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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,  1999

                       Commission file number:  333-10909

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

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


 501 Tri-County Plaza, Highways 9 and 20, 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  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:  $4,795,072.

     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, 2000, the aggregate
market  value  of  voting  stock of the Registrant held by non-affiliates of the
Registrant  based solely on the initial public offering price, was approximately
$8,000,000.

     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, 2000, there
were  800,000  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, 1999 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 16, 2000 are incorporated  by  reference
        into Part III.
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<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
$66.2  million, total deposits of $58.0 million and total stockholders equity of
$7.7  million  at  December  31,  1999. Through its wholly-owned subsidiary, The
Citizens  Bank of Forsyth County (the "Bank"), the Company operates a commercial
banking  business  in  Forsyth  County,  Georgia.


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     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."  Although the Company
has  no  present  intention  of  engaging  in  any  of  these  activities,  if
circumstances  should  lead  the Company's management to believe that there is a
need for these services in the Bank's market area and that such activities could
be profitably conducted, management of the Company would have the flexibility of
commencing these activities upon filing a notice or application with the Federal
Reserve.  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."


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<PAGE>
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.

     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 located at 501 Tri-County Plaza, Highways 9 and 20,
Cumming,  Georgia  30040,  (770)  886-9500.

     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 second 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 94,588 in 1999, a growth rate of 114.5%.  In 1999, the average
estimated  effective  buying  income per household in Forsyth County was $77,303
and  the  estimated  unemployment rate was less than 2%.  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., Siemans 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.


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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, 1999, the Bank's deposits were
allocated  among  certain categories as follows:  10.64% demand deposits, 11.46%
NOW  accounts,  77.9%  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,  1999,  the  Bank's loans were allocated as follows:  61% real estate loans,
20%  commercial  and  19%  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 will
maintain  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


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emphasizing  loans  on  owner-occupied  office  and  retail  buildings where the
loan-to-value ratio, 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 intends 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  will  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 $25,000
and,  in  the  case  of  non-revolving  loans,  are  amortized over a period not
exceeding 48 months or are 90-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


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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.

     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 (including the borrower's related
interests) 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 the 15% 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.  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 will
not  be able to meet all the lending needs of loan customers requiring aggregate
extensions  of  credit  above  these  limits.

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.  The Bank does not currently and does not
plan  to  exercise trust powers during its initial years of operation.  The Bank
may  in  the  future  offer  a  full-service  trust department, but cannot do so
without  the  prior  approval  of  the  DBF.

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, 1999, there were 13 commercial banks, with 30 commercial bank
branches  and  one  credit  union  operating  in  Forsyth  County.  A  number of


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<PAGE>
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 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.  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  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 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  1999, the activities of the Company were
also  restricted  by  the Glass-Steagall Act of 1933 (the "Glass-Steagall Act"),
which  is  discussed  below.  However,  on  November  12,  1999,


                                        8
<PAGE>
the  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  the voting shares of any company engaged in non-banking
activities,  unless the Federal Reserve Board, 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 Board 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.


                                        9
<PAGE>
     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  Board  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 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,


                                       10
<PAGE>
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  Board  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.

     The  Company  does  not believe that the GLB Act will negatively affect 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 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 Federal Reserve Board policy, the
Company  is expected to act as a source of financial strength to the Bank and to
commit resources to support the Bank in circumstances in which the Company might
not  otherwise  do  so.  Under the BHCA, the Federal Reserve Board may require a
bank  holding  company  to  terminate  any  activity  or


                                       11
<PAGE>
relinquish control of a non-bank subsidiary (other than a non-bank subsidiary of
a  bank)  upon  the  Federal Reserve Board'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 five 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 five years or more.
Georgia  bank  holding  companies  are  likewise  permitted  to  acquire banking
organizations in other states, subject to similar aging requirements.  Effective
June 1, 1997, banks located in substantially all states may merge or consolidate
with  Georgia-based banks that satisfy the five-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."

     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  repeals these
provisions  and  amends  the  BHCA  to  permit such activities by a bank holding
company  that  qualifies  as a FHC.  See "--The Gramm-Leach-Bliley Act of 1999."


                                       12
<PAGE>
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 reorganiza-tions, 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.  These rates range from zero
to  twenty-seven  basis points.  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.  Until the
earlier  of December 31, 1999 or the merger of BIF and SAIF, the assessment rate
FICO  imposes  on  a  commercial  bank  must be at a rate equal to one-fifth the
assessment  rate  applicable  to  deposits  assessable  by the SAIF.  The Bank's


                                       13
<PAGE>
FICO  Assessment for 1999 was $5,923, and management believes that it will be at
least  approximately  $7,500  for 2000.  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.

     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 will come
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 equity capital
to adjusted total assets is less than 6%; (ii) the aggregate amount of dividends
declared  or 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 at the most recent examination of the Bank
exceeds  80%  of  the  Bank's  equity  capital as reflected at such examination.

     In  addition,  the  Federal  Reserve  Board  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


                                       14
<PAGE>
payment or distribution, the institution would be considered "undercapitalized,"
as the term  is  defined  in  the  applicable  regulations.

     Branching.  In  previous  years the Bank operated only from its main office
in  Cumming,  Georgia.  The  Bank  has  recently  established a temporary branch
office  in  the  Forsyth  County  community  known as Midway.  Recently, Georgia
legislation greatly diminished the historical legal restrictions on establishing
branch  banks  across  county lines in Georgia.  Under Georgia law as of July 1,
1998,  banks  may  establish  branch  banks  statewide  without  limitation.  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,  and  under  current Georgia law any bank
acquired by the Company could be merged into the Bank and its offices could then
be operated as branches of the Bank.  The Bank has opened one branch office (the
temporary  Midway branch) and, depending upon profitability and community needs,
additional  branches  may  be  considered  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 operation 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 assessing and 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  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 makes 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."


                                       15
<PAGE>
     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  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
equal  to  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


                                       16
<PAGE>
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  which 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 no less than 5%, a Tier 1 risk-based ratio of no less
than  6%  and a total risk-based capital ratio of no 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."

     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 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.

     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


                                       17
<PAGE>
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.

     The  DBF  requires  the Bank to maintain a capital ratio, as defined in the
DBF's  regulations (the "Capital Ratio"), of total capital (which is essentially
Tier  1  capital plus the allowance for loan losses) to total assets (defined as
balance  sheet  assets  plus  the allowance for loan losses) of at least 6%.  In
addition,  under  the  operating  conditions  fixed  by  the DBF at the time its
charter  was  approved,  the Bank was required to maintain a Capital Ratio of at
least  8%  during  its  first  three  years  of  operation.

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 enacted by the GLB Act present new opportunities for
the  Company  to engage in securities, insurance and financial activities should
it elect to become a FHC.  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


                                       18
<PAGE>
disclosed.  The  new  privacy  rules  are  to  be  enforced  by  the  applicable
regulatory  agency,  and  the  GLB  Act  directs the regulators to issue written
regulations  within six months of its enactment date (November 12, 1999).  These
rules  must  be  implemented  by financial institutions within six months of the
issuance  of  the  regulations,  unless the regulators specify a later effective
date.

     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 will be charged, as well as a notice on the screen that a
fee will be charged and the amount of that fee.  These provisions of the GLB Act
became  effective  on  its  enactment  date  (November  12,  1999).

     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.  The FDIC changed,
effective  April  1,  2000,  its  deposit  insurance  assessments to more timely
reflect  changes  in  risks,  and  is  engaged  in a comprehensive review of its
insurance  premiums  and  how  to  better measure and price deposit insurance in
light  of  an  insured  bank's  size  and  risk.  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  Board'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 Board 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 17 full-time and one part-time employees at December 31, 1999.
In  January  2000  the  Bank  expanded  its  staff by adding an additional seven
full-time  employees  for  the  Midway  Branch.  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 501 Tri-County
Plaza,  Highways  9  and  20,  Cumming,  Georgia  30040.  The Company leases its
principal  facility  consisting  of  approximately  6,000  square  feet  under a
Sublease Agreement, as amended, with NationsBank, N.A. (South), the initial term
of  which  expires  August  31,  2000.  The  base  annual  rent  under  the


                                       19
<PAGE>
sublease  was  $69,525  in  1998,  $71,611  in 1999 and will be $73,759 in 2000.
During  1997,  the  Company completed all initial necessary building renovations
and  leasehold  improvements,  at  a  cost  of approximately $118,000.  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.

     In addition to the Bank's principal facility, the Company has constructed a
temporary  branch  facility  that it leases to the Bank.  The site of the Bank's
temporary  branch  facility  is  located at 5140 Highway 9, Alpharetta, Georgia,
which  is  in the 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.  While  the  temporary  branch currently consists of only a
modular  unit,  the  Company  plans  to  build  a  permanent  branch office with
facilities  similar  to  those of the main office.  The Company anticipates that
the modular unit will continue to be used as a temporary branch office until the
construction  of  the  permanent facility is completed.  The Company has not yet
entered  into  any  contractual  agreement  for  such  construction.

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,  1999.


                                     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 48 in
the  Annual  Report to Shareholders for the year ended December 31, 1999, 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 20 in the Annual Report to Shareholders for the
year  ended  December  31,  1999  and  is  incorporated  herein  by  reference.


                                       20
<PAGE>
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 22
through  47  and  in the "Independent Auditor's Report" on page 21 in the Annual
Report to Shareholders for the year ended December 31, 1999, and is incorporated
herein  by  reference.

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

     The  firm  of  Porter  Keadle Moore, LLP acted as the Company's independent
auditors  for  the  fiscal  year ended December 31, 1997. On March 17, 1998, the
Company's  Board  of  Directors retained Mauldin & Jenkins, LLC as the Company's
independent  public  accountants  and  replaced  the  Company's former auditors,
Porter  Keadle  Moore, LLP. There were no disagreements with the former auditors
on  any  matter  of  accounting  principles  or  practices,  financial statement
disclosure  or  auditing  scope  or  procedure  with  respect  to  the Company's
financial  statements  for the fiscal year ended December 31, 1997 or up through
the time of replacement.  Prior to retaining Mauldin & Jenkins, LLC, the Company
had  not  consulted  with  them  regarding  accounting  principles.  The Company
changed  its  independent  public  accountants  for general business and pricing
reasons  and to separate the functions of the Company's internal auditor and the
Company's  independent  public  accountants,  which were both being performed by
Porter  Keadle  Moore,  LLP.  Since  March  17, 1998, Mauldin & Jenkins, LLC has
acted  as  the  Company's  independent  public  accountants  and  J. M. Thomas &
Associates,  CPA  has  acted  as  the  Company's  internal  auditor.


                                    PART III

ITEM  9.     DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     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 16, 2000, and
is  incorporated  herein  by  reference.

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 16, 2000, and
is  incorporated  herein  by  reference.


                                       21
<PAGE>
ITEM  11.    SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT

     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 16, 2000, 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 16, 2000, and is incorporated
herein  by  reference.

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 1999 Annual Report to
Shareholders  and  are  incorporated  by  reference  in  Item  7  hereof:

Consolidated  Balance  Sheets  as  of  December  31,  1999  and  1998.

Consolidated  Statements  of  Income  for  the years ended December 31, 1999 and
1998.

Consolidated  Statements  of  Comprehensive  Income  (Loss)  for the years ended
December  31,  1999  and  1998.

Consolidated Statements of Stockholders' Equity for the years ended December 31,
1999  and  1998.

Consolidated  Statements of Cash Flows for the years ended December 31, 1999 and
1998.

Notes  to  Consolidated  Financial  Statements.

<TABLE>
<CAPTION>
(a)(2)  EXHIBITS

<S>    <C>
3.1.   Articles of Incorporation.(1)

3.2.   Bylaws.(1)


                                       22
<PAGE>
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)

10.5.  Employment Agreement by and between the Company and David H. Denton dated
       June 28, 1996.(1)

13.1.  The following sections of the 1999 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.

27.1.  Financial Data Schedule.
_____________________
<FN>
(1)     Incorporated  by  reference  to  exhibits  of the same number in the Company's
Registration  Statement  on  Form  S-1  (File  No.  333-10909).
</TABLE>

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


                                       23
<PAGE>
                                   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 28, 2000
---------------------------
     Catherine M. Amos

 /s/ Jeffrey S. Bagley       Vice Chairman of the Board          March 28, 2000
---------------------------
     Jeffrey S. Bagley

 /s/ Danny M. Bennett        Director                            March 28, 2000
---------------------------
     Danny M. Bennett

 /s/ Michael P. Bennett      Director                            March 28, 2000
---------------------------
     Michael P. Bennett

 /s/ Bryan L. Bettis         Director                            March 28, 2000
---------------------------
     Bryan L. Bettis

 /s/ Talmadge W. Bolton      Director                            March 28, 2000
---------------------------
     Talmadge W. Bolton

 /s/ Thomas L. Bower III     Director                            March 28, 2000
---------------------------
     Thomas L. Bower III

 /s/ Charles R. Castleberry  Director                            March 28, 2000
---------------------------
     Charles R. Castleberry

 /s/ Timothy M. Perry        President, Chief Executive Officer  March 28, 2000
---------------------------  and Director
     Timothy M. Perry

                                       24
<PAGE>
 /s/ Holly R. Hunt           Chief Financial Officer             March 28, 2000
---------------------------
     Holly R. Hunt

 /s/ Charles D. Ingram       Director                            March 28, 2000
---------------------------
     Charles D. Ingram

 /s/ Herbert A. Lang, Jr.    Director                            March 28, 2000
---------------------------
     Herbert A. Lang, Jr.

 /s/ John P. McGruder        Director                            March 28, 2000
---------------------------
     John P. McGruder

 /s/ James J. Myers          Chairman of the Board               March 28, 2000
---------------------------
     James J. Myers

 /s/ Danny L. Reid           Director                            March 28, 2000
---------------------------
     Danny L. Reid

 /s/ Charles R. Smith        Director                            March 28, 2000
---------------------------
     Charles R. Smith

 /s/ Wyatt L. Willingham     Director                            March 28, 2000
---------------------------
     Wyatt L. Willingham

 /s/ Jerry M. Wood           Director                            March 28, 2000
---------------------------
     Jerry M. Wood
</TABLE>


                                       25
<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 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 2000 Annual Meeting of Shareholders.  The
Company  will  furnish four copies of such materials to the Commission when such
materials  are  sent  to  the  shareholders.


                                       26
<PAGE>
<TABLE>
<CAPTION>

                                    EXHIBIT INDEX


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

<S>    <C>
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)

10.5.  Employment Agreement by and between the Company and David H. Denton
       dated June 28, 1996.(1)

13.1.  The following sections of the 1999 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.

27.1.  Financial Data Schedule.
<FN>
-------------------------
(1)     Incorporated  by  reference  to exhibits of the same number in the Company's
Registration  Statement  on  Form  S-1  (File  No.  333-10909).
</TABLE>


                                       27
<PAGE>
                                                                    EXHIBIT 13.1

                       1999 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 CONSOLIDATED FINANCIAL STATEMENTS


                                       28
<PAGE>
                      MARKET FOR THE COMPANY'S COMMON STOCK
                         AND RELATED SHAREHOLDER MATTERS

     There  is currently no market for the Company's shares of Common Stock, and
it  is  not  likely that an active trading market will develop for the shares in
the  future.  There  are  no  present plans for the Company's Common Stock to be
traded  on  any  stock  exchange of over-the-counter market.  As of December 31,
1999,  there  were  approximately  622 holders of record of the Company's Common
Stock  and  800,000  shares  of  Common  Stock  issued  and  outstanding.

     No cash dividends have been paid to date on the Company's Common Stock, and
it  is  anticipated that earnings will be retained for the foreseeable future to
support  the Company's rapid growth and expansion.  The Company currently has no
source of income other than dividends and other payments received from the Bank.
The  amount  of dividends that may be paid by the Bank to the Company depends on
the  Bank's  earnings  and  capital position and is limited by federal and state
law,  regulation  and  policies.


                                       29
<PAGE>