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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,  2004

                       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.)


   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:  $7,437,795

     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, 2005, 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 June
30,  2004  (not  bid  and  asked  prices),  was  approximately  $17,546,228.

     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, 2005, there
were  1,858,000  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, 2004 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 17, 2005 are incorporated by reference
          into  Part III.
     Transitional Small Business Disclosure Format:     Yes       No   X
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                                TABLE OF CONTENTS
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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS                                               3

ITEM 2.  DESCRIPTION OF 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 COMMON EQUITY AND RELATED STOCKHOLDER                     22
         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                                              22

ITEM 8B. OTHER INFORMATION                                                    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                                               25

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                  25
         MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                       25

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS                  25
          ON FORM 8-K

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                               27

SIGNATURES                                                                    28

EXHIBIT INDEX                                                                 30


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                            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.   DESCRIPTION OF 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
$137.2  million,  total deposits of $122.4 million and total stockholders equity
of  $13.9 million at December 31, 2004. 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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<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  a  second branch facility was opened at that
location  during  late  2004.  The  Company  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.

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


                                        5
<PAGE>
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,  2004, the Bank's deposits were allocated among certain categories
as  follows:  13%  demand  deposits,  11%  NOW  accounts,  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,  2004,  the  Bank's loans were allocated as follows:  81% real estate loans,
12%  commercial  loans  and  7%  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,
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


                                        6
<PAGE>
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 $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  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


                                        7
<PAGE>
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.

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


                                        8
<PAGE>
County  Area  and  elsewhere.  As of December 31, 2004, there were 18 commercial
banks,  with  45  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 does
not  currently  provide  and  does  not  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 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.


                                        9
<PAGE>
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  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


                                       10
<PAGE>
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  sought  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


                                       11
<PAGE>
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 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


                                       12
<PAGE>
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."

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,


                                       13
<PAGE>
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 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


                                       14
<PAGE>
2004  was  $15,961.08,  and  management  believes  that  it  will  be  at  least
approximately  $15,961.08  for  2005.

     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  with  certain provisions designed to avoid the taking of low quality
assets  from  affiliates  is  also  required.

     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 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.


                                       15
<PAGE>
     Branching.  Legislation  enacted  in Georgia in 1998 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, and a second branch office was opened 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  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 also provided smaller financial institutions with some relief
under  the  CRA.  Institutions  with  assets  of  not more than $250 million are
subject  to  CRA  examinations:


                                       16
<PAGE>
(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  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, banks' 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


                                       17
<PAGE>
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, 2004 had a leverage ratio of 10.36%,
a Tier 1 Capital risk-based ratio of 12.11% and a total risk-based capital ratio
of  13.21%.

     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.

     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.


                                       18
<PAGE>
     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 in 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.

     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


                                       19
<PAGE>
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 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.


                                       20
<PAGE>
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 35 full-time employees and 4 part-time employees at December
31,  2004.   The  Company  does  not have any employees other than its officers.

ITEM 2.   DESCRIPTION OF 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.

     In  addition  to the Bank's Main Office, the Company has a branch office 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  has  a second branch office with similar facilities at 11950
Cumming  Highway,  Canton,  Georgia 30115 in the Free Home community in Cherokee
County.  The  Company  purchased the site consisting of approximately 2.06 acres
in  September  of  2000  for  a purchase price of $235,000. 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,  as  a  possible  site for a third branch office.

     Because  the  Company  is  a regulated bank holding company, its investment
activities  are  limited  to  its  investment  in,  and  support  of,  its  Bank
subsidiary.  The  investment  policies  of  the  Company's  Bank  subsidiary are
described  in  detail  under  Item  I-"Description  of Business."  The Company's
management  believes  that  all  of  its  properties  are  adequately covered by
insurance.


                                       21
<PAGE>
ITEM 3.   LEGAL  PROCEEDINGS

     The  Company  is  not  engaged  in  any  litigation,  and  the officers and
directors  presently  know of no threatened or pending litigation in which it is
contemplated  that  the  Company  will  be  made  a  party.

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,  2004.

                                     PART II

ITEM 5.   MARKET  FOR  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 50 in
the  Annual  Report to Shareholders for the year ended December 31, 2004, 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,  2004  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  49 and in the "Report of Independent Registered Public Accounting Firm"
on  page 22 in the Annual Report to Shareholders for the year ended December 31,
2004,  and  is  incorporated  herein  by  reference.

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


                                       22
<PAGE>
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,  2004.

     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.

     The  Company's  management,  including  the  Company's  principal executive
officer  and  principal  financial  officer,  does not expect that the Company's
disclosure  controls  and  procedures  will  prevent all errors and all fraud. A
control  system,  no  matter  how  well conceived and operated, can provide only
reasonable,  not  absolute, assurance that the objects of the control system are
met.  Because of the inherent limitations in designing and operating any control
system,  misstatements  due  to  error  or  fraud may occur and not be detected.

     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.

ITEM 8B.  OTHER  INFORMATION

     The  Company  is  not  aware of any information required to be disclosed on
Form  8-K  during  the  fourth  quarter  of  2004  that  was  not  reported.

                                    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
17,  2005,  and  such  information  is  incorporated  herein  by  reference.


                                       23
<PAGE>
CODE  OF  ETHICS

     The  Company  has  adopted  a  code  of  ethics  that  is 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 or the Bank.  The final version of the code
of  ethics  was approved by the Company's full Board of Directors in April 2004.
The  code  of  ethics  requires  that covered officers and employees observe the
following  mandatory  standards  of  conduct:  (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.  Upon request, the Company will make the code of ethics available to any
person, without charge.  A copy of the code of ethics may be obtained by mailing
a  request  to:  Forsyth  Bancshares,  Inc.,  651  Veterans  Memorial Boulevard,
Cumming,  Georgia  30040,  Attention:  Timothy  D.  Foreman,  Secretary  of  the
Company.

CONFLICTS  OF  INTEREST

     All  of  the Company's and the Bank's officers are full-time employees, and
are  required  to  refrain  from  any activities that might create a conflict of
interest  with  their duties and obligations as officers.  With the exception of
the  Company's  principal executive officer (who also serves as a director), the
Company's  directors  all have other business or professional interests to which
they  devote  their  primary attention.  However, the Company believes that such
other  business  or  professional  interests  do  not  create  any  conflicts of
interest.  As of December 31, 2004, the Company is not aware of any conflicts of
interest  involving  any  of  its  directors  or  officers.

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.


                                       24
<PAGE>
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 17, 2005, 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 17, 2005, 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 17, 2005, 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 report of
independent  registered  public  accounting  firm  thereon  are  included in the
Company's  2004  Annual Report to Shareholders and are incorporated by reference
in  Item  7  hereof:

Consolidated  Balance  Sheets  as  of  December  31,  2004  and  2003.

Consolidated  Statements  of  Income  for  the years ended December 31, 2004 and
2003.

Consolidated Statements of Comprehensive Income for the years ended December 31,
2004  and  2003.

Consolidated Statements of Stockholders' Equity for the years ended December 31,
2004  and
2003.

Consolidated  Statements of Cash Flows for the years ended December 31, 2004 and
2003.

Notes  to  Consolidated  Financial  Statements.


                                       25
<PAGE>
(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.

13.1      The following sections of the 2004 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.
          -    Report  of  Independent  Registered  Public  Accounting  Firm.
          -    Consolidated  Financial  Statements and Notes to the Consolidated
               Financial  Statements.

14.1      Code  of  Ethics,  adopted  April  13,  2004.

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.


                                       26
<PAGE>
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)  FORM  8-K.

     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, 2004.  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 2004
were pre-approved by the Audit Committee and the Board of Directors.  All of the
work  related  to  the  audit  of  the  Company's  2004 financial statements was
performed  by  the  full  time,  permanent  employees  of  Mauldin  &  Jenkins.
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  $43,500  in  2003  and
approximately  $46,650 in 2004, including fees associated with the annual audit,
the  reviews  of  the  Company's  quarterly  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  2003  or  2004.

TAX  FEES

     Fees  for  tax  services,  including  tax  compliance,  tax  advice and tax
planning, totaled approximately $5,500 in 2003 and approximately $6,350 in 2004.
Tax  related  services  consisted principally of the preparation of the 2003 and
2004  consolidated  tax  returns  for  the  Company  and  the  Bank.


                                       27
<PAGE>
ALL  OTHER  FEES

     Except  as  disclosed above, the Company incurred no fees for accounting or
accounting  related  services  in  2003  or  2004.

                                   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 30, 2005
---------------------------
Catherine M. Amos

 /s/ Jeffrey S. Bagley       Vice Chairman of the Board            March 30, 2005
---------------------------
Jeffrey S. Bagley

 /s/ Danny M. Bennett                    Director                  March 30, 2005
---------------------------
Danny M. Bennett

 /s/ Michael P. Bennett                  Director                  March 30, 2005
---------------------------
Michael P. Bennett

 /s/ Bryan L. Bettis                     Director                  March 30, 2005
---------------------------
Bryan L. Bettis

 /s/ Talmadge W. Bolton                  Director                  March 30, 2005
---------------------------
Talmadge W. Bolton

 /s/ Thomas L. Bower III                 Director                  March 30, 2005
---------------------------
Thomas L. Bower III

 /s/ Charles R. Castleberry              Director                  March 30, 2005
---------------------------
Charles R. Castleberry

 /s/ Timothy D. Foreman      Chief Financial Officer, Senior Vice  March 30, 2005
---------------------------  President, Secretary and Treasurer
Timothy D. Foreman


                                       28
<PAGE>
 /s/ Charles D. Ingram                   Director                  March 30, 2005
---------------------------
Charles D. Ingram

 /s/ Herbert A. Lang, Jr.                Director                  March 30, 2005
---------------------------
Herbert A. Lang, Jr.

 /s/ John P. McGruder                    Director                  March 30, 2005
---------------------------
John P. McGruder

 /s/ James J. Myers                Chairman of the Board           March 30, 2005
---------------------------
James J. Myers

 /s/ Timothy M. Perry        President, Chief Executive Officer    March 30, 2005
---------------------------  and Director
Timothy M. Perry

 /s/ Danny L. Reid                       Director                  March 30, 2005
---------------------------
Danny L. Reid

 /s/ Charles R. Smith                    Director                  March 30, 2005
---------------------------
Charles R. Smith

 /s/ Wyatt L. Willingham                 Director                  March 30, 2005
---------------------------
Wyatt L. Willingham

 /s/ Jerry M. Wood                       Director                  March 30, 2005
---------------------------
Jerry M. Wood
</TABLE>


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 2005 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>
<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)

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

13.1   The following sections of the 2004 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.
       -  Report of Independent Registered Public Accounting Firm.
       -  Consolidated Financial Statements and Notes to the Consolidated Financial
       Statements.

14.1   Code of Ethics, adopted April 13, 2004.

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.
</TABLE>


(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>