--------------------------------------------------------------------------------



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549


                                    FORM 10-Q


               QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2002  Commission File number: 000-22054



                           COMMUNITY BANKSHARES, INC.
             (Exact Name of Registrant as Specified in its Charter)

         South Carolina                                    57-0966962
(State or Other Jurisdiction                              (IRS Employer
 of Incorporation or Organization)                    Identification Number)


               791 Broughton St., Orangeburg, South Carolina 29115
                (Address of Principal Executive Office, Zip Code)


                                 (803) 535-1060
              (Registrant's telephone number, including area code)



         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 [  ]

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:  3,299,674 shares of common
stock outstanding as of May 1, 2002.

--------------------------------------------------------------------------------


<Page>




                             10-Q TABLE OF CONTENTS

                           Part I-Financial Statements                      Page
 Item 1    Financial Statements .........................................     3
 Item 2    Management's Discussion and Analysis of Financial
                Condition and Results of Operations .....................     9

 Item 3    Quantitative and Qualitative Disclosure About Market Risk ....    18

                            Part II-Other Information
 Item 6    Exhibits and Reports on Form 8-K .............................    19




                                       2
<Page>

Part I. Item 1. Financial Statements
            COMMUNITY BANKSHARES, INC. - CONSOLIDATED BALANCE SHEETS
                             $ amounts in thousands
<Table>
<Caption>

                                                                                                     UNAUDITED
                                                                                                     March 31,          December 31,
         ASSETS                                                                                        2002                 2001
                                                                                                       ----                 ----
Cash and due from other financial institutions:
<S>                                                                                                <C>                    <C>
     Non-interest bearing ............................................................             $  12,213              $  14,586
     Federal funds sold ..............................................................                20,929                 11,063
                                                                                                   ---------              ---------
         Total cash and cash equivalents .............................................                33,142                 25,649
Interest bearing deposits in other banks .............................................                   988                  2,376
Investment securities:
     Securities held to maturity .....................................................                   500                    500
     Securities available for sale ...................................................                40,363                 43,207
Loans held for resale ................................................................                 8,988                 10,265

Loans ................................................................................               240,625                229,905
     Less, allowance for loan losses .................................................                (2,961)                (2,830)
                                                                                                   ---------              ---------
         Net loans ...................................................................               237,664                227,075

Premises and equipment ...............................................................                 5,352                  5,177
Accrued interest  receivable .........................................................                 1,941                  1,762
Deferred income taxes ................................................................                   958                    870
Goodwill .............................................................................                   921                    921
Other assets .........................................................................                   908                    815
                                                                                                   ---------              ---------

         Total assets ................................................................             $ 331,725              $ 318,617
                                                                                                   =========              =========

         LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
     Non-interest bearing ............................................................             $  35,092              $  35,882
     Interest bearing ................................................................               232,620                219,551
                                                                                                   ---------              ---------
         Total deposits ..............................................................               267,712                255,433
Federal funds purchased and securities
     sold under agreements to repurchase .............................................                 4,419                  4,171
Federal Home Loan Bank advances ......................................................                20,280                 20,280
Lines of credit payable ..............................................................                 8,670                  9,028
Other liabilities ....................................................................                 2,399                  2,158
                                                                                                   ---------              ---------
         Total liabilities ...........................................................               303,480                291,070
                                                                                                   ---------              ---------

Shareholders' equity:
     Common stock
         No par, authorized shares 12,000,000, issued and ............................                17,208                 17,208
         outstanding 3,299,674 in 2002 and 3,199,180 in 2001
     Retained earnings ...............................................................                11,207                 10,346
     Accumulated other comprehensive income (loss) ...................................                  (170)                    (7)
                                                                                                   ---------              ---------
         Total shareholders' equity ..................................................                28,245                 27,547
                                                                                                   ---------              ---------

         Total liabilities and shareholders' equity ..................................             $ 331,725              $ 318,617
                                                                                                   =========              =========
</Table>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       3
<Page>

              COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS
                       OF CHANGES IN SHAREHOLDERS' EQUITY
         for the three months ended March 31, 2002 and 2001 (Unaudited)
                  (amounts in thousands, except per share data)

<Table>
<Caption>
                                                                                                        Accumulated
                                                                                                          Other             Total
                                                                   Common        Common      Retained  Comprehensive   Shareholders'
                                                                   Shares        Stock       Earnings  Income (Loss)      Equity
                                                                   ------        -----       --------  -------------      ------

<S>                                                               <C>           <C>          <C>           <C>             <C>
Balances at Dec. 31, 2000 .....................................   3,199,180     $ 15,928     $  7,342      $   (131)       $ 23,139
Comprehensive income:
     Net income ...............................................                                   901                           901
     Change in unrealized gain (loss) on securities
         available for sale, net of tax effect ................                                                 163             163
Dividends paid ................................................           -            -         (224)            -            (224)
                                                                  ---------     --------     --------      --------        --------
Balances at Mar. 31, 2001 .....................................   3,199,180     $ 15,928     $  8,019      $     32        $ 23,979
                                                                  =========     ========     ========      ========        ========

Balances at Dec. 31, 2001 .....................................   3,299,674     $ 17,208     $ 10,346      $     (7)       $ 27,547
Comprehensive income:
     Net income ...............................................                                 1,125                         1,125
     Change in unrealized gain (loss) on securities
         available for sale, net of reclassification
         adjustment and tax effect ............................                                                (163)           (163)
Dividends paid ................................................           -            -         (264)            -            (264)
                                                                  ---------     --------     --------      --------        --------
Balances at Mar. 31, 2002 .....................................   3,299,674     $ 17,208     $ 11,207      $   (170)       $ 28,245
                                                                  =========     ========     ========      ========        ========
</Table>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS



                                       4
<Page>

         COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF INCOME

<Table>
<Caption>
                                                                                                    Three months ended March 31,
                                                                                                      2002                  2001
          In thousands,  except per share data                                                      UNAUDITED             UNAUDITED
                                                                                                    ---------             ---------
Interest and dividend income:
<S>                                                                                              <C>                      <C>
     Loans, including fees .......................................................               $    4,324               $    4,591
     Deposits with other financial institutions ..................................                        6                       28
     Debt securities .............................................................                      375                      725
     Dividends ...................................................................                       31                       36
     Federal funds sold ..........................................................                       87                      170
                                                                                                 ----------               ----------
          Total interest and dividend income .....................................                    4,823                    5,550
                                                                                                 ----------               ----------

Interest expense:
     Deposits:
       Certificates of deposit of $100,000 or more ...............................                      468                      648
       Other .....................................................................                    1,152                    1,814
                                                                                                 ----------               ----------
          Total deposits .........................................................                    1,620                    2,462
     Federal funds purchased and securities
       sold under agreements to repurchase .......................................                       22                       83
     Other borrowed funds ........................................................                      364                      301
                                                                                                 ----------               ----------
          Total interest expense .................................................                    2,006                    2,846
                                                                                                 ----------               ----------
Net interest income ..............................................................                    2,817                    2,704
Provision for loan losses ........................................................                      169                      142
                                                                                                 ----------               ----------
Net interest income after provision for loan losses ..............................                    2,648                    2,562
                                                                                                 ----------               ----------

Non-interest income:
     Service charges on deposit accounts .........................................                      544                      412
     Gains on sales of securities ................................................                       42                        -
     Mortgage banking income .....................................................                      956                        -
     Other .......................................................................                      145                      139
                                                                                                 ----------               ----------
          Total non-interest income ..............................................                    1,687                      551
                                                                                                 ----------               ----------

Non-interest expense:
     Salaries and employee benefits ..............................................                    1,655                    1,040
     Premises and equipment ......................................................                      297                      235
     Other .......................................................................                      626                      437
                                                                                                 ----------               ----------
          Total non-interest expense .............................................                    2,578                    1,712
                                                                                                 ----------               ----------

Income before income taxes .......................................................                    1,757                    1,401
Income tax expense ...............................................................                      632                      500
                                                                                                 ----------               ----------
Net income .......................................................................               $    1,125               $      901
                                                                                                 ==========               ==========


Basic earnings per common share:
     Weighted average shares outstanding .........................................                3,299,674                3,199,180
     Net income per common share .................................................               $     0.34               $     0.28
Diluted earnings per common share:
     Weighted average shares outstanding .........................................                3,361,108                3,217,067
     Net income per common share .................................................               $     0.33               $     0.28
</Table>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS



                                       5
<Page>

       COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                                                       Three months ended March 31,
        $ amounts in thousands                                                                           2002               2001
                                                                                                       UNAUDITED         UNAUDITED
                                                                                                       ---------         ---------
Cash flows from operating activities:
<S>                                                                                                   <C>                  <C>
Net income ...............................................................................            $  1,125             $    901
Adjustments to reconcile net income
  to net cash provided (used) by operating activities
        Depreciation and amortization ....................................................                 169                  109
        Provision for loan losses ........................................................                 169                  142
        Accretion of discounts and amortization of premiums -
          investment securities - net ....................................................                  (1)                  (8)
        Net realized (gains) on sale of securities .......................................                 (42)                   -
        Proceeds from sale of real estate loans held for sale ............................              45,029                2,164
        Origination of real estate loans held for sale ...................................             (43,752)              (2,436)

Changes in operating assets and liabilities:
        (Increase) decrease in interest receivable .......................................                (179)                  37
        (Increase) decrease in other assets ..............................................                (181)                 104
        Increase in other liabilities ....................................................                 241                  469
                                                                                                      --------             --------
           Net cash provided by operating activities .....................................               2,578                1,482
                                                                                                      --------             --------

Cash flows from investing activities:
        Net increase (decrease) in interest bearing deposits
             with other banks ............................................................               1,388               (7,849)
        Proceeds from maturities of held to maturity securities ..........................                   -                3,999
        Purchases of available for sale securities .......................................             (15,577)             (17,544)
        Proceeds from maturities of available for sale securities ........................              18,259               28,105
        Proceeds from sales of available for sale securities .............................                  42                    -
        Net (increase) in loans to customers .............................................             (10,758)              (6,577)
        Purchase of premises and equipment ...............................................                (344)                 (92)
                                                                                                      --------             --------
           Net cash provided by (used in) investing activities ...........................              (6,990)                  42
                                                                                                      --------             --------

Cash flows from financing activities:
        Net increase in demand, savings, & time deposits .................................              12,279                9,411
        Net decrease (increase) in federal funds purchased and
             securities sold under agreement to repurchase  ..............................                 248               (4,100)
        (Decrease) in Other Borrowings ...................................................                (358)                   -
        Dividend payments ................................................................                (264)                (224)
                                                                                                      --------             --------
           Net cash provided by financing activities .....................................              11,905                5,087
                                                                                                      --------             --------

Net increase in cash and cash equivalents ................................................               7,493                6,611
Cash and cash equivalents - beginning of period ..........................................              25,649               18,339
                                                                                                      --------             --------
Cash and cash equivalents - end of period ................................................            $ 33,142             $ 24,950
                                                                                                      ========             ========
</Table>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS



                                       6
<Page>


Summary of Significant Accounting Principles

         A summary of significant  accounting policies and the audited financial
statements for 2001 are included in Company's Annual Report on Form 10-K for the
year ended December 31, 2001.

Principles of Consolidation

         The consolidated financial statements include the accounts of Community
Bankshares, Inc. (CBI), the parent company, and Orangeburg National Bank, Sumter
National Bank,  Florence National Bank and Community Resource Mortgage Inc., its
wholly  owned  subsidiaries.   All  significant  intercompany  items  have  been
eliminated in the consolidated statements.

Management Opinion

         The interim financial  statements in this report are unaudited.  In the
opinion of management, all the adjustments necessary to present a fair statement
of the results for the interim period have been made. Such  adjustments are of a
normal and recurring nature.

         The results of operations  for any interim  period are not  necessarily
indicative  of the  results to be expected  for an entire  year.  These  interim
financial  statements  should be read in conjunction  with the annual  financial
statements and notes thereto contained in the 2001 Annual Report on Form 10-K.

Changes in Comprehensive Income Components

         The Financial  Accounting Standards Board issued Statement of Financial
Accounting  Standards No. 130, "Reporting  Comprehensive  Income," effective for
fiscal years  beginning  after  December 15, 1997.  This  Statement  establishes
standards for reporting and display of  comprehensive  income and its components
in a full set of general-purpose financial statements. Disclosure as required by
the Statement is as follows:

                                                    Three months ended March 31,
                                                       2002              2001
                                                       ----              ----
                                                       (Dollars in thousands)
Unrealized holding gains (losses)
 on available for sale  securities ................    $(293)           $ 251
Less: Reclassification adjustment
 for gains (losses)  realized in income ...........       42                -
                                                       -----            -----
Net unrealized gains (losses) .....................     (251)             251
Tax effect ........................................       88              (88)
                                                       -----            -----

Net-of-tax amount .................................    $(163)           $ 163
                                                       =====            =====






                                       7
<Page>





     COMMUNITY BANKSHARES, INC. - AVERAGE BALANCE SHEETS, YIELDS, AND RATES
($ in thousands)
<Table>
<Caption>
Quarter ended March 31,                                                         2002                                2001
                                                                              Interest                            Interest
                                                                Average       Income/    Yields/      Average     Income/    Yields/
                 Assets                                         Balance       Expense     Rates       Balance     Expense     Rates
                                                                --------      --------    ------      -------     --------    -----
<S>                                                             <C>             <C>        <C>       <C>            <C>        <C>
Interest bearing deposits ..................................    $  1,735        $    6     1.38%     $  1,830       $   28     6.12%
Investment securities taxable ..............................      36,688           403     4.39%       46,655          754     6.46%
Investment securities--tax exempt ..........................         341             3     5.33%          793            7     5.35%
Federal funds sold .........................................      20,935            87     1.66%       12,117          170     5.61%
Loans receivable ...........................................     243,987         4,324     7.09%      199,047        4,591     9.23%
                                                                --------        ------               --------       ------
     Total interest earning assets .........................     303,686         4,823     6.35%      260,442        5,550     8.52%
Cash and due from banks ....................................      12,326                                9,269
Allowance for loan losses ..................................      (2,960)                              (2,487)
Premises and equipment .....................................       5,541                                4,411
Goodwill ...................................................         921                                    -
Other assets ...............................................       3,130                                3,283
                                                                --------                             --------

     Total assets ..........................................    $322,644                             $274,918
                                                                ========                             ========

  Liabilities and Shareholders' Equity
Interest bearing deposits
Savings ....................................................    $ 44,327        $  189     1.71%     $ 35,684       $  350     3.92%
Interest bearing transaction accounts ......................      41,530            83     0.80%       21,267           68     1.28%
Time deposits ..............................................     140,419         1,348     3.84%      135,324        2,044     6.04%
                                                                --------        ------               --------       ------
     Total interest bearing deposits .......................     226,276         1,620     2.86%      192,275        2,462     5.12%
Short term borrowing .......................................       4,463            22     1.97%        7,304           83     4.55%
Other borrowings ...........................................      28,081           364     5.19%       20,350          301     5.92%
                                                                --------        ------               --------       ------
     Total interest bearing liabilities ....................     258,820         2,006     3.10%      219,929        2,846     5.18%
Noninterest bearing demand deposits ........................      33,569                               29,582
Other liabilities ..........................................       2,028                                1,717
Shareholders' equity .......................................      28,227                               23,690
                                                                --------                             --------

     Total liabilities and equity ..........................    $322,644                             $274,918
                                                                ========                             ========

Interest rate spread .......................................                               3.25%                               3.34%

Net interest income and net yield on earning assets ........                    $2,817     3.71%                    $2,704     4.15%
                                                                                ======     ====                     ======     ====
</Table>





                                       8
<Page>







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

Forward Looking Statements

         Statements   included  in  Management's   Discussion  and  Analysis  of
Financial Condition and Results of Operations which are not historical in nature
are intended to be, and are hereby  identified as `forward  looking  statements'
for  purposes  of the safe  harbor  provided  by Section  21E of the  Securities
Exchange Act of 1934, as amended.  The words "estimate,"  "project,"  "intend,",
"expect,"  "believe,"  "anticipate,"  "plan," and similar  expressions  identify
forward-looking  statements.  The  Corporation  cautions  readers  that  forward
looking  statements,   including  without  limitation,  those  relating  to  the
Corporation's  future  business  prospects,  ability to  successfully  integrate
recent and proposed acquisitions,  revenues, working capital, liquidity, capital
needs,   interest  costs,   and  income,   are  subject  to  certain  risks  and
uncertainties  that could cause actual results to differ  materially  from those
indicated in the forward looking  statements,  due to several  important factors
herein  identified,  among others,  and other risks and factors  identified from
time to time in the Corporation's reports filed with the Securities and Exchange
Commission.

RESULTS OF  OPERATIONS:  QUARTER  ENDED MARCH 31, 2002 COMPARED TO QUARTER ENDED
MARCH 31, 2001

Net Income

         For the  first  quarter  of 2002 CBI  earned a  consolidated  profit of
$1,125,000  compared to $901,000 for the first  quarter of 2001,  an increase of
24.9% or  $224,000.  Basic and  diluted  earnings  per share were $.34 and $.33,
respectively, for the 2002 period compared to $.28 for both in the 2001 period.

         For the first  quarter  of 2002  Orangeburg  National  Bank  reported a
profit of  $670,000  compared  to  $609,000  for the first  quarter of 2001,  an
increase of 10% or $61,000.

         For the first quarter of 2002 Sumter National Bank reported a profit of
$321,000  compared to  $250,000  for the first  quarter of 2001,  an increase of
28.4% or $71,000. The Sumter bank opened its first branch in February 2002.

         For the first quarter of 2002 Florence  National Bank reported a profit
of $53,000  compared to $47,000 for the first quarter of 2001, an improvement of
12.8% or $6,000. The Florence bank began operation in July 1998.

         For the first quarter of 2002 Community Resource Mortgage Inc. reported
a profit of $107,000. It was acquired by Community Bankshares in November 2001.

         As noted above, consolidated net income for the quarter ended March 31,
2002,  increased from the prior year by 24.9% or $224,000.  The major components
of this increase are discussed  below.  Net interest income before provision for


                                       9
<Page>

loan losses for the three  months ended March 31, 2002  increased to  $2,817,000
compared  to  $2,704,000  for the same  period in 2001,  an  increase of 4.2% or
$113,000.  For the same  period,  the  provision  for loan  losses was  $169,000
compared  to  $142,000  for the 2001  period,  an  increase  of 19% or  $27,000.
Non-interest  income for the 2002 period  increased to $1,687,000  from $551,000
for  the  2001  period,  a 206% or  $1,136,000  increase.  Non-interest  expense
increased to  $2,578,000  from  $1,712,000,  a 50.6% or $866,000  increase.  The
addition of the mortgage  company in November,  2001, is responsible for most of
the increase in noninterest income and noninterest expense.

Profitability

         One of the best ways to review  earnings  is through the ROA (return on
average assets) and the ROE (return on average equity).  Return on assets is the
income for the period divided by the average assets for the period,  annualized.
Return on equity is the income for the period  divided by the average equity for
the period, annualized.  Based on operating results for the quarters ended March
31, 2002 and 2001, the following table is presented.

Quarter ended March 31,               2002               2001
                                      ----               ----

Average assets ................     $322,644          $274,918
ROA ...........................        1.39%             1.31%
Average equity ................      $28,227           $23,690
ROE ...........................       15.94%            15.21%
Net income ....................       $1,125              $901


Net interest income

         Net interest income, the major component of CBI's income, is the amount
by which interest and fees on interest  earning assets exceeds the interest paid
on interest bearing deposits and other interest bearing funds.  During the first
quarter of 2002, net interest income after  provision for loan losses  increased
to $2,648,000 from $2,562,000, a 3.4% or $86,000 increase over the first quarter
of 2001.  Net  interest  income after the  provision  for loan losses was almost
unchanged between the periods.  Average earning assets increased to $304 million
in the first quarter of 2002 from $260 million in the first quarter of 2001, but
the average yield on these earning assets decreased to 6.35% for the 2002 period
from 8.52% for the 2001  period.  The changes  occurred in a declining  interest
rate environment,  during which the average CBI prime rate fell to 4.75% for the
first quarter of 2002 as compared to 8.50% for the same period in 2001.

         For the first quarter of 2002 the cost of funds averaged 3.10% compared
to 5.18% for the first  quarter of 2001.  The  decrease in the cost of the funds
did not  offset  the  decreased  yield on  earning  assets.  The effect of these
changes was a net interest spread (yield on earning assets less cost of interest
bearing  liabilities)  of 3.25% for the first  quarter of 2002 compared to 3.35%
during the first quarter of 2001. CBI's net interest margin (net interest income
divided  by total  earning  assets)  was  3.71% for the  first  quarter  of 2002
compared to 4.15% for the first quarter of 2001.




                                       10
<Page>


Interest Income

         Elsewhere  in this report is a table  comparing  the average  balances,
yields,  and rates for the interest  rate  sensitive  segments of CBI's  balance
sheets for the  quarters  ended March 31, 2002 and 2001.  A  discussion  of that
table follows.

         Total  interest  income  for the  first  quarter  2002  was  $4,823,000
compared  with  $5,550,000  for the same  quarter in 2001,  a 13.1% or  $727,000
decrease.  The yield on earning assets for the 2002 quarter was 6.35%, decreased
from 8.52% for the 2001 quarter.  Total average  interest earning assets for the
2002 quarter were $303,686,000 compared to $260,442,000 for the 2001 quarter, an
increase of 16.6% or $43,244,000.

         The  loan  portfolio  earned  $4,324,000  for the  first  quarter  2002
compared  with  $4,591,000  for the same  quarter  of 2001,  a 5.8% or  $267,000
decrease.  The yield on loans for the 2002  quarter  was 7.09%,  decreased  from
9.23% for the 2001 quarter.  The average size of the loan portfolio for the 2002
quarter was  $243,987,000  compared to  $199,047,000  for the 2001  quarter,  an
increase of 22.6% or $44,940,000.

         The taxable investment  portfolio earned $403,000 for the first quarter
in 2002  compared  with  $754,000  for the 2001  quarter,  a 46.6%  or  $351,000
decrease. The yield was 4.39% for the 2002 quarter, decreased from 6.46% for the
2001  quarter.  The  average  size of the  portfolio  for the 2002  quarter  was
$36,688,000  compared to $46,655,000 for the 2001 quarter,  a decrease of 21.4 %
or $9,967,000.

         The tax-exempt investment portfolio earned $3,000 for the first quarter
in 2002 compared with $7,000 for the 2001 quarter,  a 57.1% or $4,000  decrease.
The taxable  equivalent yield on the portfolio was 5.33%,  decreased from 5.35%.
The average size of the portfolio was $341,000 for the 2002 quarter  compared to
$793,000 in the 2001 quarter, a decrease of 57% or $452,000.

         Interest  bearing  deposits in other banks earned  $6,000 for the first
quarter in 2002 compared to $28,000 for the 2001 quarter, a decrease of 78.6% or
$22,000.  The yield on these deposits was 1.38% for the 2002 quarter,  decreased
from 6.12% for the 2001 quarter.  CBI averaged  $1,735,000  in interest  bearing
balances in the first quarter 2002 compared to  $1,830,000  the 2001 quarter,  a
decrease of 5.2% or $95,000.

         Federal funds sold earned $87,000 the first quarter of 2002 compared to
$170,000  for the 2001  quarter,  a decrease of 48.8% or $83,000.  The yield was
1.66% for the 2002 quarter,  decreased  from 5.61% for the 2001  quarter.  CBI's
average  volume in  federal  funds  sold was  $20,935,000  for the 2002  quarter
compared to $12,117,000 for the 2001 quarter, a 72.8% or $8,818,000 increase.

Interest Expense

         Interest expense  decreased to $2,006,000 for the first quarter of 2002
from $2,846,000 for the 2001 quarter, a 29.5% or $840,000 decrease. For the same
periods, the volume of interest bearing liabilities was $258,820,000 compared to
$219,929,000,  a 17.7%  or  $38,891,000  increase.  The  average  rate  paid for
interest-bearing liabilities was 3.10% for the 2002 quarter, down from 5.18% for
the 2001 quarter.



                                       11
<Page>

         Savings accounts cost $189,000 in the first quarter in 2002 compared to
$350,000 in the first quarter of 2001, a 46% or $161,000 decrease.  For the same
periods,   average  savings  deposit  balances  were  $44,327,000   compared  to
$35,684,000,  an increase of 24.2% or $8,643,000. The average rate paid on these
funds decreased to 1.71% from 3.92%.

         Interest  bearing  transaction  accounts  cost  $83,000  for the  first
quarter in 2002  compared to $68,000 for the first  quarter of 2001,  a 22.1% or
$15,000  increase.  The volume of these deposits was  $41,530,000  for the first
quarter in 2002 compared to  $21,267,000  for the first quarter of 2001, a 95.3%
or $20,263,000  increase.  The majority of this increase was associated  with an
increase in public  deposits,  which will  probably be short lived.  The average
rate paid on these funds decreased to .80% from 1.28%.

         Time deposits cost $1,348,000 for the first quarter of 2002 compared to
$2,044,000  for the first quarter of 2001, a decrease of 34.1% or $696,000.  The
volume was  $140,419,000  for the first quarter in 2002 compared to $135,324,000
for the first quarter of 2001, a 3.8% or $5,095,000  increase.  The average rate
paid on these funds decreased to 3.84% from 6.04%.

         Short-term borrowings consist of federal funds purchased and securities
sold under  agreements to  repurchase.  This is a relatively  small and volatile
part of the  balance  sheet.  It cost  $22,000  for the  first  quarter  in 2002
compared to $83,000 for the first quarter of 2001, a 73.5% or $61,000  decrease.
The volume of these funds was  $4,463,000  in the first quarter 2002 compared to
$7,304,000 in the first quarter of 2001, a decrease of 38.9% or $2,841,000.  The
average rate paid on these funds decreased to 1.97% from 4.55%.

         Other borrowings  include lines of credit payable and advances from the
Federal Home Loan Bank of Atlanta.  They cost  $364,000 for the first quarter in
2002 compared to $301,000 for the first quarter in 2001, an increase of 20.9% or
$63,000. The borrowings averaged $28,081,000 during the 2002 quarter compared to
$20,350,000 for the prior year quarter, a 38% or $7,731,000 increase.  The major
reason  for the  increase  in volume  was the  addition  of lines of credit  for
Community Resource Mortgage,  which was acquired in November,  2001. The average
rate paid on these funds decreased to 5.19% from 5.92%.


Non-Interest Income

         Non-interest  income for the first quarter 2002 grew to $1,687,000 from
$551,000 in the first quarter of 2001, a 206% or $1,136,000  increase.  The vast
majority of this increase was due to mortgage  banking income of $956,000 earned
during the first  quarter,  virtually  all of which was  generated  by Community
Resource Mortgage, Inc.

Non-Interest Expense

         For the  first  quarter  of 2002  non-interest  expenses  increased  to
$2,578,000  from  $1,712,000  for the first quarter of 2001, a 50.6% or $866,000
increase.  Approximately three quarters of this increase was associated with the
operation of Community Resource Mortgage.

         For the 2002  period,  personnel  costs  were  $1,655,000  compared  to
$1,040,000 for the 2001 period, an increase of 59.1% or $615,000.



                                       12
<Page>

         For the 2002 period,  premises  and  equipment  expense  were  $297,000
compared to $235,000 for the 2001 period, an increase of 26.4% or $62,000.

         For the 2002 period, other costs were $626,000 compared to $437,000 for
the 2001 period, an increase of 43.2% or $189,000.

Income Taxes

         CBI  provided  $632,000  for federal and state  income taxes during the
first  quarter of 2002 compared to $500,000 for the same period in 2001, a 26.4%
or $132,000  increase.  The average tax rate for the 2002 period was 36% and for
the 2001 period it was 35.7%.


CHANGES IN FINANCIAL POSITION

Investment portfolio

         The  investment  portfolio is comprised of held to maturity  securities
and available  for sale  securities.  CBI and its three banks  usually  purchase
short-term  issues  (ten  years or less) of U. S Treasury  and U. S.  Government
agency  securities  for  investment  purposes.  At  March  31,  2002 the held to
maturity portfolio totaled $500,000,  unchanged from December 31, 2001. At March
31,  2002 the  available  for sale  portfolio  totaled  $40,363,000  compared to
$43,207,000  at  December  31,  2001,  a  decrease  of 6.6% or  $2,844,000.  The
following  chart  summarizes  the  investment  portfolios  at March 31, 2002 and
December 31, 2001.
<Table>
<Caption>
                                                                                            March 31, 2002
                                                                        Held to maturity                     Available for sale
                                                                Amortized cost      Fair value         Amortized cost     Fair value
                                                                --------------      ----------         --------------     ----------
                                                                                       (dollars in thousands)
<S>                                                                 <C>             <C>                   <C>              <C>
U. S. Government and federal agencies ....................          $ 500           $    480              $ 38,452         $ 38,186
Tax exempt securities ....................................              -                  -                   195              196
Other equity securities ..................................              -                  -                 1,981            1,981
                                                                    -----           --------              --------         --------
Total ....................................................          $ 500           $    480              $ 40,628         $ 40,363
                                                                    =====           ========              ========         ========

Unrealized (loss) ........................................          $ (20)                                $   (265)
                                                                    =====                                 ========
</Table>
<Table>
<Caption>

                                                                                          December 31, 2001
                                                                        Held to maturity                     Available for sale
                                                                Amortized cost      Fair value         Amortized cost     Fair value
                                                                --------------      ----------         --------------     ----------
                                                                                       (dollars in thousands)
<S>                                                                 <C>             <C>                   <C>              <C>
U. S. Government and federal agencies ....................          $ 500           $    500              $ 40,437         $ 40,415
Tax exempt securities ....................................              -                  -                   802              811
Other equity securities ..................................              -                  -                 1,981            1,981
                                                                    -----           --------              --------         --------
Total ....................................................          $ 500           $    500              $ 43,220         $ 43,207
                                                                    =====           ========              ========         ========

Unrealized (loss) ........................................          $   -                                 $    (13)
                                                                    =====                                 ========
</Table>



                                       13
<Page>


Loan portfolio

         The loan portfolio is primarily  consumer and small business  oriented.
At March 31, 2002 the loan portfolio was  $240,625,000  compared to $229,905,000
at December  31, 2001,  a 4.7% or  $10,720,000  increase.  The  following  chart
summarizes the loan portfolio at March 31, 2002 and December 31, 2001.

                                               Mar. 31, 2002       Dec. 31, 2001
                                               -------------       -------------
                                                     (dollars in thousands)
Real estate ................................    $154,155             $146,559
Commercial .................................      59,688               56,515
Loans to individuals .......................      26,782               26,831
                                                --------             --------
Total ......................................    $240,625             $229,905
                                                ========             ========


         The loan portfolio does not include loans held for sale. Loans held for
sale are  loans  originated  by CBI for  sale to  others  which  are held by CBI
pending  completion of the sale.  The vast majority of such loans are originated
by Community  Resource  Mortgage,  Inc. and are one-to-four  family  residential
mortgage  loans.  At March  31,  2002  loans  held for sale  totaled  $8,988,000
compared to $10,265,000 at December 31, 2001, a 12.4% or $1,277,000 decrease.


Past Due and Non-Performing Assets

         CBI closely  monitors past due loans and loans that are in  non-accrual
status  and  other  real  estate  owned.  Below  is a  summary  of past  due and
non-performing assets at March 31, 2002 and December 31, 2001.

                                             Mar. 31, 2002         Dec. 31, 2001
                                             -------------         -------------
                                                   (dollars in thousands)
Past due 90 days + accruing loans .........        $222                  $ 17
Non-accrual loans .........................        $330                  $281
Impaired loans (included in nonaccrual) ...        $330                  $281
Other real estate owned ...................        $267                  $267

         Management  considers the past due and non-accrual amounts at March 31,
2002 to be reasonable in relation to the size of the portfolio and manageable in
the normal course of business.

         CBI had no restructured loans during any of the above listed periods.

Allowance for Loan Losses

         CBI  operates  three  independent  community  banks  in  central  South
Carolina.  Under the provisions of the National Bank Act each board of directors
is responsible  for  determining the adequacy of its bank's loan loss allowance.


                                       14
<Page>

In addition, each bank is supervised and regularly examined by the Office of the
Comptroller of the Currency (OCC) of the U. S. Treasury Department.  As a normal
part of a safety and soundness  examination,  the OCC examiners  will assess and
comment on the adequacy of a national  bank's  allowance  for loan  losses.  The
allowance presented in this discussion is on an aggregated basis.

         The nature of community  banking is such that the loan  portfolios will
be predominantly comprised of small and medium size business and consumer loans.
As community banks, there is a natural geographic  concentration of loans within
the Banks' respective city or county.  Management at each bank monitors the loan
concentrations and loan portfolio quality on an ongoing basis including, but not
limited to: quarterly analysis of loan concentrations, monthly reporting of past
dues, non-accruals, and watch loans, and quarterly reporting of loan charge-offs
and recoveries.  These efforts focus on historical  experience and are bolstered
by quarterly analysis of local and state economic  conditions,  which is part of
the Banks' assessment of the adequacy of their allowances for loan losses.

         Management  reviews  its  allowance  for loan  losses  in  three  broad
categories:  commercial,  real estate and installment loans. However, management
does not  believe it would be useful to maintain a separate  allowance  for each
category. Instead management assigns an estimated risk percentage factor to each
category in the computation of the overall allowance. In general terms, the real
estate  portfolio is subject to the least risk,  followed by the commercial loan
portfolio,  followed by the installment loan portfolio.  The Banks' internal and
external loan review  programs  will from time to time  identify  loans that are
subject to specific  weaknesses  and such loans will be reviewed  for a specific
loan loss allowance.

         Based on the current levels of non-performing  and other problem loans,
management  believes that loan charge-offs in 2002 will at least approximate the
2001 levels as such loans progress  through the collection  process.  Management
believes that the allowance for loan losses,  as of March 31, 2002 is sufficient
to absorb the  expected  charge-offs  and provide  adequately  for the  inherent
losses that remain in the loan  portfolio.  Management  will continue to closely
monitor the levels of non-performing and potential problem loans and address the
weaknesses  in these  credits to enhance  the amount of ultimate  collection  or
recovery  of these  assets.  Management  considers  the  levels  and  trends  in
non-performing  and past due loans in determining how historical loan loss rates
are adjusted.

         The aggregate  allowance for loan losses of the banks and the aggregate
activity with respect to those allowances are summarized in the following table.

<Table>
<Caption>
                                                                          Mar. 31, 2002          Dec. 31, 2001         Mar. 31, 2001
                                                                          -------------          -------------         -------------
<S>                                                                        <C>                     <C>                     <C>
Allowance at beginning of period ...........................               $ 2,830                 $ 2,424                 $ 2,424
Provision expense ..........................................                   169                     678                     142
Net charge offs ............................................                   (38)                   (272)                    (10)
                                                                           -------                 -------                 -------
Allowance at end of period .................................               $ 2,961                 $ 2,830                 $ 2,556
                                                                           =======                 =======                 =======
Allowance/outstanding loans ................................                  1.23%                   1.23%                   1.26%
</Table>




                                       15
<Page>



Goodwill

         CBI has adopted FASB No. 142, Goodwill and Other Intangible  Assets, as
of January 1,  2002.  As of March 31,  2002 the  balance in  goodwill,  our only
intangible  asset,  totaled  $921,000,  unchanged  from  December 31, 2001.  The
Company will evaluate the goodwill for impairment later in 2002.

         The balance in goodwill was acquired in connection with the purchase of
Community Resource Mortgage Inc., consummated in November 2001.

Deposits

         Deposits were  $267,712,000  at March 31, 2002 compared to $255,433,000
at December 31, 2001, an increase of 4.8% or $12,279,000.

         Time deposits  greater than $100,000 were $55,581,000 at March 31, 2002
compared to $51,374,000 at December 31, 2001, an increase of 8.2% or $4,207,000.

Liquidity

         Liquidity is the ability to meet current and future obligations through
liquidation  or maturity of existing  assets or the  acquisition  of  additional
liabilities.  Adequate  liquidity  is  necessary  to meet  the  requirements  of
customers for loans and deposit  withdrawals in a timely and economical  manner.
The most manageable  sources of liquidity are composed of liabilities,  with the
primary  focus of  liquidity  management  being the ability to attract  deposits
within the Banks' service areas. Core deposits (total deposits less certificates
of deposit of  $100,000  or more)  provide a  relatively  stable  funding  base.
Certificates  of deposit of $100,000 or more are  generally  more  sensitive  to
changes  in rates,  so they must be  monitored  carefully.  Asset  liquidity  is
provided by several  sources,  including  amounts due from banks,  federal funds
sold, and investments available-for-sale.

         CBI  maintains  an  available-for-sale   investment  portfolio.   While
investment  securities purchased for this portfolio are generally purchased with
the intent to be held to maturity, such securities are marketable and occasional
sales may occur prior to maturity as part of the process of asset/liability  and
liquidity   management.   CBI  also  maintains  a  held-to-maturity   investment
portfolio.  Securities in this  portfolio are generally not considered a primary
source of liquidity.  Management  deliberately  maintains a short-term  maturity
schedule for its  investments  so that there is a continuing  stream of maturing
investments.  CBI intends to maintain a short-term investment portfolio in order
to  continue  to be able to  supply  liquidity  to its  loan  portfolio  and for
customer withdrawals.

         CBI has substantially more liabilities  (mostly deposits,  which may be
withdrawn) which mature in the next 12 months than it has assets maturing in the
same period.  In addition CBI has  commitments to make loans and standby letters
of credit  totaling  $31,058,000 and  $2,881,000,  respectively,  outstanding at
March 31,  2002.  These off  balance  sheet  commitments  are subject to various
conditions  and,  based on historical  experience,  many will never be drawn on.
However,  based on its  historical  experience,  and that of  similar  financial
institutions,  CBI believes that it is unlikely  that so many deposits  would be
withdrawn,  without being replaced by other deposits,  and loan  commitments and
standby  letters of credit drawn on during any period,  that CBI would be unable
to meet its liquidity needs with the proceeds of maturing assets.



                                       16
<Page>

         CBI through  its banking  subsidiaries  has a  demonstrated  ability to
attract deposits from its markets.  Deposits have grown from $30 million in 1989
to over $267  million  in 2002.  This base of  deposits  is the major  source of
operating liquidity.

         CBI's long term liquidity  needs are expected to be primarily  affected
by the maturing of long-term  certificates of deposit. At March 31, 2002 CBI had
approximately  $23 million and $11 million in  certificates of deposit and other
interest bearing liabilities  maturing in one to five years and over five years,
respectively.  CBI's assets  maturing or repricing in the same periods were $138
million  and $27  million,  respectively.  CBI  expects to be able to manage its
current  balance sheet structure  without  experiencing  any material  liquidity
problems.

         In the opinion of  management,  CBI's current and  projected  liquidity
position is adequate.

Capital resources

         As  summarized  in the table  below,  CBI  maintains  a strong  capital
position.

<Table>
<Caption>
                                                                                                                    Minimum required
                                                                                                                       to be well
                                                                                Mar. 31, 2002       Dec. 31, 2001      capitalized
                                                                                -------------       -------------      -----------
<S>  <C>                                                                           <C>                  <C>              <C>
Tier 1 capital to average total assets ..............................               8.48%                8.50%            5.00%
Tier 1 capital to risk weighted assets ..............................              11.25%               11.40%            6.00%
Total capital to risk weighted assets ...............................              12.44%               12.50%           10.00%
</Table>

         In the opinion of  management,  the  Company's  current  and  projected
capital positions are adequate.  In each case the ratios exceed by a substantial
margin the minimum regulatory requirement for being considered well capitalized.

Dividends

         CBI  declared  and paid a  quarterly  cash  dividend of eight cents per
share  during the first  quarter of 2002.  The total cost of this  dividend  was
$264,000.  On May 8, 2002, CBI declared a second quarter dividend of eight cents
per  share,  payable  June 28,  2002.  The  expected  cost of this  dividend  is
$264,000.

Subsequent events

         In late  November  2001 CBI entered  into an  agreement  to acquire the
common stock of Ridgeway  Bancshares  Inc., the holding  company for the Bank of
Ridgeway.  The agreement provides for CBI to issue 1,000,000 shares of its stock
and  $4,000,000  cash  in  exchange  for  100% of the  stock  of  Ridgeway.  The
transaction  requires  approval  by  two-thirds  of  the  shareholders  of  both
companies,  as  well  as  various  regulators.  Shareholder  meetings  for  both
companies  were  held in  April  2002  and the  shareholders  of both  companies
approved the transaction.  Various regulatory  approvals are still pending.  CBI
anticipates  that the Ridgeway bank will become part of Community  Bankshares on
July 1, 2002.



                                       17
<Page>



Item 3. Quantitative and Qualitative Disclosures about Market Risk

         Market risk is the risk of loss from adverse  changes in market  prices
and rates. CBI's market risk arises principally from interest rate risk inherent
in its lending,  deposit and borrowing activities.  Management actively monitors
and manages its interest rate risk  exposure.  Although CBI manages other risks,
such as credit  quality and  liquidity  risk in the normal  course of  business,
management  considers  interest rate risk to be its most significant market risk
and this  risk  could  potentially  have the  largest  material  effect on CBI's
financial condition and results of operations.  Other types of market risks such
as foreign  currency  exchange risk and commodity price risk do not arise in the
normal course of community banking activities.

         Achieving  consistent growth in net interest income is the primary goal
of  CBI's  asset/liability  function.  CBI  attempts  to  control  the  mix  and
maturities  of  assets  and  liabilities  to  achieve  consistent  growth in net
interest  income  despite  changes  in  market  interest  rates.  CBI  seeks  to
accomplish this goal while  maintaining  adequate  liquidity and capital.  CBI's
asset/liability  mix is  sufficiently  balanced  so that the effect of  interest
rates moving in either direction is not expected to be significant over time.

         CBI's  Asset/Liability  Committee uses a simulation  model to assist in
achieving  consistent growth in net interest income while managing interest rate
risk.  The model takes into account  interest rate changes as well as changes in
the mix and volume of assets and liabilities.  The model simulates CBI's balance
sheet and income statement under several  different rate scenarios.  The model's
inputs (such as interest  rates and levels of loans and deposits) are updated on
a quarterly basis in order to obtain the most accurate projection possible.  The
projection  presents  information over a twelve-month  period. It reports a base
case in which interest rates remain flat and reports  variations that occur when
rates increase and decrease 100 and 200 basis points.  According to the model as
of March 31, 2002 CBI is positioned so that net interest  income would  increase
$652,000 and net income  would  increase  $402,000 in the next twelve  months if
interest  rates rose 200 basis  points.  Conversely,  net interest  income would
decline $652,000 and net income would decline $402,000 in the next twelve months
if interest  rates  declined  200 basis  points.  In the current  interest  rate
environment, it is unlikely that there will be any significant rate decreases in
the  immediate  future.  Computation  of  prospective  effects  of  hypothetical
interest  rate  changes are based on numerous  assumptions,  including  relative
levels of market  interest rates and loan  prepayment,  and should not be relied
upon  as  indicative  of  actual  results.  Further,  the  computations  do  not
contemplate  any actions CBI could  undertake in response to changes in interest
rates.

         As of March 31, 2002 there was no significant  change from the interest
rate  sensitivity  analysis for the various changes in interest rates calculated
as of December 31, 2001. The foregoing disclosures related to the market risk of
the  Company  should be read in  connection  with  Management's  Discussion  and
Analysis of Financial  Position and Results of  Operations  included in the 2001
Annual Report on Form 10-K.


                                       18
<Page>

         Part II--Other Information

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits

    None


b) Reports on Form 8-K.  None.

Signatures

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                             DATED: May 9, 2002

COMMUNITY BANKSHARES, INC.

By:  s/  E. J. Ayers, Jr.,
    ----------------------------------------------
         E. J. Ayers, Jr.,
         Chief Executive Officer

By:  s/  William W. Traynham
    ----------------------------------------------
         William W. Traynham
         President and Chief Financial Officer
         (Principal Accounting Officer)


                                       19