SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


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

             For the quarterly period ended  September 30, 2003
                                             ------------------

[ ]   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
                   ------------------------------------------
                    (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 November 3, 2003: 3,106,000; $ 0 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 - September 30, 2003..................3

             Consolidated Statements of Operations and Comprehensive Income
                  (Loss) - Nine Months Ended September 30, 2003 and 2002......4

             Consolidated Statements of Cash Flows -
                  Nine Months Ended September 30, 2003 and 2002...............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....................................17


PART II. OTHER INFORMATION

         Item 1.  Legal Proceedings..........................................19

         Item 6.  Exhibits and Reports on Form 8-K...........................19

         Signatures..........................................................20

                                       2
<PAGE>
                         Part I - Financial Information

Item 1.  Financial Statements

                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                               September 30, 2003
                                   (Unaudited)

                                  Assets
                                  ------
Cash and due from banks                                           $   5,454,104
Interest-bearing deposits in banks                                    2,597,081
Federal funds sold                                                    3,051,000
Securities available-for-sale, at fair value                         33,418,005
Restricted equity securities                                            780,000

Loans                                                               165,969,185
Less allowance for loan losses                                        4,542,981
                                                                  -------------
          Loans, net                                                161,426,204
                                                                  -------------

Premises and equipment                                                8,381,632
Other assets                                                          5,228,973
                                                                  -------------

          Total assets                                            $ 220,336,999
                                                                  =============

                   Liabilities and Stockholders' Equity
Deposits
    Noninterest-bearing                                           $  19,668,317
    Interest-bearing                                                161,984,665
                                                                  -------------
          Total deposits                                            181,652,982
Other borrowings                                                     15,600,000
Other liabilities                                                     1,612,468
                                                                  -------------
          Total liabilities                                         198,865,450
                                                                  -------------
Commitments and contingencies

Stockholders' equity
    Common stock, no par value; 20,000,000 shares
      authorized; 3,106,000 shares issued and outstanding            21,367,813
    Retained earnings                                                   344,354
    Accumulated other comprehensive income                             (240,618)
                                                                  -------------
          Total stockholders' equity                                 21,471,549
                                                                  -------------

          Total liabilities and stockholders' equity              $ 220,336,999
                                                                  =============

See Notes to Consolidated Financial Statements.

                                       3
<PAGE>
                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                           Three Months                   Nine Months
                                                              Ended                          Ended
                                                           September 30,                  September 30,
                                                     -----------    -----------   -----------    -----------
                                                         2003           2002          2003           2002
                                                     -----------    -----------   -----------    -----------
<S>                                                  <C>            <C>           <C>            <C>
Interest income
    Loans                                            $ 2,852,331    $ 2,670,551   $ 8,204,726    $ 7,395,009
    Taxable securities                                   172,435        138,058       411,004        273,541
    Nontaxable securities                                  6,725           --           7,133           --
    Federal funds sold                                    23,962         27,496       107,783        113,195
    Interest-bearing deposits in banks                     7,429         12,397        24,477         40,319
                                                     -----------    -----------   -----------    -----------
              Total interest income                    3,062,882      2,848,502     8,755,123      7,822,064
                                                     -----------    -----------   -----------    -----------

Interest expense
    Deposits                                             992,311      1,068,349     2,869,842      3,126,468
    Other borrowings                                      64,203        123,548       194,770        238,862
                                                     -----------    -----------   -----------    -----------
              Total interest expense                   1,056,514      1,191,897     3,064,612      3,365,330
                                                     -----------    -----------   -----------    -----------

              Net interest income                      2,006,368      1,656,605     5,690,511      4,456,734
Provision for loan losses                                346,370        153,227     2,519,414        493,057
                                                     -----------    -----------   -----------    -----------
              Net interest income after
                provision for loan losses              1,659,998      1,503,378     3,171,097      3,963,677
                                                     -----------    -----------   -----------    -----------

Other income
      Service charges and fees                           218,570        187,843       625,803        449,673
      Gains on sales of securities avaialble-               --             --          29,265           --
for-sale
      Other operating income                             111,313         85,381       433,526        235,477
                                                     -----------    -----------   -----------    -----------
              Total other income                         329,883        273,224     1,088,594        685,150
                                                     -----------    -----------   -----------    -----------

Other expenses
    Salaries and employee benefits                       877,319        685,738     2,389,409      1,973,019
    Occupancy and equipment expenses                     240,641        192,115       756,026        543,130
    Other operating expenses                             450,367        492,291     1,487,569      1,418,423
                                                     -----------    -----------   -----------    -----------
              Total other expenses                     1,568,327      1,370,144     4,633,004      3,934,572
                                                     -----------    -----------   -----------    -----------

              Net income (loss) before
income tax expense (benefit)                             421,554        406,458      (373,313)       714,255
Income tax expense  (benefit)                            154,325        146,587      (130,795)       270,932
                                                     -----------    -----------   -----------    -----------

              Net income (loss)                          267,229        259,871      (242,518)       443,323
                                                     -----------    -----------   -----------    -----------

Other comprehensive income (loss):
     Unrealized gains (losses) on securities
         available-for-sale arising during period,      (167,894)        36,759      (300,798)        77,654
net of tax
                                                     -----------    -----------   -----------    -----------

Comprehensive income (loss)                          $    99,335    $   296,630   $  (543,316)   $   520,977
                                                     ===========    ===========   ===========    ===========
</TABLE>

                                       4
<PAGE>
                                         Three Months         Nine Months
                                            Ended               Ended
                                        September 30,        September 30,
                                      -------   -------   --------   --------
                                       2003       2002      2003       2002
                                      -------   -------   --------   --------

Basic earnings (losses) per share     $  0.09   $  0.09   $  (0.08)  $   0.17
                                      =======   =======   ========   ========

Diluted earnings (losses) per share   $  0.08   $  0.09   $  (0.08)  $   0.17
                                      =======   =======   ========   ========

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


                 See Notes to Consolidated Financial Statements.

                                       5
<PAGE>
                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                    -------------   ------------
                                                                         2003           2002
                                                                    -------------   ------------
<S>                                                                 <C>             <C>
OPERATING ACTIVITIES
    Net income  (loss)                                              $   (242,518)   $    183,452
    Adjustments to reconcile net income (loss) to net cash
        provided by operating activities:
        Depreciation                                                     414,850         170,878
        Provision for loan losses                                      2,519,414         339,830
        Provision for losses on other real estate owned                   40,000              -
        Gain on sale of securities available-for-sale                    (29,265)             -
        Increase in interest receivable                                  (33,515)       (212,604)
        Decrease in interest payable                                     (42,411)        (24,011)
        Net other operating activities                                (2,114,298)        203,105
                                                                    ------------    ------------

              Net cash provided by operating activities                  512,257         660,650
                                                                    ------------    ------------

INVESTING ACTIVITIES
    Net increase in interest-bearing deposits in banks                (1,268,540)        (37,558)
    Net decrease in federal funds sold                                 2,895,000       5,361,000
    Purchases of securities available-for-sale                       (35,549,525)    (10,978,340)
    Proceeds from maturities of securities available-for-sale         13,733,460       1,500,000
    Proceeds from sales of securities available-for-sale               2,531,000               -
    Proceeds from maturities of securities held-to-maturity              399,940               -
    Purchase of restricted equity securities                            (137,500)              -
    Net increase in loans                                            (23,524,835)    (23,430,006)
    Purchase of premises and equipment                                (2,731,001)       (441,997)
                                                                    ------------    ------------

              Net cash used in investing activities                  (43,652,001)    (28,026,901)
                                                                    ------------    ------------

FINANCING ACTIVITIES
    Net increase in deposits                                          37,932,101      22,001,602
    Net proceeds from other borrowings                                 5,350,000               -
    Proceeds from sale of common stock                                 1,743,100       5,750,000
    Stock issue costs                                                          -         (87,581)
    Net increase due to exercise of options                               52,528               -
                                                                   ------------     ------------

              Net cash provided by financing activities               45,077,729      27,664,021
                                                                    ------------    ------------

Net increase in cash and due from banks                                1,937,985         297,770

Cash and due from banks, beginning of period                           3,516,119       3,479,452
                                                                    ------------    ------------

Cash and due from banks, end of period                              $  5,454,104    $  3,777,222
                                                                    ============    ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash paid for:
          Interest                                                  $  3,107,023    $  2,197,444
          Income taxes                                              $  1,143,281    $   (82,576)

    Principal balances of loans transferred to other real estate    $     50,000    $    782,867
    Financed sales of other real estate owned                       $    135,693    $    447,000
</TABLE>

See Notes to Consolidated Financial Statements.

                                       6
<PAGE>
                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES
                   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 September 30, 2003 are
         not necessarily indicative of the results to be expected for the full
         year.


NOTE 2.  STOCK COMPENSATION PLANS

         At September 30, 2003, the Company has two stock-based employee
         compensation plans. The Company accounts for those 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 income
         (loss), as all options granted under those plans had an exercise price
         equal to the market value of the underlying stock on the date of grant.
         The Company also has remaining options outstanding that were granted to
         certain executive officers under employee agreements. The following
         table illustrates the effect on net income (loss) and earnings (losses)
         per share if the Company had applied the fair value recognition
         provisions of SFAS Statement No. 123, Accounting for Stock-Based
         Compensation, to stock-based employee compensation.

                                                     Three Months Ended
                                                        September 30,
                                                  -----------------------
                                                      2003        2002
                                                  ---------    ----------

Net income, as reported                           $  267,22    $  259,871
Deduct: Total stock-based employee compensation
      expense determined under fair value based
      method for all awards                           10,398         --
                                                  ----------   ----------
Pro forma net income                              $  256,83$      259,871
                                                  ==========   ==========
Earnings per share:
   Basic - as reported                            $      .09   $      .09
                                                  ==========   ==========
   Basic - pro forma                              $      .08   $      .09
                                                  ==========   ==========
   Diluted - as reported                          $      .08   $      .09
                                                  ==========   ==========
   Diluted - pro forma                            $      .08   $      .09
                                                  ==========   ==========

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

                                                            Nine Months Ended
                                                              September 30,
                                                         -----------------------
                                                            2003          2002
                                                         ----------    ---------

Net income (loss), as reported                           $ (242,518    $ 443,323
Deduct: Total stock-based employee compensation
      expense determined under fair value based
      Method for all awards, net of related tax effects      33,268         --
                                                         ----------    ---------
Pro forma net income (loss)                              $ (275,786$     443,323
                                                         ==========    =========
Earnings (losses) per share:
   Basic - as reported                                   $     (.08)   $     .17
                                                         ==========    =========
   Basic - pro forma                                     $     (.09)   $     .17
                                                         ==========    =========
   Diluted - as reported                                 $     (.08)   $     .17
                                                         ==========    =========
   Diluted - pro forma                                   $     (.09)   $     .17
                                                         ==========    =========

NOTE 3.  EARNINGS (LOSSES) PER SHARE

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

                                                     Three Months Ended
                                                        September 30,
                                                  ------------------------
                                                      2003         2002
                                                  -----------  -----------

Basic Earnings Per Share:
   Weighted average common shares outstanding       3,102,609    2,850,000
                                                   ==========   ==========

   Net income                                      $  267,229   $  259,871
                                                   ==========   ==========

   Basic earnings per share                        $      .09   $      .09
                                                   ==========   ==========

Diluted Earnings Per Share:

   Weighted average common shares outstanding       3,102,609    2,850,000
   Net effect of the assumed exercise of stock
      options based on the treasury stock method
      using average market prices for the year         52,034           --
                                                   ----------   ----------
   Total weighted average common shares and
      common stock equivalents outstanding          3,154,643    2,850,000
                                                   ==========   ==========

   Net income                                      $  267,229   $  259,871
                                                   ==========   ==========

   Diluted earnings per share                      $      .08   $      .09
                                                   ==========   ==========

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

                                                       Nine Months Ended
                                                          September 30,
                                                   --------------------------
                                                       2003           2002
                                                   --------------------------

Basic Earnings (Losses) Per Share:
   Weighted average common shares outstanding        3,047,245      2,608,242
                                                   ===========    ===========

   Net income (loss)                               $  (242,518)   $   443,323
                                                   ===========    ===========

   Basic earnings (losses) per share               $      (.08)   $       .17
                                                   ===========    ===========

Diluted Earnings (Losses) Per Share:
   Weighted average common shares outstanding        3,047,245      2,608,242
   Net effect of the assumed exercise of stock
      options based on the treasury stock method
      using average market prices for the year            --           52,456
                                                   -----------    -----------
   Total weighted average common shares and
      common stock equivalents outstanding           3,047,245      2,660,698
                                                   ===========    ===========

   Net income (loss)                               $  (242,518)   $   443,323
                                                   ===========    ===========

   Diluted earnings  (losses) per share            $      (.08)   $       .17
                                                   ===========    ===========


NOTE 4.  STOCK OFFERINGS

         As of March 24, 2003, the Company completed an offering of its common
         stock, selling 250,000 shares (75,690 shares in 2002 and 174,310 shares
         in 2003) at a price of $10.00 per share.

         In previous offerings, the Company sold 950,000 shares of its common
         stock (575,000 shares in 2002 and 375,000 shares in 2001) at a price of
         $10.00 per share.


NOTE 5.  CURRENT ACCOUNTING DEVELOPMENTS

         There are no recent accounting pronouncements that have had, or are
         expected to have, a material effect on the Company's financial
         statements.

                                       9
<PAGE>
                   CHESTATEE BANCSHARES, INC. AND SUBSIDIARIES


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 nonbank 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" ("MD&A") are
forward-looking statements for purposes of the Securities Act of 1933, as
amended (the "Securities Act") 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; and 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, 2002
as filed in our annual report on Form 10-KSB.

                                       10
<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
September 30, 2003, our liquidity, as determined under guidelines established by
regulatory authorities and internal policy, was satisfactory.

At September 30, 2003, 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                 10.42 %        10.24 %        4.00 %
Risk-based capital ratios:
   Core capital                         11.79          11.58          4.00
   Total capital                        13.05          12.85          8.00

These ratios may decline as asset growth continues, but are expected to exceed
the minimum regulatory requirements. Future earnings and proceeds from our stock
offerings 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.

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:

                                       11
<PAGE>
                                             September 30, 2003
                                           ----------------------
                                           (dollars in thousands)
                                           ----------------------

 Commitments to extend credit                 $       34,105
 Letters of credit                                     1,577
                                              ----------------
                                              $       35,682
                                              ================

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.


                                       12
<PAGE>
Financial Condition

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

                                     September 30,  December 31,
                                         2003          2002
                                     -------------  ------------
                                        (Dollars in Thousands)
                                     ---------------------------

Cash and due from banks              $  5,454          $  3,516
Interest-bearing deposits in banks      2,597             1,329
Federal funds sold                      3,051             5,946
Securities                             34,198            15,612
Loans, net                            161,426           140,285
Premises and equipment                  8,382             6,065
Other assets                            5,229             2,660
                                     --------          --------
                                     $220,337          $175,413
                                     ========          ========

Deposits                             $181,653          $143,721
Other borrowings                       15,600            10,250
Other liabilities                       1,612             1,223
Stockholders' equity                   21,472            20,219
                                     --------          --------
                                     $220,337          $175,413
                                     ========          ========

Our total assets grew by 26% for the first nine months of 2003. Deposit growth
of $37.9 million and proceeds from the sale of common stock of $1.7 million was
primarily invested in loans and securities. Our ratio of loans to deposits and
other borrowings has decreased to 84% at September 30, 2003 from 92% at December
31, 2002, as deposit growth outpaced loan growth during the first nine months of
2003. Our total equity increased by $1.3 million, consisting of proceeds from
the sale of common stock of $1.7 million less the year-to-date net loss of
$243,000.

                                       13
<PAGE>
Results of Operations For The Three and Nine Months Ended September 30, 2003
and 2002

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

                              Three Months Ended
                                 September 30,
                            ----------------------
                             2003           2002
                            ------         ------
                            (Dollars in Thousands)
                            ----------------------

Interest income             $3,063         $2,849

Interest expense             1,057          1,192
                            ------         ------

Net interest income          2,006          1,657

Provision for loan losses      346            153

Other income                   330            273

Other expense                1,568          1,370
                            ------         ------

Pretax income                  422            407

Income taxes                   155            147
                            ------         ------

Net income                  $  267         $  260
                            ======         ======

                              Nine Months Ended
                                 September 30,
                            ----------------------
                             2003            2002
                            -------        -------
                            (Dollars in Thousands)
                            -------        -------

Interest income             $ 8,755        $ 7,822

Interest expense              3,065          3,365
                            -------        -------

Net interest income           5,690          4,457

Provision for loan losses     2,519            493

Other income                  1,089            685

Other expense                 4,633          3,935
                            -------        -------

Pretax income (loss)           (373)           714

Income taxes (benefit)         (131)           271
                            -------        -------

Net income (loss)           $  (242)       $   443
                            =======        =======

                                       14
<PAGE>
Our net interest income has increased by $350,000 and $1,234,000 for the third
quarter and first nine months of 2003, respectively, as compared to the same
periods in 2002. Our net interest margin increased to 4.09% during the first
nine months of 2003 as compared to 3.98% during the first nine months of 2002
and to 4.03% for the entire year of 2002. The increase in net interest income is
due primarily to the increased volume of average loans and investment securities
outstanding. The increase in net interest margin is largely due to fixed rate
time deposits that have matured and repriced to a lower rate over the past
twelve months. Yields earned on loans have decreased to 7.12% in the first nine
months of 2003 as compared to 7.65% in the first nine months of 2002. The cost
of funds has decreased as well, as deposits have been able to be repriced as
they have matured. Our cost of funds decreased to 2.60% in the first nine months
of 2003 as compared to 3.49% in the first nine months of 2002.

The provision for loan losses was $346,000 and $2,519,000 for the third quarter
and first nine months of 2003, respectively. These provisions are an increase
from the comparable periods in 2002 by $193,000 and $2,026,000, respectively.
The amounts provided are due to loan growth, increased nonaccrual and past due
loans and to our assessment of the inherent risk in the portfolio. Approximately
58% of the $2,519,000 in provision for loan loss booked during 2003 was
associated with loans to four commercial borrowers which represent approximately
4.5% of the total loan portfolio. These loans were deemed to present increased
risk due to the impact of adverse economic conditions and increased competition
in their markets. At September 30, 2003, these loans made up 84% of the balance
of nonaccrual loans, with the remaining balance identified in the following
table as potential problem loans. In light of our assessment of current overall
economic conditions, larger reserve allocations were deemed appropriate for
loans classified as substandard or special mention.

Nonaccrual loans of $2,894,000 at September 30, 2003 consist of $680,000 of
commercial loans, $2,183,000 of real estate loans and $31,000 of other consumer
loans. Loans past due ninety days or more and still accruing interest of
$189,000 at September 30, 2003 consists exclusively of 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 $4,543,000 in the allowance for loan losses at September 30,
2003, or 2.74% of total net outstanding loans, is adequate to absorb known risks
in the portfolio. No assurance can be given, however, that increased loan
volume, and adverse economic conditions or other circumstances will not result
in increased losses in our loan portfolio.

                                       15
<PAGE>
Information with respect to nonaccrual, past due, restructured, and potential
problem loans at September 30, 2003 and 2002 is as follows:

<TABLE>
<CAPTION>
                                                                      September 30,
                                                                 -----------------------
                                                                  2003            2002
                                                                 -----------------------
                                                                  (Dollars in Thousands)
                                                                 -----------------------

<S>                                                               <C>           <C>
Nonaccrual loans                                                  $2,894        $  547
Loans contractually past due ninety days or more as to interest
   Or principal payments and still accruing                          189           151
Restructured loans                                                    --            --
Potential problem loans                                            2,735         1,200
Interest income that would have been recorded on nonaccrual
   and restructured loans under original terms                        85            16
Interest income that was recorded on nonaccrual and                   --            --
   restructured loans
</TABLE>

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.

                                       16
<PAGE>
Information regarding certain loans and allowance for loan loss data through
September 30, 2003 and 2002 is as follows:

<TABLE>
<CAPTION>
                                                                       Nine Months Ended
                                                                         September 30,
                                                                   -----------------------
                                                                      2003         2002
                                                                   ------------  ---------
                                                                    (Dollars in Thousands)
                                                                   -----------------------
<S>                                                                 <C>          <C>
Average amount of loans outstanding                                 $153,662     $129,232
                                                                    ========     ========

Balance of allowance for loan losses at beginning of period            2,126        1,252
                                                                    --------     --------

Loans charged off
   Commercial and financial                                               --           --
   Real estate mortgage                                                   28           87
   Installment                                                            85           17
                                                                    --------     --------
                                                                         113          104
                                                                    --------     --------
Loans recovered
   Commercial and financial                                               --            5
   Real estate mortgage                                                   --           --
   Installment                                                            11            2
                                                                    --------     --------
                                                                          11            7
                                                                    --------     --------

Net charge-offs                                                          102           97
                                                                    --------     --------

Additions to allowance charged to operating expense during period      2,519          493
                                                                    --------     --------

Balance of allowance for loan losses at end of period               $  4,543     $  1,648
                                                                    ========     ========

Ratio of net loans charged off during the period to
   average loans outstanding                                             .07%         .07%
                                                                    ========     ========
</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
review by the responsible lending officers and by 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.

                                       17
<PAGE>
Other income has increased by $57,000 and $404,000 for the third quarter and the
first nine months of 2003, respectively, as compared to the same period in 2002.
These year to date increases are due primarily to increased service charges on
deposit accounts of $176,000, gain on sale of securities of $29,000, gain on
sale of loans of $130,000, and mortgage origination fees of $79,000.

Other expenses increased by $198,000 and $698,000 for the third quarter and the
first nine months of 2003, respectively, as compared to the same period in 2002.
Year to date salaries and employee benefits increased by $416,000, equipment and
occupancy expenses increased by $213,000, and other operating expenses increased
by $69,000. Salaries and employee benefits have increased due to an increase in
the number of full time equivalent employees to 68 at September 30, 2003 from 60
at September 30, 2002 and to other annual salary increases. The increase in the
number of employees is due to hiring additional officers and employees to staff
a new branch which opened in May, 2003 and to our overall growth. The increases
in equipment and occupancy expenses and other operating expenses are due to our
overall growth.

We have recorded income tax expense of $155,000 for the third quarter and an
income tax benefit of $131,000 for first nine months of 2003. The rate of tax as
a percentage of pretax income was (35%).

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 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 Securities
Exchange Act of 1934, 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.

                                       18
<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 or Chestatee Mortgage is a party or to
which any of our property is subject, other than ordinary routine legal
proceedings incidental to our business.


Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

              31     Certifications of the Chief Executive Officer and Chief
                     Financial Officer Under Rule  13a-14(a)/15d-14(a), as
                     Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
                     of 2002

              32     Certifications of the Chief Executive Officer and Chief
                     Financial Officer Under 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.

                                       19
<PAGE>
                                   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:  November 14, 2003            BY: /s/ J. Philip Hester, Sr.
       -----------------                -------------------------
                                    J. Philip Hester, Sr., President and C.E.O.
                                    (Principal executive officer)


DATE:  November 14, 2003            BY: /s/ Deborah F. McLeod
       -----------------                ---------------------
                                    Deborah F. McLeod, C.F.O. and Treasurer
                                    (Principal financial and accounting officer)