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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549
                              ____________________

                                   FORM 10-KSB
                              ____________________

[X]  Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
     1934 for the fiscal year ended December 31, 2003

                       Commission file number:  333-10909

                            FORSYTH BANCSHARES, INC.
             (Exact name of registrant as specified in its charter)

                     Georgia                             58-2231953
   (Name of Small Business Issuer in its Charter)     (I.R.S. Employer
                                                     Identification No.)


      651 Veterans Memorial Boulevard, Cumming, Georgia      30040
          (address of principal executive office)         (Zip Code)

        (Issuer's telephone number, including area code):  (770) 886-9500

              Securities registered under Section 12(b) of the Act:

        Title of Each Class     Name of Each Exchange on Which Registered
        -------------------     -----------------------------------------
               None                             None

              Securities registered under Section 12(g) of the Act:
                           Common Stock, No Par Value
                                (Title of Class)

     Check  whether  the  issuer:  (1) filed all reports required to be filed by
Section  13  or  15(d) of the Securities Exchange Act of 1934 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
           ---      ---

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation  S-B  contained  in  this  form,  and  no disclosure will be
contained,  to  the  best  of registrant's knowledge, in the definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or  any  amendment  to  this  Form  10-KSB.  [X]

     State  the  issuer's  revenues for its most recent fiscal year:  $6,960,768

     State the aggregate market value of the voting and non-voting common equity
held  by  non-affiliates  computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a  specified  date within the past 60 days:  As of March 15, 2004, the aggregate
market  value  of  voting  stock of the Registrant held by non-affiliates of the
Registrant  based  solely on an appraisal of the Registrant's shares dated March
31,  2002,  was  approximately  $10,274,122.

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as of the latest practicable date:  As of March 15, 2004, there
were  1,828,000  shares  of  the  Registrant's  common  stock  outstanding.

     Documents  Incorporated  by  Reference:
     -    Portions  of  the  Annual  Report  to Shareholders for the fiscal year
          ended December 31, 2003 are incorporated by reference into Parts I and
          II.
     -    Portions  of  the definitive proxy statement for the Annual Meeting of
          Shareholders  to be held on May 20, 2004 are incorporated by reference
          into  Part III.
     Transitional Small Business Disclosure Format:        Yes       No   X
                                                               -----    -----

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<PAGE>
                                TABLE OF CONTENTS
                                -----------------

                                     PART I

ITEM 1.   BUSINESS                                                            3

ITEM 2.   PROPERTIES                                                         21

ITEM 3.   LEGAL PROCEEDINGS                                                  22

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                22

                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED                  22
          STOCKHOLDER  MATTERS

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                  22
          CONDITION AND RESULTS OF OPERATIONS OF FORSYTH
          BANCSHARES,  INC.

ITEM 7.   FINANCIAL STATEMENTS                                               22

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                   22
          ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 8A.  CONTROLS AND PROCEDURES                                            23

                                    PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL               23
          PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

ITEM 10.  EXECUTIVE COMPENSATION                                             24

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                24
          MANAGEMENT

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                     24

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K                                   25

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES                             26

SIGNATURES                                                                   27

EXHIBIT  INDEX                                                               30



                                        2
<PAGE>
                            SPECIAL CAUTIONARY NOTICE
                      REGARDING FORWARD LOOKING STATEMENTS

     Certain  of  the  statements  made  herein  under the caption "Management's
Discussion  and  Analysis  of Financial Condition and Results of Operations" and
elsewhere  in  the  Annual Report 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 Forsyth Bancshares, Inc. (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,"  "intend" or other similar words and expressions of the
future.  The  Company's actual results may differ significantly from the results
discussed  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 the Company's
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; and the
failure  of  assumptions  underlying  the establishment of reserves for possible
loan losses.  All written or oral forward-looking statements attributable to the
Company  are  expressly  qualified  in  their  entirety  by  these  Cautionary
Statements.

                                     PART I

ITEM  1.     BUSINESS

GENERAL

     The  Company  is  a  Georgia  corporation  that  is  a bank holding company
registered  with  the  Board  of  Governors  of  the Federal Reserve System (the
"Federal  Reserve Board") under the Bank Holding Company Act of 1956, as amended
(the  "BHCA")  and  with  the  Department of Banking and Finance of the State of
Georgia  (the  "DBF")  under  the  Georgia  Financial  Institutions  Code  (the
"Financial  Institutions  Code").  The  Company had total consolidated assets of
$121.3  million,  total deposits of $107.7 million and total stockholders equity
of  $12.9 million at December 31, 2003. Through its wholly-owned subsidiary, The
Citizens  Bank of Forsyth County (the "Bank"), the Company operates a commercial
banking  business  in  Forsyth  County,  Georgia.


                                        3
<PAGE>
     The  Bank  is  community  oriented  and  focuses primarily on offering real
estate,  commercial and consumer loans and various deposit and other services to
individuals,  small  to  medium  sized businesses and professionals primarily in
Cumming,  Georgia  and  the  surrounding  area,  including  Forsyth  County (the
"Forsyth  County  Area").  The  Bank  is  the  only  locally  owned  and managed
commercial  bank operating in the Forsyth County Area.  The Company's management
team is comprised of several banking professionals with many years of experience
in Georgia with this and other banking organizations.  The Bank competes against
the  larger  regional  and  super-regional  banks  operating  in  its  market by
emphasizing  the  stability  and  accessibility  of its management, management's
long-term  familiarity  with the market, immediate local decision making and the
pride  of  local  ownership.

     The Company was incorporated as a Georgia corporation on February 14, 1996,
primarily  to own and control all of the capital stock of the Bank.  The Company
currently  engages  in no business other than owning and managing the Bank.  The
Bank received final regulatory approval on January 30, 1997 from the DBF and the
Federal Deposit Insurance Corporation (the "FDIC") to begin business on February
3,  1997.  The  Company  received final approval to acquire the capital stock of
the  Bank  from the DBF on October 15, 1996 and from the Federal Reserve Bank of
Atlanta  (the  "Federal  Reserve"),  as delegate of the Federal Reserve Board on
November  25,  1996.  The  Bank  commenced  operations  on February 3, 1997 as a
commercial  bank  engaging  in a general commercial and retail banking business.

     The  organizers  of  the  Company  and  the Bank (the "Organizers") chose a
holding  company  structure  under which the Company acquired all of the capital
stock  of  the  Bank because, in the judgment of management, the holding company
structure  provides  flexibility  that  would  not  otherwise be available.  The
holding  company  structure  can  assist  the  Bank  in maintaining its required
capital  ratios  because,  subject to compliance with Federal Reserve Board debt
guidelines, the Company may borrow money and contribute the proceeds to the Bank
as  primary  capital.  Moreover,  a  holding  company  may  engage  in  certain
non-banking  activities  that the Federal Reserve Board has deemed to be closely
related  to banking.  See "-- Supervision and Regulation."  In addition, in 1999
Congress  enacted  major  changes  in  the  regulation  of  financial  services
activities,  which  in the future could allow the Company to provide non-banking
financial  services.  See  "--The  Company--The Gramm-Leach-Bliley Act of 1999."

MARKETING  FOCUS

     Most  of  the  banks  in  the Forsyth County Area are now local branches of
large  regional  banks.  Although size gives the larger banks certain advantages
in  competing  for  business  from  large corporations, including higher lending
limits  and  the  ability  to  offer services in other areas of Georgia than the
Forsyth  County  Area, management believes that there is a void in the community
banking  market  in  the  Forsyth  County Area and that the Bank can continue to
successfully  fill  this  void.  As  a  result,  the  Company generally does not
attempt  to  compete  for  the  banking relationships of large corporations, but
concentrates its efforts on small to medium-sized businesses and on individuals.


                                        4
<PAGE>
     The Bank's current plan is to advertise aggressively, using a wide range of
media  to  target  market  segments and emphasize the Company's local ownership,
community  bank nature and ability to provide more personalized service than its
competition.  Management,  as  long-time  residents  and  business people in the
Forsyth  County  Area,  has  determined  the  credit  needs  of the area through
personal  experience  and  communications  with  their  business  colleagues.
Management believes that the area will continue to react favorably to the Bank's
emphasis  on service to small businesses, professional concerns and individuals.
However,  no  assurances  in  this  respect  can  be  given.

LOCATION  AND  SERVICE  AREA

     The  Bank  is a general commercial and retail banking business, emphasizing
the  needs  of  small  to  medium-sized  businesses,  professional  concerns and
individuals,  primarily  in Cumming, Georgia and the surrounding area, including
Forsyth  County.  The  principal  executive offices and telephone number of both
the  Company  and the Bank are 651 Veterans Memorial Boulevard, Cumming, Georgia
30040,  (770)  886-9500.

     During  2002,  the  Bank  completed  construction  of  a new Main Office to
replace  the  leased facilities that it had previously occupied.  The new 11,208
square  foot facility opened in the Fall of 2002 and is located at 651 Veteran's
Memorial  Boulevard in Cumming, Georgia.  During the second quarter of 2001, the
Bank opened a 4000 square feet permanent facility at 5140 Highway 9, Alpharetta,
Georgia  30004,  which  is in the Midway community in south Forsyth County.  The
Company  also  purchased  a  site in the Free Home community in Cherokee County,
Georgia  in  September  2000,  and plans are currently being finalized to open a
second branch facility there during late 2004.  The Company has also purchased a
site  at the intersection of Martin Road and State Road 400 in January 2004 as a
possible  branch  location.

     At  present,  the  Bank's  primary service area is Forsyth County, Georgia,
which  is  located in North Georgia.  Forsyth County was named Georgia's fastest
growing,  and  the  nation's  third  fastest  growing, county in a recent report
issued  by  the  U.S.  Census Bureau.  The estimated total population of Forsyth
County  grew  from 44,083 in 1990 to 98,407 in 2000, a growth rate of 123%.  The
population  of  the  county is estimated to be 116,924 for 2002.  The only major
city  in the county is Cumming, Georgia, which may be reached via major highways
including  Georgia  Highways  9,  20,  141,  306,  369  and  400.

     The principal components of the economy of Forsyth County are wholesale and
retail trade, manufacturing, services and construction industries.  According to
the  Cumming/Forsyth  County  Chamber  of Commerce, the largest employers in the
county  include  Tyson Foods, Inc., Siemens Industrial Automation and Scientific
Games,  Inc.  Dozens  of  manufacturing industries operate in Forsyth County and
industrial  and  business  developments  may  expand  and  establish  additional
facilities  in  Forsyth  County.


                                        5
<PAGE>
DEPOSITS

     The  Bank  offers  a  full  range  of  deposit  services that are typically
available  in  most  banks and savings and loan associations, including checking
accounts,  NOW  accounts,  savings  accounts  and other time deposits of various
types,  ranging  from daily money market accounts to longer-term certificates of
deposit.  The  transaction  accounts  and  time certificates are tailored to the
Bank's  principal  market  area  at  rates  competitive  to those offered in the
Forsyth  County  Area.  In  addition, the Bank offers certain retirement account
services, such as Individual Retirement Accounts ("IRAs").  All deposit accounts
are  insured  by  the  FDIC  up to the maximum amount allowed by law (generally,
$100,000  per depositor, subject to aggregation rules).  The Bank solicits these
accounts  from  individuals,  businesses,  associations,  organizations  and
governmental  authorities.  As  of  December  31, 2003, the Bank's deposits were
allocated  among  certain categories as follows:  12.75% demand deposits, 13.49%
NOW  accounts,  73.76%  time  and  savings  deposits.

LENDING  ACTIVITIES

     General.  The  Bank  emphasizes a range of lending services, including real
estate,  commercial  and  consumer  loans,  to small to medium-sized businesses,
professional  concerns  and  individuals  that  are  located  in  or  conduct  a
substantial portion of their business in the Bank's market area.  As of December
31,  2003,  the  Bank's loans were allocated as follows:  80% real estate loans,
12% commercial loans and 8% consumer and other loans.

     Credit  Risk.  There  are  certain  risks  inherent in making all loans.  A
principal  economic risk inherent in making loans is the creditworthiness of the
borrower.  Other  risks  inherent  in making loans include risks with respect to
the  period of time over which loans may be repaid, risks resulting from changes
in  economic  and industry conditions, risks inherent in dealing with individual
borrowers  and,  in  the  case  of  a  collateralized loan, risks resulting from
uncertainties as to the future value of the collateral.  Management maintains an
allowance  for  loan  losses  based  on,  among  other  things, an evaluation of
economic  conditions  and  regular  reviews  of delinquencies and loan portfolio
quality.  Based  upon  such  factors,  management  makes various assumptions and
judgments  about  the ultimate collectability of the loan portfolio and provides
an  allowance  for  potential  loan  losses  based  upon  a  percentage  of  the
outstanding  balances  and for specific loans when their ultimate collectability
is considered questionable.  Certain specific risks with regard to each category
of  loans  are  described  under  the  separate subheading for each type of loan
below.

     Real  Estate  Loans.  A  primary  component of the Bank's loan portfolio is
loans  secured  by  first  or  second  mortgages  on  real  estate.  These loans
generally  consist of commercial real estate loans, construction and development
loans  and  residential  real estate loans (but exclude home equity loans, which
are  classified  as  consumer  loans).  With  the  exception of residential real
estate  loans,  loan terms generally are limited to five years or less, although
payments  may  be structured on a longer amortization basis.  Interest rates may
be  fixed  or  adjustable, and are more likely fixed in the case of shorter term
loans.  The  Bank  generally charges an origination fee.  Management attempts to
reduce  credit risk in the commercial real estate portfolio by emphasizing loans
on  owner-occupied  office  and  retail buildings where the loan-to-value ratio,


                                        6
<PAGE>
established  by  independent appraisals, does not exceed 80%.  The Bank's policy
is  for the loan-to-value ratio for (i) first and second mortgage loans and (ii)
construction  loans  not  to  exceed  80%.  In  addition,  the  Bank may require
personal guarantees of the principal owners of the property backed with a review
by  the  Bank of the personal financial statements of the principal owners.  The
principal  economic  risk associated with each category of loans, including real
estate  loans,  is  the  creditworthiness  of  the  Bank's borrowers.  The risks
associated  with  real  estate  loans vary with many economic factors, including
employment  levels  and  fluctuations  in  the  value  of real estate.  The Bank
competes  for  real  estate  loans  with  a  number of bank competitors that are
well-established  in  the  Forsyth  County Area.  Most of these competitors have
substantially  greater resources and lending limits than the Bank.  As a result,
the  Bank  may  have  to  charge lower interest rates to attract borrowers.  See
"--Competition."  The  Bank may also originate loans for sale into the secondary
market.  The  Bank attempts to limit interest rate risk and credit risk on these
loans by locking the interest rate for each loan with the secondary investor and
receiving  the  investor's  underwriting approval prior to originating the loan.

     Commercial  Loans.  The Bank makes loans for commercial purposes in various
lines  of businesses.  Commercial loans include both secured and unsecured loans
for  working  capital  (including inventory and receivables), business expansion
(including  acquisition  of  real  estate  and  improvements)  and  purchases of
equipment  and machinery.  Equipment loans are typically made for a term of five
years or less at fixed or variable rates, with the loan fully amortized over the
term and secured by the financed equipment and with a loan-to-value ratio of 80%
or  less.  Working capital loans typically have terms not exceeding one year and
are  usually secured by accounts receivable, inventory or personal guarantees of
the  principals  of  the  business.  For loans secured by accounts receivable or
inventory,  principal  is  typically  repaid as the assets securing the loan are
converted  into  cash,  and  in  other  cases principal will typically be due at
maturity.  The  principal  economic risk associated with each category of loans,
including  commercial  loans,  is  the creditworthiness of the Bank's borrowers.
The  risks  associated  with  commercial  loans vary with many economic factors,
including the economy in the Forsyth County Area.  The well-established banks in
the Forsyth County Area make proportionately more loans to medium to large-sized
businesses  than  the  Bank.  Many  of  the Bank's current and future commercial
loans  are and will likely be made to small to medium-sized businesses which may
be  less  able  to withstand competitive, economic and financial conditions than
larger  borrowers.

     Consumer  Loans.  The  Bank  makes  a  variety  of loans to individuals for
personal and household purposes, including secured and unsecured installment and
term  loans, home equity loans and lines of credit and revolving lines of credit
such  as credit cards. These loans typically carry balances of less than $50,000
and,  in  the  case  of  non-revolving  loans,  are  amortized over a period not
exceeding  60 months or are 180-day term loans, in each case bearing interest at
a  fixed  rate.  The revolving loans typically bear interest at a fixed rate and
require monthly payments of interest and a portion of the principal balance. The
underwriting  criteria  for  home equity loans and lines of credit generally are
the  same as applied by the Bank when making a first mortgage loan, as described
above,  and  home equity lines of credit typically expire 10 years or less after
origination.  As with the other categories of loans, the principal economic risk
associated  with consumer loans is the creditworthiness of the Bank's borrowers,
and  the  principal  competitors for consumer loans are the established banks in
the  Forsyth  County  Area.


                                        7
<PAGE>
     Loan  Approval  and  Review.  The Bank's loan approval policies provide for
various levels of officer lending authority.  When the amount of aggregate loans
to  a  single  borrower exceeds that individual officer's lending authority, the
loan  request  is  considered  and  approved by an officer with a higher lending
limit or the officer's loan committee.  The Bank has established officer lending
limits,  and  any  loan  in excess of this lending limit must be approved by the
loan  committee.  The  Bank  will not make any loans to any director, officer or
employee  of  the  Bank  unless  the  loan  is  approved  by the Bank's Board of
Directors,  or  a  committee thereof, and is made on terms not more favorable to
such  person  than  would be available to a person not affiliated with the Bank.

     Lending  Limit.  Under the Financial Institutions Code, the Bank is limited
in  the  amount  it  can  loan  to a single borrower by the amount of the Bank's
statutory  capital  base.  The limit is 15% of the statutory capital base unless
each  loan  in excess of 15% of the capital base is approved by the Bank's Board
of  Directors,  or a committee thereof, and unless the entire amount of the loan
is  secured  by  good collateral or other ample security.  In no event, however,
may  the  aggregate  amount  loaned  to  any  borrower  exceed 25% of the Bank's
statutory  capital  base, subject to certain exceptions relating to the type and
adequacy  of  the  collateral  for  such  loan.  In  estimating the loans to any
individual,  the  Bank  must  take  into account all amounts loaned to firms and
partnerships  of  which  the individual is a member.  These limits will increase
and  decrease as the Bank's statutory capital base increases and decreases.  The
Bank  does  not  have  any  internal policy restrictions concerning loans to one
borrower  other  than  the limits imposed by the Financial Institutions Code and
those  relating  to loans to affiliates.  See "--Supervision and Regulation--The
Bank--Transactions  With  Affiliates  and  Insiders." Unless the Bank is able to
sell  participations  in  its loans to other financial institutions, the Bank is
not  able to meet all of the lending needs of loan customers requiring aggregate
extensions  of  credit  above  these  limits.

     Under  an amendment to these rules that became effective on March 24, 2000,
a  bank  may  petition  the DBF for approval to utilize the limits applicable to
national  banks regarding loans to a single person or corporation in lieu of the
limits  fixed  by  the Financial Institutions Code.  At this point, the Bank has
not  requested  such  approval from the DBF.  Under this same amendment, the DBF
was  given  the  authority  to  issue  regulations  prescribing less restrictive
lending  limits,  for  banks  meeting certain financial and management criteria,
than  the  limits  fixed  by  the  Financial  Institutions  Code.

OTHER  BANKING  SERVICES

     Other  bank  services  provided  by  the  Bank  include safe deposit boxes,
travelers  checks,  direct  deposits  of  payroll and social security checks and
automatic  drafts  for  various  accounts.  The Bank is associated with a shared
network  of  automated  teller  machines  that  may  be  used  by Bank customers
throughout  Georgia  and other regions.  Customers can access their accounts and
make  transfers through the telephone banking system and the Internet.  The Bank
does  not currently and does not plan to exercise trust powers.  The Bank may in
the  future  offer a full-service trust department, but cannot do so without the
prior  approval  of  the  DBF.


                                        8
<PAGE>
COMPETITION

     The  banking  business  is  highly  competitive.  The  Bank  competes  as a
financial  intermediary  with  other  commercial  banks,  savings  and  loan
associations, mortgage banking firms, consumer finance companies, credit unions,
securities  brokerage  firms, insurance companies, money market mutual funds and
other financial institutions operating in the Forsyth County Area and elsewhere.
As of December 31, 2003, there were 16 commercial banks, with 37 commercial bank
branches,  and  one credit union operating in Forsyth County.  A number of these
competitors  are  well-established  in  the  Forsyth County Area.  Most of these
institutions  have  substantially  greater resources and lending limits than the
Bank  and  offer  certain  services,  such  as  extensive and established branch
networks and trust services, that the Bank either does not currently provide nor
expect  to  provide.  In  addition,  non-depository  institution competitors are
generally not subject to the extensive regulations applicable to the Company and
the  Bank.  Recent  federal  legislation  permits  commercial banks to establish
operations  nationwide,  further  increasing  competition  from  out-of-state
financial  institutions.  Furthermore,  recently  enacted  Georgia  legislation
greatly  diminishes  the  historical  legal  restrictions on establishing branch
banks  across  county  lines in Georgia, thus creating further opportunities for
other financial institutions to compete with the Bank. As of July 1, 1998, banks
may  establish  branch banks statewide without limitation.  See "Supervision and
Regulation--The Bank--Branching."  In addition, on-line computer banking via the
Internet  or  otherwise  may also become an increasing source of competition for
community  financial  institutions  such  as  the  Bank.  As  a  result of these
competitive  factors,  the  Bank may from time to time be required to pay higher
rates  of  interest to attract deposits.  Management believes that the Bank will
continue to be able to compete effectively with these institutions in the Bank's
proposed  markets,  but  no  assurances  can  be  given  in  this  regard.

     Forsyth  County  is  a rapidly growing market area.  Currently, the Bank is
the only locally owned and operated bank in Forsyth County.  Management believes
that  this  enhances  the Bank's ability to maintain strong local support and to
continue  its  growth.

SUPERVISION  AND  REGULATION

     The  Company and the Bank are subject to state and federal banking laws and
regulations that impose specific requirements or restrictions on and provide for
general  regulatory  oversight  with  respect  to virtually all aspects of their
operations.  These  laws  and  regulations  are  generally  intended  to protect
depositors,  not  shareholders.  To  the  extent  that  the  following  summary
describes statutory or regulatory provisions, it is qualified in its entirety by
reference  to the particular statutory and regulatory provisions.  Any change in
applicable  laws  or  regulations may have a material effect on the business and
prospects  of  the  Company.  Beginning  with  the  enactment  of  the Financial
Institutions  Reform,  Recovery  and  Enforcement  Act  of  1989  ("FIRREA") and
following  with  the  Federal Deposit Insurance Corporation Improvement Act (the
"FDICIA"),  which  was  enacted  in  1991,  numerous  additional  regulatory
requirements  have  been  placed on the banking industry, and additional changes
have  been proposed.  The operations of the Company and the Bank may be affected
by  legislative changes and the policies of various regulatory authorities.  The
Company  is  unable  to  predict  the  nature or the extent of


                                        9
<PAGE>
the  effect  on  its  business  and  earnings  that fiscal or monetary policies,
economic  control,  or  new federal or state legislation may have in the future.

THE  COMPANY

     General.  Because  it  owns  the outstanding capital stock of the Bank, the
Company  is  a  bank  holding  company  within  the  meaning of the BHCA and the
Financial  Institutions  Code.  During  periods prior to 2000, the activities of
the Company were also restricted by The Banking Act of 1933, better known as the
Glass-Steagall  Act  (the  "Glass-Steagall  Act"),  which  is  discussed  below.
However,  on  November  12,  1999,  the  most  important  provisions  of  the
Glass-Steagall  Act  that  restricted  the Company's activities were repealed by
Public Law No. 106-102, the Gramm-Leach-Bliley Act of 1999 (the "GLB Act").  The
GLB  Act  replaced  the  prior restrictions with a regulatory regime intended to
facilitate affiliations among banking, securities, insurance and other financial
services  firms.  Most  of  these  changes  became  effective  120  days  after
enactment.  See  "--The  Gramm-Leach-Bliley  Act  of  1999."

     The  BHCA.  Under  the BHCA, the Company is subject to periodic examination
by  the  Federal  Reserve  and  is  required  to  file  periodic  reports of its
operations  and  such additional information as the Federal Reserve may require.
The  Company's  and  the  Bank's  activities  are  currently limited to banking,
managing or controlling banks; furnishing services to or performing services for
its  subsidiaries  and  engaging  in  other  activities that the Federal Reserve
determines to be so closely related to banking, managing or controlling banks as
to  be  a proper incident thereto.  However, as previously noted, changes in the
law  enacted  in  1999 may permit the Company to expand its authorized financial
services  activities in the future.  See "--The Gramm-Leach-Bliley Act of 1999."

     Investments,  Control and Activities.  With certain limited exceptions, the
BHCA  requires  every  bank  holding company to obtain the prior approval of the
Federal Reserve before:  (i) acquiring substantially all the assets of any bank;
(ii)  acquiring  direct or indirect ownership or control of any voting shares of
any  bank  if after such acquisition it would own or control more than 5% of the
voting  shares  of such bank (unless it already owns or controls the majority of
such  shares);  or  (iii)  merging  or  consolidating  with another bank holding
company.

     In  addition, and subject to certain exceptions, the BHCA and the Change in
Bank  Control  Act  require  Federal  Reserve  approval  (or,  depending  on the
circumstances,  no  notice  of  disapproval)  prior  to  any  person  or company
acquiring  "control" of a bank holding company, such as the Company.  Control is
conclusively  presumed to exist if an individual or company acquires 25% or more
of  any  class  of  voting  securities  of the bank holding company.  Control is
rebuttably  presumed  to  exist  if a person acquires 10% or more, but less than
25%,  of  any  class  of voting securities and either the Company has registered
securities  under  Section 12 of the Securities Exchange Act of 1934, as amended
(the  "Exchange  Act")  or no other person will own a greater percentage of that
class  of  voting securities immediately after the transaction.  The regulations
provide  a  procedure  for  challenging  the  rebuttable  control  presumption.

     Subject  to the changes made by the GLB Act, the BHCA generally prohibits a
bank  holding  company from engaging in, or acquiring direct or indirect control
of,  more  than  5%  of


                                       10
<PAGE>
the  voting  shares of any company engaged in non-banking activities, unless the
Federal  Reserve,  by  order  or regulation, has found those activities to be so
closely  related  to  banking or managing or controlling banks as to be a proper
incident thereto. Some of the activities that the Federal Reserve has determined
by  regulation  to be proper incidents to the business of a bank holding company
include  making  or  servicing  loans  and  certain types of leases, engaging in
securities  brokerage  and limited insurance activities, performing certain data
processing  services,  acting  in  certain  circumstances  as  a  fiduciary  or
investment  or  financial  adviser,  owning  savings  associations  and  making
investments  in  certain  corporations or projects designed primarily to promote
community  welfare.

     The  Company  is  a  legal  entity  separate  and  distinct  from the Bank.
However,  various  legal  restrictions that affect the Bank's lending activities
are  also applicable to the Company.  In particular, the Company is also subject
to  Sections  23A  and 23B of the Federal Reserve Act in dealing with affiliates
and  insiders.  See  "--The  Bank--Transactions  With  Affiliates and Insiders."

     The  Federal  Reserve  imposes  certain capital requirements on the Company
under  the  BHCA,  including  a  minimum  leverage  ratio and a minimum ratio of
"qualifying"  capital to risk-weighted assets.  These requirements are described
below  under  "-- Capital Regulations."  Subject to its capital requirements and
certain  other  restrictions,  the Company may be able to borrow money to make a
capital  contribution  to  the Bank, and such loans may be repaid from dividends
paid  from  the  Bank  to  the  Company, although the ability of the Bank to pay
dividends  is  subject to regulatory restrictions.  See "--The Bank--Dividends."
The  Company  may  also be able to raise capital for contribution to the Bank by
issuing  securities,  subject  to  compliance  with federal and state securities
laws.

     The  Gramm-Leach-Bliley Act of 1999.  Congress enacted the GLB Act into law
on  November  12,  1999,  subject  to  certain  delayed effective dates as noted
throughout  this  discussion.  The  scope of the new legislation, and its impact
upon  governmental  regulation  of  financial  services, is sweeping.  Popularly
known  as  "financial  services modernization," this legislation repeals certain
provisions  of  the  Glass-Steagall  Act  that restricted the financial services
activities  of  depository  institutions  and  holding  companies, and otherwise
facilitates  affiliation  among banks, securities firms and insurance companies.
The new legislation also affects various other bank regulatory matters including
privacy  protection  provisions  for  customers  of  financial institutions, the
Federal Home Loan Bank system's modernization, automatic teller machines and The
Community  Reinvestment  Act  of  1977  (the "CRA").  See "--The Bank--Community
Reinvestment  Act"  and  "--Legislative  and  Regulatory  Changes."

     The  GLB  Act  seeks  to  achieve  "financial  services  modernization"
principally  by amending the  BHCA to permit a bank holding company to engage in
various  financial  activities  through  a  new  type  of  bank holding company,
referred  to  as  a financial holding company ("FHC").  Under the GLB Act, FHC's
are  given  the  authority  to  engage in financial services activities in which
other  bank  holding  companies  may not engage, and to affiliate with companies
that  are  engaged  in  such  financial  services  activities.  Generally,  the
authorized  activities  of a FHC include activities that are:  (i) "financial in
nature;"  (ii) "incidental" to an activity that is financial in nature; or (iii)
"complementary"  to  a  financial  activity  and  do  not  pose


                                       11
<PAGE>
a substantial risk to the safety and soundness of depository institutions or the
financial  system  in  general.

     The  Federal  Reserve  and  the Secretary of the Treasury are authorized to
determine  which  activities  meet  these  standards.  However,  the  GLB  Act
specifically  lists  certain  activities  as being financial in nature.  Some of
these  activities  are:  lending, exchanging, transferring, investing for others
or  safeguarding  money  or  securities;  insuring, guaranteeing or indemnifying
against  loss,  harm,  damage,  illness,  disability  or death, or providing and
issuing annuities and acting as principal, agent or broker for these purposes in
any  state;  providing  financial,  investment  or  economic  advice; issuing or
selling  interests  in  pools  of  assets  that  a  bank  could  hold  directly;
underwriting,  dealing  in  or  making  markets  in  securities; engaging in any
activity that the Federal Reserve had determined as of the enactment date of the
GLB  Act to be related closely to banking; and engaging within the United States
in  any  activity  that  a  bank  holding company could engage in outside of the
United  States, if the Federal Reserve found as of the enactment date of the GLB
Act  that  the  activity was usual in connection with banking or other financial
operations  internationally.

     The GLB Act also adopts the concept of "functional regulation" with respect
to  the  activities of FHC subsidiaries.  For example, the GLB Act reaffirms the
McCarran-Ferguson Act, recognizing the primacy and legal authority of the states
to  regulate  insurance  activity.  Accordingly, insurance activities of a FHC's
insurance  subsidiary  will principally be subject to "functional regulation" by
state  insurance  regulators.  The  GLB  Act  preserves  the role of the Federal
Reserve  as the "umbrella" supervisor for bank holding companies, but limits the
Board's  authority  to  examine  non-bank  subsidiaries  that  are  subject  to
"functional  regulation."

     Not  all  bank  holding companies may become FHC's.  A bank holding company
must  meet  the  following three requirements before becoming a FHC:  (i) all of
the  bank  holding  company's  depository institution subsidiaries must be "well
capitalized;"  (ii)  all  of  the  bank holding company's depository institution
subsidiaries  must  be  "well  managed;" and (iii) the bank holding company must
file  a  declaration  with  the Federal Reserve of its election to become a FHC,
including  a certification that its depository institution subsidiaries meet the
prior  two  criteria.

     With  only  a few exceptions, in order to exercise the powers granted under
the  GLB Act, a FHC or depository institution also must meet the requirements of
the  CRA.  If  any  depository  institution, depository institution affiliate or
depository  institution  subsidiary  of a FHC did not receive a CRA rating of at
least  a  "satisfactory  record  of  meeting community credit needs" in its most
recent  CRA  examination,  the  regulatory  agencies are directed to prevent the
depository  institution  or FHC from exercising the new powers authorized by the
GLB  Act,  either  directly  or  through  a  subsidiary.  The Company received a
"satisfactory  rating"  in  its  most  recent  CRA  examination.

     To  this date, the Company does not believe that the GLB Act has negatively
affected the operations of the Company or the Bank.  However, to the extent that
the  legislation  permits  banks,  securities  firms  and insurance companies to
affiliate, the financial services industry may experience further consolidation.
This  could  result  in  a  growing  number  of  larger,  diversified


                                       12
<PAGE>
financial  companies  that  offer a wider variety of financial services than the
Company  currently  offers.  This  could in turn result in increased competition
within  the  Company's  market  area.  However,  the  GLB  Act  also  provides
opportunities  for  the  Company  to expand and diversify its activities to meet
such  competition.  See  "--Legislative  and  Regulatory  Changes."

     Source  of  Strength.  In accordance with a Policy Statement of the Federal
Reserve  and  Regulation  Y,  the  Company  is  expected  to  act as a source of
financial  strength  to  the  Bank  and  to commit resources to support the Bank
during  periods  of  "financial stress and adversity" in which the Company might
not  otherwise  do  so.  Under  the BHCA, the Federal Reserve may require a bank
holding  company  to  terminate any activity or relinquish control of a non-bank
subsidiary  (other  than  a  non-bank  subsidiary  of  a  bank) upon the Federal
Reserve's determination that such activity or control constitutes a serious risk
to the financial soundness or stability of any subsidiary depository institution
of  the bank holding company.  Further, federal bank regulatory authorities have
additional  discretion to require a bank holding company to divest itself of any
bank  or  non-bank  subsidiary if the agency determines that divestiture may aid
the  depository  institution's  financial  condition.

     The  Financial  Institutions Code.  All Georgia bank holding companies must
register  with the DBF under the Financial Institutions Code.  A registered bank
holding  company  must  provide  the  DBF  with  information with respect to the
financial  condition,  operations, management and inter-company relationships of
the  holding  company and its subsidiaries.  The DBF may also require such other
information  as  is necessary to remain informed as to whether the provisions of
Georgia  law  and  the  regulations and orders issued thereunder by the DBF have
been  complied  with,  and  the  DBF  may  make examinations of any bank holding
company  and  its  subsidiaries.

     Under  the  Financial  Institutions  Code, it is unlawful without the prior
approval  of  the  DBF:  (i)  for  any bank holding company to acquire direct or
indirect  ownership or control of more than 5% of the voting shares of the bank;
(ii)  for  any bank holding company or subsidiary thereof, other than a bank, to
acquire  all or substantially all of the assets of a bank; or (iii) for any bank
holding company to merge or consolidate with any other bank holding company.  It
is  also  unlawful  for  any  bank holding company to acquire direct or indirect
ownership  or  control  of  more than 5% of the voting shares of any bank unless
such  bank has been in existence and continuously operating or incorporated as a
bank for a period of three years or more prior to the date of application to the
DBF  for  approval  of  such  acquisition.

     The  Financial  Institutions  Code and applicable provisions of federal law
allow interstate banking by permitting bank holding companies to acquire Georgia
banking  organizations  so  long  as the Georgia-based banks to be acquired have
been  in  existence  and continuously operated as banks for three years or more.
Georgia  bank  holding  companies  are  likewise  permitted  to  acquire banking
organizations  in  other  states,  subject to similar aging requirements.  Banks
located  in  substantially  all  states  also  may  merge  or  consolidate  with
Georgia-based banks that satisfy the three year age requirement.  Following such
mergers or consolidations, the resulting bank may expand in each state where its
predecessors  were  located,  subject  to  the branching laws of that particular
state.  Those acquisitions and transactions are generally subject to federal and
Georgia  approval  as  described  above.  See  "--  The  Bank--Branching."


                                       13
<PAGE>
     Glass-Steagall  Act.  Prior  to  the  effective  date  of  the GLB Act, the
Company  was  subject  to  certain  provisions  of the Glass-Steagall Act, which
prohibited  the  Company  from  being  affiliated,  through  either ownership or
interlocking  directors, officers or employees, with firms "engaged principally"
in  securities  activities.  As  explained  above,  the  GLB  Act repealed these
provisions  and  amended  the  BHCA  to permit such activities by a bank holding
company that qualifies as a FHC. See "--The Gramm-Leach-Bliley Act of 1999."

THE  BANK

     General.  The Bank is a state-chartered non-member bank organized under the
laws of the State of Georgia and subject to examination by the DBF.  Deposits in
the  Bank are insured by the FDIC up to a maximum amount (generally $100,000 per
depositor,  subject  to  aggregation  rules).  The  DBF and the FDIC regulate or
monitor virtually all areas of the Bank's operations, including security devices
and  procedures,  adequacy  of  capitalization  and  loss  reserves,  loans,
investments,  borrowings, deposits, mergers, issuances of securities, payment of
dividends, interest rates payable on deposits, interest rates or fees chargeable
on  loans,  establishment of branches, corporate reorganizations, maintenance of
books  and  records  and adequacy of staff training to carry on safe lending and
deposit  gathering  practices.  The  DBF  and  FDIC require the Bank to maintain
certain capital ratios and impose limitations on the Bank's aggregate investment
in  real  estate,  bank  premises,  furniture  and  fixtures.  The  Bank is also
required  by  the  DBF  and  FDIC  to  prepare  quarterly  reports on the Bank's
financial  condition  and to conduct an annual audit of its financial affairs in
compliance with minimum standards and procedures prescribed by the DBF and FDIC.

     All  insured  institutions must undergo regular on site examinations by the
appropriate  bank  regulatory agency.  The DBF assesses the cost of examinations
of  insured  depository institutions and any affiliates against each institution
or  affiliate  as  it  deems necessary or appropriate.  Insured institutions are
required  to  submit  annual reports to the FDIC and the appropriate agency (and
state supervisor when applicable).  FDICIA also directs the FDIC to develop with
other  appropriate  agencies  a  method  for  insured depository institutions to
provide supplemental disclosure of the estimated fair market value of assets and
liabilities,  to  the  extent  feasible  and  practicable, in any balance sheet,
financial  statement,  report  of  condition  or any other report of any insured
depository  institution.  FDICIA  also  requires  the federal banking regulatory
agencies  to  prescribe,  by  regulation,  standards  for all insured depository
institutions  and depository institution holding companies relating, among other
things,  to:  (i) internal controls, information systems and audit systems; (ii)
loan documentation; (iii) credit underwriting; (iv) interest rate risk exposure;
and  (v)  asset  quality.

     Deposit  Insurance.  The FDIC establishes rates for the payment of premiums
by  federally  insured banks and thrifts for deposit insurance.  A separate Bank
Insurance  Fund  ("BIF")  and  Savings  Association  Insurance Fund ("SAIF") are
maintained  for  commercial  banks  and  thrifts,  respectively,  with insurance
premiums  from  the  industry  used to offset losses from insurance payouts when
banks  and  thrifts  fail.  Insurance  premiums  are established on the basis of
risk,  where  the  institutions  posing  the  highest risk of failure pay higher
premiums  than  those  posing a lower risk of failure.  The applicable rates are
based  on  a  matrix  developed  by  the  FDIC  that


                                       14
<PAGE>
places  institutions  into one of three categories based on their capital group.
See  "--Capital  Regulations."  Because  the  Bank  is  classified  as  "well
capitalized"  it  is  placed  in  capital  category  1, which results in a lower
assessment  rate.  Within each capital category, each institution is assigned to
one  of  three  subgroups  based  on  the  FDIC's  consideration  of supervisory
evaluations  provided  by  the institution's primary Federal regulator. The FDIC
can  also consider any other information, such as state regulatory examinations,
which  it  deems  appropriate.  Increases  in  deposit  insurance  premiums will
increase  the  Bank's  cost of funds, and there can be no assurance that deposit
insurance  premiums  will  not  increase  in  the  future.

     Pursuant  to  the  Federal  Deposit Insurance Funds Act of 1996, commercial
banks  are  also  required  to  pay  part  of  the  interest  on  the  Financing
Corporation's  ("FICO") bonds issued to deal with the savings and loan crisis of
the late 1980s.  As a result, commercial bank deposits are now also subject to a
special  assessment  on BIF assessable deposits by FICO upon the approval by the
FDIC  Board  ("FICO Assessment") of such assessment.  The Bank's FICO Assessment
for  2003  was  $14,163,  and  management  believes  that  it  will  be at least
approximately  $14,163  for  2004.

     Transactions  With  Affiliates  and  Insiders.  The  Bank is subject to the
provisions  of Section 23A of the Federal Reserve Act, which place limits on the
amount  of  loans or extensions of credit to, or investments in or certain other
transactions  with,  affiliates  and  on the amount of advances to third parties
collateralized by the securities or obligations of affiliates.  The aggregate of
all  covered  transactions is limited in amount, as to any one affiliate, to 10%
of  a bank's capital and surplus and, as to all affiliates combined, to 20% of a
bank's capital and surplus.  Furthermore, within the foregoing limitations as to
amount,  each  covered  transaction must meet specified collateral requirements.
Compliance is also required with certain provisions designed to avoid the taking
of  low  quality  assets  from  affiliates.

     The  Bank  is  also subject to the provisions of Section 23B of the Federal
Reserve  Act which, among other things, prohibit an institution from engaging in
certain  transactions  with  affiliates  unless  the  transactions  are on terms
substantially  the  same,  or  at  least as favorable to such institution or its
subsidiaries  as  those  prevailing at the time for comparable transactions with
non-affiliated  companies.  The  Bank  is  subject  to  certain  restrictions on
extensions  of  credit  to  executive  officers,  directors,  certain  principal
shareholders  and their related interests.  Such extensions of credit:  (i) must
be  made  on  substantially  the  same  terms,  including  interest  rates  and
collateral,  as  those  prevailing  at the time for comparable transactions with
third  parties; and (ii) must not involve more than the normal risk of repayment
or  present  other  unfavorable  features.

     Dividends.  The  principal source of the Company's cash revenues comes from
dividends  received  from the Bank.  Under the Financial Institutions Code, cash
dividends  on  the  Bank's common stock may be declared and paid only out of its
retained  earnings,  and  dividends may not be declared at any time at which the
Bank's  paid-in  capital  and  appropriated  retained  earnings  do  not,  in
combination,  equal at least 20% of its capital stock account.  In addition, the
DBF's  current  rules  and  regulations  require  prior DBF approval before cash
dividends  may  be declared and paid if:  (i) the Bank's ratio of Tier 1 Capital
(see  discussion  of Tier 1 Capital below) to Adjusted Total Assets is less than
6%;  (ii)  the  aggregate  amount  of  dividends  declared  or


                                       15
<PAGE>
anticipated  to  be declared in that calendar year exceeds 50% of the Bank's net
profits,  after  taxes  but before dividends, for the previous calendar year; or
(iii)  the percentage of the Bank's assets classified as adverse as to repayment
or recovery by the DBF in the most recent examination of the Bank exceeds 80% of
the  Bank's  Tier  1  Capital  plus  Allowance  for  Loan  Losses.

     In  addition,  the  Federal  Reserve has stated that bank holding companies
should refrain from or limit dividend increases or reduce or eliminate dividends
under  circumstances  in  which  the  bank holding company fails to meet minimum
capital requirements or in which its earnings are impaired.  Current federal law
would  prohibit,  except  under  certain circumstances and with prior regulatory
approval,  an  insured  depository  institution  such  as  the  Bank from paying
dividends  or making any other capital distribution if, after making the payment
or distribution, the institution would be considered "undercapitalized," as that
term  is  defined  in  the  applicable  regulations.

     Branching.  Recent  Georgia  legislation  has  greatly  diminished  the
historical  legal  restrictions on establishing branch banks across county lines
in  Georgia.  Under  Georgia  law,  banks  may  establish branch banks statewide
without  limitation  subject  to  prior  regulatory  approval.  Such approval is
granted  under the same criteria applied to the establishment of a de novo bank.
In  addition,  the  Company,  with  prior  regulatory  approval, is permitted to
acquire  interests in and operate banks throughout the state provided such banks
have  been  in  existence  for five years.  Any bank that can be acquired by the
Company  under  these  rules  could  also  be merged into the Bank such that its
offices  would  then  be  operated  as  branches  of  the  Bank.

     Prior  to  2000,  the  Bank  operated only from its Main Office in Cumming,
Georgia.  During  the  first quarter of 2000, the Bank opened a branch office in
the  Forsyth  County  community known as Midway.  In addition, in September 2000
the  Company  acquired  a  site  for an additional branch office in the Cherokee
County  community  known  as  Free Home.  Plans are currently being finalized to
open  a  second  branch  office  at  this  site  in late 2004.  The Company also
purchased  a  site  at  the  intersection  of  Martin Road and State Road 400 in
northern Forsyth County in January 2004 as a possible branch location. Depending
upon profitability and community needs, additional branches may be opened in the
future.

     Community  Reinvestment  Act.  The  Company and the Bank are subject to the
provisions  of the CRA and the federal banking agencies' regulations thereunder.
Under  the  CRA,  all  banks  and  thrifts  have  a  continuing  and affirmative
obligation,  consistent  with  safe and sound operations to help meet the credit
needs  for  their  entire  communities,  including  low  and  moderate  income
neighborhoods.  The  CRA  requires  a  depository  institution's primary federal
regulator,  in connection with its examination of the institution, to assess the
institution's record in meeting the credit needs of the community served by that
institution,  including  low  and moderate income neighborhoods.  The regulatory
agency's assessment of the institution's record is made available to the public.
Further,  such  assessment  is  required of any institution that has applied to:
(i)  charter  a  national  bank;  (ii)  obtain  deposit insurance coverage for a
newly-chartered  institution;  (iii)  establish a new branch office that accepts
deposits; (iv) relocate an office; (v) merge or consolidate with, or acquire the
assets  or  assume  the  liabilities  of,  a  federally  regulated  financial
institution;  or  (vi)  expand other activities, including engaging in financial
services  activities  authorized  by the GLB Act.  In the case of a bank holding
company  applying


                                       16
<PAGE>
for  approval  to  acquire  a bank or other bank holding company, or to become a
FHC,  the  Federal Reserve will assess the records of each subsidiary depository
institution  of  the applicant bank holding company, and such records may be the
basis  for denying the application. The Company received a "satisfactory rating"
in  its  most  recent  CRA  examination.

     The  GLB Act made various changes to the CRA.  Among other changes, all CRA
related  agreements  with  non-governmental  third parties must be disclosed and
annual  CRA  reports must be made to a bank's primary federal regulator.  A bank
holding  company  will  not  be permitted to become a FHC, and no new activities
authorized  under the GLB Act may be commenced by a holding company or by a bank
through  a  financial  subsidiary, if any of its bank subsidiaries received less
than  a  "satisfactory"  rating  in  its  latest  CRA  examination.

     The  GLB Act provides smaller financial institutions with some relief under
the CRA.  Institutions with assets of not more than $250 million will be subject
to  CRA examinations:  (i) not more than once every 60 months if the institution
receives  a rating of "outstanding," and (ii) not more than once every 48 months
if  the  institution  receives  a  rating  of  "satisfactory."

     Other  Regulations.  Interest  and  certain  other  charges  collected  or
contracted  for  by the Bank are subject to state usury laws and certain federal
laws  concerning interest rates.  The Bank's loan operations are also subject to
certain  federal  laws  applicable  to  credit  transactions,  such as:  (i) the
federal  Truth-In-Lending Act, governing disclosures of credit terms to consumer
borrowers;  (ii)  the  Home Mortgage Disclosure Act of 1975, requiring financial
institutions to provide information to enable the public and public officials to
determine  whether  a financial institution will be fulfilling its obligation to
help  meet  the housing needs of the community it serves; (iii) the Equal Credit
Opportunity Act, prohibiting discrimination on the basis of race, creed or other
prohibited  factors  in  extending credit; (iv) the Fair Credit Reporting Act of
1978,  governing  the  use  and  provision  of  information  to credit reporting
agencies;  (v)  the  Fair  Debt  Collection  Act,  governing the manner in which
consumer  debts  may be collected by collection agencies; and (vi) the rules and
regulations  of  the various federal agencies charged with the responsibility of
implementing  such  federal  laws.  The  deposit operations of the Bank also are
subject  to the Right to Financial Privacy Act, which imposes a duty to maintain
confidentiality  of  consumer  financial  records  and prescribes procedures for
complying with administrative subpoenas of financial records, and the Electronic
Funds  Transfer  Act,  and  Regulation  E issued by the Federal Reserve Board to
implement  that  act,  which  governs automatic deposits to and withdrawals from
deposit  accounts  and customers' rights and liabilities arising from the use of
automated  teller  machines  and  other  electronic  banking  services.

CAPITAL  REGULATIONS

     The  federal  bank  regulatory  authorities have adopted risk-based capital
guidelines  for  banks  and  bank  holding  companies  that are designed to make
regulatory  capital  requirements more sensitive to differences in risk profiles
among  banks and bank holding companies and account for off-balance sheet items.
The  guidelines  are  minimums, and the federal regulators have noted that banks
and  bank  holding companies contemplating significant expansion programs should
not  allow expansion to diminish their capital ratios and should maintain ratios
in  excess  of  the minimums.  Neither the Company nor the Bank has received any
notice


                                       17
<PAGE>
indicating  that  either  entity will be subject to higher capital requirements.
The  current  guidelines  require  all  bank  holding  companies  and
federally-regulated  banks  to maintain a minimum risk-based total capital ratio
of  8%,  of  which  at  least 4% must be Tier 1 Capital. Tier 1 Capital includes
common  stockholders'  equity, qualifying perpetual preferred stock and minority
interests in equity accounts of consolidated subsidiaries, but excludes goodwill
and most other intangibles and excludes the allowance for loan and lease losses.
Tier 2 Capital includes the excess of any preferred stock not included in Tier 1
Capital,  mandatory  convertible  securities,  hybrid  capital  instruments,
subordinated debt and intermediate term-preferred stock and general reserves for
loan  and  lease  losses  up  to  1.25%  of  risk-weighted  assets.

     Under these guidelines, bank's and bank holding companies' assets are given
risk-weights  of  0%,  20%, 50% or 100%.  In addition, certain off-balance sheet
items  are  given  credit conversion factors to convert them to asset equivalent
amounts  to  which  an  appropriate  risk-weight will apply.  These computations
result  in  the total risk-weighted assets.  Most loans are assigned to the 100%
risk  category,  except  for  first  mortgage loans fully secured by residential
property  and, under certain circumstances, residential construction loans, both
of which carry a 50% rating.  Most investment securities are assigned to the 20%
category,  except  for municipal or state revenue bonds, which have a 50% rating
and  direct  obligations  of  or  obligations  guaranteed  by  the United States
Treasury or United States government agencies, which have a 0% rating.

     The  federal  bank  regulatory authorities have also implemented a leverage
ratio,  which is equal to Tier 1 Capital as a percentage of average total assets
less  intangibles, to be used as a supplement to the risk-based guidelines.  The
principal  objective  of  the  leverage  ratio  is  to place a constraint on the
maximum  degree  to which a bank holding company may leverage its equity capital
base.  The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100
to  200  basis  points.

     FDICIA  established  a  capital-based regulatory scheme designed to promote
early intervention for troubled banks that requires the FDIC to choose the least
expensive  resolution of bank failures.  This capital-based regulatory framework
contains  five  categories  of  compliance with regulatory capital requirements,
including  "well-capitalized,"  "adequately  capitalized,"  "undercapitalized,"
"significantly  undercapitalized" and "critically undercapitalized."  To qualify
as  a  "well-capitalized"  institution, a bank must have a leverage ratio of not
less  than 5%, a Tier 1 Capital risk-based ratio of not less than 6% and a total
risk-based  capital  ratio  of not less than 10%, and the bank must not be under
any  order  or  directive  from  the  appropriate  regulatory agency to meet and
maintain  a  specific  capital  level.  The  Bank  currently  qualifies  as
"well-capitalized," and as of December 31, 2003 had a leverage ratio of 7.75%, a
Tier 1 Capital risk-based ratio of 9.77% and a total risk-based capital ratio of
10.87%.

     Under  the  FDICIA  regulations,  the  applicable  agency  can  treat  an
institution  as  if  it were in the next lower category if the agency determines
(after  notice  and  an  opportunity  for hearing) that the institution is in an
unsafe  or  unsound  condition  or is engaging in an unsafe or unsound practice.
The  degree of regulatory scrutiny of a financial institution will increase, and
the  permissible  activities  of  the  institution  will  decrease,  as it moves
downward through the capital categories.  Institutions that fall into one of the
three  undercapitalized  categories  may  be  required


                                       18
<PAGE>
to:  (i) submit a capital restoration plan; (ii) raise additional capital; (iii)
restrict  their  growth,  deposits,  interest  rates, and other activities; (iv)
improve  their  management;  (v)  eliminate  management  fees;  or  (vi)  divest
themselves  of  all  or  a  part  of  their  operations.  Bank holding companies
controlling financial institutions can be called upon to boost the institutions'
capital  and  to  partially  guarantee the institutions' performance under their
capital  restoration  plans.

     The  Federal  Reserve  has  also  established  independent capital adequacy
quidelines  for  bank holding companies.  However, if a bank holding company has
less  than  $150,000,000  in  consolidated  assets,  is  not engaged in non-bank
activities  involving  significant  publicly  held  debt  in  relation to equity
(leverage)  and  does  not  have a parent company with significant publicly held
debt,  the  capital  adequacy  guideless  are applied on a bank only basis.  The
Company  currently  comes  within  this  exception.

     These capital guidelines can affect the Company in several ways.  As noted,
the Bank currently qualifies as "well capitalized."  However, rapid growth, poor
loan  portfolio  performance  or  poor  earnings performance or a combination of
these factors, could change the Company's capital position in a relatively short
period  of  time,  making  an  additional  capital  infusion  necessary.

     Failure  to meet these capital requirements would mean that a bank would be
required  to  develop and file a plan with its primary federal banking regulator
describing  the  means  and  a  schedule  for  achieving  the  minimum  capital
requirements.  In  addition,  such a bank would generally not receive regulatory
approval of any application that requires the consideration of capital adequacy,
such  as  a  branch  or  merger application, unless the bank could demonstrate a
reasonable  plan  to  meet the capital requirement within a reasonable period of
time.

     Effective  on  March 24, 2000, the DBF issued a revised Statement of Policy
(the  "DBF  Statement")  setting  out comprehensive policies regarding financial
institutions  in Georgia.  With respect to capital regulation, the DBF Statement
states  that  its  goal  is  to  "  eliminate  differences in the definitions of
capital, assets, and related terms between the Department and Federal agencies."
Toward  this  end,  the  DBF Statement adopted the "definition of Tier 1 Capital
contained  in  Part  325  of the Federal Deposit Insurance Corporation Rules and
Regulations  [as]  the  definition  of  capital  for  purposes of this policy on
capital  adequacy."  The  DBF  Statement  also  adopted the definition of "Total
Assets"  found  in  Part  325  of  the  FDIC's  Rules  and  Regulations.

     The DBF Statement generally requires a Tier 1 Capital to Total Assets ratio
of  at least 4.5%. However, banks having less than $3,000,000 Tier 1 Capital are
required  to  maintain  a  ratio  of  at  least 5.5%, and banks having less than
$2,000,000  in Tier 1 Capital are required to maintain a ratio of at least 6.5%.
Any  banks  having  a  Tier  1  Capital ratio below these minimum levels will be
required  to  immediately provide for an injection of additional equity capital.
The  DBF Statement further provides that "even for institutions determined to be
financially  sound,  well  managed, and diversified " the DBF may require higher
levels  of capitalization based on a "qualitative analysis" of the circumstances
under  which  the  institution  is  operating  or  is  forecast  to  operate.


                                       19
<PAGE>
     The  DBF  Statement  includes separate capital adequacy guidelines for bank
holding companies.  However, the DBF Statement includes an exception under which
the  capital  adequacy  of  certain  bank  holding  companies  having  less than
$150,000,000  in  Total  Consolidated  Assets,  no  significant debt held by the
general  public,  no  nonbank  activity  involving  significant leverage, and no
significant  off-balance sheet activities will generally be considered on a bank
only  basis.

ENFORCEMENT  POWERS

     FIRREA  expanded  and  increased civil and criminal penalties available for
use  by  the  federal  regulatory  agencies  against depository institutions and
certain  "institution-affiliated  parties"  (primarily  including  management,
employees and agents of a financial institution and independent contractors such
as  attorneys,  accountants  and  others,  who participate in the conduct of the
financial institution's affairs).  These practices can include the failure of an
institution to timely file required reports or the filing of false or misleading
information  or the submission of inaccurate reports.  Civil penalties may be as
high  as  $1,000,000  a  day  for  such violations.  Criminal penalties for some
financial  institution  crimes  have  been  increased to 20 years.  In addition,
regulators are provided with greater flexibility to commence enforcement actions
against  institutions  and institution-affiliated parties.  Possible enforcement
actions  include  the  termination  of  deposit  insurance.  Furthermore, FIRREA
expanded  the  appropriate  banking  agencies'  power  to issue cease-and-desist
orders  that  may, among other things, require affirmative action to correct any
harm  resulting  from  a  violation  or  practice,  including  restitution,
reimbursement,  indemnifications  or  guarantees  against  loss.  A  financial
institution  may  also  be  ordered  to  restrict its growth, dispose of certain
assets,  rescind agreements or contracts, or take other actions as determined by
the  ordering  agency  to  be  appropriate.

LEGISLATIVE  AND  REGULATORY  CHANGES

     The  regulatory  changes  that  were enacted by the GLB Act make it legally
possible  for  the  Company  to  engage  in  securities, insurance and financial
activities.  The  Company  does  not have any plans to engage in such activities
under  active  review  or consideration.  However, the Company may consider such
activities  in  the  future if management determines that such activities are in
the  Company's  best  interest,  and are financially and operationally feasible.

     The GLB Act also requires banks and their affiliated companies to adopt and
disclose  policies  regarding  the  sharing  with  third  parties  of  personal
information  that is obtained from their customers.  At the time of establishing
a  customer  relationship,  and  not  less  frequently  than annually during the
relationship,  every  financial institution must provide a clear and conspicuous
disclosure of its policies and practices regarding the disclosure and protection
of  nonpublic  personal information.  Financial institutions are prohibited from
disclosing  such  information  to  a  non-affiliated third party if the customer
"opts  out,"  or  directs  that  such  information  not  be  disclosed.

     The  GLB  Act also amended the Electronic Funds Transfer Act to require ATM
operators  who  impose a fee for use of an ATM by a customer to post a notice on
the machine that a fee


                                       20
<PAGE>
will  be  charged,  as well as a notice on the screen that a fee will be charged
and  the  amount  of  that  fee.

     Other  legislative  and  regulatory proposals regarding changes in banking,
and  the  regulation  of  banks,  bank  holding  companies  and  other financial
institutions  powers  are  being  considered by the Federal regulatory agencies,
Congress  and  various  state  governments,  including Georgia. Certain of these
proposals,  if  adopted,  could significantly change the regulation of banks and
the  financial  services  industry.  It cannot be predicted whether any of these
proposals  will be adopted, and, if adopted, how these proposals will affect the
Company  and  the  Bank.

EFFECT  OF  GOVERNMENTAL  MONETARY  POLICIES

     The  earnings  of the Bank will be affected by domestic economic conditions
and  the  monetary  and  fiscal policies of the United States government and its
agencies.  The  Federal  Reserve's  monetary  policies have had, and will likely
continue  to  have,  an  important impact on the operating results of commercial
banks.  The monetary policies of the Federal Reserve have major effects upon the
levels  of  bank  loans,  investments  and  deposits  through  its  open  market
operations  in United States government securities and through its regulation of
the  discount  rate  on  borrowings of member banks and the reserve requirements
against  member  bank  deposits.  It  is  not  possible to predict the nature or
impact  of  future  changes  in  monetary  and  fiscal  policies.

EMPLOYEES

     The  Bank  had  34  full-time employees at December 31, 2003.   The Company
does  not  have  any  employees  other  than  its  officers.

ITEM  2.     PROPERTIES

     The site of the Bank's principal facility is located at its new Main Office
at 651 Veterans Memorial Boulevard, Cumming, Georgia 30040, which consists of an
approximately  11,208 square foot building. The Main Office facilities include a
teller line, customer service area, offices for the Bank's lenders and officers,
a vault with safe deposit boxes, drive-in teller lanes, and a drive-up automated
teller machine. The total costs for the construction of the new Main Office were
$2,047,750.

     Prior  to  the  completion  of construction of its Main Office, the Company
maintained  its  principal  facility  at  a  leased  facility  under  a Sublease
Agreement, as amended, with NationsBank, N.A. (South), the initial term of which
ended on August 31, 2000, but which was extended for an additional 5 years and 4
months.  The annual rent paid under the sublease was $75,972 in 2001, $75,972 in
2002,  and $62,060 in 2003 (including the termination payment referenced below).
Because  the  Bank  moved  to  its  new  Main  Office, the Company negotiated an
agreement  for the early termination of the Sublease Agreement.  Under the terms
of  the  termination  agreement, the Sublease Agreement was terminated effective
May  7,  2003,  in  consideration  of  the payment of a termination fee equal to
$37,985.94, plus 10 months of real estate taxes on the leased premises.


                                       21
<PAGE>
     In  addition  to  the  Bank's  principal facility, the Company has a branch
facility  at  5140  Highway  9,  Alpharetta,  Georgia,  which is in the southern
Forsyth  County  community of Midway.  The Company purchased the site consisting
of approximately 3.87 acres in October of 1998 for a purchase price of $607,892.
The  branch is a 4000 square foot office with facilities similar to those of the
main office.  The Company also purchased a site consisting of approximately 2.06
acres  in  September  of  2000  for a purchase price of $235,000 in the Cherokee
County  community  of  Free  Home.  The Company is currently finalizing plans to
open  a  second  branch facility on this site in late 2004. In January 2004, the
Company  purchased  a  site  consisting  of  approximately  4.68  acres  at  the
intersection  of Martin Road and State Road 400 in northern Forsyth County for a
purchase  price  of  $928,122.

ITEM  3.   LEGAL  PROCEEDINGS

     There are no pending legal matters.

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

     No  matter  was  submitted to a vote of security holders by solicitation of
proxies  or  otherwise  during  the  fourth quarter of the Company's fiscal year
ended  December  31,  2003.

                                     PART II

ITEM  5.   MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED STOCKHOLDER
MATTERS

     Information  required  by  this item is set forth under the heading "Market
for  the  Company's  Common Stock and Related Shareholder Matters" on page 47 in
the  Annual  Report to Shareholders for the year ended December 31, 2003, and is
incorporated  herein  by  reference.

ITEM  6.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS  OF  FORSYTH  BANCSHARES,  INC.

     Information  required  by  this  item  is  set  forth  under  the  heading
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations"  on pages 3  through 21 in the Annual Report to Shareholders for the
year  ended  December  31,  2003  and  is  incorporated  herein  by  reference.

ITEM  7.   FINANCIAL  STATEMENTS

     Information  required  by  this  item  is  set  forth  in  the Consolidated
Financial  Statements and Notes to Consolidated Financial Statements on pages 23
through  46  and  in the "Independent Auditor's Report" on page 22 in the Annual
Report to Shareholders for the year ended December 31, 2003, and is incorporated
herein  by  reference.


                                       22
<PAGE>
ITEM  8.   CHANGES  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
           FINANCIAL  DISCLOSURE

     None.

ITEM  8A.   CONTROLS  AND  PROCEDURES

     The  Company's  management  is responsible for establishing and maintaining
adequate  internal  disclosure  controls  and  procedures  over  the  Company's
financial  reporting.  The  Company's  management,  including  the  Company's
principal  executive  officer and principal financial officer, has evaluated the
Company's  disclosure  controls  and  procedures within 90 days of the filing of
this  report.  That  evaluation concluded that the Company's disclosure controls
and  procedures  are  effective  as  of the filing of this Annual Report on Form
10-KSB  for  the  year  ended  December  31,  2003.

     For  this  purpose,  "disclosure  controls  and  procedures" are defined as
controls  and  other  procedures  that  are  designed to ensure that information
required  to be disclosed in the reports filed or submitted by the Company under
the Exchange Act is recorded, processed, summarized and reported within the time
periods  specified  in  the  Securities  Exchange  Commission's rules and forms.
Disclosure  controls  and  procedures  include, without limitation, controls and
procedures  designed  to  ensure  that  information  required to be disclosed in
reports  filed or submitted by the Company under the Exchange Act is accumulated
and  communicated to the Company's management, including the Company's principal
executive  officer  and  principal  financial  officer,  as appropriate to allow
timely  decisions  regarding  required  disclosures.

     There were no significant changes in the Company's internal controls, or in
other  factors that could significantly affect these controls, subsequent to the
date  of  management's  evaluation  of  the  Company's  disclosure  controls and
procedures,  including  any  significant  deficiencies or material weaknesses of
internal  controls  that  would  require  corrective  action.

                                    PART III

ITEM  9.   DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
           COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     Certain  of  the  information  required by this item is set forth under the
heading  "Information Regarding Nominees and Continuing Directors" and under the
heading  "Section  16(a)  Beneficial  Ownership  Reporting  Compliance"  of  the
definitive  proxy  statement  for the Company's Annual Meeting to be held on May
18,  2004,  and  such  information  is  incorporated  herein  by  reference.

CODE  OF  ETHICS

     The  Company  is  in  the process of adopting a code of ethics that will be
applicable  to  the  Company's  principal executive officer, principal financial
officer  and  principal  accounting  officer  or  controller  and to all persons
performing  similar  functions  on behalf of the Company, and will also apply to
all  officers  performing such functions on behalf of the Bank.  A draft code of
ethics  has  been  prepared by the Company's management under the supervision of


                                       23
<PAGE>
the  Company's  Executive Committee. It is anticipated that the final version of
the proposed code of ethics will be submitted for the review and approval of the
Company's full Board of Directors not later than April 2004.  The code of ethics
will address:  (1) honest and ethical conduct, including the ethical handling of
actual  or  apparent  conflicts  of  interest  between personal and professional
relationships; (2) full, fair, accurate, timely and understandable disclosure in
reports  and  documents that the Company files with or submits to the Securities
Exchange  Commission, and in all other public communications by the Company; (3)
compliance  with  applicable  governmental  laws, rules and regulations; (4) the
prompt  internal reporting of violations of the code of ethics to an appropriate
person  or  persons identified in the code of ethics; and (5) accountability for
adherence  to  the code of ethics.  When finalized and adopted, the Company will
make  the  code  of  ethics  publicly available as required by 17 C.F.R. Section
                                                                  ------
228.406.

AUDIT  COMMITTEE  FINANCIAL  EXPERT

     The  five  independent  directors  who  serve  on  the  Company's Executive
Committee  also  independently function as the Company's Audit Committee.  Those
five  individuals  are  Catherine M. Amos, Jeffrey S. Bagley, Charles D. Ingram,
Herbert  A.  Lang, Jr., and James J. Myers.  The Chairman of the Company's Board
of  Directors,  James  J.  Myers,  also  serves  as  the  Chairman  of the Audit
Committee.  Mr.  Myers,  a  certified  public  accountant,  also qualifies as an
"audit  committee  financial  expert"  for  purposes  of  Section  407  of  the
Sarbanes-Oxley  Act  of  2002.

ITEM  10.   EXECUTIVE  COMPENSATION

     Information  required by this item is set forth under the heading "Director
Compensation"  and  under the heading "Executive Compensation" of the definitive
proxy statement for the Company's Annual Meeting to be held on May 18, 2004, and
is  incorporated  herein  by  reference.

ITEM  11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
            RELATED  STOCKHOLDER  MATTERS

     Information  required  by  this  item  is  set  forth  under  the  heading
"Information  Regarding Nominees and Continuing Directors" and under the heading
"Common  Stock  Ownership  of Certain Beneficial Owners" of the definitive proxy
statement  for  the  Company's Annual Meeting to be held on May 18, 2004, and is
incorporated  herein  by  reference.

ITEM  12.   CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     Information  required  by this item is set forth under the heading "Certain
Transactions  and  Business Relationships" of the definitive proxy statement for
the  Company's  Annual  Meeting  to be held on May 18, 2004, and is incorporated
herein  by  reference.


                                       24
<PAGE>
ITEM  13.   EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND
            REPORTS  ON  FORM  8-K

     (a)  THE  FOLLOWING  DOCUMENTS  ARE  FILED  AS  PART  OF  THIS  REPORT:

(a)(1)  FINANCIAL  STATEMENTS

     The  following  financial  statements  of  the  Company and the independent
auditors'  report  thereon  are  included in the Company's 2003 Annual Report to
Shareholders  and  are  incorporated  by  reference  in  Item  7  hereof:

Consolidated Balance Sheets as of December 31, 2003 and 2002.

Consolidated  Statements  of  Income  for  the years ended December 31, 2003 and
   2002.

Consolidated Statements of Comprehensive Income for the years ended December 31,
   2003  and  2002.

Consolidated Statements of Stockholders' Equity for the years ended December 31,
   2003  and  2002.

Consolidated  Statements of Cash Flows for the years ended December 31, 2003 and
   2002.

Notes  to  Consolidated  Financial  Statements.

(a)(2)    EXHIBITS

3.1.      Articles  of  Incorporation.(1)

3.2.      Bylaws.(1)

4.1.      Specimen  Stock  Certificate.(1)

10.1.     Sublease  Agreement  by  and  among  the  Company,  the  Bank  and
          NationsBank, N.A. (South) dated February 9, 1996.(1)

10.2      First  Amendment  to  Sublease Agreement by and among the Company, the
          Bank  and  NationsBank,  N.A.  (South),  dated  February  16, 1996.(1)

10.3      Second  Amendment  to Sublease Agreement by and among the Company, the
          Bank  and  NationsBank,  N.A.  (South)  dated  May  10,  1996.(1)

10.4.     Long-Term  Incentive  Compensation Plan of Forsyth Bancshares, Inc.,
          dated  January  1,  2000.


                                       25
<PAGE>
13.1      The  following  sections  of  the  2003 Annual Report to Shareholders:
          -    Market  for  the  Company's  Common Stock and Related Shareholder
               Matters.
          -    Management's Discussion and Analysis of Results of Operations and
               Financial  Condition.
          -    Independent  Auditor's  Report.
          -    Consolidated  Financial  Statements and Notes to the Consolidated
               Financial  Statements.

21.1      Subsidiaries  of  the  Company.

31.1      Certification  of  Chief  Executive Officer Pursuant to Section 302 of
          the  Sarbanes-Oxley  Act  of  2002.

31.2      Certification  of  Chief  Financial Officer Pursuant to Section 302 of
          the  Sarbanes-Oxley  Act  of  2002.

32.1      Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
          1350,  As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002.

32.2      Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
          1350,  As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002.
_______________
(1)       Incorporated  by  reference  to  exhibits  of  the  same number in the
          Company's  Registration  Statement  on  Form S-1 (File No. 333-10909).

     (b)  NO  REPORTS  ON  FORM  8-K  WERE  FILED DURING THE LAST QUARTER OF THE
PERIOD  COVERED  BY  THIS  REPORT.

ITEM  14.   PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES

     Mauldin  &  Jenkins,  LLC  acted  as  the  Company's  independent  public
accountants  for  the  fiscal year ended December 31, 2003.  The Company's Audit
Committee  reviews  and  makes  recommendations  to  the full Board of Directors
regarding  the approval of audit and permissible non-audit services performed by
Mauldin  &  Jenkins,  LLC, as well as the fees charged by Mauldin & Jenkins, LLC
for  such services.  In its review of non-audit service fees and its appointment
of  Mauldin  &  Jenkins, LLC as the Company's independent accountants, the Audit
Committee  and  the  Board of Directors considered whether the provision of such
services  is  compatible with maintaining Mauldin & Jenkins, LLC's independence.
All  of the services provided and fees charged by Mauldin & Jenkins, LLC in 2003
were  pre-approved  by  the  Audit  Committee  and  the  Board  of  Directors.
Representatives  of Mauldin & Jenkins, LLC will be present at the Annual Meeting
with  the  opportunity  to  make a statement if they desire to do so and will be
available  to  answer questions concerning the financial affairs of the Company.

AUDIT  FEES

     Fees  for  audit  services  totaled  approximately  $42,200  in  2002  and
approximately  $43,500 in 2003, including fees associated with the annual audit,
the  reviews  of  the  Company's  quarterly


                                       26
<PAGE>
reports  on Form 10-QSB and services provided in connection with other statutory
or  regulatory  filings.

AUDIT  RELATED  FEES

     Except  as  disclosed above, the Company incurred no fees for audit related
services  in  2002  or  2003.

TAX  FEES

     Fees  for  tax  services,  including  tax  compliance,  tax  advice and tax
planning, totaled approximately $6,000 in 2002 and approximately $5,500 in 2003.
Tax  related  services  consisted principally of the preparation of the 2002 and
2003  consolidated  tax  returns  for  the  Company  and  the  Bank.

ALL  OTHER  FEES

     Except  as  disclosed above, the Company incurred no fees for accounting or
accounting  related  services  in  2002  or  2003.

                                   SIGNATURES

     In  accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   FORSYTH BANCSHARES, INC.


                                   By:   /s/  Timothy  M.  Perry
                                      -----------------------------------
                                         Timothy M. Perry
                                         President and Chief Executive Officer


     In  accordance  with the Exchange Act, this report has been signed below by
the  following  persons on behalf of the registrant in the capacities and on the
dates  indicated.

<TABLE>
<CAPTION>
       Signature                            Title                       Date
       ---------                            -----                       ----
<S>                          <C>                                   <C>

 /s/ Catherine M. Amos       Director                              March 29, 2004
---------------------------
Catherine M. Amos

 /s/ Jeffrey S. Bagley       Vice Chairman of the Board            March 29, 2004
---------------------------
Jeffrey S. Bagley

 /s/ Danny M. Bennett        Director                              March 29, 2004
---------------------------
Danny M. Bennett


                                       27
<PAGE>
 /s/ Michael P. Bennett      Director                              March 29, 2004
---------------------------
Michael P. Bennett

 /s/ Bryan L. Bettis         Director                              March 29, 2004
---------------------------
Bryan L. Bettis

 /s/ Talmadge W. Bolton      Director                              March 29, 2004
---------------------------
Talmadge W. Bolton

 /s/ Thomas L. Bower III     Director                              March 29, 2004
---------------------------
Thomas L. Bower III

 /s/ Charles R. Castleberry  Director                              March 29, 2004
---------------------------
Charles R. Castleberry

 /s/ Timothy D. Foreman      Chief Financial Officer, Senior Vice  March 29, 2004
---------------------------  President, Secretary and Treasurer
Timothy D. Foreman

 /s/ Charles D. Ingram       Director                              March 29, 2004
---------------------------
Charles D. Ingram

 /s/ Herbert A. Lang, Jr.    Director                              March 29, 2004
---------------------------
Herbert A. Lang, Jr.

 /s/ John P. McGruder        Director                              March 29, 2004
---------------------------
John P. McGruder

 /s/ James J. Myers          Chairman of the Board                 March 29, 2004
---------------------------
James J. Myers

 /s/ Timothy M. Perry        President, Chief Executive Officer    March 29, 2004
---------------------------  and Director
Timothy M. Perry

 /s/ Danny L. Reid           Director                              March 29, 2004
---------------------------
Danny L. Reid

 /s/ Charles R. Smith        Director                              March 29, 2004
---------------------------
Charles R. Smith

 /s/ Wyatt L. Willingham     Director                              March 29, 2004
---------------------------
Wyatt L. Willingham

 /s/ Jerry M. Wood           Director                              March 29, 2004
---------------------------
Jerry M. Wood
</TABLE>



                                       28
<PAGE>
          SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
      PURSUANT TO SECTION 15(d) OF THE SECURITIES ACT OF 1933, AS AMENDED,
        (THE "ACT") BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
                     PURSUANT TO SECTION 12 OF THE 1934 ACT


     Subsequent  to the filing of this Annual Report on Form 10-KSB, the Company
will  distribute  to its securities holders an Annual Report to Shareholders and
Proxy Statement in connection with its 2004 Annual Meeting of Shareholders.  The
Company  will  furnish four copies of such materials to the Commission when such
materials  are  sent  to  the  shareholders.



                                       29
<PAGE>
                                  EXHIBIT INDEX

ITEM      DESCRIPTION
----      -----------

3.1.      Articles  of  Incorporation.(1)

3.2.      Bylaws.(1)

4.1.      Specimen  Stock  Certificate.(1)

10.1.     Sublease  Agreement  by  and  among  the  Company,  the  Bank  and
          NationsBank,  N.A.  (South)  dated  February  9,  1996.(1)

10.2      First  Amendment  to  Sublease Agreement by and among the Company, the
          Bank  and  NationsBank,  N.A.  (South),  dated  February  16, 1996.(1)

10.3      Second  Amendment  to Sublease Agreement by and among the Company, the
          Bank  and  NationsBank,  N.A.  (South)  dated  May  10,  1996.(1)

10.4      Long-Term  Incentive  Compensation  Plan  of Forsyth Bancshares, Inc.,
          dated  January  1,  2000.

13.1      The  following  sections  of  the  2003 Annual Report to Shareholders:
          -    Market  for  the  Company's  Common Stock and Related Shareholder
               Matters.
          -    Management's Discussion and Analysis of Results of Operations and
               Financial  Condition.
          -    Independent  Auditor's  Report.
          -    Consolidated  Financial  Statements and Notes to the Consolidated
               Financial  Statements.

21.1      Subsidiaries  of  the  Company.

31.1      Certification  of  Chief  Executive Officer Pursuant to Section 302 of
          the  Sarbanes-Oxley  Act  of  2002.

31.2      Certification  of  Chief  Financial Officer Pursuant to Section 302 of
          the  Sarbanes-Oxley  Act  of  2002.

32.1      Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
          1350,  As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002.

32.2      Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
          1350,  As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002.

(1)  Incorporated  by  reference to exhibits of the same number in the Company's
     Registration  Statement  on  Form  S-1  (File  No.  333-10909).


                                       30
<PAGE>