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 Sept. 30, 2001  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 November 1, 2001.



<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 Disclosures About Market Risk .......  19

                            Part II-Other Information
Item 6    Exhibits and Reports on Form 8-K .................................  20























                                       2
<Page>

Part I. Item 1. Financial Statements

            COMMUNITY BANKSHARES, INC. - CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
         ($ amounts in thousands)                                                                     UNAUDITED
                                                                                                       Sept. 30,        December 31,
                                                                                                         2001               2000
                                                                                                         ----               ----
         ASSETS
Cash and due from other financial institutions:
<S>                                                                                                   <C>                 <C>
     Non-interest bearing ..................................................................          $  10,738           $  10,209
     Federal funds sold ....................................................................             18,267               8,130
                                                                                                      ---------           ---------
         Total cash and cash equivalents ...................................................             29,005              18,339
Interest bearing deposits in other banks ...................................................              4,129                 594
Investment securities:
     Securities held to maturity ...........................................................              2,149              12,371
     Securities available for sale .........................................................             33,002              41,195
Loans held for resale ......................................................................                154                 343
Loans ......................................................................................            219,125             195,077
     Less, allowance for loan losses .......................................................             (2,761)             (2,424)
                                                                                                      ---------           ---------
         Net loans .........................................................................            216,364             192,653
Premises and equipment .....................................................................              4,423               4,411
Accrued interest  receivable ...............................................................              1,780               2,330
Deferred income taxes ......................................................................                648                 795
Other real estate owned ....................................................................                267                   -
Other assets ...............................................................................                360                 292
                                                                                                      ---------           ---------
         Total assets ......................................................................          $ 292,281           $ 273,323
                                                                                                      =========           =========

         LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
     Non-interest bearing ..................................................................          $  32,548           $  31,219
     Interest bearing ......................................................................            201,243             187,592
                                                                                                      ---------           ---------
         Total deposits ....................................................................            233,791             218,811
Federal funds purchased and securities
     sold under agreements to repurchase ...................................................             10,976               9,352
Federal Home Loan Bank advances ............................................................             20,280              20,350
Other liabilities ..........................................................................              1,688               1,671
                                                                                                      ---------           ---------
         Total liabilities .................................................................            266,735             250,184
                                                                                                      ---------           ---------
Shareholders' equity:
     Common stock
         No par, authorized shares 12,000,000, issued and
         outstanding 3,204,220 in 2001 and 3,199,180 in 2000 ...............................             15,967              15,928
     Retained earnings .....................................................................              9,463               7,342
     Accumulated other comprehensive income (loss) .........................................                116                (131)
                                                                                                      ---------           ---------
         Total shareholders' equity ........................................................             25,546              23,139
                                                                                                      ---------           ---------

         Total liabilities and shareholders' equity ........................................          $ 292,281           $ 273,323
                                                                                                      =========           =========
</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 nine months ended September 30, 2001 and 2000 (Unaudited)
                            ($ amounts in thousands)

<Table>
<Caption>

                                                                                                       Accumulated
                                                                     Common Stock                          Other            Total
                                                                     ------------           Retained  Comprehensive    Shareholders'
                                                                 Shares        Amount       Earnings   Income (Loss)       Equity
                                                                 ------        ------       --------   -------------       ------
                                                                                   (dollar amounts in thousands)

<S>                                                             <C>          <C>           <C>               <C>         <C>
Balances at Dec. 31, 1999 ................................      3,191,462    $   14,207    $    6,549        $(511)      $   20,245
Comprehensive income:
     Net income ..........................................                                      2,342                         2,342
     Other comprehensive income (loss) net of tax:
     Unrealized gain (loss) on securities ................                                                      88               88
Cash-in-lieu of shares in connection with Jan. 31,
     2000 stock dividend..................................           (137)
Market value of shares issued in
     five percent stock dividend..........................              -         1,709        (1,709)                            -
Shares issued under option agreement .....................          2,520            19                                          19
Costs of stock dividend ..................................                          (10)                                        (10)
Dividends paid ...........................................              -             -          (452)           -             (452)
                                                               ----------    ----------    ----------        -----       ----------
Balances at Sept. 30, 2000 ...............................      3,193,845    $   15,925    $    6,730        $(423)      $   22,232
                                                               ==========    ==========    ==========        =====       ==========

Balances at Dec. 31, 2000 ................................      3,199,180    $   15,928    $    7,342        $(131)      $   23,139
Comprehensive income:
     Net income ..........................................                                      2,793                         2,793
     Other comprehensive income (loss) net of tax:
     Unrealized gain (loss) on securities ................                                                     247              247
Shares issued under option agreement .....................          5,040            39                                          39
Dividends paid ...........................................              -             -          (672)           -             (672)
                                                               ----------    ----------    ----------        -----       ----------
Balances at September 30, 2001 ...........................      3,204,220    $   15,967    $    9,463        $ 116       $   25,546
                                                               ==========    ==========    ==========        =====       ==========
</Table>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS






                                       4
<Page>


   COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

<Table>
<Caption>
                                                                         Nine months ended Sept. 30,    Three months ended Sept. 30,
                                                                         ---------------------------    ----------------------------
                                                                           2001             2000           2001             2000
                                                                           ----             ----           ----             ----
         ($ amounts in thousands)
Interest and dividend income:
<S>                                                                    <C>              <C>              <C>              <C>
    Interest and fees on loans .................................       $   13,694       $   12,184       $    4,578       $    4,421
    Deposits with other financial institutions .................              144               53               38               25
    Investment securities:
      Interest - U. S. Treasury and
        U. S. Government Agencies ..............................            1,602            2,159              408              727
      Dividends ................................................              118               96               49               36
                                                                       ----------       ----------       ----------       ----------
         Total investment securities ...........................            1,720            2,255              457              763
    Federal funds sold and securities
      purchased under agreements to resell .....................              642              252              188               64
                                                                       ----------       ----------       ----------       ----------
         Total interest and dividend income ....................           16,200           14,744            5,261            5,273
                                                                       ----------       ----------       ----------       ----------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more ..............            1,912            1,666              602              593
      Other ....................................................            5,089            4,473            1,561            1,642
                                                                       ----------       ----------       ----------       ----------
         Total deposits ........................................            7,001            6,139            2,163            2,235
    Federal funds purchased and securities
      sold under agreements to repurchase ......................              212              117               63               53
    Federal Home Loan Bank advances ............................              861              863              265              337
                                                                       ----------       ----------       ----------       ----------
         Total interest expense ................................            8,074            7,119            2,491            2,625
                                                                       ----------       ----------       ----------       ----------
Net interest income ............................................            8,126            7,625            2,770            2,648
Provision for loan losses ......................................              457              490              180              152
                                                                       ----------       ----------       ----------       ----------
Net interest income after provision for loan losses ............            7,669            7,135            2,590            2,496
                                                                       ----------       ----------       ----------       ----------

Non-interest income:
    Service charges on deposit accounts ........................            1,490            1,059              562              363
    Gain on sale of securities .................................               14                -               14                -
    Other ......................................................              483              290              168              101
                                                                       ----------       ----------       ----------       ----------
         Total non-interest income .............................            1,987            1,349              744              464
                                                                       ----------       ----------       ----------       ----------

Non-interest expense:
    Salaries and employee benefits .............................            3,172            2,831            1,070              939
    Premises and equipment .....................................              703              690              232              234
    Other ......................................................            1,447            1,331              531              452
                                                                       ----------       ----------       ----------       ----------
         Total non-interest expense ............................            5,322            4,852            1,833            1,625
                                                                       ----------       ----------       ----------       ----------
Net income before taxes ........................................            4,334            3,632            1,501            1,335
Provision for income taxes .....................................            1,541            1,290              539              470
                                                                       ----------       ----------       ----------       ----------

Net income .....................................................       $    2,793       $    2,342       $      962       $      865
                                                                       ==========       ==========       ==========       ==========

Basic earnings per common share:
    Weighted average shares outstanding ........................        3,201,560        3,194,685        3,200,867        3,194,685
    Net income per common share ................................       $     0.87       $     0.73       $     0.30       $     0.27
Diluted earnings per common share:
    Weighted average shares outstanding ........................        3,222,456        3,216,207        3,220,138        3,216,207
    Net income per common share ................................       $     0.87       $     0.73       $     0.30       $     0.27
</Table>


                                       5
<Page>


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

<Table>
<Caption>
                                                                                                        Nine months ended Sept. 30,
                                                                                                         2001                2000
                                                                                                         ----                ----
                                                                                                       (Dollar amounts in thousands)
Cash flows from operating activities:
<S>                                                                                                    <C>                 <C>
Net income .................................................................................           $  2,793            $  2,342
Adjustments to reconcile net income to net cash
     provided (used) by operating activities
      Depreciation .........................................................................                329                 360
      Provision for loan losses ............................................................                457                 490
      Accretion of discounts and amortization of ...........................................                (18)                 (7)
           premiums - investment securities - net
Changes in assets and liabilities:
      Proceeds of sale of loans held for resale ............................................              9,807               4,861
      Origination of loans held for resale .................................................             (9,807)             (4,861)
      (Increase) decrease in interest receivable ...........................................                550                (543)
      Decrease in other assets .............................................................                 79                  62
      Increase in other liabilities ........................................................                 17                 295
                                                                                                       --------            --------
Net cash provided by operating activities ..................................................              4,207               2,999
                                                                                                       --------            --------

Cash flows from investing activities:
      Net (increase) in interest bearing deposits ..........................................             (3,535)               (781)
      Proceeds from maturities of investment ...............................................             11,375               1,500
           securities - held to maturity
      Purchases of investment securities - held to .........................................             (1,153)               (501)
           maturity
      Proceeds from maturities of investment ...............................................             69,658               3,551
           securities - available for sale
      Purchases of investment securities - available .......................................            (61,200)             (8,468)
           for sale
      Net (increase) in loans to customers .................................................            (23,979)            (29,205)
      Purchase of premises and equipment ...................................................               (341)               (212)
      Net (increase) in other real estate ..................................................               (267)                  -
                                                                                                       --------            --------
        Net cash (used) in investing activities ............................................             (9,442)            (34,116)
                                                                                                       --------            --------

Cash flows from financing activities:
      Net increase in demand, savings, and time ............................................             14,980              26,927
           deposits
      Net increase in federal funds purchased and ..........................................              1,624               2,975
           securities sold under agreements to
           repurchase
      (Decrease) in Federal Home Loan Bank advances ........................................                (70)               (370)
      Common stock issued under option plan ................................................                 39                  10
      Dividends paid in cash ...............................................................               (672)               (453)
                                                                                                       --------            --------
        Net cash provided by financing activities ..........................................             15,901              29,089
                                                                                                       --------            --------

Net increase  (decrease) in cash and cash equivalents ......................................             10,666              (2,028)
Cash and cash equivalents-beginning of period ..............................................             18,339              20,315
                                                                                                       --------            --------

Cash and cash equivalents-end of period ....................................................           $ 29,005            $ 18,287
                                                                                                       ========            ========
</Table>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       6
<Page>

Notes to Unaudited Consolidated Financial Statements

Summary of Significant Accounting Principles

         A summary of significant  accounting policies and the audited financial
statements for 2000 are included in Corporation's Annual Report on Form 10-K for
the year ended December 31, 2000.

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 and Florence  National  Bank, 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 2000 Annual Report on Form 10-K.

Changes in Comprehensive Income Components

         The  Financial  Accounting  Standards  Board's  Statement  of Financial
Accounting  Standards No. 130, "Reporting  Comprehensive  Income," effective for
fiscal  years  beginning  after  December 15, 1997,  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>
                                                                                          Before-Tax    Tax (Expense)     Net-of-Tax
                                                                                            Amount        or Benefit        Amount
                                                                                            ------        ----------        ------

Unrealized gains (losses) on securities:
<S>                                                                                        <C>               <C>          <C>
Unrealized holding gains (losses) arising during  period .............................     $(640,000)        $217,000     $(423,000)
                                                                                           ---------         --------     ---------
Other comprehensive income, Sept. 30, 2000 ...........................................     $(640,000)        $217,000     $(423,000)
                                                                                           =========         ========     =========
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period ..............................      $176,000         $(60,000)     $116,000
                                                                                            --------         ---------     --------
Other comprehensive income, Sept. 30, 2001 ...........................................      $176,000         $(60,000)     $116,000
                                                                                            ========         =========     ========
</Table>


                                       7
<Page>

     COMMUNITY BANKSHARES, INC. - AVERAGE BALANCE SHEETS, YIELDS, AND RATES

<Table>
<Caption>
                                                                                     Nine months ended Sept. 30,
  (Dollars in Thousands)                                                             ---------------------------
                                                                               2001                               2000
                                                                               ----                               ----
                                                                             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 ....................................   $  4,441    $   144      4.32%    $  1,159     $    53        6.10%
Investment securities taxable ................................     36,490      1,699      6.21%      46,646       2,230        6.37%
Investment securities--tax exempt ............................        746         21      5.69%         806          25        6.27%
Federal funds sold ...........................................     19,514        642      4.39%       5,324         252        6.31%
Loans receivable .............................................    206,419     13,694      8.85%     175,774      12,184        9.24%
                                                                 --------    -------               --------     -------
     Total interest earning assets ...........................    267,610     16,200      8.07%     229,709      14,744        8.56%
Cash and due from banks ......................................      9,166                             8,365
Allowance for loan losses ....................................     (2,605)                           (2,130)
Premises and equipment .......................................      4,475                             4,582
Other assets .................................................      3,058                             3,171
                                                                 --------                          --------
     Total assets ............................................   $281,704                          $243,697
                                                                 ========                          ========

   Liabilities and Shareholders' Equity
Interest bearing deposits
Savings ......................................................   $ 37,290    $   927      3.31%     $32,650     $   955        3.90%
Interest bearing transaction accounts ........................     23,389        165      0.94%      20,519         241        1.57%
Time deposits ................................................    136,836      5,909      5.76%     117,735       4,943        5.60%
                                                                 --------    -------               --------     -------
     Total interest bearing deposits .........................    197,515      7,001      4.73%     170,904       6,139        4.79%
Short term borrowing .........................................      7,414        212      3.81%       3,553         117        4.39%
FHLB advances ................................................     19,773        861      5.81%      19,342         863        5.95%
                                                                 --------    -------               --------     -------
     Total interest bearing liabilities ......................    224,702      8,074      4.79%     193,799       7,119        4.90%
Noninterest bearing demand deposits ..........................     30,779                            27,568
Other liabilities ............................................      1,735                             1,283
Shareholders' equity .........................................     24,488                            21,047
                                                                 --------                          --------
     Total liabilities & shareholders' equity ................   $281,704                          $243,697
                                                                 ========                          ========

Interest rate spread .........................................                            3.28%                                3.66%

Net interest income and net yield on earning assets ..........               $ 8,126      4.05%                 $ 7,625        4.43%


</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 Corporation cautions readers that forward
looking  statements,   including  without  limitation,  those  relating  to  the
Corporation's future business prospects,  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  FOR THE NINE MONTHS ENDED  SEPTEMBER 30, 2001 COMPARED TO
SEPTEMBER 30, 2000

Net Income

         For the nine months ended  September 30, 2001 CBI earned a consolidated
profit of $2,793,000  compared to $2,342,000 for the comparable  period in 2000,
an increase of 19.3% or $451,000. Basic and diluted earnings per share were $.87
in the 2001 period compared to $.73 for the 2000 period.

         For the 2001  period  Orangeburg  National  Bank  reported  a profit of
$1,869,000  compared to $1,687,000 for the 2000 period,  an increase of 10.8% or
$182,000.

         For the 2001 period Sumter  National Bank reported a profit of $849,000
compared to $634,000 for the 2000 period, an increase of 33.9% or $215,000.  The
Sumter bank began operation in September 1996.

         For the 2001  period  Florence  National  Bank  reported  a  profit  of
$125,000  compared  to  $39,000  for the 2000  period,  an  increase  of 220% or
$86,000. The Florence bank began operation in July 1998.

         As noted  above,  consolidated  net  income for the nine  months  ended
September  30, 2001,  increased  from the prior year by 19.3% or  $451,000.  The
major  components  of this  increase are discussed  below.  Net interest  income
before  provision  for loan losses for the nine months ended  September 30, 2001
increased to $8,126,000  compared to $7,625,000  for the same period in 2000, an
increase of 6.6% or $501,000.  For the 2001 period the provision for loan losses
was $457,000  compared to $490,000  for the 2000  period,  a decrease of 6.7% or
$33,000.  Non-interest  income for the 2001  period was  $1,987,000  compared to
$1,349,000  for the 2000  period,  a 47.3% or  $638,000  increase.  For the same
periods,  non-interest expense was $5,322,000 compared to $4,852,000,  a 9.7% or
$470,000 increase.



                                       9
<Page>


Profitability

         Profitability  may be  measured  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.  Operating  results for the nine months ended September 30,
2001 and 2000 yield the results in the table shown below.

                               Nine months ended Sept. 30,
                                  2001             2000
                                  ----             ----
                                 (dollars in thousands)
Average assets .............  $281,704         $243,697
ROA ........................     1.32%            1.28%
Average equity .............   $24,488          $21,047
ROE ........................    15.21%           14.84%
Net income .................    $2,793           $2,342

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
nine  months  of 2001 net  interest  income  after  provision  for  loan  losses
increased to $7,669,000 from  $7,135,000,  a 7.5% or $534,000  increase over the
first nine  months of 2000.  This  improvement  was the result of a $38  million
increase in the average volume of earning  assets.  The average yield on earning
assets  decreased  to 8.07% for the 2001 period from 8.56% for the 2000  period.
This decline was the result of market  interest rate declines.  During the first
nine months of 2001 the prime lending rate  declined from 9.0% to 5.50%.  During
the first nine months of 2000 the prime  lending  rate  increased  from 8.75% to
9.50%.

         For the first  nine  months of 2001 the cost of funds  averaged  4.79%,
decreased  from  4.90% for the first  nine  months of 2000.  The effect of these
changes was a net interest spread (yield on earning assets less cost of interest
bearing liabilities) of 3.28% for the 2001 period,  decreased from 3.66% for the
2000 period.  CBI's net interest  margin (net interest  income  divided by total
earning  assets)  was 4.05% for the 2001  period  compared to 4.43% for the 2000
period.

Interest Income

         Elsewhere  in this report is a table  comparing  the average  balances,
yields,  and rates for the interest rate sensitive segments of the Corporation's
balance  sheets  for the nine  months  ended  September  30,  2001 and  2000.  A
discussion of that table follows.

         Total interest income for the first nine months of 2001 was $16,200,000
compared  with  $14,744,000  for the same period in 2000,  a 9.9% or  $1,456,000
increase.  The yield on average  earning  assets for the 2001  period was 8.07%,
decreased  from 8.56% for the 2000  period.  The decline in yields was  directly
related to the overall decline in market interest rates.  Total average interest
earning assets for the 2001 period were  $267,610,000  compared to  $229,709,000
for the 2000 period, an increase of 16.5% or $37,901,000.


                                       10
<Page>


         The loan portfolio earned $13,694,000 for the first nine months of 2001
compared  to  $12,184,000  for the same  period of 2000,  a 12.4% or  $1,510,000
increase.  The yield  decreased  to 8.85% for the 2001 period from 9.24% for the
2000 period.  The average size of the loan  portfolio was  $206,419,000  for the
2001 period compared to $175,774,000  for the 2000 period,  an increase of 17.4%
or $30,645,000.

         The taxable  investment  portfolio earned $1,699,000 for the first nine
months in 2001  compared to  $2,230,000  for the same period in 2000, a 23.8% or
$531,000 decrease. The yield decreased to 6.21% in the 2001 period from 6.37% in
the 2000 period.  The average size of the portfolio was  $36,490,000 in the 2001
period  compared  to  $46,646,000  in the 2000  period,  a decrease  of 21.8% or
$10,156,000.  As bond market interest rates declined during 2001 the Corporation
had numerous securities called prior to maturity.

         The tax-exempt  investment  portfolio earned $21,000 for the first nine
months in 2001  compared to $25,000 for the same period in 2000, a 16% or $4,000
decrease.  The yield (on a taxable  equivalent basis) on the portfolio was 5.69%
for the 2001 period,  decreased from 6.27% for the 2000 period. The average size
of the  portfolio  was $746,000 for the 2001 period  compared to $806,000 in the
2000 period, a decrease of 7.4% or $60,000.

         Interest bearing deposits in other banks  contributed  $144,000 for the
first nine months of 2001  compared  to $53,000 for the same period in 2000,  an
increase of 172% or $91,000.  The yield on these deposits decreased to 4.32% for
the 2001 period from 6.10% in the 2000 period.  CBI averaged  $4,441,000  in the
2001 period  compared to $1,159,000  in the 2000 period,  an increase of 283% or
$3,282,000.  The increase in these  deposits was the result of declining  market
interest rates,  which caused numerous calls of investment  securities  prior to
maturity.  The funds  resulting  from these calls were  temporarily  invested in
interest bearing deposits and federal funds.

         Federal  funds  sold  earned  $642,000  the first  nine  months of 2001
compared  to  $252,000  for the same  period  in 2000,  an  increase  of 155% or
$390,000.  Yields decreased to 4.39% for the 2001 period from 6.31% for the 2000
period.  For the 2001 period CBI increased  its average  volume in federal funds
sold to  $19,514,000  compared  to  $5,324,000  for the 2000  period,  a 267% or
$14,190,000 increase.

Interest Expense

         Interest  expense  for the first  nine  months  of 2001 was  $8,074,000
compared  to the prior  year's  $7,119,000,  a 13.4% or $955,000  increase.  The
average volume of interest  bearing  liabilities was  $224,702,000  for the 2001
period  compared to  $193,799,000  for the 2000 period,  a 15.9% or  $30,903,000
increase. The average rate paid for interest-bearing liabilities during the 2001
period was 4.79%, decreased from 4.90% for the 2000 period.

         The cost of savings  accounts  was $927,000 in the first nine months in
2001  compared to  $955,000 in the first nine months of 2000,  a 2.9% or $28,000
decrease.  Average savings deposit balances were $37,290,000 for the 2001 period
compared to $32,650,000 for the 2000 period, an increase of 14.2% or $4,640,000.
The average rate paid on these funds decreased to 3.31% from 3.90%.

         Interest bearing transaction  accounts cost $165,000 for the first nine
months in 2001  compared to the prior  year's  $241,000,  a decrease of 31.5% or


                                       11
<Page>

$76,000.  The  volume of these  deposits  was  $23,389,000  for the 2001  period
compared to $20,519,000 for the 2000 period, a 14% or $2,870,000  increase.  The
average rate paid on these funds in the 2001 period decreased to .94% from 1.57%
in the 2000 period.

         Time  deposits  cost  $5,909,000  for the  first  nine  months  of 2001
compared to $4,943,000  for the first nine months of the prior year, an increase
of 19.5% or $966,000.  The volume was  $136,836,000 for the 2001 period compared
to  $117,735,000  for the 2000  period,  a 16.2% or  $19,101,000  increase.  The
average  rate paid on these  funds  increased  to 5.76% for the 2001 period from
5.60% for the 2000 period.  This increase runs contrary to market interest rates
but  reflects  increased  competition  for time  deposits  in the  Corporation's
markets.

         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  $212,000 for the first nine months in 2001
compared to $117,000 for the first nine months of 2000,  an increase of 81.2% or
$95,000. The volume of these funds was $7,414,000 in the 2001 period compared to
$3,553,000 in the 2000 period,  an increase of 109% or  $3,861,000.  The average
rate paid on these funds decreased to 3.81% from 4.39%.

         Borrowings  from the Federal Home Loan Bank cost $861,000 for the first
nine  months in 2001  compared  to  $863,000  for the first nine months in 2000,
virtually  unchanged.  The advances averaged  $19,773,000 during the 2001 period
compared to $19,342,000 for the 2000 period,  a 2.2% or $431,000  increase.  The
average rate paid on these funds decreased to 5.81% from 5.95%.


Non-Interest Income

         Non-interest  income  for  the  first  nine  months  of  2001  grew  to
$1,987,000  compared to  $1,349,000 in the first nine months of 2000, a 47.3% or
$638,000 increase. Much of this increase resulted from the introduction of a new
service,  an  automated  overdraft  courtesy  line for  customers.  This service
provides  for a flat  fee  for  paying  customer  checks  in  overdraft  that is
equivalent  to the fee  charged  for  returned  checks.  Customers  who use this
service are subject to other terms and  conditions.  Also,  some of the increase
was due to  increased  fee income from  mortgages  originated  for sale into the
secondary market.

Non-Interest Expense

         For the first nine months of 2001 non-interest expenses were $5,322,000
compared to  $4,852,000  for the first nine  months of 2000,  a 9.7% or $470,000
increase.  This  increase is related to higher  levels of business  activity and
included the following components:

         For the  2001  period  personnel  costs  were  $3,172,000  compared  to
$2,831,000 for the 2000 period, an increase of 12% or $341,000;

         For the 2001 period  premises  and  equipment  expenses  were  $703,000
compared to $690,000 for the 2000 period, an increase of 1.9% or $13,000; and

         For the 2001 period other costs were $1,447,000  compared to $1,331,000
for the 2000 period, an increase of 8.7% or $116,000.



                                       12
<Page>


Income Taxes

         CBI provided  $1,541,000  for federal and state income taxes during the
first nine months of 2001 compared to $1,290,000  for the same period in 2000, a
19.5% or $251,000  increase.  The average tax rate for the 2001 period was 35.6%
and for the 2000 period it was 35.5%.


RESULTS OF OPERATIONS FOR THE QUARTERS ENDED SEPTEMBER 30, 2001 AND 2000

Net Income

         For the quarter  ended  September 30, 2001,  CBI earned a  consolidated
profit of $962,000,  compared to $865,000 for the comparable  period of 2000, an
increase of 11.2% or $97,000.  Basic or diluted  earnings per share were $.30 in
the 2001 period,  compared to $.27 for the 2000 period. The changes in the items
comprising  net  interest  income,  which are  discussed  below,  resulted  from
essentially the same factors  discussed above regarding the results of operation
for the nine months ended September 30, 2001.

Net interest income

         Net interest  income  before  provision for loan losses for the quarter
ended September 30, 2001 increased to $2,770,000  compared to $2,648,000 for the
same period in 2000,  an increase of 4.6% or  $122,000.  For the same period the
provision for loan losses was $180,000 compared to $152,000 for the 2000 period,
an increase of 18.4% or $28,000.

Interest Income

         Total  interest  income  for the  third  quarter  2001  was  $5,261,000
compared to $5,273,000 for the same period in 2000, virtually unchanged.

         The  loan  portfolio  earned  $4,578,000  for the  third  quarter  2001
compared to $4,421,000 for the same period of 2000, a 3.6% or $157,000 increase.

         The  investment  portfolio  earned  $457,000 for the third quarter 2001
compared to $763,000  for the same  period of 2000  period,  a 40.1% or $306,000
decrease.

         Interest  bearing deposits in other banks  contributed  $38,000 for the
third  quarter 2001 compared to $25,000 for the same period of 2000, an increase
of 52% or $13,000.

         Federal  funds sold earned  $188,000 the third quarter of 2001 compared
to $64,000 for the same period, an increase of 194% or $124,000.

Interest expense

         Interest expense for the third quarter of 2001 was $2,491,000  compared
to $2,625,000 for the same period of 2000, a 5.1% or $134,000 decrease.



                                       13
<Page>



Non-interest income and expense

         Non-interest  income  for the 2001  period  was  $744,000  compared  to
$464,000 for the 2000 period,  a 60.3% or $280,000  increase.  This increase was
mostly the result of the  introduction of the new automated  overdraft  service.
Non-interest expense was $1,833,000 compared to $1,625,000,  a 12.8% or $208,000
increase.



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 September 30, 2001 the held to
maturity  portfolio totaled  $2,149,000  compared to $12,371,000 at December 31,
2000, a decrease of 82.6% or  $10,222,000.  At September 30, 2001, the available
for sale portfolio totaled  $33,002,000  compared to $41,195,000 at December 31,
2000,  a  decrease  of 19.9% or  $8,193,000.  Most of the  decline in the banks'
investment  portfolios was due to the call of many securities during 2001, which
resulted from the decline in bond market  interest  rates.  The following  chart
summarizes  the  investment  portfolios at September 30, 2001,  and December 31,
2000.
<Table>
<Caption>
                                                                                           September 30, 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 .........................        $2,149            $2,157           $30,036           $30,201
Tax exempt securities .........................................             -                 -               803               820
Other equity securities .......................................             -                 -             1,981             1,981
                                                                       ------            ------           -------           -------
Total .........................................................        $2,149            $2,157           $32,820           $33,002
                                                                       ======            ======           =======           =======

Unrealized gain ...............................................        $    8                             $   182
                                                                       ======                             =======
<Caption>

                                                                                           December 31, 2000
                                                                          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 .........................       $12,371           $12,217           $38,599           $38,404
Tax exempt securities .........................................             -                 -               814               810
Other equity securities .......................................             -                 -             1,981             1,981
                                                                      -------           -------           -------           -------
Total .........................................................       $12,371           $12,217           $41,394           $41,195
                                                                      =======           =======           =======           =======

Unrealized (loss) .............................................       $  (154)                            $  (199)
                                                                      ========                            =======
</Table>




                                       14
<Page>


Loan portfolio

         The loan portfolio is primarily  consumer and small business  oriented.
At  September  30,  2001  the  loan  portfolio  was  $219,125,000   compared  to
$195,077,000  at  December  31,  2000,  a 12.3%  or  $24,048,000  increase.  The
following chart summarizes the loan portfolio at September 30, 2001 and December
31, 2000.

                                         Sept. 30, 2001      Dec. 31, 2000
                                         --------------      -------------
                                              (dollars in thousands)
Real estate .............................     $138,258            $113,543
Commercial ..............................       55,260              52,264
Loans to individuals ....................       25,607              29,270
                                              --------            --------
Total ...................................     $219,125            $195,077
                                              ========            ========



Past Due and Non-Performing Assets and the Allowance for Loan Losses

         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 September 30, 2001 and December 31, 2000.

                                             Sept. 30, 2001        Dec. 31, 2000
                                             --------------        -------------
                                                     (dollars in thousands)
Past due 90 days + accruing loans ...........      $101                    $ 93
Non-accrual loans ...........................      $413                    $238
Impaired loans (included in non-accrual) ....      $413                    $238
Other real estate owned .....................      $267                    $  -

         Management  considers the past due and non-accrual amounts at September
30,  2001  to be  reasonable  in  relation  to the  size  of the  portfolio  and
manageable in the normal course of business.  The increase in non-accrual assets
is associated with a small number of loans and is not indicative, in the opinion
of management, of any trend.

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

Allowance for Loan Losses

         The Corporation  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.  In addition,  each bank is supervised and regularly  examined by the
Office of the Comptroller of the Currency 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.


                                       15
<Page>


         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  cities or counties.  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 loan portfolio is subject to the least risk,  followed by the installment
loan  portfolio,  which in turn is followed  by the  commercial  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 2001 will at least approximate the
2000 levels as such loans progress  through the collection  process.  Management
believes  that the  allowance  for loan  losses,  as of  September  30,  2001 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>
   (Dollars in thousands)                                             Nine months ended         Year ended         Nine months ended
                                                                        Sept. 30, 2001          Dec. 31, 2000        Sept. 30, 2000
                                                                        -------------          -------------         -------------
<S>                                                                         <C>                   <C>                    <C>
Allowance at beginning of period ..................................         $2,424                $1,936                 $1,936
Provision expense .................................................            457                   688                    490
Net charge offs ...................................................           (120)                 (200)                  (156)
                                                                            ------                ------                 ------
Allowance at end of period ........................................         $2,761                $2,424                 $2,270
                                                                            ======                ======                 ======
Allowance / outstanding loans .....................................          1.26%                 1.24%                  1.22%
</Table>

         In reviewing  the adequacy of the  allowance for loan losses at the end
of  each  period,  management  of  each  bank  considers  historical  loan  loss
experience,   current  economic   conditions,   loans  outstanding,   trends  in
non-performing  and  delinquent  loans,  and the quality of collateral  securing
problem  loans.  After  charging off all known  losses,  management of each bank
considers the allowance adequate to provide for estimated losses inherent in the
loan portfolio at September 30, 2001.


                                       16
<Page>



Deposits

         Deposits   were   $233,791,000   at  September  30,  2001  compared  to
$218,811,000 at December 31, 2000, an increase of 6.8% or $14,980,000.

         Time deposits  greater than $100,000 were  $48,708,000 at September 30,
2001  compared to  $38,702,000  at December  31,  2000,  an increase of 25.9% or
$10,006,000.

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 Orangeburg National Bank, Sumter National Bank, and Florence National
Bank 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 and its banks maintain an available for sale and a held to maturity
investment  portfolio.  While all these investment securities are 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.  Such sales will generally be from the available for sale
portfolio.  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.  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, that CBI would be
unable to meet its liquidity needs with the proceeds of maturing assets.

         CBI through its banking subsidiaries also maintains federal funds lines
of credit with correspondent  banks, and is able to borrow from the Federal Home
Loan Bank and from the Federal Reserve's discount window.

         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 $233  million  in 2001.  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 September 30, 2001 CBI
had approximately $24.7 million and $11.5 million in certificates of deposit and
other interest bearing  liabilities  maturing in one to five years and over five


                                       17
<Page>

years, respectively. CBI's assets maturing or repricing in the same periods were
$124.8 million and $26.1 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
                                                                                                                           for
                                                                        Sept. 30, 2001          Dec. 31, 2000       capital adequacy
                                                                        --------------          -------------       ----------------
<S>  <C>                                                                    <C>                   <C>                     <C>
Tier 1 capital to average total assets ..............................        8.89%                 8.20%                  4.00%
Tier 1 capital to risk weighted assets ..............................       11.77%                11.10%                  4.00%
Total capital to risk weighted assets ...............................       12.95%                12.30%                  6.00%
</Table>

         In the opinion of management,  the Corporation's  current and projected
capital positions are adequate.

Dividends

         CBI  declared  and paid a  quarterly  cash  dividend of seven cents per
share  during  the first  three  quarters  of 2001,  for a total of 21 cents per
share. The total cost of these dividends was $672,000.

Subsequent event

         On October 31, 2001, CBI completed its previously announced acquisition
of Resource Mortgage,  Inc., a mortgage company  headquartered in Columbia,  SC.
Consideration  for the  acquisition  was 95,454 shares of CBI common  stock,  of
which 63,636 are being held in escrow pending the attainment of certain earnings
goals by the subsidiary.  The subsidiary,  which was renamed Community  Resource
Mortgage,  Inc.,  has 29  employees  and has  offices  in  Columbia,  Sumter and
Anderson, SC. The subsidiary originates and sells residential mortgage loans.

         In connection  with the  acquisition,  CBI has  guaranteed a $9 million
line of credit with an unaffiliated lender for the subsidiary's  general working
capital purposes.

Commitments

         Sumter  National  Bank has entered  into a contract to  construct a new
branch bank.  This building is currently under  construction  near the corner of
Liberty Street and  Wedgefield  Highway in Sumter.  The  contracted  cost of the
building is $567,681.




                                       18
<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. The Corporation'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 the
Corporation  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  the  Corporation'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 the  Corporation's  asset/liability  function.  The  Corporation  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.  The
Corporation seeks to accomplish this goal while maintaining  adequate  liquidity
and capital. The Corporation'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.

         The Corporation'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
the  Corporation'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 September 30, 2001 the Corporation is
positioned  so that net interest  income would be expected to increase  $242,000
and net income would be expected to increase  $149,000 in the next twelve months
if interest rates rise 100 basis points.  Conversely,  net interest income would
be  expected  to decline  $242,000  and net income  would be expected to decline
$149,000 in the next twelve  months if interest  rates decline 100 basis points.
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  the
Corporation could undertake in response to changes in interest rates.

         As of  September  30,  2001 there was no  significant  change  from the
interest rate  sensitivity  analysis for the various  changes in interest  rates
calculated  as of December 31, 2000.  The foregoing  disclosures  related to the
market risk of the Corporation  should be read in connection  with  Management's
Discussion and Analysis of Financial Position and Results of Operations included
in the 2000 Annual Report on Form 10-K.


                                       19
<Page>


Part II--Other Information

Item 2.   Changes in Securities and Use of Proceeds

(c)  On October  31,  2001,  CBI  issued  95,454  shares of its common  stock as
     consideration  for  the  purchase  of  100% of the  outstanding  shares  of
     Resource  Mortgage,  Inc. Of the total  number of shares,  63,636 are being
     held in escrow  pending the  attainment  of certain  earnings  goals by the
     subsidiary.  Issuance  of the  shares by CBI was exempt  from  registration
     pursuant to Section  4(2) of the  Securities  Act of 1933 because no public
     offering was involved.

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit   No.(from                            Description
 item 601 of S-B)

10.1                        Loan  Agreement,   dated  November  1,  2001,  among
                            Community Bankshares,  Inc., Resource Mortgage Inc.,
                            and Branch Bank and Trust Company.


10.2                        Guaranty,  dated as of November 1, 2001 by Community
                            Bankshares, Inc. of obligations of Resource Mortgage
                            Inc. to Branch Bank and Trust Company.


b) Reports on Form 8-K.  None.















                                       20
<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: November 12,  2001
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)









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<Page>

                                  EXHIBIT INDEX

Exhibit   No.(from                           Description
item 601 of S-B)

10.1                        Loan  Agreement,  dated   November  1,  2001,  among
                            Community Bankshares,  Inc., Resource Mortgage Inc.,
                            and Branch Bank and Trust Company.

10.2                        Guaranty,  dated as of November 1, 2001 by Community
                            Bankshares, Inc. of obligations of Resource Mortgage
                            Inc. to Branch Bank and Trust Company.















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