SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


     [X]  Quarterly  Report  Pursuant  to Section 13 or 15 (d) of the Securities
          Exchange  Act  of  1934  for the quarterly period ended March 31, 2003

     [ ]  Transition report under Section 13 or 15(d) of the Exchange Act for
          the  transition  period  from  _____  to  _____

                       Commission file number:   000-24137


                            GATEWAY BANCSHARES, INC.
        (Exact name of small business issuer as specified in its charter)


               Georgia                               58-2202210
       (State of Incorporation)         (I.R.S. Employer Identification No.)


                              5102 Alabama Highway
                            Ringgold, Georgia  30736
                    (Address of principal executive offices)


                                 (706) 965-5500
                (Issuer's telephone number, including area code)



Check  whether  the  issuer  (1)  has  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  [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity,  as  of  the  latest  practicable  date:

               Class
               -----

     Common Stock, $5.00 par value                  681,758 as of May 5, 2003


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


<PAGE>
                            GATEWAY BANCSHARES, INC.

                           March 31, 2003 Form 10-QSB


                                TABLE OF CONTENTS


                                                                        Page No.
                                                                        --------

PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (unaudited)

          Consolidated Balance Sheets . . . . . . . . . . . . . . . . .    3

          Consolidated Statements of Income . . . . . . . . . . . . . .    4

          Consolidated Statement of Changes in Stockholders' Equity . .    5

          Consolidated Statements of Cash Flows . . . . . . . . . . . .    6

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

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

Item 3.   Controls and Procedures . . . . . . . . . . . . . . . . . . .   14

PART II.  OTHER INFORMATION

  Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .   15

  Item 2. Changes in Securities and Use of Proceeds . . . . . . . . . .   15

  Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . .   15

  Item 4. Submission of Matters to a Vote of Security Holders . . . . .   15

  Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . .   15

  Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . .   15

  Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16

  Certifications. . . . . . . . . . . . . . . . . . . . . . . . . . . .   17

                                   * * * * *


                                      -2-
<PAGE>
<TABLE>
<CAPTION>
PART  I.  FINANCIAL  INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS

                          GATEWAY  BANCSHARES,  INC.  AND  SUBSIDIARY
                                 CONSOLIDATED  BALANCE  SHEETS


                                                               March 31, 2003    December 31,
                                                                 (unaudited)         2002
                                                              ----------------  --------------
<S>                                                           <C>               <C>
ASSETS
  Cash and due from banks                                     $     8,014,357   $   7,049,445
  Federal funds sold                                                3,840,000       7,450,000
  Securities available-for-sale                                    29,217,146      29,374,441
  Federal Home Loan Bank stock, at cost                               298,200         260,000
  Loans                                                            95,699,211      93,897,207
  Allowance for loan losses                                        (1,389,559)     (1,291,097)
                                                              ----------------  --------------
  Net loans                                                        94,309,652      92,606,110

  Premises and equipment, net                                       2,926,564       2,930,060
  Accrued interest                                                    714,525         723,943
  Other assets                                                      1,074,817       1,077,919
                                                              ----------------  --------------

      Total assets                                            $   140,395,261   $ 141,471,918
                                                              ================  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
  Deposits:
    Noninterest-bearing                                       $     9,992,645   $   7,816,038
    Interest-bearing                                              112,556,170     114,174,960
                                                              ----------------  --------------

      Total deposits                                              122,548,815     121,990,998

  Long-term borrowings:
    Federal Home Loan Bank advances                                 3,000,000       4,000,000
    Notes payable                                                     800,000         800,000
  Securities sold under agreements to repurchase                    2,681,506       3,202,343
  Accrued interest                                                    276,648         288,629
  Other liabilities                                                   458,348         793,648
                                                              ----------------  --------------

      Total liabilities                                           129,765,317     131,075,618
                                                              ----------------  --------------

STOCKHOLDERS' EQUITY
  Common stock, $5 par value: 10,000,000 shares authorized,
    681,758 shares issued and outstanding                           3,408,790       3,408,790
  Additional paid-in capital                                        3,645,429       3,610,206
  Retained earnings                                                 3,458,304       3,067,123
  Accumulated other comprehensive income:
    Unrealized gains (losses) on investment securities
      available-for-sale, net of tax                                  117,421         310,181
                                                              ----------------  --------------

      Total stockholders' equity                                   10,629,944      10,396,300
                                                              ----------------  --------------

      Total liabilities and stockholders' equity              $   140,395,261   $ 141,471,918
                                                              ================  ==============
</TABLE>


The Notes to Consolidated Financial Statements are an integral part of these
statements.


                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                   GATEWAY  BANCSHARES,  INC.  AND  SUBSIDIARY
                      CONSOLIDATED  STATEMENTS  OF  INCOME
                                   (unaudited)


                                                       Three Months Ended
                                                     ----------------------
                                                     March 31,   March 31,
                                                        2003        2002
                                                     ----------  ----------
<S>                                                  <C>         <C>
INTEREST INCOME
  Loans                                              $1,708,340  $1,593,268
  Interest on securities:
    Taxable interest                                    199,972     258,513
    Nontaxable interest                                  29,359      17,830
  Interest on federal funds sold                         15,258      12,739
                                                     ----------  ----------

      Total interest income                           1,952,929   1,882,350
                                                     ----------  ----------

INTEREST EXPENSE
  Interest on deposits                                  684,702     728,040
  Interest on notes payable                               8,500      12,195
  Interest on Federal Home Loan Bank advances            29,984      29,120
  Interest on federal funds purchased                     4,823       3,015
                                                     ----------  ----------

      Total interest expense                            728,009     772,370
                                                     ----------  ----------

NET INTEREST INCOME                                   1,224,920   1,109,980
  Provision for loan losses                             110,000      80,000
                                                     ----------  ----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   1,114,920   1,029,980
                                                     ----------  ----------

NONINTEREST INCOME
  Service charges on deposits                           224,480     110,225
  Mortgage loan fees                                    125,578      93,219
  Insurance commissions                                   4,671       4,725
  Gains (losses) on sale of securities                  183,804       2,825
  Other income                                           29,765      22,437
                                                     ----------  ----------

      Total noninterest income                          568,298     233,431
                                                     ----------  ----------

NONINTEREST EXPENSE
  Salaries and employee benefits                        634,191     499,696
  Occupancy expense                                      49,516      46,846
  Furniture and equipment expense                        44,047      54,472
  Other operating expenses                              358,124     240,802
                                                     ----------  ----------

      Total noninterest expense                       1,085,878     841,816
                                                     ----------  ----------

Income before income taxes                              597,340     421,595
Income taxes                                            206,159     135,846
                                                     ----------  ----------

      Net income                                     $  391,181  $  285,749
                                                     ==========  ==========

EARNINGS PER COMMON SHARE, BASIC AND DILUTED

  Net income per common share                        $     0.57  $     0.42

  Basic weighted average shares outstanding             681,758     681,577

  Diluted earnings per common share                  $     0.56  $     0.41

  Diluted weighted average shares outstanding           695,116     688,846
</TABLE>


The Notes to Consolidated Financial Statements are an integral part of these
statements.


                                      -4-
<PAGE>
<TABLE>
<CAPTION>

                                           GATEWAY  BANCSHARES,  INC.  AND  SUBSIDIARY
                                 CONSOLIDATED  STATEMENT  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY
                                                           (unaudited)



                                               Accumulated
                                                  Total         Additional       Other
                                              Comprehensive    Stockholders'     Common     Paid-in     Retained   Comprehensive
                                                 Income           Equity         Stock      Capital     Earnings       Income
                                             ---------------  ---------------  ----------  ----------  ----------  --------------
<S>                                          <C>              <C>              <C>         <C>         <C>         <C>
BALANCE, December 31, 2002                                    $   10,396,300   $3,408,790  $3,610,206  $3,067,123  $     310,181

  Stock options compensation                                          35,223            -      35,223           -              -

  Comprehensive income:
    Net income                               $      391,181          391,181            -           -     391,181              -

    Other comprehensive income, net of tax:
      Unrealized holding gains (losses) on
        securities available for sale, net
        of reclassification adjustment             (192,760)        (192,760)           -           -           -       (192,760)
                                             ---------------  ---------------  ----------  ----------  ----------  --------------

    Total comprehensive income               $      198,421
                                             ===============

BALANCE, March 31, 2003                                       $   10,629,944   $3,408,790  $3,645,429  $3,458,304  $     117,421
                                                              ===============  ==========  ==========  ==========  ==============

<FN>

The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>


                                      -5-
<PAGE>
<TABLE>
<CAPTION>
                         GATEWAY  BANCSHARES,  INC.  AND  SUBSIDIARY
                          CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
                                         (unaudited)

                                                                      Three Months Ended
                                                                  ---------------------------
                                                                    March 31,     March 31,
                                                                      2003           2002
                                                                  -------------  ------------
<S>                                                               <C>            <C>
CASH FLOW FROM OPERATING ACTIVITIES
  Net income                                                      $    391,181   $   285,749
  Adjustments to reconcile net income to net cash provided by
    (used in) operating activities:
      Provision for loan losses                                        110,000        80,000
      Depreciation and amortization                                     40,345        53,520
      Stock options compensation                                        35,223        37,352
      Net amortization on securities                                    98,778        42,425
      Gain on sale of securities                                      (183,804)       (2,825)
      Deferred income taxes                                            (39,518)      (12,308)
      Changes in other operating assets and liabilities:
        Accrued interest receivable                                      9,418         5,316
        Accrued interest payable                                       (11,981)      (75,868)
        Other assets and liabilities                                  (199,491)     (460,268)
                                                                  -------------  ------------

          Net cash provided by (used in) operating activities          250,151       (46,907)
                                                                  -------------  ------------

CASH FLOW FROM INVESTING ACTIVITIES
  Net (increase) decrease in loans                                  (1,813,542)    1,256,656
  Proceeds from maturities, calls, and principal pay-downs
    of securities                                                    9,895,101     1,295,074
  Proceeds from sales of available-for-sale securities               3,603,824     3,499,000
  Purchase of available-for-sale securities                        (13,541,353)   (3,692,060)
  Purchase of Federal Home Bank stock                                  (38,200)            -
  Purchase of premises and equipment                                   (38,049)      (17,585)
                                                                  -------------  ------------

          Net cash provided by (used in) investing activities       (1,932,219)    2,341,085
                                                                  -------------  ------------

CASH FLOW FROM FINANCING ACTIVITIES
  Net increase in deposits                                             557,817    (8,516,350)
  Net decrease in securities sold under agreements to repurchase      (520,837)            -
  Payments on Federal Home Loan Bank advances                       (1,000,000)            -
  Exercise of stock options                                                  -        32,520
                                                                  -------------  ------------

          Net cash used in financing activities                       (963,020)   (8,483,830)
                                                                  -------------  ------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                           (2,645,088)   (6,189,652)

CASH AND CASH EQUIVALENTS, beginning of period                      14,499,445    14,963,268
                                                                  -------------  ------------

CASH AND CASH EQUIVALENTS, end of period                          $ 11,854,357   $ 8,773,616
                                                                  =============  ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the period for:
    Interest                                                      $    739,990   $   848,238
    Income taxes                                                       158,002             -
                                                                  =============  ============

<FN>

The  Notes  to  Consolidated  Financial Statements are an integral part of these
statements.
</TABLE>


                                      -6-
<PAGE>
                   GATEWAY  BANCSHARES,  INC.  AND  SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)
                                 March 31, 2003

NOTE  1  -  BASIS  OF  PRESENTATION
-----------------------------------

The  consolidated  financial  statements  include  the  accounts  of  Gateway
Bancshares,  Inc.,  and  its wholly-owned subsidiary, Gateway Bank & Trust.  All
significant  intercompany  accounts  and  transactions  have  been eliminated in
consolidation.

The  accompanying unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting  principles  for  interim
financial  information  and  with the instructions to Form 10-QSB and Regulation
S-B.  Accordingly,  they  do  not  include  all of the information and footnotes
required by U.S. generally accepted accounting principles for complete financial
statements.  In  management's  opinion,  all  adjustments  (consisting of normal
recurring  accruals)  considered  necessary  for  a  fair presentation have been
included.  Operating results for the three-month period ended March 31, 2003 are
not  necessarily  indicative  of  the  results that may be expected for the year
ending  December  31,  2003.  For  further  information,  refer to the financial
statements  and  footnotes thereto included in the Company's annual report filed
under  cover  of  Form  10-KSB  for  the  year  ended  December  31,  2002.

NOTE  2  -  ORGANIZATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
-----------------------------------------------------------------------------

Organization
------------

Gateway  Bancshares,  Inc.  (the  Company)  is  a one-bank holding company which
engages  in  providing  a  full range of banking services through its subsidiary
bank,  Gateway  Bank & Trust (the Bank), in Ringgold, Georgia. The Bank received
preliminary  charter  approval  in  1995.  In  April 1997 the Bank was granted a
charter  by  the  Georgia  Department  of  Banking  and  Finance  and began full
operations.  Further discussion of the Company's financial condition and results
of  operations  is  included  in the Company's consolidated financial statements
presented  in  the  Company's  annual  report  on Form 10-KSB for the year ended
December  31,  2002.

Net  Income  Per  Common  Share
-------------------------------

Net  income  per  common share is based on the weighted-average number of shares
outstanding  for  the  periods  presented.

NOTE  3  -  INVESTMENT  SECURITIES
----------------------------------

The  Company  has applied the accounting and reporting requirements of Statement
of Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities (SFAS No. 115).  This pronouncement requires that all
investments  in  debt  securities  be  classified  as  either  held-to-maturity
securities,  which are reported at amortized cost; trading securities, which are
reported  at  fair value, with unrealized gains and losses included in earnings;
or  available-for-sale  securities,  which  are  reported  at  fair  value, with
unrealized  gains  and  losses excluded from earnings and reported in a separate
component  of  stockholders'  equity  (net  of  deferred  taxes).

At  March  31,  2003,  the  Company  had  net  unrealized  gains  of $189,388 on
available-for-sale  securities.  As  a  result,  the  increase  in stockholders'
equity,  net of deferred taxes, was $117,421.  There were no trading securities.
The  net  decrease  in  stockholders'  equity  as  a  result of the SFAS No. 115
adjustment  from  December  31,  2002,  to  March  31,  2003,  was  $192,760.


                                      -7-
<PAGE>
NOTE  4  -  BORROWED  FUNDS
---------------------------

In  September  2000,  the  Bank obtained a $1 million loan from the Federal Home
Loan Bank.  The note requires quarterly interest payments at an interest rate of
6.09  percent,  and  matures  on September 15, 2010.  This note is subject to an
early  conversion  option effective September 15, 2003, which allows the Federal
Home  Loan  Bank  to  covert  this note into a floating rate advance tied to the
LIBOR  rate.  The note is secured by specifically identified single-family first
mortgage  loans.

In August 2002, the Bank obtained four additional advances of $500,000 each from
the  Federal  Home  Loan Bank.  These notes require monthly interest payments at
rates  of  2.24  percent,  2.73  percent, 3.33 percent, and 3.84 percent.  These
notes  have staggered maturities of August 27, 2003, August 27, 2004, August 29,
2005, and August 28, 2006, respectively.  All advances are secured by securities
held  by  the  Federal  Home  Loan  Bank.

In  September  2002,  the  Company refinanced $800,000 of a $1,000,000 loan from
Gilmer  County  Bank.  The  proceeds  of  the  original note were used to inject
additional  capital in the Bank.  This note requires quarterly interest payments
at  the  prime interest rate less one-half percent.  Principal is due in full on
September  20,  2004.  The  note  is secured by 600,000 shares of Gateway Bank &
Trust  common  stock.

NOTE  5  -  STOCK  OPTION  PLAN
-------------------------------

The  Company  has  a  stock  option  plan that provides for both incentive stock
options  and  nonqualified stock options.  The maximum number of shares that can
be  issued  or  optioned  under  the  plan  is  200,000  shares.  In the case of
incentive  stock  options, the exercise price shall not be less than 100 percent
(110  percent  for  persons  owning  more  than  10  percent  of  the  Company's
outstanding  common  stock)  of the fair market value of the common stock on the
date  of  grant.  In  the case of nonqualified stock options, the purchase price
may  be  equal  to,  less than, or more than the fair market value of the common
stock  on  the  date of grant.  All options have been granted at the fair market
value  of  the  shares at the date of grant.  If not exercised, the options will
expire  from  2009  to  2011.

Prior  to  2002,  the  Company  accounted  for  its  stock option plan under the
recognition  and  measurement  provisions of Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations.
No stock-based employee compensation was reflected in previously issued results,
as  all options granted under the plan had an exercise price equal to the market
value  of  the  underlying common stock on the date of grant.  During the fourth
quarter  of  2002,  the Company adopted the fair value recognition provisions of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation,"  (SFAS No. 123) for stock-based employee compensation.  All prior
periods presented have been restated to reflect the compensation cost that would
have been recognized had the recognition provisions of SFAS No. 123 been applied
to  all  awards  granted  to  employees  after  January  1,  1995.

A  summary  of  activity in the Company's stock option plan for the period ended
March  31,  2003,  is  as  follows:


                                      -8-
<PAGE>
                                                                 Weighted
                                                                  Average
                                                       Number    Exercise
                                                      of Shares    Price
                                                      ---------  ---------

  Unexercised options outstanding, December 31, 2002    166,300  $   12.08

    Stock options granted                                     -          -

    Stock options forfeited                                   -          -
                                                      ---------

  Unexercised options outstanding, March 31, 2003       166,300      12.08
                                                      =========

Under  the  plan, options to purchase common shares vest beginning one year from
the  grant  date  on an equal incremental basis over a period of five years.  At
March  31,  2003,  the  number  of options exercisable is 125,240.  The range of
exercise  prices  and weighted-average remaining contractual life of outstanding
options  under  the  stock  option  plan  were  $12.00 to $13.00 and 6.18 years,
respectively.

Under  SFAS  No.  123,  the  fair value of stock options at the date of grant is
charged  to  compensation  costs  over  the  vesting period.  Compensation costs
recognized  in the accompanying statements of income for the three-month periods
ended  March  31,  2003  and  2002,  were  $35,223  and  $37,352,  respectively.

NOTE  6  -RECENTLY  ISSUED  ACCOUNTING  STANDARDS
-------------------------------------------------

In  December  of 2002, the Financial Accounting Standards Board issued Statement
No.  148,  "Accounting for Stock-Based Compensation - Transition and Disclosure"
(SFAS 148).  SFAS 148 provides alternative methods of transition for a voluntary
change  to  the  fair  value based method of accounting for stock-based employee
compensation.  In  addition, SFAS 148 amends the disclosure requirements of SFAS
No.  123  to  require prominent disclosures in both annual and interim financial
statements  about the method of accounting for stock-based employee compensation
and  the  effect  of  the  method  used  on  reported  results.  The Company has
voluntarily  elected  to  change  to  the  fair  value method.  The accompanying
consolidated financial statements include stock option expense, and the required
disclosures  are  provided.

PART  I  -  FINANCIAL  INFORMATION

ITEM  2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

This  discussion  is  intended  to  assist  in an understanding of the Company's
financial  condition and results of operations.  This analysis should be read in
conjunction  with the financial statements and related notes appearing in Item 1
of  the  March 31, 2003, Form 10-QSB and Management's Discussion and Analysis of
Financial  Condition  and  Results of Operations appearing in the Company's Form
10-KSB  for  the  year  ended  December  31,  2002.

FORWARD-LOOKING  STATEMENTS

This  Quarterly Report on Form 10-QSB contains forward-looking statements within
the  meaning  of  the  Private Securities Litigation Reform Act (the "Act").  In
addition,  certain  statements  in  future  filings  by  the  Company  with  the
Securities  and  Exchange Commission, in press releases, and in oral and written
statements  made  by  or  with  the  approval  of  the  Company  may  contain
forward-looking  statements  within  the  meaning  of  the  Act.  Examples  of
forward-looking  statements  include  but are not limited to: (1) projections of
revenues, income or loss, earnings or loss per share, the payment or non-payment
of  dividends,  capital  structure  and other financial items; (2) statements of
plans  and  objectives  of  the Company or its management or Board of Directors,
including  those  relating  to  products  or  services; (3) statements of future
economic


                                      -9-
<PAGE>
performance  and (4) statements of assumptions underlying such statements. Words
such as "believes," "anticipates," "expects," "intends," "targeted," and similar
expressions  are intended to identify forward-looking statements but are not the
exclusive  means  of  identifying  such  statements.

Forward-looking  statements  involve  risks  and  uncertainties, which may cause
actual  results  to  differ  materially  from  those  in  the  forward-looking
statements.  Facts  that  could  cause  actual  results  to  differ  from  those
discussed in the forward-looking statements include, but are not limited to: (1)
the  strength  of  the  U.S.  economy  in  general and the strength of the local
economies  in  which operations are conducted; (2) the effects of and changes in
trade monetary and fiscal policies and laws, including interest rate policies of
the  Board  of  Governors of the Federal Reserve System; (3) inflation, interest
rate,  market  and  monetary  fluctuations;  (4)  the  timely development of and
acceptance  of  new  products  and services and perceived overall value of these
products and services by users; (5) changes in consumer spending, borrowing, and
saving  habits;  (6) technological changes; (7) consumer spending, borrowing and
saving  habits;  (8)  acquisitions; (9) the ability to increase market share and
control  expenses; (10) the effect of changes in laws and regulations (including
laws  and  regulations concerning taxes, banking, securities and insurance) with
which the Company and  its subsidiary must comply; (11) the effect of changes in
accounting policies and practices, as may be adopted by the regulatory agencies,
as  well  as  the  Financial  Accounting  Standards  Board;  (12) changes in the
Company's  organization,  compensation,  and  benefit  plans; (13) the costs and
effects  of litigation and of unexpected or adverse outcomes in such litigation;
and  (14)  the  success  of  the  Company  at managing the risks involved in the
foregoing.

Such  forward-looking  statements  speak  only  as  of  the  date  on  which the
statements  are  made,  and  the  Company undertakes no obligation to update any
forward-looking  statement  to reflect events or circumstances after the date on
which  the  statement is made to reflect the occurrence of unanticipated events.

EARNINGS  SUMMARY

The  Company's net income for the three months ended March 31, 2003 and 2002 was
$391,181  and  $285,749,  respectively.  The  increase  in  net  income resulted
primarily  from  net  loan  growth  and  from  an increased net interest margin.

RESULTS  OF  OPERATIONS

INTEREST  INCOME

Interest income on loans and securities is the principal source of the Company's
earnings  stream.  Fluctuations  in  interest  rates  as  well as volume and mix
changes in earning assets materially affect interest income. Interest income was
$1,952,929  and  $1,882,350  for the three months ended March 31, 2003 and 2002,
respectively.  The  increase  in  interest income has resulted from overall loan
growth  during  the  past  year.

INTEREST  EXPENSE

Interest  expense  on  deposits  and other borrowings for the three months ended
March  31,  2003 and 2002 was $728,009 and $772,370, respectively.  The decrease
in  interest expense is a result of a continued decline in interest rates during
the  past  year.  The Bank had successfully lowered all deposit rates during the
past  year  without  sacrificing  growth  in  deposits.


                                      -10-
<PAGE>
PROVISION  FOR  LOAN  LOSSES

The  provision  for  loan  losses represents the charge against current earnings
necessary  to maintain the allowance for loan losses at a level which management
considers  adequate  to provide for probable losses in the loan portfolio.  This
level  is  determined  based  upon  management's  assessment of current economic
conditions,  the composition of the loan portfolio and the levels of nonaccruing
and  past  due  loans.  The provision for loan losses was $110,000 for the three
months  ended  March  31,  2003.  The  allowance for loan losses as a percent of
outstanding  loans  was  1.45  percent  at  March  31, 2003, and 1.37 percent at
December  31,  2002.

NONINTEREST  INCOME

Noninterest  income  for  the  three  months  ended  March 31, 2003 and 2002 was
$568,298  and $233,431, respectively.  Noninterest income consisted primarily of
service  charges  on  customer  deposits ($224,480 for the first three months of
2003 and $110,225 for the same period in 2002), mortgage loan fees ($125,579 for
the  first  three months of 2003 and $93,219 for the same period in 2002), Gains
on  sales  of securities ($183,804 for the first three months of 2003 and $2,825
for  the  same  period  in  2002),  ATM and credit card fees, and rental of safe
deposit  boxes.  The increase resulted from significantly greater gains on sales
of  securities  and  an  increase  in  the  Bank's  fee  structure.

NONINTEREST  EXPENSE

Noninterest  expense  totaled $1,085,878 and $841,816 for the three months ended
March  31,  2003  and  2002,  respectively.  The increase reflects the hiring of
additional  staff  and the increase in other salary and benefit expenses.  Other
operating  expenses  consist  primarily  of  data  processing,  advertising,
professional  fees,  printing  and  postage  and  other  miscellaneous expenses.

INCOME  TAXES

Income  taxes  of  $206,159 and $135,846 have been provided for the three months
ended March 31, 2003 and 2002, respectively.  The increase is a direct result of
an  increase  in  taxable  income  in  2003  as  compared  to  2002.

FINANCIAL  CONDITION

EARNING  ASSETS

The  Company's  earning assets include loans, securities and federal funds sold.
The  mix  of  earning  assets reflects management's attempt to maximize interest
income  while  maintaining  acceptable  levels  of  risk.

SECURITIES  AND  FEDERAL  FUNDS  SOLD

The  composition  of  the  Company's securities portfolio reflects the Company's
investment strategy of maximizing portfolio yields subject to risk and liquidity
considerations.  The primary objectives of the Company's investment strategy are
to  maintain  an  appropriate level of liquidity and provide a tool to assist in
controlling  the  Company's  interest  rate  position  while  at  the  same time
producing  adequate  levels  of  interest  income.  For securities classified as
available-for-sale,  management  intends  to  hold  such  securities  for  the
foreseeable  future  except to fund increases in


                                      -11-
<PAGE>
loan demand. Management of the maturity of the portfolio is necessary to provide
liquidity  and  to  control  interest  rate  risk.

Securities  and  federal  funds  sold  decreased $3,767,295 or 10.2 percent from
December  31, 2002, to March 31, 2003.  The securities portfolio may be adjusted
to  make various term investments, to provide a source of liquidity and to serve
as  collateral  to  secure certain government deposits.  Securities at March 31,
2003  and  December  31,  2002  were  $29,217,146 and $29,374,441, respectively,
reflecting a decrease of $157,295.  Federal funds sold decreased from $7,450,000
at  December 31, 2002, to $3,840,000 at March 31, 2003.  This decline is related
to  the  increase  in  loans  during  the  same  period.

LOANS

Loans  represent  the single largest category of the Company's earning assets at
March  31, 2003.  At March 31, 2003, the Company had outstanding loans amounting
to  $94,309,652  net  of its allowance for loan losses, or 67.2 percent of total
assets, compared to net loans of $92,606,110, or 65.5 percent of total assets at
December  31,  2002.  The Company will continue to search for loan opportunities
in  its  market  area  while  assuming  acceptable  levels  of  risk.

ASSET  QUALITY

Asset  quality  is  measured  by  three  key  ratios: (1) the ratio of loan loss
allowance to total nonperforming assets (defined as nonaccrual loans, loans past
due  90  days  or greater, restructured loans, nonaccruing securities, and other
real  estate),  (2)  nonperforming assets to total assets, and (3) nonperforming
assets  to total loans.  At March 31, 2003, the Company had nonperforming assets
of  $310,046,  which  was 22.3 percent of the loan loss allowance of $1,389,559.
Nonperforming  assets  were  0.32 percent of all loans and 0.22 percent of total
assets.  At December 31, 2002, the Company had nonperforming assets of $508,000,
which  was 39.3 percent of the loan loss allowance of $1,291,097.  Nonperforming
assets  were  .32  percent  of  all  loans  and  .36  percent  of  total assets.

NONEARNING  ASSETS

Nonearning  assets  include  premises  and  equipment of $2,926,564 at March 31,
2003,  a  decrease  of  $3,496  from  December  31,  2002.  The decrease results
primarily  from the depreciation of $40,345 outpacing the additions of new fixed
assets.

The  Bank  leases  the site for its main office at the rate of $2,089 per month.
The  lease  term is for a maximum of fifty years, including extensions after the
initial  twenty-year period, and subject to certain conditions after the initial
forty-year  period.

Accrued interest receivable was $714,525 at March 31, 2003, a decrease of $9,418
from  December 31, 2002.  The decrease is due to slightly lower overall interest
rates  on  earning  assets  during  2003.

Other  assets  consist  primarily of prepaid expenses and deferred income taxes.
Deferred  income  taxes  consists  primarily  of  tax benefits related to timing
differences  in  the  tax  and financial reporting treatment of the allowance of
loan  losses,  as  well  as  other  factors.

DEPOSITS


                                      -12-
<PAGE>
At March 31, 2003, the Company had outstanding deposits of $122,548,815 compared
to $121,990,998 at December 31, 2002.  Deposits are the Company's primary source
of  funds to support its earning assets.  Noninterest-bearing deposits increased
from  $7,816,038  at  December  31, 2002, to $9,992,645 at March 31, 2003.  Time
deposits  of  $100,000  or  more  decreased  by  $1,697,703.

OTHER  LIABILITIES

Other  liabilities  consist  primarily  of accrued interest payable and accounts
payable.  Accrued  interest payable decreased $11,981 from December 31, 2002, to
March  31,  2003.  The  decrease is due to slightly lower interest rates in 2003
and  lower  balances  in  interest-bearing  deposits.

STOCKHOLDERS'  EQUITY

Stockholders'  equity  increased  $233,644  from December 31, 2002, to March 31,
2003, due in part to net income of $391,181 for the three months ended March 31,
2003.  The  equity  adjustment  for  unrealized  gains  on  securities
available-for-sale  decreased  $192,760  during the three months ended March 31,
2003.  This decrease is mostly due to the recognized earnings of $183,804 on the
sale  of  securities  during  the  same  period.

RELATED  PARTY  TRANSACTIONS

In  the  normal course of business, the Bank makes loans to directors, executive
officers  and  principal shareholders on substantially the same terms, including
interest  rates  and  collateral, as those prevailing at the time for comparable
transactions  with other borrowers.  Loans to directors, executive officers, and
principal  shareholders  totaled  $1,882,000  at  March  31,  2003.

OFF-BALANCE  SHEET  ARRANGEMENTS

The  Bank is a party to financial instruments with off-balance-sheet risk in the
normal  course  of business to meet the financing needs of its customers.  These
financial instruments include standby letters of credit  and various commitments
to  extend  credit.  At  March  31,  2003,  commitments under standby letters of
credit  and  undisbursed  loan  commitments  aggregated $15,067,000.  The Bank's
credit  exposure  for  these  financial  instruments  is  represented  by  their
contractual  amounts.  The  Bank  does  not  anticipate any material losses as a
result  of  the commitments under standby letters of credit and undisbursed loan
commitments.

LIQUIDITY  AND  CAPITAL  RESOURCES

LIQUIDITY  MANAGEMENT

Liquidity  is defined as the ability of a company to convert assets into cash or
cash  equivalents  without  significant  loss.  Liquidity  management  involves
maintaining  the Bank's ability to meet the day-to-day cash flow requirements of
its  customers,  whether  they  are  depositors  wishing  to  withdraw  funds or
borrowers  requiring funds to meet their credit needs.  Without proper liquidity
management,  the  Bank  would  not  be able to perform the primary function of a
financial  intermediary  and  therefore would not be able to meet the production
and  growth  needs  of  the  communities  it  serves.

The  primary  function  of  asset and liability management is not only to assure
adequate liquidity in order for the Bank to meet the needs of its customer base,
but  also  to  maintain an appropriate balance between interest-sensitive assets
and interest-sensitive liabilities so that the Bank can


                                      -13-
<PAGE>
also  meet  the investment requirements of its stockholders. Daily monitoring of
the  sources  and  uses  of  funds  is  necessary to maintain an acceptable cash
position  that  meets both requirements. In the banking environment, both assets
and  liabilities  are  considered  sources  of  liquidity  funding and both are,
therefore,  monitored  on  a  daily  basis.

The asset portion of the balance sheet provides liquidity primarily through loan
principal  repayments  or sales of securities.  Outstanding loans that mature in
one  year  or  less  totaled  approximately  $49.5  million  at  March 31, 2003.
Securities  maturing  in  one  year  or less totaled approximately $2.5 million.

The  liability  portion  of the balance sheet provides liquidity through various
customers'  interest-bearing and noninterest-bearing deposit accounts.  At March
31,  2003,  funds were also available through the purchase of federal funds from
correspondent  commercial  banks.  Purchases can be made from available lines of
up to an aggregate of approximately $8.0 million.  At March 31, 2003, no federal
funds had been purchased.  Liquidity management involves the daily monitoring of
the  sources  and  uses  of  funds  to  maintain  an  acceptable  cash position.

CAPITAL  RESOURCES

A  strong  capital position is vital to the profitability of the Company because
it  promotes  depositor  and investor confidence and provides a solid foundation
for future growth of the organization.  The Company has provided for its capital
requirements  with  proceeds from its initial stock offering in 1996 and through
the  retention  of  earnings.

FEDERAL  HOME  LOAN  BANK  ADVANCES

In  an  effort  to  maintain  and  improve  the  liquidity position of the Bank,
management  approved  the  Bank's  membership with the Federal Home Loan Bank of
Atlanta  (FHLB).  As  a  member  of  the  FHLB, the Bank improved its ability to
manage  liquidity  and  reduce  interest rate risk by having a funding source to
match  longer  term  loans.  The  terms  of  the  Bank's loans from the FHLB are
summarized  in Note 4 to the Consolidated Financial Statements appearing in this
report.

REGULATORY  CAPITAL  REQUIREMENTS

Regulatory  capital guidelines administered by the federal banking agencies take
into  consideration  risk  factors associated with various categories of assets,
both  on  and  off  the balance sheet.  Under the guidelines, the Bank's capital
strength  is  measured  in  two  tiers  which  are  used  in  conjunction  with
risk-adjusted  assets  to  determine  the  risk-based  capital  ratios.  Tier  I
capital,  which  consists  of  common  equity  less  unrealized  gains  on
available-for-sale  securities,  amounted  to  $10.96 million at March 31, 2003.
Tier  II  capital  components  include  supplemental  capital components such as
qualifying  allowance  for loan losses and qualifying subordinated debt.  Tier I
capital  plus  the Tier II capital components is referred to as total risk-based
capital  and  was  $12.3  million  at  March 31, 2003.  The percentage ratios as
calculated under FDIC guidelines were 10.37 percent and 11.69 percent for Tier I
and total risk-based capital, respectively, to risk-weighted assets at March 31,
2003.  Both  levels  exceeded  the  minimum  ratios  of 4 percent and 8 percent,
respectively.  Management  has  reviewed and will continue to monitor asset mix,
product  pricing,  and  the loan loss allowance, which are the areas it believes
are  most  affected  by  these  requirements.

ITEM  3.  CONTROLS  AND  PROCEDURES

At  March  31,  2003, an evaluation was performed under the supervision and with
the participation


                                      -14-
<PAGE>
of  the Company's management, including the CEO and CFO, of the effectiveness of
the  design  and  operation of the Company's disclosure controls and procedures.
Based  on  that evaluation, the Company's management, including the CEO and CFO,
concluded  that  the Company's disclosure controls and procedures were effective
at  March  31,  2003.  There  have  been no significant changes in the Company's
internal  controls  or in other factors that could significantly affect internal
controls  subsequent  to  March  31,  2003,  and  there have been no significant
deficiencies  or  material  weaknesses  requiring  corrective  action.

PART  II  -  OTHER  INFORMATION

ITEM  1-  LEGAL  PROCEEDINGS

Neither  the  Company  nor  the Bank is a party to any pending legal proceedings
which  management  believes  would  have  a  material  adverse  effect  upon the
operations  or  financial  condition  of  the  Bank.

ITEM  2  -  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS  -  NONE

ITEM  3  -  DEFAULTS  UPON  SENIOR  SECURITIES  -  NONE

ITEM  4  -  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS  -  NONE

ITEM  5  -  OTHER  INFORMATION

Stockholder  proposals submitted for consideration at the next annual meeting of
stockholders  must be received by the Company no later than December 1, 2003, to
be  included in the 2004 proxy materials.  A stockholder must notify the Company
before  February  1,  2004,  of a proposal for the 2004 annual meeting which the
stockholder  intends  to  present other than by inclusion in the Company's proxy
material.  If  the  Company  does  not  receive such notice prior to February 1,
2004,  proxies  solicited  by  the  management  of  the  Company  will  confer
discretionary authority upon the management of the Company to vote upon any such
matter.

ITEM  6  -  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)  Exhibits:

      Exhibit Number       Description of Exhibit
      --------------       ----------------------
            11             Computation of Net Income Per Share

           99.1            Certification Pursuant to 18 U.S.C. Section 1350 as
                           Adopted Pursuant to Section 906 of the Sarbanes-
                           Oxley Act of 2002

(b)  Reports  on  Form  8-K

The  Company did not file any reports on Form 8-K during the quarter ended March
31,  2003.


                                      -15-
<PAGE>
                                   SIGNATURES


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


GATEWAY BANCSHARES, INC.


               /s/  Robert  G.  Peck                     May  5,  2003
               ----------------------                    -------------
               Robert G. Peck,                           Date
               President and CEO
               (Principal Executive Officer)



               /s/  Harle  B.  Green                     May  5,  2003
               ----------------------                    -------------
               Harle B. Green,                           Date
               Chairman and Chief Financial Officer
               (Principal Financial Officer)


                                      -16-
<PAGE>
                                 CERTIFICATIONS

I,  Robert  G.  Peck,  certify  that:

     1.   I  have  reviewed  this  quarterly  report  on  Form 10-QSB of Gateway
          Bancshares,  Inc.  and  Subsidiary.

     2.   Based  on  my  knowledge,  this  quarterly report does not contain any
          untrue  statement  of a material fact or omit to state a material fact
          necessary  to  make the statements made, in light of the circumstances
          under  which such statements were made, not misleading with respect to
          the  period  covered  by  this  quarterly  report;

     3.   Based  on  my knowledge, the financial statements, and other financial
          information  included  in this quarterly report, fairly present in all
          material  respects  the financial condition, results of operations and
          cash  flows of the registrant as of, and for, the periods presented in
          this  quarterly  report;

     4.   The  registrant's  other  certifying officer and I are responsible for
          establishing  and  maintaining  disclosure controls and procedures (as
          defined  in  Exchange  Act Rules 13a-14 and 15d-14) for the registrant
          and  have:

          a)   designed  such  disclosure controls and procedures to ensure that
               material  information  relating  to the registrant, including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly  report  is  being  prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's  disclosure
               controls  and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in  this  quarterly  report  our conclusions about the
               effectiveness  of the disclosure controls and procedures based on
               our  evaluation  as  of  the  Evaluation  Date;

     5.   The  registrant's other certifying officer and I have disclosed, based
          on  our  most  recent evaluation, to the registrant's auditors and the
          audit  committee  of  registrant's  board  of  directors  (or  persons
          performing  the  equivalent  functions):

          a)   all  significant  deficiencies  in  the  design  or  operation of
               internal  controls  which could adversely affect the registrant's
               ability  to  record, process, summarize and report financial data
               and  have  identified  for the registrant's auditors any material
               weaknesses  in  internal  controls;  and

          b)   any  fraud,  whether or not material, that involves management or
               other  employees  who have a significant role in the registrant's
               internal  controls;  and

     6.   The registrant's other certifying officer and I have indicated in this
          quarterly  report  whether  there were significant changes in internal
          controls  or in other factors that could significantly affect internal
          controls  subsequent  to  the  date  of  our  most  recent evaluation,
          including  any  corrective  actions  with  regard  to  significant
          deficiencies  and  material  weaknesses.

                                                /s/ Robert G. Peck
                                                ------------------
                                                   Robert G. Peck
                                                   President and CEO
May 5, 2003


                                      -17-
<PAGE>
                                 CERTIFICATIONS

I,   Harle  B.  Green,  certify  that:

1.   I have reviewed this quarterly report on Form 10-QSB of Gateway Bancshares,
     Inc.  and  Subsidiary.

2.   Based  on  my  knowledge, this quarterly report does not contain any untrue
     statement  of a material fact or omit to state a material fact necessary to
     make  the  statements  made, in light of the circumstances under which such
     statements  were made, not misleading with respect to the period covered by
     this  quarterly  report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  quarterly  report,  fairly  present in all
     material  respects  the financial condition, results of operations and cash
     flows  of  the  registrant  as  of,  and for, the periods presented in this
     quarterly  report;

4.   The  registrant's  other  certifying  officer  and  I  are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Exchange  Act  Rules  13a-14  and  15d-14) for the registrant and have:

          a)   designed  such  disclosure controls and procedures to ensure that
               material  information  relating  to the registrant, including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly  report  is  being  prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's  disclosure
               controls  and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in  this  quarterly  report  our conclusions about the
               effectiveness  of the disclosure controls and procedures based on
               our  evaluation  as  of  the  Evaluation  Date;

5.   The  registrant's  other  certifying officer and I have disclosed, based on
     our  most  recent  evaluation,  to  the registrant's auditors and the audit
     committee  of  registrant's  board  of directors (or persons performing the
     equivalent  functions):

          a)   all  significant  deficiencies  in  the  design  or  operation of
               internal  controls  which could adversely affect the registrant's
               ability  to  record, process, summarize and report financial data
               and  have  identified  for the registrant's auditors any material
               weaknesses  in  internal  controls;  and

          b)   any  fraud,  whether or not material, that involves management or
               other  employees  who have a significant role in the registrant's
               internal  controls;  and

7.   The  registrant's  other  certifying  officer  and I have indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or  in  other  factors  that  could significantly affect internal
     controls  subsequent  to  the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

                                                /s/ Harle B. Green
                                                ------------------
                                                   Harle B. Green
                                                   Chairman and CFO
May 5, 2003


                                      -18-
<PAGE>