SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549


                                   FORM 10-QSB


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



For the quarterly period ended June 30, 1997              File number: 000-22054



                           COMMUNITY BANKSHARES, INC.
              (Exact Name of Small Business Issuer 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
                           (Issuer's telephone number)



          Check whether the issuer (1) has filed all the reports  required to be
filed by Section 13 or 15(d) of the  Securities  Exchange Act of 1934 during the
past 12 months (or for such shorter  period that the  Registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X. No _.
          State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:  2,626,476 shares of common
stock outstanding as of July 31, 1997.

                                     
<PAGE>




                                         10-QSB 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 .....................  10
                   

                                Part II-Other Information
--------------------------------------------------------------------------------
      Item 4       Submission of Matters to a Vote of Securities Holders ...  23
      Item 6       Exhibits and Reports on Form 8-K ........................  24




                                       2
<PAGE>



                   COMMUNITY BANKSHARES, INC. - BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                                                June 30,
                                                                                                  1997                  December 31,
        ASSETS                                                                                 UNAUDITED                    1996
                                                                                               ---------                    ----
                                                                    
Cash and due from other financial institutions:
<S>                                                                                         <C>                       <C>          
    Non-interest bearing .......................................................            $   5,831,000             $   5,349,000
    Federal funds sold .........................................................                6,360,000                 1,300,000
                                                                                            -------------             -------------
        Total cash and cash equivalents ........................................               12,191,000                 6,649,000
Interest bearing deposits in other banks .......................................                1,607,000                   431,000
Investment securities:
    Securities held to maturity ................................................               16,217,000                15,027,000
    Securities available for sale ..............................................               13,354,000                10,761,000
Loans held for resale ..........................................................                   48,000                   295,000

Loans ..........................................................................               81,005,000                68,829,000
    Less, allowance for loan losses ............................................               (1,014,000)                 (876,000)
                                                                                            -------------             -------------
        Net loans ..............................................................               79,991,000                67,953,000
                                                                                            -------------             -------------

Premises and equipment .........................................................                2,827,000                 2,837,000
Accrued interest  receivable ...................................................                1,044,000                   855,000
Deferred income taxes ..........................................................                  322,000                   283,000
Other assets ...................................................................                  266,000                   370,000
                                                                                            -------------             -------------

        Total assets ...........................................................            $ 127,867,000             $ 105,461,000
                                                                                            =============             =============

        LIABILITIES AND SHAREHOLDERS'
        EQUITY

Deposits:
    Non-interest bearing .......................................................            $  14,999,000             $  13,337,000
    Interest bearing ...........................................................               92,583,000                76,514,000
                                                                                            -------------             -------------
        Total deposits .........................................................              107,582,000                89,851,000
Federal funds purchased and securities
    sold under agreements to repurchase ........................................                6,138,000                 1,744,000
Federal Home Loan Bank advances ................................................                1,130,000                 1,130,000
Other liabilities ..............................................................                  612,000                   632,000
                                                                                            -------------             -------------
        Total liabilities ......................................................              115,462,000                93,357,000
                                                                                            -------------             -------------

Shareholders' equity:
    Common stock
        No par, authorized shares 12,000,000, issued                             
        and outstanding 2,626,476 in 1997 and 1996 .............................                9,055,000                 9,064,000
    Retained earnings ..........................................................                3,390,000                 3,040,000
    Unrealized (loss) on securities available for sale .........................                  (40,000)                        -
                                                                                            -------------             -------------
        Total shareholders' equity .............................................               12,405,000                12,104,000
                                                                                            -------------             -------------

        Total liabilities and shareholders' equity .............................            $ 127,867,000             $ 105,461,000
                                                                                            =============             =============
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

                                       3
<PAGE>

                COMMUNITY BANKSHARES, INC. - STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                                                    Six months ended June 30,
                                                                                                   1997                    1996
                                                                                                UNAUDITED               UNAUDITED
                                                                                                ---------               ---------
Interest and dividend income:
<S>                                                                                         <C>                       <C>          
    Interest and fees on loans .................................................            $   3,546,000             $   2,503,000
    Deposits with other financial institutions .................................                   34,000                    38,000
    Investment securities:
      Interest - U. S. Treasury and
        U. S. Government Agencies ..............................................                  791,000                   762,000
      Dividends ................................................................                   22,000                    13,000
                                                                                            -------------             -------------
         Total investment securities ...........................................                  813,000                   775,000
                                                                                            -------------             -------------
    Federal funds sold and securities
      purchased under agreements to resell .....................................                   94,000                    48,000
                                                                                            -------------             -------------
         Total interest and dividend income ....................................                4,487,000                 3,364,000
                                                                                            -------------             -------------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more ..............................                  373,000                   392,000
      Other ....................................................................                1,480,000                 1,074,000
                                                                                            -------------             -------------
         Total deposits ........................................................                1,853,000                 1,466,000
    Federal funds purchased and securities
      sold under agreements to repurchase ......................................                   61,000                    43,000
    Federal Home Loan Bank advances ............................................                   37,000                    38,000
                                                                                            -------------             -------------
         Total interest expense ................................................                1,951,000                 1,547,000
                                                                                            -------------             -------------
Net interest income ............................................................                2,536,000                 1,817,000
Provision for loan losses ......................................................                  177,000                    63,000
                                                                                            -------------             -------------
Net interest income after provision for loan losses ............................                2,359,000                 1,754,000
                                                                                            -------------             -------------

Non-interest income:
    Service charges on deposit accounts ........................................                  253,000                   172,000
    Other ......................................................................                  110,000                    63,000
                                                                                            -------------             -------------
         Total non-interest income .............................................                  363,000                   235,000
                                                                                            -------------             -------------

Non-interest expense:
    Salaries and employee benefits .............................................                1,133,000                   806,000
    Premises and equipment .....................................................                  249,000                   155,000
    Other ......................................................................                  543,000                   350,000
                                                                                            -------------             -------------
         Total non-interest expense ............................................                1,925,000                 1,311,000
                                                                                            -------------             -------------
Net income before taxes ........................................................                  797,000                   678,000
Provision for income taxes .....................................................                  250,000                   284,000
                                                                                            -------------             -------------
Net income after taxes .........................................................            $     547,000             $     394,000
                                                                                            =============             =============

Per common share:
    Weighted average shares outstanding ........................................                2,626,476                 2,278,718
                                                                                            =============             =============
    Net income per common share ................................................            $        0.21             $        0.17
                                                                                            =============             =============
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

                                       4
<PAGE>



                COMMUNITY BANKSHARES, INC. - STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                                                                     Quarter ended June 30,
                                                                                                  1997                   1996
                                                                                                UNAUDITED             UNAUDITED
                                                                                                ---------             ---------
Interest and dividend income:        
<S>                                                                                         <C>                       <C>          
    Interest and fees on loans .................................................            $   1,883,000             $   1,277,000
    Deposits with other financial institutions .................................                   23,000                    10,000
    Investment securities:
      Interest - U. S. Treasury and
        U. S. Government Agencies ..............................................                  414,000                   399,000
      Dividends ................................................................                   10,000                     7,000
                                                                                            -------------             -------------
         Total investment securities ...........................................                  424,000                   406,000
                                                                                            -------------             -------------
    Federal funds sold and securities
      purchased under agreements to resell .....................................                   59,000                    26,000
                                                                                            -------------             -------------
         Total interest and dividend income ....................................                2,389,000                 1,719,000
                                                                                            -------------             -------------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more ..............................                  195,000                   215,000
      Other ....................................................................                  781,000                   515,000
                                                                                            -------------             -------------
         Total deposits ........................................................                  976,000                   730,000
    Federal funds purchased and securities
      sold under agreements to repurchase ......................................                   42,000                    22,000
    Federal Home Loan Bank advances ............................................                   19,000                    20,000
                                                                                            -------------             -------------
         Total interest expense ................................................                1,037,000                   772,000
                                                                                            -------------             -------------
Net interest income ............................................................                1,352,000                   947,000
Provision for loan losses ......................................................                   93,000                    33,000
                                                                                            -------------             -------------
Net interest income after provision for loan losses ............................                1,259,000                   914,000
                                                                                            -------------             -------------

Non-interest income:
    Service charges on deposit accounts ........................................                  130,000                    91,000
    Other ......................................................................                   60,000                    37,000
                                                                                            -------------             -------------
         Total non-interest income .............................................                  190,000                   128,000
                                                                                            -------------             -------------

Non-interest expense:
    Salaries and employee benefits .............................................                  576,000                   428,000
    Premises and equipment .....................................................                  127,000                    86,000
    Other ......................................................................                  302,000                   186,000
                                                                                            -------------             -------------
         Total non-interest expense ............................................                1,005,000                   700,000
                                                                                            -------------             -------------
Net income before taxes ........................................................                  444,000                   342,000
Provision for income taxes .....................................................                  130,000                   166,000
                                                                                            -------------             -------------

Net income after taxes .........................................................            $     314,000             $     176,000
                                                                                            =============             =============

Per common share:
    Weighted average shares outstanding ........................................                2,626,476                 2,278,718
                                                                                            =============             =============
    Net income per common share ................................................            $        0.12             $        0.08
                                                                                            =============             =============
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

                                       5
<PAGE>

       COMMUNITY BANKSHARES, INC. - STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
                                                                                                    Six months ended June 30,
                                                                                                 UNAUDITED                   
                                                                                                    1997                 1996
                                                                                                    ----                 ----
Cash flows from operating activities:
<S>                                                                                         <C>                       <C>          
Net income .....................................................................            $     547,000             $     394,000
Adjustments to reconcile net income
  to net cash used in operating activities:
        Depreciation ...........................................................                  151,000                    76,000
        Provision for loan losses ..............................................                  177,000                    63,000
        Accretion of discounts and amortization of premiums -
          investment securities - net ..........................................                  (51,000)                  (12,000)
Changes in assets and liabilities:
        (Increase) in interest receivable ......................................                 (189,000)                 (130,000)
        (Increase) decrease in other assets ....................................                   29,000                  (300,000)
        Decrease in other liabilities ..........................................                  (20,000)                  (21,000)
                                                                                            -------------             -------------
Net cash provided by operating activities ......................................                  644,000                    70,000
                                                                                            -------------             -------------

Cash flows from investing activities:
        Proceeds from maturities and sales of
          investment securities - held to maturity .............................                3,267,000                 4,814,000
        Purchases of investment securities - held to maturity ..................               (4,446,000)               (5,724,000)
        Proceeds from maturities and sales of
          investment securities - available for sale ...........................                2,165,000                 1,922,000
        Purchases of investment securities - available for sale ................               (4,758,000)               (3,180,000)
        Net increase in interest bearing deposits ..............................               (1,176,000)                   (9,000)
        Net increase in loans to customers .....................................              (11,968,000)               (3,553,000)
        Purchase of premises and equipment .....................................                 (105,000)                 (894,000)
        Net (increase) in other real estate ....................................                        -                   (11,000)
                                                                                            -------------             -------------
          Net cash (used) in investing activities ..............................              (17,021,000)               (6,635,000)
                                                                                            -------------             -------------

Cash flows from financing activities:
        Net increase in demand, savings, & time deposits .......................               17,731,000                 6,673,000
        Net increase  (decrease) in federal funds purchased
           and securities sold under agreements to repurchase ..................                4,394,000                  (663,000)
        Sale of common stock ...................................................                        -                 4,402,000
        Cost of stock sale & dividend reinvestment program .....................                   (9,000)                  (44,000)
        Proceeds of FHLB advances ..............................................                        -                   500,000
        Dividends paid............................................................               (197,000)                 (121,000)
        Notes payable ..........................................................                        -                  (240,000)
                                                                                            -------------             -------------
          Net cash provided by financing activities ............................               21,919,000                10,507,000
                                                                                            -------------             -------------

Net increase in cash and due from other
        financial institutions .................................................                5,542,000                 3,942,000
Cash and due from other financial institutions -
        beginning of period ....................................................                6,649,000                 4,535,000
                                                                                            -------------             -------------
Cash and due from other financial institutions -
        end of period ..........................................................            $  12,191,000             $   8,477,000
                                                                                            =============             =============
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

                                       6
<PAGE>



Summary of Significant Accounting Principles

     A summary of significant accounting policies is included in the 1996 Annual
Report of Community  Bankshares,  Inc. to the Shareholders,  which also contains
the Company's audited financial statements for 1996.

Principles of Consolidation

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

Management Opinion

     The 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 1996 Annual Report.


                                       7
<PAGE>



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

                                          ...........................................  .........................................
    Six months ended June 30,                                1997                                       1996
                                          ...........................................  .........................................
                                                              Interest                                   Interest
                                                Average        Income/       Yields/        Average       Income/       Yields/
Assets                                          Balance        Expense        Rates         Balance       Expense        Rates
                                                -------        -------        -----         -------       -------        -----
                                                                      (Dollar amounts in thousands)
<S>                                           <C>                <C>           <C>         <C>             <C>            <C>  
    Interest bearing deposits ............    $  1,171           $   34        5.81%       $ 1,510         $   38         5.03%
    Investment securities taxable ........      25,989              804        6.19%        26,227            766         5.84%
    Investment securities--tax exempt ....         412                9        6.62%           417              9         6.54%
    Federal funds sold ...................       3,578               94        5.25%         1,915             48         5.01%
    Loans, net of unearned income ........      75,329            3,546        9.41%        53,629          2,503         9.33%
                                              --------           ------        ----        -------         ------         ---- 

    Total interest earning assets ........     106,479            4,487        8.43%        83,698          3,364         8.04%

    Cash and due from banks ..............       4,810                                       3,321
    Allowance for loan losses ............        (942)                                       (721)
    Premises and equipment ...............       2,837                                       1,943
    Other assets .........................       1,447                                       1,170
                                              --------                                     -------  

Total assets .............................    $114,631                                     $89,411
                                              ========                                     =======  

Liabilities and Shareholders' Equity

    Interest bearing deposits
    Savings ..............................    $ 18,651           $  313        3.36%       $13,353         $  168         2.52%
    Interest bearing transaction accounts       11,244              105        1.87%         7,976             80         2.01%
    Time deposits ........................      53,675            1,435        5.35%        44,657          1,200         5.37%
                                              --------           ------        ----        -------         ------         ----  

    Total interest bearing deposits ......      83,570            1,853        4.43%        65,986          1,448         4.39%
    Short term borrowing .................       3,142               61        3.88%         2,103             43         4.09%
    FHLB advances ........................       1,123               37        6.59%         1,152             38         6.60%
                                              --------           ------        -----       -------         ------         ---- 
    Total interest bearing liabilities ...      87,835            1,951        4.44%        69,241          1,529         4.42%

    Noninterest bearing demand deposits ..      13,913                                       9,629
    Other liabilities ....................         757                                         553
    Shareholders' equity .................      12,126                                       9,988
                                              --------                                     -------  

Total liabilities and shareholders' equity    $114,631                                     $89,411
                                              ========                                     =======  

    Interest rate spread .................                                     3.99%                                      3.62%
    Net interest income and net
       yield on earning assets ...........                       $2,536        4.76%                       $1,835         4.38%
                                                                 ======        ====                        ======         ====  

</TABLE>


                                       8
<PAGE>



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


                                          ..........................................   ..........................................
    Quarter ended June 30,                                   1997                                        1996
                                          ..........................................   ..........................................
                                                               Interest                                    Interest
                                               Average         Income/       Yields/         Average       Income/        Yields/
Assets                                         Balance         Expense        Rates          Balance       Expense         Rates
                                               -------         -------        -----          -------       -------         -----
                                                                      (Dollar amounts in thousands)
<S>                                           <C>               <C>           <C>          <C>              <C>           <C>  
    Interest bearing deposits ..............  $  1,594          $   23        5.77%        $   765          $   10         5.23%
    Investment securities taxable ..........    27,024             420        6.22%         27,130             401         5.91%
    Investment securities--tax exempt ......       411               4        5.90%            420               5         7.22%
    Federal funds sold .....................     4,368              59        5.40%          2,023              26         5.14%
    Loans, net of unearned income ..........    78,443           1,883        9.60%         54,878           1,277         9.31%
                                              --------          ------        ----         -------           -----         ----  

    Total interest earning assets ..........   111,840           2,389        8.54%         85,216           1,719         8.07%

    Cash and due from banks ................     5,141                                       3,432
    Allowance for loan losses ..............      (980)                                       (730)
    Premises and equipment .................     2,831                                       2,201
    Other assets ...........................     1,589                                       1,269
                                              --------                                     -------  

Total assets ...............................  $120,421                                     $91,388
                                              ========                                     =======  

Liabilities and Shareholders' Equity

    Interest bearing deposits
    Savings ................................  $ 19,886          $  172        3.46%        $13,783            $ 86         2.50%
    Interest bearing transaction accounts ..    11,765              55        1.87%          8,336              41         1.97%
    Time deposits ..........................    55,532             748        5.39%         44,321             603         5.44%
                                              --------          ------        ----         -------            ----         ----  

    Total interest bearing deposits ........    87,183             975        4.47%         66,440             730         4.39%
    Short term borrowing ...................     4,256              43        4.04%          2,268              22         3.88%
    FHLB advances ..........................     1,130              19        6.73%          1,200              20         6.67%
                                              --------          ------        ----         -------            ----         ----  
    Total interest bearing liabilities .....    92,569           1,037        4.48%         69,908             772         4.42%

    Noninterest bearing demand deposits ....    14,887                                       9,712
    Other liabilities ......................       743                                         570
    Shareholders' equity ...................    12,222                                      11,198
                                              --------                                     -------  

Total liabilities and shareholders' equity .  $120,421                                     $91,388
                                              ========                                     =======  

    Interest rate spread ...................                                  4.06%                                        3.65%
    Net interest income and net yield
      on earning assets ....................                    $1,352        4.84%                           $947         4.45%
                                                                ======        ====                            ====         ====  

</TABLE>

                                       9
<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.

Stock Split

          The  Corporation  effected  a  two-for-one  stock  split of its common
shares at July 21, 1997.  This increased the number of shares  outstanding  from
1,313,238 to 2,626,476. All information contained within Management's Discussion
and Analysis has been retroactively adjusted to reflect the split.


RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996

Net Income

          For the six months  ended  June 30,  1997,  CBI earned a  consolidated
profit of $547,000,  compared to $394,000 for the comparable  period of 1996, an
increase of 38.8% or $153,000.  Earnings per share were $.21 in the 1997 period,
compared to $.17 for the 1996 period, an increase of 23.5%.

          For the six  months  ended June 30,  1997,  Orangeburg  National  Bank
reported a profit of $673,000, compared to $530,000 for the comparable period of
1996, an increase of 27% or $143,000.

          For the six months ended June 30, 1997,  Sumter National Bank reported
an after tax loss of $144,000,  compared to $54,000 for the comparable period of
1996, an increase of 167% or $90,000.  However,  the 1997 amount  represents six
full months of operation, whereas the 1996 amount represents only twenty days of
operation.

          As noted above,  consolidated net income for the six months ended June
30,  1997,  increased  from  the  prior  year by 38.8% or  $153,000.  The  major
components  of this  increase are discussed  below.  Net interest  income before
provision  for loan losses for the six months ended June 30, 1997,  increased to
$2,536,000,  compared to $1,817,000  for the same period in 1996, an increase of
39.6% or  $719,000.  For the 1997  period,  the  provision  for loan  losses was
$177,000,  compared  to $63,000  for the 1996  period,  an increase of 180.9% or
$114,000.  Non-interest  income for the 1997 period  increased to $363,000  from
$235,000 for the 1996 period, a 54.5% or $128,000 increase. Non-interest expense
increased to $1,925,000 from $1,311,000,  a 46.8% or $614,000 increase.  Results
for the first six  months of 1997  include  results  of  operations  for  Sumter
National Bank,  which was in operation for only twenty days during the first six
months of 1996.  Accordingly,  many of the dollar and percentage comparisons and
changes between periods discussed in this report are unusually large.



                                       10
<PAGE>



Profitability

          One of the best ways to review  earnings is through the ROA (return on
average assets) and the ROE (return on average equity).  Return on assets is the
income for the period divided by the average assets for the period,  annualized.
Return on equity is the income for the period  divided by the average equity for
the period, annualized. Based on operating results for the six months ended June
30, 1997 and 1996, the following table is presented.

                                          Six months ended June 30,
                                            1997             1996
                                            ----             ----
                                            (dollars in thousands)
Average assets .......................   $114,631          $89,411
ROA ..................................      0.95%            0.88%
Average equity .......................   $ 12,126          $ 9,988
ROE ..................................      9.02%            7.89%
Net income ...........................   $    547          $   394

          Average equity and average assets were  substantially  greater in 1997
than  they  were in 1996  primarily  as the  result  of the  sale  of  stock  to
capitalize the Sumter bank and the deposit taking activities of the Sumter bank,
respectively.

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 exceed the interest
paid on interest bearing  deposits and other interest bearing funds.  During the
first six months of 1997,  net interest  income after  provision for loan losses
increased to $2,536,000 from $1,817,000,  a 39.6% or $719,000  increase over the
comparable period of 1996. This improvement was the result of an increase in the
volume of  earning  assets at both  banks,  but was mostly  associated  with the
operation of the new bank in Sumter, which had net interest income for the first
six months of 1997 of $425,000 or 59% of the total increase.


Interest Income

          Elsewhere in this report is a table  comparing  the average  balances,
yields,  and rates for the interest  rate  sensitive  segments of the  company's
balance  sheet for the period ended June 30, 1997 and 1996. A discussion of that
table follows.

          Total  interest  income for the six months  ended June 30,  1997,  was
$4,487,000  compared  with  $3,364,000  for the same period in 1996,  a 33.4% or
$1,123,000 increase.  The yield on earning assets for the 1997 period was 8.43%,
up from 8.04% for the 1996 period. Total average interest earning assets for the
six months ended June 30, 1997, were  $106,479,000,  up from $83,698,000 for the
same period in 1996,  an increase of 27.2% or  $22,781,000.  The Sumter bank had
average earning assets of $15,937,000,  which  represents 70% of the increase in
assets over the prior year.

          The loan portfolio earned $3,546,000 for the six months ended June 30,
1997,  up from  $2,503,000  for the same period of 1996,  a 41.7% or  $1,043,000
increase.  The 1997 yield increased to 9.41% from 9.33% for the 1996 period. The
increase in yield is partly due to an increase in the prime lending rate in late
March 1997,  to 8.50% from 8.25%.  The average  size of the loan  portfolio  was
$75,329,000  for the 1997  period,  up from  $53,629,000  for the same period of
1996, an increase of 40.4% or $21,700,000. Of that increase,  $13,495,000 or 62%
was in the Sumter National Bank loan portfolio.

          The taxable  investment  portfolio  earned $804,000 for the six months
ended June 30, 1997,  up from  $766,000  for the 1996 period,  a 4.9% or $38,000
increase. The yield increased to 6.19% in the 1997 period from 5.84% in the 1996
period.  The average size of the portfolio  declined to  $25,989,000 in the 1997
period from $26,227,000 in the 1996 period, a decrease of 1.9% or $238,000.  The
investment portfolio for Sumter National Bank averaged  $1,455,000,  5.6% of the
consolidated total.


                                       11
<PAGE>

          The tax exempt investment portfolio continues to be a relatively small
part of the portfolio,  it earned $9,000 for the six months ended June 30, 1997,
unchanged  from the prior year. The yield on the portfolio was 6.62% (on a fully
taxable equivalent basis),  slightly up from the prior year's 6.54%. The average
size of the portfolio decreased to $412,000 for the 1997 period from $417,000 in
the 1996 period,  a decrease of 1.2% or $5,000.  The entire tax exempt portfolio
is owned by Orangeburg National Bank.

          Interest bearing deposits in other banks  contributed  $34,000 for the
six months  ended June 30,  1997,  compared to $38,000  during the prior year, a
decrease of 10.5% or $4,000.  The yield on these deposits increased to 5.81% for
the 1997  period  from 5.03% in the 1996  period.  CBI  averaged  $1,171,000  in
interest  bearing balances in the 1997 period compared to $1,510,000 in the 1996
period, a decrease of 22.4% or $339,000.

          Federal  funds sold earned  $94,000 for the six months  ended June 30,
1997,  compared  to $48,000  the prior  year,  an  increase of 95.8% or $46,000.
Yields increased to 5.25% for the period ended June 30, 1997, from 5.01% for the
1996 period.  For the 1997 period,  CBI increased its average  volume in federal
funds  sold to  $3,578,000  from  $1,915,000  for the  1996  period,  a 86.8% or
$1,663,000  increase.  Sumter  National Bank averaged  $987,000 in federal funds
sold during 1997 period.


Interest expense

          Interest expense  increased for the six months ended June 30, 1997, to
$1,951,000 from the prior year's $1,529,000,  a 27.6% or $422,000 increase.  The
volume of interest bearing  liabilities  increased to $87,835,000 for the period
ended  June  30,  1997,  from  $69,241,000  for the  1996  period,  a  26.9%  or
$18,594,000  increase.  Sumter  National Bank averaged  $12,310,000  in interest
bearing  liabilities during the 1997 period,  which represented 66% of the total
increase.  The average rate CBI paid for interest bearing liabilities during the
1997 period was 4.44%, slightly up from 4.42% for the 1996 period.

          The cost of savings accounts  increased to $313,000 for the six months
ended June 30,  1997 from  $168,000  in the 1996  period,  an 86.3% or  $145,000
increase.  Average  savings  deposit  balances  increased to $18,651,000 for the
period ended June 30, 1997, from $13,353,000 for the 1996 period, an increase of
39.7% or $5,298,000.  Sumter National Bank averaged  $3,501,000 in such balances
during the 1997 period, which represented 66% of the total increase. The average
rate paid on these funds increased to 3.36% from 2.52%.

          Interest bearing transaction accounts cost $105,000 for the six months
ended June 30, 1997, up from the prior year's  $80,000,  an increase of 31.2% or
$25,000.  The volume of these deposits  increased to $11,244,000  for the period
ended June 30, 1997, from $7,976,000 for the 1996 period,  a 40.9% or $3,268,000
increase.  Sumter National Bank averaged  $2,183,000 in such balances during the
1997 period,  which  represented  66.7% of the total increase.  The average rate
paid on these funds for the period ended June 30, 1997,  decreased to 1.87% from
2.01% for the 1996 period.

          Time deposits cost  $1,435,000 for the six months ended June 30, 1997,
up from  $1,200,000  in the 1996 period,  an increase of 19.6% or $235,000.  The
volume  increased  to  $53,675,000  for the  period  ended June 30,  1997,  from
$44,657,000 for the 1996 period, a 20.2% or $9,018,000 increase. Sumter National
Bank  averaged  $6,586,000  in such  balances  during  the  1997  period,  which
represented  73% of the total  increase.  The  average  rate paid on these funds
decreased  slightly to 5.35% for the period ended June 30, 1997,  from 5.37% for
the 1996 period.

          Short  term  borrowing   consists  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  $61,000 for the six months ended
June 30, 1997, up from $43,000 for the 1996 period, a 41.9% or $18,000 increase.
The volume of these  funds  increased  to  $3,142,000  in the 1997  period  from
$2,103,000 in the 1996 period, an increase of 49.4% or $1,039,000. Virtually all
these balances were  attributable to Orangeburg  National Bank. The average rate
paid on these funds decreased to 3.88% from 4.09%.

          Borrowings  from the Federal  Home Loan Bank cost  $37,000 for the six
months ended June 30, 1997,  compared to $38,000 for the 1996 period,  a 2.7% or
$1,000  decline.  The  advances  averaged  $1,123,000  during  the 1997  period,
compared to $1,152,000  for the prior year period,  a 2.5% or $29,000  decrease.
All these balances were  attributable  to Orangeburg  National Bank. The average
rate paid on these funds decreased to 6.59% from 6.60%.


                                       12
<PAGE>

Non-Interest Income

          Non-interest  income  for the six months  ended June 30,  1997 grew to
$363,000 from $235,000 in the 1996 period, a 54.4% or $128,0000  increase.  This
increase  was mostly the result of the  operation  of the new Sumter  bank which
reported  $85,000 or 66% of the total  increase in  non-interest  income for the
1997 period. Most of the remainder of the increase was attributable to increased
credit life and accident and health insurance sales in the Orangeburg bank.

          Results  for the six months  ended June 30,  1997  include  results of
operations for Sumter National Bank for the entire period,  however,  the Sumter
bank was in  operation  for only  twenty  days  during the same  period of 1996.
Accordingly,  many of the dollar and percentage  comparisons and changes between
periods discussed in the non-interest  income and non -interest expense sections
are unusually large.


Non-Interest Expense

          For the six months ended June 30, 1997 non-interest expenses increased
to $1,925,000 from $1,311,000 for the 1996 period, a 46.8% or $614,000 increase.
Approximately  $502,000  (81.7%) of this increase is related to the operation of
Sumter National Bank.

          For the six months ended June 30, 1997 personnel costs were $1,133,000
compared  to  $806,000  for the  1996  period,  a 40.6%  or  $327,000  increase.
Approximately  $309,000  (94%) of this  increase is related to the  operation of
Sumter National Bank. The new bank has 16 full time equivalent employees.

           Premises  and  equipment  expense for the 1997  period were  $249,000
compared  to  $155,000  for the 1996  period,  an  increase of 60.6% or $94,000.
Approximately  $72,000  (76.6%) of this  increase is related to the operation of
Sumter National Bank.

          Other costs for the 1997 period were $543,000 compared to $350,000 for
the 1996  period,  an  increase  of 55.1% or  $193,000.  Approximately  $121,000
(62.6%) of this increase is related to the operation of Sumter National Bank.


Income Taxes

          CBI  provided  $250,000  for federal and state income taxes during the
six months  ended June 30,  1997,  compared to  $284,000  for the same period in
1996, a 11.9% or $34,000 decrease.


                                       13
<PAGE>

RESULTS OF OPERATIONS FOR THE QUARTERS ENDED JUNE 30, 1997 AND 1996

Net Income

          For the quarter ended June 30, 1997, CBI earned a consolidated  profit
of $314,000, compared to $176,000 for the comparable period of 1996, an increase
of 78.4% or $138,000.  Earnings per share were $.12 in the 1997 period, compared
to $.08 for the 1996 period, an increase of 50%.

          As noted above, consolidated net income for the quarter ended June 30,
1997,  increased from the prior year by 78.4% or $138,000.  The major components
of this increase are discussed  below.  Net interest income before provision for
loan  losses for the  quarter  ended June 30,  1997,  increased  to  $1,352,000,
compared  to  $947,000  for the same  period in 1996,  an  increase  of 42.7% or
$405,000.  For the same  period,  the  provision  for loan  losses was  $93,000,
compared  to $33,000  for the 1996  period,  an  increase  of 181.8% or $60,000.
Non-interest  income for the 1997 period increased to $190,000 from $128,000 for
the 1996 period, a 48.4% or $62,000 increase.  Non-interest expense increased to
$1,005,000 from $700,000,  a 43.6% or $305,000 increase.  Results for the second
quarter of 1997 include  results of operation  for Sumter  National Bank for the
entire quarter,  however,  the Sumter bank was in operation for only twenty days
during  the  second  quarter  of  1996.  Accordingly,  many  of the  dollar  and
percentage comparisons and changes between quarters discussed in this report are
unusually large.


Profitability

          The ROA and ROE for the quarters  ended June 30, 1997 and 1996 are set
forth below:

                                               Quarter ended June 30,
                                               1997              1996
                                               ----              ----
                                              (dollars in thousands)
Average assets ...........................   $120,421           $91,388
ROA ......................................      1.04%             0.77%
Average equity ...........................   $ 12,222           $11,198
ROE ......................................     10.28%             6.29%
Net income ...............................   $    314           $   176

          Average  equity and average assets were  substantially  greater in the
1997  quarter  than they were in the 1996  quarter  as the result of the sale of
stock to  capitalize  the Sumter bank and the deposit  taking  activities of the
Sumter bank, respectively.

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 quarter ended June 30, 1997, net interest  income after provision for
loan losses increased to $1,259,000 from $914,000,  a 37.7% or $345,000 increase
over the  comparable  period  of 1996.  This  improvement  was the  result of an
increase in the volume of earning  assets at both banks,  but mostly  associated
with the operation of the new bank in Sumter,  which had net interest income for
the second quarter of 1997 of $253,000 or 73.3% of the total increase.



                                       14
<PAGE>

Interest Income

          Elsewhere in this report is a table  comparing  the average  balances,
yields,  and rates for the interest  rate  sensitive  segments of the  company's
balance  sheet for the quarters  ended June 30, 1997 and 1996.  A discussion  of
that table follows.

          Total  interest  income for the  second  quarter  1997 was  $2,389,000
compared  with  $1,719,000  for the  same  period  in  1996,  a 39% or  $670,000
increase.  The yield on earning  assets for the 1997  period was 8.54%,  up from
8.07% for the 1996 period. Total average interest earning assets for the quarter
ended June 30, 1997,  were  $111,840,000,  up from  $85,216,000  for the quarter
ended June 30, 1996,  an increase of 31.2% or  $26,624,000.  The Sumter bank had
average  earnings assets of $18,300,000,  which represents 68.7% of the increase
in assets over the prior year.

          The loan portfolio  earned  $1,883,000 for the second quarter in 1997,
up from  $1,277,000  for the same period of 1996, a 47.5% or $606,000  increase.
The  second  quarter  1997  yield  increased  to 9.60% from 9.31% for the second
quarter in 1996.  This increase in yield was partly related to the prime lending
rate increase in late March 1997,  to 8.50% from 8.25%.  The average size of the
loan portfolio was $78,443,000 for the 1997 quarter, up from $54,878,000 for the
same period of 1996, an increase of 42.9% or $23,565,000.

          The  investment  portfolio  earned  $420,000 for the second quarter in
1997,  up from  $401,000 for the 1996 period,  a 4.7% or $19,000  increase.  The
yield increased to 6.22% in the 1997 quarter from 5.91% in the 1996 quarter. The
average size of the portfolio  declined to  $27,024,000 in the 1997 quarter from
$27,130,000  in the 1996 quarter,  a decrease of .4% or $6,000.  The  investment
portfolio  for  Sumter  National  Bank  averaged  $1,240,000,  about  6% of  the
consolidated total.

          The tax  exempt  investment  portfolio  earned  $4,000  for the second
quarter in 1997,  slightly down from the 1996 period. The yield on the portfolio
was 5.90% (fully  taxable  equivalent  basis),  a decrease  from 7.22% the prior
year.  The average  size of the  portfolio  decreased  to $411,000  for the 1997
period from  $420,000  in the 1996  period,  a decrease of 2.1% or $19,000.  The
entire tax exempt portfolio is owned by Orangeburg National Bank.

          Interest bearing deposits in other banks  contributed  $23,000 for the
second  quarter 1997,  compared to $10,000 during the prior year, an increase of
130% or $13,000.  The yield on these  deposits  increased  to 5.77% for the 1997
period  from 5.23% in the 1996  period.  CBI  averaged  $1,594,000  in  interest
bearing  balances in the second  quarter  1997  compared to $765,000  the second
quarter of the prior year, an increase of 108% or $829,000.
All the  interest  bearing  balances in 1997 were owned by  Orangeburg  National
Bank.

          Federal funds sold earned  $59,000 the second quarter of 1997 compared
to $26,000 the prior year, an increase of 127% or $33,000.  Yields  increased to
5.40% for the second  quarter in 1997 from 5.14% for the second quarter in 1996.
For the second  quarter of 1997,  CBI  increased  its average  volume in federal
funds sold to $4,368,000  from $2,023,000 for the second quarter of 1996, a 116%
or $2,345,000 increase.  Sumter National Bank averaged $893,000 in federal funds
sold during the second quarter, about 38% of the increase.  Most of the increase
was due to the Orangeburg bank obtaining the local  municipally owned utility as
a  customer,   beginning  in  April  1997.  The  utility   rotates  its  banking
relationship every six months as a matter of policy.


                                       15
<PAGE>

Interest expense

          Interest  expense   increased  for  the  second  quarter  of  1997  to
$1,037,000 from the prior year's  $772,000,  a 34.3% or $265,000  increase.  The
volume of interest bearing  liabilities  increased to $92,569,000 for the second
quarter  in 1997 from  $69,908,000  for the second  quarter of 1996,  a 32.4% or
$22,661,000  increase.  Sumter  National Bank averaged  $14,248,000  in interest
bearing  liabilities  during the second quarter,  which represented 62.8% of the
total  increase.  The average  rate CBI paid for  interest  bearing  liabilities
during the 1997 quarter was 4.48%, up from 4.42% for the 1996 period.

          The cost of  savings  accounts  increased  to  $172,000  in the second
quarter in 1997 from  $86,000 in the second  quarter of 1996,  a 100% or $86,000
increase.  Average  savings  deposit  balances  increased to $19,886,000 for the
second  quarter  in 1997 from  $13,783,000  for the second  quarter of 1996,  an
increase of 44.3% or  $6,103,000.  Sumter  National Bank averaged  $4,044,000 in
such balances during the second quarter,  which  represented  66.3% of the total
increase. The average rate paid on these funds increased to 3.46% from 2.50%.

          Interest  bearing  transaction  accounts  cost  $55,000 for the second
quarter in 1997,  up from the second  quarter of the prior  year's  $41,000,  an
increase  of  34.1% or  $14,000.  The  volume  of these  deposits  increased  to
$11,765,000  for the  second  quarter  in 1997 from  $8,336,000  for the  second
quarter of 1996, a 41.1% or $3,429,000  increase.  Sumter National Bank averaged
$2,620,000 in such balances during the second quarter,  which represented 76% of
the total increase.  The average rate paid on these funds for the second quarter
in 1997 decreased to 1.87% from 1.97% for the second quarter of 1996.

          Time deposits  cost  $748,000 for the second  quarter of 1997, up from
$603,000  in the  second  quarter  of the  prior  year,  an  increase  of 24% or
$145,000.  The volume  increased to  $55,532,000  for the second quarter in 1997
from  $44,321,000  for the  second  quarter  of  1996,  a 25.3%  or  $11,211,000
increase.  Sumter National Bank averaged  $7,504,000 in such balances during the
second quarter,  which represented 66.9% of the total increase. The average rate
paid on these funds decreased to 5.39% for the second quarter in 1997 from 5.44%
for the second quarter in 1996.

          Short  term  borrowing   consists  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 $43,000 for the second  quarter in
1997 up from  $22,000  for the  second  quarter  of  1996,  a 95.5%  or  $21,000
increase.  The  volume of these  funds  increased  to  $4,256,000  in the second
quarter in 1997 from  $2,268,000  in the second  quarter of 1996, an increase of
87.6%  or  $1,988,000.   Virtually  all  these  balances  were  attributable  to
Orangeburg  National Bank. The relatively  large size of this increase is mostly
due to securities sold under agreements to repurchase  involving the municipally
owned utility company discussed in the earlier federal funds sold paragraph. The
average rate paid on these funds increased to 4.04% from 3.88%.

          Borrowings from the Federal Home Loan Bank cost $19,000 for the second
quarter in 1997,  down from  $20,000  for the 1996  period,  a decrease of 5% or
$1,000.  The advances averaged  $1,130,000 during the 1997 quarter,  compared to
$1,200,000  for the prior year  period,  a 5.8% or $70,000  decrease.  All these
balances were attributable to Orangeburg National Bank. The average rate paid on
these funds increased to 6.73% from 6.67%.


Non-Interest Income

          Non-interest  income for the second quarter 1997 grew to $190,000 from
$128,000  in the second  quarter of 1996,  a 48.4% or  $62,0000  increase.  This
increase  was mostly the result of the  operation  of the new Sumter  bank.  The
remainder of the total increase was attributable to increases in the credit life
and accident and health insurance volume in Orangeburg.

          Results for the second  quarter of 1997  include  results of operation
for Sumter National Bank for the entire quarter, however, the Sumter bank was in
operation for only twenty days during the second of 1996.  Accordingly,  many of
the dollar and percentage  comparisons and changes between quarters discussed in
the non-interest income and non-interest expense sections are unusually large.

                                       16
<PAGE>


Non-Interest Expense

          For the second  quarter of 1997  non-interest  expenses  increased  to
$1,005,000  from  $700,000  for the second  quarter of 1996, a 43.5% or $305,000
increase.  Approximately  $247,000  (80.9%) of this  increase  is related to the
operation of Sumter National Bank.

          For the  three  months  ended  June 30,  1997,  personnel  costs  were
$576,000  compared  to  $428,000  for the  second  quarter  of 1996,  a 34.5% or
$148,000  increase.  Approximately  100%  of this  increase  is  related  to the
operation  of Sumter  National  Bank.  The new bank has 16 full time  equivalent
employees.

           Premises  and  equipment  expense for the 1997  period were  $127,000
compared  to $86,000  for the 1996  period,  an  increase  of 47.6% or  $41,000.
Approximately  $38,000  (92.6%) of this  increase is related to the operation of
Sumter National Bank.

          Other  costs for the second  quarter  1997 were  $302,000  compared to
$186,000  for the second  quarter of 1996,  an  increase  of 62.4% or  $116,000.
Approximately  $62,000  (53.4%) of this  increase is related to the operation of
Sumter National Bank.


Income Taxes

          CBI  provided  $130,000  for federal and state income taxes during the
second  quarter of 1997,  compared  to $166,000  for the same period in 1996,  a
21.7% or $36,000 decrease.



CHANGES IN FINANCIAL POSITION

Investment portfolio

          The  investment  portfolio  is  comprised of a held to maturity and an
available for sale portion.  CBI and its two banks usually  purchase  short term
issues of U. S Treasury and U. S.  Government  agency  securities for investment
purposes.  At June 30, 1997, the held to maturity portfolio totaled  $16,217,000
compared to $15,027,000 at December 31, 1996, an increase of 7.9% or $1,190,000.
At June 30, 1997, the available for sale portfolio totaled $13,354,000  compared
to  $10,761,000  at December 31, 1996, an increase of 24.6% or  $2,593,000.  The
following  chart  summarizes  the  investment  portfolios at June 30, 1997,  and
December 31, 1996.

<TABLE>
<CAPTION>
                                                                            June 30, 1997
                                    -------------------------------------------------------------------------------------
                                                     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 ...................                  $15,807          $15,731                  $12,704             $12,642

Tax exempt securities ...........                      410              411                        -                   -
Other equity securities .........                        -                -                      712                 712
                                                   -------          -------                  -------             -------
Total ...........................                  $16,217          $16,142                  $13,416             $13,354
                                                   =======          =======                  =======             =======

Unrealized gain or (loss) .......                  $   (75)                                  $   (62)
                                                   =======                                   =======                     
</TABLE>


                                       17
<PAGE>

<TABLE>
<CAPTION>


                                                                      December 31, 1996
                                              ----------------------------------------------------------------------------
                                                      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 .............................         $14,613         $14,612                   $10,175            $10,175
Tax exempt securities .....................             414             417                         -                  -
Other equity securities ...................               -               -                       586                586
                                                    -------         -------                   -------            -------
Total .....................................         $15,027         $15,029                   $10,761            $10,761
                                                    =======         =======                   =======            =======

Unrealized gain or (loss) .................         $     2                                   $     -
                                                    =======                                   =======
</TABLE>

          Orangeburg  National  Bank  owns  approximately  90%  of the  held  to
maturity and the  available  for sale  investment  portfolios.  The remainder is
owned by Sumter National Bank and CBI.


Loan portfolio

          The loan portfolio is primarily  consumer and small business oriented.
At June 30, 1997, the loan portfolio was $81,005,000, compared to $68,829,000 at
December  31,  1996,  a 17.7%  or  $12,176,000  increase.  The  following  chart
summarizes the loan portfolio at June 30, 1997, and December 31, 1996.

                                            June 30, 1997         Dec. 31, 1996
                                            -------------         -------------
                                                  (dollars in thousands)
Real estate ..............................        $48,253               $41,164
Commercial ...............................         18,872                16,644
Loans to individuals .....................         13,880                11,021
                                                  =======               =======
Total ....................................        $81,005               $68,829
                                                  =======               =======


          At June 30, 1997,  Orangeburg  National Bank's loan portfolio  totaled
$63,422,000  compared  to  $59,877,000  at  December  31,  1996,  an increase of
$3,545,000 or 5.9%.

          At June 30,  1997,  Sumter  National  Bank's  loan  portfolio  totaled
$17,642,000,  compared  to  $8,952,000  at  December  31,  1996,  an increase of
$8,690,000 or 97%.


                                       18
<PAGE>


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 June 30, 1997, December 31, 1996.

                                              June 30, 1997        Dec. 31, 1996
                                              -------------        -------------
Past due 90 days + accruing loans ..........       $221,000             $ 93,000
Non-accrual loans ..........................       $207,000             $431,000
Impaired loans (included in nonaccrual) ....       $ 12,000             $ 12,000
Other real estate owned ....................       $      0             $      0

          Management considers the past due and non-accrual amounts in June 1997
to be reasonable  and  manageable  in the normal  course of business.  All loans
shown in the above table are attributable to Orangeburg National Bank.

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

          CBI's   activity  with  its  allowance  for  loan  losses  reserve  is
summarized below.

                                                  June 30, 1997    Dec. 31, 1996
                                                  -------------    -------------
Allowance at beginning of period ..............     $  876,000         $707,000
Provision expense .............................        177,000          227,000
Net charge-offs ...............................        (39,000)         (58,000)
                                                    ----------         --------
Allowance at end of period ....................     $1,014,000         $876,000
                                                    ==========         ========
Allowance as a percent of outstanding loans ...           1.25%            1.27%
                                                    ==========         ========

          At December 31, 1996,  the Sumter  National  Bank  allowance  for loan
losses was $97,000. The bank increased the allowance with a provision expense of
$87,000. The allowance at June 30, 1997, was $184,000.

          At December 31, 1996, the Orangeburg  National Bank allowance for loan
losses was $779,000.  The bank increased the allowance with a provision  expense
of $90,000.  Net  chargeoffs  during the quarter were $38,000.  The allowance at
June 30, 1997, was $830,000.

          In reviewing  the adequacy of the allowance for loan losses at the end
of each period,  management considers  historical loan loss experience,  current
economic condition,  loans outstanding,  trends in non-performing and delinquent
loans, and the quality of collateral  securing problem loans. After charging off
all known losses,  management  considers  the allowance  adequate to provide for
estimated future losses inherent in the loan portfolio at June 30, 1997.


Deposits

          Deposits were  $107,582,000 at June 30, 1997,  compared to $89,851,000
at December 31, 1996,  an increase of 19.7% or  $17,731,000.  Deposits at Sumter
National Bank represent approximately 20% of total deposits.

          Time deposits greater than $100,000 were $18,785,000 at June 30, 1997,
compared  to  $13,640,000  at  December  31,  1996,  an  increase  of  37.7%  or
$5,140,000.

                                       19
<PAGE>


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 and Sumter  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 investment 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 $107 million in 1997. This stable, growing 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 June 30, 1997, CBI had
approximately  $9.5 million and $0 in certificates of deposit maturing in one to
five years and over five years, respectively. CBI's assets maturing or repricing
in the same  periods were $51.5  million and $11.5  million,  respectively.  CBI
expects  to be able to  manage  its  current  balance  sheet  structure  without
experiencing any unusual liquidity problems.

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


                                       20
<PAGE>

Capital resources

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

                                               June 30, 1997       Dec. 31, 1996
                                               -------------       -------------
Tier 1 capital to average total assets ......      11.67%              11.50%
Tier 1 capital to risk weighted assets ......      15.02%              17.50%
Total capital to risk weighted assets .......      16.25%              18.70%

The moderate  decline in the risk  weighted  capital  ratios is the  anticipated
effect of the  asset  growth  resulting  from the  operation  of the new bank in
Sumter, combined with asset growth of the Orangeburg bank.

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


Shareholders' equity

          At June 30, 1997 the common stock account totaled $9,055,000, compared
to  $9,064,000  at  December  31,  1996.  This  $9,000  reduction  was for costs
associated with the establishment of a dividend  reinvestment plan,  although no
stock was sold by CBI during the period.  Ongoing costs of the reinvestment plan
will be charged to expense.


Financial Information on Subsidiaries

                  ORANGEBURG NATIONAL BANK FINANCIAL HIGHLIGHTS

                                                 Six months ended   Year ended
                                                  June 30, 1997    Dec. 31, 1996
                                                  -------------    -------------
                                                   (Dollar amounts in thousands)
                 Financial Condition
Investment securities ........................        $ 26,698         $ 23,826
Net loans receivable .........................          62,581           59,393
Total assets .................................         101,591           90,772
Total deposits ...............................          85,794           79,792
Federal funds purchased and securities sold
     under agreement to repurchase ...........           6,138            1,744
Other borrowed money (Federal Home Loan Bank
     advances) ...............................           1,130            1,130
Stockholders' equity .........................        $  7,969         $  7,624

                  Earnings Summary
Interest income ..............................        $  3,772         $  6,904
Interest expense .............................           1,686            3,176
                                                      --------         --------
Net interest income ..........................           2,086            3,728
Provision for loan losses ....................              90              130
Non-interest income ..........................             279              469
Non-interest expense .........................           1,259            2,238
                                                      --------         --------
Net income before taxes ......................           1,016            1,829
Income taxes .................................             343              667
                                                      --------         --------
Net income after tax .........................        $    673         $  1,162
                                                      ========         ========


                                       21
<PAGE>


                    SUMTER NATIONAL BANK FINANCIAL HIGHLIGHTS

                                                Six months ended    Year ended
                                                 June 30, 1997    Dec. 31, 1996*
                                                 -------------    --------------
                                                   (Dollar amounts in thousands)
                 Financial Condition
Investment securities ........................        $  1,734         $  1,071
Net loans receivable .........................          17,458            8,855
Total assets .................................          25,019           13,322
Total deposits ...............................          21,915           10,112
Stockholders' equity .........................        $  3,012         $  3,159

                   Earnings Summary
Interest income ..............................        $    689         $    338
Interest expense .............................             264              142
                                                      --------         --------
Net interest income ..........................             425              196
Provision for loan losses ....................              87               97
Non-interest income ..........................              84               45
Non-interest expense .........................             668              701
                                                      --------         --------
Net loss before taxes ........................            (246)            (557)
Income tax (benefit) .........................            (103)            (217)
                                                      --------         --------
Net (loss) after taxes .......................        $   (143)        $   (340)
                                                      ========         ========

*Note - Sumter National Bank began operations on June 10, 1996.




                                       22
<PAGE>



Part II--Other Information

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

CBI had an Annual Meeting of Shareholders on April 29, 1997.

The following persons were elected to the Board:
Three year term: E. J. Ayers, Alvis J. Bynum, Hugo S. Sims, Jr., J. Otto Warren,
Jr. Two year term: Phil P. Leventis.  One year term: William H. Nock and William
W. Traynham.

The shareholders also approved the 1997 stock option plan.

The other item approved was the  ratification  of J. W. Hunt and Co.,  Certified
Public Accountants,  as outside auditors for CBI for the year ended December 31,
1997.

The vote tally was as follows:
<TABLE>
<CAPTION>

                                   Total number      Voting for         Voting         Abstaining       Not voting
                                    of shares                       against or to
                                   eligible to                         withhold
                                       vote                           authority
Election of directors
<S>                                <C>                <C>               <C>               <C>            <C>    
        E. J. Ayers                1,313,238          809,319                                            503,919
      Alvis J. Bynum               1,313,238          807,119            2,200                           503,919
       Hugo S. Sims                1,313,238          809,319                                            503,919
    J. Otto Warren, Jr.            1,313,238          806,287            3,032                           503,919
     Phil P. Leventis              1,313,238          809,310            1,009                           502,919
      William H. Nock              1,313,238          809,319                                            503,919
    William W. Traynham            1,313,238          809,319                                            503,919
Ratification of J. W. Hunt         1,313,238          806,602                             2,717          503,919
     (accountants)
Approval of Stock                  1,313,238          787,083           15,049            7,187          503,919
     Option Plan
</TABLE>

          The following  persons  continued  their terms as  directors:  Anna O.
Dantzler,  Samuel F. Reid, Jr., Martha Rose C. Carson, J. M. Guthrie, Michael A.
Wolfe, and Russell S. Wolfe, II.


                                       23
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibit Index

Exhibit No.(from         Description
item 601 of S-B)
(27)                     Financial Data Schedule

b) Reports on Form 8-K.  CBI filed a Form 8-K on June 16,  1997,  to report that
the Board of  Directors  of CBI approved a  two-for-one  stock split,  which was
effected July 21, 1997.

Signatures

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

                                                          DATED: August 11, 1997

COMMUNITY BANKSHARES, INC.

By:  s/  Hugo S. Sims, Jr.,
          Hugo S. Sims, Jr.,
          Chief Executive Officer

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