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 June 30, 1999              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 Identification Number)
 Incorporation or Organization)


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


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



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

         State the number of shares  outstanding of each of the issuer's classes
of common stock, as of the latest  practicable date:  3,037,288 shares of common
stock outstanding as of August 5, 1999.


<PAGE>



                             10-Q TABLE OF CONTENTS

                           Part I - Financial Statements                    Page
-------------------------------------------------------------------------------
 Item 1    Financial Statements .........................................      3
 Item 2    Management's Discussion and Analysis of Financial
           Condition and Results of Operations ..........................      9
 Item 3    Quantitative and Qualitative Disclosures about Market Risk ...     18


                  Part II - Other Information
-------------------------------------------------------------------------------
 Item 4    Submission of Matters to a Vote of Securities Holders ........     18
 Item 6    Exhibits and Reports on Form 8-K .............................     19





                                       2
<PAGE>


            COMMUNITY BANKSHARES, INC. - CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
         ($ amounts in thousands)                                                                    UNAUDITED
                                                                                                    June 30,            December 31,
         ASSETS                                                                                      1999                   1998
                                                                                                     ----                   ----

Cash and due from other financial institutions:
<S>                                                                                                <C>                    <C>
     Non-interest bearing ............................................................             $   5,474              $   7,746
     Federal funds sold ..............................................................                13,670                 15,550
                                                                                                   ---------              ---------
         Total cash and cash equivalents .............................................                19,144                 23,296
Interest bearing deposits in other banks .............................................                 1,206                  1,577
Investment securities:
     Securities held to maturity, at amortized cost ..................................                13,968                 15,286
     Securities available for sale, at fair value ....................................                28,719                 18,862
Loans held for resale ................................................................                   207                    722

Loans ................................................................................               139,525                117,795
     Less, allowance for loan losses .................................................                (1,695)                (1,459)
                                                                                                   ---------              ---------
         Net loans ...................................................................               137,830                116,336

Premises and equipment ...............................................................                 4,608                  3,892
Accrued interest  receivable .........................................................                 1,499                  1,242
Deferred income taxes ................................................................                   473                    453
Other assets .........................................................................                   522                    615
                                                                                                   ---------              ---------

         Total assets ................................................................             $ 208,176              $ 182,281
                                                                                                   =========              =========

         LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:
     Non-interest bearing ............................................................             $  26,818              $  23,883
     Interest bearing ................................................................               145,560                123,747
                                                                                                   ---------              ---------
         Total deposits ..............................................................               172,378                147,630
Federal funds purchased and securities
     sold under agreements to repurchase .............................................                 3,882                  4,464
Federal Home Loan Bank advances ......................................................                11,490                  9,490
Other liabilities ....................................................................                   966                  1,038
                                                                                                   ---------              ---------
         Total liabilities ...........................................................               188,716                162,622
                                                                                                   ---------              ---------

Shareholders' equity:
     Common stock
         No par, authorized shares 12,000,000, issued and ............................                14,189                 14,648
         outstanding 3,037,288 in 1999 and 3,047,686 in 1998
     Retained earnings ...............................................................                 5,674                  4,975
     Accumulated other comprehensive income (loss) ...................................                  (403)                    36
                                                                                                   ---------              ---------
         Total shareholders' equity ..................................................                19,460                 19,659
                                                                                                   ---------              ---------

         Total liabilities and shareholders' equity ..................................             $ 208,176              $ 182,281
                                                                                                   =========              =========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       3
<PAGE>

             COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENT OF
                        CHANGES IN SHAREHOLDERS' EQUITY
           for the six months ended June 30, 1999 and 1998 (Unaudited)


<TABLE>
<CAPTION>
                                                       Common          Common           Retained      Accumulated          Total
                                                       Shares          Stock            Earnings         Other         Stockholders'
                                                                                                     Comprehensive         Equity
                                                                                                     Income (Loss)

                                                                             (dollar amounts in thousands)

<S>                                                   <C>             <C>              <C>              <C>              <C>
Balances at Dec. 31, 1997 .....................       2,634,676       $    9,156       $    3,861       $       20       $   13,037
Comprehensive income:
     Net income ...............................                                               847                               847
     Other comprehensive income
     (loss) net of tax:
         Unrealized gain (loss) on ............                                                                  1                1
         securities
Issuance of common stock ......................         300,240            4,462            4,462
Dividends paid ................................               0                0             (215)               0             (215)
                                                     ----------       ----------       ----------       ----------       ----------
Balances at June 30, 1998 .....................       2,934,916       $   13,618       $    4,493       $       21       $   18,132
                                                     ==========       ==========       ==========       ==========       ==========

Balances at Dec. 31, 1998 .....................       3,047,686       $   14,648       $    4,975       $       36       $   19,659
Comprehensive income:
     Net income ...............................                                               972                               972
     Other comprehensive income
     (loss) net of tax:
         Unrealized gain (loss) on ............                                                               (439)            (439)
         securities
Issuance of common stock ......................          36,702              171                                                171
Redemption of common stock ....................         (47,100)            (630)                                              (630)
Dividends paid ................................               0                0             (273)               0             (273)
                                                     ----------       ----------       ----------       ----------       ----------
Balances at June 30, 1999 .....................       3,037,288       $   14,189       $    5,674       $     (403)      $   19,460
                                                     ==========       ==========       ==========       ==========       ==========
</TABLE>



                                       4
<PAGE>



         COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                        Six months ended June 30,       Three months ended June 30,
                                                                           1999            1998           1999            1998
        ($ amounts in thousands)                                         Unaudited      Unaudited       Unaudited       Unaudited

Interest and dividend income:
<S>                                                                      <C>            <C>            <C>            <C>
    Interest and fees on loans .......................................   $    5,632     $    4,539     $    2,940     $    2,336
    Deposits with other financial institutions .......................           79             68             43             30
    Investment securities:
      Interest - U. S. Treasury and
        U. S. Government Agencies ....................................        1,081            927            581            477
      Dividends ......................................................           56             30             23             15
                                                                         ----------     ----------     ----------     ----------
         Total investment securities .................................        1,137            957            604            492
    Federal funds sold and securities
      purchased under agreements to resell ...........................          297            144            143             86
                                                                         ----------     ----------     ----------     ----------
         Total interest and dividend income ..........................        7,145          5,708          3,730          2,944
                                                                         ----------     ----------     ----------     ----------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more ....................          663            608            350            321
      Other ..........................................................        2,168          1,763          1,128            874
                                                                         ----------     ----------     ----------     ----------
         Total deposits ..............................................        2,831          2,371          1,478          1,195
    Federal funds purchased and securities
      sold under agreements to repurchase ............................           75             49             37             24
    Federal Home Loan Bank advances ..................................          283            128            155             76
                                                                         ----------     ----------     ----------     ----------
         Total interest expense ......................................        3,189          2,548          1,670          1,295
                                                                         ----------     ----------     ----------     ----------
Net interest income ..................................................        3,956          3,160          2,060          1,649
Provision for loan losses ............................................          273            188            139             97
                                                                         ----------     ----------     ----------     ----------
Net interest income after provision for loan losses ..................        3,683          2,972          1,921          1,552
                                                                         ----------     ----------     ----------     ----------

Non-interest income:
    Service charges on deposit accounts ..............................          455            376            238            199
    Other ............................................................          195            115            107             62
                                                                         ----------     ----------     ----------     ----------
         Total non-interest income ...................................          650            491            345            261
                                                                         ----------     ----------     ----------     ----------

Non-interest expense:
    Salaries and employee benefits ...................................        1,683          1,311            851            677
    Premises and equipment ...........................................          437            276            222            137
    Other ............................................................          777            615            387            329
                                                                         ----------     ----------     ----------     ----------
         Total non-interest expense ..................................        2,897          2,202          1,460          1,143
                                                                         ----------     ----------     ----------     ----------
Net income before taxes ..............................................        1,436          1,261            806            670
Provision for income taxes ...........................................          464            414            263            222
                                                                         ----------     ----------     ----------     ----------
Net income after taxes ...............................................   $      972     $      847     $      543     $      448
                                                                         ==========     ==========     ==========     ==========

Basic earnings per common share:
    Weighted average shares outstanding ..............................    3,037,417      2,763,076      3,038,005      2,721,895
    Net income per common share ......................................   $     0.32     $     0.31     $     0.18     $     0.16
Diluted earnings per common share:
    Weighted average shares outstanding ..............................    3,063,042      2,862,856      3,064,022      2,800,525
    Net income per common share ......................................   $     0.32     $     0.30     $     0.18     $     0.16

</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       5
<PAGE>



        COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
                                                                                                        Six months ended June 30,
                                                                                                        1999                 1998
                                                                                                        ----                 ----
                                                                                                      (dollar amounts in thousands)

Cash flows from operating activities:
<S>                                                                                                  <C>                   <C>
Net income .............................................................................             $    972              $    847
Adjustments to reconcile net income
  to net cash provided by operating
  activities:
       Depreciation ....................................................................                  209                   156
       Provision for loan losses .......................................................                  273                   188
       Accretion of discounts and
         amortization of premiums -
         investment securities - net ...................................................                  (11)                  (26)
       Proceeds from sale of real estate loans held for sale ...........................               (6,226)               (5,244)
       Origination of real estate loans held for sale ..................................                6,741                 5,417
Changes in assets and liabilities:
       (Increase) in interest receivable ...............................................                 (257)                 (122)
       Decrease in other assets ........................................................                   73                    96
       (Decrease) in other liabilities .................................................                  (72)                  (77)
                                                                                                     --------              --------
Net cash provided by operating activities ..............................................                1,702                 1,235
                                                                                                     --------              --------

Cash flows from investing activities:
       Proceeds from maturities and sales of
         investment securities - held to maturity ......................................                5,419                11,990
       Purchases of investment securities - held to maturity ...........................               (4,101)               (7,766)
       Proceeds from maturities and sales of
         investment securities - available for sale ....................................                5,363                 7,202
       Purchases of investment securities - available for sale .........................              (15,648)              (11,484)
       Net (increase) decrease in interest bearing deposits ............................                  371                (1,078)
       Net increase in loans to customers ..............................................              (21,767)              (10,581)
       Purchase of premises and equipment ..............................................                 (925)                 (873)
                                                                                                     --------              --------
         Net cash (used) in investing activities .......................................              (31,288)              (12,590)
                                                                                                     --------              --------

Cash flows from financing activities:
       Net increase in demand, savings, & time deposits ................................               24,748                 9,167
       Net (decrease) in federal funds purchased and
         securities sold under agreements to repurchase ................................                 (582)                  (92)
       Sale of common stock ............................................................                  171                 4,462
       Common stock redemption .........................................................                 (630)                    -
       Proceeds of FHLB advances .......................................................                2,000                 8,500
       Dividends .......................................................................                 (273)                 (215)
                                                                                                     --------              --------
         Net cash provided by financing activities .....................................               25,434                21,822
                                                                                                     --------              --------

Net increase  (decrease) in cash and due from other
       financial institutions ..........................................................               (4,152)               10,467
Cash and due from other financial institutions - beginning .............................               23,296                 5,122
                                                                                                     --------              --------
Cash and due from other financial institutions - end of period .........................             $ 19,144              $ 15,589
                                                                                                     ========              ========
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       6
<PAGE>

COMMUNITY BANKSHARES, INC. - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Significant Accounting Principles

         A summary of  significant  accounting  policies is included in the 1998
Annual  Report of Community  Bankshares,  Inc. to the  Shareholders,  which also
contains the Company's audited financial statements for 1998.

Principles of Consolidation

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

Management Opinion

         The interim financial  statements in this report are unaudited.  In the
opinion of management, all the adjustments necessary to present a fair statement
of the results for the interim period have been made. Such  adjustments are of a
normal and recurring nature.

         The results of operations  for any interim  period are not  necessarily
indicative  of the  results to be expected  for an entire  year.  These  interim
financial  statements  should be read in conjunction  with the annual  financial
statements and notes thereto contained in the 1998 Annual Report.

Changes in Comprehensive Income Components

         The Financial  Accounting  Standards Board recently issued Statement of
Financial  Accounting  Standards  No.  130,  "Reporting  Comprehensive  Income,"
effective for fiscal years  beginning  after  December 15, 1997.  This Statement
establishes  standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements.  Disclosure as
required by the Statement is as follows:

<TABLE>
<CAPTION>
                                                                                   Before-Tax           Tax             Net-of-Tax
                                                                                     Amount         (Expense) or           Amount
                                                                                                      Benefit

Unrealized gains (losses) on securities:
<S>                                                                                <C>                 <C>                <C>
Unrealized holding gains (losses) arising during ........................          $   1,000           $       0          $   1,000
     period
Less: reclassification adjustment for gains (losses) ....................                  0                   0                  0
                                                                                   ---------           ---------          ---------
     realized in net income
Net unrealized gains (losses) ...........................................          $   1,000           $       0          $   1,000
                                                                                   ---------           ---------          ---------
Other comprehensive income, June 30, 1998 ...............................          $   1,000           $       0          $   1,000
                                                                                   =========           =========          =========

Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during ........................          $(611,000)          $ 208,000          $(403,000)
     period
Less: reclassification adjustment for gains (losses) ....................                  0                   0                  0
                                                                                   ---------           ---------          ---------
     realized in net income
Net unrealized gains (losses) ...........................................           (611,000)            208,000           (403,000)
                                                                                   ---------           ---------          ---------
Other comprehensive income, June 30, 1999 ...............................          $(611,000)          $ 208,000          $(403,000)
                                                                                   =========           =========          =========
</TABLE>

                                       7
<PAGE>

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

<TABLE>
<CAPTION>

    Six months ended June 30,                                     1999                                    1998
                                                                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                     $  3,039       $   79        5.20%     $  2,396       $   68          5.68%
    Investment securities taxable                   36,886        1,124        6.09%       29,849          951          6.37%
    Investment securities--tax exempt (1)              663           13        5.94%          314            6          5.79%
    Federal funds sold                              12,416          297        4.78%        5,294          144          5.44%
    Loans receivable                               128,183        5,632        8.79%       96,812        4,539          9.38%
                                                  --------       ------        -----     --------       ------          -----

    Total interest earning assets                  181,187        7,145        7.89%      134,665        5,708          8.48%

    Cash and due from banks                          8,051                                  5,868
    Allowance for loan losses                       (1,571)                                (1,201)
    Premises and equipment                           4,416                                  3,151
    Other assets                                     2,082                                  1,619
                                                  --------                               --------

    Total assets                                  $194,165                               $144,102
                                                  ========                               ========


    Liabilities and Shareholders' Equity

    Interest bearing deposits
    Savings                                       $ 28,242       $  455        3.22%     $ 18,964       $  327          3.45%
    Interest bearing transaction accounts           16,476          127        1.54%       13,491          128          1.90%
    Time deposits                                   88,765        2,249        5.07%       70,300        1,916          5.45%
                                                  --------       ------        -----     --------       ------          -----

    Total interest bearing deposits                133,483        2,831        4.24%      102,755        2,371          4.61%
    Short term borrowing                             4,906           75        3.06%        2,447           49          4.00%
    FHLB advances                                   10,501          283        5.39%        4,302          128          5.95%
                                                  --------       ------        -----     --------       ------          -----
    Total interest bearing liabilities             148,890        3,189        4.28%      109,504        2,548          4.65%

    Noninterest bearing demand deposits             24,765                                 18,126
    Other liabilities                                1,083                                    899
    Shareholders' equity                            19,427                                 15,573
                                                  --------                               --------

    Total liabilities and shareholders' equity    $194,165                               $144,102
                                                  ========                               ========


    Interest rate spread                                                       3.60%                                    3.82%

    Net interest income and net yield on earning assets          $3,956        4.37%                    $3,160          4.69%
                                                                 ======        =====                    ======          =====
</TABLE>

(1) Yield is shown on a fully taxable equivalent basis.


                                       8
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Forward Looking Statements

         Statements   included  in  Management's   Discussion  and  Analysis  of
Financial Condition and Results of Operations which are not historical in nature
are intended to be, and are hereby  identified as `forward  looking  statements'
for  purposes  of the safe  harbor  provided  by Section  21E of the  Securities
Exchange Act of 1934, as amended.  Community  Bankshares,  Inc. ("CBI") cautions
readers that forward looking  statements,  including without  limitation,  those
relating  to  CBI's  future  business  prospects,   revenues,  working  capital,
liquidity,  capital needs, interest costs, income and Year 2000 readiness of CBI
and its  customers,  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 CBI's
reports filed with the Securities and Exchange Commission.

Year 2000 Readiness Disclosure

         The  change in the year from 1999 to 2000 may create  serious  problems
for many computer systems around the world. This so-called millennium bug or Y2K
problem may affect certain of CBI's systems.  CBI is investigating the extent to
which its  systems  are  affected  and  communicating  with all of its  computer
vendors  concerning timely completion of remedies for those systems that require
modification. CBI is also communicating with third parties on which it relies to
assess  their  progress  in  evaluating   their  systems  and  implementing  any
corrective  measures  and has formed a  committee  to  coordinate  its Year 2000
activities. CBI has been taking and will continue to pursue reasonably necessary
steps to protect its operations and assets.

         Management  estimates  that the  costs  of Year  2000  compliance  will
approximate $250,000 and will be funded with internally generated resources. The
majority of these costs have  already  been  expended  and the  remaining  items
relate  primarily  to CBI's  testing  plans.  Most of CBI's  local and wide area
network  computer  and  communications  equipment  is  relatively  new. For this
reason,  the  overall  internal  financial  impact of the Year 2000  problem  is
expected to be relatively limited.

         CBI has been devoting  significant time and energy to management of the
Year 2000 problem.  It formed a Year 2000 steering committee comprised of senior
officers  from each of the three  banks and the  holding  company to oversee the
process.  The boards of directors of CBI and its  subsidiaries  receive  regular
detailed  progress  reports  on  the  Year  2000  project.   The  national  bank
regulators, which supervise the three banking subsidiaries,  have also devoted a
substantial  amount of their  time and  supervisory  attention  to the Year 2000
problems and related  issues,  as well as monitoring the banks'  progress toward
Year 2000 compliance.

         CBI has concentrated its internal efforts toward making its own mission
critical  systems fully Year 2000 compliant as quickly as practical.  Management
expects  its  efforts  to be  successful  and,  consequently,  has no  plans  to
implement  any major  changes in the  information  technology  systems  prior to
January 2000.

         CBI has completed  testing its core  information  system.  Test results
have been successful. Management is substantially complete with testing of other
mission critical systems.  In early March 1999 management  simulated  conducting
banking business during January 2000 and was successful in its testing. In April
1999  management  engaged  its  independent  accounting  firm  to  evaluate  the
reasonableness and validity of its testing program.

         Nevertheless,  CBI's  ability  to avoid  experiencing  difficulty  as a
result of the Year 2000 problem could be adversely  affected by the availability
of skilled  personnel,  the  success of  vendors,  customers  and  providers  of
services in dealing with their own Year 2000  problems and by the  difficulty of
identifying   all  the   possible   causes   of  the  Year  2000   problem   and
interrelationships between various mission critical systems. CBI is refining its
contingency  planning to anticipate  potential problems from external as well as
internal Year 2000 problems,  including, but not limited to,  telecommunications
and power suppliers.



                                       9
<PAGE>

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998

Net Income

         For the six months  ended  June 30,  1999,  CBI  earned a  consolidated
profit of $972,000,  compared to $847,000 for the comparable  period of 1998, an
increase of 14.7% or  $125,000.  Basic  earnings per share were $.32 in the 1999
period, compared to $.31 for the 1998 period, an increase of 3.2%.

         Orangeburg  National Bank reported net income of $1,002,000 for the six
months  ended June 30,  1999.  This  compares to $805,000 for the same period in
1998, an increase of $197,000 or 24%. At June 30, 1999 the  Orangeburg  bank had
$84 million in loans, $133 million in assets, and $107 million in deposits.

         Sumter National Bank reported net income of $213,000 for the six months
ended June 30, 1999.  This  compares to $53,000 for the same period in 1998,  an
increase of  $160,000 or 302%.  At June 30, 1999 the Sumter bank had $45 million
in loans,  $56 million in assets,  and $51 million in deposits.  The Sumter bank
began operation in June 1996.

         Florence  National  Bank  reported a net after tax loss of $211,000 for
the period ended June 30, 1999. The Florence bank began  operation in July 1998.
At June 30,  1999 the  Florence  bank had $11  million in loans,  $19 million in
assets, and $15 million in deposits.

         As noted above,  consolidated  net income for the six months ended June
30,  1999,  increased  from  the  prior  year by 14.7% or  $125,000.  The  major
components  of this  increase are discussed  below.  Net interest  income before
provision  for loan losses for the six months ended June 30, 1999,  increased to
$3,956,000,  compared to $3,160,000  for the same period in 1998, an increase of
25.1% or  $796,000.  For the 1999  period,  the  provision  for loan  losses was
$273,000,  compared to  $188,000  for the 1998  period,  an increase of 45.2% or
$85,000.  Non-interest  income for the 1999 period  increased  to $650,000  from
$491,000 for the 1998 period, a 32.3% or $159,000 increase. Non-interest expense
increased to $2,897,000 from $2,202,000, a 31.5% or $695,000 increase.

         Throughout this  discussion  many of the dollar and percentage  changes
between periods are substantial.  The Orangeburg and Sumter banks are continuing
to grow assets and  earnings.  The 1999 periods  include the  operations  of the
Florence bank, which were not included in the prior year since it began business
in July 1998.

Profitability

         One of the best ways to review  earnings  is through the ROA (return on
average assets) and the ROE (return on average equity).  Return on assets is the
income for the period divided by the average assets for the period,  annualized.
Return on equity is the income for the period  divided by the average equity for
the period, annualized. Based on operating results for the six months ended June
30, 1999 and 1998, the following table is presented.

                                   Six months ended June 30,
                                    1999             1998
                                    ----             ----
                                     (dollars in thousands)
Average assets                     $194,165         $144,102
ROA                                   1.00%            1.18%
Average equity                      $19,427          $15,573
ROE                                  10.01%           10.88%
Net income                             $972             $847



                                       10
<PAGE>

         Average  assets and average equity were  substantially  greater in 1999
than they were in 1998 primarily as the result of operating  three banks instead
of two and because of the sale of stock to capitalize  the new bank in Florence.
Return on assets and return on equity  diminished in 1999  primarily  because of
operating losses incurred by Florence National Bank.

Net interest income

         Net interest income, the major component of CBI's income, is the amount
by which  interest and fees on interest  earning assets exceed the interest paid
on interest bearing deposits and other interest bearing funds.  During the first
six  months  of 1999,  net  interest  income  after  provision  for loan  losses
increased to $3,683,000 from $2,972,000,  a 23.9% or $711,000  increase over the
comparable period of 1998. This improvement was the result of an increase in the
volume of earning assets at all three banks.

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 six  month  period  ended  June  30,  1999 and  1998.  A
discussion of that table follows.

         Total  interest  income for the six months  ended  June 30,  1999,  was
$7,145,000  compared  with  $5,708,000  for the same period in 1998,  a 25.1% or
$1,437,000 increase.  The yield on earning assets for the 1999 period was 7.89%,
down from 8.48.% for the 1998 period.  Total average interest earning assets for
the six months ended June 30, 1999, were $181,187,000,  up from $134,665,000 for
the same period in 1998, an increase of 34.5% or $46,522,000.

         The loan portfolio earned  $5,632,000 for the six months ended June 30,
1999,  up from  $4,539,000  for the same  period  of 1998,  a 24% or  $1,093,000
increase. The 1999 yield decreased to 8.79% from 9.38% for the 1998 period, a 59
basis point decline.  The prime lending rate fell from 8.50% to 7.75% during the
fourth quarter of 1998. The average size of the loan portfolio was  $128,183,000
for the 1999  period,  up from  $96,812,000  for the  same  period  of 1998,  an
increase of 32.4% or $31,371,000.

         The taxable  investment  portfolio earned $1,124,000 for the six months
ended June 30, 1999, up from $951,000 for the 1998 period,  an 18.1% or $173,000
increase. The yield decreased to 6.09% in the 1999 period from 6.37% in the 1998
period.  The average size of the portfolio  increased to $36,886,000 in the 1999
period from $29,849,000 in the 1998 period, an increase of 23.5% or $7,037,000.

         The tax exempt investment  portfolio continues to be a relatively small
part of the portfolio. It earned $13,000 for the six months ended June 30, 1999,
compared to $6,000 for the 1998 period, an increase of 117% or $7,000. The yield
on the portfolio was 5.94% (on a fully taxable equivalent basis), increased from
the prior year's 5.79%. The average size of the portfolio  increased to $663,000
for the 1999 period from  $314,000  in the 1998  period,  an increase of 111% or
$349,000.

         Interest  bearing deposits in other banks  contributed  $79,000 for the
six months ended June 30, 1999,  compared to $68,000  during the prior year,  an
increase of 16.1% or $11,000. The yield on these deposits decreased to 5.20% for
the 1999  period  from 5.68% in the 1998  period.  CBI  averaged  $3,039,000  in
interest  bearing balances in the 1999 period compared to $2,396,000 in the 1998
period, an increase of 26.8% or $643,000.

         Federal  funds sold earned  $297,000  for the six months ended June 30,
1999,  compared to $144,000  the prior  year,  an increase of 106% or  $153,000.
Yields decreased to 4.78% for the period ended June 30, 1999, from 5.44% for the
1998 period.  For the 1999 period,  CBI increased its average  volume in federal
funds  sold to  $12,416,000  from  $5,294,000  for the  1998  period,  a 135% or
$7,122,000 increase. This substantial increase was mostly related to the opening
of the new bank in Florence.

                                       11
<PAGE>


Interest expense

         Interest  expense  increased for the six months ended June 30, 1999, to
$3,189,000 from the prior year's $2,548,000,  a 25.1% or $641,000 increase.  The
volume of interest bearing liabilities  increased to $148,890,000 for the period
ended  June  30,  1999,  from  $109,504,000  for the  1998  period,  a 35.9%  or
$39,386,000 increase. The average rate CBI paid for interest bearing liabilities
during the 1999 period was 4.28%, down from 4.65% for the 1998 period.

         The cost of savings  accounts  increased to $455,000 for the six months
ended  June 30,  1999 from  $327,000  in the 1998  period,  a 39.1% or  $128,000
increase.  Average  savings  deposit  balances  increased to $28,242,000 for the
period ended June 30, 1999, from $18,964,000 for the 1998 period, an increase of
48.9% or  $9,278,000.  The average  rate paid on these funds  decreased to 3.22%
from 3.45%.

         Interest bearing transaction  accounts cost $127,000 for the six months
ended June 30, 1999, almost unchanged from the prior year's $128,000. The volume
of these deposits  increased to $16,476,000  for the period ended June 30, 1999,
from  $13,491,000  for the 1998  period,  a 22.1% or  $2,985,000  increase.  The
average rate paid on these funds for the period  ended June 30, 1999,  decreased
to 1.54% from 1.90% for the 1998 period.

         Time deposits cost  $2,249,000  for the six months ended June 30, 1999,
up from  $1,916,000  in the 1998 period,  an increase of 17.3% or $333,000.  The
volume  increased  to  $88,765,000  for the  period  ended June 30,  1999,  from
$70,300,000 for the 1998 period,  a 26.2% or $18,465,000  increase.  The average
rate paid on these funds  decreased to 5.07% for the period ended June 30, 1999,
from 5.45% for the 1998 period.

         Short term borrowing consists of federal funds purchased and securities
sold under  agreements to  repurchase.  This is a relatively  small and volatile
part of the balance  sheet.  It cost  $75,000 for the six months  ended June 30,
1999, increased from $49,000 for the 1998 period, a 53% or $26,000 increase. The
volume of these funds increased to $4,906,000 in the 1999 period from $2,447,000
in the 1998 period, an increase of 100% or $2,459,000.  The average rate paid on
these funds decreased to 3.06% from 4%.

         Borrowings  from the Federal  Home Loan Bank cost  $283,000 for the six
months ended June 30, 1999,  compared to $128,000 for the 1998 period, a 121% or
$155,000  increase.  The advances averaged  $10,501,000  during the 1999 period,
compared to $4,302,000 for the prior year period, a 144% or $6,199,000 increase.
The  increasing   volume  in  these  funds  is  due  to  the  Orangeburg  bank's
asset-liability  management  strategy.  The  average  rate  paid on these  funds
decreased to 5.39% from 5.95%.

Non-Interest Income

         Non-interest  income  for the six months  ended  June 30,  1998 grew to
$650,000 from $491,000 in the 1998 period, a 32.3% or $159,0000  increase.  This
increase was generated by substantial  increases in service charge fee income at
the Sumter bank and the early operation of the Florence bank.

Non-Interest Expense

         For the six months ended June 30, 1999 non-interest  expenses increased
to $2,897,000 from $2,202,000 for the 1998 period, a 31.6% or $695,000 increase.
Of this increase,  approximately  $487,000 or 70% is related to operation of the
new bank in Florence.

         Personnel  costs  were  $1,683,000  for the  1999  period  compared  to
$1,311,000 for the 1998 period, a 28.3% or $372,000 increase.

         Premises  and  equipment  expense  for the 1999  period  were  $437,000
compared to $276,000 for the 1998 period, an increase of 58.3% or $161,000.

         Other costs were $777,000 for the 1999 period  compared to $615,000 for
the 1998 period, an increase of 26.3% or $162,000.

Income Taxes

         CBI provided $464,000 for federal and state income taxes during the six
months ended June 30, 1999,  compared to $414,000 for the same period in 1998, a
12% or $50,000 increase.


                                       12
<PAGE>

RESULTS OF OPERATIONS FOR THE QUARTERS ENDED JUNE 30, 1999 AND 1998

Net Income

         For the quarter ended June 30, 1999, CBI earned a  consolidated  profit
of $543,000, compared to $448,000 for the comparable period of 1998, an increase
of 21.2% or  $95,000.  Basic  earnings  per share were $.18 in the 1999  period,
compared to $.16 for the 1998 period,  an increase of 12.5%.  The changes in the
items  comprising  net interest  income which are discussed  below resulted from
essentially the same factors discussed above regarding the results of operations
for the six months ended June 30, 1999.

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.  Net interest
income  before  provision  for loan losses for the quarter  ended June 30, 1999,
increased to $2,060,000,  compared to $1,649,000 for the same period in 1998, an
increase of 24.9% or  $411,000.  For the same  period,  the  provision  for loan
losses was  $139,000,  compared to $97,000 for the 1998  period,  an increase of
43.2% or $42,000.

Interest Income

         Total  interest  income  for the  second  quarter  1999 was  $3,730,000
compared  with  $2,944,000  for the same  period  in 1998,  a 26.6% or  $786,000
increase.

         The loan portfolio earned $2,940,000 for the second quarter in 1999, up
from $2,336,000 for the same period of 1998, a 25.8% or $604,000 increase.

         The  investment  portfolio  earned  $604,000 for the second  quarter in
1999, up from $492,000 for the 1998 period, a 22.7% or $112,000 increase.

         Interest  bearing deposits in other banks  contributed  $43,000 for the
second  quarter 1999,  compared to $30,000 during the prior year, an increase of
43.3% or $13,000.

         Federal funds sold earned  $143,000 the second quarter of 1999 compared
to $86,000 the prior year, an increase of 66.2% or $57,000.

Interest expense

         Interest expense increased for the second quarter of 1999 to $1,670,000
from the prior year's $1,295,000, a 28.9% or $375,000 increase.

Non-interest income and expense

         Non-interest  income for the 1999 period  increased  to  $345,000  from
$261,000 for the 1998 period, a 32.1% or $84,000 increase.  Non-interest expense
increased to $1,460,000 from $1,143,000, a 27.7% or $317,000 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 three banks usually purchase short term
issues of U. S Treasury and U. S.  Government  agency  securities for investment
purposes.  At June 30, 1999, the held-to-maturity  portfolio totaled $13,968,000
compared to  $15,286,000 at December 31, 1998, a decrease of 9.4% or $1,318,000.
At June 30, 1999, the available-for-sale  portfolio totaled $28,719,000 compared
to  $18,862,000  at December 31, 1998, an increase of 52.3% or  $9,857,000.  The
following  chart  summarizes  the  investment  portfolios at June 30, 1999,  and
December 31, 1998.


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                  June 30, 1999
                                                                        Held-to-maturity                    Available-for-sale
                                                                 Amortized cost       Fair value      Amortized cost      Fair value
                                                                 --------------       ----------      --------------      ----------
                                                                                       (dollars in thousands)
<S>                                                                 <C>                <C>               <C>                <C>
U. S. Government and federal agencies ....................          $ 13,868           $ 13,526          $ 27,152           $ 26,565
Tax exempt securities ....................................               100                101               831                822
Other equity securities ..................................                 -                  -             1,332              1,332
                                                                    --------           --------          --------           --------
Total ....................................................          $ 13,968           $ 13,627          $ 29,315           $ 28,719
                                                                    ========           ========          ========           ========

Unrealized (loss) ........................................          $   (341)                            $   (596)
                                                                    ========                             ========

<CAPTION>
                                                                December 31, 1998
                                                                        Held-to-maturity                    Available-for-sale
                                                                 Amortized cost       Fair value      Amortized cost      Fair value
                                                                 --------------       ----------      --------------      ----------
                                                                                       (dollars in thousands)
<S>                                                                    <C>               <C>               <C>               <C>
U. S. Government and federal agencies ......................           $15,035           $15,076           $16,921           $16,975
Tax exempt securities ......................................               251               253               225               227
Other equity securities ....................................                 -                 -             1,660             1,660
                                                                       -------           -------           -------           -------
Total ......................................................           $15,286           $15,329           $18,806           $18,862
                                                                       =======           =======           =======           =======

Unrealized gain ............................................           $    43                             $    56
                                                                       =======                             =======
</TABLE>


Loan portfolio

         The loan portfolio is primarily  consumer and small business  oriented.
At June 30, 1999, the loan portfolio was $139,525,000,  compared to $117,795,000
at December 31, 1998, an 18.4% or  $21,730,000  increase.  The  following  chart
summarizes the loan portfolio at June 30, 1999, and December 31, 1998.

                                             Jun. 30, 1999     Dec. 31, 1998
                                             -------------     -------------
                                                     (dollars in thousands)
Real estate                                        $80,425           $68,527
Commercial                                          35,989            29,943
Loans to individuals                                23,111            19,325
                                                    ------            ------
Total                                             $139,525          $117,795
                                                  ========          ========


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

         CBI closely  monitors past due loans and loans that are in  non-accrual
status  and  other  real  estate  owned.  Below  is a  summary  of past  due and
non-performing assets at June 30, 1999, and December 31, 1998.


                                               June 30, 1999       Dec. 31, 1998
                                               -------------       -------------
                                                    (dollars in thousands)
Accruing loans past due 90 days +                  $ -                $187
Non-accrual loans                                  $15                $ 31
Impaired loans (included in non-accrual)           $15                $ 31
Other real estate owned                            $31                $266

         Management  considers the past due and non-accrual  amounts at June 30,
1999 to be reasonable and manageable in the normal course of business.

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

                                       14
<PAGE>

         CBI's activity with its allowance for loan losses reserve is summarized
below.
<TABLE>
<CAPTION>

                                                                           June 30, 1999        Dec. 31, 1998        June 30, 1998
                                                                           -------------        -------------        -------------
<S>                                                                           <C>                  <C>                  <C>
Allowance at beginning of period ....................................         $ 1,459              $ 1,140              $ 1,140
Provision expense ...................................................             273                  484                  188
Net charge offs .....................................................             (37)                (165)                 (58)
                                                                              -------              -------              -------
Allowance at end of period ..........................................         $ 1,695              $ 1,459              $ 1,270
                                                                              =======              =======              =======
Allowance as a percent of outstanding loans .........................            1.21%                1.24%                1.24%
</TABLE>

         In reviewing  the adequacy of the  allowance for loan losses at the end
of each period,  management considers  historical loan loss experience,  current
economic condition,  loans outstanding,  trends in non-performing and delinquent
loans, and the quality of collateral  securing problem loans. After charging off
all known losses,  management  considers  the allowance  adequate to provide for
estimated future losses inherent in the loan portfolio at June 30, 1999.

Premises and equipment

         Premises and equipment  were  $4,608,000 at June 30, 1999,  compared to
$3,892,000  at December 31, 1998,  an increase of 18% or $716,000.  Most of this
increase  was due to the  opening of a new branch  bank  building  on  Broughton
Street in Orangeburg. This office replaced an existing branch building, which is
now being rented to Community Bankshares.

Deposits

         Deposits were  $172,378,000 at June 30, 1999,  compared to $147,630,000
at December 31, 1998, an increase of 16.7% or $24,748,000.

         Time deposits  greater than $100,000 were $32,474,000 at June 30, 1999,
compared  to  $24,504,000  at  December  31,  1998,  an  increase  of  32.5%  or
$7,970,000.

Liquidity

         Liquidity is the ability to meet current and future obligations through
liquidation  or maturity of existing  assets or the  acquisition  of  additional
liabilities.  Adequate  liquidity  is  necessary  to meet  the  requirements  of
customers for loans and deposit  withdrawals in a timely and economical  manner.
The most manageable  sources of liquidity are composed of liabilities,  with the
primary  focus of  liquidity  management  being the ability to attract  deposits
within the Orangeburg National Bank, Sumter National Bank, and Florence National
Bank service areas.  Core deposits (total deposits less  certificates of deposit
of $100,000 or more) provide a relatively  stable funding base.  Certificates of
deposit of $100,000 or more are generally more sensitive to changes in rates, so
they must be  monitored  carefully.  Asset  liquidity  is  provided  by  several
sources,  including amounts due from banks,  federal funds sold, and investments
available for sale.

                                       15
<PAGE>

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

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

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

         CBI through  its banking  subsidiaries  has a  demonstrated  ability to
attract deposits from its markets.  Deposits have grown from $30 million in 1989
to over $172  million  in 1999.  This base of  deposits  is the major  source of
operating liquidity.

         CBI's long term liquidity  needs are expected to be primarily  affected
by the maturing of long-term certificates of deposit. At March 31, 1999, CBI had
approximately  $21.8  million  in  certificates  of deposit  and other  interest
bearing  liabilities  maturing in one to five years. CBI had no such liabilities
maturing in over 5 years. CBI's assets maturing or repricing in the same periods
were $75.5  million  and $48  million,  respectively.  CBI expects to be able to
manage its current balance sheet  structure  without  experiencing  any material
liquidity problems.

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

Capital resources

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


                                                June 30, 1999      Dec. 31, 1998
                                                -------------      -------------
Tier 1 capital to average total assets .....        9.79%             10.90%
Tier 1 capital to risk weighted assets .....       13.92%             15.90%
Total capital to risk weighted assets ......       15.11%             17.00%

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



                                       16
<PAGE>

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

Common Stock

         At June 30, 1999 the common stock account totaled $14,189,000, compared
to  $14,648,000 at December 31, 1998.  This $459,000  decrease was the result of
the  redemption  of $630,000 in CBI common  stock and the  issuance of stock for
$171,000 resulting from the exercise of employee stock options.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable pursuant to Instruction 1 to 17 C.F.R. 229.304(c).


Part II--Other Information

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

CBI had an Annual Meeting of Shareholders on April 27, 1999.

The following persons were elected to the Board:
Three year term:  Martha Rose C. Carson,  J. M. Guthrie,  Phil P. Leventis,  Wm.
                  Reynolds Williams, Michael A. Wolfe.
Two year term: Richard L. Havekost.
One year term: Jesse A. Nance.

An amendment to the 1997 Employee Stock Option Plan was approved which increases
from 106,000 to 272,000 the number of shares reserved for issuance upon exercise
of the options.

The other item approved was the  ratification  of J. W. Hunt and Co.,  Certified
Public Accountants,  as outside auditors for CBI for the year ended December 31,
1999.


The vote tally was as follows:

<TABLE>
<CAPTION>
                                                      Total number    Voting for            Voting          Voting to     Present at
                                                       of shares                        against or to       abstain      meeting and
                                                      eligible to                         withhold                        not voting
                                                          vote                            authority

Election of directors
<S>                                                    <C>              <C>                 <C>              <C>                 <C>
     Martha Rose C. Carson ....................        3,036,946        1,957,053            1,500                0              0
     J. M. Guthrie ............................        3,036,946        1,950,862            7,691                0              0
     Phil P. Leventis .........................        3,036,946        1,952,758            5,795                0              0
     Wm. Reynolds Williams ....................        3,036,946        1,957,053            1,500                0              0
     Michael A. Wolfe .........................        3,036,946        1,957,053            1,500                0              0
     Richard L. Havekost ......................        3,036,946        1,954,858            3,695                0              0
     Jesse A. Nance ...........................        3,036,946        1,954,858            3,695                0              0

Approval  of Stock  Option  Plan ..............        3,036,946        1,862,938           79,300           16,315              0
     Amendment

Ratification of J. W. Hunt ....................        3,036,946        1,933,143            1,838           23,572              0
</TABLE>




                                       17
<PAGE>



Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

See Exhibit Index on page 20.

b)  None.


                                       18
<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: August 10, 1999
                                 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)








                                       19
<PAGE>


                                                   EXHIBIT INDEX


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

(10)                       Form of  Change  in  Control  Agreement  between  the
                           Registrant and each of William W.  Traynham,  Michael
                           A. Wolfe, William H. Nock and Jesse A. Nance.

(27)                       Financial Data Schedule