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




                       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 March 31, 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 of                             (IRS Employer 
  Incorporation or Organization)                         Identification Number)


               791 Broughton St., Orangeburg, South Carolina 29115
                (Address of Principal Executive Office, Zip Code)


                                 (803) 535-1060
                           (Issuer's telephone number)



     Check whether the issuer (1) has filed all the reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes [X] No [_]

     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the latest  practicable  date:  1,313,238 shares of common
stock outstanding as of April 15, 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             8
                 Condition and 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                            
                                                                                              March 31,                December 31,
        ASSETS                                                                                  1997                       1996
        ------                                                                                  ----                       ----
<S>                                                                                         <C>                       <C>          
Cash and due from other financial institutions:              
     Non-interest bearing                                                                   $   4,526,000             $   5,349,000
     Federal funds sold                                                                         3,355,000                 1,300,000
                                                                                            -------------             -------------
        Total cash and cash equivalents                                                         7,881,000                 6,649,000
Interest bearing deposits in other banks                                                        1,230,000                   431,000
Investment securities:
     Securities held to maturity                                                               14,018,000                15,027,000
     Securities available for sale                                                             10,637,000                10,761,000
Loans held for resale                                                                             182,000                   295,000

Loans                                                                                          75,395,000                68,829,000
     Less, allowance for loan losses                                                             (936,000)                 (876,000)
                                                                                            -------------             -------------
        Net loans                                                                              74,459,000                67,953,000
                                                                                            -------------             -------------

Premises and equipment                                                                          2,838,000                 2,837,000
Accrued interest  receivable                                                                      861,000                   855,000
Deferred income taxes                                                                             287,000                   283,000
Other assets                                                                                      198,000                   370,000
                                                                                            -------------             -------------

        Total assets                                                                        $ 112,591,000             $ 105,461,000
                                                                                            =============             =============

        LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
     Non-interest bearing                                                                   $  13,714,000             $  13,337,000
     Interest bearing                                                                          83,678,000                76,514,000
                                                                                            -------------             -------------
        Total deposits                                                                         97,392,000                89,851,000
Federal funds purchased and securities
     sold under agreements to repurchase                                                        1,340,000                 1,744,000
Federal Home Loan Bank advances                                                                 1,130,000                 1,130,000
Other liabilities                                                                                 628,000                   632,000
                                                                                            -------------             -------------
        Total liabilities                                                                     100,490,000                93,357,000
                                                                                            -------------             -------------

Shareholders' equity:
     Common stock
        No par, authorized shares 6,000,000, issued                                             9,061,000                 9,064,000
        and outstanding 1,313,238 in 1997 and 1996
     Retained earnings                                                                          3,076,000                 3,040,000
     Unrealized (loss) on securities available for sale                                           (36,000)                        -
                                                                                            -------------             -------------
        Total shareholders' equity                                                             12,101,000                12,104,000
                                                                                            -------------             -------------

        Total liabilities and shareholders' equity                                          $ 112,591,000             $ 105,461,000
                                                                                            =============             =============
</TABLE>
     THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       3
<PAGE>
<TABLE>

                                  COMMUNITY BANKSHARES, INC. - STATEMENTS OF INCOME

<CAPTION>

                                                                                                    Three months ended March 31,
                                                                                                    1997                     1996
                                                                                                 UNAUDITED                 UNAUDITED
                                                                                                 ---------                 ---------
<S>                                                                                              <C>                      <C>       
Interest and dividend income:                                  
    Interest and fees on loans                                                                   $1,663,000               $1,226,000
    Deposits with other financial institutions                                                       11,000                   28,000
    Investment securities:
      Interest - U. S. Treasury and
        U. S. Government Agencies                                                                   377,000                  363,000
      Dividends                                                                                      12,000                    6,000
                                                                                                 ----------               ----------
        Total investment securities                                                                 389,000                  369,000
                                                                                                 ----------               ----------
    Federal funds sold and securities
      purchased under agreements to resell                                                           35,000                   22,000
                                                                                                 ----------               ----------
        Total interest and dividend income                                                        2,098,000                1,645,000
                                                                                                 ----------               ----------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more                                                   178,000                  177,000
      Other                                                                                         699,000                  559,000
                                                                                                 ----------               ----------
        Total deposits                                                                              877,000                  736,000
    Federal funds purchased and securities
      sold under agreements to repurchase                                                            19,000                   21,000
    Federal Home Loan Bank advances                                                                  18,000                   18,000
                                                                                                 ----------               ----------
        Total interest expense                                                                      914,000                  775,000
                                                                                                 ----------               ----------
Net interest income                                                                               1,184,000                  870,000
Provision for loan losses                                                                            84,000                   30,000
                                                                                                 ----------               ----------
Net interest income after provision for loan losses                                               1,100,000                  840,000
                                                                                                 ----------               ----------

Non-interest income:
    Service charges on deposit accounts                                                             123,000                   81,000
    Other                                                                                            50,000                   26,000
                                                                                                 ----------               ----------
        Total non-interest                                                                          173,000                  107,000
        income
                                                                                                 ----------               ----------
Non-interest expense:
    Salaries and employee benefits                                                                  557,000                  378,000
    Premises and equipment                                                                          122,000                   69,000
    Other                                                                                           241,000                  164,000
                                                                                                 ----------               ----------
        Total non-interest expense                                                                  920,000                  611,000
                                                                                                 ----------               ----------
Net income before taxes                                                                             353,000                  336,000
Provision for income taxes                                                                          120,000                  118,000
                                                                                                 ----------               ----------
Net income after taxes                                                                           $  233,000               $  218,000
                                                                                                 ==========               ==========
Per common
share:
    Weighted average shares outstanding                                                           1,313,238                1,018,937
                                                                                                 ==========               ==========
    Net income per common share                                                                  $     0.18               $     0.21
                                                                                                 ==========               ==========
</TABLE>
   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                       4
<PAGE>

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

                                                                                                       Three months ended March 31,
                                                   
                                                                                                   1997                      1996
                                                                                                UNAUDITED                  UNAUDITED
                                                                                                ---------                  ---------
<S>                                                                                             <C>                     <C>        
Cash flows from operating activities:
Net income                                                                                      $   233,000             $   218,000
Adjustments to reconcile net income
  to net cash (provided) used by operating activities
      Depreciation and amortization                                                                  63,000                  38,000
      Provision for loan losses                                                                      84,000                  30,000
      Accretion of discounts and amortization of premiums -
        investment securities - net                                                                   5,000                  (3,000)
      Deferred income                                                                                (4,000)                (31,000)
      taxes
      (Increase) decrease in loans held for                                                         113,000                (456,000)
      resale
Changes in operating assets and liabilities:
      (Increase) in interest receivable                                                              (6,000)                (96,000)
      (Increase) decrease in other assets                                                           141,000                 (83,000)
      Increase (decrease) in other liabilities                                                       (4,000)                 35,000
                                                                                                -----------             -----------
      Net cash provided (used) by operating activities                                              625,000                (348,000)
                                                                                                -----------             -----------

Cash flows from investing activities:
      Net (increase) in interest bearing
        deposits with other banks                                                                  (799,000)               (475,000)
      Purchases of held to maturity securities                                                   (1,750,000)             (4,229,000)
      Proceeds from maturities of held to                                                         2,765,000               2,808,000
      maturity securities
      Purchases of available for sale securities                                                 (1,529,000)             (2,624,000)
      Proceeds from maturities of available for                                                   1,606,000               1,116,000
      sale securities
      Net (increase) in loans to customers                                                       (6,590,000)               (990,000)
      Purchase of premises and equipment                                                            (33,000)               (219,000)
                                                                                                -----------             -----------
         Net cash (used) in investing activities                                                 (6,330,000)             (4,613,000)
                                                                                                -----------             -----------

Cash flows from financing activities:
      Net increase in demand, savings, & time                                                     7,541,000               3,005,000
      deposits
      Net (decrease) in federal funds purchased
      and securities sold under agreements to re-purchase                                          (404,000)               (296,000)
      Increase in notes payable                                                                           -                 173,000
      Increase in Federal Home Loan Bank                                                                  -                 500,000
      advances
      Sale of common                                                                                      -               2,487,000
      stock
      Stock issuance & dividend reinvestment                                                         (3,000)                (32,000)
      costs
      Dividend payments                                                                            (197,000)               (121,000)
                                                                                                -----------             -----------
         Net cash provided by financing activities                                                6,937,000               5,716,000
                                                                                                -----------             -----------
Net increase in cash and cash equivalents                                                         1,232,000                 755,000
Cash and cash equivalents - beginning of period                                                   6,649,000               4,535,000
                                                                                                -----------             -----------
Cash and cash equivalents - end of period                                                       $ 7,881,000             $ 5,290,000
                                                                                                ===========             ===========
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       5
<PAGE>

Summary of Significant Accounting Principles

     A summary of significant accounting policies is included in the 1995 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.


                                       6
<PAGE>


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

                                              .....................................         ...............................    
    Quarter ended March 31,                                    1997                                     1996
                                              .....................................        ................................        
             (unaudited)                                      Interest                                  Interest
                                                   Average     Income/      Yields/        Average       Income/    Yields/
Assets                                             Balance     Expense       Rates         Balance       Expense     Rates
                                                   -------     -------       -----         -------       -------     -----
                                                                           (Dollar amounts in thousands)
<S>                                                <C>           <C>        <C>             <C>           <C>          <C>  
    Interest bearing deposits                      $    748      $   11     5.88%           $ 2,255       $   28       4.97%
    Investment securities taxable                    24,954         384     6.16%            25,323          365       5.77%
    Investment securities--tax exempt                   413           4     5.87%               414            4       5.86%
    Federal funds sold                                2,786          35     5.03%             1,807           22       4.87%
    Loans, net of unearned income                    72,216       1,664     9.22%            52,380        1,226       9.36%
                                                   --------      ------     ----            -------       ------       ---- 
    Total interest earning assets                   101,117       2,098     8.30%            82,179        1,645       8.01%
                                                              
    Cash and due from banks                           4,478                                   3,209
    Allowance for loan losses                          (903)                                   (712)
    Premises and equipment                            2,847                                   1,683
    Other assets                                      1,301                                   1,070
                                                   --------                                 -------

Total assets                                       $108,840                                 $87,429
                                                   ========                                 =======

Liabilities and Shareholders' Equity
    Interest bearing deposits
    Savings                                        $ 17,417      $  142     3.26%           $12,922       $   82       2.54%
    Interest bearing transaction accts.              10,722          50     1.87%             7,617           39       2.05%
    Time deposits                                    51,817         685     5.29%            44,993          615       5.47%
                                                   --------      ------     ----            -------       ------       ---- 
    Total interest bearing deposits                  79,956         877     4.39%            65,532          736       4.49%
    Short term borrowing                              2,028          19     3.75%             1,940           21       4.33%
    FHLB advances                                     1,116          18     6.45%             1,103           18       6.53%
                                                   --------      ------     ----            -------       ------       ---- 
    Total interest bearing liabilities               83,100         914     4.40%            68,575          775       4.52%

    Noninterest bearing demand deposits              12,938                                   9,544
    Other liabilities                                   773                                     532
    Shareholders' equity                             12,029                                   8,778
                                                   --------                                 -------

Total liabilities and equity                       $108,840                                 $87,429
                                                   ========                                 =======

    Interest rate spread                                                    3.90%                                      3.49%

    Net interest income & yield on earning assets                $1,184     4.68%                         $  870       4.23%
                                                                 ======     ====                          ======       ==== 
</TABLE>
                                       7
<PAGE>
                                         
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Forward Looking Statements

     Statements  included in  Management's  Discussion and Analysis of Financial
Condition  and  Results of  Operations  which are not  historical  in nature are
intended to be, and are hereby  identified as `forward  looking  statements' for
purposes of the safe harbor  provided by Section 21E of the Securities  Exchange
Act of 1934, as amended.  The Corporation  cautions readers that forward looking
statements,  including without  limitation,  those relating to the Corporation's
future business prospects,  revenues, working capital, liquidity, capital needs,
interest costs, and income,  are subject to certain risks and uncertainties that
could cause  actual  results to differ  materially  from those  indicated in the
forward looking statements,  due to several important factors herein identified,
among others,  and other risks and factors  identified  from time to time in the
Corporation's reports filed with the Securities and Exchange Commission.

RESULTS OF OPERATIONS

Net Income

     For the  first  quarter  of 1997,  CBI  earned  a  consolidated  profit  of
$233,000,  compared to $218,000  for the first  quarter of 1996,  an increase of
6.9% or $15,000.  Earnings per share were $.18 in the 1997  period,  compared to
$.21 for the 1996 period, a decrease of 14.3%. The decline in earnings per share
was related to the sale of 450,000 shares of common stock,  conducted during the
first half of 1996.  The  increase  in average  shares  outstanding  between the
periods was 28.8%,  the increase in earnings was 6.9%,  accordingly the earnings
per share declined.

     For the first quarter of 1997,  Orangeburg  National Bank reported a profit
of $316,000,  compared to $247,000 for the first quarter of 1996, an increase of
27.9% or $69,000.

     For the first quarter of 1997,  Sumter  National Bank reported an after tax
loss of $101,000.  The bank commenced business on June 10, 1996, and, therefore,
was not in operation during the first quarter of 1996.

     As noted  above,  consolidated  net income for the period  ended  March 31,
1997,  increased from the prior year by 6.9% or $15,000. The major components of
this increase are discussed below. Net interest income before provision for loan
losses for the three  months  ended March 31,  1997,  increased  to  $1,184,000,
compared  to  $870,000  for the same  period in 1996,  an  increase  of 36.1% or
$314,000.  For the same  period,  the  provision  for loan  losses was  $84,000,
compared  to  $30,000  for the 1996  period,  an  increase  of 180% or  $54,000.
Non-interest  income for the 1997 period increased to $173,000 from $107,000 for
the 1996 period, a 61.7% or $66,000 increase.  Non-interest expense increased to
$920,000 from $611,000, a 50.6% or $309,000 increase. First quarter 1997 results
include  results  of  operation  for  Sumter  National  Bank,  which  was not in
operation during the first quarter of 1996. Accordingly,  many of the dollar and
percentage  comparisons and changes between periods discussed in this report are
unusually large.



                                       8
<PAGE>


Profitability

     One of the best ways to review  earnings  is  through  the ROA  (return  on
average assets) and the ROE (return on average equity).  Return on assets is the
income for the period divided by the average assets for the period,  annualized.
Return on equity is the income for the period  divided by the average equity for
the period, annualized.  Based on operating results for the quarters ended March
31, 1997 and 1996, the following table is presented.

Quarter ended March 31,                       1997             1996
                                              (dollars in thousands)
Average assets                              $108,840          $87,429
ROA                                            0.86%            1.00%
Average equity                               $12,029           $8,778
ROE                                            7.75%            9.93%
Net income                                      $233             $218

     Average equity and average assets were  substantially  greater in the first
quarter of 1997 than they were in the first quarter of 1996 as the result of the
sale of stock to capitalize the Sumter bank and the deposit taking activities of
the Sumter bank, respectively. However, because the expenses associated with the
operations  of the Sumter bank exceed its earnings in the first quarter of 1997,
that  operating loss prevented a percentage  increase in  consolidated  earnings
equivalent to the percentage  increase in average equity and average assets. The
result was a decline  in both ROA and ROE as  compared  to the first  quarter of
1996.  Management expects the Sumter bank to grow and become profitable over the
next several quarters, which should result in improvement in ROE and ROA.

Net interest income

     Net interest income,  the major component of CBI's income, is the amount by
which interest and fees on interest  earning assets exceeds the interest paid on
interest  bearing  deposits and other interest  bearing funds.  During the first
quarter of 1997, net interest income after  provision for loan losses  increased
to $1,100,000 from $840,000, a 30.9% or $260,000 increase over the first quarter
of 1996. This improvement was the result of an increase in the volume of earning
assets,  mostly  associated with the operation of the new bank in Sumter,  which
had net  interest  income for the first  quarter  1997 of $133,000 or 51% of the
total increase.  The average yield on earning assets  increased to 8.30% for the
1997  period from 8.01% for the 1996  period.  This  increase  was the result of
improved  yields outside the loan  portfolio.  Also, the cost of funds decreased
for the period.  For the first quarter of 1997 the cost of funds averaged 4.40%,
compared to 4.52% for the first quarter of 1996.

     The increase in the yield on earning assets and the decrease in the cost of
funds resulted in a better spread and net interest  margin.  The effect of these
changes was a net interest spread (yield on earning assets less cost of interest
bearing  liabilities)  of 3.90% for the first  quarter  of 1997,  up from  3.49%
during the first quarter of 1996. CBI's net interest margin (net interest income
divided  by total  earning  assets)  was 4.68% for the  first  quarter  of 1996,
compared to 4.23% for the first quarter of 1996.


                                       9
<PAGE>


Interest Income

     Elsewhere in this report is a table comparing the average balances, yields,
and rates for the interest  rate  sensitive  segments of the  company's  balance
sheet for the quarters ended March 31, 1997 and 1996. A discussion of that table
follows.

     Total interest  income for the first quarter 1997 was  $2,098,000  compared
with $1,645,000 for the same period in 1996, a 27.5% or $453,000  increase.  The
yield on  earning  assets for the 1997  period was 8.30%,  up from 8.01% for the
1996 period.  Total average  interest earning assets for the quarter ended March
31, 1997, were $101,117,000, up from $82,179,000 for the quarter ended March 31,
1996, an increase of 23% or  $18,938,000.  The Sumter bank had average  earnings
assets of $13,573,000,  which  represents 72% of the increase in assets over the
prior year.

     The loan portfolio earned $1,664,000 for the first quarter in 1997, up from
$1,226,000 for the same period of 1996, a 35.7% or $438,000 increase.  The first
quarter 1997 yield  decreased to 9.22% from 9.36% for the first quarter in 1996.
The decline in yield was mostly the result of  increased  local  competition  in
both markets.  The average size of the loan  portfolio was  $72,216,000  for the
1997 quarter,  up from  $52,380,000  for the same period of 1996, an increase of
37.9% or $19,836,000. Of that increase,  $8,584,000 or 43% was in the Orangeburg
National Bank portfolio and  $11,253,000 or 57% was in the Sumter  National Bank
portfolio.

     The investment  portfolio earned $384,000 for the first quarter in 1997, up
from  $365,000  for the 1996  period,  a 5.2% or  $19,000  increase.  The  yield
increased  to 5.03% in the 1997  quarter  from  4.87% in the 1996  quarter.  The
average size of the portfolio  declined to  $24,954,000 in the 1997 quarter from
$25,323,000 in the 1996 quarter, a decrease of 1.5% or $369,000.  The investment
portfolio  for Sumter  National Bank  averaged  $1,240,000,  less than 5% of the
consolidated total.

     The tax exempt investment  portfolio earned $4,000 for the first quarter in
1997,  unchanged  from the prior  year.  The yield on the  portfolio  was 5.87%,
virtually  unchanged  from the prior  year.  The average  size of the  portfolio
decreased  to $413,000 for the 1997 period from  $414,000 in the 1996 period,  a
decrease  of .2% or  $1,000.  The  entire  tax  exempt  portfolio  is  owned  by
Orangeburg National Bank.

     Interest bearing deposits in other banks contributed  $11,000 for the first
quarter 1997,  compared to $28,000 during the prior year, a decrease of 60.7% or
$17,000. The yield on these deposits increased to 5.88% for the 1997 period from
4.87% in the 1996 period.  CBI averaged $748,000 in interest bearing balances in
the first  quarter 1997  compared to  $2,255,000  the first quarter of the prior
year, a decrease of 66.7% or $1,507,000.  All the interest  bearing  balances in
1997 were owned by  Orangeburg  National  Bank.  The high  balances in 1996 were
related to subscriptions  for common stock offered by CBI in connection with its
Sumter  bank  project.  Subscription  funds  were held in  escrow by  Orangeburg
National Bank and invested in short term time  deposits in  Orangeburg  National
Bank, pending termination of the offering.

     Federal  funds sold earned  $35,000 the first  quarter of 1997  compared to
$22,000 the prior year, an increase of 59% or $13,000. Yields increased to 5.03%
for the first quarter in 1997 from 4.87% for the first quarter in 1996.  For the
first quarter of 1997, CBI increased its average volume in federal funds sold to
$2,786,000  from  $1,807,000  for the first quarter of 1996, a 54.2% or $979,000
increase.  Sumter National Bank averaged $1,080,000 in federal funds sold during
the first quarter.

                                       10
<PAGE>


Interest expense

     Interest expense  increased for the first quarter 1997 to $914,000 from the
prior  year's  $775,000,  a 17.9% or $139,000  increase.  The volume of interest
sensitive  liabilities  increased to  $83,100,000  for the first quarter in 1997
from $68,575,000 for the first quarter of 1996, a 21.2% or $14,525,000 increase.
Sumter  National Bank averaged  $10,370,000  in interest  sensitive  liabilities
during the first  quarter,  which  represented  71% of the total  increase.  The
average rate CBI paid for interest bearing  liabilities  during the 1997 quarter
was 4.40% down from 4.52% for the 1996 period.  This change was primarily due to
the decreased cost of time deposits.

     The cost of savings accounts  increased to $142,000 in the first quarter in
1997 from  $82,000 in the first  quarter of 1996,  a 73.2% or $60,000  increase.
Average savings deposit balances  increased to $17,417,000 for the first quarter
in 1997 from  $12,922,000 for the first quarter of 1996, an increase of 34.8% or
$4,495,000. Sumter National Bank averaged $2,959,000 in such balances during the
first quarter,  which  represented 66% of the total increase..  The average rate
paid on these funds increased to 3.26% from 2.54%.

     Interest bearing transaction accounts cost $50,000 for the first quarter in
1997,  up from the first  quarter of the prior  year's  $39,000,  an increase of
28.2% or $11,000.  The volume of these deposits increased to $10,722,000 for the
first quarter in 1997 from  $7,617,000 for the first quarter of 1996, a 40.8% or
$3,105,000  increase.  Sumter National Bank averaged $1,745,000 in such balances
during the first  quarter,  which  represented  56% of the total  increase.  The
average  rate paid on these  funds for the first  quarter in 1997  decreased  to
1.87% from 2.05% for the first quarter of 1996.

     Time deposits cost $685,000 for the first quarter of 1997, up from $615,000
the first quarter of the prior year, an increase of 11.4% or $70,000. The volume
increased to $51,817,000 for the first quarter in 1997 from  $44,993,000 for the
first  quarter of 1996, a 15.2% or  $6,824,000  increase.  Sumter  National Bank
averaged $5,667,000 in such balances during the first quarter, which represented
83% of the total  increase.  The average  rate paid on these funds  decreased to
5.29% for the first quarter in 1997 from 5.47% for the first quarter in 1996.

     Short term  borrowing  consists of federal funds sold and  securities  sold
under agreements to repurchase.  This is a relatively small and volatile part of
the  balance  sheet.  It cost  $19,000  for the first  quarter in 1997 down from
$21,000 for the first quarter of 1996, a 9.5% or $2,000 decrease.  The volume of
these funds increased to $2,028,000 in the first quarter in 1997 from $1,940,000
in the first quarter of 1996, an increase of 4.5% or $88,000. All these balances
were  attributable  to Orangeburg  National Bank. The average rate paid on these
funds decreased to 3.75% from 4.33%.

     Borrowings  from the  Federal  Home Loan Bank  cost  $18,000  for the first
quarter in 1997,  unchanged  from the prior year period.  The advances  averaged
$1,116,000  during the 1997 quarter,  compared to $1,103,000  for the prior year
period,  a 1.2% or $13,000  increase.  All these balances were  attributable  to
Orangeburg  National  Bank.  The average  rate paid on these funds  decreased to
6.45% from 6.57%.


                                       11
<PAGE>

Non-Interest Income

     Non-interest  income  for the  first  quarter  1997 grew to  $173,000  from
$107,000  in the first  quarter  of 1996,  a 61.7% or  $66,0000  increase.  This
increase  was mostly the result of the  operations  of the new Sumter bank which
reported  $35,000 or 53% of the total  increase in  non-interest  income for the
first quarter  1997.  The remainder of the total  increase was  attributable  to
increases in the volume of returned checks in Orangeburg.


Non-Interest Expense

     For the first quarter of 1997 non-interest  expenses  increased to $920,000
from  $611,000  for the first  quarter of 1996,  a 50.6% or  $309,000  increase.
Approximately  $246,000  (79.6%) of this  increase  is  directly  related to the
operation of Sumter National Bank.

     For the three months ended March 31, 1997,  personnel  costs were  $557,000
compared  to  $378,000  for the  first  quarter  of 1996 , a 47.4%  or  $179,000
increase.  Approximately  $154,000 (86%) of this increase is directly related to
the operation of Sumter  National Bank. The new bank has 16 full time equivalent
employees.

     Premises and equipment  expense for the 1997 period were $122,000  compared
to $69,000 for the 1996 period,  an increase of 76.8% or $53,000.  Approximately
$34,000  (64%) of this  increase is directly  related to the operation of Sumter
National Bank.

     Other costs for the first quarter 1997 were  $241,000  compared to $164,000
for the first  quarter of 1996,  an increase of 46.9% or $77,000.  Approximately
$59,000 (76.6%) of this increase is directly  related to the operation of Sumter
National Bank.


Income Taxes

     CBI  provided  $120,000 for federal and state income taxes during the first
quarter of 1997,  compared  to $118,000  for the same period in 1996,  a 1.7% or
$2,000 increase.


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 March 31, 1997, the held to maturity portfolio totaled $14,018,000
compared to  $15,027,000 at December 31, 1996, a decrease of 6.7% or $1,009,000.
At March 31, 1997, the available for sale portfolio totaled $10,637,000 compared
to  $10,761,000  at  December  31,  1996,  a decrease of 1.2% or  $124,000.  The
following  chart  summarizes  the  investment  portfolios at March 31, 1997, and
December 31, 1996.

                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                                   March 31, 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. Treasury and U. S. Government agencies               $13,606            $13,524                       $10,084          $10,029
Tax exempt securities                                          412                413                             -                -
Other equity securities                                          -                  -                           608              608
                                                           -------            -------                       -------          -------
Total                                                      $14,018            $13,937                       $10,692          $10,637
                                                           =======            =======                       =======          =======

Unrealized gain or (loss)                                  $   (81)                                         $   (55)
                                                           =======                                          =======               

</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. Treasury and U. S. Government agencies               $14,613            $14,612                       $10,175          $10,175
Tax exempt securities                                          414                417                             -                -
Other equity securities                                          -                  -                           586              586
                                                           -------            -------                       -------          -------
Total                                                      $15,027            $15,029                       $10,761          $10,761
                                                           =======            =======                       =======          =======

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


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


Loan portfolio

         The loan portfolio is primarily  consumer and small business  oriented.
At March 31, 1997, the loan portfolio was  $75,395,000,  compared to $68,829,000
at December  31,  1996,  a 9.5% or  $6,566,000  increase.  The  following  chart
summarizes the loan portfolio at March 31, 1997, and December 31, 1996.

                                        Mar. 31, 1997             Dec. 31, 1996
                                                 (dollars in thousands)
Real estate                                $45,738                   $41,164
Commercial                                  17,289                    16,644
Loans to individuals                        12,368                    11,021
                                           =======                   =======
Total                                      $75,395                   $68,829
                                           =======                   =======

                                       13
<PAGE>

     At March 31,  1997,  Orangeburg  National  Bank's  loan  portfolio  totaled
$62,134,000,  compared to  $59,877,000  at  December  31,  1996,  an increase of
$2,257,000 or 3.8%.

     At  March  31,  1997,   Sumter  National  Bank's  loan  portfolio   totaled
$13,261,000,  compared  to  $8,952,000  at  December  31,  1996,  an increase of
$4,309,000 or 48.1%.


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

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

                                  Mar. 31, 1997   Dec. 31, 1996    Mar. 31, 1996
                                  -------------   -------------    -------------
Past due 90 days + accruing
 loans                              $106,000         $ 93,000         $      -
Non-accrual loans                   $417,000         $431,000         $271,000
Impaired loans (included in         $120,000         $ 12,000         $108,000
nonaccrual)
Other real estate owned             $      -         $      -         $      -

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

                               Mar. 31, 1997     Dec. 31, 1996     Mar. 31, 1996
                               -------------     -------------     -------------
Allowance at beginning
 of period                        $876,000        $707,000           $707,000
Provision expense                   84,000         227,000             30,000
Net charge-offs                    (24,000)        (58,000)           (10,000)
                                  --------        --------           --------
Allowance at end of period        $936,000        $876,000           $727,000
                                  ========        ========           ========
Allowance as a percent of     
 outstanding loans                   1.24%             1.27%             1.36%

     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
$39,000. The allowance at March 31, 1997, was $136,000.

     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 $45,000.  Net  chargeoffs  during the quarter were $24,000.  The allowance at
March 31, 1997, was $800,000.

     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 March 31, 1997.

                                       14
<PAGE>


Deposits

     Deposits were  $97,392,000  at March 31, 1997,  compared to  $89,851,000 at
December 31, 1996, an increase of 8.4% or $7,541,000.  Approximately  $4,811,000
or 64% of this increase was at Sumter National Bank.

     Time deposits  greater than $100,000  were  $14,408,000  at March 31, 1997,
compared to $13,640,000 at December 31, 1996, an increase of 5.6% or $768,000.


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 portfolio. While all these investment securities are purchased with the
intent to be held to maturity,  such  securities  are  marketable and occasional
sales may occur prior to maturity as part of the process of asset/liability  and
liquidity  management.  Such sales will generally be from the available for sale
portfolio.  Management deliberately maintains a short-term maturity schedule for
its  investments so that there is a continuing  stream of maturing  investments.
CBI intends to maintain a short-term  investment  portfolio in order to continue
to be  able  to  supply  liquidity  to  its  loan  portfolio  and  for  customer
withdrawals.

     CBI has  substantially  more  liabilities  (mostly  deposits,  which may be
withdrawn) which mature in the next 12 months than it has assets maturing in the
same period.  However, based on its historical  experience,  and that of similar
financial  institutions,  CBI believes that it is unlikely that so many deposits
would be withdrawn,  without being replaced by other deposits, that CBI would be
unable to meet its liquidity needs with the proceeds of maturing assets.

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

     CBI has a  demonstrated  ability  to  attract  deposits  from its  markets.
Deposits  have grown from $30 million in 1989 to over $97 million in 1997.  This
stable, growing base of deposits is the major source of operating liquidity.

                                       15
<PAGE>

     CBI's long term  liquidity  needs are expected to be primarily  affected by
the maturing of long term  certificates  of deposit.  At March 31, 1997, CBI had
approximately  $7,454,000 and $0 in certificates  of deposit  maturing in one to
five years and over five years, respectively. CBI's assets maturing or repricing
in the same periods were $38,767,000 and $10,416,000,  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.

                                               Mar. 31, 1997       Dec. 31, 1996
Tier 1 capital to average total assets            11.53%                11.50%
Tier 1 capital to risk weighted assets            16.18%                17.50%
Total capital to risk weighted assets             17.43%                18.70%

     Banks are required to maintain a minimum risk weighted  capital ratio of at
least 8%.

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


Shareholders' equity

     At March 31, 1997, the common stock account totaled $9,061,000, compared to
$9,064,000 at December 31, 1996. This $3,000  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.


Dividends and Dividend Reinvestment

     CBI declared  and paid a  semi-annual  cash  dividend of 15 cents per share
during the first quarter of 1997. The total cost of this dividend was $197,000.

     CBI has  implemented  a  dividend  reinvestment  plan  with  an  additional
purchase  option.  The recent  dividend  payment was the first  opportunity  for
shareholders  to  participate in the plan.  Approximately  $62,000 or 31% of the
dividends  were  reinvested  in  CBI's  common  stock.  Shareholders  also  made
additional purchases of $123,000. Overall, the plan purchased on the open market
13,217 shares at an average cost of $14.04.


                                       16
<PAGE>

Financial information on subsidiaries

                  ORANGEBURG NATIONAL BANK FINANCIAL HIGHLIGHTS

                                                   Mar. 31            Dec. 31,
               Period ended                         1997                1996
                                                    ----                ----
                                                  (Dollar amounts in thousands)
           Financial Condition
Investment securities                             $22,295             $23,826
Net loans receivable                               61,516              59,393
Total assets                                       93,322              90,772
Total deposits                                     82,667              79,792
Federal funds purchases and securities              1,340               1,744
sold under agreement to repurchase
Other borrowed money                                1,060               1,130
Stockholders' equity                               $7,615              $7,624

             Earnings Summary
Interest income                                    $1,803              $6,904
Interest expense                                      803               3,176
                                                  -------             -------
Net interest income                                 1,000               3,728
Provision for loan losses                              45                 130
Non-interest income                                   138                 469
Gains on securities                                     -                   -
Non-interest expense                                  606               2,238
                                                  -------             -------
Net income before taxes                               487               1,829
Income taxes                                          171                 667
                                                  -------             -------
Net income after tax                              $   316             $ 1,162
                                                  =======             =======



                                       17
<PAGE>



                    SUMTER NATIONAL BANK FINANCIAL HIGHLIGHTS

                                                    Mar. 31            Dec. 31,
Period ended                                         1997               1996*
------------                                         ----               -----
                                                   (Dollar amounts in thousands)
            Financial Condition
Investment securities                              $ 1,474            $ 1,071
Net loans receivable                                13,125              8,855
Total assets                                        18,050             13,322
Total deposits                                      14,933             10,112
Stockholders' equity                               $ 3,056            $ 3,159

             Earnings Summary
Interest income                                    $   282            $   338
Interest expense                                       110                142
                                                   -------            ------- 
Net interest income                                    172                196
Provision for loan losses                               39                 97
Non-interest income                                     36                 45
Non-interest expense                                   330                701
                                                   -------            ------- 
Net loss before taxes                                 (161)              (557)
Income tax (benefit)                                   (60)              (217)
                                                   -------            ------- 
Net (loss) after taxes                             $  (101)           $  (340)
                                                   =======            ======= 

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




                                       18
<PAGE>



Part II--Other Information

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibit Index

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

b)  Reports on Form 8-K.  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: May 13, 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)