SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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


For the quarterly period ended March 31, 2004      Commission File No. 000-22054


                           COMMUNITY BANKSHARES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         South Carolina                                    57-0966962
-------------------------------               ----------------------------------
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)


                              791 Broughton Street
                        Orangeburg, South Carolina 29115
--------------------------------------------------------------------------------
               (Address of principal executive offices, zip code)


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



         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

         Yes [X]  No [ ]


         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined in Rule 12b-2 of the Exchange Act).

         Yes [ ]  No [X]


         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date: Common Stock, no par
or stated value, 4,349,775 shares outstanding on April 29, 2004.



<PAGE>


                           COMMUNITY BANKSHARES, INC.

                                    FORM 10-Q

                                      Index

                                                                            Page
PART I -    FINANCIAL INFORMATION

Item 1.     Financial Statements

            Consolidated Balance Sheet........................................ 3
            Consolidated Statement of Income.................................. 4
            Consolidated Statement of Changes in Shareholders' Equity......... 5
            Consolidated Statement of Cash Flows ............................. 6
            Notes to Unaudited Consolidated Financial Statements ............. 7

Item 2.     Management's Discussion and Analysis
             of Financial Condition and Results of Operations ................ 8
Item 3.     Quantitative and Qualitative Disclosures About Market Risk .......16
Item 4.     Controls and Procedures ..........................................16

PART II -   OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K .................................17

SIGNATURES ...................................................................18




                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. - Financial Statements

COMMUNITY BANKSHARES, INC.
Consolidated Balance Sheet
<TABLE>
<CAPTION>
                                                                                                     (Unaudited)
                                                                                                       March 31,        December 31,
                                                                                                         2004               2003
                                                                                                         -----              ----
                                                                                                         (Dollars in thousands)
Assets
<S>                                                                                                    <C>                <C>
     Cash and due from banks .................................................................         $  12,033          $  16,554
     Federal funds sold ......................................................................            23,415             25,321
                                                                                                       ---------          ---------
            Total cash and cash equivalents ..................................................            35,448             41,875
     Interest bearing deposits with other banks ..............................................             1,073              1,124
     Securities available-for-sale ...........................................................            56,100             64,864
     Securities held-to-maturity (estimated fair value $2,009 for 2004
          and $2,155 for 2003) ...............................................................             2,000              2,000
     Other investments .......................................................................             2,038              2,038
     Loans held for sale .....................................................................            12,500              8,411
     Loans receivable ........................................................................           338,945            332,106
         Less, allowance for loan losses .....................................................            (4,205)            (4,206)
                                                                                                       ---------          ---------
            Net loans ........................................................................           334,740            327,900
     Premises and equipment - net ............................................................             6,826              6,915
     Accrued interest receivable .............................................................             2,119              2,186
     Net deferred income tax assets ..........................................................               634                805
     Intangible assets .......................................................................             7,589              7,650
     Prepaid expenses and other assets .......................................................             1,406                812
                                                                                                       ---------          ---------

            Total assets .....................................................................         $ 462,473          $ 466,580
                                                                                                       =========          =========

Liabilities
     Deposits
         Non-interest bearing ................................................................         $  58,899          $  59,337
         Interest bearing ....................................................................           308,706            319,367
                                                                                                       ---------          ---------
            Total deposits ...................................................................           367,605            378,704
     Short-term borrowings ...................................................................            13,010             17,960
     Long-term debt ..........................................................................            30,450             20,140
     Accrued interest payable ................................................................               675                585
     Accrued expenses and other liabilities ..................................................             1,359              1,121
                                                                                                       ---------          ---------
            Total liabilities ................................................................           413,099            418,510
                                                                                                       ---------          ---------

Shareholders' equity
     Common stock - no par value; 12,000,000 shares authorized; issued and
         outstanding - 4,336,112 for 2004 and 4,331,460 for 2003 .............................            29,447             29,402
     Retained earnings .......................................................................            19,562             18,610
     Accumulated other comprehensive income ..................................................               365                 58
                                                                                                       ---------          ---------
            Total shareholders' equity .......................................................            49,374             48,070
                                                                                                       ---------          ---------

            Total liabilities and shareholders' equity .......................................         $ 462,473          $ 466,580
                                                                                                       =========          =========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       3
<PAGE>

COMMUNITY BANKSHARES, INC.
Consolidated Statement of Income
<TABLE>
<CAPTION>
                                                                                                            (Unaudited)
                                                                                                        Three Months Ended
                                                                                                             March 31,
                                                                                                     2004                     2003
                                                                                                     -----                    ----
                                                                                                         (Dollars in thousands,
                                                                                                          except per share)
Interest and dividend income
<S>                                                                                                 <C>                      <C>
     Loans, including fees ........................................................                 $ 5,331                  $ 5,526
     Interest bearing deposits with other banks ...................................                       4                        4
     Debt securities ..............................................................                     496                      493
     Dividends ....................................................................                      19                       20
     Federal funds sold ...........................................................                      58                       57
                                                                                                    -------                  -------
         Total interest and dividend income .......................................                   5,908                    6,100
                                                                                                    -------                  -------

Interest expense
     Deposits
     Time deposits $100M and over .................................................                     313                      427
     Other deposits ...............................................................                     919                    1,119
                                                                                                    -------                  -------
         Total interest expense on deposits .......................................                   1,232                    1,546
     Short-term borrowings ........................................................                     105                      181
     Long-term debt ...............................................................                     303                      274
                                                                                                    -------                  -------
         Total interest expense ...................................................                   1,640                    2,001
                                                                                                    -------                  -------

Net interest income ...............................................................                   4,268                    4,099
Provision for loan losses .........................................................                     233                      264
                                                                                                    -------                  -------
Net interest income after provision ...............................................                   4,035                    3,835
                                                                                                    -------                  -------

Noninterest income
     Service charges on deposit accounts ..........................................                     845                      783
     Mortgage brokerage income ....................................................                     749                    1,260
     Net gains or losses on sales of securities ...................................                      (4)                      46
     Other ........................................................................                     256                      215
                                                                                                    -------                  -------
         Total non-interest income ................................................                   1,846                    2,304
                                                                                                    -------                  -------

Noninterest expenses
     Salaries and employee benefits ...............................................                   2,111                    2,351
     Premises and equipment .......................................................                     491                      403
     Other ........................................................................                   1,131                      981
                                                                                                    -------                  -------
         Total other expenses .....................................................                   3,733                    3,735
                                                                                                    -------                  -------

Income before income taxes ........................................................                   2,148                    2,404
Income tax expense ................................................................                     763                      823
                                                                                                    -------                  -------
Net income ........................................................................                 $ 1,385                  $ 1,581
                                                                                                    =======                  =======

Per share
     Net income ...................................................................                 $  0.32                  $  0.37
     Net income - diluted .........................................................                    0.31                     0.36
     Cash dividends declared ......................................................                    0.10                     0.09
</TABLE>



See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>

COMMUNITY BANKSHARES, INC.
Consolidated Statement of Changes in Shareholders' Equity

<TABLE>
<CAPTION>
                                                                    (Unaudited)

                                                                     Common Stock
                                                                     ------------                          Accumulated
                                                               Number of                    Retained    Other Comprehensive
                                                                Shares          Amount      Earnings         Income         Total
                                                                ------          ------      --------         ------         -----
                                                                             (Dollars in thousands, except per share)

<S>                                                             <C>           <C>           <C>            <C>            <C>
Balance, January 1, 2003 ..................................     4,304,384     $  29,090     $  14,529      $      98      $  43,717
                                                                                                                          ---------
Comprehensive income:
    Net income ............................................             -             -         1,581              -          1,581
                                                                                                                          ---------
    Unrealized holding gains and losses
      on available-for-sale securities arising
      during the period, net of income
      taxes of $30 ........................................             -             -             -             54             54
    Reclassification adjustment for losses (gains)
      realized in income, net of
      income taxes of $16 .................................             -             -             -            (30)           (30)
                                                                                                                          ---------
        Total other comprehensive income ..................             -             -             -              -             24
                                                                                                                          ---------
          Total comprehensive income ......................             -             -             -              -          1,605
                                                                                                                          ---------
Exercise of employee stock options ........................         1,600            17             -              -             17
Cash dividends declared, $.09 per share ...................             -             -          (387)             -           (387)
                                                                ---------     ---------     ---------      ---------      ---------
Balance, March 31, 2003 ...................................     4,305,984     $  29,107     $  15,723      $     122      $  44,952
                                                                =========     =========     =========      =========      =========


Balance, January 1, 2004 ..................................     4,331,460     $  29,402     $  18,610      $      58      $  48,070
                                                                                                                          ---------
Comprehensive income:
    Net income ............................................             -             -         1,385              -          1,385
                                                                                                                          ---------
    Unrealized holding gains and losses
      on available-for-sale securities arising
      during the period, net of income
      taxes of $171 .......................................             -             -             -            304            304
    Reclassification adjustment for losses (gains)
      realized in income, net of
      income taxes of $1 ..................................             -             -             -              3              3
                                                                                                                          ---------
        Total other comprehensive income ..................             -             -             -              -            307
                                                                                                                          ---------
          Total comprehensive income ......................             -             -             -              -          1,692
                                                                                                                          ---------
Exercise of employee stock options ........................         4,652            45             -              -             45
Cash dividends declared, $.10 per share ...................             -             -          (433)             -           (433)
                                                                ---------     ---------     ---------      ---------      ---------
Balance, March 31, 2004 ...................................     4,336,112     $  29,447     $  19,562      $     365      $  49,374
                                                                =========     =========     =========      =========      =========
</TABLE>











See accompanying notes to unaudited consolidated financial statements.

                                       5
<PAGE>

COMMUNITY BANKSHARES, INC.
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
                                                                                                              (Unaudited)
                                                                                                           Three Months Ended
                                                                                                                March 31,
                                                                                                        2004                 2003
                                                                                                        -----                ----
                                                                                                          (Dollars in thousands)
Operating activities
<S>                                                                                                    <C>                 <C>
     Net income ............................................................................           $  1,385            $  1,581
     Adjustments to reconcile net income to net
         cash (used) provided by operating activities
            Depreciation and amortization ..................................................                283                 232
            Net amortization of securities .................................................                 71                  46
            Provision for loan losses ......................................................                233                 264
            Net losses or (gains) on sales of securities ...................................                  4                 (46)
            Proceeds of sales of loans held for sale .......................................             37,663              71,867
            Originations of loans held for sale ............................................            (41,752)            (70,394)
            Decrease (increase) in accrued interest receivable .............................                 67                 (25)
            Increase in other assets .......................................................               (633)               (201)
            Gains on sales of other real estate ............................................                 (9)                  -
            Increase in accrued interest payable ...........................................                 90                  90
            Other liabilities ..............................................................                238                 308
                                                                                                       --------            --------
                Net cash (used) provided by operating activities ...........................             (2,360)              3,722
                                                                                                       --------            --------

Investing activities
     Net decrease (increase) in interest bearing deposits due from banks ...................                 51                (372)
     Purchases of available-for-sale securities ............................................            (10,739)            (19,847)
     Maturities, calls and paydowns of available-for-sale securities .......................             11,979              24,810
     Proceeds of sales of available-for-sale securities ....................................              7,927               1,747
     Net increase in loans made to customers ...............................................             (7,084)             (7,297)
     Purchases of premises and equipment ...................................................               (133)               (221)
     Proceeds from sales of other real estate ..............................................                 59                   -
                                                                                                       --------            --------
                Net cash provided (used) by investing activities ...........................              2,060              (1,180)
                                                                                                       --------            --------

Financing activities
     Net (decrease) increase in deposits ...................................................            (11,099)              9,608
     Net decrease in short-term borrowings .................................................             (4,950)             (1,322)
     Proceeds from issuing long-term debt ..................................................             10,310                   -
     Exercise of employee stock options ....................................................                 45                  17
     Cash dividends paid ...................................................................               (433)               (387)
                                                                                                       --------            --------
                Net cash (used) provided by financing activities ...........................             (6,127)              7,916
                                                                                                       --------            --------
(Decrease) increase in cash and cash equivalents ...........................................             (6,427)             10,458
Cash and cash equivalents, beginning of period .............................................             41,875              38,569
                                                                                                       --------            --------
Cash and cash equivalents, end of period ...................................................           $ 35,448            $ 49,027
                                                                                                       ========            ========

Supplemental Disclosures of Cash Flow Information
     Cash payments for interest ............................................................           $  1,550            $  1,907
                                                                                                       ========            ========
     Cash payments for income taxes ........................................................           $    179            $    517
                                                                                                       ========            ========

Supplemental Disclosures of Non-Cash Investing Activities
     Transfers of loans receivable to other real estate ....................................           $     11            $    131
                                                                                                       ========            ========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.



                                       6
<PAGE>


COMMUNITY BANKSHARES, INC.

Notes to Unaudited Consolidated Financial Statements

Accounting  Principles - A summary of  significant  accounting  policies and the
audited  financial  statements  for 2003 are included in  Community  Bankshares,
Inc.'s (the  "Company" or "CBI")  Annual  Report on Form 10-K for the year ended
December 31, 2003. Certain amounts in the 2003 consolidated financial statements
have been  reclassified  to conform to the current period  classification.  Such
reclassification  had no effect on previously reported  shareholders'  equity or
net income.

Management  Opinion  - The  interim  financial  statements  in this  report  are
unaudited.  In the  opinion of  management,  all the  adjustments  necessary  to
present a fair  statement of the results for the interim  period have been made.
Such adjustments are of a normal and recurring nature. The results of operations
for any  interim  period are not  necessarily  indicative  of the  results to be
expected for an entire year. These interim  financial  statements should be read
in conjunction with the annual financial  statements and notes thereto contained
in the 2003 Annual Report on Form 10-K.

Nonperforming  Loans - As of March 31, 2004, there were $1,482,000 in nonaccrual
loans and loans 90 or more days past due and still accruing interest.

Earnings Per Share - Basic earnings per share is computed by dividing net income
applicable  to common  shares by the weighted  average  number of common  shares
outstanding.  Diluted earnings per share is computed by dividing  applicable net
income by the weighted  average  number of shares  outstanding  and any dilutive
potential  common  shares and  dilutive  stock  options.  It is assumed that all
dilutive  stock  options are  exercised at the beginning of each period and that
the proceeds are used to purchase  shares of the  Company's  common stock at the
average market price during the period.  Net income per share and net income per
share, assuming dilution, were computed as follows:

<TABLE>
<CAPTION>
                                                                                                            (Unaudited)
                                                                                                         Three Months Ended
                                                                                                              March 31,
                                                                                                    2004                    2003
                                                                                                    ----                    ----
                                                                                                       (Dollars in thousands,
                                                                                                       except per share amounts)

Net income per share, basic
<S>                                                                                               <C>                     <C>
  Numerator - net income ...........................................................              $    1,385              $    1,581
                                                                                                  ==========              ==========
  Denominator
    Weighted average common shares issued and outstanding ..........................               4,333,718               4,305,237
                                                                                                  ==========              ==========

               Net income per share, basic .........................................              $      .32              $      .37
                                                                                                  ==========              ==========

Net income per share, assuming dilution
  Numerator - net income ...........................................................              $    1,385              $    1,581
                                                                                                  ==========              ==========
  Denominator
    Weighted average common shares issued and outstanding ..........................               4,333,718               4,305,237
    Effect of dilutive stock options ...............................................                 142,560                 114,796
                                                                                                  ----------              ----------
               Total shares ........................................................               4,476,278               4,420,033
                                                                                                  ==========              ==========
               Net income per share, assuming dilution .............................              $      .31              $      .36
                                                                                                  ==========              ==========
</TABLE>

Stock  Based  Compensation  - The  Company  has  elected to  continue  using the
methodology  of  Accounting  Principles  Board  Opinion  No. 25 ("APB No.  25"),
"Accounting for Stock Issued to Employees," to account for compensation expenses
related to stock-based  compensation.  Options issued under the Company's  plans
have no intrinsic value at the grant date and no compensation cost is recognized
in accordance with APB No. 25. Statement of Financial  Accounting  Standards No.
123  ("SFAS No.  123"),  "Accounting  for  Stock-Based  Compensation,"  requires
entities to provide pro forma disclosures of net income, and earnings per share,
as if the fair value based method of accounting promulgated by that standard had
been applied.  While the Company has adopted the  disclosure  provisions of SFAS
No.  123, as amended,  there are no current  intentions  to adopt the fair value
recognition  provisions  of  that  statement.  Had  compensation  cost  for  the
Company's  stock option plan been  determined  based on the fair value as of the
grant dates for awards under the plans consistent with the method  prescribed by


                                       7
<PAGE>

SFAS No. 123,  the  Company's  net income and earnings per share would have been
adjusted to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                                                             (Unaudited)
                                                                                                         Three Months Ended
                                                                                                              March 31,
                                                                                                    2004                     2003
                                                                                                    ----                     ----
                                                                                                       (Dollars in thousands,
                                                                                                     except per share amounts)

<S>                                                                                              <C>                       <C>
Net income, as reported ........................................................                 $   1,385                 $   1,581
Deduct:  Total stock-based employee
      compensation expense determined under
      fair value based method for all awards,
      net of any related tax effects ...........................................                       214                         -
                                                                                                 ---------                 ---------
Pro forma net income ...........................................................                 $   1,171                 $   1,581
                                                                                                 =========                 =========

Net income per share, basic
      As reported ..............................................................                 $    0.32                 $    0.37
      Pro forma ................................................................                      0.27                      0.37
Net income per share, assuming dilution
      As reported ..............................................................                 $    0.31                 $    0.36
      Pro forma ................................................................                      0.26                      0.36
</TABLE>


Variable  Interest  Entities - On March 8, 2004, CBI sponsored the creation of a
Delaware trust, SCB Capital Trust I (the "Trust"),  and is the sole owner of the
common  securities  issued by the Trust.  On March 10,  2004,  the Trust  issued
$10,000,000 in floating rate capital securities.  The proceeds of this issuance,
and the amount of CBI's  capital  investment,  were used to acquire  $10,310,000
principal amount of CBI's floating rate junior subordinated  deferrable interest
debt securities  ("Debentures")  due April 7, 2034,  which  securities,  and the
accrued interest thereon,  now constitute the Trust's sole assets.  The interest
rate  associated  with the debt  securities,  and the  distribution  rate on the
common  securities  of the  Trust,  was  established  initially  at 3.91% and is
adjustable  quarterly  at 3 month  LIBOR plus 280 basis  points.  The index rate
(LIBOR)  may not be lower than  1.11%.  CBI may defer  interest  payments on the
Debentures  for up to twenty  consecutive  quarters,  but not  beyond the stated
maturity date of the  Debentures.  In the event that such interest  payments are
deferred by CBI, the Trust may defer distributions on the common securities.  In
such an event,  CBI would be  restricted  in its ability to pay dividends on its
common  stock and  perform  under other  obligations  that are not senior to the
junior subordinated Debentures.

         The  Debentures are redeemable at par at the option of CBI, in whole or
in part, on any interest  payment date on or after April 7, 2009.  Prior to that
date,  the  Debentures  are  redeemable  at 105% of par upon the  occurrence  of
certain  events  that would  have a  negative  effect on the Trust or that would
cause it to be required to be  registered  as an  investment  company  under the
Investment  Company Act of 1940 or that would cause trust  preferred  securities
not to be eligible to be treated as Tier 1 capital by the Federal Reserve Board.
Upon repayment or redemption of the Debentures,  the Trust will use the proceeds
of the transaction to redeem an equivalent amount of trust preferred  securities
and trust common securities.  The Trust's  obligations under the trust preferred
securities are unconditionally guaranteed by CBI.

         The  Company's  investment  in the  Trust is  carried  at cost in other
assets and the  debentures  are included in long-term  debt in the  consolidated
balance sheet.


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.  Forward-looking statements include statements


                                       8
<PAGE>

other than statements of historical facts concerning plans,  objectives,  goals,
strategies,  future  events or  performance  and  underlying  assumptions.  Such
forward-looking statements may be identified,  without limitation, by the use of
the words "anticipates," "believes," "estimates," "expects," "intends," "plans,"
"predicts,"  "projects," and similar  expressions.  The Company's  expectations,
beliefs,  estimates and projections are expressed in good faith and are believed
by the  Company  to  have a  reasonable  basis,  including  without  limitation,
management's  examination of historical  operating trends, data contained in the
Company's records and other data available from third parties,  but there can be
no assurance that management's  expectations,  beliefs, estimates or projections
will result or be achieved or  accomplished.  The Company  cautions readers that
forward looking statements,  including without limitation, those relating to the
Company's  recent  and  continuing  expansion,  its future  business  prospects,
revenues, working capital, liquidity, capital needs, interest costs, income, and
adequacy  of  the  allowance   for  loan  losses,   are  subject  to  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  Company's  reports filed with the  Securities  and Exchange
Commission.  The Company  undertakes no obligation to publicly  update or revise
any forward-looking statements,  whether as a result of new information,  future
events or otherwise.

Critical Accounting Policies

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

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

         CBI is a  holding  company  for four  community  banks  and a  mortgage
company and, as a financial institution,  believes the allowance for loan losses
is a critical accounting policy that requires the most significant judgments and
estimates used in preparation of its consolidated financial statements. Refer to
the sections  "Allowance for Loan Losses" and "Provision for Loan Losses" in the
Annual  Report  on Form  10-K  for  2003  for a  detailed  description  of CBI's
estimation process and methodology related to the allowance for loan losses.


RESULTS OF OPERATIONS

Earnings Performance

         For the  quarter  ended March 31,  2004,  CBI earned  consolidated  net
income of $1,385,000,  compared with  $1,581,000  for the  comparable  period of
2003. This represents a decrease of $196,000 or 12.4%.  Basic earnings per share
were $.32 in the 2004 period,  compared with $.37 for the 2003 quarter.  Diluted
earnings per share were $.31 for the 2004 period and $.36 for the 2003 period.

         Operating results for the first quarter of 2004 were adversely affected
primarily  by lower  demand for  mortgage  loan  refinancing  and other  related
activity.  Because the current low interest  rate  environment  has lasted for a
relatively  long  period  of time,  most  homeowners  who would be  inclined  to
refinance  existing  mortgage  debts probably have already done so. As a result,
demand  for  refinancings  has  declined  markedly  from the level of 2003.  The
current  level of mortgage  loan activity is believed to reflect more nearly the
underlying "base" amount of such activity resulting from normal, ongoing factors
and, accordingly,  is believed to more indicative of a sustainable level of such
activity.

         The prime  lending  rate for the first  quarter  2004  averaged  4.00%,
compared with 4.25% for the same quarter in 2003, putting continuing pressure on
CBI's net  interest  margin.  The  average  yield on earning  assets in 2004 was
5.51%,  a 56 basis point  decline from the same period of 2003.  However,  CBI's
average rate paid on interest bearing liabilities  declined also, from 2.37% for
the 2003 period to 1.86% for the 2004 period. As a result,  interest rate spread
decreased only 5 basis points and net interest margin for 2004 was just 10 basis
points lower than in 2003.  The Company  believes  that its  reductions in rates
paid on deposit  accounts are  comparable  to the  practices of other  competing
financial  institutions in its market areas. However,  because the rates offered
for such deposit  instruments  have declined to such low levels,  the ability to
effect further cost reductions in this area is believed to be limited.


                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                                                Summary Income Statement
                                                              -------------------------------------------------------------------
                                                                                 (Dollars in thousands)
For the Three Months Ended March 31,                            2004             2003           Dollar Change   Percentage Change
                                                                ----             ----           -------------   -----------------
<S>                                                           <C>               <C>               <C>                  <C>
Interest income ...................................           $5,908            $6,100            $ (192)               -3.1%
Interest expense ..................................            1,640             2,001              (361)              -18.0%
                                                              ------            ------            ------
Net interest income ...............................            4,268             4,099               169                 4.1%
Provision for loan losses .........................              233               264               (31)              -11.7%
Noninterest income ................................            1,846             2,304              (458)              -19.9%
Noninterest expenses ..............................            3,733             3,735                (2)               -0.1%
Income tax expense ................................              763               823               (60)               -7.3%
                                                              ------            ------            ------
Net income ........................................           $1,385            $1,581            $ (196)              -12.4%
                                                              ======            ======            ======
</TABLE>


Net Interest Income

         Net interest income is the amount of interest income earned on interest
earning assets (primarily loans, securities,  interest bearing deposits in other
banks,  and federal funds sold),  less the interest expense incurred on interest
bearing liabilities (interest bearing deposits and other borrowings), and is the
principal source of the Company's  earnings.  Net interest income is affected by
the level of  interest  rates,  volume and mix of  interest  earning  assets and
interest bearing liabilities and the relative funding of those assets.

         Interest  income  decreased by $192,000,  or 3.1%,  in the 2004 quarter
compared with the same 2003 period.  Interest  income from  mortgage  activities
declined from  $251,000 in the 2003 period to $110,000 for 2004,  primarily as a
result of the decreased  level of activity  discussed  above.  Interest on other
lending activities  declined from $5,275,000 in the 2003 period to $5,221,000 in
the 2004 period due to the lower interest rate environment.  Amounts of interest
earned  on other  categories  of  interest  earning  assets  were  substantially
unchanged, in the aggregate, as reductions in the average yields earned on those
assets were offset by increased average balances held.  However,  an increase of
$22,000 in income from taxable  securities was offset by a $20,000  reduction in
income from tax-exempt securities.

         Interest  expense for deposits  decreased from  $1,546,000 for the 2003
period to  $1,232,000  for the 2004  period  primarily  due to a 62 basis  point
reduction in the rate paid for time deposits and a 37 basis point decline in the
rate paid for savings deposits.  Offsetting the effects of these rate reductions
were sizable  increases in the average amounts of interest  bearing  transaction
and savings  accounts.  In  addition,  because of the lower  demand for mortgage
loan-related  products,  the Company's average amounts of short-term  borrowings
declined from $29,832,000 in the 2003 period to $16,767,000 for the 2004 period.
As a result, the interest expense for such borrowings  declined from $181,000 in
2003 to $105,000 for 2004.

         During the first quarter of 2004, CBI sponsored the creation of a Trust
that issued  $10,000,000 in trust preferred  securities.  The Trust invested the
proceeds  of  this  issuance  and  $310,000  of  capital  provided  by CBI  into
$10,310,000  of junior  subordinated  debentures  ("Debentures")  issued by CBI.
Interest  payments on the  Debentures  are due quarterly at a variable  interest
rate. CBI used the proceeds of the Debentures to repay certain pre-existing debt
obligations,  to enhance the capital position of two of the subsidiary banks, to
provide an additional funding mechanism for its mortgage  brokerage  activities,
and for other general corporate purposes.  Although the interest rate associated
with the debt is variable,  management  believes that the  indenture  provisions
governing that  variability  will result in less volatility in interest  expense
than achievable under certain short-term debt agreements.  In addition,  because
of the long-term nature of the new arrangement, transaction costs, such as those
incurred to renew  lines of credit,  are  expected  to be reduced.  Furthermore,
under current regulatory  guidelines,  the trust preferred  securities issued by
the Trust are includible in Tier 1 capital for risk-based capital purposes.


                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                                Average Balances, Yields and Rates
                                                                                   Three Months Ended March 31,
                                                                                   ----------------------------

                                                                             2004                                  2003
                                                                             ----                                  ----
                                                                           Interest                              Interest
                                                             Average        Income/     Yields/      Average      Income/    Yields/
                                                             Balances       Expense     Rates*       Balances     Expense    Rates*
                                                             --------       -------     ------       --------     -------    ------
                                                                                       (Dollars in thousands)
Assets
<S>                                                        <C>           <C>             <C>        <C>           <C>         <C>
Interest earning deposits ...............................  $   1,110     $       4       1.46%      $     576     $      4    2.82%
Investment securities - taxable .........................     57,236           431       3.05%         44,758          409    3.71%
Investment securities - tax exempt ......................     10,208            84       3.34%          9,534          104    4.42%
Federal funds sold ......................................     24,647            58       0.95%         20,441           57    1.13%
Loans, including loans held for sale ....................    341,982         5,331       6.32%        332,526        5,526    6.74%
                                                           ---------     ---------                  ---------     --------
             Total interest earning assets ..............    435,183         5,908       5.51%        407,835        6,100    6.07%
Cash and due from banks .................................     17,314                                   14,313
Allowance for loan losses ...............................     (4,162)                                  (3,607)
Premises and equipment ..................................      7,073                                    6,615
Intangible assets .......................................      7,618                                    7,864
Other assets ............................................      3,860                                    3,386
                                                           ---------                                ---------
             Total assets ...............................  $ 466,886                                $ 436,406
                                                           =========                                =========

Liabilities and shareholders' equity
Interest bearing deposits
       Interest bearing transaction accounts ............  $  57,474     $      66       0.47%      $  40,891     $     51    0.51%
       Savings ..........................................     79,663           183       0.93%         66,553          214    1.30%
       Time deposits ....................................    181,616           983       2.20%        184,417        1,281    2.82%
                                                           ---------     ---------                  ---------     --------
             Total interest bearing deposits ............    318,753         1,232       1.57%        291,861        1,546    2.15%
Short-term borrowings ...................................     16,767           105       2.54%         29,832          181    2.46%
Long-term debt ..........................................     22,718           303       5.41%         20,210          274    5.50%
                                                           ---------     ---------                  ---------     --------
             Total interest bearing liabilities .........    358,238         1,640       1.86%        341,903        2,001    2.37%
Noninterest bearing demand deposits .....................     58,045                                   47,939
Other liabilities .......................................      1,836                                    1,956
Shareholders' equity ....................................     48,767                                   44,608
                                                           ---------                                ---------
Total liabilities and shareholders' equity ..............  $ 466,886                                $ 436,406
                                                           =========                                =========

Interest rate spread ....................................                                3.65%                                3.70%
Net interest income and net yield
       on earning assets ................................                $   4,268       3.98%                     $  4,099   4.08%
Interest free funds supporting earning  assets ..........  $  76,945                                 $  65,932
</TABLE>


* Yields and rates are annualized.


Provision and Allowance for Loan Losses

         The  provision  for loan  losses for the 2004  period was  $233,000,  a
decrease of $31,000,  or 11.7%,  from the  $264,000 for the same period of 2003.
During the first quarter of 2004, a nonaccrual loan in the amount of $1,350,000,
or  approximately   52%  of  CBI's  December  31,  2003  nonaccrual  loans,  was
satisfactorily  resolved with CBI  collecting  all principal and interest  owed.
Because  of this  favorable  outcome,  the  amount  previously  included  in the
allowance for loan losses for this loan was no longer required.  Therefore,  the
2004 provision for loan losses was beneficially affected.


                                       11
<PAGE>

         Net  charge-offs  during the three  months  ended  March 31,  2004 were
$234,000,  compared with $70,000 for the same period of 2003.  The allowance for
loan losses as of March 31, 2004 was 1.24% of loans  outstanding,  compared with
1.27% as of  December  31, 2003 and 1.20% as of March 31,  2003.  Non-performing
loans totaled  $1,482,000 as of March 31, 2004,  compared with  $2,741,000 as of
December  31,  2003,  a decrease of  $1,259,000  or 45.9%.  The  coverage  ratio
(allowance  for loan  losses  divided by  non-performing  loans) was 2.84x as of
March 31, 2004 and 1.53x as of December 31, 2003. The majority of non-performing
loans at March  31,  2004 were  secured  by  commercial  real  estate  and other
collateral.

         Management believes that the allowance for loan losses, as of March 31,
2004,  is  adequate  to  absorb  the  losses  inherent  in the  loan  portfolio.
Management will continue to monitor the levels of  non-performing  and potential
problem  loans and  address  the  weaknesses  in these  credits to  enhance  the
ultimate collection or recovery of these assets. Management considers the levels
and trends in  non-performing  assets and past due loans in determining  how the
provision and allowance for loan losses is estimated and adjusted.

         The  activity in the  allowance  for loan losses is  summarized  in the
following table:

<TABLE>
<CAPTION>
                                                                    Three Months Ended       Year Ended         Three Months Ended
                                                                      March 31, 2004      December 31, 2003        March 31, 2003
                                                                      --------------      -----------------        --------------
                                                                                         (Dollars in thousands)
<S>                                                                      <C>                   <C>                   <C>
Allowance at beginning of period .................................       $   4,206             $   3,573             $   3,573
Provision for loan losses ........................................             233                 1,119                   264
Net charge-offs ..................................................            (234)                 (486)                  (70)
                                                                         ---------             ---------             ---------
Allowance at end of period .......................................       $   4,205             $   4,206             $   3,767
                                                                         =========             =========             =========
Allowance as a percentage of loans outstanding ...................            1.24%                 1.27%                 1.20%

Loans at end of period ...........................................       $ 338,945             $ 332,106             $ 313,711
                                                                         =========             =========             =========
</TABLE>


         Following is a summary of non-performing loans as of March 31, 2004 and
December 31, 2003:

                                                       March 31,    December 31,
                                                         2004          2003
                                                         ----          ----
                                                        (Dollars in thousands)
Non-performing loans
  Nonaccrual loans ...................................   $1,162       $2,595
  Past due 90 days or more and still accruing ........      320          146
                                                         ------       ------
                Total ................................   $1,482       $2,741
                                                         ======       ======
Nonperforming loans as a percentage
  of loans outstanding ...............................     0.44%        0.83%


Noninterest Income

         Non-interest income for the 2004 period decreased  $458,000,  or 19.9%,
from the  $2,304,000  reported for the 2003 period.  Mortgage  brokerage  income
decreased $511,000, or 40.6%, from $1,260,000 in the 2003 period to $749,000 for
the 2004 period, due to the market factors discussed previously.  Service charge
income continued to improve,  totaling  $845,000 in the 2004 period, an increase
of $62,000,  or 7.9%,  due to the continued  success of the Automatic  Overdraft
Protection product.



                                       12
<PAGE>

Noninterest Expenses

         Salaries and employee  benefits for the 2004 period were  $240,000,  or
10.2%, less than for the same period of 2003. This decrease  resulted  primarily
from the  decreased  level of activity  in the  mortgage  brokerage  subsidiary.
Because  demand for  refinancing  and other  mortgage loan products has declined
recently,  the number of  employees  needed to conduct  the  operations  of that
company has decreased.  Also, that entity's compensation system is predominantly
commission-based.  Expenses associated with premises and equipment were $88,000,
or 21.8%,  higher  in the 2004  period,  primarily  due to the  acquisition  and
implementation  of hardware and software  associated with imaging  technologies.
Over time,  the use of such  technology is expected to reduce  postage  expense,
reduce time  required for  research,  improve  internal  processes and access to
information, enable the Company to take advantage of the opportunities presented
by the recent Check 21 legislation, and enhance the Company's ability to provide
service to its customers.  Other expenses were $150,000, or 15.3%, higher in the
2004 period.  The major area of increase was  advertising,  which was  increased
primarily as a result of the mortgage company's efforts to increase sales.


Income Taxes

         Although income tax expense for 2004 decreased  $60,000,  or 7.3%, from
the amount for 2003,  the  average  tax rate for 2004 was 35.5% while in 2003 it
was 34.2%.  The increase in the average tax rate for 2004 is a result of a lower
percentage  of income  being  derived  from  tax-exempt  sources in the  current
period.  While  average  interest  earning  assets  for  the  2004  period  were
$27,348,000,  or 6.7%,  more  than in the 2003  period,  tax-exempt  investments
increased only $674,000,  or 7.1%, and the yield on such securities decreased by
108 basis  points,  or  24.4%.  As a result of these  factors,  interest  income
derived from tax-exempt  investment  securities was $20,000 less in 2004 than in
2003 and was 3.9% of pretax income in the 2004 period, compared with 4.3% in the
2003 period.


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 CBI's service areas.  Individual and commercial  deposits are the primary
source of funds for credit activities,  along with long-term borrowings from the
Federal Home Loan Bank of Atlanta and the net proceeds of issuing $10,000,000 of
trust  preferred  securities.  Cash and amounts due from banks and federal funds
sold are CBI's primary sources of asset liquidity. These funds provide a cushion
against  short-term  fluctuation  in cash  flow from  both  loans and  deposits.
Securities  available-for-sale  are CBI's  principal  source of secondary  asset
liquidity.  However,  the  availability  of this  source is limited by  pledging
commitments  for  public  deposits  and  securities  sold  under  agreements  to
repurchase, and is influenced by market conditions.

         Total  deposits as of March 31, 2003 were  $367,605,000,  a decrease of
$11,099,000,  or 2.9%,  from the amount as of December 31, 2003,  primarily as a
result of  fluctuations  in the amounts of public  deposits  held by the banking
subsidiaries. As of March 31, 2003 the loan to deposit ratio was 92.2%, compared
with 87.7% at December 31, 2003 and 90.5% at March 31, 2003.

         Management  believes CBI and its  subsidiaries'  liquidity  sources are
adequate to meet their current and projected operating needs.

CAPITAL RESOURCES

         CBI and its banking  subsidiaries are subject to regulatory  risk-based
capital adequacy  standards.  Under these standards,  bank holding companies and
banks  are  required  to  maintain   certain   minimum   ratios  of  capital  to
risk-weighted  assets and average  total  assets.  Under the  provisions  of the
Federal Deposit  Insurance  Corporation  Improvement  Act of 1991,  federal bank
regulatory  authorities are required to implement  prescribed "prompt corrective
actions"  upon the  deterioration  of the  capital  position  of a bank.  If the
capital position of an affected  institution were to fall below a certain level,
increasingly stringent regulatory corrective actions would be mandated.

         The March 31, 2004  risk-based  capital  ratios for CBI and its banking
subsidiaries  are  presented in the  following  table,  compared  with the "well
capitalized" and minimum ratios under the regulatory definitions and guidelines:


                                       13
<PAGE>

                                                       March 31, 2004
                                                       --------------
                                              Tier 1    Total Capital   Leverage
                                              ------    -------------   --------

Community Bankshares, Inc. .................  15.25%        16.39%        11.19%
Orangeburg National Bank ...................  13.05%        14.30%         8.90%
Sumter National Bank .......................  10.91%        12.12%         9.53%
Florence National Bank .....................  12.14%        13.25%        10.47%
Bank of Ridgeway ...........................  14.05%        14.94%         8.43%
Minimum "well capitalized" requirement .....   6.00%        10.00%         6.00%
Minimum requirement ........................   4.00%         8.00%         4.00%


         As shown in the table  above,  each of the capital  ratios  exceeds the
regulatory  requirement to be considered  "well  capitalized." In the opinion of
management,  the current and projected  capital positions of CBI and its banking
subsidiaries are adequate.

OFF-BALANCE-SHEET ARRANGEMENTS

         In the normal course of business,  CBI engages in transactions that, in
accordance with generally accepted  accounting  principles,  are not recorded in
the  financial  statements  (generally  commitments  to  extend  credit)  or are
recorded  in  amounts  that  differ  from  their  notional  amounts   (generally
derivatives).  These transactions involve elements of credit,  interest rate and
liquidity risk of varying degrees. Such transactions are used by CBI for general
corporate purposes.

Variable Interest Entity

         As discussd under "Results of Operations - Net Interest  Income" and in
the  notes  to  unaudited  consolidated  financial  statements  under  "Variable
Interest  Entities," as of March 31, 2004,  CBI held an equity  interest in, and
guarantees the liabilities of, a non-consolidated variable interest entity.

Commitments

         CBI's banking and mortgage brokerage subsidiaries are parties to credit
related financial instruments with  off-balance-sheet  risk in the normal course
of business to meet the  financing  needs of their  customers.  These  financial
instruments  include commitments to extend credit and standby letters of credit.
Such  commitments  involve  varying  degrees of credit and interest rate risk in
excess of the amount recognized in the consolidated balance sheets.  Exposure to
credit loss is represented  by the  contractual,  or notional,  amounts of these
commitments.  The same credit  policies  are used in making  commitments  as for
on-balance-sheet instruments.




                                       14
<PAGE>


The following  table sets forth the  contractual  amounts of  commitments  which
represent credit risk:

                                                      March 31, 2004
                                                      --------------
                                                        (Dollars in
                                                        thousands)
Loan commitments ...................................    $ 44,776
Standby letters of credit ..........................       2,730


         Commitments  to extend  credit are  agreements to lend to a customer as
long as there is no  violation of any  condition  established  in the  contract.
Commitments  generally have fixed expiration dates or other termination  clauses
and may require  payment of a fee. Since many of the commitments are expected to
expire without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The amount of collateral obtained, if deemed
necessary  by  management  upon  extension of credit,  is based on  management's
credit evaluation of the  counter-party.  Collateral held varies but may include
personal  residences,  accounts  receivable,   inventory,  property,  plant  and
equipment, and income-producing commercial properties.

         Standby  letters  of  credit  are  conditional  commitments  issued  to
guarantee  the  performance  of a customer to a third  party.  Those  letters of
credit are  primarily  issued to support  private  borrowing  arrangements.  All
letters of credit are short-term guarantees. The credit risk involved in issuing
letters of credit is  essentially  the same as that  involved in extending  loan
facilities to customers.  Generally,  collateral supporting those commitments is
held if deemed  necessary.  Since  many of the  standby  letters  of credit  are
expected to expire  without being drawn upon, the total letter of credit amounts
do not necessarily represent future cash requirements.

Derivative Financial Instruments

         In  April,  2003,  the  Financial  Accounting  Standards  Board  issued
Statement No. 149,  "Amendment of Statement  133 on Derivative  Instruments  and
Hedging Activities." Among other requirements, this Statement provides that loan
commitment contracts entered into or modified after June 30, 2003 that relate to
the  origination of mortgage loans that will be held for sale shall be accounted
for as derivative  instruments by the issuer of the loan commitment.  CBI issues
mortgage loan rate lock  commitments  to potential  borrowers to facilitate  its
origination  of home  mortgage  loans that are intended to be sold.  Between the
time that CBI issues its  commitments  and the time that the loans close and are
sold,  CBI is subject to  variability  in the  selling  prices  related to those
commitments  due to changes in market  rates of interest.  However,  CBI offsets
this  variability  through the use of so-called  "forward  sales  contracts"  to
investors in the secondary market. Under these arrangements,  an investor agrees
to purchase the closed loans at a predetermined price. CBI generally enters into
such forward  sales  contracts at the same time that rate lock  commitments  are
issued. These arrangements are designated as fair value hedges. These derivative
financial  instruments  are carried in the balance sheet at estimated fair value
and changes in the estimated  fair values of these  derivatives  are recorded in
the  statement of income in net gains or losses on loans held for sale.  Because
CBI has  effectively  matched its forward sales  contracts to investors and rate
lock commitments to potential  borrowers,  no net gains or losses due to changes
in market interest rates have been recorded in the statement of income.

         Derivative financial  instruments are written in amounts referred to as
notional  amounts.  Notional  amounts  only  provide  the basis for  calculating
payments  between  counterparties  and do not represent  amounts to be exchanged
between parties or a measure of financial risk. The following table includes the
notional  principal amounts of rate lock commitments and forward sales contracts
as of  March  31,  2004,  and the  estimated  fair  values  of  those  financial
instruments  included in other assets and liabilities in the balance sheet as of
that date.




                                       15
<PAGE>

                                                              March 31, 2004
                                                              --------------
                                                                     Estimated
                                                                     Fair Value
                                                           Notional    Asset
                                                            Amount   (Liability)
                                                            ------   -----------
                                                          (Dollars in thousands)
Rate lock commitments to potential borrowers
  to originate mortgage loans to be held for sale .....     $10,765     $   (76)
Forward sales contracts with investors
  of mortgage loans to be held for sale ...............      10,765          76




Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

         CBI's  Asset/Liability  Committee uses a simulation  model to assist in
achieving  consistent growth in net interest income while managing interest rate
risk.  According to the model,  as of March 31, 2004,  CBI is positioned so that
net interest  income  would  increase  $383,000  and net income  would  increase
$227,000 in the next  twelve  months if  interest  rates rose 100 basis  points.
Conversely,  net  interest  income would  decline  $483,000 and net income would
decline  $297,000 in the next twelve months if interest rates declined 100 basis
points.  CBI issued $10 million in trust  preferred  securities  that float with
LIBOR,  which  are at or near  their  contractual  floor  rate.  In the  current
interest  rate  environment,  it is not  expected  that  there will be any large
decreases in market  interest  rates in the  immediate  future.  Computation  of
prospective effects of hypothetical  interest rate changes are based on numerous
assumptions,  including  relative  levels  of  market  interest  rates  and loan
prepayment,  and  should not be relied  upon as  indicative  of actual  results.
Further,  the  computations do not contemplate any actions CBI and its customers
could undertake in response to changes in interest rates.

         As of March 31, 2004 there was no significant  change from the interest
rate  sensitivity  analysis for the various changes in interest rates calculated
as of December 31, 2003. The foregoing disclosures related to the market risk of
CBI should be read in connection  with  Management's  Discussion and Analysis of
Financial Position and Results of Operations  included in the 2003 Annual Report
on Form 10-K.


Item 4.  Controls and Procedures

         Based on the evaluation required by 17 C.F.R. Section  240.13a-15(b) or
240.15d-15(b) of the Company's disclosure controls and procedures (as defined in
17  C.F.R.  Sections  240.13a-15(e)  and  240.15d-15(e)),  the  Company's  chief
executive  officer and chief financial  officer concluded that the effectiveness
of such  controls and  procedures,  as of the end of the period  covered by this
quarterly report, was adequate.

         No disclosure is required under 17 C.F.R. Section 229.308(c).



                                       16
<PAGE>

                           PART II--OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

a)   Exhibits  10-1  Indenture,  dated as of March 10, 2004, between Community
                     Bankshares, Inc. and Wells Fargo Bank, National Association

               10-2  Amended and Restated Declaration of Trust, SCB Capital
                     Trust I, dated as of March 10, 2004

               10-3  Guranty Agreement, dated as of March 10, 2004

               31-1  Rule 13a-14(a)/15d-14(a) Certification of principal
                     executive officer

               31-2  Rule 13a-14(a)/15d-14(a) Certification of principal
                     financial officer

               32    Certifications Pursuant to 18 U.S.C. Section 1350


b)   Reports on Form 8-K.  Form 8-K filed  January 23, 2004  pursuant to Items 7
     and 12 of that Form.





                                       17
<PAGE>


SIGNATURES

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

                                                             DATED: May 12, 2004

COMMUNITY BANKSHARES, INC.

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

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




                                       18
<PAGE>

                                  EXHIBIT INDEX


      10-1          Indenture,  dated as of March 10, 2004, between Community
                    Bankshares, Inc. and Wells Fargo Bank, National Association

      10-2          Amended and Restated Declaration of Trust, SCB Capital
                    Trust I, dated as of March 10, 2004

      10-3          Guranty Agreement, dated as of March 10, 2004

      31-1          Rule 13a-14(a)/15d-14(a) Certification of principal
                    executive officer

      31-2          Rule 13a-14(a)/15d-14(a) Certification of principal
                    financial officer

      32            Certifications Pursuant to 18 U.S.C. Section 1350




                                       19