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




                       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, 2003  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 of             (IRS Employer Identification Number)
 Incorporation or Organization)


               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 [ ]

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

         State the number of  sharesoutstanding  of each of the issuer's classes
of common equity, as of the latest practicable date:  4,306,984 shares of common
stock outstanding as of May 1, 2003.

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

<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 ........  17
 Item 4   Controls and Procedures ..........................................  18
                            Part II-Other Information
 Item 6   Exhibits and Reports on Form 8-K .................................  18




                                       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                                                                                      2003                  2002
                                                                                                      ----                  ----

Cash and due from other financial institutions:
<S>                                                                                                <C>                    <C>
      Non-interest bearing ...........................................................             $  16,599              $  14,738
      Federal funds sold .............................................................                32,428                 23,831
                                                                                                   ---------              ---------
          Total cash and cash equivalents ............................................                49,027                 38,569
Interest bearing deposits in other banks .............................................                   883                    511
Securities available for sale, at fair value .........................................                46,380                 53,066
Loans held for resale ................................................................                23,191                 24,664
Loans receivable .....................................................................               313,711                306,484
      Less, allowance for loan losses ................................................                (3,767)                (3,573)
                                                                                                   ---------              ---------
          Net loans ..................................................................               309,944                302,911

Accrued interest  receivable .........................................................                 2,156                  2,131
Premises and equipment ...............................................................                 6,426                  6,376
Net deferred tax asset ...............................................................                   571                    584
Intangible assets ....................................................................                 7,835                  7,896
Other assets .........................................................................                   826                    612
                                                                                                   ---------              ---------

          Total assets ...............................................................             $ 447,239              $ 437,320
                                                                                                   =========              =========

          LIABLITIES AND SHAREHOLDERS' EQUITY
Deposits:
      Non-interest bearing ...........................................................             $  50,524              $  47,128
      Interest bearing ...............................................................               296,146                289,934
                                                                                                   ---------              ---------
          Total deposits .............................................................               346,670                337,062
Federal funds purchased and securities
      sold under agreements to repurchase ............................................                14,500                 16,302
Federal Home Loan Bank advances ......................................................                20,210                 20,210
Lines of credit payable ..............................................................                18,729                 18,249
Other liabilities ....................................................................                 2,178                  1,780
                                                                                                   ---------              ---------
          Total liabilities ..........................................................               402,287                393,603
                                                                                                   ---------              ---------
Shareholders' equity:
      Common stock ...................................................................                29,107                 29,090
          No par, authorized shares 12,000,000, issued and
          outstanding 4,305,984 in 2003 and 3,299,674 in 2002
      Retained earnings ..............................................................                15,723                 14,529
      Accumulated other comprehensive income .........................................                   122                     98
                                                                                                   ---------              ---------
          Total shareholders' equity .................................................                44,952                 43,717
                                                                                                   ---------              ---------

          Total liabilities and shareholders' equity .................................             $ 447,239              $ 437,320
                                                                                                   =========              =========
</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, 2003 and 2002 (Unaudited)
                    (Amounts in thousands, except 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, 2001 ...............................     3,299,674     $   17,208     $   10,346     $       (7)    $   27,547
Comprehensive income:
     Net income .........................................                                       1,125                         1,125
     Other comprehensive income (loss) net of tax:
         Unrealized gain (loss) on securities ...........                                                       (163)          (163)
Dividends paid ..........................................             -              -           (264)             -           (264)
                                                             ----------     ----------     ----------     ----------     ----------
Balances at Mar. 31, 2002 ...............................     3,299,674     $   17,208     $   11,207     $     (170)    $   28,245
                                                             ==========     ==========     ==========     ==========     ==========

Balances at Dec. 31, 2002 ...............................     4,304,384     $   29,090     $   14,529     $       98     $   43,717
Comprehensive income:
     Net income .........................................                                       1,581                         1,581
     Other comprehensive income (loss) net of tax:
         Unrealized gain (loss) on securities ...........                                                         24             24
Stock issued under option ...............................         1,600             17                                           17
Dividends paid ..........................................             -              -           (387)             -           (387)
                                                             ----------     ----------     ----------     ----------     ----------
Balances at Mar. 31, 2003 ...............................     4,305,984     $   29,107     $   15,723     $      122     $   44,952
                                                             ==========     ==========     ==========     ==========     ==========
</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,
                                                                                                         2003                 2002
          In  thousands,  except shares and per share data                                             UNAUDITED           UNAUDITED
                                                                                                       ---------           ---------
Interest and dividend income:
<S>                                                                                                   <C>                 <C>
     Loans, including fees .................................................................          $    5,275          $    4,324
     Deposits with other financial institutions ............................................                   4                   6
     Debt securities .......................................................................                 493                 375
     Dividends .............................................................................                  20                  31
     Federal funds sold ....................................................................                  57                  87
                                                                                                      ----------          ----------
          Total interest and dividend income ...............................................               5,849               4,823
                                                                                                      ----------          ----------
Interest expense:
     Deposits:
       Certificates of deposit of $100,000 or more .........................................                 427                 468
       Other ...............................................................................               1,119               1,152
                                                                                                      ----------          ----------
          Total deposits ...................................................................               1,546               1,620
     Federal funds purchased and securities
       sold under agreements to repurchase .................................................                  38                  22
     Other borrowed funds ..................................................................                 417                 364
                                                                                                      ----------          ----------
          Total interest expense ...........................................................               2,001               2,006
                                                                                                      ----------          ----------
Net interest income ........................................................................               3,848               2,817
Provision for loan losses ..................................................................                 264                 169
                                                                                                      ----------          ----------
Net interest income after provision for loan losses ........................................               3,584               2,648
                                                                                                      ----------          ----------
Non-interest income:
     Service charges on deposit accounts ...................................................                 783                 544
     Gains on sales of securities ..........................................................                  46                  42
     Mortgage banking income ...............................................................               1,511                 956
     Other .................................................................................                 215                 145
                                                                                                      ----------          ----------
          Total non-interest income ........................................................               2,555               1,687
                                                                                                      ----------          ----------
Non-interest expense:
     Salaries and employee benefits ........................................................               2,351               1,655
     Premises and equipment ................................................................                 403                 297
     Other .................................................................................                 981                 626
                                                                                                      ----------          ----------
          Total non-interest expense .......................................................               3,735               2,578
                                                                                                      ----------          ----------
Income before income taxes .................................................................               2,404               1,757
Income tax expense .........................................................................                 823                 632
                                                                                                      ----------          ----------
Net income .................................................................................          $    1,581          $    1,125
                                                                                                      ==========          ==========

Basic earnings per common share:
     Weighted average shares outstanding ...................................................           4,305,237           3,299,674
     Net income per common share ...........................................................          $     0.37          $     0.34
Diluted earnings per common share:
     Weighted average shares outstanding ...................................................           4,420,033           3,361,108
     Net income per common share ...........................................................          $     0.36          $     0.33
</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,
       (Dollar amounts in thousands)                                                                      2003              2002
                                                                                                        UNAUDITED         UNAUDITED
                                                                                                        ---------         ---------
Cash flows from operating activities:
<S>                                                                                                  <C>                   <C>
Net income .............................................................................             $  1,581              $  1,125
Adjustments to reconcile net income
  to net cash (provided) used by operating activities
       Depreciation and amortization ...................................................                  232                   169
       Net amortization (accretion) of securities ......................................                   46                    41
       Provision for loan losses .......................................................                  264                   169
       Net realized gains on sale of securities ........................................                  (46)                  (42)
       Proceeds from sales of loans held for sale ......................................               71,867                45,029
       Originations of real estate loans held for sale .................................              (70,394)              (43,752)
       Deferred income taxes ...........................................................                   13                     -
Changes in operating assets and liabilities:
       Accrued interest receivable .....................................................                  (25)                 (179)
       Other assets ....................................................................                 (214)                 (181)
       Other liabilities ...............................................................                  398                   241
                                                                                                     --------              --------
          Net cash provided by operating activities ....................................                3,722                 2,620
                                                                                                     --------              --------

Cash flows from investing activities:
       Net (increase) decrease in interest bearing deposits ............................                 (372)                1,388
       Purchases of securities available for sale ......................................              (19,847)              (15,577)
       Maturities of securities available-for-sale .....................................               24,810                12,611
       Sales of securities available-for-sale ..........................................                1,747                 5,648
       Loan originations and principal collections, net ................................               (7,297)              (10,758)
       Purchases of premises and equipment .............................................                 (221)                 (344)
                                                                                                     --------              --------
       Net cash (used) in investing activities .........................................               (1,180)               (7,032)
                                                                                                     --------              --------

Cash flows from financing activities:
       Net increase in deposits ........................................................                9,608                12,279
       Net increase (decrease) in short-term borrowing .................................               (1,802)                  248
       Net increase (decrease) under line of credit ....................................                  480                  (358)
       Proceeds from issuance of common stock ..........................................                   17                     -
       Dividend payments ...............................................................                 (387)                 (264)
                                                                                                     --------              --------
          Net cash provided by financing activities ....................................                7,916                11,905
                                                                                                     --------              --------

Net increase in cash and cash equivalents ..............................................               10,458                 7,493
Cash and cash equivalents - beginning of period ........................................               38,569                25,649
                                                                                                     --------              --------
Cash and cash equivalents - end of period ..............................................             $ 49,027              $ 33,142
                                                                                                     ========              ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS



                                       6
<PAGE>



 COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)


<TABLE>
<CAPTION>
                                                                                                        Three months ended March 31,
                                                                                                          2003               2002
                                                                                                          ----               ----
SUPPLEMENTAL DISCLOSURES OF
  CASH FLOW INFORMATION
<S>                                                                                                     <C>                 <C>
    Cash payments for interest .........................................................                $1,907              3,711
                                                                                                        ======              =====
    Cash payments for income tax .......................................................                $  517                580
                                                                                                        ======              =====

NON-CASH INVESTING ACTIVITIES
    Transfers of loans receivable to other real estate .................................                $  131                  0
                                                                                                        ======              =====
</TABLE>













                                       7
<PAGE>


Summary of Significant Accounting Principles
         A summary of significant  accounting policies and the audited financial
statements for 2002 are included in Company's Annual Report on Form 10-K for the
year ended December 31, 2002.

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, Community Resource Mortgage Inc., and the
Bank of Ridgeway,  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 2002 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:

<TABLE>
<CAPTION>
                                                                                                        Three months ended March 31,
                                                                                                           2003              2002
                                                                                                           ----              ----
                                                                                                           (Dollars in thousands)
<S>                                                                                                      <C>                  <C>
Unrealized holding gains (losses) on available for sale
     securities ..........................................................................               $ (10)               $(293)
Less: Reclassification adjustment for gains (losses)
     realized in income ..................................................................                  46                   42
                                                                                                         -----                -----
Net unrealized gains (losses) ............................................................                  36                 (251)
Tax effect ...............................................................................                 (12)                  88
                                                                                                         -----                -----

Net-of-tax amount ........................................................................               $  24                $(163)
                                                                                                         =====                =====
</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 (CBI) cautions readers that forward
looking statements,  including without  limitation,  those relating to the CBI's
future   business   prospects,   ability  to   successfully   integrate   recent
acquisitions,  revenues,  adequacy of the  allowance  for loan  losses,  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  CBI's  reports  filed  with  the
Securities and Exchange Commission.

Critical Accounting Policies

         CBI  has  adopted  various  accounting   policies,   which  govern  the
application of accounting  principles generally accepted in the United States of
America in the  preparation of the CBI's financial  statements.  The significant
accounting policies of CBI are described in detail in the notes to CBI's audited
consolidated financial statements included in CBI's Annual Report on Form 10-K.

         Certain accounting policies involve significant judgments and estimates
by  management,  which have a material  impact on the carrying  value of certain
assets and  liabilities.  Management  considers such  accounting  policies to be
critical accounting policies. The judgments and estimates used by management are
based on  historical  experience  and other  factors,  which are  believed to be
reasonable under the  circumstances.  Because of the nature of the judgments and
assumptions made by management, actual results could differ from these judgments
and  estimates,  which could have a material  impact on the  carrying  values of
assets and liabilities and the results of operations of CBI.

         CBI is a holding  company for  community  banks and a mortgage  company
and, as a financial  institution,  believes the  allowance  for loan losses is a
critical  accounting  policy that  requires the most  significant  judgments and
estimates used in preparation of its consolidated financial statements. Refer to
the sections  "Allowance for Loan Losses" and "Provision for Loan Losses" in the
Annual  Report  on Form  10-K  for  2002  for a  detailed  description  of CBI's
estimation process and methodology related to the allowance for loan losses.






                                       9
<PAGE>



RESULTS OF  OPERATIONS:  QUARTER  ENDED MARCH 31, 2003 COMPARED TO QUARTER ENDED
MARCH 31, 2002 (all  comparisons in this section are quarter to quarter,  unless
specified otherwise)

     COMMUNITY BANKSHARES, INC. - AVERAGE BALANCE SHEETS, YIELDS, AND RATES
<TABLE>
<CAPTION>

Quarter ended March 31,                                                       2003                                2002
                                                                              ----                                ----
($ in thousands)                                                            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 ................................    $    576       $    4        2.78%    $  1,735      $    6       1.38%
Investment securities taxable ............................      44,758          409        3.66%      36,688         403       4.39%
Investment securities--tax exempt ........................       9,534          104        6.61%         341           3       5.33%
Federal funds sold .......................................      20,441           57        1.12%      20,935          87       1.66%
Loans receivable .........................................     332,526        5,275        6.35%     243,987       4,324       7.09%
                                                              --------       ------                 --------      ------
   Total interest earning assets .........................     407,835        5,849        5.74%     303,686       4,823       6.35%
Cash and due from banks ..................................      14,313                                12,326
Allowance for loan losses ................................      (3,607)                               (2,960)
Premises and equipment ...................................       6,615                                 5,541
Intangible assets ........................................       7,864                                   921
Other assets .............................................       3,386                                 3,130
                                                              --------                              --------
   Total assets ..........................................    $436,406                              $322,644
                                                              ========                              ========

Liabilities and Shareholders' Equity
Interest bearing deposits
Savings ..................................................    $ 66,553       $  214        1.29%    $ 44,327      $  189       1.71%
Interest bearing transaction accounts ....................      40,891           51        0.50%      41,530          83       0.80%
Time deposits ............................................     184,417        1,281        2.78%     140,419       1,348       3.84%
                                                              --------       ------                 --------      ------
   Total interest bearing deposits .......................     291,861        1,546        2.12%     226,276       1,620       2.86%
Short term borrowing .....................................      14,475           38        1.05%       4,463          22       1.97%
Warehouse lines of credit ................................      15,357          143        3.72%       7,801          86       4.41%
FHLB advances ............................................      20,210          274        5.42%      20,280         278       5.48%
                                                              --------       ------                 --------      ------
   Total interest bearing liabilities ....................     341,903        2,001        2.34%     258,820       2,006       3.10%
Noninterest bearing demand deposits ......................      47,939                                33,569
Other liabilities ........................................       1,956                                 2,028
Shareholders' equity .....................................      44,608                                28,227
                                                              --------                              --------
   Total liabilities and equity ..........................    $436,406                              $322,644
                                                              ========                              ========

Interest rate spread .....................................                                 3.40%                               3.25%
Net  interest  income  and net  yield  on
     earning assets ......................................                   $3,848        3.77%                  $2,817       3.71%
</TABLE>

Notes:
Yields and rates are annualized.
The yield on tax exempt securities is calculated on a tax equivalent basis using
a 34% income tax rate.




                                       10
<PAGE>


Earnings Performance, March 31, 2003 compared to March 31, 2002

         The  first  quarter  of 2003 was  influenced  by three  major  factors:
interest  rates  held  stable at  historically  low  levels,  higher  demand for
mortgage  loans  generated by continuing low interest  rates,  and the July 2002
acquisition  of the Bank of  Ridgeway.  The  prime  lending  rate for the  first
quarter  2003 was 4.25%,  compared  to 4.75% for the same  quarter in 2002.  Low
interest  rates put  continuing  pressure  on the  Banks' net  interest  margin,
nevertheless  the  Banks'  margin  improved  to 3.77% from  3.71%.  Most of this
increase was  associated  with the  acquisition  of the Bank of Ridgeway in July
with its relatively  large dollar volume of relatively  low cost  deposits.  Low
rates  were also  responsible  for the  unprecedented  volume of  mortgage  loan
originations and refinances done by Community Resource  Mortgage,  Inc., and its
income was up over 82%,  favorably  impacting  CBI's (CBI)  noninterest  income.
Three  months  of  operation  in  2003  for  the  Bank of  Ridgeway  also  had a
significant  impact  on CBI's  income  statement.  The  substantial  dollar  and
percentage changes that are discussed  throughout this document are due in large
measure to these factors.

         CBI's  net  income  was  $1,581,000  or $.37  per  basic  share in 2003
compared to  $1,125,000 or $.34 per basic share in 2002, an increase of $456,000
or 40.5%. Diluted earnings were $.36 per share, up from $.33.

         This  increase  in net  income  resulted  from  the  operations  of the
subsidiaries, which are detailed in the following chart (dollars in thousands):

                                   Net Income
<TABLE>
<CAPTION>

For the quarter ended March 31,                                             2003             2002          $ change        % change
                                                                            ----             ----          --------        --------
<S>                                                                        <C>              <C>              <C>             <C>
Orangeburg National Bank (ONB) .................................           $  699           $  671           $   28            4.2%
Sumter National Bank (SNB) .....................................              349              321               28            8.7%
Florence National Bank (FNB) ...................................              139               53               86          162.3%
Community Resource Mortgage, Inc.(CRM) .........................              195              107               88           82.2%
Bank of Ridgeway (RW) ..........................................              239                0              239           na
                                                                           ------           ------           ------          -----
Totals .........................................................           $1,621           $1,152           $  469           40.7%
                                                                           ======           ======           ======          =====
</TABLE>

The totals  reflected  in the chart do not include the net costs of operation of
the holding company and accordingly are more than CBI's  consolidated net income
for the period as shown on the  Consolidated  Statements  of Income  included in
this report.

Net Income

         As noted above,  consolidated  net income for 2003,  increased from the
prior year by 40.5% or $456,000. The major components of this increase are shown
below.








                                       11
<PAGE>



              Summary Income Statement for Quarters ended March 31,

<TABLE>
<CAPTION>
                                                                      2003             2002               $ change          % change
                                                                      ----             ----               --------          --------
(Dollar amounts in thousands)
<S>                                                               <C>                 <C>                 <C>                  <C>
Interest income .....................................             $ 5,849             $ 4,823             $ 1,026              21.3%
Interest expense ....................................               2,001               2,006                  (5)             -0.2%
                                                                  -------             -------             -------
Net interest income .................................               3,848               2,817               1,031              36.6%
Provision for loan losses ...........................                 264                 169                  95              56.2%
Noninterest income ..................................               2,555               1,687                 868              51.5%
Noninterest expense .................................               3,735               2,578               1,157              44.9%
Income tax expense ..................................                 823                 632                 191              30.2%
                                                                  -------             -------             -------
Net income ..........................................               1,581               1,125                 456              40.5%
                                                                  =======             =======             =======
</TABLE>


         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, 2003 and 2002.  A  discussion  of that
table and the above table follows.

Interest Income

         Total average interest  earning assets for 2003 increased  $104,149,000
or 34.3% over 2002. The RW acquisition accounted for about $77 million or 75% of
the increase.  The acquisition  also accounted for the majority of the increases
in the volumes of specific earning assets.  The acquisition  provided almost the
entire increase in the tax exempt security portfolio. Thus, although the average
yield on interest earning assets declined, interest income rose.

Interest Expense

         Total average  interest  bearing  liabilities  for 2003 also  increased
$83,083,000  or 32.1%  over  2002.  RW  contributed  $64  million  or 77% of the
increase.  The  acquisition  also accounted for the majority of the increases in
the volumes of specific  interest bearing  liabilities.  Even though the volumes
increased,  rates  declined  enough to  produce a slight  decrease  in  increase
expense.

Net interest income

         Net  interest  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.  For  2003  net  interest  income  was  up
significantly  over  2002,  as  noted  above  mostly  as  a  result  of  the  RW
acquisition.

         CBI's net  interest  margin  was 3.77% for 2003  compared  to 3.71% for
2002. Most of the improvement was attributable to the RW acquisition,  as RW had
a large amount of relatively low cost deposits, but a portion of the improvement
was also due to aggressive interest rate management by the other banks.



                                       12
<PAGE>

Provision of loan losses

         The  increase  in the  provision  for  loan  losses  was  due to the RW
acquisition after the first quarter of 2002 and the establishment of a loan loss
reserve by CRM, also after the first quarter of 2002.


Non-Interest Income

         Non-interest  income for 2003 increased $868,000 over 2002. Most of the
increase was due to mortgage banking income which increased  $555,000,  the vast
majority of which was generated by CRM.  Approximately  $200,000 of the increase
was provided by service charges and other income from RW.


Non-Interest Expense

         Approximately   $683,000   or  50%  of  the   $1,157,000   increase  in
non-interest  expense was  accounted  for by the RW  acquisition.  The remaining
increase  was due to  volume  increases  at CRM,  which has a  commission  based
compensation system, and normal increases at the other banks.


Income Taxes

         Although  income tax expense for 2003 increased  $191,000 or 30.2% over
2002,  the  average  tax rate for 2003 was 34.2%  while in 2002 it was 36%.  The
decline in the average tax rate is related to the  acquisition  of the  Ridgeway
bank's substantial tax exempt investment portfolio.


Profitability

         One of the best ways to review  earnings  is through the ROA (return on
average  assets)  and the ROE  (return on average  equity).  Based on  operating
results for the quarters ended March 31, 2003 and 2002,  the following  table is
presented.

Period ended March 31,                   2003                2002
                                         ----                ----
(Dollar amounts in thousands)
Average assets .....................   $436,406           $322,644
ROA ................................      1.45%              1.39%
Average equity .....................    $44,608            $28,227
ROE ................................     14.18%             15.94%
Net income .........................     $1,581             $1,125

The decline in ROE is related to the increase in shareholders'  equity resulting
from the RW acquisition in July 2002.



                                       13
<PAGE>

CHANGES IN FINANCIAL POSITION

Investment portfolio

         The investment portfolio is comprised of available for sale securities.
CBI and its four 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, 2003 the available for sale portfolio totaled $46,380,000  compared to
$53,066,000 at December 31, 2002, a decrease of 12.6% or $6,686,000. The decline
in the investment  portfolio is related primarily to calls prior to maturity and
the lack of attractive  investment  options in the bond market.  The proceeds of
these calls and maturities have generally been reinvested in federal funds.  The
following  chart  summarizes  the  investment  portfolios  at March 31, 2003 and
December 31, 2002.

                                                              March 31, 2003
                                                              --------------
                                                         Amortized         Fair
Available for sale                                         Cost           Value
                                                           ----           -----
(Dollar amounts in thousands)
U.S. Government and federal agencies .............        $34,892        $35,101
State and local governments ......................          8,713          9,369
Other equity securities ..........................          1,910          1,910
                                                          -------        -------
Total ............................................        $45,515        $46,380
                                                          =======        =======

                                                            December 31, 2002
                                                            -----------------
                                                          Amortized       Fair
Available for sale                                          Cost          Value
                                                            ----          -----
(Dollar amounts in thousands)
U.S. Government and federal agencies .............        $41,488        $41,531
State and local governments ......................          9,514          9,625
Other equity securities ..........................          1,910          1,910
                                                          -------        -------
Total ............................................        $52,912        $53,066
                                                          =======        =======



Loan portfolio

         The loan  portfolio  is primarily  consumer,  and small and medium size
business  oriented.  At  March  31,  2003 the loan  portfolio  was  $313,711,000
compared to  $306,484,000  at December 31, 2002, a 2.4% or $7,227,000  increase.
This  increase was  attributable  to normal  growth of the banks.  The following
chart summarizes the loan portfolio at March 31, 2003 and December 31, 2002.

                                             Mar. 31, 2003     Dec. 31, 2002
                                             -------------     -------------
                                            (Dollar amounts in thousands)
Real estate ..............................     $ 79,409          $ 78,210
Commercial ...............................      197,552           191,844
Loans to individuals .....................       36,750            36,430
                                               --------          --------
Total ....................................     $313,711          $306,484
                                               ========          ========


                                       14
<PAGE>

         The above loan  portfolio  table does not include  loans held for sale.
Loans held for sale are loans  originated by CBI's banks or mortgage company for
sale to others which are held pending  completion of the sale. The vast majority
of such  loans are  originated  by CRM and are  one-to-four  family  residential
mortgage  loans.  At March 31,  2003  loans  held for sale  totaled  $23,191,000
compared to $24,664,000 at December 31, 2002, a 6% or $1,473,000  decrease.  The
amount of loans held for sale is subject to significant fluctuation depending on
current market conditions.


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, 2003 and December 31, 2002.

<TABLE>
<CAPTION>
                                                                                              Mar. 31, 2003         Dec. 31, 2002
                                                                                              -------------         -------------
                                                                                                     (Dollar amounts in thousands)
<S>                                                                                               <C>                  <C>
Past due 90 days + and still accruing loans ............................................          $2,514               $1,740
Non-accrual loans ......................................................................          $  822               $  796
Impaired loans (included in nonaccrual) ................................................          $  822               $  796
Other real estate owned ................................................................          $  350               $  219
</TABLE>

         Most of the  amount of  accruing  loans  greater  than 90 days past due
amount at March 31, 2003 is  attributable  to two  unrelated  loans,  one in the
approximate  amount of $1.3 million and the other in the  approximate  amount of
$.5 million.  The larger loan involves principals who are having a legal dispute
with each other.  Management  believes  that the bank's  collateral  position is
sufficient  so that no loss is  expected.  The smaller loan is related to a loan
participation  which management  expects to be paid out in May.  Management does
not expect any material loss in relation to either of these credits.

         Management  considers the past due and non-accrual amounts at March 31,
2003 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

         The  allowance  for loan losses is increased by the  provision for loan
losses,  which is a direct  charge  to  expense.  Losses on  specific  loans are
charged against the allowance in the period in which management  determines that
such loans become uncollectible.  Recoveries of previously charged-off loans are
credited to the allowance.

         Management  reviews  its  allowance  for loan  losses  in  three  broad
categories: commercial, real estate and loans to individuals. The combination of
a relatively short operating history and relatively high asset quality precludes
management from establishing a meaningful  specific loan loss percentage for the


                                       15
<PAGE>

computation of the allowance for each category.  Instead  management  assigns an
estimated percentage factor to each in the computation of the overall allowance.
These estimates are not, however,  intended to restrict CBI's ability to respond
to  losses.  CBI  charges  losses  from  any  segment  of the  portfolio  to the
allowance,  regardless  of the  allocation.  In general  terms,  the real estate
portfolio  is  subject  to the  least  risk,  followed  by the  commercial  loan
portfolio,  followed by the loans to individuals portfolio.  The banks' internal
and external  loan review  programs  from time to time  identify  loans that are
subject to specific  weaknesses  and such loans are 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 2003 will be less than the 2002
levels  as  such  loans  progress  through  the  collection,   foreclosure,  and
repossession process. Management believes that the allowance for loan losses, as
of March 31, 2003, is  sufficient  to absorb 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 the provision for loan losses is adjusted.

         The  aggregate  allowance for loan losses of the banks and the mortgage
company and the aggregate  activity with respect to the allowance are summarized
in the following table.
<TABLE>
<CAPTION>

(Dollar amounts in thousands)                                            Mar. 31, 2003          Dec. 31, 2002         Mar. 31, 2002
                                                                         -------------          -------------         -------------
<S>                                                                        <C>                     <C>                     <C>
Allowance at beginning of period ...........................               $ 3,572                 $ 3,274                 $ 2,830
Provision expense ..........................................                   264                   1,033                     169
Net charge offs ............................................                   (69)                   (734)                    (38)
                                                                           -------                 -------                 -------
Allowance at end of period .................................               $ 3,767                 $ 3,573                 $ 2,961
                                                                           =======                 =======                 =======
Allowance / outstanding loans ..............................                  1.20%                   1.17%                   1.23%
</TABLE>


Intangible assets

         CBI has adopted FASB No. 142, Goodwill and Other Intangible  Assets, as
of January 1, 2002. As of March 31, 2003 intangible  assets totaled  $7,835,000,
compared to $7,896,000 at December 31, 2002, a decrease of $61,000. The decrease
represented  amortization of the core deposit intangible acquired in conjunction
with the RW acquisition.

Deposits

         Deposits at March 31,  2003 were  $9,608,000,  or 2.9%,  higher than at
December 31, 2002.  This increase was the result of normal  business  growth for
the banks.

         Time deposits  greater than $100,000 at March 31, 2003 were $155,000 or
..23% greater than December 31, 2002, essentially unchanged.

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


                                       16
<PAGE>

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.

         As of March 31,  2003 the loan to deposit  ratio was 90.5%  compared to
90.9% at December 31, 2002 and 89.9% at March 31, 2002.  The RW  acquisition  in
July  2002 did  provide a  significant  amount of  additional  liquidity  to the
company as a whole,  and the  additional  liquidity has been used in meeting the
overall demand for loans since the acquisition.

         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
                                                                                                                       for capital
                                                                                Mar. 31, 2003       Dec. 31, 2002       adequacy
                                                                                -------------       -------------       --------
<S>                                                                                <C>                  <C>               <C>
Tier 1 capital to average total assets ...............................              8.56%                8.29%            4.00%
Tier 1 capital to risk weighted assets ...............................             11.59%               11.56%            4.00%
Total capital to risk weighted assets ................................             12.74%               12.70%            8.00%
</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 regulatory requirement for being considered well capitalized.

Dividends

         CBI declared and paid a quarterly cash dividend of nine cents per share
during the first quarter of 2003. The total cost of this dividend was $387,000.


Commitments

         On March 31,  2003 the Board of CBI  approved  a project  to  introduce
imaging  technology  into the company.  This technology will enable the banks to
provide  imaged  statements to customers and it will also provide for imaging of
documents. The estimated cost of the project is $700,000.


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


                                       17
<PAGE>

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.

         CBI's  Asset/Liability  Committee uses a simulation  model to assist in
achieving  consistent growth in net interest income while managing interest rate
risk.  According to the model as of March 31, 2003 CBI is positioned so that net
interest income would increase  $418,000 and net income would increase  $278,000
in the next twelve months if interest  rates rose 200 basis points.  Conversely,
net interest income would decline $418,000 and net income would decline $278,000
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 large
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 and its  customers  could  undertake in response to
changes in interest rates.

         As of March 31, 2003 there was no significant  change from the interest
rate  sensitivity  analysis for the various changes in interest rates calculated
as of December 31, 2002. The foregoing disclosures related to the market risk of
CBI should be read in connection  with  Management's  Discussion and Analysis of
Financial Position and Results of Operations  included in the 2002 Annual Report
on Form 10-K.



Item 4. Controls and Procedures

(a) Based on their evaluation of the issuer's disclosure controls and procedures
(as defined in 17 C.F.R. Sections  240.13a-14(c) and 240.15d-14(c)) as of a date
within 90 days prior to the filing of this quarterly report,  the issuer's chief
executive  officer and chief financial  officer concluded that the effectiveness
of such controls and procedures was adequate.

(b) There were no significant  changes in the issuer's  internal  controls or in
other factors that could  significantly  affect these controls subsequent to the
date of their  evaluation,  including  any  corrective  actions  with  regard to
significant deficiencies and material weaknesses.

         Part II--Other Information

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits

None


b) Reports on Form 8-K.  Form 8-K filed  April 25,  2003,  pursuant to Item 9 of
that Form with respect to the information  provided  pursuant to Item 12 of that
Form.


                                       18
<PAGE>

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 13, 2003

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
<PAGE>

                                 CERTIFICATIONS

         I, E. J. Ayers, Jr., certify that:

         1. I have  reviewed  this  quarterly  report on Form 10-Q of  Community
Bankshares Inc.;

         2. Based on my knowledge,  this  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
quarterly report (the "Evaluation Date"); and

         c)  presented  in this  quarterly  report  our  conclusions  about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

         a) all significant  deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this quarterly report whether or not there were significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date: May 13, 2003                   s/E. J. Ayers, Jr.
                                     -----------------------------------
                                     E. J. Ayers, Jr.

                                     Chairman and CEO



                                       20
<PAGE>

                                 CERTIFICATIONS

         I, William W. Traynham, certify that:

         1. I have  reviewed  this  quarterly  report on Form 10-Q of  Community
Bankshares Inc.;

         2. Based on my knowledge,  this  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
quarterly report (the "Evaluation Date"); and

         c)  presented  in this  quarterly  report  our  conclusions  about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

         a) all significant  deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this quarterly report whether or not there were significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date: May 13, 2003                      s/William W. Traynham
                                        -----------------------------------
                                        William W. Traynham

                                        President and CFO