UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

For the Fiscal Year Ended December 31, 2009        Commission File No. 000-29640

                         COMMUNITY FIRST BANCORPORATION
              (Exact name of registrant as specified in its charter)

         South Carolina                                   58-2322486
(State or Other Jurisdiction of             (IRS Employer Identification Number)
Incorporation or Organization)

              449 Highway 123 Bypass, Seneca, South Carolina 29678
               (Address of Principal Executive Offices, Zip Code)

       Registrant's Telephone Number, Including Area Code: (864) 886-0206

        Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock (no par value)
                                (Title of Class)

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act.  Yes [ ] No [X]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act.  Yes [ ] No [X]

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

Indicate by check mark whether the registrant has submitted  electronically  and
posted on its corporate Web site, if any, every  Interactive  Data File required
to be submitted  and posted  pursuant to Rule 405 of  Regulation  S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to  submit  and  post  such  files).  Yes  [ ] No [ ]  (Not  yet  applicable  to
Registrant)

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.   [ ]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer or a smaller reporting company.  See
definitions of  "accelerated  filer," "large  accelerated  filer,"  and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

         Large accelerated filer [ ]             Accelerated filer [ ]

         Non-accelerated filer [ ]               Smaller Reporting Company  [X]
(Do not check if smaller reporting company)

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Act). [ ] Yes [X] No

The aggregate market value of the voting common equity held by non-affiliates on
June  30,  2009,  which  was the  last  day of the  Registrant's  most  recently
completed second fiscal quarter, based on the average of the bid and asked price
on the OTC Bulletin Board, was  approximately  $26,135,989.  For purposes of the
foregoing  calculation  only,  all  directors  and  executive  officers  of  the
Registrant have been deemed affiliates.

As of March 12, 2010,  there were 3,782,415  shares of the  Registrant's  Common
Stock, no par value, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

(1)  Portions of the  Registrant's  Annual Report to  Shareholders  for the year
     ended December 31, 2009 - Parts I and II
(2)  Portions of the Registrant's Proxy Statement for the 2010 Annual Meeting of
     Shareholders - Part III
<PAGE>

                          10-K CROSS REFERENCE INDEX

                                     Part I                                 Page
Item 1   Business .......................................................     2
Item 1A  Risk Factors ...................................................    10
Item 1B  Unresolved Staff Comments ......................................    14
Item 2   Properties .....................................................    14
Item 3   Legal Proceedings ..............................................    15
Item 4   (Removed and Reserved) .........................................    15
                                     Part II
Item 5   Market for Registrant's Common Equity, Related Stockholder
           Matters, and Issuer Purchases of Equity Securities ...........    15
Item 6   Selected Financial Data ........................................    15
Item 7   Management's Discussion and Analysis of Financial Condition
           and Results of Operations ....................................    15
Item 7A  Quantitative and Qualitative Disclosures about
           Market Risk ..................................................    15
Item 8   Financial Statements and Supplementary Data ....................    15
Item 9   Changes In and Disagreements with Accountants
           on Accounting and Financial Disclosure .......................    15
Item 9A(T) Controls and Procedures ......................................    16
Item 9B  Other Information ..............................................    16
                                    Part III
Item 10  Directors, Executive Officers and Corporate Governance .........    16
Item 11  Executive Compensation .........................................    16
Item 12  Security Ownership of Certain Beneficial Owners and Management
         and Related Stockholder Matters ................................    17
Item 13  Certain Relationships and Related Transactions, and
           Director Independence ........................................    17
Item 14  Principal Accountant Fees and Services .........................    17
Item 15  Exhibits, Financial Statement Schedules ........................    18


<PAGE>

                        CAUTIONARY NOTICE WITH RESPECT TO
                           FORWARD LOOKING STATEMENTS

         This report contains "forward-looking statements" within the meaning of
the  securities  laws.  The  Private  Securities  Litigation  Reform Act of 1995
provides a safe harbor for forward-looking  statements.  In order to comply with
the terms of the safe harbor,  the Company notes that a variety of factors could
cause the Company's actual results and experience to differ  materially from the
anticipated   results  or  other   expectations   expressed  in  the   Company's
forwarding-looking statements.

         All statements that are not historical  facts are statements that could
be  "forward-looking   statements."  You  can  identify  these   forward-looking
statements  through the use of words such as "may," "will,"  "should,"  "could,"
"would," "expect,"  "anticipate,"  "assume," indicate,"  "contemplate,"  "seek,"
"plan,"  "predict,"  "target,"  "potential,"  "believe,"  "intend,"  "estimate,"
"project,  " "continue,"  or other  similar  words.  Forward-looking  statements
include,  but are not limited to,  statements  regarding  the  Company's  future
business  prospects,   revenues,  working  capital,  liquidity,  capital  needs,
interest costs, income, business operations and proposed services.

         These  forward-looking  statements  are based on current  expectations,
estimates and projections about the banking industry,  management's beliefs, and
assumptions made by management.  Such information includes,  without limitation,
discussions  as to estimates,  expectations,  beliefs,  plans,  strategies,  and
objectives  concerning  future  financial  and  operating   performance.   These
statements  are not guarantees of future  performance  and are subject to risks,
uncertainties and assumptions that are difficult to predict.  Therefore,  actual
results  may  differ  materially  from those  expressed  or  forecasted  in such
forward-looking  statements.  The risks and uncertainties  include,  but are not
limited to:

     o    future economic and business conditions;
     o    lack of  sustained  growth in the  economies of the  Company's  market
          areas;
     o    government monetary and fiscal policies;
     o    the  effects of changes in interest  rates on the levels,  composition
          and costs of deposits, loan demand, and the values of loan collateral,
          securities, and interest sensitive assets and liabilities;
     o    the effects of  competition  from a wide  variety of local,  regional,
          national and other providers of financial,  investment,  and insurance
          services,  as well as  competitors  that offer  banking  products  and
          services by mail, telephone, computer and/or the Internet;
     o    credit risks;
     o    higher than anticipated levels of defaults on loans;
     o    perceptions by depositors about the safety of their deposits;
     o    the  failure  of  assumptions  underlying  the  establishment  of  the
          allowance for loan losses and other estimates,  including the value of
          collateral securing loans;
     o    the risks of opening new offices,  including,  without limitation, the
          related  costs  and  time  of  building  customer   relationships  and
          integrating  operations as part of these  endeavors and the failure to
          achieve  expected  gains,  revenue growth and/or expense  savings from
          such endeavors;
     o    changes in laws and regulations, including tax, banking and securities
          laws and regulations;
     o    changes in accounting policies, rules and practices;
     o    cost and difficulty of implementing changes in technology or products;
     o    the  effects of war or other  conflicts,  acts of  terrorism  or other
          catastrophic  events that may affect general  economic  conditions and
          economic confidence;
     o    ability to weather the current economic downturn;
     o    loss of consumer or investor confidence; and
     o    other factors and  information  described in this report and in any of
          the  other  reports  that we file  with the  Securities  and  Exchange
          Commission under the Securities Exchange Act of 1934.

         All  forward-looking   statements  are  expressly  qualified  in  their
entirety by this cautionary notice. The Company has no obligation,  and does not
undertake,  to update,  revise or correct any of the forward-looking  statements
after the date of this  report.  The Company  has  expressed  its  expectations,
beliefs and projections in good faith and believes they have a reasonable basis.
However,  there is no assurance that these expectations,  beliefs or projections
will result or be achieved or accomplished.

<PAGE>
                                     PART I

Item 1.  Business

                              FORM OF ORGANIZATION

         Community  First  Bancorporation  (the  "Company") is a South  Carolina
corporation and a bank holding company incorporated on May 23, 1997. The Company
commenced  operations on October 16, 1997, upon effectiveness of the acquisition
of Community First Bank (the "Bank") as a wholly owned subsidiary. The principal
business of the Company is ownership  and  operation of the Bank.  In 2009,  the
Company organized Upstate Resource Management, Inc. as a wholly owned subsidiary
to hold certain troubled assets sold to it by the Bank.

                               BUSINESS OF BANKING

General

         The Bank is a South  Carolina  state  bank  which was  incorporated  in
December,  1988, and commenced  operations as a commercial bank in March,  1990.
The Bank operates from its offices in Walhalla,  Seneca,  Anderson,  Westminster
and Williamston,  South Carolina.  The main office is located at 3685 Blue Ridge
Boulevard,  in Walhalla,  South Carolina;  the Seneca offices are located at 449
Highway 123 Bypass, and 1600 Sandifer Boulevard,  in Seneca, South Carolina; the
Anderson offices are located at 4002 Clemson Boulevard, and 2007 East Greenville
Street in Anderson,  South Carolina;  the  Williamston  office is located at 208
East Main Street in Williamston,  South Carolina;  and the Westminster office is
located at 1101 East Main Street, Westminster, South Carolina.

Services and Products Offered

         The Bank  offers a full  array of  commercial  bank  services.  Deposit
services include business and personal checking accounts, NOW accounts,  savings
accounts,  money market  accounts,  various term  certificates  of deposit,  IRA
accounts, and other deposit services.  Most of the Bank's deposits are attracted
from individuals and small  businesses.  The Bank does not offer trust services,
and does not accept brokered deposits.

         The Bank  offers  secured  and  unsecured,  short-to-intermediate  term
loans,  with  floating  and fixed  interest  rates for  commercial  and consumer
purposes.  Consumer loans include generally car loans,  home equity  improvement
loans  (secured  by first and second  mortgages),  personal  expenditure  loans,
education  loans,  and  overdraft  lines of  credit.  Commercial  loans  include
generally short term unsecured loans,  short and  intermediate  term real estate
mortgage  loans,  loans  secured by listed  stocks,  loans secured by equipment,
inventory,  and accounts  receivable.  Management believes that the credit staff
possesses knowledge of the community and lending skills sufficient to enable the
Bank to maintain a sufficient volume of high quality loans.

         Management of the Bank  believes that the loan  portfolio is adequately
diversified.  There are no significant concentrations of loans in any particular
individuals,  industries or groups of related  individuals or industries and the
Bank has no  foreign  loans.  The loan  portfolio  is,  however,  geographically
concentrated because it consists primarily of extensions of credit to businesses
and  individuals  in its service  areas within  Oconee and Anderson  Counties of
South Carolina.  The economy of this area is, nonetheless,  diversified and does
not depend on any one industry or group of related  industries.  Management  has
established  loan  policies  and  practices  that  include  set  limitations  on
loan-to-collateral  value for different  types of collateral,  requirements  for
appraisals,  obtaining and maintaining current credit and financial  information
on borrowers, and credit approvals.

         Other services  offered by the Bank include  residential  mortgage loan
origination  services,  safe deposit boxes, night depository  service,  VISA and
MasterCard credit cards, tax deposits,  sale of U.S.  Treasury bonds,  notes and
bills and other U.S. government securities (through a correspondent),  travelers
checks,  and twenty-four hour automated  teller service.  The ATM is part of the
Cirrus network.

                                        2

<PAGE>

         As  of  December  31,  2009,  local  governmental   deposits  comprised
approximately   12.3%  of  the  Bank's  total   deposits.   These  deposits  are
concentrated among a few local governmental  entities and are somewhat volatile.
Management of the Bank has, however, taken steps that it believes are sufficient
to minimize to the greatest extent  possible the impact of such  volatibility on
the Bank's liquidity position,  including maintaining  membership in the Federal
Home Loan Bank of Atlanta in order to gain access to its credit programs.

Employees

         At December 31, 2009, the Company employed 88 people.

Competition

         The banking laws of South  Carolina  allow  statewide  branching,  and,
therefore, commercial banking in the state is highly competitive. South Carolina
law also permits bank holding  companies in other states with reciprocal laws to
acquire  depository  institutions  in  South  Carolina,  and  most of the  other
financial  institutions  in the  Oconee  and  Anderson  County  areas are branch
offices of large,  regional banks.  Further, the Riegle-Neal  Interstate Banking
and  Branching  Efficiency  Act of 1994  increased  the ability of bank  holding
companies and banks to operate across state lines.

         Banks generally compete with other financial  institutions  through the
banking  services and products  offered,  the pricing of services,  the level of
service provided,  the convenience and availability of services,  and the degree
of expertise  and personal  concern  with which  services are offered.  The Bank
encounters  strong  competition  from most of the financial  institutions in the
Bank's market areas, which generally encompass Oconee County and the immediately
surrounding area and Anderson County and the immediately surrounding area. As of
June 30, 2009, the most recent date for which  information  is available,  there
were 14 banks and savings and loan  associations,  including the Bank, in Oconee
County,  with 27 branch  locations.  Total  deposits  in the  county  were $1.14
billion,  of which the Bank had a 25.20% market share. As of June 30, 2009 there
were 21 banks and savings and loan associations, including the Bank, in Anderson
County,  with 65 branch  locations.  Total deposits in Anderson County were $2.5
billion,  of which  the  Bank had a 5.20%  market  share.  Additionally,  in the
conduct  of certain  banking  business,  the Bank also  competes  with  consumer
finance  companies,  insurance  companies,  money market mutual funds, and other
financial  institutions,  some of which are not  subject  to the same  degree of
regulation and restrictions imposed upon the Bank.

         Many of the Bank's competitors have substantially greater resources and
lending limits than the Bank and offer certain  services,  such as international
banking and trust services,  that the Bank does not provide.  The Bank believes,
however,  that its relatively  small size permits it to offer more  personalized
services than many of its  competitors.  The Bank attempts to compensate for its
lower lending limits by participating larger loans with other institutions.

                         EFFECT OF GOVERNMENT REGULATION

         The Company and the Bank operate in a highly regulated environment, and
their   business   activities   are   governed  by  statute,   regulation,   and
administrative  policies.  Relevant  information about the regulatory  framework
that  applies to the  Company and the Bank is provided  below.  This  regulatory
framework is intended  primarily  for the benefit and  protection  of the Bank's
depositors and the Depository  Insurance Fund, and not for the protection of the
Company's shareholders or creditors.

         Financial  institutions  are being subjected to increased  scrutiny and
enforcement  activity by state and federal banking  agencies,  the United States
Department of Justice, the Securities and Exchange  Commission,  and other state
and  federal  regulatory  agencies.  This  increased  scrutiny  and  enforcement
activity entails significant potential increases in compliance  requirements and
associated  costs.

         To the extent that the following  information  describes  statutory and
regulatory  provisions,  it is  qualified  in its  entirety by reference to such
statutes and regulations.  Any change in applicable law or regulation may have a
material effect on the business of the Holding Company and the Bank.

General

         As a bank holding company registered under the Bank Holding Company Act
("BHCA"),  the Company is subject to supervision,  and to regular  inspection by
the Federal Reserve. The Bank is a state bank subject to regulation by the South
Carolina State Board of Financial Institutions ("State Board") and the FDIC. The
Company  is also  subject  to  regulation  by the  State  Board.  The  following
discussion  summarizes certain aspects of those laws and regulations that affect
the Company and the Bank. Proposals to change the laws and regulations governing
the banking industry are frequently  raised in Congress,  the state  legislature
and before  the  various  bank  regulatory  agencies,  and such  proposals  have
increased in the wake of the recent financial crisis.  The likelihood and timing
of any  changes and the impact  such  changes  might have on the Company and the
Bank are difficult to determine.

                                        3

<PAGE>
         As discussed below under the caption "Gramm-Leach-Bliley Act", Congress
has adopted  extensive  changes in the laws  governing  the  financial  services
industry.  Among the changes  adopted  are  creation  of the  financial  holding
company, a type of bank holding company with powers that greatly exceed those of
standard  holding  companies,  and  creation  of  the  financial  subsidiary,  a
subsidiary that can be used by national banks to engage in many, though not all,
of the same  activities  in which a financial  holding  company may engage.  The
legislation  also establishes the concept of functional  regulation  whereby the
various financial activities in which financial institutions engage are overseen
by the regulator with the relevant  regulatory  experience.

         Under the BHCA, the Company's  activities and those of its subsidiaries
are limited to banking, managing or controlling banks, furnishing services to or
performing services for its subsidiaries or engaging in any other activity which
the Federal  Reserve  determines to be so closely related to banking or managing
or controlling banks as to be a proper incident thereto.  The BHCA prohibits the
Company  from  acquiring  direct  or  indirect  control  of more  than 5% of the
outstanding  voting stock or substantially all of the assets of any bank or from
merging or  consolidating  with  another  bank  holding  company  without  prior
approval of the Federal  Reserve.  In making  such  determinations,  the Federal
Reserve is required to consider  whether the performance of such activities by a
bank holding company or its  subsidiaries  can reasonably be expected to produce
benefits to the public such as greater  convenience,  increased  competition  or
gains in  efficiency  that  outweigh  possible  adverse  effects,  such as undue
concentration  of  resources,  decreased  or unfair  competition,  conflicts  of
interest or unsound banking practices.

         Additionally,  the BHCA prohibits the Company from engaging in, or from
acquiring  ownership or control of more than 5% of the outstanding  voting stock
of any  company  engaged in, a  non-banking  business  unless  such  business is
determined by the Federal  Reserve to be so closely  related to banking as to be
properly incident thereto.

         In addition to  regulation by the Federal  Reserve under the BHCA,  the
Company is also subject to supervision  and  regulation by the State Board.  The
Company  must  provide  the State  Board with  information  with  respect to its
financial condition, operations,  management, and inter-company relationships of
the Company and its  subsidiaries.  The State Board may also  require such other
information as is necessary to keep itself informed about whether the provisions
of South Carolina law and the  regulations  and orders issued  thereunder by the
State Board have been complied with,  and the State Board may make  examinations
of the Company and its subsidiaries.

Obligations of the Company to its Subsidiary Bank

         A number of obligations  and  restrictions  are imposed on bank holding
companies  and their  depository  institution  subsidiaries  by Federal  law and
regulatory  policy that are designed to reduce  potential  loss  exposure to the
depositors of such  depository  institutions  and to the FDIC insurance funds in
the event the depository  institution  is in danger of becoming  insolvent or is
insolvent.  For example, under the policy of the Federal Reserve with respect to
bank holding company operations,  a bank holding company is required to serve as
a source of financial strength to its subsidiary depository  institutions and to
commit resources to support such  institutions in  circumstances  where it might
not do so absent such policy. In addition,  the "cross-guarantee"  provisions of
the  Federal  Deposit  Insurance  Act,  as  amended  ("FDIA"),  require  insured
depository  institutions under common control to reimburse the FDIC for any loss
suffered or reasonably  anticipated by the Deposit Insurance Fund of the FDIC as

                                        4

<PAGE>

a result of the default of a commonly controlled insured depository  institution
or for any  assistance  provided  by the FDIC to a commonly  controlled  insured
depository institution in danger of default. The FDIC may decline to enforce the
cross-guarantee  provisions  if it  determines  that a  waiver  is in  the  best
interest of the Deposit Insurance Fund. The FDIC's claim for damages is superior
to claims of stockholders of the insured  depository  institution or its holding
company  but is  subordinate  to claims of  depositors,  secured  creditors  and
holders of subordinated debt (other than affiliates) of the commonly  controlled
insured depository institutions.

         The FDIA also provides that amounts  received from the  liquidation  or
other resolution of any insured  depository  institution by any receiver must be
distributed (after payment of secured claims) to pay the deposit  liabilities of
the  institution  prior to payment  of any other  general  or  unsecured  senior
liability,   subordinated  liability,  general  creditor  or  stockholder.  This
provision gives depositors a preference over general and subordinated  creditors
and  stockholders  in the event a receiver is appointed to distribute the assets
of the Bank.

         Any capital  loans by a bank holding  company to any of its  subsidiary
banks are  subordinate  in right of payment  to  deposits  and to certain  other
indebtedness of such subsidiary  bank. In the event of a bank holding  company's
bankruptcy,  any  commitment  by the bank  holding  company  to a  federal  bank
regulatory  agency to maintain the capital of a subsidiary  bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.

Capital Adequacy Guidelines for Bank Holding Companies and State Banks

         The various federal bank regulators,  including the Federal Reserve and
the FDIC,  have adopted  risk-based  capital  requirements  for  assessing  bank
holding company and bank capital adequacy. These standards define what qualifies
as capital and  establish  minimum  capital  standards in relation to assets and
off-balance sheet exposures, as adjusted for credit risks.

         The Company's and the Bank's  December 31, 2009 ratios are set forth in
the Annual Report to Shareholders for the year ended December 31, 2009 under the
caption "Management's Discussion and Analysis -- Capital Resources."

         Failure to meet capital  guidelines could subject the Bank to a variety
of enforcement remedies,  ranging from, for example, a prohibition on the taking
of brokered  deposits to the termination of deposit insurance by the FDIC or the
appointment of a receiver for the Bank.

         The risk-based  capital standards of both the Federal Reserve Board and
the FDIC explicitly identify  concentrations of credit risk and the risk arising
from non-traditional  activities,  as well as an institution's ability to manage
these  risks,  as  important  factors to be taken into  account by the agency in
assessing an institution's overall capital adequacy. The capital guidelines also
provide that an institution's exposure to a decline in the economic value of its
capital due to changes in interest rates be considered by the agency as a factor
in  evaluating a bank's  capital  adequacy.  The Federal  Reserve Board also has
issued additional  capital  guidelines for bank holding companies that engage in
certain trading activities.

Payment of Dividends

         The  Company is a legal  entity  separate  and  distinct  from its bank
subsidiary.  Most of the  revenues of the  Company  are  expected to result from
dividends  paid to the Company by the Bank.  There are statutory and  regulatory
requirements  applicable to the payment of dividends by subsidiary banks as well
as by the Company to its  stockholders.  It is not anticipated  that the Company
will pay cash dividends in the near future.

Certain Transactions by the Company with its Affiliates

         Federal  law  regulates   transactions  between  the  Company  and  its
affiliates,  including  the  amount of the  Bank's  loans to or  investments  in

                                        5

<PAGE>

nonbank affiliates and the amount of advances to third parties collateralized by
securities of an affiliate. Further, a bank holding company and its subsidiaries
are prohibited  from engaging in certain tie-in  arrangements in connection with
any extension of credit, lease or sale of property or furnishing of services.

FDIC Insurance Assessments

         The FDIC merged the Bank  Insurance  Fund and the  Savings  Association
Insurance  Fund to form the Deposit  Insurance Fund ("DIF") on March 31, 2006 in
accordance  with the  Federal  Deposit  Insurance  Reform Act of 2005.  The FDIC
maintains the DIF by assessing depository institutions an insurance premium. The
amount each institution is assessed is based upon statutory factors that include
the balance of insured  deposits  as well as the degree of risk the  institution
poses to the  insurance  fund.  The FDIC uses a risk-based  premium  system that
assesses higher rates on those  institutions that pose greater risks to the DIF.
Since January 1, 2007, the FDIC has placed each  institution in one of four risk
categories  using a two-step  process based first on capital ratios (the capital
group assignment) and then on other relevant  information (the supervisory group
assignment).

         As a result of recent bank failures and in order to increase the amount
in the DIF to  reflect  the  increased  risk of  additional  bank  failures  and
insurance  claims,  the FDIC  raised  its  assessments  on banks for  2009,  and
collected a special  assessment.  The Bank's  portion of the special  assessment
totaled $215,000, and was paid in September,  2009 based on deposits at June 30,
2009. The FDIC also required insured  institutions to pay three years of deposit
insurance  premiums  in  advance.  On  December  30,  2009  the  FDIC  collected
$2,822,265  from the Company for deposit  insurance  premiums.  Of that  amount,
$177,658 related to the regular quarterly assessment,  and $2,644,607 related to
the  prepayment  of premiums for the years 2010,  2011 and 2012. In 2010 and the
following two years, on a quarterly  basis,  the FDIC will continue to calculate
the assessment amount with then current financial  information,  and will deduct
the quarterly  assessment amount from the prepaid balance. The Bank will expense
the current portion as calculated by the FDIC.

Regulation of the Bank

         The Bank is also subject to  regulation  and  examination  by the South
Carolina state bank examiners. In addition, the Bank is subject to various other
state and  federal  laws and  regulations,  including  state  usury  laws,  laws
relating  to  fiduciaries,  consumer  credit  laws and laws  relating  to branch
banking. The Bank's loan operations are also subject to certain federal consumer
credit laws and regulations promulgated thereunder,  including,  but not limited
to: the federal  Truth-In-Lending  Act, governing disclosures of credit terms to
consumer  borrowers;  the Home  Mortgage  Disclosure  Act,  requiring  financial
institutions to provide certain  information  concerning their mortgage lending;
the  Equal  Credit  Opportunity  Act  and  the  Fair  Housing  Act,  prohibiting
discrimination on the basis of certain  prohibited  factors in extending credit;
and the Fair Debt Collection  Act,  governing the manner in which consumer debts
may be collected by collection agencies.  The deposit operations of the Bank are
also subject to the Truth in Savings Act,  requiring  certain  disclosures about
rates paid on savings  accounts;  the Expedited  Funds  Availability  Act, which
deals with disclosure of the availability of funds deposited in accounts and the
collection  and return of checks by banks;  the Right to Financial  Privacy Act,
which imposes a duty to maintain certain  confidentiality  of consumer financial
records  and the  Electronic  Funds  Transfer  Act and  regulations  promulgated
thereunder,  which govern  automatic  deposits to and  withdrawals  from deposit
accounts and customers' rights and liabilities arising from the use of automated
teller machines and other electronic banking services.  The Bank is also subject
to the Bank Secrecy Act,  dealing  with,  among other  things,  the reporting of
certain currency transactions;  the Fair Credit Reporting Act, governing the use
and provision of information to credit reporting  agencies;  and the USA Patriot
Act, dealing with, among other things, requiring the establishment of anti-money
laundering  programs,  including standards for verifying customer information at
account opening.

         The  Bank  is  also  subject  to  the  requirements  of  the  Community
Reinvestment  Act (the  "CRA").  The CRA imposes on  financial  institutions  an
affirmative  and  ongoing  obligation  to meet the credit  needs of their  local
communities,  including low- and moderate-income neighborhoods,  consistent with
the safe and sound operation of those institutions. Each financial institution's
actual performance in meeting community credit needs is evaluated as part of the
examination process, and also is considered in evaluating mergers,  acquisitions
and applications to open a branch or facility.

Other Safety and Soundness Regulations

         Prompt  Corrective  Action.  The federal  banking  agencies  have broad
powers under  current  federal law to take prompt  corrective  action to resolve
problems of insured depository institutions.  The extent of these powers depends

                                        6
<PAGE>

upon whether the  institutions in question are "well  capitalized,"  "adequately
capitalized,"    "undercapitalized,"    "significantly    undercapitalized"   or
"critically undercapitalized."

         A bank  that  is  "undercapitalized"  becomes  subject  to the  "prompt
corrective  action"  provisions  of the  FDIA  restricting  payment  of  capital
distributions  and management  fees;  requiring FDIC to monitor the condition of
the  bank;  requiring  submission  by the bank of a  capital  restoration  plan;
prohibiting  the acceptance of employee  benefit plan deposits;  restricting the
growth of the bank's assets and requiring  prior  approval of certain  expansion
proposals.  A bank  that is  "significantly  undercapitalized"  is  additionally
subject to restrictions on compensation  paid to senior  management of the bank,
and  a  bank  that  is  "critically  undercapitalized"  is  further  subject  to
restrictions  on the  activities  of the bank and  restrictions  on  payments of
subordinated  debt of the bank.  The purpose of these  provisions  is to require
banks with less than  adequate  capital to act quickly to restore  their capital
and to have the FDIC move  promptly  to take over  banks that are  unwilling  or
unable to take such steps.

         Brokered Deposits.  Under current FDIC regulations,  "well capitalized"
banks may accept brokered deposits without restriction, "adequately capitalized"
banks may accept  brokered  deposits  with a waiver  from the FDIC  (subject  to
certain  restrictions on payment of rates), while  "undercapitalized"  banks may
not accept brokered  deposits.  The regulations  provide that the definitions of
"well capitalized", "adequately capitalized" and "undercapitalized" are the same
as the  definitions  adopted by the agencies to implement the prompt  corrective
action provisions described in the previous paragraph.

Interstate Banking

         Under the Riegle-Neal  Interstate Banking and Branching  Efficiency Act
of 1994 the Company and any other  adequately  capitalized  bank holding company
located in South  Carolina can acquire a bank located in any other state,  and a
bank  holding  company  located  outside  South  Carolina  can acquire any South
Carolina-based  bank, in either case subject to certain  deposit  percentage and
other  restrictions.  The legislation  also provides that, in any state that has
not previously elected to prohibit  out-of-state banks from operating interstate
branches within its territory,  adequately  capitalized and managed bank holding
companies can  consolidate  their  multistate bank operations into a single bank
subsidiary and branch interstate through  acquisitions.  De novo branching by an
out-of-state bank is permitted only if it is expressly  permitted by the laws of
the host state. The authority of a bank to establish and operate branches within
a state will continue to be subject to applicable  state branching  laws.  South
Carolina law permits such  interstate  branching but not de novo branching by an
out-of-state bank.

         The  Riegle-Neal  Act,  together  with  legislation  adopted  in  South
Carolina,  resulted in a number of South  Carolina banks being acquired by large
out-of-state  bank  holding  companies.  Size  gives the  larger  banks  certain
advantages in competing for business from larger corporations.  These advantages
include  higher  lending limits and the ability to offer services in other areas
of South  Carolina and the region.  As a result,  the Company does not generally
attempt to compete  for the banking  relationships  of large  corporations,  but
concentrates its efforts on small to medium-sized businesses and on individuals.
The  Company  believes it has  competed  effectively  in this market  segment by
offering quality, personal service.

Gramm-Leach-Bliley Act

         The  Gramm-Leach-Bliley  Act makes it easier for  affiliations  between
banks,   securities  firms  and  insurance   companies  to  take  place, removed
Depression-era barriers that had separated banks and securities firms, and seeks
to protect the privacy of consumers' financial information.

         Under  provisions of the  legislation  and  regulations  adopted by the
appropriate regulators, banks, securities firms and insurance companies are able
to structure new affiliations  through a holding company  structure or through a

                                        7
<PAGE>

financial  subsidiary.  The  legislation  creates a type of bank holding company
called a "financial  holding  company" which has powers much more extensive than
those of standard holding companies.  These expanded powers include authority to
engage in "financial activities," which are activities that are (1) financial in
nature;  (2)  incidental  to  activities  that are  financial in nature;  or (3)
complementary  to a  financial  activity  and that do not  impose  a safety  and
soundness risk. Significantly,  the permitted financial activities for financial
holding  companies include authority to engage in merchant banking and insurance
activities,  including insurance portfolio investing. A bank holding company can
qualify as a financial holding company and expand the services it offers only if
all of its subsidiary depository institutions are well-managed, well-capitalized
and  have  received  a  rating  of   "satisfactory"   on  their  last  Community
Reinvestment Act examination.

         The legislation also creates another type of entity called a "financial
subsidiary." A financial subsidiary may be used by a national bank or a group of
national  banks  to  engage  in  many of the  same  activities  permitted  for a
financial holding company,  though several of these  activities,  including real
estate development or investment,  insurance or annuity underwriting,  insurance
portfolio  investing and merchant  banking,  are reserved for financial  holding
companies.  A bank's  investment  in a financial  subsidiary  affects the way in
which the bank calculates its regulatory capital, and the assets and liabilities
of financial  subsidiaries  may not be consolidated  with those of the bank. The
bank must also be certain that its risk  management  procedures  are adequate to
protect it from  financial and  operational  risks created both by itself and by
any financial subsidiary.  Further, the bank must establish policies to maintain
the separate corporate  identities of the bank and its financial  subsidiary and
to prevent each from becoming liable for the obligations of the other.

         The Act also  establishes  the  concept  of  "functional  supervision,"
meaning that  similar  activities  should be  regulated  by the same  regulator.
Accordingly,  the Act spells out the regulatory authority of the bank regulatory
agencies,  the Securities and Exchange Commission and state insurance regulators
so that each type of activity is  supervised by a regulator  with  corresponding
expertise.  The Federal  Reserve Board is intended to be an umbrella  supervisor
with the  authority  to  require a bank  holding  company or  financial  holding
company  or any  subsidiary  of  either  to  file  reports  as to its  financial
condition,  risk management  systems,  transactions with depository  institution
subsidiaries  and  affiliates,  and compliance  with any federal law that it has
authority to enforce.

         Although the Act reaffirms that states are the regulators for insurance
activities  of  all  persons,  including   federally-chartered  banks,  the  Act
prohibits  states from preventing  depository  institutions and their affiliates
from conducting insurance activities.

         The Act also  establishes  a minimum  federal  standard  of  privacy to
protect the confidentiality of a consumer's  personal financial  information and
gives the consumer the power to choose how personal financial information may be
used by financial  institutions.  The regulations govern the consumer's right to
opt-out of further disclosure of nonpublic  personal  financial  information and
require the Bank to provide initial and annual privacy notices. The Bank is also
required  to  develop a  comprehensive  plan for the  safeguarding  of  customer
information   which   encompasses  all  aspects  of  the  Bank's   technological
environment, business practices, and Bank facilities.

         The  Act  and  the  regulations  adopted  pursuant  to the  Act  create
opportunities  for the Company to offer  expanded  services to  customers in the
future,  though  the  Company  has not yet  determined  what the  nature  of the
expanded  services  might be or when the Company might find it feasible to offer
them. The Act has increased competition from larger financial  institutions that
are  currently  more  capable  than  the  Company  of  taking  advantage  of the
opportunity  to  provide a  broader  range of  services.  However,  the  Company
continues to believe that its commitment to providing high quality, personalized
service to customers will permit it to remain competitive in its market area.


                                        8
<PAGE>

Sarbanes-Oxley Act of 2002

         The Sarbanes-Oxley Act became effective in 2002, and mandated extensive
reforms and requirements  for public  companies.  The SEC has adopted  extensive
regulations  pursuant  to  the  requirements  of  the  Sarbanes-Oxley  Act.  The
Sarbanes-Oxley  Act and the SEC's  regulations have increased the Company's cost
of doing  business,  particularly  its  fees for  internal  and  external  audit
services  and  legal  services,  and the law and  regulations  are  expected  to
continue  to do so.  However,  the  Company  does  not  believe  that it will be
affected  by  Sarbanes-Oxley  and the  regulations  in ways that are  materially
different or more  onerous than those of other public  companies of similar size
and in similar businesses.

Legislative Proposals

         Proposed  legislation which could significantly  affect the business of
banking is  introduced  in Congress and the General  Assembly of South  Carolina
from time to time.  For example,  numerous bills are pending in Congress and the
South Carolina Legislature to provide various forms of relief to homeowners from
foreclosure of mortgages as a result of publicity  surrounding economic problems
resulting  from  subprime  mortgage  lending  and the  economic  adjustments  in
national real estate markets.  Broader  problems in the financial  sector of the
economy,  which  became  apparent in 2008,  have led to numerous  calls for, and
legislative and regulatory proposals relating to, restructuring of the regulaton
of financial  institutions.  Management of the Company cannot predict the future
course of such legislative proposals or their impact on the Company and the Bank
should they be adopted.

Fiscal and Monetary Policy

         Banking is a business  which depends to a large extent on interest rate
differentials. In general, the difference between the interest paid by a bank on
its deposits and its other borrowings and the interest received by a bank on its
loans  and  securities  holdings  constitutes  the  major  portion  of a  bank's
earnings.  Thus, the earnings and growth of the Company and the Bank are subject
to the influence of economic  conditions  generally,  both domestic and foreign,
and also to the  monetary  and  fiscal  policies  of the  United  States and its
agencies,  particularly the Federal Reserve.  The Federal Reserve  regulates the
supply of money through various means,  including open-market dealings in United
States government  securities,  the discount rate at which banks may borrow from
the Federal Reserve,  and the reserve  requirements on deposits.  The nature and
timing of any changes in such  policies  and their impact on the Company and the
Bank cannot be predicted.

Governmental Response to 2008 Financial Crisis

         During the fourth  quarter of 2008 and  continuing  into 2009 the FDIC,
the Federal  Reserve,  the Department of the Treasury and Congress took a number
of actions designed to alleviate or correct  mounting  problems in the financial
services  industry.  A number of these  initiatives were directly  applicable to
community banks.

         Congress  enacted  the  Emergency  Economic  Stabilization  Act of 2008
which,  among other things,  temporarily  increased  the maximum  amount of FDIC
deposit insurance from $100,000 to $250,000 and created a Troubled Assets Relief
Program ("TARP") administered by Treasury. In October,  2008, Treasury announced
a Capital Purchase Program ("CPP") under TARP to increase the capital of healthy
banks. Under the CPP, Treasury would purchase preferred stock with warrants from
qualified banks and bank holding companies in an amount up to 3% of the seller's
risk-weighed  assets  as  of  September  30,  2008.   Institutions   wishing  to
participate in the CPP were required to file an application with their principal
federal  regulators.   The  Company  filed  such  an  application  and  received
preliminary  approval to sell  preferred  stock to the Treasury,  but ultimately
elected not to  participate  in the CPP because of (i) the cost of the preferred
stock, (ii) the open-ended  administrative burdens associated with the preferred
stock,  including  having to agree to allow Treasury to amend  unilaterally  the
stock purchase agreement to comply with subsequent changes in applicable federal
statutes,  (iii)  the fact  that the  Company  and the Bank  were  already  well
capitalized  under regulatory  guidelines and expected to continue to be so, and
(iv) management's  belief that other sources of capital were, and would continue
to be, available should additional capital be needed.

         The FDIC  also  implemented  in  October,  2008 a  Temporary  Liquidity
Guarantee Program consisting of a deposit insurance  component pursuant to which
it  undertook  to  provide  deposit   insurance  in  an  unlimited   amount  for
non-interest  bearing  transaction  accounts,  and a  debt  guarantee  component
pursuant to which it undertook to fully guarantee senior,  unsecured debt issued
by banks or bank holding  companies.  Coverage of both  components was automatic
until December 5, 2008, at which time covered  institutions could opt out of one
or both of the components. Institutions not opting out would be charged fees for
their  participation  in the  components.  The  Bank  did not opt out of  either
component.

                                       9
<PAGE>

         An  unfortunate  consequence  of the  difficulties  that have beset the
banking  industry  in the  last two  years  has  been a large  increase  in bank
failures,  which has led to  substantial  claims  being made  against the FDIC's
Deposit Insurance Fund. In order to increase the amount in the Deposit Insurance
Fund to reflect the  increased  risk of  additional  bank failures and insurance
claims,  the FDIC  raised  its  assessments  on banks  for 2009 and also  made a
special one-time  assessment of 5 cents per $100 of assessable  deposits at June
30,  2009,  which was payable  September  30, 2009.  Under the new  methodology,
assessments will range between 7 and 77.5 cents per $100 in assessable deposits.
In  November  of 2009 the FDIC  adopted a final  rule  amending  the  assessment
regulation to require insured depository  institutions to prepay their quarterly
risk-based  assessments  for the fourth  quarter  of 2009,  and for all of 2010,
2011, and 2012 on December 30, 2009,  along with each  institution's  risk-based
assessment  for  the  third  quarter  of  2009.  See  also  "--  FDIC  Insurance
Assessments."

         Additional  governmental  efforts to ameliorate the problems afflicting
the banking  industry have been adopted or proposed,  or are being considered by
Congress and various governmental  entities.  The Company is presently unable to
predict the impact of any such changes, although it appears that they are likely
to increase  operating  expenses in the near term  without  creating  completely
offsetting benefits.

Further Information

         Further  information  about the business of the Company and the Bank is
set  forth in this  Form  10-K  under  Item 7  -"Management's  Discussion  and
Analysis of Financial Condition and Results of Operations."

Item 1A. Risk Factors

                                  RISK FACTORS

                          Risks Related to Our Business

         There can be no  assurance  that recent  government  actions  will help
stabilize the U.S. financial system.

         In response to the financial  crises  affecting the banking  system and
financial  markets  and going  concern  threats  to  investment  banks and other
financial  institutions,  various  branches and agencies of the U.S.  government
have  put in place  laws,  regulations  and  programs  to  address  capital  and
liquidity issues in the banking system.  There can be no assurance,  however, as
to the actual impact that such laws,  regulations  and programs will have on the
financial  markets,  including the extreme levels of  volatility,  liquidity and
confidence issues, and limited credit availability  currently being experienced.
The  failure  of such laws,  regulations  and  programs  to help  stabilize  the
financial  markets and a continuation or worsening of current  financial  market
conditions  could  materially  and  adversely  affect  our  business,  financial
condition,  results of operations,  access to credit or the trading price of our
common stock.

         Recent levels of market volatility are unprecedented.

         The  volatility  and  disruption  of financial  and credit  markets has
reached  unprecedented  levels for recent times. In some cases, the markets have
produced downward  pressure on stock prices and credit  availability for certain
issuers  without  regard to those issuers'  underlying  financial  strength.  If
recent levels of market disruption and volatility continue or worsen,  there can
be no assurance  that we will not  experience  an adverse  effect,  which may be
material,  on our  ability  to access  capital  and on our  business,  financial
condition and results of operations.

                                       10
<PAGE>

         The soundness of other financial  institutions  could adversely  affect
us.

         Financial  services  institutions  are  interrelated  as  a  result  of
trading,  clearing,  counterparty,  or other relationships.  We have exposure to
many  different   industries  and  counterparties,   and  we  routinely  execute
transactions with  counterparties in the financial services industry,  including
brokers,  dealers,  commercial banks, investment banks, and government sponsored
enterprises. Many of these transactions expose us to credit risk in the event of
default of our  counterparty.  In addition,  our credit risk may be  exacerbated
when the  collateral  we hold cannot be realized or is  liquidated at prices not
sufficient  to recover the full amount of the loan or other  obligation  due us.
There is no assurance  that any such losses would not  materially  and adversely
affect our results of operations or earnings.

         Our primary  source of funding  for our  operations  is  deposits  from
customers  in our local  market.  Should other banks in or near our market areas
fail, it could cause our deposit customers to lose confidence in banks and cause
them to withdraw  or  substantially  restrict  their  deposits  with us. If such
activity  reached  a high  enough  level,  it could  substantially  disrupt  our
business. There is no assurance that such disruptions, were they to occur, would
not materially and adversely affect our results of operations or earnings.

         Current market developments may adversely affect our industry, business
and results of operations.

         Dramatic  declines  in the housing  market  during the prior two years,
with falling home prices and  increasing  foreclosures  and  unemployment,  have
resulted in significant  write-downs of asset values by financial  institutions,
including  government-sponsored  entities and major  commercial  and  investment
banks. These write-downs,  initially of mortgage-backed securities but spreading
to credit default swaps,  other derivative  securities,  and mortgage loans have
caused many financial  institutions  to seek additional  capital,  to merge with
larger and stronger institutions and, in some cases, to fail. Reflecting concern
about the  stability  of the  financial  markets  generally  and the strength of
counterparties,  many lenders and institutional  investors have reduced,  and in
some cases,  ceased to provide  funding to borrowers,  including other financial
institutions.  The resulting lack of available credit, lack of confidence in the
financial  sector,  increased  volatility in the  financial  markets and reduced
business activity could materially and adversely, directly or indirectly, affect
our business, financial condition and results of operations.

         Our growth  strategy or regulatory  requirements  could require  future
increases in capital that we may not be able to accomplish.

         We are required by banking  regulators  to maintain  various  ratios of
capital to assets.  As our assets grow we expect our  capital  ratios to decline
unless we can increase our earnings or raise sufficient new capital to keep pace
with asset growth.  Our ability to raise  additional  capital,  if needed,  will
depend,  among other things,  on conditions in the capital markets at that time,
which are outside our control,  and on our financial  condition and performance.
If we are unable to limit a capital ratio decline by increasing our capital,  we
will have to  restrict  our asset  growth as we approach  the  minimum  required
capital to asset ratios.

         We may be unable to successfully manage our future growth.

         Our future  profitability  will depend in part on our ability to manage
growth  successfully.  Our ability to manage growth  successfully will depend on
our  ability to  maintain  cost  controls  and asset  quality  while  attracting
additional loans and deposits, as well as on factors beyond our control, such as
economic conditions and interest rate trends. If we grow too quickly and are not
able to control  costs and  maintain  asset  quality,  growth  could  materially
adversely affect our financial performance.

         We depend on the services of a number of key  personnel,  and a loss of
any of those  personnel  could  disrupt  our  operations  and  result in reduced
revenues.

                                       11
<PAGE>

         We are a relationship-driven  organization.  Our growth and development
to date have  depended  in large part on the  efforts  of our senior  management
team.  These senior  officers  have primary  contact with our  customers and are
extremely important in maintaining personalized  relationships with our customer
base,  which are key aspects of our business  strategy,  and in  increasing  our
market  presence.  The  unexpected  loss of services of one or more of these key
employees  could have a material  adverse  effect on our operations and possibly
result in  reduced  revenues  if we were  unable to find  suitable  replacements
promptly.

         If our loan customers do not pay us as they have  contracted to, we may
experience losses.

         Our principal  revenue  producing  business is making  loans.  When our
customers  do not repay  loans,  we suffer  losses.  Even  though we maintain an
allowance  for loan losses,  the amount of the  allowance may not be adequate to
cover the losses we  experience.  We attempt to mitigate this risk by a thorough
review of the  creditworthiness of loan customers.  Nevertheless,  there is risk
that  our  credit  evaluations  will  prove  to be  inaccurate  due  to  changed
circumstances or otherwise.

         Our business is  concentrated  in the Upstate  area of South  Carolina,
and, as has been the case over the prior two years, a downturn in the economy of
the area,  a decline in area real estate  values or,  other events in our market
area may adversely affect our business.

         Substantially  all of our  business is located in the  Upstate  area of
South Carolina.  As a result, our financial  condition and results of operations
are  affected by changes in the Upstate  economy.  As has been the case over the
prior two years, a prolonged period of economic recession,  a general decline in
real estate  values in our market area or other adverse  economic  conditions in
the  Upstate  and South  Carolina  may  result in  decreases  in demand  for our
services,  increases  in  nonpayment  of loans  and  decreases  in the  value of
collateral  securing  loans,  which could have a material  adverse effect on our
business,  future prospects,  financial condition or results of operations.  The
longer such adverse economic conditions persist,  the greater the adverse impact
on us will be.

         We face strong  competition from larger,  more established  competitors
which may adversely affect our ability to operate profitably.

         We encounter strong competition from financial  institutions  operating
in the Upstate area of South Carolina.  In the conduct of our business,  we also
compete with credit unions,  insurance companies,  money market mutual funds and
other financial  institutions,  some of which are not subject to the same degree
of regulation as we are. Many of these  competitors have  substantially  greater
resources  and  lending  abilities  than we have  and  offer  services,  such as
investment  banking,  trust and  international  banking  services that we do not
provide.  We believe that we have been able to, and will continue to be able to,
compete  effectively with these institutions  because of our experienced bankers
and  personalized  service,  as well as through  loan  participations  and other
strategies and techniques. However, we cannot promise that we are correct in our
belief.  If we are wrong,  our ability to operate  profitably  may be negatively
affected.

         Technological  changes  affect  our  business,  and we may  have  fewer
resources than many of our competitors to invest in technological improvements.

         The   financial   services   industry   continues   to  undergo   rapid
technological  changes  with  frequent  introductions  of new  technology-driven
products and services.  In addition to enabling financial  institutions to serve
clients better, the effective use of technology may increase  efficiency and may
enable financial institutions to reduce costs. Our future success may depend, in
part,  upon our ability to use technology to provide  products and services that
provide  convenience to customers and to create  additional  efficiencies in our
operations.  We may need to make significant  additional capital  investments in
technology in the future,  and we may not be able to  effectively  implement new
technology-driven   products  and  services.   Many  of  our  competitors   have
substantially greater resources to invest in technological improvements.

         Our  profitability  and  liquidity  are affected by changes in interest
rates and economic conditions.

         Our  profitability  depends upon our net interest income,  which is the
difference between interest earned on our interest earning assets, such as loans
and investment securities, and interest expense on interest bearing liabilities,
such as deposits and borrowings.  Our net interest income is adversely  affected
when market  interest rates change such that the interest we pay on deposits and
borrowings  increases  faster than the interest earned on loans and investments,
or,  conversely,  when the interest  earned on loans and  investments  decreases
faster than the interest we pay on deposits and borrowings. Interest

                                       12

<PAGE>

rates,  and  consequently  our results of  operations,  are  affected by general
economic  conditions  (domestic  and foreign) and fiscal and monetary  policies.
Monetary and fiscal  policies may  materially  affect the level and direction of
interest  rates.  Beginning in June 2004 through June 2006, the Federal  Reserve
raised rates 17 times for a total increase of 4.25%. Increases in interest rates
generally  decrease the market values of interest earning  investments and loans
held and therefore may  adversely  affect our liquidity and earnings.  Increased
interest rates also generally  affect the volume of mortgage loan  originations,
the resale value of mortgage  loans  originated  for resale,  and the ability of
borrowers to perform  under  existing  loans of all types.  Since  September 18,
2007, the Federal  Reserve has decreased  interest rates  significantly  to near
zero percent in 2009.  Decreases in interest  rates  generally have the opposite
effect on market values of interest-bearing  assets, the volume of mortgage loan
originations,  the resale value of mortgage loans originated for resale, and the
ability of  borrowers  to  perform  under  existing  loans of all types from the
effect of increases in interests rates.

                        Risks Related to Our Common Stock

         Our  common  stock has a  limited  trading  market,  which may make the
prompt execution of sale transactions difficult.

         Although  our  common  stock  may be  traded  from  time  to time on an
individual  basis or on the OTCBB,  no active  trading  market has developed and
none may develop in the  foreseeable  future.  Our common stock is not traded on
any exchange. Accordingly, if you wish to sell shares you may experience a delay
or have to sell them at a lower price in order to sell them promptly, if at all.

         We may issue additional securities, which could affect the market price
of our common stock and dilute your ownership.

         We may issue  additional  securities to raise  additional  capital,  to
support growth, or to make acquisitions. Sales of a substantial number of shares
of our common  stock,  or the  perception  by the market  that those sales could
occur, could cause the market price of our common stock to decline or could make
it more difficult for us to raise capital through the sale of common stock or to
use our common stock in future acquisitions.

         We do not plan to pay cash dividends in the foreseeable future.

         We have never paid cash dividends and do not plan to pay cash dividends
in the  foreseeable  future.  We plan to use the funds that might  otherwise  be
available to pay dividends to expand our business and increase our capital.

         Declaration  and payment of dividends are within the  discretion of our
board of directors.  Our bank will be our most likely source of funds with which
to pay cash dividends. Our bank's declaration and payment of future dividends to
us are within the discretion of the bank's board of directors, and are dependent
upon its earnings,  financial condition,  its need to retain earnings for use in
the business and any other pertinent factors. The bank's payment of dividends is
also subject to various regulatory requirements.

         Provisions in our articles of incorporation  and South Carolina law may
discourage  or prevent  takeover  attempts,  and these  provisions  may have the
effect of reducing the market price for our stock.

         Our articles of incorporation  include several provisions that may have
the  effect  of  discouraging  or  preventing  hostile  takeover  attempts,  and
therefore  of  making  the  removal  of  incumbent  management  difficult.   The
provisions  include  staggered terms for our board of directors and requirements
that make it difficult to remove our directors. In addition,  South Carolina law
contains several provisions that may make it more difficult for a third party to
acquire  control of us without the approval of our board of  directors,  and may
make it more  difficult or expensive  for a third party to acquire a majority of
our outstanding  common stock. To the extent that these provisions are effective
in discouraging  or preventing  takeover  attempts,  they may tend to reduce the
market price for our stock.

         Our directors have significant voting power.

         Our present directors  beneficially own over 40% of our stock.  Because
they own over 33 1/3%, if they vote  together,  they will be able to prevent any
merger, consolidation,  share exchange, sale of substantial assets, dissolution,
removal of directors or amendment to the articles of  incorporation  they do not
want.

         Our  common  stock  is  not  insured,  so you  could  lose  your  total
investment.

         Our  common  stock is not a  deposit  or  savings  account,  and is not
insured by the Federal  Deposit  Insurance  Corporation or any other  government
agency. Should our business fail you could lose your total investment.

                                       13
<PAGE>

                          Risks Related to Our Industry

         We are  subject  to  governmental  regulation  which  could  change and
increase our cost of doing business or have an adverse affect on our business.

         We  operate  in  a  highly  regulated   industry  and  are  subject  to
examination,  supervision  and  comprehensive  regulation by various federal and
state agencies. Our compliance with the requirements of these agencies is costly
and may limit our  growth and  restrict  certain  of our  activities,  including
payment of dividends, mergers and acquisitions,  investments, loans and interest
rates charged,  and locations of offices.  We are also subject to capitalization
guidelines  established  by federal  authorities  and our  failure to meet those
guidelines  could  result,  in an extreme  case,  in our bank's  being placed in
receivership.  We are  also  subject  to some  of the  extensive  and  expensive
requirements  imposed on public companies by the  Sarbanes-Oxley Act of 2002 and
related regulations.

         Various  laws,  including  the Federal  Deposit  Insurance  Act and the
Emergency Economic Stability Act of 2008 ("EESA"),  and related  regulations are
structured  to  spread  the  governmental  costs of  problems  in the  financial
industry  broadly over the financial  industry in order to prevent the taxpayers
from having to pay such costs.  As a result,  assessments by the FDIC to pay for
deposit  insurance  have  increased,  and  will  likely  continue  to  increase,
substantially,  and the total our bank will be  required  to pay could  increase
enough to  materially  affect our income and our ability to operate  profitably.
Additionally,  EESA  contains  a  provision  for the  financial  industry  to be
required to absorb,  in an as yet undetermined  fashion,  any losses suffered by
the  government on account of its acquiring  troubled  assets under the Troubled
Assets Relief Program of EESA.

         The laws and  regulations  applicable  to the  banking  industry  could
change at any time,  and we cannot  predict  the impact of these  changes on our
business or profitability.  Because  government  regulation  greatly affects the
business  and  financial  results  of all  commercial  banks  and  bank  holding
companies,  our cost of compliance could adversely affect our ability to operate
profitably.

         We are  susceptible  to changes in monetary  policy and other  economic
factors which may adversely affect our ability to operate profitably.

         Changes in governmental,  economic and monetary policies may affect the
ability of our bank to attract  deposits  and make loans.  The rates of interest
payable  on  deposits  and  chargeable  on loans are  affected  by  governmental
regulation  and fiscal policy as well as by national,  state and local  economic
conditions.  All of these  matters  are  outside of our  control  and affect our
ability to operate profitably.

Item 1B. Unresolved Staff Comments.

        Not Applicable.

Item 2.  Properties

         The  Bank  owns in fee  simple  with no  major  encumbrances,  the real
property  where its  corporate  offices and banking  offices are located at 3685
Blue Ridge  Boulevard,  Walhalla,  South  Carolina;  449  Highway  123 Bypass in
Seneca, South Carolina;  1600 Sandifer Boulevard in Seneca, South Carolina; 4002
Clemson  Boulevard in Anderson,  South Carolina;  2007 East Greenville Street in
Anderson,  South Carolina; 208 East Main Street in Williamston,  South Carolina;
and 1101 East Main Street in Westminster, South Carolina. The Westminster branch
is currently  operating in a modular  facility.  Management of the Bank believes
the Bank's facilities are suitable and adequate for the Company's needs.

         The Company also holds 15 properties acquired through foreclosure or in
settlement of loans. All of the properties are being marketed for sale.

                                       14
<PAGE>
         In 2007, the Company purchased real property near  Powdersville,  South
Carolina,  to be used for future  expansion.  The Company has not  established a
budget or a schedule for construction on the property.

Item 3.  Legal Proceedings

         The Bank is from  time to time a party  to  various  legal  proceedings
arising in the ordinary  course of business,  but  management of the Bank is not
aware  of  any  pending  or  threatened   litigation  or  unasserted  claims  or
assessments  that are  expected  to  result in  losses,  if any,  that  would be
material to the Bank's business and operations.

Item 4.  (Removed and Reserved)

                                     PART II

         The portions of the 2009 Annual Report to Shareholders  incorporated by
reference into this Form 10-K are set forth in Exhibit 13 hereto.

Item 5.  Market for Registrant's Common Equity,  Related Stockholder Matters and
         Issuer Purchases of Equity Securities

         The  information  set forth under the caption  "Market for Common Stock
and Dividends" and in Note I to the Company's  Consolidated Financial Statements
under the caption "Restrictions on Subsidiary  Dividends,  Loans or Advances" in
the Company's Annual Report to Shareholders for the year ended December 31, 2009
(the "2009 Annual Report") is incorporated herein by reference.  The information
set  forth in Part I, Item 1 of this Form 10-K  under  the  caption  "Effect  of
Government  Regulation -- Payment of Dividends" is also  incorporated  herein by
reference.

         The information  required by Item 201(d) of Regulation S-K is set forth
in Item 12 of this Form 10-K.

         The  Company  did not sell any  equity  securities  during  the  period
covered by this  report that were not  registered  under the  Securities  Act of
1933.

Issuer Purchases of Equity Securities
<TABLE>
<CAPTION>
                                        (a) Total Number         (b) Average       (c) Total Number of         Maximum Number
                                           of Shares              Price Paid       Shares Purchased as    of Shares that May yet be
                Period                     Purchased              Per Share    Part of Publicly Announced   Purchased Under the
                                                                                 Plans or Programs            Plans or Programs
<S>                                      <C>                      <C>              <C>                            <C>
10/1/09-10/31/09 .....................   7,490 (1)                $10.68           -                              -
11/1/09-11/30/09 .....................       -                         -           -                              -
12/1/09-12/31/09 .....................       -                         -           -                              -
                                         -----                     -----

        Total .......................    7,490                     10.68           -                              -
</TABLE>
(1)  7,490 shares were purchased from employees of the Company who had exercised
     options in the previous month for the exercise price.

Item 6. Selected Financial Data

         The information set forth under the caption "Financial  Summary" in the
2009 Annual Report is incorporated herein by reference.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

         The  information set forth under the caption  "Management's  Discussion
and Analysis of Financial Condition and Results of Operatons" in the 2009 Annual
Report is incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.

         Not Applicable

Item 8.  Financial Statements and Supplementary Data

         The Consolidated  Financial  Statements,  including Notes thereto,  and
Report of Independent  Registered Public  Accounting Firm thereon,  set forth in
the 2009 Annual Report are incorporated herein by reference.

Item 9.   Changes  In and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure

          None.

Item 9A(T).  Controls and Procedures.

                                       15
<PAGE>

Effectiveness of Disclosure Controls and Procedures

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

Management's Report on Internal Control Over Financial Reporting

         The report set forth under the caption "Management's Report on Internal
Control  Over  Financial  Reporting"  set  forth in the 2009  Annual  Report  is
incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

         The  Company  is  continually  seeking to improve  the  efficiency  and
effectiveness  of its operations and of its internal  controls.  This results in
modifications to its processes throughout the Company.  However,  there has been
no change in the Company's internal control over financial  reporting during the
most recent fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.

Item 9B.  Other Information.

         No  information  was required to be disclosed in a Form 8-K during the
fourth quarter of 2009 that was not so disclosed.

                                    PART III

Item 10. Directors, Executive Officers and Corporate Governance.

         The  information  set  forth  under  the  captions  "Management  of the
Company" and "Section 16(a) Beneficial  Ownership  Reporting  Compliance" in the
Proxy  Statement  to be used in  conjunction  with the 2010  Annual  Meeting  of
Shareholders (the "Proxy Statement"), which will be filed within 120 days of the
Corporation's fiscal year end, is incorporated herein by reference.

         Code of Ethics

         The  Company  has  adopted a code of ethics  (as  defined  by 17 C.F.R.
229.406) that applies to its principal executive officer and principal financial
officer.  The Company will provide a copy of the code of ethics, free of charge,
to any person upon written request to Benjamin L. Hiott,  Senior Vice President,
Community First Bancorporation,  449 Highway 123 Bypass,  Seneca, South Carolina
29678.

         Audit Committee

         The Company  has an Audit  Committee  established  in  accordance  with
Section  3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee
is responsible for seeing that audits of the Company's financial  statements are
conducted annually. An independent registered public accounting firm is employed
for that  purpose by the Board of  Directors  upon  recommendation  of the Audit
Committee.  Reports on these audits are reviewed by the  Committee  upon receipt
and a  report  thereon  is made to the  Board  at its next  meeting.  The  Audit
Committee is comprised of Messrs. Edwards, Hamrick, Thrift and Winchester,  each
of whom is independent as defined in the Nasdaq Rules.  The Audit Committee does
not have a written charter.

         Audit Committee Financial Expert

         The Company's  board of directors has determined  that the Company does
not have an "audit committee  financial expert," as that term is defined by Item
407(d)(5)  of  Regulation  S-K   promulgated  by  the  Securities  and  Exchange
Commission,  serving on its audit committee.  The Company's audit committee is a
committee of directors who are  independent  of the Company and its  management.
After reviewing the experience and training of all of the Company's  independent
directors,  the board of directors has concluded  that no  independent  director
meets the SEC's very demanding definition.  Therefore,  it would be necessary to
find a qualified  individual  willing to serve as both a director  and member of
the audit committee and have that person elected by the shareholders in order to
have an "audit  committee  financial  expert"  serving  on the  Company's  audit
committee.  The  Company's  audit  committee  is,  however,  authorized  to  use
consultants  to provide  financial  accounting  expertise in any instance  where
members of the committee  believe such assistance would be useful.  Accordingly,
the Company does not believe that it needs to have an "audit committee financial
expert" on its audit committee.

Item 11.  Executive Compensation

         The information set forth under the captions "Management  Compensation"
and "Compensation of Directors" in the Proxy Statement is incorporated herein by
referenced.


                                       16
<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters

         The  information  set forth under the caption  "Security  Ownership  of
Certain Beneficial Owners and Management" in the Proxy Statement is incorporated
herein by reference.

Equity Compensation Plan Information

         The following  table sets forth  aggregated  information as of December
31, 2009 about all of the Company's  compensation  plans  (including  individual
compensation  arrangements)  under which  equity  securities  of the Company are
authorized for issuance:

<TABLE>
<CAPTION>
Plan category                   Number of securities         Weighted-average             Number of securities
                                to be issued upon            exercise price of            remaining available
                                exercise of                  outstanding options,         for future issuance
                                outstanding options,         warrants and rights          under equity
                                warrants and rights                                       compensation plans
                                                                                          (excluding securities
                                                                                          reflected in column(a))
                                (a)(1)                       (b)                          (c)(2)
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                                  <C>                           <C>                          <C>
Equity compensation
plans approved by
security holders                     364,011                       11.82                       -0-

Equity compensation
plans not approved
by security holders                      -0-                         -0-                       -0-
Total
</TABLE>

(1)  These  include   shares  that  may  be  issued  upon  exercise  of  options
     outstanding at December 31, 2009 under the 1998 Stock Option Plan (see note
     2 below). The Company's 1989 Stock Option Plan previously expired,  and all
     remaining  options  thereunder  expired in 2009. No further  options may be
     issued or exercised under the 1989 Plan.
(2)  The 1998 Plan  terminated  March 19, 2008  according  to its terms,  and no
     further  options  may  be  issued  pursuant  to  the  1998  Plan.   Options
     outstanding  under the 1998 Plan may  continue  to be  exercised  until the
     earlier  of their  termination  dates  (as set  forth in  individual  grant
     agreements) or ten years from the date of grant.

Item 13.  Certain   Relationships   and  Related   Transactions,   and  Director
          Independence

         The information set forth under the captions "Certain Relationships and
Related  Transactions" and "Governance Matters -- Director  Independence" in the
Proxy  Statement is incorporated  herein by reference.  The members of our Audit
and  Compensation  Committees are all independent as defined in the Nasdaq Stock
Market,  Inc.  Marketplace  Rules.  Our entire Board of Directors  serves as our
Nominating  Committee.  Frederick  D.  Shepherd,  Jr., our  President  and Chief
Executive  Officer, is the only  member  of our  Board of  Directors  who is not
independent as defined by such rules.

                                    PART IV

Item 14.  Principal Accountant Fees and Services

         The  information  set forth under the caption  "Independent  Registered
Public  Accounting  Firm" in the  Proxy  Statement  is  incorporated  herein  by
reference.



                                       17
<PAGE>

Item 15.  Exhibits, Financial Statement Schedules

(a)(1) and (2)  Financial Statements and Financial Schedules

     -    Report of Independent Registered Public Accounting Firm.
     -    Consolidated Balance Sheets - December 31, 2009 and 2008
     -    Consolidated  Statements  of Income - Years ended  December  31, 2009,
          2008 and 2007
     -    Consolidated  Statements  of Changes in  Shareholders'  Equity - Years
          ended December 31, 2009, 2008 and 2007
     -    Consolidated Statements of Cash Flows - Years ended December 31, 2009,
          2008 and 2007
     -    Notes to Consolidated Financial Statements


(3) Exhibit No.(from              Description
    item 601 of
    Regulation S-K)

         3.1                      Articles   of   Incorporation,    as   amended
                                  (Incorporated   by  reference  to  the  Annual
                                  Report  on  Form  10-KSB  for the  year  ended
                                  December  31, 1998, and Current Report on Form
                                  8-K, filed February 9, 2009.)

         3.2                      By-laws  (Incorporated  by  reference  to  the
                                  Annual  Report  on Form  10-KSB  for the  year
                                  ended December 31, 1997 (the "1997 10-KSB"))

         4                        Specimen Stock certificate (Incorporated by
                                  reference to the 1997 10-KSB)

         10.1                     Community First Bank 1989 Incentive
                                  Stock Option Plan (Incorporated by reference
                                  to the 1997 10-KSB)

         10.2                     Community First Bank Incentive Stock
                                  Agreement with Frederick D.Shepherd, Jr.
                                  (Incorporated by reference to the 1997 10-KSB)

         10.3                     Community First Bancorporation 1998 Stock
                                  Option Plan (Incorporated by reference to
                                  Proxy Statement filed in connection with the
                                  1998 Annual Meeting of Shareholders)

         10.4                     Employment   Agreement  between  the  Company,
                                  Community   First   Bank  and   Frederick   D.
                                  Shepherd,     Jr.,    dated    July   31, 2007
                                  (Incorporated  by  reference to Report on Form
                                  8-K filed August 6, 2007)

         10.5                     Salary  Continuation   Agreement  between  the
                                  Company and Frederick D. Shepherd,  Jr., dated
                                  July 31, 2007  (Incorporated  by  reference to
                                  Report on Form 8-K filed August 6, 2007)

         13                       Portions of the Annual Report to Shareholders
                                  for the Year Ended December 31, 2009

         21                       Subsidiaries of the registrant

         23                       Consent of J. W. Hunt & Company, L.L.P.

         31                       Rule 13a-14(a)/15d-14(a) Certifications

         32                       18 U.S.C. Section 1350 Certifications


                                       18
<PAGE>

SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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.

                              COMMUNITY FIRST BANCORPORATION

                                   s/Frederick D. Shepherd, Jr.
Date: March 30, 2010            By:-------------------------------------------
                                   Frederick D. Shepherd, Jr.
                                   Its President

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                                        Capacity                                         Date

<S>                                              <C>                                              <C>

-------------------------------                  Vice Chairman and Director                       March __, 2010
(Larry S. Bowman)


-------------------------------                  Director and Secretary                           March __, 2010
(William M. Brown)

s/Robert H. Edwards
-------------------------------                  Director                                         March 30, 2010
(Robert H. Edwards)

s/Blake L. Griffith
-------------------------------                  Director                                         March 30, 2010
(Blake L. Griffith)

s/John R. Hamrick
-------------------------------                  Director                                         March 30, 2010
(John R. Hamrick)


-------------------------------                  Chairman and Director                            March __, 2010
(James E. McCoy)

s/Frederick D. Shepherd, Jr.
-------------------------------                  Director, President, Chief                       March 30, 2010
(Frederick D. Shepherd, Jr.)                     Executive Officer, Treasurer and
                                                 Principal Financial Officer

s/Gary V. Thrift
-------------------------------                  Director                                         March 30, 2010
(Gary V. Thrift)

s/James E. Turner
-------------------------------                  Director                                         March 30, 2010
(James E. Turner)

s/Charles L. Winchester
-------------------------------                  Director                                         March 30, 2010
(Charles L. Winchester)
</TABLE>


                                       19
<PAGE>

                                  EXHIBIT INDEX


         3.1                      Articles   of   Incorporation,    as   amended
                                  (Incorporated   by  reference  to  the  Annual
                                  Report  on  Form  10-KSB  for the  year  ended
                                  December  31, 1998, and Current Report on Form
                                  8-K, filed February 9, 2009.)

         3.2                      By-laws  (Incorporated  by  reference  to  the
                                  Annual  Report  on Form  10-KSB  for the  year
                                  ended December 31, 1997 (the "1997 10-KSB"))

         4                        Specimen Stock certificate (Incorporated by
                                  reference to the 1997 10-KSB)

         10.1                     Community First Bank 1989 Incentive
                                  Stock Option Plan (Incorporated by reference
                                  to the 1997 10-KSB)

         10.2                     Community First Bank Incentive Stock
                                  Agreement with Frederick D.Shepherd, Jr.
                                  (Incorporated by reference to the 1997 10-KSB)

         10.3                     Community First Bancorporation 1998 Stock
                                  Option Plan (Incorporated by reference to
                                  Proxy Statement filed in connection with the
                                  1998 Annual Meeting of Shareholders)

         10.4                     Employment   Agreement  between  the  Company,
                                  Community   First   Bank  and   Frederick   D.
                                  Shepherd,     Jr.,    dated    July   31, 2007
                                  (Incorporated  by  reference to Report on Form
                                  8-K filed August 6, 2007)

         10.5                     Salary  Continuation   Agreement  between  the
                                  Company and Frederick D. Shepherd,  Jr., dated
                                  July 31, 2007  (Incorporated  by  reference to
                                  Report on Form 8-K filed August 6, 2007)

         13                       Portions of the Annual Report to Shareholders
                                  for the Year Ended December 31, 2009

         21                       Subsidiaries of the registrant

         23                       Consent of J. W. Hunt & Company, L.L.P.

         31                       Rule 13a-14(a)/15d-14(a) Certifications

         32                       18 U.S.C. Section 1350 Certifications


                                       20