<PAGE>

                    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, 2000
                      -----------------

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

     For the transition period from ______________to _______________

     Commission file number ______

                           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:  $2,655,082
                                                          ----------

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:  $5,280,678 as of March 15, 2001
                                         -------------------------------

                    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 15, 2001
                                                  ----------------------------

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended December 31, 2000 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 30, 2001, are incorporated by reference into
Part III.

     Transitional Small Business Disclosure format (check one):  Yes     No [X]
                                                                     ---    ---
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                               TABLE OF CONTENTS
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<S>         <C>                                                                                   <C>
PART I      ....................................................................................   3
  ITEM 1.   DESCRIPTION OF BUSINESS.............................................................   3
  ITEM 2.   DESCRIPTION OF PROPERTIES...........................................................  13
  ITEM 3.   LEGAL PROCEEDINGS...................................................................  14
  ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................................  14
PART II     ....................................................................................  14
  ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND
            RELATED STOCKHOLDER MATTERS.........................................................  14
  ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS.................................................  14
  ITEM 7.   FINANCIAL STATEMENTS................................................................  14
  ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  15
PART III    ....................................................................................  15
  ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
            SECTION 16(a) OF THE EXCHANGE ACT...................................................  15
  ITEM 10.  EXECUTIVE COMPENSATION..............................................................  15
  ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT..........................................................................  15
  ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................................  15
  ITEM 13.  EXHIBITS, LISTS AND REPORTS ON FORM 10-KSB..........................................  16
</TABLE>
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                                     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, Canton, Gerogia (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

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the best interests of the Company and its shareholders. Any acquisition would be
subject to various regulatory approvals and requirements.

                              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 12 other bank and thrift institutions.  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.  Currently, the Bank's loan portfolio is comprised of:

                Loan Classification           Percentage
                -------------------           ----------

                Real estate-related loans        30.6%

                Commercial loans                 54.3%

                Consumer loans                   15.1%

     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

                                       4
<PAGE>

the terms of the loan are no more favorable than would be available to any other
borrower similarly situated.

     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 has established an internal maximum loan limit of $750,000, which
is separate from its statutory lending limits described above.  Any loan
extention above this internal maximum loan limit must be approved by the Bank's
board of directors.  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 comprises approximately 4% of the Bank's total loans and
have interest rate terms that are variable rather than fixed.

     Approximately 52% of the Bank's real estate loans have interest rate terms
that are variable or carry 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, approximately 31% are
adjustable rate loans or mature within one year, 39% are fixed rate loans with
maturities extending beyond 12 months but less than 60 months and 29% are fixed
rate loans with 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 these 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.

                                       5
<PAGE>

     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 profitablity 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
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

     At December 31, 2000, the Bank employed 20 full-time 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;

                                       6
<PAGE>

     .  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 anticompetitive 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 five years.  As a result, no
bank holding company may acquire control of the Company until after the fifth
anniversary date of the Bank's incorporation.

     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 challenge of the rebuttable control
presumption.

     Permitted Activities.  Since we have not qualified or elected to become a
financial holding company, we are generally prohibited under the Bank Holding
Company Act, from engaging in or acquiring direct or indirect control of more
than 5% of the voting shares of any company engaged in any activity other than:

     .  Banking or managing or controlling banks; and

     .  An 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;

                                       7
<PAGE>

     .  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.

     Generally, if the Company qualifies and elects to become a financial
holding company, it may engage in 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:

     .  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 and election with

                                       8
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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.

     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
and the Georgia Department of Banking and Finance.  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.

     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.

                                       9
<PAGE>

     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 difference 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 1.96 cents per $100 of
deposits for the first quarter of 2001.

     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 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.  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;

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

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

                                       10
<PAGE>

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

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

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

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, 2000 our ratio of total capital to
risk-weighted assets was 20.8% and our ratio of Tier 1 Capital to risk-weighted
assets was 19.8%.

     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
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, 2000, our leverage ratio was 11.6%.  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

                                       11
<PAGE>

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.  See "--Cherokee Bank, N.A.--Prompt Corrective Action."

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 is 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.  See "--Cherokee
Bank, N.A.--Prompt Corrective Action" above.

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

                                       12
<PAGE>

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.

     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.  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.

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 the nation's financial institutions.  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 will be 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 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 is included in the Company's Annual
Report to Shareholders, 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, the newest major

                                       13
<PAGE>

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 encomberances.

     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" on page 4, 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.


                                    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 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) No sales of Company securities were made during 2000, except for the
issuance of stock options to various key employees of the Company and the Bank.
The issuance of the employee stock options is exempt under Section 4(2) of the
Securities Act.  All sales of securities by the Company in 1999 were registered
under the Securities Act.


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 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 Annual
Report to Shareholders, and are incorporated herein by reference:

     .  Report of Independent Certified Public Accountants

                                       14
<PAGE>

     .  Financial Statements:

         1. Consolidated Balance Sheets dated as of December 31, 2000 and 1999.
         2. Consolidated Statements of Operations for the Years Ended December
            31, 2000 and 1999.
         3. Consolidated Statements of Changes in Shareholders' Equity for the
            Years Ended December 31, 2000 and 1999.
         4. Consolidated Statements of Comprehensive Income for the Years Ended
            December 31, 2000 and 1999.
         5. Consolidated Statements of Cash Flows for the Years Ended December
            31, 2000 and 1999.
         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 30, 2001, under the
headings "Election of Directors" and "Security Ownership of Certain Beneficial
Owners and Management," and are incorporated herein by reference.


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 30, 2001, under the
heading "Compensation of Executive Officers and Directors," and are incorporated
herein by reference.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The responses to this Item are included in the Company's Proxy Statement
for the Annual Meeting of Shareholders to be held on April 30, 2001, 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 30, 2001, under the
headings "Certain Relationships and Related Transactions," and "Compensation of
Executive Officers and Directors," and are incorporated herein by reference.

                                       15
<PAGE>

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

(a)  Exhibits

    Exhibit
    Number           Exhibit
    ------           -------

    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

    13.1             2000 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)
_________________________
*  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.

(b)  Reports on Form 8-K filed in the fourth quarter of 2000:  None.

                                       16
<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 21, 2001


                               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.

<TABLE>
<CAPTION>
             Signature                                        Title                            Date
------------------------------------      ---------------------------------------------  -----------------
<S>                                       <C>                                             <C>
                                          President and Chief Executive Officer,
/s/ Dennis W. Burnette                    Director (Principal Executive Officer)          March 21, 2001
------------------------------------
Dennis W. Burnette

/s/ William L. Early                      Director                                        March 21, 2001
------------------------------------
William L. Early

/s/ Albert L. Evans, Jr.                  Director                                        March 21, 2001
------------------------------------
Albert L. Evans, Jr.

                                          Director
------------------------------------
J. Calvin Hill, Jr.
</TABLE>

                                       17
<PAGE>

<TABLE>
<CAPTION>

<S>                                       <C>                                            <C>
/s/ Roger M. Johnson                      Director                                       March 21, 2001
------------------------------------
Roger M. Johnson

/s/ J. David Keller                       Director                                       March 21, 2001
------------------------------------
J. David Keller

/s/ Wanda P. Roach                        Director                                       March 21, 2001
------------------------------------
Wanda P. Roach
                                          Secretary, Director
/s/ A. R. Roberts, III                    (Principal Financial and Accounting Officer)   March 21, 2001
------------------------------------
A. R. Roberts, III

/s/ Donald F. Stevens                     Director                                       March 21, 2001
------------------------------------
Donald F. Stevens

/s/ Edwin I. Swords, III                  Director                                       March 21, 2001
------------------------------------
Edwin I. Swords, III
</TABLE>

                                       18
<PAGE>

                                 EXHIBIT INDEX
                                 -------------
<TABLE>
<CAPTION>


                                                                                      Page Number in
Exhibit                                                                                Sequentially
Number               Exhibit                                                           Numbered Copy
-------              -------                                                           -------------
<S>                  <C>                                                              <C>

10.6                 Cherokee Banking Company 2000 Stock Option Plan and
                     Form of Stock Option Award                                              N/A

13.1                 2000 Annual Report sent to security holders of Cherokee                 N/A
                     Banking Company

24.1                 Power of Attorney (appears on the signature pages to                    N/A
                     this Annual Report on 10-KSB).
</TABLE>
_________________________

                                       19