**SECURITIES        AND EXCHANGE COMMISSION**

**WASHINGTON,        DC 20549**

**FORM        10-QSB**

**TRANSCOMMUNITY        FINANCIAL**

**CORPORATION**

| Virginia                                           |   | 54-2032355                             |
|----------------------------------------------------|--------|----------------------------------------|
| (State                    or other jurisdiction of |   | (I.R.S.                    Employer    |
| incorporation                    or organization)  |   | Identification                    No.) |

----

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| Class                                        |   | Outstanding                  at August 12, 2005 |
|--------------------------------------------------------|--------|-------------------------------------------------|
| Common                  Stock, par value - $0.01  |   | 4,593,241                  shares               |

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**TRANSCOMMUNITY        FINANCIAL CORPORATION**

|                                                                      |   Page                                                                                 |
|---------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
| PART                  I FINANCIAL                  INFORMATION  |                                                                                             |
|                                                                      |                                                                                             |   |
| Item                    1.                                                | Financial                    Statements (Unaudited)                                              |  2   |
|                                                                      |                                                                                             |   |
|                                                                      | Consolidated                    Balance Sheets –                                           |   |
|                                                                      | June                    30, 2005 and December 31, 2004                                           | 2   |
|                                                                      |                                                                                             |   |
|                                                                      | Consolidated                    Statements of Operations – Three and Six Months Ended |   |
|                                                                      | June                    30, 2005 and 2004                                                        | 3   |
|                                                                      |                                                                                             |   |
|                                                                      | Consolidated                    Statements of Changes in Stockholders' Equity  –      |   |
|                                                                      | Six                    Months Ended June 30, 2005 and 2004                                       | 4   |
|                                                                      |                                                                                             |   |
|                                                                      | Consolidated                    Statements of Cash Flows – Six Months                 |   |
|                                                                      | Ended                    June 30, 2005 and 2004                                                  | 5   |
|                                                                      |                                                                                             |   |
|                                                                      | Notes                    to Consolidated Financial Statements                                    | 6   |
|                                                                      |                                                                                             |   |
| Item                    2.                                                | Management's                    Discussion and Analysis or Plan of Operation                     | 12   |
|                                                                      |                                                                                             |   |
| Item                    3.                                                | Controls                    and Procedures                                                       | 22   |
|                                                                      |                                                                                             |   |
|                                                                      |                                                                                             |   |
| PART                    II OTHER                    INFORMATION      |                                                                                             |
|                                                                      |                                                                                             |   |
| Item                    1.                                                | Legal                    Proceedings                                                             | 24   |
|                                                                      |                                                                                             |   |
| Item                    2.                                                | Unregistered                    Sales of Equity Securities and Use of Proceeds                   | 24   |
|                                                                      |                                                                                             |   |
| Item                    3.                                                | Defaults                    Upon Senior Securities                                               | 24   |
|                                                                      |                                                                                             |   |
| Item                    4.                                                | Submission                    of Matters to a Vote of Security Holders                           | 24   |
|                                                                      |                                                                                             |   |
| Item                    5.                                                | Other                    Information                                                             | 25   |
|                                                                      |                                                                                             |   |
| Item                    6.                                                | Exhibits                                                                                         | 25   |
|                                                                      |                                                                                             |   |
|                                                                      | SIGNATURES                                                                                       | 26   |

----

**Part        I**
**Financial        Information**

**Item        1.**
**Financial        Statements (Unaudited)**

| **TRANSCOMMUNITY                    FINANCIAL CORPORATION**                                                                                                                                                                       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                    BALANCE SHEETS**                                                                                                                                                                                |
| **JUNE                    30, 2005 AND DECEMBER 31, 2004**                                                                                                                                                                        |
|                                                                                                                                                                                                                              |   |   |   |   |   |
|                                                                                                                                                                                                                              |   | June                    30, 2005Unaudited |   | December                    31, 2004 |   |
| **Assets**                                                                                                                                                                                                                        |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |
| Cash                    and due from banks                                                                                                                                                                                        |   | $ | 5,070,054 |   | $ | 3,617,266 |   |
| Federal                    funds sold                                                                                                                                                                                             |   |   | 1,961,000 |   |   | 143,000 |   |
|                                                                                                                                                                                                                              |   |   |  |   |   |  |   |
| Total                    cash and cash equivalents                                                                                                                                                                                |   |   | 7,031,054 |   |   | 3,760,266 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |  |   |
| Securities                    available for sale, at fair value                                                                                                                                                                   |   |   | 6,381,599 |   |   | 17,876,464 |   |
| Securities                    held to maturity                                                                                                                                                                                    |   |   | 25,392,611 |   |   | 9,899,035 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Loans                                                                                                                                                                                                                             |   |   | 110,339,525 |   |   | 104,914,700 |   |
| Allowance                    for loan losses                                                                                                                                                                                      |   |   | (1,576,537 | ) |   | (1,422,078 | ) |
| Total                    loans, net                                                                                                                                                                                               |   |   | 108,762,988 |   |   | 103,492,622 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Premises                    and equipment, net                                                                                                                                                                                    |   |   | 7,102,783 |   |   | 6,142,819 |   |
| Federal                    Reserve bank stock (restricted)                                                                                                                                                                        |   |   | 507,300 |   |   | 507,300 |   |
| Other                    assets                                                                                                                                                                                                   |   |   | 1,769,037 |   |   | 1,369,244 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Total                    assets                                                                                                                                                                                                   |   | $ | 156,947,372 |   | $ | 143,047,750 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| **Liabilities**                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                              |   |   |  |   |   |  |   |
| Deposits:                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| Demand:                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
| Noninterest                    bearing                                                                                                                                                                                            |   | $ | 19,621,317 |   | $ | 15,549,428 |   |
| Interest                    bearing                                                                                                                                                                                               |   |   | 42,017,585 |   |   | 36,603,311 |   |
| Savings                                                                                                                                                                                                                           |   |   | 9,312,285 |   |   | 8,502,482 |   |
| Time                                                                                                                                                                                                                              |   |   | 69,045,025 |   |   | 63,006,695 |   |
|                                                                                                                                                                                                                              |   |   |  |   |   |  |   |
| Total                    deposits                                                                                                                                                                                                 |   |   | 139,996,212 |   |   | 123,661,916 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |  |   |
| Federal                    funds purchased                                                                                                                                                                                        |   |   | 144,000 |   |   | 2,277,000 |   |
| Note                    payable                                                                                                                                                                                                   |   |   | 1,450,000 |   |   | 1,450,000 |   |
| Accrued                    interest payable                                                                                                                                                                                       |   |   | 266,539 |   |   | 205,879 |   |
| Accrued                    expenses and other liabilities                                                                                                                                                                         |   |   | 626,219 |   |   | 514,447 |   |
|                                                                                                                                                                                                                              |   |   |  |   |   |  |   |
| Total                    liabilities                                                                                                                                                                                              |   |   | 142,482,970 |   |   | 128,109,242 |   |
|                                                                                                                                                                                                                              |   |   |  |   |   |  |   |
| **Stockholders'                    Equity**                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Common                    stock (5,000,000 shares authorized $.01 par value) 2,293,241                    and 2,250,508                    shares issued and outstanding at June 30,2005 and December 31,                    2004 |   |   | 22,932 |   |   | 22,505 |   |
| Additional                    paid in capital                                                                                                                                                                                     |   |   | 23,253,521 |   |   | 22,753,004 |   |
| Expenses                    of stock offering                                                                                                                                                                                     |   |   | (81,796 | ) |   | (186,083 | ) |
| Accumulated                    deficit                                                                                                                                                                                            |   |   | (8,682,335 | ) |   | (7,607,270 | ) |
| Accumulated                    other comprehensive income (loss)                                                                                                                                                                  |   |   | (47,920 | ) |   | (43,648 | ) |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Total                    stockholders' equity                                                                                                                                                                                     |   |   | 14,464,402 |   |   | 14,938,508 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Total                    liabilities and stockholders' equity                                                                                                                                                                     |   | $ | 156,947,372 |   | $ | 143,047,750 |   |
|                                                                                                                                                                                                                              |   |   |   |   |   |   |   |

*See        accompanying notes to consolidated financial statements.*

----

| **TRANSCOMMUNITY                    FINANCIAL CORPORATION**                                         |
|-----------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                    STATEMENTS OF OPERATIONS**                                        |
| **FOR                    THE SIX AND THREE MONTHS ENDED JUNE 30, 2005 AND                    2004** |
| **(UNAUDITED)**                                                                                     |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   | Three                    months ended |  | Six                    months ended |
|                                                                                                |   |   |   | June                    30, 2005 |   | June                    30, 2004 |   | June                    30, 2005 |   | June                    30, 2004 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |
| **Interest                    and dividend income**                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Interest                    on loans, including fees                                                |   |   |   |   | $ | 2,167,495 |   | $ | 1,368,902 |   | $ | 4,143,962 |   | $ | 2,610,745 |   |
| Interest                    on federal funds sold                                                   |   |   |   |   |   | 138,344 |   |   | 17,320 |   |   | 193,046 |   |   | 36,957 |   |
| Dividends                    on equity securities                                                   |   |   |   |   |   | 15,219 |   |   | 0 |   |   | 19,719 |   |   | —  |   |
| Interest                    on debt securities                                                      |   |   |   |   |   | 104,236 |   |   | 108,498 |   |   | 221,258 |   |   | 189,180 |   |
|                                                                                                |   |   |   |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                    interest income                                                            |   |   |   |   |   | 2,425,294 |   |   | 1,494,720 |   |   | 4,577,985 |   |   | 2,836,882 |   |
|                                                                                                |   |   |   |   |   |   |   |   |  |   |   |   |   |   |  |   |
| **Interest                    expense**                                                             |   |   |   |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Interest                    on deposits                                                             |   |   |   |   |   | 698,654 |   |   | 384,093 |   |   | 1,299,750 |   |   | 769,698 |   |
| Interest                    on other borrowed funds                                                 |   |   |   |   |   | 34,257 |   |   | 16,121 |   |   | 52,498 |   |   | 33,149 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    interest expense                                                           |   |   |   |   |   | 732,911 |   |   | 400,214 |   |   | 1,352,248 |   |   | 802,847 |   |
|                                                                                                |   |   |   |   |   |  |   |   |  |   |   |  |   |   |  |   |
| **Net                    interest income**                                                          |   |   |   |   |   | 1,692,383 |   |   | 1,094,506 |   |   | 3,225,737 |   |   | 2,034,035 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Provision                    for loan losses**                                                    |   |   |   |   |   | 89,898 |   |   | 118,457 |   |   | 154,459 |   |   | 264,253 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                    interest income after provision for loan losses**                          |   |   |   |   |   | 1,602,485 |   |   | 976,049 |   |   | 3,071,278 |   |   | 1,769,782 |   |
|                                                                                                |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| **Noninterest                    income**                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                    service charges and fees                                                    |   |   |   |   |   | 235,841 |   |   | 400,249 |   |   | 450,650 |   |   | 498,851 |   |
| Commissions                    and fees from loan originations                                      |   |   |   |   |   | 1,100,949 |   |   | 812,716 |   |   | 2,087,244 |   |   | 1,357,505 |   |
|                                                                                                |   |   |   |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                    noninterest income                                                         |   |   |   |   |   | 1,336,790 |   |   | 1,212,965 |   |   | 2,537,894 |   |   | 1,856,356 |   |
|                                                                                                |   |   |   |   |   |   |   |   |  |   |   |   |   |   |  |   |
| **Noninterest                    expense**                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries                    and employee benefits                                                   |   |   |   |   |   | 2,087,922 |   |   | 1,688,693 |   |   | 4,082,033 |   |   | 3,096,779 |   |
| Occupancy                    expenses                                                               |   |   |   |   |   | 206,914 |   |   | 185,803 |   |   | 442,019 |   |   | 327,043 |   |
| Equipment                    expenses                                                               |   |   |   |   |   | 184,008 |   |   | 161,227 |   |   | 339,274 |   |   | 322,811 |   |
| Other                    operating expenses                                                         |   |   |   |   |   | 1,062,229 |   |   | 873,559 |   |   | 1,820,911 |   |   | 1,515,924 |   |
|                                                                                                |   |   |   |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                    noninterest expense                                                        |   |   |   |   |   | 3,541,073 |   |   | 2,909,282 |   |   | 6,684,237 |   |   | 5,262,557 |   |
|                                                                                                |   |   |   |   |   |  |   |   |  |   |   |  |   |   |  |   |
| **Net                    loss**                                                                     |   |   |   |   | $ | (601,798 | ) | $ | (720,268 | ) | $ | (1,075,065 | ) | $ | (1,636,419 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |  |   |   |   |   |   |  |   |
| Net                    loss per share (basic and diluted)                                           |   |   |   |   | $ | (0.26 | ) | $ | (0.35 | ) | $ | (0.47 | ) | $ | (0.79 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |  |   |   |   |   |   |  |   |
| Weighted                    average number of shares outstanding                                    |   |   |   |   |   | 2,293,241 |   |   | 2,072,085 |   |   | 2,285,740 |   |   | 2,069,723 |   |

*See        accompanying notes to consolidated financial statements.*

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| **TRANSCOMMUNITY                    FINANCIAL                    CORPORATION**                                     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                    STATEMENTS OF CHANGES IN STOCKHOLDERS'                    EQUITY**               |
| **FOR                    THE SIX MONTHS END JUNE 30, 2005 AND                    2004**                            |
| **(UNAUDITED)**                                                                                                    |
|                                                                                                                                                                                     |   |   |   |    |   |   |   |    |   |    |   |    |   |    |   |    |   |
|                                                                                                                                                                                     |   | Shares                    of Common Stock |   |  Common                    Stock Subscriptions |   |  Expenses                    of Current Stock Offering |   |  Common                    Stock |   |  Paid                    in Surplus |   |  Accumulated                    Deficit |   |  Accumulated                    Other Comprehensive Income (Loss) |   |  Total |   |
| **Balance,**                                                                                                                                                                             |   |   |   |    |   |    |   |    |   |    |   |    |   |    |   |    |   |
| **December                    31, 2004**                                                                                                                                            |   |   | 2,250,508 |   | $ | — |   | $ | (186,083 | ) | $ | 22,505 |   | $ | 22,753,004 |   | $ | (7,607,270 | ) | $ | (43,648 | ) | $ | 14,938,508 |   |
|                                                                                                                                                                                     |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |   |   |   |   |   |
| Net                    loss                                                                                                                                                              |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | (1,075,065 | ) |   | — |   |   | (1,075,065 | ) |
| Unrealized                    loss on securities available for sale                                                                                                                 |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | (4,272 | ) |   | (4,272 | ) |
| Total                    comprehensive loss                                                                                                                                         |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | (1,079,337 | ) |
| Subscriptions                    received                                                                                                                                                |   |   | — |   |   | 640,495 |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 640,495 |   |
| Common                    stock issued                                                                                                                                                   |   |   | 42,733 |   |   | (640,495 | ) |   | — |   |   | 427 |   |   | 640,068 |   |   | — |   |   | — |   |   | — |   |
| Expenses                    of stock offering                                                                                                                                            |   |   | — |   |   | — |   |   | (82,730 | ) |   | — |   |   | — |   |   | — |   |   | — |   |   | (82,730 | ) |
| Transfer                    of stock offering expenses                                                                                                                                   |   |   | — |   |   | — |   |   | 187,017 |   |   | — |   |   | (187,017 | ) |   | — |   |   | — |   |   | — |   |
| Deferred                    compensation expense                                                                                                                                         |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 47,466 |   |   | — |   |   | — |   |   | 47,466 |   |
| **Balance,**                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **June                    30, 2005**                                                                                                                                                |   |   | 2,293,241 |   | $ | — |   | $ | (81,796 | ) | $  | 22,932 |   | $ | 23,253,521 |   | $ | (8,682,335 | ) | $ | (47,920 | ) | $ | 14,464,402 |   |
|                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **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 |   |   | — |   |   | — |   |   | — |   |
| Deferred                    compensation 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 |   |

*See        accompanying notes to consolidated financial statements.*

----

| **TRANSCOMMUNITY                    FINANCIAL CORPORATION**                                                                     |
|---------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                    STATEMENTS OF CASH FLOWS**                                                                    |
| **FOR                    THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004**                                                          |
| **(UNAUDITED)**                                                                                                                 |
|                                                                                                                            |   |   |   |   |   |
|                                                                                                                            |   | Six                    months ended |   |
|                                                                                                                            |   | June                    30, 2005 |   | June                    30, 2004 |   |
|                                                                                                                            |   |   |   |   |   |
| **Operating                    activities:**                                                                                    |   |   |   |   |   |
| Net                    loss                                                                                                     |   | $ | (1,075,065 | ) | $ | (1,636,419 | ) |
| Adjustments                    to reconcile net loss to net cash provided by (used in) operating                    activities: |   |   |  |   |   |  |   |
| Provision                    for loan losses                                                                                    |   |   | 154,459 |   |   | 264,253 |   |
| Accretion                    income                                                                                             |   |   | (2,983 | ) |   | (27,103 | ) |
| Depreciation                                                                                                                    |   |   | 256,861 |   |   | 202,958 |   |
| Loss                    (gain) on disposition of property                                                                       |   |   | 2,064 |   |   | (967 | ) |
| Deferred                    compensation expense                                                                                |   |   | 47,466 |   |   | 47,464 |   |
| Net                    change in:                                                                                               |   |   |  |   |   |   |   |
| Other                    assets                                                                                                 |   |   | (399,793 | ) |   | (538,093 | ) |
| Interest                    payable                                                                                             |   |   | 60,660 |   |   | 3,488 |   |
| Accrued                    expenses and other liabilities                                                                       |   |   | 111,772 |   |   | 99,686 |   |
|                                                                                                                            |   |   |  |   |   |  |   |
| Net                    cash used in operating activities                                                                        |   |   | (844,559 | ) |   | (1,584,733 | ) |
|                                                                                                                            |   |   |   |   |   |  |   |
| **Investing                    activities:**                                                                                    |   |   |  |   |   |  |   |
| Purchase                    of securities held to maturity                                                                      |   |   | (37,500,000 | ) |   | (16,919,321 | ) |
| Purchase                    of securities available for sale                                                                    |   |   | —  |   |   | (6,999,383 | ) |
| Proceeds                    from maturities of securities held to maturity                                                      |   |   | 22,000,000 |   |   | 16,599,250 |   |
| Proceeds                    from maturities of securities available for sale                                                    |   |   | 11,500,000 |   |   | 1,519,928 |   |
| Purchase                    of Federal Reserve bank stock                                                                       |   |   | — |   |   | (150,000 | ) |
| Net                    change in loans                                                                                          |   |   | (5,424,825 | ) |   | (14,876,197 | ) |
| Proceeds                    from the sale of property                                                                           |   |   | — |   |   | 2,500 |   |
| Payments                    for the Purchase of premises and equipment                                                          |   |   | (1,218,889 | ) |   | (223,410 | ) |
|                                                                                                                            |   |   |   |   |   |   |   |
| Net                    cash used in investing activities                                                                        |   |   | (10,643,714 | ) |   | (21,046,633 | ) |
|                                                                                                                            |   |   |  |   |   |  |   |
| **Financing                    activities:**                                                                                    |   |   |  |   |   |  |   |
| Net                    change in federal funds purchased                                                                        |   |   | (2,133,000 | ) |   | 4,535,000 |   |
| Proceeds                    from sale of common stock                                                                           |   |   | 640,495 |   |   | 409,200 |   |
| Costs                    associated with stock offering                                                                         |   |   | (82,730 | ) |   | — |   |
| Proceeds                    from other short term borrowings                                                                    |   |   | — |   |   | 352,000 |   |
| Curtailment                    of debt                                                                                          |   |   | — |   |   | (198,000 | ) |
| Net                    change in:                                                                                               |   |   |  |   |   |   |   |
| Demand                    deposits                                                                                              |   |   | 9,486,163 |   |   | 14,312,977 |   |
| Savings                    deposits                                                                                             |   |   | 809,803 |   |   | 1,828,203 |   |
| Time                    deposits                                                                                                |   |   | 6,038,330 |   |   | 1,011,793 |   |
|                                                                                                                            |   |   |   |   |   |   |   |
| Net                    cash provided by financing activities                                                                    |   |   | 14,759,061 |   |   | 22,251,173 |   |
|                                                                                                                            |   |   |   |   |   |   |   |
| **Net                    increase (decrease) in cash and cash equivalents**                                                     |   |   | 3,270,788 |   |   | (380,193 | ) |
|                                                                                                                            |   |   |   |   |   |   |   |
| **Cash                    and cash equivalents:**                                                                               |   |   |   |   |   |   |   |
| Beginning                    of the period                                                                                      |   |   | 3,760,266 |   |   | 8,099,777 |   |
|                                                                                                                            |   |   |   |   |   |   |   |
| End                    of the period                                                                                            |   | $ | 7,031,054 |   | $ | 7,719,584 |   |
|                                                                                                                            |   |   |   |   |   |  |   |
| Supplemental                    disclosures of cash flow information:                                                           |   |   |  |   |   |   |   |
| Interest                    paid                                                                                                |   | $ | 1,291,588 |   | $ | 799,359 |   |

*See        accompanying notes to consolidated financial statements.*

----

**TRANSCOMMUNITY        FINANCIAL CORPORATION**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE        1**
**ACCOUNTING        PRINCIPLES:**

**Consolidation        Policy**

**NOTE        2**
**INVESTMENT        SECURITIES:**

**Securities        Available for Sale**

**June        30, 2005**

|                                   |   |      |      | Gross      |   | Gross      |   |   |    |
|----------------------------------------|--------|-----------|-----------|------------|--------|------------|--------|--------|---------|
|                                   |   | Amortized |      | Unrealized |   | Unrealized |   | Fair   |    |
|                                   |   | Cost      |      | Gains      |   | Losses     |   | Value  |    |
|                                   |   |      |      |       |   |       |   |   |    |
| U.S.                      Agency notes |   | $         | 6,429,519 |       | $      | —    |   | $      | (47,920 | ) | $ | 6,381,599 |   |

**Securities              Held to Maturity**

** June            30,            2005**

|                                                   |   |                  |       |             |  Gross |             |  Gross  |        |    |   |   |
|--------------------------------------------------------|--------|-----------------------|------------|------------------|-------------|------------------|-------------------|-------------|---------|--------|--------|
|                                                   |   |  Amortized  |       |  Unrealized |        |  Unrealized |              |  Fair  |    |
|                                                   |   |  Cost       |       |  Gains      |        |  Losses     |              |  Value |    |
|                                                   |   |                  |       |             |        |             |              |        |    |   |   |   |   |
| U.S.                      Agency discount notes        |   | $                     | 12,496,333 |             | $           | —          |              | $           | (1,833  | )      | $      | 12,494,500 |   |
| U.S.                      Agency notes                 |   |                  | 12,896,278 |             |        | —          |              |        | (49,474 | )      |   | 12,846,804 |   |
|                                                   |   |                  |       |             |        |             |              |        |    |   |   |   |   |
| Total                      Securities Held to Maturity |   | $                     | 25,392,611 |             | $           | —          |              | $           | (51,307 | )      | $      | 25,341,304 |   |

----

**TRANSCOMMUNITY        FINANCIAL CORPORATION**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE        2**
**INVESTMENT        SECURITIES (CONTINUED):**

**Securities        Available for Sale**

**December        31, 2004**

|                                                   |   |      |       | Gross      |   | Gross      |   |   |    |
|--------------------------------------------------------|--------|-----------|------------|------------|--------|------------|--------|--------|---------|
|                                                   |   | Amortized |       | Unrealized |   | Unrealized |   | Fair   |    |
|                                                   |   | Cost      |       | Gains      |   | Losses     |   | Value  |    |
| U.S.                    Agency discount notes          |   | $         | 9,490,176  |       | $      | —    |   | $      | (6,927  | )  | $ | 9,483,249 |   |
| U.S.                    Agency notes                   |   |      | 8,430,130  |       |   | —    |   |   | (36,915 | ) |   | 8,393,215 |   |
|                                                   |   |      |       |       |   |       |   |   |    |   |   |   |   |
| Total                    Securities Available for Sale |   | $         | 17,920,306 |       | $      | —    |   | $      | (43,842 | ) | $ | 17,876,464 |   |

**Securities        Held to Maturity**

**December        31, 2004**

|                                                 |   |      |      | Gross      |   | Gross      |   |   |    |
|------------------------------------------------------|--------|-----------|-----------|------------|--------|------------|--------|--------|---------|
|                                                 |   | Amortized |      | Unrealized |   | Unrealized |   | Fair   |    |
|                                                 |   | Cost      |      | Gains      |   | Losses     |   | Value  |    |
| U.S.                    Agency discount notes        |   | $         | 4,999,158 |       | $      | 355        |   | $      | (1,124  | ) | $ | 4,998,389 |   |
| U.S.                    Agency notes                 |   |      | 4,899,877 |       |   | 1,875      |   |   | (31,158 | ) |   | 4,870,594 |   |
|                                                 |   |      |      |       |   |       |   |   |    |   |   |   |   |
| Total                    Securities Held to Maturity |   | $         | 9,899,035 |       | $      | 2,230      |   | $      | (32,282 | ) | $ | 9,868,983 |   |

|                                          |   |  (In                    Thousands) |       |
|-----------------------------------------------|--------|-----------------------------------------|------------|
|                                          |   | Less                    than 12 months  |       | 12                    months or more |   | Total |   |
| **June                    30, 2005**          |   | Fair                    Value           |       | Unrealized                    Loss |   | Fair                    Value |   | Unrealized                    Loss |   | Fair                    Value |   | Unrealized                    Loss |   |
| Description                    of securities: |   |                                    |       |   |   |   |   |   |   |   |   |   |   |
| US                    Agency notes            |   | $                                       | 30,222,901 |   | $ | 99,227 |   | $ | — |   | $ | — |   | $ | 30,222,901 |   | $ | 99,227 |   |
|                                          |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                         |   | $                                       | 30,222,901 |   | $ | 99,227 |   | $ | — |   | $ | — |   | $ | 30,222,901 |   | $ | 99,227 |   |

----

**TRANSCOMMUNITY        FINANCIAL CORPORATION**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE        3**
**STOCK        OPTION PLAN:**

|                                                                            |   | For                      the Six Months Ended  |                           |
|---------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------------------------------|
|                                                                            |   | June                      30                   |                           |
|                                                                            |   | 2005                                           |                           |  2004  |   |
| Outstanding                      at beginning of the year                       |   | 317,375                                             |                           | 318,675 |   |
| Granted                                                                         |   |                                                |                           |   |   |   |   |
| Exercised                                                                       |   |                                                | (100                           | ) |   | — |   |
| Terminated                                                                      |   |                                                | —                        |   |   | (1,300 | ) |
|                                                                            |
| Outstanding                      at June 30                                     |   |                                                | 317,275                        |   |   | 317,375 |   |
|                                                                            |
| Options                      exercisable at June 30                             |   |                                                | 243,153                        |   |   | 127,892 |   |
|                                                                            |
| Exercise                      Price                                             |   |  $                                             | 10.00                          |   | $ | 10.00 |   |
| Weighted                      average remaining contracted life                 |   |                                                |                           |   |   |   |   |
|        at                      June 30, 2005 |   |                                                | 90                      Months |   |   |  |   |

----

**TRANSCOMMUNITY        FINANCIAL CORPORATION**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE        3**
**STOCK        OPTION PLAN (CONTINUED):**

|                                                                                        |   | Three                    Months Ended  |     |  Six                    Months Ended  |   |
|---------------------------------------------------------------------------------------------|--------|---------------------------------------------|----------|-------------------------------------------------|--------|
|                                                                                        |   | June                    30             |     | June                    30                 |   |
|                                                                                        |   | 2005                                   |     | 2004                                       |   | 2005  |   |  2004  |   |
| Net                    loss, as reported                                                    |   | $                                           | (601,798 | )                                               | $      | (720,268 | ) | $ | (1,075,065 | ) | $ | (1,636,419 | ) |
| Deduct:                    Total stock-based                                                |   |                                        |     |                                            |   |   |   |   |   |   |   |   |   |
|         employee                    compensation    |   |                                        |     |                                            |   |   |   |   |   |   |   |   |   |
|         expense                    determined under |   |                                        |     |                                            |   |   |   |   |   |   |   |   |   |
|         fair                    value based method  |   |                                        | (36,066  | )                                               |   | (64,617 | ) |   | (72,131 | ) |   | (183,483 | ) |
|                                                                                        |   |                                        |     |                                            |   |   |   |   |   |   |   |   |   |
| Pro                    Forma Net Loss                                                       |   | $                                           | (637,864 | )                                               | $      | (784,885 | ) | $ | (1,147,196 | ) | $ | (1,819,902 | ) |
| Loss                    per Share:                                                          |   |                                        |     |                                            |   |   |   |   |   |   |   |   |   |
|         Basic                    - as reported      |   | $                                           | (.26     | )                                               | $      | (.35 | ) | $ | (.47 | ) | $ | (.79 | ) |
|         Basic                    - pro forma        |   | $                                           | (.28     | )                                               | $      | (.38 | ) | $ | (.50 | ) | $ | (.88 | ) |

**NOTE        4**
**LOSS        PER SHARE:**

**NOTE        5**
**BUSINESS        SEGMENTS:**

----

**TRANSCOMMUNITY        FINANCIAL CORPORATION**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE        5**
**BUSINESS        SEGMENTS (CONTINUED):**

|                                                      |   |  Three                      Months Ended June 30, 2005 |    |
|-----------------------------------------------------------|--------|-------------------------------------------------------------|---------|
|                                                      |   |  (In                      Thousands)                   |    |
|                                                      |   | Banks                                                       |    | Main                      Street |   | Financial                      Services |   | Trans-Community |   | Elimi-nations |   | Consolidated |   |
| Net                      interest income                  |   | $                                                           | 1,730   |   | $ | (10 | ) | $ | — |   | $ | (28 | ) | $ | — |   | $ | 1,692 |   |
| Provision                      for loan losses            |   |                                                        | (58     | ) |   | (32 | ) |   | — |   |   | — |   |   | — |   |   | (90 | ) |
| Noninterest                      income                   |   |                                                        | 183     |   |   | 1,101 |   |   | 91 |   |   | 65 |   |   | (102 | ) |   | 1,338 |   |
| Noninterest                      expense                  |   |                                                        | (1,514  | ) |   | (1,037 | ) |   | (197 | ) |   | (895 | ) |   | 102 |   |   | (3,541 | ) |
| Income                      (Loss) from from subsidiaries |   |                                                        | 22      |   |   | — |   |   | — |   |   | 257 |   |   | (279 | ) |   | — |   |
| Net                      Income (Loss)                    |   | $                                                           | 363     |   | $ | 22 |   | $ | (106 | ) | $  | (601 | ) | $ | (279 | ) | $ | (601 | ) |
|                                                      |   |                                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                      Assets                         |   | $                                                           | 156,804 |   | $ | 1,430 |   | $ | 18 |   | $ | 16,236 |   | $ | (17,541 | ) | $ | 156,947 |   |

|                                                    |   |  Three                    Months Ended June 30, 2004 |    |
|---------------------------------------------------------|--------|-----------------------------------------------------------|---------|
|                                                    |   |  (In                    Thousands)                   |    |
|                                                    |   | Banks                                                     |    | Main                    Street |   | Financial                    Services |   | Trans-Community |   | Elimi-nations |   | Consolidated |   |
| Net                    interest income                  |   | $                                                         | 1,114   |   | $ | (10 | ) | $ | — |   | $ | (10 | ) | $ | — |   | $ | 1,094 |   |
| Provision                    for loan losses            |   |                                                      | (118    | ) |   | — |   |   | — |   |   | — |   |   | — |   |   | (118 | ) |
| Noninterest                    income                   |   |                                                      | 401     |   |   | 813 |   |   | — |   |   | 299 |   |   | (299 | ) |   | 1,214 |   |
| Noninterest                    expense                  |   |                                                      | (1,690  | ) |   | (761 | ) |   | — |   |   | (758 | ) |   | 299 |   |   | (2,910 | ) |
| Income                    (Loss) from from subsidiaries |   |                                                      | 42      |   |   | — |   |   | — |   |   | (251 | ) |   | 209 |   |   | — |   |
| Net                    Income (Loss)                    |   | $                                                         | (251    | ) | $ | 42 |   | $ | — |   | $ | (720 | ) | $ | 209 |   | $ | (720 | ) |
|                                                    |   |                                                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    Assets                         |   | $                                                         | 120,352 |   | $ | 1,430 |   | $ | — |   | $ | 15,350 |   | $ | (16,395 | ) | $ | 120,686 |   |

|                                                  |   |  Six                  Months Ended June 30, 2005 |    |
|-------------------------------------------------------|--------|-------------------------------------------------------|---------|
|                                                  |   |  (In                  Thousands)                 |    |
|                                                  |   | Banks                                                 |    | Main                  Street |   | Financial                  Services |   | Trans-Community |   | Elimi-nations |   | Consolidated |   |
| Net                  interest income                  |   | $                                                     | 3,287   |   | $ | (21 | ) | $ | — |   | $ | (40 | ) | $ | — |   | $ | 3,226 |   |
| Provision                  for loan losses            |   |                                                  | (107    | ) |   | (47 | ) |   | — |   |   | — |   |   | — |   |   | (154 | ) |
| Noninterest                  income                   |   |                                                  | 354     |   |   | 2,087 |   |   | 178 |   |   | 149 |   |   | (229 | ) |   | 2,539 |   |
| Noninterest                  expense                  |   |                                                  | (2,839  | ) |   | (1,982 | ) |   | (414 | ) |   | (1,680 | ) |   | 229 |   |   | (6,686 | ) |
| Income                  (Loss) from from subsidiaries |   |                                                  | 37      |   |   | — |   |   | — |   |   | 496 |   |   | (533 | ) |   | — |   |
| Net                  Income (Loss)                    |   | $                                                     | 732     |   | $ | 37 |   | $ | (236 | ) | $ | (1,075 | ) | $ | (533 | ) | $ | (1,075 | ) |
|                                                  |   |                                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Assets                         |   | $                                                     | 156,804 |   | $ | 1,430 |   | $ | 18 |   | $ | 16,236 |   | $ | (17,541 | ) | $ | 156,947 |   |

----

**TRANSCOMMUNITY        FINANCIAL CORPORATION**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE        5**
**BUSINESS        SEGMENTS (CONTINUED):**

|                                                    |   |  Six                    Months Ended June 30, 2004 |    |
|---------------------------------------------------------|--------|---------------------------------------------------------|---------|
|                                                    |   |  (In                    Thousands)                 |    |
|                                                    |   | Banks                                                   |    | Main                    Street |   | Financial                    Services |   | Trans-Community |   | Elimi-nations |   | Consolidated |   |
| Net                    interest income                  |   | $                                                       | 2,066   |   | $ | (18 | ) | $ | — |   | $ | (14 | ) | $ | — |   | $ | 2,034 |   |
| Provision                    for loan losses            |   |                                                    | (264    | ) |   | — |   |   | — |   |   | — |   |   | — |   |   | (264 | ) |
| Noninterest                    income                   |   |                                                    | 494     |   |   | 1,357 |   |   | — |   |   | 304 |   |   | (299 | ) |   | 1,856 |   |
| Noninterest                    expense                  |   |                                                    | (2,765  | ) |   | (1,410 | ) |   | — |   |   | (1,386 | ) |   | 299 |   |   | (5,262 | ) |
| Income                    (Loss) from from subsidiaries |   |                                                    | (71     | ) |   | — |   |   | — |   |   | (541 | ) |   | 612 |   |   | — |   |
| Net                    Income (Loss)                    |   | $                                                       | (540    | ) | $ | (71 | ) | $ | — |   | $ | (1,637 | ) | $ | 612 |   | $ | (1,636 | ) |
|                                                    |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                    Assets                         |   | $                                                       | 120,352 |   | $ | 1,379 |   | $ | — |   | $ | 15,350 |   | $ | (16,395 | ) | $ | 120,686 |   |

**NOTE        6**
**SUBSEQUENT        EVENTS:**

----

**Item        2.**
**Management's        Discussion and Analysis or Plan of Operation**

** **
**Forward        Looking Statements**

| ·   | General                  economic conditions, either nationally or within the Company's                  markets,                  could be less favorable than                  expected; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Changes                  in market interest rates could affect interest margins and                  profitability; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | Competitive                  pressures could be greater than anticipated;                  and |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   | Legal                  or accounting changes could affect the Company's                  results. |
|--------------------|---------------------------------------------------------------------------------------------------|

**Critical        Accounting Policies**

**Overview**

----

**Consolidated        Results**
*** ***

**Business        Segment Results**

***Banks***

----

***Main        Street Mortgage***

----

***Financial        Services***

**Net        Interest Margin**

**Provision        for Loan Losses**

----

**Noninterest        Income**

** **

**Noninterest        Expense**

**Income        Taxes**

----

**Loans**

|                                                           |   |  June                        30, |        |  December                        31, |   |
|----------------------------------------------------------------|--------|---------------------------------------|-------------|-------------------------------------------|--------|
|                                                           |   |  2005                            |        |  2004                                |   |
| Real                        estate:                            |   |                                  |        |                                      |   |   |   |
| Construction                                                   |   | $                                     | 17,084,051  |                                      | $      | 17,472,345 |   |
| Residential                                                    |   |                                  | 23,665,263  |                                      |   | 21,721,425 |   |
| Commercial                                                     |   |                                  | 42,213,829  |                                      |   | 41,481,954 |   |
| Commercial,                        industrial and agricultural |   |                                  | 19,328,035  |                                      |   | 17,424,992 |   |
| Consumer                        and Installment                |   |                                  | 7,296,754   |                                      |   | 6,616,012 |   |
| All                        other                               |   |                                  | 751,593     |                                      |   | 197,972 |   |
|                                                           |   |                                  |        |                                      |   |   |   |
| Total                        Loans                             |   | $                                     | 110,339,525 |                                      | $      | 104,914,700 |   |

**Nonaccrual,        Past Due and Restructured Loans**

**Allocation        for the Allowance for Loan Losses**

|                                              |   | June                    30, 2005  |      |  December                    31, 2004  |   |
|---------------------------------------------------|--------|----------------------------------------|-----------|--------------------------------------------------|--------|
|                                              |   |                                   |      | 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  |   |
|                                              |   |                                   |      |                                             |   |   |   |   |   |
| Real                  Estate:                     |   |                                   |      |                                             |   |   |   |   |   |
| Construction                                      |   | $                                      | 236,481   |                                             |   | 15 | % | $ | 241,753 |   |   | 17 | % |
| Residential                                       |   |                                   | 331,073   |                                             |   | 21 | % |   | 298,636 |   |   | 21 | % |
| Commercial                                        |   |                                   | 599,084   |                                             |   | 38 | % |   | 568,831 |   |   | 40 | % |
| Commercial,                    industrial and     |   |                                   |      |                                             |   |   |   |   |   |   |   |   |   |
| agricultural                                      |   |                                   | 283,777   |                                             |   | 18 | % |   | 227,532 |   |   | 16 | % |
| Consumer                                          |   |                                   | 110,358   |                                             |   | 7 | % |   | 71,104 |   |   | 5 | % |
| All                    other                      |   |                                   | 15,764    |                                             |   | 1 | % |   | 14,222 |   |   | 1 | % |
|                                              |
| Total                    Allowance for            |   |                                   |      |                                             |   |   |   |   |   |   |   |   |   |
| Loan                    Losses                    |   | $                                      | 1,576,537 |                                             |   | 100 | % | $ | 1,422,078 |   |   | 100 | % |

----

**Deposits**

**Capital**

**Liquidity        and Interest Sensitivity**

----

**Future        Prospects**

----

| **TRANSCOMMUNITY                      FINANCIAL                      CORPORATION**                  |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|
| **NET                      INTEREST MARGIN                      ANALYSIS**                          |   |
| **AVERAGE                      BALANCE                      SHEETS**                                |   |
| **FOR                      THE SIX MONTHS ENDED JUNE 30, 2005 AND                      2004**       |   |
|                                                                                                                              |   |   |   |    |   |   |   |    |   |    |   |   |   |
|                                                                                                                              |   |   2005 |   |    2004 |   |
|                                                                                                                              |   | Average |   |  Interest |   | Average |   |  Average |   |  Interest |   | Average |   |
|                                                                                                                              |   | Balance |   |  Income/ |   | Rates |   |  Balance |   |  Income/ |   | Rates |   |
|                                                                                                                              |   | Sheet |   |  Expense |   | Earned/Paid |   |  Sheet |   |  Expense |   | Earned/Paid |   |
| **ASSETS:**                                                                                                                       |   |   |   |    |   |   |   |    |   |    |   |   |   |
|                                                                                                                              |   |   |   |    |   |   |   |    |   |    |   |   |   |
| Loans,                      including fees                                                                                        |   | $ | 106,594,833 |   | $ | 4,143,962 |   |   | 7.78 | % | $ | 74,243,011 |   | $ | 2,610,745 |   |   | 7.03 | % |
| Federal                      funds sold                                                                                           |   |   | 14,182,862 |   |   | 193,046 |   |   | 2.72 |   |   | 8,243,472 |   |   | 36,957 |   |   | 0.90 |   |
| Investments                                                                                                                       |   |   | 16,307,730 |   |   | 240,977 |   |   | 2.96 |   |   | 19,782,913 |   |   | 189,180 |   |   | 1.91 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                      Earning Assets                                                                                         |   |   | 137,085,425 |   |   | 4,577,985 |   |   | 6.68 |   |   | 102,269,396 |   |   | 2,836,882 |   |   | 5.55 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance                      for loan losses                                                                                    |   |   | (1,479,901 | ) |   |   |   |   |   |   |   | (980,954 | ) |   |   |   |   |   |   |
| Non-earning                      assets                                                                                           |   |   | 11,116,741 |   |   |   |   |   |   |   |   | 11,893,180 |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                      Assets                                                                                                 |   | $ | 146,722,265 |   |   |   |   |   |   |   | $ | 113,181,622 |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITIES                      AND STOCKHOLDERS' EQUITY**                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand                      -                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest                      bearing                                                                                       |   | $ | 35,692,783 |   | $ | 188,039 |   |   | 1.05 | % | $ | 21,186,193 |   | $ | 100,689 |   |   | 0.95 | % |
| Savings                                                                                                                           |   |   | 8,847,916 |   |   | 49,452 |   |   | 1.12 |   |   | 6,747,734 |   |   | 33,141 |   |   | 0.98 |   |
| Time                      deposits                                                                                                |   |   | 66,812,135 |   |   | 1,062,259 |   |   | 3.18 |   |   | 49,889,975 |   |   | 635,868 |   |   | 2.55 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                      deposits                                                                                               |   |   | 111,352,834 |   |   | 1,299,750 |   |   | 2.33 |   |   | 77,823,902 |   |   | 769,698 |   |   | 1.98 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                      borrowed                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Funds                                                                                                                       |   |   | 3,330,901 |   |   | 52,498 |   |   | 3.15 |   |   | 3,465,945 |   |   | 33,149 |   |   | 1.91 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                      interest-bearing                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Liabilities                                                                                                                 |   |   | 114,683,735 |   |   | 1,352,248 |   |   | 2.36 |   |   | 81,289,847 |   |   | 802,847 |   |   | 1.98 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                      bearing                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Deposits                                                                                                                    |   |   | 17,681,356 |   |   |   |   |   |   |   |   | 15,311,441 |   |   |   |   |   |   |   |
| Other                      liabilities                                                                                            |   |   | 910,690 |   |   |   |   |   |   |   |   | 726,315 |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                      liabilities                                                                                       |   |   | 133,275,781 |   |   |   |   |   |   |   |   | 97,327,603 |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders'                      equity                                                                                         |   |   | 13,446,484 |   |   |   |   |   |   |   |   | 15,854,019 |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                      liabilities and                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  stockholders'                      equity                                                                                   |   | $ | 146,722,265 |   |   |   |   |   |   |   | $ | 113,181,622 |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                      interest earnings                                                                                        |   |   |   |   | $ | 3,225,737 |   |   |   |   |   |   |   | $ | 2,034,035 |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net                      Interest Margin                                                                                    |   |   |   |   |   |   |   |   | 4.71 | % |   |   |   |   |   |   |   | 3.98 | % |
|                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Interest                      Spread                                                                                        |   |   |   |   |   |   |   |   | 4.32 | % |   |   |   |   |   |   |   | 3.57 | % |

----

| **TRANSCOMMUNITY                          FINANCIAL CORPORATION, INC**. |   |
|-------------------------------------------------------------------------|--------|
| **INTEREST                          SENSITIVITY ANALYSIS**              |   |
| **JUNE                          30, 2005**                              |   |
|                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                    |   | 1                          -                          365 |   | 1                          to 5 |   | Over                          5 |   |   |   |
|                                                                    |   | Days |   | Years |   | Years |   | Total |   |
| Uses                          of Funds:                                 |   |   |   |   |   |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |
| Loans:                                                                  |   |   |   |   |   |   |   |   |   |
| Real                          estate                                    |   |   |   |   |   |   |   |   |   |
| Construction                                                       |   |   | 15,777,876 |   |   | 1,306,175 |   |   | — |   |   | 17,084,051 |   |
| Residential                                                        |   |   | 16,317,446 |   |   | 5,710,888 |   |   | 1,636,929 |   |   | 23,665,263 |   |
| Commercial                                                              |   |   | 22,083,968 |   |   | 16,750,902 |   |   | 3,378,959 |   |   | 42,213,829 |   |
| Commercial,                          industrial and agricultural        |   |   | 11,664,443 |   |   | 7,473,419 |   |   | 190,173 |   |   | 19,328,035 |   |
| Consumer                          and Installment                       |   |   | 4,575,515 |   |   | 2,494,157 |   |   | 227,082 |   |   | 7,296,754 |   |
| All                          other                                      |   |   | 743,141 |   |   | 8,452 |   |   | — |   |   | 751,593 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                          Loans                                    |   |   | 71,162,389 |   |   | 33,743,993 |   |   | 5,433,143 |   |   | 110,339,525 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                          funds sold                             |   |   | 1,961,000 |   |   | — |   |   | — |   |   | 1,961,000 |   |
| Investment                          securities at cost                  |   |   | 18,992,719 |   |   | 5,399,892 |   |   | 1,000,000 |   |   | 25,392,611 |   |
| Investment                          securities at fair value            |   |   | 2,991,251 |   |   | 3,390,348 |   |   | — |   |   | 6,381,599 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                   |   |   | 95,107,359 |   |   | 42,534,234 |   |   | 6,433,143 |   |   | 144,074,736 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sources                          of Funds:                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand                          Deposits                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                          bearing                               |   |   | 42,017,585 |   |   | — |   |   | — |   |   | 42,017,585 |   |
| Savings                          accounts                               |   |   | 9,312,285 |   |   | — |   |   | — |   |   | 9,312,285 |   |
| Time                          Deposits > $100,000                    |   |   | 10,449,059 |   |   | 15,305,831 |   |   | — |   |   | 25,754,890 |   |
| Time                          Deposits < $100,000                    |   |   | 19,596,703 |   |   | 23,693,432 |   |   | — |   |   | 43,290,135 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                          deposits                                 |   |   | 81,375,632 |   |   | 38,999,263 |   |   | — |   |   | 120,374,895 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                          funds purchased                        |   |   | 144,000 |   |   | — |   |   | — |   |   | 144,000 |   |
| Borrowings                                                              |   |   | 1,450,000 |   |   | — |   |   | — |   |   | 1,450,000 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                   |   |   | 82,969,632 |   |   | 38,999,263 |   |   | — |   |   | 121,968,895 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discrete                          Gap                                   |   |   | 12,137,727 |   |   | 3,534,971 |   |   | 6,433,143 |   |   | 22,105,841 |   |
| Cumulative                          Gap                                 |   |   | 12,137,727 |   |   | 15,672,698 |   |   | 22,105,841 |   |   |   |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio                          of Cumulative Gap                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to                          Total Earning Assets                        |   |   | 8.42 | % |   | 10.88 | % |   | 15.34 | % |   |   |   |

----

**Item        3. **
**Controls        and Procedures**

----

----

**Part        II**
**Other        Information**

**Item        1.**
**Legal        Proceedings**

**Item        2.**
**Unregistered        Sales of Equity Securities and Use of Proceeds**

**Item        3.**
**Defaults        Upon Senior Securities**

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

|                                       | For   |   |  Withheld  |
|--------------------------------------------|-----------------|--------|----------------------|
| Richard                    W. Mayhew       | 1,364,566       |   | 130,809              |
| James                    L. Minter         | 1,339,645       |   | 155,730              |
| Stuart                    C. Siegel        | 1,394,395       |   | 100,980              |
| John                    C. Watkins         | 1,374,739       |   | 120,636              |
| Robin                    Traywick Williams | 1,376,129       |   | 119,246              |

| Voted                    For:       |   | 1,166,371 |
|-------------------------------------|--------|-----------|
| Voted                    Against:   |   | 183,015   |
| Abstained:                          |   | 16,650    |
| Broker                    Non-Vote: |   | 0         |

| Voted                    For:       |   | 1,361,445 |
|-------------------------------------|--------|-----------|
| Voted                    Against:   |   | 124,630   |
| Abstained:                          |   | 9,300     |
| Broker                    Non-Vote: |   | 0         |

----

**Item        5.**
**Other        Information **

**Item        6.**
**Exhibits        **

|  Exhibit                  No. |   |  Description                  of Exhibits                                                                                                                                                                                                                                                                                             |
|------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |   |                                                                                                                                                                                                                                                                                                                                       |
| 3.1                                |   | Articles                    of Incorporation of TransCommunity (as amended May 31, 2005)                    (1)                                                                                                                                                                                                                            |
|                               |   |                                                                                                                                                                                                                                                                                                                                       |
| 3.2                                |   | Bylaws                    of TransCommunity (as amended May 25, 2004) (2)                                                                                                                                                                                                                                                                  |
|                               |   |                                                                                                                                                                                                                                                                                                                                       |
| 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 3.1 to the Company's Registration Statement                  on                  Form SB-2 (No. 333-125560) filed with the Securities and Exchange                  Commission on June 6, 2005. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Incorporated                  by reference to Exhibit 3.2 to the Company's Quarterly Report on                  Form                  10-QSB filed with the Securities and Exchange Commission on August                  16,                  2004. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Signature**

|                                   |  **TRANSCOMMUNITY                  FINANCIAL C****ORPORATION**                          (Registrant) |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|                                   |                                                                                                                                              |
|                              |                                                                                                                                         |    |
| Date:                  August 12, 2005 | By:                                                                                                                                     | /s/ William                  C. Wiley |
|                                   | William                  C. Wiley                                                                                                                 |
|                                   | Chairman                    of the Board and Chief Executive                    Officer                                                           |

|                                         |                                                   |                                     |
|----------------------------------------------|--------------------------------------------------------|------------------------------------------|
|                                         |                                                   |
|                                    |                                              |                                |
| Date:                  August 12, 2005  | By:                                          | /s/ Bruce                  B. Nolte |
|                                         | Bruce                  B. Nolte                        |
|                                         | President                  and Chief Operating Officer |

|                                                   |                                   |                                      |
|--------------------------------------------------------|----------------------------------------|-------------------------------------------|
|                                                   |                                   |
|                                              |                              |                                 |
| Date:                August 12, 2005    | By:                          | /s/ Thomas                M. Crowder |
|                                                   | Thomas                M. Crowder       |
|                                                   | Chief                Financial Officer |