##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q





(Mark One)

|x | Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------

For the Quarterly Period Ended March 31, 2010

or



| ̈ | Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

For the Transition Period from  to

Commission File Number 33-76644





COMMUNITYCORP

(Exact name of registrant as specified in its charter)







|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|South Carolina                                 |  | 57-1019001                          
|(State or other jurisdiction
of incorporation) |  | (I.R.S. Employer
Identification No.)

1100 N. Jefferies Boulevard

Walterboro, SC 29488

(Address of principal executive offices, including zip code)

(843) 549-2265

(Issurers telephone number, including area code)





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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    YES   ̈    NO   ̈

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 large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  |  ̈
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    YES   ̈    NO  x

Indicate the number of shares outstanding of each of the issuers classes of common stock as of the latest practicable date:

233,003 shares of common stock, $5.00 par value, as of April 28, 2010









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COMMUNITYCORP

Index



|                                |  |                                                                                                                                            |  |       
|------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ |  | ------
|                                |  | PageNo.                                                                                                                                   
|PART I. - FINANCIAL INFORMATION |  |                                                                                                                                           
|                                |  |                                                                                                                                           
|Item 1.                         |  | Financial Statements (Unaudited)                                                                                                           |  |       
|                                |  |                                                                                                                                           
|                                |  | Condensed Consolidated Balance Sheets  March 31, 2010 and December 31, 2009                                                               |  | 3     
|                                |  |                                                                                                                                           
|                                |  | Condensed Consolidated Statements of Operations - Three months ended March 31, 2010 and 2009                                               |  | 4     
|                                |  |                                                                                                                                           
|                                |  | Condensed Consolidated Statements of Changes in Shareholders Equity and Comprehensive Income - Three months ended March 31, 2010 and
2009 |  | 5     
|                                |  |                                                                                                                                           
|                                |  | Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 2010 and 2009                                               |  | 6     
|                                |  |                                                                                                                                           
|                                |  | Notes to Condensed Consolidated Financial Statements                                                                                       |  | 7 - 13
|                                |  |                                                                                                                                           
|Item 2.                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                      |  | 14-21 
|                                |  |                                                                                                                                           
|Item 3.                         |  | Quantitative and Qualitative Disclosure About Market Risk                                                                                  |  | 21    
|                                |  |                                                                                                                                           
|Item 4.                         |  | Controls and Procedures                                                                                                                    |  | 21    
|                                | 
|PART II. - OTHER INFORMATION    |  |                                                                                                                                           
|                                |  |                                                                                                                                           
|Item 1.                         |  | Legal Proceedings                                                                                                                          |  | 22    
|                                |  |                                                                                                                                           
|Item 1A.                        |  | Risk Factors                                                                                                                               |  | 22    
|                                |  |                                                                                                                                           
|Item 2.                         |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                |  | 22    
|                                |  |                                                                                                                                           
|Item 3.                         |  | Defaults Under Senior Securities                                                                                                           |  | 22    
|                                |  |                                                                                                                                           
|Item 4.                         |  | Removed and Reserved                                                                                                                       |  | 22    
|                                |  |                                                                                                                                           
|Item 5.                         |  | Other Information                                                                                                                          |  | 22    
|                                |  |                                                                                                                                           
|Item 6.                         |  | Exhibits                                                                                                                                   |  | 22    
|                                | 
|Signatures                      |  | 23                                                                                                                                        



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COMMUNITYCORP

PART I.  Financial Information

Item 1. Financial Statements

Condensed Consolidated Balance Sheets



|                                                                                                                         |  |               |             |   |                  |   |             |  
|------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                         |  | March 31,2010 |             |   | December 31,2009 |  
|                                                                                                                         |  | (Unaudited)   |             |   | (Audited)        |  
|Assets:                                                                                                                  |  |               |             |   |                  |   |             |  
|Cash and cash equivalents:                                                                                               |  |               |             |   |                  |   |             |  
|Cash and due from banks                                                                                                  |  | $             | 12,639,293  |   |                  | $ | 14,589,266  |  
|Interest-bearing deposits with other banks                                                                               |  |               | 6,300,000   |   |                  |   | 1,075,000   |  
|Federal funds sold                                                                                                       |  |               | 2,030,000   |   |                  |   | 2,030,000   |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|Total cash and cash equivalents                                                                                          |  |               | 20,969,296  |   |                  |   | 17,694,266  |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|                                                                                                                         |  |              
|Time deposits with other banks                                                                                           |  |               | 1,500,000   |   |                  |   | 1,500,000   |  
|                                                                                                                         |  |              
|Investment securities:                                                                                                   |  |               |             |   |                  |   |             |  
|Available-for-sale                                                                                                       |  |               | 21,905,617  |   |                  |   | 24,620,177  |  
|Held-to-maturity (estimated market value of $573,126 and $572,115 at March 31, 2010 and December 31, 2009,
respectively) |  |               | 564,857     |   |                  |   | 564,821     |  
|Nonmarketable equity securities                                                                                          |  |               | 302,400     |   |                  |   | 302,300     |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|Total investment securities                                                                                              |  |               | 22,772,874  |   |                  |   | 25,487,298  |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|                                                                                                                         |  |              
|Loans receivable                                                                                                         |  |               | 115,463,662 |   |                  |   | 116,458,480 |  
|Less allowance for loan losses                                                                                           |  |               | (2,069,976  | ) |                  |   | (2,053,340  | )
|                                                                                                                         |  |               |             |   |                  |   |             |  
|Loans, net                                                                                                               |  |               | 113,393,686 |   |                  |   | 114,405,140 |  
|                                                                                                                         |  |              
|Premises, furniture & equipment, net                                                                                     |  |               | 3,046,970   |   |                  |   | 3,089,929   |  
|Accrued interest receivable                                                                                              |  |               | 981,686     |   |                  |   | 978,500     |  
|Other real estate owned                                                                                                  |  |               | 340,000     |   |                  |   | 340,000     |  
|Other assets                                                                                                             |  |               | 1,699,608   |   |                  |   | 1,897,922   |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|                                                                                                                         |  |              
|Total assets                                                                                                             |  | $             | 164,704,117 |   |                  | $ | 165,393,055 |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|                                                                                                                         |  |              
|Liabilities and Shareholders Equity:                                                                                    |  |               |             |   |                  |   |             |  
|Liabilities:                                                                                                             |  |               |             |   |                  |   |             |  
|Deposits:                                                                                                                |  |               |             |   |                  |   |             |  
|Noninterest-bearing                                                                                                      |  | $             | 13,579,145  |   |                  | $ | 14,163,321  |  
|Interest-bearing                                                                                                         |  |               | 132,456,091 |   |                  |   | 132,524,675 |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|Total deposits                                                                                                           |  |               | 146,035,236 |   |                  |   | 146,687,996 |  
|Accrued interest payable                                                                                                 |  |               | 609,906     |   |                  |   | 701,979     |  
|Other liabilities                                                                                                        |  |               | 285,772     |   |                  |   | 257,427     |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|Total liabilities                                                                                                        |  |               | 146,930,914 |   |                  |   | 147,647,402 |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|                                                                                                                         |  |              
|Shareholders Equity:                                                                                                    |  |               |             |   |                  |   |             |  
|Preferred stock, $5 par value, 3,000,000 shares authorized and unissued                                                  |  |               |            |   |                  |   |            |  
|Common stock, $5 par value, 3,000,000 shares authorized, 300,000 shares issued and outstanding                           |  |               | 1,500,000   |   |                  |   | 1,500,000   |  
|Capital surplus                                                                                                          |  |               | 1,737,924   |   |                  |   | 1,737,924   |  
|Retained earnings                                                                                                        |  |               | 18,528,502  |   |                  |   | 18,440,398  |  
|Accumulated other comprehensive income                                                                                   |  |               | 323,919     |   |                  |   | 286,072     |  
|Treasury stock (66,997 shares in 2010 and 65,697 shares in 2009)                                                         |  |               | (4,317,142  | ) |                  |   | (4,218,741  | )
|                                                                                                                         |  |               |             |   |                  |   |             |  
|Total shareholders equity                                                                                               |  |               | 17,773,203  |   |                  |   | 17,745,653  |  
|                                                                                                                         |  |               |             |   |                  |   |             |  
|                                                                                                                         |  |              
|Total liabilities and shareholders equity                                                                               |  | $             | 164,704,117 |   |                  | $ | 165,393,055 |  
|                                                                                                                         |  |               |             |   |                  |   |             |  

See notes to condensed consolidated financial statements.



3



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COMMUNITYCORP

Condensed Consolidated Statements of Operations

(Unaudited)



|                                                     |  |                              |           |      |   |           |  
|---------------------------------------------------- |  | ---------------------------- | --------- | ---- | - | --------- | -
|                                                     |  | Three Months EndedMarch 
31, |          
|                                                     |  | 2010                         |           | 2009 |  
|Interest income:                                     |  |                              |           |      |   |           |  
|Loans, including fees                                |  | $                            | 1,835,457 |      | $ | 1,986,170 |  
|Securities                                           |  |                              | 214,583   |      |   | 272,672   |  
|Other interest income                                |  |                              | 12,858    |      |   | 16,380    |  
|                                                     |  |                              |           |      |   |           |  
|Total                                                |  |                              | 2,062,898 |      |   | 2,275,222 |  
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Interest expense:                                    |  |                              |           |      |   |           |  
|Deposit accounts                                     |  |                              | 605,259   |      |   | 922,528   |  
|Other interest expense                               |  |                              | 1         |      |   | 7         |  
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                              | 605,260   |      |   | 922,535   |  
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Net interest income                                  |  |                              | 1,457,638 |      |   | 1,352,687 |  
|                                                     |  |                             
|Provision for loan losses                            |  |                              | 365,000   |      |   | 90,000    |  
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Net interest income after provision for loan losses  |  |                              | 1,092,638 |      |   | 1,262,687 |  
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Noninterest income:                                  |  |                              |           |      |   |           |  
|Service charges                                      |  |                              | 99,242    |      |   | 129,002   |  
|Impairment losses on securities available-for-sale   |  |                              |          |      |   | (250,000  | )
|Impairment losses on nonmarketable equity securities |  |                              |          |      |   | (211,935  | )
|Other income                                         |  |                              | 41,511    |      |   | 42,957    |  
|                                                     |  |                              |           |      |   |           |  
|Total                                                |  |                              | 140,753   |      |   | (289,976  | )
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Noninterest expenses:                                |  |                              |           |      |   |           |  
|Salaries and benefits                                |  |                              | 494,103   |      |   | 510,491   |  
|Net occupancy expense                                |  |                              | 62,931    |      |   | 66,496    |  
|Equipment expense                                    |  |                              | 93,380    |      |   | 89,838    |  
|Other operating expenses                             |  |                              | 302,872   |      |   | 263,767   |  
|                                                     |  |                              |           |      |   |           |  
|Total                                                |  |                              | 953,286   |      |   | 930,592   |  
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Income before taxes                                  |  |                              | 280,105   |      |   | 42,119    |  
|                                                     |  |                             
|Income tax provision                                 |  |                              | 75,000    |      |   | 61,000    |  
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Net income (loss)                                    |  | $                            | 205,105   |      | $ | (18,881   | )
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Earnings per share:                                  |  |                              |           |      |   |           |  
|                                                     |  |                             
|Weighted average common shares outstanding           |  |                              | 234,010   |      |   | 236,175   |  
|                                                     |  |                              |           |      |   |           |  
|                                                     |  |                             
|Net income (loss) per common share                   |  | $                            | .88       |      | $ | (.08      | )
|                                                     |  |                              |           |      |   |           |  

See notes to condensed consolidated financial statements.



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COMMUNITYCORP

Condensed Consolidated Statement of Shareholders Equity and Comprehensive Income

for the three months ended March 31, 2010 and 2009

(Unaudited)



|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|--------------------------------------------------------- |  | ------------ |  | -------------- | --------- | ----------------------------------------- | - | ---------------- |  | - | ------------- |  | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                          |  | Common stock |  | CapitalSurplus |           | AccumulatedOtherComprehensiveIncome(Loss) |   | RetainedEarnings |  |   | TreasuryStock |  |   | Total      |  
|                                                          |  | Shares       |  | Amount         |           |                                           |   |                  | 
|Balance, December 31, 2008                                |  | 300,000      |  | $              | 1,500,000 |                                           | $ | 1,728,328        |  | $ | 75,701        |  | $ | 18,392,614 |   |  | $ | (4,003,225 | ) |  | $ | 17,693,418 |  
|                                                          |  |              |  |                |           |                                           |  
|Cash dividends paid ($1.07 per share)                     |  |              |  |                |           |                                           |   |                  |  |   |               |  |   | (252,689   | ) |  |   |            |   |  |   | (252,689   | )
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Net income (loss) for the period                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   | (18,881    | ) |  |   |            |   |  |   | (18,881    | )
|                                                          |  |              |  |                |           |                                           |  
|Other comprehensive income, net of tax expense of $50,584 |  |              |  |                |           |                                           |   |                  |  |   | 96,037        |  |   |            |   |  |   |            |   |  |   | 96,037     |  
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Comprehensive income                                      |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   | 77,156     |  
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Purchase of treasury stock                                |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   | (129,520   | ) |  |   | (129,520   | )
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Balance, March 31, 2009                                   |  | 300,000      |  | $              | 1,500,000 |                                           | $ | 1,728,328        |  | $ | 171,738       |  | $ | 18,121,044 |   |  | $ | (4,132,745 | ) |  | $ | 17,388,365 |  
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Balance, December 31, 2009                                |  | 300,000      |  | $              | 1,500,000 |                                           | $ | 1,737,924        |  | $ | 286,072       |  | $ | 18,440,398 |   |  | $ | (4,218,741 | ) |  | $ | 17,745,653 |  
|                                                          |  |              |  |                |           |                                           |  
|Cash dividends paid ($ .50 per share)                     |  |              |  |                |           |                                           |   |                  |  |   |               |  |   | (117,001   | ) |  |   |            |   |  |   | (117,001   | )
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Net income for the period                                 |  |              |  |                |           |                                           |   |                  |  |   |               |  |   | 205,105    |   |  |   |            |   |  |   | 205,105    |  
|                                                          |  |              |  |                |           |                                           |  
|Other comprehensive income, net of tax expense of $19,934 |  |              |  |                |           |                                           |   |                  |  |   | 37,847        |  |   |            |   |  |   |            |   |  |   | 37,847     |  
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Comprehensive income                                      |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   | 242,952    |  
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Purchase of treasury stock                                |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   | (98,401    | ) |  |   | (98,401    | )
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                          |  |              |  |                |           |                                           |  
|Balance, March 31, 2010                                   |  | 300,000      |  | $              | 1,500,000 |                                           | $ | 1,737,924        |  | $ | 323,919       |  | $ | 18,528,502 |   |  | $ | (4,317,142 | ) |  | $ | 17,773,203 |  
|                                                          |  |              |  |                |           |                                           |   |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  

See notes to condensed consolidated financial statements.



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COMMUNITYCORP

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                                       |  |                              |            |   |      |   |            |  
|------------------------------------------------------------------------------------------------------ |  | ---------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                                       |  | Three Months EndedMarch 
31, |           
|                                                                                                       |  | 2010                         |            |   | 2009 |  
|Cash flows from operating activities:                                                                  |  |                              |            |   |      |   |            |  
|Net income (loss)                                                                                      |  | $                            | 205,105    |   |      | $ | (18,881    | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities:               |  |                              |            |   |      |   |            |  
|Provision for loan losses                                                                              |  |                              | 365,000    |   |      |   | 90,000     |  
|Depreciation expense                                                                                   |  |                              | 59,536     |   |      |   | 67,219     |  
|Net premium amortization of investment securities                                                      |  |                              | 18,309     |   |      |   | 16,407     |  
|Net amortization (accretion) of loan fees and costs                                                    |  |                              | 898        |   |      |   | (5,506     | )
|Impairment losses on securities available for sale                                                     |  |                              |           |   |      |   | 250,000    |  
|Impairment losses on nonmarketable equity securities                                                   |  |                              |           |   |      |   | 211,935    |  
|(Increase) decrease in accrued interest receivable                                                     |  |                              | (3,186     | ) |      |   | 53,565     |  
|Decrease in accrued interest payable                                                                   |  |                              | (92,073    | ) |      |   | (58,251    | )
|Decrease in other assets                                                                               |  |                              | 198,314    |   |      |   | 189,574    |  
|Increase (decrease) in other liabilities                                                               |  |                              | 8,411      |   |      |   | (111,622   | )
|                                                                                                       |  |                              |            |   |      |   |            |  
|Net cash provided by operating activities                                                              |  |                              | 760,314    |   |      |   | 684,440    |  
|                                                                                                       |  |                              |            |   |      |   |            |  
|                                                                                                       |  |                             
|Cash flows from investing activities:                                                                  |  |                              |            |   |      |   |            |  
|Proceeds from maturities of securities available-for-sale                                              |  |                              | 3,153,996  |   |      |   | 8,463,771  |  
|Purchases of securities available-for-sale                                                             |  |                              | (400,000   | ) |      |   | (4,624,492 | )
|Proceeds from maturities of securities held-to-maturity                                                |  |                              |           |   |      |   | 101,000    |  
|Purchases of nonmarketable equity securities                                                           |  |                              | (100       | ) |      |   | (5,900     | )
|Net (increase) decrease in loans to customers                                                          |  |                              | 645,556    |   |      |   | (2,843,073 | )
|Purchases of premises and equipment                                                                    |  |                              | (16,577    | ) |      |   | (46,252    | )
|                                                                                                       |  |                              |            |   |      |   |            |  
|Net cash by investing activities                                                                       |  |                              | 3,382,875  |   |      |   | 1,045,054  |  
|                                                                                                       |  |                              |            |   |      |   |            |  
|                                                                                                       |  |                             
|Cash flows from financing activities:                                                                  |  |                              |            |   |      |   |            |  
|Net increase (decrease) in demand deposits, interest-bearing transaction accounts and savings accounts |  |                              | (1,687,054 | ) |      |   | 1,488,981  |  
|Net increase (decrease) in time deposits                                                               |  |                              | 1,034,294  |   |      |   | (1,511,946 | )
|Cash dividends paid                                                                                    |  |                              | (117,001   | ) |      |   | (252,689   | )
|Purchase of treasury stock                                                                             |  |                              | (98,401    | ) |      |   | (129,520   | )
|                                                                                                       |  |                              |            |   |      |   |            |  
|Net cash used by financing activities                                                                  |  |                              | (868,162   | ) |      |   | (405,174   | )
|                                                                                                       |  |                              |            |   |      |   |            |  
|                                                                                                       |  |                             
|Net increase in cash and cash equivalents                                                              |  |                              | 3,275,027  |   |      |   | 1,324,320  |  
|                                                                                                       |  |                             
|Cash and cash equivalents, beginning of period                                                         |  |                              | 17,694,266 |   |      |   | 16,614,965 |  
|                                                                                                       |  |                              |            |   |      |   |            |  
|                                                                                                       |  |                             
|Cash and cash equivalents, end of period                                                               |  | $                            | 20,969,293 |   |      | $ | 17,939,285 |  
|                                                                                                       |  |                              |            |   |      |   |            |  
|                                                                                                       |  |                             
|Cash paid during the period for:                                                                       |  |                              |            |   |      |   |            |  
|                                                                                                       |  |                             
|Income taxes                                                                                           |  | $                            |           |   |      | $ | 87,700     |  
|Interest                                                                                               |  | $                            | 697,333    |   |      | $ | 980,786    |  

See notes to
condensed consolidated financial statements.



6



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##### Table of Contents

COMMUNITYCORP

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1
- BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in accordance with the requirements for
interim financial statements and, accordingly, they are condensed and omit disclosures, which would substantially duplicate those contained in the most recent annual report to shareholders. The financial statements as of March 31, 2010 and for
the interim periods ended March 31, 2010 and 2009 are unaudited and, in our opinion, include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. The results of operations for the three
months ended March 31, 2010 are not necessarily indicative of the results which may be expected for the entire calendar year. The financial information as of December 31, 2009 has been derived from the audited financial statements as of
that date. For further information, refer to the financial statements and the notes included in Communitycorps 2009 Annual Report.

NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS

The following is a summary of recent authoritative pronouncements that affect accounting, reporting, and disclosure of financial information by the
Company:

In January 2010, compensation guidance was updated to reflect the SECs views of when escrowed share arrangements are
considered to be compensatory. Historically the SEC staff has expressed the view that an escrowed share arrangement involving the release of shares to certain shareholders based on performance-related criteria is presumed to be compensatory. Facts
and circumstances may indicate that the arrangement is an incentive made to facilitate a transaction on behalf of the company if the escrowed shares will be released or canceled without regard to continued employment. In such cases, the SEC staff
generally believes that the arrangement should be recognized and measured according to its nature and reflected as a reduction of the proceeds allocated to the newly issued securities. The SEC staff believes that an escrowed share arrangement in
which the shares are automatically forfeited if employment terminates is compensation. The guidance is effective upon issuance and had no impact on the Companys financial statements.

In January 2010, fair value guidance was amended to require disclosures for significant amounts transferred in and out of Levels 1 and 2 and the reasons
for such transfers and to require that gross amounts of purchases, sales, issuances and settlements be provided in the Level 3 reconciliation. The new disclosures are effective for the Company for the current quarter and have been reflected in the
Fair Value footnote.

Guidance related to subsequent events was amended in February 2010 to remove the requirement for an SEC filer to
disclose the date through which subsequent events were evaluated. The amendments were effective upon issuance and had no significant impact on the Companys financial statements.

Consolidation guidance was amended in February 2010 to defer guidance regarding the analysis of interests in variable interest entities issued in June
2009 for entities having attributes of investment companies or that apply investment company measurement principles. Disclosure requirements provided in the June 2009 guidance were not deferred. The amendments were effective January 1, 2010 and
had no effective on the Companys financial statements.

In March 2010, guidance related to derivatives and hedging was amended to exempt
embedded credit derivative features related to the transfer of credit risk from potential bifurcation and separate accounting. Embedded features related to other types of risk and other embedded credit derivative features were not exempt from
potential bifurcation and separate accounting. The amendments will be effective for the Company on July 1, 2010 although early adoption is permitted. The Company does not expect these amendments to have any impact on the financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a
material impact on the Companys financial position, results of operations or cash flows.



7



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##### Table of Contents

COMMUNITYCORP

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 3 - COMPREHENSIVE INCOME

The components of other comprehensive income and related tax effects are as follows:



|                                                                      |  |               |          |   |                     |   |         |                  |  |   |          |  
|--------------------------------------------------------------------- |  | ------------- | -------- | - | ------------------- | - | ------- | ---------------- |  | - | -------- | -
|                                                                      |  | Pre-taxAmount |          |   | TaxExpense(Benefit) |   |         | Net-of-taxAmount | 
|For the Three Months Ended March 31, 2010:                            |  |               |          |   |                     |   |         |                  |  |   |          |  
|Unrealized gains on securities available-for-sale                     |  | $             | 57,781   |   |                     | $ | 19,934  |                  |  | $ | 37,847   |  
|Reclassification adjustment for gains (losses) realized in net income |  |               |         |   |                     |   |        |                  |  |   |         |  
|                                                                      |  |               |          |   |                     |   |         |                  |  |   |          |  
|                                                                      |  |               |         
|Other comprehensive income - net unrealized gains on securities       |  | $             | 57,781   |   |                     | $ | 19,934  |                  |  | $ | 37,847   |  
|                                                                      |  |               |          |   |                     |   |         |                  |  |   |          |  
|                                                                      |  |               |         
|For the Three Months Ended March 31, 2009:                            |  |               |          |   |                     |   |         |                  |  |   |          |  
|Unrealized gains on securities available-for-sale                     |  | $             | 396,621  |   |                     | $ | 136,834 |                  |  | $ | 259,787  |  
|Reclassification adjustment for gains (losses) realized in net income |  |               | (250,000 | ) |                     |   | (86,250 | )                |  |   | (163,750 | )
|                                                                      |  |               |          |   |                     |   |         |                  |  |   |          |  
|                                                                      |  |               |         
|Other comprehensive income - net unrealized gains on securities       |  | $             | 146,621  |   |                     | $ | 50,584  |                  |  | $ | 96,037   |  
|                                                                      |  |               |          |   |                     |   |         |                  |  |   |          |  

Accumulated other comprehensive income consists of the net unrealized gains and (losses) on securities available for sale,
net of the deferred tax effects.

NOTE 4 - RECLASSIFICATIONS

Certain captions and amounts in the financial statements in the Companys Form 10-Q for the quarter ended March 31, 2009 were reclassified to
conform to the March 31, 2010 presentation.

NOTE 5 - INVESTMENT SECURITIES

Securities Available-for-Sale

The
amortized cost and estimated fair values of securities available-for-sale were:



|                                           |  |               |            |                  |        |            |  |   |        |  |   |           
|------------------------------------------ |  | ------------- | ---------- | ---------------- | ------ | ---------- |  | - | ------ |  | - | ----------
|                                           |  | AmortizedCost |            | Gross Unrealized |        | Fair Value
|                                           |  |               | Gains      |                  | Losses |           
|March 31, 2010                             |  |               |            |                  |        |            |  |   |        |  |   |           
|                                           |  |               |            |                 
|Government-sponsored enterprises           |  | $             | 9,364,620  |                  | $      | 254,969    |  | $ | 8,594  |  | $ | 9,610,995 
|Obligations of state and local governments |  |               | 11,846,465 |                  |        | 274,601    |  |   | 26,444 |  |   | 12,094,622
|Other                                      |  |               | 200,000    |                  |        |           |  |   |       |  |   | 200,000   
|                                           |  |               |            |                  |        |            |  |   |        |  |   |           
|Total                                      |  | $             | 21,411,085 |                  | $      | 529,570    |  | $ | 35,038 |  | $ | 21,905,617
|                                           |  |               |            |                  |        |            |  |   |        |  |   |           
|                                           |  |               |            |                 
|December 31, 2009                          |  |               |            |                  |        |            |  |   |        |  |   |           
|                                           |  |               |            |                 
|Government-sponsored enterprises           |  | $             | 11,550,964 |                  | $      | 244,051    |  | $ | 27,959 |  | $ | 11,767,056
|Obligations of state and local governments |  |               | 12,432,461 |                  |        | 247,181    |  |   | 26,521 |  |   | 12,653,121
|Other                                      |  |               | 200,000    |                  |        |           |  |   |       |  |   | 200,000   
|                                           |  |               |            |                  |        |            |  |   |        |  |   |           
|Total                                      |  | $             | 24,183,425 |                  | $      | 491,232    |  | $ | 54,480 |  | $ | 24,620,177
|                                           |  |               |            |                  |        |            |  |   |        |  |   |           



8



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##### Table of Contents

COMMUNITYCORP

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 5 - INVESTMENT SECURITIES (continued)



The following table shows gross unrealized losses and fair value, aggregated by investment category, and
length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2010 and December 31, 2009.



|                                           |  |                |           |                   |   |           |  |                  |           |  |   |       
|------------------------------------------ |  | -------------- | --------- | ----------------- | - | --------- |  | ---------------- | --------- |  | - | ------
|                                           |  | March 31, 2010 |           | December 31, 2009
|                                           |  | FairValue      |           | UnrealizedLosses  |   | FairValue |  | UnrealizedLosses
|Less Than 12 Months                        |  |                |           |                   |   |           |  |                  |           |  |   |       
|Government-sponsored enterprises           |  | $              | 1,191,406 |                   | $ | 8,594     |  | $                | 1,874,183 |  | $ | 27,959
|Obligations of state and local governments |  |                | 808,753   |                   |   | 19,352    |  |                  | 887,972   |  |   | 17,701
|                                           |  |                |           |                   |   |           |  |                  |           |  |   |       
|                                           |  |                | 2,000,159 |                   |   | 27,946    |  |                  | 2,762,155 |  |   | 45,660
|12 Months or More                          |  |                |           |                   |   |           |  |                  |           |  |   |       
|Obligations of state and local governments |  |                | 192,908   |                   |   | 7,092     |  |                  | 191,180   |  |   | 8,820 
|                                           |  |                |           |                   |   |           |  |                  |           |  |   |       
|                                           |  |                |           |                  
|Obligations of state and local governments |  | $              | 2,193,067 |                   | $ | 35,038    |  | $                | 2,953,335 |  | $ | 54,480
|                                           |  |                |           |                   |   |           |  |                  |           |  |   |       

A total of nine available-for-sale securities were in a loss position
at March 31, 2010. Of these securities, one was in a loss position of twelve months or more, which consisted of an obligation of a state and local government. The Company believes that the deterioration in value is attributable to changes in
market interest rates and not in credit quality and considers these losses temporary. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell these securities before recovery
of their amortized costs. Management evaluates investment securities in a loss position based on length of impairment, severity of impairment and other factors.

Management determined that impairment related to certain securities were not temporary in nature at March 31, 2009. Other then temporary impairment
losses were $461,935 for the quarter ended March 31, 2009. There were no other than temporary impairment losses for the quarter ended March 31, 2010.

The amortized cost and estimated fair values of securities available-for-sale based on their contractual maturities are summarized below. Actual
maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations without penalty.



|                                          |  |                |            |            |   |           
|----------------------------------------- |  | -------------- | ---------- | ---------- | - | ----------
|                                          |  | March 31, 2010
|                                          |  | AmortizedCost  |            | Fair Value
|Due in one year or less                   |  | $              | 201,412    |            |   | 206,620   
|Due after one year but within five years  |  |                | 2,538,509  |            |   | 2,593,360 
|Due after five years but within ten years |  |                | 8,752,927  |            |   | 8,930,920 
|Due after ten years                       |  |                | 3,862,641  |            |   | 3,874,545 
|                                          |  |                |            |            |   |           
|                                          |  |                | 15,355,489 |            |   | 15,605,445
|Mortgage-backed securities                |  |                | 6,055,596  |            |   | 6,300,172 
|                                          |  |                |            |            |   |           
|                                          |  |               
|Total                                     |  | $              | 21,411,085 |            | $ | 21,905,617
|                                          |  |                |            |            |   |           

Securities Held-To-Maturity

The amortized cost and estimated fair values of securities held-to-maturity were:



|                                           |  |               |         |                  |   |            |  |   |   |  |   |        
|------------------------------------------ |  | ------------- | ------- | ---------------- | - | ---------- |  | - | - |  | - | -------
|                                           |  | AmortizedCost |         | Gross Unrealized |   | Fair Value
|                                           |  | Gains         |         | Losses           |  
|March 31, 2010 -                           |  |               |         |                  |   |            |  |   |   |  |   |        
|Obligations of state and local governments |  | $             | 564,857 |                  | $ | 8,269      |  | $ |  |  | $ | 573,126
|                                           |  |               |         |                  |   |            |  |   |   |  |   |        
|                                           |  |               |         |                 
|December 31, 2009 -                        |  |               |         |                  |   |            |  |   |   |  |   |        
|Obligations of state and local governments |  | $             | 564,821 |                  | $ | 7,294      |  | $ |  |  | $ | 572,115
|                                           |  |               |         |                  |   |            |  |   |   |  |   |        



9



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##### Table of Contents

COMMUNITYCORP

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 5 - INVESTMENT SECURITIES (continued)



The amortized cost and estimated fair values of securities held-to-maturity based on their contractual
maturities are summarized below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations without penalty.



|                                          |  |                |         |            |   |        
|----------------------------------------- |  | -------------- | ------- | ---------- | - | -------
|                                          |  | March 31, 2010
|                                          |  | AmortizedCost  |         | Fair Value
|Due in one year or less                   |  | $              | 265,000 |            | $ | 265,027
|Due after one year but within five years  |  |                | 99,857  |            |   | 101,591
|Due after five years but within ten years |  |                | 200,000 |            |   | 206,508
|                                          |  |                |         |            |   |        
|                                          |  |               
|Total                                     |  | $              | 564,857 |            | $ | 573,126
|                                          |  |                |         |            |   |        

NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value Measurements

Fair value is
the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement
date. The Company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The three levels of inputs used to measure fair value are as follows:



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level 1 |  | Valuation is based upon quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 
|Level 2 |  | Valuation is based upon quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted
prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 
|Level 3 |  | Valuation is generated from model-based techniques that use at least one significant assumption based on unobservable inputs for the asset or liability, which are typically based
on an entitys own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair
value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Companys assessment of the significance of a particular input to the
fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.



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COMMUNITYCORP

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)



Assets Measured at Fair Value on a Recurring Basis

The following is a description of valuation methodologies used for assets and liabilities recorded at fair value on a recurring basis.

Securities Available-for-Sale - Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value
measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted
for the securitys credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those securities traded on an active exchange, such as the New York Stock Exchange, as well as U.S. Treasury
securities that are traded by dealers or brokers in active over-the- counter markets, and money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds, and corporate debt
securities. Securities classified as Level 3 include asset-backed securities in less liquid markets.

The table below presents the
Companys assets measured at fair value on a recurring basis as of March 31, 2010, and December 31, 2009, aggregated by the level in the fair value hierarchy within which those measurements fall.



|                                           |  |       |            |         |   |         |  |         |            |  |   |  
|------------------------------------------ |  | ----- | ---------- | ------- | - | ------- |  | ------- | ---------- |  | - | -
|                                           |  | Total |            | Level 1 |   | Level 2 |  | Level 3
|March 31, 2010                             |  |       |            |         |   |         |  |         |            |  |   |  
|                                           |  |       |            |        
|Available for Sale Securities:             |  |       |            |         |   |         |  |         |            |  |   |  
|Government-sponsored enterprises           |  | $     | 9,610,995  |         | $ |        |  | $       | 9,610,995  |  | $ | 
|Obligations of state and local governments |  |       | 12,094,622 |         |   |        |  |         | 12,094,622 |  |   | 
|Other                                      |  |       | 200,000    |         |   |        |  |         | 200,000    |  |   |  
|                                           |  |       |            |         |   |         |  |         |            |  |   |  
|                                           |  |       |            |        
|Total                                      |  | $     | 21,905,617 |         | $ |        |  | $       | 21,905,617 |  | $ | 
|                                           |  |       |            |         |   |         |  |         |            |  |   |  
|                                           |  |       |            |        
|December 31, 2009                          |  |       |            |         |   |         |  |         |            |  |   |  
|                                           |  |       |            |        
|Available for Sale Securities:             |  |       |            |         |   |         |  |         |            |  |   |  
|Government-sponsored enterprises           |  | $     | 11,767,056 |         | $ |        |  | $       | 11,767,056 |  | $ | 
|Obligations of state and local governments |  |       | 12,653,121 |         |   |        |  |         | 12,653,121 |  |   | 
|Other                                      |  |       | 200,000    |         |   |        |  |         | 200,000    |  |   | 
|                                           |  |       |            |         |   |         |  |         |            |  |   |  
|                                           |  |       |            |        
|Total                                      |  | $     | 24,620,177 |         | $ |        |  | $       | 24,620,177 |  | $ | 
|                                           |  |       |            |         |   |         |  |         |            |  |   |  

There were no liabilities carried at fair value at March 31, 2010
or December 31, 2009.

Assets Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. These instruments are not measured at fair value on an ongoing
basis, but subject to fair value in certain circumstances, such as when there is evidence of impairment that may require write-downs. The write-downs of the Companys more significant assets or liabilities, which are measured on a
nonrecurring basis are based on the lower of amortized or estimated fair value.

The following is a description of valuation methodologies used
for assets and liabilities recorded at fair value on a recurring basis.

Impaired Loans - The Company is predominantly an
asset-based lender with real estate serving as collateral on a substantial majority of loans. Loans that are deemed impaired are primarily valued on a nonrecurring basis at the fair values of the underlying real estate collateral. Such fair values
are obtained using independent appraisals, which the Company considers to be Level 2 inputs.

Other Real Estate Owned -
Other real estate owned consists of assets acquired in settlement of loans and is carried at the lower of carrying value or fair value on a non-recurring basis. The fair value is dependent primarily upon independent appraisals, which the Company
considers Level 2 inputs.



11



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##### Table of Contents

COMMUNITYCORP

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)



The table below presents the Companys assets measured at fair value on a nonrecurring basis as of
March 31, 2010, and December 31, 2009, aggregated by the level in the fair value hierarchy within which those measurements fall.



|                           |  |       |           |         |   |         |  |         |           |  |   |  
|-------------------------- |  | ----- | --------- | ------- | - | ------- |  | ------- | --------- |  | - | -
|                           |  | Total |           | Level 1 |   | Level 2 |  | Level 3
|March 31, 2010             |  |       |           |         |   |         |  |         |           |  |   |  
|Impaired loans             |  | $     | 8,730,112 |         | $ |        |  | $       | 8,730,112 |  |   | 
|Other real estate owned    |  |       | 340,000   |         |   |        |  |         | 340,000   |  |   | 
|                           |  |       |           |         |   |         |  |         |           |  |   |  
|                           |  |       |           |        
|Total assets at fair value |  | $     | 9,070,112 |         | $ |        |  | $       | 9,070,112 |  | $ | 
|                           |  |       |           |         |   |         |  |         |           |  |   |  
|                           |  |       |           |        
|December 31, 2009          |  |       |           |         |   |         |  |         |           |  |   |  
|Impaired loans             |  | $     | 8,758,272 |         | $ |        |  | $       | 8,758,272 |  |   | 
|Other real estate owned    |  |       | 340,000   |         |   |        |  |         | 340,000   |  |   | 
|                           |  |       |           |         |   |         |  |         |           |  |   |  
|                           |  |       |           |        
|Total assets at fair value |  | $     | 9,098,272 |         | $ |        |  | $       | 9,098,272 |  | $ | 
|                           |  |       |           |         |   |         |  |         |           |  |   |  

There were no liabilities carried at fair value at March 31, 2010
or December 31, 2009.

Fair Value Disclosures

The fair value of a financial instrument is the amount at which the asset or obligation could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. Because no market value exists for a significant
portion of the financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. Premise and
equipment, accrued interest receivable, other assets, accrued interest payable and other liabilities are not considered financial instruments. The following methods and assumptions were used to estimate the fair value of significant financial
instruments:

Cash and Due from Banks - The carrying amount is a reasonable estimate of fair value.

Federal Funds Sold - Federal funds sold are typically for a term of one day, and the carrying amount approximates the fair value.

Time Deposits with Other Banks - The carrying value of these instruments is a reasonable estimate of fair value.

Investment Securities - The fair values of marketable securities held-to-maturity are based on quoted market prices or
dealer quotes. For securities available-for-sale, fair value equals the carrying amount, which is the quoted market price. If quoted market prices are not available, fair values are based on quoted market prices of comparable securities. The
carrying amount of nonmarketable securities is a reasonable estimate of fair value since no ready market exists for these securities.

Loans Receivable - For certain categories of loans receivable, such as variable rate loans which are repriced frequently and have no
significant change in credit risk and credit card receivables, fair values are based on the carrying amounts. The fair value of other types of loans is estimated by discounting the future cash flows using the current rates at which similar loans
would be made to the borrowers with similar credit ratings and for the same remaining maturities.

Deposits - The fair
value of demand deposits, interestbearing transaction, savings, and money market accounts is the amount payable on demand at the reporting date. The fair values of time deposits are estimated using a discounted cash flow calculation that
applies current interest rates to a schedule of aggregated expected maturities.



12



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##### Table of Contents

COMMUNITYCORP

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)



The carrying values and estimated fair values of the Companys financial instruments were as
follows:



|                                                                                 |  |                |             |                      |   |                |  |                      |             |  |   |            
|-------------------------------------------------------------------------------- |  | -------------- | ----------- | -------------------- | - | -------------- |  | -------------------- | ----------- |  | - | -----------
|                                                                                 |  | March 312010   |             | December 
312009    
|                                                                                 |  | CarryingAmount |             | EstimatedFair 
Value |   | CarryingAmount |  | EstimatedFair 
Value
|Financial Assets:                                                                |  |                |             |                      |   |                |  |                      |             |  |   |            
|Cash and due from banks                                                          |  | $              | 18,939,293  |                      | $ | 18,939,293     |  | $                    | 15,664,266  |  | $ | 15,664,266 
|Federal funds sold                                                               |  |                | 2,030,000   |                      |   | 2,030,000      |  |                      | 2,030,000   |  |   | 2,030,000  
|Time deposits with other banks                                                   |  |                | 1,500,000   |                      |   | 1,500,000      |  |                      | 1,500,000   |  |   | 1,500,000  
|Securities available-for-sale                                                    |  |                | 21,905,617  |                      |   | 21,905,617     |  |                      | 24,620,177  |  |   | 24,620,177 
|Securities held-to-maturity                                                      |  |                | 564,857     |                      |   | 573,126        |  |                      | 564,821     |  |   | 572,115    
|Nonmarketable equity securities                                                  |  |                | 302,400     |                      |   | 302,400        |  |                      | 302,300     |  |   | 302,300    
|Loans receivable, gross                                                          |  |                | 115,463,662 |                      |   | 115,700,298    |  |                      | 116,458,480 |  |   | 115,567,742
|                                                                                 |  |                |             |                     
|Financial Liabilities:                                                           |  |                |             |                      |   |                |  |                      |             |  |   |            
|Demand deposit, interest-bearing transaction, money market, and savings accounts |  | $              | 52,472,214  |                      | $ | 52,472,214     |  | $                    | 54,159,268  |  | $ | 54,159,268 
|Time deposits                                                                    |  |                | 93,563,022  |                      |   | 93,903,299     |  |                      | 92,528,728  |  |   | 92,710,544 
|                                                                                 |  |                |             |                     
|                                                                                 |  | NotionalAmount |             | EstimatedFair 
Value |   | NotionalAmount |  | EstimatedFair 
Value
|                                                                                 |  |                |             |                     
|Off-Balance Sheet Financial Instruments:                                         |  |                |             |                      |   |                |  |                      |             |  |   |            
|Commitments                                                                      |  | $              | 6,786,000   |                      | $ |               |  | $                    | 7,064,000   |  | $ |           
|Standby letters of credit                                                        |  |                | 810,000     |                      |   |               |  |                      | 825,000     |  |   |           

NOTE 7 -
SUBSEQUENT EVENTS

Subsequent events are events or transactions that occur after the balance sheet date but before financial statements
are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial
statements. Nonrecognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management has reviewed events occurring through the date the
financial statements were issued and no subsequent events occurred requiring accrual or disclosure.



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##### Table of Contents

COMMUNITYCORP

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

The following is a discussion of the Companys financial condition as of March 31, 2010 compared to December 31, 2009, and the results of
operations for the three months ended March 31, 2010 compared to the three months ended March 31, 2009. These comments should be read in conjunction with the Companys condensed financial statements and accompanying footnotes
appearing in this report. This report contains forward-looking statements relating to, without limitation, future economic performance, plans and objectives of management for future operations, and projections of revenues and other
financial items that are based on the beliefs of the Companys management, as well as assumptions made by and information currently available to the Companys management. The words expect, estimate,
anticipate, and believe, as well as similar expressions, are intended to identify forward-looking statements. The Companys actual results may differ materially from the results discussed in the forward-looking
statements, and the Companys operating performance each quarter is subject to various risks and uncertainties that are discussed in detail in the Companys filings with the Securities and Exchange Commission.

Results of Operations

Net income for
the quarter ended March 31, 2010 was $205,105, or $0.88 per share, compared to a net loss of $18,881, or a loss of $0.08 per share, for the quarter ended March 31, 2009, resulting in an increase of $223,986.

The increase in net income during the first quarter of 2010 is mostly attributable to not having any impairment losses on our investment securities. In
the first quarter of 2009 we recognized impairment losses of $461,935 on our investment securities.

Disregarding the impairment losses for
the first quarter of 2009, our net income for the quarter ended March 31, 2009, would have been approximately $281,000, compared to $205,105, a decrease of approximately $76,000 for the first quarter of 2010. Defaults by borrowers increased
substantially during 2009 and continues into 2010, resulting in the recording of higher provisions for credit losses and higher net charge-offs. For the quarter ended March 31, 2010, we recorded a provision for loan losses of $365,000 compared
to $90,000 for the first quarter of 2009. Our net charge offs for the comparable periods were $348,364 and $18,378, respectively.

Our 2010
operating results, compared to 2009, were also negatively impacted by the increase in the rates for our deposit insurance. Compared to the first quarter of 2009 our federal deposit insurance premiums increased $30,816.

Net Interest Income

The largest
component of total income is net interest income, the difference between the income earned on assets and the interest accrued or paid on deposits and borrowings used to support such assets. The volume and mix of assets and liabilities and their
sensitivity to interest rate movement determine changes in net interest income. Net interest margin is determined by dividing annualized net interest income by average earning assets. Net interest spread is derived from determining the
weighted-average rate of interest paid on deposits and borrowings and subtracting them from the weighted-average yield on earning assets.

Net
interest income for the quarter ended March 31, 2010, was $1,457,638, compared to $1,352,687 for the same period last year, an increase of $104,951, or 7.76%. This increase is mainly attributable to the decline in market interest rates, which
resulted in the average cost of our interest-bearing liabilities declining 105 basis points, while our the average yield on our earning assets declined only 52 basis points. The high percentage of fixed rate loans, which we maintain, tends to
minimize the effect of falling interest rates.

For the quarter ended March 31, 2010, average-earning assets totaled $147,175,520 with an
annualized average yield of 5.68%. Average earning assets and annualized average yield were $148,775,931 and 6.20%, respectively, for the quarter ended March 31, 2009. For the quarter ended March 31, 2010, average interest-bearing
liabilities totaled $131,122,735 with an annualized average cost of 1.87%. Average interest-bearing liabilities and annualized average cost were $128,251,115 and 2.92%, respectively, for the quarter ended March 31, 2009.

Our net interest margin and net interest spread were 4.02% and 3.81% for the quarter ended March 31, 2010 compared to 3.69% and 3.28%, respectively
for the quarter ended March 31, 2009. The increases were primarily attributable to the increase in the average volume of our loans, which generally are our highest yielding assets. For the quarter ended March 31, 2010 and 2009, the average
volume of our loans was 79.01% and 77.37% of our total average earnings assets, respectively.



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##### Table of Contents

COMMUNITYCORP

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations -(continued)

Net Interest Income(continued)



Details of the components of earning assets and interest-bearing liabilities are discussed in the
following paragraphs.

Because loans often provide a higher yield than other types of earning assets, one of our goals is to maintain our loan
portfolio as the largest component of total earning assets. Loans comprised approximately 79.01% and 77.37% of average earning assets for the quarter ended March 31, 2010 and 2009, respectively. Loan interest income was $1,835,457 and
$1,986,170 for quarter ended March 31, 2010 and 2009, respectively. The annualized average yield on loans was 6.40% and 7.00% for the quarter ended March 31, 2010 and 2009, respectively. Average balances of loans increased to $116,289,894
during the quarter ended March 31, 2010, an increase of $1,177,208 over the average of $115,112,686 during the quarter ended March 31, 2009. The decrease in the annualized yield on loans is mainly attributable to the decline in market
interest rates and to the significant increase of $329,986 and $1,364,882 in net loans charged off and in nonaccruing loans, respectively. Fixed rate loans averaged approximately 97% of our loan portfolio for the first quarter of 2010 and 2009.

Investment securities averaged $23,926,625 or 16.26% of average earning assets, for first quarter of 2010 compared to $27,853,945 or 18.72%
of average earning assets, for the same period in 2009. Interest earned on investment securities amounted to $214,583 for the quarter ended March 31, 2009, compared to $272,672 for the comparable period last year. Investment securities yielded
3.64% and 3.97% for the quarter ended March 31, 2010 and 2009, respectively.

Total interest expense for the quarter ended March 31,
2010 and 2009 was $605,260 and $922,535 respectively. The largest component of interest expense is interest on deposit accounts. Interest expense on deposit accounts was $605,259 and $922,528, for the quarter ended March 31, 2010 and 2009,
respectively. The average balance of interest bearing deposits increased to $131,122,146 during the quarter ended March 31, 2010 from $128,247,215 for the quarter ended March 31, 2009. The annualized average cost of deposits was 1.87% for
the quarter ended March 31, 2010 compared to 2.92% for the same period in 2009.

For the quarter ended March 31, 2010 and 2009,
interest expense on other interest-bearing liabilities was insignificant.

Provision and Allowance for Loan Losses

We provide for loan losses using the allowance method. Increase to the allowance result from recording a provision for loan losses. Loan losses and
recoveries are charged to the allowance. Charge-offs to the allowance are made when all or a portion of the loan is confirmed as a loss based on our review of the loan, through possession of the underlying security, or through a troubled debt
restructuring transaction. Likewise, recoveries offset these increases through credits to the allowance.

The allowance is maintained at a
level that we believe is sufficient to cover losses in the loan portfolio at a specific point in time. Assessing the adequacy of the allowance requires considerable judgment. The adequacy of the allowance is analyzed on a monthly basis using an
internal analysis model. For purposes of this analysis, adequacy is defined as a level sufficient to absorb probable losses in the portfolio. This methodology relies upon our judgment. Our judgments are based on our assessment of various issues,
including, but not limited to, the pace of loan growth, emerging portfolio concentrations, the risk management system relating to lending activities, entry into new markets, new product offerings, loan portfolio quality trends, and uncertainty in
current economic and business conditions. An allowance model is used that takes into account factors including the composition of the loan portfolio such as risk grade classifications, historical asset quality trends including, but not limited to,
previous loss experience ratios, our assessment of current economic conditions, and reviews of specific high risk sectors of the portfolio. Loans are graded at inception and are reviewed on a periodic basis to ensure that assigned risk grades are
proper based on the definition of such classification. The value of underlying collateral is also considered during such analysis. The resulting monthly model and the related conclusions are reviewed and approved by Senior Management. Our analysis
of allowance adequacy includes consideration for loan impairment. While we use the best information available to make evaluations, future adjustments to the allowance may be necessary if results differ substantially from the assumptions used in
making the evaluations.



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##### Table of Contents

COMMUNITYCORP

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations -(continued)

Provision and Allowance for Loan Losses (continued)



The methodology for assessing the adequacy of the allowance establishes both an allocated and
unallocated component of the allowance. The allocated component is based principally on current loan grades and historical loss rates. The unallocated component is the result of the portion of the assessment that estimates probable losses in the
portfolio that are not fully captured in the allocated allowance. This analysis includes, but is not necessarily limited to, industry concentrations, model imprecision, and the estimated impact of current economic conditions on historical loss
rates. On a continual basis, we monitor trends within the portfolio, both quantitative and qualitative, and assess the reasonableness of the unallocated component.

The allowance is subject to examination and adequacy testing by regulatory agencies. In addition, such regulatory agencies could require allowance
adjustments based on information available to them at the time of their examination

The allowance for loan losses was 1.79% and 1.76% of
total loans at March 31, 2010 and 2009, respectively. We believe the allowance for loan losses at March 31, 2010 is reflective of the results of our allowance model methodology and accordingly, we believe the allowance as of March 31,
2010 is adequate, based on our assessment of probable losses, and available facts and circumstances then prevailing.

The provision for loan
losses is the charge to operating earnings that management feels is necessary to maintain the allowance for possible loan losses at an adequate level. For both the three months ended March 31, 2010 and 2009, the provision charged to expense was
$365,000 and $90,000, respectively.

Noninterest Income

Noninterest income for the first quarter of 2010 was $140,753 compared to a net noninterest loss of $289,976 for the first quarter of 2009, respectively.
The increase in the first quarter of 2010 other incomes is mostly attributable to the write down of our investment securities for being other than temporarily impaired during the first quarter of 2009. Before the write downs, other noninterest
income for the first quarter of 2009 is $171,959 compared to $140,753 for the first quarter of 2010, resulting in a net decrease of $31,206. Our service charges for the first quarter of 2010 were $29,690 less than what they were for the first
quarter of 2009. This decrease is due in part to the decline in our noninterest-bearing deposits and to the closing of problematic deposit accounts.

Noninterest Expense

Total noninterest
expense for the three months ended March 31, 2010 and 2009 was $953,286 and $930,592, respectively. This represented an increase in noninterest expense of $22,694, or 2.44%. Salaries and employee benefits decreased $16,388, or 3.21%, from
$510,491 for the three months ended March 31, 2009 to $494,103 for the comparable period in 2010, mainly as the result of the reduction of $22,642 in employee benefits. For the three months ended March 31, 2010, other operating expense was
$302,872, or $39,105, higher than the three months ended March 31, 2009. This increase is mainly attributable to the increase in federal deposit insurance premiums, which was $30,816 higher for the first quarter of 2010 compared to the first
quarter of 2009. The total of net occupancy and equipment expense was $156,311 and $156,334 for the first quarter of 2010 and 2009, respectively.

Income Taxes

The income tax provision
for the three months ended March 31, 2010 was $75,000 compared to $61,000 for the same period in 2009. The increase in the provision resulted primarily from the increase in net income before taxes. The tax provision was also impacted by the
relationship of the amount of non-deductible items for income tax purposes that were included in net income before taxes.



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##### Table of Contents

COMMUNITYCORP

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations -(continued)



Assets and Liabilities

During the first three months of 2010, total assets decreased $688,938 or 0.42%, when compared to December 31, 2009. The balance of the federal funds
sold was $2,030,000 at March 31, 2010 and December 31, 2009. Total investment securities decreased $2,714,424 from December 31, 2009 to $22,772,874 at March 31, 2010. Gross loans decreased $994,818, or 0.85%, to $115,463,662 at
March 31, 2010.

For the three months ended March 31, 2010, total liabilities decreased $716,488 or 0.48% and total deposits
decreased $652,760 or 0.44% from December 31, 2009.

For more analysis of the components of the changes in asset and liabilities, see the
following discussion of major balance sheet categories and the Consolidated Statements of Cash Flows included in Item 1. Financial Statements.

We closely monitor and seek to maintain appropriate levels of interest earning-assets and interest-bearing liabilities so that maturities of assets are
such that adequate funds are provided to meet customer withdrawals and loan demand.

Loans

At March 31, 2010, our total loans were $115,463,662 compared to $116,458,480 at December 31, 2009, a decrease of $994,818 or 0.85%. At
March 31, 2010 and 2009, approximately 97% of our loan portfolio consisted of fixed rate loans. Balances within the major loans receivable categories as of March 31, 2010 and December 31, 2009 are as follows:



|                                               |  |               |             |                  |   |            
|---------------------------------------------- |  | ------------- | ----------- | ---------------- | - | -----------
|                                               |  | March 31,2010 |             | December 31,2009
|Real estate  construction                     |  | $             | 3,006,497   |                  | $ | 3,256,857  
|Real estate  mortgage                         |  |               | 30,116,501  |                  |   | 31,601,663 
|Commercial and industrial                      |  |               | 73,390,014  |                  |   | 71,750,588 
|Consumer and other                             |  |               | 8,950,650   |                  |   | 9,849,372  
|                                               |  |               |             |                  |   |            
|Total gross loans                              |  | $             | 115,463,662 |                  | $ | 116,458,480
|                                               |  |               |             |                  |   |            
|                                               |  |              
|The loan portfolio consisted of loans having : |  |               |             |                  |   |            
|Variable rates loans                           |  | $             | 3,889,830   |                  | $ | 3,802,991  
|Fixed rates                                    |  |               | 111,573,832 |                  |   | 112,655,489
|                                               |  |               |             |                  |   |            
|Total gross loans                              |  | $             | 115,463,662 |                  | $ | 116,458,480
|                                               |  |               |             |                  |   |            

Risk Elements in the Loan Portfolio

The following table sets forth the Companys nonperforming assets at the dates indicated:



|                                                           |  |           |           |   |      |   |           |  
|---------------------------------------------------------- |  | --------- | --------- | - | ---- | - | --------- | -
|                                                           |  | March 31, |          
|                                                           |  | 2010      |           |   | 2009 |  
|Loans impaired and included in nonaccrual loans            |  | $         | 3,926,894 |   |      | $ | 2,562,012 |  
|Loans impaired and not included in nonaccrual              |  |           | 4,803,218 |   |      |   | 2,662,156 |  
|                                                           |  |           |           |   |      |   |           |  
|Total impaired loans                                       |  |           | 8,730,112 |   |      |   | 5,224,168 |  
|Loans 90 days or more past due and still accruing interest |  |           | 2,543     |   |      |   | 2,958     |  
|                                                           |  |           |           |   |      |   |           |  
|Total impaired and nonperforming loans                     |  |           | 8,732,655 |   |      |   | 5,227,126 |  
|Other real estate owned                                    |  |           | 340,000   |   |      |   | 75,000    |  
|                                                           |  |           |           |   |      |   |           |  
|Total impaired and nonperforming assets                    |  | $         | 9,072,655 |   |      | $ | 5,302,126 |  
|                                                           |  |           |           |   |      |   |           |  
|                                                           |  |          
|Nonperforming assets to year end loans                     |  |           | 7.86      | % |      |   | 4.55      | %



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##### Table of Contents

COMMUNITYCORP

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations -(continued)



The following tables summarize information on impaired loans at and for the years ended March 31,
2010 and 2009.



|                                              |  |      |           |      |   |          
|--------------------------------------------- |  | ---- | --------- | ---- | - | ---------
|                                              |  | 2010 |           | 2009
|Impaired loans with specific allowance        |  | $    | 2,821,588 |      | $ | 1,836,987
|Impaired loans with no specific allowance     |  |      | 5,908,524 |      |   | 2,875,051
|                                              |  |      |           |      |   |          
|Total impaired loans                          |  | $    | 8,730,112 |      | $ | 4,712,038
|                                              |  |      |           |      |   |          
|                                              |  |     
|Related specific allowance                    |  | $    | 875,001   |      | $ | 322,620  
|Average recorded investment in impaired loans |  |      | 8,744,192 |      |   | 4,968,103

At March 31, 2010 real
estate or other collateral secured practically all of the loans that were considered impaired. In the event of foreclosure on these loans, there can be no assurance that in liquidation, the collateral can be sold for its estimated fair market value
or even for an amount at least equal to or greater than the loan amount.

The results our internal review process and applying the allowance
model methodology are the primary determining factors in managements assessment of the adequacy of the allowance for loan losses.

Activity in the Allowance for Loan Losses is as follows:



|                                               |  |                             |             |   |      |   |             |  
|---------------------------------------------- |  | --------------------------- | ----------- | - | ---- | - | ----------- | -
|                                               |  | Three Months
EndedMarch 31, |            
|                                               |  | 2010                        |             |   | 2009 |  
|Balance, January 1,                            |  | $                           | 2,053,340   |   |      | $ | 1,981,637   |  
|Provision for loan losses for the period       |  |                             | 365,000     |   |      |   | 90,000      |  
|Net loans charged-off for the period           |  |                             | (348,364    | ) |      |   | (18,378     | )
|                                               |  |                             |             |   |      |   |             |  
|                                               |  |                            
|Balance, end of period                         |  | $                           | 2,069,976   |   |      | $ | 2,053,259   |  
|                                               |  |                             |             |   |      |   |             |  
|                                               |  |                            
|Gross loans outstanding, end of period         |  | $                           | 115,463,662 |   |      | $ | 116,534,721 |  
|                                               |  |                            
|Allowance for loan losses to loans outstanding |  |                             | 1.79        | % |      |   | 1.76        | %

Deposits

Total deposits decreased by 0.44% or $652,760 from December 31, 2009 to $146,035,236 at March 31, 2010. Noninterest-bearing deposits decreased
$584,176, or 4.12% to $13,579,145 at March 31, 2010, while interest-bearing deposits increased $68,584, or 0.05% to $132,456,091 at March 31, 2010.

Balances within the major deposit categories as of March 31, 2010 and December 31, 2009 are as follows:



|                                    |  |               |             |                  |   |            
|----------------------------------- |  | ------------- | ----------- | ---------------- | - | -----------
|                                    |  | March 31,2010 |             | December 31,2009
|Noninterest-bearing demand deposits |  | $             | 13,579,145  |                  | $ | 14,163,321 
|Interest-bearing demand deposits    |  |               | 26,283,491  |                  |   | 26,584,806 
|Savings deposits                    |  |               | 12,609,578  |                  |   | 13,411,141 
|Certificates of deposit             |  |               | 93,563,022  |                  |   | 92,528,728 
|                                    |  |               |             |                  |   |            
|                                    |  |              
|                                    |  | $             | 146,035,236 |                  | $ | 146,687,996
|                                    |  |               |             |                  |   |            

We did not have any brokered deposits at March 31, 2010 or
December 31, 2009



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##### Table of Contents

COMMUNITYCORP

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations -(continued)



Liquidity

Liquidity needs are met by us through scheduled maturities of loans and investments on the asset side and through pricing policies on the liability side
for demand deposit accounts and short-term borrowings. The level of liquidity is measured by the loan-to-total funds ratio (total deposits plus short-term borrowings if any), which was 79.07 % at March 31, 2010 and 79.39% at
December 31, 2009.

Asset liquidity is provided from several sources, including amounts due from banks and federal funds sold. Available
for sale securities, particularly those maturing within one year, provide a secondary source of liquidity. Additionally, funds from maturing loans are a source of liquidity.

At March 31, 2010 the Bank had available an unused short-term line of credit to purchase up to $10,000,000 of federal funds from unrelated
correspondent institutions. The Bank also has a credit availability agreement with the Federal Home Loan Bank totaling 15 percent of the Banks assets as of any quarter end. As of March 31, 2010, the available credit totaled approximately
$34,909,000 and there were no borrowings outstanding. Any borrowings from the Federal Home Loan Bank will be secured by a blanket lien on all of the Banks 1-4 family residential first lien mortgage loans and or investment securities.

Interest Rate Sensitivity

Interest rate sensitivity is defined as the exposure to variability in net interest income resulting from changes in market-based interest rates.
Asset/liability management is the process by which we monitor and control the mix, maturities, and interest sensitivity of our assets and liabilities. Asset/liability management seeks to ensure adequate liquidity and to maintain an appropriate
balance between interest-sensitive assets and liabilities to minimize potentially adverse impacts on earnings from changes in market interest rates. Interest rate sensitivity can be managed by repricing assets or liabilities, selling securities
available-for-sale, replacing an asset or liability at maturity, or adjusting the interest rate during the life of an asset or liability. We believe that interest rate risk management becomes increasingly important in an interest rate environment
and economy such as the one that we are currently experiencing.

We monitor interest rate sensitivity by measuring our interest sensitivity
through a gap analysis, which is the positive or negative dollar difference between assets and liabilities that are subject to interest rate repricing within a given time period. Currently we are liability-sensitive over periods with
maturity dates of less than twelve months. However, since interest rates and yields on various interest sensitive assets and liabilities do not all adjust in the same degree when there is a change in prevailing interest rates (such as prime rate),
the traditional gap analysis is only a general indicator of rate sensitivity and net interest income volatility. As stated in Results of Operations for the Three Months Ended March 31, 2010 Compared to the Three Months Ended
March 31, 2009  Net Interest Income, our net interest margin increased during the current period. If net interest margin were to decline, net income will likely decline also.

Capital Resources

Total
shareholders equity increased $27,550 from $17,745,653 at December 31, 2009 to $17,773,203 at March 31, 2010. The net increase is attributable to the net income for the period of $205,105 and the net increase for the period of
$37,847 in the fair value of securities available-for-sale. These increases were reduced by the payment of $117,001 in cash dividends, and the purchase of treasury stock for $98,401.

Bank holding companies, such as ours, and their banking subsidiaries are required by banking regulators to meet certain minimum levels of capital
adequacy, which are expressed in the form of certain ratios. Capital is separated into Tier 1 capital (essentially common shareholders equity less intangible assets) and Tier 2 capital (essentially the allowance for loan losses limited to
1.25% of risk-weighted assets). The first two ratios, which are based on the degree of credit risk in our assets, provide the weighting of assets based on assigned risk factors and include off-balance sheet items such as loan commitments and
stand-by letters of credit. The ratio of Tier 1 capital to risk-weighted assets must be at least 4.0% and the ratio of total capital (Tier 1 capital plus Tier 2 capital) to risk-weighted assets must be at least 8.0%. The capital leverage ratio
supplements the risk-based capital guidelines. Banks and bank holding companies are required to maintain a minimum ratio of Tier 1 capital to adjusted quarterly average total assets of 3.0%.



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##### Table of Contents

COMMUNITYCORP

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations -(continued)

Capital Resourcescontinued



The following table summarizes the Banks risk-based capital at March 31, 2010:



|                                         |  |   |             |  
|---------------------------------------- |  | - | ----------- | -
|Shareholders equity                     |  | $ | 17,423,521  |  
|Less: intangibles                        |  |   |            |  
|                                         |  |   |             |  
|Tier 1 capital                           |  |   | 17,423,521  |  
|                                         | 
|Plus: allowance for loan losses (1)      |  |   | 1,570,213   |  
|                                         |  |   |             |  
|                                         | 
|Total capital                            |  | $ | 18,993,734  |  
|                                         |  |   |             |  
|                                         | 
|Risk-weighted assets                     |  | $ | 125,617,000 |  
|                                         |  |   |             |  
|                                         | 
|Risk-based capital ratios                |  |   |             |  
|Tier 1 capital (to risk-weighted assets) |  |   | 13.87       | %
|Total capital (to risk-weighted assets)  |  |   | 15.12       | %
|Tier 1 capital (to total average assets) |  |   | 10.66       | %



|(1) | limited to 1.25% of risk-weighted assets
|--- | ----------------------------------------

The
Federal Reserve Board has similar requirements for bank holding companies. The Company is currently not subject to these requirements because the Federal Reserve guidelines contain an exemption for bank holding companies of less than $500,000,000 in
consolidated assets.

Regulatory Matters

We are not aware of any current recommendations by regulatory authorities which, if they were to be implemented, would have a material effect on
liquidity, capital resources or operations.

Off-Balance Sheet Risk

Through the operations of our Bank, we have made contractual commitments to extend credit in the ordinary course of our business activities. These
commitments are legally binding agreements to lend money to our customers at predetermined interest rates for a specified period of time. At March 31, 2010, we had issued commitments to extend credit of $6,786,000 and standby letters of credit
of $810,000 through various types of commercial lending arrangements. We evaluate each customers creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on our
credit evaluation of the borrower. Collateral varies but may include accounts receivable, inventory, property, plant and equipment, commercial and residential real estate.



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##### Table of Contents

COMMUNITYCORP

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations -(continued)



Critical Accounting Policies

We have adopted various accounting policies, which govern the application of accounting principles generally accepted in the United States in the
preparation of our financial statements. Our significant accounting policies are described in the notes to the consolidated financial statements at December 31, 2009 as filed in our annual report on Form 10-K. Certain accounting policies
involve significant judgments and assumptions by us, which have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use
are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Because of the nature of the judgments and assumptions we make, actual results could differ from these judgments and estimates which
could have a material impact on our carrying values of assets and liabilities and our results of operations.

We believe the allowance for
loan losses is a critical accounting policy that requires the most significant judgments and estimates used in preparation of our consolidated financial statements. Refer to the portion of this discussion that addresses our allowance for loan losses
for a description of our processes and methodology for determining our allowance for loan losses.

Recently Issued Accounting Standards

Accounting standards which have been issued or proposed by the Financial Accounting Standards Board that do not require adoption until a
future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Not applicable since we are a smaller reporting company.

Item 4. Controls and Procedures

Within 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our principal executive
officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and principal financial officer concluded that our
disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC reports. The design of any system of controls is based in part upon certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

In addition, we reviewed our internal controls, and there have been no significant changes in our internal controls or in other factors that could
significantly affect those controls subsequent to the date of their last evaluation.



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COMMUNITYCORP

PART II  Other Information

Item 1. Legal Proceedings

There are no material pending legal proceedings to which we are a party or of which any of our
properties are the subject.

Item 1A. Risk Factors

There has been no change in the risk factors, which were reported on Form 10-K for the year ended December 31, 2009.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable

Item 3. Default Upon Senior Securities

Not applicable

Item 4. Removed and Reserved

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits



|     |  |                                                                 
|---- |  | ----------------------------------------------------------------
|31.1 |  | Rule 13a-14(a) Certification of the Principal Executive Officer.
|     | 
|31.2 |  | Rule 13a-14(a) Certification of the Principal Financial Officer.
|     | 
|32   |  | Section 1350 Certifications.                                    



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COMMUNITYCORP

SIGNATURES

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

COMMUNITYCORP



|      |  |              |  |     |  |                                    
|----- |  | ------------ |  | --- |  | -----------------------------------
|Date: |  | May 12, 2010 |  | By: |  | /s/ W. ROGER CROOK                 
|      |  |              |  |     |  | W. Roger Crook                     
|      |  |              |  |     |  | President & Chief Executive Officer
|      |  |              | 
|Date: |  | May 12, 2010 |  | By: |  | /s/ GWEN P. BUNTON                 
|      |  |              |  |     |  | Gwen P. Bunton                     
|      |  |              |  |     |  | Chief Financial Officer            



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