U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                                   FORM 10-Q

(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended June 30, 1997


[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Exchange Act

     For the transition period from ______ to ______

                       Commission File Number:

                         COMMUNITY FIRST BANKING COMPANY
------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


                 GEORGIA                              58-2309605
   ---------------------------------            ---------------------
   (State or Other Jurisdiction of              (I.R.S. Employer
   Incorporation or Organization)               Identification No.)

                                110 Dixie Street
                            Carrollton, Georgia 30117
                                 (770) 834-1071

            -------------------------------------------------------
          (Address of Principal Executive Offices and Telephone Number)


     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:  As of
June  30,  1997,  there  were  2,413,562  shares  issued  and  2,220,477  shares
outstanding of the Registrant's Common Stock, par value $.01 per share.


CONTENTS

PART I.  FINANCIAL INFORMATION
         ---------------------
Item 1.  Financial Statements

     Consolidated  Balance  Sheets as of  June 30,  1997 (unaudited) and
         December 31, 1996

     Consolidated  Statements  of Earnings  for the Three  Months and Six Months
          Ended June 30, 1997 and 1996 (unaudited)

     Consolidated  Statements  of Cash Flows for the Six  Months  Ended June 30,
          1997 and 1996 (unaudited)

     Notes to Consolidated Financial Statements

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities

Item 3.  Defaults Upon Senior Securities

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

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

SIGNATURES



<PAGE>
<TABLE>


                                                COMMUNITY FIRST BANKING COMPANY
                                                  Consolidated Balance Sheets
<CAPTION>
                                                                                                   Unaudited
                                                                                                     6-30-97            12-31-96
                                                                                              --------------       -------------
<S>                                                                                     <C>                   <C>
Assets
Cash and due from banks                                                                           11,224,089          11,061,383
Interest-bearing deposits in financial institutions                                               75,338,625           3,355,586
Federal funds sold                                                                                 6,490,000           8,680,000
                                                                                                  ----------          ----------
   Cash & cash equivalents                                                                        93,052,714          23,096,969
                                                                                                  ----------          ----------
Securities available for sale                                                                     44,669,346          33,927,243
Securities held to maturity                                                                        7,027,339           7,764,058
Other investments                                                                                  2,379,592           2,599,741
Mortgage loans held for sale                                                                         156,500             282,488
Loans, net                                                                                       282,814,770         269,834,098
Premises & equipment, net                                                                          9,849,925           9,288,592
Accrued interest receivable                                                                        2,699,194           2,687,472
Other assets                                                                                       8,000,791           3,050,849
                                                                                                 -----------         -----------
   Total assets                                                                                  450,650,171         352,531,510
                                                                                                 ===========         ===========

Liabilities and Stockholders' Equity
Deposits:
  Demand                                                                                          19,739,774          15,903,005
  Interest-bearing demand                                                                         50,544,598          47,288,357
  Savings                                                                                         82,943,324          34,076,732
  Time                                                                                           161,651,150         163,257,956
  Time, over $100,000                                                                             46,719,486          47,230,149
                                                                                                 -----------         -----------
     Total deposits                                                                              361,598,332         307,756,199
                                                                                                 -----------         -----------
Federal Home Loan Bank advances                                                                   15,957,608          16,295,186
Subordinated debentures                                                                              900,000           2,000,000
Accrued interest payable & other liabilities                                                       2,804,946           1,222,602
                                                                                                 -----------          ----------
     Total Liabilities                                                                           381,260,886         327,273,987
                                                                                                 -----------         -----------
Stockholders' Equity:
  Common stock, $.01 par, 10,000,000 authorized, 2,413,562 issued, 2,220,477
  outstanding                                                                                         24,135
  Additional paid in capital                                                                      46,997,681
  Unearned ESOP shares                                                                           (3,861,700)
  Retained Earnings                                                                               26,282,745          25,278,036
  Net unrealized loss on securities available for sale, net of tax                                  (53,576)            (20,513)
                                                                                                 -----------          ----------
     Total stockholders' equity                                                                   69,389,285          25,257,523
                                                                                                  ----------          ----------
Total liabilities & stockholders' equity                                                         450,650,171         352,531,510
                                                                                                 ===========         ===========


</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>

<TABLE>

                                                                   COMMUNITY FIRST BANKING COMPANY
                                                                CONSOLIDATED STATEMENTS OF EARNINGS
                                                                                (Unaudited)
<CAPTION>

                                                                   Three Months Ended June 30         Six Months Ended June 30
                                                                         1997            1996             1997            1996
                                                                         ----            ----             ----            ----
<S>                                                             <C>            <C>             <C>              <C>
Interest income:
Interest and fees on loans                                           6,492,213       6,135,414       12,733,173      12,234,115
Interest-bearing deposits and federal funds sold                       266,783         211,619          418,509         572,234
Interest and dividends on investment securities:
   U.S. Treasury                                                         6,874           2,146           13,749          25,364
   U.S. Govt. agency and mortgage-backed                               881,182         522,055        1,679,202         692,694
   State, county & municipals                                           22,169           9,776           50,322          11,520
   Other                                                                41,046          59,556           88,449         116,671
                                                                     ---------       ---------       ----------      ----------
     Total Interest Income                                           7,710,267       6,940,566       14,983,404      13,652,598
                                                                     ---------       ---------       ----------      ----------
Interest Expense:
 Interest on deposits:
   Demand                                                              390,335         354,113          750,934         703,558
   Savings                                                             321,852         214,703          575,091         421,723
   Time                                                              2,985,815       2,776,722        5,908,311       5,507,321
                                                                     ---------       ---------        ---------       ---------
                                                                     3,698,002       3,345,538        7,234,336       6,632,602
                                                                     ---------       ---------        ---------       ---------
 Interest on  FHLB advances & subordinated debentures                  261,041         264,602          522,108         530,268
                                                                       -------         -------          -------         -------
          Total interest expense                                     3,959,043       3,610,140        7,756,444       7,162,870
                                                                     ---------       ---------        ---------       ---------
                Net interest income                                  3,751,224       3,330,426        7,226,960       6,489,728
                                                                     ---------       ---------        ---------       ---------
Provision for loan losses                                              209,000         105,000          303,500         210,000
                                                                       -------         -------          -------         -------
          Net interest inc. after provision for loan loss            3,542,224       3,225,426        6,923,460       6,279,728
                                                                     ---------       ---------        ---------       ---------
Other Income:
   Service charges on deposits                                         682,988         565,989        1,287,604       1,075,629
   Miscellaneous                                                       274,570         155,586          450,364         315,289
                                                                       -------         -------          -------         -------
          Total other income                                           957,558         721,575        1,737,968       1,390,918
                                                                       -------         -------        ---------       ---------
Other expenses:
   Salaries and related benefits                                     1,786,671       1,567,763        3,589,963       3,095,438
   Occupancy and equipment                                             452,512         383,205          919,138         754,121
   Depository insurance premiums                                        46,466         152,999           58,264         305,997
   Other operating                                                   1,260,401       1,216,713        2,583,822       2,247,491
                                                                     ---------       ---------        ---------       ---------
         Total other expenses                                        3,546,050       3,320,680        7,151,187       6,403,047
                                                                     ---------       ---------        ---------       ---------
         Earnings before income tax expense                            953,732         626,321        1,510,241       1,267,599
Income tax expense                                                     317,422         209,229          505,532         406,846
                                                                       -------         -------          -------         -------    
               Net Earnings                                            636,310         417,092        1,004,709         860,753
                                                                       =======         =======        =========         =======


</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>

<TABLE>

                                                    COMMUNITY FIRST BANKING COMPANY
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                              (Unaudited)
<CAPTION>
                                                                                          Six Months Ended June 30
                                                                                            1997              1996
                                                                                            ----              ----
<S>                                                                                <C>             <C>
Net earnings                                                                           1,004,709           860,753
Adjustments  to  reconcile  net  earnings  to net  cash  provided  by  operating
activities:
  Depreciation, amortization and accretion                                               646,080           565,363
  Provision for loan losses                                                              303,500           210,000
  (Gain) or loss on sales of premises and equipment, net                                (19,372)            25,848
  Change in:
    Mortgage loans held for sale                                                         125,988         1,438,613
    Accrued interest receivable                                                         (11,722)         (379,261)
    Other assets                                                                        (73,313)         (292,206)
    Accrued interest payable                                                             164,598         (106,764)
    Accrued expenses and other liabilities                                             1,417,746          (37,479)
                                                                                       ---------         ---------
       Net cash provided by operating activities                                       3,558,214         2,284,867
                                                                                       ---------         ---------
Cash flows from investing activities:
  Proceeds from maturities of securities available for sale                            4,000,000            55,898
  Proceeds from maturities of securities held to maturity                                736,719           969,544
  Proceeds from maturities of other investments                                          220,149
  Purchases of other investments                                                                         (130,376)
  Purchases of securities available for sale                                        (14,742,103)      (27,537,813)
  Net change in loans                                                               (18,173,649)           254,852
  Proceeds from sale of real estate                                                       11,643
  Proceeds from sales of premises and equipment                                           28,401            80,000
  Purchases of premises and equipment                                                (1,216,440)       (1,999,121)
  Organization costs                                                                    (31,860)
                                                                                     -----------       -----------
       Net cash used in investing activities                                        (29,167,140)      (28,307,016)
                                                                                    ------------      ------------

Cash flows from financing activities:
  Net change in demand and savings deposits                                           55,959,602         4,724,184
  Net change in time deposits                                                        (2,117,470)         3,631,389
  Payment of FHLB advances                                                             (337,578)         (337,578)
  Payment of subordinated debentures                                                 (1,100,000)
  Net Proceeds from issuance of common stock                                          43,160,116
                                                                                      ----------         ---------
      Net cash provided by financing activities                                       95,564,670         8,017,995
                                                                                      ----------         ---------
       Net change in cash and cash equivalents                                        69,955,744      (18,004,154)
                                                                                      ----------      ------------
  Cash and cash equivalents at beginning of year                                      23,096,970        34,057,178
                                                                                      ----------        ----------
Cash and cash equivalents at quarter end                                              93,052,714        16,053,024
                                                                                      ==========        ==========
Supplemental schedule of non-cash investing activity:
   Transfer from loans to other real estate owned                                      4,901,121            57,056


</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>

COMMUNITY FIRST BANKING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1.  NATURE OF BUSINESS

Community First Banking Company (the "Company") was incorporated in the State of
Georgia on March 12, 1997, for the purpose of becoming a holding  company to own
all of the  outstanding  capital  stock of  Carrollton  Federal  Bank,  FSB (the
"Savings Bank"), an existing  federally  chartered stock savings bank, which was
100%  owned  by  CF  Mutual  Holdings  (the  "Mutual  Holding  Company").   Upon
consummation of the plan of conversion and  reorganization,  ("the  Conversion")
(see Note 3.  below),  the Company  became the unitary  holding  company for the
Savings Bank and the Mutual Holding Company was dissolved.


NOTE 2.  BASIS OF PRESENTATION

Prior to June 27, 1997,  the Company had not issued any stock,  had no assets or
liabilities,  and had not engaged in any  business  activities  other than of an
organizational nature. Accordingly, the financial data for periods prior to June
27, 1997  included  herein  reflect the  operations of the  consolidated  Mutual
Holding Company.

The  accompanying   unaudited  consolidated  financial  statements  (except  for
statements of financial  condition at December 31, 1996, which are audited) have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial information and with the instructions  contained in Regulation
S-X.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements.  In the opinion of management,  all adjustments  (none of which were
other than normal recurring  accruals)  necessary for a fair presentation of the
financial position and results of operations for the periods presented have been
included.

The  results  of  operations  for the six  months  ended  June 30,  1997 are not
necessarily indicative of the results of operations that may be expected for the
year ended  December 31,  1997.  For further  information,  refer to the audited
consolidated  financial  statements  and  footnotes  thereto  for the year ended
December 31, 1996, included in the Prospectus of the Company dated May 14,1997.

NOTE 3.  STOCK CONVERSION

On June 27,1997 the Conversion to a stock holding  company  organized  under the
laws of Georgia,  the issuance of common stock,  and  dissolution  of the Mutual
Holding  Company  were  completed.  In  connection  therewith,  the Company sold
2,413,562  shares of common stock, par value $.01 per share, at an initial price
of $20 per share in subscription offerings. Costs associated with the Conversion
were  approximately  $1,379,000  including  underwriting  fees. These conversion
costs were deducted from the gross proceeds of the sale of the common stock.

NOTE 4. EMPLOYEE STOCK OWNERSHIP PLAN

In connection  with the  Conversion,  the Company  established an employee stock
ownership  plan (the "ESOP").  The ESOP purchased  approximately  8%, or 193,085
shares, of the total shares of common stock sold. The Company lent $3,861,700 to
the ESOP for the purchase of the shares of common stock. All existing  employees
over age 21 and new employees who have  completed at least 1000 hours of service
during a twelve  month  period  and who have  attained  age 21 are  eligible  to
participate in the ESOP. The Company will make  discretionary  contributions  to
the ESOP in an amount not less than the amount  needed to pay any  principal and
interest payments required by the acquisition loan. The Company will account for
its ESOP in accordance with Statement of Position 93-6,  "Employer's  Accounting
for Employee Stock Ownership  Plans".  As shares are committed to be released to
participants,  the Company will report compensation expense equal to the average
market price of the shares during the period.

NOTE 5.  EARNINGS PER SHARE

The initial public offering was completed June 27, 1997. Accordingly, net income
per share  calculations  for the three and six month periods ended June 30, 1997
are not meaningful and are therefore not presented.

NOTE 6.  RECENTLY ISSUED ACCOUNTING STANDARDS

During 1997,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial  Accounting  Standards  No. 128, " Earnings  Per Share" (SFAS 128) and
SFAS No. 129  "Disclosure  of  Information  About Capital  Structure".  SFAS 128
simplifies current standards by eliminating the presentation of primary earnings
per share (EPS) and requiring the  presentation  of basic EPS, which includes no
potential  common  shares and thus no  dilution.  The  Statement  also  requires
entities with complex capital structures to present basic and diluted EPS on the
face of the income  statement and also  eliminates  the modified  treasury stock
method of computing  potential common shares.  SFAS 129 simply  consolidates the
established  accounting  pronouncements  on required  disclosure of  information
about a company's capital structure.  The statement contains no new requirements
for  companies  that  reported  previously  under those  established  accounting
pronouncements. Both standards are effective for financial statements issued for
periods  ending after  December  15,  1997,  including  interim  periods.  Early
application  is not  permitted.  Upon adoption of SFAS 128,  restatement  of all
prior-period  EPS data  presented  is required.  Based upon the current  capital
structure of the Company,  these  statements  will not have a material impact on
the Company's financial statements.




<PAGE>


ITEM 2.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
     RESULTS OF OPERATIONS


COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1997 AND DECEMBER 31, 1996

Total assets at June 30, 1997 grew approximately 27.8% to $451 million from $353
million at  December  31,  1996.  The  increase  in total  assets was  primarily
attributable to a $72 million increase in interest-bearing deposits in financial
institutions,  a $10.7 million increase in securities  available for sale, a $13
million increase in net loans, and a $4.9 million increase in other assets.  The
asset growth was funded  primarily  by the net proceeds  received by the Company
from its  initial  public  offering  and  increase  in demand  deposits  of $7.1
million.

The increase in  interest-bearing  deposits in financial  institutions  resulted
from the proceeds of the initial public  offering.  The initial public  offering
was over subscribed by $44.9 million and although refunds of  over-subscriptions
were  mailed on June 27,  1997,  the  checks had not  cleared  and  remained  in
overnight interest bearing deposits at June 30, 1997 .

Total net loans grew $13 million,  or 4.81%, from December 31, 1996 through June
30, 1997.  The increase in loans was  primarily  due to  commercial  installment
loans ($15 million),  commercial adjustable line of credit loans ($5.5 million),
commercial  single pay loans ($3 million),  and indirect  automobile loans ($3.1
million).  Mortgage  loans  decreased $10 million during the first six months of
1997.

The  increase in other assets  resulted  from  foreclosure  on five loans to one
commercial  borrower ($4. 9 million).  The foreclosed property is represented by
two parcels of  undeveloped  land. In July 1997, the Savings Bank entered into a
Purchase  and Sale  Agreement  on the  largest  of the tracts of  property.  The
Agreement  calls for a 90 day  inspection  period for the purchaser to determine
whether the  property  is  suitable  for the  purchaser's  purposes.  No loss is
anticipated from the sale of these parcels of undeveloped land.

The net asset growth was funded  primarily by the initial public  offering which
resulted in subscriptions of $91.7 million. As mentioned above, $44.9 million in
over  subscriptions  is in the process of being  refunded which will result in a
decrease in interest bearing  deposits in financial  institutions and a decrease
in savings deposit liabilities in the month following June 30, 1997.

Non-interest bearing demand deposits increased $3.8 million and interest bearing
demand  deposits  increased $3.3 million from December 31, 1996 through June 30,
1997.  Savings  deposit  liabilities  increased $48.9 million which includes the
$44.9 million being refunded for the over subscription. Time deposit liabilities
decreased  $2.1  million  as  the  result  of  deposits  being  used  for  stock
subscriptions.

Of the growth in deposits  during the period from December 31, 1996 through June
30, 1997, $9.9 million came from the four Wal-Mart branches opened in 1996.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND
1996

Net earnings  totaled  $636,310  for the three  months  ended June 30, 1997,  an
increase of 53% from the  $417,092  earned for the three  months  ended June 30,
1996. This increase is primarily  attributable to the continued increases in net
interest income.

Net Interest Income

Net interest income for the three months ended June 30, 1997 increased $420,798,
or 12.6%,  over the same period in 1996.  This  increase  reflects the continued
change in loan mix,  moving toward more  commercial  and consumer loans and away
from 1 - 4 family mortgage loans.

Provision for Loan Losses

The provision  for loan losses  increased to $209,000 for the three months ended
June 30, 1997  compared to $105,000  for the three  months  ended June 30, 1996.
This  increase has been deemed  appropriate  by management to reflect the higher
risk associated with the change in the loan portfolio mix.

Other Income

Other income increased  $235,983 for the three months ended June 30, 1997 verses
1996.  This is  primarily  the result of increased  service  charges and fees on
transaction  accounts  generated  by the  increase  in  accounts  from  the four
Wal-Mart branches opened from March through September 1996.

Other Expenses

Other expenses  increased $225,370 for the three months ended June 30, 1997 over
the same  period in 1996.  Salaries  and  related  employee  benefits  increased
$218,908 or 14%,  occupancy  expense  increased $69,307 or 18% and other expense
increased  $43,688 or 4%. These  increases  are  primarily  associated  with the
Wal-Mart  branches  which were  opened in 1996.  Depository  insurance  premiums
decreased  for the same three months ended June 30, 1997 and 1996 because of the
special  assessment  made in September 1996 to equalize the Savings  Association
Insurance Fund (SAIF) with the Bank Insurance Fund (BIF).

Income Taxes

Income tax expense increased $108,193 or 52% for the quarter ended June 30, 1997
as compared to the same period in 1996.  The  effective tax rate as a percentage
of pretax income for both periods was approximately 33%.

COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996.

Net earnings were  $1,004,709 for the six months ended June 30, 1997 compared to
$860,753  for the same  period in 1996.  This  16.7%  increase  in net  earnings
resulted  primarily  from an increase in net interest  income and a reduction in
deposit insurance premiums during the six months ended June 30, 1997 as compared
to the six months ended June 30, 1996.

Net Interest Income

Net interest  income for the six months ended June 30, 1997 increased  $737,232,
or  11.4%,  over the  same  period  in 1996.  Total  interest  income  increased
$1,330,806  during the six months  ended June 30,  1997 as  compared to the same
period of the prior year.  This increase was primarily the result of an increase
in interest on investment securities.  Total interest expense increased $593,574
during the first six months of 1997 compared to the same period in 1996.

Provision For Loan Losses

The provision for loan losses increased by $93,500 for the six months ended June
30, 1997 over the amount for the six months ended June 30, 1996.  This  increase
for the  comparative  six months period reflects the higher risk associated with
the increased commercial and consumer lending activities.

Other Income

Other income  increased  $347,050,  or 25.0%,  for the six months ended June 30,
1997 versus the same period in 1996. This increase is primarily  attributable to
the  increased  volume  of  transaction  accounts  generated  from the  Wal-Mart
branches.

Other Expenses

Other  expenses for the six months ended June 30, 1997  increased  $748,140 over
the amount for the six months  ended June 30, 1996.  This  increase is primarily
the result of  increased  costs  associated  with the Wal-Mart  branches  opened
during 1996. An offset to this increase,  however, was the reduction in the SAIF
deposit  insurance premium of $247,733 during the six months ended June 30, 1997
compared to the same six months in 1996.

Income Taxes

Income tax expense increased  approximately $99,000 or 24% during the first half
of 1997 as  compared  to the same period in 1996.  The  effective  tax rate as a
percentage  of pretax income for the six months ended June 30, 1997 and 1996 was
33% and 32% respectively.  These tax rates differ from the statutory Federal tax
rate of 34  percent  primarily  due to tax  exempt  interest  income on  certain
investment  securities.  For the first six  months of 1997 and 1996,  tax exempt
investment  securities  interest  expressed as a percentage  of pretax  earnings
increased to 3% from 1%, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company's  primary sources of funds are time,  savings and demand  deposits,
principal  and  interest  payments  on loans and  securities  and,  to a limited
extent,  borrowings  from the FHLB of Atlanta.  While  maturities  and scheduled
amortization of loans and securities  provide an indication of the timing of the
receipt of funds, changes in interest rates, economic conditions and competition
strongly influence mortgage prepayment rates and savings deposit flows, reducing
the predictability of the timing of sources of funds.

On June 27,  1997 the  Conversion  from a  federally  chartered  mutual  holding
company to a state chartered stock holding company was completed, and all of the
capital  stock of the  Savings  Bank was  acquired by the  Company.  The Company
issued and sold 2,413,562 shares of its common stock, $.01 par value, at a price
of $20.00  per share in a  subscription  offering  (the  "Offering")  to certain
depositors of the Savings Bank and to the  Company's  Employee  Stock  Ownership
Plan. Net proceeds from the Offering were $46.9 million. At June 30, 1997, total
stockholders'  equity of Community First Banking Company was $69.4 million.  The
ratio of the Company's equity to total assets at June 30, 1997 was 15.4%.

The Savings  Bank is required  to  maintain an average  daily  balance of liquid
assets and short-term liquid assets as a percentage of net withdrawable  deposit
accounts plus short-term borrowings, as defined by the regulations of the Office
of Thrift Supervision (the "OTS"). The minimum required liquidity and short-term
liquidity  ratios are currently 5.0% and 1.0%,  respectively.  At June 30, 1997,
the Savings Bank's liquidity ratio was 19.1% and its short-term  liquidity ratio
was  15.7%.  The  levels of the  Savings  Bank's  short-term  liquid  assets are
dependent on the Savings Bank's  operating,  financing and investing  activities
during any given period.  Management believes it will have adequate resources to
fund all  commitments on a short-term and long-term basis in accordance with its
business strategy.

See the  "Statements  of Cash  Flows" in the  Unaudited  Consolidated  Financial
Statements included in this Form 10-Q for the sources and uses of cash flows for
operating activities,  investing activities and financing activities for the six
months ended June 30, 1997 and 1996.

The Savings Bank has other sources of liquidity if a need for  additional  funds
arises,  including  the ability to obtain FHLB of Atlanta  advances of up to $53
million.  The Savings Bank had $16 million in outstanding  FHLB advances at June
30, 1997.

The Savings  Bank  continued  to  substantially  exceed all  regulatory  capital
requirements  at June 30, 1997.  The  following  table shows the Savings  Bank's
regulatory  capital  amounts and ratios along with the  required  amounts of the
Office of Thrift Supervision.

<TABLE>
<CAPTION>
                                       Tangible Capital               Tier One Capital      Total Risk-Based Capital
                                       ----------------               ----------------      ------------------------         

                                       Amount                         Amount                       Amount
                                    Thousands   Percent            Thousands   Percent          Thousands    Percent
                                    ---------   -------            ---------   -------          ---------    -------
<S>                                <C>        <C>                  <C>       <C>                <C>       <C>   
Capital for regulatory purposes        46,641     10.3%               46,641     10.3%             48,608      17.0%

Minimum regulatory requirement          6,781      1.5%               13,563      3.0%             22,915       8.0%

Excess                                 39,860      8.8%               33,078      7.3%             25,693       9.0%

</TABLE>

NON PERFORMING ASSETS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES

Non performing  assets,  comprised of nonaccrual loans,  other real estate owned
and loans  for which  payments  are more  than 90 days  past due,  totaled  $7.7
million at June 30, 1997,  as compared to $7.5 million at December 31, 1996.  In
addition,  non  performing  assets as a percentage of total loans and other real
estate  owned  was  2.7%  and  2.8% at June 30,  1997  and  December  31,  1996,
respectively.

Management  considers the size and character of the loan  portfolio,  changes in
nonperforming and past due loans, historical loan loss experience,  the existing
risk of  individual  loans,  concentrations  of loans to specific  borrowers and
existing and prospective  economic  conditions when  determining the adequacy of
the  allowance  for loan  losses.  The  allowance  for loan losses  totaled $2.6
million (.96% of loans  outstanding) at 12/31/96 and $2.4 million (.83% of loans
outstanding)  at 6/30/97.  The reduction in the ratio is a result of loan growth
for the first six months of 1997,  strengthening  of  underwriting  criteria for
consumer loans,  and overall  improvement in the quality of the loan portfolios.
Management  believes the allowance for loan losses is adequate to absorb loss in
the portfolio.


<PAGE>



PART II.  OTHER INFORMATION

      ITEM 1.  LEGAL PROCEEDINGS

          None.

      ITEM 2.  CHANGES IN SECURITIES

          None.

      ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

          None.

      ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

          None.

      ITEM 5.  OTHER INFORMATION

          None.

      ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

          (a) The following exhibit is filed herewith:

               Exhibit 27 Financial Data Schedule

          (b) No reports on Form 8-K were filed  during the  quarter  ended June
30, 1997.


<PAGE>

                                   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 FIRST BANKING COMPANY


Date:  August 14 , 1997                   /s/ Gary D. Dorminey
                                        --------------------------
                                        Gary D. Dorminey
                                        President
                          (Principal Executive Officer)



Date:  August 14, 1997                   /s/ C. Lynn Gable
                                        -------------------------
                                        C. Lynn Gable
                                        Chief Financial Officer
                          (Principal Financial Officer)