<PAGE>

                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                   FORM 10-QSB

                 [X] Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  For the quarterly period ended March 31, 2003

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

         For the transition period ended _______________________________

                        Commission File Number 000-30517

                       AMERICAN COMMUNITY BANCSHARES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

        NORTH CAROLINA                                      56-2179531
 -------------------------------                      ----------------------
 (State or other jurisdiction of                           (IRS Employer
 incorporation or organization)                       Identification Number)

           2593 WEST ROOSEVELT BOULEVARD, MONROE, NORTH CAROLINA 28111
--------------------------------------------------------------------------------
                          (Address of principal office)

                                 (704) 225-8444
--------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

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

As of March 31, 2003, 2,824,376 shares of the issuer's common stock, no par
value, were outstanding.

This report contains 14 pages.

<PAGE>


<TABLE>
<CAPTION>
                                                                                  Page No.
                                                                                  --------
<S>                                                                                     <C>
Part I.   FINANCIAL INFORMATION

Item 1 -  Financial Statements (Unaudited)

              Consolidated Balance Sheets
              March 31, 2003 and December 31, 2002..............................         3

              Consolidated Statements of Operations
              Three Months Ended March 31, 2003 and 2002........................         4

              Consolidated Statements of Cash Flows
              Three Months Ended March 31, 2003 and 2002........................         5

              Notes to Consolidated Financial Statements........................         6

Item 2 -  Management's Discussion and Analysis of Financial Condition and
          Results of Operations.................................................         9

Item 3 -  Controls and procedures...............................................        12

Part II.  OTHER INFORMATION

              Item 6. Exhibits and Reports on Form 8-K..........................        13
</TABLE>

                                        2

<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                       AMERICAN COMMUNITY BANCSHARES, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                        March 31, 2003     December 31,
                                                                                         (Unaudited)           2002*
                                                                                        --------------    --------------
                                                                                                 (In Thousands)
<S>                                                                                     <C>               <C>
ASSETS

Cash and due from banks                                                                 $        5,444    $       12,183
Interest-earning deposits with banks                                                            11,822             4,655
Investment securities available for sale at fair value                                          31,842            27,465
Investment securities held to maturity at cost                                                   1,481                 -
Loans                                                                                          173,974           165,366
Allowance for loan losses                                                                       (2,129)           (2,375)
                                                                                        --------------    --------------

                                                                       NET LOANS               171,845           162,991

Accrued interest receivable                                                                        980               955
Bank premises and equipment                                                                      4,863             4,639
Foreclosed real estate                                                                              94               446
Federal Home Loan Bank stock at cost                                                               800               450
Other assets                                                                                     1,809             1,321
                                                                                        --------------    --------------

                                                                    TOTAL ASSETS        $      230,980    $      215,105
                                                                                        ==============    ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
   Demand                                                                               $       23,739    $       22,062
   Savings                                                                                       5,118             4,435
   Money market and NOW                                                                         29,415            26,541
   Time                                                                                        124,086           121,277
                                                                                        --------------    --------------

                                                                  TOTAL DEPOSITS               182,358           174,315

Borrowings                                                                                      15,945             9,000
Securities sold under agreement to repurchase                                                    3,869             2,576
Capital lease obligation                                                                         1,705             1,705
Accrued expenses and other liabilities                                                             575               933
Trust preferred securities                                                                       3,500             3,500
                                                                                        --------------    --------------

                                                               TOTAL LIABILITIES               207,952           192,029
                                                                                        --------------    --------------
Stockholders' Equity
    Preferred stock, no par value, 1,000,000 shares authorized; none
     issued
    Common stock, $1 par value, 9,000,000 shares authorized;
     2,824,376 issued and outstanding                                                            2,824             2,824
   Additional paid-in capital                                                                   19,191            19,191
   Retained earnings                                                                               946               909
   Accumulated other comprehensive income                                                           67               152
                                                                                        --------------    --------------

                                                      TOTAL STOCKHOLDERS' EQUITY                23,028            23,076
                                                                                        --------------    --------------
Commitments (Note B)
                                                           TOTAL LIABILITIES AND
                                                            STOCKHOLDERS' EQUITY        $      230,980    $      215,105
                                                                                        ==============    ==============
</TABLE>

*Derived from audited financial statements

See accompanying notes.

                                        3

<PAGE>

                       AMERICAN COMMUNITY BANCSHARES, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                   THREE MONTHS ENDED MARCH 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                  Three months       Three months
                                                                                      ended             ended
                                                                                 March 31, 2003      March 31, 2002
                                                                                -----------------   -----------------
                                                                                (In Thousands, except per share data)
<S>                                                                             <C>                 <C>
INTEREST INCOME
   Loans                                                                        $           2,751   $           2,489
   Investments                                                                                260                 138
   Interest-earning deposits with banks                                                        19                  85
                                                                                -----------------   -----------------

                                                     TOTAL INTEREST INCOME                  3,030               2,712
                                                                                -----------------   -----------------

INTEREST EXPENSE
   Money market, NOW and savings deposits                                                      52                  97
   Time deposits                                                                              957               1,082
   Borrowings                                                                                 257                 201
                                                                                -----------------   -----------------

                                                    TOTAL INTEREST EXPENSE                  1,266               1,380
                                                                                -----------------   -----------------

                                                       NET INTEREST INCOME                  1,764               1,332

PROVISION FOR LOAN LOSSES                                                                     365                 141
                                                                                -----------------   -----------------
                                                 NET INTEREST INCOME AFTER
                                                 PROVISION FOR LOAN LOSSES                  1,399               1,191
                                                                                -----------------   -----------------

NON-INTEREST INCOME
   Service charges on deposit accounts                                                        467                 235
   Mortgage operations                                                                        140                 126
   Other                                                                                       73                  85
                                                                                -----------------   -----------------

                                                 TOTAL NON-INTEREST INCOME                    680                 446
                                                                                -----------------   -----------------

NON-INTEREST EXPENSE
   Salaries and employee benefits                                                             854                 690
   Occupancy and equipment                                                                    297                 270
   Other                                                                                      514                 476
                                                                                -----------------   -----------------

                                                TOTAL NON-INTEREST EXPENSE                  1,665               1,436
                                                                                -----------------   -----------------

                                      INCOME BEFORE INCOME TAXES (BENEFIT)                    414                 201

INCOME TAXES (BENEFIT)                                                                        151                 (57)
                                                                                -----------------   -----------------

                                                                NET INCOME      $             263   $             258
                                                                                =================   =================

                                              BASIC AND DILUTED NET INCOME
                                                          PER COMMON SHARE      $             .09   $             .14
                                                                                =================   =================
   WEIGHTED AVERAGE COMMON
    SHARES OUTSTANDING                                               BASIC              2,824,376           1,820,697
                                                                                =================   =================

                                                                   DILUTED              2,829,897           1,820,697
                                                                                =================   =================

   DIVIDEND DECLARED PER COMMON SHARE                                           $            0.08                   -
                                                                                =================   =================
</TABLE>

                                        4

<PAGE>

                       AMERICAN COMMUNITY BANCSHARES, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                   THREE MONTHS ENDED MARCH 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                    Three months      Three months
                                                                                       ended             ended
                                                                                   March 31, 2003    March 31, 2002
                                                                                   --------------    --------------
                                                                                            (In Thousands)
<S>                                                                                <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                                      $          263    $          258
   Adjustments to reconcile net income to net
    cash provided (used) by operating activities:
     Depreciation and amortization                                                            185               137
     Provision for loan losses                                                                365               112
     Loss on sale of foreclosed real estate                                                    28                 -
     Change in assets and liabilities
        (Increase) decrease in accrued interest receivable                                    (25)              129
        Increase in other assets                                                             (446)             (299)
        Decrease in accrued expenses and other liabilities                                   (358)              (58)
                                                                                   --------------    --------------

                                                      NET CASH PROVIDED BY
                                                      OPERATING ACTIVITIES                     12               279
                                                                                   --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of investment securities available for sale                                  (12,614)             (209)
   Purchases of investment securities held to maturity                                     (1,482)                -
   Proceeds from maturities, calls and principal re-payments
    of investment securities                                                                8,031             2,650
   Net increase in loans from originations and repayments                                  (9,219)           (3,111)
   Purchases of bank premises and equipment                                                  (329)             (365)
   Proceeds from sale of foreclosed real estate                                               324
   Purchase of Federal Home Loan Bank stock                                                  (350)                -
                                                                                   --------------    --------------

                                                          NET CASH USED BY
                                                      INVESTING ACTIVITIES                (15,639)           (1,035)
                                                                                   --------------    --------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in demand deposits                                                          5,234             6,503
   Net increase in time deposits                                                            2,809             3,561
   Net increase in advances from Federal Home Loan Bank                                     6,945                 -
   Net increase in securities sold under agreement to repurchase                            1,293                 -
   Proceeds from issuance of trust preferred securities                                         -             1,500
   Cash paid for dividends                                                                   (226)                -
   Proceeds from common stock sold, net                                                         -               107
                                                                                   --------------    --------------
                                                      NET CASH PROVIDED BY
                                                      FINANCING ACTIVITIES                 16,055            11,671
                                                                                   --------------    --------------
                                                      NET INCREASE IN CASH
                                                      AND CASH EQUIVALENTS                    428            10,915
                                                                                   --------------    --------------

CASH AND CASH EQUIVALENTS, BEGINNING                                                       16,838            23,509
                                                                                   --------------    --------------

CASH AND CASH EQUIVALENTS, ENDING                                                  $       17,266    $       34,424
                                                                                   ==============    ==============
</TABLE>

                                        5

<PAGE>

                       AMERICAN COMMUNITY BANCSHARES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

In management's opinion, the financial information, which is unaudited, reflects
all adjustments (consisting solely of normal recurring adjustments) necessary
for a fair presentation of the financial information as of and for the three
month periods ended March 31, 2003 and 2002, in conformity with accounting
principles generally accepted in the United States of America. The consolidated
financial statements include the accounts of American Community Bancshares, Inc.
(the "Company") and its wholly owned subsidiaries, American Community Bank (the
"Bank") and American Community Capital Trust I ("Capital Trust I"). All
significant inter-company transactions and balances are eliminated in
consolidation. Operating results for the three-month period ended March 31, 2003
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2003.

The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to the consolidated
financial statements filed as part of the Company's 2002 annual report on Form
10-KSB. This quarterly report should be read in conjunction with such annual
report.

NOTE B - COMMITMENTS

At March 31, 2003, loan commitments are as follows:

         Undisbursed lines of credit                     $     29,887,211
         Stand-by letters of credit                             1,955,581

                                        6

<PAGE>

                       AMERICAN COMMUNITY BANCSHARES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C - PER SHARE RESULTS

In January 2002, the Company effected an eleven for ten stock split in the form
of a 10% stock dividend.

Basic earnings per share represents income available to common stockholders
divided by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflect additional common shares that would
have been outstanding if dilutive potential common shares had been issued, as
well as any adjustment to income that would result from the assumed issuance.
Potential common shares that may be issued by the company relate solely to
outstanding stock options and warrants and are determined using the treasury
stock method.

                                                     Three months ended
                                                         March 31,
                                                   2003               2002
                                             ----------------   ---------------

Weighted average number of common
 shares used in computing basic
 net income per share                               2,824,376         1,820,697
Effective of dilutive stock options                     5,521                 -
                                             ----------------   ---------------
Weighted average number of common
 shares and dilutive potential common
 shares used in computing diluted net
 income per share
                                                    2,829,897         1,820,697
                                             ================   ===============

NOTE D - ISSUANCE OF COMMON STOCK

On April 29, 2002 the Company completed the sale of 1,000,500 units at $9.00 per
share in a public offering, with each unit sold consisting of one share of
common stock and one warrant to purchase one share of common stock at a price of
$10.50 per share at any time until April 30, 2005. This offering generated net
proceeds to the Company of approximately $8.1 million.

                                        7

<PAGE>

                       AMERICAN COMMUNITY BANCSHARES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE E - COMPREHENSIVE INCOME

Total comprehensive income, consisting of net income and unrealized gains and
losses on available for sale securities, net of taxes, was $178,000 and $218,000
for the three months ended March 31, 2003 and 2002.

NOTE F - STOCK COMPENSATION PLAN

Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for
Stock-Based Compensation, encourages all entities to adopt a fair value based
method of accounting for employee stock compensation plans, whereby compensation
cost is measured at the grant date based on the value of the award and is
recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost for
those plans using the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, whereby compensation cost is the excess, if any, of the quoted market
price of the stock at the grant date (or other measurement date) over the amount
an employee must pay to acquire the stock. Stock options issued under the
company's stock option plans have no intrinsic value at the grant date and,
under Opinion No. 25, no compensation cost is recognized for them. The company
has elected to continue with the accounting methodology in Opinion No. 25.
Presented below are the pro forma disclosures of net income and earnings per
share and other disclosures as if the fair value based method of accounting had
been applied.

<TABLE>
<CAPTION>
                                                              Three months ended
                                                                   March 31,
                                                              2003            2002
                                                          ------------    ------------
<S>                                                       <C>             <C>
Net income:
  As reported                                             $    263,000    $    258,000
    Deduct: Total stock-based employee compensation
     expense determined under fair value method
     for all awards, net of related tax effects                (23,800)        (19,500)
                                                          ------------    ------------
Pro forma                                                 $    239,200    $    238,500
                                                          ============    ============

Basic net income per share
  As reported                                             $       0.09    $       0.14
  Proforma                                                        0.08            0.13

Diluted net income per share
  As reported                                                     0.09            0.14
  Proforma                                                        0.08            0.13
</TABLE>

                                        8

<PAGE>

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

This Quarterly Report on Form 10-QSB may contain certain forward-looking
statements consisting of estimates with respect to the financial condition,
results of operations and business of the Company that are subject to various
factors which could cause actual results to differ materially from these
estimates. These factors include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, loan demand, real estate
values, and competition; changes in accounting principles, policies, or
guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory, and technological factors affecting the
Company's operations, pricing, products, and services. There are no pending
legal proceedings other than those incurred in the normal course of business to
which the Bank or Bancshares is a party, or of which any of their property is
the subject.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2003 AND DECEMBER 31, 2002

Total assets at March 31, 2003 increased by $15.9 million or 7.4% to $231.0
million compared to $215.1 million at December 31, 2002. The Company had earning
assets of $219.9 million at month-end March 31, 2003 consisting of $174.0
million in gross loans, $34.1 million in investment securities and Federal Home
Loan Bank (FHLB) stock and $11.8 million in overnight investments. Total
deposits as of March 31, 2003 increased by $8.1 million or 4.6% to $182.4
million compared to $174.3 million at December 31, 2002. Total borrowed money as
of March 31, 2003 increased by $8.2 million or 49.1% to $25.0 million compared
to $16.8 million at December 31, 2002. Stockholders' equity was $23.0 million at
March 31, 2003 compared to $23.1 million at December 31, 2002 for a decrease of
$48,000 or 0.2%. The decrease resulted from the payment of a cash dividend in
the amount of $226,000 combined with total comprehensive income of $178,000.

The Company recorded a $365,000 provision for loan losses for the quarter ended
March 31, 2003, representing an increase of $224,000 or 159% over the $141,000
provision for the quarter ended March 31, 2002. Provisions for loan losses are
charged to income to bring the allowance for loan losses to a level deemed
appropriate by management. The Company has continued to provide provisions for
loan losses principally as a result of the continued growth in the loan
portfolio. Total loans receivable increased by $8.6 million during the quarter
ended March 31, 2003. The allowance for loan losses at March 31, 2003 of $2.13
million equaled 1.22% of total loans outstanding and 3671% of non-performing
loans. The allowance for loan losses at December 31, 2002 of $2.38 million
equaled 1.44% of total loans outstanding and 409% of non-performing loans. The
decrease in the allowance for loan losses as a percentage of total loans is
attributable to the write off of a $552,000 loan for which $414,000 had been
specifically reserved.

The Company had investment securities available for sale of $31.8 million at
March 31, 2003. The portfolio increased by $4.4 million or 16.0% from the $27.4
million balance at December 31, 2002 as the Company continued to invest excess
liquidity. In addition the Company had investment securities held to maturity of
$1.5 million at March 31, 2003. No such securities were held at December 31,
2002.

Interest-earning deposits with banks at March 31, 2003 increased by $7.2 million
or 154.0% to $11.8 million compared to $4.6 million at December 31, 2002. This
increase was primarily a result of the decrease in cash and due from banks. The
Company holds funds in interest-earning deposits with banks to provide liquidity
for future loan demand and to satisfy fluctuations in deposit levels.

Non interest-earning assets at March 31, 2003 decreased by $6.3 million or 32.3%
to $13.2 million compared to $19.5 million at December 31, 2002. The decrease is
primarily attributable to a decrease of $6.7 million to $5.4 million in the cash
and due from banks category. This primarily represents customer deposits that
are in the process of collection and not available for overnight investment

                                        9

<PAGE>

combined with cash on hand in the branches. Accrued interest receivable
increased $25,000 to $980,000 at March 31, 2003 as a result of the timing in the
collection of interest income. Bank premises and equipment was $4.9 million at
March 31, 2003, an increase of $224,000 from December 31, 2002. The net increase
resulted from additions of $329,000 and depreciation of $105,000. Other real
estate owned decreased by $352,000 as a result of the sale of two 1-4 family
properties obtained through foreclosure. Other assets increased by $488,000 at
March 31, 2003 to $1.8 million primarily as a result of the increase in prepaid
expenses and other repossessed assets.

Total deposits increased $8.1 million or 4.6% from $174.3 million at December
31, 2002 to $182.4 million at March 31, 2003. The composition of the deposit
base, by category, at March 31, 2003 is as follows: 13% non-interest bearing
demand deposits, 3% savings deposits, 16% money market and interest bearing
demand deposits and 68% time deposits. All deposit categories experienced
increases over the three-month period. Dollar and percentage increases by
category were as follows: non-interest bearing demand deposits, $1.7 million or
8%; savings deposits, $683,000 or 15%, money market and interest bearing demand
deposits, $2.9 million or 11%, and time deposits, $2.8 million or 2%. Time
deposits of $100,000 or more totaled $60.1 million, or 33% of total deposits at
March 31, 2003. The composition of deposits at December 31, 2002 was 13%
non-interest bearing demand deposits, 2% savings deposits, 15% money market and
interest bearing demand deposits and 70% time deposits.

The Company had advances from the Federal Home Loan Bank of Atlanta at March 31,
2003 of $15.9 million with maturity dates ranging from June 2003 through
February 2013. The balance of Federal Home Loan Bank advances at December 31,
2002 was $9.0 million with maturity dates ranging from June 2003 through
December 2011. These advances are secured by a blanket lien on 1-4 family real
estate loans and certain commercial real property. Total securities sold under
agreement to repurchase increased $1.3 million or 50.2% from $2.6 million at
December 31, 2002 to $3.9 million at March 31, 2003. These borrowings are
secured by certain of the Company's investment securities. The Company also
maintained the capital lease for its main office. The recorded obligation under
this capital lease at March 31, 2003 was $1.7 million. In addition, Capital
Trust I maintained the Trust Preferred Securities in the amount of $3.5 million
at a fixed rate of 9%. The Trust Preferred securities have a maturity date of
March 1, 2032, are redeemable on or after March 1, 2007 at par value and are
eligible for inclusion as Tier I capital.

Other liabilities decreased by $358,000 to $575,000 or 38.4% at March 31, 2003
from $933,000 at December 31, 2002. The decrease was primarily due to the
payment of previously accrued income tax liabilities.

The Company began 2003 with total stockholders' equity of $23.1 million. Total
equity decreased to $23.0 million at March 31, 2003. The decrease resulted from
the payment of a cash dividend in the amount of $226,000 combined with total
comprehensive income of $178,000.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003
AND 2002

Net Income The Company generated a net pre-tax profit for the three months ended
March 31, 2003 of $414,000 compared to a net pre-tax profit for the three months
ended March 31, 2002 of $201,000 an increase of 106%. The Company generated net
income for the three months ended March 31, 2003 of $263,000 compared to a
profit for the three months ended March 31, 2002 of $258,000. On a per share
basis earnings were $.09 for 2003 compared to $.14 for 2002. Return on average
assets was 0.48% and 0.55% and return on average equity was 4.61% and 7.51% for
the three months ended March 31, 2003 and 2002, respectively. Earnings for the
three months ended March 31, 2003 were positively impacted by strong growth in
average earning assets and by increases in net interest income and non-interest
income.

Net Interest Income. Net interest income increased $432,000 from $1.3 million
for the three months ended March 31, 2002 to $1.8 million for the three months
ended March 31, 2003. Total interest

                                       10

<PAGE>

income benefited from growth in average earning assets that offset the lower
asset yields resulting from the reductions in short-term rates during 2002. In
addition, total interest expense benefited from the lower funding costs
prevalent in 2003.

Total average earning assets increased $31.5 million or 18% from an average of
$175.0 million during the first quarter of 2002 to an average of $206.5 during
the first quarter of 2003. The Company experienced strong loan growth with
average loan balances increasing by $27.3 million. The increase in average
balances for investment securities and interest-earning deposits was $4.2
million. Average interest-bearing liabilities increased by $19.8 million during
the first quarter of 2003 of which $13.0 million was attributable to deposits
while borrowings increased $6.8 million.

Net interest margin is interest income earned on loans, securities and other
earning assets, less interest expense paid on deposits and borrowings, expressed
as a percentage of total average earning assets. The net interest margin for the
quarter ended March 31, 2003 was 3.47% compared to 3.05% for the same quarter in
2002. The increase in net interest margin resulted primarily from the re-pricing
of our interest bearing liabilities to lower prevailing rates. The interest rate
spread, which is the difference between the average yield on earning assets and
the cost of interest-bearing funds, increased 34 basis points from 2.63% in the
quarter ended March 31, 2002 to 2.97% for the same quarter in 2003.

Provision for Loan Losses. The Company's provision for loan losses for the
quarter ended March 31, 2003 was $365,000, representing a $224,000 or 159%
increase over the $141,000 recorded for the quarter ended March 31, 2002. The
increase was a result of the increase in loans outstanding combined with the
charge-off of a loan in the amount of $138,000 for which no previous loan
allowance had been recorded. Provisions for loan losses are charged to income to
bring the allowance for loan losses to a level deemed appropriate by management.

Non-interest Income. Non-interest income increased by $234,000 or 52% to
$680,000 for the three months ended March 31, 2003 compared with $446,000 for
the same period in the prior year. Non-interest income as a percentage of total
revenue (defined as net interest income plus non-interest income) increased to
28% for the three months ended March 31, 2003 from 25% for the same period in
the prior year. The largest components of non-interest income were service
charges on deposit accounts of $467,000 for the quarter ended March 31, 2003 as
compared to $235,000 for the same period in 2002 or a 99% increase and fees from
mortgage banking operations of $140,000 in 2003 as compared to $126,000 in 2002
or an 11% increase. Service charge income increased primarily as a result of the
introduction of an overdraft privilege program in the fourth quarter of 2002.
Fees from mortgage banking operations increased due to the favorable mortgage
interest rate environment in 2003.

Non-interest Expense. Total non-interest expense increased from $1.4 million for
the three months ended March 31, 2002 to $1.7 million for the same period in
2003. This 16% increase was primarily due to increased expenses associated with
the opening of permanent facilities at two of our current locations combined
with the addition of our eighth branch location.

Provision for Income Taxes. The Company had income tax expense in the amount of
$151,000 for the three months ended March 31, 2003 which equates to a 36.5%
effective tax rate. The Company had an income tax benefit in the amount of
$57,000 for the three months ended March 31, 2002. This difference is
principally due to adjustments to the valuation allowance associated with
deferred tax assets in 2002. As the Company became profitable and continued to
demonstrate a sustained pattern of profitability, the valuation allowance was
adjusted accordingly with the benefit reflected in net income.

                                       11

<PAGE>

ASSET QUALITY

No material changes have occurred in the Company's asset quality since December
31, 2002.

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Within 90 days prior to the date of this report (the Evaluation Date), the
Company's President and Chief Executive Officer and Senior Vice President and
Chief Financial Officer, carried out an evaluation of the effectiveness of the
Company's "disclosure controls and procedures" (as defined in the Securities
Exchange Act of 1934 Rules 13a-14(c) and 15(d)-14(c)). Based on that evaluation,
these officers have concluded that as of the Evaluation Date, the Company's
disclosure controls and procedures were adequate and designed to ensure that
material information relating to the Company and the Company's consolidated
subsidiaries would be made known to them by others within those entities.

CHANGES IN INTERNAL CONTROLS

There were no significant changes in the Company's internal controls, or to the
Company's knowledge, in other factors that could significantly affect the
Company's disclosure controls and procedures subsequent to the Evaluation Date.

                                       12

<PAGE>

Part II.  OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits.

               99.1      Certification Pursuant to Section 906 of the
                         Sarbanes-Oxley Act of 2002

          (b)  Reports on Form 8-K.

        During the first quarter of fiscal year 2003, the Registrant filed a
        report on Form 8-K regarding the Registrant's declaration of its first
        cash dividend in an amount equal to $.08 per share which was to be paid
        to shareholders on March 17, 2003 to shareholders of record on February
        28, 2003. Registrant indicated this was an annual dividend to reward
        shareholders for its financial results in 2002.

        The Registrant also announced unaudited net income for the year ended
        December 31, 2002 of $1.3 million representing a 74.3% increase over
        results for the year ended December 31, 2001. At December 31, 2002
        Registrant's assets were $215.2 million, loans receivable were $165.4
        million, deposits were $174.3 million and stockholders' equity was $23.1
        million.

        Also during the first quarter of fiscal year 2003, the Registrant filed
        a report on Form 8-K regarding the Registrant's presentation to certain
        financial consultants of the investment banking firm of Ryan Beck & Co.,
        Inc. During the course of the presentation, the Registrant presented
        certain information regarding the Registrant's recent financial
        performance.

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                                   SIGNATURES

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

                                     AMERICAN COMMUNITY BANCSHARES, INC.

Date: April 28, 2003             By: /s/  Randy P. Helton
                                     -------------------------------------------

                                     Randy P. Helton
                                     President and Chief Executive Officer

Date: April 28, 2003             By: /s/  Dan R. Ellis, Jr.
                                     -------------------------------------------

                                     Dan R. Ellis, Jr.
                                     Senior Vice President and Chief Financial
                                     Officer

                                       14

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                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Randy P. Helton, certify that:

(1)  I have reviewed this quarterly report on Form 10-QSB of American Community
     Bancshares, Inc., a North Carolina bank (the "registrant");

(2)  Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

(4)  The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

        (a) designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, is made known to us
            by others within those entities, particularly during the period in
            which this quarterly report is being prepared;

        (b) evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

        (c) presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

(5)  The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions):

        (a) all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

        (b) any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

(6)  The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: April 28, 2003             By:   /s/ Randy P. Helton
                                    --------------------------------------------

                                     Randy P. Helton
                                     President and Chief Executive Officer

                                       15

<PAGE>

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dan R. Ellis, Jr., certify that:

(1)  I have reviewed this quarterly report on Form 10-QSB of American Community
     Bancshares, Inc., a North Carolina bank (the "registrant");

(2)  Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

(4)  The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

        (a) designed such disclosure controls and procedures to ensure that
            material information relating to the registrant, is made known to us
            by others within those entities, particularly during the period in
            which this quarterly report is being prepared;

        (b) evaluated the effectiveness of the registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

        (c) presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

(5)  The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions):

        (a) all significant deficiencies in the design or operation of internal
            controls which could adversely affect the registrant's ability to
            record, process, summarize and report financial data and have
            identified for the registrant's auditors any material weaknesses in
            internal controls; and

        (b) any fraud, whether or not material, that involves management or
            other employees who have a significant role in the registrant's
            internal controls; and

(6)  The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: April 28, 2003             By:  /s/ Dan R. Ellis, Jr.
                                     -------------------------------------------

                                     Dan R. Ellis, Jr.
                                     Senior Vice President and Chief Financial
                                     Officer

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