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 March 31, 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 April 26, 1999, there
were 3,282,054 shares  issued  and 2,580,258 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  March 31, 1999  (unaudited)  and
          December 31, 1998

     Consolidated  Statements  of Earnings  for the Three Months  Ended
          March 31, 1999 and 1998 (unaudited)

     Consolidated  Statements  of  Comprehensive  Income  for the Three 
          Months Ended March 31, 1999 and 1998 (unaudited)

     Consolidated  Statements of Cash Flows for the Three Months Ended March
          31, 1999 and 1998 (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>
                         COMMUNITY FIRST BANKING COMPANY
                           Consolidated Balance Sheets
                            (In thousands of dollars)
<TABLE>
<CAPTION>

                                                                   March 31,  December 31,
                              Assets                                 1999         1998
                                                                 (Unaudited)
<S>                                                                <C>         <C>
Cash and due from banks .........................................      7,052      10,883
Interest-bearing deposits in financial institutions .............        720       3,553
Federal funds sold ..............................................     15,070      18,300
                                                                      ------      ------
   Cash & cash equivalents ......................................     22,842      32,736

Securities available for sale ...................................     69,851      71,702
Securities held to maturity .....................................        212         232
Other investments ...............................................      3,400       2,328
Mortgage loans held for sale ....................................        204         199
Loans, net ......................................................    268,079     264,855
Premises & equipment net ........................................      8,016       8,160
Accrued interest receivable .....................................      2,556       2,558
Other real estate and repossessions .............................      5,334       5,479
Other assets ....................................................      4,432       3,737
                                                                       -----       -----
   Total assets .................................................    384,926     391,986
                                                                     =======     =======

                Liabilities and Stockholders' Equity
Deposits:
  Demand ........................................................     16,304      13,611
  Interest-bearing demand .......................................     51,136      52,644
  Savings .......................................................     32,837      31,630
  Time ..........................................................    150,057     146,603
  Time, over $100,000 ...........................................     42,736      41,449
                                                                      ------      ------
     Total deposits .............................................    293,070     285,937

Note payable and other borrowings ...............................     60,880      47,945
Subordinated debentures .........................................        900         900
Payable for branch sales ........................................          -      27,461
Accrued interest payable & other liabilities ....................      3,715       3,619
                                                                     -------     -------
     Total liabilities ..........................................    358,565     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 ......................................     13,522      13,481
Unearned ESOP and MRP shares ....................................     (3,897)     (4,196)
Retained earnings ...............................................     27,107      26,611
Treasury stock at cost ..........................................     (9,369)     (9,021)
Accumulated other comprehensive income (loss) ...................     (1,036)       (785)
                                                                      ------        ---- 
     Total stockholders' equity .................................     26,361      26,124
                                                                      ------      ------
Total liabilities & stockholders' equity ........................    384,926     391,986
                                                                     =======     =======
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
                         COMMUNITY FIRST BANKING COMPANY
                       Consolidated Statement of Earnings
                                  (Unaudited)
                 (In thousands of dollars - except per share data)
<TABLE>
<CAPTION>

                                                                   Three Months Ended
                                                                        March 31,
                                                                     1999     1998
<S>                                                                <C>      <C>
Interest income:
Interest and fees on loans .......................................   6,251   6,605
Interest-bearing deposits and federal funds sold .................     179     364
Interest and dividends on investment securities:
   U.S. Treasury .................................................      45      45
   U.S. Govt. agency and mortgage-backed .........................     938     867
   State, county & municipals ....................................      29      29
   Other .........................................................      89      78
                                                                     -----   -----
     Total interest income .......................................   7,531   7,988
                                                                     -----   -----
Interest Expense:
Interest on deposits:
   Demand ........................................................     272     353
   Savings .......................................................     165     300
   Time ..........................................................   2,598   2,901
                                                                     -----   -----
                                                                     3,035   3,554
Interest on note payable and other borrowings.....................     957     264
                                                                     -----   -----
          Total interest expense .................................   3,992   3,818
                                                                     -----   -----
               Net interest income ...............................   3,539   4,170

Provision for loan losses ........................................     172     153
                                                                     -----   -----
          Net interest income after provision for loan losses ....   3,367   4,017
                                                                     -----   -----
Noninterest income:
   Service charges on deposits ...................................     582     697
   Gain (Loss) on sales of securities available for sale .........       -      51
   Insurance commissions .........................................     195     252
   Miscellaneous .................................................     244     189
                                                                     -----   -----
          Total noninterest income ...............................   1,021   1,189
                                                                     -----   -----
Noninterest expenses:
   Salaries and employee benefits ................................   1,553   1,851
   ESOP & MRP expense ............................................     370     426
   Occupancy and equipment .......................................     375     559
   Deposit insurance premiums ....................................      45      46
   Other operating expense .......................................     985   1,283
                                                                     -----   -----
         Total noninterest expense ...............................   3,328   4,165
                                                                     -----   -----
         Earnings before income tax expense ......................   1,060   1,041
Income tax expense ...............................................     297     334
                                                                     -----   -----
               Net earnings ......................................     763     707
                                                                     =====   =====

Basic earnings per share .........................................    0.30    0.17
Diluted earnings per share .......................................    0.28    0.17
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
                         COMMUNITY FIRST BANKING COMPANY
                 Consolidated Statements of Comprehensive Income
                      (Unaudited - in thousands of dollars)
<TABLE>
<CAPTION>
                                                                               Three Months Ended 
                                                                                    March 31,     
                                                                                  1999      1998 
                                                                                  ----      ---- 
<S>                                                                             <C>       <C>    
Net earnings .................................................................      763       707
                                                                                    ---       ---
Other  comprehensive  income (loss),  net of  income  taxes:
 Unrealized  gains (losses) on securities available for sale .................     (404)      598
  Income tax on unrealized gains (losses) ....................................     (153)      366
                                                                                   ----       ---
    Unrealized gains (losses) arising during the period, net of tax ..........     (251)      964
                                                                                   ----       ---

 Reclassification adjustment for gains included in net earnings ............       -         51  
  Income tax on reclassification adjustments ................................       -         17 
                                                                                   ----       ---
    Reclassification adjustment for gains included in net earnings, net of tax       -         34  
                                                                                   ----       ---
     Other comprehensive income (loss)........................................     (251)      930
                                                                                   ----       ---
Comprehensive income .........................................................      512     1,637
                                                                                   ====     =====
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
                         COMMUNITY FIRST BANKING COMPANY 
                      Consolidated Statements of Cash Flows
                      (Unaudited - in thousands of dollars)
<TABLE>
<CAPTION>
                                                                                      Three Months Ended
                                                                                           March 31, 
                                                                                     1999              1998
                                                                                     ----              ----
                                                                                          In thousands
<S>                                                                           <C>              <C>
Cash flows from operating activities:
 Net earnings                                                                          763              707
 Adjustments to reconcile net earnings to net cash provided
  by operating activities:
   Depreciation, amortization and accretion                                            249              329
   Provision for loan losses                                                           172              153
   Deferred income tax benefit                                                           -              (15)
   Gain on calls and sales of securities available for sale                              -              (51)
   Gain on sale of other real estate                                                   (58)               -
   Loss (gain) on sales of premises and equipment, net                                 (15)               -
   ESOP and MRP compensation expense                                                   370              450
   Change in:
    Mortgage loans held for sale                                                        (5)          (1,618)
    Accrued interest receivable                                                          2              (28)
    Other real estate owned                                                             -               (73)
    Other assets                                                                      (695)            (467)
    Accrued interest payable                                                            12              288
    Other liabilities                                                                   84              524
                                                                                   -------          -------

       Net cash provided by (used in) operating activities                             879              199
                                                                                   -------          -------

Cash flows from investing activities:
  Proceeds from sales of securities available for sale                                   -            8,051
  Proceeds from maturities of securities held to maturity                               20               51
  Proceeds from maturities of securities available for sale                          4,370                -    
  Purchases of other investments                                                    (1,072)             (60)
  Purchases of securities available for sale                                        (2,998)         (49,066)
  Net change in loans                                                               (3,324)          12,433
  Proceeds from sale of real estate and repossessions                                  311                -
  Proceeds from sales of premises and equipment                                         15                -
  Purchases of premises and equipment                                                  (87)            (336)
                                                                                   -------          -------
       Net cash provided by (used in) investing activities                          (2,758)         (28,927)
                                                                                   -------          -------

Cash flows from financing activities:
  Net change in demand and savings deposits                                          2,392            3,546
  Net change in time deposits                                                        4,741           (2,561)
  Payment of FHLB advances                                                         (10,065)            (440)
  Proceeds from  FHLB advances                                                      24,000           40,000
  Change in payable for branch sales                                               (27,461)               -
  Payment of note payable                                                           (1,000)               -
  Treasury stock purchased                                                            (348)         (11,078)
  Cash dividend paid                                                                  (267)            (294)
                                                                                   -------          -------
      Net cash provided by financing activities                                     (8,008)          29,173
                                                                                   -------          -------
      Net change in cash and cash equivalents                                       (9,894)             445
                                                                                   -------          -------
Cash and cash equivalents at beginning of year                                      32,736           30,284
                                                                                   -------          -------
Cash and cash equivalents at quarter end                                            22,842           30,729
                                                                                   =======          =======
</TABLE>
See Notes to Consolidated Financial Statements.
<TABLE>
<CAPTION>
                                                                                      Three months ended
Supplemental disclosure of cash flow information:                                          March 31,
                                                                                      1999             1998
                                                                                      ----             ----
  Cash paid for:                                                                         In thousands
<S>                                                                                 <C>             <C>
     Interest                                                                        3,980            3,530
     Income taxes                                                                        -              350
</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  months  ended March 31, 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 month period ended March
31, 1999 and 1998 are  presented  based on the net earnings for the three months
divided by the  weighted  average  number of shares  outstanding,  or  2,561,707
shares (three  months ended March 31, 1999) and  4,111,488  shares (three months
ended March 31, 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 2,757,297 and 4,155,692  shares for the three months ended March 31,
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 payable April 1, 1999 for  stockholders of record on March 18,
1999.

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

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 1999 AND MARCH 31, 1998

On March 31 ,1999 the Company  had total  assets of $384.9  million  compared to
$392.0 million at December 31, 1998.  This decrease in assets of $7.1 million or
1.8% is primarily due to a decrease in cash and cash equivalents of $9.9 million
which  was  partially  offset  by an  increase  in net  loans  of $3.2  million.
Securities  available for sale  decreased  $1.9 million  because of  maturities.
Other assets  increased $1.1 million from the purchase of FHLB stock required to
be  purchased  as a result of the  additional  advances  obtained  from the FHLB
during the first quarter of 1999.

Total deposit liabilities increased $7.1 million from December 31, 1998 to March
31, 1999.  Certificate of deposits  increased $4.7 million while demand deposits
and savings  increased $2.4 million.  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  increased  $12.9  million  during the period
December  31, 1998 to March 31, 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. On March 16,
1999 the Bank paid $10 million to the FHLB on this credit.  On February 24, 1999
the  Company  paid $1  million on the line of credit  owed to another  financial
institution.

Stockholders  equity increased  $237,000 during the three months ended March 31,
1999.  Retained  earnings  increased  $496,000  from  earnings of $763,000  less
dividends paid of $267,000.  Treasury stock increased $348,000 from the purchase
of 17,418  shares at an  average  price of $19.98  per  share.  Amortization  of
unearned ESOP shares and MRP awards  increased  equity by $299,000.  Accumulated
other  comprehensive  loss increased  $251,000 as the result of the market value
adjustment  of  available  for  sale  securities.  Additional  paid  in  capital
increased  from  the  amortization  of the  MRP  awards  and  the  market  value
adjustment of the ESOP shares committed to be released.

COMPARISON  OF RESULTS OF  OPERATIONS  FOR THE THREE MONTHS ENDED MARCH 31, 1999
AND 1998

GENERAL.  Net  earnings  totaled  $763,000  for the three months ended March 31,
1999, an increase of $56,000 or 7.9% over the $707,000  earned in the same three
months in 1998.  This  increase is  primarily  the result of lower  non-interest
expense  incurred  during the three  months  ended March 31,  1999  ($3,328,000)
compared  to the same  three  months of 1998  ($4,165,000).  This  reduction  in
expenses was offset by lower net interest  income.  These and other  significant
fluctuations are discussed below.

NET INTEREST  INCOME.  Net interest  income for the three months ended March 31,
1999  decreased  $631,000 or 15.1%  compared to the same  three-month  period in
1998. Total interest income  decreased  $457,000 or 5.7%, while interest expense
increased  $174,000 or 4.6%. The decrease in earnings on interest bearing assets
was  caused  by a  smaller  loan  portfolio  and  higher  levels  of  investment
securities producing lower yields. 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 first quarters of 1999 and 1998 were as
follows:

                                    Average Balances
                                   Three Months Ended
                                       March 31,
                                    1999       1998
                                    ----       ----
                                    (In thousands)
Mortgage loans                   113,822      120,065         
Consumer loans                    54,548       63,762         
Credit card loans                  3,239        4,079         
Commercial loans                 103,049       92,906         
                                 -------      -------         
                                 274,658      280,812         
                                 =======      =======         
                                             
Interest and fee income on loans decreased $354,000 or 5.4% in the first quarter
1999  compared to the same quarter in 1998,  while the average  balance of loans
decreased  $6.2  million  or 2.2%.  Interest  income on  federal  funds sold and
interest bearing deposits decreased $185,000 or 50.8% for the three months ended
March 31,  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 during the first
three months on 1999.

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 March 31, 1999 and
1998 was 3.94% and 3.90% respectively. This 4 basis point increase in the spread
resulted  primarily from the lower rates paid on all deposits and debt. This was
offset by a decrease in rates earned on interest bearing assets.  Average yields
paid on total funding sources decreased by 35 basis points for the quarter ended
March 31, 1999 compared to the same quarter in 1998, and average rates earned on
interest bearing assets decreased by 32 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 March 31, 1999 and 1998.  (dollars in thousands)  
<TABLE>
<CAPTION>
                                                         Quarter ended March 31, 1999              Quarter ended March 31, 1998
                                                       Average      Interest    Effective      Average      Interest     Effective
                                                       Balance       Yield        Rate         Balance       Yield         Rate
<S>                                                    <C>           <C>           <C>         <C>           <C>             <C>  
Loans                                                  271,689       6,251         9.33%       277,912       6,605           9.64%
Interest Bearing Deposits & FF Sold                     14,213         179         5.11%        25,238         364           5.84%
Securities                                              74,600       1,101         5.99%        65,485       1,019           6.31%
-----------------------------------------------------------------------------------------------------------------------------------
                                                       360,502       7,531         8.47%       368,635       7,988           8.79%
-----------------------------------------------------------------------------------------------------------------------------------
Demand Deposits                                         65,308         272         1.69%        53,906         353           2.66%
Savings                                                 32,117         165         2.08%        39,017         300           3.11%
Certificates of Deposit                                189,591       2,598         5.56%       205,145       2,901           5.73%
Borrowings                                              69,831         957         5.56%        18,745         264           5.72%
-----------------------------------------------------------------------------------------------------------------------------------
                                                       356,847       3,992         4.54%       316,813       3,818           4.89%
-----------------------------------------------------------------------------------------------------------------------------------
Net interest income & spread                                         3,539         3.94%                     4,170           3.90%
</TABLE>

PROVISION  FOR LOAN LOSSES.  The  provision for loan losses was $172,000 for the
three  months  ended March 31, 1999  compared to $153,000  for the three  months
ended March 31, 1998. At March 31, 1999,  the loan loss reserve was $3.0 million
or 1.1% of total loans  compared to $2.9 million or 1.0% of total loans at March
31, 1998.  Management deemed the allowance for loan losses adequate at March 31,
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  $6.2 million or 1.6% of total assets at March
31,  1999,  and $7.3  million  or 1.7% of total  assets at March 31,  1998.  The
majority of nonperforming assets or $4.9 million at March 31, 1999 and 1998 were
the result of foreclosure  on five loans to one borrower  represented by several
parcels of undeveloped land and a residence with acreage. On April 30, 1999, the
sale of the largest  parcel of undeveloped  land was completed.  The sales price
was  approximately  $4.4 million.  No gain will be realized  until the completed
sale of the remaining  properties.  However,  future  periods will be positively
impacted by the conversion of $4.4 million into an earning asset.

OTHER INCOME.  Total noninterest  income decreased  $168,000,  or 14.1%, for the
three months ended March 31, 1999 versus the same three months in 1998.  Service
charges on deposits  decreased  $115,000 or 16.5% for the first  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 12-31-98.
Income  from  insurance  commissions  decreased  $57,000  or 22.6% for the three
months  ended March 31, 1999 versus the same three months in 1998 as a result of
lower loan volume and  stricter  underwriting  standards.  Miscellaneous  income
increased  $55,000  for the quarter  ended  March 31, 1999  compared to the same
three months in 1998 primarily from the recognition of the gain on sale of other
real estate owned totaling $48,000.

NONINTEREST EXPENSES. Total noninterest expenses decreased $837,000 or 20.1% for
the three  months  ended March 31, 1999 as compared to the same three  months in
1998. This decrease was primarily the result of reduced compensation,  employee,
occupancy and other operating expenses resulting from 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  expense  for the  quarter  ended  March 31, 1999 was
$297,000 or 28.1% of pretax  income and  $334,000 or 32.1% of pretax  income for
the same three month period in 1998. The difference  between these rates and the
statutory  rate is  primarily  the  result  of  interest  income  on tax  exempt
securities  and dividend  received  deduction  on  government  agency  preferred
stocks.

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 March 31,
1999, the Bank had  outstanding  advances from the FHLB of Atlanta in the amount
of $56.9  million.  Such advances were used in the Bank's normal  operations and
investing activities.

As of  March  31,  1999 the  Bank's  regulatory  capital  was in  excess  of all
applicable  regulatory  requirements.  At  March  31,  1999,  the  Bank's  total
risk-based  capital,  tier 1  risk-based  capital  and  tier 1  leverage  ratios
amounted  to  11.2%,  10.2%  and  7.2%,  respectively,  compared  to  regulatory
requirements of 8.0%, 4.0% and 4.0%, respectively.

YEAR 2000 ISSUES. The Company is currently addressing the many areas affected by
the Year 2000 computer  issue.  A Year 2000 Plan (Plan) has been approved by the
Board of Directors  which  addresses  whether our computer,  communications  and
other  operating  systems will operate  accurately  after December 31, 1999. The
Plan  addresses  internal  and  external  interfaces  with third party  computer
systems that communicate  with our system.  A committee,  chaired by a member of
senior management, has been established to administer the Plan.

The Company  continues  to refine its Year 2000 Plan begun in the latter part of
1997.  The  Federal  Financial  Institutions  Examination  Council  (FFIEC)  has
established  key milestones for the testing phase.  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.  95% COMPLETE  (Third
     party  testing  of  non-mission  critical  systems  will  be  completed  by
     06/30/99)

     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.  Approximately  85% of this  equipment has been installed with the other
15% scheduled for completion before 6/30/99.

Management  has been  reviewing 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.

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 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.

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
              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:       May 7, 1999            /s/ Gary D. Dorminey
                                  ----------------------
                                    Gary D. Dorminey
                                       President
                              (Principal Executive Officer)



Date:       May 7, 1999           /s/ C. Lynn Gable
                                 -------------------
                                  C. Lynn Gable
                              Chief Financial Officer
                          (Principal Financial Officer)