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 September 30, 1997


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

     For the transition period from ______ to ______

                       Commission File Number:

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


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

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

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


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X      No
                                             ------    ------
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date: As of September 30, 1997, there
were  2,413,562   shares  issued  and  2,230,131   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  September 30,  1997 (unaudited) and
         December 31, 1996

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

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

     Notes to Consolidated Financial Statements

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


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities

Item 3.  Defaults Upon Senior Securities

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

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

SIGNATURES




<PAGE>


<TABLE>

                         COMMUNITY FIRST BANKING COMPANY
                           Consolidated Balance Sheets
<CAPTION>



                                    Assets                                   Unaudited
                                                                              9-30-97         12-31-96
<S>                                                                       <C>           <C>
Cash and due from banks ................................................     11,215,068      11,061,383
Interest-bearing deposits in financial institutions ....................        833,025       3,355,586
Federal funds sold .....................................................     13,625,000       8,680,000
                                                                             ----------       ---------
   Cash & cash equivalents .............................................     25,673,093      23,096,969

Securities available for sale ..........................................     43,779,376      33,927,243
Securities held to maturity ............................................      6,317,076       7,764,058
Other investments ......................................................      2,379,592       2,599,741
Mortgage loans held for sale ...........................................        213,302         282,488
Loans, net .............................................................    293,809,062     269,834,098
Premises & equipment, net ..............................................      9,931,859       9,288,592
Accrued interest receivable ............................................      3,188,980       2,687,472
Other assets ...........................................................      9,277,483       3,050,849
                                                                              ---------       ---------
   Total assets ........................................................    394,569,823     352,531,510
                                                                            ===========     ===========

                     Liabilities and Stockholders' Equity
Deposits:
  Demand ...............................................................     21,409,631      15,903,005
  Interest-bearing demand ..............................................     48,426,060      47,288,357
  Savings ..............................................................     37,781,615      34,076,732
  Time .................................................................    161,496,772     163,257,956
  Time, over $100,000 ..................................................     45,906,911      47,230,149
                                                                             ----------      ----------
      Total deposits ....................................................   315,020,989     307,756,199

Federal Home Loan Bank advances ........................................      5,892,391      16,295,186
Subordinated debentures ................................................        900,000       2,000,000
Accrued interest payable & other liabilities ...........................      2,519,058       1,222,602
                                                                              ---------       ---------
      Total Liabilities .................................................   324,332,438     327,273,987

Stockholders' Equity:
  Common stock, $.01 par, 10,000,000 authorized, 2,413,562 issued,
     2,230,131 outstanding .............................................         24,136
  Additional paid in capital ...........................................     46,894,219
  Unearned ESOP shares .................................................     (3,668,615)
  Retained Earnings ....................................................     26,836,667      25,278,036
  Net unrealized (loss)gain on securities available for sale, net of tax        150,978         (20,513)
                                                                                -------         -------
     Total stockholders' equity ........................................     70,237,385      25,257,523

Total liabilities & stockholders' equity ...............................    394,569,823     352,531,510
                                                                            ===========     ===========



</TABLE>
See Notes to Consolidated Financial Statements.


<PAGE>




<TABLE>
                         COMMUNITY FIRST BANKING COMPANY
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)
<CAPTION>
                                                                           Three Months Ended                 Nine Months Ended
                                                                        9/30/97           9/30/96           9/30/97          9/30/96
                                                                        -------           -------           -------          -------
<S>                                                                 <C>              <C>              <C>             <C>
Interest income:
Interest and fees on loans .......................................       6,975,078        6,343,984       19,708,250      18,578,099
Interest-bearing deposits and federal funds sold .................         369,308           95,493          787,817         667,727
Interest and dividends on investment securities:
   U.S. Treasury .................................................          47,930           11,172           61,679          36,536
   U.S. Govt. agency and mortgage-backed .........................         897,564          719,490        2,576,766       1,412,184
   State, county & municipals ....................................          28,835           33,078           79,157          44,598
   Other .........................................................          40,860           58,225          129,310         174,896
                                                                            ------           ------          -------         -------
     Total Interest Income .......................................       8,359,575        7,261,442       23,342,979      20,914,040

Interest Expense:
Interest on deposits:
   Demand ........................................................         387,098          369,641        1,138,032       1,073,199
   Savings .......................................................         283,351          226,281          858,442         648,004
   Time ..........................................................       2,956,474        2,877,216        8,864,785       8,384,537
                                                                         ---------        ---------        ---------       ---------
                                                                         3,626,923        3,473,138       10,861,259      10,105,740
                                                                         ---------        ---------       ----------      ----------
Interest on  FHLB advances & subordinated debentures .............         170,077          320,147          692,185         850,415
                                                                           -------          -------          -------         -------
          Total interest expense .................................       3,797,000        3,793,285       11,553,444      10,956,155
                                                                         ---------        ---------       ----------      ----------
               Net interest income ...............................       4,562,575        3,468,157       11,789,535       9,957,885
                                                                         ---------        ---------       ----------       ---------
Provision for loan losses ........................................         320,310          105,000          623,810         315,000
                                                                           -------          -------          -------         -------
          Net interest inc. after provision for loan loss ........       4,242,265        3,363,157       11,165,725       9,642,885
                                                                         ---------        ---------       ----------       ---------
  Other income:
   Service charges on deposits ...................................         732,970          630,697        2,020,574       1,706,325
   Miscellaneous .................................................         346,034          186,010          796,399         501,300
                                                                           -------          -------          -------         -------
          Total other income .....................................       1,079,004          816,707        2,816,973       2,207,625
                                                                         ---------          -------        ---------       ---------

Other expenses:
   Salaries and related benefits .................................       1,732,281        1,627,806        5,322,244       4,723,244
   ESOP & retirement expense .....................................         335,109           11,250          335,109          11,250
   Occupancy and equipment .......................................         469,720          400,427        1,388,858       1,154,548
   Depository insurance premiums .................................          46,852        1,876,684          105,116       2,182,681
   Other operating ...............................................       1,388,903        1,278,481        3,972,725       3,525,972
                                                                         ---------        ---------        ---------       ---------
         Total other expenses ....................................       3,972,865        5,194,648       11,124,052      11,597,695
                                                                         ---------        ---------       ----------      ----------
         Earnings (loss) before income tax expense ...............       1,348,404       (1,014,784)       2,858,646         252,815
Income tax expense (benefit) .....................................         432,448         (377,408)         937,980          29,438
                                                                           -------         --------          -------          ------
               Net Earnings (Loss)................................         915,956         (637,376)       1,920,666         223,377
                                                                           =======         ========        =========         =======

Earnings per share (note 5) ......................................            0.41              N/A              N/A             N/A
Weighted average number of common shares outstanding .............       2,220,477              N/A              N/A             N/A
Dividends per share (note 7) .....................................            0.15              N/A              N/A             N/A

See Notes to Consolidated Financial Statements ...................
</TABLE>


<PAGE>


<TABLE>
                         COMMUNITY FIRST BANKING COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)
<CAPTION>
                                                                                          YTD                 YTD
                                                                                         9/30/97             9/30/96
                                                                                         -------             -------
<S>                                                                                 <C>              <C>
Net earnings                                                                             1,920,665           223,377

Adjustments  to  reconcile  net  earnings  to net  cash  provided  by  operating
activities:
  Depreciation, amortization and accretion                                                 995,647           849,901
  Provision for loan losses                                                                623,810           315,000
  (Gain) or loss on sales of premises and equipment, net                                   (19,497)           25,848
  Change in:
    Mortgage loans held for sale                                                            69,186         2,475,413
    Accrued interest receivable                                                           (501,508)         (467,579)
    Other assets                                                                           135,124           295,716
    Accrued interest payable                                                               292,697          (137,813)
    Accrued expenses and other liabilities                                               1,003,759          1,233,935
                                                                                --------------------------------------
       Net cash provided by operating activities                                         4,519,883          4,813,798
                                                                                --------------------------------------
Cash flows from investing activities:
  Proceeds from sales of other investments                                                 220,149                 -
  Proceeds from maturities of securities available for sale                             10,967,619            278,483
  Proceeds from maturities of securities held to maturity                                1,446,982          1,525,383
  Purchases of other investments                                                                            (116,553)
  Purchases of securities available for sale                                          (20,675,678)       (33,769,025)
  Net change in loans                                                                 (30,984,291)        (3,285,780)
  Proceeds from sale of real estate                                                        53,940                  -
  Proceeds from sales of premises and equipment                                            32,115             80,000
  Purchases of premises and equipment                                                  (1,624,115)        (2,947,656)
  Organization costs                                                                      (30,181)                 -
                                                                                --------------------------------------
       Net cash used in investing activities                                          (40,593,460)       (38,235,148)
                                                                                --------------------------------------

Cash flows from financing activities:
  Net change in demand and savings deposits                                            10,349,212          8,856,120
  Net change in time deposits                                                          (3,084,422)         8,829,786
  (Payment) of FHLB advances                                                          (10,402,795)        (3,402,794)
  Borrowing of FHLB advances                                                                    -          5,000,000
  Payment of subordinated debentures                                                   (1,100,000)                 -
  Cash dividend paid                                                                     (362,035)                 -
  Net Proceeds from issuance of common stock                                           43,249,740                  -
                                                                                --------------------------------------
      Net cash provided by financing activities                                        38,649,700         19,283,112
                                                                                --------------------------------------
                                                                                --------------------------------------
      Net change in cash and cash equivalents                                           2,576,123        (14,138,238)
                                                                                --------------------------------------
Cash and cash equivalents at beginning of year                                          23,096,970         34,057,178
                                                                                --------------------------------------
Cash and cash equivalents at quarter end                                                25,673,093         19,918,940
                                                                                ======================================

Supplemental schedule of non-cash investing activity:
   Transfer from loans to other real estate owned                                        6,385,517            132,790
   Cash paid during the year for income taxes                                              935,000            935,000
   Cash paid for interest                                                               11,260,747         11,093,968
   Net change in unrealized gain (loss) on available for sale securities                   150,978             37,232

</TABLE>

See Notes to Consolidated Financial Statements.

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

NOTE 1.  NATURE OF BUSINESS

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


NOTE 2.  BASIS OF PRESENTATION

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

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

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

NOTE 3.  STOCK CONVERSION

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

NOTE 4. EMPLOYEE STOCK OWNERSHIP PLAN

In connection  with the  Conversion,  the Company  established an employee stock
ownership  plan (the "ESOP").  The ESOP purchased  approximately  8%, or 193,085
shares, of the total shares of common stock sold. The Company lent $3,861,700 to
the ESOP for the purchase of the shares of common stock. All existing  employees
as of June 17, 1997,  over age 21 and new employees who have  completed at least
1000 hours of service  during a twelve month period and who have attained age 21
are eligible to  participate  in the ESOP.  The Company will make  discretionary
contributions  to the ESOP in an amount not less than the  amount  needed to pay
any  principal  and interest  payments  required by the  acquisition  loan.  The
Company will account for its ESOP in accordance with Statement of Position 93-6,
"Employer's  Accounting  for  Employee  Stock  Ownership  Plans".  As shares are
committed to be released to participants,  the Company will record  compensation
expense  equal to the  average  market  price of the shares  during the  period.
During the three month period ended  September  30, 1997,  the Company  released
9,654  shares and  recorded  $330,650  in related  compensation  expense for the
period.

NOTE 5.  EARNINGS PER SHARE

The initial  public  offering was  completed  June 27, 1997.  Earnings per share
calculations  for the three month period ended  September 30, 1997 are presented
based on the net income for the three months and the weighted  average number of
shares  outstanding,  or  2,220,477  shares.  Net  earnings  per  share  are not
presented for the nine months ended  09/30/97 since shares issued in conjunction
with the conversion and offering were not outstanding for the entire period. For
purposes of this  computation,  the number of shares  purchased by the Company's
employee  stock  ownership  plan which have not been committed to be released to
participant accounts are not assumed to be outstanding.

NOTE 6.  RECENTLY ISSUED ACCOUNTING STANDARDS

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

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130,  "Reporting  Comprehensive  Income" ("SFAS 130") and Statement of Financial
Accounting  Standards No. 131,  "Disclosures about Segments of an Enterprise and
Related  Information"  ("SFAS  131").  SFAS 130  establishes  standards  for the
reporting and display of  comprehensive  income and its components in a full set
of general-purpose financial statements. SFAS 131 specifies the presentation and
disclosure of operating  segment  information  reported in the annual report and
interim reports issued to  stockholders.  The provisions of both statements will
be effective for fiscal years  beginning after December 15, 1997. The management
of the Company  believes that the adoption of these  statements  will not have a
material impact on the Company's financial position,  results of operations,  or
liquidity.

NOTE 7. DIVIDENDS DECLARED

On August  21,  1997 the  Board of  Directors  of the  Company  approved  a cash
dividend of $.15 per share payable October 1, 1997 for stockholders of record on
September  15,  1997.  The  dividends  are  accrued in the  September  30,  1997
consolidated balance sheet.



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


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

Total assets at September 30, 1997 grew approximately 11.9% to $395 million from
$353 million at December 31,  1996.  The increase in total assets was  primarily
attributable  to a $24  million  (8.9%)  increase  in net loans,  a $10  million
(29.0%)  increase in  securities  available  for sale,  a $2.5  million  (11.2%)
increase in cash and cash  equivalents,  and a $6 million  (204.1%)  increase in
other  assets.  The asset  growth was funded  primarily  by the net  proceeds of
approximately  $43  million  received by the  Company  from its  initial  public
offering and an increase in demand deposits of  approximately  $6.6 million,  or
10.5%.

Total net loans grew $24  million,  or 8.9%,  from  December  31, 1996  through
September 30, 1997. The increase in loans was primarily due to commercial
installment  loans ($31  million),  commercial  adjustable  line of credit loans
($6.5  million),  commercial  single  pay loans  ($3.6  million),  and  indirect
automobile loans ($4.8 million). Mortgage loans decreased $24 million during the
first nine months of 1997.

The increase in other assets resulted  primarily from  foreclosure on five loans
to  one  commercial   borrower  ($4.9  million).   The  foreclosed  property  is
represented by two parcels of  undeveloped  land. In July 1997, the Savings Bank
entered  into a  Purchase  and Sale  Agreement  on the  largest of the tracts of
property.  This  Agreement  was  terminated  by the  purchaser in October  1997.
Marketing efforts with other prospective  purchasers are currently underway.  No
loss is anticipated from the sale of these parcels of undeveloped land.

Premises and equipment increased by $643,267, or 6.9% primarily from the opening
of two new branches in Carrollton,  Georgia. A new branch with six drive through
lanes  and walk in office  was  constructed  and  opened in July 1997 in the new
McIntosh  shopping  center  on  Highway  27 South in  Carrollton,  Georgia.  The
operations of the Savings Bank branch located inside the Kroger Grocery Store on
Highway 27 South was  transferred  to the new  facilities  at McIntosh.  Another
leased  branch  office  was opened in July 1997  located in the new  Hummingbird
Citgo Station at 1201 Maple Street, Carrollton, Georgia. This facility has three
drive through windows and walk in facilities.

Total deposit growth during the period from December 31, 1996 through  September
30,  1997 was  $7.3  million,  or 2.4%.  Non-interest  bearing  demand  deposits
increased $5.5 million, or 34.6%, and interest bearing demand deposits increased
$1.1 million, or 2.4% from December 31, 1996 through September 30, 1997. Savings
deposit  liabilities  increased $3.7 million, or 10.9% for the same period. Time
deposit  liabilities  decreased a net of $3.1 million,  or 1.5% primarily as the
result of deposits being used for stock subscriptions.

Stockholder's  equity increased  approximately $45.0 million for the nine months
ended September 30, 1997.  Approximately  $43.2 million of the increase resulted
from  the  stock  offering  discussed  in Note 3 to the  consolidated  financial
statements.  Net earnings for the nine months ended September 30, 1997 were $1.9
million. Dividends paid were $362 thousand.


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

Net earnings  totaled  $915,956 for the three months ended September 30, 1997, a
substantial  increase  from the $637,376  loss  reflected for the same period in
1996. The Savings Bank paid $1.7 million in November 1996 for a special  Savings
Association  Insurance  Fund  (SAIF)  assessment  that was levied by the FDIC to
capitalize  the SAIF fund  accounting  for the majority of the difference in net
earnings. This assessment was accrued as an expense in September 1996.

Net Interest Income

Net  interest  income for the three months ended  September  30, 1997  increased
$1,094,418, or 31.6%, over the same period in 1996. Interest expense on deposits
and borrowings was almost constant for both periods;  therefore, the increase is
due to interest  income  realized on loans and  interest  bearing  deposits  and
investment  securities.  Interest income on loans increased $631,094 or 9.9% and
interest  earned on deposits and  investment  securities  increased  $467,039 or
50.9%.

Provision for Loan Losses

The provision  for loan losses  increased to $320,310 for the three months ended
September 30, 1997 compared to $105,000 for the three months ended September 30,
1996.  This  increase has been deemed  appropriate  by management to reflect the
higher  risk  associated  with the change in loan  portfolio  mix as well as the
increase in the size of the portfolio.

Other Income

Other income increased $262,297,  or 32.1%, for the three months ended September
30, 1997 versus 1996. This is primarily the result of the increase in the volume
of transaction  accounts and the fees generated by these accounts.  The increase
in the volume of transaction  accounts resulted primarily from the four Wal*Mart
branches opened from March through  September 1996. The number of demand deposit
accounts in the Wal*Mart branches more than doubled for the period September 30,
1996 through September 30, 1997 from 2,082 to 4,247.

Other Expenses

Other  expenses  decreased  $1,221,783,  or 23.5%  for the  three  months  ended
September 30, 1997 as compared to the same period in 1996. This decrease was due
to the $1.7  million SAIF  assessment  recorded in  September  1996.  Depository
insurance  premiums  for the quarter  ended  September  30, 1997 were $46,852 as
compared with $1,876,684 for the quarter ended September 30, 1996.

Salaries and related  benefits for the current quarter have increased  $104,475,
or 6.4%,  over the same  period  in 1996.  Concurrently, occupancy  expense  has
increased $69,293, or 17.3%, and other operating  expenses,  which includes data
processing  costs, has increased  $110,421,  or 8.6%. All of these increases are
primarily associated with the branch delivery expansion of the four (4) Wal*Mart
branches  opened  from  March  through  September  1996 and the  opening  of two
traditional branches in July 1997.

The ESOP and  retirement  expense  reflects  compensation  expense  of  $330,650
related to the release of 9,654 shares of the Company's stock in September 1997.
Accounting rules require the release to the ESOP be valued at the average market
price during the quarter, which was $34.25 per share.

Income Taxes

Income tax expense for the quarter ended  September 30, 1997 was $432,448  which
reflects an effective tax rate of 32 percent.  An income tax benefit of $377,408
was reflected  for the quarter ended  September 30, 1996 due to the loss created
by the $1.7 million SAIF assessment recorded in that quarter.

COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
AND 1996.

Net  earnings  were  $1,920,666  for the nine months  ended  September  30, 1997
compared  to  $223,377  for the same  period  in  1996.  Earnings  in 1996  were
negatively impacted by the $1.7 million SAIF assessment discussed earlier.

Net Interest Income

Net interest income totaled  $11,789,535 for the nine months ended September 30,
1997 as compared with  $9,957,885 for the nine months ended  September 30, 1996,
an  increase  of $1.8  million,  or 18.4%.  Interest  income on loans  increased
$1,130,151, or 6.1%, and interest earned on investments increased $2,520,571, or
107.9%,  over the first nine months of 1996.  Interest  expense on deposits  and
borrowings  increased  $597,289,  or 5.5%,  for the first nine months of 1997 as
compared with the same period in 1996.

Provision for Loan Losses

The provision for loan losses  increased by $308,810,  or 98.0%, to $623,810 for
the nine months ended September 30, 1997 from $315,000 for the nine months ended
September  30,  1996.  This  increase  for the  comparative  nine months  period
reflects the higher risk  associated  with  increasing  commercial  and consumer
lending activities.

Other Income

Other income increased  $609,348,  or 27.6%, for the nine months ended September
30, 1997 versus the same period in 1996. This increase is primarily attritutable
to  the  fee  income  recognized  on  of  transaction   accounts  and  insurance
commissions associated with consumer lending activities.

Other Expense

Other expenses for the nine months ended  September 30, 1997 were  $473,643,  or
4.1%,  lower than the amount  for the nine  months  ended  September  30,  1996.
Depository  insurance  premiums,  including the one-time SAIF assessment of $1.7
million,  were over $2 million higher in 1996 than in the same nine month period
in  1997.  Salaries,  occupancy  expenses,  and  other  operating  expenses  all
increased  over 1996 levels due to  bringing  new  branches  on-line in 1996 and
1997.  Salaries  increased  $599  thousand,  or 12.7%,  occupancy  and equipment
expense increased $234 thousand, or 20.3%, and other operating expense increased
$447 thousand, or 12.7%.

The ESOP & retirement expense,  as discussed earlier,  reflects the compensation
expense  associated with the release of 9,654 shares of the Company's stock from
the unearned ESOP shares  account as reflected on the balance sheet at September
30, 1997.

Income Taxes

Income tax expense increased to $937,980 for the nine months ended September 30,
1997 from $29,438 for the same period in 1996.  This increase  resulted from the
lower pre-tax  earnings in 1996 primarily as the result of the SAIF  assessment.
The  effective  tax rate as a percentage  of pre-tax  income for the nine months
ended September 30, 1997 was  approximately  33%. This tax rate differs from the
statutory Federal tax rate of 34% primarily due to tax exempt interest income on
certain  investment  securities and loans. For the first nine months of 1997 and
1996,  interest  income on tax exempt  investment  securities  was  $79,157  and
$44,598, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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

On June 27,  1997 the  Conversion  from a  federally  chartered  mutual  holding
company to a state chartered stock holding company was completed, and all of the
capital  stock of the  Savings  Bank was  acquired by the  Company.  The Company
issued and sold 2,413,562 shares of its common stock, $.01 par value, at a price
of $20.00  per share in a  subscription  offering  (the  "Offering")  to certain
depositors of the Savings Bank and to the  Company's  Employee  Stock  Ownership
Plan.  Net proceeds  from the  Offering  were $46.9  million,  which the Company
applied as  follows:  $21.6  million  as a  contribution  to the  capital of the
Savings Bank; $3.9 million as a loan to the ESOP;  $21.4 million retained by the
Company.  At September 30, 1997, total  stockholders'  equity of the Company was
$70.2  million.  The ratio of the Company's  equity to total assets at September
30, 1997 was 17.8%.

The Savings  Bank is required  to  maintain an average  daily  balance of liquid
assets and short-term liquid assets as a percentage of net withdrawable  deposit
accounts plus short-term borrowings, as defined by the regulations of the Office
of Thrift Supervision (the "OTS"). The minimum required liquidity and short-term
liquidity  ratios are currently  5.0% and 1.0%,  respectively.  At September 30,
1997, the Savings Bank's liquidity ratio was 21.5% and its short-term  liquidity
ratio was 8.0%.  The levels of the Savings Bank's  short-term  liquid assets are
dependent on the Savings Bank's  operating,  financing and investing  activities
during any given period.  Management believes it will have adequate resources to
fund all  commitments on a short-term and long-term basis in accordance with its
business strategy.

The Savings Bank has other sources of liquidity if a need for  additional  funds
arises,  including  the ability to obtain FHLB of Atlanta  advances of up to $53
million.  The Savings  Bank had $5.9  million in  outstanding  FHLB  advances at
September 30, 1997.

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

<TABLE>
<CAPTION>

                                                  Tangible Capital                 Core Capital               Risk-Based Capital
                                                       Amount                         Amount                       Amount
                                                  Thousands   Percent            Thousands   Percent          Thousands   Percent
<S>                                            <C>           <C>                  <C>          <C>              <C>        <C>

Capital for regulatory purposes Sept.
30, 1997                                       $46,750           12.0%            $46,750       12.0%           $49,560      17.5%
Minimum regulatory requirement                   5,837            1.5%             11,674        3.0%            22,663       8.0%
Excess                                          40,913           10.5%             35,076        9.0%            26,897       9.5%

</TABLE>

NON PERFORMING ASSETS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES

Non performing  assets,  comprised of non-accrual loans, other real estate owned
and loans  for which  payments  are more  than 90 days  past due,  totaled  $8.2
million at September 30, 1997, as compared to $7.5 million at December 31, 1996.
In addition, non performing assets as a percentage of total loans and other real
estate owned was 2.71% and 2.33 % at  September  30, 1997 and December 31, 1996,
respectively.

Management  considers the size and character of the loan  portfolio,  changes in
non-performing and past due loans, historical loan loss experience, the existing
risk of  individual  loans,  concentrations  of loans to specific  borrowers and
existing and prospective  economic  conditions when  determining the adequacy of
the  allowance  for loan  losses.  The  allowance  for loan losses  totaled $2.6
million (.96% of loans  outstanding) at 12/31/96 and $2.2 million (.74% of loans
outstanding)  at 9/30/97.  The reduction in the ratio is primarily the result of
loan growth for the first nine months of 1997. Management believes the allowance
for loan losses is adequate to absorb loss in the portfolio.



<PAGE>




PART II.  OTHER INFORMATION

      ITEM 1.  LEGAL PROCEEDINGS

          None.

      ITEM 2.  CHANGES IN SECURITIES

          None.

      ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

          None.

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

          None.

      ITEM 5.  OTHER INFORMATION

          In  October  1997,  the  Savings  Bank filed an  application  with the
          Georgia  Department  of Banking and Finance to convert  from a federal
          savings bank to a state-chartered commercial bank.

      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
          September 30, 1997.


<PAGE>

                                   SIGNATURES

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

                                        COMMUNITY FIRST BANKING COMPANY


Date:  November 12, 1997                   /s/ Gary D. Dorminey
                                        --------------------------
                                        Gary D. Dorminey
                                        President
                          (Principal Executive Officer)



Date:  November 12, 1997                   /s/ C. Lynn Gable
                                        -------------------------
                                        C. Lynn Gable
                                        Chief Financial Officer
                          (Principal Financial Officer)