SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549


                                    FORM 10-Q


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



For the quarterly period ended March 31, 1999  Commission File number: 000-22054



                           COMMUNITY BANKSHARES, INC.
                     (Exact Name of Registrant as Specified)

                 South Carolina                                  57-0966962
(State or Other Jurisdiction of Incorporation or    (IRS Employer Identification
                  Organization)                         Number)


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


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



         Indicate  by check mark  whether the  registrant  (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 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 equity, as of the latest practicable date:  3,037,288 shares of common
stock outstanding as of May 3, 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             10
              Condition and Results of Operations


                                Part II-Other Information
  Item 6      Exhibits and Reports on Form 8-K                              18


                                       2
<PAGE>


            COMMUNITY BANKSHARES, INC. - CONSOLIDATED BALANCE SHEETS
                             $ amounts in thousands

<TABLE>
<CAPTION>
                                                                                                 March 31, 1999        December 31,
        ASSETS                                                                                     UNAUDITED               1998
                                                                                                   ---------               ----

Cash and due from other financial institutions:
<S>                                                                                              <C>                      <C>      
    Non-interest bearing .........................................................               $   5,432                $   7,746
    Federal funds sold ...........................................................                  15,450                   15,550
                                                                                                 ---------                ---------
        Total cash and cash equivalents ..........................................                  20,882                   23,296
Interest bearing deposits in other banks .........................................                   3,885                    1,577
Investment securities:
    Securities held to maturity ..................................................                  13,132                   15,286
    Securities available for sale ................................................                  22,874                   18,862
Loans held for resale ............................................................                     320                      722

Loans ............................................................................                 127,405                  117,795
    Less, allowance for loan losses ..............................................                  (1,565)                  (1,459)
                                                                                                 ---------                ---------
        Net loans ................................................................                 125,840                  116,336

Premises and equipment ...........................................................                   4,151                    3,892
Accrued interest  receivable .....................................................                   1,390                    1,242
Deferred income taxes ............................................................                     454                      453
Other assets .....................................................................                     556                      615
                                                                                                 ---------                ---------

        Total assets .............................................................               $ 193,484                $ 182,281
                                                                                                 =========                =========

        LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:
    Non-interest bearing .........................................................               $  26,734                $  23,883
    Interest bearing .............................................................                 131,741                  123,747
                                                                                                 ---------                ---------
        Total deposits ...........................................................                 158,475                  147,630
Federal funds purchased and securities
    sold under agreements to repurchase ..........................................                   3,185                    4,464
Federal Home Loan Bank advances ..................................................                  11,490                    9,490
Other liabilities ................................................................                   1,094                    1,038
                                                                                                 ---------                ---------
        Total liabilities ........................................................                 174,244                  162,622
                                                                                                 ---------                ---------

Shareholders' equity:
    Common stock
        No par, authorized shares 12,000,000, issued .............................                  14,187                   14,648
        and outstanding 3,037,288 in 1999 and
        3,047,686 in 1998
    Retained earnings ............................................................                   5,129                    4,975
    Accumulated other comprehensive income .......................................                     (76)                      36
                                                                                                 ---------                ---------
        Total shareholders' equity ...............................................                  19,240                   19,659
                                                                                                 ---------                ---------

        Total liabilities and shareholders' equity ...............................               $ 193,484                $ 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 three months ended March 31, 1999 and 1998 (Unaudited)

<TABLE>
<CAPTION>
                                                                                                       Accumulated  
                                                                                                          Other           Total
                                                                  Common Shares            Retained   Comprehensive    Shareholders'
                                                              Shares         Amount        Earnings   Income (Loss)       Equity
                                                              ------         ------        --------   -------------       ------
                                                                                                                     
                                                                                (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 .......................................                                        399                           399
     Other comprehensive income (loss) net of tax:                                                                   
     Unrealized gain (loss) on securities .............                                                      4                 4
Issuance of common stock ..............................        93,101           1,404                                      1,404
Dividends paid ........................................             0               0         (215)          0              (215)
                                                           ----------        --------      -------        ----          --------
Balances at Mar. 31, 1998 .............................     2,727,777        $ 10,560      $ 4,045        $ 24          $ 14,629
                                                           ==========        ========      =======        ====          ========
                                                                                                                     
Balances at Dec. 31, 1998 .............................     3,047,686        $ 14,648      $ 4,975        $ 36          $ 19,659
Comprehensive income:                                                                                                
     Net income .......................................                                        429                           429
     Other comprehensive income (loss) net of tax:                                                                   
     Unrealized gain (loss) on securities .............                                                   (112)             (112)
Issuance of common stock ..............................        36,700             169                                        169
Redemption of common stock ............................       (47,100)           (630)                                      (630)
Dividends paid ........................................             0               0         (275)          0              (275)
                                                           ----------        --------      -------        ----          --------
Balances at Mar. 31, 1999 .............................     3,037,286        $ 14,187      $ 5,129        $(76)         $ 19,240
                                                           ==========        ========      =======        ====          ========
</TABLE>


                                       4
<PAGE>


         COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                                                          Quarter ended March 31,
                                                                                                            1999            1998
                                                                                                            ----            ----
        $ amounts in thousands, except per share                                                         UNAUDITED        UNAUDITED
                                                                                                         ---------        ---------

Interest and dividend income:
<S>                                                                                                     <C>             <C>        
    Interest and fees on loans ...................................................................      $    2,692      $     2,203
    Deposits with other financial institutions ...................................................              36               38
    Investment securities:
      Interest - U. S. Treasury and Government Agencies ..........................................             500              450
      Dividends ..................................................................................              33               15
                                                                                                        ----------      -----------
        Total investment securities ..............................................................             533              465
    Federal funds sold and securities
      purchased under agreements to resell .......................................................             154               58
                                                                                                        ----------      -----------
        Total interest and dividend income .......................................................           3,415            2,764
                                                                                                        ----------      -----------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more ................................................             313              287
      Other ......................................................................................           1,040              889
                                                                                                        ----------      -----------
        Total deposits ...........................................................................           1,353            1,176
    Federal funds purchased and securities
      sold under agreements to repurchase ........................................................              38               25
    Federal Home Loan Bank advances ..............................................................             128               52
                                                                                                        ----------      -----------
        Total interest expense ...................................................................           1,519            1,253
                                                                                                        ----------      -----------
Net interest income ..............................................................................           1,896            1,511
Provision for loan losses ........................................................................             134               91
                                                                                                        ----------      -----------
Net interest income after provision for loan losses ..............................................           1,762            1,420
                                                                                                        ----------      -----------

Non-interest income:
    Service charges on deposit accounts ..........................................................             217              177
    Losses on sale of securities .................................................................               -               (1)
    Other ........................................................................................              88               54
                                                                                                        ----------      -----------
        Total non-interest income ................................................................             305              230
                                                                                                        ----------      -----------
Non-interest expense:
    Salaries and employee benefits ...............................................................             832              634
    Premises and equipment .......................................................................             215              139
    Other ........................................................................................             390              286
                                                                                                        ----------      -----------
        Total non-interest expense ...............................................................           1,437            1,059
Net income before taxes ..........................................................................             630              591
Provision for income taxes .......................................................................             201              192
                                                                                                        ----------      -----------
Net income after taxes ...........................................................................      $      429      $       399
                                                                                                        ==========      ===========

Basic earnings per common share:
    Weighted average shares outstanding ..........................................................       3,038,593        2,680,714
                                                                                                        ==========      ===========
    Net income per common share ..................................................................      $     0.14      $      0.15
                                                                                                        ==========      ===========
Diluted earnings per common share:
    Weighted average shares outstanding ..........................................................       3,065,001        2,738,194
                                                                                                        ==========      ===========
    Net income per common share ..................................................................      $     0.14      $      0.15
                                                                                                        ==========      ===========
</TABLE>


                                       5
<PAGE>


       COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                       Three months ended March 31,
       $ amounts in thousands                                                                           1999                1998
                                                                                                        ----                ----
                                                                                                      UNAUDITED           UNAUDITED
                                                                                                      ---------           ---------
Cash flows from operating activities:
<S>                                                                                                  <C>                   <C>     
Net income .............................................................................             $    429              $    399
Adjustments to reconcile net income
  to net cash (provided) used by operating activities
       Depreciation and amortization ...................................................                  109                    74
       Provision for loan losses .......................................................                  134                    91
       Accretion of discounts and amortization of premiums -
         investment securities - net ...................................................                   23                   (31)
       Deferred income taxes ...........................................................                    -                    52
       Proceeds from sale of real estate loans held for sale ...........................                3,389                 2,244
       Origination of real estate loans held for sale ..................................               (2,987)               (2,238)

Changes in operating assets and liabilities:
       (Increase) decrease in interest receivable ......................................                 (148)                   68
       (Increase) decrease in other assets .............................................                   59                   (49)
       Increase  in other liabilities ..................................................                   56                   207
                                                                                                     --------              --------
          Net cash provided by operating activities ....................................                1,064                   817
                                                                                                     --------              --------

Cash flows from investing activities:
       Net (increase) in interest bearing deposits
            with other banks ...........................................................               (2,308)                 (620)
       Purchases of held to maturity securities ........................................               (2,251)               (5,257)
       Proceeds from maturities of held to maturity securities .........................                4,403                 8,908
       Purchases of available for sale securities ......................................               (7,977)               (6,536)
       Proceeds from maturities of available for sale securities .......................                3,829                 4,922
       Net (increase) in loans to customers ............................................               (9,638)               (4,163)
       Purchase of premises and equipment ..............................................                 (368)                 (136)
                                                                                                     --------              --------
          Net cash (used) in investing activities ......................................              (14,310)               (2,882)
                                                                                                     --------              --------

Cash flows from financing activities:
       Net increase in demand, savings, & time deposits ................................               10,845                 5,093
       Net (decrease) in federal funds purchased
         and  securities sold under agreements to repurchase ...........................               (1,279)                 (220)
       Increase in Federal Home Loan Bank advances .....................................                2,000                 3,500
       Sale of common stock ............................................................                  169                 1,404
       Common stock redemption .........................................................                 (630)                    -
       Dividend payments ...............................................................                 (273)                 (215)
                                                                                                     --------              --------
          Net cash provided by financing activities ....................................               10,832                 9,562

Net (decrease) increase in cash and cash equivalents ...................................               (2,414)                7,497
Cash and cash equivalents - beginning of period ........................................               23,296                 5,122
                                                                                                     --------              --------
Cash and cash equivalents - end of period ..............................................             $ 20,882              $ 12,619
                                                                                                     ========              ========
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       6
<PAGE>


Summary of Significant Accounting Principles

         A summary of  significant  accounting  policies is included in the 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>
                                                                                                        Tax               
                                                                                Before-Tax           (Expense)            Net-of-Tax
                                                                                  Amount            or Benefit              Amount
Unrealized gains (losses) on securities:
<S>                                                                             <C>                   <C>                  <C>     
Unrealized holding gains (losses) arising during period ............            $   6,000             $ (2,000)            $  4,000
Less: reclassification adjustment for gains ........................                    0                    0                    0
   (losses) realized in net income                                              ---------             --------             --------

Net unrealized gains (losses) ......................................                6,000               (2,000)               4,000
                                                                                ---------             --------             --------
Other comprehensive income, March 31, 1998 .........................            $   6,000             $ (2,000)            $  4,000
                                                                                =========             ========             ========

Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period ............            $(115,000)            $ 39,000             $(76,000)
Less: reclassification adjustment for gains ........................                    0                    0                    0
   (losses) realized in net income                                              ---------             --------             --------

Net unrealized gains (losses) ......................................             (115,000)              39,000              (76,000)
                                                                                ---------             --------             --------
Other comprehensive income, March 31, 1999 .........................            $(115,000)            $ 39,000             $(76,000)
                                                                                =========             ========             ========
</TABLE>


                                       7
<PAGE>

     COMMUNITY BANKSHARES, INC. - AVERAGE BALANCE SHEETS, YIELDS, AND RATES
<TABLE>
<CAPTION>
Quarter ended March 31,                                                        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 ..................................   $   2,671     $   36       5.39%    $   2,807      $   38       5.42%
Investment securities taxable ..............................      34,303        527       6.15%       29,231         461       6.31%
Investment securities--tax exempt ..........................         602          6       6.04%          374           4       6.48%
Federal funds sold .........................................      12,585        154       4.89%        4,008          58       5.79%
Loans receivable ...........................................     122,562      2,692       8.79%       94,417       2,203       9.33%
                                                               ---------     ------       ----     ---------      ------       ---- 
                                                                                                  
Total interest earning assets ..............................     172,723      3,415       7.91%      130,837       2,764       8.45%
                                                                                                  
Cash and due from banks ....................................       7,978                               5,862                 
Allowance for loan losses ..................................      (1,519)                             (1,151)                
Premises and equipment .....................................       4,269                               2,910                 
Other assets ...............................................       2,054                               1,610                 
                                                               ---------                           ---------                 
                                                                                                  
Total assets ...............................................   $ 185,505                           $ 140,068                 
                                                               =========                           =========                 
Liabilities and Shareholders' Equity                                                              
                                                                                                  
Interest bearing deposits                                                                         
Savings ....................................................   $  26,847     $  216       3.22%    $  18,318      $  157       3.43%
Interest bearing transaction accounts ......................      15,919         61       1.53%       13,438          64       1.91%
Time deposits ..............................................      84,534      1,076       5.09%       70,045         955       5.45%
                                                               ---------     ------       ----     ---------      ------       ----
                                                                                                  
Total interest bearing deposits ............................     127,300      1,353       4.25%      101,801       1,176       4.62%
Short term borrowing .......................................       5,113         38       2.97%        2,539          25       3.94%
FHLB advances ..............................................       9,512        128       5.38%        3,543          52       5.87%
                                                               ---------     ------       ----     ---------      ------       ----
Total interest bearing liabilities .........................     141,925      1,519       4.28%      107,883       1,253       4.65%
                                                                                                  
Noninterest bearing demand deposits ........................      23,033                              17,128                 
Other liabilities ..........................................       1,113                                 900                 
Shareholders' equity .......................................      19,434                              14,157                 
                                                               ---------                           ---------                 
Total liabilities and shareholders' equity .................   $ 185,505                           $ 140,068                 
                                                               =========                           =========                 
Interest rate spread .......................................                              3.63%                                3.80%
                                                                                                  
Net interest income and net yield on earning assets ........                 $1,896       4.39%                   $1,511       4.62%
                                                                             ======       ====                    ======       ==== 
</TABLE>


                                       8
<PAGE>


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

Forward Looking Statements

         Statements   included  in  Management's   Discussion  and  Analysis  of
Financial Condition and Results of Operations which are not historical in nature
are intended to be, and are hereby  identified as `forward  looking  statements'
for  purposes  of the safe  harbor  provided  by Section  21E of the  Securities
Exchange Act of 1934, as amended.  The Corporation cautions readers that forward
looking  statements,   including  without  limitation,  those  relating  to  the
Corporation's future business prospects,  revenues, working capital,  liquidity,
capital needs, interest costs, income and Year 2000 readiness of the Corporation
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 the
Corporation'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 the  Corporation'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.  The Corporation 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.  The Corporation 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 $225,000 and will be funded with internally generated resources. The
majority of these costs have  already  been  expended  and the  remaining  items
relate primarily to the  Corporation's  testing plans. Most of the Corporation'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.

         The  Corporation  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 the  Corporation 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.


                                       9
<PAGE>

         The Corporation 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.

         The Corporation has completed testing its core information system. Test
results have been successful.  Management  expects to be substantially  complete
with testing of other mission  critical  systems by the end of the first quarter
1999.  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,   the   Corporation'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. The Corporation 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.


RESULTS OF OPERATIONS

Net Income

         For the  first  quarter  of 1999 CBI  earned a  consolidated  profit of
$429,000,  compared to $399,000  for the first  quarter of 1998,  an increase of
7.5% or  $30,000.  Basic and  diluted  earnings  per share were $.14 in the 1999
period, compared to $.15 for the 1998 period.

         For the first  quarter  of 1999  Orangeburg  National  Bank  reported a
profit of  $469,000,  compared to  $373,000  for the first  quarter of 1998,  an
increase of 25.7% or $96,000.

         For the first quarter of 1999 Sumter National Bank reported a profit of
$82,000  compared to $12,000 for the first  quarter of 1998, an increase of 583%
or $70,000. The Sumter bank began operation in June 1996.

         For the first  quarter of 1999  Florence  National  Bank reported a net
after tax loss of $116,000. The Florence bank began operation in July 1998.

         As noted above, consolidated net income for the quarter ended March 31,
1999,  increased from the prior year by 7.5% or $30,000. The major components of
this increase are discussed below. Net interest income before provision for loan
losses for the three  months  ended March 31,  1999,  increased  to  $1,896,000,
compared  to  $1,511,000  for the same  period in 1998,  an increase of 25.5% or
$385,000.  For the same  period,  the  provision  for loan losses was  $134,000,
compared  to $91,000  for the 1998  period,  an  increase  of 47.2% or  $43,000.
Non-interest  income for the 1999 period increased to $305,000 from $230,000 for
the 1998 period, a 32.6% or $75,000 increase.  Non-interest expense increased to
$1,437,000 from  $1,059,000,  a 35.7% or $378,000  increase.  First quarter 1999
results include results of operation for Florence  National Bank, which incurred
an after tax loss of $116,000.  However,  for the comparable  period in 1998 the
results only include the operations of the Sumter bank and the Orangeburg  bank.
Accordingly,  many of the dollar and percentage  comparisons and changes between
periods discussed in this report are unusually large or extreme.



                                       10
<PAGE>


Profitability

         One of the best ways to review  earnings  is through the ROA (return on
average assets) and the ROE (return on average equity).  Return on assets is the
income for the period divided by the average assets for the period,  annualized.
Return on equity is the income for the period  divided by the average equity for
the period, annualized.  Based on operating results for the quarters ended March
31, 1999 and 1998, the following table is presented.

Period ended March 31,           1999            1998
                                 ----            ----
                               (dollars in thousands)
Average assets                $185,505        $140,068
ROA                              0.93%           1.14%
Average equity                 $19,434         $14,157
ROE                              8.83%          11.27%
Net income                        $429            $399

Management  regards the decline in ROA and ROE as the temporary result of having
sold stock to capitalize  the Florence bank and the time required for a new bank
to reach a size at which the investment is effectively used.

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 1999, net interest income after  provision for loan losses  increased
to $1,762,000 from $1,420,000, a 24% or $342,000 increase over the first quarter
of 1998. This improvement was the result of a $42 million increase in the volume
of earning  assets.  The average yield on earning assets  decreased to 7.91% for
the 1999 period from 8.45% for the 1998 period.  This was mostly the result of a
decline in the prime lending  rate,  which was 7.75% during the first quarter of
1999,  compared to 8.50% for the same period in 1998.  For the first  quarter of
1999 the cost of funds  averaged  4.28%,  decreased  from  4.65%  for the  first
quarter of 1998.

         As noted  above,  the  decline  in the  yield  on  earning  assets  was
partially  offset  by the  decline  in the cost of  funds.  The  effect of these
changes was a net interest spread (yield on earning assets less cost of interest
bearing  liabilities)  of 3.63% for the first  quarter of 1999,  decreased  from
3.80% during the first quarter of 1998.  CBI's net interest margin (net interest
income divided by total earning assets) was 4.39% for the first quarter of 1999,
compared to 4.62% for the first quarter of 1998.

Interest Income

         Elsewhere  in this report is a table  comparing  the average  balances,
yields,  and rates for the interest rate sensitive segments of the Corporation's
balance  sheets for the quarters  ended March 31, 1999 and 1998. A discussion of
that table follows.

         Total  interest  income  for the  first  quarter  1999  was  $3,415,000
compared  with  $2,764,000  for the same  period  in 1998,  a 23.6% or  $651,000
increase.  The yield on earning assets for the 1999 period was 7.91%,  decreased
from 8.45% for the 1998 period.  Total average  interest  earning assets for the
quarter ended March 31, 1999, were  $172,723,000,  up from  $130,837,000 for the
quarter ended March 31, 1998, an increase of 32% or $41,886,000.

         The loan portfolio earned  $2,692,000 for the first quarter in 1999, up
from $2,203,000 for the same period of 1998, a 22.2% or $489,000  increase.  The
first quarter 1999 yield  decreased to 8.79% from 9.33% for the first quarter in
1998.  The average  size of the loan  portfolio  was  $122,562,000  for the 1999
quarter,  up from  $94,417,000 for the same period of 1998, an increase of 29.8%
or $28,145,000.

         The taxable investment  portfolio earned $527,000 for the first quarter
in 1999, up from $461,000 for the 1998 period, a 14.3% or $66,000 increase.  The
yield decreased to 6.15% in the 1999 quarter from 6.31% in the 1998 quarter. The
average size of the portfolio  increased to $32,898,000 in the 1999 quarter from
$29,231,000 in the 1998 quarter, an increase of 12.5% or $3,667,000.



                                       11
<PAGE>

         The tax exempt investment portfolio earned $6,000 for the first quarter
in 1999, up from $4,000 for the same period in 1998.  The yield on the portfolio
was 6.04%, a decrease from 6.48%. The average size of the portfolio increased to
$602,000 for the 1999 period from  $374,000 in the 1998  period,  an increase of
61% or $228,000.

         Interest  bearing deposits in other banks  contributed  $36,000 for the
first  quarter  1999,  compared to $38,000  during the prior year, a decrease of
5.3% or  $2,000.  The yield on these  deposits  decreased  to 5.39% for the 1999
period  from 5.42% in the 1998  period.  CBI  averaged  $2,671,000  in  interest
bearing  balances in the first  quarter 1999  compared to  $2,807,000  the first
quarter of the prior year, a decrease of 4.8% or $136,000.

         Federal  funds sold earned  $154,000 the first quarter of 1999 compared
to $58,000 the prior year, an increase of 165% or $96,000.  Yields  decreased to
4.89% for the first  quarter in 1999 from  5.79% for the first  quarter in 1998.
For the first quarter of 1999, CBI increased its average volume in federal funds
sold to  $13,990,000  from  $4,008,000  for the first quarter of 1998, a 249% or
$9,982,000  increase.  Most of this  increase was due to the new Florence  bank,
which maintained an average balance in federal funds during the first quarter of
$5,694,000.

Interest Expense

         Interest  expense  increased  for the first  quarter 1999 to $1,519,000
from the prior year's $1,253,000,  a 21.2% or $266,000  increase.  The volume of
interest bearing liabilities  increased to $141,925,000 for the first quarter in
1999 from  $107,883,000  for the first  quarter of 1998, a 31.6% or  $34,042,000
increase. The average rate paid for interest bearing liabilities during the 1999
quarter was 4.28%, down from 4.65% for the 1998 period.

         The cost of savings accounts increased to $216,000 in the first quarter
in 1999 from $157,000 in the first quarter of 1998, a 37.6% or $59,000 increase.
Average savings deposit balances  increased to $26,847,000 for the first quarter
in 1999 from  $18,318,000 for the first quarter of 1998, an increase of 46.6% or
$8,529,000. The average rate paid on these funds decreased to 3.22% from 3.43%.

         Interest  bearing  transaction  accounts  cost  $61,000  for the  first
quarter in 1999, a decrease from the prior year's $64,000,  down 4.7% or $3,000.
The volume of these deposits  increased to $15,919,000  for the first quarter in
1999 from  $13,438,000  for the first  quarter of 1998,  an 18.5% or  $2,481,000
increase.  The average  rate paid on these  funds for the first  quarter in 1999
decreased to 1.53% from 1.91% for the first quarter of 1998.

         Time  deposits cost  $1,076,000  for the first quarter of 1999, up from
$955,000 the first  quarter of the prior year, an increase of 12.7% or $121,000.
The  volume  increased  to  $84,534,000  for the  first  quarter  in  1999  from
$70,045,000 for the first quarter of 1998, a 20.7% or $14,489,000 increase.  The
average  rate paid on these funds  decreased  to 5.09% for the first  quarter in
1999 from 5.45% for the first quarter in 1998.

         Short-term   borrowings   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 $38,000 for the first  quarter in
1999,  an increase from $25,000 for the first quarter of 1998, up 52% or $13,000
increase. The volume of these funds increased to $5,113,000 in the first quarter
in 1999 from  $2,539,000  in the first  quarter of 1998,  an increase of 101% or
$2,574,000.  This increase was mostly related to temporary  fluctuations  in the
balances of customer repurchase agreements. The average rate paid on these funds
decreased to 2.97% from 3.94%.

         Borrowings  from the Federal Home Loan Bank cost $128,000 for the first
quarter in 1999, an increase from $52,000 for the first quarter in 1998, up 146%
or $76,000.  The advances averaged $9,512,000 during the 1999 quarter,  compared
to $3,543,000  for the prior year quarter,  a 168% or $5,969,000  increase.  The
Orangeburg  bank has been  increasing its borrowings  from the Federal Home Loan
Bank as part of its ongoing asset liability management program. The average rate
paid on these funds decreased to 5.38% from 5.87%.


                                       12
<PAGE>

Non-Interest Income

         Non-interest  income for the first  quarter 1999 grew to $305,000  from
$230,000 in the first  quarter of 1998,  a 32.6% or $75,000  increase.  This was
mostly the result of adding the new bank in Florence,  plus increases in service
charge volume at the Sumter bank.


Non-Interest Expense

         For the  first  quarter  of 1999  non-interest  expenses  increased  to
$1,437,000  from  $1,059,000  for the first quarter of 1998, a 35.7% or $378,000
increase, primarily resulting from expenses associated with the Florence bank.

         For the 1999 period, personnel costs were $832,000 compared to $634,000
for the 1998 period , an increase of 31.2% or $198,000, which primarily resulted
from staffing the Florence bank.

         For the 1999 period,  premises  and  equipment  expense  were  $215,000
compared to $139,000 for the 1998 period, an increase of 54.7% or $76,000.

         For the 1999 period, other costs were $390,000 compared to $286,000 for
the 1998 period, an increase of 36.4% or $104,000.


Income Taxes

         CBI  provided  $201,000  for federal and state  income taxes during the
first quarter of 1999,  compared to $192,000 for the same period in 1998, a 4.7%
or $9,000 increase.

CHANGES IN FINANCIAL POSITION

Investment portfolio

         The investment portfolio is comprised of a held-to-maturity  securities
and  available-for-sale  securities.  CBI and its three banks  usually  purchase
short term  issues  (ten years or less) of U. S  Treasury  and U. S.  Government
agency   securities   for   investment   purposes.   At  March  31,  1999,   the
held-to-maturity  portfolio  totaled  $13,132,000  compared  to  $15,286,000  at
December  31, 1998, a decrease of 14.1% or  $2,154,000.  At March 31, 1999,  the
available-for-sale  portfolio  totaled  $22,874,000  compared to  $18,862,000 at
December 31,  1998,  an increase of 21.3% or  $4,012,000.  The  following  chart
summarizes the investment portfolios at March 31, 1999, and December 31, 1998.

                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                 March 31, 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 ..................           $ 13,032            $12,932           $ 20,619            $20,517
Tax exempt securities ..................................                100                101                623                625
Other equity securities ................................                  0                  0              1,732              1,732
                                                                   --------            -------           --------            -------
Total ..................................................           $ 13,132            $13,033           $ 22,974            $22,874
                                                                   ========            =======           ========            =======

Unrealized gain or (loss) ..............................           $    (99)                             $   (100)                 
                                                                   ========                              ======== 
</TABLE>


<TABLE>
<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 or (loss) ..............................            $    43                               $    56    
                                                                    =======                               =======
</TABLE>



Loan portfolio

         The loan portfolio is primarily  consumer and small business  oriented.
At March 31, 1999, the loan portfolio was $127,405,000, compared to $117,795,000
at December  31, 1998,  an 8.2% or  $9,610,000  increase.  The  following  chart
summarizes the loan portfolio at March 31, 1999, and December 31, 1998.

                                     Mar. 31, 1999       Dec. 31, 1998
                                     -------------       -------------
                                        (dollars in thousands)

Real estate                              $74,586           $68,527
Commercial                                32,471            29,943
Loans to individuals                      20,348            19,325
                                        ========          ========
Total                                   $127,405          $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 March 31, 1999, and December 31, 1998.

                                            Mar. 31, 1999       Dec. 31, 1998
                                            -------------       -------------
                                                   (dollars in thousands)
Past due 90 days (accruing loans)                  $99                $187
Non-accrual loans                                  $31                 $31
Impaired loans (included in nonaccrual)            $31                 $31
Other real estate owned                           $261                $266

                                       14
<PAGE>

         Management  considers the past due and non-accrual amounts at March 31,
1999 to be reasonable in relation to the size of the portfolio and manageable in
the normal course of business.

         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.
<TABLE>
<CAPTION>
                                                                        Quarter ended            Year ended           Quarter ended
                                                                        Mar. 31, 1999           Dec. 31, 1998         Mar. 31, 1998
                                                                        -------------           -------------         -------------
<S>                                                                        <C>                     <C>                     <C>    
Allowance at beginning of period ...........................               $ 1,459                 $ 1,140                 $ 1,140
Provision expense ..........................................                   134                     484                      91
Net charge offs ............................................                   (28)                   (165)                    (11)
                                                                           -------                 -------                 -------
Allowance at end of period .................................               $ 1,565                 $ 1,459                 $ 1,220
                                                                           =======                 =======                 =======
Allowance as a percent of outstanding loans.................                  1.23%                   1.24%                   1.27%
</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 March 31, 1999.

Deposits

         Deposits were $158,475,000 at March 31, 1999,  compared to $147,630,000
at December 31, 1998, an increase of 7.3% or $10,845,000.

         Time deposits greater than $100,000 were $26,918,000 at March 31, 1999,
compared to $24,504,000 at December 31, 1998, an increase of 9.9% or $2,414,000.

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.

         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.

                                       15
<PAGE>

         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 $156  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 $19.5 million and $0 in certificates of deposit and other interest
bearing  liabilities  maturing  in  one to  five  years  and  over  five  years,
respectively.  CBI's assets maturing or repricing in the same periods were $67.6
million and $37.5  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.

                                              Mar. 31, 1999      Dec. 31, 1998
                                              -------------      -------------
Tier 1 capital to average total assets               10.41%             10.90%
Tier 1 capital to risk weighted assets               14.70%             15.90%
Total capital to risk weighted assets                15.89%             17.00%

         The decline in the capital  ratios are related to balance  sheet growth
during the period,  a redemption of common stock (see the  following  section on
Common Stock), and the payment of semi-annual  dividends to shareholders.  Banks
are required to maintain a minimum total risk weighted capital ratio of at least
8%, and CBI currently has 15.89%.  In the opinion of  management,  the Company's
current and projected capital positions are adequate.

Common Stock

         At March 31,  1999,  the  common  stock  account  totaled  $14,187,000,
compared to  $14,648,000  at December 31, 1998.  This $461,000  decrease was the
result of the  redemption  of $630,000 in CBI common  stock and the  issuance of
stock for $169,000 resulting from the exercise of employee stock options.

Dividends

         CBI declared and paid a semi-annual  cash dividend of 9 cents per share
during the first quarter of 1999. The total cost of this dividend was $273,000.



Part II--Other Information

Item 2. Changes in Securities and Use of Proceeds.

During the period ended March 31, 1999, the  Registrant  issued shares of common
stock to the  following  classes of persons upon the exercise of options  issued
pursuant to the  Registrant's  1995 Incentive  Stock Option Plan. The securities
were issued pursuant to the exemption from registration provided by Section 4(2)
of the  Securities  Act of 1933  because the  issuance  did not involve a public
offering.

                        Class               # of shares              Aggregate
Date issued         of purchasers             issued              exercise price
-----------         -------------             ------              --------------


Jan. 1999           Employees                 20,000                  $78,000
Feb. 1999           Employees                  7,500                  $29,250



                                       16
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibit Index

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

b)  Reports on Form 8-K.  None.

























                                       17
<PAGE>

Signatures

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

                                                             DATED: May 11, 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)