UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,  D. C. 20549
FORM 10-Q
Mark One

      /X/  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
           SECURITIES AND EXCHANGE ACT OF 1934
                For the quarter period ended June 30, 1999

      //   TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF
           THE EXCHANGE ACT
              For the transition period from _______ to _______
                       Commission File Number: 33-81890
                          Community Bankshares, Inc.
                      __________________________________
            (Exact name of registrant as specified in its charter)

                Georgia                             58-1415887
      (State or other jurisdiction of             (IRS Employer
        incorporation or organization)          Identification No.)

                            448 North Main Street,
                           Cornelia, Georgia 30531
                   (Address of principal executive offices)
                                  (Zip Code)
                                (706) 778-2265
             (Registrant's telephone number, including area code)

                                     N/A
                (Former name, former address and former fiscal
                     year, if changed since last report)

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of
August 1, 1999: 2,172,830
<PAGE>


                          COMMUNITY BANKSHARES, INC.
                               AND SUBSIDIARIES
                                    INDEX

                                     Page No.
PART I.   FINANCIAL INFORMATION

Item 1.    Financial Statements

      Consolidated Balance Sheet -
      June 30, 1999 and December 31, 1998                             2

      Consolidated Statements of Operations
      and Comprehensive Income for Three
      Months Ended June 30, 1999 and 1998
      and Six Months Ended June 30, 1999
      and 1998                                                        3

      Consolidated Statements of Cash Flows -
      Six Months Ended June 30, 1999 and 1998                         4

      Notes to Consolidated Financial Statements                      5

Item 2.    Management's Discussion and Analysis of
      Financial Condition and Results of Operations                   6

PART II.   OTHER INFORMATION

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

Item 6.    Exhibits and Reports on Form 8 - K                         7

      Signatures                                                      8
<PAGE>

                       PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                          COMMUNITY BANKSHARES, INC.
                               AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                     JUNE 30, 1999 AND DECEMBER 31, 1998
                            (Dollars in thousands)
                                 (Unaudited)

                      Assets                           1999        1998
                                                   ----------  ----------
<S>                                               <C>         <C>
Cash and due from banks                            $  25,826   $  26,796
Interest-bearing deposits in banks                       457         428
Federal funds sold                                    12,160      22,890
Securities available-for-sale                         47,342      42,525
Securities held-to-maturity (fair value
     $31,233 and $32,174)                             30,875      30,915
Loans held for sale                                    1,157         699

Loans                                                349,703     313,438
Less allowance for loan losses                         5,320       4,863
                                                   ----------  ----------
          Loans, net                                 344,383     308,575
                                                   ----------  ----------

Premises and equipment                                13,603      13,463
Other assets                                          14,860      14,302
                                                   ----------  ----------

          Total assets                             $ 490,663   $ 460,593
                                                   =========  ==========

       Liabilities and Stockholders' Equity

Deposits
    Noninterest-bearing demand                     $  73,310   $  65,266
    Interest-bearing demand                          106,457      94,458
    Savings                                           21,744      19,731
    Time, $100,000 and over                           73,119      67,003
    Other time                                       160,722     158,824
                                                   ----------  ----------
          Total deposits                             435,352     405,282
Other borrowings                                       6,131       5,808
Other liabilities                                      6,930       8,958
                                                   ----------  ----------
          Total liabilities                          448,413     420,048
                                                   ----------  ----------

Commitments and contingent liabilities

Redeemable common stock held by ESOP, 363,616
     Shares outstanding, at fair value                14,254      14,254
                                                     --------    --------

Stockholders' equity
    Common stock, par value $1; 5,000,000
        Shares authorized; 2,172,830
        Shares issued and outstanding                  2,173       2,170
    Capital surplus                                    6,063       6,036
    Retained earnings                                 20,414      17,858
    Accumulated other comprehensive income,
         Net of tax                                     (654)        227
                                                   ----------  ----------
          Total stockholders' equity                  27,996      26,291
                                                   ----------  ----------

 Total liabilities and stockholders' equity        $ 490,663   $ 460,593
                                                   ==========  ==========
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>


<TABLE>
<CAPTION>
                          COMMUNITY BANKSHARES, INC.
                               AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                           AND COMPREHESIVE INCOME
                THREE MONTHS ENDED JUNE 30, 1999 AND 1998 AND
                   SIX MONTHS ENDED JUNE 30, 1999 AND 1998
               (Dollars in thousands, except per share amounts)
                                 (Unaudited)

                                      Three Months         Six Months
                                         Ended               Ended
                                        June 30,            June 30,
                                     1999     1998        1999     1998
                                   -----------------  --------- --------
<S>                               <C>      <C>        <C>      <C>
Interest income
    Loans                          $ 8,642  $ 7,349   $ 16,778  $14,033
    Taxable securities                 603      655      1,156    1,410
    Nontaxable securities              494      418        978      808
    Deposits in banks                    5        7         11       18
    Federal funds sold                 176       97        437      219
                                   -------- --------   --------  -------
          Total interest income      9,920    8,526     19,360   16,488
                                   -------- --------   --------  -------

Interest expense on deposits
    Deposits                         4,188    3,911      8,312    7,603
    Other borrowings                    82        9        161       17
                                   -------- --------  --------- --------
          Total interest expense     4,270    3,920      8,473    7,620
                                   -------- --------  --------- --------

          Net interest income        5,650    4,606      10,887   8,868
Provision for loan losses              388      350        657      540
                                   -------- --------  --------- --------
          Net interest income
           after provision
           for loan losses           5,262    4,256      10,230   8,328
                                   -------- --------  --------- --------

Other income
    Service charges on deposit         700      614      1,361    1,216
accounts
    Other service charges and fees     124      173        264      256
    Gains on sale of loans              99      154        156      215
    Trust Department fees               22       27         68       54
    Net realized gains on sales
      of securities                      -        2          -       11
    Nonbank subsidiary
      non-interest income            1,564    1,980      2,999    3,639
    Other operating income             201       86        379      245
                                   -------- --------  --------- --------
          Total other income         2,710    3,036      5,227    5,636
                                   -------- --------  --------- --------

Other expenses
    Salaries and employee benefits   3,246    2,550      6,199    4,900
    Occupancy expense                  346      311        669      614
    Equipment expense                  655      459      1,262      904
    Other operating expenses         1,801    1,560      3,555    3,069
                                   -------- --------  --------- --------
          Total other expenses       6,048    4,880      11,685   9,487
                                   -------- --------  --------- --------

          Income before income
             taxes                   1,924    2,412      3,772    4,477

Income tax expense                     528      793      1,044    1,439
                                   -------- --------  --------- --------

          Net income               $ 1,396  $ 1,619   $  2,728  $ 3,038
                                   -------- --------  --------- --------

Other comprehensive income (loss):
     Unrealized gains (losses) on
       securities Available-for-sale
       arising during the period      (609)      70       (881)     (32)
     Less:  reclassification
            adjustment
            for gains
            included in net
            income                       -        2          -       11
                                   -------- --------  --------- --------
     Total other comprehensive
        income                        (609)      72       (881)     (21)
                                   -------- --------  --------- --------

          Comprehensive income     $   787  $ 1,691   $  1,847  $ 3,107
                                   ======== ========  ========= ========

Basic earnings per common share    $  0.64  $  0.75   $   1.26  $  1.40
                                   -------- --------  --------- --------
Diluted earnings per common share     0.63     0.74       1.24     1.38
                                   -------- --------  --------  ---------
Cash dividends per share of
common stock                       $  .039  $ 0.037   $   .079  $ 0.073
                                   -------- --------  --------- --------
<FN>
See Notes to Consolidated
Financial Statements.
</FN>
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                          COMMUNITY BANKSHARES, INC.
                               AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                            (Dollars in thousands)
                                 (Unaudited)

                                                       1999        1998
                                                    --------    --------
<S>                                              <C>         <C>
OPERATING ACTIVITIES
    Net income                                    $   2,728   $   3,038
    Adjustments to reconcile net income to
        net cash provided by operating
        activities:
        Depreciation and amortization                 1,131         928
        Provision for loan losses                       657         540
        Provision for other real estate                   -          10
        Deferred income taxes                          (319)       (141)
        Increase in loans held for sale                (458)       (190)
        Net realized (gains) losses on
          securities available-for-sale                   -         (11)
        Net (gains) losses on sale of other real
          estate                                        (39)         -
        Increase in interest receivable                (428)       (552)
        Increase (decrease) in interest payable        (983)        273
        Increase in taxes payable                       287         573
        Increase (decrease) in accounts
          receivable of nonbank subsidiary              245      (1,617)
        Increase (decrease) in work in
          process of nonbank subsidiary                 (18)        (24)
        Increase (decrease) in accruals and
          payables of nonbank subsidiary             (1,148)       (860)
        Other operating activities                       39      (1,384)
                                                  ----------  ----------

              Net cash provided by
                 operating activities                 1,694         585
                                                  ----------  ----------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale      (16,488)     (5,867)
    Proceeds from sales of securities
      available-for-sale                                  -       1,875
    Proceeds from maturities of securities
      available-for-sale                             10,203      12,939
    Purchases of securities held-to-maturity           (448)     (2,209)
    Proceeds from maturities of securities
      held-to-maturity                                  488         830
    Net decrease in Federal funds sold               10,730         180
    Net increase in interest-bearing
     deposits in banks                                  (29)        (60)
    Net increase in loans                           (36,532)    (45,374)
    Purchase of premises and equipment               (1,115)     (2,285)
    Net cash acquired in branch acquisition               -         171
    Proceeds from sales of other real estate            276          16
                                                  ----------  ----------

              Net cash used in
                investing activities                (32,915)    (39,786)
                                                  ----------  ----------

FINANCING ACTIVITIES
    Net increase (decrease) in deposits              30,069      37,181
    Increase in other borrowings                        400           -
    Repayment of other borrowings                       (77)        (76)
    Proceeds from issuance of Common
      Stock                                              30           -
    Dividends paid                                     (171)       (159)
                                                  ----------  ----------
              Net cash provided by
                financing activities                 30,251      36,946
Net increase (decrease) in cash and
   due from banks                                 $   (970)    $ (2,255)

Cash and due from banks at beginning of the
  Period                                             26,796      23,957
                                                  ----------  ----------

Cash and due from banks at end of the Period      $  25,826   $  21,702
                                                  ==========  ==========

SUPPLEMENTAL DISCLOSURES
    Cash paid for:
        Interest                                  $   9,456   $   7,347

        Income taxes                              $   1,076   $   1,007

NONCASH TRANSACTIONS
    Unrealized (gains) losses on
      securities available-for sale               $   1,468   $      32

    Principal balances on loans and premises
      and equipment transferred to other
      real estate                                 $      67   $
                                                                     29

BRANCH ACQUISITION
    Net cash acquired                             $       -   $     171
                                                  ----------    --------

    Loans                                         $       -       2,981
    Premises and equipment                                -          10
    Other assets                                          -          14
    Core deposit intangible                               -         759
    Deposits                                              -     (5,838)
    Other liabilities                                     -        (25)
                                                  ----------    --------

         Net liabilities assumed, net of                  -
           cash and due from banks of $171        $           $ (2,099)
                                                  ==========  ==========

 <FN>
 See Notes to Consolidated Financial Statements
 </FN>
 </TABLE>
 <PAGE>


                          COMMUNITY BANKSHARES, INC.
                               AND SUBSIDIARIES

                   NOTE TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1.   BASIS OF PRESENTATION

 The consolidated financial information included herein is unaudited;
 however, such information reflects all adjustments (consisting solely of
 normal recurring adjustments) which are, in opinion of management, necessary
 for a fair statement of results for the interim periods.

 The results of operations for the six month period ending June 30, 1999 are
 not necessarily indicative of the results to be expected for the full year.

 NOTE 2.   CURRENT ACCOUNTING DEVELOPMENTS

 In June 1998, the Financial Accounting Standards Board issued Statement of
 Financial Accounting Standards No. 133 ("SFAS No. 133"), "Accounting for
 Derivative Instruments and Hedging Activities".  This statement is required
 to be adopted for fiscal years beginning after June 15, 1999.  However, the
 statement permits early adoption as of the beginning of any fiscal quarter
 after its issuance.  The Company expects to adopt this statement effective
 January 1, 2000.  SFAS No. 133 requires the Company to recognize all
 derivatives as either assets or liabilities in the consolidated balance
 sheet at fair value.  For derivatives that are not designated as hedges, the
 gain or loss must be recognized in earnings in the period of change.  For
 derivatives that are designed as hedges, changes in the fair value of the
 hedged assets, liabilities, or firm commitments must be recognized in
 earnings or recognized in other comprehensive income until the hedged item
 is recognized in earnings, depending on the nature of the hedge.  The
 ineffective portion of a derivative's change in fair value must be
 recognized in earnings immediately.  Management has not yet determined what
 effect the adoption of SFAS No. 133 will have on the Company's earnings or
 financial position.


NOTE 3    EARNINGS PER COMMON SHARE

 The following is a reconciliation of net income (the numerator) and
 weighted-average shares outstanding (the denominator) used in determining
 basic and diluted earnings per common share (EPS).
 <TABLE>
 <CAPTION>
                        Three Months Ended June 30, 1999
                        (Dollars and shares in Thousands,
                            except per share amounts)

                            Net      Weighted-Average
                           Income         Shares       Per Share
                         (Numerator)   (Denominator)     Amount
                          ---------    -------------    -------

<S>                         <C>        <C>             <C>
    Basic EPS                $1,396           2,172     $ 0.64
    Effect of Dilutive
     Securities
     Stock options                0              27
                             ------          ------     ------
    Diluted EPS              $1,396           2,199     $ 0.63
                             ======          ======     ======
</TABLE>
<TABLE>
<CAPTION>

                        Three Months Ended June 30, 1998
                        (Dollars and shares in Thousands,
                            except per share amounts)

                            Net      Weighted-Average
                           Income         Shares       Per Share
                         (Numerator)   (Denominator)     Amount
                          ---------    -------------    -------
<S>                         <C>        <C>             <C>
    Basic EPS                $1,619           2,170     $ 0.75
    Effect of Dilutive
     Securities
     Stock options                0              26
                             ------          ------     ------
    Diluted EPS              $1,619           2,196     $ 0.74
                             ======          ======     ======
</TABLE>
<TABLE>
<CAPTION>

                            Six Months Ended June 30, 1999
                        (Dollars and shares in Thousands,
                            except per share amounts)

                            Net      Weighted-Average
                           Income         Shares       Per Share
                         (Numerator)   (Denominator)     Amount
                          ---------    -------------    -------
<S>                         <C>        <C>             <C>
    Basic EPS                $2,728           2,171     $ 1.26
    Effect of Dilutive
     Securities
     Stock options                0              27
                             ------          ------     ------
    Diluted EPS              $2,728           2,198     $ 1.24
                             ======          ======     ======
</TABLE>
<TABLE>
<CAPTION>

                            Six Months Ended June 30, 1998
                        (Dollars and shares in Thousands,
                            except per share amounts)

                            Net      Weighted-Average
                           Income         Shares       Per Share
                         (Numerator)   (Denominator)     Amount
                          ---------    -------------    -------
<S>                         <C>        <C>             <C>
    Basic EPS                $3,038           2,170     $ 1.40
    Effect of Dilutive
     Securities
     Stock options                0              26
                             ------          ------     ------
    Diluted EPS              $3,038           2,196     $ 1.38
                             ======          ======     ======

 </TABLE>
 NOTE 4    SEGMENT INFORMATION

 Selected segment  information by industry segment for the
 reporting periods is as follows:
 <TABLE>
 <CAPTION>

                                        Reportable Segments
                                       (Dollars in thousands)
                               ---------------------------------------
                                                      All
   For the three month period   Banking   Financial  Other    Total
   ended June 30, 1998                    Supermarkets
   ---------------------------- --------- --------- -------- ---------
   <S>                         <C>       <C>        <C>     <C>


   Revenue from external        $  9,584  $  2,013   $   36  $ 11,633
   customers
   Intersegment revenues             (90)      113      366       389
   (expenses)
   Segment profit (loss)        $  1,099  $    740   $ (223) $  1,616
</TABLE>

<TABLE>
<CAPTION>

                                        Reportable Segments
                                       (Dollars in thousands)
                               ---------------------------------------
                                                      All
   For the six month period     Banking   Financial  Other     Total
   ended June 30, 1999                    Supermarkets
   ---------------------------- --------- --------- --------  --------
   <S>                         <C>       <C>        <C>      <C>

   Revenue from external        $ 21,828  $  3,062   $   85  $ 24,975
   customers
   Intersegment revenues            (244)      307      789       852
   Segment profit               $  2,489  $    817   $ (531) $  2,775
</TABLE>


<TABLE>
<CAPTION>

                                        Reportable Segments
                                       (Dollars in thousands)
                               ---------------------------------------
                                                      All
   For the six month period     Banking   Financial  Other     Total
   ended June 30, 1998                    Supermarkets
   ---------------------------- --------- --------- --------  --------
   <S>                         <C>       <C>        <C>      <C>

   Revenue from external        $ 18,526  $  3,659   $   58  $ 22,243
   customers
   Intersegment revenues            (172)      225      730       783
   Segment profit               $  2,096  $  1,292   $ (357) $  3,031
</TABLE>


<TABLE>
<CAPTION>
                                  For the three        For the six
                                      months             months
                                  Ended June, 30     Ended June, 30
                                ------------------- ------------------

                                    1999      1998     1999      1998
                                --------- --------- --------  --------
   <S>                         <C>         <C>      <C>       <C>
   Net Income:
   Total profit for
   reportable segments          $  1,677    $1,839   $3,306    $3,388
   Non-reportable segment loss      (284)     (223)    (531)     (357)
   Elimination of
   intersegment (gains) losses         3         3      (47)        7
                                --------- --------- --------  --------
   Total consolidated
   other income                  $ 1,396    $1,619   $2,728    $3,038
                                ========= ========= ========  ========
</TABLE>

 <PAGE>


                          COMMUNITY BANKSHARES, INC.
                               AND SUBSIDIARIES

                MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

 The following is management's discussion and analysis of certain significant
 factors which have affected the Company's financial position and operating
 results during the periods included in the accompanying consolidated
 financial statements.

 Financial Condition

 As of June 30, 1999, the Company continues to experience growth in total
 assets, total loans and total deposits as compared to December 31, 1998.
 Total assets, loans, and deposits increased by 6.53%, 11.69% and 7.42%
 respectively.  The growth in all areas is slightly less than the same period
 last year but consistent with management's expectations. The growth in
 assets is attributable to growth in deposits and retention of earnings.
 Management expects the growth to continue in the future.

 Liquidity

 As of June 30, 1999, the Liquidity Ratio was 23.20% which is within the
 Company's target range of 20 - 25%.  Liquidity is measured by the ratio of
 net cash, short term and marketable securities to net deposits and short
 term liabilities.

 Interest Rate Risk

 The Company's overall interest rate risk was less than 1% of net interest
 income subjected to rising and falling rates of 200 basis points.

Capital

 Banking regulation requires the Company to maintain capital levels in
 relation to Company assets.  At June 30, 1999, the Company's capital ratios
 were considered satisfactory based on regulatory minimum capital
 requirements.  The minimum capital requirements and the actual capital
 ratios for the Company at June 30, 1999 were as follows:
 <TABLE>


                                      Actual        Regulatory
                                                       Minimum
    <S>                             <C>               <C>
    Leverage                           8.37%             4.00%
        Risked Based
    Capital ratios:
        Core Capital                  10.55%             4.00%
        Total Capital                 11.81%             8.00%

 </TABLE>
 Results of Operation

 Net interest income for the six month period ended June 30, 1999 is up
 22.77% over the same period for 1998, from $8,868,000 to $10,887,000, and is
 up 22.67% for the three month period ending June 30, 1999 from $4,606,000 to
 $5,650,000 for 1999.  Interest income was up by 17.42% for the six month
 period ending June 30, 1999 from $16,488,000 to $19,360,000 and up 16.35%
 for the three month period ending June 30, 1999 from $8,526,000 to
 $9,920,000.  Interest expense was up 11.19% or $853,000 for the six month
 period ended June 30, 1999, over the same period in 1998 and up 8.93% or
 $350,000 for the three month period ending June 30, 1999, as compared to
 1998.  The increase in interest income is due to an increase of 18.85% or
 $70,042,000 in earning assets from June 30, 1998 to June 30, 1999.
 Investment securities increased slightly by $3,805,000 or 5.11% during the
 period primarily due to funds being used to fund loan growth.  Total loans
 increased during the last year by $60,229,000 or 20.72%. The increase in
 interest income, interest expense, and net interest income were consistent
 with the budget projections made by management and are on target to be
 consistent with annual projections.

 The provision for loan losses was $657,000 for the first six months of
 1999.  This provision will fluctuate based on Small Business Administration
 (SBA) loans closed, as we have a policy of reserving 5% of the un-guaranteed
 portion of any SBA loans.  The Company currently has reserves totaling
 $1,042,318 for its un-guaranteed portion of SBA loans.

 The following table furnishes information on the Loan Loss Reserve for the
 current six month reporting period and the same period for 1998.
 <TABLE>
 <CAPTION>
                                             1999      1998
     <S>                                 <C>       <C>
     Beginning Balance                    $ 4,863   $ 4,024

     Less Charge Offs:
          Real Estate Loans                  (23)       (7)
          Commercial Loans                  (169)      (34)
          Consumer Loans                    (186)     (165)
          Credit Cards                          0         0

     Plus Recoveries
          Real Estate Loans                     4        18
          Commercial Loans                     33        10
          Consumer Loans                      141        53
          Credit Cards                          0         0

     Plus Provision                           657       540
                                          -------   -------
     Ending Balance                       $ 5,320   $ 4,439
                                          =======   =======
</TABLE>

The loan loss reserve for the company is evaluated monthly and adjusted to
reflect the risk in the portfolio in the following manner.  We use four
different methods of measuring risk in the portfolio:  (a)  Risk in our watch
list of loans and past due ratios;  (b)  Historical charge offs;  ( c) Peer
group comparisons; and (d)  Percentage of classified loans.  We then compare
results to reserve balances to assure any and all identified risk are covered.

The Provision for Loan Losses for the six month period ended June 30, 1999
represented 174% of charge offs for the same period, while the provision for
the first six months of 1998 represented 262% of the charge offs recorded in
that period.  The reserve at the end of June 30, 1999 represented 707% of non
accrual loans while the reserve at June 30, 1998 represented 383% of non
accrual loans.  Non accrual loans have increased from $1,158,000 at June 30,
1998 to $1,284,000 as of June 30, 1999.  Past due loans greater than 90 days
and accruing interest have increased significantly from $371,000 in 1998 to
$2,178,000 in 1999.  The primary reason for this increase in past due loans
is an additional $1,100,000 secured by real estate.  Management anticipates no
significant losses in these credits.  The remaining increase is due to
slight deteriation in the installment porffolio.  However, management does
not anticipate any losses in excess of its historical loss experience.
The Company is well within its policy limit of maintaining a loan loss
reserve of at least 200% of non-performing assets.  The Loan Loss Reserve
balance to total loan ratio at June 30, 1999 was 1.52% as compared to 1.53%
at June 30, 1998.  Management considered the Loan Loss Reserve to be adequate
to absorb any losses that may be incurred.

The following table is a summary of Non Accrual, Past due and Restructured
Debt
<TABLE>
<CAPTION>
                                 June 30, 1999

                       Non-accrual    Past Due   Restructured
                          Loans       90 days        Debt
                                       still
                                      accruing
    <S>                     <C>          <C>           <C>
    Real Estate Loans        $    0       $    0        $    0
    Commercial Loans            665        1,256           752
    Consumer Loans              619          922             0
                             -------      -------       -------
    Total                    $1,284       $2,178        $  752
                             =======      =======       =======

 </TABLE>
                                 June 30, 1998
 <TABLE>
 <CAPTION>
                       Non-accrual    Past Due   Restructured
                          Loans       90 days        Debt
                                       still
                                      accruing
    <S>                     <C>          <C>           <C>
    Real Estate Loans        $    7       $   44        $    0
    Commercial Loans            473          133           808
    Consumer Loans              678          194             0
                             -------      -------       -------
    Total                    $1,158       $  371        $  808
                             =======      =======       =======
 </TABLE>
Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not
represent or result from trends or uncertainties which management reasonably
expects will materially impact future operating results, liquidity or capital
resources.  These classified loans do not represent material credits about
which management is aware of any information which causes management to have
serious doubts as to the ability of such borrows to comply with the loan
payment terms.

The bank places loans on non-accrual at such a time it is apparent that the
collection of all principal and interest is questionable and the loan is
either past due 90 days or bankruptcy has been filed.

Other income decreased by 7.26% or $409,000 during the six month period ended
June 30, 1999 as compared to the same period for 1998 and the three month
period ending June 30, 1999 showed a 10.73% or $326,000 decrease over the
same three month period of 1998.  The majority of these decreases, $640,000
and $416,000, respectively, are due to fewer installations of supermarket
bank units in the first half of 1999 compared to 1998.  Service charges on
deposit accounts increased by $145,000 or 11.92% for the six month period
ended June 30, 1999, and $86,000 or 14.00% for the three month period ended
June 30, 1999, as compared to the same periods in 1998.  The major increase
was the increase in non-sufficient funds (NSF) charges of $150,000 and
$47,000 for the six month period and the three month period ended June 30,
1999, respectively, compared to the same period in 1998.  NSF charges
increased primarily as a result of the Company's continued growth in accounts
in the totally free checking program.  The gains on sale of loans decreased
by $59,000 or 27.44% during the six month period ended June 30, 1999 as
compared to the same period for 1998.  This decrease is due to a smaller
number of SBA loan originations during the first half of 1999 compared to
1998.  Trust department income for the first half of 1999 increased by 14,000
or 25.93% to $68,000 compared to $54,000 for the first half of 1998.

Other operating expenses increased by 23.17% or $2,198,000 for the six month
period ended June 30, 1999, and 23.93% or $1,168,000 for the three month
period ending June 30, 1999 as compared to the same periods in 1998.
Salaries and benefits increased by $1,299,000 or 26.51% during the six month
period ended June 30, 1999 compared to the same period in 1998.  Full time
equivalent employees increased from 278 at the end of June 1998 to 303 at the
end of June 1999.  Equipment and occupancy expenses were up by 27.21% or
$413,000 for the six month period ended June 30, 1999, and 30.00% or $231,000
for the three month period ending June 30, 1999, as compared to the same
period in 1998. The increase in full time equivalent employees as well as
equipment and occupancy expenses was influenced by the addition of two
supermarket banking center during the past twelve months as well as the
overall growth of the Company's banking operations.  In addition, the
increase in the equipment and occupancy expense is a direct result of the
depreciation and operating expense associated with the Company's new data
processing system which was became fully operational during the first six
months of 1999.

Net income for the six month period ended June 30, 1999, was $2,728,000 or a
decrease of 10.20% and for the three month period ended June 30, 1999, was
$1,396,000 or a decrease of 13.77% over the same periods for 1998.  The net
income was less than management's budget for both periods primarily due to
fewer sales of supermarket banking units than anticipated during the first
half of the year.  Management anticipates the sale of supermarket banking
units to remain low during the last half of 1999 primarily due to limited
capital expansion in the banking industry due to Year 2000 concerns.
However, management expects sales associated with the first phase of an
agreement with the Canadian Imperial Bank of Commerce to start during the
last quarter of 1999.  Overall management anticipates income to be less than
in 1998 and less than budgeted for 1999.

The company is not aware of any other known trends, events or uncertainties,
other than the effect of events as described above, that will have or that
are reasonably likely to have a material effect on its liquidity, capital
resources or operations.  The Company is also not aware of any current
recommendations by the regulatory authorities which, if they were
implemented, would have such an effect.

YEAR 2000 COMPLIANCE

     The following are forward-looking statements reflecting management's
current assessment and estimates with respect to the Company's year 2000
compliance efforts and the impact of year 2000 issues on the Company's
business and operations.  Various factors could cause actual plans and
results to differ materially from those contemplated by such assessments,
estimates and forward-looking statements, many of which are beyond the
control of the Company.  Some of these factors include, but are not limited
to representations by the Company's vendors and counterparties, technological
advances,economic considerations, and consumer perceptions.  The Company's
year 2000 compliance program is an ongoing process involving continual
evaluation and may be subject to change in response to new developments.

     The Company utilizes and depends upon data processing systems and
software to conduct its business.  The "year 2000 issue" arises from the
widespread use of computer programs that rely on two-digit codes to perform
computations or decision-making functions.  Many of these programs may fail
due to an inability to properly interpret date codes
beginning January 1, 2000.   For example, such programs may misinterpret "00"
as the year 1900, rather than 2000.  In addition, some equipment, being
controlled by microprocessor chips, may not deal appropriately with the year
"00".

The Company's State of Readiness

     The Company views year 2000 readiness as not only an information or
technology problem, but as a corporate-wide challenge and has placed the
issue at the forefront of all strategic planning.  The Company's readiness
plan has been designed to cover all aspects of its operations, which include
the current operations, the conversionperiod and contingency
planning in the event of the failure of a mission critical system.
Based on the complex nature of the Company's operations,
corporate wide objectives have been to: 1) minimize disruptions of service to
the institution and its customers, 2) ensure timely resumption of operations,
and 3) limit losses to earnings andcapital.

     The Company began evaluating its information technology ("IT") systems
and non-IT systems, which include microcontrollers and other embedded
computers, to ascertain the impact of year 2000 issues in June of 1997.  In
l997, a Year 2000 Task Force Committee was organized and the Chief Financial
Officer of the Company was appointed to direct the Company's year 2000
remediation efforts.  The Committee believes that it has identified and
remediated all major internal business and operational functions that
will be impacted by the date changes.

     Remediation of the Company's IT and Non-IT Systems.

     The Company's remediation program was implemented during the first quarter
 of 1998.  In general, the Company believes that because the majority of IT
equipment and software is relatively new, and has been certified by the
developers as being year 2000 compliant, such equipment and software  require
only minor modification to become year 2000 compliant.

     During the fourth quarter of 1998, management of the Company determined
that it would be necessary to proceed with its traditional software provider,
as opposed to the client-based software as originally planned.  As planned,
modifications to the Company's IT equipment and software were complete on
March 8, 1999.  With respect to the Company's non-IT systems, no remediations
were required.

     Record retention policies have been amended to include all year 2000 due
diligence documents and any new acquisition, upgrades to existing systems, or
written agreements are reviewed prior to execution for year 2000 warrants or
guarantees of readiness.

     Year 2000 Testing.

     The Company considers the testing phase of its year 2000 program to
be a significant phase of its year 2000 program.  In May of l998, a
Year 2000 Readiness-Key Milestones Testing Plan was adopted that defined the
Company's year 2000 testing strategy (the "Plan").  The Plan will
continue to be modified to address any change in the remediation plans as
necessary.  The Company anticipates that the results of testing will be
reviewed by employees independent of in-house testing.  In addition, test
results will be presented to the Board of Directors of each Community Banking
Subsidiary for evaluation.  The Company successfully completed its Year 2000
testing prior to June 30, 1999.

     Assessment of Third Party Readiness.

To the extent possible, the Company has also evaluated the systems of its
major business partners, borrowers and suppliers of products and services.
The Company has sent out a letter and questionnaire to its major borrowers and
suppliers of products and services.  The Company has received a majority of
responses from these parties and notes no significant year 2000 issues.

Costs to Address Year 2000 Issues

     The Company does not anticipate that the related overall costs will be
material to the financial condition of the Company for any single year or
quarter.  The Company estimates that costs of assessing, testing, and
remediation issues associated with the year 2000 will total approximately
$1,200,000. Total costs incurred to date with respect to year 2000
remediations are $1,000,000.  The Company anticipates that it will incur
additional costs relating to the remaining modifications of $200,000.   A
majority of these costs have been capitalized, with 62% incurred in
connection with the purchase of new software and 38% required as a result of
the replacement of hardware.  It is anticipated that expenses relating to the
independent audit of the test results will be deducted from income.

     The Company has not used any independent verification and validation
processes to assure the reliability of year 2000 cost estimates.  None of the
Company's IT projects have been deferred due to year 2000 efforts.

Risks of the Year 2000

     The Company believes that all significant remediations with respect to
the Company's systems are complete.  However, no assurance can be given that
the Company will not be exposed to potential losses resulting from system
problems associated with the change in date. There can also be no assurance
that the Company's systems that have been designed to be year 2000 compliant
contain all of the necessary date code changes and that systems have been
correctly modified, or will be correctly modified in contemplation of the
year 2000.

     In addition to year 2000 compliance in the Company's internal systems,
the impact of year 2000 non-compliance by outside parties with whom the
Company may transact business cannot be accurately gauged.  The year 2000
issue may have a material impact on the financial condition of the Company if
borrowers of the Company become insolvent and are, therefore, unable to repay
loans as they become due as a result of the borrowers' year 2000
non-compliance.


    Certain risk controls to manage the year 2000 related risks posed by
customers have been implemented and the broad categories of customers have
been identified.  They are: 1) Funds Takers, 2) Funds Providers and 3)
Capital Market/Asset Management Counterparties. Based on the analysis of the
previously described groups, the Company is able to look at different
assumptions of risk, liquidity and contingency.  A high level program of
awareness continues in this area with sub-committees of the Board of
Directors of each Community Banking Subsidiary carefully monitoring year 2000
remediation efforts to minimize financial risk.  Lending officers have been
asked to identify any economic factors in the bank's trade or assessment
areas that would have an impact on customers as a result of a potential year
2000 problem.

     In addition, the Company is reliant upon the Federal Reserve Company of
Atlanta (the "Atlanta Reserve Bank") for electronic funds transfers.  If the
Atlanta Reserve Bank does not successfully complete all modifications
required by the date change, and is forced to interrupt automated services to
the Company, the Company could experience difficulties with respect to making
electronic funds transfers.  The Company believes that the Atlanta Reserve
Bank is aggressively pursuing a year 2000 compliance strategy, and that the
risk associated with year 2000 non-compliance by the Atlanta Reserve Bank is
insignificant.  With the exception of the Atlanta Reserve Bank, the Company
is not aware of any other third party relationships whose year 2000
non-compliance could result in a material adverse effect on the Company's
results of operations, liquidity and financial condition due to the date
change.

     Another area of review for year 2000 potential liability has been that
of fiduciary services.  Client assessment management through the bank's trust
department has been identified and will continued to be monitored.


Contingency Plans

The potential impact of business disruptions has placed contingency plan
validation and training at the forefront of Year 2000 planning during .   The
company has established organizational planning guidelines that define the
business continuity planning strategy;  conducted business impact analysis in
all banking centers; developed a business resumption contingency plan that
has directorate approval and established a schedule for plan validation. The
business resumption contingency plan is considered phase II of the company's
overall Plan of Prevention which emphasis disaster prevention.

Plan development has been centered around mission critical and mission
necessary systems. A process of  " event planning" has been used to focus on
each core business process.

The major portion of plan validation has been completed, although August 30,
l999 is the target date for completion.  The parent company's internal
auditor has reviewed contingency and validation plans.  A report has been
given to the directorate on plan development, implementation and audit
findings.  Documentation is maintained on all planning and validation
processes and placed in record retention.

Staff wide contingency training has been identified as a primary component of
the company's overall plan.  Monthly contingency planning has been scheduled
in all banking centers during third and fourth quarters with the emphasis on
external forces that could create or compound Year 2000 related risks.

Contingency planning has encompassed liquidity and sources designated that
could be converted to cash quickly.  Management is in the process of securing
additional lines through the Federal Home Loan Bank and Federal Reserve.
Other market funds providers have also been considered.  Affiliate banks have
adopted specific liquidity polices that detail cash on hand, borrowings and
net incoming cash flows.

Customer awareness continues and has become intensified over the last 90 days.
Awareness programs include not only information concerning the company's Year
2000 readiness but emphasizes avoiding fraudulent Year 2000 schemes.

The companies continuing due diligence processes in the areas of contingency,
recovery and restoration, training, liquidity and customer awareness should
decrease the bank's vulnerabilities to those external forces outside the
company's control.


<PAGE>

                          PART II - OTHER INFORMATION

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

 The Annual Meeting of the Shareholders of the Company was held on April 14,
 1999.  Total shares outstanding amounted to 2,169,830.  A total of 1,901,789
 shares (87.65%) were represented by shareholders in attendance or by proxy.
 The following directors were re-elected to serve for a one-year term.  The
 results of the election were as follows:

 <TABLE>
                                        Shares Voted:
                                   For      Against   Abstain
                               ---------------------------------
    <S>                        <C>         <C>       <C>
    Steven C. Adams              1,901,789         0          0
    Edwin B. Burr                1,901,789         0          0
    Harry H. Purvis              1,901,789         0          0
    H. Calvin Stovall            1,901,789         0          0
    Dean C. Swanson              1,901,789         0          0
    George D. Telford            1,901,789         0          0
    J. Alton Wingate             1,901,789         0          0
    Lois M. Wood-Schroyer      1,901,789           0          0

 </TABLE>

 ITEM 6.   Exhibits and Reports on Form 8-K

(a)   Exhibits

                      Exhibit 27.  Financial Data Schedule

(b)   Reports on Form 8-K

                The Company filed a report on Form 8-K on June 11, 1999
                related to a press release associated with an agreement with
                the Canadian Imperial Bank of Commerce.
<PAGE>

                                 SIGNATURES

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



                               COMMUNITY BANKSHARES, INC.


DATE:  August 13, 1999              BY:  /s/  Harry L. Stephens
                               Harry L. Stephens,
                               Executive Vice President and
                               Chief Financial Officer