bank subsidiaries, Chestatee Financial Services, Inc. and Chestatee
Residential Mortgage, Inc., during the period included in the accompanying
consolidated financial statements.

Forward-Looking Statements

Certain of the statements made herein under the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" are
forward-looking statements for purposes of the Securities Act of 1933, as
amended and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and as such may involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Company to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements. Such
forward-looking statements include statements using the words such as "may,"
"will," "anticipate," "should," "would," "believe," "contemplate," "expect,"
"estimate," "continue," "may," "intend," or other similar words and expressions
of the future. Our actual results may differ significantly from the results we
discuss in these forward-looking statements.

These forward-looking statements involve risks and uncertainties and may not be
realized due to a variety of factors, including, without limitation: the effects
of future economic conditions; governmental monetary and fiscal policies, as
well as legislative and regulatory changes; the risks of changes in interest
rates on the level and composition of deposits, loan demand, and the values of
loan collateral, securities, and other interest-sensitive assets and
liabilities; interest rate risks; the effects of competition from other
commercial banks, thrifts, mortgage banking firms, consumer finance companies,
credit unions, securities brokerage firms, insurance companies, money market and
other mutual funds and other financial institutions operating in our market area
and elsewhere, including institutions operating regionally, nationally, and
internationally, together with such competitors offering banking products and
services by mail, telephone, computer, and the Internet.

Critical Accounting Policies

We have adopted various accounting policies which govern the application of
accounting principles generally accepted in the United States in the preparation
of our financial statements. Our significant accounting policies are described
in the footnotes to the consolidated financial statements at December 31, 2006
as filed on our annual report on Form 10-KSB.

                                       9
<PAGE>



Certain accounting policies involve significant judgments and assumptions by us
which have a material impact on the carrying value of certain assets and
liabilities. We consider these accounting policies to be critical accounting
policies. The judgments and assumptions we use are based on historical
experience and other factors, which we believe to be reasonable under the
circumstances. Because of the nature of the judgments and assumptions we make,
actual results could differ from these judgments and estimates which could have
a material impact on our carrying values of assets and liabilities and our
results of operations.

We believe the allowance for loan losses is a critical accounting policy that
requires the most significant judgments and estimates used in preparation of our
consolidated financial statements. Refer to the portion of this discussion that
addresses our allowance for loan losses for a description of our processes and
methodology for determining our allowance for loan losses.

Liquidity and Capital Resources

We monitor our liquidity resources on an ongoing basis. Our liquidity is also
monitored on a periodic basis by State and Federal regulatory authorities. As of
March 31, 2007, our liquidity, as determined under guidelines established by
regulatory authorities and internal policy, was satisfactory.

At March 31, 2007, our capital ratios were adequate based on regulatory minimum
capital requirements. The minimum capital requirements and the actual capital
ratios on a consolidated and bank-only basis are as follows:

                                                 Actual
                                         --------------------
                                                                    Minimum
                                                                   Regulatory
                                       Consolidated      Bank      Requirement
                                       ------------    --------   ------------

     Leverage capital ratios              9.48 %         9.26 %       4.00 %
     Risk-based capital ratios:
        Core capital                      9.99           9.67         4.00
        Total capital                    11.24          10.92         8.00

These ratios may decline as asset growth continues, but are expected to exceed
the minimum regulatory requirements. Future earnings will assist in keeping
these ratios at satisfactory levels.

Off-Balance Sheet Risk

We are a party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of our customers. These
financial instruments include commitments to extend credit and standby letters
of credit. Such commitments involve, to varying degrees, elements of credit risk
and interest rate risk in excess of the amount recognized in the balance sheets.

                                       10

<PAGE>



Our exposure to credit loss in the event of nonperformance by the other party to
the financial instrument for commitments to extend credit and standby letters of
credit is represented by the contractual amount of those instruments. We use the
same credit policies in making commitments and conditional obligations as we do
for on-balance sheet instruments. A summary of our commitments is as follows:



                                                              March 31, 2007
                                                          ----------------------
                                                          (Dollars in thousands)
                                                          ----------------------

     Commitments to extend credit                         $               61,305
     Letters of credit                                                       727
                                                          ----------------------
                                                          $               62,032
                                                          ======================

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. Since many
of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. The
amount of collateral obtained, if deemed necessary by us upon extension of
credit, is based on our credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by us to guarantee
the performance of a customer to a third party. Those letters of credit are
primarily issued to support public and private borrowing arrangements. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loans to customers. Collateral is required in
instances which we deem necessary.



                                       11

<PAGE>



Financial Condition

Following is a summary of our balance sheets for the periods indicated:

                                             March 31,        December 31,
                                              2007              2006
                                          ---------------   ---------------
                                              (Dollars in Thousands)
                                          ---------------------------------

Cash and due from banks                   $        4,242    $        4,543
Interest-bearing deposits in banks                   932               748
Federal funds sold                                17,967            12,593
Securities                                        19,355            20,695
Loans, net                                       260,248           249,082
Premises and equipment                             7,200             7,296
Other assets                                       4,476             4,718
                                          --------------    --------------
                                          $      314,420    $      299,675
                                          ==============    ==============

Deposits                                  $      277,432    $      262,504
Other borrowings                                   6,000             7,000
Other liabilities                                  2,030             2,089
Stockholders' equity                              28,958            28,082
                                          --------------    --------------
                                          $      314,420    $      299,675
                                          ==============    ==============

Our total assets grew by 4.9% for the three months ended March 31, 2007. Deposit
growth of $14.9 million, cash flows from securities of $1.3 million and net
income of $700,000 was used to fund $11.2 million in loans, reduce other
borrowings by $1.0 million, and provide additional federal funds sold of $5.4
million. Our ratio of gross loans to deposits and other borrowings was 93% at
March 31, 2007 and 94% at December 31, 2006. Our total equity increased by
$876,000 due to year-to-date net income of $748,000, stock based compensation of
$74,000 and net unrealized gains on securities of $54,000.


                                       12
<PAGE>



Results of Operations For The Three Months Ended March 31, 2007 and 2006

Following is a summary of our operations for the periods indicated:

                                               Three Months Ended
                                                    March 31,
                                          -------------------------------
                                               2007            2006
                                          -------------    --------------
                                               (Dollars in Thousands)
                                          -------------------------------

Interest income                           $       6,120    $        4,711
Interest expense                                  2,834             1,737
                                          -------------    --------------

Net interest income                               3,286             2,974
Provision for loan losses                           209                86
Other income                                        243               243
Other expense                                     2,115             2,000
                                          -------------    --------------

Pretax income                                     1,205             1,131
Income taxes                                        457               412
                                          -------------    --------------

Net income                                $         748    $          719
                                          =============    ==============

Our net interest income increased by $312,000 for the three months ended March
31, 2007, as compared to the same period in 2006. Our net interest margin was
4.57% during the three months ended March 31, 2007 as compared to 4.90% for the
three months ended March 31, 2006 and 4.88% for the entire year of 2006. The
decrease in net interest income is due primarily to the repricing of liabilities
and increased rate competition in our local area markets. Yields earned on loans
have increased to 9.01% in the first three months of 2007 as compared to 8.59%
in the first three months of 2006. Our cost of funds increased to 4.18% in the
first three months of 2007 as compared to 3.05% in the first three months of
2006. The increase in cost of funds also reflects the impact of repricing of
liabilities and increased competition for deposits.

The provision for loan losses was $209,000 for the three months ended March 31,
2007. The provision for the three months ended March 31, 2007 increased $123,000
over the same period in 2006. The increase in provision expense is due largely
to loan growth.

Nonaccrual loans of $733,000 at March 31, 2007 consist of $492,000 of commercial
loans, $225,000 of 1-4 family residential loans, and $16,000 of consumer loans.
Loans past due ninety days or more and still accruing interest of $8,000 at
March 31, 2007 were consumer loans. These loans were identified through our loan
evaluation process and have been properly considered in the determination of the
allowance for loan losses. Management believes that the $3,937,000 in the
allowance for loan losses at March 31, 2007, or 1.49% of total net outstanding
loans, is adequate to absorb known risks in the portfolio. However, no assurance
can be given that increased loan volume, and adverse economic conditions or
other circumstances will not result in increased losses in our loan portfolio.


                                       13
<PAGE>

Information with respect to nonaccrual, past due, restructured, and potential
problem loans at March 31, 2007 and 2006 is as follows:

<TABLE>
<CAPTION>

                                                                              March 31,
                                                                     -----------------------------
                                                                          2007          2006
                                                                     -----------------------------
                                                                         (Dollars in Thousands)
                                                                     -----------------------------
<S>                                                                  <C>           <C>
Nonaccrual loans                                                     $      733    $     2,277
Loans contractually past due ninety days or more as to interest
   or principal payments and still accruing                                   8             58
Restructured loans                                                          751             --
Potential problem loans                                                      --             --
Interest income that would have been recorded on nonaccrual
   and restructured loans under original terms                              124             85
Interest income that was recorded on nonaccrual and                          --             --
   restructured loans
</TABLE>



Nonaccrual loans at March 31, 2007 decreased by $1.5 million from the same
period in 2006. This reduction was largely attributable to management's decision
in 2006 to designate a $1.4 million commercial and financial loan as nonaccrual
although the creditor had made all required payments in full and in a timely
manner. This credit, which is participated among several banks, was to be
restructured in late 2006 and would result in write-downs for all banks
involved. The credit was restructured (see table above) and resulted in a
write-down of $389,000 for the company during 2006.

Potential problem loans are defined as loans about which we have serious doubts
as to the ability of the borrower to comply with the present loan repayment
terms and which may cause the loan to be placed on nonaccrual status, to become
past due more than ninety days, or to be restructured.

It is our policy to discontinue the accrual of interest income when, in the
opinion of management, collection of such interest becomes doubtful. This status
is accorded interest when (1) there is a significant deterioration in the
financial condition of the borrower and full repayment of principal and interest
is not expected and (2) the principal or interest is more than ninety days past
due, unless the loan is both well-secured and in the process of collection.

Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity or capital resources.
Management is not aware of any information that causes it to have serious doubts
as to the ability of borrowers to comply with the loan repayment terms.


                                       14
<PAGE>


Information regarding certain loans and allowance for loan loss data through
March 31, 2007 and 2006 is as follows:

<TABLE>
<CAPTION>
                                                               Three Months Ended
                                                                   March 31,
                                                              ---------------------
                                                                2007        2006
                                                              --------    --------
                                                             (Dollars in Thousands)
                                                              --------------------

<S>                                                           <C>         <C>
Average amount of loans outstanding                           $258,815    $201,317
                                                              ========    ========

Balance of allowance for loan losses at beginning of period      3,734       4,111
                                                              --------    --------
Loans charged off
   Commercial and financial                                         --           5
   Real estate mortgage                                             --          --
   Installment                                                      18           3
                                                              --------    --------
                                                                    18           8
                                                              --------    --------
Loans recovered
   Commercial and financial                                         --          --
   Real estate mortgage                                             --          --
   Installment                                                      12          --
                                                              --------    --------
                                                                    12          --
                                                              --------    --------
Net charge-offs                                                      6           8
                                                              --------    --------

Additions to allowance charged to operating
        expense during the period                                  209          86
                                                              --------    --------

Balance of allowance for loan losses at end of period         $  3,937    $  4,189
                                                              ========    ========
Ratio of net loans charged off during the period to
   average loans outstanding                                       .00%        .00%
                                                              ========    ========
</TABLE>

The allowance for loan losses is maintained at a level that is deemed
appropriate by management to adequately cover all known and inherent risks in
the loan portfolio. Management's evaluation of the loan portfolio includes a
loan classification program. Under the program, as each loan is made, we assign
a loan grade. Each loan grade is assigned an allowance percentage determined
based on our experience specifically and the historical experience of the
banking industry generally. Loan classifications are then subject to periodic
reviews by the responsible lending officers, internal loan review which is
performed by a third party, regulators, external auditors, and senior management
based upon their judgment, our loan loss experience, current economic conditions
that may affect the borrower's ability to repay, lender requirements, the
underlying collateral value of the loans and other appropriate information.
Management relies predominantly on this ongoing review of the loan portfolio to
assess the risk characteristics of the portfolio in the aggregate and to
determine adjustments, if any, to our allowance for loan losses. Based upon this
ongoing review, we may identify loans that could be impaired. A loan is
considered impaired when it is probable that we will be unable to collect all
principal and interest due in accordance with the contractual terms of the loan
agreement. When we identify a loan as impaired, the allowance for loan losses is
increased if we determine that the amount of impairment is in excess of the
allowance determined under our loan classification program. We maintain an
allowance for loan losses of no less than 1.0% of outstanding loans at all
times.


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Other income remained constant at $243,000 for the three months ended March 31,
2007, respectively, as compared to the same period in 2006.

Other expenses increased by $115,000 for the three months ended March 31, 2007,
as compared to the same period in 2006. Salaries and employee benefits increased
by $118,000 and slight decreases were seen in other operating expense. Salaries
and employee benefits have increased due to increased expense associated with
the stock option plans discussed in Note 2 to the financial statements and
annual salary increases.

We have recorded income tax expense of $457,000 for the three months ended March
31, 2007. The rate of tax as a percentage of pretax income was 37.9% as compared
to 36.4% for the same period in 2006.

We are not aware of any known trends, events or uncertainties, other than the
effect of events as described above, that will have or that are reasonably
likely to have a material effect on its liquidity, capital resources or
operations. We are also not aware of any current recommendations by the
regulatory authorities which, if they were implemented, would have such an
effect.

ITEM 3.  Controls and Procedures

As of the end of the period covered by this report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and the Chief Financial Officer, of the design and operation
of our disclosure controls and procedures. Based on this evaluation, our Chief
Executive and Chief Financial Officer concluded that our disclosure controls and
procedures are effective for gathering, analyzing and disclosing the information
that we are required to disclose in the reports we file under the Exchange Act,
within the time periods specified in the SEC's rules and forms. Our Chief
Executive Officer and Chief Financial Officer also concluded that our disclosure
controls and procedures are effective in timely alerting them to material
information relating to our Company required to be included in our periodic SEC
filings. In connection with the new rules, we are in the process of further
reviewing and documenting our disclosure controls and procedures, including our
internal controls and procedures for financial reporting, and may from time to
time make changes designed to enhance their effectiveness and to ensure that our
systems evolve with our business.

There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of this evaluation.



                                       16

<PAGE>



                           PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

Management is not aware of any material pending legal proceedings to which the
Company, the Bank, Chestatee Financial Services or Chestatee Residential
Mortgage are a party or to which any of their property is subject, other than
ordinary routine legal proceedings incidental to our business.

ITEM 6.  Exhibits And Reports On Form 8-K

(a)  Exhibits.

     Number    Description

     31.1      Certification Of Chief Executive Officer
     31.2      Certification Of Chief Financial Officer
     32        Certifications of CEO and CFO 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.




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                                   SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                           CHESTATEE BANCSHARES, INC.
                                  (Registrant)



DATE:  April 27, 2007           BY: /s/ J. Philip Hester, Sr.
       --------------               --------------------------------------------
                                    J. Philip Hester, Sr., President and C.E.O.
                                    (Principal Executive Officer)


DATE:  April 27, 2007           BY: /s/ Deborah F. McLeod
       --------------               --------------------------------------------
                                    Deborah F. McLeod, C.F.O. and Treasurer
                                    (Principal Financial and Accounting Officer)








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