U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly Period Ended June 30, 2004

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ________ to ___________

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

|Georgia                  | 55-0855542                          
|------------------------ | ------------------------------------
|(State of Incorporation) | (I.R.S. Employer Identification No.)



|210-214 West Morris StreetDalton, Georgia | 30720     
|----------------------------------------- | ----------
|(Address of principal executive offices)  | (Zip Code)



706-279-1600

(Issuer's Telephone Number)

N/A

(Former name, former address
and former fiscal year, if changed since last report)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___

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

Common stock, $0.10 par value per share: 968,739 shares

issued and outstanding as of July 30, 2004.

Transitional Small Business Disclosure Format (check one): Yes ___ NoX

1

<PAGE>



ALLIANCE BANCSHARES INC.

AND SUBSIDIARY

INDEX



|         |                                                                                                                       | Page No.
|-------- | --------------------------------------------------------------------------------------------------------------------- | --------
|         |                                                                                                                       |         
|PART I   | FINANCIAL INFORMATION                                                                                                 |         
|Item 1.  | Financial Statements                                                                                                  | 3       
|         | Consolidated Balance Sheet at June 30, 2004 (unaudited)                                                               | 3       
|         | Consolidated Statements of Income (unaudited) for the Three and Six Months Ended June 30, 2004 and 2003               | 4       
|         | Consolidated Statements of Comprehensive Income (unaudited) for the Three and Six Months Ended June 30, 2004 and 2003 | 5       
|         | Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2004 and 2003                     | 6       
|         | Notes to Consolidated Financial Statements (unaudited)                                                                | 7       
|Item 2.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                 | 9       
|Item 3.  | Controls and Procedures                                                                                               | 12      
|         |                                                                                                                       |         
|PART II. | OTHER INFORMATION                                                                                                     |         
|Item 4.  | Submission of Matters to a Vote of Security Holders                                                                   | 13      
|Item 6.  | Exhibits and Reports on Form 8-K                                                                                      | 14      
|         |                                                                                                                       |         
|         | Signatures                                                                                                            | 15      



This Form 10-QSB contains forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, changes in interest rate environment, management's business strategy, national, regional and local market conditions and legislative and regulatory conditions.

Readers should not place undue reliance on forward-looking statements, which reflect management's view only as of the date hereof. Alliance Bancshares Inc. undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Readers should also carefully review the risk factors described in other documents Alliance Bancshares Inc. files from time to time with the U.S. Securities and Exchange Commission.

2

<PAGE>

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALLIANCE BANCSHARES INC.

AND SUBSIDIARY

Consolidated Balance Sheet

June 30, 2004

(Unaudited)



|Assets                                                                                                            |                       
|----------------------------------------------------------------------------------------------------------------- | ----------------------
|                                                                                                                  |                       
|                                                                                                                  |                       
|Cash and due from banks                                                                                           | $            2,524,582
|Interest-bearing deposits at other financial institutions                                                         | 554,032               
|Federal funds sold                                                                                                | 1,735,000             
|                                                                                                                  |                       
|Cash and cash equivalents                                                                                         | 4,813,614             
|                                                                                                                  |                       
|Securities available for sale                                                                                     | 20,317,683            
|Securities held to maturity                                                                                       | 4,071,775             
|Restricted equity securities, at cost                                                                             | 487,950               
|                                                                                                                  |                       
|Loans                                                                                                             | 59,009,380            
|Less: Allowance for loan losses                                                                                   | 731,168               
|Loans, net                                                                                                        | 58,278,212            
|                                                                                                                  |                       
|Premises and equipment, net                                                                                       | 4,164,937             
|Other assets                                                                                                      | 678,428               
|                                                                                                                  | $        92,812,599   
|                                                                                                                  |                       
|Liabilities and Shareholder's Equity                                                                             
|                                                                                                                  |                       
|Liabilities:                                                                                                      |                       
|Deposits:                                                                                                         |                       
|Demand                                                                                                            | $          5,939,928  
|Money market and NOW accounts                                                                                     | 35,218,524            
|Savings                                                                                                           | 975,338               
|Time                                                                                                              | 24,362,891            
|Time over $100,000                                                                                                | 11,629,837            
|                                                                                                                  |                       
|Total deposits                                                                                                    | 78,126,518            
|                                                                                                                  |                       
|Federal Home Loan Bank advances                                                                                   | 4,800,000             
|Securities sold under repurchase agreements                                                                       | 115,086               
|Other liabilities                                                                                                 | 353,681               
|                                                                                                                  |                       
|Total liabilities                                                                                                 | 83,395,285            
|                                                                                                                  |                       
|Shareholders' equity:                                                                                             |                       
|Common stock, $.10 par value; authorized
        20,000,000 shares; issued and outstanding
        968,739 shares | 96,874                
|Additional paid in capital                                                                                        | 9,760,771             
|Accumulated deficit                                                                                               | (103,703)             
|Accumulated other comprehensive (loss)                                                                            | (336,628)             
|                                                                                                                  |                       
|Total shareholder's equity                                                                                        | 9,417,314             
|                                                                                                                  | $       92,812,599    
|                                                                                                                  |                       
|See accompanying notes to consolidated financial statements.                                                      |                       



3

<PAGE>

ALLIANCE BANCSHARES INC.

AND SUBSIDIARY

Consolidated Statements of Income

For the Three and Six Months Ended June 30, 2004 and 2003

(Unaudited)

|                                                    | Three Months Ended | Six Months Ended
|--------------------------------------------------- | ------------------ | ----------------
|                                                    | June 30,           | June 30,        
|                                                    | 2004               | 2003            
|                                                    |                    |                 
|Interest income:                                    |                    |                 
|Loans                                               | 945,246            | 946,488         
|Investment securities                               | 210,298            | 119,707         
|Federal funds sold                                  | 24,612             | 18,339          
|                                                    |                    |                 
|Total interest income                               | 1,180,156          | 1,084,534       
|                                                    |                    |                 
|Interest expense:                                   |                    |                 
|Demand deposits                                     | 121,633            | 123,704         
|Savings deposits                                    | 2,720              | 1,025           
|Time deposits                                       | 261,753            | 291,344         
|Other borrowings                                    | 39,008             | 42,177          
|                                                    |                    |                 
|Total interest expense                              | 425,114            | 458,250         
|                                                    |                    |                 
|Net interest income                                 | 755,042            | 626,284         
|                                                    |                    |                 
|Provision for loan losses                           | 20,000             | 86,000          
|                                                    |                    |                 
|Net interest income after provision for loan losses | 735,042            | 540,284         
|                                                    |                    |                 
|Other income:                                       |                    |                 
|Service charges on deposit accounts                 | 74,703             | 39,039          
|Mortgage origination income                         | 62,448             | 118,755         
|Gain on sale of securities available for sale       | -                  | 41,901          
|Other operating income                              | 3,839              | 3,486           
|                                                    |                    |                 
|Total other income                                  | 140,990            | 203,181         
|                                                    |                    |                 
|Other expense:                                      |                    |                 
|Salaries and other personnel expense                | 377,290            | 343,014         
|Net occupancy and equipment expense                 | 83,682             | 71,492          
|Other operating expense                             | 234,639            | 156,574         
|                                                    |                    |                 
|Total other expense                                 | 695,611            | 571,080         
|                                                    |                    |                 
|Net income                                          | $     180,421      | 172,385         
|                                                    |                    |                 
|Basic earnings per common share                     | $             .19  | .20             
|                                                    |                    |                 
|Diluted earnings per common share                   | $             .18  | .19             
|                                                    |                    |                 
|Dividends per common shares                         | $              --- | ---             



See accompanying notes to consolidated financial statements.

4

<PAGE>

ALLIANCE BANCSHARES INC.

AND SUBSIDIARY

Consolidated Statement of Comprehensive Income

For the Three and Six Months Ended June 30, 2004 and 2003

(Unaudited)





|                                                                                                     | Three Months Ended | Six Months Ended
|---------------------------------------------------------------------------------------------------- | ------------------ | ----------------
|                                                                                                     | June 30,           | June 30,        
|                                                                                                     | 2004               | 2003            
|                                                                                                     |                    |                 
|Net income                                                                                           | $ 180,421          | 172,385         
|                                                                                                     |                    |                 
|Other comprehensive income (loss):                                                                   |                    |                 
|                                                                                                     |                    |                 
|Reclassification adjustment for gains on sales of securities available for sale, net of income taxes | ---                | ---             
|                                                                                                     |                    |                 
|Unrealized holding gain (loss) on investment securities available for sale, net of income taxes      | (409,420)          | 54,393          
|                                                                                                     |                    |                 
|Other comprehensive income (loss)                                                                    | (409,420)          | 54,393          
|                                                                                                     |                    |                 
|Comprehensive income (loss)                                                                          | $ (228,999)        | 226,778         



See accompanying notes to consolidated financial statements.

5

<PAGE>

ALLIANCE BANCSHARES INC.

AND SUBSIDIARY

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2004 and 2003

(Unaudited)



|                                                                                  | 2004        | 2003        
|--------------------------------------------------------------------------------- | ----------- | ------------
|                                                                                  |             |             
|Cash flows from operating activities:                                             |             |             
|Net income                                                                        | $397,797    | 297,273     
|Adjustments to reconcile net income to net cash provided by operating activities: |             |             
|Provisions for loan losses                                                        | 102,000     | 143,000     
|Depreciation, amortization and accretion                                          | 130,852     | 181,758     
|Gain on sale of securities available for sale                                     | (15,000)    | ---         
|Change in assets and liabilities:                                                 |             |             
|Other assets                                                                      | (30,575)    | (95,709)    
|Other liabilities                                                                 | (76,334)    | 87,368      
|Net cash provided by operating activities                                         | 508,740     | 613,690     
|                                                                                  |             |             
|Cash flows from investing activities:                                             |             |             
|Proceeds from maturities and paydowns of securities available for sale            | 2,645,546   | 11,954,674  
|Proceeds from sale of securities available for sale                               | 515,000     | ---         
|Purchases of securities available for sale                                        | (3,247,000) | (13,457,077)
|Redemption of restricted equity securities                                        | 193,200     | ---         
|Purchase of restricted equity securities                                          | (100,350)   | (9,600)     
|Net increase in loans                                                             | (4,888,399) | (5,996,604) 
|Purchases of premises and equipment                                               | (232,667)   | (1,530)     
|Net cash used in investing activities                                             | (5,114,670) | (7,455,137) 
|                                                                                  |             |             
|Cash flows from financing activities:                                             |             |             
|Net increase in deposits                                                          | 6,129,619   | 10,104,091  
|Net increase (decrease) in securities sold under repurchase agreements            | (76,920)    | 48,688      
|Proceeds from Federal Home Loan Bank advances                                     | 2,000,000   | 1,000,000   
|Repayment of Federal Home Loan Bank advances                                      | (4,000,000) | (1,000,000) 
|Proceeds from note payable                                                        | 400,000     | ---         
|Repayment of note payable                                                         | (400,000)   | ---         
|Proceeds from sale of common stock                                                | 999,996     | ---         
|                                                                                  |             |             
|Net cash provided by financing activities                                         | 5,052,695   | 10,152,779  
|                                                                                  |             |             
|Net increase in cash and cash equivalents                                         | 446,765     | 3,311,332   
|Cash and cash equivalents at beginning of period                                  | 4,366,849   | 3,047,214   
|Cash and cash equivalents at end of period                                        | $4,813,614  | 6,358,546   
|                                                                                  |             |             
|Supplemental cash flow information:                                               |             |             
|Cash paid for interest                                                            | $   848,634 | 927,236     
|                                                                                  |             |             
|Non cash transactions:                                                            |             |             
|Securities available-for-sale transferred to securities held-to-maturity          | $4,054,399  | ---         
|                                                                                  |             |             



See accompanying notes to consolidated financial statements.

6

<PAGE>

ALLIANCE BANCSHARES INC.

AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Unaudited)

(1)	Basis of Presentation

The accompanying unaudited consolidated financial statements include Alliance Bancshares Inc. and Alliance National Bank (the "Bank") and have been prepared in accordance with generally accepted accounting principles for interim financial information, and with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2004, are not necessarily indicative of the results that may be expected for the year ended December 31, 2004. For further information refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2003.





(2)	Stock Compensation Plans



At June 30, 2004, we had two stock-based compensation plans. We account for these plans under the recognition and measurement principals of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based compensation cost is reflected in earnings, as all options granted under these plans have an exercise price equal to the market value of the underlying stock on the date of grant. The following table illustrates the effect on net income and income per share if we had applied the fair value recognition provisions of SFAS Statement No. 123, Accounting for Stock-Based Compensation, to stock-based compensation.



| | Three Months Ended June 30 | Six Months Ended June 30,
| | -------------------------- | -------------------------

|                                                                | 2004              | 2003              | 2004              | 2003             
|--------------------------------------------------------------- | ----------------- | ----------------- | ----------------- | -----------------
|                                                                |                   |                   |                   |                  
|Net Income as reported                                          | $     180,421     | $     172,385     | $     397,797     | $     297,273    
|Deduct: Total stock-based compensation                          |                   |                   |                   |                  
|Expense determined under fair value based method for all awards | ---               | ---               | ---               | ---              
|Pro forma net income                                            | 180,421           | 172,385           | 397,797           | 297,273          
|Earnings per share:                                             |                   |                   |                   |                  
|Basic - as reported                                             | $             .19 | $             .20 | $             .44 | $             .34
|Diluted - as reported                                           | $             .18 | $             .19 | $             .42 | $             .33
|Basic - pro forma                                               | $             .19 | $             .20 | $             .44 | $             .34
|Diluted - pro forma                                             | $             .18 | $             .19 | $             .42 | $             .33

7

<PAGE>

ALLIANCE BANCSHARES INC.

AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Unaudited)



1. Earnings Per Common Share

Presented below is a summary of the components used to calculate basic and diluted earning per share for the three and six-month periods ended June 30, 2004 and 2003.

|                                            | Three Months Ended June 30, | Six Months Ended June 30,
|------------------------------------------- | --------------------------- | -------------------------
|                                            | 2004                        | 2003                     
|                                            |                             |                          
|Basic Earnings Per Share:                   |                             |                          
|Weighted average common shares outstanding  | 936,688                     | 870,276                  
|                                            |                             |                          
|Net Income                                  | $  180,421                  | $  172,385               
|                                            |                             |                          
|Basic Earnings Per Share                    | $          .19              | $          .20           
|                                            |                             |                          
|Diluted Earning Per Share:                  |                             |                          
|Weighted average common shares outstanding  | 936,688                     | 870,276                  
|Net effect of the assumed exercise of stock |                             |                          
|Options based on the treasury stock method  |                             |                          
|Using average market prices for the period  | 28,387                      | 26,722                   
|Common stock equivalents outstanding        | 965,074                     | 896,998                  
|                                            |                             |                          
|Net income                                  | $   180,421                 | $   172,385              
|                                            |                             |                          
|Diluted earnings per share                  | $           .18             | $           .19          

8

<PAGE>



ALLIANCE BANCSHARES INC.

AND SUBSIDIARY

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

For the Three and Six Months Ended

June 30, 2004 and 2003



Financial Condition

Alliance Bancshares Inc. (the "Company") reported total assets of $92,812,599 as of June 30, 2004, compared to $87,583,413 at December 31, 2003, an increase of 5.97% since December 31, 2003. The most significant change in the composition of assets was an increase in gross loans to $59,009,380 as of June 30, 2004 from $54,183,821 as of December 31, 2003 or an increase of 8.91%. The increase in gross loans was funded from an increase in deposits of $6,129,620 to $78,126,518. Federal Home Loan Advances decreased $2,000,000 to $4,800,000 as of June 30, 2004 from $6,800,000 at December 31, 2003. Cash and cash equivalents increased $446,765 to $4,813,614 as of June 30, 2004 from $4,366,849 at December 31, 2003. During the second quarter ended June 30, 2004 common stock and additional paid in capital increased by a total of $999,996 resulting from the sale of an additional 83,333 shares of Alliance Bancshares Inc. common stock, $.10 par value, at $12.00 per share.

Liquidity

The Company's liquid assets, as a percentage of total deposits was 30.50% at June 30, 2004, compared to 33.20% at December 31, 2003. The Company has approximately $6,700,000 in available unsecured federal fund lines of credit with correspondent banks. At June 30, 2004, the Company had unpledged securities totaling approximately $16,000,000. Management analyzes the level of off-balance sheet commitments such as unfunded loan equivalents, loan repayments, maturity of securities, liquid investments, and available fund lines in an attempt to minimize the possibility that a potential shortfall will exist. Based on this analysis, management believes that the Company has adequate liquidity to meet short-term operating requirements. However, no assurance can be given in this regard.

Capital

The capital of the Bank totaled $8,325,372 as of June 30, 2004. The capital of the Bank exceeded all prescribed regulatory capital guidelines. Regulations require that the most highly rated banks maintain a Tier 1 leverage ratio of 3% plus an additional cushion of at least 1 to 2 percentage points. Tier 1 capital consists of common shareholders' equity, less accumulated other comprehensive income (loss). The Bank's Tier 1 leverage ratio was 9.25% at June 30, 2004, compared to 9.58% at December 31, 2003. Regulations require that the Bank maintain a minimum total risk weighted capital ratio of 8%, with one-half of this amount, or 4%, made up of Tier 1 capital. Risk-weighted assets consist of balance sheet assets adjusted by risk category, and off-balance sheet assets equivalents similarly adjusted. At June 30, 2004, the Bank had a total risk-weighted capital ratio of 13.95%, compared to 14.39% at December 31, 2003, and a Tier I risk-weighted capital ratio of 12.86%, compared to 13.27% at December 31, 2003. We met all criteria at June 30, 2004 to be considered well capitalized.

Off Balance Sheet Arrangements

Our financial statements do not reflect various commitments and contingent liabilities that arise in the normal course of business. These off-balance sheet financial instruments include commitments to extend credit and standby letters of credit. Such financial instruments are included in the financial statements when funds are distributed or the instruments become payable. Our exposure to the credit loss in the event of nonperformance 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. We use the same credit policies in making commitments as we do for on-balance sheet instruments. Although these amounts do not necessarily represent future cash requirements, a summary of our commitments as of June 30, 2004 and December 31, 2003 are as follows:

|                                | June 30, 2004  | December 31, 2003
|------------------------------- | -------------- | -----------------
|                                |                |                  
|Commitments to extend credit    | $    9,055,000 | $   6,025,000    
|Other standby letters of credit | 51,000         | 72,000           
|                                | $    9,106,000 | $   6,097,000    



<PAGE>

Asset Quality

As of June 30, 2004, nonaccrual loans totaled $152,380 compared to $79,073 at December 31, 2003. At June 30, 2004 the total recorded investment in impaired loans, all of which had allowances determined in accordance with SFAS No.114, amounted to $296,962 compared to $358,291 at December 31, 2003. The allowance for loan losses related to impaired loans amounted to $42,320 at June 30, 2004 and $73,878 at December 31, 2003. As of June 30, 2004 there were no loans past due 90 days and still accruing interest.

The allowance for loan losses totaled $731,168 at June 30, 2004, an increase of $39,160 from December 31, 2003. The allowance for loan losses represented 1.24% and 1.28% of total loans at June 30, 2004 and December 31, 2003, respectively. An analysis of the allowance for loan losses for the six months ended June 30, 2004 and 2003 is as follows:

|                                        | 2004       | 2003   
|--------------------------------------- | ---------- | -------
|                                        |            |        
|Allowance for loan losses at January 1, | $  692,008 | 605,549
|                                        |            |        
|Charge-offs:                            |            |        
|                                        |            |        
|Commercial                              | 64,958     | ---    
|Real Estate                             | ---        | ---    
|Installment                             | ---        | 5,794  
|Total                                   | 64,958     | 5,794  
|                                        |            |        
|Recoveries:                             |            |        
|                                        |            |        
|Commercial                              | ---        | ---    
|Real Estate                             | ---        | ---    
|Installment                             | 2,118      | 1,810  
|Total                                   | 2,118      | 1,810  
|                                        |            |        
|Net charge-offs                         | 62,840     | 3,984  
|                                        |            |        
|Provision charged to income             | 102,000    | 143,000
|                                        |            |        
|Allowance for loan losses at June 30,   | $  731,168 | 744,565

Amounts charged to expense related to the allowance for loan losses for the first six months of 2004 decreased by $41,000 compared to the same period for 2003. The decrease is primarily attributable to the slower rate of loan growth for the first six months in 2004.

The loan portfolio is reviewed periodically to evaluate the outstanding loans and to measure the performance of the portfolio and the adequacy of the allowance for loan losses. This analysis includes a review of delinquency trends, actual losses, and internal credit ratings. Management's judgment as to the adequacy of the allowance is based upon a number of assumptions about future events which it believes to be adequate. However, because of the inherent uncertainty of assumptions made during the evaluation process, there can be no assurance that loan losses in future periods will not exceed the allowance for loan losses or that additional allocations to the allowance will not be required.

The Bank was most recently examined by its primary regulatory authority in February 2003. There were no recommendations by the regulatory authority that in management's opinion will have material effects on the Company's liquidity, capital resources or operations. Loans classified for regulatory purposes as loss, doubtful, substandard, or special

10

<PAGE>

mention that have not been included in nonperforming loans do not represent or result from trends or uncertainties which, management reasonably expects will materially impact future operating results, liquidity, or capital.

Investment Securities

At June 30, 2004, the Bank had $20,317,683 in investment securities available-for-sale and $4,071,775 in investment securities held-to-maturity. The net unrealized loss on available for sale securities, net of deferred taxes, was $336,628 on June 30, 2004. During the second quarter ended June 30, 2004 the Bank transferred investment securities with an amortized cost of $4,054,399 from available-for-sale to held-to-maturity. Management made the determination that it intended to hold these securities to maturity based on the following factors. It was unlikely that the securities would be needed for liquidity purposes, and there were no concerns regarding the creditworthiness of the issuers. The securities were transferred at the then current fair value of $4,073,261 and the unrealized holding gain of $18,862 recorded as a separate component of shareholders equity is being amortized to income by the interest method over the remaining life and the related premium is amortized over the same period. The Company has included in its investment portfolio instruments described as derivatives (primarily, structured note derivatives). Structured notes are debt securities whose cash flow characteristics depend on one or more indexes. Structured notes carry high credit ratings and are issued as floating-rate instruments. In a rising interest rate environment, the market value of these securities can decrease due to the fact that the embedded options, puts, calls, etc., become evident. There can be no assurance that as interest rates change in the future the amount of unrealized gains will not decrease, but if these securities are held until they mature and are repaid in accordance with their terms, these principal gains will not be realized.

Results of Operations

Net interest income for the first six months of 2004 was $1,573,367, an increase of $337,973 (27.36%) compared to the same period for 2003. The growth in interest income was primarily due to increases in loans and securities of $4,460,306 and $6,060,216 respectively, offset by a decline in yields since June 30, 2003. Interest expense for the first six months of 2004 decreased $62,029 (6.76%) compared to the same period in 2003. Interest-bearing deposits have increased $6,894,787 (10.56%) since June 30, 2003. The majority of the growth in interest-bearing deposits was in Money Market and NOW accounts. While deposits have increased significantly, the Company has been able to reduce the rates paid and, therefore, has not incurred a corresponding increase in interest expense. The net interest margin for the six months ending June 30, 2004 was 3.70% compared to 3.54% for the year ending December 31, 2003.

Other income for the first six months of 2004 was $270,914, a decrease of $62,982 (18.86%) compared to the same period in 2003. The decrease in other income is due to increased fee income on deposit accounts of $61,017 related to increases in deposits, and an decrease in gain on sale of investment securities of $26,901, offset by a decrease in mortgage origination income of $98,988 resulting from lower volumes of mortgage originations as mortgage interest rates have increased.

Other expense for the first six months of 2004 increased $215,467 (19.08%) compared to the first six months in 2003. The increase was the result of increases in salaries and benefits of $69,680, and other operating expense of $132,114, primarily due to the Company's continued growth.

Net income for the first six months of 2004 was $397,797 compared to $297,273 for the first six months of 2003. Net income has improved due to the improvement in net interest income as the Company continues to grow, and to the current interest rate environment which has allowed the Bank to increase the deposit base without increasing interest expense. Net income has also improved due to the increase in the net interest margin and decreases in the provisions for loan losses.

11

<PAGE>



Item 3.	Controls and Procedures

As of the end of the quarterly period ended June 30, 2004, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2004 our disclosure controls and procedures are effective for gathering, analyzing and disclosing the information that we are required to disclose in the reports we file under the Securities Exchange Act of 1934, within the time periods specified in the SEC's rules and forms. Our Chief Executive Officer and Chief Financial Officer also concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in our periodic SEC filings. We continually review our disclosure controls and procedures, including our internal control and procedures for financial reporting, and may from time to time make changes designed to enhance their effectiveness and to ensure that our systems evolve with our business.

There have been no changes in our internal control over financial reporting during our fiscal quarter ended June 30, 2004 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



<PAGE>

PART II. OTHER INFORMATION

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

On May 26, 2004, the Company held its Annual Meeting of Shareholders for the purpose of (a) electing as Company Directors those persons listed in the Company's April 26, 2004 proxy statement, and (b) amend the articles of incorporation and bylaws of the Company to provide that directors shall be elected by plurality vote of the shareholders rather than by cumulative vote, and (c) ratifying the appointment of Mauldin & Jenkins, LLC as independent auditors.



In accordance with the bylaws of the Company, shareholders may, but are not required to cumulate votes for the election of Directors by multiplying the number of shares owned by the number of nominees (eight). Shareholders may cast all votes for a single nominee or distribute them in any manner among two or more nominees. The eight directors receiving the most votes are elected. On a cumulative basis 5,556,672 votes were cast for the nominees, 0 votes were withheld, and 0 votes abstained, out of a total 7,083,248 votes eligible. The nominees elected at the meeting and the votes cast for each nominee on a cumulative basis are presented in the following table.



|Nominees                | Votes cast for
|----------------------- | --------------
|Charles Y. Allgood      | 702,951       
|Murray Bandy            | 562,031       
|J. Raymond Bates, Jr.   | 561,031       
|J. David Gregg          | 635,201       
|Carl L. Griggs, Jr.     | 569,431       
|G. Lamar Lyle           | 821,931       
|J. Frank Robertson, Jr. | 562,281       
|Jackson P. Turner       | 1,141,815     

The amendment of the Articles of Incorporation and Bylaws of the Company to provide that directors shall be elected by plurality vote of the shareholders rather than cumulative vote received the requisite number of affirmative votes required for approval. Of the 885,406 outstanding shares of the Company, the voting was as follows: 689,584 shares voted for, 4,500 voted against, and 500 abstained.

The appointment of independent auditors also received the requisite number of affirmative votes required for approval pursuant to the Bylaws of the Company. Of the 885,406 outstanding shares of the Company, the voting was as follows: 694,084 shares voted for, 500 voted against, and 0 abstained.

13

<PAGE>

Item 6.	Exhibits and Reports on Form 8-K

(a)	Exhibits



|Exhibit
Number | Exhibit                                                                                                                                      | Page Number in
Sequentially
Numbered Copy
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------
|3.1            | Articles of Incorporation.1/                                                                                                                 | N/A                                      
|3.2            | Bylaws.1/                                                                                                                                    | N/A                                      
|4.1            | Instruments Defining the Rights of Security Holders. See Articles of Incorporation at Exhibit 3.1 hereto and Bylaws at Exhibit 3.2 hereto.1/ | N/A                                      
|10.1*          | Form of Incentive Stock Option Award Payment to Alliance Bancshares, Inc. 1999 Stock Option Plan.2/                                          | N/A                                      
|10.2*          | Employment Agreement between Alliance National Bank and Charles Y. Allgood.2/                                                                | N/A                                      
|10.3*          | Alliance Bancshares, Inc. 1999 Stock Incentive Plan.2/                                                                                       | N/A                                      
|10.4*          | Form of Warrant Agreement between Alliance Bancshares, Inc. and the Organizers.2/                                                            | N/A                                      
|10.5*          | Employment Agreement between Alliance National Bank and J. David Gregg.2/'                                                                   | N/A                                      
|10.6*          | Employment Agreement between Alliance National Bank and Daniel G. Rees.2/                                                                    | N/A                                      
|10.7*          | Form of Alliance Bancshares, Inc. Option Assumption Agreement and Form of Alliance National Bank Incentive Stock Option Award.2/             | N/A                                      
|31.1           | Rule 13a-14(a)/15d-14(a) Certification of CEO                                                                                                | 16                                       
|31.2           | Rule 13a-14(a)/15d-14(a) Certification of CFO                                                                                                | 17                                       
|32             | Section 1350 Certifications                                                                                                                  | 18                                       

1/

2/

*	Indicates a management contract or compensatory plan or arrangement.



14

<PAGE>

(b)	Reports on Form 8-K

No reports on Form 8-K were filed by the Company during the Company's quarter ended June 30, 2004.



SIGNATURES

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

|                      | ALLIANCE BANCSHARES, INC.                                                                  
|--------------------- | -------------------------------------------------------------------------------------------
|                      |                                                                                            
|Date: August 16, 2004 | By: s/Charles Y. Allgood
Charles Y. Allgood
Vice Chairman and Chief Executive Officer      
|                      |                                                                                            
|Date: August 16, 2004 | By:  s/Daniel G. Rees
Daniel G. Rees, CPA
Senior Vice President and Chief Financial Officer

15

<PAGE>