**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549**

FORM 10-QSB

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE            ACT OF 1934

For the quarterly period ended September 30, 2001

[  ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE            ACT OF 1934

For the transition period from **** to ****





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|VIRGINIA                                                      | 54-1532044                         
|------------------------------------------------------------- | -----------------------------------
|(State of other jurisdiction ofincorporation or organization) | (I.R.S. EmployerIdentification No.)

---



---

Number of shares of Common Stock, par value $.01 per share, outstanding at the close of business on November 5, 2001:
2,278,242.

Transitional Small Business Disclosure Format (Check one):         Yes  [  ]                  No  [X]





|PART I.  | FINANCIAL INFORMATION                                                                                       |  
|-------- | ----------------------------------------------------------------------------------------------------------- | -
|Item 1.  | Consolidated Financial Statements                                                                           |  
|         | Consolidated Statements of Financial Conditionat September 30, 2001 (unaudited) and March 31, 2001          | 1
|         | Consolidated Statements of Income for theThree and Six Months Ended September 30, 2001 and 2000 (unaudited) | 2
|         | Consolidated Statements of Cash Flows for theSix Months Ended September 30, 2001 and2000 (unaudited)        | 3
|         | Notes to Unaudited Interim ConsolidatedFinancial Statements                                                 | 4
|Item 2.  | Management's Discussion and Analysis of FinancialCondition and Results of Operations                        | 6
|PART II. | OTHER INFORMATION                                                                                           | 9



|                                                                                                                                                        | September 30,2001 | March 31, 2001
|------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | --------------
|                                                                                                                                                        | (Unaudited)       |               
|ASSETS                                                                                                                                                  |                   |               
|Cash (including interest-bearing deposits of approximately
  $2,951,789 at September 30, 2001 and $2,697,000 at March 31, 2001)                         | $    4,414,415    | $    5,168,499
|Securities                                                                                                                                              |                   |               
|Held to maturity                                                                                                                                        | 10,112,858        | 29,905,180    
|Available for sale                                                                                                                                      | 8,389,448         | 8,421,433     
|Investment in Federal Home Loan Bank stock, at cost                                                                                                     | 2,600,000         | 3,150,000     
|Loans receivable, net                                                                                                                                   | 214,464,391       | 214,557,798   
|Real estate owned                                                                                                                                       | 819,274           | 451,310       
|Property and equipment, net                                                                                                                             | 5,593,238         | 5,827,020     
|Accrued interest receivable                                                                                                                             |                   |               
|Loans                                                                                                                                                   | 1,318,340         | 1,421,726     
|Investments                                                                                                                                             | 218,217           | 239,696       
|Prepaid expenses and other assets                                                                                                                       | 1,450,119         | 1,032,871     
|Total Assets                                                                                                                                            | $249,380,300      | $270,175,533  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                    |                   |               
|Liabilities                                                                                                                                             |                   |               
|Deposits                                                                                                                                                | $186,672,917      | $174,307,472  
|Advances from Federal Home Loan Bank                                                                                                                    | 32,000,000        | 63,000,000    
|Securities sold under agreement to repurchase                                                                                                           | 1,732,352         | 4,422,389     
|Advance payments by borrowers for taxes and insurance                                                                                                   | 223,360           | 293,168       
|Other liabilities                                                                                                                                       | 2,596,996         | 2,347,815     
|Total Liabilities                                                                                                                                       | 223,225,625       | 244,370,844   
|Stockholders' Equity                                                                                                                                    |                   |               
|Preferred stock $.01 par value, authorized 3,000,000 shares,
    none outstanding                                                                       |                   |               
|Common stock, $.01 par value, authorized 10,000,000 shares,
    2,285,542 and 2,348,832 shares outstanding at September 30, 2001
    and March 31, 2001 | 22,856            | 23,488        
|Additional paid in capital                                                                                                                              | 4,380,199         | 4,500,450     
|Retained earnings                                                                                                                                       | 19,635,252        | 19,144,552    
|Net unrealized gain on securities available for sale                                                                                                    | 2,116,368         | 2,136,199     
|Total Stockholders' Equity                                                                                                                              | 26,154,675        | 25,804,689    
|Total Liabilities and Stockholders' Equity                                                                                                              | $249,380,300      | $270,175,533  



|                                                           | Three Months Ended
September 30 | Six Months Ended
September 30
|---------------------------------------------------------- | ------------------------------- | -----------------------------
|                                                           | 2001                            | 2000                         
|                                                           | (Unaudited)                     | (Unaudited)                  
|INTEREST INCOME  Loans                                     | $4,292,468                      | $4,351,014                   
|Investment securities                                      | 482,123                         | 520,746                      
|Other                                                      | 164,468                         | 166,158                      
|Total interest income                                      | 4,939,059                       | 5,037,918                    
|INTEREST EXPENSE
  Deposits                                | 1,961,030                       | 1,890,507                    
|Borrowed money                                             | 543,049                         | 1,171,465                    
|Total interest expense                                     | 2,504,079                       | 3,061,972                    
|NET INTEREST INCOME                                        | 2,434,980                       | 1,975,946                    
|PROVISION FOR LOAN LOSSES                                  | 116,348                         | 100,511                      
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES        | 2,318,632                       | 1,875,435                    
|NONINTEREST INCOME
  Service charges, fees and commissions | 819,411                         | 753,506                      
|Gain on sale of securities                                 | ---                             | ---                          
|Miscellaneous                                              | 14,739                          | 7,036                        
|Total noninterest income                                   | 834,150                         | 760,542                      
|NONINTEREST EXPENSE
  Compensation & benefits              | 1,188,827                       | 1,123,988                    
|Occupancy                                                  | 324,254                         | 284,223                      
|Data processing                                            | 207,921                         | 213,215                      
|Federal insurance premium                                  | 8,194                           | 8,170                        
|Miscellaneous                                              | 492,522                         | 403,148                      
|Total noninterest expense                                  | 2,221,718                       | 2,032,744                    
|INCOME BEFORE TAXES                                        | 931,064                         | 603,233                      
|INCOME TAXES                                               | 289,025                         | 202,344                      
|NET INCOME                                                 | $    642,039                    | $    400,889                 
|BASIC EARNINGS PER SHARE                                   | $          0.28                 | $          0.16              
|DILUTED EARNINGS PER SHARE                                 | $          0.28                 | $          0.16              
|DIVIDENDS PER SHARE                                        | $          0.08                 | $          0.08              



|                                                                                     | Six Months Ended
September 30,
|------------------------------------------------------------------------------------ | ------------------------------
|                                                                                     | 2001                          
|                                                                                     | (Unaudited)                   
|OPERATING ACTIVITIES                                                                 |                               
|Net income                                                                           | $  1,364,471                  
|Adjustments to reconcile net income to
    net cash provided by operating activities |                               
|Provision for loan losses                                                            | 174,098                       
|Depreciation                                                                         | 348,160                       
|Amortization of premium and accretion of discount on securities, net                 | (84,287)                      
|Increase (decrease) in net deferred loan fees                                        | (37,191)                      
|Increase in deferred income taxes                                                    | 33,245                        
|(Increase) in other assets                                                           | (417,248)                     
|(Decrease) other liabilities                                                         | (228,090)                     
|(Gain) on sale of loans                                                              | (10,907)                      
|Proceeds from sale of loans                                                          | 19,227,370                    
|Loans originated for resale                                                          | (18,785,505)                  
|Net cash provided by operating activities                                            | 1,584,116                     
|INVESTING ACTIVITIES                                                                 |                               
|Proceeds from maturities of held to maturity securities                              | 23,490,000                    
|Purchases of investment securities                                                   | (3,365,160)                   
|Net (increase) in loans                                                              | (238,053)                     
|Purchases of property and equipment                                                  | (87,775)                      
|Redemption (purchase) of FHLB stock                                                  | 550,000                       
|Decrease (increase) decrease in real estate owned                                    | (367,964)                     
|Net cash provided (absorbed) by investing activities                                 | 19,981,048                    
|FINANCING ACTIVITIES                                                                 |                               
|Dividends paid                                                                       | (369,568)                     
|Net increase in deposits                                                             | 12,365,445                    
|Proceeds from advances and other borrowed money                                      | 342,306,083                   
|Repayments of advances and other borrowed money                                      | (375,996,120)                 
|Repurchase of common stock                                                           | (625,088)                     
|Net cash provided (absorbed) by financing activities                                 | (22,319,248)                  
|(DECREASE) IN CASH AND CASH EQUIVALENTS                                              | (754,084)                     
|CASH AND CASH EQUIVALENTS-beginning of period                                        | 5,168,499                     
|CASH AND CASH EQUIVALENTS-end of period                                              | $       4,414,415             



NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB
and Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.

The accompanying consolidated financial statements include the accounts of Community Financial Corporation
("Community" or the "Company"), its wholly-owned subsidiary, Community Bank (the "Bank") and Community
First Mortgage Corporation, a wholly-owned subsidiary of the Bank ("First Mortgage").  All significant
intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for
fair presentation have been included.  Operating results for the three months ended September 30, 2001, are not
necessarily indicative of the results that may be expected for the year ending March 31, 2002.

NOTE 2 - EARNINGS PER SHARE

Basic earnings per share is based on net income divided by the weighted average number of common shares
outstanding during the period.  Diluted earnings per share shows the dilutive effect of additional common shares
issuable under stock option plans. Diluted earnings per share is computed by dividing net earnings by the weighted
average number of common shares and common share equivalents outstanding. Basic and diluted earnings per share are computed in the following table.

|                                          | For the Three Months Ended
|----------------------------------------- | --------------------------
|                                          |                           
|                                          | September 30, 2001        
|                                          | Income                    
|                                          |                           
|Basic EPS                                 |                           
|                                          |                           
|Income available to
  common stockholders | $642,039                  
|                                          |                           
|Effect of Dilutive Securities             |                           
|                                          |                           
|Options                                   | ---                       
|                                          |                           
|Diluted EPS                               |                           
|                                          |                           
|Income available to
  common stockholders | $642,039                  

|                                          | For the Six Months Ended
|----------------------------------------- | ------------------------
|                                          |                         
|                                          | September 30, 2001      
|                                          | Income                  
|                                          |                         
|Basic EPS                                 |                         
|                                          |                         
|Income available to
  common stockholders | $1,364,471              
|                                          |                         
|Effect of Dilutive Securities             |                         
|                                          |                         
|Options                                   | ---                     
|                                          |                         
|Diluted EPS                               |                         
|                                          |                         
|Income available to
  common stockholders | $1,364,471              

NOTE 3 - STOCKHOLDERS' EQUITY

The following table presents the Bank's regulatory capital levels at September 30, 2001:

|                   | AmountRequired | PercentRequired | ActualAmount | ActualPercent | ExcessAmount
|------------------ | -------------- | --------------- | ------------ | ------------- | ------------
|                   |                |                 |              |               |             
|Tangible Capital   | $  3,758,000   | 1.50%           | $23,569,000  | 9.41%         | $19,811,000 
|Core Capital       | 10,022,000     | 4.00            | 23,569,000   | 9.41          | 13,547,000  
|Risk-based Capital | 16,423,000     | 8.00            | 26,637,000   | 12.98         | 10,214,000  

Capital distributions by OTS-regulated savings banks are limited by regulation ("Capital Distribution Regulation").
Capital distributions are defined to include, in part, dividends, stock repurchases and cash-out mergers.  The Capital
Distribution Regulation permits a savings bank to make capital distributions during a calendar year equal to net
income for the current year plus the previous two years net income, less capital distributions paid over the same
period. Any distributions in excess of that amount requires prior OTS approval. The Capital Distribution Regulation
requires that savings banks in holding company structures provide the applicable OTS Regional Director with a 30-day advance written notice of all proposed capital distributions whether or not advance approval is required by the
regulation. The OTS may object to capital distributions if the bank is not meeting its regulatory capital
requirements, the distribution raises safety and soundness concerns or is otherwise in violation of law.

NOTE 4 - SUPPLEMENTAL INFORMATION - STATEMENT OF CASH FLOWS

Total interest paid for the three months ended September 30, 2001 and 2000 was $2,677,766 and $3,200,174,
respectively. Total interest paid for the six months ended September 30, 2001 and 2000 was $5,286,894 and $5,861,408.  Total income taxes paid for the six months ended September 30, 2001 and 2000 were $1,031,192 and $357,418.

NOTE 5 - COMPREHENSIVE INCOME

Comprehensive income is defined as "the change in equity (net assets) of a business enterprise during a period from
transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a
period except those resulting from investments by owners and distributions to owners." Comprehensive income for
the Company includes net income and unrealized gains and losses on securities available for sale. The following
tables set forth the components of comprehensive income for the three-month periods ended September 30, 2001 and
2000:

|                                                                                                                                                      | Three Months Ended September 30
|----------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------
|                                                                                                                                                      | 2001                           
|                                                                                                                                                      | (Amounts in thousands)         
|                                                                                                                                                      |                                
|Net income                                                                                                                                            | $ 642,039                      
|Other comprehensive income, net of tax
    Unrealized gains (losses) on securities:
      Unrealized holding gains (losses) arising during the period | (55,180)                       
|                                                                                                                                                      |                                
|Less: Reclassification
        adjustment for (gains) losses included in net income                                                                   | ---                            
|                                                                                                                                                      | $ 586,859                      

|                                                                                                                                                      | Six Months Ended September 30
|----------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------
|                                                                                                                                                      | 2001                         
|                                                                                                                                                      | (Amounts in thousands)       
|                                                                                                                                                      |                              
|Net income                                                                                                                                            | $1,364,471                   
|Other comprehensive income, net of tax
    Unrealized gains (losses) on securities:
      Unrealized holding gains (losses) arising during the period | (19,831)                     
|                                                                                                                                                      |                              
|Less: Reclassification
        adjustment for (gains) losses included in net income                                                                   | ---                          
|                                                                                                                                                      | $1,344,640                   

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

FINANCIAL CONDITION

The Company's total assets decreased $20.8 million to $249.4 million at September 30, 2001 from $270.2 million at March
31, 2001 due primarily to a decrease in held to maturity securities of $19.8 million, the majority of which were redeemed by the issuer.  The proceeds from securities that were called or matured during the period were used primarily to reduce borrowings.  Deposits increased $12.4 million
to $186.7 million at September 30, 2001, from $174.3 million at March 31, 2001. While the increase in deposits was due to increases in all deposit categories, time deposit accounts represented the largest increase, increasing by $5.1 million for the six months ended September 30, 2001.  Stockholders' equity increased $350,000 to $26.2 million at September 30, 2001, from $25.8 million at March 31, 2001,
due primarily to earnings for the six month period ended September 30, 2001 which was partially offset by a decrease in the net unrealized gain on securities available for sale, the Company's stock repurchase of $625,000 and two payments of $0.08 per share in cash dividends.

At September 30, 2001, non-performing assets totaled approximately $1.3 million or .54% of assets compared to $1.2
million or .43% of assets at March 31, 2001.  Non-performing assets at September 30, 2001 were comprised primarily of
nonaccrual loans 90 days or more delinquent. At September 30, 2001, our allowance for loan losses to non-performing
assets was 118% and to total assets was .64%.  Based on current market values of the properties securing these
loans, management anticipates no significant losses in excess of the reserves for losses previously recorded.

As of September 30, 2001, there were also $4.9 million in loans with respect to which known information about the
possible credit problems of the borrowers or the cash flows of the security properties have caused management to
have doubts as to the ability of the borrowers to comply with present loan repayment terms and which may result in
the future inclusion of such items in the non-performing asset categories. These loans are comprised primarily of
commercial and residential real estate loans.  Included in the commercial real estate loans of concern was six loans to one borrower in
the amount of $1.5 million, which were repaid subsequent to September 30, 2001.

We maintain an allowance for loan losses to provide for estimated potential losses in our loan portfolio.
Management determines the level of reserves based on loan performance, the value of the collateral, economic and
market conditions, and previous experience.  Management reviews the adequacy of the allowance at least quarterly,
utilizing its internal loan classification system.  Management believes that the loan loss reserve is adequate at September
30, 2001.  Although management believes it uses the best information available, future adjustments to reserves may
be necessary.

LIQUIDITY

Historically, the Bank has maintained its liquid assets at a level believed adequate to meet requirements of normal
daily activities, repayment of maturing debt and potential deposit outflows, and management believes that the Bank
will continue to have adequate liquidity for the foreseeable future. Cash flow projections are regularly reviewed and
updated to assure that adequate liquidity is provided. As of September 30, 2001, the Bank's liquidity ratio (liquid assets as
a percentage of net withdrawable savings and current borrowings) was 24.7%.

At September 30, 2001, we had commitments to purchase or originate $11.3 million of loans. Certificates of deposit
scheduled to mature in one year or less at September 30, 2001, totaled $80.4 million. Based on our historical experience,
management believes that a significant portion of such deposits will remain with us. Management further believes
that loan repayments and other sources of funds will be adequate to meet our foreseeable short-term and long-term
liquidity needs.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2001 and 2000.

General.  Net income for the three months ended September 30, 2001 was $642,000
compared to $401,000 for the three months ended September 30, 2000 an increase
of $241,000. Net interest income increased $459,000, while non-interest income
increased $74,000 during the three months ended September 30, 2001 compared to
the same period in 2000. Income before taxes increased by $328,000 to $931,000
for the three months ended September 30, 2001 from $603,000 for the three months
ended September 30, 2000.

Interest Income.   Total interest income decreased by $99,000 to $4.9 million for
the three months ended September 30, 2001, from $5.0 million for the three months
ended September 30, 2000, due primarily to decreases on the yield for both
investment securities and loans for the three months ended September 30, 2001 as
compared to the period ended September 30,2000.  The decline in yield was due to
the decline in market interest rates generally. The average yield earned on
interest-earning assets was 7.68% for the three months ended September 30, 2001
compared to 8.04% for the three months ended September 30, 2000.

Interest Expense.  Total interest expense increased by $558,000 to $2.5 million
for the quarter ended September 30, 2001, from $3.1 million for the quarter ended
September 30, 2000. Interest on deposits increased by $71,000 to $2.0 million for
the quarter ended September 30, 2001 from $1.9 million for the quarter ended
September 30, 2000 due primarily to an increase in average outstanding deposit
balances. Interest expense on borrowed money decreased by $628,000 to $543,000
for the quarter ended September 30, 2001, from $1.2 million for the quarter ended
September 30, 2000, due to decreases both in the rate paid and the average
outstanding balances on borrowings.  The average rate paid on interest-bearing
liabilities was 4.17% during the three months ended September 30, 2001 compared
to 5.25% for the three months ended September 30, 2000 due to a decrease in the
level of market interest rates generally.

Provision for Loan Losses.  The provision for loan losses increased by $16,000
to $116,000 for the three months ended September 30, 2001, from $100,000 for the
three months ended September 30, 2000.

Noninterest Income.  Noninterest income increased by $74,000 to $834,000 for the
three months ended September 30, 2001, from $760,000 for the three months ended
September 30, 2000 due primarily to an increase in fees on the sale of mortgage
loans in the secondary market by our mortgage-banking subsidiary, during the
September 30, 2001 quarter.

Noninterest Expense.  Noninterest expense increased by $189,000 to $2.2 million
for the three months ended September 30, 2001 compared to the same period last
year. Miscellaneous expense increased by $90,000 to $493,000 during the September
30, 2001 quarter compared to the September 30, 2000 quarter. Compensation and
benefits increased by $65,000 to $1.2 million compared to the same period last
year due primarily to the addition of twelve full-time employees and annual
salary increases.

Taxes.  Taxes increased by $87,000 to $289,000 for the three months ended
September 30, 2001, from $202,000 for the three months ended September 30, 2000
due to increased income before taxes. The effective tax rate decreased from 33.5%
for the September 30, 2000 quarter to 31.0% for the September 30, 2001 quarter.

Six Months Ended September 30, 2001 and 2000.

General.  Net income for the six months ended September 30, 2001 increased to
$1,364,000 compared to $838,000 for the six months ended September 30, 2000 due
primarily to an increase net interest income. Income before income taxes
increased to $2.0 million for the six months ended September 30, 2001 from $1.3
million for the same period in the prior year.

Interest Income.  Total interest income increased to $10.1 million for the six
months ended September 30, 2001, from $9.7 million for the six months ended
September 30, 2000, due primarily to an increase in the average balance of loans and investment securities outstanding during the period. The yield on loans
and securities decreased from 8.06% to 7.90% for the same periods.

Interest Expense.  Total interest expense decreased to $5.3 million for the six
months ended September 30, 2001, from $5.8 million for the six months ended
September 30, 2000.  Interest on deposits increased to $4.0 million for the six
months ended September 30, 2001, from $3.6 million for the same period last year
due to an increase in the average outstanding deposit balances. The rate paid on
deposits decreased from 4.50% for the six months ended September 30, 2000 to
4.48% for the same period in the current fiscal year. Interest expense on
borrowed money decreased to $1.3 million for the six months ended September 30,
2001 from $2.2 million for the six months ended September 30, 2000, due primarily
to a decrease in the rate paid. The average rate paid on borrowings decreased
from 6.7% for the six months ended September 30, 2000 to 4.16% for the six month
period ended September 30, 2001.

Provision for Loan Losses.  The provision for loan losses increased to $174,000
for the six months ended September 30, 2001, from $166,000 for the same period
last year.

Noninterest Income.  Noninterest income increased to $1.6 million for the six
months ended September 30, 2001, from $1.5 million for the six months ended
September 30, 2000, due primarily to an increase in fees on the sale of mortgage
loans by our mortgage-banking subsidiary.

Noninterest Expenses.  Noninterest expenses increased $403,000 for the six months
ended September 30, 2001, compared to the same period last year. Compensation and
benefits increased by $188,000 to 2.3 million compared to the same period last
year due primarily to the addition of twelve full-time employees and annual
salary increases. Miscellaneous expenses increased by $134,000 to $948,000 for
the six month period ended September 30, 2001 compared to the same period last
year. The increase in miscellaneous expenses was due an increase in professional
expenses and expenses related to foreclosed property.

Taxes.  Taxes increased to $625,000 for the six months ended September 30, 2001, from $450,000 for the six months ended September 30, 2000. The effective
tax rate decreased from 34.9% for the September 30, 2000 period to 31.4% for the
same period ended September 30, 2001.

RECENT ACCOUNTING PRONOUNCEMENTS

In July, 2001 the Financial Accounting Standards Board issued two
statements- Statement No.141, Business Combinations, and Statement No.142,
"Goodwill and Other Intangible Assets", which will potentially impact the
accounting for goodwill and other intangible assets.  Statement No.141 eliminates
the pooling method of accounting for business combinations and requires that
intangible assets that meet certain criteria be reported separately from
goodwill.  The Statement also requires negative goodwill arising from a business
combination to be recorded as an extraordinary gain.  Statement No.142 eliminates
the amortization of goodwill and other intangibles that are determined to have
an indefinite life.  The Statement requires, at a minimum, annual impairment
tests for goodwill and other intangible assets that are determined to have an
indefinite life.

Upon adoption of these Statements, an organization is required to re-evaluate goodwill and other intangible assets that arose from business
combinations entered into before July 1, 2001.  If the recorded other intangibles
assets do not meet the criteria for recognition, they should be classified as
goodwill.  Similarly, if there are other intangible assets that meet the criteria
for recognition but were not separately recorded from goodwill, they should be
reclassified from goodwill.  An organization also must reassess the useful lives
of intangible assets and adjust the remaining amortization periods accordingly.
Any negative goodwill must be written-off.

The standards generally are required to be implemented by the Bank in its
2002 financial statements.  The adoption of these standards will not have a
material impact on the financial statements.

Disclosure Regarding Forward-Looking Statements

This document, including information incorporated by reference, and future filings by Community on Form 10-KSB, Form 10-QSB and Form 8-K and future oral and written statements by Community and its management may
contain, forward-looking statements about the corporation and its subsidiaries which we believe are within the
meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include,
without limitation, statements with respect to anticipated future operating and financial performance, growth
opportunities, interest rates, cost savings and funding advantages expected or anticipated to be realized by
management.  Words such as "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect,"
"intend," "plan" and similar expressions are intended to identify these forward-looking statements.  Forward-looking
statements by Community and its management are based on beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and are not guarantees of future performance.  Community
disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future
events, the receipt of new information, or otherwise.  The important factors we discuss below and elsewhere in this
document, as well as other factors discussed under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in this document and identified in our filings with the SEC and those
presented elsewhere by our management from time to time, could cause actual results to differ materially from those
indicated by the forward-looking statements made in this document:

The following factors, many of which are subject to change based on various other factors beyond our control,
could cause our financial performance to differ materially from the plans, objectives, expectations, estimates and
intentions expressed in such forward-looking statements:

- the strength of the United States economy in general and the strength of the local economies in which
we conduct our operations;
- the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate
policies of the Federal Reserve Board;
- inflation, interest rate, market and monetary fluctuations;
- the timely development of and acceptance of new products and services of the Bank and the perceived
overall value of these products and services by users, including the features, pricing and quality
compared to competitors' products and services;
- the willingness of users to substitute competitors' products and services for our products and services;
- the success of the Bank in gaining regulatory approval of its products and services, when required;
- the impact of changes in financial services' laws and regulations (including laws concerning taxes,
banking, securities and insurance);
- the impact of  technological changes;
- acquisitions;
- changes in consumer spending and saving habits;
- our success at managing the risks involved in the foregoing; and
- the economic impact of the terrorist attacks, and the response of the
United States to those attacks.