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

                                   FORM 10-QSB

(Mark One)

[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

     FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     FOR THE TRANSITION PERIOD FROM _________ TO _________


                         Commission File Number 0-50322


                          COMMUNITY FIRST BANCORP, INC.
--------------------------------------------------------------------------------
        (Exact name of Small Business Issuer as specified in its Charter)


             MARYLAND                                           36-4526348
-------------------------------                              -------------------
(State or other jurisdiction of                                (IRS Employer
 incorporation or organization)                              Identification No.)


              2420 NORTH MAIN STREET, MADISONVILLE, KENTUCKY 42431
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (270) 326-3500
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


                                 NOT APPLICABLE
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


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

     As of September  30, 2004,  there were 277,725  shares of the  Registrant's
common stock, par value $.01 per share, outstanding.

         Transitional Small Business Issuer Disclosure Format (check one):
        Yes       No  X
            ---      ---

<PAGE>

                          COMMUNITY FIRST BANCORP, INC.

                             MADISONVILLE, KENTUCKY

                                      INDEX

                                                                            PAGE
                                                                            ----

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets as of September 30, 2004
             (unaudited) and December 31, 2003                                3
         CondensedConsolidated  Statements of  Operations - (Unaudited)
             for the three and nine months ended September 30, 2004
             and 2003                                                         4
         Condensed Consolidated Statements of Cash Flows - (Unaudited)
             for the nine months ended September 30, 2004 and 2003            5
         CondensedConsolidated  Statements  of Changes in  Stockholders'
              Equity for the nine months ended September 30, 2004
              and 2003                                                        7
         Notes to Condensed Consolidated Financial Statements
              (Unaudited)                                                     8

Item 2.  Management's Discussion and Analysis of Financial                   11
                  Condition and Results of Operations

Item 3.  Controls and Procedures                                             17

PART II. OTHER INFORMATION

Item 6.  Exhibits                                                            18

Signatures                                                                   19

                                       2
<PAGE>

                          COMMUNITY FIRST BANCORP, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                          SEPTEMBER 30,           DECEMBER 31,
                                                                              2004                    2003
                                                                          -----------             -----------
                                                                              (UNAUDITED)
<S>                                                                       <C>                     <C>
                                 ASSETS
Cash and cash equivalents:
    Cash and due from banks                                               $   437,368             $ 1,068,146
    Interest-bearing demand deposits                                        1,321,804                  15,916
    Interest-bearing time deposits                                              --                     25,000
                                                                          -----------             -----------
        Total cash and cash equivalents                                     1,759,172               1,109,062

Securities, held-to-maturity (market values of
   $107,806 and $1,535,160 at September 30,
   2004 and December 31, 2003, respectively)                                  100,815               1,424,067
Securities, available-for-sale, at fair value                               2,227,188               1,975,718
Loans, net of the allowance for loan loss of
  $270,081 and $180,955 at September 30, 2004
  and December 31, 2003, respectively                                      46,714,257              35,066,142
Premises and equipment, net                                                 2,555,638               1,952,549
Foreclosed real estate                                                         15,000                  --
Federal Home Loan Bank (FHLB) stock                                           679,800                 659,600
Interest receivable                                                           235,139                 159,150
Deferred income taxes                                                         388,638                 127,677
Other assets                                                                   83,495                  67,499
                                                                          -----------             -----------
        Total assets                                                      $54,759,142             $42,541,464
                                                                          ===========             ===========

                  LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Deposits                                                              $41,349,502             $33,171,526
    FHLB advances                                                           9,500,000               5,000,000
    Interest payable and other liabilities                                    216,613                 161,171
                                                                          -----------             -----------
        Total liabilities                                                  51,066,115              38,332,697
                                                                          -----------             -----------
Stockholders' equity:
    Preferred stock, $.01 par value;
      authorized 1,000,000 shares                                              --                      --
    Common stock, $.01 par value: authorized,
      5,000,000 shares; issued and outstanding
      277,725 at September 30, 2004 and
      December 31, 2003                                                         2,777                   2,777
    Additional paid-in capital                                              2,457,429               2,466,428
    Retained earnings - substantially
      restricted                                                            1,254,215               1,763,045
    Accumulated other comprehensive income                                    (21,394)                (23,483)
                                                                          -----------             -----------
        Total stockholders' equity                                          3,693,027               4,208,767
                                                                          -----------             -----------
        Total liabilities and stockholders' equity
                                                                          $54,759,142             $42,541,464
                                                                          ===========             ===========
</TABLE>

            See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                          COMMUNITY FIRST BANCORP, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED             NINE MONTHS ENDED
                                         SEPTEMBER 30,                 SEPTEMBER 30,
                                   --------------------------   --------------------------
                                       2004          2003          2004           2003
                                   -----------    -----------   -----------    -----------
<S>                                <C>            <C>           <C>            <C>
Interest and dividend income:
  Loans                            $   674,778    $   524,321   $ 1,840,084    $ 1,513,665
  Investment securities                 14,165         31,517        64,545         85,757
  Dividend on FHLB Stock                 6,624          6,519        19,744         19,159
                                   -----------    -----------   -----------    -----------
      Total interest and
       dividend income                 695,567        562,357      1,924,373     1,618,581
                                   -----------    -----------   -----------    -----------

Interest expense:
  Deposits                             241,193        206,717       688,963        614,939
  FHLB advances                         36,907          2,943        69,157          7,673
                                   -----------    -----------   -----------    -----------
      Total interest expense           278,100        209,660       758,120        622,612
                                   -----------    -----------   -----------    -----------

      Net interest income              417,467        352,697     1,166,253        995,969

  Provision for loan losses             32,500         18,000       101,500         50,000
                                   -----------    -----------   -----------    -----------
      Net interest income
        after provision for
          loan losses                  384,967        334,697     1,064,753        945,969
                                   -----------    -----------   -----------    -----------

Noninterest income:
  Service charges and fees              60,627         37,865       155,283        100,243
  Loss on sale of foreclosed
    assets                                  --             --           404             --
  Foreclosed real estate
    expense, net                          (450)            --        (3,215)            --
  Insurance commissions and
    premiums                               665            940         2,890          3,584
  Other income                           1,871          3,332        10,234         14,083
                                   -----------    -----------   -----------    -----------
      Total noninterest income          62,713         42,137       165,596        117,910
                                   -----------    -----------   -----------    -----------
Other expenses:
  Compensation and benefits            295,504        144,363       814,849        398,013
  Directors fees                        10,800         10,800        32,400         32,400
  Occupancy expense                     91,266         50,483       282,285        121,042
  Insurance premiums                    10,815          8,422        28,732         20,341
  Data processing                       55,389         45,989       164,926        135,230
  Advertising                           41,424         23,258       127,023         60,656
  Office supplies and postage           32,795         21,518       112,414         50,740
  Payroll and other taxes               30,055         18,112        81,557         53,696
  Professional fees                      5,961         11,572        83,770         29,027
  Expenses related to conversion
      of data processor                     --             --       110,834             --
  Other operating expenses              61,270         26,596       162,427         75,567
                                   -----------    -----------   -----------    -----------
      Total noninterest expense        635,279        361,113     2,001,217        976,712
                                   -----------    -----------   -----------    -----------
Income (loss) before income
  taxes                               (187,599)        15,721      (770,868)        87,167
Income tax expense (benefit)           (63,730)         5,933      (262,038)       (49,435)
                                   -----------    -----------   -----------    -----------
Net income (loss)                  $  (123,869)   $     9,788   $  (508,830)   $   136,602
                                   ===========    ===========   ===========    ===========
Basic earnings (loss) per share    $     (0.45)   $      0.04   $     (1.83)   $      0.49
                                   ===========    ===========   ===========    ===========
Weighted average common shares
   outstanding during the period       277,725        277,725       277,725        277,725
                                   ===========    ===========   ===========    ===========
</TABLE>

            See notes to condensed consolidated financial statements.

                                       4
<PAGE>
                          COMMUNITY FIRST BANCORP, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED
                                                                      SEPTEMBER 30
                                                             ----------------------------
                                                                2004            2003
                                                             ------------    ------------
<S>                                                          <C>             <C>
Operating Activities:
    Net income (loss)                                        $   (508,830)   $    136,602
    Adjustments to reconcile net income (loss) to net
      cash provided by operating activities:
        FHLB stock dividend                                       (20,200)        (19,000)
        Provision for loan losses                                 101,500          50,000
        Depreciation, amortization and accretion                  142,556          63,036
        Loss on sale of foreclosed assets                            --              --
        Deferred income tax benefit                              (262,038)        (50,140)
        Change in assets and liabilities:
            Other assets                                          (30,996)           --
            Accrued interest receivable and other assets          (75,989)       (101,552)
            Accrued interest payable and other liabilities         55,442         150,172

                Net cash (used)/provided by
                  operating activities                           (598,555)        229,118
                                                             ------------    ------------

Investing Activities:
    Net increase in loans                                     (11,749,615)     (6,604,585)
    Proceeds from maturities/calls of held-to-maturity
       securities                                               1,323,252         439,914
    Purchases of available-for-sale securities                   (252,570)     (2,014,098)
    Purchases of premises and equipment                          (741,378)       (772,584)
                                                             ------------    ------------

                Net cash used in investing
                  activities                                  (11,420,311)     (8,951,353)
                                                             ------------    ------------

Financing Activities:
    Net increase in deposits                                    8,177,976       4,227,953
    Payments on short-term borrowings                          (4,000,000)           --
    Proceeds from short-term borrowings                         8,500,000       2,000,000
    Net proceeds/(costs) from issuance of common stock             (9,000)      2,469,205
                                                             ------------    ------------

                Net cash provided by financing activities      12,668,976       8,697,158
                                                             ------------    ------------

Net increase (decrease) in cash and cash equivalents              650,110         (25,077)
Cash and cash equivalents, beginning of period                  1,109,062         758,126
                                                             ------------    ------------
Cash and cash equivalents, end of period                     $  1,759,172    $    733,049
                                                             ============    ============
</TABLE>
            See notes to condensed consolidated financial statements.

                                       5
<PAGE>
                          COMMUNITY FIRST BANCORP, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                  NINE MONTHS ENDED
                                                                    SEPTEMBER 30
                                                             --------------------------
                                                                2004            2003
                                                             ------------    ----------
<S>                                                          <C>              <C>
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest                                        $758,120         $622,612
                                                              ========         ========

NON-CASH TRANSACTIONS:
Loans transferred to foreclosed real estate                   $ 15,000         $   --
                                                              ========         ========
</TABLE>

            See notes to condensed consolidated financial statements.

                                       6
<PAGE>

                          COMMUNITY FIRST BANCORP, INC.
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                           COMMON STOCK             ADDITIONAL
                                                    ----------------------------    PAID-IN          RETAINED
                                                        SHARES       AMOUNT         CAPITAL          EARNINGS
                                                    ------------------------------------------------------------

<S>                                                       <C>          <C>             <C>          <C>
    BALANCE, JANUARY 1, 2003                              0            $0              $0           $1,748,866

      Comprehensive income
        Net income                                        --           --              --             $136,603
        Change in unrealized depreciation on
          available-for-sale

           Total securities, net of taxes


                  Total comprehensive income

        Issuance of stock                            277,725        2,777       2,446,428
                                                     -------       ------      ----------         ------------
    BALANCE, SEPTEMBER 30, 2003                      277,725       $2,777       2,466,428           $1,885,469
                                                     =======       ======      ==========         ============

    BALANCE, JANUARY 1, 2004                         277,725       $2,777      $2,466,428           $1,763,045

      Comprehensive income
        Net loss                                          --           --              --            $(508,830)
        Change in unrealized depreciation on
          available-for-sale securities, net of
          taxes                                           --           --              --                   --

           Total comprehensive loss

      Costs of stock issuance                                                      (9,000)
                                                     -------       ------      ----------         ----------
    BALANCE, SEPTEMBER 30, 2004                      277,725       $2,777      $2,457,428         $1,254,215
                                                     =======       ======      ==========         ==========
<CAPTION>
                                                       ACCUMULATED
                                                           OTHER
                                                      COMPREHENSIVE       COMPREHENSIVE
                                                      INCOME (LOSS)       INCOME (LOSS)         TOTAL
                                                    ---------------------------------------------------------

<S>                                                        <C>             <C>                <C>
    BALANCE, JANUARY 1, 2003                               $0                                 $1,748,866

      Comprehensive income                                                                      $136,603
        Net income                                                         $ 136,603
        Change in unrealized depreciation on
          available-for-sale

           Total securities, net of taxes              $(18,177)           $ (18,177)           $(18,177)
                                                                           ---------

                  Total comprehensive income                               $ 118,426
                                                                           =========
        Issuance of stock                                                                      2,468,205
                                                                                              ----------
    BALANCE, SEPTEMBER 30, 2003                        $(18,177)                              $4,336,497
                                                       ========                               ==========
    BALANCE, JANUARY 1, 2004                           $(23,483)                              $4,208,767

      Comprehensive income
        Net loss                                             --            $(508,830)         $ (508,830)
        Change in unrealized depreciation on
          available-for-sale securities, net of
          taxes                                           2,089                2,089               2,089
                                                                           ---------
           Total comprehensive loss                                        $(506,741)                --
                                                                           =========
      Costs of stock issuance                                                                     (9,000)
                                                       --------                               ----------
    BALANCE, SEPTEMBER 30, 2004                        $(21,394)                              $3,693,026
                                                       ========                               ==========
</TABLE>

See notes to condensed consolidated financial statements.

                                       7
<PAGE>

                          COMMUNITY FIRST BANCORP, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   COMMUNITY FIRST BANCORP, INC.

     In  March  2003,   Community  First  Bancorp,   Inc.  (the  "Company")  was
     incorporated  to facilitate  the  conversion  of Community  First Bank (the
     "Bank")  from  a  mutual   savings  bank  to  a  stock  savings  bank  (the
     "Conversion").  In connection with the Conversion,  the Company offered its
     common stock to the  depositors  and  borrowers of the Bank as of specified
     dates.  The Conversion was  consummated on June 26, 2003, at which time the
     Company  became the holding  company for the Bank and issued  shares of its
     stock to the general public.

     The Company filed a Form SB-2 with the Securities  and Exchange  Commission
     ("SEC") on April 1, 2003, which as amended,  was declared  effective by the
     SEC on May 14,  2003.  The Bank  filed a Form AC with the  Office of Thrift
     Supervision  (the  "OTS") on April 2, 2003,  which as  amended,  along with
     related offering and proxy materials, was conditionally approved by the OTS
     on May 14, 2003.  The Company also filed an  Application  H-(e)1-S with the
     OTS on April 2, 2003,  which was  conditionally  approved by the OTS on May
     14,  2003.  The members of the Bank  approved the Plan of  Conversion  at a
     special meeting held on June 23, 2003, and the subscription offering closed
     on June 17, 2003.

     On June 26, 2003, the Company became the holding  company for the Bank upon
     the consummation of the Conversion. The Conversion was accomplished through
     the sale and  issuance by the Company of 277,725  shares of common stock at
     $10 per share.  Net proceeds from the sale of common stock were $2,460,205.
     Costs  associated  with the Conversion were deducted from the proceeds from
     the sale of the common stock and totaled $317,045.

2.   BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements were
     prepared in accordance with instructions for Form 10-QSB and therefore,  do
     not include all  disclosures  necessary for a complete  presentation of the
     statements  of condition,  statements  of operations  and statement of cash
     flows in conformity with accounting  principles  generally  accepted in the
     United States of America.  However,  all adjustments (all of which are of a
     normal  recurring  nature),  which  are,  in  the  opinion  of  management,
     necessary for the fair  presentation  of the interim  financial  statements
     have been included. The condensed consolidated balance sheet of the Company
     as of  December  31,  2003 has been  derived  from  the  audited  condensed
     consolidated  balance  sheet  of  the  company  as of  that  date.  Certain
     information and note disclosures  normally included in the Company's annual
     financial  statements  prepared in accordance  with  accounting  principles
     generally  accepted in the United States of America have been  condensed or
     omitted.  These condensed  consolidated financial statements should be read
     in conjunction with the consolidated financial statements and notes thereto
     included in the Company's Form 10-KSB annual report for 2003 filed with the
     Securities  and Exchange  Commission.  The  statements  of  operations  for
     periods  presented are not necessarily  indicative of the results which may
     be expected for the entire year.

                                       8
<PAGE>

     The  unaudited  condensed  consolidated  financial  statements  include the
     accounts of the Company and the Bank for the periods  presented in 2004 and
     the accounts of the Bank for the periods  presented  in 2003.  All material
     intercompany   balances   and   transactions   have  been   eliminated   in
     consolidation.

3.   OTHER COMPREHENSIVE LOSS

     Other comprehensive loss components and related taxes were as follows:

                                                  2004         2003
                                                  ----         ----
         Unrealized loss on available-
            for-sale securities before
            tax effect                          $(3,167)      $ --
         Tax benefit                              1,077         --
                                                -------       -----
                  Other comprehensive loss      $(2,090)      $ --
                                                =======       =====

4.   EARNINGS PER SHARE

     Earnings per share has been  determined  in accordance  with  Statements of
     Financial  Accounting Standards No. 128, "Earnings per Share." Earnings per
     common  share were  computed by dividing net income by the number of shares
     of common  stock issued in the Bank's  conversion  to stock form as if such
     shares had been  outstanding  for the entire period.  Diluted  earnings per
     share is not  presented  since  the  Company  did not have any  outstanding
     common stock equivalents.

     The  following  data show the amounts used in computing  earnings per share
     (EPS).
<TABLE>
<CAPTION>

                                                         2004             2003
                                                         ----             ----
<S>                                                   <C>              <C>
Nine Months ended September 30,
  Net income (loss)                                   $(508,830)       $ 136,602
  Weighted average number of
    common shares                                       277,725          277,725
                                                      ---------        ---------
         Basic Earnings (Loss)
           per share                                  $   (1.83)       $    0.49
                                                      =========        =========

                                                         2004             2003
                                                         ----             ----
Three Months ended September 30,
  Net income (loss)                                   $(123,869)       $   9,788
  Weighted average number of
    common shares                                       277,725          277,725
                                                      ---------        ---------
         Basic Earnings (Loss)
           per share                                  $   (0.45)       $    0.04
                                                      =========        =========

</TABLE>


                                       9
<PAGE>
5.   REGULATORY CAPITAL

     The Bank's actual capital and its statutory  required capital levels are as
     follows (in thousands):
<TABLE>
<CAPTION>
                                                                    SEPTEMBER 30, 2004
                             -------------------------------------------------------------------------------
                                                               FOR CAPITAL                 TO BE WELL
                                                            ADEQUACY PURPOSES           CAPITALIZED UNDER
                                                                                        PROMPT CORRECTIVE
                                                                                        ACTION PROVISIONS
                             -------------------------   -------------------------  ------------------------
                                      ACTUAL                     REQUIRED                   REQUIRED
                             -------------------------   -------------------------  ------------------------
                                AMOUNT        %             AMOUNT        %            AMOUNT         %
                             -------------------------   -------------------------  ------------------------
<S>                               <C>           <C>      <C>            <C>          <C>             <C>
Core capital                      $3,612        6.59%    $2,191         4.00%        $3,287          6.00%
Tangible capital                   3,612        6.59%     2,191         4.00%           n/a          n/a
Total Risk based capital           3,882       12.29%     2,527         8.00%         3,159         10.00%
Tier 1 Risk based capital          3,612       11.44%        n/a         n/a          2,739          5.00%
</TABLE>

                                       10
<PAGE>

ITEM 2.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The following discussion and analysis is intended to assist in understanding the
financial condition and results of operations of the Company.

FORWARD-LOOKING STATEMENTS

When used in this  discussion  and  elsewhere in this  Quarterly  Report on Form
10-QSB,  the words or phrases  "will likely  result,"  "are  expected  to," will
continue," "is anticipated,"  "estimate,"  "project," or similar expressions are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private Securities  Litigation Reform Act of 1995. The Bank cautions readers not
to place undue reliance on any such forward-looking statements, which speak only
as of the date  made,  and  advises  readers  that  various  factors,  including
regional  and  national  economic  conditions,  substantial  changes in level of
market  interest  rates,  credit  and  other  risks of  lending  and  investment
activities,  expenses  related to the opening of the new office and  competitive
and  regulatory  factors could affect the Company's  financial  performance  and
could cause the Bank's actual  results for future  periods to differ  materially
from  those  anticipated  or  projected.  The  Company  does not  undertake  and
specifically  disclaims any obligation to update any forward-looking  statements
to reflect  occurrence of anticipated or  unanticipated  events or circumstances
after the date of such statements.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

ALLOWANCE  FOR LOAN  LOSSES.  The  Company's  condensed  consolidated  financial
statements  are prepared in  accordance  with  accounting  principles  generally
accepted in the United States and follow general  practices within the financial
services  industry.  The most significant  accounting  policies  followed by the
Company are presented in Note 1 to the consolidated  financial statements in the
Company's  Annual Report on Form 10-KSB filed with the  Securities  and Exchange
Commission.  These policies,  along with the disclosures  presented in the other
financial  statement notes and in this financial review,  provide information on
how significant  assets and  liabilities are valued in the financial  statements
and how those values are determined.  Based on the valuation techniques used and
the sensitivity of financial statement amounts to the methods,  assumptions, and
estimates underlying those amounts,  management has identified the determination
of the  allowance  for loan losses to be the  accounting  area that requires the
most  subjective  or complex  judgments,  and as such  could be most  subject to
revision as new information becomes available.

The  allowance  for loan  losses  represents  management's  estimate of probable
credit  losses  inherent in the loan  portfolio.  Determining  the amount of the
allowance for loan losses is considered a critical  accounting  estimate because
it requires  significant judgment and the use of estimates related to the amount
and timing of expected future cash flows on impaired loans,  estimated losses on
loans based on historical loss experience, and consideration of current economic
trends and conditions, all of which may be susceptible to significant change.

                                       11
<PAGE>

The loan  portfolio  also  represents  the largest  asset type on the  condensed
consolidated  balance sheet. Note 1 to the consolidated  financial statements in
the  Company's  Annual  Report on Form  10-KSB  filed  with the  Securities  and
Exchange  Commission  describes the methodology  used to determine the allowance
for loan losses,  and a discussion of the factors  driving changes in the amount
of the allowance for loan losses is included under Asset Quality below.

Loans that  exhibit  probable  or  observed  credit  weaknesses  are  subject to
individual review. Where appropriate, reserves are allocated to individual loans
based on management's estimate of the borrower's ability to repay the loan given
the  availability  of  collateral,  other sources of cash flow and legal options
available to the Company.  Included in the review of individual  loans are those
that are  impaired as provided in SFAS No. 114,  "Accounting  by  Creditors  for
Impairment  of a  Loan."  The  Company  evaluates  the  collectibility  of  both
principal and interest when assessing the need for a loss accrual. Historical or
industry  loss  rates  are  applied  to  other  loans  not  subject  to  reserve
allocations.  These  historical  or  industry  loss  rates may be  adjusted  for
significant  factors that, in management's  judgment,  reflect the impact of any
current  conditions on loss recognition.  Factors which management  considers in
the analysis include the effects of the national and local economies,  trends in
the  nature  and  volume of loans  (delinquencies,  charge-offs  and  nonaccrual
loans),  changes  in  mix,  asset  quality  trends,  risk  management  and  loan
administration,  changes in internal lending policies and credit standards,  and
examination  results  from bank  regulatory  agencies  and our  internal  credit
examiners.

An unallocated  reserve is maintained to recognize the imprecision in estimating
and measuring loss when  evaluating  reserves for  individual  loans or pools of
loans.  Reserves on individual  loans and  historical or industry loss rates are
reviewed  quarterly and adjusted as necessary based on changing  borrower and/or
collateral conditions and actual collection and charge-off experience.

The Company has not substantively  changed any aspect of its overall approach in
the determination of the allowance for loan losses.  There have been no material
changes in  assumptions  or  estimation  techniques as compared to prior periods
that impacted the determination of the current period allowance.

Based on the procedures  discussed above,  management is of the opinion that the
reserve of $270,081 was adequate, but not excessive,  to absorb estimated credit
losses associated with the loan portfolio at September 30, 2004.

DEFERRED INCOME TAXES.  We have a recorded  deferred tax asset of $388,638 as of
December 31, 2004. We evaluate this asset on a quarterly basis. To the extent we
believe it is more likely than not that it will not be utilized,  we establish a
valuation  allowance to reduce its carrying amount to the amount we expect to be
realized.  At September 30, 2004, there is no valuation  allowance  established.
The  deferred tax asset will be utilized as we become  profitable.  Prior to the
expenses  incurred with our computer  conversion and the opening of our new main
office, we had three consecutive  profitable  quarters from January 2003 through
September 2003.

                                       12
<PAGE>

COMPARISON  OF THE RESULTS OF  OPERATIONS  FOR THE THREE AND NINE MONTH  PERIODS
ENDED SEPTEMBER 30, 2004 AND 2003

NET  INCOME/LOSS.  Net loss for the three  months ended  September  30, 2004 was
$123,900  compared to net income of $9,800 for the three months ended  September
30,  2003.  Net loss for the nine months ended  September  30, 2004 was $508,832
compared to net income of $136,600 for the nine months ended September 30, 2003.
The  Company's  net loss for the three and nine months ended  September 30, 2004
reflects  expenses incurred as a result of opening a new main office, as well as
expenses  associated with a computer conversion which offset improvements in net
interest income and noninterest income.

NET INTEREST INCOME.  Net interest income increased $64,800 or 18.4% to $417,500
for the three months ended September 30, 2004 compared to $352,700 for the three
months ended September 30, 2003. Year-to-date net interest income was $1,166,300
compared to $996,000 for the nine months ended  September  30, 2003, an increase
of  $170,300  or 17.1%.  The  increase in net  interest  income  during the 2004
periods was  attributable  to a higher volume of loans.  Interest income for the
three and nine months ended  September  30, 2004 was  $695,600  and  $1,924,400,
respectively,  an increase of $133,200  and  $305,800  over the prior year.  The
increase in interest income reflects a higher volume of interest-earning  assets
and a shift in interest-earning  assets into  higher-yielding  loans. During the
nine months ended  September 30, 2004,  net loans averaged $40.6 million for the
period as compared to $29.1 million  during the first nine months of fiscal year
2003,  an increase of $11.5 million or 39.5%.  While  interest  rates  decreased
during this  period,  interest  income  increased by $305,800  primarily  due to
higher  outstanding  loan  balances.  Net interest  income also  benefited  from
reduced  deposit costs in the lower interest rate  environment as higher costing
certificates  of deposit  matured.  With  increased  deposits  of $9.0  million,
interest expense increased by $68,400 and $135,500 for the three and nine months
ended September 30, 2004. The Bank's interest rate spread decreased to 3.23% for
the nine months ended  September  30, 2004 compared to 3.48% for the nine months
ended September 30, 2003 The narrowing of the spread was primarily  attributable
to two short-term certificate of deposit promotions conducted in connection with
the opening of the new office which attracted  approximately $2.1 million in new
deposits. Net interest margin decreased to 3.43% for the 2004 period compared to
3.64% for the 2003 period.

PROVISION  FOR LOAN  LOSSES.  The  provision  for loan  losses was  $32,500  and
$101,500 for the three and nine months ended  September 30, 2004,  respectively,
compared to $18,000 and  $50,000 for the three and nine months  ended  September
30, 2003,  respectively.  The Bank makes  provisions  for loan losses in amounts
deemed  necessary to maintain the adequacy of the allowance for loan losses.  At
September 30, 2004,  the Bank's  allowance for loan losses was $270,081 or 0.57%
of the gross loan  portfolio,  compared  to  $180,955 or 0.51% of the gross loan
portfolio as of December 31, 2003. The increase in allowance for loan losses can
be attributed to the increase in commercial and consumer lending during the nine
months ended September 30, 2004.

NONINTEREST  INCOME.  Noninterest  income was $62,700 and $165,600 for the three
and nine months ended September 30, 2004, respectively,  compared to $42,100 and
$117,900 for the three and nine months ended  September 30, 2003,  respectively.
The  increase for the most recent  periods is due  primarily to increases in the
volume of non-sufficient funds fees and overdraft fees.

                                       13
<PAGE>

NONINTEREST EXPENSE. Noninterest expense was $635,300 and $361,100 for the three
months ended  September  30, 2004 and 2003,  respectively,  and  $2,001,200  and
$976,700 for the nine months ended  September  30, 2004 and 2003,  respectively.
The  increases for the three months of $274,200 or 76.0% and for the nine months
of  $1,024,500 or 104.9% were due primarily to the addition of a new main office
and expenses  incurred in the conversion of data processors.  The opening of the
new main office and its related  renovations and improvements  created increased
occupancy  expenses  of $40,800 or 80.8% to $91,300 for the three  months  ended
September 30, 2004 compared to $50,500 for the three months ended  September 30,
2003. For the nine-month period,  occupancy expense increased $161,200 or 133.2%
to $282,300.  The data processor  conversion  expenses totaling $110,800 for the
nine months ended  September  30, 2004  included  billed items from our previous
data   processor  of  $22,700  for  data  test  tapes  and  $30,700  for  online
deconversion services.  During the three months ended June 30, 2004 our previous
data processor refunded us $8,300 for overpayment of deconversion expenses. Also
included  were  items  from  our new data  processor  such as data  mapping  and
converting,   parameter  setup,  item  processing   setup,  data   communication
installation  fees,  and software  license  fees.  Computer and data  processing
expense  increased  by $9,400 or 20.4% to  $55,400  for the three  months  ended
September 30, 2004 compared to $46,000 for the three months ended  September 30,
2003 and  increased  by $29,700 or 22.0% to $164,900  for the nine months  ended
September 30, 2004 and compared to $135,200 for the nine months ended  September
30, 2003. The increase in data-processing  costs is related to the growth of the
Bank and the  increase in the number of  customers  since the opening of the new
office.  Compensation  and benefits  expense  increased by $151,100 or 104.7% to
$295,400 for the three months ended  September 30, 2004 compared to $144,400 for
the three months ended September 30, 2003 and increased by $416,800 or 104.7% to
$814,800 for the nine months ended  September  30, 2004 compared to $398,000 for
the nine months ended  September  30, 2003.  Salaries for officers  increased by
$81,800 or 168.6% to $130,300 for the three months ended  September 30, 2004 and
increased by $189,400 or 131.6% to $333,400 for the nine months ended  September
30, 2004  compared to $48,500 and  $144,000  for the three and nine months ended
September  30,  2003.  The  increase  was due to the  addition  of four new loan
officers,  two of whom also  serve as  branch  managers  for our two  locations.
Salaries for  employees  increased by $41,800 or 60.5% to $111,000 for the three
months ended  September  30, 2004 and increased by $119,000 or 70.6% to $287,400
for the nine months ended  September  30, 2004  compared to $69,100 and $168,500
for the three and nine months  ended  September  30, 2003 due to the addition of
five to six new  employees  hired to help with  staffing of the new main office.
Advertising  expenses increased $18,200 or 78.1% to $41,400 for the three months
ended  September 30, 2004 and increased  $66,400,  or 109.4% to $127,000 for the
nine months  ended  September  30, 2004  compared to $23,300 and $60,700 for the
three and nine months ended  September 30, 2003. The change was due primarily to
increased  overall  marketing  expenses,  marketing  the new main office and the
activities  associated  with its  grand  opening  on March 5,  2004,  as well as
marketing  efforts to explain our data  processor  conversion and its effects to
our customers.  Office supplies and postage expenses  increased $11,300 or 52.4%
to $32,800 for the three months ended September 30, 2004 and increased  $61,700,
or 121.6% to $112,400 for the nine months ended  September  30, 2004 compared to
$21,500 and $50,700 for the three and nine months ended  September 30, 2003. The
increases  are due primarily to the greater need for paper and supplies with the
bank's new  second  location.  Professional  fees  decreased  $5,600 or 48.5% to
$6,000 for the three months ended September 30, 2004 and increased  $54,700,  or
188.6% to $83,800  for the nine months  ended  September

                                       14
<PAGE>

30, 2004  compared  to $11,600  and $29,000 for the three and nine months  ended
September  30,  2003.  The  change was due  primarily  to  additional  legal and
accounting fees incurred in connection with SEC reporting requirements.

INCOME TAX EXPENSE.  The Company  provides for both the current and deferred tax
effects of the transactions reported in its financial statements and established
deferred tax assets and  liabilities for the temporary  differences  between the
financial  reporting  and tax bases of its assets and  liabilities.  The Company
establishes  valuation  allowances  for its net deferred tax assets unless it is
more likely than not that these net deferred tax assets will be realized.  Based
on future projected earnings,  and other factors, the Bank has not established a
valuation allowance for its net deferred tax assets.


COMPARISON OF BALANCE SHEETS AT SEPTEMBER 30, 2004 AND DECEMBER 31, 2003

The  Company's  total assets as of  September  30, 2004 were $54.8  million,  an
increase  of $12.3  million or 28.9% from  December  31,  2003's  level of $42.5
million.  The increase was due primarily to growth in the loan  portfolio,  more
specifically an increase in commercial real estate loans.  Net loans  receivable
increased by $11.6 million,  or 33.2%,  which reflected our continued  marketing
efforts.  The Company's  investment  securities  decreased by $1.1  million,  or
31.5%,  to $2.3 million at September 30, 2004 due to  maturities of  securities.
Premises  and  equipment  increased  $603,000,  or 30.9%,  primarily  due to the
opening of a new main office and the purchase of  equipment  for the new office.
The  Company's  cash and cash  equivalents  as of  September  30, 2004 were $1.8
million, an increase of $700,000 from December 31, 2003's level of $1.1 million.

Liabilities increased by $12.7 million, or 33.2%, to $51.1 million due primarily
to a $8.2  million,  or 24.7%,  increase in deposits  as the Bank  continued  to
attract  deposits  locally at favorable  rates.  The  increase in deposits  came
primarily from checking accounts and certificates of deposit.  Federal Home Loan
Bank advances  increased  $4.5 million or 90.0% to $9.5 million at September 30,
2004 from $5.0 million at December 31, 2003. The Bank has used proceeds from the
advances to help meet loan demand.

Stockholders'  equity  decreased to $3.7 million at September 30, 2004 from $4.2
million at December 31, 2003. The decrease in stockholders'  equity  principally
reflects $509,000 in losses during the period.

At September 30, 2004, the Bank was in compliance with all applicable regulatory
capital  requirements  with tangible and core capital equal to 6.59% of adjusted
total  assets  and total  risk-based  capital  equal to 12.29% of  risk-weighted
assets.

ASSET QUALITY

The following table sets forth  information  regarding the Bank's  nonperforming
assets at the dates indicated.
<TABLE>
<CAPTION>
                                                  SEPTEMBER 30,     DECEMBER 31,
                                                     2004              2003
                                                    -------          -------
<S>                                                 <C>              <C>
  Non-accrual loans                                 $ 1,000          $28,000
  Accruing loans past due 90 days or more            70,000           20,000
                                                    -------          -------

  Total non-performing loans                         71,000           48,000

Foreclosed assets                                    15,000             --
                                                    -------          -------
  Total non-performing assets                       $86,000          $48,000
                                                    =======          =======
</TABLE>

                                       15
<PAGE>

Non-accrual  loans at September 30, 2004  consisted of one loan.  Accruing loans
past due 90 days or more at September 30, 2004 consisted of eight loans.

At September  30, 2004,  there were no loans  outstanding  not  reflected in the
above table as to which known  information  about  possible  credit  problems of
borrowers  caused  management  to have serious  doubts as to the ability of such
borrowers to comply with present loan repayment terms.

An analysis of the changes in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
                                                         NINE MONTHS ENDED
                                                           SEPTEMBER 30,
                                                    ---------------------------
                                                       2004             2003
                                                    ---------         ---------
<S>                                                 <C>               <C>
Balance, beginning of period                        $ 180,955         $ 105,868
Loans charged off                                     (13,091)           (6,052)
Loan recoveries                                           717             1,461
                                                    ---------         ---------

     Net charge-offs                                  (12,374)           (4,591)

Provision for loan losses                             101,500            50,000
                                                    ---------         ---------

Balance, end of period                              $ 270,081         $ 151,277
                                                    =========         =========
</TABLE>


LIQUIDITY AND CAPITAL RESOURCES

The Company  currently  has no  operating  business  and does not have  material
funding  needs.  In the future,  the Company may require funds for dividends and
tax payments for which it will rely on dividends  and other  distributions  from
the Bank. The Bank is subject to various regulatory  restrictions on the payment
of dividends.

The Bank's  sources of funds for lending  activities and operations are deposits
from its primary market area,  advances from the FHLB of  Cincinnati,  principal
and  interest  payments on loans,  interest  received on other  investments  and
proceeds from maturing investment securities.  Its principal funding commitments
are for the  origination  of  loans,  the  payment  of  maturing  deposits,  and
principal  and  interest  payments  on  advances  from the  FHLB.  Deposits  are
considered  a  primary  source  of  funds  supporting  the  Bank's  lending  and
investment activities.

Cash and cash equivalents (cash, due from banks,  interest-bearing deposits with
banks, and federal funds sold), as of September 30, 2004,  totaled $1.76 million
compared  to $1.11  million at  December  31,  2003.  The Bank's cash flows were
provided mainly by financing activities, including $8.2 million from net deposit
increases and $4.5 million net increase in FHLB borrowings. Operating activities
used  $598,600 in cash for the nine months ended  September 30, 2004 compared to
$229,100 provided in cash for the nine months ended September 30, 2003. The Bank
used cash flows of $11.4 million for its investing  activities primarily to fund
an increase in gross loans of $11.7 million.

                                       16
<PAGE>

At September 30, 2004, the Bank had  outstanding  commitments to originate loans
totaling $1.9 million,  excluding $459,300 in unused home equity lines of credit
and $33,000 in other  lines of credit.  Additionally,  the Bank had  undisbursed
commitments on construction loans closed totaling $790,000.  Management believes
that the Bank's sources of funds are  sufficient to fund all of its  outstanding
commitments.  Certificates of deposit, which are scheduled to mature in one year
or less from September 30, 2004, totaled $15.9 million. Management believes that
a significant percentage of such deposits will remain with the Bank.

As  a  federal  savings  bank,  the  Bank  is  subject  to  regulatory   capital
requirements  of  Office  of  Thrift  Supervision  ("OTS").  In order to be well
capitalized  under OTS  regulations,  the Bank must maintain a leverage ratio of
Tier I Capital to  average  assets of at least 5% and ratios of Tier I and total
capital  to  risk-weighted  assets  of at  least  6% and  10%  respectively.  At
September  30,  2004,   the  Bank   satisfied  the  capital   requirements   for
classification as well capitalized under OTS regulations.

During the quarter ended  September 30, 2004, the Company opened a $750,000 line
of credit with The Banker's Bank of Tennessee to provide additional liquidity at
the holding company level and for future capital  contributions  for the Bank if
needed.  The line of credit  provides for an interest rate at the prime rate and
is secured by the  Company's  stock in the Bank.  No amounts  have been drawn on
this line.

ITEM 3.  CONTROLS AND PROCEDURES

The Company's  management  evaluated,  with the  participation  of the Company's
Chief Executive  Officer and Chief Financial  Officer,  the effectiveness of the
Company's  disclosure  controls  and  procedures,  as of the  end of the  period
covered by this report.  Based on that evaluation,  the Chief Executive  Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective to ensure that information  required to be disclosed by
the  Company  in the  reports  that it files or  submits  under  the  Securities
Exchange Act of 1934 is recorded, processed,  summarized and reported within the
time periods  specified in the  Securities and Exchange  Commission's  rules and
forms.

There were no changes in the Company's internal control over financial reporting
that occurred  during the  Company's  last fiscal  quarter that have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

                                       17
<PAGE>

PART II
                                OTHER INFORMATION

ITEM 6.  EXHIBITS

          The following  exhibits are either being filed with or incorporated by
          reference in this quarterly report on Form 10-QSB:

         NUMBER   DESCRIPTION
         ------   -----------
         3.1      Articles of Incorporation *
         3.2      Bylaws *
         4        Form of Common Stock Certificate *
         10.1     Employment Agreement with William M. Tandy *
         10.2     2004 Stock Option Plan **
         31.1     Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
                     Officer
         31.2     Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
                     Officer
         32       Section 1350 Certification
         _______________
         *     Incorporated by reference from the Registrant's Registration
               Statement on Form SB-2 (File No. 333-104226).
         **    Incorporated by reference from Registrant's Registration
               Statement on Form S-8 (File No. 333-116450).

                                       18
<PAGE>
                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                            COMMUNITY FIRST BANCORP, INC.


Date: November 15, 2004                     /s/ William M. Tandy
                                            ------------------------------------
                                            William M. Tandy, President
                                            (Duly Authorized Representative)


Date: November 15, 2004                     /s/ Michael D. Wortham
                                            ------------------------------------
                                            Michael D. Wortham, Vice President
                                            (Chief Financial Officer)