UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                ___________________________________________

                                 FORM 10-QSB

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                            EXCHANGE ACT OF 1934

             For the quarterly period ended September 30, 2005.

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                 For the transition period from _____ to _____

                         Commission File No. 0-25437

                       COMMUNITY NATIONAL BANCORPORATION
               ------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                Georgia                            58-1856963
         ----------------------        ----------------------------------
        (State of Incorporation)      (I.R.S. Employer Identification No.)

          561 E. Washington Avenue, P.O. Box 2619, Ashburn, Georgia 31714
          ---------------------------------------------------------------
                     (Address of Principal Executive Offices)

                                  (229) 567-9686
               ------------------------------------------------
               (Issuer's Telephone Number, Including Area Code)

                                  Not Applicable
               ------------------------------------------------
             (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

      Check whether the issuer (1) 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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

                                Yes  X            No
                                    ----             ----

      Indicate by check mark whether the registrant is a shell company (as
defined in rule 12b-2 of the Exchange Act).   Yes     No  X
                                                  ---    ---

      APPLICABLE ONLY TO CORPORATE ISSUERS:  Indicate the number of shares
outstanding of each of the issuer's classes of common equity as of the latest
practicable date.

      As of November 11, 2005, the issuer had outstanding 2,008,595 shares of
Common Stock, no par value.

      Transitional Small Business Disclosure Format    Yes        No  X
                                                           ----      ----


                            PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
-----------------------------

                      COMMUNITY NATIONAL BANCORPORATION
                              ASHBURN, GEORGIA
                         CONSOLIDATED BALANCE SHEETS

                                  ASSETS
                                  ------
                                                      (Unaudited)   (Unaudited)
                                                     September 30,  December 31,
                                                         2005           2004
                                                         ----           ----
Cash and due from banks                             $  2,463,391   $  1,136,527
Federal funds sold                                     3,558,000     11,504,000
                                                     -----------    -----------
Total Cash and Cash Equivalents                        6,021,391     12,640,527
Securities:
Available for sale, at fair values                     9,702,993     10,568,640
Loans, net                                           109,432,223    110,319,197
Property and equipment, net                            2,438,587      2,548,750
Other real estate owned                                  872,260        536,892
Other assets                                           2,951,136      2,551,309
                                                     -----------    -----------
Total Assets                                        $131,418,590   $139,165,315
                                                     ===========    ===========

                    LIABILITIES AND SHAREHOLDERS' EQUITY
                    ------------------------------------
Liabilities:
Deposits
  Non-interest bearing deposits                     $  9,254,619   $ 12,346,906
  Interest bearing deposits                          102,981,727    108,493,349
                                                     -----------    -----------
  Total deposits                                     112,236,346    120,840,255

Other liabilities                                        834,023        463,932
                                                     -----------    -----------
  Total Liabilities                                 $113,070,369   $121,304,187
                                                     -----------    -----------

Commitments and contingencies

Shareholder's Equity:
Preferred stock, no par value,
  10,000,000 shares authorized,
  0 shares issued and outstanding                   $     -  -     $     -  -
Common stock, no par value,
  50,000,000 shares authorized,
  2,008,595 shares issued and outstanding             11,488,452     11,488,452
Retained earnings                                      6,909,283      6,324,343
Unrealized gain (loss) on securities, net                (49,514)        48,333
                                                     -----------    -----------
  Total Shareholders' Equity                        $ 18,348,221   $ 17,861,128
                                                     -----------    -----------
Total Liabilities and Shareholders' Equity          $131,418,590   $139,165,315
                                                     ===========    ===========


            Refer to notes to the consolidated financial statements.



                    COMMUNITY NATIONAL BANCORPORATION
                           ASHBURN, GEORGIA
               UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

                                                     For the nine months ended
                                                            September 30,
                                                    ---------------------------
                                                         2005           2004
                                                         ----           ----
Interest income                                     $  6,973,524   $  7,612,474
Interest expense                                       2,013,829      2,419,415
                                                     -----------    -----------
Net interest income                                    4,959,695      5,193,059

Provisions for possible loan losses                      950,000      2,893,000
                                                     -----------    -----------

Net interest income
 after provisions for possible loan losses             4,009,695      2,300,059
                                                     -----------    -----------

Other Income:
Service charges                                          670,722        780,869
Other fees                                               185,544        204,763
Loss on sale of other real estate owned                  (23,930)       (57,065)
Gain (loss) on settlement
 of assets and securities                                 46,910         (6,064)
                                                     -----------    -----------
Total other income                                       879,246        922,503
                                                     -----------    -----------

Salaries and benefits                                  1,961,985      2,421,691
Advertising and business development                      61,145         65,347
Repairs and maintenance                                  105,724        135,511
Depreciation and amortization                            138,559        219,206
Legal and professional                                   308,570        465,997
Data processing                                          167,971        240,141
Regulatory fees and assessments                          103,104        134,171
Other operating expenses                                 706,688        976,134
                                                     -----------    -----------
Total other expenses                                   3,553,746      4,658,198
                                                     -----------    -----------

Net income (loss) before taxes                         1,335,195     (1,435,636)
Income tax (benefit)                                     549,415       (419,813)
                                                     -----------    -----------

Net income/(loss)                                   $    785,780   $ (1,015,823)
                                                     ===========    ===========

Basic income/(loss) per share                       $       0.39   $      (0.51)
                                                     ===========    ===========

Diluted income/(loss) per share                     $       0.39   $      (0.51)
                                                     ===========    ===========


           Refer to notes to the consolidated financial statements.



                    COMMUNITY NATIONAL BANCORPORATION
                           ASHBURN, GEORGIA
               UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

                                                     For the three months ended
                                                            September 30,
                                                    ---------------------------
                                                         2005           2004
                                                         ----           ----
Interest income                                     $  2,427,544   $  2,533,924
Interest expense                                         706,440        834,847
                                                     -----------    -----------
Net interest income                                    1,721,104      1,699,077

Provisions for possible loan losses                      225,000        325,000
                                                     -----------    -----------

Net interest income (loss)
 after provisions for possible loan losses             1,496,104      1,374,077
                                                     -----------    -----------

Other Income:
Service charges                                          235,378        260,080
Other fees                                                45,320         80,282
(Loss) on sale of other real estate owned                (23,888)        (4,482)
Gain (loss) on settlement
 of assets and securities                                  4,852         (1,366)
                                                     -----------    -----------
Total other income                                       261,662        334,514
                                                     -----------    -----------

Salaries and benefits                                    629,082        804,392
Advertising and business development                      20,886         25,640
Repairs and maintenance                                   34,514         40,697
Depreciation and amortization                             42,953         73,110
Legal and professional                                   155,205        130,333
Data processing                                           55,737         78,048
Regulatory fees and assessments                           33,391         42,672
Other operating expenses                                 233,905        309,885
                                                     -----------    -----------
Total other expenses                                   1,205,673      1,504,777
                                                     -----------    -----------

Net income (loss) before taxes                           552,093        203,814
Income tax (benefit)                                     226,659         84,042
                                                     -----------    -----------

Net income/(loss)                                   $    325,434   $    119,772
                                                     ===========    ===========

Basic income/(loss) per share                       $       0.16   $       0.06
                                                     ===========    ===========

Diluted income/(loss) per share                     $       0.16   $       0.06
                                                     ===========    ===========


           Refer to notes to the consolidated financial statements.




                     COMMUNITY NATIONAL BANCORPORATION
                             ASHBURN, GEORGIA
              UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                      For the nine months ended
                                                           September 30,
                                                    ---------------------------
                                                         2005           2004
                                                         ----           ----
Cash flows from operating activities                $  1,771,020   $  1,690,850
                                                     -----------    -----------

Cash flows from investing activities:
  (Increase) in other real estate owned             $   (335,368)  $     47,800
  Securities, available-for-sale:
    Purchase of securities                                -  -       (7,500,000)
    Maturity and paydowns                                841,383      7,379,900
  (Increase) in loans, net                               (63,026)      (549,240)
  Purchase of property and equipment                     (28,396)       (19,751)
                                                     -----------    -----------
    Net cash provided by investing activities       $    414,593   $   (641,291)
                                                     -----------    -----------

Cash flows from financing activities:
  Payment of dividends                              $   (200,840)  $     -  -
  Increase in borrowings and FHLB funding                 -  -        3,000,000
  (Decrease) in customers' deposits                   (8,603,909)   (15,583,449)
                                                     -----------    -----------
    Net cash used for financing activities          $ (8,804,749)  $(12,583,449)
                                                     -----------    -----------

Net (decrease) in cash and cash equivalents         $ (6,619,136)  $(11,533,890)
Cash and cash equivalents, beginning of period        12,640,527     27,482,214
                                                     -----------    -----------
Cash and cash equivalents, end of period            $  6,021,391   $ 15,948,324
                                                     ===========    ===========


               Refer to notes to the consolidated financial statements.

                      COMMUNITY NATIONAL BANCORPORATION
                             ASHBURN, GEORGIA
     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
         FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2004 AND 2005


                                                       Accumulated
                                                          Other
                  Common Stock       Preferred           Compre-
                ------------------    Stock    Retained  hensive
                Shares    Zero Par   Zero Par  Earnings   Income      Total
                ------    --------   --------  --------   ------      -----

Balance,
 December 31,
 2003          2,008,595 $11,488,452 $615,000 $6,171,500 $ 120,395  $18,395,347
               ---------  ----------  -------  ---------  --------   ----------

Comprehensive Income:
---------------------
Net (loss),
 nine-month
 period ended
 Sept. 30, 2004   - -         - -       - -   (1,015,823)    - -     (1,015,823)

Net unrealized
 (loss) on
 securities,
 nine-month
 period ended
 Sept. 30, 2004   - -         - -       - -       - -      (49,916)     (49,916)
               ---------  ----------  -------  ---------  --------   ----------

Total
 comprehensive
 (loss)           - -         - -       - -   (1,015,823)  (49,916)  (1,065,739)
               ---------  ----------  -------  ---------  --------   ----------

Balance,
 Sept. 30,
 2004          2,008,595 $11,488,452 $615,000 $5,155,677 $  70,479  $17,329,608
               =========  ==========  =======  =========  ========   ==========

-------------------------------------

Balance,
 December 31,
 2004           2,008,595 $11,488,452 $  - -   $6,324,343 $ 48,333  $17,861,128
                ---------  ----------  -------  ---------  -------   ----------

Comprehensive Income:
---------------------
Net income,
 nine-month
 period ended
 Sept. 30, 2005    - -         - -       - -      785,780   - -         785,780

Net unrealized
 loss on
 securities,
 nine-month
 period ended
 Sept. 30, 2005    - -         - -       - -       - -     (97,847)     (97,847)
                ---------  ----------  -------  ---------  -------   ----------

Total
 comprehensive
 income            - -         - -       - -      785,780  (97,847)     687,933

Dividends paid     - -         - -       - -     (200,840)  - -        (200,840)
                ---------  ----------  -------  ---------  -------   ----------

Balance,
 Sept. 30,
 2005           2,008,595 $11,488,452 $  - -   $6,909,283 $(49,514)  $18,348,221
                =========  ==========  =======  =========  =======    ==========


           Refer to notes to the consolidated financial statements.



                         COMMUNITY NATIONAL BANCORPORATION
                                 ASHBURN, GEORGIA
                     NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                                SEPTEMBER 30, 2005


NOTE 1 - BASIS OF PRESENTATION

     The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB.  Accordingly, they do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included.  Operating results for the three- and
nine-month periods ended September 30, 2005 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2005.  These
statements should be read in conjunction with the consolidated financial
statements and footnotes thereto included in Form 10-KSB for the year ended
December 31, 2004.

NOTE 2 - ORGANIZATION OF THE BUSINESS

     Community National Bancorporation, Ashburn, Georgia (the "Company") was
organized in August 1989 to serve as a holding company for a proposed de novo
bank, Community National Bank, Ashburn, Georgia ("CNB").  CNB was capitalized
with approximately $3.4 million when it commenced operations in August 1990.
During 1998, the Company issued and sold 400,000 shares of its common stock at
$10.00 per share.  The public offering yielded approximately $4 million, all of
which was invested in 1999, in a de novo bank, Cumberland National Bank, St.
Mary's, Georgia ("Cumberland").  In February 2000, the Company purchased Tarpon
Financial Corporation, Tarpon Springs, Florida, a one-bank holding company with
respect to First National Bank, Tarpon Springs, Florida ("Tarpon").  During
calendar years 2003 and 2004, the Company sold Cumberland and Tarpon,
respectively, to unrelated third parties, leaving the Company with CNB as its
sole subsidiary bank.  CNB was chartered by and is currently regulated by the
Office of the Comptroller of the Currency (the "OCC").  CNB primarily engages
in the business of obtaining deposits and providing commercial, consumer and
real estate loans to the general public.  Bank deposits are each insured up to
$100,000 by the Federal Deposit Insurance Corporation (the "FDIC") subject to
certain limitations imposed by the FDIC.


NOTE 3 - INVESTMENT SECURITIES

      Information pertaining to securities with gross unrealized losses at
September 30, 2005, aggregated by investment category and further segregated by
the length of time (less than or over twelve months) that the securities have
been in a continuous loss position follows:

                       Less than             Over
                     Twelve Months       Twelve Months           Total
                   ----------------  --------------------  --------------------
                   Fair  Unrealized   Fair   Unrealized       Fair    Unrealized
Description        Value    Loss      Value     Loss          Value      Loss
-----------        -----    ----      -----     ----          -----      ----
U.S. Agency and
 Government
 Corporations     $  - -   $  - -    $7,339,375 $(160,625) $7,339,375 $(160,625)
                   ======   ======   ==========  ========   =========  ========

      At September 30, 2005, unrealized losses in the securities portfolio
amounted to $160,625 representing 1.66% of the total portfolio.  All of the
unrealized losses relate to U.S. Agency securities and securities of U.S.
government corporations.  These unrealized losses were caused by fluctuations
in market interest rates, rather than concerns over the credit quality of the
issuers.  The Company believes that the U.S. Agencies and government
corporations will continue to honor their interest payments on time as well as
the full debt at maturity.  Because the unrealized losses are due to
fluctuations in the interest rate, and no credit-worthiness factors exist, the
Company believes that the investments are not considered other-than-temporarily
impaired.


NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS

      EXCHANGES OF NONMONETARY ASSETS:  In December 2004, the FASB issued SFAS
153, "Exchanges of Nonmonetary Assets", an amendment to APB Opinion No. 29,
"Accounting for Nonmonetary Transactions."  This statement amends the principle
that exchanges of nonmonetary assets should be measured based on the fair value
of the assets exchanged and more broadly provides for exceptions regarding
exchanges of nonmonetary assets that do not have commercial substance.  This
Statement is effective for nonmonetary asset exchanges occurring in fiscal
periods beginning after June 15, 2005.  The adoption of this standard is not
expected to have a material impact on the Company's financial condition, results
of operations, or liquidity.

      SHARE-BASED PAYMENT:  In December 2004, the FASB issued Statement No.
123(R), "Share-Based Payment."  Statement No. 123(R) requires companies to
recognize in the income statement the grant-date fair value of stock options
and other equity-based compensation issued to employees.  The revised Statement
generally requires that companies account for these share-based transaction
using the fair-value-based method, and eliminates a company's ability to account
for these transactions using the intrinsic value method of accounting in APB
Opinion No. 25.  For small business issuers, Statement No. 123(R) is effective
as of the beginning of the first interim or annual reporting period that begins
after December 15, 2005.  The Company has not yet determined the exact impact
the new standard will have on its consolidated financial statements.  The above
disclosures, as required by FASB Statement No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of FASB Statement No. 123,"
provide detail as to its results of operations as if it had applied the fair
value based method and recognition provisions of Statement No. 148 to stock-
based employee compensation to the current reporting periods.

      MEANING OF OTHER THAN TEMPORARY IMPAIRMENT:  In March 2004, the Financial
Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) released
Issue 03-01, "Meaning of Other Than Temporary Impairment," which addressed
other-than-temporary impairment for certain debt and equity investments.  The
recognition and measurement requirements of Issue 03-01, and other disclosure
requirements not already implemented, were effective for periods beginning after
June 15, 2004.  In September 2004, the FASB staff issued FASB Staff Position
(FSP) EITF 03-1-1, which delayed the effective date for certain measurement and
recognition guidance contained in Issue 03-01.  The FSP requires the application
of pre-existing other-than-temporary guidance during the period of delay until
a final consensus is reached.  Management does not anticipate the issuance of
the final consensus will have a material impact on the Company's financial
condition, results of operations, or liquidity.

      LOAN COMMITMENTS:  On March 9, 2004, the SEC issued Staff Accounting
Bulletin 105 (SAB 105), "Application of Accounting Principles to Loan
Commitment" stating that the fair value of loan commitments is to be accounted
for as a derivative instrument under SFAS 133, but the valuation of such
commitment should not consider expected future cash flows related to servicing
of the future loan.

      The Company adopted the provisions of SAB 105 as of January 1, 2004.
Adoption of SAB 105 did not result in a material impact on the Company's
financial condition, results of operations, or liquidity.

      ACCOUNTING FOR CERTAIN LOANS OR DEBT SECURITIES ACQUIRED IN A TRANSFER:
In December 2003, the American Institute of Certified Public Accountants issued
Statement of Position (SOP) 03-3, "Accounting for Certain Loans or Debt
Securities Acquired in a Transfer."  SOP 03-3 requires acquired loans, including
debt securities, to be recorded at the amount of the purchaser's initial
investment and prohibits carrying over valuation allowances from the seller for
those individually-evaluated loans that have evidence of deterioration in credit
quality since origination, and it is probable all contractual cash flows on the
loan will be unable to be collected.  SOP 03-3 also requires the excess of all
undiscounted cash flows expected to be collected at acquisition over the
purchaser's initial investment to be recognized as interest income on a level-
yield basis over the life of the loan.  Subsequent increases in cash flows
expected to be collected are recognized as impairment.  Loans carried at fair
value, mortgage loans held for sale, and loans to borrowers in good standing
under revolving credit agreements are excluded from the scope of SOP 03-3.  The
guidance is effective for loans acquired in fiscal years beginning after
December 15, 2004 and is not expected to have a material impact on the Company's
financial condition, results of operations, or liquidity.

      ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH
LIABILITIES AND EQUITY:  In May 2003, the FASB issued SFAS 150, "Accounting for
Certain Financial Instruments with Characteristics of Both Liabilities and
Equity."  This statement establishes standards for classifying and measuring
certain financial instruments that embody obligations of the issuer and have
characteristics of both liabilities and equity.    The provisions of SFAS 150
became effective June 1, 2003, for all financial instruments created or modified
after May 31, 2003, and otherwise became effective as of July 1, 2003.  The
adoption of this standard did not have a material impact on the Company's
financial condition, results of operations, or liquidity.

      In December 2003, the FASB deferred for an indefinite period the
application of the guidance in SFAS 150 to noncontrolling interest that are
classified as equity in the financial statement of a subsidiary but would be
classified as a liability in the parent's financial statements under SFAS 150.
The deferral is limited to mandatorily redeemable noncontrolling interest
associated with finite-lived subsidiaries.  Management does not believe any
such applicable entities exist as of June 30, 2005, but will continue to
evaluate the applicability of this deferral to entities which may be
consolidated as a result of FASB Interpretation No. 46 (FIN 46), "Consolidation
of Variable Interest Entities."

      CONSOLIDATION OF VARIABLE INTEREST ENTITIES:  In January 2003, the FASB
issued FIN 46, which provides guidance on how to identify a  variable interest
entity (VIE) and determine when the assets, liabilities, noncontrolling
interests, and the results of operations of a VIE are to be included in an
entity's consolidated financial statements.  A VIE exists when either the total
equity investment is at risk is not sufficient to permit the entity to finance
its activities itself, or the equity investors lack one of three characteristics
associated with owning a controlling financial interest.  Those characteristics
include the direct and indirect ability to make decisions about the entity's
activities through voting rights or similar rights, the obligation to absorb the
expected losses of an entity if they occur, or the right to receive the expected
residual returns of the entity if they occur.

      In December 2003, the FASB reissued FIN 46 with certain modifications and
clarifications.  Application of this guidance was effective for interests in
certain VIEs commonly referred to as special-purpose entities (SPEs) as of
December 31, 2003.  Application for all other types of entities was required as
of March 31, 2004, unless previously applied.  Adoption of FIN 46 did not result
in a material impact on the Company's financial condition, results of
operations, or liquidity.


ITEM 2.  MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
-----------------------------------------------------------------

      The purpose of the disclosure in this section is to convey information
relating to the financial condition and results of operations of the Company
that may not be readily apparent from a review of the consolidated financial
statements and the notes thereto appearing elsewhere in this report.  The
following discussion of the Company's financial condition and results of
operations should be read in conjunction with the Company's consolidated
financial statements and related notes.

      Certain statements that the Company may make from time to time, including
statements contained in this report constitute "forward-looking statements"
within the meaning of the federal securities laws.  Forward-looking statements
include all statements other than statements of historical fact, and  may
sometimes be identified by words such as "estimate," "plan," "intend," "expect,"
"anticipate," "believe," "will" and similar expressions used in conjunction
with, among other things, discussions of plans, objectives, future operations,
financial performance or other events.  Such forward-looking statements are not
guarantees of future performance and are subject to risks and uncertainties.
Factors that could cause the actual results to differ materially from those
expressed in any forward-looking statement made by, or on behalf of, the Company
include the following, some of which are described in greater detail in this
report: (i) the effect of changes in laws and regulations, including federal and
state banking laws and regulations, with which the Company or CNB banks must
comply, and the associated costs of compliance with such laws and regulations
either currently or in the future; (ii) the effect of changes in accounting
policies and practices, as may be adopted by the regulatory agencies as well as
by the Financial Accounting Standards Board, or of changes in the Company's
organization, compensation and benefit plans; (iii) the effect on the Company's
competitive position within its market area of the increasing consolidation
within the banking and financial services industries, including the increased
competition from larger regional and out-of-state banking organizations as well
as non-bank providers of various financial services; (iv) the inability of the
Company or CNB to comply with the terms of their agreements with banking
regulators; (v) the effect of changes in interest rates; and (vi) the effect
of changes in the business cycle and downturns in local, regional or national
economies.

      The foregoing list of important factors is not exclusive.  Readers are
cautioned not to place undue reliance on any forward-looking statements.
The Company does not undertake to update any forward-looking statement, whether
written or oral, that it or its agents may make from time to time.


CRITICAL ACCOUNTING POLICIES

      The Company has adopted various accounting policies which govern the
application of accounting principles generally accepted in the U.S. in the
preparation of financial statements.  The Company's significant accounting
policies are described in Note 2 to the Company's consolidated financial
statements included in its Form 10-KSB for the fiscal year ended December 31,
2004.  Certain accounting policies require the Company to make significant
assumptions and estimates, the use of which has a material impact on the
carrying value of certain assets and liabilities, and could potentially result
in materially different financial results under different assumptions and
conditions.  For further discussion of the accounting policies that management
believes are the most critical upon which the Company's financial condition
depends, and which involve the most complex or subjective decisions or
assessments, see the discussion of critical accounting policies under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's Form 10-KSB for the fiscal year ended December 31,
2004.


RESULTS OF OPERATIONS

      THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THREE
MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2004

      For the three-month period ended September 30, 2005, net income amounted
to $325,434 or $.16 per basic and diluted share.  By comparison, net income for
the three-month period ended September 30, 2004 amounted to $119,772 or $.06 per
basic and diluted share.  Total non-interest income for the three-month period
ended September 30, 2004 was actually $73,000 higher than the results obtained
during the three-month period ended September 30, 2005.  However, in the 2005
period, provision for loan losses and operating expenses were $400,000 lower
than during the 2004 period.  The provision for loan losses declined from
$325,000 for the three-month period ended September 30, 2004 to $225,000 for the
three-month period ended September 30, 2005 due to an improvement in asset
quality.  Impaired loans declined from $8.5 million at September 30, 2004 to
$5.1 million at September 30, 2005.  There was also a significant reduction in
operating expenses, from $1.50 million for the three-month period ended
September 30, 2004 to $1.20 million for the three-month period ended September
30, 2005.  The primary reason for the above $300,000 reduction is attributed to
the fact that Tarpon is no longer a subsidiary in the 2005 period, but it
accounted for $353,000 of the Company's operating expenses during the three-
month period ended September 30, 2004.

      For the nine-month period ended September 30, 2005, net income amounted to
$785,780, or $.39 per basic and diluted share.  By comparison, for the nine-
month period ended September 30, 2004, the Company experienced a loss of
$(1,015,823), or $(.51) per basic and diluted share.

      NET INTEREST INCOME

      The Company's results of operations are determined by its ability to
effectively manage interest income and expense, minimize loan and investment
losses, generate non-interest income, and control non-interest expense.  Since
interest rates are determined by market forces and economic conditions beyond
the control of the Company, the ability to generate net interest income is
dependent upon the Company's ability to maintain an adequate spread between the
rate earned on interest-earning assets and the rate paid on interest-bearing
liabilities, such as deposits and borrowings. Thus, net interest income is a key
performance measure for the Company.

      Net interest income, before provision for possible loan losses, was $4.96
million for the nine-month period ended September 30, 2005 as compared to $5.19
million for the corresponding period ended September 30, 2004.  For the nine-
month period ended September 30, 2005, the Company's average earning assets were
$127.5 million as compared to $164.0 million for the nine-month period ended
September 30, 2004, a decrease of $36.5 million.  Earning assets include federal
funds sold, interest-bearing deposits at other banks, securities and loans.
Approximately $22.9 million of the above $36.5 million decrease is attributable
to the sale of Tarpon in October 2004, and approximately $9.2 million is a
result of loan reductions at CNB, as the Company continues its efforts to reduce
higher-risk loans and strengthen the quality of its loan portfolio.

      Due to the decrease in average earning assets of approximately $36.5
million, gross interest income declined from $7.6 million for the nine
months ended September 30, 2004 to $7.0 million for the nine months ended
September 30, 2005.  Interest expense declined from $2.4 million for the nine
months ended September 30, 2004 to $2.0 million for the nine months ended
September 30, 2005, due to a decrease in interest-bearing liabilities.
Interest-bearing deposits averaged $105.7 million for the nine-month period
ended September 30, 2005 as compared to $135.7 million for the comparable period
ended September 30, 2004.

      Average net interest yield is computed by subtracting interest expense
from interest income and dividing the resulting figure by average earning assets
for the periods in question.  Net yield on average earning assets for the nine-
month periods ended September 30, 2005 and September 30, 2004 was 5.18% and
4.22%, respectively.  The increase in net interest yield is primarily
attributable to the increase in yield on earning assets, from 6.28% for the
nine-month period ended September 30, 2004 to 7.29% for the nine-month period
ended September 30, 2005.  The increase in the yield exceeded the increase in
the cost of funds, from 2.38% for the nine months ended September 30, 2004 to
2.54% for the nine months ended September 30, 2005.

      PROVISION FOR LOAN LOSSES

      The provision for loan losses during the nine-month period ended September
30, 2005 was $950,000, as compared to $2,893,000 for the nine-month period ended
September 30, 2004.  Net charge-offs for the nine-month periods ended September
30, 2005 and 2004 amounted to $1.1 million and $3.0 million, respectively.

      Management will continue to focus on reducing the Company's risk profile
and increasing the quality of its assets rather than on growth.

      As of September 30, 2005, the Company's allowance for loan losses amounted
to $1,943,966, or 1.74% of gross loans, as compared to $2,084,800, or 1.85% of
gross loans as of December 31, 2004.  Management considers the allowance for
loan losses to be adequate to absorb anticipated future losses.  However, there
can be no assurance that charge-offs in future periods will not exceed the
allowance for loan losses or that additional provisions to the allowance will
not be required.

      NON-INTEREST INCOME

      Non-interest income decreased from approximately $922,000 during the
nine-month period ended September 30, 2004 to $879,000 during the nine-month
period ended September 30, 2005.  The primary cause of this decline was due to
the fact that Tarpon is no longer a subsidiary during 2005, but it contributed
$183,000 as non-interest income for the nine-month period ended September 30,
2004.  As a percentage of average assets, non-interest income increased from
0.71% for the nine-month period ended September 30, 2004 to 0.87% for the nine-
month period ended September 30,2005.

      NON-INTEREST EXPENSE

      Non-interest expense declined from $4.7 million for the nine-month period
ended September 30, 2004 to $3.6 million for the nine-month period ended
September 30, 2005, primarily due to the sale of Tarpon and the continuing
contraction in the Company's size.  As a percentage of average assets, non-
interest expense decreased from 3.57% during the nine-month period ended
September 30, 2004 to 3.50% during the nine-month period ended September 30,
2005.  Expense items with the largest decline included salaries, benefits, legal
and professional, depreciation and data processing.


LIQUIDITY

      Liquidity represents the ability to provide steady sources of funds for
loan commitments and investment activities, as well as to maintain sufficient
funds to cover deposit withdrawals and payment of debt and operating
obligations.  Below are the pertinent liquidity balances and ratios as of
September 30, 2005 and December 31, 2004:

                                           September 30,   December 31,
                                               2005           2004
                                               ----           ----
                                              (Dollars in thousands)
      Cash and cash equivalents               $6,021         $12,461
      CDs, over $100,000
         to total deposits ratio               11.6%           20.7%
      Loan to deposit ratio                    97.5%           91.3%
      Securities to total assets ratio          7.4%            7.6%
      Brokered deposits                         --              --

      Cash and cash equivalents are the Company's primary source of liquidity,
and securities available for sale represent a secondary source of liquidity.
The Company's management monitors appropriate levels and maturities of earning
assets and interest-bearing liabilities to ensure that adequate funds are
available to meet customer withdrawals and loan demand.  The Company is not
aware of any trends or other uncertainties that are reasonably likely to have
a material adverse effect on the Company's liquidity.


CAPITAL ADEQUACY

      The Company opened for business in 1990 with $3.4 million in its capital
accounts.  By September 30, 2005, the capital accounts had increased to $18.3
million through the sale of additional common stock and through retained
earnings.  As evidenced by the table below, CNB complies with the minimum
capital guidelines for "well capitalized" banks.  Below are the capital
ratios of CNB, as well as the minimum capital guidelines for "well capitalized"
banks.

                                                            Minimum
                                                           Regulatory
                                    September 30, 2005     Requirement
                                    ------------------     -----------
   CNB
   ---
     Tier 1 Capital Ratio                  15.0%               4.0%
     Total Risk-Based Capital Ratio        16.2%               8.0%
     Leverage Ratio                        12.1%               4.0%

   Company--Consolidated
   ---------------------
     Tier 1 Capital Ratio                  17.0%               4.0%
     Total Risk-Based Capital Ratio        18.2%               8.0%
     Leverage Ratio                        13.7%               4.0%

      CNB is subject to an informal agreement with the OCC which imposes higher
minimum capital ratios, including a risk-based Tier 1 capital ratio of at least
10.0%, and a total risk-based capital ratio of at least 11.0%.

      During the nine-month period ended September 30, 2005, total assets
decreased by $7.7 million, to $131.4 million.  This decline in assets was
effected by management in order to achieve higher capital ratios and higher
quality of assets.  During the nine-month period ended September 30, 2005, cash
and cash equivalents decreased by $6.6 million, to $6.0 million; securities
decreased by $0.9 million, to $9.7 million; loans decreased by $0.9 million to
$109.4 million; and other assets increased by $0.7 million to $6.3 million.  To
accommodate the decline in assets, deposits declined by $8.6 million to $112.2
million, other liabilities increased by $0.4 million to $0.8 million, and the
capital accounts increased by $0.5 million to $18.3 million.


OFF-BALANCE SHEET ARRANGEMENTS

      In the normal course of business, the Company has outstanding various
commitments to extend credit in the form of unused loan commitments and standby
letters of credit that are not reflected in the Company's consolidated financial
statements.  Since these commitments may expire without being exercised, these
commitments do not necessarily represent future funding requirements.  The
Company uses the same credit and collateral policies in making commitments as
those it uses in making loans.

      As of September 30, 2005, the Company had outstanding unused loan
commitments of approximately $6.8 million.  There were no letters of credit
outstanding at September 30, 2005.  Various assets collateralize the majority
of these commitments.  The Company does not anticipate that it will suffer any
material losses as a result of these transactions.


ENTRY INTO PRELIMINARY LETTER OF INTENT TO BE ACQUIRED

      On June 16, 2005 the Company and South Georgia Bank Holding Company
entered into a preliminary letter of intent under which South Georgia Bank
Holding Company would acquire the Company for total cash consideration of $29.5
million, subject to possible downward adjustment if specified net worth and loan
loss reserve benchmarks are not met at closing.  The transaction is subject to
completion of definitive documentation and approval by the Company's
shareholders and regulatory authorities.


ITEM 3.  CONTROLS AND PROCEDURES
--------------------------------

      Management of the Company, with the participation and under the
supervision of the Company's chief Executive Officer (the Company's principal
executive and financial officer) has evaluated the effectiveness of the
Company's disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly
report.  Based on this evaluation the Company's Chief Executive Officer has
concluded that the Company's disclosure controls and procedures are effective
as of the end of the period covered by this periodic SEC filing to provide
reasonable assurance that material information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
by the Securities and Exchange Commission's rules and forms.  There has been no
change in the Company's internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the period covered by
this report that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.



                          PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS
-----------------

     The following exhibits are filed with this report:

     3.1    Amended and Restated Articles of Incorporation of the Company
            (incorporated by reference to the Registrant's Registration
            Statement on Form S-4/A filed on January 25, 2000 (SEC file no.
            333-92407)).

     3.2    Amendment to Amended and Restated Articles of Incorporation of
            the Company, as amended April 8, 2003 (incorporated by reference to
            Exhibit 3.2 of the Company's Form 10-KSB filed on April 14, 2004).

     3.3    Bylaws of the Company (incorporated by reference to the Company's
            Statement on Form S-4/A filed on January 25, 2000 (SEC file no.
            333-92407)).

     31.1   Certification of Principal Executive and Financial Officer
            pursuant to 18 U.S.C. Section 1350

     32.1   Certification of Principal Executive and Financial Officer
            pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
            906 of the Sarbanes-Oxley Act of 2002



                                    SIGNATURES

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

                                COMMUNITY NATIONAL BANCORPORATION
                                 (Registrant)

                                By: /s/Theron G. Reed
                                    -----------------------------
                                    Theron G. Reed
                                    President and Chief Executive Officer
                                    (Principal Executive, Financial and
                                     Accounting Officer)

Date: November 14, 2005