**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, 2002

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

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





---

|**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 7, 2002:  2,058,847.

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, 2002 (unaudited) and March 31, 2002  | 1 
|               | Consolidated Statements of Income for theThree  and Six Months Ended September 30, 2002 (unaudited) | 2 
|               | Consolidated Statements of Cash Flows for theSix Months Ended September 30, 2002 (unaudited)        | 3 
|               | Notes to Unaudited ConsolidatedFinancial Statements                                                 | 4 
|Item 2.        | Management's Discussion and Analysis Plan of Operation                                              | 7 
|Item 3.        | Controls and Procedures                                                                             | 13
|PART II.       | OTHER INFORMATION                                                                                   | 13
|Item 1.        | Legal Proceedings                                                                                   | 13
|Item 2.        | Changes in Securities                                                                               | 14
|Item 3.        | Defaults Upon Senior Securities                                                                     | 14
|Item 4.        | Submission of Matters to a Vote of Security Holders                                                 | 14
|Item 5.        | Other Information                                                                                   | 14
|Item 6.        | Exhibits and Reports on Form 8-K                                                                    | 14
|SIGNATURES     | 15                                                                                                 
|CERTIFICATIONS | 16                                                                                                 
|EXHIBIT INDEX  | 18                                                                                                 

COMMUNITY  FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

|                                                                                                                                              | September 30,2002 | March 31,2002
|--------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | -------------
|                                                                                                                                              | (Unaudited)      
|ASSETS                                                                                                                                       
|Cash (including interest-bearing
   deposits of approximately
  $1,999,776 at September 30, 2002 and
  $1,931,000 at March 31, 2002)          | $  4,106,174      | $  3,206,926 
|Securities                                                                                                                                   
|Held to maturity                                                                                                                              | 21,574,567        | 16,773,803   
|Available for sale                                                                                                                            | 10,619,838        | 8,399,486    
|Investment in Federal Home Loan                                                                                                              
|Bank stock, at cost                                                                                                                           | 2,600,000         | 2,600,000    
|Loans receivable, net of allowances  for loan losses of $1,719,106 at  September 30, 2002 and $1,675,679  at March 31, 2002                   | 231,834,215       | 219,433,684  
|Loans held for sale                                                                                                                           | 5,525,220         | 4,409,122    
|Real estate owned                                                                                                                             | 560,877           | 793,603      
|Property and equipment, net                                                                                                                   | 6,570,038         | 5,421,183    
|Accrued interest receivable                                                                                                                  
|Loans                                                                                                                                         | 1,172,403         | 1,211,437    
|Investments                                                                                                                                   | 428,809           | 369,447      
|Prepaid expenses and other assets                                                                                                             | 734,696           | 755,280      
|Total Assets                                                                                                                                  | $285,726,837      | $263,373,971 
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                         
|Liabilities                                                                                                                                  
|Deposits                                                                                                                                      | $223,823,928      | $204,535,456 
|Advances from Federal Home Loan Bank                                                                                                          | 29,000,000        | 28,000,000   
|Securities sold under agreement to Repurchase                                                                                                 | 2,183,218         | 950,805      
|Advance payments by borrowers for   taxes and insurance                                                                                       | 198,414           | 254,846      
|Other liabilities                                                                                                                             | 2,826,547         | 2,937,754    
|Total Liabilities                                                                                                                             | 258,032,107       | 236,678,861  
|Stockholders' Equity                                                                                                                         
|Preferred stock $.01 par value,
    authorized 3,000,000 shares,
    none outstanding                                                         | ---               | ---          
|Common stock, $.01 par value,
    authorized 10,000,000 shares,
    2,253,147 shares outstanding
    at September 30, 2002 and March 31, 2002 | 22,531            | 22,531       
|Additional paid in capital                                                                                                                    | 4,373,419         | 4,326,489    
|Retained earnings                                                                                                                             | 21,310,806        | 20,223,498   
|Accumulated other comprehensive income                                                                                                        | 1,987,974         | 2,122,592    
|Total Stockholders' Equity                                                                                                                    | 27,694,730        | 26,695,110   
|Total Liabilities and  Stockholders' Equity                                                                                                   | $285,726,837      | $263,373,971 

See notes to unaudited consolidated financial statements.

COMMUNITY  FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

|                                                     | Three Months Ended
September 30, | Six Months Ended
September 30,
|---------------------------------------------------- | -------------------------------- | ------------------------------
|                                                     | 2002                             | 2001                          
|                                                     | (Unaudited)                      | (Unaudited)                   
|INTEREST INCOME                                     
|Loans                                                | $4,043,675                       | $4,292,468                    
|Investment securities                                | 239,909                          | 482,123                       
|Other                                                | 144,121                          | 164,468                       
|Total interest income                                | 4,427,705                        | 4,939,059                     
|INTEREST EXPENSE                                    
|Deposits                                             | 1,613,482                        | 1,961,030                     
|Borrowed money                                       | 129,750                          | 543,049                       
|Total interest expense                               | 1,743,232                        | 2,504,079                     
|NET INTEREST INCOME                                  | 2,684,473                        | 2,434,980                     
|PROVISION FOR LOAN LOSSES                            | 72,389                           | 116,348                       
|NET INTEREST INCOME AFTER  PROVISION FOR LOAN LOSSES | 2,612,084                        | 2,318,632                     
|NONINTEREST INCOME                                  
|Service charges, fees     and commissions            | 910,601                          | 819,411                       
|Miscellaneous                                        | 38,133                           | 14,739                        
|Total noninterest income                             | 948,734                          | 834,150                       
|NONINTEREST EXPENSE                                 
|Compensation and benefits                            | 1,439,132                        | 1,188,827                     
|Occupancy                                            | 336,786                          | 324,254                       
|Data processing                                      | 249,346                          | 207,921                       
|Federal insurance premium                            | 8,819                            | 8,194                         
|Miscellaneous                                        | 423,730                          | 492,522                       
|Total noninterest expense                            | 2,457,813                        | 2,221,718                     
|INCOME BEFORE TAXES                                  | 1,103,005                        | 931,064                       
|INCOME TAXES                                         | 335,072                          | 289,025                       
|NET INCOME                                           | $  767,933                       | $  642,039                    
|BASIC EARNINGS PER SHARE                             | $    0.34                        | $    0.28                     
|DILUTED EARNINGS PER SHARE                           | $    0.34                        | $    0.28                     
|DIVIDENDS PER SHARE                                  | $    0.09                        | $    0.08                     

See notes to unaudited consolidated financial statements.

COMMUNITY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                     | Six Months Ended
September 30,
|------------------------------------------------------------------------------------ | ------------------------------
|                                                                                     | 2002                          
|                                                                                     | (Unaudited)                   
|OPERATING ACTIVITIES                                                                
|Net income                                                                           | $1,512,533                    
|Adjustments to reconcile net income to     net cash provided by operating activities
|Provision for loan losses                                                            | 174,637                       
|Depreciation                                                                         | 338,119                       
|Amortization of premium and accretion        of discount on securities, net          | 33,844                        
|Increase (decrease) in net deferred loan fees                                        | 4,341                         
|(Decrease) increase in deferred income taxes                                         | (2,218)                       
|(Increase) decrease in other assets                                                  | 256                           
|(Decrease) in other liabilities                                                      | (165,421)                     
|(Gain) on sale of loans                                                              | (115,277)                     
|Proceeds from sale of loans                                                          | 33,167,333                    
|Loans originated for resale                                                          | (34,283,431)                  
|Net cash provided by operating activities                                            | 664,716                       
|INVESTING ACTIVITIES                                                                
|Proceeds from maturities of held to     maturity securities                          | 3,750,000                     
|Purchases of investment securities                                                   | (10,737,272)                  
|Net (increase) in loans                                                              | (12,653,708)                  
|Purchases of property and equipment                                                  | (1,486,974)                   
|Redemption of FHLB stock                                                             | -                             
|Decrease (increase) in Real Estate Owned                                             | 232,726                       
|Net cash provided (absorbed) by investing activities                                 | (20,895,228)                  
|FINANCING ACTIVITIES                                                                
|Dividends paid                                                                       | (383,515)                     
|Net increase in deposits                                                             | 19,288,472                    
|Proceeds from advances and other borrowed money                                      | 171,474,529                   
|Repayments of advances and other borrowed money                                      | (169,242,116)                 
|Proceeds from issuance of common stock                                               | 58,390                        
|Repurchase of common stock                                                           | (66,000)                      
|Net cash provided (absorbed) by financing activities                                 | (21,129,760)                  
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     | 899,248                       
|CASH AND CASH EQUIVALENTS-beginning of period                                        | 3,206,926                     
|CASH AND CASH EQUIVALENTS-end of period                                              | $4,106,174                    

See accompanying notes to consolidated financial statements.

COMMUNITY FINANCIAL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002

NOTE 1. - BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Regulation S-B.  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 six months ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ending March 31, 2003.

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, 2002        
|                                        | Income                    
|Basic EPS                              
|Income available to common stockholders | $767,933                  
|Effect of Dilutive Securities          
|Options                                 | ---                       
|Diluted EPS                            
|Income available to common stockholders | $767,933                  

|                                        | For the Six Months Ended
|--------------------------------------- | ------------------------
|                                        | September 30, 2002      
|                                        | Income                  
|Basic EPS                              
|Income available to common stockholders | $1,512,533              
|Effect of Dilutive Securities          
|Options                                 | ---                     
|Diluted EPS                            
|Income available to common stockholders | $1,512,533              

NOTE 3. - STOCKHOLDERS' EQUITY

The following table presents the Bank's regulatory capital levels at September 30, 2002:

|                   | AmountRequired | PercentRequired | ActualAmount | ActualPercent | ExcessAmount
|------------------ | -------------- | --------------- | ------------ | ------------- | ------------
|Tangible Capital   | $ 4,279,000    | 1.50%           | $24,404,000  | 8.55%         | $20,125,000 
|Core Capital       | 11,412,000     | 4.00            | 24,404,000   | 8.55          | 12,992,000  
|Risk-based Capital | 16,313,000     | 8.00            | 27,530,000   | 13.50         | 11,217,000  

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 require 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 six months ended September 30, 2002 and 2001 was
$4,729,964 and $5,286,894. Total income taxes paid for the three months ended
September 30, 2002 and 2001 was $369,520 and $711,192.

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
six-month periods ended September 30, 2002 and 2001:

|                                                            | Six Months Ended September 30,
|----------------------------------------------------------- | ------------------------------
|                                                            | 2002                          
|Net income                                                  | $1,512,533                    
|Other comprehensive income, net of tax                     
|Unrealized gains(losses)on securities:                     
|Unrealized holding gains (losses) arising during the period | (134,618)                     
|                                                            | $1,377,915                    

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

FINANCIAL CONDITION

The Company's total assets increased $22.4 million to $285.7 million at
September 30, 2002 from $263.4 million at March 31, 2002 due primarily to
increases in securities of $7.0 million and loans receivable of $12.4 million.
The increase in assets was funded with deposits which increased $19.3 million
to $223.8 million at September 30, 2002, from $204.5 million at March 31, 2002.
The increase in deposits was due primarily to increases in savings accounts of
$20.1 million and money market accounts of $3.7 million, which was offset by
a decrease in time deposits of $7.9 million. Stockholders' equity increased
$1.0 million to $27.7 million at September 30, 2002, from $26.7 million at
March 31, 2002, due primarily to earnings for the six month period ended
September 30, 2002 which was partially offset by a decrease in the net
unrealized gain on securities available for sale, the Company's stock
repurchase of $66,000 and two cash dividend payments totaling $.17 per share.

At September 30, 2002, non-performing assets totaled approximately $2.1 million
or .73% of assets compared to $941,000 or .36% of assets at March 31, 2002.
Non-performing assets at September 30, 2002 were comprised primarily of real
estate 90 days or more past due. At September 30, 2002, our allowance for loan
losses to non-performing assets was 82.5% and to total assets was .60%. Based
on current market values of the properties securing these loans, management does not anticipate any significant losses in excess of the reserves
for losses previously recorded.

As of September 30, 2002, there were also $3.5 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 real estate loans. Included in the commercial real estate loans of
concern was a loan to one borrower in the amount of $1.2 million, which we are
monitoring due to a prior bankruptcy. The loan is presently current as to
principal and interest.

CRITICAL ACCOUNTING POLICIES

General

The Company's financial statements are prepared in accordance with accounting
principles generally accepted in the United States (GAAP). The financial
information contained within our statements is, to a significant extent,
financial information that is based on measures of the financial effects of
transactions and events that have already occurred. A variety of factors could
affect the ultimate value that is obtained either when earning income,
recognizing an expense, recovering an asset or relieving a liability. We use
historical loss factors as one factor in determining the inherent loss that may
be present in our loan portfolio. Actual losses could differ significantly from
the historical factors that we use. In addition, GAAP itself may change from
one previously acceptable method to another method. Although the economics of
our transactions would be the same, the timing of events that would impact our
transactions could change.

Allowance for Loan Losses

The allowance for loan losses is an estimate of the losses that may be
sustained in our loan portfolio. The allowance is based on two basic principles
of accounting: (i) Statement of Financial Accounting Standard ("SFAS") No.5,
Accounting for Contingencies, which requires that losses be accrued when they
are probable of occurring and estimable and (ii) SFAS 114, Accounting by
Creditors for Impairment of a Loan, which requires that losses be accrued based
on the differences between the value of collateral, present value of future
cash flows or values that are observable in the secondary market and the loan
balance.

We maintain an allowance for loan losses to provide for estimated probable 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 allowance for loan loss is adequate at September 30, 2002.  Although management believes it uses the best information available, future adjustments to the allowance 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. 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,
2002, the Bank's liquidity ratio (liquid assets as a percentage of net withdrawable savings and current borrowings) was 13.1%.

At September 30, 2002, we had commitments to purchase or originate $15.0
million of loans. Unused lines of credit at September 30, 2002 was $15.1
million. Certificates of deposit scheduled to mature in one year or less at
September 30, 2002, totaled $55.0 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, 2002 and 2001.

General.  Net income for the three months ended September 30, 2002 was $768,000
compared to $642,000 for the three months ended September 30, 2001, an increase
of $126,000. Net interest income increased $249,000, while non-interest income
increased $115,000 during the three months ended September 30, 2002 compared
to the same period in 2001. Return on equity for the three months ended
September 30, 2002 was 11.21% compared to 9.88% for the three month period
ended September 30, 2001. Return on assets was 1.10% for quarter ended
September 30, 2002 compared to .97% for the same period in the previous fiscal
year.

Interest Income. Total interest income decreased by $511,000 to $4.4 million
for the three months ended September 30, 2002, from $4.9 million for the three
months ended September 30, 2001, due to a decline in the average balance of our
investment securities and lower yields for both investment securities and loans
for the three months ended September 30, 2002 as compared to the period ended
September 30, 2001. The decline in the average balance for investment
securities is due primarily to a security in the amount of $20,000,000 which
was called in September, 2001. The decline in yield was due to the decline in
market interest rates generally. The average yield earned on interest-earning
assets was 6.59% for the three months ended September 30, 2002 compared to
7.68% for the three months ended September 30, 2001.

Interest Expense.  Total interest expense decreased by $761,000 to $1.7 million
for the quarter ended September 30, 2002, from $2.5 million for the quarter
ended September 30, 2001. Interest on deposits decreased by $348,000 to $1.6
million for the quarter ended September 30, 2002 from $2.0 million for the
quarter ended September 30, 2001 due primarily to a 137 basis point decline in
the average rate paid on deposits to 2.90%. Interest expense on borrowed money
decreased by $413,000 to $130,000 for the quarter ended September 30, 2002,
from $543,000 for the quarter ended September 30, 2001, as a result of a
decline both in the rate paid and the average outstanding balances on
borrowings. The decline in the average balance for borrowings is due primarily
to a security in the amount of $20,000,000 which was called in September, 2001,
the proceeds of which were used to reduce borrowings. The average rate paid on
interest-bearing liabilities was 2.79% during the three months ended September
30, 2002 compared to 4.17% for the three months ended September 30, 2001.

Provision for Loan Losses.  The provision for loan losses decreased by $44,000
to $72,000 for the three months ended September 30, 2002, from $116,000 for the
three months ended September 30, 2001.

Noninterest Income.  Noninterest income increased by $115,000 to $949,000 for
the three months ended September 30, 2002, from $834,000 for the three months
ended September 30, 2001 due primarily to an increase in service charges and
fees on transaction accounts in the Company's subsidiary, Community Bank, as
a result of an increase in the number of transaction accounts.

Noninterest Expense.  Noninterest expense increased by $236,000 to $2.5 million
for the three months ended September 30, 2002 compared to the same period last
year. Compensation and benefits increased by $250,000 to $1.4 million compared
to the same period last year due primarily to the addition of full-time
equivalent employees and annual salary increases. Miscellaneous expense
decreased by $69,000 to $423,000 during the September 30, 2002 quarter compared
to the September 30, 2001 quarter. The decrease in miscellaneous expenses is
attributable to decreases in professional expenses and expenses on foreclosed
property.

Taxes.  Taxes increased by $46,000 to $335,000 for the three months ended
September 30, 2002, from $289,000 for the three months ended September 30,
2001. The effective tax rate decreased from 31.0% for the September 30, 2001
quarter to 30.4% for the September 30, 2002 quarter.

Six Months Ended September 30, 2002 and 2001

General.  Net income for the six months ended September 30, 2002 increased to
$1,513,000 compared to $1,364,000 for the six months ended September 30, 2001
due primarily to an increase in net interest income. Income before income taxes
increased to $2.2 million for the six months ended September 30, 2002 from $2.0
million for the same period in the prior year. Return on equity for the six
months ended September 30, 2002 was 11.13% compared to 10.59% for the six month
period ended September 30, 2001. Return on assets was 1.10% for six-months
ended September 30, 2002 compared to 1.11% for the same period in the previous
fiscal year.

Interest Income.  Total interest income decreased to $8.9 million for the six
months ended September 30, 2002, from $10.1 million for the six months ended
September 30, 2001, due primarily to a decrease in the yield on loans and
securities during the period. The yield on loans and securities decreased from
7.90% to 6.73% for the same periods.

Interest Expense.  Total interest expense decreased to $3.6 million for the six
months ended September 30, 2002, from $5.3 million for the six months ended
September 30, 2001.  Interest on deposits decreased to $3.3 million for the six
months ended September 30, 2002, from $4.0 million for the same period last
year due to a decrease in the average rate on deposit balances. The rate paid
on deposits decreased from 4.48% for the six months ended September 30, 2001
to 2.91% for the same period in the current fiscal year. Interest expense on
borrowed money decreased to $259,000 for the six months ended September 30,
2002 from $1.3 million for the six months ended September 30, 2001, due
primarily to a decrease in the average outstanding balance on borrowings. The
average rate paid on borrowings decreased from 4.26% for the six months ended
September 30, 2001 to 1.88% for the six-month period ended September 30, 2002.

Provision for Loan Losses.  The provision for loan losses increased to $175,000
for the six months ended September 30, 2002, from $174,000 for the same period
last year.

Noninterest Income.  Noninterest income increased to $1.7 million for the six
months ended September 30, 2002, from $1.6 million for the six months ended
September 30, 2001, due primarily to an increase in service charges and fees
on transactions accounts in the Company's subsidiary, Community Bank, as a
result of an increase in the number of transactions accounts.

Noninterest Expenses.  Noninterest expenses increased $313,000 for the six
months ended September 30, 2002, compared to the same period last year.
Compensation and benefits increased by $469,000 to $4.7 million compared to the
same period last year due primarily to the addition of 18 full-time equivalent
employees and annual salary increases. Miscellaneous expenses decreased by
$241,000 to $707,000 for the six month period ended September 30, 2002 compared
to the same period last year. The decrease in miscellaneous expenses was due
a decrease in professional expenses and expenses related to the outsourcing of
check processing.

Taxes.  Taxes increased to $667,000 for the six months ended September 30, 2002, from $625,000 for the six months ended September 30, 2001. The effective
tax rate decreased from 31.4% for the September 30, 2001 period to 30.5% for
the same period ended September 30, 2002.

RECENT ACCOUNTING PRONOUNCEMENTS

In April 2002, the Financial Accounting Standards Board issued Statement 145,
*Rescission of FASB No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections.*This Statement rescinds FASB Statement No. 4, *Reporting
Gains and Losses from Extinguishment of Debt,*and an amendment of that
Statement, FASB Statement No. 64, *Extinguishments of Debt Made to Satisfy
Sinking-Fund Requirements.*This Statement also rescinds FASB Statement No. 44,
*Accounting for Intangible Assets of Motor Carriers.*This Statement amends FASB
Statement No. 13, *Accounting for Leases,*to eliminate an inconsistency between
the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions.  This Statement also amends other
existing authoritative pronouncements to make various technical corrections,
clarify meanings, or describe their applicability under changed conditions.
The provisions of this Statement related to the rescission of Statement 4 shall
be applied in fiscal years beginning after May 15, 2002.  The provisions of
this Statement related to Statement 13 are effective for transactions occurring
after May 15, 2002, with early application encouraged. The Statement is not
expected to have a material effect on the Company's financial statements.

In June 2002, the Financial Accounting Standards Board issued Statement
146, *Accounting for Costs Associated with Exit or Disposal Activities.*  This
Statement addresses financial accounting and reporting for costs associated
with exit or disposal activities and nullifies Emerging Issues Task Force
(EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring)."  The standard requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan.  The provisions of
this Statement are effective for exit or disposal activities that are initiated
after December 31 2002, with early application encouraged.  The Statement is not
expected to have a material effect on the Company's financial statements.

The Financial Accounting Standards Board issued Statement  No. 147,
*Acquisitions of Certain Financial Institutions, an Amendment of FASB Statements
No. 72 and 144 and FASB Interpretation No. 9*in October 2002.  FASB Statement
No. 72, *Accounting for Certain Acquisitions of Banking or Thrift Institutions,*and FASB Interpretation No. 9, *Applying APB Opinions No. 16 and 17 When a
Savings and Loan Association or a Similar Institution Is Acquired in a Business
Combination Accounted for by the Purchase Method,*provided interpretive
guidance on the application of the purchase method to acquisitions of financial
institutions.  Except for transactions between two or more mutual enterprises,
this Statement removes acquisitions of financial institutions from the scope
of both Statement 72 and Interpretation 9 and requires that those transactions
be accounted for in accordance with FASB Statements No. 141, *Business
Combinations,*and No. 142, *Goodwill and Other Intangible Assets.*Thus, the
requirement in paragraph 5 of Statement 72 to recognize (and subsequently
amortize) any excess of the fair value of liabilities assumed over the fair
value of tangible and identifiable intangible assets acquired as an
unidentifiable intangible asset no longer applies to acquisitions with the
scope of this Statement.  In addition, this Statement amends FASB Statement No.
144, *Accounting for the Impairment or Disposal of Long-Lived Assets,*to include
in its scope long-term customer-relationship intangible assets of financial
institutions such as depositor-

and borrower-relationship assets and credit
cardholder intangible assets.  Consequently, those intangible assets are
subject to the same undiscounted cash flow recoverability test and impairment
loss recognition and measurement provisions that Statement 144 requires for
other long-lived assets that are held and used.

Paragraph 5 of this Statement, which relates to the application of the
purchase method of accounting, is effective for acquisitions for which the date
of acquisition is on or after October 1, 2002.  The provisions in paragraph 6
related to accounting for the impairment or disposal of certain long-term
customer-relationship intangible assets are effective on October 1, 2002.
Transition provisions for previously recognized unidentifiable intangible
assets in paragraphs 8-14 are effective on October 1, 2002, with earlier
application permitted.

This Statement clarifies that a branch acquisition that meets the definition
of a business should be accounted for as a business combination, otherwise the
transaction should be accounted for as an acquisition of net assets that does
not result in the recognition of goodwill.

The transition provisions state that if the transaction that gave rise to the
unidentifiable intangible asset was a business combination, the carrying amount
of that asset shall be reclassified to goodwill as of the later of the date of
acquisition or the date Statement 142 was first applied (fiscal years beginning
after December 15, 2001). Any previously issued interim statements that reflect
amortization of the unidentifiable intangible asset subsequent to the Statement
142 application date shall be restated to remove that amortization expense.
The carrying amounts of any recognized intangible assets that meet the
recognition criteria of Statement 141 that have been included in the amount
reported as an unidentifiable intangible asset and for which separate
accounting records have been maintained shall be reclassified and accounted for
as assets apart from the unidentifiable intangible asset and shall not be
reclassified to goodwill. The Statement is not expected to have a material
effect on the Company's financial statements.

Disclosure Regarding Forward-Looking Statements

This document, including information incorporated by reference, contains and
future filings by the Company on Form 10-KSB, Form 10-QSB and Form 8-K and
future oral and written statements by the Company and its management may
contain, forward-looking statements about the Company 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 the Company
and its management are based on beliefs, plans, objectives, goals,
expectations, anticipations, estimates and intentions of management and are not
guarantees of future performance. The Company 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 or
Plan of Operation 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; and
- our success at managing the risks involved in the foregoing.

**Item 3.  Controls and Procedures**

| | (a) | Evaluation of Disclosure Controls and Procedures: An evaluation of the Company's
disclosure controls and procedures (as defined in Section 13(a)-14(c) of the Securities
Exchange Act of 1934 (the "Act")) was carried out under the supervision and with the
participation of the Company's Chief Executive Officer, Chief Financial Officer and several other members
of the Company's senior management within the 90-day period preceding the filing date
of this quarterly report.  The Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures as currently in
effect are effective in ensuring that the information required to be disclosed by the
Company in the reports it files or submits under the Act is (i) accumulated and
communicated to the Company's management (including the Chief Executive Officer
and Chief Financial Officer) in a timely manner, and (ii) recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and forms.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | Changes in Internal Controls:  In the quarter ended September 30, 2002, the Company
did not make any significant changes in, nor take any corrective actions regarding, its internal
controls or other factors that could significantly affect these controls.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Item 1.  Legal Proceedings

Not Applicable.

Item 2.  Changes in Securities

Not Applicable.

Item 3.  Defaults Upon Senior Securities

Not Applicable.

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

The Company held an annual meeting of stockholders on July 31, 2002.  The
following directors were elected at the meeting:  Charles F. Andersen, M.D.,
and Charles W. Fairchilds. The following directors term of office continued
after the meeting: James R. Cooke, Jr., D.D.S., P. Douglas Richard, Morgan N.
Trimyer, Jr., Jane C. Hickok and Dale C. Smith.

The matters voted on at the Meeting were

(1)	The election of two directors.

|                          | For       | Withheld
|------------------------- | --------- | --------
|Charles F. Andersen, M.D. | 1,966,344 | 18,743  
|Charles W. Fairhilds      | 1,966,517 | 18,570  

Item 5.  Other Information

Not Applicable.

Item 6.  Exhibits and Reports on Form 8-K

| | a. | Exhibits:  See Exhibit Index
| | -- | ----------------------------
| | b. | Reports on Form 8-K: None   

SIGNATURES

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

|                        | COMMUNITY FINANCIAL CORPORATION
|----------------------- | -------------------------------
|Date: November 14, 2002 | By:                            

**CERTIFICATIONS**

I, P. Douglas Richard, Principal Executive Officer, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Community Financial Corporation (the
"Registrant");

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

3. Based on my knowledge, the consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the consolidated 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 we have:

> a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
> 
> b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
> 
> c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

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

> a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the
> Registrant's auditors any material weaknesses in internal controls; and
> 
> b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and

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

Date: November 14, 2002

/s/ P. Douglas Richard
P. Douglas Richard
President and Chief Executive Officer

I, R. Jerry Giles, Principal Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Community Financial
Corporation (the "Registrant");

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

3. Based on my knowledge, the consolidated financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the consolidated 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 we have:

> a) designed such disclosure controls and procedures to ensure that
> material information relating to the Registrant, including its
> consolidated subsidiaries, is made known to us by others within those
> entities, particularly during the period in which this quarterly report
> is being prepared;
> 
> b) evaluated the effectiveness of the Registrant's disclosure controls
> and procedures as of a date within 90 days prior to the filing date of
> this quarterly report (the "Evaluation Date"); and
> 
> c) presented in this quarterly report our conclusions about the
> effectiveness of the disclosure controls and procedures based on our
> evaluation as of the Evaluation Date;

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

> a) all significant deficiencies in the design or operation of internal
> controls which could adversely affect the Registrant's ability to record,
> process, summarize and report financial data and have identified for the
> Registrant's auditors any material weaknesses in internal controls; and
> 
> b) any fraud, whether or not material, that involves management or other
> employees who have a significant role in the Registrant's internal
> controls; and

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

Date: November 14, 2002

/s/ R. Jerry Giles
R. Jerry Giles
Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

|ExhibitNumber     | Document                                                                     | Reference to Prior Filingor Exhibit NumberAttached Hereto               
|----------------- | ---------------------------------------------------------------------------- | ------------------------------------------------------------------------
|3.1               | Amended and Restated Articles of Incorporation                               | *                                                                       
|3.2               | Bylaws, as amended an currently in effect                                    | **                                                                      
|4                 | Form of Common Stock Certificate                                             | ***                                                                     
|                  | Material contracts:                                                          |                                                                         
|10.1              | Stock Option and Incentive Plan                                              | ****                                                                    
|10.2              | Employment Agreement for P. Douglas Richard                                  | **                                                                      
|10.3              | Amendment No. One and Two to the Employment Agreement for
P. Douglas Richard | *****                                                                   
|10.4              | Employment Agreement for Chris P. Kyriakides, as amended                     | *****                                                                   
|10.5              | 1996 Incentive Plan                                                          | *                                                                       
|10.6              | Supplemental Executive Retirement Plan                                       | ***                                                                     
|11            | Statement re computation of per share earnings                               | (See Note 2 to the Notes to
Unaudited Consolidated
Financial Statements)
|99.1          | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002      | 99                                                                      

|*     | Filed on July 5, 1996 as an exhibit to the Registrant's Definitive Proxy Statement (File Number 000-18265) on Schedule 14A. Such previously filed document is hereby incorporated herein by reference in accordance with Item 601 of Regulation S-B.                                 
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**    | Filed on November 14, 2000 as Exhibits to the Registrant's Quarterly Report on Form 10-QSB (file no, 000-18265) for the quarter ended September 30, 2000.  Such previously filed documents are hereby incorporated herein by reference in accordance with Item 601 of Regulation S-B.
|***   | Filed on June 29, 2000, as Exhibit 10 to the Annual Report on Form 10-KSB (file no, 000-18265) for the fiscal year ended March 31, 2000. Such previously filed document is hereby incorporated herein by reference in accordance with Item 601 of Regulation S-B.                    
|****  | Filed on May 19, 1989 as Exhibits to the Registrant's Registration Statement No. 33-28817 on Form S-4. All of such previously filed documents are hereby incorporated herein by reference in accordance with It                                                                      
|***** | Filed on August 14, 2002 as Exhibits to the Registrant's Quarterly Report on Form 10-QSB (file no, 000-18205), for the quarter ended June 30, 2002.  Such previously filed documents are hereby incorporated herein by reference in accordance with Item 601 of Regulation S-B.