SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


     [X]       Quarterly  Report  Pursuant  to  Section  13  or  15  (d)  of the
               Securities  Exchange  Act  of 1934 for the quarterly period ended
               September  30,  2003

     [ ]       Transition  report  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             655,638    as of November 7, 2003


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


<PAGE>
                            GATEWAY BANCSHARES, INC.

                         September 30, 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 . . . . . . . . . . . . . . . . .         16

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . .         16

  Item 2. Changes in Securities and Use of Proceeds . . . . . . . .         16

  Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . .         16

  Item 4. Submission of Matters to a Vote of Security Holders . . .         16

  Item 5. Other Information . . . . . . . . . . . . . . . . . . . .         16

  Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . .         17

  Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . .         18

  Certifications. . . . . . . . . . . . . . . . . . . . . . . . . .         20

                                    * * * * *


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

ITEM 1. FINANCIAL STATEMENTS

                             GATEWAY  BANCSHARES,  INC.  AND  SUBSIDIARY
                                    CONSOLIDATED  BALANCE  SHEETS


                                                                      September 30,
                                                                          2003         December 31,
                                                                      (unaudited)          2002
                                                                     ---------------  --------------
<S>                                                                  <C>              <C>
ASSETS
  Cash and due from banks                                            $    5,902,608   $   7,049,445
  Federal funds sold                                                        600,000       7,450,000
  Securities available-for-sale                                          30,319,746      29,374,441
  Federal Home Loan Bank stock, at cost                                     298,200         260,000
  Loans                                                                 108,870,032      93,897,207
  Allowance for loan losses                                              (1,511,423)     (1,291,097)
                                                                     ---------------  --------------
  Net loans                                                             107,358,609      92,606,110

  Premises and equipment, net                                             2,988,632       2,930,060
  Accrued interest                                                          787,965         723,943
  Other assets                                                            1,295,824       1,077,919
                                                                     ---------------  --------------

      Total assets                                                   $  149,551,584   $ 141,471,918
                                                                     ===============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
  Deposits:
    Noninterest-bearing                                              $   13,507,462   $   7,816,038
    Interest-bearing                                                    118,382,203     114,174,960
                                                                     ---------------  --------------

      Total deposits                                                    131,889,665     121,990,998

  Federal Home Loan Bank advances                                         2,500,000       4,000,000
  Notes payable                                                           1,100,000         800,000
  Securities sold under agreements to repurchase                          2,626,135       3,202,343
  Accrued interest                                                          257,772         288,629
  Other liabilities                                                         480,121         793,648
                                                                     ---------------  --------------

      Total liabilities                                                 138,853,693     131,075,618
                                                                     ---------------  --------------

STOCKHOLDERS' EQUITY
  Common stock ($5 par value: 10,000,000 shares authorized,
    shares issued and outstanding of 655,638 at September 30, 2003
    and 681,758 at December 31, 2002)                                     3,278,190       3,408,790
  Additional paid-in capital                                              3,304,704       3,610,206
  Retained earnings                                                       4,200,057       3,067,123
  Accumulated other comprehensive income:
    Unrealized gains (losses) on investment securities
      available-for-sale, net of tax                                        (85,060)        310,181
                                                                     ---------------  --------------

      Total stockholders' equity                                         10,697,891      10,396,300
                                                                     ---------------  --------------

      Total liabilities and stockholders' equity                     $  149,551,584   $ 141,471,918
                                                                     ===============  ==============


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


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


                                                                       Three Months Ended              Nine Months Ended
                                                                 ------------------------------  ------------------------------
                                                                 September 30,   September 30,   September 30,   September 30,
                                                                      2003            2002            2003            2002
                                                                 --------------  --------------  --------------  --------------
<S>                                                              <C>             <C>             <C>             <C>

INTEREST INCOME
  Loans                                                          $    1,953,660  $    1,631,472  $    5,489,774  $    4,798,515
  Interest on securities:
    Taxable interest                                                    160,431         262,251         542,497         792,231
    Nontaxable interest                                                  37,939          27,457         100,878          67,362
  Interest on federal funds sold                                          2,985           8,613          34,271          38,751
                                                                 --------------  --------------  --------------  --------------

      Total interest income                                           2,155,015       1,929,793       6,167,420       5,696,859
                                                                 --------------  --------------  --------------  --------------

INTEREST EXPENSE
  Interest on deposits                                                  669,724         669,629       2,036,288       2,077,895
  Interest on notes payable                                              10,386          12,195          19,580          36,585
  Interest on Federal Home Loan Bank advances                            29,730          34,579          90,030          93,321
  Interest on securities sold under agreement to repurchase and
    on federal funds purchases                                            7,455             495          15,700           3,510
                                                                 --------------  --------------  --------------  --------------

      Total interest expense                                            717,295         716,898       2,161,598       2,211,311
                                                                 --------------  --------------  --------------  --------------

NET INTEREST INCOME                                                   1,437,720       1,212,895       4,005,822       3,485,548
  Provision for loan losses                                             200,000          90,000         460,000         245,000
                                                                 --------------  --------------  --------------  --------------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                   1,237,720       1,122,895       3,545,822       3,240,548
                                                                 --------------  --------------  --------------  --------------

NONINTEREST INCOME
  Service charges on deposits                                           270,832         196,368         729,151         462,862
  Mortgage loan fees                                                    165,483         105,650         444,657         281,831
  Insurance commissions                                                   2,510           3,271          10,047          10,856
  Gains (losses) on sale of securities                                   29,337               -         213,141           8,613
  Other income                                                           31,658          31,363          95,112          84,394
                                                                 --------------  --------------  --------------  --------------

      Total noninterest income                                          499,820         336,652       1,492,108         848,556
                                                                 --------------  --------------  --------------  --------------

NONINTEREST EXPENSE
  Salaries and employee benefits                                        658,845         584,198       1,933,934       1,624,909
  Occupancy expense                                                      69,246          54,474         166,105         144,832
  Furniture and equipment expense                                        51,010          43,376         142,938         143,630
  Other operating expenses                                              382,317         267,802       1,072,570         787,080
                                                                 --------------  --------------  --------------  --------------

      Total noninterest expense                                       1,161,418         949,850       3,315,547       2,700,451
                                                                 --------------  --------------  --------------  --------------

Income before income taxes                                              576,122         509,697       1,722,383       1,388,653
Income taxes                                                            179,193         177,182         589,449         469,269
                                                                 --------------  --------------  --------------  --------------

      Net income                                                 $      396,929  $      332,515  $    1,132,934  $      919,384
                                                                 ==============  ==============  ==============  ==============

EARNINGS PER COMMON SHARE, BASIC AND DILUTED

  Net income per common share                                    $         0.60  $         0.49  $         1.68  $         1.35

  Basic weighted average shares outstanding                             658,171         681,758         673,711         681,698

  Diluted earnings per common share                              $         0.57  $         0.48  $         1.59  $         1.35

  Diluted weighted average shares outstanding                           697,554         685,807         713,698         681,698


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


                                      -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                                 89,688            -        89,688            -               -

    Exercise of stock options                                 134,560       55,650        78,910            -               -

    Repurchases of common                                    (660,350)    (186,250)     (474,100)           -               -
        stock, at cost

    Comprehensive income:
      Net income                      $    1,132,934        1,132,934            -             -    1,132,934               -

  Other comprehensive income,
    net of tax: 'Unrealized
     holding gains (losses) on
      securities available for sale,
       net of reclassification
         adjustment                         (395,241)        (395,241)           -             -            -        (395,241)
                                      ---------------  ---------------  -----------  ------------  ----------  ---------------

  Total comprehensive income          $      737,693
                                      ===============

BALANCE, September 30, 2003                            $   10,697,891   $3,278,190   $ 3,304,704   $4,200,057  $      (85,060)
                                                       ===============  ===========  ============  ==========  ===============
</TABLE>


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



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


                                                                                    Nine Months Ended
                                                                             --------------------------------
                                                                              September 30,    September 30,
                                                                                  2003             2002
                                                                             ---------------  ---------------
<S>                                                                          <C>              <C>

CASH FLOW FROM OPERATING ACTIVITIES
  Net income                                                                 $    1,132,934   $      919,384
  Adjustments to reconcile net income to net cash provided by
    (used in) operating activities:
      Provision for loan losses                                                     460,000          245,000
      Depreciation and amortization                                                 124,854          137,417
      Stock options compensation                                                     89,688          112,056
      Net amortization on securities                                                385,094          165,662
      Gain on sale of securities                                                   (213,142)          (8,613)
      Deferred income taxes                                                        (119,574)         (36,922)
      Changes in other operating assets and liabilities:
        Accrued interest receivable                                                 (64,022)          36,575
        Accrued interest payable                                                    (30,857)         (79,308)
        Other assets and liabilities                                               (169,613)        (339,112)
                                                                             ---------------  ---------------

          Net cash provided by operating activities                               1,595,362        1,152,139
                                                                             ---------------  ---------------

CASH FLOW FROM INVESTING ACTIVITIES
  Net increase in loans                                                         (15,212,499)      (6,330,151)
  Proceeds from maturities, calls, and principal pay-downs
    of securities                                                                15,369,745        4,120,744
  Proceeds from sales of available-for-sale securities                           10,380,568        6,236,000
  Purchase of available-for-sale securities                                     (27,505,056)     (15,043,694)
  Purchase of Federal Home Loan Bank stock                                          (38,200)           8,500
  Purchase of premises and equipment                                               (183,426)         (52,691)
                                                                             ---------------  ---------------

          Net cash used in investing activities                                 (17,188,868)     (11,061,292)
                                                                             ---------------  ---------------

CASH FLOW FROM FINANCING ACTIVITIES
  Net increase (decrease) in deposits                                             9,898,667       (6,642,193)
  Net increase (decrease) in securities sold under agreements to repurchase        (576,208)       2,667,701
  Proceeds from federal funds purchased                                                   -        1,000,000
  Proceeds from Federal Home Loan Bank advances                                           -        2,000,000
  Payments on Federal Home Loan Bank advances                                    (1,500,000)               -
  Proceeds from notes payable                                                       300,000                -
  Payments on notes payable                                                               -         (200,000)
  Repurchases of common stock                                                      (660,350)               -
  Exercise of stock options                                                         134,560           32,520
                                                                             ---------------  ---------------

          Net cash provided by (used in) financing activities                     7,596,669       (1,141,972)
                                                                             ---------------  ---------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                        (7,996,837)     (11,051,125)

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

CASH AND CASH EQUIVALENTS, end of period                                     $    6,502,608   $    3,912,143
                                                                             ===============  ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the period for:
    Interest                                                                 $    2,192,455   $    2,290,619
    Income taxes                                                                    780,632          448,740
                                                                             ===============  ===============


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)
                               September 30, 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 nine-month period ended September 30, 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  September  30,  2003,  the  Company had net unrealized losses of $137,195 on
available-for-sale  securities.  As  a  result,  the  decrease  in stockholders'
equity, net of deferred taxes, was $85,060.  There were no trading securities at
September 30, 2003.  The net decrease in stockholders' equity


                                      -7-
<PAGE>
as  a result of the SFAS No. 115 adjustment from December 31, 2002, to September
30,  2003,  was  $395,241.

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  a  blanket lien on single-family first
mortgage  loans.

In August 2002, the Bank obtained four additional advances of $500,000 each from
the  Federal  Home Loan Bank.  One advance with an interest rate of 2.24 percent
was  paid  at  maturity  on  August 27, 2003.  The three remaining notes require
monthly  interest  payments  at  rates  of  2.73 percent, 3.33 percent, and 3.84
percent.  These  notes  have staggered maturities of 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.

In  June  2003,  the Company obtained a $300,000 loan from Gilmer County Bank to
fund  the  repurchase  of  Company  stock.  The note requires quarterly interest
payments  at  the  prime  interest rate with the rate not being less than 4.25%.
Principal  is  due  in  full  on  June 16, 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.


                                      -8-
<PAGE>
A  summary  of  activity in the Company's stock option plan for the period ended
September  30,  2003,  is  as  follows:

<TABLE>
<CAPTION>
                                                                      Weighted
                                                                       Average
                                                            Number    Exercise
                                                          of Shares     Price
                                                          ----------  ---------
<S>                                                       <C>         <C>

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

          Stock options exercised                           (11,130)      12.09

          Stock options forfeited                            (7,420)      12.20
                                                          ----------  ---------

     Unexercised options outstanding, September 30, 2003    147,750   $   12.07
                                                          ==========  =========
</TABLE>

Each  of  the  outstanding  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  September  30,  2003,  the number of options exercisable is 114,000.
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 5.68
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 nine-month periods
ended  September  30,  2003  and  2002  were $89,688 and $112,056, 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 September 30, 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


                                      -9-
<PAGE>
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  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.

CRITICAL  ACCOUNTING  POLICIES

Management  has  determined  that  the accounting for the allowance for loan and
lease  losses  is a critical accounting policy with respect to the determination
of  financial  condition  and  reporting  of  results  of  operations.

Management  determines the required allowances by classifying loans according to
credit  quality and collateral security and applying historical loss percentages
to  each  category.  Additionally,  as necessary, management determines specific
allowances  related  to  impaired  loans  based on the present value of expected
future  cash flows discounted at the loan's effective interest rate, or the fair
value  of the collateral if the loan is collateral dependent. A key component in
the  accounting  policy  is  management's  ability to timely identify changes in
credit  quality,  which  may  impact  the  Company's  financial  results.


                                      -10-
<PAGE>
Management  recognizes  that  in making loans, credit losses will be experienced
and  that  the risk of loss will vary with, among other things, the type of loan
being  made, the creditworthiness of the borrower over the term of the loan and,
in  the  case  of  a  secured  loan,  the  quality of the security for the loan.
Management's  policy  is to maintain an appropriate allowance for estimated loan
and  lease  losses  on  the  portfolio  as  a whole. The allowances are based on
estimates  of  the  historical  loan  loss  experience,  evaluation  of economic
conditions  and  regular  periodic  reviews of the Bank's loan portfolio by both
internal  personnel  and  a  third  party review firm. The Bank's loan portfolio
consists  mostly  of  commercial  and  real estate loans to companies in various
industries,  whose  financial  performance  may  be  impacted differently by the
local,  regional  or  national  economies  and  stage  of  the  economic  cycle.
Management  believes  that  the  effects of any reasonably likely changes in the
economy  would  be  limited  somewhat  due  to  the  diversification of the loan
portfolio  and  the Bank's normal collateral requirements for such loans.  While
management  uses  available information to recognize losses on loans and leases,
future  adjustments  in  the  allowance  may  be  necessary  based on changes in
economic  conditions,  which  could have a significant detrimental impact to the
Company's  financial  condition  and results of operation. Additionally, various
regulatory  agencies,  as  an  integral  part  of  their  examination  process,
periodically  review  the  Company's  allowance for loans and lease losses. Such
agencies  may  require  the  Company to recognize additions to the allowance for
loan  and  lease  losses  based on their judgment about information available to
them  at  the  time  of  their  examination.

EARNINGS  SUMMARY

The  Company's  net income for the nine months ended September 30, 2003 and 2002
was  $1,132,934 and $919,384, respectively.  The increase in net income resulted
primarily  from  net  loan  growth,  an  increased  net  interest margin, and an
increase  in  deposit  service  charges  and  mortgage  loan  fees.

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
$6,167,420 and $5,696,859 for the nine months ended September 30, 2003 and 2002,
respectively.  The  increase  in  interest  income  is  a result of overall loan
growth  during  the  past  year.

INTEREST  EXPENSE

Interest  expense  on  deposits  and  other borrowings for the nine months ended
September  30,  2003  and 2002 was $2,161,598 and $2,211,311, respectively.  The
decrease  in  interest  expense  is  a result of a continued decline in interest
rates during the past year.  The Bank has successfully lowered all deposit rates
during  the  past  year  without  sacrificing  growth  in  deposits.

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 $460,000 for the nine


                                      -11-
<PAGE>
months  ended September 30, 2003.  The allowance for loan losses as a percent of
outstanding  loans  was  1.39 percent at September 30, 2003, and 1.37 percent at
December  31,  2002.

NONINTEREST  INCOME

Noninterest  income  for  the  nine months ended September 30, 2003 and 2002 was
$1,492,108  and  $848,556, respectively.  Noninterest income consisted primarily
of  service  charges on customer deposits ($729,151 for the first nine months of
2003 and $462,862 for the same period in 2002), mortgage loan fees ($444,657 for
the  first  nine months of 2003 and $281,831 for the same period in 2002), gains
on  sales  of  securities ($213,141 for the first nine months of 2003 and $8,613
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, an increase in the Bank's fee structure, and an increased demand
for  mortgage  loans  due  to  lower  interest  rates.

NONINTEREST  EXPENSE

Noninterest  expense totaled $3,315,547 and $2,700,451 for the nine months ended
September  30,  2003  and  2002,  respectively.  The  largest  components  of
noninterest  expense  consist  of  salaries  and  employee  benefits  and  other
operating  expenses.  Other  operating  expenses  consist  primarily  of  data
processing,  advertising,  professional fees, supplies, printing and postage and
other  miscellaneous  expenses.  For  the  nine months ended September 30, 2003,
salaries  and  employee benefits were $309,025 more than the same time period in
2002 due to the hiring of additional staff and increased insurance premiums.  At
September  30, 2003, other operating expenses were  $285,490 above September 30,
2002  due  to  increased data processing fees and printing and supplies expenses
directly  related  to  the  growth  in  customer  accounts.

INCOME  TAXES

Income  taxes  of  $589,449  and $469,269 have been provided for the nine months
ended  September  30,  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 loan demand.  Management of the
maturity  of  the  portfolio  is  necessary  to provide liquidity and to control
interest  rate  risk.


                                      -12-
<PAGE>
Securities  and  federal  funds  sold  decreased $5,904,695 or 16.0 percent from
December  31,  2002,  to  September  30,  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
September  30,  2003  and  December  31,  2002 were $30,319,746 and $29,374,441,
respectively,  reflecting an increase of $945,305.  Federal funds sold decreased
from  $7,450,000  at December 31, 2002, to $600,000 at September 30, 2003.  This
decline  is  related  to  the  increase  in  loans and a decrease in public fund
deposits  during  the  same  period.

LOANS

Loans  represent  the single largest category of the Company's earning assets at
September  30,  2003.  At  September 30, 2003, the Company had outstanding loans
amounting  to $107,358,609 net of its allowance for loan losses, or 71.8 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  September 30, 2003, the Company had nonperforming
assets  of  $521,445,  which  was  34.5  percent  of  the loan loss allowance of
$1,511,423.  Nonperforming  assets were .48 percent of all loans and .35 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 at December 31, 2002 were .55 percent of all loans and .36
percent  of  total  assets.

NONEARNING  ASSETS

Nonearning  assets include premises and equipment of $2,988,632 at September 30,
2003,  an  increase  of  $58,572  from  December 31, 2002.  The increase results
primarily  from  the additions of new fixed assets outpacing the depreciation of
$124,854.

The  Bank  leases  the site for its main office at the rate of $2,140 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 $787,965 at September 30, 2003, an increase of
$64,022  from December 31, 2002.  The increase is primarily due to the growth in
the  loan  portfolio.

Other  assets  consist primarily of prepaid expenses, deferred income taxes, and
other  real  estate.   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

At  September  30,  2003,  the  Company had outstanding deposits of $131,889,665
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


                                      -13-
<PAGE>
December  31,  2002,  to  $13,507,462  at  September 30, 2003.  Time deposits of
$100,000  or  more  decreased  by  $1,344,344.

OTHER  LIABILITIES

Other  liabilities  consist  primarily  of accrued interest payable and accounts
payable.  Accrued  interest payable decreased $30,857 from December 31, 2002, to
September  30,  2003.  The  decrease  is due to slightly lower interest rates in
2003  and  lower  balances  in  savings  and  certificates  of  deposit.

STOCKHOLDERS'  EQUITY

Stockholders' equity increased $301,591 from December 31, 2002, to September 30,
2003,  due  in  part  to  net  income  of  $1,132,934  for the nine months ended
September  30,  2003.  The  equity adjustment for unrealized gains on securities
available-for-sale decreased $395,241 during the nine months ended September 30,
2003  resulting  in  an unrealized loss of $85,060.  This decrease is due to the
recognized earnings of $213,142 on the sale of securities during the same period
and  the  decline  in  market  values  on  securities.

On  April  30,  2003,  the  Company initiated a tender offer to repurchase up to
110,000  shares  of its outstanding common stock, par value $5.00, at a price of
$17.72  per  share.  The tender offer expired on May 30, 2003. A total of 36,250
shares  of  the  Company's  Common  Stock  were  repurchased  at a total cost of
$642,350.  In addition, in September 2003, the Company purchased 1,000 shares of
its  Common  Stock  from a former officer at a total cost of $18,000 pursuant to
the  Company's Right of First Refusal to purchase the shares as set forth in the
March  18,  1999 Incentive Stock Option Award between the Company and the former
officer.

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  $834,000  at  September  30,  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 September 30, 2003, commitments under standby letters of
credit  and  undisbursed  loan  commitments  aggregated $22,792,000.  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


                                      -14-
<PAGE>
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 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 $50.1 million at September 30, 2003.
Securities  maturing  in  one  year  or less totaled approximately $1.7 million.

The  liability  portion  of the balance sheet provides liquidity through various
customers'  interest-bearing  and  noninterest-bearing  deposit  accounts.  At
September  30,  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 September 30,
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 $11.7 million at September 30, 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 $13.1 million at September 30, 2003.  The percentage ratios as
calculated  under FDIC guidelines were 9.97 percent and 11.22 percent for Tier I
and total risk-based


                                      -15-
<PAGE>
capital,  respectively,  to  risk-weighted  assets  at  September 30, 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  September  30,  2003,  an evaluation was performed under the supervision and
with  the  participation  of  the  Company's  management,  including  the  Chief
Executive  Officer  and  Chief  Financial  Officer,  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 Chief Executive
Officer  and  Chief  Financial  Officer, concluded that the Company's disclosure
controls  and  procedures  were  effective  at  timely alerting them to material
information relating to the Company (including its consolidated subsidiary) that
is required to be included in the Company's periodic filings with the Securities
and  Exchange  Commission.  There  have  been  no  significant  changes  in  the
Company's  internal controls or in other factors that could significantly affect
internal  controls  subsequent  to  September  30,  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.


                                      -16-
<PAGE>
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

     Exhibit  Number     Description  of  Exhibit
     ---------------     ------------------------

            11           Computation of Net Income Per Share

            31           Certifications Pursuant to 18 U.S.C. Section 1350 as
                         Adopted Pursuant to Section 302 of the Sarbanes-Oxley
                         Act of 2002

            32           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
     September  30,  2003.


                                      -17-
<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                      November 7, 2003
                        -----------------------                 ----------------
                        Robert G. Peck,                         Date
                        President and CEO
                        (Principal Executive Officer)



                        /s/ Harle B. Green                      November 7, 2003
                        -----------------------                 ----------------
                        Harle B. Green,                         Date
                        Chairman and Chief Financial Officer
                        (Principal Financial Officer)


                                      -18-
<PAGE>