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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 2004


COMMISSION FILE NUMBER   000-33021

GREER BANCSHARES INCORPORATED
(Exact Name of Registrant as Specified in Its Charter)

               South Carolina                                   57-1126200               
(State or Other Jurisdiction of Incorporation)     (I.R.S. Employer Identification Number)

1111 West Poinsett Street
P.O. Box 1029
Greer, SC 29650 		   

(864) 877-2000
(Address of Principal Executive Offices)     (Issuer's Telephone Number)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 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    

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes           No  X  

The number of outstanding shares of the issuer’s $5.00 par value common stock as of October 29, 2004 was 2,429,767.

GREER BANCSHARES INCORPORATED
Index

PART 1        
        
FINANCIAL INFORMATION       
        
Item 1       
Consolidated Financial Statements (Unaudited)       

Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003              3  
Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2004 and 2003              4 
Consolidated Statements of Comprehensive Income (loss) for the Three and Nine Months Ended
September 30, 2004 and 2003 		              5 
Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended
September 30, 2004 		              6 
Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2004 and 2003              7 
Notes to Consolidated Financial Statements             8 
        
Item 2.       
Management's Discussion and Analysis of Financial Condition and Results of Operations              9 
        
Item 3.       
Quantitative and Qualitative Disclolsures About Market Risk           15 
        
Item 4.       
Controls and Procedures           16 
        
PART II       
        
OTHER INFORMATION 
        
Item 1.      Legal Proceedings           16 
Item 2.      Changes in Securities and Use of Proceeds           16 
Item 3.      Defaults Upon Senior Securities           16 
Item 4.      Submission of Matters to a Vote of Security Holders           16 
Item 5.      Other Information           16 
Item 6.      Exhibits           16 
        
Signatures           17 
        
Index to Exhibits           18 


2

GREER BANCSHARES INCORPORATED
Consolidated Balance Sheets
(Unaudited)

(dollars in thousands except per share data) September 30,
 December 31,
2004
 2003
Assets:            
Cash and due from banks   $ 6,020   $ 7,267  
Federal funds sold    1,636    159  
Investment securities:  
  Held to maturity    24,561    17,263  
  Available for sale    51,840    66,760  
Loans    130,496    115,564  
   Less: allowance for loan losses    1,029    1,298  
Net loans    129,467    114,266  
Premises and equipment, net    4,354    3,886  
Real estate held for sale    515    125  
Other assets    5,820    4,407  
Total Assets   $ 224,213   $ 214,133  
Liabilities:          
Deposits          
  Non-interest bearing   $ 23,104   $ 20,311  
  Interest bearing    131,052    132,650  
Total Deposits    154,156    152,961  
   
Notes payable to Federal Home Loan Bank    46,896    40,057  
   
Other liabilities    2,602    1,408  
Total Liabilities    203,654    194,426  
   
Stockholders' Equity:          
Common stock--par value $5 per share, 10,000,000 shares          
authorized, 2,429,767 and 1,615,277 shares issued and          
outstanding at September 30, 2004 and December 31, 2003,          
respectively    12,148    8,076  
Additional paid in capital    2,496    6,465  
Retained earnings    4,773    4,060  
Accumulated other comprehensive income    1,142    1,106  
Total Stockholders' Equity    20,559    19,707  
Total Liabilities and Stockholders' Equity   $ 224,213   $ 214,133  

          The accompanying notes are an integral part of these consolidated financial statements.



3

GREER BANCSHARES INCORPORATED
Consolidated Statements of Income
(Unaudited)

(dollars in thousands except per share data) For Three Months
 For Nine Months
09/30/04
 09/30/03
 09/30/04
 09/30/03
Interest Income:                    
Loans (including fees)   $ 1,848   $ 1,774   $ 5,238   $ 5,381  
Investment securities:                  
  Taxable    473    286    1,415    979  
  Exempt from federal income tax    352    351    1,101    1,016  
Federal funds sold    4    10    16    31  
Other    21    62    70    118  
                     Total interest income    2,698    2,483    7,840    7,525  
   
Interest Expense:                  
Interest on deposit accounts    523    465    1,557    1,485  
Interest on other borrowings    416    452    1,181    1,327  
                     Total interest expense    939    917    2,738    2,812  
   
                      Net interest income    1,759    1,566    5,102    4,713  
   
Provision for loan losses    94    0    139    10  
      Net interest income after provision for loan losses    1,665    1,566    4,963    4,703  
   
Non-interest income:                  
Service charges for deposit accounts    323    293    942    908  
Other service charges    72    68    196    208  
Gain on sale of investment securities    29    0    110    41  
Other operating income    200    142    515    380  
                   Total non-interest income    624    503    1,763    1,537  
   
Non-interest expenses:                  
Salaries and employee benefits    869    790    2,542    2,310  
Occupancy and equipment    195    207    547    629  
Postage and supplies    56    44    173    180  
Other operating expenses    418    352    1,222    1,125  
                  Total non-interest expenses    1,538    1,393    4,484    4,244  
   
                   Income before income taxes    751    676    2,242    1,996  
   
Provision for income taxes:    143    104    430    362  
                           Net income   $ 608   $ 572   $ 1,812   $ 1,634  
Basic net income per share of common stock   $ .25   $ .24   $ .74   $ .68  
Diluted net income per share of common stock   $ .24   $ .23   $ .74   $ .67  

          The accompanying notes are an integral part of these consolidated financial statements.



4

GREER BANCSHARES INCORPORATED
Consolidated Statements of Comprehensive Income (Loss)

For Three Months
 For Nine Months
09/30/04
 09/30/03
 09/30/04
 09/30/03
 
Net Income     $ 608   $ 572   $ 1,812   $ 1,634  
Other comprehensive                  
income(loss), net of tax:                  
  Unrealized Holding Gains (Losses) on                  
  Investment Securities    931    (749 )  104    102  
  Less Reclassification Adjustments for                  
  (Gains)/Losses Included in Net Income    (18 )  0    (68 )  (25 )
                   Subtotal    913    (749 )  36    77  
Comprehensive Income (Loss)   $ 1,521   $ (177 ) $ 1,848   $ 1,711  

          The accompanying notes are an integral part of these consolidated financial statements.





5

GREER BANCSHARES INCORPORATED
Consolidated Statements of Changes in Stockholders’ Equity
For the Nine Months Ended September 30, 2004
(Unaudited)

Additional Accumulated Total
(dollars in thousands, except per share data) Common Paid-In Retained Other Comp. Stockholders
Stock
 Capital
 Earnings
 Income
 Equity
Balances at 12/31/2003     $ 8,076   $ 6,465   $ 4,060   $ 1,106   $ 19,707  
Net Income            1,812        1,812  
Other comprehensive income, net of tax                36  36
Stock exercised pursuant