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U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-QSB



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(Mark One)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

For the Quarterly Period Ended September 30, 2007

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
|- | ----------------------------------------------------------------------------------------------------------

For the Transition Period from  to

Commission File Number 33-76644



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COMMUNITYCORP

(Exact name of registrant as specified in its charter)



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|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|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

(Registrants telephone number, including area code)



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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 the number of shares outstanding of each of the issuers classes of common stock as of the date of this filing.

240,563 shares of common stock, $5 par value, as of November 12, 2007

Transitional Small Business Disclosure
Format (Check one): Yes ̈No  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



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##### Table of Contents

COMMUNITYCORP

Index



|                                                                                                                                               |  |         
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                                                               |  | Page No.
|PART I. FINANCIAL INFORMATION                                                                                                                  |  |         
|                                                                                                                                               | 
|Item 1. Financial Statements (Unaudited)                                                                                                       |  |         
|                                                                                                                                               | 
|Condensed Consolidated Balance Sheets - September 30, 2007 and December 31, 2006                                                               |  | 3       
|                                                                                                                                               | 
|Condensed Consolidated Statements of Income - Nine months ended September 30, 2007 and 2006 and Three months ended September 30, 2007 and 2006 |  | 4       
|                                                                                                                                               | 
|Condensed Consolidated Statements of Shareholders Equity and Comprehensive IncomeNine months ended September 30, 2007 and 2006               |  | 5       
|                                                                                                                                               | 
|Condensed Consolidated Statements of Cash Flows - Nine months ended September 30, 2007 and 2006                                                |  | 6       
|                                                                                                                                               | 
|Notes to Condensed Consolidated Financial Statements                                                                                           |  | 7-8     
|                                                                                                                                               | 
|Item 2. Managements Discussion and Analysis or Plan of Operations                                                                             |  | 9-16    
|                                                                                                                                               | 
|Item 3. Controls and Procedures                                                                                                                |  | 16      
|                                                                                                                                               | 
|PART II. OTHER INFORMATION                                                                                                                     |  |         
|                                                                                                                                               | 
|Item 6. Exhibits and Reports on Form 8-K                                                                                                       |  | 17      
|                                                                                                                                               | 
|(a) Exhibits                                                                                                                                   |  | 17      
|                                                                                                                                               | 
|(b) Reports on Form 8-K                                                                                                                        |  | 17      
|                                                                                                                                               | 
|Signatures                                                                                                                                     |  | 17      
|                                                                                                                                               | 
|Index to Exhibits                                                                                                                              |  | 18      



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##### Table of Contents

COMMUNITYCORP

PART 1. FINANCIAL INFORMATION

Item 1  Financial Statements

Condensed Consolidated Balance Sheets



|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                            |  | September 30, 2007 |             |   | December 31,2006 |  
|                                                                                                                                            |  | (Unaudited)        |             |   | (Audited)        |  
|Assets:                                                                                                                                     |  |                    |             |   |                  |   |             |  
|Cash and cash equivalents:                                                                                                                  |  |                    |             |   |                  |   |             |  
|Cash and due from banks                                                                                                                     |  | $                  | 7,865,279   |   |                  | $ | 6,041,317   |  
|Federal funds sold                                                                                                                          |  |                    | 4,050,000   |   |                  |   | 8,363,000   |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Total cash and cash equivalents                                                                                                             |  |                    | 11,915,279  |   |                  |   | 14,404,317  |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Time deposits with other banks                                                                                                              |  |                    |            |   |                  |   | 100,000     |  
|                                                                                                                                            |  |                   
|Investment securities:                                                                                                                      |  |                    |             |   |                  |   |             |  
|Securities available-for-sale                                                                                                               |  |                    | 39,060,017  |   |                  |   | 32,468,498  |  
|Securities held-to-maturity (estimated market value of $1,838,661 and $1,596,605 at September 30, 2007 and December 31, 2006,
respectively) |  |                    | 1,819,416   |   |                  |   | 1,574,215   |  
|Nonmarketable equity securities                                                                                                             |  |                    | 347,257     |   |                  |   | 342,857     |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Total investment securities                                                                                                                 |  |                    | 41,226,689  |   |                  |   | 34,385,570  |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Loans receivable                                                                                                                            |  |                    | 108,754,641 |   |                  |   | 105,840,360 |  
|Less allowance for loan losses                                                                                                              |  |                    | (1,919,368  | ) |                  |   | (1,856,888  | )
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Loans, net                                                                                                                                  |  |                    | 106,835,273 |   |                  |   | 103,983,472 |  
|                                                                                                                                            |  |                   
|Premises, furniture & equipment, net                                                                                                        |  |                    | 3,022,076   |   |                  |   | 3,130,914   |  
|Accrued interest receivable                                                                                                                 |  |                    | 1,327,696   |   |                  |   | 1,216,414   |  
|Other assets                                                                                                                                |  |                    | 765,886     |   |                  |   | 871,299     |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Total assets                                                                                                                                |  | $                  | 165,092,899 |   |                  | $ | 158,091,986 |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Liabilities and Shareholders Equity:                                                                                                       |  |                    |             |   |                  |   |             |  
|Liabilities:                                                                                                                                |  |                    |             |   |                  |   |             |  
|Deposits:                                                                                                                                   |  |                    |             |   |                  |   |             |  
|Noninterest-bearing                                                                                                                         |  | $                  | 18,590,233  |   |                  | $ | 19,764,876  |  
|Interest-bearing                                                                                                                            |  |                    | 128,290,252 |   |                  |   | 121,021,388 |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|                                                                                                                                            |  |                    | 146,880,485 |   |                  |   | 140,786,264 |  
|                                                                                                                                            |  |                   
|Short-term borrowings                                                                                                                       |  |                    | 270,000     |   |                  |   | 250,000     |  
|Accrued interest payable                                                                                                                    |  |                    | 1,508,542   |   |                  |   | 1,534,531   |  
|Other liabilities                                                                                                                           |  |                    | 253,885     |   |                  |   | 383,756     |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Total liabilities                                                                                                                           |  |                    | 148,912,912 |   |                  |   | 142,954,551 |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|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                                                                                                                             |  |                    | 1,723,196   |   |                  |   | 1,720,382   |  
|Accumulated other comprehensive loss                                                                                                        |  |                    | (20,515     | ) |                  |   | (95,015     | )
|Retained earnings                                                                                                                           |  |                    | 16,680,819  |   |                  |   | 15,632,119  |  
|Treasury stock (59,437 shares in 2007 and 58,251 shares in 2006)                                                                            |  |                    | (3,703,513  | ) |                  |   | (3,620,051  | )
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Total shareholders equity                                                                                                                  |  |                    | 16,179,987  |   |                  |   | 15,137,435  |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  
|Total liabilities and shareholders equity                                                                                                  |  | $                  | 165,092,899 |   |                  | $ | 158,091,986 |  
|                                                                                                                                            |  |                    |             |   |                  |   |             |  

See notes to condensed consolidated financial statements



3



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##### Table of Contents

COMMUNITYCORP

Condensed Consolidated Statements of Income

(Unaudited)



|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|--------------------------------------------------- |  | ------------------------------- | --------- | -------------------------------- | - | --------- |  | ---- | --------- |  | - | ---------
|                                                    |  | Nine Months Ended September 30, |           | Three Months Ended September 30,
|                                                    |  | 2007                            |           | 2006                             |   | 2007      |  | 2006
|Interest income:                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Loans, including fees                               |  | $                               | 6,135,722 |                                  | $ | 5,491,515 |  | $    | 2,105,173 |  | $ | 1,934,962
|Securities                                          |  |                                 | 1,219,149 |                                  |   | 980,992   |  |      | 459,696   |  |   | 352,717  
|Other interest income                               |  |                                 | 389,207   |                                  |   | 399,549   |  |      | 104,321   |  |   | 163,520  
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Total                                               |  |                                 | 7,744,078 |                                  |   | 6,872,056 |  |      | 2,669,190 |  |   | 2,451,199
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Interest expense:                                   |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Deposit accounts                                    |  |                                 | 3,530,825 |                                  |   | 2,773,956 |  |      | 1,220,100 |  |   | 1,054,440
|Other interest expense                              |  |                                 | 8,670     |                                  |   | 10,889    |  |      | 3,007     |  |   | 4,017    
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|                                                    |  |                                 | 3,539,495 |                                  |   | 2,784,845 |  |      | 1,223,107 |  |   | 1,058,457
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Net interest income                                 |  |                                 | 4,204,583 |                                  |   | 4,087,211 |  |      | 1,446,083 |  |   | 1,392,742
|                                                    |  |                                 |           |                                 
|Provision for loan losses                           |  |                                 | 170,000   |                                  |   | 225,000   |  |      | 30,000    |  |   | 75,000   
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Net interest income after provision for loan losses |  |                                 | 4,034,583 |                                  |   | 3,862,211 |  |      | 1,416,083 |  |   | 1,317,742
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Noninterest income:                                 |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Service charges                                     |  |                                 | 355,623   |                                  |   | 403,928   |  |      | 128,577   |  |   | 126,027  
|Other income                                        |  |                                 | 148,243   |                                  |   | 136,542   |  |      | 42,495    |  |   | 39,972   
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Total                                               |  |                                 | 503,866   |                                  |   | 540,470   |  |      | 171,072   |  |   | 165,999  
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Noninterest expenses:                               |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Salaries and benefits                               |  |                                 | 1,456,720 |                                  |   | 1,423,383 |  |      | 493,909   |  |   | 475,619  
|Net occupancy expense                               |  |                                 | 198,106   |                                  |   | 185,357   |  |      | 66,601    |  |   | 74,646   
|Equipment expense                                   |  |                                 | 247,039   |                                  |   | 255,584   |  |      | 81,720    |  |   | 86,327   
|Other operating expenses                            |  |                                 | 772,341   |                                  |   | 715,673   |  |      | 277,595   |  |   | 238,422  
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Total                                               |  |                                 | 2,674,206 |                                  |   | 2,579,997 |  |      | 919,825   |  |   | 875,014  
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Income before taxes                                 |  |                                 | 1,864,243 |                                  |   | 1,822,684 |  |      | 667,330   |  |   | 608,727  
|Income tax provision                                |  |                                 | 575,000   |                                  |   | 582,600   |  |      | 205,000   |  |   | 182,000  
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Net income                                          |  | $                               | 1,289,243 |                                  | $ | 1,240,084 |  | $    | 462,330   |  | $ | 426,727  
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Earnings per share:                                 |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Weighted average common shares outstanding          |  |                                 | 240,776   |                                  |   | 242,862   |  |      | 240,543   |  |   | 242,451  
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          
|Net income per common share                         |  | $                               | 5.35      |                                  | $ | 5.11      |  | $    | 1.92      |  | $ | 1.76     
|                                                    |  |                                 |           |                                  |   |           |  |      |           |  |   |          

See notes to condensed consolidated financial statements



4



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##### Table of Contents

COMMUNITYCORP

Condensed Consolidated Statements of Shareholders Equity and Comprehensive Income

for the nine months ended September 30, 2007 and 2006

(Unaudited)



|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|------------------------------------------------------------------------------------ |  | ------------ |  | --------------- | --------- |  | --------------------------------------------- | ----------------- | - |  | -------------- | -------- | - | ----- | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                                                     |  | Common Stock |  | Capital Surplus |           |  | Accumulated Other Comprehensive Income (Loss) |                   |   |  |                |          |   |       |   |            |  
|                                                                                     |  | Shares       |  | Amount          |           |  |                                               | Retained Earnings |   |  | Treasury Stock |          |   | Total |  
|Balance, December 31, 2005, As previously reported                                   |  | 300,000      |  | $               | 1,500,000 |  | $                                             | 1,716,454         |   |  | $              | (265,071 | ) |       | $ | 14,224,597 |   |  | $ | (3,532,608 | ) |  | $ | 13,643,373 |  
|Adjustment to reflect the Adoption of SEC Staff Accounting Bulletin No. 108 (Note 3) |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   | (116,000   | ) |  |   |            |   |  |   | (116,000   | )
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|Balance, December 31, 2005, as Restated                                              |  | 300,000      |  | $               | 1,500,000 |  | $                                             | 1,716,454         |   |  | $              | (265,071 | ) |       | $ | 14,108,597 |   |  | $ | (3,532,608 | ) |  | $ | 13,527,373 |  
|Cash dividends declared  ($.90 per share)                                           |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   | (219,099   | ) |  |   |            |   |  |   | (219,099   | )
|Net income for the period                                                            |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   | 1,240,084  |   |  |   |            |   |  |   | 1,240,084  |  
|Other comprehensive loss, net of taxes of $48,707                                    |  |              |  |                 |           |  |                                               |                   |   |  |                | 92,473   |   |       |   |            |   |  |   |            |   |  |   | 92,473     |  
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|Comprehensive income                                                                 |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   | 1,332,557  |  
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|Sale of treasury stock                                                               |  |              |  |                 |           |  |                                               | (2,711            | ) |  |                |          |   |       |   |            |   |  |   | 168,924    |   |  |   | 171,635    |  
|Purchase of treasury stock                                                           |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   | (219,714   | ) |  |   | (219,714   | )
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|Balance, September 30, 2006                                                          |  | 300,000      |  | $               | 1,500,000 |  | $                                             | 1,719,166         |   |  | $              | (172,598 | ) |       | $ | 15,129,582 |   |  | $ | (3,583,398 | ) |  | $ | 14,592,752 |  
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|Balance, December 31, 2006                                                           |  | 300,000      |  | $               | 1,500,000 |  | $                                             | 1,720,382         |   |  | $              | (95,015  | ) |       | $ | 15,632,119 |   |  | $ | (3,620,051 | ) |  | $ | 15,137,435 |  
|Cash dividends declared  ($1.00 per share)                                          |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   | (240,543   | ) |  |   |            |   |  |   | (240,543   | )
|Net income for the period                                                            |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   | 1,289,243  |   |  |   |            |   |  |   | 1,289,243  |  
|Other comprehensive income, net of taxes of $ 39,240                                 |  |              |  |                 |           |  |                                               |                   |   |  |                | 74,500   |   |       |   |            |   |  |   |            |   |  |   | 74,500     |  
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|Comprehensive income                                                                 |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   | 1,363,743  |  
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|Sale of treasury stock                                                               |  |              |  |                 |           |  |                                               | 2,814             |   |  |                |          |   |       |   |            |   |  |   | 28,738     |   |  |   | 31,552     |  
|Purchase of treasury stock                                                           |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   | (112,200   | ) |  |   | (112,200   | )
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  
|Balance, September 30, 2007                                                          |  | 300,000      |  | $               | 1,500,000 |  | $                                             | 1,723,196         |   |  | $              | (20,515  | ) |       | $ | 16,680,819 |   |  | $ | (3,703,513 | ) |  | $ | 16,179,987 |  
|                                                                                     |  |              |  |                 |           |  |                                               |                   |   |  |                |          |   |       |   |            |   |  |   |            |   |  |   |            |  

See notes to condensed consolidated financial statements



5



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##### Table of Contents

COMMUNITYCORP

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  |                                 |             |   |      |   |            |  
|--------------------------------------------------------------------------------- |  | ------------------------------- | ----------- | - | ---- | - | ---------- | -
|                                                                                  |  | Nine Months Ended September 30, |            
|                                                                                  |  | 2007                            |             |   | 2006 |  
|Cash flows from operating activities:                                             |  |                                 |             |   |      |   |            |  
|Net income                                                                        |  | $                               | 1,289,243   |   |      | $ | 1,240,084  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                 |             |   |      |   |            |  
|Depreciation                                                                      |  |                                 | 169,313     |   |      |   | 180,141    |  
|Provision for possible loan losses                                                |  |                                 | 170,000     |   |      |   | 225,000    |  
|Amortization less accretion on investments                                        |  |                                 | (44,586     | ) |      |   | 16,604     |  
|Amortization of deferred loan costs                                               |  |                                 | (6,611      | ) |      |   | (1,588     | )
|Increase in interest receivable                                                   |  |                                 | (111,282    | ) |      |   | (133,758   | )
|Increase (decrease) in interest payable                                           |  |                                 | (25,989     | ) |      |   | 678,006    |  
|(Increase) decrease in other assets                                               |  |                                 | 66,173      |   |      |   | (162,341   | )
|Increase (increase) in other liabilities                                          |  |                                 | (129,871    | ) |      |   | 99,678     |  
|                                                                                  |  |                                 |             |   |      |   |            |  
|Net cash provided by operating activities                                         |  |                                 | 1,376,390   |   |      |   | 2,141,826  |  
|                                                                                  |  |                                 |             |   |      |   |            |  
|Cash flows from investing activities:                                             |  |                                 |             |   |      |   |            |  
|Net increase in loans to customers                                                |  |                                 | (3,015,190  | ) |      |   | (8,213,641 | )
|Purchases of securities available-for-sale                                        |  |                                 | (23,599,980 | ) |      |   | (5,664,681 | )
|Maturities of securities available-for-sale                                       |  |                                 | 17,166,587  |   |      |   | 4,084,396  |  
|Purchases of securities held-to-maturity                                          |  |                                 | (300,000    | ) |      |   |           |  
|Maturities of securities held-to-maturity                                         |  |                                 | 55,000      |   |      |   | 303,168    |  
|Increase in nonmarketable equity securities                                       |  |                                 | (4,400      | ) |      |   | (3,200     | )
|Decrease in time deposits with other banks                                        |  |                                 | 100,000     |   |      |   | 200,000    |  
|Purchases of premises and equipment                                               |  |                                 | (60,475     | ) |      |   | (35,291    | )
|                                                                                  |  |                                 |             |   |      |   |            |  
|Net cash used by investing activities                                             |  |                                 | (9,658,458  | ) |      |   | (9,329,249 | )
|                                                                                  |  |                                 |             |   |      |   |            |  
|Cash flows from financing activities:                                             |  |                                 |             |   |      |   |            |  
|Net increase in deposit accounts                                                  |  |                                 | 6,094,221   |   |      |   | 20,383,677 |  
|Increase in short-term borrowings                                                 |  |                                 | 20,000      |   |      |   | 80,000     |  
|Dividends paid                                                                    |  |                                 | (240,543    | ) |      |   | (219,099   | )
|Sale of treasury stock                                                            |  |                                 | 31,552      |   |      |   | 171,635    |  
|Purchase of treasury stock                                                        |  |                                 | (112,200    | ) |      |   | (219,714   | )
|                                                                                  |  |                                 |             |   |      |   |            |  
|Net cash provided by financing activities                                         |  |                                 | 5,793,030   |   |      |   | 20,196,499 |  
|                                                                                  |  |                                 |             |   |      |   |            |  
|Net increase (decrease) in cash and cash equivalents                              |  |                                 | (2,489,038  | ) |      |   | 13,009,076 |  
|Cash and cash equivalents, beginning of period                                    |  |                                 | 14,404,317  |   |      |   | 7,862,462  |  
|                                                                                  |  |                                 |             |   |      |   |            |  
|Cash and cash equivalents, end of period                                          |  | $                               | 11,915,279  |   |      | $ | 20,871,538 |  
|                                                                                  |  |                                 |             |   |      |   |            |  
|Cash paid during the period for:                                                  |  |                                 |             |   |      |   |            |  
|Income taxes                                                                      |  | $                               | 682,280     |   |      | $ | 623,700    |  
|Interest                                                                          |  |                                 | 3,565,484   |   |      |   | 2,106,839  |  
|                                                                                  |  |                                
|Supplemental non cash activities                                                  |  |                                 |             |   |      |   |            |  
|Changes in unrealized gains (losses) on securities available-for-sale             |  | $                               | 74,500      |   |      | $ | 92,473     |  

See notes to condensed consolidated financial statements



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##### Table of Contents

COMMUNITYCORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying condensed 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 condensed consolidated financial statements as of September 30, 2007
and for the interim periods ended September 30, 2007 and 2006 are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. The financial
information as of December 31, 2006 has been derived from the audited consolidated financial statements as of that date. For further information, refer to the consolidated financial statements and the related notes included in
Communitycorps 2006 Annual Report.

NOTE 2 - COMPREHENSIVE INCOME

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



|                                                                      |  |                |         |             |   |         |                   |  |   |        
|--------------------------------------------------------------------- |  | -------------- | ------- | ----------- | - | ------- | ----------------- |  | - | -------
|                                                                      |  | Pre-tax Amount |         | Tax Benefit |   |         | Net-of-tax Amount
|For the Nine Months Ended September 30, 2007:                         |  |                |         |             |   |         |                   |  |   |        
|Net unrealized gains on securities available-for-sale                 |  | $              | 113,740 |             | $ | (39,240 | )                 |  | $ | 74,500 
|Reclassification adjustment for gains (losses) realized in net income |  |                |        |             |   |         |                   |  |   |        
|                                                                      |  |                |         |             |   |         |                   |  |   |        
|Other comprehensive income (loss)                                     |  | $              | 113,740 |             | $ | (39,240 | )                 |  | $ | 74,500 
|                                                                      |  |                |         |             |   |         |                   |  |   |        
|                                                                      |  |                |        
|For the Nine Months Ended September 30, 2006:                         |  |                |         |             |   |         |                   |  |   |        
|Net unrealized gains on securities available-for-sale                 |  | $              | 141,180 |             | $ | (48,707 | )                 |  | $ | 92,473 
|Reclassification adjustment for gains (losses) realized in net income |  |                |        |             |   |        |                   |  |   |       
|                                                                      |  |                |         |             |   |         |                   |  |   |        
|Other comprehensive income (loss)                                     |  | $              | 141,180 |             | $ | (48,707 | )                 |  | $ | 92,473 
|                                                                      |  |                |         |             |   |         |                   |  |   |        
|                                                                      |  |                |        
|For the Three Months Ended September 30, 2007:                        |  |                |         |             |   |         |                   |  |   |        
|Net unrealized gains on securities available-for-sale                 |  | $              | 282,749 |             | $ | (97,548 | )                 |  | $ | 185,201
|Reclassification adjustment for gains (losses) realized in net income |  |                |        |             |   |        |                   |  |   |       
|                                                                      |  |                |         |             |   |         |                   |  |   |        
|Other comprehensive income (loss)                                     |  | $              | 282,749 |             | $ | (97,548 | )                 |  | $ | 185,201
|                                                                      |  |                |         |             |   |         |                   |  |   |        
|                                                                      |  |                |        
|For the Three Months Ended September 30, 2006:                        |  |                |         |             |   |         |                   |  |   |        
|Net unrealized gains on securities available-for-sale                 |  | $              | 217,513 |             | $ | (75,042 | )                 |  | $ | 142,471
|Reclassification adjustment for gains (losses) realized in net income |  |                |        |             |   |        |                   |  |   |       
|                                                                      |  |                |         |             |   |         |                   |  |   |        
|Other comprehensive income (loss)                                     |  | $              | 217,513 |             | $ | (75,042 | )                 |  | $ | 142,471
|                                                                      |  |                |         |             |   |         |                   |  |   |        

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



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##### Table of Contents

COMMUNITYCORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 3  ADOPTION OF SEC STAFF ACCOUNTING BULLETIN NO. 108

The Company has adopted SEC Staff Accounting Bulletin No. 108 (SAB 108), Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB 108 states that registrants
must quantify the impact of correcting all misstatements, including both the carryover (iron curtain method) and reversing (rollover method) effects of prior-year misstatements on the current-year financial statements, and evaluate misstatements
measured under each method in light of quantitative and qualitative factors. Under SAB 108, prior-year misstatements that are material to the current year must be corrected, even though such correction previously was and continues to be immaterial
to the prior-year financial statements. Correcting prior-year financial statements for such immaterial errors does not require previously filed reports to be amended. Such corrections can be made the next time the Company files the
prior-year financial statements.

In adopting the requirements of SAB 108, the Company adjusted its income tax accruals, which had been understated by
$116,000 as of January 1, 2006. Such understatement resulted from the under accrual of income taxes payable in each of the prior three years, which were previously evaluated as being immaterial under the rollover method. The Company has
reported the cumulative effect of the initial application of SAB 108 by reducing retained earnings as of January 1, 2006 by $116,000, and increasing by the same amount, its income tax expense accruals. The adjustment of the quarterly financial
results for 2006 will be accomplished by adjusting the applicable financial statement line items when such information is next presented. Reports previously filed with the SEC will not be amended.



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##### Table of Contents

COMMUNITYCORP

Item 2 - Managements Discussion and Analysis or Plan of Operations

The following is a discussion of the
Companys financial condition as of September 30, 2007 compared to December 31, 2006, and the results of operations for the three and nine months ended September 30, 2007 compared to the three and nine months ended
September 30, 2006. These comments should be read in conjunction with the Companys condensed consolidated 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 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 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 it from the weighted-average yield on earning assets.

Net interest
income for the nine months ended September 30, 2007, was $4,204,583 compared to $4,087,211 for the same period last year, an increase of 2.87%. For the quarter ended September 30, 2007, net interest income was $1,446,083 compared to
$1,392,742 for the quarter ended September 30, 2006, an increase of 3.83%. The increase in both periods was primarily attributable to the increase in the balances of earning assets plus the impact of higher yields earned on these balances.

For the nine months ended September 30, 2007, average-earning assets totaled $154,351,532 with an annualized average yield of 6.71% compared to
$146,185,702 and 6.29%, respectively, for the same period last year. Average interest-bearing liabilities totaled $128,318,606 with an annualized average cost of 3.69% for the nine months ended September 30, 2007, compared to $122,288,772 and
3.04%, respectively, for the same period last year.

For the quarter ended September 30, 2007, average-earning assets totaled $156,242,686 with an
annualized average yield of 6.85% compared to $152,069,504 and 6.47%, respectively, for the same period last year. Average interest-bearing liabilities totaled $130,168,639 with an annualized average cost of 3.73% for the quarter ended
September 30, 2007, compared to $127,106,779 and 3.30%, respectively, for the same period last year.

Our annualized yield on earning assets increased
42 and 38 basis points during the nine months and quarter ended September 30, 2007, respectively, from the annualized yield on earnings assets for the same periods last year. Annualized average cost of our interest-bearing liabilities increased
65 and 43 basis points during the nine months and quarter ended September 30, 2007, respectively, from the annualized average cost of our interest-bearing liabilities for the same periods last year.

Our net interest margin and net interest spread was 3.64% and 3.02%, respectively, for the nine months ended September 30, 2007, compared to 3.74% and 3.24%,
respectively, for the nine months ended September 30, 2006. For the quarter ended September 30, 2007 our net interest margin and our net interest spread was 3.67% and 3.12%, respectively, compared to 3.63% and 3.16%, respectively, for the
quarter ended September 30, 2006. The decrease in the net interest margin for the nine months ended September 30, 2007, and the slight increase in the net interest margin for the quarter ended September 30, 2007, as well as the net
decrease in the net interest spread for the nine-months and quarter ended September 30, 2007, is primarily attributable to the volume of fixed rate loans included in our loan portfolio.

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



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##### Table of Contents

COMMUNITYCORP

Item 2 - Managements Discussion and Analysis or Plan of Operations- continued



Net Interest Income (continued)

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 70.03% and 69.13% of average-earning assets for the nine months ended September 30, 2007 and 2006, respectively, and 69.80%, and 68.59% for the quarter s ended September 30, 2007 and 2006,
respectively. Loan interest income for the nine months and three months ended September 30, 2007, totaled $6,135,722 and $2,105,173, respectively, compared to $5,491,515 and $1,934,962, respectively, for the same periods in 2006. The annualized
average yield on loans was 7.59% and 7.66% for the nine months and three months ended September 30, 2007, respectively. Average balances of loans increased to $108,096,983 during the nine months ended September 30, 2007, an increase of
$7,035,515 over the average of $101,061,468 during the comparable period in 2006. For the quarters ended September 30, 2007, the average balances of loans increased by $4,743,691 over the average balances of loans of $104,311,736 for the
quarter ended September 30, 2006. Fixed rates loans comprised approximately 99% of our loan portfolio for all periods presented.

Investment
securities averaged $36,435,277 or 23.61% of average-earning assets, for the nine months ended September 30, 2007, compared to $34,158,729, or 23.37% of average earning assets, for the same period in 2006. For the quarter ended
September 30, 2007, investment securities averaged $39,344,021 or 25.18% of average-earnings assets compared to $35,134,334 or 23.10% of average earnings-assets for the three months ended September 30, 2006. Interest earned on investment
securities amounted to $1,219,149 for the nine months ended September 30, 2007, compared to $980,992 for the same period last year. For the quarter ended September 30, 2007, interest earned on investment securities amounted to $459,696
compared to $352,717 for the same period last year. Investment securities yielded 4.47% and 3.84% for the nine months ended September 30, 2007 and 2006, respectively. For the quarters ended September 30, 2007 and 2006, the yields on
investment securities were 4.64% and 3.98%, respectively.

Total interest expense for the nine months ended September 30, 2007 and 2006 was $3,539,495
and $2,784,845, respectively. For the quarters ended September 30, 2007 and 2006, interest expense was $1,223,107 and $1,058,457, respectively. The largest component of interest expense is interest on deposit accounts. Interest expense for
deposit accounts was $3,530,825 and $2,773,956, for the nine months ended September 30, 2007 and 2006, respectively. The average balance of interest-bearing deposits increased to $128,053,005 during the nine months ended September 30,
2007, from $121,827,841during the same period last year. During the quarter ended September 30, 2007, the average balances of interest-bearing deposits increased to $129,890,976 from $126,732,106 for the same period last year. The annualized
average cost of deposits was 3.69% for the nine months ended September 30, 2007, compared to 3.04% for the same period in 2006. For the quarters ended September 30, 2007 and 2006, the annualized average cost of deposits was 3.73% and
3.30%, respectively.

Provision and Allowance for Loan Losses

We provide for loan losses using the allowance method. Increases to the allowance are charged by 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.



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##### Table of Contents

COMMUNITYCORP

Item 2 - Managements Discussion and Analysis or Plan of Operations- continued



Provision and Allowance for Loan Losses (continued)

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 and future 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 and future 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

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, future market expansions, 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 1.77% and 1.74%% of total loans at September 30, 2007 and 2006, respectively. The allowance for loan losses at September 30, 2007, is reflective of the results of our allowance model methodology. We monitor
and evaluate the adequacy of the allowance and loss exposure in the loan portfolio by considering the borrowers financial conditions and other factors in the unallocated component of the allowance model methodology. Accordingly, we believe the
allowance as of September 30, 2007, 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 the nine months ended September 30, 2007, the provision
charged to expense was $170,000 as compared to $225,000 in the same period in 2006. For the three months ended September 30, 2007 and 2006, the provision charged to expense was $30,000 and $75,000, respectively.

Noninterest Income

Noninterest income for the nine months ended
September 30, 2007, was $503,866, a decrease of $36,604 or 6.77% from the comparable period in 2006. This decrease is partially attributable to the decrease in service charges on deposit accounts. This decrease in service charges is mainly
attributable to the closing of problem accounts and to being more selective in opening new accounts that could potentially be problematic. Income from service charges was $355,623 and $403,928 for the nine months ended September 30, 2007 and
2006, respectively, while other income was $148,243 and $136,542, respectively.

For the quarter ended September 30, 2007, noninterest income
increased $5,073 or 3.06% over the same period in 2006. Service charges on deposit accounts increased $2,550 from the quarter ended September 30, 2006, to $128,577 for the quarter ended September 30, 2007. Other income was $42,495 and
$39,972 for the quarter ended June 30, 2007 and 2006, respectively.



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##### Table of Contents

COMMUNITYCORP

Item 2 - Managements Discussion and Analysis or Plan of Operations- continued



Noninterest Expense

Total noninterest expense for the nine months ended September 30, 2007, increased $94,209 or 3.65% over the same period in 2006. Total noninterest expense was $2,674,206 and $2,579,997 for the nine months ended September 30, 2007
and 2006, respectively. Compared to the nine months ended September 30, 2006, salaries and benefits increased $33,337 or 2.34% to $1,456,720; net occupancy and equipment expense increased $4,204 or 0.95% to $445,145; and other operating
expenses increased $56,668 or 7.92% to $772,341.

For the quarter ended September 30, 2007, noninterest expense increased $44,811 or 5.12% over the
same period in 2006. Noninterest expense was $919,825 and $875,014 for the quarter ended September 30, 2007 and 2006, respectively. Compared to the quarter ended September 30, 2006, salaries and benefits increased $18,290 or 3.85% to
$493,909; net occupancy and equipment expense decreased $12,652 or 7.86% to $148,321; and other operating expenses increased $39,173 or 16.43% to $277,595.

Income Taxes

The income tax provision for the nine months ended September 30, 2007, was $575,000 as compared to $582,600 for the same
period in 2006. The effective tax rates were 30.84% and 31.96% for the nine months ended September 30, 2007 and September 30, 2006, respectively. For the quarters ended September 30, 2007 and 2006, the income tax provision was
$205,000 and $182,000, respectively. The effective tax rates were 30.72% and 29.90% for the quarters ended September 30, 2007 and September 30, 2006, respectively.

Net Income

The combination of the above factors resulted in net income for the nine months ended September 30,
2007, of $1,289,243 as compared to $1,240,084 for the same period in 2006. This represents an increase of $49,159 or 3.96% over the same period in 2006. Net income for the quarter ended September 30, 2007, was $462,330 as compared to $426,727
for quarter ended September 30, 2006, which represents an increase $35,603 or 8.34% from the same period in 2006.

Assets and Liabilities

During the first nine months of 2007, total assets increased $7,000,913, or 4.43%, when compared to December 31, 2006. The increase in total
assets was mainly attributable to investments securities and gross loans, which increased $6,841,119 and $2,914,281, respectively. These increases were offset by the decrease in federal funds sold, which decreased $4,313,000.

For the nine months ended September 30, 2007 total liabilities increased $5,958,361 or 4.17% from December 31, 2006. Deposits increased $6,094,221 or 4.33%,
while all other liabilities decreased $135,860 or 6.27%.

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 demands.



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##### Table of Contents

COMMUNITYCORP

Item 2 - Managements Discussion and Analysis or Plan of Operations- continued



Loans

Our loan
portfolio during the nine months ended September 30, 2007, increased $2,914,281 or 2.75% during the period. Balances within the major loans receivable categories as of September 30, 2007 and December 31, 2006, are as follows:



|                           |  |                    |             |                   |   |            
|-------------------------- |  | ------------------ | ----------- | ----------------- | - | -----------
|                           |  | September 30, 2007 |             | December 31, 2006
|Real estate  construction |  | $                  | 4,375,408   |                   | $ | 3,234,546  
|Real estate  mortgage     |  |                    | 32,485,772  |                   |   | 33,437,784 
|Commercial and industrial  |  |                    | 60,963,985  |                   |   | 57,823,076 
|Consumer and other         |  |                    | 10,929,476  |                   |   | 11,344,954 
|                           |  |                    |             |                   |   |            
|                           |  | $                  | 108,754,641 |                   | $ | 105,840,360
|                           |  |                    |             |                   |   |            

Risk Elements in the Loan Portfolio

The following is a summary of risk elements in the loan portfolio:



|                                                   |  |               |           |      |   |          
|-------------------------------------------------- |  | ------------- | --------- | ---- | - | ---------
|                                                   |  | September 30,
|                                                   |  | 2007          |           | 2006
|Nonaccrual loans                                   |  | $             | 758,636   |      | $ | 582,716  
|Accruing loans more than 90 days past due          |  | $             | 3,433     |      | $ | 2,798    
|Loans identified by the internal review mechanism: |  |               |           |      |   |          
|Criticized                                         |  | $             | 1,459,273 |      | $ | 98,849   
|Classified                                         |  | $             | 1,091,095 |      | $ | 2,529,459

Criticized loans have potential weaknesses that deserve close attention and could, if uncorrected, result in
deterioration of the prospects for repayment or our credit position at a future date. Classified loans are inadequately protected by the sound worth and paying capacity of the borrower or any collateral and there is a distinct possibility or
probability that we will sustain a loss if the deficiencies are not corrected.

At September 30, 2007, real estate or other collateral secured
practically all of the loans that were criticized and classified. In the event of foreclosure on these loans, there can be no assurance that in the case of 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 of this internal review process are the primary determining factor in
managements assessment of the adequacy of the allowance for loan losses.

Activity in the Allowance for Loan Losses is as follows:



|                                                 |  |               |             |   |      |   |             |  
|------------------------------------------------ |  | ------------- | ----------- | - | ---- | - | ----------- | -
|                                                 |  | September 30, |            
|                                                 |  | 2007          |             |   | 2006 |  
|Balance, January 1,                              |  | $             | 1,856,888   |   |      | $ | 1,664,948   |  
|Provision for loan losses for the period         |  |               | 170,000     |   |      |   | 225,000     |  
|Net loans (charged-off) recovered for the period |  |               | (107,520    | ) |      |   | (25,031     | )
|                                                 |  |               |             |   |      |   |             |  
|Balance, end of period                           |  | $             | 1,919,368   |   |      | $ | 1,844,917   |  
|                                                 |  |               |             |   |      |   |             |  
|Gross loans outstanding, end of period           |  | $             | 108,754,641 |   |      | $ | 105,765,497 |  
|Allowance for loan losses to loans outstanding   |  |               | 1.77        | % |      |   | 1.74        | %



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##### Table of Contents

COMMUNITYCORP

Item 2 - Managements Discussion and Analysis or Plan of Operations- continued



Deposits

Total deposits increased $6,094,221 or 4.33% from December 31, 2006. Interest-bearing deposits increased $7,268,864 to $128,290,252 at September 30, 2007. Noninterest-bearing deposits decreased $1,174,643 to $18,590,223 at
September 30, 2007. Expressed in percentages, interest-bearing deposits increased 6.01%, noninterest-bearing deposits decreased 5.94%.

Balances
within the major deposit categories are as follows:



|                                    |  |                   |             |                  |   |            
|----------------------------------- |  | ----------------- | ----------- | ---------------- | - | -----------
|                                    |  | September 30,2007 |             | December 31,2006
|Noninterest-bearing demand deposits |  | $                 | 18,590,233  |                  | $ | 19,764,876 
|Interest-bearing demand deposits    |  |                   | 22,805,173  |                  |   | 23,916,250 
|Savings deposits                    |  |                   | 16,828,352  |                  |   | 16,610,063 
|Certificates of deposits            |  |                   | 88,656,727  |                  |   | 80,495,075 
|                                    |  |                   |             |                  |   |            
|                                    |  | $                 | 146,880,485 |                  | $ | 140,786,264
|                                    |  |                   |             |                  |   |            

There were no brokered deposits at December 31, 2006 or September 30, 2007.

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), which was at 73.91% at September 30, 2007 and 75.04% at December 31, 2006.

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. In addition, funds from maturing loans are a source of liquidity.

At September 30, 2007, the Bank had available an unused short-term line of credit to purchase up to $3,800,000 of federal funds from an unrelated
correspondent institution. 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 September 30, 2007, the available credit totaled
approximately $24,762,000, and there were no borrowings outstanding. Any borrowings from the Federal Home Loan Bank will be secured by liens on all of the Banks 1-4 family residential first lien mortgage loans and or investment securities.



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##### Table of Contents

COMMUNITYCORP

Item 2 - Managements Discussion and Analysis or Plan of Operations- continued



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. 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 Nine Months Ended
September 30, 2007 Compared to the Nine Months Ended September 30, 2006  Net Interest Income, our net interest margin has decreased during the current year. If net interest margin continues to decline, net income will likely
decline also.

Capital Resources

Total
shareholders equity increased from $15,137,435 at December 31, 2006 to $16,179,987 at September 30, 2007. The net increase of $1,042,552 is attributable to earnings for the period of $1,289,243 before the payment of $240,543 in cash
dividends, the net increase for the period of $74,500 in the fair value of securities available-for-sale, and the net decrease of $80,648 from the sales and purchases of treasury stock.

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%.

The following table summarizes the Banks
risk-based capital at September 30, 2007:



|                                             |  |   |             |  
|-------------------------------------------- |  | - | ----------- | -
|Shareholders equity                         |  | $ | 16,089,619  |  
|Less: intangibles                            |  |   |            |  
|                                             |  |   |             |  
|Tier 1 capital                               |  |   | 16,089,619  |  
|Plus: allowance for loan losses (1)          |  |   | 1,449,850   |  
|Total capital                                |  | $ | 17,539,469  |  
|                                             |  |   |             |  
|Net risk-weighted assets                     |  | $ | 115,988,000 |  
|                                             |  |   |             |  
|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 quarterly average assets) |  |   | 9.77        | %

---

|(1) | limited to 1.25% of gross 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.



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COMMUNITYCORP

Item 2 - Managements Discussion and Analysis or Plan of Operations- continued



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 September 30, 2007, we had issued commitments to extend credit of $14,095,000 and standby letters of credit of $903,000 through various types of commercial lending arrangements. We evaluate each
customers credit worthiness 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.

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.

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, 2006, as filed in our annual report on Form 10-KSB. 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 - 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 6 - Exhibits and Reports on Form 8-K



|(a) | Exhibits  The following exhibits are filed with this report.
|--- | -------------------------------------------------------------



| | 31.1 | Rule 15d-14(a) Certifications
| | ---- | -----------------------------



| | 31.2 | Rule 15d-14(a) Certifications
| | ---- | -----------------------------



| | 32 | Section 1350 Certifications
| | -- | ---------------------------



|(b) | Reports on Form 8-K  There were no reports on form 8-K filed during the period.
|--- | --------------------------------------------------------------------------------

Items 1, 2, 4, and 5 are not applicable.

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: November 12, 2007 |  | By: |  | /s/ W. ROGER CROOK                 
|                        |  |     |  | W. Roger Crook                     
|                        |  |     |  | President & Chief Executive Officer
|                        |  |    
|Date: November 12, 2007 |  | By: |  | /s/ GWEN P. BUNTON                 
|                        |  |     |  | Gwen P. Bunton                     
|                        |  |     |  | Chief Financial Officer            



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COMMUNITYCORP

Index to Exhibits



|            |  |                              
|----------- |  | -----------------------------
|Exhibit No. |  | Description                  
|31.1        |  | Rule 15d-14(a) Certifications
|            | 
|31.2        |  | Rule 15d-14(a) Certifications
|            | 
|32          |  | Section 1350 Certifications  



18