SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.


                                   FORM 10-QSB

(Mark One)
[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 2003

                                       OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OT 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO _______.

                         FDIC Certificate Number 26588-8


                       DARLINGTON COUNTY BANCSHARES, INC.
             (Exact Name of Registrant as Specified in the Charter)


                   Incorporated in the State of South Carolina
                I.R.S. Employer Identification Number 57-0805621


                    202 Cashua Street, Darlington, S.C. 29532
                    (Address of Principal Executive Offices)


                                 (843) 395-1956
              (Registrant's Telephone Number, including Area Code)



     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during the  preceding  12  months(or  for such  shorter  periods  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. [ X ] Yes [ ] No

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

       158,000 SHARES OF COMMON STOCK, $.01 PAR VALUE AS OF JULY 31, 2003

<PAGE>

                       DARLINGTON COUNTY BANCSHARES, INC.


                                      INDEX
<TABLE>
<CAPTION>


PART I. - FINANCIAL INFORMATION                                                                                    PAGE NO.

Item 1.  Financial Statements (Unaudited)

         <S>                                                                                                             <C>
         Condensed Consolidated Balance Sheets - June 30, 2003 and December 31, 2002......................................3

         Condensed Consolidated Statements of Operations -
           Six months ended June 30, 2003 and 2002 and three months ended June 30, 2003 and 2002..........................4

         Condensed Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income -
           Six months ended June 30, 2003 and 2002........................................................................5

         Condensed Consolidated Statements of Cash Flows - Six months ended June 30, 2003 and 2002........................6

         Notes to Condensed Consolidated Financial Statements.............................................................7

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.........................8-13

Item 3.  Controls and Procedures.........................................................................................13

PART II. - OTHER INFORMATION

Item 1.  Legal Proceedings...............................................................................................14

Item 2.  Changes in Securities...........................................................................................14

Item 3.  Defaults Upon Senior Securities.................................................................................14

Item 4.  Submission of Matters to a Vote of Security Holders.............................................................14

Item 5.  Other Information...............................................................................................14

Item 6.  Exhibits and Reports on Form 8-K................................................................................14

         (a)  Exhibits...................................................................................................14

         (b)  Reports....................................................................................................14

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                       DARLINGTON COUNTY BANCSHARES, INC.

                           CONSOLIDATED BALANCE SHEETS

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS
                                                                                               JUNE 30,        DECEMBER 31,
                                                                                                 2003              2002
                                                                                               --------        ------------
   (in thousands)                                                                            (UNAUDITED)
ASSETS Cash and cash equivalents:
<S>                                                                                          <C>                 <C>
   Cash and due from banks                                                                   $     1,212         $    1,144
   Federal funds sold                                                                              1,800              2,386
                                                                                             -----------         ----------
     Total cash and cash equivalents                                                               3,012              3,530
                                                                                             -----------         ----------
Securities available-for-sale                                                                      7,995              5,905
Securities held-to-maturity                                                                          561                641
Nonmarketable equity securities                                                                       50                 50
                                                                                             -----------         ----------
     Total investment securities                                                                   8,606              6,596
                                                                                             -----------         ----------
Loans                                                                                             19,542             19,015
Less allowance for loan losses                                                                       185                206
                                                                                             -----------         ----------
     Loans, net                                                                                   19,357             18,809
Premises and equipment, net                                                                          965              1,003
Accrued interest receivable                                                                          260                282
Other assets                                                                                         113                 47
                                                                                             -----------         ----------
     Total assets                                                                            $    32,313         $   30,267
                                                                                             ===========         ==========
LIABILITIES
Deposits
   Demand                                                                                    $     4,696         $    4,607
   Savings and NOW                                                                                17,472             15,252
   Other time deposits                                                                             6,154              6,345
                                                                                             -----------         ----------
     Total deposits                                                                               28,322             26,204
Accrued interest payable                                                                              25                 29
Other liabilities                                                                                     55                 87
                                                                                             -----------         ----------
     Total Liabilities                                                                            28,402             26,320

STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 1,000,000 shares authorized,
   158,000 shares issued and outstanding at June 30, 2003
   and December 31, 2002                                                                               2                  2
Capital in excess of par value of stock                                                            1,618              1,618
Retained earnings                                                                                  2,236              2,260
Accumulated other comprehensive income                                                                55                 67
                                                                                             -----------         ----------
     Total stockholders' equity                                                                    3,911              3,947
                                                                                             -----------         ----------
     Total liabilities and stockholders' equity                                              $    32,313         $   30,267
                                                                                             ===========         ==========
</TABLE>

                 See notes to consolidated financial statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                                       SIX MONTHS ENDED              THREE MONTHS ENDED
(Dollars in thousands)                                                     JUNE 30,                       JUNE 30,
                                                                      -------------------            -------------------
                                                                      2003           2002            2003           2002
                                                                      ----           ----            ----           ----
INTEREST INCOME:
<S>                                                             <C>             <C>            <C>            <C>
   Loans, including fees                                        $       713     $      692     $       359    $       354
   Investment securities:
     Taxable                                                            121            194              61             92
     Nontaxable                                                          13             15               6              7
     Nonmarketable equity securities                                     -               1              -               1
   Federal funds sold                                                    20             16               9              6
                                                                -----------     ----------     -----------    -----------
       Total interest income                                            867            918             435            460
                                                                -----------     ----------     -----------    -----------
INTEREST EXPENSE:
   Deposits                                                             186            251              93            117
                                                                -----------     ----------     -----------    -----------
       Total interest expense                                           186            251              93            117
                                                                -----------     ----------     -----------    -----------
NET INTEREST INCOME                                                     681            667             342            343
Provision for loan losses                                                42             34              24             18
                                                                -----------     ----------     -----------    -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                     639            633             318            325
                                                                -----------     ----------     -----------    -----------
NONINTEREST INCOME:
   Service charges on deposit accounts                                  162            174              81             92
   Gains on sales of securities available-for-sale                       20             -               20             -
   Other service charges, commissions and fees                           11              8               6              5
                                                                -----------     ----------     -----------    -----------
       Total                                                            193            182             107             97
                                                                -----------     ----------     -----------    -----------
NONINTEREST EXPENSES:
   Salaries and employee benefits                                       356            320             179            160
   Net occupancy expense                                                 41             36              22             18
   Furniture and equipment expense                                       54             40              27             19
   Other operating expenses                                             182            209              83            108
                                                                -----------     ----------     -----------    -----------
       Total                                                            633            605             311            305
                                                                -----------     ----------     -----------    -----------
INCOME BEFORE INCOME TAXES                                              199            210             114            117
Income tax provision                                                     65             72              37             42
                                                                -----------     ----------     -----------    -----------
NET INCOME                                                      $       134     $      138     $        77    $        75
                                                                ===========     ==========     ===========    ===========
PER SHARE
AVERAGE SHARES OUTSTANDING                                          158,000        158,000         158,000        158,000
                                                                ===========     ==========     ===========    ===========
NET INCOME                                                      $      0.84     $     0.87     $      0.48    $      0.48
                                                                ===========     ==========     ===========    ===========
DIVIDENDS PAID                                                  $      1.00     $     1.00     $      1.00    $      1.00
                                                                ===========     ==========     ===========    ===========

</TABLE>

                See notes to consolidated financial statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>

                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
                                           FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
                                                           (UNAUDITED)

                                                                                                    ACCUMULATED
                                                                                                       OTHER
                                                                                                      COMPRE-
                                                   COMMON STOCK          ADDITIONAL                   HENSIVE
                                                --------------------      PAID-IN     RETAINED        INCOME
(Dollars in thousands)                          SHARES        AMOUNT      CAPITAL     EARNINGS        (LOSS)        TOTAL
                                                ------        ------     ----------   --------     -------------    ------
<S>                                             <C>       <C>          <C>          <C>          <C>          <C>
BALANCE, DECEMBER 31, 2001                      158,000   $         2  $     1,618  $     2,096  $       (22) $     3,694

Net income for the period                                                                   138                       138

Comprehensive income, net of tax                                                                          63           63
                                                                                                               ----------

Comprehensive income                                                                                                  201
                                                                                                               ----------

Cash dividend ($1.00 per share)                                                            (158)                     (158)
                                               --------   -----------  -----------  ------------  ----------   ----------

BALANCE, JUNE 30, 2002                          158,000   $         2  $     1,618  $     2,076  $        41  $     3,737
                                               ========   ===========  ===========  ===========  ===========  ===========

BALANCE, DECEMBER 31, 2002                      158,000   $         2  $     1,618  $     2,260  $        67  $     3,947

Net income for the period                                                                   134                       134

Comprehensive income, net of tax                                                                         (12)         (12)
                                                                                                              -----------

Comprehensive income                                                                                                  122
                                                                                                              -----------

Cash dividend ($1.00 per share)                                                            (158)                     (158)
                                               --------   -----------  -----------  ------------  ----------   ----------

BALANCE, JUNE 30, 2003                          158,000   $         2  $     1,618  $     2,236  $        55  $     3,911
                                               ========   ===========  ===========  ===========  ===========  ===========
</TABLE>

               See notes to consolidated financial statements.

                                       5
<PAGE>
<TABLE>
<CAPTION>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                                                                    SIX MONTHS ENDED
                                                                                                        JUNE 30,
                                                                                        ---------------------------------
(Dollars in thousands)                                                                       2003               2002
                                                                                        -------------       -------------
<S>                                                                                     <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                           $         134       $         138
   Adjustments to reconcile net income to net cash
      provided by operating activities:
       Depreciation                                                                                40                  36
       Provision for loan losses                                                                   42                  34
       Gain on sales of securities available-for-sale                                             (20)                 -
       (Increase) decrease in other assets                                                        (39)                 64
       Increase (decrease) in other liabilities                                                   (35)                 18
                                                                                        -------------       -------------
         Net cash provided by operating activities                                                122                 290
                                                                                        -------------       -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Decrease in federal funds sold                                                                 586                 440
   Proceeds from maturities of securities held-to-maturity                                         80                  76
   Proceeds from sales of investment securities available-for-sale                                835               3,811
   Proceeds from calls and maturities of securities available-for-sale                          2,172                  -
   Purchase of investment securities available-for-sale                                        (5,095)             (1,500)
   Net increase in loans                                                                         (590)             (1,002)
   Purchase of equipment                                                                           (2)                 (8)
                                                                                        -------------       -------------
         Net cash provided (used) by investing activities                                      (2,014)              1,817
                                                                                        -------------       -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase (decrease) in deposit accounts                                                  2,118                (729)
   Cash dividends paid                                                                           (158)               (158)
                                                                                        -------------       -------------
         Net cash provided (used) for financing activities                                      1,960                (887)
                                                                                        -------------       -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                          68               1,220
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                  1,144                 315
                                                                                        -------------       -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                                $       1,212       $       1,535
                                                                                        =============       =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
   Increase (decrease) in net unrealized gains on securities
     available-for-sale                                                                 $         (12)      $          63
                                                                                        =============       =============
CASH PAID FOR
   Interest                                                                             $         190       $         252
                                                                                        =============       =============
   Income taxes                                                                         $          76       $          71
                                                                                        =============       =============
</TABLE>

               See notes to consolidated financial statements.

                                       6
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and with the  instructions  to Form 10-QSB and item 310(b) of Regulation  S-B of
the Securities  and Exchange  Commission.  Accordingly,  they do not include all
information and footnotes required by generally accepted  accounting  principles
for complete financial  statements.  However, in the opinion of management,  all
adjustments  (consisting of normal recurring  adjustments)  considered necessary
for a fair presentation have been included.

NOTE 2 - NET INCOME PER SHARE

Net income per share is computed on the basis of the weighted  average number of
common shares  outstanding in accordance with Statement of Financial  Accounting
Standards No. 128,  "Earnings per Share". The Bank does not have any instruments
which are dilutive;  therefore,  only basic net income per share of common stock
is presented.











                                       7
<PAGE>

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

The following  discussion and analysis  should be read in  conjunction  with the
financial  statements  and related notes  appearing in the 2002 Annual Report of
Darlington  County  Bancshares,  Inc.  Results of operations  for the six months
ending  June 30,  2003  are not  necessarily  indicative  of the  results  to be
attained  for  any  other  period.   The  following   information   may  contain
forward-looking  statements that involve risks and uncertainties.  The Company's
actual  results  may  differ  materially  from  the  results  discussed  in  the
forward-looking statements.

This  report  contains   "forward-looking   statements"   relating  to,  without
limitation, future economic performance,  plans and objectives of management for
future  operations,  and  projections of revenues and other financial items that
are based on the beliefs of our management,  as well as assumptions  made by and
information   currently  available  to  our  management.   The  words  "expect,"
"estimate,"  "anticipate,"  and "believe," as well as similar  expressions,  are
intended to identify forward-looking  statements.  Our actual results may differ
materially from the results discussed in the forward-looking statements, and our
operating   performance   each   quarter  is   subject  to  various   risks  and
uncertainties.  The Private Securities  Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. In order to comply with terms of the
safe  harbor,  the  Company  notes  that a variety of  factors  could  cause the
Company's   actual  results  and  experience  to  differ   materially  from  the
anticipated   results  or  other   expectations   expressed  in  the   Company's
forward-looking  statements.  The risks and  uncertainties  that may  affect the
operations,  performances,  development  and results of the  Company's  business
include,  but are not limited to, the following:  risks from changes in economic
and industry  conditions;  changes in interest  rates;  risks inherent in making
loans including  repayment  risks and value of collateral;  dependence on senior
management;  and recently-enacted or proposed legislation.  Statements contained
in this filing  regarding  the demand for the  Company's  products and services,
changing  economic  conditions,  interest rates,  consumer spending and numerous
other factors may be forward-looking statements and are subject to uncertainties
and risks.  When relying on  forward-looking  statements to make  decisions with
respect to the Company, investors and others are cautioned to consider these and
other risks and uncertainties.

Such  forward-looking  statements  speak  only  as of the  date  on  which  such
statements  are made. We undertake no  obligation to update any  forward-looking
statement  to  reflect  events or  circumstances  after  the date on which  such
statement  is made  to  reflect  the  occurrence  of  unanticipated  events.  In
addition,  certain  statements  in  future  filings  by  the  Company  with  the
Securities  and Exchange  Commission,  in press releases and in oral and written
statements  made by or with the approval of the Company which are not statements
of historical fact constitute forward-looking statements.

RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2003

The  Company's net income for the six months ended June 30, 2003 was $134,000 or
$0.84 per share as  compared  to  $138,000 or $0.87 per share for the six months
ended June 30, 2002.

NET INTEREST INCOME

Net interest  income is the  difference  between the interest  earned on earning
assets and the interest paid for funds  acquired to support  those  assets.  Net
interest income,  the principal source of the Bank's earnings,  was $681,000 and
$667,000 for the six months ended June 30, 2003 and 2002, respectively.

Changes that affect net  interest  income are changes in the average rate earned
on interest-earning assets, changes in the average rate paid on interest-bearing
liabilities,   and  changes  in  the  volume  of  interest-earning   assets  and
interest-bearing liabilities.

                                       8
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS - (continued)

Average  interest-earning  assets for the second  quarter of 2003  increased  by
$686,717 or 2.39% over the same period in 2002,  while average  interest-bearing
liabilities  increased by $372,860 or 1.66% comparing the second quarter of 2003
with the second quarter of 2002.
<TABLE>
<CAPTION>
                                                                         AVERAGE BALANCES, INCOME AND EXPENSES, AND RATES
                                                                                  SIX MONTHS ENDED JUNE 30, 2003
                                                              ------------------------------------------------------------
                                                                     AVERAGE               INCOME/            ANNUALIZED
                                                                     BALANCE               EXPENSE            YIELD/RATE
                                                              ---------------       ---------------           -----------
<S>                                                           <C>                   <C>                             <C>
   Federal funds sold                                         $     3,461,084       $        20,000                 1.16%
   Investment securities                                            6,825,556               134,000                 3.90%
   Loans                                                           19,075,162               713,000                 7.48%
                                                              ---------------       ---------------
     Total earning assets                                     $    29,361,802               867,000                 5.91%
                                                              ===============
     Total interest bearing liabilities                       $    22,896,171               186,000                 1.62%
                                                              ===============       ---------------        --------------
   Net interest spread                                                                                              4.29%
   Net interest income/margin                                                       $       681,000                 4.64%
                                                                                    ===============        ==============
</TABLE>

<TABLE>
<CAPTION>

                                                                         AVERAGE BALANCES, INCOME AND EXPENSES, AND RATES
                                                                                    SIX MONTHS ENDED JUNE 30, 2002
                                                              -----------------------------------------------------------
                                                                     AVERAGE               INCOME/            ANNUALIZED
                                                                     BALANCE               EXPENSE            YIELD/RATE
                                                              ---------------       ---------------          ------------
<S>                                                           <C>                   <C>                             <C>
   Federal funds sold                                         $     1,987,906       $        16,000                 1.61%
   Investment securities                                            8,987,941               210,000                 4.67%
   Loans                                                           17,699,238               692,000                 7.82%
                                                              ---------------       ---------------
     Total earning assets                                     $    28,675,085               918,000                 6.40%
                                                              ===============
     Total interest bearing liabilities                       $    22,523,311               251,000                 2.22%
                                                              ===============       ---------------          ------------
   Net interest spread                                                                                              4.18%
   Net interest income/margin                                                       $       667,000                 4.65%
                                                                                    ===============          ============
</TABLE>

As  reflected  above,  for the six months of 2003 the  average  yield on earning
assets  amounts  amounted to 5.91%,  while the average cost of  interest-bearing
liabilities was 1.62%. For the same period of 2002, the average yield on earning
assets was 6.40% and the average cost of interest-bearing liabilities was 2.22%.
The decrease in the yield on earning assets is attributable to a decrease in the
yield on all interest  earning  assets.  The net interest  margin is computed by
subtracting  interest  expense from  interest  income and dividing the resulting
figure by  average  interest-earning  assets.  The net  interest  margin for the
period ended June 30, 2003 was 4.64% and for 2002 was 4.65%.

NONINTEREST INCOME

Noninterest  income for the six months ended June 30, 2003 and 2002 was $193,000
and $182,000,  respectively.  Noninterest income increased due to gains on sales
of  securities  which  totaled  $20,000 for the six months  ended June 30, 2003.
There were no gains on sales of securities  during the six months ended June 30,
2002. Service charges on deposit accounts decreased $12,000 or 6.90% to $162,000
when comparing the six months ended June 30, 2003 to 2002.


                                       9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS - (continued)

NONINTEREST EXPENSES

Noninterest  expenses  for the six  months  ended  June  30,  2003  and 2002 was
$633,000 and  $605,000,  respectively.  Noninterest  expenses  increased  due to
increases in salaries  and  employee  benefits  expense,  occupancy  expense and
furniture and fixtures  expense net of a decrease in other  operating  expenses.
These increases were due to the normal growth of the Bank.

PROVISION FOR LOAN LOSSES

The allowance  for loan losses was 0.95% of loans,  as of June 30, 2003 compared
to 1.08% at December 31,  2002.  The  provision  for loan losses was $42,000 and
$34,000  for  the six  months  ended  June  30,  2003  and  2002,  respectively.
Management  reviews  the  adequacy  of the  allowance  on an  ongoing  basis and
believes the allowance is adequate.

Risks are  inherent  in making all loans,  including  risks with  respect to the
period of time over which loans may be repaid,  risks  resulting from changes in
economic  and industry  conditions,  risks  inherent in dealing with  individual
borrowers,  and, in the case of a  collateralized  loan,  risks  resulting  from
uncertainties about the future value of the collateral. We maintain an allowance
for loan  losses  based  on,  among  other  things,  historical  experience,  an
evaluation of economic conditions, and regular reviews of delinquencies and loan
portfolio  quality.  Our judgment  about the adequacy of the  allowance is based
upon a number  of  assumptions  about  future  events,  which we  believe  to be
reasonable,  but which may not prove to be accurate. Thus, charge-offs in future
periods could exceed the allowance for loan losses,  or  substantial  additional
increases in the allowance  for loan losses could be required.  Additions to the
allowance  for loan  losses  would  result in a decrease  of our net income and,
possibly,  our capital.  Based on present information,  we believe the allowance
for loan  losses  is  adequate  at June 30,  2003 to meet  presently  known  and
inherent risks in the loan portfolio.

RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2003

The Company's net income for the second quarter of 2003 was $77,000 or $0.48 per
share compared to $75,000 or $0.48 per share for the second quarter of 2002.

NET INTEREST INCOME

Net interest  income is the  difference  between the interest  earned on earning
assets and the interest paid for funds  acquired to support  those  assets.  Net
interest income,  the principal source of the Bank's earnings,  was $342,000 and
$343,000 for the quarters ended June 30, 2003 and 2002, respectively.

NONINTEREST INCOME

Noninterest  income  for the  three  months  ended  June 30,  2003 and 2002 were
$107,000 and $97,000, respectively. Noninterest income increased due to gains on
sales of securities of $20,000.  Service charges on deposit  accounts  decreased
from  $92,000 for the three  months  ended June 30, 2002 to $81,000 for the same
period in 2003.

NONINTEREST EXPENSES

Noninterest  expenses  for the three  months  ended June 30,  2003 and 2002 were
$311,000 and  $305,000,  respectively.  Noninterest  expenses  increased  due to
increased  salaries  and  employee  benefits  expense,  occupancy  expense,  and
furniture and fixtures  expense net of a decrease in other  operating  expenses.
These increases were due to the normal growth of the Bank.

PROVISION FOR LOAN LOSSES

The provision for loan losses was $24,000 and $18,000 for the three months ended
June 30, 2003 and 2002, respectively.  Management increased its provision during
the quarter due to the declining economy.


                                       10
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS - (continued)

FINANCIAL CONDITION

LIQUIDITY

Liquidity  is the  ability  to  meet  current  and  future  obligations  through
liquidation or maturity of existing  assets or the  acquisition of  liabilities.
The Company manages both assets and liabilities to achieve appropriate levels of
liquidity.  Cash and short-term investments are the Company's primary sources of
asset liquidity.  These funds provide a cushion against short-term  fluctuations
in cash flow from both  deposits  and loans.  The  investment  portfolio  is the
Bank's principal source of secondary asset liquidity.  However, the availability
of this source of funds is influenced by market conditions.  Management believes
that the Company's  liquidity  sources are adequate to meet its operating needs.
However, we have approximately  $2,500,000 of unused lines of credit to purchase
federal funds should additional funding sources be needed.

OFF-BALANCE SHEET RISK

Through the  operations of our bank,  we have made  contractual  commitments  to
extend  credit  in  the  ordinary  course  of  our  business  activities.  These
commitments  are legally  binding  agreements  to lend money to our customers at
predetermined  interest rates for a specified  period of time. At June 30, 2003,
we had issued  commitments to extend credit of $3,706,000  through various types
of  commercial  lending   arrangements.   We  evaluate  each  customer's  credit
worthiness on a case-by-case basis. The amount of collateral obtained, if deemed
necessary by us upon extension of credit,  is based on our credit  evaluation of
the borrower. Collateral varies but may include accounts receivable,  inventory,
property, plant and equipment, commercial and residential real estate. We manage
the credit risk on these  commitments by subjecting them to normal  underwriting
and risk management processes.

INVESTMENT SECURITIES

Total investment  securities increased $2,010,000 during the first six months of
2003.  This increase was due to an increase in securities  available for sale of
$2,090,000.  Excess  funds  generated  from  deposit  growth  were  invested  in
securities available for sale.

LOANS

Loans  increased  slightly  during  the  first  six  months  of 2003.  Net loans
increased  $548,000,  or 2.91%,  during the  period.  As shown  below,  the main
components of growth in the loan portfolio were commercial and industrial  loans
which increased 9.29%, or $353,000, and real estate-construction which increased
$354,000, or 4.84%, from December 31, 2002 to June 30, 2003. Balances within the
major loans receivable  categories as of June 30, 2003 and December 31, 2002 are
as follows:

                                              JUNE 30,             DECEMBER 31,
                                                2003                   2002
                                          ---------------       ---------------
     Real estate - construction           $     1,086,000       $       732,000
     Real estate - mortgage                     8,344,000             8,714,000
     Commercial and industrial                  4,150,000             3,797,000
     Agriculture                                  982,000             1,034,000
     Consumer and other                         4,980,000             4,738,000
                                          ---------------       ---------------
                                          $    19,542,000       $    19,015,000
                                          ===============       ===============

                                       11
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS - (continued)

CAPITAL RESOURCES

The  capital  base for the  Company  decreased  by $36,000  during the first six
months of 2003. This net change includes an increase to equity for net income of
$134,000  offset by a decrease in unrealized  gains on investment  securities of
$12,000 and cash dividends paid of $158,000.

The Federal Deposit  Insurance  Corporation has issued guidelines for risk-based
capital  requirements.  As of June  30,  2003,  the  Bank  exceeds  the  capital
requirement levels that are to be maintained.

<TABLE>
<CAPTION>

                                                                              WELL CAPITALIZED       ADEQUATELY CAPITALIZED
                                                         ACTUAL                  REQUIREMENT                REQUIREMENT
                                                   ------------------        ------------------      -----------------------
                                                   AMOUNT       RATIO        AMOUNT       RATIO        AMOUNT        RATIO

  <S>                                          <C>              <C>      <C>              <C>      <C>             <C>
  Total capital (to risk-weighted assets)      $   4,013        18.60%   $   2,157        10.00%   $    1,726      8.00%

  Tier 1 capital (to risk weighted assets)     $   3,828        17.74%   $   1,294         6.00%   $      863      4.00%

  Tier 1 capital (to average assets)           $   3,828        11.98%   $   1,598         5.00%   $    1,278      4.00%

</TABLE>

CRITICAL ACCOUNTING POLICIES

We have adopted  various  accounting  policies  which govern the  application of
accounting principles generally accepted in the United States in the preparation
of our financial statements.  Our significant  accounting policies are described
in the notes to the  consolidated  financial  statements at December 31, 2002 as
filed on our annual report on Form 10-KSB.  Certain accounting  policies involve
significant  judgments and assumptions by us which have a material impact on the
carrying value of certain assets and  liabilities.  We consider these accounting
policies to be critical  accounting  policies.  The judgments and assumptions we
use are based on the historical  experience and other factors,  which we believe
to be reasonable under the circumstances. Because of the nature of the judgments
and  assumptions we make,  actual results could differ from these  judgments and
estimates  which could have a major impact on our carrying  values of assets and
liabilities and our results of operations.

We believe the  allowance for loan losses is a critical  accounting  policy that
requires the most significant judgments and estimates used in preparation of our
consolidated  financial  statements.  Refer to the  portions  of our 2002 Annual
Report on Form 10-KSB and this Form 10-QSB that address our  allowance  for loan
losses for a description of our processes and  methodology  for  determining our
allowance  for loan  losses.  There  have  been no  significant  changes  in our
critical accounting policies since December 31, 2002.

EFFECTS OF REGULATORY ACTION

The  management  of the Company is not aware of any current  recommendations  by
regulatory  authorities,  which if they  were to be  implemented,  would  have a
material effect on liquidity, capital resources, or operations.

IMPACT OF INFLATION

Unlike  most  industrial  companies,  the assets and  liabilities  of  financial
institutions  such as the Bank are  primarily  monetary  in  nature.  Therefore,
interest rates have a more significant  impact on the Bank's performance than do
the effects of changes in the general rate of  inflation  and changes in prices.
In addition, interest rates do not necessarily move in the same magnitude as the
prices of goods and  services.  As  discussed  previously,  management  seeks to
manage the  relationships  between interest  sensitive assets and liabilities in
order to protect against wide rate fluctuations,  including those resulting from
inflation.

                                       12
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS - (continued)

RECENTLY ISSUED ACCOUNTING STANDARDS

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-based
Compensation  - Transition and  Disclosure",  an amendment of FASB Statement No.
123, "Accounting for Stock-Based  Compensation",  to provide alternative methods
of  transition  for a  voluntary  change  to the  fair  value  based  method  of
accounting for stock-based employee  compensation.  SFAS No. 148 also amends the
disclosure provisions of SFAS No. 123 and Accounting Pronouncement Board ("APB")
Opinion No. 28,  "Interim  Financial  Reporting",  to require  disclosure in the
summary  of  significant  accounting  policies  of the  effects  of an  entity's
accounting policy with respect to stock-based employee  compensation on reported
net income and  earnings per share in annual and interim  financial  statements.
While SFAS No. 148 does not amend SFAS No. 123 to require  companies  to account
for  employee  stock  options  using  the  fair  value  method,  the  disclosure
provisions  of SFAS No. 148 are  applicable to all  companies  with  stock-based
employee compensation,  regardless of whether they account for that compensation
using the fair value method of SFAS No. 123 or the intrinsic value method of APB
Opinion  No.  25.  The  provisions  of SFAS No.  148 are  effective  for  annual
financial  statements  for fiscal years ending after  December 15, 2003, and for
financial reports containing  condensed financial  statements for interim period
beginning after December 15, 2002. We have adopted the disclosure  provisions of
SFAS No.  148,  which had no  impact on our  financial  condition  or  operating
results.

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts and loan commitments that relate to the
origination of mortgage loans held for sale,  and for hedging  activities  under
SFAS No. 133. SFAS No. 149 is generally  effective for contracts entered into or
modified  after  June 30,  2003.  The  adoption  of SFAS No. 149 will not have a
material impact on our financial condition or operating results.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some  circumstances).  Many of those  instruments
were previously  classified as equity.  SFAS No. 150 is generally  effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period  beginning  after June
15,  2003.  The  adoption of SFAS No. 150 did not have a material  impact on our
financial condition or operating results.

In June 2003, the American  Institute of Certified  Public  Accountants  (AICPA)
issued an exposure draft of a proposed  Statement of Position  (SOP),  Allowance
for Credit Losses. The proposed SOP addresses the recognition and measurement by
creditors of the allowance for credit losses related to all loans,  as that term
is defined in SFAS No. 114,  Accounting by Creditors  for  Impairment of a Loan.
The proposed SOP provides that the  allowance  for credit  losses  reported on a
creditor's  balance sheet should  consist only of (1) a component for individual
loan impairment  recognized and measured  pursuant to FASB Statement No. 114 and
(2) one or more components of collective loan impairment  recognized pursuant to
FASB Statement No. 5, Accounting for  Contingencies,  and measured in accordance
with the guidance in the proposed SOP. The  provisions of the proposed SOP would
be effective for financial  statements for fiscal years beginning after December
15, 2003, with earlier application  permitted.  The effect of initially applying
the  provisions  of the proposed SOP would be reported as a change in accounting
estimate.  Comments on the exposure draft are due by September 19, 2003. We have
not  determined  the effect on our  financial  condition  or  operating  results
related to the adoption of this  proposed SOP, but such effect would most likely
be material.


ITEM 3. CONTROLS AND PROCEDURES

Based on their evaluation of the issuer's disclosure controls and procedures (as
defined in 17 C.F.R.  Sections  240.13a-14(c)  and  240.15d-14(c))  as of a date
within 90 days prior to the filing of this quarterly report,  the issuer's chief
executive  officer and chief financial  officer concluded that the effectiveness
of such controls and procedures was adequate.

There were no significant  changes in the issuer's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their  evaluation,  including any corrective  actions with regard to significant
deficiencies and material weaknesses.

                                       13
<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no  material  pending  legal  proceedings  to which the Company or its
subsidiary party or of which any of their property is the subject.

ITEM 2.  CHANGES IN SECURITIES

Not Applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not Applicable

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

The annual shareholders' meeting of Darlington County Bancshares,  Inc. was held
on April 22, 2003. Of the 158,000 outstanding  shares,  93,704 were either voted
in person or by proxy.  At the meeting the following  directors were elected for
three-year terms:
<TABLE>
<CAPTION>

                                                      NUMBER OF VOTES         NUMBER OF VOTES            NUMBER OF VOTES
                                                            FOR                   AGAINST                    ABSTAINED
                                                      ---------------         ----------------           ----------------

<S>                                                       <C>                                                     <C>
Hubert C. Baker                                           93,204                         -                        500

G. Clyde Scott                                            93,204                         -                        500

Eugene A. Vaughan                                         93,204                         -                        500

Henry M. Funderburk, III                                  93,204                         -                        500
</TABLE>

The  Company has  a "staggered" board  of directors, and the following directors
continued in office after the meeting:  W. Edwin  Dargan,  Albert L. James, III,
W.B. McCown, III, Raymond Galloway, R.E. Goodson, Sr. and Charles G. Howard.

ITEM 5.  OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORT ON FORM 8-K

(a)  Exhibit 31.1    Certification  of  CEO  Pursuant  to  Section  302  of  the
                     Sarbanes-Oxley Act of 2002

    Exhibit 31.2    Certification   of  CFO  Pursuant  to  Section  302  of  the
                    Sarbanes-Oxley Act of 2002

    Exhibit 32.1   Certification Pursuant to 18 U.S.C.  Section 1350, as adopted
                   Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

    Exhibit 32.2   Certification Pursuant to 18 U.S.C. Section 1350, as  adopted
                   Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

                                       14
<PAGE>

                                    SIGNATURE

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



DARLINGTON COUNTY BANCSHARES, INC.
Name of Bank


By:  /s/ W. B. McCown, III                         Date: August 12, 2003
     -------------------------------
     W. B. McCown, III, President and
     Chief Executive Officer


By:  /s/ Henry M. Funderburk                       Date: August 12, 2003
     --------------------------------
     Henry M. Funderburk
     Executive Vice President
     and Chief Financial Officer








                                       15