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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 March 31, 2004



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)



---



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.



247,738 shares of common stock, $5 par value, as of May 14,
2004



Transitional Small Business Disclosure Format (Check
one):    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 - March 31, 2004 and December 31, 2003                                                    |  | 3       
|Condensed Consolidated Statements of Income - Three months ended March 31, 2004 and 2003                                        |  | 4       
|Condensed Consolidated Statements of Shareholders Equity and Comprehensive Income - Three months ended March 31, 2004 and 2003 |  | 5       
|Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 2004 and 2003                                    |  | 6       
|Notes to Condensed Consolidated Financial Statements                                                                            |  | 7       
|                                                                                                                                | 
|Item 2.
Managements Discussion and Analysis or Plan of Operations                                                              |  | 8-14    
|                                                                                                                                | 
|Item 3.
Controls and Procedures                                                                                                 |  | 14      
|                                                                                                                                | 
|PART II.
OTHER INFORMATION                                                                                                      |  |         
|                                                                                                                                | 
|Item 6.
Exhibits and Reports on Form 8-K                                                                                        |  | 15      
|(a)
Exhibits                                                                                                                    |  | 15      
|(b)
Reports on Form 8-K                                                                                                         |  | 15      
|                                                                                                                                | 
|Signature                                                                                                                       |  | 16      
|                                                                                                                                | 
|Index to Exhibits                                                                                                               |  | 17      





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##### Table of Contents

COMMUNITYCORP



Condensed
Consolidated Balance Sheets



|                                                                                                                                        |  |                |             |   |                  |   |             |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                        |  | March 31, 2004 |             |   | December 31,2003 |  
|                                                                                                                                        |  | (Unaudited)    |             |   | (Audited)        |  
|Assets:                                                                                                                                 |  |                |             |   |                  |   |             |  
|Cash and cash equivalents:                                                                                                              |  |                |             |   |                  |   |             |  
|Cash and due from banks                                                                                                                 |  | $              | 5,193,842   |   |                  | $ | 4,862,983   |  
|Federal funds sold                                                                                                                      |  |                | 18,978,000  |   |                  |   | 16,367,000  |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Total cash and cash equivalents                                                                                                         |  |                | 24,171,842  |   |                  |   | 21,229,983  |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Time deposits with other banks                                                                                                          |  |                | 699,000     |   |                  |   | 499,000     |  
|                                                                                                                                        |  |               
|Investment securities:                                                                                                                  |  |                |             |   |                  |   |             |  
|Securities available-for-sale                                                                                                           |  |                | 16,538,783  |   |                  |   | 16,494,638  |  
|Nonmarketable equity securities                                                                                                         |  |                | 214,375     |   |                  |   | 214,375     |  
|Securities held-to-maturity (estimated market value of $2,486,213 and $2,764,762 at March 31, 2004 and December 31, 2003,
respectively) |  |                | 2,341,106   |   |                  |   | 2,644,498   |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Total investment securities                                                                                                             |  |                | 19,094,264  |   |                  |   | 19,353,511  |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Loans receivable                                                                                                                        |  |                | 79,000,574  |   |                  |   | 80,169,314  |  
|Less allowance for loan losses                                                                                                          |  |                | (1,376,834  | ) |                  |   | (1,270,062  | )
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Loans, net                                                                                                                              |  |                | 77,623,740  |   |                  |   | 78,899,252  |  
|                                                                                                                                        |  |               
|Accrued interest receivable                                                                                                             |  |                | 761,983     |   |                  |   | 817,309     |  
|Premises, furniture & equipment, net                                                                                                    |  |                | 2,477,615   |   |                  |   | 2,517,479   |  
|Other real estate owned                                                                                                                 |  |                | 725,035     |   |                  |   | 725,035     |  
|Other assets                                                                                                                            |  |                | 575,106     |   |                  |   | 596,372     |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Total assets                                                                                                                            |  | $              | 126,128,585 |   |                  | $ | 124,637,941 |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Liabilities and Shareholders Equity:                                                                                                   |  |                |             |   |                  |   |             |  
|Liabilities:                                                                                                                            |  |                |             |   |                  |   |             |  
|Deposits:                                                                                                                               |  |                |             |   |                  |   |             |  
|Noninterest-bearing                                                                                                                     |  | $              | 15,504,553  |   |                  | $ | 13,952,334  |  
|Interest-bearing                                                                                                                        |  |                | 98,343,223  |   |                  |   | 98,631,492  |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Total deposits                                                                                                                          |  |                | 113,847,776 |   |                  |   | 112,583,826 |  
|Short-term borrowings                                                                                                                   |  |                | 360,000     |   |                  |   | 450,000     |  
|Accrued interest payable                                                                                                                |  |                | 290,650     |   |                  |   | 295,934     |  
|Other liabilities                                                                                                                       |  |                | 79,228      |   |                  |   | 67,958      |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Total liabilities                                                                                                                       |  |                | 114,577,654 |   |                  |   | 113,397,718 |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|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                                                                                                                         |  |                | 1,721,647   |   |                  |   | 1,731,708   |  
|Accumulated other comprehensive income                                                                                                  |  |                | 157,198     |   |                  |   | 64,545      |  
|Retained earnings                                                                                                                       |  |                | 11,437,001  |   |                  |   | 11,239,046  |  
|Treasury stock (52,262 shares in 2004 and 52,664 shares in 2003)                                                                        |  |                | (3,264,915  | ) |                  |   | (3,295,076  | )
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Total shareholders equity                                                                                                              |  |                | 11,550,931  |   |                  |   | 11,240,223  |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|Total liabilities and shareholders equity                                                                                              |  | $              | 126,128,585 |   |                  | $ | 124,637,941 |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  
|                                                                                                                                        |  |                |             |   |                  |   |             |  



See notes to condensed
consolidated financial statements.



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COMMUNITYCORP



Condensed
Consolidated Statements of Income

(Unaudited)



|                                                    |  |                              |           |      |   |          
|--------------------------------------------------- |  | ---------------------------- | --------- | ---- | - | ---------
|                                                    |  | Three Months Ended March 31,
|                                                    |  | 2004                         |           | 2003
|Interest income:                                    |  |                              |           |      |   |          
|Loans, including fees                               |  | $                            | 1,509,756 |      | $ | 1,444,280
|Securities                                          |  |                              | 146,940   |      |   | 160,536  
|Other interest income                               |  |                              | 47,266    |      |   | 60,280   
|                                                    |  |                              |           |      |   |          
|Total                                               |  |                              | 1,703,962 |      |   | 1,665,096
|                                                    |  |                              |           |      |   |          
|Interest expense:                                   |  |                              |           |      |   |          
|Deposit accounts                                    |  |                              | 381,764   |      |   | 558,036  
|Other interest expense                              |  |                              | 90        |      |   | 288      
|                                                    |  |                              |           |      |   |          
|                                                    |  |                              | 381,854   |      |   | 558,324  
|                                                    |  |                              |           |      |   |          
|Net interest income                                 |  |                              | 1,322,108 |      |   | 1,106,772
|                                                    |  |                             
|Provision for loan losses                           |  |                              | 145,951   |      |   | 85,000   
|                                                    |  |                              |           |      |   |          
|Net interest income after provision for loan losses |  |                              | 1,176,157 |      |   | 1,021,772
|                                                    |  |                              |           |      |   |          
|Noninterest income:                                 |  |                              |           |      |   |          
|Service charges                                     |  |                              | 97,416    |      |   | 97,513   
|Other income                                        |  |                              | 31,307    |      |   | 53,993   
|                                                    |  |                              |           |      |   |          
|Total                                               |  |                              | 128,723   |      |   | 151,506  
|                                                    |  |                              |           |      |   |          
|Noninterest expenses:                               |  |                              |           |      |   |          
|Salaries and benefits                               |  |                              | 385,254   |      |   | 334,689  
|Net occupancy expense                               |  |                              | 52,784    |      |   | 46,461   
|Equipment expense                                   |  |                              | 88,935    |      |   | 63,253   
|Other operating expenses                            |  |                              | 229,530   |      |   | 190,214  
|                                                    |  |                              |           |      |   |          
|Total                                               |  |                              | 756,503   |      |   | 634,617  
|                                                    |  |                              |           |      |   |          
|Income before taxes                                 |  |                              | 548,377   |      |   | 538,661  
|                                                    |  |                             
|Income tax provision                                |  |                              | 172,000   |      |   | 165,000  
|                                                    |  |                              |           |      |   |          
|Net income                                          |  | $                            | 376,377   |      | $ | 373,661  
|                                                    |  |                              |           |      |   |          
|Earnings per share:                                 |  |                              |           |      |   |          
|                                                    |  |                             
|Weighted average common shares outstanding          |  |                              | 247,585   |      |   | 274,734  
|                                                    |  |                              |           |      |   |          
|Net income per common share                         |  | $                            | 1.52      |      | $ | 1.36     
|                                                    |  |                              |           |      |   |          



See notes to condensed
consolidated financial statements.



4



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COMMUNITYCORP



Condensed
Consolidated Statement of Shareholders Equity and Comprehensive Income

for the three months ended March 31, 2004 and 2003

(Unaudited)



|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|--------------------------------------------------- |  | ------------ |  | -------------- | --------- |  | ----------------------------------- | --------- | ---------------- |  | - | ------------- |  | - | ---------- | - |  | - | ---------- | - |  | - | ---------- | -
|                                                    |  | Common stock |  | CapitalSurplus |           |  | AccumulatedOtherComprehensiveIncome |           | RetainedEarnings |  |   | TreasuryStock |  |   | Total      |  
|                                                    |  | Shares       |  | Amount         |           |  |                                     |           |                 
|                                                    |  |              |  |                |           |  |                                    
|Balance, December 31,2002                           |  | 300,000      |  | $              | 1,500,000 |  | $                                   | 1,731,708 |                  |  | $ | 128,119       |  | $ | 9,993,521  |   |  | $ | (1,104,171 | ) |  | $ | 12,249,177 |  
|                                                    |  |              |  |                |           |  |                                    
|Cash dividends declared ($.65 per share)            |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   | (179,516   | ) |  |   |            |   |  |   | (179,516   | )
|                                                    |  |              |  |                |           |  |                                    
|Net income for the period                           |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   | 373,661    |   |  |   |            |   |  |   | 373,661    |  
|                                                    |  |              |  |                |           |  |                                    
|Other comprehensive income, net of taxes of $14,937 |  |              |  |                |           |  |                                     |           |                  |  |   | 28,299        |  |   |            |   |  |   |            |   |  |   | 28,299     |  
|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                    |  |              |  |                |           |  |                                    
|Comprehensive income                                |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   | 401,960    |  
|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|                                                    |  |              |  |                |           |  |                                    
|Sale of treasury stock                              |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   | 144,225    |   |  |   | 144,225    |  
|                                                    |  |              |  |                |           |  |                                    
|Purchase of treasury stock                          |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   | (45,000    | ) |  |   | (45,000    | )
|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|Balance, March 31, 2003                             |  | 300,000      |  | $              | 1,500,000 |  | $                                   | 1,731,708 |                  |  | $ | 156,418       |  | $ | 10,187,666 |   |  | $ | (1,004,946 | ) |  | $ | 12,570,846 |  
|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|Balance, December 31, 2003                          |  | 300,000      |  | $              | 1,500,000 |  | $                                   | 1,731,708 |                  |  | $ | 64,545        |  | $ | 11,239,046 |   |  | $ | (3,295,076 | ) |  | $ | 11,240,223 |  
|                                                    |  |              |  |                |           |  |                                    
|Cash dividends declared ($.72 per share)            |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   | (178,422   | ) |  |   |            |   |  |   | (178,422   | )
|                                                    |  |              |  |                |           |  |                                    
|Net income for the period                           |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   | 376,377    |   |  |   |            |   |  |   | 376,377    |  
|                                                    |  |              |  |                |           |  |                                    
|Other comprehensive income, net of taxes of $48,802 |  |              |  |                |           |  |                                     |           |                  |  |   | 92,653        |  |   |            |   |  |   |            |   |  |   | 92,653     |  
|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|Comprehensive income                                |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   | 469,030    |  
|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|Sale of treasury stock                              |  |              |  |                |           |  |                                     | (10,061   | )                |  |   |               |  |   |            |   |  |   | 50,161     |   |  |   | 40,100     |  
|                                                    |  |              |  |                |           |  |                                    
|Purchase of treasury stock                          |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   | (20,000    | ) |  |   | (20,000    | )
|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  
|Balance, March 31, 2004                             |  | 300,000      |  | $              | 1,500,000 |  | $                                   | 1,721,647 |                  |  | $ | 157,198       |  | $ | 11,437,001 |   |  | $ | (3,264,915 | ) |  | $ | 11,550,931 |  
|                                                    |  |              |  |                |           |  |                                     |           |                  |  |   |               |  |   |            |   |  |   |            |   |  |   |            |  



See notes to condensed
consolidated financial statements.



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COMMUNITYCORP



Condensed
Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  |                              |            |   |      |   |            |  
|--------------------------------------------------------------------------------- |  | ---------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                  |  | Three Months Ended March 31, |           
|                                                                                  |  | 2004                         |            |   | 2003 |  
|Cash flows from operating activities:                                             |  |                              |            |   |      |   |            |  
|Net income                                                                        |  | $                            | 376,377    |   |      | $ | 373,661    |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                              |            |   |      |   |            |  
|Depreciation                                                                      |  |                              | 64,697     |   |      |   | 51,647     |  
|Provision for possible loan losses                                                |  |                              | 145,951    |   |      |   | 85,000     |  
|Amortization less accretion on investments                                        |  |                              | 11,926     |   |      |   | 9,156      |  
|Amortization of deferred loan costs                                               |  |                              | 944        |   |      |   | 866        |  
|(Increase) decrease in interest receivable                                        |  |                              | 55,326     |   |      |   | (17,466    | )
|Increase (decrease) in interest payable                                           |  |                              | (5,284     | ) |      |   | 57,576     |  
|(Increase) decrease in other assets                                               |  |                              | 21,266     |   |      |   | (67,805    | )
|Increase (decrease) in other liabilities                                          |  |                              | (37,532    | ) |      |   | 144,532    |  
|                                                                                  |  |                              |            |   |      |   |            |  
|Net cash provided by operating activities                                         |  |                              | 633,671    |   |      |   | 637,167    |  
|                                                                                  |  |                              |            |   |      |   |            |  
|Cash flows from investing activities:                                             |  |                              |            |   |      |   |            |  
|Net (increase) decrease in loans to customers                                     |  |                              | 1,128,617  |   |      |   | (724,272   | )
|Purchases of securities available-for-sale                                        |  |                              | (5,563,574 | ) |      |   | (5,776,527 | )
|Maturities of securities available-for-sale                                       |  |                              | 5,648,974  |   |      |   | 4,821,358  |  
|Maturities of securities held-to-maturity                                         |  |                              | 303,376    |   |      |   | 254,568    |  
|Purchases of time deposits with other banks                                       |  |                              | (200,000   | ) |      |   |           |  
|Purchases of premises and equipment                                               |  |                              | (24,833    | ) |      |   | (93,622    | )
|                                                                                  |  |                              |            |   |      |   |            |  
|Net cash provided (used) by investing activities                                  |  |                              | 1,292,560  |   |      |   | (1,518,495 | )
|                                                                                  |  |                              |            |   |      |   |            |  
|Cash flows from financing activities:                                             |  |                              |            |   |      |   |            |  
|Net increase in demand accounts                                                   |  |                              | 1,263,950  |   |      |   | 3,918,066  |  
|Decrease in short-term borrowings                                                 |  |                              | (90,000    | ) |      |   | (140,000   | )
|Dividends paid                                                                    |  |                              | (178,422   | ) |      |   | (179,516   | )
|Sale of treasury stock                                                            |  |                              | 40,100     |   |      |   | 144,225    |  
|Purchase of treasury stock                                                        |  |                              | (20,000    | ) |      |   | (45,000    | )
|                                                                                  |  |                              |            |   |      |   |            |  
|Net cash provided by financing activities                                         |  |                              | 1,015,628  |   |      |   | 3,697,775  |  
|                                                                                  |  |                              |            |   |      |   |            |  
|Net increase in cash and cash equivalents                                         |  |                              | 2,941,859  |   |      |   | 2,816,447  |  
|                                                                                  |  |                             
|Cash and cash equivalents, beginning of period                                    |  |                              | 21,229,983 |   |      |   | 21,824,998 |  
|                                                                                  |  |                              |            |   |      |   |            |  
|Cash and cash equivalents, end of period                                          |  | $                            | 24,171,842 |   |      | $ | 24,641,445 |  
|                                                                                  |  |                              |            |   |      |   |            |  
|Cash paid during the period for:                                                  |  |                              |            |   |      |   |            |  
|                                                                                  |  |                             
|Income taxes                                                                      |  | $                            | 155,500    |   |      | $ | 40,242     |  
|                                                                                  |  |                             
|Interest                                                                          |  | $                            | 387,138    |   |      | $ | 500,748    |  



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 consolidated financial statements have been prepared in accordance with the requirements for interim financial statements and, accordingly, they are
condensed and omit disclosures, which would substantially duplicate those contained in the most recent annual report to shareholders. The financial statements as of March 31, 2003 and for the interim periods ended March 31, 2004 and 2003 are
unaudited and, in our opinion, include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. The financial information as of December 31, 2003 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 2003 Annual Report.



NOTE 2 - COMPREHENSIVE INCOME (LOSS)



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



|                                                                   |  |               |         |                  |   |         |                   |  |   |       
|------------------------------------------------------------------ |  | ------------- | ------- | ---------------- | - | ------- | ----------------- |  | - | ------
|                                                                   |  | Pre-taxAmount |         | (Expense)Benefit |   |         | Net-of-tax Amount
|For the Three Months Ended March 31, 2004:                         |  |               |         |                  |   |         |                   |  |   |       
|Unrealized gains on securities available-for-sale                  |  | $             | 141,455 |                  | $ | (48,802 | )                 |  | $ | 92,653
|Plus: reclassification adjustment for gains realized in net income |  |               |        |                  |   |        |                   |  |   |      
|                                                                   |  |               |         |                  |   |         |                   |  |   |       
|Net unrealized gains on securities                                 |  |               | 141,455 |                  |   | (48,802 | )                 |  |   | 92,653
|                                                                   |  |               |         |                  |   |         |                   |  |   |       
|Other comprehensive income                                         |  | $             | 141,455 |                  | $ | (48,802 | )                 |  | $ | 92,653
|                                                                   |  |               |         |                  |   |         |                   |  |   |       



|                                                                   |  |               |        |                  |   |         |                   |  |   |       
|------------------------------------------------------------------ |  | ------------- | ------ | ---------------- | - | ------- | ----------------- |  | - | ------
|                                                                   |  | Pre-taxAmount |        | (Expense)Benefit |   |         | Net-of-tax Amount
|For the Three Months Ended March 31, 2003:                         |  |               |        |                  |   |         |                   |  |   |       
|Unrealized gains on securities available-for-sale                  |  | $             | 43,236 |                  | $ | (14,937 | )                 |  | $ | 28,299
|Plus: reclassification adjustment for gains realized in net income |  |               |       |                  |   |        |                   |  |   |      
|                                                                   |  |               |        |                  |   |         |                   |  |   |       
|Net unrealized gains on securities                                 |  |               | 43,236 |                  |   | (14,937 | )                 |  |   | 28,299
|                                                                   |  |               |        |                  |   |         |                   |  |   |       
|Other comprehensive income                                         |  | $             | 43,236 |                  | $ | (14,937 | )                 |  | $ | 28,299
|                                                                   |  |               |        |                  |   |         |                   |  |   |       



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



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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 March 31, 2004 compared to December 31, 2003, and the results of operations for the three months ended March 31, 2004 compared to the three
months ended March 31, 2003. These comments should be read in conjunction with the Companys condensed financial statements and accompanying footnotes appearing in this report. This report contains forward-looking statements
relating to, without limitation, future economic performance, plans and objectives of management for future operations, and projections of revenues and other financial items that are based on the beliefs of the Companys management, as well as
assumptions made by and information currently available to the Companys management. The words expect, estimate, anticipate and believe, as well as similar expressions, are intended to identify
forward-looking statements. The Companys actual results may differ materially from the results discussed in the forward-looking statements, and the Companys operating performance each quarter is subject to various risks and uncertainties
that are discussed in detail in the Companys filings with the Securities and Exchange Commission.



Results of Operations



Net
Interest Income



The largest component of total income is net interest
income, the difference between the income earned on assets and the interest accrued or paid on deposits and borrowings used to support such assets. The volume and mix of assets and liabilities and their sensitivity to interest rate movement
determine changes in net interest income. Net interest margin is determined by dividing annualized net interest income by average earning assets. Net interest spread is derived from determining the weighted-average rate of interest paid on deposits
and borrowings and subtracting them from the weighted-average yield on earning assets. Net interest income for the quarter ended March 31, 2004, was $1,322,108, compared to $1,106,772 for the same period last year, an increase of 19.46%. This
increase was the result of increased balances of earning assets and the impact of lower interest rates on our interest-bearing liabilities, offset partially by the effect of lower interest rates on earning assets.



For the quarter ended March 31, 2004, average earning assets totaled $116,687,100 with an
annualized average yield of 5.86%. Average earning assets and annualized average yield were $113,637,821 and 5.94%, respectively, for the quarter ended March 31, 2003. For the quarter ended March 31, 2004, average interest-bearing liabilities
totaled $98,783,447 with an annualized average cost of 1.55%. Average interest-bearing liabilities and annualized average cost were $96,391,733 and 2.35%, respectively, for the quarter ended March 31, 2003. Net interest margin was 4.54% for the
quarter ended March 31, 2004 compared to 3.94% for the quarter ended March 31, 2003. The increase in net interest margin is due primarily to the fixed rate loans included in our loan portfolio. Fixed rates loans averaged approximately 95% of our
loans during the quarter ending March 31, 2004. For the quarter ended March 31, 2004, and 2003 the average annualized yield on loans was 7.64%. While our annualized yield on earning assets declined just 8 basis points, the annualized yield of our
interest-bearing liabilities declined 80 basis points, which is reflective of the declining interest rate environment. 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 67.88% and 67.50% of average earning assets for the quarter ended March 31, 2004 and 2003, respectively. Loan interest
income for the quarter ended March 31, 2004 totaled $1,509,756, compared to $1,444,280 for the same period in 2003. The annualized average yield on loans was 7.64% for the quarter ended March 31, 2004 and 2003. The yield remained constant because of
the volume of fixed rate loans included in our loan portfolio. For the quarter ended March 31, 2004 and 2003 fixed rates loans averaged approximately 95% of our loans. Average balances of loans increased to $79,212,207 during the quarter ended March
31, 2004, an increase of $2,509,636 over the average of $76,702,571 during the comparable quarter in 2003. The increase in average balances was also a contributing factor for the constant yield realized on loans during the first quarter of 2004 and
2003.



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



Net Interest Income (continued)



Investment
securities averaged $18,596,487, or 15.94% of average earning assets, for the first quarter of 2004, compared to $17.070.639, or 15.02% of average earning assets, for the same period in 2003. Interest earned on investment securities amounted to
$146,940 for the quarter ended March 31, 2004, compared to $160,536 for the quarter ended March 31, 2003. Investment securities yielded 3.18% during the first quarter of 2004, compared to 3.81% during the same period last year. The decline in the
yield on investment securities is due to securities being called, whereby the proceeds were reinvested in lower prevailing interest rates securities.



Interest expense for the quarter ended March 31, 2004 was $381,854 compared to $558,324 for the same period last year. The largest component of interest expense is
interest on deposit accounts. The average balance of deposits increased to $98,432,568 during the quarter ended March 31, 2004 from $96,063,955 during the quarter ended March 31, 2003. The annualized average cost of deposits was 1.56% for the
quarter ended March 31, 2004, compared to 2.36% for the same period in 2003. The decrease was due to market interest rates declining throughout 2004, which has impacted the rates we offer to our depositors. Interest on other interest-bearing
liabilities for the quarter ended March 31, 2004 and 2003 was $90 and $288, receptively. The overall cost of funds was 1.55% for the quarter ended March 31, 2004, compared to 2.35% for the same period in 2003.



Provision and Allowance for Loan Losses



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 three months ended March 31, 2004, the provision charged to expense was $145,951, as compared to $85,000 in the same period in 2003. The allowance for loan
losses was 1.74% and 1.77% of total loans at March 31, 2004 and 2003 respectively. There are risks inherent in making all loans, including risks with respect to the period of time over which loans may be repaid, risks resulting from changes in
economic and industry conditions, risks inherent in dealing with individual borrowers, and, in the case of a collateralized loan, risks resulting from uncertainties about the future value of the collateral. The Bank maintains an allowance for loan
losses based on, among other things, historical experience, an evaluation of economic conditions, and regular reviews of delinquencies and loan portfolio quality. Managements judgment about the adequacy of the allowance is based upon a number
of assumptions about future events, which it believes to be reasonable, but which may not prove to be accurate. Thus, there is a risk that charge-offs in future periods could exceed the allowance for loan losses or that substantial additional
increases in the allowance for loan losses could be required. Additions to the allowance for loan losses would result in a decrease of the Banks net income and, possibly, its capital.



We believe that the allowance for loan losses is adequate to absorb all estimated future risk
of loss inherent in the loan portfolio as of March 31, 2004.



Noninterest
Income



Noninterest income decreased $22,783, or 15.04%, to $128,723
for the three months ended March 31, 2004 from the comparable period in 2003. Service charges on deposit accounts decreased .10% to $97,416 for the three months ended March 31, 2004, while other income decreased $22,686 from March 31, 2003 to
$31,307 for the same period in 2004. The decrease in other income was mainly due to a refund of overpayment of property taxes in prior years of approximately $20,000 received in the first quarter of 2003.



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



Noninterest Expense



Total noninterest expense for the three months ended March 31, 2004 was $121,886, or 19.21%,
greater than the three months ended March 31, 2003. Salaries and employee benefits increased $50,565, or 15.11%, from $334,689 for the three months ended March 31, 2003 to $385,254 for the comparable period in 2004. This increase is primarily
attributable to the addition of a branch manager and a mortgage loan processor plus normal salary increases. For the three months ended March 31, 2004, other operating expense was $39,316, or 20.67%, greater than the three months ended March 31,
2003. The increase is mainly attributable to an increase in legal fees of approximately $34,000 relating to loan collections. Net occupancy and equipment expense increased from $109,714 for the quarter ended March 31, 2003 to $141,719 for the
comparable period in 2004. The increase is mainly attributable to depreciation expense on new equipment and the implementation of internet banking during the latter part of 2003.



Income Taxes



The income tax provision for the three months ended March 31, 2004 was $172,000 compared to $165,000 for the same period in 2003. The increase was primarily a result of
an increase in income before taxes. The effective tax rates were 31.37% and 30.63% for the three months ended March 31, 2004 and 2003, respectively.



Net Income



The combination of the above factors resulted in net income for the three months ended March 31, 2004 of $376,377 as compared to $373,661 for the same period in 2003. This represents an increase of $2,716, or .73%,
more than the same period in 2003.



Assets and Liabilities



During the first three months of 2004, total assets increased $1,490,644,
or 1.20%, when compared to December 31, 2003. Total investment securities decreased $259,247 from December 31, 2003 to $19,094,264 at March 31, 2004. Loans decreased $1,168,740, or 1.46%, to $79,000,574 at March 31, 2004. These decreases were offset
by an increase in federal funds sold of $2,611,000 or 15.95% from December 31, 2003.



Total deposits also increased by 1.12%, or $1,263,950, from December 31, 2003 to $113,847,776 at March 31, 2004. Noninterest-bearing deposits increased $1,552,219 to $15,504,553 at March 31, 2004. Interest-bearing deposits decreased
$288,269 or .29% to $98,343,223 at March 31, 2004.



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



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



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COMMUNITYCORP



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



Loans



The Banks loan portfolio during the first three months of 2004 decreased slightly due to the payout of several large loans. Gross
loans decreased $1,168,740, or 1.46%, during the period. Balances within the major loans receivable categories as of March 31, 2004 and December 31, 2003 are as follows:



|                           |  |               |            |                   |   |           
|-------------------------- |  | ------------- | ---------- | ----------------- | - | ----------
|                           |  | March 31,2004 |            | December 31, 2003
|Real estate  construction |  | $             | 3,171,669  |                   | $ | 2,011,177 
|Real estate  mortgage     |  |               | 35,418,288 |                   |   | 36,813,674
|Commercial and industrial  |  |               | 29,048,317 |                   |   | 30,668,580
|Consumer and other         |  |               | 11,362,300 |                   |   | 10,675,883
|                           |  |               |            |                   |   |           
|Total gross loans          |  | $             | 79,000,574 |                   | $ | 80,169,314
|                           |  |               |            |                   |   |           



Risk Elements in the Loan
Portfolio



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



|                                                   |  |           |           |      |   |          
|-------------------------------------------------- |  | --------- | --------- | ---- | - | ---------
|                                                   |  | March 31,
|                                                   |  | 2004      |           | 2003
|Loans: Nonaccrual loans                            |  | $         | 1,521,951 |      | $ | 3,163,878
|Accruing loans more than 90 days past due          |  |           | 3,521     |      |   | 1,000    
|                                                   |  |          
|Loans identified by the internal review mechanism: |  |           |           |      |   |          
|Criticized                                         |  | $         | 522,803   |      | $ | 538,745  
|Classified                                         |  |           | 2,570,982 |      |   | 3,269,596



Criticized loans have potential
weaknesses that deserve close attention and could, if uncorrected, result in deterioration of the prospects for repayment or the Banks 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 the Bank will sustain a loss if the deficiencies are not corrected.



At March 31, 2004 real estate or other collateral secured practically all of the loans that were criticized and classified. We believe that
in the event of foreclosure on these loans the Company will not incur a significant loss on those loans because of the estimated market value of the related collateral. However, 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:



|                                                 |  |           |            |   |      |   |            |  
|------------------------------------------------ |  | --------- | ---------- | - | ---- | - | ---------- | -
|                                                 |  | March 31, |           
|                                                 |  | 2004      |            |   | 2003 |  
|Balance, January 1,                              |  | $         | 1,270,062  |   |      | $ | 1,319,202  |  
|Provision for loan losses for the period         |  |           | 145,951    |   |      |   | 85,000     |  
|Net loans (charged-off) recovered for the period |  |           | (39,179    | ) |      |   | (65,588    | )
|                                                 |  |           |            |   |      |   |            |  
|Balance, end of period                           |  | $         | 1,376,834  |   |      | $ | 1,338,614  |  
|                                                 |  |           |            |   |      |   |            |  
|Gross loans outstanding, end of period           |  | $         | 79,000,574 |   |      | $ | 75,833,439 |  
|Allowance for loan losses to loans outstanding   |  |           | 1.74       | % |      |   | 1.77       | %



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



Deposits



Total deposits increased $1,263,950, or 1.12%, from December 31, 2003. The largest change was an increase in Noninterest-bearing deposits.
Noninterest-bearing deposits increased $1,552,219 to $15,504,553 at March 31, 2004. The increase was offset by a decrease in interest-bearing deposits of $288,269. Expressed in percentages, interest-bearing deposits decreased .29% during the period
and noninterest-bearing deposits increased 11.13%.



Balances within the major
deposit categories as of March 31, 2004 and December 31, 2003 are as follows:



|                                    |  |                |             |                  |   |            
|----------------------------------- |  | -------------- | ----------- | ---------------- | - | -----------
|                                    |  | March 31, 2004 |             | December 31,2003
|Noninterest-bearing demand deposits |  | $              | 15,504,553  |                  | $ | 13,952,334 
|Interest-bearing demand deposits    |  |                | 20,569,606  |                  |   | 22,836,817 
|Savings deposits                    |  |                | 22,918,792  |                  |   | 21,945,671 
|Certificates of deposit             |  |                | 54,854,825  |                  |   | 53,849,004 
|                                    |  |                |             |                  |   |            
|                                    |  | $              | 113,847,776 |                  | $ | 112,583,826
|                                    |  |                |             |                  |   |            



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 interest-bearing deposit accounts. The level of liquidity is measured by the loan-to-total funds ratio, which was 69.30% at March 31, 2004 and 71.21% at December 31, 2003.



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 March 31, 2004 we had available an unused short-term line of credit to purchase up to
$3,800,000 of federal funds from an unrelated correspondent institution. We also have a credit availability agreement with the Federal Home Loan Bank totaling 15 percent of the Banks assets as of any quarter end. As of March 31, 2004, the
available credit totaled $18,919,288, and there were no draws on this line.



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
Three Months Ended March 31, 2004 Compared to the Three Months Ended March 31, 2004  Net Interest Income, our net interest margin has been increased during the current year. If net interest margin were 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 $11,240,223 at December 31, 2003 to $11,550,931 at
March 31, 2004. The net increase of $310,708 is attributable to earnings for the period of $376,377 before the payment of $178,422 in cash dividends, the net increase for the period of $92,653 in the fair value of securities available-for-sale and
the net increase of $20,100 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 March 31, 2004:



|                                         |  |   |            |  
|---------------------------------------- |  | - | ---------- | -
|Shareholders equity                     |  | $ | 11,250,273 |  
|Less: intangibles                        |  |   |           |  
|                                         |  |   |            |  
|Tier 1 capital                           |  |   | 11,250,273 |  
|Plus: allowance for loan losses (1)      |  |   | 1,098,225  |  
|                                         |  |   |            |  
|Total capital                            |  | $ | 12,348,498 |  
|                                         |  |   |            |  
|Risk-weighted assets                     |  | $ | 87,858,000 |  
|                                         |  |   |            |  
|Risk-based capital ratios                |  |   |            |  
|Tier 1 capital (to risk-weighted assets) |  |   | 12.81      | %
|Total capital (to risk-weighted assets)  |  |   | 14.06      | %
|Tier 1 capital (to total average assets) |  |   | 9.01       | %

---

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



The Federal Reserve Board has similar requirements for bank holding companies. The Company is currently not subject to these requirements because the Federal Reserve
guidelines contain an exemption for bank holding companies of less than $150,000,000 in consolidated assets.



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COMMUNITYCORP



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



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, 2003 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.



Off-Balance
Sheet Risk



Through the operations of our Bank, we have made
contractual commitments to extend credit in the ordinary course of our business activities. These commitments are legally binding agreements to lend money to our customers at predetermined interest rates for a specified period of time. At March 31,
2004, we had issued commitments to extend credit of $6,295,000 and standby letters of credit of $1,497,000 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.



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, 3, 4, and 5 are not applicable.



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COMMUNITYCORP



SIGNATURE



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
|                   |  |              
|                   |  | By:           |  | /s/ W. ROGER CROOK                 
|                   |  |               |  | W. Roger Crook                     
|                   |  |               |  | President & Chief Executive Officer
|                   |  |              
|Date: May 14, 2004 |  | 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
| | -- | ---------------------------



17