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 September 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 Identification Number)
  of Incorporation or Organization)


               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 October 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 ...........................     9
                   Results of Operations


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







                                       2
<PAGE>



                   COMMUNITY BANKSHARES, INC. - BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                             UNAUDITED
                                                                                            September 30,               December 31,
        ASSETS                                                                                  1997                        1996
                                                                                                ----                        ----

Cash and due from other financial institutions:
<S>                                                                                         <C>                       <C>          
    Non-interest bearing .......................................................            $   6,011,000             $   5,349,000
    Federal funds sold .........................................................                8,405,000                 1,300,000
                                                                                            -------------             -------------
        Total cash and cash equivalents ........................................               14,416,000                 6,649,000
Interest bearing deposits in other banks .......................................                1,341,000                   431,000
Investment securities:
    Securities held to maturity ................................................               17,407,000                15,027,000
    Securities available for sale ..............................................               13,834,000                10,761,000
Loans held for resale ..........................................................                  101,000                   295,000

Loans ..........................................................................               86,710,000                68,829,000
    Less, allowance for loan losses ............................................               (1,091,000)                 (876,000)
                                                                                            -------------             -------------
        Net loans ..............................................................               85,619,000                67,953,000
                                                                                            -------------             -------------

Premises and equipment .........................................................                2,797,000                 2,837,000
Accrued interest  receivable ...................................................                1,141,000                   855,000
Deferred income taxes ..........................................................                  332,000                   283,000
Other assets ...................................................................                  166,000                   370,000
                                                                                            -------------             -------------

        Total assets ...........................................................            $ 137,154,000             $ 105,461,000
                                                                                            =============             =============

        LIABILITIES AND SHAREHOLDERS'
        EQUITY

Deposits:
    Non-interest bearing .......................................................            $  15,836,000             $  13,337,000
    Interest bearing ...........................................................               98,988,000                76,514,000
                                                                                            -------------             -------------
        Total deposits .........................................................              114,824,000                89,851,000
Federal funds purchased and securities
    sold under agreements to repurchase ........................................                7,960,000                 1,744,000
Federal Home Loan Bank advances ................................................                1,060,000                 1,130,000
Other liabilities ..............................................................                  733,000                   632,000
                                                                                            -------------             -------------
        Total liabilities ......................................................              124,577,000                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 ..........................................................                3,517,000                 3,040,000
    Unrealized gain (loss) on securities available for sale.....................                    5,000                         -
                                                                                            -------------             -------------
        Total shareholders' equity .............................................               12,577,000                12,104,000
                                                                                            -------------             -------------

        Total liabilities and shareholders' equity .............................            $ 137,154,000             $ 105,461,000
                                                                                            =============             =============
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       3
<PAGE>

                COMMUNITY BANKSHARES, INC. - STATEMENTS OF INCOME
                         Nine months ended September 30,
<TABLE>
<CAPTION>
                                                                                                  1997                      1996
                                                                                               UNAUDITED                  UNAUDITED
                                                                                               ---------                  ---------
 Interest and dividend income:
<S>                                                                                         <C>                       <C>          
    Interest and fees on loans .................................................            $   5,544,000             $   3,874,000
    Deposits with other financial institutions .................................                   54,000                    43,000
    Investment securities:
      Interest - U. S. Treasury and
        U. S. Government Agencies ..............................................                1,269,000                 1,172,000
      Dividends ................................................................                   32,000                    22,000
                                                                                            -------------             -------------
         Total investment securities ...........................................                1,301,000                 1,194,000
                                                                                            -------------             -------------
     Federal funds sold and securities
      purchased under agreements to resell .....................................                  183,000                   120,000
                                                                                            -------------             -------------
         Total interest and dividend income ....................................                7,082,000                 5,231,000
                                                                                            -------------             -------------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more ..............................                  624,000                   580,000
      Other ....................................................................                2,338,000                 1,698,000
                                                                                            -------------             -------------
         Total deposits ........................................................                2,962,000                 2,278,000
                                                                                            -------------             -------------
    Federal funds purchased and securities
      sold under agreements to repurchase ......................................                  118,000                    65,000
    Federal Home Loan Bank advances ............................................                   55,000                    57,000
                                                                                            -------------             -------------
         Total interest expense ................................................                3,135,000                 2,400,000
                                                                                            -------------             -------------
Net interest income ............................................................                3,947,000                 2,831,000
Provision for loan losses ......................................................                  258,000                   140,000
                                                                                            -------------             -------------
Net interest income after provision for loan losses ............................                3,689,000                 2,691,000
                                                                                            -------------             -------------

  Non-interest income:
    Service charges on deposit accounts ........................................                  399,000                   263,000
    Other ......................................................................                  160,000                    92,000
                                                                                            -------------             -------------
         Total non-interest income .............................................                  559,000                   355,000
                                                                                            -------------             -------------

Non-interest expense:
    Salaries and employee benefits .............................................                1,738,000                 1,329,000
    Premises and equipment .....................................................                  384,000                   270,000
    Other ......................................................................                  826,000                   579,000
                                                                                            -------------             -------------
         Total non-interest expense ............................................                2,948,000                 2,178,000
                                                                                            -------------             -------------
Net income before taxes ........................................................                1,300,000                   868,000
Provision for income taxes .....................................................                  428,000                   364,000
                                                                                            -------------             -------------
Net income after taxes .........................................................            $     872,000             $     504,000
                                                                                            =============             =============

Per common share:
    Weighted average shares outstanding ........................................                2,626,476                 2,397,220
                                                                                            =============             =============
    Net income per common share ................................................            $        0.33             $        0.21
                                                                                            =============             =============
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       4
<PAGE>


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

                                                                                                  Quarter ended September 30,
                                                                                                1997                       1996
                                                                                              UNAUDITED                 UNAUDITED
                                                                                              ---------                 ---------
Interest and dividend income:
<S>                                                                                         <C>                       <C>          
    Interest and fees on loans .................................................            $   1,998,000             $   1,371,000
    Deposits with other financial institutions .................................                   20,000                     5,000
    Investment securities:
      Interest - U. S. Treasury and
        U. S. Government Agencies ..............................................                  478,000                   410,000
      Dividends ................................................................                   10,000                     9,000
                                                                                            -------------             -------------
         Total investment securities ...........................................                  488,000                   419,000
                                                                                            -------------             -------------
    Federal funds sold and securities
      purchased under agreements to resell .....................................                   89,000                    72,000
                                                                                            -------------             -------------
         Total interest and dividend income ....................................                2,595,000                 1,867,000
                                                                                            -------------             -------------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more ..............................                  251,000                   188,000
      Other ....................................................................                  858,000                   624,000
                                                                                            -------------             -------------
         Total deposits ........................................................                1,109,000                   812,000
    Federal funds purchased and securities
      sold under agreements to repurchase ......................................                   57,000                    22,000
    Federal Home Loan Bank advances ............................................                   18,000                    19,000
                                                                                            -------------             -------------
         Total interest expense ................................................                1,184,000                   853,000
                                                                                            -------------             -------------
Net interest income ............................................................                1,411,000                 1,014,000
Provision for loan losses ......................................................                   81,000                    77,000
                                                                                            -------------             -------------
Net interest income after provision for loan losses ............................                1,330,000                   937,000
                                                                                            -------------             -------------

Non-interest income:
    Service charges on deposit accounts ........................................                  146,000                    91,000
    Other ......................................................................                   50,000                    29,000
                                                                                            -------------             -------------
         Total non-interest income .............................................                  196,000                   120,000
                                                                                            -------------             -------------

Non-interest expense:
    Salaries and employee benefits .............................................                  605,000                   523,000
    Premises and equipment .....................................................                  135,000                   115,000
    Other ......................................................................                  283,000                   229,000
                                                                                            -------------             -------------
         Total non-interest expense ............................................                1,023,000                   867,000
                                                                                            -------------             -------------
Net income before taxes ........................................................                  503,000                   190,000
Provision for income taxes .....................................................                  178,000                    80,000
                                                                                            -------------             -------------

Net income after taxes .........................................................            $     325,000             $     110,000
                                                                                            =============             =============

Per common share:
    Weighted average shares outstanding ........................................                2,626,476                 2,337,968
                                                                                            =============             =============
    Net income per common share ................................................            $        0.12             $        0.05
                                                                                            =============             =============
</TABLE>


    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS

                                       5
<PAGE>

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

                                                                                                                UNAUDITED
                                                                                                     Nine months ended September 30,
                                                                                                       1997                   1996
                                                                                                       ----                   ----
Cash flows from operating activities:   
<S>                                                                                             <C>                    <C>         
Net income .....................................................................                $    872,000           $    504,000
Adjustments to reconcile net income                                                     
  to net cash used in operating activities:                                             
        Depreciation ...........................................................                     227,000                134,000
        Provision for loan losses ..............................................                     258,000                140,000
        Accretion of discounts and amortization of premiums -                           
          investment securities - net ..........................................                     (86,000)               (28,000)
  Changes in assets and liabilities:                                                    
        Proceeds of sale of loans held for resale ..............................                   3,614,000              2,877,000
        Origination of loans held for resale ...................................                  (3,420,000)            (2,937,000)
        (Increase) in interest receivable ......................................                    (286,000)              (168,000)
        (Increase) decrease in other assets ....................................                     131,000                (70,000)
        Decrease in other liabilities ..........................................                     101,000                 16,000
                                                                                                ------------           ------------
Net cash provided by operating activities ......................................                   1,411,000                468,000
                                                                                                ------------           ------------
                                                                                        
Cash flows from investing activities:                                                   
        Proceeds from maturities and sales of                                           
          investment securities - held to maturity .............................                   5,036,000              5,814,000
        Purchases of investment securities - held to maturity ..................                  (7,381,000)            (8,049,000)
        Proceeds from maturities and sales of                                           
          investment securities - available for sale ...........................                   3,724,000              3,068,000
        Purchases of investment securities - available for sale ................                  (6,741,000)            (5,411,000)
        Net (increase) in interest bearing deposits ............................                    (910,000)              (226,000)
        Net (increase) in loans to customers ...................................                 (17,924,000)            (9,731,000)
        Purchase of premises and equipment .....................................                    (163,000)            (1,120,000)
        Net (increase) in other real estate ....................................                           -                (11,000)
                                                                                                ------------           ------------
          Net cash (used) in investing activities ..............................                 (24,759,000)           (15,655,000)
                                                                                                ------------           ------------
                                                                                        
Cash flows from financing activities:                                                   
        Net increase in demand, savings, & time deposits .......................                  24,973,000             14,843,000
        Net increase in federal funds purchased
        and securities sold under agreements to repurchase .....................                   6,216,000                245,000
        Sale of common stock ...................................................                           -              4,402,000
        Cost of stock sale & dividend reinvestment program .....................                      (9,000)               (44,000)
        Proceeds of FHLB advances ..............................................                     (70,000)               430,000
        Dividends paid..........................................................                    (395,000)              (317,000)
        Notes payable ..........................................................                           -               (240,000)
                                                                                                ------------           ------------
          Net cash provided by financing activities ............................                  30,715,000             19,319,000
                                                                                                ------------           ------------
                                                                                        
Net increase in cash and due from other financial institutions .................                   7,367,000              4,132,000
Cash and due from other financial institutions - beginning .....................                   6,649,000              4,535,000
                                                                                                ------------           ------------
Cash and due from other financial institutions - end ...........................                $ 14,416,000           $  8,667,000
                                                                                                ============           ============
</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>

    Nine months ended September 30,                           1997                                      1996
                                                            Interest                                  Interest
                                               Average      Income/       Yields/        Average       Income/       Yields/
Assets                                         Balance      Expense        Rates(1)      Balance       Expense        Rates(1)
                                               -------      -------        -----         -------       -------        -----
                                                                    (Dollar amounts in thousands)
<S>                                           <C>             <C>           <C>         <C>             <C>            <C>  
    Interest bearing deposits ............    $  1,251        $   54        5.76%       $ 1,124         $   44         5.22%
    Investment securities--taxable .......      27,612         1,288        6.22%        26,706          1,180         5.89%
    Investment securities--tax exempt ....         411            13        6.39%           417             13         6.30%
    Federal funds sold ...................       4,543           183        5.37%         3,074            120         5.20%
    Loans, net of unearned income ........      78,252         5,544        9.45%        55,266          3,874         9.35%
                                              --------        ------        ----         ------         ------         ---- 
                                             
    Total interest earning assets ........     112,069         7,082        8.43%        86,587          5,231         8.06%
                                             
    Cash and due from banks ..............       4,929                                    3,613
    Allowance for loan losses ............        (978)                                    (733)
    Premises and equipment ...............       2,831                                    2,205
    Other assets .........................       1,543                                    1,230
                                              --------                                  -------
                                             
Total assets .............................    $120,394                                  $92,902
                                              ========                                  =======  
                                             
Liabilities and Shareholders' Equity         
                                             
    Interest bearing deposits                
    Savings ..............................    $ 19,267        $  495        3.43%       $12,600         $  218         2.31%
    Interest bearing transaction accounts       11,623           164        1.88%         8,478            129         2.03%
    Time deposits ........................      56,849         2,303        5.40%        47,224          1,930         5.45%
                                              --------        ------        ----        -------         ------         ----
                                             
    Total interest bearing deposits ......      87,739         2,962        4.50%        68,302          2,277         4.44%
    Short term borrowing .................       3,969           118        3.96%         2,187             65         3.96%
    FHLB advances ........................       1,114            55        6.58%         1,123             58         6.89%
                                              --------        ------        ----        -------         ------         ----
    Total interest bearing liabilities ...      92,822         3,135        4.50%        71,612          2,400         4.47%
                                             
    Noninterest bearing demand deposits ..      14,500                                   10,068
    Other liabilities ....................         797                                      591
    Shareholders' equity .................      12,275                                   10,631
                                              --------                                  -------
                                             
Total liabilities and shareholders' equity    $120,394                                  $92,902
                                              ========                                  =======
                                             
    Interest rate spread .................                                  3.92%                                      3.59%
    Net interest income and net yield on earning assets       $3,947        4.70%                       $2,831         4.36%
                                                              ======        ====                        ======         ==== 
</TABLE>                                     

(1)  Computed on a fully tax equivalent basis using a 34% federal tax rate.
                                             
                                       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.

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.

Florence National Bank (proposed)

     On September 15, 1997 CBI entered into an Organizational Agreement pursuant
to which it agreed  to  sponsor  the  organization  of  Florence  National  Bank
(proposed),  a  national  bank  that is  being  organized  by a group  of  local
businessmen in Florence,  South Carolina to become a wholly-owned  subsidiary of
CBI. CBI has also agreed to finance the expenses of the organization of the bank
and to  furnish  the  funds  necessary  to  capitalize  the  bank.  The funds to
capitalize Florence National Bank and to finance expenses of organization of the
bank are expected to be provided by CBI from the proceeds of a stock offering or
borrowed  funds  or some  combination  of debt  and  equity.  Completion  of the
organization  of Florence  National Bank and  acquisition of the bank by CBI are
subject  to  approval  of the Office of the  Comptroller  of the  Currency,  the
Federal  Deposit  Insurance  Corporation,  the Board of Governors of the Federal
Reserve System, and the South Carolina State Board of Financial Institutions. On
September 15, 1997 an  application  for a national bank charter for the proposed
Florence  National  Bank was filed  with the  Office of the  Comptroller  of the
Currency and an  application  for deposit  insurance  was filed with the Federal
Deposit Insurance Corporation.


RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

Net Income

     For the nine months ended  September  30, 1997,  CBI earned a  consolidated
profit of $872,000,  compared to $504,000 for the comparable  period of 1996, an
increase of 73% or  $368,000.  Earnings  per share were $.33 in the 1997 period,
compared to $.21 for the 1996 period, an increase of 57.1%.

     For the nine months ended  September  30, 1997,  Orangeburg  National  Bank
reported a profit of $1,028,000,  compared to $836,000 for the comparable period
of 1996, an increase of 22.9% or $192,000.

     For the nine months ended September 30, 1997, Sumter National Bank reported
an after tax loss of $169,000, compared to a loss of $238,000 for the comparable
period of 1996, an  improvement  of 29% or $69,000.  The 1997 amount  represents
nine full months of operation, whereas the 1996 amount represents less than four
months of operation.

                                       9
<PAGE>

     For the nine months ended September 30, 1997, the holding  company's parent
only net income  after  taxes was  $13,000  compared  to a net after tax loss of
$94,000 for the same period in 1996. This is an improvement of $107,000 or 114%.
Operations in 1996 included $112,000 in pre-opening expenses associated with the
new Sumter bank.

     As noted above, consolidated net income for the nine months ended September
30, 1997, increased from the prior year by 73% or $368,000.  Net interest income
before  provision for loan losses for the nine months ended  September 30, 1997,
increased to $3,947,000,  compared to $2,831,000 for the same period in 1996, an
increase of 39.4% or  $1,116,000.  For the 1997 period,  the  provision for loan
losses was  $258,000,  compared to $140,000 for the 1996 period,  an increase of
84.3% or $118,000. Non-interest income for the 1997 period increased to $559,000
from $355,000 for the 1996 period,  a 57.5% or $204,000  increase.  Non-interest
expense increased to $2,948,000 from $2,178,000,  a 35.4% or $770,000  increase.
Results  for the first nine months of 1997  include  results of  operations  for
Sumter  National  Bank for the entire  period,  however  the Sumter  bank was in
operation for less than four months during the 1996 period. Accordingly, many of
the dollar and percentage  comparisons and changes between periods  discussed in
this report are unusually large.


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 nine months ended
September 30, 1997 and 1996, the following table is presented.

                                         Period ended Sept. 30,
                                        1997               1996
                                        ----               ----
                                         (dollars in thousands)
Average assets                          $120,394          $92,902
ROA                                        0.97%            0.72%
Average equity                           $12,275          $10,631
ROE                                        9.47%            6.32%
Net income                                  $872             $504

     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.

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
nine  months of 1997,  net  interest  income  after  provision  for loan  losses
increased to $3,689,000  from  $2,691,000,  a 39% or $998,000  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
nine months of 1997 of $598,000, or 60% of the total increase.


                                       10
<PAGE>

Interest Income

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

     Total  interest  income for the nine months ended  September 30, 1997,  was
$7,082,000  compared  with  $5,231,000  for the same period in 1996,  a 35.4% or
$1,851,000 increase.  The yield on earning assets for the 1997 period was 8.43%,
up from 8.06% for the 1996 period. Total average interest earning assets for the
nine months ended September 30, 1997, were $112,069,000, up from $86,587,000 for
the same period in 1996, an increase of 29.4% or  $25,482,000.  Sumter  National
Bank averaged $18,729,000 in earning assets, or about 73% of the total increase.

     The loan portfolio  earned  $5,544,000 for the nine months ended  September
30, 1997, up from  $3,874,000 for the same period of 1996, a 43.1% or $1,670,000
increase.  The 1997 yield increased to 9.45% from 9.35% for the 1996 period. The
average size of the loan portfolio was $78,252,000 for the 1997 period,  up from
$55,266,000 for the same period of 1996, an increase of 41.6% or $22,986,000.

     The taxable  investment  portfolio  earned  $1,288,000  for the nine months
ended  September 30, 1997,  up from  $1,180,000  for the 1996 period,  a 9.2% or
$108,000 increase. The yield increased to 6.22% in the 1997 period from 5.89% in
the 1996 period.  The average size of the portfolio  increased to $27,612,000 in
the 1997  period from  $26,706,000  in the 1996  period,  an increase of 3.4% or
$906,000.

     The tax exempt investment portfolio continues to be a relatively small part
of the  portfolio.  It earned  $13,000 for the nine months ended  September  30,
1997,  unchanged from the prior year. The yield on the portfolio was 6.39% (on a
fully taxable  equivalent  basis),  up from the prior year's 6.30%.  The average
size of the portfolio decreased to $411,000 for the 1997 period from $417,000 in
the 1996 period, a decrease of 1.4% or $6,000.

     Interest bearing deposits in other banks  contributed  $54,000 for the nine
months ended  September 30, 1997,  compared to $44,000 during the prior year, an
increase of 22.7% or $10,000. The yield on these deposits increased to 5.76% for
the 1997  period  from 5.22% in the 1996  period.  CBI  averaged  $1,251,000  in
interest  bearing balances in the 1997 period compared to $1,124,000 in the 1996
period, an increase of 11.3% or $127,000.

     Federal funds sold earned  $183,000 for the nine months ended September 30,
1997,  compared  to $120,000  the prior  year,  an increase of 52.5% or $63,000.
Yields  increased to 5.37% for the period ended  September 30, 1997,  from 5.20%
for the 1996 period.  For the 1997 period,  CBI increased its average  volume in
federal funds sold to $4,543,000 from $3,074,000 for the 1996 period, a 47.8% or
$1,469,000 increase.

Interest expense

     Interest expense increased for the nine  months ended September 30, 1997 to
$3,135,000 from the prior year's $2,400,000,  a 30.6% or $735,000 increase.  The
volume of interest bearing  liabilities  increased to $92,822,000 for the period
ended  September  30, 1997,  from  $71,612,000  for the 1996 period,  a 29.6% or
$21,210,000  increase.  Sumter  National Bank averaged  $14,749,000  in interest
bearing  liabilities, or about 70% of the total  increase.  The average rate CBI
paid for interest bearing liabilities during the 1997 period was 4.50%, slightly
up from 4.47% for the 1996 period.


                                       11
<PAGE>

     The cost of savings  accounts  increased  to  $495,000  for the nine months
ended  September 30, 1997 from  $218,000 in the 1996 period,  a 127% or $277,000
increase.  Average  savings  deposit  balances  increased to $19,267,000 for the
period  ended  September  30, 1997,  from  $12,600,000  for the 1996 period,  an
increase of 52.9% or $6,667,000.  The average rate paid on these funds increased
to 3.43% from  2.31%.  Most of this  increase was due to growth in money  market
accounts at the Sumter Bank.

     Interest  bearing  transaction  accounts  cost $164,000 for the nine months
ended  September  30, 1997,  up from the prior year's  $129,000,  an increase of
27.1% or $35,000.  The volume of these deposits increased to $11,623,000 for the
period ended September 30, 1997, from $8,478,000 for the 1996 period, a 37.1% or
$3,145,000  increase.  The average rate paid on these funds for the period ended
September 30, 1997, decreased to 1.88% from 2.03% for the 1996 period.

     Time deposits cost $2,303,000 for the nine months ended September 30, 1997,
up from  $1,930,000  in the 1996 period,  an increase of 19.3% or $373,000.  The
volume  increased to $56,849,000  for the period ended  September 30, 1997, from
$47,224,000  for the 1996 period,  a 20.4% or $9,625,000  increase.  The average
rate paid on these funds  decreased to 5.40% for the period ended  September 30,
1997, from 5.45% 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 $118,000 for the nine months ended September
30, 1997, up from $65,000 for the 1996 period, an 81.5% or $53,000 increase. The
volume of these funds increased to $3,969,000 in the 1997 period from $2,187,000
in the 1996 period, an increase of 81.5% or $1,782,000. The average rate paid on
these funds was 3.96% for both periods.

     Borrowings from the Federal Home Loan Bank cost $55,000 for the nine months
ended  September  30, 1997,  compared to $58,000 for the 1996 period,  a 5.5% or
$3,000  decline.  The  advances  averaged  $1,114,000  during  the 1997  period,
compared to $1,123,000 for the prior year period, a .8% or $9,000 decrease.  All
these balances were  attributable to Orangeburg  National Bank. The average rate
paid on these funds decreased to 6.58% from 6.89%.

Non-Interest Income

     Non-interest  income for the nine months ended  September  30, 1997 grew to
$559,000 from $355,000 in the 1996 period, a 57.5% or $204,0000  increase.  This
increase was mostly the result of the  operation  of the new Sumter bank,  which
accounted for $118,000 or 58% 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.

                                       12
<PAGE>

Non-Interest Expense

     For  the  nine  months  ended  September  30,  1997  non-interest  expenses
increased to $2,948,000 from $2,178,000 for the 1996 period, a 35.3% or $770,000
increase.  Approximately  $454,000  (59%) of this  increase  is  related  to the
operation of Sumter National Bank.

     For  the  nine  months  ended  September  30,  1997  personnel  costs  were
$1,738,000  compared  to  $1,329,000  for the 1996  period,  a 30.8% or $409,000
increase.

     Premises and equipment  expense for the 1997 period were $384,000  compared
to $270,000 for the 1996 period, an increase of 42.2% or $114,000.

     Other costs for the 1997 period were $826,000  compared to $579,000 for the
1996 period, an increase of 42.7% or $193,000.

Income Taxes

     CBI  provided  $428,000  for federal and state income taxes during the nine
months ended  September  30,  1997,  compared to $364,000 for the same period in
1996, a 17.6% or $64,000 increase.


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

Net Income

     For the quarter ended September 30, 1997, CBI earned a consolidated  profit
of $325,000, compared to $110,000 for the comparable period of 1996, an increase
of 195% or $215,000.  Earnings per share were $.12 in the 1997 period,  compared
to $.05 for the 1996 period, an increase of 140%.

     Net interest income before  provision for loan losses for the quarter ended
September 30, 1997, increased to $1,411,000, compared to $1,014,000 for the same
period in 1996,  an  increase of 39.2% or  $397,000.  For the same  period,  the
provision for loan losses was $81,000,  compared to $77,000 for the 1996 period,
an increase of 5.2% or $4,000. Non-interest income for the 1997 period increased
to $196,000  from  $120,000  for the 1996 period,  a 63.3% or $76,000  increase.
Non-interest  expense increased to $1,023,000 from $867,000,  an 18% or $156,000
increase.

     The third  quarter of 1996 was the first full quarter of operation  for the
Sumter bank. Sumter National Bank's net loss for the quarter ended September 30,
1997,  was $25,000,  an improvement of 86% over its net loss of $184,000 for the
quarter ended September 30, 1996. Many of the dollar and percentage  comparisons
and changes  between  quarters  discussed are unusually large because the Sumter
bank's  ratio of  non-interest  expense to earning  assets was so much  greater,
17.6% in the 1996 quarter, than in the 1997 quarter, 5.8%.

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  September 30, 1997, net interest  income after  provision for loan losses
increased to $1,330,000  from  $937,000,  a 41.9% or $393,000  increase over the
comparable period of 1996. This improvement was the result of an increase in the
volume of earning assets at both banks.

                                       13
<PAGE>

Interest Income

     Total interest  income for the third quarter 1997 was  $2,595,000  compared
with $1,867,000 for the same period in 1996, a 39% or $1,092,000 increase.

     The loan portfolio earned $1,998,000 for the third quarter in 1997, up from
$1,371,000 for the same period of 1996, a 45.7% or $627,000 increase.

     The investment  portfolio earned $488,000 for the third quarter in 1997, up
from $419,000 for the 1996 period, a 16.5% or $69,000 increase.

     Interest bearing deposits in other banks contributed  $20,000 for the third
quarter  1997,  compared to $5,000 during the prior year, an increase of 300% or
$15,000.

     Federal  funds sold earned  $89,000 the third  quarter of 1997  compared to
$72,000 the prior year, an increase of 23.6% or $17,000.

Interest expense

     Interest expense increased for the third quarter of 1997 to $1,184,000 from
the prior year's $853,000, a 38.8% or $331,000 increase.

Non-Interest Income

     Non-interest  income  for the  third  quarter  1997 grew to  $196,000  from
$120,000 in the third quarter of 1996, a 63.3% or $76,000 increase.

Non-Interest Expense

     For the third quarter of 1997 non-interest expenses increased to $1,023,000
from $867,000 for the third quarter of 1996, an 18% or $156,000 increase.

     For the three  months  ended  September  30,  1997,  personnel  costs  were
$605,000  compared to $523,000 for the third quarter of 1996, a 15.7% or $82,000
increase.

     Premises and equipment  expense for the 1997 period were $135,000  compared
to $115,000 for the 1996 period, an increase of 17.4% or $20,000.

     Other costs for the third quarter 1997 were  $283,000  compared to $229,000
for the third quarter of 1996, an increase of 23.5% or $54,000.

Income Taxes

     CBI  provided  $178,000 for federal and state income taxes during the third
quarter of 1997,  compared  to $80,000  for the same  period in 1996,  a 122% or
$98,000 decrease.


                                       14
<PAGE>

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  September  30,  1997,  the  held to  maturity  portfolio  totaled
$17,407,000  compared to  $15,027,000 at December 31, 1996, an increase of 15.8%
or $2,380,000.  At September 30, 1997, the available for sale portfolio  totaled
$13,834,000  compared to  $10,761,000 at December 31, 1996, an increase of 28.6%
or $3,073,000.  The following  chart  summarizes  the  investment  portfolios at
September 30, 1997, and December 31, 1996.

<TABLE>
<CAPTION>


                                                           September 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 ...............       $17,000            $16,989                  $13,114         $13,122

Tax exempt securities ..........           407                410                        -               -
Other equity securities ........             -                  -                      712             712
                                       =======            =======                  =======         =======
Total ..........................       $17,407            $17,399                  $13,826         $13,834
                                       =======            =======                  =======         =======

Unrealized gain or (loss) ......       $    (8)                                    $     8
                                       =======                                     =======    
</TABLE>
<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 91% of the held to maturity and
the available for sale investment portfolios.

                                       15
<PAGE>

Loan portfolio

     The loan portfolio is primarily  consumer and small business  oriented.  At
September 30, 1997, the loan portfolio was $86,710,000,  compared to $68,829,000
at December 31, 1996,  a 25.9% or  $17,881,000  increase.  The  following  chart
summarizes the loan portfolio at September 30, 1997, and December 31, 1996.

                                               Sep. 30, 1997      Dec. 31, 1996
                                               -------------      -------------
                                                     (dollars in thousands)
Real estate ................................      $51,218            $41,164
Commercial .................................       19,582             16,644
Loans to individuals .......................       15,910             11,021
                                                  =======            ======= 
Total ......................................      $86,710            $68,829
                                                  =======            ======= 

     At September 30, 1997,  Orangeburg  National Bank's loan portfolio  totaled
$65,963,000  (including  loans  held for  resale)  compared  to  $59,877,000  at
December 31, 1996, an increase of $6,086,000 or 10.2%.

     At September  30,  1997,  Sumter  National  Bank's loan  portfolio  totaled
$20,849,000,  compared  to  $8,952,000  at  December  31,  1996,  an increase of
$11,897,000 or 133%.

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

     CBI  closely  monitors  past due  loans,  non-accrual  loans and other real
estate  owned.  Below is a  summary  of past due and  non-performing  assets  at
September 30, 1997 and December 31, 1996.

                                               Sept. 30, 1997      Dec. 31, 1996
                                               --------------      -------------
Past due 90 days + accruing loans ..........     $104,000              $ 93,000
Non-accrual loans ..........................     $365,000              $431,000
Impaired loans (included in nonaccrual) ....     $ 12,000              $ 12,000
Other real estate owned ....................     $      -              $      -

     Management considers the past due and non-accrual amounts in September 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.

                                                Sept. 30, 1997     Dec. 31, 1996
                                                --------------     -------------
Allowance at beginning of period ............    $  876,000          $707,000
Provision expense ...........................       258,000           227,000
Net charge-offs .............................       (43,000)          (58,000)
                                                 ==========          ========   
Allowance at end of period ..................    $1,091,000          $876,000
                                                 ==========          ========   
Allowance as a percent of outstanding loans .          1.26%             1.27%


                                       16
<PAGE>

     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
$123,000 as it  continued  to  establish  its  allowance  for loan  losses.  Net
charge-offs  during the period were $1,000. The allowance at September 30, 1997,
was $219,000.

     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 $135,000.  Net  chargeoffs  during the period were $42,000.  The allowance at
September 30, 1997 was $872,000.

     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 September 30, 1997.

Deposits

     Deposits were  $114,824,000 at September 30, 1997,  compared to $89,851,000
at December 31, 1996, an increase of 27.8% or $24,973,000.

     Time deposits greater than $100,000 were $20,484,000 at September 30, 1997,
compared  to  $13,640,000  at  December  31,  1996,  an  increase  of  50.2%  or
$6,844,000.

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 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.

                                       17
<PAGE>

     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
$114 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 September 30, 1997, CBI
had  approximately  $9.1  million and $1.2  million 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 $58.7  million and $11 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.

Capital resources

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

                                             Sept. 30, 1997       Dec. 31, 1996
                                             --------------       -------------
Tier 1 capital to average total assets             11.31%              11.50%
Tier 1 capital to risk weighted assets             14.17%              17.50%
Total capital to risk weighted assets              15.41%              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 September 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.   Total  shareholders'   equity  increased  from
$12,104,000  at December 31, 1996 to  $12,577,000  at September 30, 1997, a 3.9%
increase.

ACCOUNTING AND REPORTING MATTERS

          In February 1997, the FASB issued SFAS No. 128,  "Earnings Per Share."
SFAS No. 128 simplifies the current  computation of earnings per share and makes
the  United  States   standards  for  the   computation   more  compatible  with
international  earnings  per  share  standards.   The  statement  requires  dual
presentation  of  earnings  per  share for all  entities  with  complex  capital
structures. It also replaces the presentation of primary earnings per share with
a presentation  of basic earnings per share.  The Statement is effective for the
Company for the year ended  December 31, 1997.  The Company does not  anticipate
that  adoption of this  Statement  will have a material  effect on its financial
statements.

                                       18
<PAGE>



Part II--Other Information

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit No.(from         Description
item 601 of S-B)
(3)                      Articles of Incorporation, as amended.
(10)                     Organizational  Agreement  among  Community Bankshares,
                         Inc. and  the  Organizers  of  Florence  National Bank,
                         dated as of September 15, 1997.
(27)                     Financial Data Schedule

(b)  Reports on Form 8-K.  None.

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: November 10, 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)





                                       19
<PAGE>



                                  Exhibit Index

Exhibit No.(from         Description
item 601 of S-B)
(3)                      Articles of Incorporation, as amended.
(10)                     Organizational  Agreement  among  Community Bankshares,
                         Inc. and  the  Organizers  of  Florence  National Bank,
                         dated as of September 15, 1997.
(27)                     Financial Data Schedule