UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                  FORM 10-QSB



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

                    For Quarterly Period Ended June 30, 2004

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

                          Commission File No. 000-33355

                           TRANSCOMMUNITY FINANCIAL
                                  CORPORATION
             (Exact name of small business issuer as specified in its charter)

           Virginia                                            54-2032355
-----------------------------                            --------------------
(State or Other Jurisdiction of                            I.R.S. Employer
 Incorporation or Organization)                          Identification No.)

                              4235 Innslake Drive
                          Glen Allen, Virginia 23060
                (Address of principal executive offices, including zip code)

                                   (804) 934-9999
               (Issuer's Telephone Number, Including Area Code)



      Check whether the issuer:  (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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
             ------    -----

    State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

            Class                               Outstanding at August 8, 2004
Common Stock, par value - $0.01                        2,128,836 shares


<PAGE> 1

                      TRANSCOMMUNITY FINANCIAL CORPORATION


                                     INDEX


                                                                        Page

PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Statements of Income - Six Months Ended
         June 30, 2004 and 2003                                           2

         Consolidated Statements of Income - Three Months Ended
         June 30, 2004 and 2003                                           3

         Consolidated Balance Sheets -
         June 30, 2004 and December 31, 2003                              4

         Consolidated Statements of Changes in Stockholders' Equity -
         Six Months Ended June 30, 2004 and 2003                          5

         Consolidated Statements of Cash Flows - Six Months
         Ended June 30, 2004 and 2003                                     6


         Notes to Consolidated Financial Statements                       7

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                       11

Item 3.  Controls and Procedures                                         20


PART II  OTHER INFORMATION

Item 1.  Legal Proceedings                                               21

Item 2.  Change in Securities, Use of Proceeds and Small Business        21
         Issuer Purchases of Equity Securities

Item 3.  Defaults Upon Senior Securities                                 21

Item 4.  Submission of Matters to a Vote of security Holders             21

Item 5.  Other Information                                               22

Item 6.  Exhibits and Reports on Form 8-K                                22


         SIGNATURES                                                      23


<PAGE> 2

Part I  Financial Information
Item 1. Financial Statements

                      TRANSCOMMUNITY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

                                                       Six Months Ended
                                                           June 30
                                                     2004          2003
                                                     ----          ----

Interest and Dividend Income
   Loans, including fees                         $ 2,610,745    $ 1,621,624
   Federal funds sold                                 36,957         52,307
   Debt securities                                   189,180         55,261
                                                  -----------    ----------

   Total Interest Income                           2,836,882      1,729,192
                                                  ----------     ----------

Interest Expense
   Interest on deposits                              769,698        498,949
   Interest on other borrowed funds                   33,149          9,409
                                                  ----------     ----------

   Total Interest Expense                            802,847        508,358
                                                  ----------     ----------

Net Interest Income                                2,034,035      1,220,834

Provision for Loan Losses                            264,253        147,366
                                                  ----------     ----------

Net Interest Income After Provision for
   Loan Losses                                     1,769,782      1,073,468
                                                  ----------     ----------

Noninterest Income
   Bank service charges and fees                     498,851        117,137
   Commissions and fees from loan originations     1,357,505      1,144,451
                                                  ----------     ----------

   Total Noninterest Income                        1,856,356      1,261,588
                                                  ----------     ----------

Noninterest Expense
   Salaries and employee benefits                  3,096,779      1,900,854
   Occupancy expenses                                327,043        134,628
   Equipment expenses                                322,811        170,918
   Other operating expenses                        1,515,924        876,008
                                                  ----------     ----------

   Total Noninterest Expense                       5,262,557      3,082,408
                                                  ----------     ----------

Net Loss                                         $(1,636,419)   $  (747,352)
                                                  ==========     ==========

   Net Loss Per Share (Basic and Diluted)        $     (0.79)   $     (0.42)
                                                  ==========     ==========

   Weighted Average Shares Outstanding             2,069,723      1,777,248

              The accompanying notes are an integral part of this statement.

<PAGE> 3


                      TRANSCOMMUNITY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                 FOR THE THREE MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)
                                                      Three Months Ended
                                                            June 30
                                                       2004          2003
                                                       ----          ----

Interest and Dividend Income
   Loans, including fees                          $ 1,368,902   $   898,680
   Federal funds sold                                  17,320        28,104
   Debt securities                                    108,498        43,703
                                                   ----------    ----------

   Total Interest Income                            1,494,720       970,487
                                                   ----------    ----------

Interest Expense
   Interest on deposits                               384,093       273,741
   Interest on other borrowed funds                    16,121         2,551
                                                   ----------    ----------

   Total Interest Expense                             400,214       276,292
                                                   ----------    ----------

Net Interest Income                                 1,094,506       694,195

Provision for Loan Losses                             118,457        64,856
                                                   ----------    ----------

Net Interest Income After Provision for
   Loan Losses                                        976,049       629,339
                                                   ----------    ----------

Noninterest Income
   Bank service charges and fees                      400,249        67,495
   Commissions and fees from loan originations        812,716       638,908
                                                   ----------    ----------

   Total Noninterest Income                         1,212,965       706,403
                                                   ----------    ----------

Noninterest Expense
   Salaries and employee benefits                   1,688,693     1,011,997
   Occupancy expenses                                 185,803        67,457
   Equipment expenses                                 161,227        90,471
   Other operating expenses                           873,559       485,991
                                                   ----------    ----------

   Total Noninterest Expense                        2,909,282     1,655,916
                                                   ----------    ----------

Net Loss                                          $  (720,268)  $  (320,174)
                                                   ==========    ==========

   Net Loss Per Share (Basic and Diluted)         $     (0.35)  $     (0.17)
                                                   ==========    ==========

   Weighted Average Shares Outstanding              2,072,085     1,924,058


               The accompanying notes are an integral part of this statement.


<PAGE> 4

                      TRANSCOMMUNITY FINANCIAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2004 AND DECEMBER 31, 2003


                                                  June 30,      December 31,
                                                    2004            2003
                                                 Unaudited        Audited
     ASSETS

Cash and due from banks                         $  7,719,584   $   7,913,777
Federal funds sold                                                   186,000
                                                 -----------    ------------

Total Cash and Cash Equivalents                    7,719,584       8,099,777

Securities available-for-sale, at fair value       7,764,022       2,314,445
Securities held to maturity                       17,786,199      17,439,025
Loans net of allowance for loan losses of
   $1,107,072 at June 30, 2004 and $842,819
   at December 31, 2003                           79,888,808      65,276,864
Bank premises and equipment, net                   5,306,893       5,089,975
Federal Reserve Bank stock (restricted)              507,300         357,300
Other assets                                       1,713,060       1,174,969
                                                 -----------    ------------

   Total Assets                                 $120,685,866   $  99,752,355
                                                 ===========    ============

     LIABILITIES

Deposits:
   Demand deposits:
     Noninterest bearing                        $ 19,343,433   $  11,948,835
     Interest bearing                             22,447,042      15,528,664
   Savings deposits                                7,654,348       5,826,145
   Time deposits                                  50,382,950      49,371,157
                                                 -----------    ------------

   Total Deposits                                 99,827,773      82,674,801

Federal funds purchased                            5,036,000         501,000
Note payable                                       1,550,000       1,198,000
Accrued interest payable                             148,434         144,946
Accrued expenses and other liabilities               431,849         332,166
                                                 -----------    ------------

   Total Liabilities                             106,994,056      84,850,913
                                                 -----------    ------------

     STOCKHOLDERS' EQUITY

Common stock subscriptions received                   32,445
Common stock (5,000,000 shares authorized
   $.01 par value)
     2,067,613 shares issued and outstanding                          20,676
     2,092,730 shares issued and outstanding          20,927
Paid-in-surplus                                   20,340,450      19,916,482
Accumulated deficit                               (6,662,272)     (5,025,853)
Accumulated other comprehensive loss                 (39,740)         (9,863)
                                                 -----------    ------------

   Total Stockholders' Equity                     13,691,810      14,901,442
                                                 -----------    ------------

   Total Liabilities and Stockholders' Equity   $120,685,866   $  99,752,355
                                                 ===========    ============


         The accompanying notes are an integral part of this statement.


<PAGE> 5
<TABLE>
                                      TRANSCOMMUNITY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                               FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                                 (UNAUDITED)
<CAPTION>

                                                   Expenses of                                        Accumulated
                           Shares of    Common       Current                                              Other
                            Common       Stock        Stock      Common     Paid in     Accumulated    Comprehensive
                            Stock    Subscriptions   Offerings    Stock     Surplus        Deficit      Gain (Loss)       Total

<S>                       <C>         <C>            <C>        <C>         <C>           <C>             <C>         <C>
Balance,
   December 31, 2003      2,067,613   $              $          $  20,676   $19,916,482   $(5,025,853)    $(9,863)    $ 14,901,442

Net Loss                                                                                   (1,636,419)                  (1,636,419)
 Unrealized loss on securities
   available for sale                                                                                     (29,877)         (29,877)
                                                                                                                       -----------

   Total comprehensive loss                                                                                             (1,666,296)
Subscriptions received                    409,200                                                                          409,200
Common stock issued          25,117      (376,755)                    251       376,504
Restricted stock award
   expense                                                                       47,464                                     47,464
                           --------    ----------     --------   --------    ----------    ----------      ------      -----------


Balance
   June 30, 2004          2,092,730   $    32,445   $          $   20,927   $20,340,450   $(6,662,272)   $(39,740)    $ 13,691,810
                          =========    ==========    ========   =========    ==========    ==========     =======      ===========


Balance,
   December 31, 2002      1,605,249   $             $(588,335) $   16,052   $15,831,921   $(2,788,358)   $   (500)    $ 12,470,780

Net Loss                                                                                     (747,352)                    (747,352)
Unrealized gain on securities
   available for sale                                                                                      10,001           10,001
                                                                                                                        ----------

  Total comprehensive loss                                                                                                (737,351)
  Subscriptions received               3,704,794                                                                         3,704,794
Common stock issued         363,951   (3,672,594)                   3,640     3,668,954
Expenses of stock
  offering                                            (65,922)                                                             (65,922)
                          ---------    ---------     --------     -------    ----------    ----------     -------      -----------


Balance
   June 30, 2003          1,969,200  $    32,200    $(618,215)   $  19,692  $19,500,875   $(3,535,710)   $  9,501     $ 15,372,301
                          =========  ===========     ========     ========   ==========    ==========     =======      ===========


                The accompanying notes are an integral part of this statement.
</TABLE>

<PAGE> 6

                      TRANSCOMMUNITY FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)

                                                       Six Months Ended
                                                            June 30,
                                                       2004           2003
                                                       ----           ----
Operating Activities:
   Net loss                                     $  (1,636,419) $    (747,352)
   Adjustments to reconcile net loss to net
     cash used in operating activities:
       Provision for loan losses                      264,253        147,366
       Accretion income                               (27,103)        (2,381)
       Depreciation                                   202,958        119,733
       Gain on disposition of property                   (967)
       Restricted stock award expense                  47,464
       Net change in:
         Other assets                                (538,093)      (295,049)
         Interest payable                               3,488         36,674
         Accrued expenses and other liabilities        99,686       (256,633)
                                                 ------------    -----------

   Net Cash Used in Operating Activities           (1,584,733)      (997,642)
                                                 ------------    -----------

Investing Activities:
   Purchase of securities held to maturity        (16,919,321)   (14,806,193)
   Purchase of securities available for sale       (6,999,383)    (3,805,000)
   Proceeds from maturities of securities held
     to maturity                                   16,599,250      9,800,000
   Proceeds from maturities of securities
     available for sale                             1,519,928        805,000
   Purchase of Federal Reserve Stock                 (150,000)
   Net change in loans                            (14,876,197)   (11,330,563)
   Proceeds from the sale of property                   2,500
   Payments for the purchase of property             (223,410)    (1,396,404)
                                                 ------------    -----------

   Net Cash Used in Investing Activities          (21,046,633)   (20,733,160)
                                                 ------------   ------------

Financing Activities:
   Net change in federal funds purchased            4,535,000     (1,250,439)
   Proceeds from sale of common stock                 409,200      3,704,794
   Costs associated with stock offering                              (65,922)
   Proceeds from note payable                         352,000         15,000
   Curtailment of debt                               (198,000)
   Net change in:
     Demand deposits                               14,312,977      6,012,270
     Savings deposits                               1,828,203        916,058
     Time deposits                                  1,011,793     14,678,830
                                                 ------------   ------------

   Net Cash Provided by Financing Activities       22,251,173     24,010,591
                                                 ------------   ------------

Net Increase (Decrease) in Cash and
   Cash Equivalents                                  (380,193)     2,279,789

Cash and Cash Equivalents, Beginning of Period      8,099,777      6,967,473
                                                 ------------   ------------

Cash and Cash Equivalents, End of Period        $   7,719,584  $   9,247,262
                                                 ============   ============

Supplemental Information:
   Interest paid                                $     799,359  $     471,684

          The accompanying notes are an integral part of this statement.


<PAGE> 7

                     TRANSCOMMUNITY FINANCIAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1    ACCOUNTING PRINCIPLES:

              The consolidated financial statements of TransCommunity Financial
          Corporation ("TransCommunity") conform to generally accepted
          accounting principles and to general industry practices. In the
          opinion of management, the accompanying unaudited consolidated
          financial statements contain all adjustments (consisting of only
          normal recurring accruals) necessary to present fairly the financial
          position as of June 30, 2004, and the results of operations for the
          six and three month periods ended June 30, 2004 and 2003. The notes
          included herein should be read in conjunction with the notes to
          financial statements included in the audited December 31, 2003
          financial statements for TransCommunity, which statements were
          included in the Company's annual report on Form 10-KSB filed with the
          Securities and Exchange Commission.

          Consolidation Policy

              The  consolidated financial statements include TransCommunity,
          Bank  of Powhatan,  N.A. ("Bank  of  Powhatan"), Bank of Goochland,
          N.A. ("Bank  of Goochland"), Bank of Louisa, N.A. ("Bank of Louisa");
          Main Street Mortgage and Investment Corporation ("Main Street
          Mortgage"),  a wholly owned  subsidiary of Bank of Powhatan,
          TransCommunity  Investment  Advisors,  Inc. and  TransCommunity
          Investment Services,  Inc. All significant  intercompany balances and
          transactions have been eliminated.


NOTE 2    INVESTMENT SECURITIES:

             The carrying values, unrealized gains, unrealized losses and
          approximate fair values of investment securities at June 30, 2004 are
          shown in the table below. As of June 30, 2004 U.S. Agency Securities
          with a carrying value of $10,179,239 were pledged as collateral for
          public deposits.

         Securities Available for Sale
         June 30, 2004
                                           Gross       Gross
                             Amortized  Unrealized  Unrealized      Fair
                               Cost        Gains      Losses        Value

         U.S. Agency
           notes           $ 7,803,762  $      469  $  (40,209) $ 7,764,022
                            ==========   =========   =========   ==========

         Securities Held
         to Maturity
         June 30, 2004
                                           Gross       Gross
                             Amortized  Unrealized  Unrealized      Fair
                               Cost        Gains      Losses        Value
         U.S. Agency
           discount notes  $ 6,986,717  $           $  (18,838) $ 6,967,879
         U.S. Agency notes  10,799,482       2,797    (133,635)  10,668,644
                            ----------  ----------   ---------   ----------

         Total Securities
            Held
            to Maturity    $17,786,199  $    2,797  $ (152,473) $17,636,523
                            ==========   =========   =========   ==========


<PAGE> 8

                     TRANSCOMMUNITY FINANCIAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2    INVESTMENT SECURITIES (CONTINUED):

         Securities Available for Sale
         December 31, 2003
                                           Gross        Gross
                             Amortized  Unrealized   Unrealized      Fair
                               Cost        Gains       Losses        Value

         U.S. Agency notes $ 2,324,308   $  10,450   $  (20,313)  $ 2,314,445
                            ==========    ========    =========    ==========

         Securities Held
         to Maturity
         December 31, 2003
                                           Gross        Gross
                             Amortized  Unrealized   Unrealized       Fair
                               Cost        Gains       Losses         Value
         U.S. Agency
           discount
           notes           $12,489,180   $           $   (7,340)  $12,481,840
         U.S. Agency
           notes             4,949,845       2,078      (17,874)    4,934,049
                            ----------    --------    ----------   ----------

         Total Securities
            Held to
            Maturity       $17,439,025   $   2,078   $  (25,214)  $17,415,889
                            ==========    ========    =========    ==========


NOTE 3    LOANS:

              Loans by type are shown in the following schedule:

                                                           (In Thousands)
                                                        June 30,  December 31,
                                                          2004        2003

              Commercial, financial, and agricultural  $ 35,647     $28,095
              Real estate -construction                  11,273      16,187
              Real estate -mortgage                      27,613      13,357
              Installment loans to individuals            6,463       8,481
                                                        -------      ------

              Total loans                                80,996      66,120

              Less allowance for loan losses             (1,107)       (843)
                                                        -------      ------

              Net Loans                                $ 79,889     $65,277
                                                        =======      ======


NOTE 4    ALLOWANCE FOR LOAN LOSSES:

             Transactions in the Banks' allowance for loan losses are shown in
          the following schedule:
                                                     For the Six Months Ended
                                                             June 30,
                                                          2004      2003

             Balance, beginning of period             $  842,819  $  462,200
             Provision for loan losses                   264,253      82,510
                                                       ---------   ---------

             Balance, end of period                   $1,107,072  $  544,710
                                                       =========   =========


<PAGE> 9

                     TRANSCOMMUNITY FINANCIAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5    STOCK OPTION PLAN:

              A stock option plan was adopted by the Board of Directors of the
         Bank of Powhatan on May 8, 2001. This Plan was adopted by
         TransCommunity effective August 15, 2001 in connection with the
         Reorganization whereby the Bank of Powhatan, became a subsidiary of
         TransCommunity. The purpose of the Plan is to reward employees and
         directors for services rendered and investment risks undertaken to date
         and to promote the success of TransCommunity and its subsidiaries by
         providing incentives to employees and directors that will promote the
         identification of their personal interest with the long-term financial
         success of TransCommunity, its subsidiaries and with growth in
         shareholder value. The Plan provides that options for up to 330,000
         shares of TransCommunity common stock may be issued. The exercise price
         may not be less than 100% of the fair market value of the shares on the
         award date.

              Unless the Stock Option Committee determines otherwise, one-third
         of an award becomes vested and exercisable on each of the first three
         anniversaries of the award date. Each award becomes fully vested and
         exercisable in the event of a change in control of TransCommunity. All
         options are subject to exercise or forfeiture if TransCommunity's
         capital falls below its minimum requirements, as determined by its
         primary regulator, and TransCommunity's primary regulator so directs.
         The Plan will expire on May 7, 2011, unless terminated sooner by the
         Board of Directors. On May 16, 2001 and April 15, 2003, options to
         acquire 45,575 and 226,200 shares, respectively, were awarded under the
         Plan; these options have an exercise price of $10 per share and a term
         of ten years. In addition, on April 15, 2003, options were awarded to
         executive officers, under existing employments agreements, to acquire
         51,000 shares. These options were fully exercisable at December 31,
         2003.

              The fair value of each option granted on April 15, 2003 was $3.30
         using the "Black Scholes Option Pricing" method with the following
         assumptions: risk free interest rate 4.00%, expected life - 10 years,
         expected volatility - zero and expected dividends of zero. No options
         have expired as March 31, 2004, however 600 options have been exercised
         pursuant to the Plan.

         A summary of the options granted is shown in the following table:

                                                   For the Six Months Ended
                                                           June 30
                                                       2004        2003

         Outstanding at beginning of the year         318,675      45,575
         Granted                                                  272,950
         Exercised
                                                   ----------  ----------

         Outstanding at June 30                       318,675     318,525
                                                    =========   =========
         Options exercisable at June 30               127,892      30,383
                                                    =========   =========
         Exercise Price                            $    10.00  $    10.00
         Weighted average remaining contracted
           Life at June 30, 2004                          102 Months


<PAGE> 10

                     TRANSCOMMUNITY FINANCIAL CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6    STOCK OPTION PLAN (CONTINUED):

             TransCommunity accounts for the Plan under the recognition and
          measurement principles of APB No. 25, Accounting for Stock Issued to
          Employees, and related Interpretations. No stock-based employee
          compensation cost is reflected in the net loss, as all options granted
          under the Plan had an exercise price equal to the market value of the
          underlying common stock on the date of grant. The following table
          illustrates the effect on net loss and loss per share as if
          TransCommunity had applied the fair value recognition provisions of
          FASB Statement No. 123, Accounting for Stock-Based Compensation, to
          the Plan.
<TABLE>

<CAPTION>
                                        Three Months Ended            Six Months Ended
                                             June 30                      June 30
                                       --------------------          -------------------
                                          2004         2003           2004          2003
                                          ----         ----           ----          ----
          <S>                          <C>           <C>           <C>            <C>

          Net loss, as reported        $(720,268)    $(320,174)    $(1,636,419)   $(747,352)
          Deduct: Total stock-based
            employee compensation
            expense determined
            under fair value based
            method                       (64,617)     (121,626)       (183,483)    (133,684)
                                        --------      --------       ---------     --------

          Pro Forma Net Loss           $(784,885)    $(441,800)    $(1,819,902)   $(881,036)
                                        ========      ========      ==========     ========

          Loss per Share:
            Basic - as reported        $    (.35)    $    (.17)    $      (.79)   $    (.42)
                                        ========      ========      ==========     ========
            Basic - pro forma          $    (.38)    $    (.23)    $      (.88)   $    (.50)
                                        ========      ========      ==========     ========
</TABLE>


NOTE 7    EARNINGS PER SHARE:

             Since TransCommunity continues to incur losses, the effect on loss
          per share of TransCommunity's outstanding stock options would be
          antidilutive and a decrease in loss per share is not appropriate.
          Therefore, basic and dilutive loss per share are identical.


NOTE 8   NOTES PAYABLE:

             In 2003, TransCommunity entered into a line of credit arrangement
         that provides up to $1,700,000 of financing to be used primarily as
         working capital. The line of credit has a rate of 1/2% over the prime
         rate as published in the Wall Street Journal. This renewable line of
         credit matures on December 31, 2004 and is secured by 250,000 shares of
         stock of the Bank of Powhatan owned by TransCommunity. At June 30,
         2004, TransCommunity had outstanding borrowings under this line of
         $1,550,000 carrying an interest rate of 4 1/2%.

             In 2002, TransCommunity purchased a two acre parcel in the Town of
         Louisa as a site for the Bank of Louisa for $200,000. The trustee of
         the trust that sold this property to TransCommunity is a member of the
         Board of Directors of the Bank of Louisa. The Board received two
         independent appraisals regarding the parcel and believes that the terms
         of the purchase are equal to or better than the terms that might be
         available for similar property purchased from an unrelated third-party.
         In connection with this transaction, the seller financed $198,000 at an
         interest rate of 4.75% with principal and interest due on November 1,
         2003. In October 2003, this indebtedness was extended until November 1,
         2004 at an interest rate of 6% per annum. Effective April 29, 2004,
         this property and the related debt obligation was transferred to Bank
         of Louisa, N.A. and paid off.


<PAGE> 11

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

 Forward Looking Statements

      The following discussion contains statements that refer to future
expectations, contain projections of the results of operations or of financial
condition or state other information that is "forward-looking."
"Forward-looking" statements are easily identified by the use of words such as
"could," "could anticipate," "estimate," "believe," and similar words that refer
to the future outlook. There is always a degree of uncertainty associated with
"forward-looking" statements. The Company's management believes that the
expectations reflected in such statements are based upon reasonable assumptions
and on the facts and circumstances existing at the time of these disclosures.
Actual results could differ significantly from those anticipated.

      Many factors could cause the Company's actual results to differ materially
from the results contemplated by the forward-looking statements. Some factors,
which could negatively affect the results, include:

      o  General economic conditions,  either nationally or within the Company's
         markets, could be less favorable than expected;
      o  Changes in market interest rates could affect interest margins and
         profitability;
      o  Competitive pressures could be greater than
         anticipated; and
      o  Legal or accounting changes could affect the Company's results.

Overview

      TransCommunity Financial Corporation ("TransCommunity") is a community
bank holding company, designated for regulatory purposes as a financial holding
company, headquartered in Richmond, Virginia. TransCommunity, through its three
national bank subsidiaries, Bank of Powhatan, N.A. ("Bank of Powhatan"), Bank of
Goochland, N.A. ("Bank of Goochland"), and Bank of Louisa, N.A. ("Bank of
Louisa"), operates a community banking business in the contiguous counties of
Powhatan, Goochland and Louisa, all located to the west of the Richmond
metropolitan area. Bank of Powhatan has its main office in Powhatan County.
TransCommunity became the holding company for Bank of Powhatan on August 15,
2001. TransCommunity's subsidiary, Bank of Goochland, opened for business on
November 25, 2002, in a temporary facility located at Goochland Courthouse. On
October 20, 2003, the Bank of Goochland moved its headquarters to a new facility
located on U.S. Route 250 in the Centerville area of Goochland County, and
converted its prior temporary office into a permanent branch of the Bank.
Effective April 19, 2004, TransCommunity established its third independent
community bank in the central Virginia area, the Bank of Louisa, N.A.
TransCommunity initially established the Bank of Louisa in July 2003 as a branch
of Bank of Powhatan. The assets and liabilities of this branch office were
transferred to Bank of Louisa contemporaneously with the receipt by that bank of
its independent national banking charter.

            TransCommunity is currently engaged in a non-underwritten public
offering of 1,000,000 shares of its common stock. The present offering is being
undertaken to provide additional funds for TransCommunity's continuing
operations, including the capitalization of a contemplated new bank subsidiary
to be organized in the Lexington, Virginia area as well as the expansion of its
non-banking services and activities. The capitalization of the proposed Bank of
Rockbridge will require approximately $5.0 million of capital. The sale of
additional shares of stock is an important source of capital to support
TransCommunity's operations at the holding company level and essential to the
establishment of the contemplated new bank.

      As of June 30, 2004, TransCommunity had raised $409,200, in the offering
through the sale of 25,117 shares at $15.00 per share. These proceeds include
$32,445 in proceeds received for which 2,163 shares were unissued at June 30,
2004. If all of the shares that are offered are sold, TransCommunity will use
$5,000,000 of the offering proceeds to capitalize the proposed Bank of
Rockbridge, N.A. and will use the remaining proceeds, and any future proceeds
for general corporate purposes. At June 30, 2004, there were 972,720 shares
remaining unsold in the current offering.


<PAGE> 12

      TransCommunity's management plans to make application to the Office of the
Comptroller of the Currency to establish our fourth national bank, Bank of
Rockbridge, N.A.(in organization) in early August. The County of Rockbridge is
located in the western portion of the TransCommunity market area, referred to as
the "Valley of Virginia", bordering the city of Lexington. TransCommunity has
executed a lease to use the original main office facility for the predecessor
Bank of Rockbridge, and has hired a President & CEO to head up the establishment
of this new bank operation.

      Main Street Mortgage & Investment Corporation ("Main Street Mortgage"), a
mortgage banking subsidiary of the Bank of Powhatan, expanded its mortgage loan
origination operation during 2003, with the establishment of new offices in
Abingdon, Danville, Williamsburg and Virginia Beach, Virginia, as well as the
addition of a "sub-prime" mortgage loan office in Richmond. Main Street Mortgage
currently operates a total of 11 mortgage offices across Virginia.

      TransCommunity also provides certain non-banking services and activities
permissible under a financial holding company structure. In October, 2003,
TransCommunity organized a new subsidiary, TransCommunity Investment Advisors,
Inc. to provide investment advisory services to its subsidiary bank customers.
In conjunction with the establishment of the investment advisor services,
TransCommunity received permission from the Comptroller of the Currency to
exercise the full range of trust and fiduciary activities by each of its
subsidiary banks. This now allows each subsidiary bank to offer the full range
of investment management and trust fiduciary services to its customers. A
similar application to exercise the full range of fiduciary activities through
the Bank of Rockbridge, N.A. in organization, is planned to be submitted with
its charter application.

      In addition, during the first quarter of 2004, TransCommunity established
TransCommunity Investment Services, Inc. as a wholly owned subsidiary. This
company acts as an agent in the delivery of certain investment and insurance
products. To allow for certain of these activities to be transacted,
TransCommunity Investment Services, Inc. is also licensed as an insurance agency
by the State of Virginia. Through this subsidiary, we intend to offer a wide
range of life, annuity and retirement insurance products for our subsidiary bank
customers.

      At June 30, 2004, TransCommunity had, on a consolidated basis, total
assets of $120.7 million, total deposits of $99.8 million, total loans of $81.0
million, and total stockholders' equity of $13.7 million.

      For the six months ended June 30, 2004, TransCommunity had a net loss of
$1,636,419 compared with a net loss of $747,352 for the six months ended June
30, 2003. The net loss per share was $.79 in 2004 compared with $.42 per share
for the same period in 2003.

      The increase in TransCommunity's net losses reflects start-up operating
losses of the Bank of Louisa, which was opened on April 19, 2004, and Bank of
Goochland. Operating losses of the Bank of Louisa since April 19, 2004 through
June 30, 2004 were $711,178. Operating losses of the Bank of Goochland totaled
$171,458 for the first six months of 2004. Prior to the formal establishment of
Bank of Louisa, its operating losses, as a branch of Bank of Powhatan, were
$188,095 from January 1, 2004 through April 18, 2004. TransCommunity also
continues to incur operating expenses associated with exploring new geographical
banking markets, and developing and introducing new financial services. New
financial services developed and introduced include investment advisory and
trust banking services, as well as insurance services.

      Bank of Powhatan (on a consolidated basis with Main Street Mortgage)
experienced a net profit of $341,627 for the six months ended June 30, 2004.
This compares with the net income of $406,231 for the same period in 2003. Bank
of Powhatan's consolidated lower net income in comparison with the amount
reported for the same period in 2003 is attributed to the $188,095 in losses
incurred prior to the spin off of the Louisa branch as a stand alone national
bank in 2nd quarter 2004 and the reported six month loss of $70,730 by Main
Street Mortgage versus a net profit of $92,985 for the same period in 2003. The
core profit of Bank of Powhatan for the first 6 months on a stand alone basis
was $600,452 versus $313,246 on a stand alone basis for the first 6 months in
2003.


<PAGE> 13

      Main Street Mortgage, a subsidiary of the Bank of Powhatan, had a net loss
of $70,730 for the six month period ended June 30, 2004, as compared with net
income of $92,985 for the same period in 2003. This declining trend is due to
the expansion costs incurred with the infrastructure put in place in the fourth
quarter of 2003.

      Bank of Goochland experienced net losses of $171,458 for the six months
ended June 30, 2004, as compares with the net loss of $344,487 for the same
period in 2003. The decline in the net loss when compared to the prior year is
attributable to continued growth in the customer base.

      The following is a condensed consolidating statement of operations for
TransCommunity and its subsidiaries for the six months ending June 30, 2004 and
2003:
<TABLE>

<CAPTION>
                                                       Six Months Ended June 30, 2004
                                                               (In Thousands)
                            Bank of         Main         Bank of        Bank of    (1) Trans-      Elimi-
                            Powhatan       Street       Goochland        Louisa      Community     nations     Consolidated

<S>                         <C>           <C>           <C>            <C>          <C>          <C>          <C>
Net interest income         $  1,281      $   (18)      $    738       $     47     $   (14)     $            $     2,034
Provision for loan losses        (92)        (124)           (48)                                                    (264)
Noninterest income               432        1,357             58              4         304           (299)         1,856
Noninterest expense           (1,208)      (1,410)          (843)          (714)     (1,386)           299         (5,262)

Loss from subsidiaries           (71)                                                  (541)           612
                             -------       ------         ------        -------      ------       --------     ----------
Net Income (Loss)           $    342      $   (71)      $   (171)      $   (711)    $(1,637)     $     612    $    (1,636)
                             =======       ======        =======        =======      ======       ========

Total Assets                $ 61,716      $ 1,379       $ 43,815       $ 14,821     $15,350      $ (16,395)   $   120,686
                             =======       ======        =======        =======      ======       ========     ==========
</TABLE>

<TABLE>

<CAPTION>

                                  Three Months Ended June 30, 2004
                                      (In Thousands)
                  Bank of Main   Bank of  Bank of(1) Trans-  Elimi-
                 Powhatan StreetGoochland Louisa Community   nationsConsolidated

<S>                        <C>            <C>           <C>            <C>          <C>          <C>          <C>
Net interest income        $    667       $   (10)      $    400       $     47     $   (10)     $            $    1,094
Provision for loan losses                                    (70)           (48)                                    (118)
Noninterest income              364           813             33              4         299           (299)        1,214
Noninterest expense            (551)         (761)          (425)          (714)       (758)           299        (2,910)
Income (Loss)
   from subsidiaries             42                                                    (251)           209
                            -------        ------        -------        -------      ------       --------     ---------
Net Income (Loss)          $    522       $    42       $    (62)      $   (711)    $  (720)     $     209    $     (720)
                            =======        ======        =======        =======      ======       ========     =========

Total Assets               $ 61,716       $ 1,379       $ 43,815       $ 14,821     $15,350      $ (16,395)   $  120,686
                            =======        ======       =======        =======      ======       ========     =========
</TABLE>

(1)   Includes financial data for TransCommunity Investment Advisors and
      Services, which were immaterial for reporting purposes.

Net Interest Margin

     TransCommunity's consolidated net interest margin was 3.98% for the six
months ended June 30, 2004, compared with 4.27% for the six months ended June
30, 2003. The decrease in the net interest margin is attributable to a growth of
deposits over loans during this period. The establishment of Bank of Louisa and
its low loan to deposit percentage resulted in a lower combined loan to deposit
rate for all the subsidiary banks combined. A low loan to deposit ratio has been
the experience of each of our previously created de-novo banks. The combined
interest rate margin of 3.98% is still considered reasonable and compares
favorably with the experience of many other commercial banks. As we are able to
grow our loan portfolio at Bank of Louisa thereby reducing the loan to deposit
gap, we anticipate that our interest margin will improve.

     TransCommunity's net interest margin analysis and average balance sheets
are shown in Schedule I.


<PAGE> 14

Provision for Loan Losses

     The provision for loan losses for the first six months of 2004 was
$264,253, resulting in an allowance for loan losses of $1,107,072 (1.37% of
total loans) at June 30, 2004. The calculation of the allowance for loan losses
is considered a critical accounting policy. The allowance for loan losses is
evaluated on a regular basis by management and is based upon management's
periodic review of the collectibility of the loans, industry historical
experience, the nature and volume of the loan portfolio, adverse situations that
may affect the borrower's ability to repay, estimated value of any underlying
collateral and prevailing economic conditions. An adequate allowance is
calculated using risk factors depending on the type of borrower and whether the
loan is secured or unsecured. Loans that are classified adversely are assigned a
risk percentage based on the classification to which they are assigned.
Unclassified commercial loans secured by real estate and secured consumer loans
are assigned a risk factor of 1%. Unclassified other commercial loans and
unsecured consumer loans are assigned a risk factor of 2%. As TransCommunity's
subsidiary banks mature, the factors will be adjusted to reflect actual
experience. In addition, an allowance would be established for problem loans
individually or by grouping. This evaluation is inherently subjective as it
requires estimates that are susceptible to significant revision as more
information becomes available. As of June 30, 2004 $68,000 of loans were in
non-accrual status and were past due 90 days or more.

Noninterest Income

     Noninterest income increased from $1,261,588 in the first six months of
2003 to $1,856,356 in the first six months of 2004. Noninterest income as a
percentage (annualized) of average assets for the first six months of 2004 was
3.28% compared to 3.97% for the first six months of 2003. Commissions and fees
received by Main Street Mortgage increased $213,054, or 18.62%, due to the
increase in the volume of loans originated. Bank service charges and fees
increased $381,714, or 325.87%, due to the continuing increase in
TransCommunity's customer base and deposits.

Noninterest Expense

      Noninterest expense increased from $3,082,408 in the first six months of
2003 to $5,262,557 in the first six months of 2004. A schedule of noninterest
expense by company is shown below. The expenses of Main Street Mortgage are
mostly salaries and commissions related to the origination of mortgage loans.
The expenses of TransCommunity relate mainly to ongoing operation of the holding
company's support services for the banks and the start up operations of the
asset management/trust banking services and insurance agency. Bank of Powhatan's
growth in expenses included the additional cost of the operation of the branch
office in Louisa through April 19th of 2004. This branch was spun off as a stand
alone national bank on April 19, 2004 and is reported separately going forward.
The increase in expenses at Bank of Goochland was due to the opening of the Main
Office located in Centerville in the fourth quarter of 2003 while converting the
temporary office to a permanent branch. Noninterest expense, as a percentage
(annualized) of average assets, improved for the first six months of 2004 to
9.30%, down from 9.69% for the first six months of 2003.

      Noninterest expense by company is as follows:

                                                        Six Months Ended
                                                            June 30,
                                                         2004         2003

              TransCommunity                       $ 1,385,937   $  818,771
              Bank of Powhatan                       1,208,333      769,588
              Bank of Goochland                        843,157      440,422
              Bank of Louisa                           414,864
              Main Street Mortgage                   1,410,266    1,053,627
                                                    ----------    ---------

                 Total                             $ 5,262,557   $3,082,408
                                                   ========================


<PAGE> 15

Income Taxes

     No income tax benefit has been recorded since, at this time, there is
insufficient evidence to conclude that TransCommunity will produce taxable
income in the future which can be offset by loss carryforwards from the current
period.

Loans

     Total loans increased $14,876,197 during the first six months of 2004 to
$80,995,880 as a result of the subsidiary banks' anticipated market growth.

      Loans by type are shown in the following schedule:

                                                           (In Thousands)
                                                        June 30,  December 31,
              Type                                        2004        2003
              ----                                        ----        ----

              Commercial, financial, and agricultural  $ 35,647     $28,095
              Real estate -construction                  11,273      16,187
              Real estate -mortgage                      27,613      13,357
              Installment loans to individuals            6,463       8,481
                                                        -------      ------

              Total loans                                80,996      66,120

              Less allowance for loan losses             (1,107)       (843)
                                                        -------      ------

              Net Loans                                $ 79,889     $65,277
                                                        =======      ======


Nonaccrual, Past Due and Restructured Loans

      At June 30, 2004, TransCommunity had $68,000 in loans classified as
restructured or past due more than 90 days. This single loan in the amount of
$68,000 was considered to be a nonaccrual loan as of June 30, 2004. Loans are
placed in a non-accrual status when, in the opinion of management, the accrued
interest income will not be collected.


Allocation for the Allowance for Loan Losses

      The following table shows the allocation for the allowance for loan losses
at:

                                     June 30, 2004        December 31, 2003

                                           Percent of             Percent of
                                          loans in each          loans in each
     Balance at end of period              category to            category to
          applicable to           Amount   total loans   Amount   total loans

      Commercial                $  610,462     55%    $   438,265    43%
      Real estate - construction   236,664     21%        202,276    24%
      Real estate - mortgage       181,535     16%        109,566    20%
      Installment                   78,411      8%         92,712    13%
                                ----------    ---      ----------   ---

      Total Allowance for
        Loan Losses             $1,107,072    100%    $   842,819   100%
                                 =========    ===      ==========   ===


<PAGE> 16

Bank Premises and Equipment

     Bank premises and equipment consisted of the following as of June 30, 2004:

     Land and land improvements                          $ 1,493,479
     Buildings                                             2,546,040
     Furniture and equipment                               1,955,098
     Construction in progress                                174,752
                                                          ----------

                                                           6,169,369
     Less:  Accumulated Depreciation                         862,476
                                                          ----------

     Total Bank Premises and Equipment                   $ 5,306,893
                                                          ==========

     During 2002, TransCommunity purchased property in the Town of Louisa,
Virginia as a site for the Bank of Louisa, N.A. In connection with this
purchase, the seller financed $198,000 at an interest rate of 4.75% with
principal and interest due on November 1, 2003. In October, 2003, this
indebtedness was extended until November 1, 2004 at an interest rate of 6% per
annum. Upon the establishment of Bank of Louisa as a stand alone institution on
April 19, 2004, this property was transferred to Bank of Louisa and the
outstanding loan, including accrued interest, was assumed by Bank of Louisa and
paid off.

      TransCommunity has a 10-year lease on approximately 14,000 square feet of
office space located at 4235 Innslake Drive, Glen Allen, Virginia beginning in
December of 2003. This office space houses the corporate operations of
TransCommunity as well as elements of Main Street Mortgage and the offices of
TransCommunity Investment Advisors, Inc., TransCommunity Investment Services,
Inc., as well as the trust banking operations of the subsidiary banks. The
original corporate offices of TransCommunity have been turned over to Main
Street Mortgage for use in its expanding sub-prime lending operation. The
minimum lease payments associated with TransCommunity's new office space over
the next four years are $155,553 for 2004, $229,407 for 2005, $234,060 for 2006
and $238,763 for 2007. Monthly lease payments of $12,951 commenced in February,
2004. The lease provides for an abatement of rent on 4,000 square feet for one
year from the occupancy date.

Deposits

     TransCommunity's deposits increased $17,152,972 during the first six months
of 2004 to $99,827,773 at June 30, 2004. Time deposits of $100,000 or more
equaled 20.43% of deposits at June 30, 2004. This increase is attributable to
the growth of the banks.

Capital

      TransCommunity's capital as a percentage of total assets was 11% at June
30, 2004, and 15% at December 31, 2003, which significantly exceeded regulatory
requirements at both dates.

Liquidity and Interest Sensitivity

      At June 30, 2004, TransCommunity had liquid assets of approximately $15.5
million in the form of cash, federal funds sold and available-for-sale
investments. Management believed that liquid assets were adequate at June 30,
2004. Management anticipates that additional liquidity will be provided by the
growth in deposit accounts and loan repayments. TransCommunity's bank
subsidiaries, Bank of Powhatan, Bank of Goochland and Bank of Louisa, also have
the ability to purchase federal funds and borrow from the Federal Reserve Bank,
if necessary. TransCommunity has established a line of credit of $1,700,000 with
a non-affiliated bank, secured by a pledge of a portion of the outstanding
shares of Bank of Powhatan, to use for working capital. Of this amount, $150,000
remained available at June 30, 2004.


<PAGE> 17

      Because of regulatory limitations on the payment of dividends to
TransCommunity by its subsidiary banks, expenses associated with the start-up of
its subsidiary banks and its other financial services will require
TransCommunity to continue to fund operating expenses at the holding company
level through a combination of borrowings and the sale of capital stock.
Although Bank of Powhatan is capable of paying dividends to TransCommunity, the
projected profitability in 2004 will not support all of the holding company's
operations through the rest of 2004. Therefore, the inability of TransCommunity
to sell additional shares of capital stock would likely have a material adverse
effect on TransCommunity's business plan and its financial position. In April
2004, TransCommunity filed a registration statement with the Securities and
Exchange Commission for the sale of up to 1,000,000 shares of common stock
through a non-underwritten offering. On May 12, 2004 the registration statement
was declared effective. Other than as stated, management is not aware of any
trends, events or uncertainties that are reasonably likely to have a material
impact on the TransCommunity's short term or long term liquidity. Bank premises
and equipment in the near future will be purchased using liquid assets.

      At June 30, 2004, TransCommunity had a negative cumulative Gap Rate
Sensitivity Ratio of (6.30)% for the one year repricing period. This rate does
not reflect the historical movement of funds during varying interest rate
environments. Management constantly monitors the interest rate risk and believes
that the current position is an acceptable risk for a growing community bank.
TransCommunity's interest rate sensitivity analysis is shown in Schedule II.

Future Prospects

      TransCommunity's strategy is to grow principally through the establishment
of de novo banks in relatively under-banked communities experiencing
faster-than-average growth. Newly-chartered banking institutions normally
experience losses during their early years of operation, as it takes time to
build a loan portfolio generating sufficient interest income to offset operating
costs.

      Management anticipates that Bank of Powhatan will experience continued
growth in 2004. Bank of Powhatan has recouped its original capital and is now
positioned to begin to pay a dividend to TransCommunity.

      Likewise, we anticipate that Bank of Goochland and our newest bank
subsidiary, Bank of Louisa, as well as future de novo banks such as Bank of
Rockbridge will initially experience operating losses as they establish their
customer base, but that each institution will reach profitability as they
execute TransCommunity's community banking strategy and take advantage of the
operational cost savings afforded by using TransCommunity's common operating
platform. Additionally, TransCommunity's new Financial Services division,
offering asset management, trust banking, securities brokerage and insurance
will begin generating revenues during 2004, and expects to contribute to
TransCommunity's profitability in the years ahead. Nevertheless, it may be
several years before TransCommunity will be able to show a profit on a
consolidated basis.

Employees

      TransCommunity's full time equivalent employees have increased from 100 at
December 31, 2003, to 103 at June 30, 2004, including 19 at Bank of Powhatan, 18
at Bank of Goochland, 8 at Bank of Louisa, 39 at Main Street and 19 at
TransCommunity. The number of new employees hired for the duration of 2004 will
depend on the continued growth in operations.


<PAGE> 18
Schedule I
<TABLE>

                       TRANSCOMMUNITY FINANCIAL COPORATION
                          NET INTEREST MARGIN ANALYSIS
                              AVERAGE BALANCE SHEET
                      FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

<CAPTION>
                                             2004                               2003
                              --------------------------          -     ------------------------
                            Average                   Average         Average                Average
                            Balance         Income/    Rates          Balance   Income/       Rates
                             Sheet          Expense  Earned/Paid        Sheet   Expense     Earned/Paid


<S>                      <C>               <C>           <C>         <C>           <C>          <C>
ASSETS
   Loans including
     fees                $ 74,243,011      $2,610,745    7.03%       $ 43,369,200  $1,621,624   7.48%
   Federal funds sold       8,243,472          36,957    0.90%          9,072,511      52,307   1.15%
   Investments             19,782,913         189,180    1.91%          4,774,504      55,261   2.31%
                          -----------       ---------   -----         -----------   ---------  -----

   Total Earning
     Assets               102,269,396       2,836,882    5.55%         57,216,215   1,729,192   6.04%
                          -----------       ---------   -----         -----------   ---------  -----

   Allowance for
     loan losses             (980,954)                                   (527,670)
   Non-earning assets      11,893,180                                   6,922,572
                          -----------                                 -----------

   Total Assets          $113,181,622                                $ 63,611,117
                          ===========                                 ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

   Deposits
     Demand -
       Interest
         bearing         $ 21,186,193     $   100,689    0.95%       $  8,353,337  $  45,576   1.09%
     Savings                6,747,734          33,141    0.98%          3,698,435     22,141   1.20%
     Time deposits         49,889,975         635,868    2.55%         29,262,432    431,232   2.95%
                          -----------      ----------   -----         -----------   --------  -----

     Total Deposits        77,823,902         769,698    1.98%         41,314,204    498,949   2.42%

     Other borrowed
       Funds                3,465,945          33,149    1.91%            649,983      9,409   2.90%
                          -----------       ---------   -----         -----------   --------  -----

     Total Interest
       Bearing
       Liabilities         81,289,847         802,847    1.98%         41,964,187    508,358   2.42%
                          -----------       ---------   -----         -----------   --------  -----

   Non-interest
     bearing
     Deposits              15,311,441                                   7,398,301
   Other liabilities          726,315                                     457,156
                          -----------                                  ----------

     Total Liabilities     97,327,603                                  49,819,644

   Stockholders' Equity    15,854,019                                  13,791,473
                          -----------                                 -----------

   Total Liabilities
     And Stockholders'
      Equity             $113,181,622                                $ 63,611,117
                          ===========                                 ===========

   Net Interest
     Earnings                              $2,034,035                             $1,220,834
                                            =========                              =========

   Net Yield on
     Interest
     Earning Assets                                     3.98%                                  4.27%
  </TABLE>


<PAGE> 19
Schedule II

               TRANSCOMMUNITY FINANCIAL CORPORATION INCORPORATED
                         INTEREST SENSITIVITY ANALYSIS
                                  JUNE 30, 2004


                          Less than      1 to 5       Over 5
                           1 Year         Years        Years         Total
Uses of Funds:

Loans:
   Commercial and
    real estate -
    construction        $ 16,332,021 $ 14,887,910  $  4,426,720 $ 35,646,651
   Real estate - mortgage 22,797,708   11,003,838     5,084,496   38,886,042
   Installment             3,309,084    3,063,483        90,620    6,463,187
                        ------------  -----------   -----------  -----------

   Total Loans            42,438,813   28,955,231     9,601,836   80,995,880

Federal funds sold
Investment securities
   at cost                11,386,652    5,399,547     1,000,000   17,786,199
Investment securities at
   fair value              2,990,626    4,773,396                  7,764,022
                         -----------  -----------   -----------  -----------

Total                   $ 56,816,091 $ 39,128,174  $ 10,601,836 $106,546,101
                         ===========  ===========   ============ ===========

Sources of Funds:

Demand Deposits
   Interest bearing     $ 22,447,042 $             $            $ 22,447,042
Savings Deposits           7,654,348                               7,654,398
Time Deposits:
   Over $100,000          11,947,369    8,444,536                 20,391,905
   Other                  14,893,653   15,097,392                 29,991,045
                         -----------  -----------   -----------  -----------

   Total Deposits         50,942,412   23,541,928                 80,484,340

Federal funds purchased    5,036,000                               5,036,000
Borrowings                 1,550,000                               1,550,000
                        ------------  -----------   -----------  -----------

Total                   $ 63,528,412 $ 23,541,928  $            $ 87,070,340
                         -----------   ----------    ----------   ----------

Discrete Gap              (6,712,321)  15,586,246    10,601,836   19,475,761
Cumulative Gap            (6,712,321)   8,873,925    19,475,761

Ratio of Cumulative
   Gap to Total
   Earning Assets              (6.30)%       8.33%        18,28%
                         ============  ==========   ===========


<PAGE> 20

Item 3.     Controls and Procedures

      (a)   Evaluation of Disclosure Controls and Procedures

      As a result of the enactment of the Sarbanes-Oxley Act of 2002, issuers
such as TransCommunity that file periodic reports under the Securities Exchange
Act of 1934 (the "Act") are required to include in those reports certain
information concerning the issuer's controls and procedures for complying with
the disclosure requirements of the federal securities laws. These disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports it files or submits under the Act, is accumulated and communicated to
the issuer's management, including its principal executive officer or officers
and principal financial officer or officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosures.

      We have established disclosure controls and procedures to ensure that
material information related to TransCommunity is available to or made known to
our principal executive officers and principal financial officer on a regular
basis, in particular during the periods in which our quarterly and annual
reports are being prepared. As required, we evaluate the effectiveness of these
disclosure controls and procedures on a quarterly basis, and have done so as of
the end of the period covered by this report. Based on this evaluation,
TransCommunity's management, including the Chief Executive Officer and the Chief
Financial Officer, concluded that TransCommunity's disclosure controls and
procedures were operating effectively as designed as of the date of such
evaluation.

      Notwithstanding the foregoing, because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
the Company's disclosure controls and procedures will detect or uncover every
situation involving the failure of persons within the Company and its
consolidated subsidiaries to disclose material information otherwise required to
be set forth in the Company's periodic reports.

      (b)   Changes in Internal Controls

      The Company's management is also responsible for establishing and
maintaining adequate internal controls over financial reporting and control of
its assets to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. During the
quarter ended March 31, 2004, in the course of the audit of the Company's
financial statements for 2003, the Company's independent auditors identified
several deficiencies in the Company's internal control structure at the
Company's subsidiary banks involving the lack of independent review of certain
online computer entries, the need for officer review and approval of all general
ledger debit and credit tickets, and the need for independent review and
comparison of master file changes to source documentation on a daily basis.
During the second quarter, the Company implemented procedures to address each of
these identified concerns. Other than as noted, during TransCommunity's most
recent fiscal quarter, there were no significant changes in TransCommunity's
internal controls pertaining to its financial reporting and control of its
assets or in other factors that could significantly affect these controls.


<PAGE> 21

Part II Other Information

Item 1. Legal Proceedings

      In the ordinary course of operations, TransCommunity and the Banks expect
to be parties to various legal proceedings. At present, there are no pending or
threatened proceedings against TransCommunity or any of the Banks which, if
determined adversely, would have material effect on the business, results of
operations, or financial position of TransCommunity or any of the Banks.

Item 2. Changes in Securities, Use of Proceeds and Small Business Issuer
        Purchases of Equity Securities

      Not applicable.


Item 3. Defaults Upon Senior Securities

      Not applicable.

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

      The following actions were approved at the Annual Meeting of Shareholders
of TransCommunity Financial Corporation held on May 25, 2004, by shareholders of
record at March 31, 2004:

1. Class III Directors elected to serve until the 2007 Annual meeting were:

                                   For              Withheld

        Dean P. Agee            1,202,142            24,370
        Lawrence B, Nuckols     1,221,642             4,870
        John W. Pretlow, Jr.    1,202,642            23,870
        John J. Sponski         1,220,642             5,870
        William C. Wiley        1,220,417             6,095

      Class II Directors continuing to serve until the 2006 Annual Meeting
       include:
         Thomas M. Crowder, Julian C. Metts, Jr., Troy A. Perry, John J.
         Purcell, Jr., and George W. Rimler

      Class I Directors continuing to serve until the 2005 Annual Meeting
       include:
         Richard W. Mayhew, James L. Minter, Stuart C.  Siegel, John C. Watkins,
         and Robin Traywick Williams

2.    The approval of an amendment to TransCommunity's articles of incorporation
      changing the corporate name to "TransCommunity Financial Corporation".

         Voted For         1,307,987
         Voted Against         3,375
         Abstained            10,200
         Broker Non-votes          0

3.    Ratification of the designation of S. B. Hoover & Company, L.L.P. as
      independent public accountants for TranCommunity Financial Corporation for
      the fiscal year ending December 31, 2004.

      Voted For            1,309,137
      Voted Against            2,875
      Abstained                9,550
      Broker Non-votes             0


<PAGE> 22

Item 5.  Other Information

         Not Applicable


Item 6. Exhibits and Reports on 8-K

(a)   Exhibits

     The  following  exhibits  are filed or  incorporated  by reference as part
of this Form 10-QSB

    Exhibit No.  Description of Exhibits

        3.1      Articles of  Incorporation  of  TransCommunity  Financial
                 Corporation  (as amended May 25, 2004) (filed herewith)

        3.2      Bylaws of TransCommunity Financial Corporation (as amended
                 May 25, 2004) (filed herewith)

        10.2(h)  Employment agreement by and between Bank of Louisa, N.A. and
                 George D. Yancey, dated April 19, 2004 (1)

        31.1     Certification of Chief Executive  Officer pursuant to Rule
                 13a-14(a) (filed herewith).

        31.2     Certification of Chief Operating  Officer pursuant to Rule
                 13a-14(a) (filed herewith).

        31.3     Certification of Chief Financial  Officer pursuant to Rule
                 13a-14(a) (filed herewith).

        32       Certifications of Chief Executive Officer, Chief Operating
                 Officer and Chief Financial Officer pursuant to 18 U.S.C.
                 Section 1350, as adopted pursuant to Section 906 of the
                 Sabanes-Oxley Act of 2002 (filed herewith).

        -------------------
(1)        Incorporated by reference to Exhibit 10.2 (h) to Registration
           Statement on Form SB-2 filed with the SEC April 23, 2004 (File No.
           333-114755).


(b)        Reports on Form 8-K

           None.



<PAGE> 23

                                   Signature



     In accordance with the requirements of the Exchange Act, the issuer has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                         TRANSCOMMUNITY FINANCIAL
                                         CORPORATION
                                          (Registrant)


Date: August 12, 2004                 /s/ WILLIAM C. WILEY
                                      ----------------------------------
                                         William C. Wiley
                                         Chairman of the Board and Chief
                                         Executive Officer


Date: August 12, 2004                 /s/ BRUCE B. NOLTE
                                      ----------------------------------
                                         Bruce B. Nolte
                                         President and Chief Operating Officer


Date: August 12, 2004                 /s/ THOMAS M. CROWDER
                                      ----------------------------
                                         Thomas M. Crowder
                                         Chief Financial Officer