##### Table of Contents

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U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB



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

For the Quarterly Period Ended June 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

COMMUNITYCORP

(Exact name of registrant as specified in its charter)



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

1100 N. Jefferies Boulevard

Walterboro, SC 29488

(Address of principal executive offices, including zip
code)

(843) 549-2265

(Registrants telephone number, including area code)



---

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

YES  x    NO ̈

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

240,563 shares of common stock, $5 par value, as of August 11, 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 - June 30, 2007 and December 31, 2006 (audited)                                               |  | 3       
|                                                                                                                                    | 
|Condensed Consolidated Statements of Income - Six months ended June 30, 2007 and 2006 and three months ended June 30, 2007 and 2006 |  | 4       
|                                                                                                                                    | 
|Condensed Consolidated Statements of Shareholders Equity and Comprehensive Income - Six months ended June 30, 2007 and 2006        |  | 5       
|                                                                                                                                    | 
|Condensed Consolidated Statements of Cash Flows - Six months ended June 30, 2007 and 2006                                           |  | 6       
|                                                                                                                                    | 
|Notes to Condensed Consolidated Financial Statements                                                                                |  | 7-8     
|                                                                                                                                    | 
|Item 2. Managements Discussion or Analysis or Plan of Operations                                                                   |  | 9-16    
|                                                                                                                                    | 
|Item 3. Controls and Procedures                                                                                                     |  | 16      
|                                                                                                                                    | 
|PART II. OTHER INFORMATION                                                                                                          |  |         
|                                                                                                                                    | 
|Item 4. Submission of Matters to a Vote of Security Holders                                                                         |  | 16      
|                                                                                                                                    | 
|Item 6. Exhibits and Reports on Form 8-K                                                                                            |  | 16      
|                                                                                                                                    | 
|(a) Exhibits                                                                                                                        |  | 16      
|                                                                                                                                    | 
|(b) Reports on Form 8-K                                                                                                             |  | 16      
|                                                                                                                                    | 
|Signatures                                                                                                                          |  | 17      
|                                                                                                                                    | 
|Index to Exhibits                                                                                                                   |  | 18      



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##### Table of Contents

COMMUNITYCORP

Condensed Consolidated Balance Sheets



|                                                                                                                            |  |               |             |   |                  |   |             |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                            |  | June 30, 2007 |             |   | December 31,2006 |  
|                                                                                                                            |  | (Unaudited)   |             |   | (Audited)        |  
|Assets:                                                                                                                     |  |               |             |   |                  |   |             |  
|Cash and cash equivalents:                                                                                                  |  |               |             |   |                  |   |             |  
|Cash and due from banks                                                                                                     |  | $             | 5,440,900   |   |                  | $ | 6,041,317   |  
|Federal funds sold                                                                                                          |  |               | 9,597,000   |   |                  |   | 8,363,000   |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Total cash and cash equivalents                                                                                             |  |               | 15,037,900  |   |                  |   | 14,404,317  |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Time deposits with other banks                                                                                              |  |               | 100,000     |   |                  |   | 100,000     |  
|Investment securities:                                                                                                      |  |               |             |   |                  |   |             |  
|Available-for-sale                                                                                                          |  |               | 33,176,585  |   |                  |   | 32,468,498  |  
|Held-to-maturity (estimated market value of $1,823,215 and $1,596,065 at June 30, 2007 and December 31, 2006,
respectively) |  |               | 1,819,345   |   |                  |   | 1,574,215   |  
|Nonmarketable equity securities                                                                                             |  |               | 347,257     |   |                  |   | 342,857     |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Total investment securities                                                                                                 |  |               | 35,343,187  |   |                  |   | 34,385,570  |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Loans receivable                                                                                                            |  |               | 108,482,169 |   |                  |   | 105,840,360 |  
|Less allowance for loan losses                                                                                              |  |               | (1,919,340  | ) |                  |   | (1,856,888  | )
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Loans, net                                                                                                                  |  |               | 106,562,829 |   |                  |   | 103,983,472 |  
|Premises, furniture & equipment, net                                                                                        |  |               | 3,060,056   |   |                  |   | 3,130,914   |  
|Accrued interest receivable                                                                                                 |  |               | 1,376,351   |   |                  |   | 1,216,414   |  
|Other assets                                                                                                                |  |               | 839,508     |   |                  |   | 871,299     |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Total assets                                                                                                                |  | $             | 162,319,831 |   |                  | $ | 158,091,986 |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Liabilities and Shareholders Equity:                                                                                       |  |               |             |   |                  |   |             |  
|Liabilities:                                                                                                                |  |               |             |   |                  |   |             |  
|Deposits:                                                                                                                   |  |               |             |   |                  |   |             |  
|Noninterest-bearing                                                                                                         |  | $             | 18,241,361  |   |                  | $ | 19,764,876  |  
|Interest-bearing                                                                                                            |  |               | 126,793,807 |   |                  |   | 121,021,388 |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|                                                                                                                            |  |               | 145,035,168 |   |                  |   | 140,786,264 |  
|Short-term borrowings                                                                                                       |  |               | 370,000     |   |                  |   | 250,000     |  
|Accrued interest payable                                                                                                    |  |               | 1,225,380   |   |                  |   | 1,534,531   |  
|Other liabilities                                                                                                           |  |               | 156,827     |   |                  |   | 383,756     |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Total liabilities                                                                                                           |  |               | 146,787,375 |   |                  |   | 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                                                                                        |  |               | (205,716    | ) |                  |   | (95,015     | )
|Retained earnings                                                                                                           |  |               | 16,218,489  |   |                  |   | 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                                                                                                  |  |               | 15,532,456  |   |                  |   | 15,137,435  |  
|                                                                                                                            |  |               |             |   |                  |   |             |  
|Total liabilities and shareholders equity                                                                                  |  | $             | 162,319,831 |   |                  | $ | 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)



|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|--------------------------------------------------- |  | ------------------------- | --------- | --------------------------- | - | --------- |  | ---- | --------- |  | - | ---------
|                                                    |  | Six Months Ended June 30, |           | Three Months Ended June 30,
|                                                    |  | 2007                      |           | 2006                        |   | 2007      |  | 2006
|Interest income:                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Loans, including fees                               |  | $                         | 4,030,549 |                             | $ | 3,556,553 |  | $    | 2,060,151 |  | $ | 1,821,271
|Securities                                          |  |                           | 759,453   |                             |   | 628,275   |  |      | 395,173   |  |   | 331,282  
|Other interest income                               |  |                           | 284,886   |                             |   | 236,029   |  |      | 163,704   |  |   | 161,870  
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Total                                               |  |                           | 5,074,888 |                             |   | 4,420,857 |  |      | 2,619,028 |  |   | 2,314,423
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Interest expense:                                   |  |                           |           |                             |   |           |  |      |           |  |   |          
|Deposit accounts                                    |  |                           | 2,310,725 |                             |   | 1,719,516 |  |      | 1,188,825 |  |   | 955,345  
|Other interest expense                              |  |                           | 5,663     |                             |   | 6,872     |  |      | 3,267     |  |   | 3,437    
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Total                                               |  |                           | 2,316,388 |                             |   | 1,726,388 |  |      | 1,192,092 |  |   | 958,782  
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Net interest income                                 |  |                           | 2,758,500 |                             |   | 2,694,469 |  |      | 1,426,936 |  |   | 1,355,641
|Provision for loan losses                           |  |                           | 140,000   |                             |   | 150,000   |  |      | 65,000    |  |   | 75,000   
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Net interest income after provision for loan losses |  |                           | 2,618,500 |                             |   | 2,544,469 |  |      | 1,361,936 |  |   | 1,280,641
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Noninterest income:                                 |  |                           |           |                             |   |           |  |      |           |  |   |          
|Service charges                                     |  |                           | 227,046   |                             |   | 277,901   |  |      | 113,543   |  |   | 148,217  
|Other income                                        |  |                           | 105,748   |                             |   | 96,570    |  |      | 47,766    |  |   | 47,707   
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Total                                               |  |                           | 332,794   |                             |   | 374,471   |  |      | 161,309   |  |   | 195,924  
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Noninterest expenses:                               |  |                           |           |                             |   |           |  |      |           |  |   |          
|Salaries and benefits                               |  |                           | 962,811   |                             |   | 947,764   |  |      | 487,954   |  |   | 479,771  
|Net occupancy expense                               |  |                           | 131,505   |                             |   | 110,711   |  |      | 66,217    |  |   | 54,534   
|Equipment expense                                   |  |                           | 165,319   |                             |   | 169,257   |  |      | 73,869    |  |   | 84,948   
|Other operating expenses                            |  |                           | 494,746   |                             |   | 477,251   |  |      | 267,497   |  |   | 230,513  
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Total                                               |  |                           | 1,754,381 |                             |   | 1,704,983 |  |      | 895,537   |  |   | 849,766  
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Income before taxes                                 |  |                           | 1,196,913 |                             |   | 1,213,957 |  |      | 627,708   |  |   | 626,799  
|Income tax provision                                |  |                           | 370,000   |                             |   | 400,600   |  |      | 196,000   |  |   | 220,000  
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Net income                                          |  | $                         | 826,913   |                             | $ | 813,357   |  | $    | 431,708   |  | $ | 406,799  
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Earnings per share:                                 |  |                           |           |                             |   |           |  |      |           |  |   |          
|Weighted average common shares outstanding          |  |                           | 240,884   |                             |   | 243,071   |  |      | 240,557   |  |   | 242,758  
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          
|Net income per common share                         |  | $                         | 3.43      |                             | $ | 3.35      |  | $    | 1.79      |  | $ | 1.68     
|                                                    |  |                           |           |                             |   |           |  |      |           |  |   |          

See notes to condensed consolidated financial statements



4



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##### Table of Contents

COMMUNITYCORP

Condensed Consolidated Statement of Shareholders Equity and Comprehensive Income

for the six months ended June 30, 2007 and 2006

(Unaudited)



|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  
|------------------------------------------------------------------------------------ | ------ | ------------ | ------ | -------------- | --------- | ------------------------------------------ | - | --------- | ----------------- | - | -------- | -------------- |  | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                                                     |        | Common stock |        | CapitalSurplus |           | AccumulatedOtherComprehensiveIncome
(loss) |   |           | Retained Earnings |   |          | Treasury Stock |  |   | Total      |  
|                                                                                     | Shares |              | Amount |                |           |                                            |   |          
|Balance, December 31, 2005, As previously reported                                   |        | 300,000      |        | $              | 1,500,000 |                                            | $ | 1,716,455 |                   | $ | (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 |                                            | $ | 1,716,455 |                   | $ | (265,071 | )              |  | $ | 14,108,597 |   |  | $ | (3,532,608 | ) |  | $ | 13,527,373 |  
|Cash dividends declared ($.90 per share)                                             |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   | (219,098   | ) |  |   |            |   |  |   | (219,098   | )
|Net income for the period                                                            |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   | 813,357    |   |  |   |            |   |  |   | 813,357    |  
|Other comprehensive loss, net of tax benefit of $26,335                              |        |              |        |                |           |                                            |   |           |                   |   | (49,998  | )              |  |   |            |   |  |   |            |   |  |   | (49,998    | )
|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  
|Comprehensive income                                                                 |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   | 763,359    |  
|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  
|Sale of treasury stock                                                               |        |              |        |                |           |                                            |   | 2,517     |                   |   |          |                |  |   |            |   |  |   | 165,820    |   |  |   | 168,337    |  
|Purchase of treasury stock                                                           |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   | (152,964   | ) |  |   | (152,964   | )
|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  
|Balance, June 30, 2006                                                               |        | 300,000      |        | $              | 1,500,000 |                                            | $ | 1,718,972 |                   | $ | (315,069 | )              |  | $ | 14,702,856 |   |  | $ | (3,519,752 | ) |  | $ | 14,087,007 |  
|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  
|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                                                            |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   | 826,913    |   |  |   |            |   |  |   | 826,913    |  
|Other comprehensive loss, net of tax benefit of $58,308                              |        |              |        |                |           |                                            |   |           |                   |   | (110,701 | )              |  |   |            |   |  |   |            |   |  |   | (110,701   | )
|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  
|Comprehensive income                                                                 |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   | 716,212    |  
|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  
|Sale of treasury stock                                                               |        |              |        |                |           |                                            |   | 2,814     |                   |   |          |                |  |   |            |   |  |   | 28,738     |   |  |   | 31,552     |  
|Purchase of treasury stock                                                           |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   | (112,200   | ) |  |   | (112,200   | )
|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  
|Balance, June 30, 2007                                                               |        | 300,000      |        | $              | 1,500,000 |                                            | $ | 1,723,196 |                   | $ | (205,716 | )              |  | $ | 16,218,489 |   |  | $ | (3,703,513 | ) |  | $ | 15,532,456 |  
|                                                                                     |        |              |        |                |           |                                            |   |           |                   |   |          |                |  |   |            |   |  |   |            |   |  |   |            |  

See notes to condensed consolidated financial statements



5



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##### Table of Contents

COMMUNITYCORP

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  |                           |             |   |      |   |            |  
|--------------------------------------------------------------------------------- |  | ------------------------- | ----------- | - | ---- | - | ---------- | -
|                                                                                  |  | Six Months Ended June 30, |            
|                                                                                  |  | 2007                      |             |   | 2006 |  
|Cash flows from operating activities:                                             |  |                           |             |   |      |   |            |  
|Net income                                                                        |  | $                         | 826,913     |   |      | $ | 813,357    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                           |             |   |      |   |            |  
|Depreciation                                                                      |  |                           | 80,250      |   |      |   | 120,094    |  
|Provision for possible loan losses                                                |  |                           | 140,000     |   |      |   | 150,000    |  
|Amortization less accretion on investments                                        |  |                           | 8,826       |   |      |   | 10,834     |  
|Amortization of deferred loan costs                                               |  |                           | 639         |   |      |   | (2,878     | )
|Increase in interest receivable                                                   |  |                           | (159,937    | ) |      |   | (148,783   | )
|Increase (decrease) in interest payable                                           |  |                           | (309,151    | ) |      |   | 331,016    |  
|(Increase) decrease in other assets                                               |  |                           | 90,099      |   |      |   | (75,691    | )
|Increase (decrease) in other liabilities                                          |  |                           | (226,929    | ) |      |   | 17,849     |  
|                                                                                  |  |                           |             |   |      |   |            |  
|Net cash provided by operating activities                                         |  |                           | 450,710     |   |      |   | 1,215,798  |  
|                                                                                  |  |                           |             |   |      |   |            |  
|Cash flows from investing activities:                                             |  |                           |             |   |      |   |            |  
|Net increase in loans to customers                                                |  |                           | (2,719,996  | ) |      |   | (5,884,459 | )
|Purchases of securities available-for-sale                                        |  |                           | (12,544,254 | ) |      |   | (4,351,732 | )
|Maturities of securities available-for-sale                                       |  |                           | 11,658,202  |   |      |   | 1,851,874  |  
|Purchases of securities held-to-maturity                                          |  |                           | (300,000    | ) |      |   |           |  
|Proceeds from maturities of securities held-to-maturity                           |  |                           | 55,000      |   |      |   | 303,179    |  
|Maturities of time deposits with other banks                                      |  |                           |            |   |      |   | 200,000    |  
|Increase in nonmarketable equity securities                                       |  |                           | (4,400      | ) |      |   | (3,200     | )
|Purchases of premises and equipment                                               |  |                           | (9,392      | ) |      |   | (27,640    | )
|                                                                                  |  |                           |             |   |      |   |            |  
|Net cash used by investing activities                                             |  |                           | (3,864,840  | ) |      |   | (7,911,978 | )
|                                                                                  |  |                           |             |   |      |   |            |  
|Cash flows from financing activities:                                             |  |                           |             |   |      |   |            |  
|Net increase in deposit accounts                                                  |  |                           | 4,248,904   |   |      |   | 17,100,108 |  
|Increase (decrease) in short-term borrowings                                      |  |                           | 120,000     |   |      |   | (70,000    | )
|Dividends paid                                                                    |  |                           | (240,543    | ) |      |   | (219,098   | )
|Sale of treasury stock                                                            |  |                           | 31,552      |   |      |   | 168,337    |  
|Purchase of treasury stock                                                        |  |                           | (112,200    | ) |      |   | (152,964   | )
|                                                                                  |  |                           |             |   |      |   |            |  
|Net cash provided by financing activities                                         |  |                           | 4,047,713   |   |      |   | 16,826,383 |  
|                                                                                  |  |                           |             |   |      |   |            |  
|Net increase in cash and cash equivalents                                         |  |                           | 633,583     |   |      |   | 10,130,203 |  
|Cash and cash equivalents, beginning of period                                    |  |                           | 14,404,317  |   |      |   | 7,862,462  |  
|                                                                                  |  |                           |             |   |      |   |            |  
|Cash and cash equivalents, end of period                                          |  | $                         | 15,037,900  |   |      | $ | 17,992,665 |  
|                                                                                  |  |                           |             |   |      |   |            |  
|Cash paid during the period for:                                                  |  |                           |             |   |      |   |            |  
|Income taxes                                                                      |  | $                         | 237,964     |   |      | $ | 391,200    |  
|Interest                                                                          |  | $                         | 2,625,539   |   |      | $ | 1,395,372  |  
|Supplemental noncash activities                                                   |  |                           |             |   |      |   |            |  
|Changes in unrealized gains (losses) on securities available-for-sale             |  | $                         | (110,701    | ) |      | $ | (49,998    | )

See notes to condensed consolidated financial statements



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COMMUNITYCORP

NOTE 1 - BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in accordance with the requirements for interim financial statements and, accordingly, they are condensed and omit disclosures, which would
substantially duplicate those contained in the most recent annual report to shareholders. The financial statements as of June 30, 2007 and for the interim periods ended June 30, 2007 and 2006 are unaudited and, in our opinion, include all
adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. The results of operations for the six months ended June 30, 2007 are not necessarily indicative of the results, which may be expected for the
entire calendar year. The financial information as of December 31, 2006 has been derived from the audited financial statements as of that date. For further information, refer to the financial statements and the notes included in
Communitycorps 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 Six Months Ended June 30, 2007:                               |  |                |          |   |             |   |                   |  |   |          |  
|Unrealized losses on securities available-for-sale                    |  | $              | (169,009 | ) |             | $ | 58,308            |  | $ | (110,701 | )
|Reclassification adjustment for gains (losses) realized in net income |  |                |         |   |             |   |                  |  |   |         |  
|                                                                      |  |                |          |   |             |   |                   |  |   |          |  
|Other comprehensive income (loss)                                     |  | $              | (169,009 | ) |             | $ | 58,308            |  | $ | (110,701 | )
|                                                                      |  |                |          |   |             |   |                   |  |   |          |  
|For the Six Months Ended June 30, 2006:                               |  |                |          |   |             |   |                   |  |   |          |  
|Unrealized losses on securities available-for-sale                    |  | $              | (76,333  | ) |             | $ | 26,335            |  | $ | (49,998  | )
|Reclassification adjustment for gains (losses) realized in net income |  |                |         |   |             |   |                  |  |   |         |  
|                                                                      |  |                |          |   |             |   |                   |  |   |          |  
|Other comprehensive income (loss)                                     |  | $              | (76,333  | ) |             | $ | 26,335            |  | $ | (49,998  | )
|                                                                      |  |                |          |   |             |   |                   |  |   |          |  
|For the Three Months Ended June 30, 2007:                             |  |                |          |   |             |   |                   |  |   |          |  
|Unrealized losses on securities available-for-sale                    |  | $              | (223,859 | ) |             | $ | 77,231            |  | $ | (146,628 | )
|Reclassification adjustment for gains (losses) realized in net income |  |                |         |   |             |   |                  |  |   |         |  
|                                                                      |  |                |          |   |             |   |                   |  |   |          |  
|Other comprehensive income (loss)                                     |  | $              | (223,859 | ) |             | $ | 77,231            |  | $ | (146,628 | )
|                                                                      |  |                |          |   |             |   |                   |  |   |          |  
|For the Three Months Ended June 30, 2006:                             |  |                |          |   |             |   |                   |  |   |          |  
|Unrealized losses on securities available-for-sale                    |  | $              | (51,945  | ) |             | $ | 17,921            |  | $ | (34,024  | )
|Reclassification adjustment for gains (losses) realized in net income |  |                |         |   |             |   |                  |  |   |         |  
|                                                                      |  |                |          |   |             |   |                   |  |   |          |  
|Other comprehensive income (loss)                                     |  | $              | (51,945  | ) |             | $ | 17,921            |  | $ | (34,024  | )
|                                                                      |  |                |          |   |             |   |                   |  |   |          |  

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

See notes to condensed consolidated financial statements



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COMMUNITYCORP

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.

See notes to condensed consolidated financial statements



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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 June 30, 2007 compared to December 31, 2006, and the results of operations for the three and six months ended June 30, 2007 compared to the three
and six months ended June 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 them from the weighted-average yield on earning assets.

Net interest
income for the six months ended June 30, 2007, was $2,758,500, compared to $2,694,469 for the same period last year, an increase of 2.38%. For the quarter ended June 30, 2007, net interest income was $1,426,936, compared to $1,355,641 for
the quarter ended June 30, 2006 an increase of 5.26%. 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 six months ended June 30, 2007, average-earning assets totaled $153,390,282 with an annualized average yield of 6.67%, compared to $143,195,036 and 6.23%,
respectively, for the same period last year. Average interest-bearing liabilities totaled $127,378,257 with an annualized average cost of 3.67% for the six months ended June 30, 2007, compared to $119,839,841 and 2.91%, respectively, for the
same period last year. For the quarter ended June 30, 2007, average-earning assets totaled $156,145,542 with an annualized average yield of 6.73%, compared to $148,947,426 and 6.23%, respectively, for the same period last year. Average
interest-bearing liabilities totaled $129,246,808 with an annualized average cost of 3.70% for the three months ended June 30, 2007, compared to $124,831,507 and 3.08%, respectively, for the same period last year.

Our annualized yield on earning assets increased 44 and 50 basis points during the six months and quarter ended June 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 76 and 62 basis points during the six months and quarter ended June 30, 2007, respectively, from the annualized
average cost of our interest-bearing liabilities for the same periods last year.



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COMMUNITYCORP



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

Net Interest Income (continued)

Our net interest margin and net interest spread was
3.63% and 3.00%, respectively for the six months ended June 30, 2007, compared to 3.79% and 3.32%, respectively for the six months ended June 30, 2006. For the quarter ended June 30, 2007 our net interest margin and our net interest
spread was 3.67% and 3.03%, respectively compared to 3.65% and 3.15%, respectively, for the quarter ended June 30, 2006. The decrease in the net interest margin for the six months ended June 30, 2007 and the slight increase in the net
interest margin for the quarter ended June 30, 2007, as well as the net decrease in the net interest spread for the six-months and quarter ended June 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.

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 70.15% and 69.42% of average earning assets for the six months ended June 30, 2007 and 2006, respectively, and 69.48%, and 67.81% for the quarter ended June 30, 2007 and 2006, respectively.
Loan interest income for the six months ended June 30, 2007 totaled $4,030,549 compared to $3,556,553 for the same period in 2006. The annualized average yield on loans was 7.55% and 7.21% for the six months ended June 30, 2007 and 2006,
respectively. Loan interest income for the quarter ended June 30, 2007 totaled $2,060,151, compared to $1,821,271 for the same period in 2006. For the quarter ended June 30, 2007 and 2006 the annualized average yield on loans was 7.62% and
7.23%, respectively. Average balances of loans increased to $107,609,818 during the six months ended June 30, 2007, an increase of $8,200,421 over the average of $99,409,397 during the comparable period in 2006. For the quarter ended
June 30, 2007, the average balances of loans increased by $7,489,658 over the average balances of loans of $100,995,061 for the quarter ended June 30, 2006. The annualized average yield on our loans is significantly impacted by the volume
of fixed rates loans in our loan portfolio. Fixed rate loans averaged approximately 98% of our loan portfolio for all periods presented.

Investment
securities averaged $34,956,800, or 22.79% of average earning assets, for the six months ended June 30, 2007, compared to $33,662,838 or 23.51% of average earning assets, for the same period in 2006. For the quarter ended June 30, 2007,
investment securities averaged $35,479,821, or 22.72%, of average earning assets compared to $34,610,047, or 23.24% of average earnings assets, for the same period in 2006. Interest earned on investment securities amounted to $759,453 for the six
months ended June 30, 2007, compared to $628,275 for the same period last year. For the quarter ended June 30, 2007, interest earned on investment securities amounted to $395,173 compared to $331,282 for the same period last year.
Investment securities yielded 4.38% and 3.76% for the six months ended June 30, 2007 and 2006, respectively. For the quarter ended June 30, 2007 and 2006 the yields on investment securities was 4.47% and 3.84%, respectively.

Total interest expense for the six months ended June 30, 2007 and 2006 was $2,316,388 and $1,726,388, respectively. For the quarter ended June 30, 2007 and
2006, interest expense was $1,192,092 and $958,782, respectively. The largest component of interest expense is interest on deposit accounts. Interest expense for deposit accounts was $2,310,725 and $1,719,516, for the six months ended June 30,
2007 and 2006, respectively. The average balance of interest bearing deposits increased to $127,118,787 during the six months ended June 30, 2007 from $119,335,066 during the same period last year. During the quarter ended June 30, 2007,
the average balances of interest bearing deposits increased to $128,946,765 from $124,491,987 for the same period last year. The annualized average cost of deposits was 3.67% for the six months ended June 30, 2007, compared to 2.91% for the
same period in 2006. For the quarter ended June 30, 2007 and 2006, the annualized average cost of deposits was 3.70% and 3.08%, respectively.

For the
six months ended June 30, 2007 and 2006, the total annualized average cost of funds was 3.67% and 2.91%, respectively. The overall cost of funds was 3.70% and 3.08 % for the quarter ended June 30, 2007, and 2006, 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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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 1.71% of total loans at June 30, 2007 and
2006 respectively. The allowance for loan losses at June 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. Accordingly, we believe the allowance as of June 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 six months ended June 30, 2007, the provision charged to expense was $140,000 as compared to $150,000 for the same period in 2006. For the three months ended June 30, 2007
and 2006, the provision charged to expense was $65,000 and $75,000 respectively.

Noninterest Income

Noninterest income for the six months ended June 30, 2007 was $332,794, a decrease of $41,677 or 11.13% from the comparable period in 2006. This decrease is
primarily attributable to the decrease in service charges on deposit accounts. The decrease is mainly attributable to the closing of problem accounts and being more selective in opening new accounts that could potentially be problematic. Income from
service charges was $227,046 and $277,901 for the six months ended June 30, 2007 and 2006, respectively, while other income was $105,748 and 96,570, respectively.

For the quarter ended June 30, 2007, noninterest income decreased $34,615 or 17.67% over the same period in 2006. Service charges on deposit accounts decreased $34,674 from the quarter ended June 30, 2006 to
$113,543 for the quarter ended June 30, 2007. Other income was $47,766 and $47,707 for the quarter ended June 30, 2007 and 2006 respectively.



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COMMUNITYCORP



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

Noninterest Expense

Total noninterest expense for the six months
ended June 30, 2007 increased $49,398 or 2.90% over the same period in 2006. Total noninterest expense was $1,754,381 and 1,704,983 for the six months ended June 30, 2007 and 2006 respectively. Compared to the six-months ended
June 30, 2006, salaries and benefits increased $15,047 or 1.59% to $962,811, net occupancy and equipment expense increased $16,856 or 6.02% to $296,824, and other operating expenses increased $17,495 or 3.67% to $494,746.

For the quarter ended June 30, 2007, noninterest expense increased $45,771 or 5.39% over the same period in 2006. Noninterest expense was $895,537 and $849,766 for
the quarter ended June 30, 2007 and 2006, respectively. Compared to the quarter ended June 30, 2006, salaries and benefits increased $8,183 or 1.71% to $487,954, net occupancy and equipment expense increased $604 or .43% to $140,086 and
other operating expenses increased $36,984 or 16.04% to $267,497.

Income Taxes

The income tax provision for the six months ended June 30, 2007 was $370,000 as compared to $400,600 for the same period in 2006. This decrease was primarily a result of the decrease in income before taxes. The
effective tax rates were 30.91% for the six months ended June 30, 2007 and 33.00% for the six months ended June 30, 2006. The effective tax rates were 31.22% and 35.10% for the quarter ended June 30, 2007 and June 30, 2006,
respectively.

Net Income

The combination of the above
factors resulted in net income for the six months ended June 30, 2007 of $826,913 as compared to $813,357 for the same period in 2006. This represents an increase of $13,556 or 1.67% over the same period in 2006. Net income for the quarter
ended June 30, 2007 increased $24,909 or 6.12% over the same period in 2006.

Assets and Liabilities

During the first six months of 2006, total assets increased $4,227,845, or 2.67%, when compared to December 31, 2006. The increase in total assets was mainly
attributable to federal funds sold, investments securities, and gross loans, which increased $1,234,000, $957,617 and $2,641,809 respectively.

For the six
months ended June 30, 2007 total liabilities increased $3,832,824 or 2.68% from December 31, 2006. Deposits increased $4,248,904 or 3.02% and other liabilities decreased $416,080 or 19.19%.

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.

Loans

At June 30, 2007 our total loans were $108,482,169 compared to $105,840,360 at December 31, 2006, an
increase of $2,641,809 or 2.50%. Balances within the major loans receivable categories as of June 30, 2007 and December 31, 2006 are as follows:



|                           |  |               |             |                   |   |            
|-------------------------- |  | ------------- | ----------- | ----------------- | - | -----------
|                           |  | June 30, 2007 |             | December 31, 2006
|Real estate  construction |  | $             | 4,209,324   |                   | $ | 3,234,546  
|Real estate  mortgage     |  |               | 32,286,305  |                   |   | 33,437,784 
|Commercial and industrial  |  |               | 60,534,333  |                   |   | 57,752,569 
|Consumer and other         |  |               | 11,452,207  |                   |   | 11,415,461 
|                           |  |               |             |                   |   |            
|                           |  | $             | 108,482,169 |                   | $ | 105,840,360
|                           |  |               |             |                   |   |            



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COMMUNITYCORP



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

Risk Elements in the Loan Portfolio

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



|                                                   |  |          |           |      |   |          
|-------------------------------------------------- |  | -------- | --------- | ---- | - | ---------
|                                                   |  | June 30,
|                                                   |  | 2007     |           | 2006
|Nonaccrual loans                                   |  | $        | 982,589   |      | $ | 570,935  
|Accruing loans more than 90 days past due          |  |          | 2,152     |      |   | 2,023    
|Loans identified by the internal review mechanism: |  |          |           |      |   |          
|Criticized                                         |  | $        | 975,958   |      | $ | 1,351,606
|Classified                                         |  |          | 1,703,808 |      |   | 1,357,260

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 June 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:



|                                                 |  |          |             |   |      |   |             |  
|------------------------------------------------ |  | -------- | ----------- | - | ---- | - | ----------- | -
|                                                 |  | June 30, |            
|                                                 |  | 2007     |             |   | 2006 |  
|Balance, January 1,                              |  | $        | 1,856,888   |   |      | $ | 1,664,948   |  
|Provision for loan losses for the period         |  |          | 140,000     |   |      |   | 150,000     |  
|Net loans (charged-off) recovered for the period |  |          | (77,548     | ) |      |   | (51,041     | )
|                                                 |  |          |             |   |      |   |             |  
|Balance, end of period                           |  | $        | 1,919,340   |   |      | $ | 1,763,907   |  
|                                                 |  |          |             |   |      |   |             |  
|Gross loans outstanding, end of period           |  | $        | 108,482,169 |   |      | $ | 103,431,595 |  
|Allowance for loan losses to loans outstanding   |  |          | 1.77        | % |      |   | 1.71        | %

Deposits

Total deposits increased $4,248,904 or 3.02% from December 31, 2006. Interest-bearing deposits increased $5,772,419 to $126,793,807 at June 30, 2007. Noninterest-bearing deposits decreased $1,523,515 to $18,241,361 at
June 30, 2007. Expressed in percentages, interest-bearing deposits increased 4.77%, noninterest-bearing deposits decreased 7.71%.



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

Deposits (continued)

Balances within the major deposit categories are as follows:



|                                    |  |               |             |                   |   |            
|----------------------------------- |  | ------------- | ----------- | ----------------- | - | -----------
|                                    |  | June 30, 2007 |             | December 31, 2006
|Noninterest-bearing demand deposits |  | $             | 18,241,361  |                   | $ | 19,764,876 
|Interest-bearing demand deposits    |  |               | 23,332,679  |                   |   | 23,916,250 
|Savings deposits                    |  |               | 16,969,238  |                   |   | 16,610,063 
|Certificates of deposits            |  |               | 86,491,890  |                   |   | 80,495,075 
|                                    |  |               |             |                   |   |            
|                                    |  | $             | 145,035,168 |                   | $ | 140,786,264
|                                    |  |               |             |                   |   |            

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 74.61% at June 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 June 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 June 30, 2007, the available credit totaled approximately $24,348,000, and there were no borrowings outstanding. Any borrowings from the Federal Home Loan Bank will be secured by a blanket on all of the Banks 1-4 family residential
first lien mortgage loans and or investment securities.

Interest Rate Sensitivity

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

We monitor interest rate sensitivity by measuring our interest sensitivity through a gap analysis, which is the positive or negative dollar
difference between assets and liabilities that are subject to interest rate repricing within a given time period. Currently we are liability-sensitive over periods with maturity dates of less than twelve months. However, since interest rates and
yields on various interest sensitive assets and liabilities do not all adjust in the same degree when there is a change in prevailing interest rates (such as prime rate), the traditional gap analysis is only a general indicator of rate sensitivity
and net interest income volatility. As stated in Results of Operations for the Six Months Ended June 30, 2007 Compared to the Six Months Ended June 30, 2006  Net Interest Income, our net interest margin decreased during
the current period. If net interest margin continues to decline, net income will likely decline also.



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COMMUNITYCORP



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

Capital Resources

Total shareholders equity increased from
$15,137,435 at December 31, 2006 to $15,532,456 at June 30, 2007. The net increase of $395,021 is attributable to earnings for the period of $826,913 less the payment of a cash dividend of $240,543, the net decrease of $80,648 from the
sales and purchases of treasury stock and the net decrease of $110,701 in the fair value of securities available-for-sale, net of income taxes.

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
June 30, 2007:



|                                             |  |   |             |  
|-------------------------------------------- |  | - | ----------- | -
|Shareholders equity                         |  | $ | 15,627,288  |  
|Less: intangibles                            |  |   |            |  
|                                             |  |   |             |  
|Tier 1 capital                               |  |   | 15,627,288  |  
|Plus: allowance for loan losses (1)          |  |   | 1,449,050   |  
|                                             |  |   |             |  
|Total capital                                |  | $ | 17,076,338  |  
|                                             |  |   |             |  
|Net risk-weighted assets                     |  | $ | 115,924,000 |  
|                                             |  |   |             |  
|Risk-based capital ratios                    |  |   |             |  
|Tier 1 capital (to risk-weighted assets)     |  |   | 13.48       | %
|Total capital (to risk-weighted assets)      |  |   | 14.73       | %
|Tier 1 capital (to quarterly average assets) |  |   | 9.53        | %



|(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.

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 June 30, 2007, we had issued commitments to extend credit of $8,546,000 and standby letters of credit of $926,000 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.



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COMMUNITYCORP



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

Critical Accounting Policies

We have adopted various accounting
policies, which govern the application of accounting principles generally accepted in the United States in the preparation of our financial statements. Our significant accounting policies are described in the notes to the consolidated financial
statements at December 31, 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.

PART II - OTHER
INFORMATION



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

On
April 24, 2007, the Company held its Annual Meeting of Shareholders for the purpose of electing two directors for three-year terms.

The nominees for
director received the number of affirmative votes of shareholders required for such nominees election in accordance with the Bylaws of the Company with 229,896 shareholders voting for the nominees out of a total 240,563 outstanding
shareholders. During there election, there were no abstention votes, no votes against nor any votes withheld.



|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, 3, 4, and 5 are not
applicable.



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COMMUNITYCORP

SIGNATURES

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

COMMUNITYCORP



|                      |  |  |  |     |  |                    |  |                                    
|--------------------- |  |  |  | --- |  | ------------------ |  | -----------------------------------
|                      |  |  | 
|Date: August 11, 2007 |  |  |  | By: |  | /s/ W. ROGER CROOK
|                      |  |  |  |     |  |                    |  | W. Roger Crook                     
|                      |  |  |  |     |  |                    |  | President & Chief Executive Officer
|                      |  |  | 
|Date: August 11, 2007 |  |  |  | By: |  | /s/ GWEN P. BUNTON
|                      |  |  |  |     |  |                    |  | Gwen P. Bunton                     
|                      |  |  |  |     |  |                    |  | Chief Financial Officer            



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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