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

FORM 10-QSB

|  |  |                                                                               
|- |  | ------------------------------------------------------------------------------
|X |  | QUARTERLY REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

| |  |                                                                                        
| |  | ---------------------------------------------------------------------------------------
| |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________

Commission File Number: 333-86082

SOUTHERN COMMUNITY BANCSHARES, INC.

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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Georgia                                                        |  | 58  2639705                           
|                                                               |  |                                        
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification Number)

525 North Jeff Davis Drive, Fayetteville, Georgia 30214

---

(770) 461-4365

---

N/A

---

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

State the number of shares outstanding of each of the issuers classes of
capital stock, as of May 7, 2003: 1,450,983; no par value

Transitional Small Business Disclosure Format                      Yes  No X





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TABLE OF CONTENTS



|                                                                        |                                                                                               |                                                 |  |  |  |  |  | 
|----------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|                                                                        |                                                                                               | CONSOLIDATED BALANCE SHEETS                    
|                                                                        |                                                                                               | CONSOLIDATED STATEMENTS OF INCOME              
|                                                                        |                                                                                               | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|                                                                        |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS          
|                                                                        |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
|                                                                        | Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                        | Item 3. CONTROLS AND PROCEDURES                                                              
|PART II  Other Information                                            
|                                                                        |                                                                                               | Item 6. Exhibits                               
|SIGNATURES                                                             
|Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|EX-99.3 SECTION 906 CERTIFICATION OF THE CEO                           
|EX-99.4 SECTION 906 CERTIFICATION OF THE CFO                           



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SOUTHERN COMMUNITY BANCSHARES, INC. AND SUBSIDIARY

INDEX

|                              |                                                                                               |                                                                                                               |  |       |       | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- |  | ----- | ----- | 
|                              |                                                                                               |                                                                                                               |  | Page 
|                              |                                                                                               |                                                                                                               |  |      
|Part I. Financial Information |                                                                                               |                                                                                                               |  |      
|                              | Item 1. Financial Statements                                                                  |                                                                                                               |  |       |      
|                              |                                                                                               | Consolidated Balance Sheet
as of March 31, 2003                                                               |  |       | 3     | 
|                              |                                                                                               | Consolidated Statements of Income and
Comprehensive Income for the Three Months
Ended March 31, 2003 and 2002 |  |       | 4     | 
|                              |                                                                                               | Consolidated Statements of Comprehensive Income
for the Three Months Ended March 31, 2003 and 2002            |  |       | 5     | 
|                              |                                                                                               | Consolidated Statements of Cash Flows
For The Three Months Ended March 31, 2003 and 2002                      |  |       | 6     | 
|                              |                                                                                               | Notes to Consolidated Financial Statements                                                                    |  |       | 7 - 8 | 
|                              | Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations |                                                                                                               |  | 9-13  |      
|                              | Item 3. Controls and Procedures                                                               |                                                                                                               |  | 13    |      
|Part II. Other Information    |                                                                                               |                                                                                                               |  |      
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                               |  | 14    |      
|                              | Signatures                                                                                    |                                                                                                               |  | 15    |      
|                              | Certifications                                                                                |                                                                                                               |  | 16-21 |      

2



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SOUTHERN COMMUNITY BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
March 31, 2003

|                                            |                                                                                                    |                                            |            |            |             |  | 
|------------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------------------------ | ---------- | ---------- | ----------- |  | 
|                                            |                                                                                                    |                                            |            |            | 2003       
|                                            |                                                                                                    |                                            |            |            |            
|Assets                                     
|Cash and due from banks                     |                                                                                                    | $                                          | 4,547,528  |           
|Federal funds sold                          |                                                                                                    |                                            | 8,431,000  |           
|Securities available-for-sale               |                                                                                                    |                                            | 22,035,177 |           
|Restricted equity securities                |                                                                                                    |                                            | 288,900    |           
|Loans                                       |                                                                                                    |                                            | 92,774,509 |           
|Less allowance for loan losses              |                                                                                                    |                                            | 1,161,096  |           
|                                            |                                                                                                    |                                            |            |           
|                                            |                                                                                                    | Loans, net                                 |            |            | 91,613,413  | 
|Premises and equipment                      |                                                                                                    |                                            | 4,060,166  |           
|Other assets                                |                                                                                                    |                                            | 1,152,631  |           
|                                            |                                                                                                    |                                            |            |           
|                                            |                                                                                                    | Total assets                               |            | $          | 132,128,815 | 
|Liabilities and Shareholders Equity       
|Deposits                                    |                                                                                                    |                                            |            |           
|                                            | Noninterest-bearing                                                                                |                                            | $          | 13,126,639 |            
|                                            | Interest-bearing                                                                                   |                                            |            | 96,692,566 |            
|                                            |                                                                                                    |                                            |            |           
|                                            |                                                                                                    | Total deposits                             |            |            | 109,819,205 | 
|Securities sold under repurchase agreements |                                                                                                    |                                            | 3,794,291  |           
|Other liabilities                           |                                                                                                    |                                            | 777,551    |           
|                                            |                                                                                                    |                                            |            |           
|                                            |                                                                                                    | Total liabilities                          |            |            | 114,391,047 | 
|                                            |                                                                                                    |                                            |            |           
|Shareholders equity                        |                                                                                                    |                                            |            |           
|                                            | Capital stock, no par value; 10,000,000 shares authorized;
1,450,983 shares issued and outstanding |                                            |            | 16,047,815 |            
|                                            | Retained earnings                                                                                  |                                            |            | 1,497,129  |            
|                                            | Accumulated other comprehensive income                                                             |                                            |            | 192,824    |            
|                                            |                                                                                                    |                                            |            |           
|                                            |                                                                                                    | Total shareholders equity                 |            |            | 17,737,768  | 
|                                            |                                                                                                    |                                            |            |           
|                                            |                                                                                                    | Total liabilities and shareholders equity |            | $          | 132,128,815 | 
|                                            |                                                                                                    |                                            |            |           

See Notes to Consolidated Financial Statements.

3



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SOUTHERN COMMUNITY BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 2003 and 2002

|                             |                                               |                                |                                                     |           |         |           |         |           |         |           | 
|---------------------------- | --------------------------------------------- | ------------------------------ | --------------------------------------------------- | --------- | ------- | --------- | ------- | --------- | ------- | --------- | 
|                             |                                               |                                |                                                     |           | 2003    |           | 2002   
|                             |                                               |                                |                                                     |           |         |           |        
|Interest income              |                                               |                                |                                                     |           |         |           |         |          
|                             | Loans, including fees                         |                                | $                                                   | 1,702,229 |         |           | $       | 1,353,390 |        
|                             | Taxable securities                            |                                |                                                     | 139,735   |         |           |         | 178,962   |        
|                             | Nontaxable securities                         |                                |                                                     | 40,627    |         |           |         | 638       |        
|                             | Federal funds sold                            |                                |                                                     | 12,567    |         |           |         | 15,024    |        
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|                             |                                               |                                | Total interest income                               |           |         | 1,895,158 |         |           |         | 1,548,014 | 
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|Interest expense             |                                               |                                |                                                     |           |         |           |         |          
|                             | Deposits                                      |                                |                                                     | 614,819   |         |           |         | 572,806   |        
|                             | Other borrowings                              |                                |                                                     | 9,270     |         |           |         | 8,288     |        
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|                             |                                               |                                | Total interest expense                              |           |         | 624,089   |         |           |         | 581,094   | 
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|                             |                                               |                                | Net interest income                                 |           |         | 1,271,069 |         |           |         | 966,920   | 
|Provision for loan losses    |                                               |                                | 70,000                                              |           |         |           | 42,000  |          
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|                             |                                               |                                | Net interest income after provision for loan losses |           |         | 1,201,069 |         |           |         | 924,920   | 
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|Other income                 |                                               |                                |                                                     |           |         |           |         |          
|                             | Service charges on deposit accounts           |                                | 88,813                                              |           |         |           | 55,359  |          
|                             | Gain on sale of securities available-for-sale |                                |                                                     |          |         |           |         | 7,417     |        
|                             | Gain on sale of loans                         |                                |                                                     | 21,113    |         |           |         |          |        
|                             | Other operating income                        |                                |                                                     | 6,676     |         |           |         | 11,669    |        
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|                             |                                               |                                | Total other income                                  |           |         | 116,602   |         |           |         | 74,445    | 
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|Other expenses               |                                               |                                |                                                     |           |         |           |         |          
|                             | Salaries and employee benefits                |                                | 441,352                                             |           |         |           | 344,438 |          
|                             | Equipment and occupancy expenses              |                                |                                                     | 113,651   |         |           |         | 103,344   |        
|                             | Other operating expenses                      |                                |                                                     | 254,409   |         |           |         | 252,178   |        
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|                             |                                               |                                | Total other expenses                                |           |         | 809,412   |         |           |         | 699,960   | 
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|                             |                                               | Net income before income taxes |                                                     |           | 508,259 |           |         |           | 299,405 |          
|Income tax expense           |                                               |                                | 193,138                                             |           |         |           | 113,816 |          
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|                             |                                               |                                | Net income                                          |           | $       | 315,121   |         |           | $       | 185,589   | 
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|Basic earnings per share     |                                               | $                              | 0.22                                                |           |         | $         | 0.23    |          
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|Diluted earnings per share   |                                               | $                              | 0.22                                                |           |         | $         | 0.23    |          
|                             |                                               |                                |                                                     |           |         |           |         |           |        
|Dividends declared per share |                                               | $                              |                                                    |           |         | $         |        |          
|                             |                                               |                                |                                                     |           |         |           |         |           |        

See Notes to Consolidated Financial Statements.

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SOUTHERN COMMUNITY BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended March 31, 2003 and 2002

|                                   |                                                                                              |   |         |        |      |   |         |         |  
|---------------------------------- | -------------------------------------------------------------------------------------------- | - | ------- | ------ | ---- | - | ------- | ------- | -
|                                   |                                                                                              |   | 2003    |        | 2002
|                                   |                                                                                              |   |         |        |     
|Net income                         |                                                                                              | $ | 315,121 |        |      | $ | 185,589 |        
|                                   |                                                                                              |   |         |        |      |   |         |        
|Other comprehensive income (loss): |                                                                                              |   |         |        |      |   |         |        
|                                   | Unrealized gains (losses) on securities available-for-sale
arising during period, net of tax |   |         | 85,444 |      |   |         | (76,016 | )
|                                   | Reclassification adjustment for gains realized in net income,
net of tax                     |   |         |       |      |   |         | (4,599  | )
|                                   |                                                                                              |   |         |        |      |   |         |        
|                                   | Other comprehensive income (loss)                                                            |   |         | 85,444 |      |   |         | (80,615 | )
|                                   |                                                                                              |   |         |        |      |   |         |        
|Comprehensive income               |                                                                                              | $ | 400,565 |        |      | $ | 104,974 |        
|                                   |                                                                                              |   |         |        |      |   |         |        

See Notes to Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2003 and 2002

|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |         |            |         | 
|-------------------------------------------- | --------------------------------------------------------------------------------- | --------------------------------------------- | ----------------------------------------- | ----------------------------------------- | ------- | ---------- | --------- | ---------- | ------- | ---------- | ------- | 
|                                             |                                                                                   |                                               |                                           |                                           |         | 2003       |           | 2002      
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |           
|OPERATING ACTIVITIES                         |                                                                                   |                                               |                                           |                                           |         |            |           |           
|                                             | Net income                                                                        |                                               | $                                         | 315,121                                   |         |            | $         | 185,589    |        
|                                             | Adjustments to reconcile net income to net cash
provided by operating activities: |                                               |                                           |                                           |         |            |           |            |        
|                                             |                                                                                   | Depreciation                                  |                                           |                                           | 63,596  |            |           |            | 59,406  |           
|                                             |                                                                                   | Provision for loan losses                     |                                           |                                           | 70,000  |            |           |            | 42,000  |           
|                                             |                                                                                   | Gain on sale of securities available-for-sale |                                           |                                           |        |            |           |            | (7,417  | )         
|                                             |                                                                                   | Decrease in interest receivable               |                                           |                                           | 17,555  |            |           |            | 70,445  |           
|                                             |                                                                                   | Increase (decrease) in interest payable       |                                           |                                           | 3,355   |            |           |            | (43,715 | )         
|                                             |                                                                                   | Net other operating activities                |                                           |                                           | (30,630 | )          |           |            | (27,300 | )         
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |        
|                                             |                                                                                   |                                               |                                           | Net cash provided by operating activities |         |            | 438,997   |            |         |            | 279,008 | 
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |        
|INVESTING ACTIVITIES                         |                                                                                   |                                               |                                           |                                           |         |            |           |           
|                                             | Purchase of securities available-for-sale                                         |                                               |                                           | (2,286,578                                | )       |            |           | (1,214,187 | )      
|                                             | Proceeds from maturities of securities available-for-sale                         |                                               |                                           | 3,187,903                                 |         |            |           | 444,756    |        
|                                             | Proceeds from sales of securities available-for-sale                              |                                               |                                           |                                          |         |            |           | 695,418    |        
|                                             | Purchase of restricted equity securities                                          |                                               |                                           | (147,100                                  | )       |            |           |           |        
|                                             | Net increase in federal funds sold                                                |                                               |                                           | (8,431,000                                | )       |            |           | (1,968,000 | )      
|                                             | Net increase in loans                                                             |                                               |                                           | (1,902,929                                | )       |            |           | (5,616,721 | )      
|                                             | Purchase of premises and equipment                                                |                                               |                                           | (412,360                                  | )       |            |           | (48,251    | )      
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |        
|                                             |                                                                                   |                                               | Net cash used in investing activities     |                                           |         | (9,992,064 | )         |            |         | (7,706,985 | )      
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |        
|FINANCING ACTIVITIES                         |                                                                                   |                                               |                                           |                                           |         |            |           |           
|                                             | Net increase in deposits                                                          |                                               |                                           | 10,310,460                                |         |            |           | 8,871,813  |        
|                                             | Proceeds from issuance of capital stock                                           |                                               |                                           | 705,200                                   |         |            |           |           |        
|                                             | Net decrease in federal funds purchased                                           |                                               |                                           | (719,000                                  | )       |            |           |           |        
|                                             | Net increase in repurchase agreements                                             |                                               |                                           | 14,278                                    |         |            |           | 356,580    |        
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |        
|                                             |                                                                                   |                                               | Net cash provided by financing activities |                                           |         | 10,310,938 |           |            |         | 9,228,393  |        
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |        
|Net increase in cash and due from banks      |                                                                                   |                                               | 757,871                                   |                                           |         |            | 1,800,416 |           
|Cash and due from banks at beginning of year |                                                                                   |                                               | 3,789,657                                 |                                           |         |            | 1,404,674 |           
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |        
|Cash and due from banks at end of year       |                                                                                   | $                                             | 4,547,528                                 |                                           |         | $          | 3,205,090 |           
|                                             |                                                                                   |                                               |                                           |                                           |         |            |           |            |        

See Notes to Consolidated Financial Statements.

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SOUTHERN COMMUNITY BANCSHARES, INC. AND SUBSIDIARY




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1. BASIS OF PRESENTATION



| |                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The consolidated financial information included for Southern
Community Bancshares, Inc. (the Company) and Southern Community
Bank (the Bank) herein is unaudited; however, such information
reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary
for a fair statement of results for the interim periods.
|
| | The results of operations for the three month period ended March
31, 2003 are not necessarily indicative of the results to be
expected for the full year.                                                                                                                                                                                                                               

NOTE 2. STOCK COMPENSATION PLANS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | At March 31, 2003, the Company has two stock-based employee
compensation
plans. The Company accounts for those plans under the recognition
and measurement principles of APB Opinion No. 25, Accounting for
Stock Issued to Employees,and related Interpretations. No
stock-based employee compensation cost is reflected in net income,
as all options granted under these plans have an exercise price
equal to the market value of the underlying stock on the date of
grant. The following table illustrates the effect on net income and
earnings per share if the Company had applied the fair value
recognition provisions of SFAS Statement No. 123, Accounting for
Stock-Based Compensation, to stock-based employee compensation.

|                                                                                                    |  |                              |  |            
|--------------------------------------------------------------------------------------------------- |  | ---------------------------- |  | -----------
|                                                                                                    |  | Three Months Ended March 31,
|                                                                                                    |  |                             
|                                                                                                    |  | 2003                         |  | 2002       
|                                                                                                    |  |                              |  |            
|Net income, as reported                                                                             |  |                              |  |            
|Deduct: Total stock-based employee compensation
          expense determined under fair value based |  | $315,121                     |  | $185,589   
|Method for all awards, net of related tax effects                                                   |  |                              |  |            
|                                                                                                    |  |                              |  |            
|Pro forma net income                                                                                |  | $315,121                     |  | $185,589   
|                                                                                                    |  |                              |  |            
|Earnings per share:                                                                                 |  |                              |  |            
|Basic  as reported                                                                                 |  | $      0.22                  |  | $      0.23
|                                                                                                    |  |                              |  |            
|Basic  pro forma                                                                                   |  | $      0.22                  |  | $      0.23
|                                                                                                    |  |                              |  |            
|Diluted  as reported                                                                               |  | $      0.22                  |  | $      0.23
|                                                                                                    |  |                              |  |            
|Diluted  pro forma                                                                                 |  | $      0.22                  |  | $      0.23
|                                                                                                    |  |                              |  |            

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NOTE 3. EARNINGS PER CAPITAL SHARE



| |                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Presented below is a summary of the components used to calculate
basic and diluted earnings per capital share for the periods ended
March 31, 2003 and 2002.

|                                                                                                                                 |  |                    |           |      |  |   |         | 
|-------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | --------- | ---- |  | - | ------- | 
|                                                                                                                                 |  | Three Months Ended
|                                                                                                                                 |  | March 31,         
|                                                                                                                                 |  |                   
|                                                                                                                                 |  | 2003               |           | 2002
|                                                                                                                                 |  |                    |           |     
|Net income                                                                                                                       |  | $                  | 315,121   |      |  | $ | 185,589 | 
|                                                                                                                                 |  |                    |           |      |  |   |         | 
|Weighted average capital shares outstanding                                                                                      |  |                    | 1,433,994 |      |  |   | 810,983 | 
|Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market price for the period |  |                    | 7,207     |      |  |   |        | 
|                                                                                                                                 |  |                    |           |      |  |   |         | 
|Total weighted average capital shares and
Capital stock equivalents outstanding                                                  |  |                    | 1,441,201 |      |  |   | 810,983 | 
|                                                                                                                                 |  |                    |           |      |  |   |         | 
|Diluted earnings per capital share                                                                                               |  | $                  | 0.22      |      |  | $ | 0.23    | 
|                                                                                                                                 |  |                    |           |      |  |   |         | 

NOTE 4. COMMON STOCK OFFERING



| |                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company completed its capital stock offering of 640,000 shares of
capital stock in its secondary stock offering which concluded on January
31, 2003.

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SOUTHERN COMMUNITY BANCSHARES, INC. AND SUBSIDIARY




Item 2. MANAGEMENTS 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 our financial position and operating results during
the periods included in the accompanying consolidated financial statements.

Forward-Looking Statements

This quarterly report contains certain forward-looking statements which are
based on certain assumptions and describe future plans, strategies, and our
expectations. These forward-looking statements are generally identified by use
of the words believe, expect, intend, anticipate, estimate,
project, or similar expressions. Our ability to predict results or the
actual effect of future plans or strategies is inherently uncertain. Factors
which could have a material adverse effect on our operations include, but are
not limited to, changes in interest rates, general economic conditions,
legislation and regulation, monetary and fiscal policies of the U.S.
Government, including policies of the U.S. Treasury and the Federal Reserve
Board, the quality or composition of our loan and investment portfolios, demand
for loan products, deposit flows, competition, demand for financial services in
our market area, and accounting principles and guidelines. You should consider
these risks and uncertainties in evaluating forward-looking statements and
should not place undue reliance on such statements. We will not publicly
release the result of any revisions which may be made to any forward-looking
statements to reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated events.

FINANCIAL CONDITION

Total assets increased $11.1 million from $121.1 million to $132.1 million, or
9.1% for the three months ended March 31, 2003. The increase in total assets
in 2003 is slightly more than the 9.3 million growth for the same period in
2002. The growth in both years continues to be funded primarily by increases
in total deposits, which increased by $10.4 million and $8.9 million,
respectively. The net increase in total assets for the three months ended
March 31, 2003 consisted primarily of an increase of $1.9 million in total
loans and an increase in Federal funds sold of $8.4 million. The loan to
deposit ratio at March 31, 2003 was 84% compared to 91% at December 31, 2002.
The decrease in the loan to deposit ratio as compared to December 31, 2002 is
due to total loans increasing by only $1.9 million and total deposits
increasing by $10.4 million.

Stockholders equity increased by $1.1 million for the three months ended March
31, 2003. This net increase consists of net income of $315,121, an increase in
unrealized gains on securities of $85,000, and proceeds from our stock offering
of $705,000. We sold the offering maximum of 640,000 shares by the expiration
date of January 31, 2003.

9



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LIQUIDITY

Liquidity management involves the matching of the cash flow requirements of
customer withdrawals of funds and the funding of loan originations, and the
ability of our subsidiary bank to meet those requirements. Management monitors
and maintains appropriate levels of liquidity so that maturities of assets and
deposit growth are such that adequate funds are provided to meet estimated
customer withdrawals and loan requests.

At March 31, 2003, the Banks liquidity ratio was 24.88% which is above the
Banks target ratio of 20%.

REGULATORY CAPITAL REQUIREMENTS

Banking regulations require us to maintain minimum capital levels in relation
to assets. At March 31, 2003, the Banks capital ratios were considered well
capitalized based on regulatory minimum capital requirements. The minimum
capital requirements and the actual capital ratios for the Bank at March 31,
2003 are as follows:

|                          |               |  |      |       |             |  |            |      |  
|------------------------- | ------------- |  | ---- | ----- | ----------- |  | ---------- | ---- | -
|                          |               |  |      |       |             |  | Regulatory
|                          |               |  |      |       |             |  | Minimum   
|                          |               |  | Bank |       | Requirement
|                          |               |  |      |       |            
|Leverage Capital Ratio    |               |  | 8.80 | %     |             |  | 4.00       | %   
|Risk-Based Capital Ratios |               |  |      |       |             |  |            |     
|                          | Core Capital  |  |      | 11.25 | %           |  |            | 4.00 | %
|                          | Total Capital |  |      | 12.38 | %           |  |            | 8.00 | %

Upon completion of our first branch facility in Peachtree City, we plan to open
for business during the second quarter of 2003. In addition, we are currently
negotiating the purchase of land for a second branch.

We are not aware of any other recommendations by the regulatory authorities,
events or trends, which, if they were to be implemented, would have a material
effect on our liquidity, capital resources, or operations.

RESULTS OF OPERATIONS

Net Interest Income. Net interest income increased by $304,000 for the three
month period ended March 31, 2003 compared to the same period in 2002. The
increase in net interest income is attributable to an increase in earning
assets of $34.6 million as compared to March 31, 2002. Loans increased during
this period by $21.4 million, which generally provide greater yields to the
Company. During this same period, total deposits increased by $26.3 million,
which included an increase of $27.5 million in interest-bearing deposits and a
decrease of $1.2 million in non-interest bearing deposits. The increase in net
interest income is also based on the spread between rates earned on interest
earning assets and rates paid on interest bearing liabilities. The yield on
total loans for the three months ended March 31, 2003 is approximately 7.51% as
compared to 8.03% for the same period in 2002. The yield
on total interest earning assets for the three months ended March 31, 2003 was
6.49% compared to

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7.46% for the same period in 2002, or a decrease of 97 basis
points. The rate paid on interest bearing liabilities for the same periods
decreased by 72 basis points to 2.75% from 3.47%. These decreases in yields
are directly related to the decline in interest rates over the past two years.

Due to the continued decrease in interest rates and increased volume of loans
and deposits at their respective current yields, the net interest margin
decreased to 4.35% at March 31, 2003 as compared to 4.66% at March 31, 2002.
We utilize floors on many of our adjustable rate loans to minimize the impact
of changing rates.

Provision for Loan Losses. The provision for loan losses is based on
managements evaluation of the economic environment, the history of charged off
loans and recoveries, size and composition of the loan portfolio, nonperforming
and past due loans, and other aspects of the loan portfolio. We review the
allowance for loan loss on a quarterly basis and make provisions as necessary.
A provision of $70,000 was made during the three month period ending March 31,
2003 based upon this evaluation process as compared to $42,000 for the same
period in 2002. The allowance for loan loss as a percentage of total loans was
1.25% at March 31, 2003, 1.25% at December 31, 2002, and 1.19% at March 31,
2002. Management believes the allowance for loan loss at March 31, 2003 is
adequate to meet any foreseeable losses in the loan portfolio. The increase in
the provision in 2003 as compared to 2002 is due to an additional provision
of $50,000 related to a partial charge-off of a real estate loan realized during
the first quarter of 2003. The remaining portion of the loan loss makes up the
majority of the increase in non-accrual loans.

At March 31, 2003 and 2002, nonaccrual, past due, and restructured loans were
as follows:

|                                                                                                         |  |                        |     |           |  |   |    | 
|-------------------------------------------------------------------------------------------------------- |  | ---------------------- | --- | --------- |  | - | -- | 
|                                                                                                         |  | March 31,              |     | March 31,
|                                                                                                         |  | 2003                   |     | 2002     
|                                                                                                         |  |                        |     |          
|                                                                                                         |  | (Dollars in thousands)
|Total nonaccruing loans                                                                                  |  | $                      | 336 |           |  | $ | 32 | 
|Loans contractually past due ninety days
or more as to interest or principal
payments and still accruing |  |                        |     |           |  |   |    | 
|Restructured loans                                                                                       |  |                        |    |           |  |   |   | 

It is our policy to discontinue the accrual of interest income when, in the
opinion of management, collection of such interest becomes doubtful. This
status is accorded such interest when (1) there is a significant deterioration
in the financial condition of the borrower and full repayment of principal and
interest is not expected or (2) the principal or interest is more than ninety
days past due, unless the loan is both well-secured and in the process of
collection. Accrual of interest on such loans is resumed when, in managements
judgment, the collection of interest and principal becomes probable.

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

11



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about which management is aware of any
information which causes management to have serious doubts as to the ability of
such borrowers to comply with the loan repayment terms.

Information regarding certain loans and allowance for loan loss data for the
three months ended March 31, 2003 and 2002 is as follows:

|                                                                              |                          |   |                        |     |      |   |        |   | 
|----------------------------------------------------------------------------- | ------------------------ | - | ---------------------- | --- | ---- | - | ------ | - | 
|                                                                              |                          |   | Three Months Ended    
|                                                                              |                          |   | March 31,             
|                                                                              |                          |   |                       
|                                                                              |                          |   | 2003                   |     | 2002
|                                                                              |                          |   |                        |     |     
|                                                                              |                          |   | (Dollars in thousands)
|Average amount of loans outstanding                                           |                          | $ | 91,934                 |     |      | $ | 68,327 |  
|                                                                              |                          |   |                        |     |      |   |        |  
|Balance of allowance for loan losses at beginning of period                   |                          | $ | 1,141                  |     |      | $ | 804    |  
|Loans charged off                                                             |                          |   |                        |     |      |   |        |  
|                                                                              | Commercial and financial |   |                        |    |      |   |        |  | 
|                                                                              | Real estate              |   |                        | (50 | )    |   |        |  | 
|                                                                              | Installment              |   |                        |    |      |   |        |  | 
|                                                                              |                          |   |                        |     |      |   |        |  
|                                                                              |                          |   | (50                    | )   |      |   | (-     | )
|                                                                              |                          |   |                        |     |      |   |        |  
|Loans recovered                                                               |                          |   |                        |     |      |   |        |  
|                                                                              | Commercial and financial |   |                        |    |      |   |        |  | 
|                                                                              | Real estate              |   |                        |    |      |   |        |  | 
|                                                                              | Installment              |   |                        |    |      |   |        |  | 
|                                                                              |                          |   |                        |     |      |   |        |  
|                                                                              |                          |   |                        |     |      |   |        |  
|Net charge-offs                                                               |                          |   | (50                    | )   |      |   | (-     | )
|                                                                              |                          |   |                        |     |      |   |        |  
|Additions to allowance charged to operating expense during period             |                          |   | 70                     |     |      |   | 42     |  
|                                                                              |                          |   |                        |     |      |   |        |  
|Balance of allowance for loan losses at end of period                         |                          |   | 1,161                  |     |      |   | 846    |  
|                                                                              |                          |   |                        |     |      |   |        |  
|Ratio of net loans charged-off during the
period to average loans outstanding |                          |   | 0.05                   | %   |      |   | 0.0    | %
|                                                                              |                          |   |                        |     |      |   |        |  

Other Income.Other income increased by $42,000 for the three months ended
March 31, 2003 compared to the same period in 2002. The most significant
difference was an increase in service charges on deposit accounts of $33,000
which is directly related to the growth in deposit accounts. Gains on sales
of securities decreased $7,000 for the three months ended March 31, 2003, while
gains on sales of loans increased $21,000 for the same period. This increase
was offset by a decrease of $4,000 related to income received from a third
party brokerage arrangement.

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Other Expenses.Other expenses increased by $109,000 for the three months
ended March 31, 2003 as compared to the same period in 2002. The most
significant increases in 2003 are increases of $97,000 in salaries and employee
benefits and $10,000 in equipment and occupancy expenses for the three month
period ended March 31, 2003. The increase in salaries and employee benefits
represent normal increases in salaries and an increase in the number of
employees. At March 31, 2003, the number of full-time equivalent employees was
37 compared to 28 at March 31, 2002. The increase in equipment and occupancy
expenses is directly related to equipment purchases for new employees.

Income Taxes.Income tax expense increased by $66,000 for the three months
ended March 31, 2003 as compared to 2002. The effective tax rate for 2003 and
2002 was 38%.

Net Income. Net income increased by $129,000 for the three months ended March
31, 2003 as compared to the same period in 2002. The primary reason for the
increase in net income for the three months ended March 31, 2003 as compared to
the same period in 2002 is the increase in net interest income.




Item 3. CONTROLS AND PROCEDURES

Within 90 days prior to the date of filing of this report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and the Chief Financial Officer, of the design and operation
of our disclosure controls and procedures. Based on this evaluation, our Chief
Executive Officer and the Chief Financial Officer concluded that our disclosure
controls and procedures are effective for gathering, analyzing and disclosing
the information that we are required to disclose in the reports we file under
the Securities Exchange Act of 1934, within the time periods specified in the
SECs rules and forms. Our Chief Executive Officer and the Chief Financial
Officer also concluded that our disclosure controls and procedures are
effective in timely alerting them to material information relating to our
company required to be included in our periodic SEC filings. In connection
with the new rules, we are in the process of further reviewing and documenting
our disclosure controls and procedures, including our internal controls and
procedures for financial reporting, and may from time to time make changes
designed to enhance their effectiveness and to ensure that our systems evolve
with our business.

There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the
date of this evaluation.

13



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PART II  Other Information




Item 6. Exhibits

|     |  |                              
|---- |  | -----------------------------
|99.3 |  | Section 906 CEO Certification
|99.4 |  | Section 906 CFO Certification

Exhibits and Reports on Form 8-K.



| |      
| | -----
| | None.

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SIGNATURES

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

|      |  |              |  |                                                                            
|----- |  | ------------ |  | ---------------------------------------------------------------------------
|      |  |              |  | SOUTHERN COMMUNITY
BANCSHARES, INC.                                        
|     
|Date: |  | May 14, 2003 |  | /s/ Gary McGahaGary McGaha
President and Director                          
|     
|Date  |  | May 14, 2003 |  | /s/ Leslye GrindleLeslye Grindle
Vice President and
Chief Financial Officer

15



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##### Table of Contents






Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Gary McGaha, President and C.E.O., certify that:



|1. |  | I have reviewed this quarterly report on Form 10-QSB of Southern
Community Bancshares, Inc.                                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|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, including its
consolidated subsidiary, is made known to us by others within that
entity, 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 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 registrants board of directors:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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                                                                                                                                        

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|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether 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: | May | 14, 2003 |  |                                                                  
|     
|      |     |          |  | /s/ Gary McGahaGary McGaha, President and
Chief Executive Officer

17



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Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Leslye Grindle, C.F.O., certify that:



|1. |  | I have reviewed this quarterly report on Form 10-QSB of Southern
Community Bancshares, Inc.                                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|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, including its
consolidated subsidiary, is made known to us by others within that
entity, 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 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 registrants board of directors:
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 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                                                                                                                                        

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|6. |  | The registrants other certifying officer and I have indicated in this
quarterly report whether 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: | May | 14, 2003 |  |                                                                             
|      |     |         
|     
|      |     |          |  | /s/ Leslye GrindleLeslye Grindle, Vice President and
Chief Financial Officer

19