U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark  One)

[X]  Annual  report  pursuant  to  Section  13  or  15(d) of the Securities
     Exchange  Act  of  1934

For  fiscal  year  ended  DECEMBER  31,  2002
                          -------------------

[ ]  Transition report under Section 13 or 15(d) of the Securities Exchange
     Act  of  1934

     For  the  transition  period  from  ______________to  _______________

     Commission  file  number  000-30511
                              -----------

                           CHEROKEE  BANKING  COMPANY
                           --------------------------
                 (Name of small business issuer in its charter)

                 GEORGIA                                    58-2432974
--------------------------------------------------------------------------------
     (State  or other jurisdiction of                   (I.R.S. Employer
     incorporation  or  organization)                  Identification No.)

1275  RIVERSTONE  PARKWAY,  CANTON,  GEORGIA                   30114
--------------------------------------------------------------------------------
(Address  of  Principal  Executive  Offices)                (Zip  Code)

Securities registered pursuant
  to Section 12(b) of the Act:     NONE.
                                   -----------------------------

Securities registered pursuant
  to Section 12(g) of the Act:     COMMON STOCK, NO  PAR  VALUE.
                                   -----------------------------

Check whether the issuer:  (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act 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  past  90  days.  Yes  X     No
                                                                   ---       ---

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  is  not  contained  in  this  form,  and  no disclosure will be
contained,  to  the  best  of  registrant's  knowledge, in definitive proxy or a
information statements incorporated by reference in Part III of this Form 10-KSB
or  any  amendment  to  this  Form  10-KSB. [ ]

State  issuer's  revenues  for  its  most  recent  fiscal  year:  $5,538,387
                                                                  ----------

State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates  computed  by  reference  to the price at which the stock was
sold,  or  the  average  bid  and  asked  prices  of such common equity, as of a
specified  date  within  the  past  60  days:  $7,200,000  AS  OF MARCH 10, 2003
                                               ---------------------------------

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity, as of the latest practicable date.  738,658 AS OF MARCH 17, 2003
                                                    ----------------------------

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions  of  the Registrant's Annual Report to Shareholders for the fiscal year
ended  December  31,  2002  are  incorporated  by reference into Parts I and II.

Portions  of  the  Registrant's  Proxy  Statement  for  the  Annual  Meeting  of
Shareholders,  to  be held on April 28, 2003, are incorporated by reference into
Part  III.

     Transitional Small Business Disclosure format (check one): Yes     No  X
                                                                    ---    ---

<PAGE>
<TABLE>
<CAPTION>
                                        TABLE OF CONTENTS

<S>                                                                                            <C>
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
  ITEM 1.   DESCRIPTION OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
  ITEM 2.   DESCRIPTION OF PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
  ITEM 3.   LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
  ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . . . . . . . . . . . . .  12
PART II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
  ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
              STOCKHOLDER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
  ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
  ITEM 7.   FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
  ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  13
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
  ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
              COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. . . . . . . . . . . . . . . . .  13
  ITEM 10.  EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
  ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
              MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
  ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . . .  14
  ITEM 13.  EXHIBITS, LISTS AND REPORTS ON FORM 10-KSB . . . . . . . . . . . . . . . . . . . . .  14
  ITEM 14.  CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
</TABLE>


<PAGE>
                                     PART I


ITEM  1.     DESCRIPTION  OF  BUSINESS

         SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

     Various matters discussed in this document and in documents incorporated by
reference  herein,  including  matters discussed under the caption "Management's
Discussion  and  Analysis of Financial Condition and Results of Operations," may
constitute forward-looking statements for purposes of the Securities Act and the
Securities  Exchange Act. These forward-looking statements may involve known and
unknown  risks,  uncertainties  and  other  factors  which  may cause the actual
results, performance or achievements of Cherokee Banking Company (the "Company")
to  be  materially  different  from  future results, performance or achievements
expressed  or  implied  by  such forward-looking statements. The words "expect,"
"anticipate,"  "intend,'  "plan,"  "believe,"  "seek,'  "estimate,"  and similar
expressions  are  intended  to  identify  such  forward-looking  statements. The
Company's  actual  results may differ materially from the results anticipated in
these forward-looking statements due to a variety of factors, including, without
limitation:

     -    The  effects  of  future  economic  conditions;

     -    Governmental  monetary and fiscal policies, as well as legislative and
          regulatory  changes;

     -    The risks of changes in interest rates on the level and composition of
          deposits,  loan  demand, and the values of loan collateral, securities
          and  interest  rate  protection  agreements,  as well as interest rate
          risks;

     -    The  effects  of  competition  from  other  financial institutions and
          financial service providers operating in the Company's market area and
          elsewhere,  including  institutions  operating  locally,  regionally,
          nationally  and  internationally,  together  with  such  competitors
          offering  banking  products  and  services  by  mail,  telephone,  and
          computer  and  the  Internet;  and

     -    The  failure  of  assumptions underlying the establishment of reserves
          for  possible  loan losses and estimations of values of collateral and
          various  financial  assets  and  liabilities.

All  written  or oral forward-looking statements attributable to the Company are
expressly  qualified  in  their  entirety  by  these  cautionary  statements.

                            CHEROKEE BANKING COMPANY

     The  Company  was incorporated as a Georgia corporation on October 9, 1998,
and became a bank holding company by acquiring all of the issued and outstanding
common  stock  of  Cherokee Bank, N.A., located in Canton, Georgia (the "Bank").
The  Bank  is  the  only  subsidiary  of  the  Company.

     The  Company  was  organized  to facilitate the Bank's ability to serve its
customers'  banking needs.  Specifically, the holding company structure provides
flexibility  to  expand  the  Company's banking business through possible future
acquisitions  of  other  financial  institutions  and  the ability to acquire or
establish  banking-related  services  that  cannot  be  engaged  in  directly by
national  banks  but  are permissible for bank holding companies.  Additionally,
the  holding  company  structure  makes  it easier to raise capital for the Bank
because  the Company will be able to issue securities without the need for prior
banking  regulatory  approval, and the proceeds of debt securities issued by the
Company  can  be  invested  in  the  Bank  as  primary  capital.

     The  Company  has  no  present plans to acquire or establish any additional
operating subsidiaries.  We may, however, make acquisitions in the future in the
event  that  the  acquisitions  are  deemed  to  be in the best interests of the
Company  and  its  shareholders.  Any  acquisition  would  be subject to various
regulatory  approvals  and  requirements.


                                        1
<PAGE>
                               CHEROKEE BANK, N.A.

GENERAL

     Cherokee  Bank  began business in July of 1999 as a full-service commercial
bank.  The Bank offers personal and business checking accounts, interest-bearing
checking  accounts,  savings  accounts  and  various  types  of  certificates of
deposit.  Cherokee  Bank  also  offers  commercial  loans, installment and other
consumer  loans,  home  equity  loans, home equity lines of credit, construction
loans  and  mortgage  loans.  In  addition,  the Bank provides such products and
services  as  official  bank  checks  and  money  orders,  traveler's  checks,
Mastercard(R)  and  Visa(R)  credit  cards, MasterMoney(R) debit cards, internet
banking  and  bill-pay,  bank-by-mail,  direct deposit and United States Savings
Bonds.

PHILOSOPHY

     Our  business  philosophy  is  to  operate the Bank as a community-oriented
financial  institution  emphasizing  prompt,  personalized  customer  service to
individuals  and  businesses  located  primarily in Cherokee County, Georgia. We
have adopted this philosophy in order to attract customers and to acquire market
share  now  controlled  by other financial institutions operating in our primary
market.  We  believe  that  local ownership and control allows the Bank to serve
its  customers  more  efficiently,  helping us to grow both our deposit base and
loan  portfolio.

MARKET  AREA  AND  COMPETITION

     The  Bank's  primary  service  or  market area is Cherokee County, Georgia,
which  includes  the  cities of Ball Ground, Canton, Holly Springs, Waleska, and
Woodstock.  Cherokee  County  lies  northwest  of  the  city  of  Atlanta  with
Interstates  575  and  75  providing  convenient access for many Cherokee County
residents to employment opportunities in the northern metropolitan Atlanta area.

     The  Bank  competes  with  other  commercial  banks,  savings  and  loan
associations,  credit  unions,  and  money  market mutual funds serving Cherokee
County,  many  of  which  have  equal  or  greater  financial or banking-related
resources  than the Company or the Bank.  Cherokee County is currently served by
at  least  15  other  bank  and thrift institutions through 50 branch locations.
These  competitors  offer the same or similar products and services as the Bank.
Currently,  the  Bank's  three  largest  competitors  are Regions Bank, Wachovia
(through  its  acquisition  of  the Bank of Canton), and Synovus Financial Corp.

LOAN  PORTFOLIO

     LENDING  POLICY.  The Bank aggressively seeks creditworthy borrowers within
its  primary  service  area.  As of December 31, 2002, the Bank's loan portfolio
was  comprised  of  the  following:

                                             PERCENTAGE  OF
          LOAN  CLASSIFICATION               TOTAL  LOANS
          --------------------               --------------

          Real  estate-related  loans             38%

          Commercial  loans                       54%

          Consumer  loans                          8%

     LOAN  APPROVAL  AND  REVIEW.  The Bank's loan approval policies provide for
various  levels of officer lending authority.  When the total amount of loans to
a  single borrower exceeds an individual officer's lending authority, an officer
with  a  higher lending limit or the Bank's loan committee determines whether to
approve the loan request.  As part of its lending policy, the Bank does not make
loans  to  its  directors  or  executive  officers  unless  a  majority  of  its
disinterested  board  members approves the loan and the terms of the loan are no
more favorable than would be available to any other borrower similarly situated.


                                        2
<PAGE>
     LENDING  LIMITS.  The Bank's lending activities are subject to a variety of
lending limits imposed by federal law.  Differing limits apply based on the type
of loan and the nature of the borrower, including the borrower's relationship to
the  Bank.  In  general,  however,  the  Bank is able to loan any one borrower a
maximum  amount  equal  to  either:

     -    15%  of  the  Bank's  capital  and  surplus;  or

     -    25%  of  its  capital  and  surplus  if  the excess over 15% is within
          federal  guidelines,  which provides an exception to the 15% limit for
          debt  secured  by  readily  marketable  collateral,  as defined by OCC
          regulations.

     The  Bank  complies  with the statutory lending limits, as described above.
The  Bank's legal lending limits will increase or decrease as the Bank's capital
increases  or  decreases  as  a  result of, among other reasons, its earnings or
losses.  The  Bank  will continue to sell loan participations to other financial
institutions  to meet the needs of customers requiring loans above these limits.

     REAL  ESTATE  LOANS.  The  Bank  makes and holds real estate-related loans,
consisting  primarily  of  mortgage  loans,  home  equity  lines  of  credit and
single-family  residential  construction  loans  for  one-to-four  unit  family
structures.  The  Bank  is involved in both the originating and servicing of its
first  and  second  mortgage  loans,  and  generally  requires  an  aggregated
loan-to-value  ratio  of  no  more  than  85%.  For construction loans, the Bank
requires  a  first  lien  position  on the land associated with the project with
terms  not exceeding one year.  Loan disbursements on construction loans require
on-site  inspections  to  assure  the  project  is  on  budget and that the loan
proceeds  are  not  being diverted to another project.  The loan-to-value ratios
for  construction loans are typically 80% of the lower of the as-built appraised
value  or project cost, and a maximum of 85% if the loan is amortized.  The Bank
also offers home equity lines of credit, which equaled approximately 3.5% of the
Bank's  total  loans, as of December 31, 2002, and have interest rate terms that
are  variable  rather  than  fixed.

     As  of  December  31,  2002,  approximately  54%  of  the  Bank's  real
estate-related loans had interest rate terms that are variable or carried a term
of  12  months  or less. Additionally, the terms of the Bank's real estate loans
generally  do  not  exceed five years. Loans for construction can present a high
degree  of risk to the lender and depend upon, among other things, the builder's
ability  to  sell  the  home to a buyer, the buyer's ability to obtain permanent
financing  and  the  construction  project's  ability  to  produce income in the
interim.

     COMMERCIAL  LOANS.  The  Bank's  commercial lending is directed principally
toward  small-  to medium-size businesses whose demand for funds fall within the
legal  lending  limits  of  the  Bank.  The  Bank's commercial loans are made to
individual,  partnership  or corporate borrowers, and are obtained for a variety
of  business  purposes.  Of the Bank's commercial loans as of December 31, 2002,
approximately  69% were adjustable-rate loans or mature within one year, 26% had
maturities  extending  beyond  12  months  but  less  than  60 months and 5% had
maturities  of  over  60  months.  Risks  associated  with  these  loans  can be
significant  and  include,  but  are not limited to, fraud, bankruptcy, economic
downturn, deteriorated or non-existing collateral and changes in interest rates.

     CONSUMER  LOANS.  The  Bank  makes  consumer loans, consisting primarily of
installment  loans  to  individuals for personal, family and household purposes,
including  loans for automobiles, home improvements and investments.  Almost all
of  the  Bank's  consumer  loans  are fixed rate loans generally with maturities
ranging  from  3  to 5 years.  Risks associated with consumer loans include, but
are  not  limited  to,  fraud,  deteriorated or non-existing collateral, general
economic  downturn  and  customer  financial  problems.

     INVESTMENTS.  In  addition  to  its  loan  operations, the Bank makes other
investments  primarily  in  obligations  of  the  United  States  or obligations
guaranteed  as  to principal and interest by the United States and other taxable
securities.  The  bank  also  invests  in  certificates  of  deposits  in  other
financial institutions.  The amount invested in such time deposits, as viewed on
an  institution  by institution basis, does not exceed $100,000.  Therefore, the
amounts  invested  in certificates of deposit are fully insured by the FDIC.  No
investment  held by the Bank exceeds any applicable limitation imposed by law or
regulation.  Our asset and liability management committee reviews the investment
portfolio  on  an  ongoing  basis  to  ascertain investment profitability and to
verify  compliance  with  the  Bank's  investment  policies.

     DEPOSITS.  The Bank's core deposits include checking accounts, money market
accounts,  a  variety  of  certificates of deposit and IRA accounts.  To attract
deposits, the Bank has employed an aggressive marketing plan in Cherokee County,
and offers broad array of competitive products and services.  The Bank's primary


                                        3
<PAGE>
sources of deposits are residents of, and businesses and their employees located
in,  Cherokee  County.  The  Bank  has  obtained  its deposits primarily through
personal  solicitation by its officers and directors, direct mail solicitations,
television  advertisements  and advertisements published in the local media.  We
plan  to  continue  generating deposits by offering competitively priced deposit
services,  including  demand  deposits,  regular  savings accounts, money market
deposits,  certificates  of  deposit,  retirement  accounts  and  other  legally
permitted  deposit  or  fund  transfer  services.

     ASSET  AND  LIABILITY  MANAGEMENT.  The  Bank  has established an asset and
liability  management  committee to manage its assets and liabilities.  The goal
of  this  committee  is to maintain an optimum and stable net interest margin, a
profitable  after-tax  return  on  assets  and  return  on  equity  and adequate
liquidity.  The  committee  conducts  these  management  functions  within  the
framework  of  written  loan  and investment policies that the Bank has adopted.
The  committee  also  attempts  to  maintain  a  balanced  position between rate
sensitive  assets  and  rate sensitive liabilities.  Specifically, the committee
charts  the  Bank's  assets  and  liabilities on a matrix by maturity, effective
duration  and  interest  adjustment  period  and  attempts to manage any gaps in
maturity  ranges.

                                    EMPLOYEES

     As  of  December  31,  2002,  the  Bank  employed 33.4 full-time equivalent
employees,  and  the Company had no employees who were not also employees of the
Bank.  The  Company  considers  the Bank's relationship with its employees to be
excellent.

                           SUPERVISION AND REGULATION

     Both  the  Company  and the Bank are subject to extensive state and federal
banking  regulations  that  impose  restrictions  on  and  provide  for  general
regulatory  oversight of their operations.  These laws are generally intended to
protect depositors and not shareholders.  The following discussion describes the
material  elements  of  the  regulatory  framework  that  applies  to  us.

CHEROKEE  BANKING  COMPANY

     Since  the  Company owns all of the capital stock of the Bank, it is a bank
holding  company  under  the  federal  Bank  Holding  Company Act of 1956.  As a
result,  the  Company  is primarily subject to the supervision, examination, and
reporting  requirements  of  the Bank Holding Company Act and the regulations of
the  Federal  Reserve.

     ACQUISITIONS  OF  BANKS.  The  Bank Holding Company Act requires every bank
holding  company  to  obtain  the  Federal  Reserve's  prior  approval  before:

     -    acquiring direct or indirect ownership or control of any voting shares
          of  any  bank if, after the acquisition, the bank holding company will
          directly  or  indirectly  own  or  control  more than 5% of the bank's
          voting  shares;

     -    acquiring  all  or  substantially  all  of  the assets of any bank; or

     -    merging  or  consolidating  with  any  other  bank  holding  company.

     Additionally,  the  Bank  Holding  Company  Act  provides  that the Federal
Reserve  may not approve any of these transactions if it would result in or tend
to  create a monopoly or, substantially lessen competition or otherwise function
as  a  restraint  of  trade, unless the anti-competitive effects of the proposed
transaction  are  clearly  outweighed  by  the  public  interest  in meeting the
convenience  and  needs  of  the community to be served.  The Federal Reserve is
also  required  to  consider  the  financial and managerial resources and future
prospects  of the bank holding companies and banks concerned and the convenience
and needs of the community to be served.  The Federal Reserve's consideration of
financial  resources  generally  focuses on capital adequacy, which is discussed
below.

     Under  the  Bank  Holding  Company  Act,  if  adequately  capitalized  and
adequately  managed,  the  Company  or any other bank holding company located in
Georgia  may  purchase  a  bank  located  outside  of  Georgia.  Conversely,  an
adequately  capitalized  and  adequately  managed  bank  holding company located
outside  of  Georgia  may purchase a bank located inside Georgia.  In each case,
however,  restrictions  may be placed on the acquisition of a bank that has only
been  in  existence  for  a  limited  amount of time or will result in specified
concentrations  of  deposits.  For example, Georgia law prohibits a bank holding
company  from  acquiring  control  of  a  financial institution until the target
financial  institution  has  been incorporated for three years.  As a result, no
bank  holding  company  may acquire control of the Company until after the third


                                        4
<PAGE>
anniversary  date  of  the  Bank's  incorporation.  Because  the  Bank  has been
incorporated  for  more  than three years, this limitation does not apply to the
Bank  or  to  the  Company.

     CHANGE  IN  BANK  CONTROL.  Subject to various exceptions, the Bank Holding
Company  Act  and  the  Change  in  Bank  Control  Act,  together  with  related
regulations,  require  Federal  Reserve  approval prior to any person or company
acquiring "control" of a bank holding company.  Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities  of the bank holding company.  Control is refutably presumed to exist
if  a person or company acquires 10% or more, but less than 25%, of any class of
voting  securities  and  either:

     -    the bank holding company has registered securities under Section 12 of
          the  Securities  Act  of  1934;  or

     -    no  other  person  owns  a  greater percentage of that class of voting
          securities  immediately  after  the  transaction.

Our  common  stock is registered under the Securities Exchange Act of 1934.  The
regulations  provide  a  procedure for challenging any rebuttable presumption of
control.

     PERMITTED  ACTIVITIES.  A bank holding company is generally permitted under
the Bank Holding Company Act, to engage in or acquire direct or indirect control
of  more  than  5%  of the voting shares of any company engaged in the following
activities:

     -    Banking  or  managing  or  controlling  banks;  and

     -    Any  activity  that  the  Federal  Reserve determines to be so closely
          related  to  banking  as  to  be  a proper incident to the business of
          banking.

     Activities  that  the Federal Reserve has found to be so closely related to
banking  as  to  be  a  proper  incident  to  the  business  of banking include:

     -    Factoring  accounts  receivable;

     -    Making,  acquiring,  brokering  or  servicing  loans and usual related
          activities;

     -    Leasing  personal  or  real  property;

     -    Operating  a  non-bank  depository  institution,  such  as  a  savings
          association;

     -    Trust  company  functions;

     -    Financial  and  investment  advisory  activities;

     -    Conducting  discount  securities  brokerage  activities;

     -    Underwriting  and  dealing  in government obligations and money market
          instruments;

     -    Providing  specified  management consulting and counseling activities;

     -    Performing  selected  data  processing  services and support services;

     -    Acting  as  agent or broker in selling credit life insurance and other
          types  of  insurance  in  connection  with  credit  transactions;  and

     -    Performing  selected  insurance  underwriting  activities.

     Despite  prior  approval,  the  Federal  Reserve  may  order a bank holding
company or its subsidiaries to terminate any of these activities or to terminate
its  ownership  or  control  of  any  subsidiary when it has reasonable cause to
believe that the bank holding company's continued ownership, activity or control
constitutes  a  serious risk to the financial safety, soundness, or stability of
it  or  any  of  its  bank  subsidiaries.

     In  addition  to  the  permissible  bank  holding company activities listed
above,  a  bank  holding  company  may  qualify  and elect to become a financial
holding  company,  permitting  the  bank holding company to engage in additional
activities  that  are  financial  in  nature  or  incidental or complementary to
financial  activity.  The Bank Holding Company Act expressly lists the following
activities  as  financial  in  nature:


                                        5
<PAGE>
     -    Lending,  trust  and  other  banking  activities;

     -    Insuring,  guaranteeing,  or  indemnifying  against  loss  or harm, or
          providing  and  issuing  annuities, and acting as principal, agent, or
          broker  for  these  purposes,  in  any  state;

     -    Providing  financial,  investment,  or  advisory  services;

     -    Issuing  or  selling  instruments  representing  interests in pools of
          assets  permissible  for  a  bank  to  hold  directly;

     -    Underwriting,  dealing  in  or  making  a  market  in  securities;

     -    Other  activities  that  the  Federal  Reserve  may determine to be so
          closely related to banking or managing or controlling banks as to be a
          proper  incident  to  managing  or  controlling  banks;

     -    Foreign  activities  permitted  outside  of  the  United States if the
          Federal  Reserve  has  determined  them to be usual in connection with
          banking  operations  abroad;

     -    Merchant  banking  through  securities  or  insurance  affiliates; and

     -    Insurance  company  portfolio  investments.

     To  qualify  to  become a financial holding company, the Bank and any other
depository  institution  subsidiary  of the Company must be well capitalized and
well  managed  and  must  have  a  Community Reinvestment Act rating of at least
"satisfactory."  Additionally,  the  Company  must  file  an  election  with the
Federal  Reserve  to  become  a  financial  holding company and must provide the
Federal  Reserve  with  30 days' written notice prior to engaging in a permitted
financial  activity.  While  the  Company  meets  the  qualification  standards
applicable to financial holding companies, the Company has not elected to become
a  financial  holding  company  at  this  time.

     SUPPORT  OF  SUBSIDIARY  INSTITUTIONS.  Under  Federal  Reserve policy, the
Company is expected to act as a source of financial strength for the Bank and to
commit  resources  to  support  the Bank.  This support may be required at times
when,  without this Federal Reserve policy, the Company might not be inclined to
provide it.  In addition, any capital loans made by the Company to the Bank will
be  repaid  only  after its deposits and various other obligations are repaid in
full.  In  the  unlikely event of the Company's bankruptcy, any commitment by it
to  a federal bank regulatory agency to maintain the capital of the Bank will be
assumed  by  the  bankruptcy  trustee  and  entitled  to  a priority of payment.

CHEROKEE  BANK,  N.A.

     Since  the Bank is chartered as a national bank, it is primarily subject to
the supervision, examination and reporting requirements of the National Bank Act
and  the  regulations  of  the  Office  of the Comptroller of the Currency.  The
Office  of  the  Comptroller  of  the  Currency  regularly  examines  the Bank's
operations  and  has  the  authority  to  approve  or  disapprove  mergers,  the
establishment  of  branches  and  similar  corporate actions.  The Office of the
Comptroller  of  the  Currency  also has the power to prevent the continuance or
development  of  unsafe or unsound banking practices or other violations of law.
Additionally,  the Bank's deposits are insured by the FDIC to the maximum extent
provided  by  law.  The  Bank  is  also  subject  to  numerous state and federal
statutes  and  regulations  that affect its business, activities and operations.

     BRANCHING.  National  banks are required by the National Bank Act to adhere
to  branching  laws  applicable  to  state banks in the states in which they are
located.  Under current Georgia law, the Bank may open branch offices throughout
Georgia  with  the  prior  approval  of  the  Office  of  the Comptroller of the
Currency.  In  addition,  with  prior  regulatory approval, the Bank may acquire
branches  of existing banks located in Georgia.  The Bank and any other national
or  state-chartered bank generally may branch across state lines by merging with
banks  in  other states if allowed by the applicable states' laws.  Georgia law,
with  limited exceptions, currently permits branching across state lines through
interstate  mergers.

     Under  the  Federal  Deposit  Insurance  Act, states may "opt-in" and allow
out-of-state  banks  to  branch  into their state by establishing a new start-up
branch  in  the  state.  Currently,  Georgia has not opted-in to this provision.
Therefore,  interstate  merger  is  the only method through which a bank located
outside  of Georgia may branch into Georgia.  This provides a limited barrier of
entry  into  the  Georgia  banking  market,  which protects us from an important
segment  of  potential competition.  However, because Georgia has elected not to
opt-in,  our  ability to establish a new start-up branch in another state may be
limited.  Many  states  that have elected to opt-in have done so on a reciprocal
basis,  meaning  that  an  out-of-state bank may establish a new start-up branch
only  if  their  home  state  has  also  elected to opt-in.  Consequently, until
Georgia changes its election, the only way we will be able to branch into states
that  have  elected  to  opt-in on a reciprocal basis will be through interstate
merger.


                                        6
<PAGE>
     PROMPT  CORRECTIVE  ACTION.  The  Federal  Deposit  Insurance  Corporation
Improvement  Act  of  1991  establishes  a system of prompt corrective action to
resolve  the  problems  of  undercapitalized financial institutions.  Under this
system,  the federal banking regulators have established five capital categories
(well  capitalized,  adequately  capitalized,  undercapitalized,  significantly
undercapitalized  and critically undercapitalized) in which all institutions are
placed.  Federal  banking  regulators  are  required  to  take various mandatory
supervisory  actions and are authorized to take other discretionary actions with
respect  to institutions in the three undercapitalized categories.  The severity
of  the  action  depends  upon  the capital category in which the institution is
placed.  Generally,  subject  to  a narrow exception, the banking regulator must
appoint  a  receiver  or  conservator  for  an  institution  that  is critically
undercapitalized.  The federal banking agencies have specified by regulation the
relevant  capital  level  for  each  category.

     An  institution  that  is  categorized  as  undercapitalized, significantly
undercapitalized,  or  critically  undercapitalized  is  required  to  submit an
acceptable capital restoration plan to its appropriate federal banking agency. A
bank  holding  company  must  guarantee that a subsidiary depository institution
meets  its  capital  restoration  plan,  subject  to  various  limitations.  The
controlling  holding  company's obligation to fund a capital restoration plan is
limited  to  the  lesser of 5% of an undercapitalized subsidiary's assets at the
time  it  became  undercapitalized  or  the  amount  required to meet regulatory
capital  requirements.  An  undercapitalized  institution  is  also  generally
prohibited  from  increasing  its  average  total  assets,  making acquisitions,
establishing  any branches or engaging in any new line of business, except under
an accepted capital restoration plan or with FDIC approval. The regulations also
establish  procedures for downgrading an institution to a lower capital category
based  on  supervisory  factors  other  than  capital.

     FDIC  INSURANCE  ASSESSMENTS.  The FDIC has adopted a risk-based assessment
system  for  insured  depository  institutions that takes into account the risks
attributable  to  different  categories  and  concentrations  of  assets  and
liabilities.  The  system  assigns  an  institution  to  one  of  three  capital
categories:  (1)  well  capitalized;  (2)  adequately  capitalized;  and  (3)
undercapitalized.  These  three  categories  are  substantially  similar  to the
prompt corrective action categories described above, with the "undercapitalized"
category  including  institutions  that  are  undercapitalized,  significantly
undercapitalized,  and  critically undercapitalized for prompt corrective action
purposes.  The  FDIC  also  assigns  an  institution to one of three supervisory
subgroups  based  on  a  supervisory  evaluation  that the institution's primary
federal  regulator provides to the FDIC and information that the FDIC determines
to  be  relevant  to the institution's financial condition and the risk posed to
the  deposit  insurance funds.  Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In  addition,  the  FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the  late  1980s  as part of the government rescue of the thrift industry.  This
assessment  rate  is  adjusted  quarterly  and  is set at 1.68 cents per $100 of
deposits  for  the  first  quarter  of  2003.

     The  FDIC  may  terminate  its  insurance  of deposits if it finds that the
institution  has  engaged  in  unsafe  and unsound practices, is in an unsafe or
unsound  condition  to  continue operations, or has violated any applicable law,
regulation,  rule,  order,  or  condition  imposed  by  the  FDIC.

     COMMUNITY  REINVESTMENT ACT.  The Community Reinvestment Act requires that,
in  connection  with  examinations  of  financial  institutions  within  their
respective  jurisdictions,  the  Federal Reserve, the FDIC, or the Office of the
Comptroller  of  the  Currency,  shall  evaluate  the  record  of each financial
institution  in  meeting  the credit needs of its local community, including low
and  moderate-income  neighborhoods.  These  facts  are  also  considered  in
evaluating mergers, acquisitions, and applications to open a branch or facility.
Failure  to  adequately meet these criteria could impose additional requirements
and  limitations on the Bank.  Since our aggregate assets are not more than $250
million,  under  the  Gramm-Leach-Bliley  Act,  we  are  generally  subject to a
Community  Reinvestment  Act examination only once every 60 months if we receive
an  "outstanding"  rating,  once  every 48 months if we receive a "satisfactory"
rating  and  as needed if our rating is "less than satisfactory."  Additionally,
we  must  publicly  disclose  the  terms  of  various  Community  Reinvestment
Act-related  agreements.

     OTHER  REGULATIONS.  Interest and other charges collected or contracted for
by the Bank are subject to state usury laws and federal laws concerning interest
rates. For example, under the Soldiers' and Sailors' Civil Relief Act of 1940, a
lender  is  generally prohibited from charging an annual interest rate in excess
of  6%  on any obligation for which the borrower is a person on active duty with
the  United  States  military.

     The  Bank's  loan operations are also subject to federal laws applicable to
credit  transactions,  such  as  the:

     -    federal Truth-In-Lending Act, governing disclosures of credit terms to
          consumer  borrowers;


                                        7
<PAGE>
     -    Home Mortgage Disclosure Act of 1975, requiring financial institutions
          to  provide  information  to enable the public and public officials to
          determine whether a financial institution is fulfilling its obligation
          to  help  meet  the  housing  needs  of  the  community  it  serves;

     -    Equal  Credit Opportunity Act, prohibiting discrimination on the basis
          of  race,  creed  or  other  prohibited  factors  in extending credit;

     -    Fair  Credit Reporting Act of 1978, governing the use and provision of
          information  to  credit  reporting  agencies;

     -    Fair Debt Collection Act, governing the manner in which consumer debts
          may  be  collected  by  collection  agencies;

     -    Soldiers'  and  Sailors'  Civil  Relief  Act  of  1940,  governing the
          repayment  terms  of,  and  property  rights  underlying,  secured
          obligations  of  persons  in  military  service;  and

     -    the rules and regulations of the various federal agencies charged with
          the  responsibility  of  implementing  these  federal  laws.

     In  addition  to  the  federal and state laws noted above, the Georgia Fair
Lending  Act  ("GFLA")  imposes restrictions and procedural requirements on most
mortgage loans made in Georgia, including home equity loans and lines of credit.
GFLA  became  effective  on  October  1,  2002 and was amended on March 7, 2003.
While  selected  provisions  of  GFLA  apply  regardless of the interest rate or
charges  on  the loan, the majority of the requirements apply only to "high cost
home  loans,"  as  defined  by  GFLA.

     The  deposit  operations  of  the  Bank  are  subject  to:

     -    The  Right  to Financial Privacy Act, which imposes a duty to maintain
          confidentiality  of  consumer  financial  records  and  prescribes
          procedures  for  complying  with administrative subpoenas of financial
          records;  and

     -    The  Electronic  Funds  Transfer  Act  and  Regulation E issued by the
          Federal Reserve to implement that act, which govern automatic deposits
          to  and  withdrawals  from  deposit accounts and customers' rights and
          liabilities  arising  from  the  use  of automated teller machines and
          other  electronic  banking  services.

CAPITAL  ADEQUACY

     The  Company  and the Bank are required to comply with the capital adequacy
standards  established  by  the Federal Reserve, in the case of the Company, and
the  Office  of  the  Comptroller of the Currency, in the case of the Bank.  The
Federal  Reserve  has established a risk-based and a leverage measure of capital
adequacy  for  bank  holding  companies.  Since the Company's consolidated total
assets  are  less  than  $150  million,  under  the  Federal  Reserve's  capital
guidelines, our capital adequacy is measured on a bank-only basis, as opposed to
a  consolidated  basis.  The  Bank  is  also  subject to risk-based and leverage
capital  requirements  adopted by the Office of the Comptroller of the Currency,
which are substantially similar to those adopted by the Federal Reserve for bank
holding  companies.

     The  risk-based  capital  standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and bank
holding  companies,  to  account for off-balance-sheet exposure, and to minimize
disincentives  for  holding  liquid assets.  Assets and off-balance-sheet items,
such  as  letters of credit and unfunded loan commitments, are assigned to broad
risk  categories,  each  with  appropriate  risk weights.  The resulting capital
ratios  represent  capital  as  a  percentage  of total risk-weighted assets and
off-balance-sheet  items.

     The  minimum  guideline  for  the  ratio  of total capital to risk-weighted
assets is 8%.  Total capital consists of two components, Tier 1 Capital and Tier
2  Capital.  Tier  1  Capital  generally  consists  of  common  stock,  minority
interests  in  the  equity  accounts of consolidated subsidiaries, noncumulative
perpetual  preferred  stock,  and  a  limited  amount  of  qualifying cumulative
perpetual  preferred stock, less goodwill and other specified intangible assets.
Tier  1  Capital must equal at least 4% of risk-weighted assets.  Tier 2 Capital
generally  consists  of  subordinated debt, other preferred stock, and a limited
amount  of loan loss reserves.  The total amount of Tier 2 Capital is limited to
100%  of  Tier  1  Capital.  At  December 31, 2002 our ratio of total capital to
risk-weighted  assets was 12.9% and our ratio of Tier 1 Capital to risk-weighted
assets  was  11.8%.

     In  addition,  the  Federal  Reserve has established minimum leverage ratio
guidelines  for  bank holding companies.  These guidelines provide for a minimum
ratio  of  Tier  1  Capital to average assets, less goodwill and other specified


                                        8
<PAGE>
intangible  assets,  of  3%  for  bank  holding  companies  that  meet specified
criteria,  including  having  the highest regulatory rating and implementing the
Federal  Reserve's  risk-based  capital measure for market risk.  All other bank
holding  companies  generally  are  required  to maintain a leverage ratio of at
least  4%.  At  December  31, 2002, our leverage ratio was 7.5%.  The guidelines
also  provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without reliance on intangible assets.  The
Federal  Reserve  considers  the  leverage ratio and other indicators of capital
strength  in  evaluating  proposals  for  expansion  or  new  activities.

     Failure  to  meet  capital  guidelines could subject a bank or bank holding
company  to  a  variety of enforcement remedies, including issuance of a capital
directive,  the  termination  of deposit insurance by the FDIC, a prohibition on
accepting  brokered deposits, and certain other restrictions on its business. As
described  above,  significant  additional  restrictions  can  be  imposed  on
FDIC-insured  depository  institutions  that  fail  to  meet  applicable capital
requirements.

PAYMENT  OF  DIVIDENDS

     The  Company  is  a  legal entity separate and distinct from the Bank.  The
principal  sources  of  the  Company's  cash  flow,  including  cash flow to pay
dividends  to  its  shareholders,  are  dividends that the Bank pays to its sole
shareholder,  the  Company.  Statutory  and  regulatory limitations apply to the
Bank's  payment  of dividends to the Company as well as to the Company's payment
of  dividends  to  its  shareholders.

     The  Bank is required by federal law to obtain prior approval of the Office
of the Comptroller of the Currency for payments of dividends if the total of all
dividends  declared  by  our  board of directors in any year will exceed (1) the
total  of the Bank's net profits for that year, plus (2) the Bank's retained net
profits  of  the  preceding  two  years, less any required transfers to surplus.

     The  payment  of dividends by the Company and the Bank may also be affected
by  other  factors,  such  as the requirement to maintain adequate capital above
regulatory  guidelines.  If,  in the opinion of the Office of the Comptroller of
the  Currency,  the  Bank  were  engaged  in  or about to engage in an unsafe or
unsound  practice,  the Office of the Comptroller of the Currency could require,
after  notice  and  a  hearing,  that  the  Bank stop or refrain engaging in the
practice. The federal banking agencies have indicated that paying dividends that
deplete  a depository institution's capital base to an inadequate level would be
an  unsafe  and  unsound  banking  practice. Under the Federal Deposit Insurance
Corporation  Improvement  Act  of 1991, a depository institution may not pay any
dividend  if  payment would cause it to become undercapitalized or if it already
is  undercapitalized.  Moreover,  the  federal  agencies  have  issued  policy
statements  that  provide  that  bank holding companies and insured banks should
generally  only  pay  dividends  out  of  current  operating  earnings.

RESTRICTIONS  ON  TRANSACTIONS  WITH  AFFILIATES

     The  Company  and  the Bank are subject to the provisions of Section 23A of
the  Federal  Reserve  Act.  Section  23A  places  limits  on  the  amount  of:

     -    a  bank's  loans  or  extensions  of  credit  to  affiliates;

     -    a  bank's  investment  in  affiliates;

     -    assets  a  bank  may  purchase  from  affiliates,  except for real and
          personal  property  exempted  by  the  Federal  Reserve;

     -    loans  or  extensions of credit to third parties collateralized by the
          securities  or  obligations  of  affiliates;  and

     -    a bank's guarantee, acceptance or letter of credit issued on behalf of
          an  affiliate.

     The  total amount of the above transactions is limited in amount, as to any
one  affiliate, to 10% of a bank's capital and surplus and, as to all affiliates
combined, to 20% of a bank's capital and surplus.  In addition to the limitation
on  the  amount  of these transactions, each of the above transactions must also
meet  specified  collateral  requirements.  The Bank must also comply with other
provisions  designed  to  avoid  the  taking  of  low-quality  assets.

     The  Company and the Bank are also subject to the provisions of Section 23B
of  the  Federal  Reserve Act which, among other things, prohibit an institution
from  engaging in the above transactions with affiliates unless the transactions
are on terms substantially the same, or at least as favorable to the institution
or its subsidiaries, as those prevailing at the time for comparable transactions
with  nonaffiliated  companies.


                                        9
<PAGE>
     The  Bank  is  also  subject to restrictions on extensions of credit to its
executive  officers,  directors,  principal  shareholders  and  their  related
interests.  These  extensions  of  credit  (1) must be made on substantially the
same  terms, including interest rates and collateral, as those prevailing at the
time  for  comparable  transactions with third parties, and (2) must not involve
more  than  the  normal risk of repayment or present other unfavorable features.

PRIVACY

     Financial  institutions  are  required  to  disclose  their  policies  for
collecting  and  protecting  confidential  information.  Customers generally may
prevent  financial  institutions  from  sharing  nonpublic  personal  financial
information  with nonaffiliated third parties except under narrow circumstances,
such  as  the  processing  of transactions requested by the consumer or when the
financial  institution  is  jointly  sponsoring  a  product  or  service  with a
nonaffiliated  third  party.  Additionally, financial institutions generally may
not  disclose  consumer account numbers to any nonaffiliated third party for use
in  telemarketing,  direct  mail  marketing  or  other  marketing  to consumers.

ANTI-TERRORISM  LEGISLATION

     In  the  wake  of the tragic events of September 11th, on October 26, 2001,
the  President  signed  the  Uniting  and  Strengthening  America  by  Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act
of  2001.  Under  the  USA  PATRIOT  Act,  financial institutions are subject to
prohibitions  against specified financial transactions and account relationships
as  well  as  enhanced due diligence and "know your customer" standards in their
dealings  with  foreign  financial  institutions  and  foreign  customers.  For
example,  the enhanced due diligence policies, procedures and controls generally
require  financial  institutions  to  take  reasonable  steps:

     -    to conduct enhanced scrutiny of account relationships to guard against
          money  laundering  and  report  any  suspicious  transaction;

     -    to ascertain the identity of the nominal and beneficial owners of, and
          the  source  of  funds deposited into, each account as needed to guard
          against  money  laundering  and  report  any  suspicious transactions;

     -    to  ascertain  for  any  foreign  bank,  the  shares  of which are not
          publicly  traded,  the  identity of the owners of the foreign bank and
          the  nature  and  extent of the ownership interest of each such owner;
          and

     -    to  ascertain whether any foreign bank provides correspondent accounts
          to other foreign banks and, if so, the identity of those foreign banks
          and  related  due  diligence  information.

     Under the USA PATRIOT Act, financial institutions must establish anti-money
laundering programs.  The USA PATRIOT Act sets forth minimum standards for these
programs,  including:

     -    the  development  of  internal  policies,  procedures  and  controls;

     -    the  designation  of  a  compliance  officer;

     -    an  ongoing  employee  training  program;  and

     -    an  independent  audit  function  to  test  the  programs.

     Pursuant  to  the  mandate  of  the  USA  PATRIOT Act, the Secretary of the
Treasury  issued  regulations  effective  April 24, 2002 applicable to financial
institutions.  Because  all  federally  insured  depository  institutions  are
required  to have anti-money laundering programs, the regulations provide that a
financial  institution  which is subject to regulation by a "federal functional"
is  in  compliance  with  the  regulations  if it complies with the rules of its
primary  federal  regulator  governing  the  establishment  and  maintenance  of
anti-money  laundering  programs.

     Under  the  authority of the USA PATRIOT Act, the Secretary of the Treasury
adopted  rules  on September 26, 2002 increasing the cooperation and information
sharing  between  financial  institutions,  regulators  and  law  enforcement
authorities  regarding  individuals,  entities  and organizations engaged in, or
reasonably  suspected  based on credible evidence of engaging in, terrorist acts
or money laundering activities.  Under the new rules, a financial institution is
required  to:


                                       10
<PAGE>
     -    expeditiously  search its records to determine whether it maintains or
          has  maintained  accounts, or engaged in transactions with individuals
          or  entities,  listed  in  a request submitted by the Financial Crimes
          Enforcement  Network  ("FinCEN");

     -    notify  FinCEN  if  an  account  or  transaction  is  identified;

     -    designate  a  contact  person  to  receive  information  requests;

     -    limit  use  of  information  provided  by  FinCEN to: (1) reporting to
          FinCEN, (2) determining whether to establish or maintain an account or
          engage in a transaction and (3) assisting the financial institution in
          complying  with  the  Bank  Secrecy  Act;  and

     -    maintain  adequate  procedures  to  protect  the  security  and
          confidentiality  of  FinCEN  requests.

     Under  the  new  rules,  a financial institution may also share information
regarding  individuals,  entities,  organizations  and countries for purposes of
identifying  and,  where  appropriate, reporting activities that it suspects may
involve  possible  terrorist  activity  or  money  laundering.  Such
information-sharing  is  protected  under  a  safe  harbor  if  the  financial
institution:

     -    notifies  FinCEN  of  its  intention  to  share information, even when
          sharing  with  an  affiliated  financial  institution;

     -    takes reasonable steps to verify that, prior to sharing, the financial
          institution  or  association  of  financial institutions with which it
          intends  to  share  information  has  submitted  a  notice  to FinCEN;

     -    limits  the  use of shared information to identifying and reporting on
          money  laundering  or  terrorist  activities,  determining  whether to
          establish  or  maintain  an  account  or  engage  in a transaction, or
          assisting  it  in  complying  with  the  Bank  Security  Act;  and

     -    maintains  adequate  procedures  to  protect  the  security  and
          confidentiality  of  the  information.

     Any  financial institution complying with these rules will not be deemed to
have  violated  the  privacy  requirements  discussed  above.

     The Secretary of the Treasury also adopted a new rule on September 26, 2002
intended  to  prevent  money  laundering  and  terrorist  financing  through
correspondent  accounts  maintained  by U.S. financial institutions on behalf of
foreign  banks.  Under  the  new  rule,  financial  institutions:

     -    are  prohibited from providing correspondent accounts to foreign shell
          banks;

     -    are  required  to  obtain a certification from foreign banks for which
          they  maintain a correspondent account stating the foreign bank is not
          a  shell bank and that it will not permit a foreign shell bank to have
          access  to  the  U.S.  account;

     -    must  maintain  records  identifying the owner of the foreign bank for
          which  they  may maintain a correspondent account and its agent in the
          Unites  States  designated  to  accept  services  of  legal  process;

     -    must  terminate  correspondent  accounts of foreign banks that fail to
          comply  with  or  fail to contest a lawful request of the Secretary of
          the Treasury or the Attorney General of the United States, after being
          notified  by  the  Secretary  or  Attorney  General.

     The  new  rule  applies to correspondent accounts established after October
28,  2002.

PROPOSED  LEGISLATION  AND  REGULATORY  ACTION

     New  regulations  and  statutes  are  regularly  proposed  that  contain
wide-ranging  proposals for altering the structures, regulations and competitive
relationships  of  financial  institutions  operating  and doing business in the
United  States.  We  cannot  predict  whether  or  in  what  form  any  proposed
regulation or statute will be adopted or the extent to which our business may be
affected  by  any  new  regulation  or  statute.

EFFECT  OF  GOVERNMENTAL  MONETARY  POLICES

     Our  earnings are affected by domestic economic conditions and the monetary
and  fiscal  policies  of  the  United  States government and its agencies.  The
Federal Reserve Bank's monetary policies have had, and are likely to continue to
have,  an  important impact on the operating results of commercial banks through


                                       11
<PAGE>
its power to implement national monetary policy in order, among other things, to
curb  inflation  or  combat  a  recession.  The monetary policies of the Federal
Reserve  affect  the  levels of bank loans, investments and deposits through its
control over the issuance of United States government securities, its regulation
of  the  discount rate applicable to member banks and its influence over reserve
requirements to which member banks are subject.  We cannot predict the nature or
impact  of  future  changes  in  monetary  and  fiscal  policies.

                        SELECTED STATISTICAL INFORMATION

     The  selected statistical information required by Item 1 is included in the
Company's  2002  Annual  Report  to Shareholders under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and is
incorporated  herein  by  reference.


ITEM  2.     DESCRIPTION  OF  PROPERTIES

     The  Bank  is located at 1275 Riverstone Parkway, Canton, Georgia, which is
part  of  the  new Riverstone Plaza Development near Interstate 575.  Riverstone
Parkway  is  also  Georgia  Business  Highway  5-one  of the major thoroughfares
through  Cherokee  County  and  the  city of Canton.  Because the Bank is easily
accessible  from  Interstate 575, our location allows us to reach small business
customers  throughout  Cherokee  County  and  consumers  traveling to Riverstone
Plaza,  a major retail area in Cherokee County and the primary destination point
in  the  market.  The Bank's primary facility, which is also the location of the
Company's executive offices, is a 7,800 square foot building with three drive-up
lanes  and  one  drive-up ATM.   The facility was completed in February 2000 and
was  financed by the Company's initial capitalization of the Bank.  As a result,
the  property  is  free  from  any  mortgage  liens  or  encumbrances.

     In  July 2001, the Bank purchased 2 acres of land at 3595 Marietta Highway,
Canton,  Georgia for the purpose of constructing a full-service branch facility.
The  land  was  purchased for an aggregate amount of $599,380, including closing
costs,  and  is  owned  by  the  Bank  free  and  clear  of any mortgage or debt
obligation.  In  July 2002, the Bank began operating out of a temporary facility
with  approximately  2,000  square  feet.  The  purchase  price of the temporary
facility  and  related  furnishings  was  approximately $250,000.  Additionally,
approximately  $450,000  in  site  improvements in connection with this property
have  been made as well.  The temporary facility will be replaced by a permanent
branch  facility,  which  is  expected  to  be  opened  in  2004.

     Other  than  the Bank facility described in the preceding paragraph and the
real  estate-related  loans  funded by the Bank previously described in "Item 1.
Description  of  Business-Cherokee  Bank, N.A.-Loan Portfolio," the Company does
not  invest  in real estate, interests in real estate, real estate mortgages, or
securities  of  or  interests  in  persons  primarily  engaged  in  real  estate
activities.


ITEM  3.     LEGAL  PROCEEDINGS

     There  are  no material pending legal proceedings to which the Company is a
party  or  of  which  any  of its properties are subject, nor are there material
proceedings  known  to  the  Company  to  be  contemplated  by  any governmental
authority.   Additionally,  the  Company is unaware of any material proceedings,
pending  or  contemplated,  in  which any director, officer or affiliate, or any
principal  security  holder  of  the  Company,  or  any  associate of any of the
foregoing,  is  a  party  or  has  an  interest  adverse  to  the  Company.


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

     None.


                                       12
<PAGE>
                                     PART II

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

     (a)     The  response  to  this Item 5(a) is included in the Company's 2002
Annual  Report  to  Shareholders under the heading, "Market for Cherokee Banking
Company's  Common  Stock;  Payment  of Dividends," and is incorporated herein by
reference.

     (b)     The  Company did not issue any unregistered securities during 2002.


ITEM  6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION
             AND  RESULTS  OF  OPERATIONS

     The  response  to this Item is included in the Company's 2002 Annual Report
to  Shareholders  under  the  heading  "Management's  Discussion and Analysis of
Financial  Condition  and  Results  of Operations" and is incorporated herein by
reference.


ITEM  7.     FINANCIAL  STATEMENTS

     The  following  financial  statements  are  included  in the Company's 2002
Annual  Report  to  Shareholders,  and  are  incorporated  herein  by reference:

     -     Report  of  Independent  Certified  Public  Accountants

     -     Financial  Statements:

          1.   Consolidated  Balance  Sheets  dated  as of December 31, 2002 and
               2001.
          2.   Consolidated  Statements of Earnings for the Years Ended December
               31,  2002  and  2001.
          3.   Consolidated  Statements  of  Changes in Shareholders' Equity for
               the  Years  Ended  December  31,  2002  and  2001.
          4.   Consolidated  Statements  of  Comprehensive  Income for the Years
               Ended  December  31,  2002  and  2001.
          5.   Consolidated  Statements  of  Cash  Flows  for  the  Years  Ended
               December  31,  2002  and  2001.
          6.   Notes  to  Consolidated  Financial  Statements.


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

     None.


                                    PART III

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

     The  responses  to  this Item are included in the Company's Proxy Statement
for  the  Annual Meeting of Shareholders to be held on April 28, 2003, under the
headings  "Election  of  Directors",  "Security  Ownership of Certain Beneficial
Owners  and  Management"  and  "Section  16(a)  Beneficial  Ownership  Reporting
Compliance"  and  are  incorporated  herein  by  reference.


                                       13
<PAGE>
ITEM  10.     EXECUTIVE  COMPENSATION

     The  responses  to  this Item are included in the Company's Proxy Statement
for  the  Annual Meeting of Shareholders to be held on April 28, 2003, under the
heading  "Compensation"  and  are  incorporated  herein  by  reference.


ITEM  11.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT

     The following table provides information regarding compensation plans under
which equity securities of the Company are authorized for issuance.  All data is
presented  as  of  December  31,  2002.

<TABLE>
<CAPTION>

                                          Equity Compensation Plan Table
------------------------------------------------------------------------------------------------------------------

                                       (a)                           (b)                           (c)
-------------------------  ---------------------------  ------------------------------  --------------------------
Plan category              Number of securities to be     Weighted-average exercise        Number of securities
                             issued upon exercise of         price of outstanding        remaining available for
                              outstanding options,       options, warrants and rights     future issuance under
                               warrants and rights                                      equity compensation plans
                                                                                          (excluding securities
                                                                                         reflected in column (a))
-------------------------  ---------------------------  ------------------------------  --------------------------
<S>                        <C>                          <C>                             <C>

Equity compensation plans                       10,750  $                        10.50                      67,092
approved by security
holders
-------------------------  ---------------------------  ------------------------------  --------------------------
Equity compensation plans                      213,550  $                        10.00                         N/A
not approved by security
holders
-------------------------  ---------------------------  ------------------------------  --------------------------
Total                                          223,750  $                        10.02                      67,092
-------------------------  ---------------------------  ------------------------------  --------------------------
</TABLE>

     The  additional  responses to this Item are included in the Company's Proxy
Statement  for  the Annual Meeting of Shareholders to be held on April 28, 2003,
under  the  heading  "Security  Ownership  of  Certain  Beneficial  Owners  and
Management"  and  are  incorporated  herein  by  reference.


ITEM  12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  responses  to  this Item are included in the Company's Proxy Statement
for  the  Annual  Meeting  of  Shareholders  held  on  April 28, 2003, under the
headings  "Related  Party  Transactions" and "Compensation" and are incorporated
herein  by  reference.


ITEM  13.     EXHIBITS,  LISTS  AND  REPORTS  ON  FORM  10-KSB

(a)     Exhibits

       Exhibit
       Number  Exhibit
       ------  -------
          n/a  Certifications  pursuant  to  Rule  13a-14  under  the Securities
               Exchange  Act  of  1934,  as  amended

          3.1  Articles  of  Incorporation(1)

          3.2  Bylaws(1)

          4.1  See  Articles  of  Incorporation  at  Exhibit  3.1  and Bylaws at
               Exhibit  3.2

          10.1 Purchase  and  Sale  Agreement  (main  office  property),  dated
               December  11,  1998(1)


                                       14
<PAGE>
         10.2* Employment  Agreement,  dated  as  of  January  1,  1999, among
               Cherokee  Bank,  N.A.  ,  Cherokee  Banking Company and Dennis W.
               Burnette(1)

          10.3 Form of Cherokee Banking Company Organizers' Warrant Agreement(1)

          10.4 Escrow  Agreement,  dated  as  of  April  1, 1999, among Cherokee
               Banking  Company  and  The  Bankers  Bank(1)

          10.5 Construction  Agreement  dated  September 29, 1999 by and between
               Cherokee  Banking  Company,  Inc.  and  W.  H.  Bass,  Inc.(2)

          10.6 Cherokee Banking Company 2000 Stock Option Plan and Form of Stock
               Option  Award(3)

          10.7 Lot/Land  Purchase and Sale Agreement dated April 18, 2001 by and
               between  Cherokee  Bank,  N.A. and Davis Holding Company, Inc.(4)

          10.8 Construction  contract dated as of March 18, 2002, among Cherokee
               Bank,  N.A.  and  W.H.  Bass,  Inc.

          10.9 Modular  building  contract  dated  as of February 6, 2002, among
               Cherokee  Bank,  N.A.  and  Bank  &  Business  Systems,  Inc.

          10.10 Form of Executive Supplemental Retirement Plan

          10.11 Form of Executive Split Dollar Plan

          10.12 Form of Director Supplemental Retirement Plan

          10.13 Form of Director Split Dollar Plan

          13.1 2002  Annual  Report sent to security holders of Cherokee Banking
               Company

          22.1 Subsidiaries  of  Cherokee  Banking  Company(2)

          24.1 Power  of Attorney (appears on the signature pages to this Annual
               Report  on  10-KSB)

          99.1 Certifications  pursuant  to  18  U.S.C. Section 1350, as adopted
               pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of 2002

-------------------------------
*    Compensatory  plan  or  arrangement.

(1)  Incorporated herein by reference to exhibit of same number to the Company's
     Registration  Statement  on  Form  SB-2,  Registration No. 333-71571, filed
     March  18,  1999.

(2)  Incorporated herein by reference to exhibit of same number to the Company's
     Annual  Report  on  Form  10-KSB,  filed  March  23,  2000.

(3)  Incorporated herein by reference to exhibit of same number to the Company's
     Annual  Report  on  Form  10-KSB,  filed  April  2,  2001.

(4)  Incorporated herein by reference to exhibit of same number to the Company's
     Annual  Report  on  Form  10-KSB,  filed  March  29,  2002.

(b)  Reports  on  Form  8-K  filed  in  the  fourth  quarter  of  2002:  None.


ITEM  14.     CONTROLS  AND  PROCEDURES

     Pursuant  to  Section  302 of the Sarbanes-Oxley Act of 2002, and as a date
within  90  days  prior  to the date of this report (the "Evaluation Date"), our
management,  including  our Chief Executive Officer and Chief Financial Officer,
reviewed  the effectiveness and design of our disclosure controls and procedures
under  Exchange  Act  Rules  13a-14 and 15d-14.  Based upon that evaluation, our
Chief  Executive  Officer  and  Chief  Financial  Officer,  concluded  that such
disclosure  controls  and  procedures  are  adequate  to  ensure  that  material
information relating to the Company, including its consolidated subsidiary, that
is  required  to  be  included  in  its periodic filings with the Securities and
Exchange  Commission,  is  timely made known to them.  There were no significant
changes  in  internal  controls,  or to management's knowledge, in other factors
that  could  significantly  affect  those  internal  controls  subsequent to the
Evaluation  Date,  and  there  has  been  no  corrective  action with respect to
significant  deficiencies  or  material  weaknesses.


                                       15
<PAGE>
                                   SIGNATURES

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



                                            CHEROKEE  BANKING  COMPANY




                                            By:  /s/  Dennis  W.  Burnette
                                                      -------------------------
                                                      Dennis  W.  Burnette
                                                      President  and  Chief
                                                      Executive  Officer


                                            Date:     March  19,  2003


                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears on
the  signature  page  to this Report constitutes and appoints Dennis W. Burnette
and A. R. Roberts, III, his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him or her and in his or
her  name,  place,  and  stead,  in  any and all capacities, to sign any and all
amendments  to  this Report, and to file the same, with all exhibits hereto, and
other  documents  in  connection  herewith  with  the  Securities  and  Exchange
Commission,  granting  unto  said  attorneys-in-fact  and agents, full power and
authority to do and perform each and every act and thing requisite and necessary
to  be  done  in and about the premises, as fully to all intents and purposes as
they  might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes, may lawfully do
or  cause  to  be  done  by  virtue  hereof.

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
Report  has  been  signed  below  by  the  following  persons  on  behalf of the
Registrant  and  in  the  capacities  and  on  the  dates  indicated.

       Signature                             Title                     Date
       ---------                             -----                     ----

/s/ Dennis W. Burnette          President and Chief Executive
-----------------------------         Officer, Director
                                (Principal Executive Officer)     March 19, 2003
Dennis  W.  Burnette

/s/  William  L.  Early                  Director                 March 19, 2003
-----------------------------
William  L.  Early

/s/  Albert  L.  Evans,  Jr.             Director                 March 19, 2003
-----------------------------
Albert  L.  Evans,  Jr.

/s/  J.  Calvin  Hill,  Jr.              Director                 March 19, 2003
-----------------------------
J.  Calvin  Hill,  Jr.

/s/  Roger  M.  Johnson                  Director                 March 19, 2003
-----------------------------
Roger  M.  Johnson

/s/  J.  David  Keller                   Director                 March 19, 2003
-----------------------------
J.  David  Keller


<PAGE>
/s/  Wanda  P.  Roach                    Director                 March 19, 2003
-----------------------------
Wanda  P.  Roach

/s/  A.  R.  Roberts,  III         Secretary,  Director           March 19, 2003
--------------------------       (Principal Financial and
A.  R.  Roberts,  III              Accounting Officer)

/s/  Donald  F.  Stevens                 Director                 March 19, 2003
-----------------------------
Donald  F.  Stevens

/s/  Edwin  I.  Swords,  III             Director                 March 19, 2003
-----------------------------
Edwin  I.  Swords,  III



<PAGE>
                CERTIFICATIONS PURSUANT TO RULE 13a-14 UNDER THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I,  Dennis  W.  Burnette,  Chief  Executive  Officer,  certify  that:

1.   I  have  reviewed  this  Form  10-KSB  of  Cherokee  Banking  Company  (the
     "Report");

2.   Based on my knowledge, this 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
     Report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  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 Report.

4.   The  registrant's  other  certifying  officers  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 annual 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  annual  report  (the  "Evaluation  Date");  and

     c)   presented  in  this  annual  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 officers 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  officers and I have indicated in this
     annual  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.

Date:     March  19,  2003


/s/  Dennis  W.  Burnette
-------------------------------------
Dennis  W.  Burnette
President and Chief Executive Officer


<PAGE>
                CERTIFICATIONS PURSUANT TO RULE 13a-14 UNDER THE
                   SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I,  A.  R.  Roberts,  III,  Chief  Financial  Officer,  certify  that:

1.   I  have  reviewed  this  Form  10-KSB  of  Cherokee  Banking  Company  (the
     "Report");

2.   Based on my knowledge, this 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
     Report;

3.   Based  on  my  knowledge,  the  financial  statements,  and other financial
     information  included  in  this  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 Report.

4.   The  registrant's  other  certifying  officers  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 annual 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  annual  report  (the  "Evaluation  Date");  and

     c)   presented  in  this  annual  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 officers 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  officers and I have indicated in this
     annual  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.

Date:     March  19,  2003


/s/  A.  R.  Roberts,  III
-------------------------------------
A.  R.  Roberts,  III
Chief  Financial  Officer


<PAGE>
                                  EXHIBIT INDEX
                                  -------------

       Exhibit
       Number  Exhibit
       ------  -------
          n/a  Certifications  pursuant  to  Rule  13a-14  under  the Securities
               Exchange  Act  of  1934,  as  amended

          3.1  Articles  of  Incorporation(1)

          3.2  Bylaws(1)

          4.1  See  Articles  of  Incorporation  at  Exhibit  3.1  and Bylaws at
               Exhibit  3.2

          10.1 Purchase  and  Sale  Agreement  (main  office  property),  dated
               December  11,  1998(1)

         10.2* Employment  Agreement,  dated  as  of  January  1,  1999, among
               Cherokee  Bank,  N.A.  ,  Cherokee  Banking Company and Dennis W.
               Burnette(1)

          10.3 Form of Cherokee Banking Company Organizers' Warrant Agreement(1)

          10.4 Escrow  Agreement,  dated  as  of  April  1, 1999, among Cherokee
               Banking  Company  and  The  Bankers  Bank(1)

          10.5 Construction  Agreement  dated  September 29, 1999 by and between
               Cherokee  Banking  Company,  Inc.  and  W.  H.  Bass,  Inc.(2)

          10.6 Cherokee Banking Company 2000 Stock Option Plan and Form of Stock
               Option  Award(3)

          10.7 Lot/Land  Purchase and Sale Agreement dated April 18, 2001 by and
               between  Cherokee  Bank,  N.A. and Davis Holding Company, Inc.(4)

          10.8 Construction  contract dated as of March 18, 2002, among Cherokee
               Bank,  N.A.  and  W.H.  Bass,  Inc.

          10.9 Modular  building  contract  dated  as of February 6, 2002, among
               Cherokee  Bank,  N.A.  and  Bank  &  Business  Systems,  Inc.

          10.10 Form of Executive Supplemental Retirement Plan

          10.11 Form of Executive Split Dollar Plan

          10.12 Form of Director Supplemental Retirement Plan

          10.13 Form of Director Split Dollar Plan

          13.1 2002  Annual  Report sent to security holders of Cherokee Banking
               Company

          22.1 Subsidiaries  of  Cherokee  Banking  Company(2)

          24.1 Power  of Attorney (appears on the signature pages to this Annual
               Report  on  10-KSB)

          99.1 Certifications  pursuant  to  18  U.S.C. Section 1350, as adopted
               pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of 2002

-------------------------------
*    Compensatory  plan  or  arrangement.

(1)  Incorporated herein by reference to exhibit of same number to the Company's
     Registration  Statement  on  Form  SB-2,  Registration No. 333-71571, filed
     March  18,  1999.

(2)  Incorporated herein by reference to exhibit of same number to the Company's
     Annual  Report  on  Form  10-KSB,  filed  March  23,  2000.

(3)  Incorporated herein by reference to exhibit of same number to the Company's
     Annual  Report  on  Form  10-KSB,  filed  April  2,  2001.

(4)  Incorporated herein by reference to exhibit of same number to the Company's
     Annual  Report  on  Form  10-KSB,  filed  March  29,  2002.


<PAGE>