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U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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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, 2003



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)



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



1100 N. Jefferies
Boulevard

Walterboro, SC 29488

(Address of principal executive offices, including zip code)



(843) 549-2265

(Registrants telephone number, including area code)



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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO ̈



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



247,436 shares of common stock, $5 par value, as of
August 11, 2003



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  June 30, 2003 and December 31, 2002                                                         |  | 3       
|                                                                                              |  |                                                                                                                                    
|                                                                                              |  | Condensed Consolidated Statements of Income  Six months ended June 30, 2003 and 2002 and three months ended June 30, 2003 and 2002 |  | 4       
|                                                                                              |  |                                                                                                                                    
|                                                                                              |  | Condensed Consolidated Statements of Shareholders Equity and Comprehensive Income  Six months ended June 30, 2003 and 2002        |  | 5       
|                                                                                              |  |                                                                                                                                    
|                                                                                              |  | Condensed Consolidated Statements of Cash Flows  Six months ended June 30, 2003 and 2002                                           |  | 6       
|                                                                                              |  |                                                                                                                                    
|                                                                                              |  | Notes to Condensed Consolidated Financial Statements                                                                                |  | 7-8     
|                                                                                              | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 9-13                                                                                                                               
|                                                                                              | 
|Item 3. Controls and Procedures                                                               |  | 14                                                                                                                                 
|                                                                                              | 
|PART II. OTHER INFORMATION                                                                    |  |                                                                                                                                    
|                                                                                              | 
|Item 4. Submission of Matters to a Vote of Security Holders                                   |  | 14                                                                                                                                 
|                                                                                              | 
|Item 6. Exhibits and Reports on Form 8-K                                                      |  | 14                                                                                                                                 
|                                                                                              |  |                                                                                                                                    
|                                                                                              |  | (a) Exhibits                                                                                                                        |  | 14      
|                                                                                              |  |                                                                                                                                    
|                                                                                              |  | (b) Reports on Form 8-K                                                                                                             |  | 14      
|                                                                                              |  |                                                                                                                                    
|Signature                                                                                     |  |                                                                                                                                     |  | 15      
|                                                                                              |  |                                                                                                                                    
|Exhibits                                                                                      |  |                                                                                                                                     |  | 16      





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COMMUNITY CORP



Condensed Consolidated Balance Sheets

(Unaudited)



|                                                                                                                                       |  | June 30, 2003 |             |   | December 31,2002 |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | - | ---------------- | -
|Assets:                                                                                                                                |  |               |             |   |                  |  
|Cash and cash equivalents:                                                                                                             |  |               |             |   |                  |  
|Cash and due from banks                                                                                                                |  | $             | 4,066,920   |   |                  | $
|Federal funds sold and securities purchased under agreements to resell                                                                 |  |               | 21,593,000  |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Total cash and cash equivalents                                                                                                        |  |               | 25,659,920  |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Time deposits with other banks                                                                                                         |  |               | 499,000     |   |                  |  
|Investment securities:                                                                                                                 |  |               |             |   |                  |  
|Securities available-for-sale                                                                                                          |  |               | 11,352,973  |   |                  |  
|Nonmarketable equity securities                                                                                                        |  |               | 214,375     |   |                  |  
|Securities held-to-maturity (estimated market value of $2,841,824 and $3,156,497 at June 30, 2003 and December 31, 2002,
respectively) |  |               | 2,657,708   |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Total investment securities                                                                                                            |  |               | 14,225,056  |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Loans receivable                                                                                                                       |  |               | 78,289,899  |   |                  |  
|Less allowance for loan losses                                                                                                         |  |               | (1,331,789  | ) |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Loans, net                                                                                                                             |  |               | 76,958,110  |   |                  |  
|Accrued interest receivable                                                                                                            |  |               | 783,024     |   |                  |  
|Premises, furniture & equipment, net                                                                                                   |  |               | 2,206,549   |   |                  |  
|Other assets                                                                                                                           |  |               | 900,193     |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Total assets                                                                                                                           |  | $             | 121,231,852 |   |                  | $
|                                                                                                                                       |  |               |             |   |                  |  
|Liabilities and Shareholders Equity:                                                                                                  |  |               |             |   |                  |  
|Liabilities:                                                                                                                           |  |               |             |   |                  |  
|Deposits:                                                                                                                              |  |               |             |   |                  |  
|Noninterest-bearing                                                                                                                    |  | $             | 13,582,723  |   |                  | $
|Interest-bearing                                                                                                                       |  |               | 95,957,108  |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|                                                                                                                                       |  |               | 109,539,831 |   |                  |  
|Short-term borrowings                                                                                                                  |  |               | 400,000     |   |                  |  
|Accrued interest payable                                                                                                               |  |               | 394,206     |   |                  |  
|Other liabilities                                                                                                                      |  |               | 195,987     |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Total liabilities                                                                                                                      |  |               | 110,530,024 |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|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   |   |                  |  
|Capital surplus                                                                                                                        |  |               | 1,731,708   |   |                  |  
|Accumulated other comprehensive income                                                                                                 |  |               | 169,939     |   |                  |  
|Retained earnings                                                                                                                      |  |               | 10,563,607  |   |                  |  
|Treasury stock (52,031 shares in 2003 and 25,471 shares in 2002)                                                                       |  |               | (3,263,426  | ) |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Total shareholders equity                                                                                                             |  |               | 10,701,828  |   |                  |  
|                                                                                                                                       |  |               |             |   |                  |  
|Total liabilities and shareholders equity                                                                                             |  | $             | 121,231,852 |   |                  | $
|                                                                                                                                       |  |               |             |   |                  |  



See notes to condensed
consolidated financial statements



3



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COMMUNITYCORP



Condensed Consolidated Statements of Income

(Unaudited)



|                                                    |  | Six Months Ended June 30, |           | Three Months Ended June 30,
|--------------------------------------------------- |  | ------------------------- | --------- | ---------------------------
|                                                    |  | 2003                      |           | 2002                       
|Interest income:                                    |  |                           |           |                            
|Loans, including fees                               |  | $                         | 2,898,662 |                            
|Securities                                          |  |                           | 317,206   |                            
|Other interest income                               |  |                           | 116,753   |                            
|                                                    |  |                           |           |                            
|Total                                               |  |                           | 3,332,621 |                            
|                                                    |  |                           |           |                            
|Interest expense:                                   |  |                           |           |                            
|Deposit accounts                                    |  |                           | 1,055,481 |                            
|Other interest expense                              |  |                           | 577       |                            
|                                                    |  |                           |           |                            
|Total                                               |  |                           | 1,056,058 |                            
|                                                    |  |                           |           |                            
|Net interest income                                 |  |                           | 2,276,563 |                            
|Provision for loan losses                           |  |                           | 160,000   |                            
|                                                    |  |                           |           |                            
|Net interest income after provision for loan losses |  |                           | 2,116,563 |                            
|                                                    |  |                           |           |                            
|Other operating income:                             |  |                           |           |                            
|Service charges                                     |  |                           | 196,889   |                            
|Other income                                        |  |                           | 78,522    |                            
|                                                    |  |                           |           |                            
|Total                                               |  |                           | 275,411   |                            
|                                                    |  |                           |           |                            
|Other operating expenses:                           |  |                           |           |                            
|Salaries and benefits                               |  |                           | 696,666   |                            
|Net occupancy expense                               |  |                           | 60,756    |                            
|Equipment expense                                   |  |                           | 153,863   |                            
|Other operating expenses                            |  |                           | 391,087   |                            
|                                                    |  |                           |           |                            
|Total                                               |  |                           | 1,302,372 |                            
|                                                    |  |                           |           |                            
|Income before taxes                                 |  |                           | 1,089,602 |                            
|Income tax provision                                |  |                           | 340,000   |                            
|                                                    |  |                           |           |                            
|Net income                                          |  | $                         | 749,602   |                            
|                                                    |  |                           |           |                            
|Earnings per share:                                 |  |                           |           |                            
|Weighted average common shares outstanding          |  |                           | 247,892   |                            
|                                                    |  |                           |           |                            
|Net income per common share                         |  | $                         | 3.02      |                            
|                                                    |  |                           |           |                            



See notes to condensed
consolidated financial statements



4



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COMMUNITYCORP



Condensed Cons
olidated Statement of Shareholders Equity and Comprehensive Income

for the six months ended June 30,
2003 and 2002

(Unaudited)



|                                               |  | Common stock |         | CapitalSurplus |   | AccumulatedOtherComprehensiveIncome |  | RetainedEarnings |           |  | TreasuryStock |         |  | Total |           
|---------------------------------------------- |  | ------------ | ------- | -------------- | - | ----------------------------------- |  | ---------------- | --------- |  | ------------- | ------- |  | ----- | ----------
|                                               |  | Shares       |         | Amount         |   |                                     |  |                  |          
|Balance, December 31, 2001                     |  |              | 300,000 |                | $ | 1,500,000                           |  | $                | 1,731,708 |  | $             | 51,132  |  | $     | 8,648,977 
|Cash dividends declared ($.59 per share)       |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       | (163,846  
|Net income for the period                      |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       | 717,685   
|Other comprehensive income(loss), net of taxes |  |              |         |                |   |                                     |  |                  |           |  |               | 59,159  |  |       |           
|                                               |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|Comprehensive income                           |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|                                               |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|Purchase of treasury stock                     |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|                                               |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|Balance, June 30, 2002                         |  |              | 300,000 |                | $ | 1,500,000                           |  | $                | 1,731,708 |  | $             | 110,291 |  | $     | 9,202,816 
|                                               |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|Balance, December 31, 2002                     |  |              | 300,000 |                | $ | 1,500,000                           |  | $                | 1,731,708 |  | $             | 128,119 |  | $     | 9,993,521 
|Cash dividends declared ($.65 per share)       |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       | (179,516  
|Net income for the period                      |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       | 749,602   
|Other comprehensive income, net of taxes       |  |              |         |                |   |                                     |  |                  |           |  |               | 41,820  |  |       |           
|                                               |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|Comprehensive income                           |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|                                               |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|Sale of treasury stock                         |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|Purchase of treasury stock                     |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|                                               |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           
|Balance, June 30, 2003                         |  | $            | 300,000 |                | $ | 1,500,000                           |  | $                | 1,731,708 |  | $             | 169,939 |  | $     | 10,563,607
|                                               |  |              |         |                |   |                                     |  |                  |           |  |               |         |  |       |           



See notes to condensed
consolidated financial statements



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COMMUNITYCORP



Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  | Six Months Ended June 30, |           
|--------------------------------------------------------------------------------- |  | ------------------------- | ----------
|                                                                                  |  | 2003                      |           
|Cash flows from operating activities:                                             |  |                           |           
|Net income                                                                        |  | $                         | 749,602   
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                           |           
|Depreciation                                                                      |  |                           | 103,294   
|Provision for possible loan losses                                                |  |                           | 160,000   
|Amortization less accretion on investments                                        |  |                           | 25,390    
|Amortization of deferred loan costs                                               |  |                           | 741       
|Gain on sale of premises and equipment                                            |  |                           |          
|(Increase) decrease in interest receivable                                        |  |                           | 5,642     
|Decrease in interest payable                                                      |  |                           | (28,296   
|Increase in other assets                                                          |  |                           | (109,006  
|Increase (decrease) in other liabilities                                          |  |                           | 90,136    
|                                                                                  |  |                           |           
|Net cash provided by operating activities                                         |  |                           | 997,503   
|                                                                                  |  |                           |           
|Cash flows from investing activities:                                             |  |                           |           
|Net increase in loans to customers                                                |  |                           | (3,262,432
|Purchases of securities available-for-sale                                        |  |                           | (9,335,949
|Maturities of securities available-for-sale                                       |  |                           | 10,682,429
|Maturities of securities held-to-maturity                                         |  |                           | 392,262   
|Decrease in nonmarketable equity securities                                       |  |                           | 120,500   
|Increase in time deposits with other banks                                        |  |                           | (200,000  
|Proceeds from disposal of premises and equipment                                  |  |                           |          
|Purchases of premises and equipment                                               |  |                           | (140,692  
|                                                                                  |  |                           |           
|Net cash used by investing activities                                             |  |                           | (1,743,882
|                                                                                  |  |                           |           
|Cash flows from financing activities:                                             |  |                           |           
|Net increase in deposit accounts                                                  |  |                           | 6,920,072 
|(Decrease) increase in short-term borrowings                                      |  |                           |          
|Dividends paid                                                                    |  |                           | (179,516  
|Sale of treasury stock                                                            |  |                           | 167,715   
|Purchase of treasury stock                                                        |  |                           | (2,326,970
|                                                                                  |  |                           |           
|Net cash provided by financing activities                                         |  |                           | 4,581,301 
|                                                                                  |  |                           |           
|Net increase in cash and cash equivalents                                         |  |                           | 3,834,922 
|Cash and cash equivalents, beginning of period                                    |  |                           | 21,824,998
|                                                                                  |  |                           |           
|Cash and cash equivalents, end of period                                          |  | $                         | 25,659,920
|                                                                                  |  |                           |           
|Cash paid during the period for:                                                  |  |                           |           
|Income taxes                                                                      |  | $                         | 433,445   
|Interest                                                                          |  | $                         | 1,084,354 



See notes to condensed
consolidated financial statements



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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 June 30,
2003 and for the interim periods ended June 30, 2003 and 2002 are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation. The financial information
as of December 31, 2002 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 2002 Annual Report.



NOTE 2  COMPREHENSIVE INCOME



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



|                                                                   |  | Pre-tax Amount |        | (Expense) Benefit |   |         | Net-of-tax Amount
|------------------------------------------------------------------ |  | -------------- | ------ | ----------------- | - | ------- | -----------------
|For the Six Months Ended June 30, 2003:                            |  |                |        |                   |   |         |                  
|Unrealized gains (losses) on securities available-for-sale         |  | $              | 63,880 |                   | $ | (22,060 | )                
|Plus: reclassification adjustment for gains realized in net income |  |                |       |                   |   |        |                  
|                                                                   |  |                |        |                   |   |         |                  
|Net unrealized gains (losses) on securities                        |  |                | 63,880 |                   |   | (22,060 | )                
|                                                                   |  |                |        |                   |   |         |                  
|Other comprehensive income                                         |  | $              | 63,880 |                   | $ | (22,060 | )                
|                                                                   |  |                |        |                   |   |         |                  
|                                                                   |  |                |       
|                                                                   |  | Pre-tax Amount |        | (Expense) Benefit |   |         | Net-of-tax Amount
|For the Six Months Ended June 30, 2002:                            |  |                |        |                   |   |         |                  
|Unrealized gains (losses) on securities available-for-sale         |  | $              | 90,318 |                   | $ | (31,159 | )                
|Plus: reclassification adjustment for gains realized in net income |  |                |       |                   |   |        |                  
|                                                                   |  |                |        |                   |   |         |                  
|Net unrealized gains (losses) on securities                        |  |                | 90,318 |                   |   | (31,159 | )                
|                                                                   |  |                |        |                   |   |         |                  
|Other comprehensive income                                         |  | $              | 90,318 |                   | $ | (31,159 | )                
|                                                                   |  |                |        |                   |   |         |                  



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COMMUNITYCORP



NOTES T
O CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



NOTE 2  COMPREHENSIVE INCOME continued



|                                                                   |  | Pre-tax Amount |         | (Expense) Benefit |   |         | Net-of-tax Amount
|------------------------------------------------------------------ |  | -------------- | ------- | ----------------- | - | ------- | -----------------
|For the Three Months Ended June 30, 2003:                          |  |                |         |                   |   |         |                  
|Unrealized gains (losses) on securities available-for-sale         |  | $              | 20,644  |                   | $ | (7,123  | )                
|Plus: reclassification adjustment for gains realized in net income |  |                |        |                   |   |        |                  
|                                                                   |  |                |         |                   |   |         |                  
|Net unrealized gains (losses) on securities                        |  |                | 20,644  |                   |   | (7,123  | )                
|                                                                   |  |                |         |                   |   |         |                  
|Other comprehensive income                                         |  | $              | 20,644  |                   | $ | (7,123  | )                
|                                                                   |  |                |         |                   |   |         |                  
|                                                                   |  |                |        
|                                                                   |  | Pre-tax Amount |         | (Expense) Benefit |   |         | Net-of-tax Amount
|For the Three Months Ended June 30, 2002:                          |  |                |         |                   |   |         |                  
|Unrealized gains (losses) on securities available-for-sale         |  | $              | 141,217 |                   | $ | (48,788 | )                
|Plus: reclassification adjustment for gains realized in net income |  |                |        |                   |   |        |                  
|                                                                   |  |                |         |                   |   |         |                  
|Net unrealized gains (losses) on securities                        |  |                | 141,217 |                   |   | (48,788 | )                
|                                                                   |  |                |         |                   |   |         |                  
|Other comprehensive income                                         |  | $              | 141,217 |                   | $ | (48,788 | )                
|                                                                   |  |                |         |                   |   |         |                  



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



NOTE 3  SHAREHOLDERS EQUITY



On June 30, 2003, Communitycorp purchased and redeemed 27,454 share of its common stock, $5.00 par value form Mr. Robert Redfearn, a corporation controlled by Mr. Redfearn and members of Mr. Redfearns family, for $80.00 per share or
$2,196,320 in the aggregate. The 27,454 shares repurchased by Communitycorp represented 9.92% of the 276,734 shares of common stock outstanding immediately prior to the purchase. An outside consultant reported to the Board that the repurchase of Mr.
Redfearns shares would be accretive as to all other Communitycorp shareholders in terms of earning per share.



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COMMUNITYCORP



Item2.    

Managements Discussion and Analysis or Plan of Operations



The following is a discussion of the Companys financial condition as of June 30, 2003 compared to December 31, 2002, and the results of operations for the three and six months ended June 30, 2003 compared to the
three and six months ended June 30, 2002. 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 tat are based on the beliefs of the
Companys managements, 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



For the six months ended June 30, 2003, net interest income increased $226,355, or 11.04%, as compared to the same period in 2002. Interest and fees on loans decreased $36,107, or 1.23% to $2,898,662 for the six
months ended June 30, 2003 as compared to the same period in 2002. Other interest income, which includes interest on federal funds sold, decreased $48,751 or 29.46% to $116,753 for the six months ended June 30, 2003 when compared to the same period
in 2002. In addition, interest income on securities decreased $46,226 to $317,206 for the six months ended June 30, 2003 when compared to the same six months ended June 30, 2002. Interest expense decreased $357,439 to $1,056,058 for the six months
ended June 30, 2003 when compared to the same period in 2002. The net interest margin realized on earning assets increased from 3.79% for the six months ended June 30, 2002 to 4.01% for the same period in 2003. The interest rate spread also
increased by 33 basis points from 3.33% at June 30, 2002 to 3.66% at June 30, 2003.



Net interest income increased $106,260 or 9.99% to $1,169,791 for the quarter ended June 30, 2003 when compared to the same quarter ended June 30, 2002. Interest on loans and fees decreased $17,836 or 1.21% to $1,454,382 for the quarter
ended June 30, 2003 when compared to the same period in 2002. Other interest income decreased $25,176 from $81,649 for the quarter ended June 30, 2002 to $56,473 for the quarter ended June 30, 2003. The interest income on securities for the quarter
ending June 30, 2003 decreased $34,136 to $156,670 when compared to the same period in 2002. Interest expense on deposits decreased 26.93% to $497,734 for the quarter ended June 30, 2003 when compared to the same period in 2002. The net interest
margin realized on earning assets increased from 3.91% for the quarter ended June 30, 2002 to 4.11% for the quarter ended June 30, 2003. The interest rate spread also increased from 3.34% for the quarter ended June 30, 2002 to 3.79% 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 believes
is necessary to maintain the allowance for possible loan losses at an adequate level. For the six months ended June 30, 2003, the provision charged to expense was $160,000, as compared to $150,000 for the same period in 2002. For the quarter ended
June 30, 2003 and 2002, the provision charged to expense was $75,000. 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. We maintain 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. Our judgment about the adequacy of the allowance is based upon a number of assumptions about future
events, which we believe 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 our net income and, possibly, our 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 June 30, 2003.



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



Noninterest Income



Noninterest income during the six months
ended June 30, 2003 was $275,411, an increase of $42,236 or 18.11% from the comparable period in 2002. Service charges on deposit accounts increased $21,763 from the period ended June 30, 2002 to $196,889 for the period ended June 30, 2003. The
increase is partially attributable to a shift in deposit accounts to noninterest bearing checking accounts. Other income increased 35.27% to $78,522 for the six months ended June 30, 2003 when compared to the same period ended June 30, 2002.



For the quarter ended June 30, 2003, noninterest income increased $9,914 or
8.69% over the same period in 2002. This increase is primarily due to service charges, which increased 14.38% from the quarter ended June 30, 2002 to $99,376 for the quarter ended June 30, 2003. The increase in noninterest bearing deposit accounts
led to the increase in service charges.



Noninterest Expense



Total noninterest expense for the six months ended June 30, 2003 increased $220,773 or
20.41% over the same period in 2002. Salaries and employee benefits increased from $561,646 for the six months ended June 30, 2002 to $696,666 for the six months ended June 30, 2003. This increase is primarily attributable to the addition of several
full time employees and a loan officer and to normal annual pay raises. Other operating expenses increased $77,136 or 24.57% to $391,087 for the six months ended June 30, 2003 when compared to the same period in 2002.



For the quarter ended June 30, 2003, noninterest expense increased $127,749 or 23.66% over
the same period in 2002. This increase was largely attributable to the increase of other operating expenses of $46,039 or 29.73% to $200,873 and to the increase of salaries and employee benefits of $74,921 or 26.10% to $361,977 for the quarter ended
June 30, 2003 when compared to the quarter ended June 30, 2002. The increase in salaries and employee benefits is primarily attributable to the addition of several full time employees and a loan officer and to normal annual pay raises.



Income Taxes



The income tax provision for the six months ended June 30, 2003 was $340,000 as compared to $334,099 for the same period in 2002. This
increase was primarily a result of an increase in income before taxes. The effective tax rates were 31.20% and 31.76% for the six months ended June 30, 2003 and June 30, 2002, respectively. The effective tax rates were 31.76% and 32.35% for the
quarter ended June 30, 2003 and June 30, 2002, respectively.



Net Income



The combination of the above factors resulted in net income for the six
months ended June 30, 2003 of $749,602 as compared to $717,685 for the same period in 2002. This represents an increase of $31,917 or 4.45% over the same period in 2002. Net income for the quarter ended June 30, 2003 was $4,575 or 1.20% lower than
for the same period in 2002.



Assets and Liabilities



During the first six months of 2003, total assets increased $5,456,622, or 4.71%, when
compared to December 31, 2002. This increase was primarily a result of an increase in cash and cash equivalents and loans of $3,834,922 and $3,114,278, or 17.57% and 4.14%, respectively from the corresponding amounts for December 31, 2002. These
increases were reduced by the decrease in investment securities of $1,820,752 or 11.35% from December 31, 2002 to $14,225,056 at June 30, 2003.



Total deposits increased by 6.74%, or $6,920,072, from December 31, 2002 to $109,539,831 at June 30, 2003. Noninterest-bearing deposits increased $4,278,921or 45.99% to
$13,582,723 at June 30, 2003, interest bearing deposits increased $2,641,151 or 2.83% to $95,957,108 at June 30, 2003. The increase in deposits was the result of the continual growth of the Bank.



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



Loans



The demand for loans continued to increase in the Walterboro marketplace during the first six months of 2003. Gross loans increased $3,114,278 or 4.14% during the period.
Balances within the major loans receivable categories as of June 30, 2003 and December 31, 2002 are as follows:



|                           |  | June 30, 2003 |            | December 31, 2002
|-------------------------- |  | ------------- | ---------- | -----------------
|Real estate  construction |  | $             | 4,466,814  |                  
|Real estate  mortgage     |  |               | 32,294,754 |                  
|Commercial and industrial  |  |               | 28,396,968 |                  
|Consumer and other         |  |               | 13,131,363 |                  
|                           |  |               |            |                  
|                           |  | $             | 78,289,899 |                  
|                           |  |               |            |                  



Risk Elements in the Loan Portfolio



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



|                                                   |  | June 30, 2003 |           | December 31,2002
|-------------------------------------------------- |  | ------------- | --------- | ----------------
|Loans: Nonaccrual loans                            |  | $             | 3,371,964 |                 
|Accruing loans more than 90 days past due          |  | $             | 2,435     |                 
|Loans identified by the internal review mechanism: |  |               |           |                 
|Criticized                                         |  | $             | 2,295,329 |                 
|Classified                                         |  | $             | 1,296,144 |                 



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.



Activity in the Allowance for Loan Losses is as follows:



|                                                 |  | June 30, |           
|------------------------------------------------ |  | -------- | ----------
|                                                 |  | 2003     |           
|Balance, January 1,                              |  | $        | 1,319,202 
|Provision for loan losses for the period         |  |          | 160,000   
|Net loans (charged-off) recovered for the period |  |          | (147,413  
|                                                 |  |          |           
|Balance, end of period                           |  | $        | 1,331,789 
|                                                 |  |          |           
|Gross loans outstanding, end of period           |  | $        | 78,289,899
|Allowance for loan losses to loans outstanding   |  |          | 1.70      



Deposits



Total deposits increased $6,920,072 or 6.74% from December 31, 2002. The largest change was
an increase in noninterest-bearing deposits. Noninterest-bearing deposits increased $4,278,921 to $13,582,723 at June 30, 2003. Expressed in percentages, noninterest-bearing deposits increased 45.99%. The increases were attributable to normal growth
of the Bank.



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



Balances within the major deposit categories as of June 30, 2003 and December 31, 2002 are
as follows:



|                                    |  | June 30, 2003 |             | December 31,2002
|----------------------------------- |  | ------------- | ----------- | ----------------
|Noninterest-bearing demand deposits |  | $             | 13,582,723  |                 
|Interest-bearing demand deposits    |  |               | 16,195,930  |                 
|Savings deposits                    |  |               | 22,835,914  |                 
|Certificates of deposit             |  |               | 56,925,264  |                 
|                                    |  |               |             |                 
|                                    |  | $             | 109,539,831 |                 
|                                    |  |               |             |                 



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 at 71.21% at June 30, 2003 and 72.97% at December 31, 2002.



Securities available-for-sale, which totaled $11,352,973 at June 30, 2003,
serve as a ready source of liquidity. We also have lines of credit available with correspondent banks to purchase federal funds. At June 30, 2003, unused lines of credit totaled $3,940,000. 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 June 30, 2003, the available credit totaled $ 18,000,000, and there were no draws on this line.



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 footnotes to the consolidated financial statements at December 31, 2002 as filed on our
annual report on Form 10-K. Certain accounting policies involve significant judgments and assumptions by us which have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical
accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Because of the nature of the judgments and assumptions we make, actual results
could differ from these judgments and estimates which could have a material impact on our carrying values of assets and liabilities and our results of operations.



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



Capital Resources



Total shareholders equity decreased from $12,249,177 at December 31, 2002 to $10,701,828 at June 30, 2003. The decrease of $1,547,349
is primarily attributable to the purchase of treasury stock for the period of $2,326,970 and by the payment of dividends, which totaled $179,516. These decreases were offset by an increase in net income and other comprehensive income of $749,602 and
$41,820, respectively plus the sale of treasury stock of $167,715.



On June 30,
2003, Communitycorp purchased and redeemed 27,454 share of its common stock, $5.00 par value form Mr. Robert Redfearn, a corporation controlled by Mr. Redfearn and members of Mr. Redfearns family, for $80.00 per share or $2,196,320 in the
aggregate. The 27,454 shares repurchased by Communitycorp represented 9.92% of the 276,734 shares of common stock outstanding immediately prior to the purchase. An outside consultant reported to the Board that the repurchase of Mr. Redfearns
shares would be accretive as to all other Communitycorp shareholders in terms of earning per share.



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COMMUNITYCORP



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



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,
2003:



|Shareholders equity                         |  | $ | 10,701,828 |  
|-------------------------------------------- |  | - | ---------- | -
|Less: intangibles                            |  |   |           |  
|                                             |  |   |            |  
|Tier 1 capital                               |  |   | 10,701,828 |  
|                                             |  |   |            |  
|Plus: allowance for loan losses (1)          |  |   | 1,331,789  |  
|                                             |  |   |            |  
|Total capital                                |  | $ | 12,033,617 |  
|                                             |  |   |            |  
|Net risk-weighted assets                     |  | $ | 83,579,000 |  
|                                             |  |   |            |  
|Risk-based capital ratios                    |  |   |            |  
|Tier 1 capital (to risk-weighted assets)     |  |   | 12.46      | %
|Total capital (to risk-weighted assets)      |  |   | 13.72      | %
|Tier 1 capital (to quarterly average assets) |  |   | 8.58       | %



|(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 $150,000,000 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, 2003, we had issued commitments to extend credit of $5,942,000 and standby letters of credit of $676,000 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 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 May 1, 2003, 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 222,211 shareholders voting for the nominees out of a total 300,000 outstanding shareholders. There were no abstention votes or no votes against their election. There were no votes withheld.



Item 6.
    Exhibits and Reports on Form 8-K



(a)
Exhibits:



Exhibit

Description31

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This exhibit is not filed for purposes
of Section 18 of the Securities Exchange Act of 1934 but is instead furnished as provided by applicable rules of the Securities and Exchange Commission.




(b)
Reports on Form 8-K  No reports on Form 8-K were filed during the quarter ended June 30, 2003.



Items 1, 2, 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
|--------------------- |  | -------------
|                      |  |              
|                      |  |              
|                      |  |              
|                      |  |              
|Date: August 11, 2003 |  |              
|                      |  |              



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|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                      
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              | 
|31            |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                   
|              | 
|32            |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This exhibit is not filed for purposes
of Section 18 of the Securities Exchange Act of 1934 but is instead furnished as provided by applicable rules of the Securities and Exchange Commission.



16