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, 1999

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

     For the transition period from ______ to ______

                       Commission File Number: 0-22543

                         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 July 26, 1999, there were
3,282,054  shares issued and 2,599,860  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, 1999  (unaudited)  and December
          31, 1998

     Consolidated Statements of Earnings for the Three and Six Months Ended June
          30, 1999 and 1998 (unaudited)

     Consolidated  Statements  of  Comprehensive  Income  for the  Three and Six
          Months Ended June 30, 1999 and 1998 (unaudited)

     Consolidated  Statements  of Cash Flows for the Six  Months  Ended June 30.
          1999 and 1998 (unaudited)

     Notes to Consolidated Financial Statements

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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>
                         COMMUNITY FIRST BANKING COMPANY
                           Consolidated Balance Sheets
                            (In thousands of dollars)
<TABLE>
<CAPTION>
                                                      June 30,    December 31,
                          Assets                         1999        1998
                                                     (unaudited)
<S>                                                  <C>         <C>
Cash and due from banks ...........................     11,531      10,883
Interest-bearing deposits in financial institutions      3,857       3,553
Federal funds sold ................................      5,030      18,300
                                                      --------    --------
   Cash & cash equivalents ........................     20,418      32,736

Securities available for sale .....................     62,966      71,702
Securities held to maturity .......................        202         232
Other investments .................................      1,029       2,328
Mortgage loans held for sale ......................        521         199
Loans, net ........................................    271,425     264,855
Premises and equipment net ........................      7,844       8,160
Accrued interest receivable .......................      2,608       2,558
Other real estate and repossessions ...............        855       5,479
Other assets ......................................      5,240       3,737
                                                      --------    --------
Total assets ......................................    373,108     391,986
                                                      ========    ========

             Liabilities and Stockholders' Equity
Deposits:
  Demand ..........................................     18,646      13,611
  Interest-bearing demand .........................     54,187      52,644
  Savings .........................................     31,872      31,630
  Time ............................................    150,135     146,603
  Time, over $100,000 .............................     42,019      41,449
                                                      --------    --------
     Total deposits ...............................    296,859     285,937

Note payable and other borrowings .................     45,457      47,945
Subordinated debentures ...........................        900         900
Payable for branch sales ..........................         -       27,461
Accrued interest payable and other liabilities ....      2,925       3,619
                                                      --------    --------
     Total liabilities ............................    346,141     365,862
                                                      --------    --------
Stockholders' Equity:
 Convertible preferred stock, par value $.01,
   96,542 shares issued ...........................          1           1
 Common stock, $.01 par, 10,000,000 authorized,
   3,282,054 issued ...............................         33          33
 Additional paid in capital .......................     13,740      13,481
 Unearned ESOP shares and stock awards ............     (2,153)     (4,196)
 Retained earnings ................................     26,695      26,611
 Treasury stock at cost ...........................     (9,369)     (9,021)
 Accumulated other comprehensive income and (loss)      (1,980)       (785)
                                                      --------    --------
     Total stockholders' equity ...................     26,967      26,124
                                                      --------    --------

 Total liabilities & stockholders' equity .........    373,108     391,986
                                                       =======     =======
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
                         COMMUNITY FIRST BANKING COMPANY
                       Consolidated Statement of Earnings
                                  (Unaudited)
                 (In thousands of dollars - except per share data)

                                                               Three Months Ended        Six Months Ended
                                                                     June 30,                 June 30,
                                                                 1999       1998          1999       1998
                                                                 ----       ----          ----       ----
<S>                                                            <C>        <C>          <C>        <C>
Interest income:
 Interest and fees on loans                                     6,322      6,485        12,574     13,090
 Interest-bearing deposits  and federal funds sold                131        268           310        632
 Interest and dividends on investment securities:
   U.S. Treasury                                                   44         45            89         90
   U.S. Govt. agency and mortgage-backed                          918      1,315         1,855      2,182
   State, county & municipals                                      29         29            58         59
   Other                                                           68         79           157        157
                                                             -------------------   -----------------------
     Total interest income                                      7,512      8,221        15,043     16,210
                                                             -------------------   -----------------------
Interest Expense:
 Interest on deposits:
   Demand                                                         281        356           553        710
   Savings                                                        163        295           328        595
   Time                                                         2,611      2,921         5,209      5,822
                                                             -------------------   -----------------------
                                                                3,055      3,572         6,090      7,127
                                                             -------------------   -----------------------
Interest on note payable and other borrowings                     711        678         1,668        942
                                                             -------------------   -----------------------
          Total interest expense                                3,766      4,250         7,758      8,069
                                                             -------------------   -----------------------
                                                             -------------------   -----------------------
           Net interest income                                  3,746      3,971         7,285      8,141
                                                             -------------------   -----------------------
Provision for loan losses                                         192        182           364        335
                                                             -------------------   -----------------------
          Net interest income after provision for loan losses   3,554      3,789         6,921      7,806
                                                             ---------------------------------------------
Noninterest income:
   Service charges on deposits                                    564        773         1,145      1,470
   Gain (Loss) on sales and calls of securities
     available for sale                                            46        452            46        503
   Insurance commissions                                          166        112           361        364
   Miscellaneous                                                  141        321           385        510
                                                             -------------------   -----------------------
          Total noninterest income                                917      1,658         1,937      2,847
                                                             -------------------   -----------------------
Noninterest expenses:
   Salaries and employee benefits                               1,574      1,901         3,127      3,751
   ESOP and MRP expense                                         1,973        825         2,343      1,250
   Occupancy and equipment                                        340        539           714      1,098
   Deposit insurance premiums                                      39         46            84         92
   Other operating                                                879      1,045         1,864      2,329
                                                             -------------------   -----------------------
         Total noninterest expense                              4,805      4,356         8,132      8,520
                                                             -------------------   -----------------------
         Earnings (loss) before income taxes                     (334)     1,091           726      2,133
Income tax expense (benefit)                                     (201)       355            96        690
                                                             -------------------   -----------------------
               Net earnings (loss)                               (133)       736           630      1,443
                                                             ===================   =======================
Basic earnings (loss) per share                                  (.05)       .19           .24        .36
Diluted earnings (loss) per share                                (.05)       .18           .23        .34
Dividends per common share                                       .115       .075          .225        .15
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>

                       COMMUNITY FIRST BANKING COMPANY
                 Consolidated Statements of Comprehensive Income
                      (Unaudited - in thousands of dollars)
                                                                                     Three Months Ended         Six Months Ended
                                                                                         June 30,                   June 30,
                                                                                      1999        1998           1999       1998
<S>                                                                                <C>          <C>            <C>       <C>
Net earnings                                                                           (133)        736            630     1,443
                                                                                ------------------------   ----------------------
Other  comprehensive  income,  net of  income  taxes:
 Unrealized  gains (losses) on securities available for sale                         (1,569)     (1,300)        (1,974)      562
  Income tax on gains (losses)                                                         (596)       (442)          (750)      191
                                                                                ------------------------   ----------------------
    Unrealized gains (losses) arising during the period, net of tax                    (973)       (858)        (1,224)      371
                                                                                ------------------------   ----------------------
  Less: Reclassification adjustment for gains included in net earnings                   46         452             46       503
   Income tax on reclassification on adjustments                                         17         154             17       171
                                                                                ------------------------   ----------------------
    Reclassification adjustment for gains included in net earnings, net of tax           29         298             29       332
                                                                                ------------------------   ----------------------
     Other comprehensive income                                                        (944)       (560)        (1,195)       39
                                                                                ------------------------   ----------------------
COMPREHENSIVE INCOME                                                                 (1,077)        176           (565)    1,482
                                                                                ========================   ======================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
                         COMMUNITY FIRST BANKING COMPANY
                      Consolidated Statements of Cash Flows
                      (Unaudited - in thousands of dollars)
                                                                      Six Months Ended
                                                                          June 30,
                                                                    1999            1998
                                                                    ----            ----
                                                                        In thousands
<S>                                                                <C>          <C>
Net earnings                                                          630          1,443
 Adjustments to reconcile net earnings to net cash
      provided by operating activities:
  Depreciation, amortization and accretion                            538            768
  Provision for loan losses                                           364            335
  Deferred income tax benefit                                         644
  Gain on calls and sales of securities available for sale            (46)          (503)
  Gain on sale of other real estate                                   (58)          (178)
  Loss (gain) on sales of premises and equipment, net                 (14)            27
  ESOP and MRP compensation expense                                 2,339          1,264
  Change in:
    Mortgage loans held for sale                                     (323)            80
    Accrued interest receivable                                       (51)          (432)
    Other assets                                                   (1,506)          (571)
    Accrued interest payable                                           (7)           528
    Other liabilities                                                (687)           154
                                                                -------------------------
       Net cash provided by operating activities                    1,823          2,915
                                                                -------------------------

Cash flows from investing activities:
  Proceeds from sales and calls of securities available for sale    8,284         16,301
  Proceeds from maturities of securities held to maturity              29            109
  Proceeds from maturities of securities available for sale         4,685
  Proceeds from sales of other investments                                           619
  Purchases of other investments                                   (1,075)            60
  Proceeds from sales of other investments                          1,210
  Purchases of securities available for sale                       (4,998)       (56,934)
  Net change in loans                                              (6,932)        15,770
  Proceeds from sale of real estate and repossessions               4,682            717
  Proceeds from sales of premises and equipment                        15             27
  Purchases of premises and equipment                                (120)          (738)
                                                                -------------------------
       Net cash provided by (used in) investing activities          5,780        (24,069)
                                                                -------------------------

Cash flows from financing activities:
  Net change in demand and savings deposits                         6,820          3,050
  Net change in time deposits                                       4,103         (3,082)
  Payment of FHLB advances                                        (24,238)        (1,088)
  Proceeds from  FHLB advances                                     24,000         40,000
  Change in payable for branch sales                              (27,461)
  Payment of note payable                                          (2,250)         5,000
  Treasury stock purchased                                           (348)       (25,397)
  Cash dividend paid                                                 (547)          (548)
                                                                -------------------------
      Net cash provided by (used in) financing activities         (19,921)        17,935
                                                                -------------------------
      Net change in cash and cash equivalents                     (12,318)        (3,219)

Cash and cash equivalents at beginning of year                     32,736         30,284
                                                                -------------------------
Cash and cash equivalents at quarter end                           20,418         27,065
                                                                =========================
</TABLE>
<TABLE>
<CAPTION>
                                                                    Six Months Ended
                                                                        June 30,
                                                                   1999            1998
                                                                   ----            ----
                                                                       In thousands
<S>                                                            <C>            <C>
Supplemental disclosure of cash flow information:
  Cash paid for:
     Interest                                                      7,766          7,540
     Income taxes                                                    400          1,250
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
COMMUNITY FIRST BANKING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1.  NATURE OF BUSINESS

GENERAL

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
100% of the  outstanding  capital  stock of Carrollton  Federal  Bank,  FSB (the
"Savings  Bank").  The Savings Bank was organized on August 1, 1994 as a federal
savings bank subsidiary of CF Mutual Holdings (the "Mutual Holding Company"),  a
federally chartered mutual holding company.  Prior to that date, the predecessor
of the Savings Bank had operated as a mutual savings bank since 1929.

On June 27, 1997, a plan of conversion  and  reorganization  whereby the Company
became the unitary  holding  company for the Savings Bank and the dissolution of
the Mutual Holding Company was completed.

On December 29, 1997,  the Savings Bank  converted  from a federal  savings bank
regulated  by the  Office of Thrift  Supervision  to a Georgia  chartered  state
commercial  bank regulated by the Georgia  Department of Banking and Finance and
concurrently  changed the name of the  institution to Community  First Bank (the
"Bank").

NOTE 2.  BASIS OF PRESENTATION

The  accompanying   unaudited  consolidated  financial  statements  (except  for
statements of financial  condition on December 31, 1998, which are audited) have
been prepared in accordance with instructions to Form 10Q. 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.  Certain
amounts in the prior  year's  financial  statements  have been  reclassified  to
conform with the 1999 presentation. These reclassifications had no effect on net
income. The accompanying  consolidated financial statements include the accounts
of the  Company  and the Bank.  All  significant  intercompany  items  have been
eliminated.

The results of  operations  for the three and six months ended June 30, 1999 are
not necessarily indicative of the results of operations that may be expected for
the year ended  December  31,  1999.  The  accompanying  consolidated  financial
statements and related notes of Community  First Banking  Company and subsidiary
should be read in conjunction with the audited consolidated financial statements
and related notes  included in the Company's  Annual Report on Form 10-K for the
year ended December 31, 1998.

NOTE 3.  EARNINGS PER COMMON SHARE

On January 21, 1999,  the  Company's  Board of Directors  declared a two-for-one
common  stock split to be  effected  in the form of a 100% stock  dividend to be
distributed  on  February  16,  1999 to holders of record on  February  1, 1999.
Accordingly,  all  references  to common shares  outstanding  and per share data
throughout  the  consolidated  financial  statements  (except  data  related  to
treasury shares) have been restated to reflect the stock split.

Earnings per common share calculations for the three and six month periods ended
June 30, 1999 and 1998 are presented based on the net earnings for the three and
six months  divided by the weighted  average  number of shares  outstanding,  or
2,579,758  and  2,579,013  shares (three and six months ended June 30, 1999) and
3,795,864  and  3,955,122  shares  (three and six months  ended June 30,  1998).
Diluted earnings per common share takes into account the effect of dilution from
the  assumed  exercise of all  outstanding  stock  options  and awards.  Diluted
earnings per common share is  calculated by dividing net earnings by the average
number  of  common  shares  outstanding  adjusted  for  the  incremental  shares
resulting from the exercise of dilutive options during the period,  or 2,802,126
and  4,064,438  shares  for the  three  months  ended  June  30,  1999  and 1998
respectively, and 2,788,380 and 4,208,648 for the six months ended June 30, 1999
and 1998 respectively.


NOTE 4. DIVIDENDS DECLARED

On March 18, 1999 the Board of Directors of the Company approved a cash dividend
of $.11 per share  which was paid  April 1,  1999 to  stockholders  of record on
March 18, 1999. On June 17, 1999 the Board of Directors of the Company  approved
a cash  diuidend of $.115 per share to be paid July 1, 1999 to  stockholders  of
record on June 18, 1999.

NOTE 5. EMPLOYEE BENEFITS

On June 17 , 1999 the  Compensation  Committee  of the Board of Directors of the
Company voted to accelerate the vesting of the Management Recognition Plan (MRP)
so that the  Restricted  Stock Awards be fully vested as of June 30, 1999.  This
resulted in a charge to compensation  expense of $1.4 million and a reduction in
unearned stock awards by the same amount.

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

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1999 AND DECEMBER 31, 1998

On June 30,  1999 the  Company had total  assets of $373.1  million  compared to
$392.0 million at December 31, 1998. This decrease in assets of $18.9 million or
4.8% is  primarily  due to a  decrease  in cash  and cash  equivalents  of $12.3
million  (37.6%);  a decrease in available  for sale  securities of $9.9 million
(13.8%);  and a decrease in other real  estate of $4.6  (84.4%)  million.  These
decreases  were  partially  offset by an increase  in net loans of $6.6  million
(2.5%).

The decrease in available for sale securities resulted from sales by the Bank of
$7.2 million, maturities of $4.7 million, and a mark to market decrease in value
of $1.9 million.  The Company  received a $1.1 million cash  distribution in the
form of a non-taxable  return of capital on equity  securities on June 25, 1999.
These decreases were offset by purchases by the Bank of $5 million.

The  increase  in loans of $6.6  million  (2.5%) is  primarily  the result of an
increase in commercial loans of $11.2 million  partially offset by a decrease in
mortgage  loans of $3.9 million,  a decrease in credit card loans of $.5 million
and an increase in the loan loss reserve of $.2 million.

Other  real  estate and  repossessions  decreased  primarily  from the sale of a
parcel of undeveloped land on April 30, 1999. The sales price was  approximately
$4.4 million and no gain or loss was recognized on the sale.

Other assets  increased $1.5 million  primarily from an increase in deferred tax
asset ($733,000)  resulting from an increase in the unrealized loss on available
for sale securities, and an increase in receivables ($475,000) due from the sale
of three Wal*Mart  branches on December 31, 1998.  This receivable was funded to
the Bank on July 2, 1999.

Total deposit liabilities  increased $10.9 million (3.8%) from December 31, 1998
to June 30, 1999.  Certificate  of deposits  increased $4.1 million (2.2%) while
demand  deposits and savings  increased  $6.8 million  (9.9%).  These  increases
resulted  primarily  from offering a new  certificate  of deposit  product,  and
increased  marketing  efforts  of  demand  deposit  accounts  through  increased
advertising and employee incentives.

Note  payable and other  borrowings  decreased  $2.5  million  during the period
December  31, 1998 to June 30,  1999.  On January 4, 1999 the Bank  borrowed $24
million  from the FHLB on a daily rate  credit to help fund the  payable for the
sale of the Wal*Mart  branches  that was effective  December 31, 1998.  The Bank
repaid $10 million to the FHLB  during the first  quarter of 1999 and repaid the
remaining $14 million,  of the $24 million  credit  borrowed on January 4, 1999,
during the three months  ended June 30,  1999.  The Company paid $2.3 million on
the line of credit owed to another financial  institution  during the six months
ended June 30, 1999.

Stockholders  equity  increased  $843,000  during the six months  ended June 30,
1999.  Additional  paid in capital  increased  $259,000  from the  market  value
adjustment of the ESOP shares committed to be released. Amortization of unearned
ESOP  shares  and MRP awards  increased  equity by $2.0  million  during the six
months ended June 30, 1999. On June 17 , 1999 the  Compensation  Committee  (the
Committee)  of the Board of Directors  of the Company  voted to  accelerate  the
vesting of the Management  Recognition  Plan (MRP) so that the Restricted  Stock
Awards  be fully  vested  as of June 30,  1999.  This  resulted  in a charge  to
compensation expense of $1.4 million and a reduction in unearned stock awards by
the same amount.  The Committee  believes that  continued  compensation  expense
charges  against  the  Company's  earnings  over the  vesting  period of the MRP
negatively  affects the value of the common  stock and the  acceleration  of the
vesting will  improve the future  financial  position of the  Company.  Retained
earnings  increased  $84,000 from  earnings of $630,000 less  dividends  paid of
$546,000.  Treasury stock increased  $348,000 from the purchase of 17,418 shares
at an  average  price of $19.98 per share  during the six months  ended June 30,
1999.  Accumulated other comprehensive loss increased $1.2 million as the result
of the market value  adjustment  of available  for sale  securities  caused by a
rising interest rate environment.


COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND
1998

GENERAL.  The Company had a net loss of $133,000 for the three months ended June
30,  1999,  a decrease of $869,000  over the  $736,000  earned in the same three
months in 1998.  This decrease is primarily the result of the recognition of the
remaining  unamortized  MRP expense ($1.4 million) in the quarter ended June 30,
1999. The MRP shares were  originally to vest at a rate of five percent (5%) per
quarter  beginning  with the quarter  ended  March 31,  1998.  The  Compensation
Committee of the Company  believes that  acceleration  of the vesting of the MRP
shares will  improve the future  financial  position of the Company and will not
affect the  Company's  ability  to retain  the  services  of the  employees  and
directors  who  received  the awards.  Had the  additional  MRP expense not been
recognized in the quarter ended June 30, 1999 the quarterly  earnings would have
been $763,000.  This would have been an increase of $27,000 (3.7%) over the same
three months in 1998.

NET INTEREST  INCOME.  Net  interest  income for the three months ended June 30,
1999 decreased $225,000 or 5.7% compared to the same three-month period in 1998.
Total  interest  income  decreased  $709,000  or 8.6%,  while  interest  expense
decreased $484,000 or 11.4%. The decrease in earnings on interest bearing assets
was caused by lower average  interest  earning  assets which  decreased by $42.3
million  for the three  month  ended June 30,  1999  compared  to the same three
months average in 1998. Interest bearing liabilities decreased $20.6 million in
three months ended June 30, 1999 compared to the same three months in 1998.

The loan  portfolio mix continues to move away from  residential  mortgage loans
and into higher yielding  commercial loans. The average balance of loans by type
for the second quarters of 1999 and 1998 were as follows:

                                    Average Balances
                                   Three Months Ended
                                        June 30,
                                    1999       1998
                                    ----       ----
                                    (In thousands)
Mortgage loans                   113,040      115,189
Consumer loans                    54,275       61,508
Credit card loans                  3,145        3,718
Commercial loans                 101,859       92,247
                                 -------      -------
                                 272,319      272,662
                                 =======      =======

Interest  and fee  income  on loans  decreased  $163,000  or 2.5% in the  second
quarter of 1999 compared to the same quarter in 1998,  while the average balance
of loans decreased $2.9 million or 1.06%.  Interest income on federal funds sold
and interest bearing deposits  decreased  $137,000 or 51.1% for the three months
ended June 30, 1999 compared to the same three months of 1998.  This decrease in
income on fed funds  and  deposits  resulted  from use of funds not  needed  for
liquidity being applied to reduce debt of the Bank and Company.

The net interest rate spread  measures the difference  between the average yield
on earning  assets and the  average  rate paid on  interest  bearing  sources of
funds.  The net interest  rate spread for the  quarters  ended June 30, 1999 and
1998 was 4.02% and  3.52%  respectively.  This 50 basis  point  increase  in the
spread  resulted  primarily from the lower rates paid on all deposits.  This was
offset by a decrease in rates earned on interest bearing assets.  Average yields
paid on total funding sources decreased by 29 basis points for the quarter ended
June 30, 1999 compared to the same quarter in 1998,  and average rates earned on
interest bearing assets increased by 21 basis points.

The following table presents  average  balances and associated  rates earned and
paid for all interest  earning assets and interest  bearing  liabilities for the
three months ended June 30, 1999 and 1998.  (dollars in thousands)
<TABLE>
<CAPTION>

                                              Quarter ended June 30, 1999              Quarter ended June 30, 1998
                                          Average       Interest  Effective        Average       Interest    Effective
                                          Balance         Yield      Rate          Balance         Yield        Rate
<S>                                        <C>            <C>         <C>           <C>            <C>            <C>
Loans Net                                  266,952        6,322       9.50%         269,818        6,485          9.64%
Interest Bearing Deposits & FF Sold         10,318          131       5.09%          19,037          268          5.65%
Securities                                  71,082        1,059       5.98%         101,783        1,468          5.78%
----------------------------------------------------------------------------    ----------------------------------------
                                           348,352        7,512       8.65%         390,638        8,221          8.44%
----------------------------------------------------------------------------    ----------------------------------------
Demand Deposits                             52,117          281       2.16%          56,382          356          2.53%
Savings                                     32,045          163       2.04%          38,998          295          3.03%
Certificates of Deposit                    192,469        2,611       5.44%         204,154        2,921          5.74%
Borrowings                                  49,542          711       5.76%          47,192          678          5.76%
----------------------------------------------------------------------------    ----------------------------------------
                                           326,173        3,766       4.63%         346,726        4,250          4.92%
----------------------------------------------------------------------------    ----------------------------------------
Net interest income & spread                              3,746       4.02%                        3,971          3.52%
</TABLE>

PROVISION  FOR LOAN LOSSES.  The  provision for loan losses was $192,000 for the
three  months  ended June 30, 1999  compared to $182,000  for the three  months
ended June 30, 1998. At June 30, 1999,  the loan loss reserve was $3.1 million
or 1.1% of total loans  compared to $2.8 million or 1.0% of total loans at June
30, 1998.  Management deemed the allowance for loan losses adequate at June 30,
1999.

NONPERFORMING  ASSETS AND PAST DUE LOANS.  Nonperforming  assets,  comprised  of
non-accrual  loans (loans on which  payments are more than 90 days past due) and
other real estate owned  totaled $2.1 million or .5% of total assets at June 30,
1999,  and $6.9 million or 1.7% of total  assets at June 30, 1998.  On April 30,
1999, the sale of a large parcel of undeveloped land, formerly recorded as other
real estate,  was completed.  The sales price was approximately $4.4 million and
no gain or loss was recorded on the sale.

OTHER INCOME.  Total noninterest  income decreased  $741,000,  or 44.7%, for the
three months  ended June 30, 1999 versus the same three months in 1998.  Service
charges on deposits  decreased  $209,000 or 27.0% for the second quarter of 1999
verses the same  period in 1998  primarily  because of the  reduction  in demand
deposit accounts related to the sale of three Wal*Mart  branches on December 31,
1998. Gains on sales of securities  available for sale decreased by $406,000 for
the three months ended June 30, 1999  compared to the same three months in 1998.
The securities sold in the three months ended June 30, 1998 were sales of equity
securities with gains totaling $452,000 which were owned by the Company and sold
to help fund the purchase of a block of 238,700  shares of the Company's  common
stock on June 2, 1998. The gains on sale of securities available for sale in the
same three months of 1999 were gains  recognized on  securities  sold to shorten
the securities  portfolio  maturity and increase yields by purchasing new higher
yielding investments. Income from insurance commissions increased $54,000 or 54%
for the three  months  ended June 30, 1999 versus the same three months in 1998.
The increase in  insurance  commissions  results  primarily  from the  insurance
subsidary of the Bank.  Miscellaneous  income decreased $180,000 for the quarter
ended June 30, 1999 compared to the same three months in 1998 primarily  because
the recognition of the gain on sale of other real estate owned totaling $172,000
in the three  months  ended June 30,  1998.  There were no gains on sale of real
estate in the same three months of 1999.

NONINTEREST EXPENSES. Total noninterest expenses increased $449,000 or 10.3% for
the three  months  ended June 30, 1999 as  compared to the same three  months in
1998.  This  increase  was  primarily  the result of the MRP shares  being fully
vested at June 30, 1999 and the related  expense  recorded in the second quarter
of 1999.  During the three  months  ended June 30,  1998 the  Company  allocated
17,586  shares of stock to the  employee  ESOP  accounts  rather than the normal
9,654 shares per quarter. This caused ESOP expense in the second quarter of 1998
to be  increased  by $371,000  above what it would have been for the quarter had
the normal  allocation  shares been  allocated.  Salaries,  occupancy  and other
operating  expense were lower for the three months ended June 30, 1999  compared
to the same three months of 1998 because of the sale of three Wal*Mart  branches
on December  31, 1998 in addition to the  continuation  of cost saving  measures
initiated during 1998.

INCOME  TAXES.  Income tax  benefit  for the  quarter  ended  June 30,  1999 was
$201,000  on a pretax  loss of  $334,000.  This  large  benefit  results  from a
marginal  federal  and state tax rate of 37.96%  being used by the parent  which
recorded the MRP expense  during the three months ended June 30, 1999.  The Bank
uses a  combined  rate of 34%  applied  to  financial  income  adjusted  for any
permanent  differences  between financial and taxable income. The Bank generates
state business  license and occupation tax credits against state income tax. The
bank currently has business and occupation tax carry forward  credits so that no
state  taxes  are due for the  current  year so no  amount  is  added to the 34%
federal tax rate for the Bank.


COMPARISON OF RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND
1998

GENERAL. Net earnings totaled $630,000 for the six months ended June 30, 1999, a
decrease of 56.3% from the $1.4 million earned in the same  six-month  period in
1998.  This decrease is primarily the result of the recognition of the remaining
unamortized  MRP expense ($1.4  million) at June 30, 1999 which was discussed in
the  results of  operations  for the three  months  ended June 30. Net  interest
income decreased  $885,000 or 11.3%.  Non-interest  income decreased $910,000 or
32.0% and  non-interest  expense  decreased  $388,000  or 4.6%.  These and other
significant fluctuations are discussed below.

NET INTEREST  INCOME.  Total interest income decreased $1.2 million or 7.2%, and
total interest expense decreased  $311,000 or 3.9% for the six months ended June
30, 1999 compared to the same six months in 1998. The following is a rate volume
analysis  for the six months  ended June 30,  1999 and 1998  showing the average
balances, yields and variances caused by volume and yields.
<TABLE>
<CAPTION>
                                                                                               Six Months Ended June 30, 1999
                                                                                             Compared To Same Six Months in 1998
                            Six Months ended June 30, 1999   Six Months ended June 30, 1998  Increase (Decrease) due to change in
                              Average  Interest Effective     Average   Interest   Effective   Volume      Rate         Total
                              Balance    Yield    Rate        Balance     Yield       Rate                             Variance
<S>                           <C>       <C>       <C>         <C>         <C>         <C>     <C>         <C>          <C>
Loans Net                     269,321   12,574    9.41%       273,865     13,090      9.64%      (217)      (299)        (516)
Interest Bearing Deposits      12,266      310    5.10%        22,137        632      5.76%      (282)       (40)        (322)
Securities                     72,840    2,159    5.98%        83,634      2,488      6.00%      (321)        (8)        (329)
---------------------------------------------------------  ---------------------------------  --------------------------------
                              354,427   15,043    8.56%       379,636     16,210      8.61%    (1,076)       (91)      (1,167)
---------------------------------------------------------  ---------------------------------  --------------------------------
Demand Deposits                51,562      553    2.16%        55,144        710      2.60%       (46)      (111)        (157)
Savings                        32,081      328    2.06%        39,007        595      3.08%      (106)      (161)        (267)
Certificates of Deposit       191,030    5,209    5.50%       204,649      5,822      5.74%      (387)      (226)        (613)
Borrowings                     59,687    1,668    5.64%        32,969        942      5.76%       763        (37)         726
---------------------------------------------------------  ---------------------------------  --------------------------------
                              334,360    7,758    4.68%       331,769      8,069      4.90%        63       (374)        (311)
---------------------------------------------------------  ---------------------------------  --------------------------------
Net interest income & spread             7,285    3.88%                    8,141      3.71%
                                                                                            Change In Net Interest Income(856)
</TABLE>

PROVISION  FOR LOAN LOSSES.  The  provision for loan losses was $364,000 for the
six months  ended June 30, 1999  compared to $335,000  for the six months  ended
June 30,  1998.  This  increase has been deemed  appropriate  by  management  to
reflect the higher risk  associated  with the change in loan  portfolio mix to a
higher percentage of commercial loans as previously discussed.

OTHER INCOME. Total noninterest income decreased $910,000, or 32.0%, for the six
months ended June 30, 1999 versus the same six months in 1998.  Service  charges
on deposits  decreased  $325,000 or 22.1% primarily,  as a result of the sale of
the three Wal*Mart  branches on December 31, 1998.  Gains on sales of securities
were lower in the six months ended June 30, 1999 compared to the same six months
in 1998.  These gains were  discussed  in the results  operations  for the three
months ended June 30, 1999.  Miscellaneous  income  decreased  $125,000 or 24.5%
primarily from less gains  recognized on sales of real estate for the six months
end June 30,  1999  compared  to the same six months in 1998.  Gains on sales of
real estate totaled  $184,000 for the six months ended June 30, 1998 and $68,000
for the same period in 1999.

NONINTEREST  EXPENSES.  Total noninterest expense decreased $388,000 or 4.6% for
the six months  ended June 30,  1999 as compared to the same six months in 1998.
This decrease is primarily the result of reduced  expenses caused by the sale of
three Wal*Mart branches on December 31, 1998 and a reduction in ESOP expense for
the six months  ended June 30, 1999,  as discussed in the results of  operations
for the three months ended June 30, 1999.  The reduction of expenses  associated
with the sale of the Wal*Mart  branches and lower ESOP expense in the six months
ended June 30, 1999 were  partially  offset by the increase in MRP expense ($1.4
million)  discussed in the results of operations for the three months ended June
30, 1999 above.  Salaries and employee benefits  decreased  $624,000  (16.6%)and
occupancy and equipment  expense  decreased  $384,000 (35.0%) for the six months
ended June 30, 1999 compared to the same period in 1998.  These decreases relate
to the Wal*Mart branch sales.  Other expenses decreased $465,000 (20.0%) for the
six  months  ended  June 30,  1999  compared  to the same  period in 1998.  This
decrease in other expenses was caused  primarily by the reduction of real estate
owned and the costs  associated  with carrying these  non-earnng  assets and the
sale of the Wal*Mart branches.

INCOME  TAXES.  Income tax  expense  for the six months  ended June 30, 1999 was
$96,000 or 13.2% of income before tax and $690,000 or 32.3% of income before tax
for the same six month period in 1998.  The  difference  between these rates and
the statutory rate is the result of interest income on tax exempt securities and
the dividend received  deduction on some preferred stock dividends.  Because the
income from these  permanent  differences  between book and tax income is such a
high  percentage  of the total  income  (because of the  recognition  of the MRP
expense in June of 1999) the tax as a percent of pretax  income is low  compared
to statutory  rates.  The fact that the Bank has state tax credit carry forwards
(as discussed in the results of  operations  for the three months ended June 30,
1999) also contributes to a lower income tax rate as a percent of pretax income.

LIQUIDITY AND CAPITAL RESOURCES.  The Company's  liquidity,  represented by cash
and cash  equivalents,  is a product of its  operating,  investing and financing
activities.  The Company's primary sources of funds are deposits,  amortization,
prepayments  and  maturities  of  outstanding  loans,  maturities  of investment
securities,  mortgage-backed  securities and other  short-term  investments  and
funds provided from operations.  While scheduled loan  amortization and maturing
investment securities, mortgage-backed securities and short-term investments are
relatively  predictable sources of funds, deposit flows and loan prepayments are
greatly   influenced  by  general  interest  rates,   economic   conditions  and
competition.  The  Company  manages  the  pricing of its  deposits to maintain a
steady  deposit  balance.  In  addition,  the Company  invests  excess  funds in
overnight  deposits and other short-term  interest-earning  assets which provide
liquidity to meet lending  requirements.  The Company has generally been able to
generate enough cash through the retail deposit market, its traditional  funding
source,  to offset the cash utilized in investing  activities.  As an additional
source of funds,  the Bank may  borrow  from the FHLB of  Atlanta.  At June 30,
1999, the Bank had  outstanding  advances from the FHLB of Atlanta in the amount
of $42.7  million.  Such advances were used in the Bank's normal  operations and
investing activities.

As of  June 30,  1999 the  Bank's  regulatory  capital  was in  excess  of all
applicable  regulatory  requirements.  At  June 30,  1999,  the  Bank's  total
risk-based  capital,  tier 1  risk-based  capital  and  tier 1  leverage  ratios
amounted  to  11.4%,  10.3%  and  7.84,  respectively,  compared  to  regulatory
requirements of 8.0%, 4.0% and 4.0%, respectively.

YEAR 2000 ISSUES. The Company continues to review the many areas affected by the
Year 2000 computer issue. The Year 2000 Plan (Plan) tasks, approved by the Board
of Directors,  which addresses  whether our computer,  communications  and other
operating   systems  will  operate   accurately  after  December  31,  1999  are
substantially complete. The Plan addressed internal and external interfaces with
third party computer  systems that  communicate with our system as well as other
risks  associated  with the date  change.  A  committee,  chaired by a member of
senior management, has monitored compliance with the Plan.

The Federal Financial  Institutions  Examination Council (FFIEC) established key
milestones for completion of Year 2000 testing and implementation. The Company's
status toward meeting those milestones are as follows:

     06/30/98  Institutions  should  complete the development of written testing
     strategies and plans. 100% COMPLETE

     09/01/98 Testing of internal  mission-critical systems should have started.
     100% COMPLETE

     12/31/98   Testing  of   internal   mission-critical   systems   should  be
     substantially  complete.  Service  providers  should  be ready to test with
     customers. 100% COMPLETE (Service providers have completed proxy testing of
     mission critical systems)

     03/31/99 Testing with service  providers should be substantially  complete.
     Testing with other third parties  should be underway. 100% COMPLETE

     06/30/99 Testing and implementation of all mission-critical  systems should
     be complete. 100% COMPLETE

The  original  budget  for  expenses  associated  with  Year 2000  upgrades  and
implementation has remained feasible. All mission critical hardware and software
necessary  to bring the  Company  into Y2K  compliance  has been  purchased  and
tested.  All of this  equipment has been installed.

Management continues the review of all of the Bank's significant commercial loan
relationships  to determine  how much Y2K risk may exist in the Bank's  customer
base. To the extent that such risk is identified,  management  will request such
customers  to develop  their own  compliance  strategy  and will  require  those
customers to keep us informed of their progress.  Management's current plans are
to help the Bank's customers understand the risks involved,  to share the Bank's
strategies  and  to  encourage  those  customers  to  satisfy  their  compliance
requirements  on time lines  that are  consistent  with  those of the Bank.  The
Bank's loan agreements and credit review processes have been modified to address
this risk.  The Bank's  contingency  plans for  customers who fail to adequately
address  this  risk may  include  but  will not be  limited  to  requiring  such
customers to pay off their loans.  The risk  evaluation of these larger  credits
has been reported to the Board of Directors and the Asset Review Committee.

As part of its normal  business  practices,  the Company  maintains  contingency
plans in the event of emergency  situations,  some of which could arise from Y2K
related  problems.  The Company has formulated a detailed Y2K  contingency  plan
which assesses several  possible  scenarios to which the Company may be required
to react.  However,  the Company  believes  that it is not possible to know with
complete certainty all Y2K problems that could affect the Company.

The  most  reasonable  likely  worst  case  Y2K  scenario  would be one in which
electrical service or phone service is disrupted for an extended period of time.
As noted above,  the Company's  computer  hardware and software,  its commercial
customer  risk  and  its  third  party   vendors/supplier   risk  evaluation  is
progressing as planned.  However, the Company cannot accurately predict how many
failures related to the Y2K problem will occur with its suppliers,  customers or
other third parties or the severity,  duration or financial consequences of such
failures.  As a result,  it is possible the Company  could suffer the  following
consequences:

     o    A number of  operational  inconveniences  and  inefficiencies  for the
          Company,  its service  providers or its customers  that may divert the
          Company's  time and attention and financial and human  resources  from
          its ordinary business activities.

     o    System  malfunctions  that  may  require  significant  efforts  by the
          Company,  its  service  providers  or  its  customers  to  prevent  or
          alleviate material business disruptions.

Even if the  Company  does  not  incur  significant  costs  in  connection  with
responding to Y2K issues, there can be no assurance that the failure or delay of
the Company's  customers,  vendors or other third  parties in  addressing  these
issues or the costs  involved in such process  will not have a material  adverse
effect on the Company's business, financial condition and results of operations.

The foregoing are forward-looking  statements  reflecting  management's  current
assessments  and estimates with respect to the Company's Y2K compliance  efforts
and the impact of Y2K issues on the Company's  business and operations.  Various
factors  could cause  actual plans and results to differ  materially  from those
contemplated by such assessments, estimates and forward-looking statements, many
of which are beyond the control of the Company.  Some of these factors  include,
but are not limited to,  representations by the Company's vendors and customers,
technological advances,  economic  considerations and consumer perceptions.  The
Y2K compliance program is an ongoing process involving continual  evaluation and
may be subject to change in response to new developments.

The Company has also been subject to regulatory  review of its overall Year 2000
Plan and will continue to be monitored by its regulators for its progress.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There was no material change for the three and six months ended June 30, 1999 in
the information about the Company's  "Quantitative  and Qualitative  Disclosures
About  Market  Risk" as  disclosed  in the Form 10-K for the  fiscal  year ended
December 31, 1998.



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

               (a) Annual meeting of shareholders was held on April 29, 1999.

               (b)  Matters  voted upon at the Annual  Meeting on April 29, 1999
                    included  the  following  items and the number of votes cast
                    included:
                                                              Votes
                 Election of Class I Directors   Votes For   Withheld

                    T. E. Reeve, Jr.            2,318,824    2,970
                    Michael P. Steed            2,318,394    3,400
                    Thomas S. Upchurch          2,318,994    2,800

                 Directors not up for re-election and continuing in office:

                    T. Aubrey Silvey
                    Gary D. Dorminey
                    Anna L. Berry
                    Gary M. Bullock
                    Jerry L. Clayton
                    Dean B. Talley

                                                        Votes
                 Ratification of Auditor    Votes For  Against   Abstentions

                  Porter Keadle Moore, LLP  2,312,666   3,112       6,016

               There were no broker non-votes,  as no discretionary  issues were
               presented for approval.



      ITEM 5.  OTHER INFORMATION

               Pursuant  to Rule  14a-4(c)(1)  promulated  under the  Securities
               Exchange  Act of  1934,  as  amended,  shareholders  desiring  to
               present a proposal for consideration at the Company's 2000 Annual
               Meeting of Shareholders must notify the Company in writing at its
               principal office,  110 Dixie Street,  Carrollton,  Georgia 30117,
               attn:  Corporate  Secretary,  of the contents of such proposal no
               later than  February  9, 2000.  Failure to timely  submit  such a
               proposal  will  enable the proxies  appointed  by  management  to
               exercise their  discretionary  voting authority when the proposal
               is raised at the  Annual  Meeting  of  Shareholders  without  any
               discussion of the matter in the proxy statement.

      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
              March 31, 1999.


<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 6, 1999         /s/ Gary D. Dorminey
                                  ----------------------
                                    Gary D. Dorminey
                                       President
                              (Principal Executive Officer)



Date:       August 6, 1999        /s/ C. Lynn Gable
                                 -------------------
                                  C. Lynn Gable
                              Chief Financial Officer
                          (Principal Financial Officer)