EXHIBIT 13.1

                       2002 ANNUAL REPORT TO SHAREHOLDERS

<PAGE>





                            Cherokee Banking Company



                               2002 ANNUAL REPORT




<PAGE>
                         BOARD OF DIRECTORS AND OFFICERS

                               BOARD OF DIRECTORS


Dennis W. Burnette                         David Keller
William L. Early                           Wanda Roach
Albert L. Evans, Jr.                       A.R. Roberts, III
J. Calvin Hill, Jr.                        Donald F. Stevens, Chairman
Roger Johnson                              Edwin I. Swords, III

EXECUTIVE MANAGEMENT                       ADMINISTRATION

                                           Cindy Poole, Executive Assistant &
Dennis W. Burnette, CEO & President        Banking Officer

A. R. Roberts, III, CFO & Senior Vice
President

John S. Moreau, SLO & Senior Vice
President

                                           COMMERCIAL AND CONSTRUCTION
OPERATIONS                                 LENDING

Cathy Dobson, Client Services Manager &    Lori Davis, Commercial Lender and
Vice President                             Assistant Vice President

RETAIL BANKING                             Lisa Jeans, Construction Lender and
                                           Assistant Vice President
Shelia Garrison, Vice President of Retail
Banking and Deposits                       Susan Jenkins, Commercial Banking
                                           Assistant & Banking Officer
Mitzi Saxon, North Canton Office
Manager & Assistant Vice President

Debra Williams, South Canton Office        MORTGAGE LENDING
Manager & Assistant Vice President
                                           Tish Burns, Mortgage Lender &
LOAN ADMINISTRATION                        Assistant Vice President

Becky Richey, Loan Administrator &         Tina Ratcliff, Mortgage Lender &
Banking Officer                            Assistant Vice President


<PAGE>
March  19,  2003



Dear  Shareholder:

This  is  the  time  that  we  all  come together to review the past year.  Your
company  has
enjoyed  many  successes  in  2002  including:

-     Cherokee  Banking Company (CHKJ) stock began 2002 trading at $10.75 and is
      currently  at  $15.00,  a 39% increase. For 2002, the Dow was down 17% for
      the  year,  NASDAQ  was  down  29%  and  the  S&P  was  down  22%.

-     At  year-end, total assets were $96,931,982 compared to $66,360,428 at the
      end  of  last  year.  An  increase  of  46%.

-     Our  second  office  opened on July 1st. We will begin construction on our
      permanent  South  Canton  facility  in  the  next  90  days.

-     Loan  growth  for  2002 exceeded $43 million. That was an increase of 42%.

-     In  March,  our  Board of Directors adopted a Statement of Beliefs. One of
      the  Board's expressed values was to be educated and up-to-date on banking
      industry  issues  and trends. By the end of the year, seven of our outside
      directors had completed the Community Bankers Association's Bank Directors
      College.

-     As a result of a client and prospective client survey, we introduced a new
      product,  Hometown  Free  Checking,  and broke our record for the most new
      accounts  opened  during  a  single  month.  We  also  began  offering the
      convenience  of  Saturday  banking  at  our  South  Canton  Office.

The  year  2002  was  great  for Cherokee Banking Company and we look forward to
serving you  as  a  shareholder  and  a  client  in  2003.

Sincerely,

/s/ Dennis  W.  Burnette

Dennis  W.  Burnette
President  &  CEO


<PAGE>
                            CHEROKEE BANKING COMPANY
                                  ANNUAL REPORT
                                Table of Contents

                                                                           Page
                                                                           ----

Selected  Financial  Data . . . . . . . . . . . . . . . . . . . . . . . .     2
Management's  Discussion  and  Analysis  of  Financial  Condition  and
     Results  of  Operations. . . . . . . . . . . . . . . . . . . . . . .     3
Report  of  Independent  Certified  Public  Accountants . . . . . . . . .    13
Consolidated  Financial  Statements . . . . . . . . . . . . . . . . . . .    14
Notes  to  Consolidated  Financial  Statements. . . . . . . . . . . . . .    19
Market  for  Cherokee  Banking  Company's  Common  Stock. . . . . . . . .    32
Corporate  and  Shareholder  Information. . . . . . . . . . . . . . . . .    33



<PAGE>
<TABLE>
<CAPTION>
                                CHEROKEE BANKING COMPANY

                                SELECTED FINANCIAL DATA
                          (in thousands except per share data)

                                         2002         2001         2000         1999
                                     ------------  -----------  -----------  -----------
<S>                                  <C>           <C>          <C>          <C>
FOR THE YEAR
  Net interest income                $ 2,996,446    2,230,570    1,117,889      259,642
  Provision for loan losses              206,496      216,634      179,677       68,663
  Noninterest income                     778,256      605,584      202,599        9,219
  Noninterest expense                  2,893,709    2,141,513    1,569,768      744,267
  Income taxes (benefit)                 244,076     (224,619)           -            -
  Net earnings (loss)                $   430,421      702,626     (428,957)    (544,069)

PER COMMON SHARE
  Basic earnings (loss)              $       .58          .95         (.58)        (.74)
  Diluted earnings (loss)                    .55          .95         (.58)        (.74)
  Cash dividends declared                      -            -            -            -
  Book value                         $     10.34         9.36         8.61

AT YEAR END
  Loans, net                         $43,482,681   30,598,815   19,519,227    5,424,415
  Earnings assets                     86,743,248   60,664,463   38,194,164   16,822,738
  Assets                              96,931,982   66,360,428   42,198,199   18,816,152
  Deposits                            80,256,835   58,762,746   35,518,640   11,996,069
  Stockholders' equity               $ 7,635,795    6,911,876    6,357,818    6,713,141
  Common shares outstanding              738,658      738,658      738,658      738,658

AVERAGE BALANCES
  Loans                              $39,144,053   26,715,848   12,303,562            -
  Earnings assets                     73,967,853   51,145,828   30,175,477            -
  Assets                              80,740,156   55,734,056   33,710,058            -
  Deposits                            66,725,025   50,297,666   29,593,348            -
  Stockholders' equity               $ 7,239,154    6,597,548    6,498,822            -
  Weighted average shares
    outstanding                          738,658      738,658      738,658            -

KEY PERFORMANCE RATIOS
  Return on average assets                   .53%        1.26%      (1.27%)           -
  Return on average stockholders'
    equity                                  5.95%       10.65%      (6.60%)           -
  Net interest margin                       4.05%        4.36%        3.70%           -
  Dividend payout ratio                        -            -            -            -
  Average equity to average assets          8.97%       11.84%       19.28%           -

</TABLE>


                                        2
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

                                     GENERAL

Cherokee  Banking  Company  is  a  bank holding company headquartered in Canton,
Georgia  organized  to  own  all  of  the  common  stock of its bank subsidiary,
Cherokee  Bank,  NA.  The  principal  activity of the bank is to provide banking
services to domestic markets, principally in Cherokee County, Georgia.  The bank
is  primarily regulated by the Office of the Comptroller of the Currency ("OCC")
and undergoes periodic examinations by this regulatory agency.  Our bank holding
company is regulated by the Federal Reserve Bank and also is subject to periodic
examinations.

The  following  discussion  focuses  on  significant  changes  in  the financial
condition and results of operations during the years ended December 31, 2002 and
2001.  This  discussion  and  the  financial  information  contained  herein are
presented  to  assist  the  reader in understanding and evaluating our financial
condition,  results  of operations, and future prospects and should be read as a
supplement  to and in conjunction with the Consolidated Financial Statements and
Related  Notes.

                           FORWARD-LOOKING STATEMENTS

This  report  contains  "forward-looking  statements"  relating  to,  without
limitation,  future economic performance, plans and objectives of management for
future  operations,  and  projections of revenues and other financial items that
are  based  on  the  beliefs  of  management, as well as assumptions made by and
information  currently  available  to  management.  The  words  "may,"  "will,"
"anticipate," "should," "would," "believe," "contemplate," "expect," "estimate,"
"continue,"  "may," and "intend," as well as other similar words and expressions
of  the future, are intended to identify forward-looking statements.  Our actual
results  may differ materially from the results discussed in the forward-looking
statements,  and  our  operating  performance each quarter is subject to various
risks  and  uncertainties  that  are discussed in detail in our filings with the
Securities  and  Exchange  Commission,  including,  without  limitation:

     -    the  effects  of  future  economic  conditions;
     -    governmental  monetary and fiscal policies, as well as legislative and
          regulatory  changes;
     -    changes  in  interest  rates  and  their  effect  on  the  level  and
          composition  of  deposits,  loan  demand,  and  the  values  of  loan
          collateral,  securities  and  other  interest-sensitive  assets  and
          liabilities;
     -    our  ability  to  control costs, expenses, and loan delinquency rates;
          and
     -    the  effects  of  competition  from  other  commercial banks, thrifts,
          mortgage  banking  firms,  consumer  finance companies, credit unions,
          securities  brokerage  firms,  insurance  companies,  money market and
          other  mutual  funds and other financial institutions operating in our
          market  area  and  elsewhere,  including  institutions  operating
          regionally,  nationally,  and  internationally,  together  with  such
          competitors offering banking products and services by mail, telephone,
          computer  and  the  Internet.

                              RESULTS OF OPERATIONS

Net  income for 2002 was $430,000 compared to $703,000 in 2001.  The decrease in
net  income  in 2002 compared to 2001 was primarily due to the recognition of an
income  tax  benefit  in 2001 of $225,000, compared to the recognition of income
tax  expense in 2002 of $244,000.  Earnings before income taxes were $674,000 in
2002  compared  to $478,000 in 2001.   Our operational results depend to a large
degree  on  net  interest  income,  which is the difference between the interest
income  received  on  investments (such as loans, investment securities, federal
funds  sold,  etc.)  and  the  interest  expense,  which  is  paid  on  deposit
liabilities.  Net interest income was $2,996,000 for the year ended December 31,
2002  compared  to  $2,231,000  in  2001.

The provision for loan losses in 2002 was $206,000 compared to $217,000 in 2001.
The provision for loan losses reflects management's estimate of potential losses
inherent  in the loan portfolio and the creation of an allowance for loan losses
adequate  to  absorb  such  losses.

Other  operating  income  for  the year ended December 31, 2002 totaled $778,000
compared  to  $606,000 in 2001.  Other operating income includes service charges
on  deposit  accounts,  mortgage  origination fee income and investment security
gains.  Declining  interest  rates  during  2002  and  2001  provided us with an
opportunity to derive significant income from the origination of mortgage loans.
Other operating expenses in 2002 were $2,894,000 compared to $2,142,000 in 2001.
The  largest  component  of  other  operating expenses is salaries and benefits,
which  totaled  $1,541,000  for  the  year  ended  December 31, 2002 compared to
$1,136,000  in  2001.


                                        3
<PAGE>
NET  INTEREST  INCOME

For  the  years  ended  December  31, 2002 and 2001, net interest income totaled
$2,996,000  and $2,231,000, respectively.  Interest income from loans, including
fees was $3,051,000 representing a yield of 7.79% in 2002 compared to a yield of
9.52%  in 2001.  Significant decrease in the prime lending rate in 2002 resulted
in  the decrease in yield on loans.  Interest expense totaled $1,764,000 for the
year  ended  December 31, 2002 compared to $1,761,000 in 2001.  The net interest
margin  realized  on  earning assets and the interest rate spread were 4.05% and
3.69%,  respectively,  for  the  year  ended  December  31,  2002 compared to an
interest  rate  margin  of  4.36%  and  interest  rate  spread of 3.58% in 2001.

AVERAGE  BALANCES  AND  INTEREST  RATES

The  table  below  shows  the  average  balance outstanding for each category of
interest  earning  assets and interest-bearing liabilities for 2002 and 2001 and
the average rate of interest earned or paid thereon.  Average balances have been
derived  from  the  daily  balances  throughout  the  period  indicated.

<TABLE>
<CAPTION>
                                            For the Year Ended          For the Year Ended
                                            December 31, 2002           December 31, 2001
                                     ------------------------------  ------------------------
                                            (Amounts presented          (Amounts presented
                                               in thousands)               in thousands)

                                      Average               Yield/   Average            Yield/
                                      Balance   Interest     Rate    Balance  Interest   Rate
                                     ---------  ---------  --------  -------  --------  -----
<S>                                  <C>        <C>        <C>       <C>      <C>       <C>
Assets:
  Interest earning assets:
    Loans (including loan fees)      $ 39,144      3,051      7.79%   26,715     2,544  9.52%
    Investment securities              31,968      1,639      5.13%   17,125     1,141  6.66%
    Interest bearing deposits             523         28      5.35%    1,104        70  6.34%
    Federal funds sold                  2,332         42      1.80%    6,201       237  3.82%
                                     ---------  ---------  --------  -------  --------  -----
Total interest earning assets          73,967      4,760      6.44%   51,145     3,992  7.81%
Other non-interest earnings
assets                                  6,773                          4,589
                                     ---------                       -------

       Total assets                  $ 80,740                         55,734
                                     =========                       =======

Liabilities and stockholders'
equity:
  Interest-bearing liabilities:
   Deposits:
    Interest-bearing demand
      and savings                   $ 32,166        566      1.76%  23,104        617  2.67%
    Time                              25,759        992      3.85%  21,315      1,144  5.37%
    Federal Home Loan Bank
     advances                          6,010        201      3.34%       -          -     -
    Federal funds purchased              219          5      2.28%       -          -     -
                                     ---------  ---------  --------  -------  --------  -----
Total interest-bearing
liabilities                            64,154      1,764      2.75%  44,419      1,761  3.96%
Other non-interest bearing
    liabilities                         9,347                         6,401
Stockholders' equity                    7,239                         4,914
                                     ---------                       -------

    Total liabilities and
      stockholders' equity           $ 80,740                        55,734
                                     =========                       =======

Excess of interest-earning assets
  over interest bearing liabilities  $  8,889                         6,726
                                     =========                       =======

Ratio of interest-earning assets
  to interest-bearing liabilities      113.66%                       115.14%

Net interest income                     2,996                         2,231
                                     =========                       =======

Net interest spread                      3.69%                         3.85%

Net interest margin                      4.05%                         4.36%
</TABLE>

Non-accrual  loans  are  included  in  average  loan balances during the periods
presented  as  the  balances  were  not  significant.


                                        4
<PAGE>
VOLUME/RATE  ANALYSIS

Net  interest  income  can  also  be analyzed in terms of the impact of changing
rates  and  changing  volume.  The following table describes the extent to which
changes  in  interest rates and changes in the volume of interest-earning assets
and  interest-bearing liabilities have affected our interest income and interest
expense  during  the  periods  indicated.

<TABLE>
<CAPTION>
                                          2002 COMPARED TO 2001
                                           INCREASE (DECREASE)
                                            DUE TO CHANGES IN
                                                             NET
                                         VOLUME    RATE    CHANGE
                                        --------  -------  -------
<S>                                     <C>       <C>      <C>
Interest income on:
  Loans (including loan fees)           $ 1,675   (1,168)     507
  Investment securities                   1,399     (901)     498
  Interest-bearing deposits                 (36)      (6)     (42)
  Federal funds sold                       (116)     (79)    (195)
                                        --------  -------  -------
                                          2,922   (2,154)     768
                                        --------  -------  -------

Interest expense on:
  Interest-bearing demand and savings        61     (112)     (51)
  Time                                      126     (278)    (152)
  Federal Home Loan Bank advances           100      101      201
  Federal funds purchased                     3        2        5
                                        --------  -------  -------
                                            290     (287)       3
                                        --------  -------  -------

                                        $ 2,632   (1,867)     765
                                        ========  =======  =======
</TABLE>

INTEREST  RATE  SENSITIVITY  AND  ASSET  LIABILITY  MANAGEMENT

Interest  rate sensitivity measures the timing and magnitude of the repricing of
assets  compared  with  the repricing of liabilities and is an important part of
asset/liability  management  of  a  financial  institution.  The  objective  of
interest  rate  sensitivity  management  is  to  generate  stable  growth in net
interest  income,  and  to  control  the  risks  associated  with  interest rate
movements.  Management  constantly  reviews  interest rate risk exposure and the
expected  interest  rate  environment  so  that  adjustments  in  interest  rate
sensitivity  can be timely made.  Since the assets and liabilities of a bank are
primarily  monetary  in  nature  (payable  in  fixed, determinable amounts), the
performance  of  a  bank  is  affected more by changes in interest rates than by
inflation.  Interest  rates  generally  increase  as  the  rate  of  inflation
increases,  but  the  magnitude  of  the  change  in  rates may not be the same.

Net  interest  income  is  the  primary  component  of  net income for financial
institutions.  Net  interest  income  is affected by the timing and magnitude of
repricing  of as well as the mix of interest sensitive and noninterest sensitive
assets and liabilities.  "Gap" is a static measurement of the difference between
the  contractual  maturities or repricing dates of interest sensitive assets and
interest  sensitive  liabilities  within the following twelve months.  Gap is an
attempt  to  predict  the  behavior of the bank's net interest income in general
terms  during periods of movement in interest rates.  In general, if the bank is
asset  sensitive,  more of its interest sensitive assets are expected to reprice
within  twelve  months  than  its  interest  sensitive liabilities over the same
period.  In a rising interest rate environment, assets repricing more quickly is
expected  to  enhance  net  interest income.  Alternatively, decreasing interest
rates would be expected to have the opposite effect on net interest income since
assets  would  theoretically  be  repricing at lower interest rates more quickly
than  interest  sensitive  liabilities.  Although  it  can  be used as a general
predictor,  Gap  as  a  predictor  of  movements  in  net  interest  income  has
limitations  due  to the static nature of its definition and due to its inherent
assumption  that  all  assets  will  reprice  immediately  and  fully  at  the
contractually  designated  time.  At December 31, 2002, the bank, as measured by
Gap,  is  in  a  liability  sensitive  position.  Management  has  several tools
available  to  it  to  evaluate and affect interest rate risk, including deposit
pricing  policies  and  changes  in  the  mix  of  various  types  of assets and
liabilities.


                                        5
<PAGE>
We also measure the actual effects that repricing opportunities have on earnings
through  simulation  modeling,  referred to as earnings at risk.  For short-term
interest  rate  risk,  the  bank's  model  simulates the impact of balance sheet
strategies  on  net  interest income, pre-tax income, and net income.  The model
includes  interest  rate ramps to test the impact of rising and falling interest
rates  on  projected  earnings.  Rates  are  ramped  over  a one-year period and
include a level rate scenario as the benchmark with rising and falling 200 basis
point  scenarios  for  comparison.  The bank determines the assumptions that are
used  in  the  model.

In  addition  to measuring the effect changes in rates will have on earnings, we
also  measure  the  effect of interest rate changes on the economic value of the
bank.  Economic  Value of Equity is measured by calculating the present value of
future  cash  flows  for  financial instruments on the balance sheet.  The model
utilizes  rate  shocks of rising and falling 200 basis points to compare against
the  level  benchmark  for best and worst case scenarios.  All rates are shocked
instantaneously  for  the  200  basis  point  movements.  The  purpose  of  this
measurement  is  to determine the long-term effect interest rate changes have on
the  economic  value  of  the  balance  sheet.

The  following  table  summarizes  the  amounts  of  interest-earning assets and
interest-bearing liabilities outstanding at December 31, 2002, that are expected
to  mature,  prepay, or reprice in each of the future time periods shown. Except
as  stated  below,  the  amount  of assets or liabilities that mature or reprice
during  a  particular  period  was determined in accordance with the contractual
terms  of  the  asset  or  liability.  Adjustable rate loans are included in the
period  in  which interest rates are next scheduled to adjust rather than in the
period  in  which  they  are  due,  and  fixed  rate  loans  and mortgage-backed
securities  are  included  in  the  periods  in which they are anticipated to be
repaid  based  on  scheduled  maturities.  The  bank's  savings  accounts  and
interest-bearing  demand accounts (NOW and money market deposit accounts), which
are generally subject to immediate withdrawal, are included in the "Three Months
or  Less"  category, although historical experience has proven these deposits to
be  more  stable  over  the  course  of  a  year.

<TABLE>
<CAPTION>
                                          At December 31, 2002
                                        Maturing or Repricing in
                                        ------------------------
                                         (dollars in thousands)


                                            Three
                                           Months     Four Months    1 to 5   Over 5
                                           or Less   to 12 Months    Years     Years   Total
                                          ---------  -------------  --------  -------  ------
<S>                                       <C>        <C>            <C>       <C>      <C>
Interest-earning assets:
  Federal funds sold                      $  7,414              -         -        -    7,414
  Investment securities                          -              -     2,497   33,051   35,548
  Interest bearing deposits                      -            298         -        -      298
  Loans                                     28,301          3,299    11,217    1,306   44,123
                                          ---------  -------------  --------  -------  ------

Total interest-bearing assets               35,715          3,597    13,714   34,357   87,383
                                          ---------  -------------  --------  -------  ------

Interest-bearing liabilities:
    Deposits:
      Savings and demand                    34,173              -         -        -   34,173
      Time deposits                          5,658          8,163    12,308        -   26,129
    Federal Home Loan Bank advances              -              -     3,000    5,500    8,500
                                          ---------  -------------  --------  -------  ------

Total interest-bearing liabilities          39,831          8,163    15,308    5,500   68,802
                                          ---------  -------------  --------  -------  ------

Interest sensitive difference per period    (4,116)        (4,566)   (1,594)  28,857   18,581
Cumulative interest sensitivity
  difference                              $ (4,116)        (8,682)  (10,276)  18,581
                                          =========  =============  ========  =======
Cumulative difference to total
  assets                                    (4.25%)        (8.96%)  (10.60%)   19.17%
                                          =========  =============  ========  =======
</TABLE>

At  December  31, 2002, the difference between the bank's liabilities and assets
repricing  or  maturing  within  one  year  was  $8,682,000. Due to an excess of
liabilities repricing or maturing within one year, an increase in interest rates
would  cause  the  bank's  net  interest  income  to  decline.


                                        6
<PAGE>
Certain  shortcomings  are  inherent  in the method of analysis presented in the
foregoing  table.  For example, although certain assets and liabilities may have
similar  maturities  or periods of repricing, they may reflect changes in market
interest  rates  differently.  Additionally,  certain  assets,  such  as
adjustable-rate  mortgages,  have  features  that  restrict  changes in interest
rates,  both on a short-term basis and over the life of the asset. Other factors
which  may  affect the assumptions made in the table include changes in interest
rates,  pre-payment rates, early withdrawal levels, and the ability of borrowers
to  service  their  debt.

PROVISION  AND  ALLOWANCE  FOR  LOAN  LOSSES

The  provision  for  loan  losses  is  the  charge  to  operating  earnings that
management believes is necessary to maintain the allowance for loan losses at an
adequate  level.  The  provision  charged  to  expense was $206,000 for the year
ended  December 31, 2002 as compared to $217,000 for the year ended December 31,
2001.  The  change in the provision has been a result of management's efforts to
increase  the allowance to match the growth in the loan portfolio as well as net
recoveries  during  2002  on  loans  previously charged off.  The loan portfolio
increased  by  approximately  $12.8  million  during the year ended December 31,
2002.  The  allowance  for  loan losses was 1.45% of gross loans at December 31,
2002.  There  are  risks  inherent  in  making  all  loans, including risks with
respect  to  the  period of time over which loans may be repaid, risks resulting
from changes in economic and industry conditions, risks inherent in dealing with
individual borrowers, and, in the case of a collateralized loan, risks resulting
from  uncertainties  about  the  future  value of the collateral.  We anticipate
maintaining  an  allowance  for  loan  losses  based  on,  among  other  things,
historical experience, an evaluation of economic conditions, and regular reviews
of delinquencies and loan portfolio quality.  Our judgment about the adequacy of
the  allowance  is based upon a number of assumptions about future events, which
we  believe  to  be  reasonable,  but which may not prove to be accurate.  Thus,
there  is  a  risk that charge-offs in future periods could exceed the allowance
for  loan  losses  or that substantial additional increases in the allowance for
loan losses could be required.  Additions to the allowance for loan losses would
result  in  a  decrease  of  our  net  income  and,  possibly,  our  capital.

The  following  table  summarizes  information concerning the allowance for loan
losses:

<TABLE>
<CAPTION>
                                                                December 31,
                                                -----------------------------------------
                                                     2002           2001          2000
                                                --------------  -------------  ----------
<S>                                             <C>             <C>            <C>
                                                   (Amounts are presented in thousands)

Balance at beginning of year                    $         428            247          69
Charge-offs:
  Commercial                                                -              -           -
  Real Estate - construction                                -              -           -
  Real Estate - mortgage                                    -              -           -
  Consumer                                                 90             37           1
                                                --------------  -------------  ----------

    Total charge-offs                                      90             37           1

Recoveries:
  Commercial                                                -              -           -
  Real Estate - construction                                -              -           -
  Real Estate - mortgage                                    -              -           -
  Consumer                                                 96              2           -
                                                --------------  -------------  ----------

    Total recoveries                                       96              2           -
                                                --------------  -------------  ----------

Net charge-offs (recoveries)                               (6)            35           1

Additions charged to operations                           206            216         179
                                                --------------  -------------  ----------

Balance at end of year                          $         640            428         247
                                                ==============  =============  ==========
Ratio of net charge-offs during the period to
  average loans outstanding during the period          (.015%)          .116%       .008%
</TABLE>


                                        7
<PAGE>
The following table summarizes past due and non-accrual loans, other real estate
and repossessions, and income that would have been reported on non-accrual loans
as  of  December  31,  2002  and  2002  (amounts  are  presented  in thousands):

<TABLE>
<CAPTION>
                                          December 31,
                                         --------------
                                          2002    2001
                                         ------  ------
<S>                                      <C>     <C>
Other real estate and repossessions      $    -       -
Accruing loans 90 days or more past due       -       -
Non-accrual loans                           108       4
Interest on non-accrual loans which
  would have been reported                    -       -
</TABLE>

NONINTEREST  INCOME  AND  EXPENSE

Noninterest  income  for  the  year  ended December 31, 2002 totaled $778,000 as
compared  to  $606,000  for  the year ended December 31, 2001.  This increase in
noninterest income was primarily due to an increase in investment security gains
and  an  increase  in  service  charges on deposit accounts.  Service charges on
deposit accounts grew as the number of accounts increased in 2002 as compared to
2001.

Total noninterest expense for the year ended December 31, 2002 was $2,894,000 as
compared  to $2,142,000 for the same period in 2001.  Salaries and benefits, the
largest  component of noninterest expense, totaled $1,541,000 for the year ended
December  31,  2002,  compared  to  $1,136,000  for  the same period a year ago.
Salary and benefits expense primarily increased due to the addition of employees
in  2002  due  to  the  opening  of our South Canton branch in July 2002.  Other
operating  expenses  were  $1,058,000  for  the  year ended December 31, 2002 as
compared  to  $766,000  for  the year ended December 31, 2001.  This increase in
noninterest  expenses  are  due  to  the  continued  growth  of  the  bank.

INCOME  TAXES

For  the  year  ended  December  31,  2002,  we recognized income tax expense of
$244,000 compared to an income tax benefit of $225,000 in 2001.  The recognition
of  the  income  tax  benefit  in  2001 was due to the reversal of the valuation
allowance  that  we  had previously recorded related to our deferred tax assets.
These  deferred  tax  assets  accumulated  during our organizational and initial
operating  stages  and  were  not  recognized  previously  due  to the fact that
realization  of  these  benefits  was dependent upon future taxable income.  Our
effective  tax  rate  in  2002  was  approximately  36%  in  2002.

                               FINANCIAL CONDITION

Total  assets  increased  $30,572,000, or 46% from December 31, 2002 to December
31,  2001. The primary source of growth in assets was net loans, which increased
$12,884,000  or  42%,  during  the  year  ended  December  31, 2002.  Investment
securities  available-for-sale  increased  $6,110,000  from December 31, 2001 to
$34,873,000  at December 31, 2002.  Total deposits increased $21,494,000, or 37%
during  2002.

INTEREST-EARNING  ASSETS

LOANS

Gross loans totaled $44,123,000 at December 31, 2002, an increase of $13,096,000
or 42% since December 31, 2001.  The largest increase in loans was in commercial
loans,  which  increased  $7,568,000 or 46% to $23,863,000 at December 31, 2002.
Real  estate-construction  loans  increased  $5,058,000  during  2002.  Balances
within  the  major  loans  receivable  categories  as  of  December 31, 2002 and
December  31,  2001  are  as  follows:

<TABLE>
<CAPTION>
                                           2002                 2001
                                        -----------         ----------
<S>                                     <C>          <C>    <C>         <C>
Commercial, financial and agricultural  $23,862,595    54%  16,294,606   53%
Real estate - mortgage                    7,453,721    17%   6,435,719   21%
Real estate - construction                9,272,306    21%   4,214,108   13%
Consumer                                  3,534,217     8%   4,082,555   13%
                                        -----------  -----  ----------  ----

                                        $44,122,839   100%  31,026,988  100%
                                        ===========  =====  ==========  ====
</TABLE>


                                        8
<PAGE>
As  of  December  31, 2002, maturities of loans in the indicated classifications
were  as  follows:

<TABLE>
<CAPTION>
                            Real Estate
               Commercial   Construction    Total
               -----------  ------------  ----------
<S>            <C>          <C>           <C>
Maturity
--------
Within 1 year  $ 9,879,468     9,179,811  19,059,279
1 to 5 years    11,768,560        92,495  11,861,055
Over 5 years     2,214,567             -   2,214,567
               -----------  ------------  ----------

  Totals       $23,862,595     9,272,306  33,134,901
               ===========  ============  ==========
</TABLE>

As  of  December  31,  2002,  the  interest  terms  of  loans  in  the indicated
classification  for  the  indicated  maturity ranges are as follows (amounts are
presented  in  thousands):

<TABLE>
<CAPTION>
                            Fixed Interest   Variable Interest
                                 Rates             Rates          Total
                            ---------------  -----------------  ----------
<S>                         <C>              <C>                <C>
Commercial
  1 to 5 years              $     6,119,651          5,648,909  11,768,560
  Over 5 years                    1,151,575          1,062,992   2,214,567

Real estate - construction
  1 to 5 years                            -             92,495      92,495
                            ---------------  -----------------  ----------

                            $     7,271,226          6,804,396  14,075,622
                            ===============  =================  ==========
</TABLE>


INVESTMENT  SECURITIES

Investment  securities  available-for-sale  increased to $34,873,000 at December
31,  2002 from $28,763,000 at December 31, 2001. This increase was the result of
an  increase  in  deposits  being  invested  in  securities.  All  of the bank's
marketable  investment  securities  were  designated  as  available-for-sale  at
December  31,  2002.

The  following  table  presents the investments by category at December 31, 2002
and  2001:

<TABLE>
<CAPTION>
                                               2002                         2001
                                   ---------------------------  --------------------------
                                                    Estimated                   Estimated
                                   Amortized Cost   Fair Value  Amortized Cost  Fair Value
                                   ---------------  ----------  --------------  ----------
<S>                                <C>              <C>         <C>             <C>
United States government agencies  $     1,049,287   1,055,625       8,468,790   8,465,349
Mortgage-backed                         33,524,441  33,817,592      20,468,503  20,298,049
                                   ---------------  ----------  --------------  ----------

                                   $    34,573,728  34,873,217      28,937,293  28,763,398
                                   ===============  ==========  ==============  ==========
</TABLE>


                                        9
<PAGE>
The following table presents the maturities of investment securities at carrying
value  and  the  weighted average yields for each range of maturities presented.
(Amounts  are  presented  in  thousands).

<TABLE>
<CAPTION>
                                     US       Weighted    Mortgage   Weighted
                                 Government    Average     Backed     Average
                                  Agencies     Yields    Securities   Yields
                                 -----------  ---------  ----------  ---------
<S>                              <C>          <C>        <C>         <C>
Maturities at December 31, 2002
-------------------------------

Within 1 year                    $         -         -            -         -
After 1 through 5 years                    -         -        2,466      3.75%
After 5 through 10 years               1,049      3.42%      12,697      4.10%
After 10 years                             -         -       18,361      4.99%
                                 -----------             ----------

Totals                           $     1,049                 33,524
                                 ===========             ==========

</TABLE>

DEPOSITS

At  December  31,  2002  total  deposits  increased  by $21,494,000, or 37% from
December  31,  2001.   Noninterest-bearing demand deposits increased $14,334,000
or  255%  and  interest-bearing  deposits  increased  $7,160,000  or  13%.

Balances  within  the  major  deposit  categories  as  of  December 31, 2002 and
December  31,  2001  as  follows:

<TABLE>
<CAPTION>
                                        2002         2001
                                     -----------  ----------
<S>                                  <C>          <C>
Noninterest-bearing demand deposits  $19,954,811   5,620,933
Interest-bearing demand deposits      32,028,352  27,993,680
Savings deposits                       2,144,761   1,541,472
Time                                  20,099,856  19,208,488
Time over $100,000                     6,029,055   4,398,173
                                     -----------  ----------

                                     $80,256,835  58,762,746
                                     ===========  ==========
</TABLE>

The  average balance of deposits and the average rates paid on such deposits are
summarized  for  the  periods  indicated  in  the  following  table.

<TABLE>
<CAPTION>
                                              December 31,
                                     -----------------------------
                                           2002          2001
                                     --------------  -------------
                                       (Amounts are presented
                                           in thousands)

                                     Amount   Rate   Amount  Rate
                                     -------  -----  ------  -----
<S>                                  <C>      <C>    <C>     <C>
Noninterest-bearing demand           $ 8,800     -    5,878     -
Interest-bearing demand and savings   32,166  1.76%  23,104  2.67%
Time deposits                         25,759  3.85%  21,315  5.37%
                                     -------         ------

Totals                               $66,725         50,297
                                     =======         ======
</TABLE>

Maturities  of  time  certificates of deposit of $100,000 or more outstanding at
December  31,  2002,  are  summarized  as  follows  (Amounts  are  presented  in
thousands):

<TABLE>
<CAPTION>
<S>                        <C>
Within 3 months            $  932
After 3 through 6 months      770
After 6 through 12 months     431
After 12 months             3,896
                           ------

    Total                  $6,029
                           ======
</TABLE>


                                       10
<PAGE>
CAPITAL  RESOURCES

Total  shareholders'  equity  increased  from $6,912,000 at December 31, 2001 to
$7,614,000 at December 31, 2002.  This increase was attributable to net earnings
for  the  period  and  an  increase  of $293,000 in the fair value of securities
available-for-sale,  net  of  tax.

Bank  holding companies, such as us, and their banking subsidiaries are required
by  banking regulators to meet certain minimum levels of capital adequacy, which
are  expressed  in the form of certain ratios.  Capital is separated into Tier 1
capital  (essentially  common  shareholders'  equity less intangible assets) and
Tier  2  capital  (essentially the allowance for loan losses limited to 1.25% of
risk-weighted  assets).  The  first two ratios, which are based on the degree of
credit  risk  in  our  assets, provide the weighting of assets based on assigned
risk  factors  and  include off-balance sheet items such as loan commitments and
stand-by letters of credit.  The ratio of Tier 1 capital to risk-weighted assets
must be at least 4.0% and the ratio of total capital (Tier 1 capital plus Tier 2
capital)  to  risk-weighted  assets must be at least 8.0%.  The capital leverage
ratio  supplements  the  risk-based  capital  guidelines.

Banks  and  bank  holding  companies are required to maintain a minimum ratio of
Tier  1  capital  to  adjusted  quarterly  average  total  assets  of  3.0%.

The  following table summarizes the bank's risk-based capital ratios at December
31,  2002:

  Tier 1 capital (to risk-weighted assets)                      11.8%
  Total capital (to risk-weighted assets)                       12.9%
  Tier 1 capital (to total average assets)                       8.5%


LIQUIDITY

The  bank  must  maintain,  on  a  daily  basis,  sufficient  funds to cover the
withdrawals from depositors' accounts and to supply new borrowers with funds. To
meet  these obligations, the bank keeps cash on hand, maintains account balances
with  its  correspondent  banks, and purchases and sells federal funds and other
short-term  investments.  Asset  and  liability  maturities  are monitored in an
attempt to match the maturities to meet liquidity needs. It is the policy of the
bank  to  monitor  its liquidity to meet regulatory requirements and their local
funding  requirements.

We  are  a  party  to  financial  instruments with off-balance-sheet risk in the
normal  course  of business to meet the financing needs of our customers.  These
financial  instruments  consist  of  commitments  to  extend  credit and standby
letters  of  credit.  Commitments  to  extend credit are agreements to lend to a
customer  as  long  as there is no violation of any condition established in the
contract.  Standby  letters of credit are written conditional commitments issued
by  the  bank to guarantee the performance of a customer to a third party. Those
guarantees  are  primarily  issued  to  support  public  and  private  borrowing
arrangements.  Most  letters of credit extend for less than one year. The credit
risk  involved  in  issuing  letters  of  credit is essentially the same as that
involved  in extending loan facilities to customers.  Commitments generally have
fixed expiration dates or other termination clauses and may require payment of a
fee.  A commitment involves, to varying degrees, elements of credit and interest
rate  risk  in  excess  of  the  amount  recognized  in the balance sheets.  Our
exposure  to  credit  loss in the event of non-performance by the other party to
the  instrument  is  represented  by  the  contractual  notional  amount  of the
instrument.

Since  certain  commitments are expected to expire without being drawn upon, the
total  commitment amounts do not necessarily represent future cash requirements.
We  use the same credit policies in making commitments to extend credit as we do
for  on-balance-sheet  instruments.  Collateral  held  for commitments to extend
credit  varies  but may include accounts receivable, inventory, property, plant,
equipment,  and  income-producing  commercial  properties.

The following table summarizes our off-balance-sheet financial instruments whose
contract  amounts  represent  credit  risk  as  of  December  31,  2002:

    Commitments to extend credit                  $     7,538,000
    Standby letters of credit                     $       176,000



                                       11
<PAGE>
Management is not aware of any significant concentrations of loans to classes of
borrowers or industries that would be affected similarly by economic conditions.
Although  the bank's loan portfolio is diversified, a substantial portion of its
borrowers'  ability  to  honor  the  terms  of  their  loans is dependent on the
economic  conditions  in  Cherokee  County  and  surrounding  areas.

The bank maintains relationships with correspondent banks that can provide funds
to  it  on  short  notice,  if needed. Presently, the bank has arrangements with
commercial  banks  for  short  term  unsecured  advances  up  to  $5,000,000.

Cash  and  cash  equivalents  as  of December 31, 2002 increased $9,972,000 from
December  31,  2001.  Cash  provided by operating activities totaled $566,000 in
2002,  while  inflows  from financing activities totaled $29,772,000, which were
attributable  to  net deposit increases and proceeds from Federal Home Loan Bank
Advances.

During  2002,  investing  activities  used  $20,366,000.  Investing  activities
included  net loans made to customers of approximately $13,090,000, purchases of
investment  securities  available-for-sale  of  $31,530,000  and  purchases  of
premises  and  equipment of $1,179,000, partially offset by maturities and sales
of  investment  securities  available-for-sale  of  approximately  $26,046,000.

INFLATION

Inflation  impacts the growth in total assets in the banking industry and causes
a  need  to  increase equity capital at higher than normal rates to meet capital
adequacy  requirements.  We  cope  with  the  effects  of  inflation through the
management  of interest rate sensitivity gap position, by periodically reviewing
and  adjusting  its  pricing  of  services to consider current costs and through
managing  our  level  of  net  income  relative  to  our dividend payout policy.

SELECTED  RATIOS

The  following  table  sets  out  certain  ratios  of  the Company for the years
indicated.

<TABLE>
<CAPTION>
                                    2002    2001
                                    -----  ------
<S>                                 <C>    <C>
  Net income to:
    Average stockholders' equity    5.95%  10.65%
    Average assets                   .53%   1.26%
  Dividends to net income              -       -
  Average equity to average assets  8.97%  11.84%
</TABLE>

RECENT  ACCOUNTING  PRONOUNCEMENTS

Accounting  standards  that  have  been  issued  or  proposed  by  the Financial
Accounting  Standards  Board  and  other  standard  setting entities that do not
require  adoption until a future date are not expected to have a material impact
on  our  consolidated  financial  statements  upon  adoption.


                                       12
<PAGE>
                               [GRAPHIC  OMITED]

                            Porter Keadle Moore, LLP



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS





To  the  Board  of  Directors
Cherokee  Banking  Company
Canton,  Georgia


We have audited the accompanying consolidated balance sheets of Cherokee Banking
Company  and  subsidiary  as  of  December  31,  2002  and 2001, and the related
statements  of  earnings,  changes in shareholders' equity, comprehensive income
and  cash  flows  for  the  years then ended. These financial statements are the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects, the financial position of Cherokee Banking
Company and subsidiary as of December 31, 2002 and 2001 and the results of their
operations  and  their  cash  flows  for the years then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.



                                        /s/  PORTER  KEADLE  MOORE,  LLP


Atlanta,  Georgia
February  12,  2003


                          Certified Public Accountants
--------------------------------------------------------------------------------
Suite 1800  235 Peachtree Street NE   Atlanta, Georgia 30303  Phone 404-588-4200
                         Fax 404-588-4222   www.pkm.com
                                       13
<PAGE>
<TABLE>
<CAPTION>

                                CHEROKEE BANKING COMPANY

                               CONSOLIDATED BALANCE SHEETS

                               DECEMBER 31, 2002 AND 2001



                                                                   2002         2001
                                                                -----------  -----------
                           Assets
                           ------
<S>                                                             <C>          <C>
Cash and due from banks, including reserve requirements
  of $934,000 and $374,000                                      $ 4,169,641   1,611,623
Federal funds sold                                                7,414,000           -
                                                                -----------  -----------

      Cash and cash equivalents                                  11,583,641   1,611,623

Interest-bearing deposits                                           298,000     997,000
Investment securities available-for-sale                         34,873,217  28,763,398
Other investments                                                   675,350     305,250
Loans, net                                                       43,482,681  30,598,815
Premises and equipment, net                                       3,741,026   2,981,469
Accrued interest receivable and other assets                      2,278,067   1,102,873
                                                                -----------  -----------

                                                                $96,931,982  66,360,428
                                                                ===========  ===========

             Liabilities and Shareholders' Equity
             ------------------------------------
Deposits:
  Demand                                                        $19,954,811   5,620,933
  Money market and NOW accounts                                  32,028,352  27,993,680
  Savings                                                         2,144,761   1,541,472
  Time                                                           20,099,856  19,208,488
  Time over $100,000                                              6,029,055   4,398,173
                                                                -----------  -----------

      Total deposits                                             80,256,835  58,762,746

Advances from Federal Home Loan Bank                              8,500,000           -
Federal funds purchased                                                   -     222,000
Accrued interest payable and other liabilities                      539,352     463,806
                                                                -----------  -----------

      Total liabilities                                          89,296,187  59,448,552
                                                                -----------  -----------

Commitments

Shareholders' equity:
  Preferred stock, no par value, 2,000,000 shares authorized,
    no shares issued and outstanding                                      -           -
  Common stock, no par value; 10,000,000 shares authorized;
    738,658 issued and outstanding                                7,330,505   7,330,505
  Retained earnings (accumulated deficit)                           119,607    (310,814)
  Accumulated other comprehensive income (loss)                     185,683    (107,815)
                                                                -----------  -----------

      Total shareholders' equity                                  7,635,795   6,911,876
                                                                -----------  -----------

                                                                $96,931,982  66,360,428
                                                                ===========  ===========

<FN>
See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>


                                       14
<PAGE>
<TABLE>
<CAPTION>
                                CHEROKEE BANKING COMPANY

                           CONSOLIDATED STATEMENTS OF EARNINGS

                     FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001



                                                                   2002          2001
                                                             ----------------  ---------
<S>                                                          <C>               <C>
Interest income:
  Interest and fees on loans                                 $     3,050,818   2,543,428
  Interest on investment securities                                1,638,800   1,140,899
  Interest on federal funds sold                                      41,769     237,415
  Interest on interest bearing deposits                               28,744      70,242
                                                             ----------------  ---------

        Total interest income                                      4,760,131   3,991,984
                                                             ----------------  ---------

Interest expense:
  Interest on money market and NOW accounts                          538,987     588,287
  Interest on savings and time deposits                            1,019,106   1,173,127
  Interest on other borrowings                                       205,592           -
                                                             ----------------  ---------

        Total interest expense                                     1,763,685   1,761,414
                                                             ----------------  ---------

        Net interest income                                        2,996,446   2,230,570

Provision for loan losses                                            206,496     216,634
                                                             ----------------  ---------

        Net interest income after provision for loan losses        2,789,950   2,013,936
                                                             ----------------  ---------

Other income:
  Service charges on deposit accounts                                366,631     304,493
  Mortgage origination fees                                          161,485     180,632
  Investment security gains                                          159,319      72,314
  Other income                                                        90,821      48,145
                                                             ----------------  ---------

        Total other income                                           778,256     605,584
                                                             ----------------  ---------

Other expenses:
  Salaries and employee benefits                                   1,540,910   1,136,136
  Occupancy and equipment                                            294,429     239,561
  Other operating                                                  1,058,370     765,816
                                                             ----------------  ---------

        Total other expenses                                       2,893,709   2,141,513
                                                             ----------------  ---------

        Earnings before income taxes                                 674,497     478,007

Income tax (expense) benefit                                        (244,076)    224,619
                                                             ----------------  ---------

        Net earnings                                         $       430,421     702,626
                                                             ================  =========

        Basic earnings per share                             $           .58         .95
                                                             ================  =========

        Diluted earnings per share                           $           .55         .95
                                                             ================  =========

<FN>
See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>


                                       15
<PAGE>
<TABLE>
<CAPTION>
                                          CHEROKEE BANKING COMPANY

                         CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                               FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001




                                                                      Retained     Accumulated
                                            Common Stock              Earnings        Other
                                     ---------------------------   (Accumulated   Comprehensive
                                        Shares        Amount         Deficit)     Income (Loss)    Total
                                     ------------  -------------  --------------  -------------  ----------
<S>                                  <C>           <C>            <C>             <C>            <C>
Balance, December 31, 2000                738,658  $   7,330,505     (1,013,440)        40,753   6,357,818

Change in unrealized gain/loss on
   investment securities available-
   for-sale, net of tax                         -              -              -       (148,568)   (148,568)

Net earnings                                    -              -        702,626              -     702,626
                                     ------------  -------------  --------------  -------------  ----------

Balance, December 31, 2001                738,658      7,330,505       (310,814)      (107,815)  6,911,876

Change in unrealized gain/loss on
   investment securities available-
   for-sale, net of tax                         -              -              -        293,498     293,498

Net earnings                                    -              -        430,421              -     430,421
                                     ------------  -------------  --------------  -------------  ----------

Balance, December 31, 2002                738,658  $   7,330,505        119,607        185,683   7,635,795
                                     ============  =============  ==============  =============  ==========

<FN>
See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>


                                       16
<PAGE>
<TABLE>
<CAPTION>
                               CHEROKEE BANKING COMPANY

                    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                    FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001



                                                                    2002       2001
                                                                  ---------  ---------
<S>                                                               <C>        <C>
Net earnings                                                      $430,421    702,626
                                                                  ---------  ---------

Other comprehensive income (loss), net of tax:
  Unrealized gains (losses) on investment securities available-
    for-sale, net of income taxes of $240,427 and $63,518          392,276   (103,733)

  Reclassification adjustment for gains on sale of investment
    securities available-for-sale, net of income taxes of
      $60,541 and $27,479                                          (98,778)   (44,835)
                                                                  ---------  ---------

      Total other comprehensive income (loss)                      293,498   (148,568)
                                                                  ---------  ---------

      Comprehensive income                                        $723,919    554,058
                                                                  =========  =========

<FN>
See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>


                                       17
<PAGE>
<TABLE>
<CAPTION>
                                     CHEROKEE BANKING COMPANY

                               CONSOLIDATED STATEMENTS OF CASH FLOWS

                          FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                                           2002           2001
                                                                       -------------  ------------
<S>                                                                    <C>            <C>
Cash flows from operating activities:
  Net earnings                                                         $    430,421       702,626
  Adjustments to reconcile net earnings to net cash
    provided by operating activities:
      Depreciation, amortization and accretion                              188,770        81,910
      Provision for loan losses                                             206,496       216,634
      Deferred income tax expense (benefit)                                  14,139      (228,054)
      Gain on sales, paydowns, and calls on securities                     (159,319)      (72,314)
      Change in:
        Accrued interest receivable and other assets                        (10,532)     (130,862)
        Accrued interest payable and other liabilities                     (104,339)      233,126
                                                                       -------------  ------------

                Net cash provided by operating activities                   565,636       803,066
                                                                       -------------  ------------

Cash flows from investing activities:
  Proceeds from sales of investment securities available-for-sale        14,339,843     8,085,455
  Proceeds from calls and maturities of investment
    securities available-for-sale                                        11,706,528    15,133,124
  Purchases of investment securities available-for-sale                 (31,530,323)  (37,519,822)
  Change in interest-bearing deposits                                       699,000       782,000
  Purchases of other investments                                           (370,100)      (69,150)
  Net change in loans                                                   (13,090,361)  (11,303,456)
  Purchase of premises and equipment                                       (941,493)     (665,371)
  Purchase of cash surrender value of life insurance                     (1,178,801)     (378,965)
                                                                       -------------  ------------

                Net cash used by investing activities                   (20,365,707)  (25,936,185)
                                                                       -------------  ------------

Cash flows from financing activities:
  Net change in deposits                                                 21,494,089    23,244,106
  Net change in federal funds purchased                                    (222,000)      222,000
  Proceeds from Federal Home Loan Bank advances                           8,500,000             -
                                                                       -------------  ------------

                Net cash provided by financing activities                29,772,089    23,466,106
                                                                       -------------  ------------

Net change in cash and cash equivalents                                   9,972,018    (1,667,013)
Cash and cash equivalents at beginning of period                          1,611,623     3,278,636
                                                                       -------------  ------------

Cash and cash equivalents at end of period                             $ 11,583,641     1,611,623
                                                                       =============  ============

Supplemental schedule of noncash investing and
  financing activities consisting of change in unrealized
  gain /loss on investment securities available-for-sale, net of tax   $    293,498      (148,568)

Supplemental disclosures of cash flow information:
  Cash paid during the year for interest                               $  1,995,329     1,633,967
  Cash paid during the year for income taxes                           $    139,000             -

<FN>
See  accompanying  notes  to  consolidated  financial  statements.
</TABLE>


                                       18
<PAGE>
                            CHEROKEE BANKING COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
     Basis  of  Presentation
     -----------------------
     The  consolidated  financial  statements  include  the accounts of Cherokee
     Banking  Company  (the "Company") and its wholly owned subsidiary, Cherokee
     Bank,  N.A.  (the  "Bank").  All  significant  intercompany  accounts  and
     transactions  have  been  eliminated  in  consolidation.

     The  Company  was  incorporated  for the purpose of becoming a bank holding
     company.  The  Bank commenced business on July 26, 1999 upon receipt of its
     banking charter from the Office of the Comptroller of Currency ("OCC"). The
     Bank  is primarily regulated by the OCC and undergoes periodic examinations
     by  this regulatory agency. The Company is regulated by the Federal Reserve
     and  also  is  subject  to  periodic examinations. The Bank provides a full
     range  of  commercial  and consumer banking services throughout the city of
     Canton  and  the  Cherokee  County  area  in  Georgia.

     The  accounting  principles  followed  by the Company and the Bank, and the
     methods  of  applying  these principles, conform with accounting principles
     generally  accepted in the United States of America (GAAP) and with general
     practices  in  the  banking  industry. In preparing financial statements in
     conformity  with  GAAP,  management  is  required  to  make  estimates  and
     assumptions  that  affect the reported amounts in the financial statements.
     Actual  results  could  differ significantly from these estimates. Material
     estimates  common to the banking industry that are particularly susceptible
     to significant change in the near term include, but are not limited to, the
     determination  of  the  allowance  for  loan  losses, the valuation of real
     estate  acquired in connection with or in lieu of foreclosure on loans, and
     valuation  allowances  associated  with  the  realization  of  deferred tax
     assets,  which  are  based  on  future  taxable  income.

     Cash  and  Cash  Equivalents
     ----------------------------
     Cash  and cash equivalents include amounts due from banks, interest-bearing
     demand deposits with banks and federal funds sold. Generally, federal funds
     are  sold  for  one-day  periods.

     Investment  Securities
     ----------------------
     The  Company classifies its securities in one of three categories: trading,
     available-for-sale,  or held-to-maturity. Trading securities are bought and
     held  principally  for  the  purpose  of  selling  them  in  the near term.
     Held-to-maturity  securities are those securities for which the Company has
     the  ability and intent to hold until maturity. All securities not included
     in  trading  or  held-to-maturity  are classified as available-for-sale. At
     December  31,  2002  and 2001, all investment securities were classified as
     available-for-sale.

     Trading  and  available-for-sale  securities  are  recorded  at fair value.
     Held-to-maturity  securities  are  recorded  at  cost,  adjusted  for  the
     amortization  or  accretion  of  premiums  or discounts. Unrealized holding
     gains  and  losses on trading securities of which the Company currently has
     none  would be recognized in earnings. Unrealized holding gains and losses,
     net  of  the  related  tax  effect,  on  securities  available-for-sale are
     excluded  from  earnings  and  are  reported  as  a  separate  component of
     shareholders'  equity  until  realized.  Transfers  of  securities  between
     categories  are  recorded  at  fair  value  at  the  date  of  transfer.

     A decline in the market value of any available-for-sale or held-to-maturity
     security  below  cost  that  is  deemed  other than temporary is charged to
     earnings  and  establishes  a  new  cost  basis  for  the  security.

     Premiums  and  discounts  are  amortized  or  accreted over the life of the
     related  securities  as adjustments to the yield. Realized gains and losses
     for  securities  classified  as available-for-sale and held-to-maturity are
     included  in  earnings  and  are  derived using the specific identification
     method  for  determining  the  cost  of  securities  sold.

     Other  Investments
     ------------------
     Other  investments  include  equity securities with no readily determinable
     fair  value.  These  investments  are  carried  at  cost.


                                       19
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
     Loans  and  Allowance  for  Loan  Losses
     ----------------------------------------
     Interest  on  loans  is  calculated  by using the simple interest method on
     daily  balances  of  the  principal  amount  outstanding.

     A  loan  is  considered  impaired  when,  based  on current information and
     events,  it  is  probable that all amounts due according to the contractual
     terms  of  the  loan  agreement  will  not be collected. Impaired loans are
     measured  based  on  the  present  value  of  expected  future  cash  flows
     discounted  at  the  loan's  effective  interest  rate,  or  at  the loan's
     observable market price, or at the fair value of the collateral of the loan
     if the loan is collateral dependent. Accrual of interest is discontinued on
     a  loan  when  management believes, after considering economic and business
     conditions  and collection efforts, that the borrower's financial condition
     is  such  that  collection  of  interest  is  doubtful.

     The  allowance  for loan losses is established through a provision for loan
     losses charged to expense. Loans are charged against the allowance for loan
     losses when management believes that the collectibility of the principal is
     unlikely.  The  allowance  represents  an  amount  which,  in  management's
     judgment, will be adequate to absorb probable losses on existing loans that
     may  become  uncollectible.

     Management's judgment in determining the adequacy of the allowance is based
     on  evaluations of the collectibility of loans. These evaluations take into
     consideration  such factors as changes in the nature and volume of the loan
     portfolio,  current  economic  conditions  that  may  affect the borrower's
     ability  to  pay,  overall portfolio quality and review of specific problem
     loans.  Management  uses an external independent loan reviewer to challenge
     and  corroborate  its  loan  gradings  and  provide  additional  analysis,
     including  peer  group  comparisons,  in  determining  the  adequacy of the
     allowance  for  loan  losses  and  necessary  provisions  to the allowance.

     Management  believes  that the allowance for loan losses is adequate. While
     management  uses available information to recognize losses on loans, future
     additions  to  the  allowance may be necessary based on changes in economic
     conditions.  In  addition, various regulatory agencies, as an integral part
     of  their examination process, periodically review the Bank's allowance for
     loan  losses.  Such agencies may require the Bank to recognize additions to
     the  allowance  based  on  judgments  different  than  those of management.

     Premises  and  Equipment
     ------------------------
     Premises  and  equipment  are stated at cost less accumulated depreciation.
     Depreciation  is provided using the straight-line method over the estimated
     useful  lives  of  the  assets. Leasehold improvements are amortized on the
     straight-line  method over the shorter of the estimated useful lives of the
     improvements  or  the  terms  of  the  related  leases.  Costs incurred for
     maintenance  and  repairs  are  expensed  currently.

     Depreciation expense is computed over the following estimated useful lives:

          Buildings  and  improvements     10  -  25  years
          Furniture  and  equipment         3  -  10  years

     Income  Taxes
     -------------
     Deferred  tax  assets  and  liabilities  are  recognized for the future tax
     consequences  attributable  to  differences between the financial statement
     carrying  amounts  of  existing assets and liabilities and their respective
     tax  bases  and  operating  loss and tax credit carryforwards. Deferred tax
     assets  and  liabilities  are  measured using enacted tax rates expected to
     apply  to  taxable income in the years in which those temporary differences
     are  expected to be recovered or settled. The effect on deferred tax assets
     and  liabilities  of  a  change in tax rates is recognized in income in the
     period  that  includes  the  enactment  date.


                                       20
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
     Income  Taxes,  continued
     -------------------------
     In  the  event  the  future  tax  consequences  of  differences between the
     financial  reporting  bases and the tax bases of the assets and liabilities
     results  in  deferred tax assets, an evaluation of the probability of being
     able  to realize the future benefits indicated by such asset is required. A
     valuation  allowance  is provided for the portion of the deferred tax asset
     when  it  is  more likely than not that some portion or all of the deferred
     tax  asset  will  not  be  realized.  In assessing the realizability of the
     deferred  tax  assets,  management  considers  the  scheduled  reversals of
     deferred tax liabilities, projected future taxable income, and tax planning
     strategies.

     Net  Earnings  Per  Share
     -------------------------
     Basic earnings per share are based on the weighted average number of common
     shares  outstanding during the period while the effects of potential shares
     outstanding  during  the period are included in diluted earnings per share.

     For  2001,  the potential outstanding options and warrants had no effect on
     earnings  per  share.  The  reconciliation  of  the  amounts  used  in  the
     computation  of  both  "basic earnings per share" and "diluted earnings per
     share"  for  2002  is  presented  as  follows:

<TABLE>
<CAPTION>
                               Net     Common    Per Share
                            Earnings   Shares     Amount
                            ---------  -------  -----------
<S>                         <C>        <C>      <C>
Basic earnings per share    $ 430,421  738,658  $      .58

Effect of stock options             -   41,231        (.03)
                            ---------  -------  -----------

Diluted earnings per share  $ 430,421  779,889  $      .55
                            =========  =======  ===========
</TABLE>

     Stock-Based  Compensation
     -------------------------
     The  Company  sponsors  stock-based compensation plans, which are described
     more  fully  in  Note  9.  The  Company  accounts for these plans under the
     recognition  and  measurement principles of APB Opinion No. 25, "Accounting
     for Stock Issued to Employees", and related Interpretations. No stock-based
     employee  compensation  cost  is  reflected  in  net income, as all options
     granted  under  those plans had an exercise price equal to the market value
     of  the  underlying  common stock on the date of grant. The following table
     illustrates  the  effect  on  net  earnings  and  earnings per share if the
     Company  had  applied the fair value recognition provisions of Statement of
     Financial  Accounting  Standards  ("SFAS")  No.  123,  "Accounting  for
     Stock-Based  Compensation",  to  stock-based  employee compensation for the
     years  ended  December  31,  2002  and  2001.

<TABLE>
<CAPTION>
                                                           2002       2001
                                                       ------------  -------
<S>                                                    <C>           <C>
     Net earnings as reported                          $    430,421  702,626

     Deduct: Total stock-based employee compensation
       expense determined under fair-value based
       method for all awards, net of tax                    198,528   77,535
                                                       ------------  -------

     Pro forma net earnings                            $    231,893  625,091
                                                       ============  =======
     Basic earnings per share:

       As reported                                     $        .58      .95
                                                       ============  =======

       Pro forma                                       $        .31      .85
                                                       ============  =======
     Diluted earnings per share:

       As reported                                     $        .55      .95
                                                       ============  =======

       Pro forma                                       $        .30      .85
                                                       ============  =======
</TABLE>


                                       21
<PAGE>
                            CHEROKEE BANKING COMPANY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
     Reclassifications
     -----------------
     Certain  reclassifications  have been made to the 2001 financial statements
     to  conform  with  classifications  used  for  2002.

(2)  INVESTMENT  SECURITIES
     At  December  31,  2002  and 2001, investment securities available-for-sale
     consisted  of  the  following:

<TABLE>
<CAPTION>

                                                 DECEMBER 31, 2002
                                   -----------------------------------------------
                                                  Gross       Gross     Estimated
                                    Amortized   Unrealized  Unrealized     Fair
                                      Cost        Gains       Losses      Value
                                   -----------  ----------  ----------  ----------
<S>                                <C>          <C>         <C>         <C>
U.S. Treasury and U.S. Government
      agency obligations           $ 1,049,287       6,338           -   1,055,625
Mortgage-backed securities          33,524,441     374,653      81,502  33,817,592
                                   -----------  ----------  ----------  ----------

                                   $34,573,728     380,991      81,502  34,873,217
                                   ===========  ==========  ==========  ==========
</TABLE>

<TABLE>
<CAPTION>
                                                 DECEMBER 31, 2001
                                   -----------------------------------------------
                                                  Gross       Gross     Estimated
                                    Amortized   Unrealized  Unrealized     Fair
                                      Cost        Gains       Losses      Value
                                   -----------  ----------  ----------  ----------
<S>                                <C>          <C>         <C>         <C>
U.S. Treasury and U.S. government
    agency obligations             $ 8,468,790      26,624      30,065   8,465,349
Mortgage-backed securities          20,468,503     106,043     276,497  20,298,049
                                   -----------  ----------  ----------  ----------

                                   $28,937,293     132,667     306,562  28,763,398
                                   ===========  ==========  ==========  ==========
</TABLE>

     The  amortized  cost  and  estimated  fair  value  of investment securities
     available-for-sale at December 31, 2002, by contractual maturity, are shown
     below.  Expected maturities will differ from contractual maturities because
     borrowers have the right to call or prepay obligations with or without call
     or  prepayment  penalties.

<TABLE>
<CAPTION>
                             Amortized   Estimated
                               Cost      Fair Value
                            -----------  ----------
<S>                         <C>          <C>
U.S. Treasuries and U.S.
   government agencies:
   1 to 5 years             $         -           -
   5 to 10 years              1,049,287   1,055,625
Mortgage backed securities   33,524,441  33,817,592
                            -----------  ----------

                            $34,573,728  34,873,217
                            ===========  ==========
</TABLE>

     For  the  years  ended  December  31, 2002 and 2001, proceeds from sales of
     investment  securities available-for-sale totaled approximately $14,340,000
     and  $8,085,000,  respectively.  The  Company  recognized  gross  gains  of
     $159,632 and $99,346 on those sales during 2002 and 2001, respectively. The
     Company recognized gross losses of $313 and $27,032 on the call and paydown
     of  securities  during  2002  and  2001,  respectively.


                                       22
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2)  INVESTMENT  SECURITIES,  CONTINUED
     At  December  31,  2002  and  2001  securities  with  a  carrying  value of
     approximately  $22,166,000  and  $6,816,000 were pledged to secure advances
     from  the  Federal  Home  Loan Bank ("FHLB"), public deposits and for other
     purposes  as  required  by  law.

(3)  LOANS
     Major  classifications of loans at December 31, 2002 and 2001 are presented
     below:

<TABLE>
<CAPTION>
                                           2002         2001
                                        -----------  ----------
<S>                                     <C>          <C>
Commercial, financial and agricultural  $23,862,595  16,294,606
Real estate - mortgage                    7,453,721   6,435,719
Real estate - construction                9,272,306   4,214,108
Consumer                                  3,534,217   4,082,555
                                        -----------  ----------

                                         44,122,839  31,026,988

Less: Allowance for loan losses             640,158     428,173
                                        -----------  ----------

                                        $43,482,681  30,598,815
                                        ===========  ==========
</TABLE>

     The Bank grants loans and extensions of credit to individuals and a variety
     of  businesses  and  corporations  located  in  its  general  trade area of
     Cherokee  County,  Georgia  and adjoining counties. Although the Bank has a
     diversified  loan portfolio, a substantial portion of the loan portfolio is
     collateralized by improved and unimproved real estate and is dependent upon
     the  real  estate  market.

     Activity  in the allowance for loan losses is summarized as follows for the
     years  ended  December  31,  2002  and  2001:

<TABLE>
<CAPTION>
                                    2002       2001
                                  ---------  --------
<S>                               <C>        <C>
Balance at beginning of year      $428,173   246,951
Provisions charged to operations   206,496   216,634
Loan charge-offs                   (90,381)  (37,395)
Loan recoveries                     95,870     1,983
                                  ---------  --------

Balance at end of year            $640,158   428,173
                                  =========  ========
</TABLE>



 (4) PREMISES  AND  EQUIPMENT
     Major classifications of premises and equipment as of December 31, 2002 and
     2001  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                   2002       2001
                                ----------  ---------
<S>                             <C>         <C>
Land and land improvements      $1,086,143  1,086,143
Buildings and improvements       2,264,436  1,585,447
Furniture and equipment            885,151    622,648
                                ----------  ---------

                                 4,235,730  3,294,238
Less: Accumulated depreciation     494,704    312,769
                                ----------  ---------

                                $3,741,026  2,981,469
                                ==========  =========
</TABLE>

     Depreciation  expense amounted to $181,935 and $151,543 for the years ended
     December  31,  2002  and  2001,  respectively.


                                       23
<PAGE>
                            CHEROKEE BANKING COMPANY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(5)  DEPOSITS
     At  December  31,  2002,  contractual  maturities  of  time  deposits  are
     summarized  as  follows:

       2003                                   $13,821,105
       2004                                     6,456,522
       2005                                     1,490,793
       2006                                     2,121,501
       2007                                     2,238,990
                                              -----------

                                              $26,128,911
                                              ===========


(6)  FEDERAL  HOME  LOAN  BANK  ADVANCES
     Advances  from FHLB are collateralized by FHLB stock and certain investment
     securities.  Advances from FHLB outstanding at December 31, 2002 mature and
     bear  fixed  interest  rates  as  follows:

<TABLE>
<CAPTION>
Maturing In    Amount    Interest Rate   Early Conversion Option Date
-----------  ----------  --------------  ----------------------------
<C>          <C>         <C>             <S>

       2007  $3,000,000           2.88%  September 4, 2005
       2012   5,500,000           3.38%  January 31, 2004
             ----------

             $8,500,000
             ==========
</TABLE>

     These  advances  from FHLB contain provisions that give the FHLB the option
     on  the  dates  noted above to convert the fixed interest rates noted above
     into  floating  interest  rates  based  on  the  three  month  LIBOR  rate.

(7)  INCOME  TAXES
     The components of income tax expense (benefit) for the years ended December
     31,  2002  and  2001  are  as  follows:

<TABLE>
<CAPTION>
                                          2002       2001
                                        ---------  ---------
<S>                                     <C>        <C>
Current expense                         $229,937    211,192
Deferred expense                          45,395    185,808
Benefit of operating loss carryforward   (31,256)  (207,757)
Change in valuation allowance                  -   (413,862)
                                        ---------  ---------
                                        $244,076   (224,619)
                                        =========  =========
</TABLE>

     The  differences  between  income  tax  expense  (benefit)  and  the amount
     computed  by  applying  the  statutory  federal income tax rate to earnings
     before taxes for the years ended December 31, 2002 and 2001 are as follows:

<TABLE>
<CAPTION>
                                                         2002       2001
                                                      ---------  ---------
<S>                                                   <C>        <C>
Pretax income at statutory rate                       $229,329    162,522
Add (deduct):
  State income taxes, net of federal effect             26,980          -
  Increase in cash surrender value of life insurance   (10,132)         -
  Change in valuation allowance                              -   (413,862)
  Other                                                 (2,101)    26,721
                                                      ---------  ---------

                                                      $244,076   (224,619)
                                                      =========  =========
</TABLE>


                                       24
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(7)  INCOME  TAXES,  CONTINUED
     The  following  summarizes the components of deferred taxes at December 31,
     2002  and  2001.

<TABLE>
<CAPTION>
                                                       2002     2001
                                                     --------  -------
<S>                                                  <C>       <C>
Deferred income tax assets:
  Allowance for loan losses                          $222,949  144,563
  Pre-opening expenses                                 30,957   50,510
  Operating loss and state tax credit carryforwards    13,191   54,363
  Unrealized loss on available-for-sale securities          -   66,080
  Other                                                 7,440    3,436
                                                     --------  -------

        Gross deferred tax assets                     274,537  318,952
                                                     --------  -------

Deferred income tax liabilities:
  Premises and equipment                               60,621   24,817
  Unrealized gain of available-for-sale securities    113,805        -
                                                     --------  -------

        Gross deferred tax liabilities                174,426   24,817
                                                     --------  -------

        Net deferred tax asset                       $100,111  294,135
                                                     ========  =======
</TABLE>

(8)  COMMITMENTS
     The Bank is a party to financial instruments with off-balance-sheet risk in
     the normal course of business to meet the financing needs of its customers.
     These  financial  instruments  include  commitments  to  extend  credit and
     standby  letters  of credit. Those instruments involve, to varying degrees,
     elements  of  credit  risk  in  excess  of  the  amount  recognized  in the
     consolidated  balance  sheet.  The contractual amounts of those instruments
     reflect  the  extent  of  involvement the Bank has in particular classes of
     financial  instruments.

     The  Bank's  exposure to credit loss in the event of non-performance by the
     other  party  to  the financial instrument for commitments to extend credit
     and  standby  letters of credit is represented by the contractual amount of
     those  instruments.  The  Bank  uses  the  same  credit  policies in making
     commitments  and  conditional  obligations  as it does for on-balance-sheet
     instruments.  In  most  cases,  the  Bank  requires  collateral  to support
     financial  instruments  with  credit  risk.

<TABLE>
<CAPTION>
                                                 2002       2001
                                              ----------  ---------
<S>                                           <C>         <C>
Financial instruments whose contract amounts
  represent credit risk:
    Commitments to extend credit              $7,538,000  5,565,000
    Standby letters of credit                 $  176,000     10,000
</TABLE>

     Commitments  to  extend credit are agreements to lend to a customer as long
     as  there  is  no  violation  of any condition established in the contract.
     Commitments  generally  have  fixed  expiration  dates or other termination
     clauses and may require payment of a fee. Since many of the commitments may
     expire  without  being  drawn  upon,  the  total  commitment amounts do not
     necessarily  represent  future  cash  requirements. The Bank evaluates each
     customer's  creditworthiness  on  a  case-by-case  basis.  The  amount  of
     collateral  obtained,  if  deemed  necessary by the Bank, upon extension of
     credit  is  based on management's credit evaluation. Collateral held varies
     but  may  include  unimproved  and  improved  real  estate, certificates of
     deposit,  or  personal  property.

     Standby letters of credit are conditional commitments issued by the Bank to
     guarantee  the performance of a customer to a third party. Those guarantees
     are primarily issued to businesses within the Bank's trade area. The credit
     risk  involved in issuing letters of credit is essentially the same as that
     involved  in  extending  loan  facilities to customers. The Bank holds real
     estate  and  assignments of deposit accounts as collateral supporting those
     commitments  for  which  collateral  is  deemed  necessary.  The  extent of
     collateral held for these commitments at December 31, 2002 and 2001 varies.


                                       25
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(8)  COMMITMENTS,  CONTINUED
     The  Bank  also  has  obtained lines of credit available with correspondent
     banks  to  purchase  federal  funds.  At December 31, 2002, unused lines of
     credit  totaled  $5,000,000.

(9)  EMPLOYEE  AND  DIRECTOR  BENEFIT  PLANS
     Defined  Contribution  Plan
     ---------------------------
     The Company sponsors a defined contribution profit sharing and pension plan
     that  is qualified pursuant to section 401(k) of the Internal Revenue Code.
     The  plan  allows  eligible employees to defer a portion of their income by
     making  contributions  into the plan on a pretax basis. The plan provides a
     matching  contribution  based  on a percentage of the amount contributed by
     the  employee.  The plan also provides that the Board of Directors may make
     discretionary  profit-sharing  contributions  to  the plan. During the year
     ended  December  31, 2002, the Company contributed approximately $23,000 to
     this  plan under its matching provisions. The Company made no contributions
     to  this  plan  during  2001.

     Stock  Option  Plan  and  Warrants
     ----------------------------------
     The  Company  sponsors an employee stock option plan for the benefit of key
     officers and employees. A total of 77,842 shares were reserved for possible
     issuance under the plan. The options generally vest over a five year period
     and  expire  after  ten  years.

     In  connection  with the Company's formation and initial offering, warrants
     for  183,500  shares were issued to the organizers. The warrants allow each
     holder  to  purchase  one  additional  share of common stock for each share
     purchased in connection with the initial offering and were issued as of the
     date  of  issuance  of  the common stock sold in the offering. The warrants
     will  be  exercisable  for  a  period  of ten years following issuance, but
     generally  no later than three months after ceasing to serve as a director,
     at  the  initial  offering  price  of  $10  per  share.

     A summary of activity in the directors' warrants and stock option plans for
     the  years  ended  December  31,  2002  and  2001  are  presented  below:

<TABLE>
<CAPTION>

                                      2002                     2001
                           -----------------------  -------------------------
                                       Weighted                  Weighted
                                    Average Price             Averaged Price
                           Shares     Per Share      Shares      Per Share
                           -------  --------------  --------  ---------------
<S>                        <C>      <C>             <C>       <C>
Outstanding, beginning of
year                       224,300  $        10.02  223,400   $         10.02
Granted during the year          -               -    5,000             10.50
Canceled during the year         -               -   (4,100)            10.50
                           -------  --------------  --------  ---------------

Outstanding, end of year   224,300  $        10.02  224,300   $         10.02
                           =======  ==============  ========  ===============

Exercisable at year end    204,850  $        10.01  135,517   $         10.00
                           =======  ==============  ========  ===============
</TABLE>



     The  fair  value of each option is estimated on the date of grant using the
     Minimum  Value  pricing  model  with  the  following  weighted  average
     assumptions:  dividend  yield  of  0%; risk free interest rate of 5.00% for
     2001,  and  an  expected  life  of  10 years. There were no options granted
     during 2002. The weighted-average fair value of options granted in 2001 was
     $3.48.  Warrants  and options have a weighted average remaining contractual
     life  of approximately six years and exercise prices ranging from $10.00 to
     $10.50  as  of  December  31,  2002.

     Life  Insurance  Policies
     -------------------------
     The Company has adopted a defined contribution post retirement benefit plan
     to  provide  retirement  benefits  to  certain  of  the Company's executive
     officers  and to provide death benefits for their designated beneficiaries.
     Under  this  plan,  single-premium,  split-dollar,  whole-life  insurance
     contracts  totaling approximately $1,558,000 have been purchased on certain
     executive  officers.  For  the  years ended December 31, 2002 and 2001, the
     Company  incurred  no  expenses  in  connection  with  this  plan.


                                       26
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(10)  SHAREHOLDERS'  EQUITY
     Shares  of  preferred  stock may be issued from time to time in one or more
     series  as  established  by  resolution  of  the  Board of Directors of the
     Company, up to a maximum of 2,000,000 shares. Each resolution shall include
     the number of shares issued, preferences, special rights and limitations as
     determined  by  the  Board.

(11) RELATED  PARTY  TRANSACTIONS
     The  Bank  conducts transactions with its directors and officers, including
     companies in which they have a beneficial interest, in the normal course of
     business.  It  is the Bank's policy to comply with federal regulations that
     require  that  loan  and  deposit transactions with directors and executive
     officers be made on substantially the same terms as those prevailing at the
     time  made  for  comparable  loans  and  deposits  to  other persons. As of
     December  31,  2002,  there  were  $1,725,968  of  related  party deposits.
     Following  is  a  summary  of  related  party  loans:

<TABLE>
<CAPTION>
<S>                           <C>
Balance at December 31, 2001  $3,096,355
New Loans/Advances               786,958
Less: Repayments                (697,929)
                              -----------

Balance at December 31, 2002  $3,185,384
                              ===========
</TABLE>

(12) MISCELLANEOUS  OPERATING  EXPENSES
     Components  of  other  operating  expenses  which  are  greater  than 1% of
     interest income and other operating income for the years ended December 31,
     2002  and  2001  are  as  follows:

<TABLE>
<CAPTION>
                          2002     2001
                        --------  -------
<S>                     <C>       <C>
Supplies                $ 58,457   44,485
Other outside services    73,739   61,273
Advertising               72,870   45,249
Bookkeeping              141,376  110,951
Data processing           97,154   67,870
</TABLE>

(13) REGULATORY  MATTERS
     The  Company  and  the  Bank  are  subject  to  various  regulatory capital
     requirements  administered by the federal banking agencies. Failure to meet
     minimum  capital  requirements  can initiate certain mandatory and possibly
     additional  discretionary  actions by regulators that, if undertaken, could
     have  a  direct  material effect on the financial statements. Under certain
     adequacy  guidelines  and  the  regulatory  framework for prompt corrective
     action,  specific  capital guidelines that involve quantitative measures of
     the  assets, liabilities, and certain off-balance sheet items as calculated
     under  regulatory accounting practices must be met. The capital amounts and
     classifications are also subject to qualitative judgments by the regulators
     about  components,  risk  weightings,  and  other  factors.

     Quantitative  measures established by regulation to ensure capital adequacy
     require  the  Company  and  the Bank to maintain minimum amounts and ratios
     (set  forth  in the table below) of Total and Tier 1 Capital (as defined in
     the  regulations)  to  risk-weighted  assets  (as  defined),  and of Tier 1
     Capital  (as  defined) to average assets (as defined). Management believes,
     as  of  December  31,  2002, that the Company and the Bank meet all capital
     adequacy  requirements  to  which  they  are  subject.

     As  of  December  31,  2002,  the most recent notification from the Federal
     Deposit  Insurance  Corporation  categorized  the  Bank as well capitalized
     under  the  regulatory  framework  for  prompt  corrective  action.  To  be
     categorized  as  well  capitalized,  the  Bank  must maintain minimum total
     risk-based,  Tier  1  risk-based and Tier 1 leverage ratios as set forth in
     the  table below. There are no conditions or events since that notification
     that  management  believes  have  changed  the  Bank's  category.


                                       27
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13) REGULATORY  MATTERS,  CONTINUED
     The  Company's  and Bank's actual capital amounts (in thousands) and ratios
     are  presented  in  the  table  below.

<TABLE>
<CAPTION>
                                                                                To Be Well
                                                                                Capitalized
                                                                                   Under
                                                                                   Prompt
                                                                 For Capital     Corrective
                                                                  Adequacy         Action
                                                              ---------------  ---------------
                                                 Actual           Purposes       Provisions
                                             ---------------  ---------------  ---------------
                                             Amount   Ratio   Amount   Ratio   Amount   Ratio
                                             -------  ------  -------  ------  -------  ------
<S>                                          <C>      <C>     <C>      <C>     <C>      <C>
AS OF DECEMBER 31, 2002:
  Total Capital (to Risk Weighted Assets):
    Consolidated                             $ 8,068   13.8%  $ 4,674    8.0%      N/A    N/A
    Bank                                     $ 7,480   12.9%  $ 4,654    8.0%  $ 5,818   10.0%
  Tier 1 Capital (to Risk Weighted Assets):
    Consolidated                             $ 7,450   12.7%  $ 2,337    4.0%      N/A    N/A
    Bank                                     $ 6,840   11.8%  $ 2,327    4.0%  $ 3,491    6.0%
  Tier 1 Capital (to Average Assets):
    Consolidated                             $ 7,450    7.5%  $ 3,265    4.0%      N/A    N/A
    Bank                                     $ 6,840    8.0%  $ 3,230    4.0%  $ 4,037    5.0%

AS OF DECEMBER 31, 2001:
  Total Capital (to Risk Weighted Assets):
    Consolidated                             $ 7,448   18.3%  $ 3,250    8.0%      N/A    N/A
    Bank                                     $ 6,135   15.2%  $ 3,229    8.0%  $ 4,036   10.0%
  Tier 1 Capital (to Risk Weighted Assets):
    Consolidated                             $ 7,020   17.3%  $ 1,625    4.0%      N/A    N/A
    Bank                                     $ 5,707   14.1%  $ 1,615    4.0%  $ 2,422    6.0%
  Tier 1 Capital (to Average Assets):
    Consolidated                             $ 7,020   12.3%  $ 2,281    4.0%      N/A    N/A
    Bank                                     $ 5,707   10.2%  $ 2,229    4.0%  $ 2,787    5.0%
</TABLE>

     Dividends paid by the Bank are the primary source of funds available to the
     Company. Banking regulations limit the amount of dividends that may be paid
     without prior approval of the regulatory authorities. At December 31, 2002,
     the  Bank  could  pay  dividends  of  approximately  $140,000 without prior
     approval.

(14) CHEROKEE  BANKING  COMPANY  (PARENT COMPANY ONLY) FINANCIAL INFORMATION

<TABLE>
<CAPTION>

                                 BALANCE SHEETS

                           DECEMBER 31, 2002 AND 2001



                                              2002       2001
                                           ----------  ---------
<S>                                        <C>         <C>
                Assets
                ------
Cash and interest bearing deposits         $  547,007  1,282,362
Investment in Bank                          7,026,013  5,598,878
Other assets                                   62,775     34,071
                                           ----------  ---------

                                           $7,635,795  6,915,311
                                           ==========  =========

  Liabilities and Shareholders' Equity
  ------------------------------------

Other liabilities                          $        -      3,435
Shareholders' equity                        7,635,795  6,911,876
                                           ----------  ---------

                                           $7,635,795  6,915,311
                                           ==========  =========
</TABLE>



                                       28
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

 (14) CHEROKEE  BANKING  COMPANY (PARENT COMPANY ONLY) FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                  STATEMENTS OF EARNINGS

                      FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                                         2002       2001
                                                                       ---------  --------
<S>                                                                    <C>        <C>
Interest income                                                        $ 48,801    45,031
Other operating expense                                                  73,414    67,960
                                                                       ---------  --------
Loss before equity in undistributed earnings of Bank and income taxes   (24,613)  (22,929)
Income tax benefit                                                       21,398    30,635
Equity in undistributed earnings of Bank                                433,636   694,920
                                                                       ---------  --------
Net earnings                                                           $430,421   702,626
                                                                       =========  ========
</TABLE>


<TABLE>
<CAPTION>
                                       STATEMENTS OF CASH FLOWS

                            FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                                                 2002         2001
                                                                             ------------  ----------
<S>                                                                          <C>           <C>
Cash flows from operating activities:
  Net earnings                                                               $   430,421     702,626
  Adjustments to reconcile net earnings to net cash
    used by operating activities:
      Equity in undistributed earnings of Bank                                  (433,636)   (694,920)
      Change in other                                                            (32,140)    (30,642)
                                                                             ------------  ----------

        Net cash used by operating activities                                    (35,355)    (22,936)
                                                                             ------------  ----------
Cash flows from investing activities consisting of investment in subsidiary     (700,000)          -
                                                                             ------------  ----------
Net change in cash                                                              (735,355)    (22,936)
                                                                             ------------  ----------
Cash at beginning of period                                                    1,282,362   1,305,298
                                                                             ------------  ----------
Cash at end of period                                                        $   547,007   1,282,362
                                                                             ============  ==========
</TABLE>



(15) FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
     The  Company is required to disclose fair value information about financial
     instruments,  whether  or  not recognized on the face of the balance sheet,
     for which it is practicable to estimate that value. The assumptions used in
     the estimation of the fair value of the Company's financial instruments are
     detailed  below.  Where  quoted  prices  are not available, fair values are
     based  on  estimates  using  discounted  cash  flows  and  other  valuation
     techniques.  The use of discounted cash flows can be significantly affected
     by  the  assumptions  used,  including  the  discount rate and estimates of
     future  cash  flows.  The  following disclosures should not be considered a
     surrogate  of  the  liquidation value of the Company or its subsidiary, but
     rather  a  good-faith  estimate  of  the  increase  or decrease in value of
     financial  instruments  held  by the Company since purchase, origination or
     issuance.

          Cash  and  Cash  Equivalents
          ----------------------------
          For  cash,  due from banks and federal funds sold, the carrying amount
          is  a  reasonable  estimate  of  fair  value.

          Interest-Bearing  Deposits
          --------------------------
          For  interest-bearing  deposits,  the  carrying  value is a reasonable
          estimate  of  fair  value.

          Investment  Securities  Available-for-Sale
          ------------------------------------------
          Fair  values for investment securities available-for-sale are based on
          quoted  market  prices.


                                       29
<PAGE>
                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

 (15)     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS,  CONTINUED
          Other  Investments
          ------------------
          For  other investments, the carrying value is a reasonable estimate of
          fair  value.

          Loans
          -----
          The  fair  value  of  fixed rate loans is estimated by discounting the
          future cash flows using the current rates at which similar loans would
          be  made  to  borrowers with similar credit ratings. For variable rate
          loans,  the  carrying  amount  is a reasonable estimate of fair value.

          Deposits
          --------
          The  fair value of demand deposits, NOW and money market accounts, and
          savings  accounts  is  the  amount  payable on demand at the reporting
          date.  The  fair  value  of  fixed maturity certificates of deposit is
          estimated  by  discounting  the  future  cash  flows  using  the rates
          currently  offered  for  deposits  of  similar  remaining  maturities.

          Advances  from  the  Federal  Home  Loan  Bank
          ----------------------------------------------
          The fair value of the Federal Home Loan Bank fixed rate borrowings are
          estimated  using  discounted  cash  flows,  based  on  the  current
          incremental  borrowing  rates  for  similar  types  of  borrowing
          arrangements.

          Federal  Funds  Purchased
          -------------------------
          For  Federal  Funds  purchased,  the  carrying  amount is a reasonable
          estimate  of  fair  value.

          Commitments  to  Extend  Credit  and  Standby  Letters  of  Credit
          ------------------------------------------------------------------
          Because commitments to extend credit and standby letters of credit are
          generally  short-term  and  at  variable rates, the contract value and
          estimated fair value associated with these instruments are immaterial.

          Limitations
          -----------
          Fair  value  estimates  are made at a specific point in time, based on
          relevant  market  information  and  information  about  the  financial
          instrument.  These  estimates  do  not reflect any premium or discount
          that  could  result  from  offering for sale at one time the Company's
          entire  holdings  of  a  particular  financial  instrument. Because no
          market  exists  for  a  significant portion of the Company's financial
          instruments,  fair  value estimates are based on many judgments. These
          estimates  are  subjective  in  nature  and  involve uncertainties and
          matters  of  significant  judgment  and therefore cannot be determined
          with  precision. Changes in assumptions could significantly affect the
          estimates.

          Fair  value  estimates  are based on existing on and off-balance sheet
          financial  instruments  without  attempting  to  estimate the value of
          anticipated  future  business  and the value of assets and liabilities
          that  are not considered financial instruments. Significant assets and
          liabilities  that  are  not  considered  financial instruments include
          deferred income taxes and premises and equipment. In addition, the tax
          ramifications  related  to the realization of the unrealized gains and
          losses  can have a significant effect on fair value estimates and have
          not  been  considered  in  the  estimates.


                                       30
<PAGE>

                            CHEROKEE BANKING COMPANY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(15) FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS,  CONTINUED
     Limitations,  continued
     -----------------------
     The  carrying  amount  and estimated fair values of the Company's financial
     instruments  at  December  31,  2002  and  2001  are as follows (amounts in
     thousands):

<TABLE>
<CAPTION>
                                                      2002                   2001
                                              ---------------------  --------------------
                                              Carrying   Estimated   Carrying  Estimated
                                               Amount    Fair Value   Amount   Fair Value
                                              ---------  ----------  --------  ----------
<S>                                           <C>        <C>         <C>       <C>
Assets:
  Cash and cash equivalents                   $  11,584      11,584     1,612       1,612
  Interest-bearing deposits with other banks        298         298       997         997
  Investment securities available-for-sale       34,873      34,873    28,763      28,763
  Other investments                                 675         675       305         305
  Loans, net                                     43,483      43,730    30,599      30,811
  Cash surrender value of life insurance          1,558       1,558       379         379

Liabilities:
  Deposits                                    $  80,257      81,475    58,763      59,231
  Federal funds purchased                             -           -       222         222
  Advances from Federal Home Loan Bank            8,500       9,382         -           -
</TABLE>


                                       31
<PAGE>
               MARKET FOR CHEROKEE BANKING COMPANY'S COMMON STOCK;

                              PAYMENT OF DIVIDENDS

The Company's common stock, no par value, is reported on the NASDAQ OTC Bulletin
Board  under  the symbol "CHKJ." The following table is the high and low closing
stock  price information for the Company's common stock during 2002 and 2001, as
reported  by  NASDAQ:

<TABLE>
<CAPTION>
                        2002            2001
                   --------------  -------------
APPLICABLE PERIOD   HIGH    LOW     HIGH    LOW
-----------------  ------  ------  ------  -----
<S>                <C>     <C>     <C>     <C>

First Quarter      $13.00  $10.00  $11.50  $9.75
Second Quarter     $13.00  $13.00  $12.00  $6.00
Third Quarter      $13.15  $11.00  $12.00  $9.00
Fourth Quarter     $15.25  $13.10  $12.00  $9.75
</TABLE>

The  quotations  above  reflect  interdealer  prices,  without  retail mark-ups,
mark-downs  or  commission  and  may  not  represent  actual  transactions.

     The  development of an active secondary market requires the existence of an
adequate number of willing buyers and sellers. As of January 1, 2003, the NASDAQ
OTC  Bulletin  Board  indicated  that  reported trading volume for the Company's
common  stock  was  22,100 shares during 2002. Although this reported volume may
not  reflect  total  volume  during  the  indicated  period  due to the possible
existence  of  unreported  private  sales  and  purchases  among  investors, the
reported  volume  would  indicate a lack of activity in the secondary market for
the Company's common stock. The lack of activity in the secondary market for the
Company's common stock may materially impact a shareholder's ability to promptly
sell  Company  common  stock  at  a price acceptable to the selling shareholder.
According  to  the  Company's  transfer  agent,  there  are  approximately  550
shareholders  of  record.

     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. For example, all FDIC insured institutions,
regardless  of  their  level  of  capitalization, are prohibited from paying any
dividend  or  making  any other kind of distribution if following the payment or
distribution  the  institution  would  be  undercapitalized.  Moreover,  federal
agencies  having  regulatory  authority over the Company or the Bank have issued
policy  statements  that  provide  that bank holding companies and insured banks
should  generally  only  pay  dividends  out  of  current  operating  earnings.

     It  is the current policy of the Bank to retain earnings to permit possible
future  expansion. As a result, the Company has no current plans to initiate the
payment  of  cash  dividends,  and its future dividend policy will depend on the
Bank's  earnings,  capital  requirements,  financial condition and other factors
considered  relevant  by  the  board  of  directors of the Company and the Bank.

                                       32
<PAGE>

                      CORPORATE AND SHAREHOLDER INFORMATION


EXECUTIVE  OFFICERS  OF  CHEROKEE  BANKING  COMPANY

DENNIS  W.  BURNETTE,  President and Chief Executive Officer of Cherokee Banking
Company  and  Cherokee  Bank

A.  R. ("RICK") ROBERTS, III, Secretary of Cherokee Banking Company; Senior Vice
President, Chief Financial Officer and Chief Operations Officer of Cherokee Bank

JOHN S. MOREAU, Senior Vice President and Chief Lending Officer of Cherokee Bank

DIRECTORS  OF  CHEROKEE  BANKING  COMPANY

DENNIS  W.  BURNETTE,  President  and  Chief Executive Officer, Cherokee Banking
Company  and  Cherokee  Bank

DR.  WILLIAM  L.  EARLY, MD, Physician; Founder, President and Managing Partner,
Etowah  Regional  Medical  Services,  Inc.

DR.  ALBERT  L.  EVANS,  JR.,  Science  Division Chairperson, Chemistry Teacher,
Etowah  High  School

J.  CALVIN  HILL,  JR.,  President,  Gila Distributing-GA, Inc.; President, Gila
Properties,  Inc.;  State  House  Representative  (District  16)

ROGER M. JOHNSON, Attorney; Partner, Bray & Johnson (Attorneys at Law); partner,
Johnson-Kent,  LLC;  President  and  Owner,  North  Street  Properties,  Inc.

J.  DAVID  KELLER,  Partner,  Denney-Keller  Investments,  LLC

WANDA  P.  ROACH,  Real  Estate  Agent,  Century  21-Max  Stancil  Realty

A.  R.  (RICK)  ROBERTS,  III,  Secretary, Cherokee Banking Company; Senior Vice
President,
Chief Financial Officer and Chief Operations Officer, Cherokee Bank; Mayor, Ball
Ground,  Georgia

DONALD  F. STEVENS, Chairman of the Board of Directors, Cherokee Banking Company
and  Cherokee  Bank

EDWIN  I.  SWORDS,  III,  Dentist,  Swords  and  Phelps




Shareholders  may  obtain,  without charge, a copy of Cherokee Banking Company's
Annual  Report  filed with the Securities and Exchange Commission on Form 10-KSB
for the period ended December 31, 2002.  Written requests should be addressed to
Dennis  W.  Burnette,  1275  Riverstone  Parkway,  Canton,  Georgia  30114.


                                       33
<PAGE>
                             SHAREHOLDER INFORMATION

STOCK  TRANSFER  AGENT
SunTrust,  Atlanta
P  O  Box  4625
Atlanta,  GA  30302


REGULATORY  AND  SECURITIES  COUNSEL
Powell,  Goldstein,  Frazer  &  Murphy
Sixteenth  Floor
191  Peachtree  Street,  NE
Atlanta,  GA  30303


INDEPENDENT  AUDITORS
Porter  Keadle  Moore,  LLP
235  Peachtree  Street  NE
Suite  1800
Atlanta,  GA  30303


ANNUAL  SHAREHOLDERS  MEETING
April  28,  2003,  5:00  p.m.

Cherokee  Bank
1275  Riverstone  Pkwy.
Canton,  GA  30114



                              WWW.CHEROKEEBANK.COM


                                       34
<PAGE>