<PAGE>

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

                                   FORM 10-QSB/A
                        AMENDMENT NO. ONE
    
          (Mark one)
              [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1995  

                                        OR

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

                    For the transition period from         to              

                      Commission file number           018261                 
      
                          COMMUNITY FINANCIAL CORPORATION                
         (Exact name of small business issuer as specified in its charter)

               DELAWARE                             54-1532044       
     (State of other jurisdiction of            (I.R.S. Employer
      incorporation or organization)            Identification No.)

                      38 North Central Ave., Staunton, Va. 24401            
                   (Address of principal executive offices zip code)

                                   (540) 886-0796                            
                     (Issuer's telephone number, including area code)          
         

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

              Yes    X               No          

Number of shares of Common Stock, par value per share, $.01, outstanding at
the close of business on December 31, 1995:  1,269,698.

Transitional Small Business Disclosure Format (Check one)

              Yes                    No    X     
<PAGE>
<PAGE>

                          COMMUNITY FINANCIAL CORPORATION
                                         

                                       INDEX

                                                                  

PART I.  FINANCIAL INFORMATION                                        PAGE

Item 1.  Financial Statements


         Consolidated Statements of Financial Condition
         at December 31, 1995 (unaudited) and             
         March 31, 1995 (audited).......................................1

         Consolidated Statements of Income for the
         Three Months Ended December 31, 1995 and 1994
         and for the Nine Months Ended December 31, 1995
         and 1994 (unaudited)...........................................2

         Consolidated Statements of Cash Flows for the
         Nine Months Ended December 31, 1995 and
         1994 (unaudited)...............................................3

         Notes to Unaudited Interim Consolidated 
         Financial Statements...........................................4

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


PART II. OTHER INFORMATION   -   II-1



<PAGE>
<PAGE>

                          COMMUNITY FINANCIAL CORPORATION
                   CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


<TABLE>
<CAPTION> 
                         
                                     December 31,      March 31, 
                                          1995            1995     
                                     ------------    -------------
                                     (Unaudited)       (Audited) 

<S>                                  <C>              <C>
ASSETS
Cash (including interest bearing                       
  deposits of approximately 
  $1,392,000 and $2,166,000)         $  4,002,089     $  4,582,983
Securities 
  Held to maturity                      5,818,151        4,268,530
  Available for sale                    1,718,430          524,790
Investment in Federal Home Loan 
  Bank stock, at cost                   1,250,000        1,250,000
Loans receivable, net                 139,828,857      134,515,658
Real estate owned                         215,525          350,308
Property and equipment, net             3,738,543        3,846,007
Accrued interest receivable                                          
  Loans                                   791,424          671,753
  Investments                             124,184           97,266
Prepaid expenses and other assets         279,049          325,660             
  
                                                                       
                                     $157,766,252     $150,432,955

LIABILITIES AND STOCKHOLDERS' EQUITY 
                                   
Liabilities
  Deposits                           $109,822,085     $105,013,566
Advances from Federal Home Loan                                        
    Bank                               25,000,000       25,000,000
Advance payments by borrowers for
    taxes and insurance                   122,521          152,197       
Other liabilities                       1,246,778          714,758

        Total Liabilities             136,191,384      130,880,521

Stockholders' Equity
  Preferred stock $.01 par value,
    authorized 1,000,000 shares,
    none outstanding
  Common stock, $.01 par value, 
    authorized 3,000,000 shares,
    1,269,698 and 1,241,878 shares           
    outstanding                            12,697           12,419   
  Additional paid in capital            4,651,634        4,540,632 
  Retained earnings                    15,903,275       14,723,799
  Net unrealized gain on securities
    available for sale                  1,007,262          275,584
  Total Stockholders' Equity           21,574,868       19,552,434

                                     $157,766,252     $150,432,955

   See accompanying notes to consolidated financial statements.

</TABLE>

   <PAGE>                                                                      

                         COMMUNITY FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                            Three Months Ended     Nine Months Ended
                               December 31,          December 31,
                            ------------------     -----------------
                              1995       1994       1995       1994 
                            --------    ------     ------     ------ 
                               (Unaudited)             (Unaudited)

<S>                        <C>        <C>        <C>        <C>        
                                                       
INTEREST INCOME
  Loans                    $3,007,517 $2,466,323 $8,802,833 $7,029,810
  Investment securities       115,332     81,358    324,510    215,570
  Other                        35,930     43,261     99,723    122,947
    Total interest income   3,158,779  2,590,942  9,227,066  7,368,327

INTEREST EXPENSE
  Deposits                  1,300,133  1,032,555  3,723,119  2,943,439
  Borrowed money              378,274    229,210  1,144,476    651,704
    Total interest expense  1,678,407  1,261,765  4,867,595  3,595,143

NET INTEREST INCOME         1,480,372  1,329,177  4,359,471  3,773,184

PROVISION FOR LOAN LOSSES      31,720     25,000     99,220     76,237

NET INTEREST INCOME AFTER
 PROVISION FOR LOAN LOSSES  1,448,652  1,304,177  4,260,251  3,696,947

NONINTEREST INCOME
  Service charges, fees
    and commissions           109,155     95,427    320,038    275,191
  Miscellaneous                 5,108      6,794     18,127     20,368
    Total noninterest
      income                  114,263    102,221    338,165    295,559         
                                                     
NONINTEREST EXPENSE
  Compensation & benefits     295,456    266,231    860,376    811,486
  Occupancy                    96,191     84,835    280,778    263,791
  Data processing              72,222     64,168    227,387    191,936
  Federal insurance premium    60,608     58,610    180,401    176,230
  Miscellaneous               180,237    154,581    538,125    458,767
    Total noninterest
      expense                 704,714    628,425  2,087,067  1,902,210

INCOME BEFORE TAXES           858,201    777,973  2,511,349  2,090,296

INCOME TAXES                  321,818    295,122    942,440    792,230

NET INCOME                 $  536,383 $  482,851 $1,568,909 $1,298,066
                             
EARNINGS PER SHARE         $     0.42 $     0.39 $     1.25 $     1.06 
DIVIDENDS PER SHARE        $     0.11 $    0.085 $     0.31 $    0.255


       See accompanying notes to consolidated financial statements.

</TABLE>




<PAGE>


                  COMMUNITY FINANCIAL CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION> 

                                                 Nine Months Ended  
                                                    December 31,     
                                              ------------------------
                                                  1995        1994     
                                              -----------  -----------
                                                     (Unaudited)       
                                                       
<S>                                           <C>>         <C>
OPERATING ACTIVITIES                                 
  Net income                                  $1,568,909   $1,298,741
  Adjustments to reconcile net income to  
   net cash provided by operating activities
     Provision for loan losses                    99,220       76,237
     Depreciation                                159,047      153,161
     Amortization of premium and accretion  
       of discount on securities, net             (7,210)     (15,998)
     (Decrease) in net deferred loan fees        (77,517)     (81,344)  
     Decrease (increase) in deferred income
       taxes                                      98,480     (131,761)
     Decrease (increase) in other assets         (99,978)     116,134  
     (Decrease) in other liabilities             (58,098)    (114,107)
     Gain on sale of assets                         (818)        -    
   Net cash provided by operating activities   1,682,035    1,301,063 

INVESTING ACTIVITIES
  Proceeds from maturities of
    investment securities                      2,500,000    2,525,391
  Purchases of investment securities          (4,042,397)  (5,451,699)
  Net increase in loans                       (5,203,178)  (7,623,120)
  Purchases of property and equipment            (47,720)    (375,569)
  Proceeds from sale of loans                  1,136,000       69,000
  Loans originated for resale                 (1,136,000)        -
    Net cash provided (absorbed) by 
      investing activities                    (6,793,295) (10,855,997)
     
FINANCING ACTIVITIES
  Dividends paid                                (389,433)    (312,425)
  Net increase (decrease) in deposits          4,808,519    4,721,591
  Proceeds from advances and other 
   borrowed money                             73,000,000   26,000,000
  Repayments of advances and other
   borrowed money                            (73,000,000) (27,500,000)
  Proceeds from issuance of common stock         111,280       91,640      
Net cash provided (absorbed) by  
  financing activities                         4,530,366    3,000,806 
INCREASE (DECREASE) IN CASH AND CASH                    
  EQUIVALENTS                                   (580,894)  (6,554,128)

CASH AND CASH EQUIVALENT-beginning of period   4,582,983    9,388,430 

CASH AND CASH EQUIVALENTS-end of period       $4,002,089   $2,834,302 
  
</TABLE>
   See accompanying notes to consolidated financial statements. 







<PAGE>

                          COMMUNITY FINANCIAL CORPORATION
           NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                 December 31, 1995


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-Q and Rule
10-01 of 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 and its wholly-owned subsidiary, Community
Federal Savings Bank.  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 and nine months ended December 31, 1995, are
not necessarily indicative of the results that may be expected for the year
ending March 31, 1996.

NOTE 2. - EARNINGS PER SHARE
  
Earnings per share is computed based on the weighted average number of shares
of common stock outstanding during each period and is retroactively adjusted
for stock dividends and stock splits. Earnings per share for the three months
ended December 31, 1995 and 1994 have been determined by dividing net income
by the weighted number of shares of common stock outstanding during these
periods (1,269,698 and 1,230,031). Earnings per share for the nine months
ended December 31, l995 and 1994 have been determined by dividing net income
by the weighted number of shares of common stock outstanding during these
periods (1,254,220 and 1,223,396).

<PAGE>

NOTE 3. - STOCKHOLDERS' EQUITY

The following table presents the Savings Bank's capital levels at December 31,
1995, relative to the requirements applicable under the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 ('FIRREA') at that date: 
<TABLE>               
<CAPTION>
                      Amount     Percent    Actual      Actual      Excess     
                     Required   Required    Amount      Percent     Amount     
                     --------   --------   ---------    -------   ---------

<S>                <C>        <C>        <C>          <C>       <C>          
        
Tangible Capital   $2,349,000   1.50%     $17,829,000   11.38%  $15,480,000
Core Capital        4,698,000   3.00       17,829,000   11.38    13,131,000
Risk-based Capital  7,806,000   8.00       18,566,000   19.03    10,760,000

</TABLE>
<PAGE>
<PAGE>

NOTE 3. - STOCKHOLDERS' EQUITY (cont.)

Capital distributions by the Savings Bank are limited by federal regulations
("Capital Distribution Regulation").  Capital distributions are defined to
include, in part, dividends, stock repurchases and cash-out mergers.  The
Capital Distribution Regulation permits a "Tier 1" association to make capital
distributions during a calendar year up to 100% of its net income to date plus
the amount that would reduce by one-half its surplus capital ratio at the 
beginning of the calendar year.  Any distributions in excess of that amount
require prior notice to the Office of Thrift Supervision ("OTS") with the
opportunity for the OTS to object to the distribution. A Tier 1 association is
defined as an association that has, on a pro forma basis after the proposed
distribution, capital equal to or greater than the OTS fully phased-in capital
requirement and has not been deemed by the OTS to be "in need of more than
normal supervision".  The Savings Bank is currently classified as a Tier 1
institution for these purposes.  The Capital Distribution Regulation requires
that associations provide the applicable OTS District Director with a 30-day
advance written notice of all proposed capital distributions whether or not
advance approval is required by the regulation. 


NOTE 4. - SUPPLEMENTAL INFORMATION - STATEMENT OF CASH FLOWS

Total interest paid for the three months ended December 31, 1995 and 1994 was
$1,667,381 and $1,275,950.  Total interest paid for the nine months ended
December 31, 1995 and 1994 was $4,845,725 and $3,692,824. Total income taxes
paid for the three months ended December 31, 1995 and 1994 was $341,526 and
$163,108.  Total income taxes paid for the nine months ended December 31, 1995
and 1994 was $960,746 and $629,143.  
                              
                                  
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS.


FINANCIAL CONDITION

The Company's total assets increased $7.3 million to $157.8 million at
December 31, 1995, due primarily to an increase in loans receivable of $5.3
million.  The increase in loans receivable was due primarily to the
origination of variable rate mortgage loans. Deposits increased $4.8 million
to $109.8 million at December 31, 1995, from $105.0 million at March 3l, l995. 
The increase in deposits was used to fund the increase in loans. Stockholders'
equity increased to $21.6 million at December 31, 1995, from $19.6 million at
March 31, 1995, due to earnings and an adjustment in the carrying value of
securities available for sale for the nine month period ended December 31,
1995, which was partially offset by three cash dividend payments totalling 
$0.31 per share. At December 31, 1995, the Bank's non-performing assets
totalled $422,000 or 0.27% of assets. This compares to non-performing assets
of $350,000 or 0.23% of total assets as of March 31, 1995. The non-performing
assets consisted of three 1-4 family dwellings which is the real estate owned
of $216,000, loans on 1-4 family dwellings in the amount of $145,000 and
various consumer loans totalling $61,000.
<PAGE>
<PAGE>

Historically, the Bank has maintained its liquid assets above the minimum
requirements imposed by federal regulations and at a level believed adequate
to meet requirements of normal daily activities, repayment of maturing debt
and potential deposit outflows.  Cash flow projections are regularly reviewed
and updated to assure that adequate liquidity is provided.  As of December 31,
1995, the Bank's liquidity ratio (liquid assets as a percentage of net
withdrawable savings and current borrowings) was 6.99%, which exceeds the
regulatory requirement.   

     The deposits of savings associations, such as the Savings Bank, are
presently insured by the SAIF, which together with the BIF, are the two
insurance funds administered by the FDIC. Financial institutions which are
members of the BIF are experiencing substantially lower deposit insurance
premiums because the BIF has achieved its required level of reserves while the 
SAIF has not yet achieved its required reserves. A recapitalization plan for
the SAIF under consideration by Congress reportedly provides for a special
assessment of 0.85% to 0.90% of deposits to be imposed on all SAIF insured
institutions to enable the SAIF to achieve its required level of reserves. If
the proposed assessment of 0.85% to 0.90% was effected based on deposits as of
March 31, 1995 (as proposed), the Savings Bank's special assessment would
amount to approximately $893,000 to $945,000, before taxes, respectively.
Accordingly, if imposed, this special assessment would reduce earnings.
Conversely, assuming the insurance premium levels for BIF and SAIF members are
again equalized, future deposit insurance premiums are expected to decrease
significantly, to as low as 0.04% from the 0.23% of deposits currently paid by
the Savings Bank, which would reduce annual non-interest expense for future
periods by approximately $200,000, before taxes, based on deposits at March
31, 1995. 
                                    
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS.


RESULTS OF OPERATIONS

Three Months Ended December 31, 1995 and 1994.
----------------------------------------------

General.  Net income for the three months ended December 31, 1995 was $536,383
compared to $482,851 for the three months ended December 31, 1994, due
primarily to an increase in net interest income which was offset in part by an
increase in noninterest expense. Income before taxes increased to $858,201 for
the three months ended December 31, 1995 from $777,973 for the three months
ended December 31, 1994.

Interest Income.   Total interest income increased to $3,158,779 for the three
months ended December 31, 1995, from $2,590,942 for the three months ended
December 31, 1994, due primarily to an increase in the yield on loans and
investments from 7.22% for the three months ended December 31, l994, to 8.39%
for the period ended December 31, l995.

Interest Expense.  Total interest expense increased to $1,678,407 for the
quarter ended December 31, 1995, from $1,261,765 for the quarter ended
December 31, 1994.  Interest on deposits increased to $1,300,133 for the
quarter ended December 31, 1995 from $1,032,555 for the quarter ended December
31, 1994 due primarily to an increase in the average cost of deposits from
3.79% at December 30, 1994 compared to 4.72% at December 31, 1995. Interest
expense on borrowed money increased to $378,274 for the quarter ended
December 31, 1995, from $229,210 for the quarter ended December 31, 1994, due
primarily to an increase in the cost of borrowing.





<PAGE>

Provision for Loan Losses.  The provision for loan losses increased to $31,720
for the three months ended December 31, 1995 from $25,000 for the three months
ended December 31, 1994. The increase in the provision for loan losses is
attributable primarily to a modest increase in losses on consumer loans and
credit cards. Due to the growth in the loan portfolio and the economic
uncertainty presently existing, management feels it is prudent to monitor the
unallocated reserves and make additions as appropriate to provide for possible
unforseen losses.  

Noninterest Income.  Noninterest income increased to $114,263 for the three
months ended December 31, 1995, from $102,221 for the three months ended
December 31, 1994. NOW account charges increased as a result of increased
account volume.               

Noninterest Expenses.  Noninterest expenses increased to $704,714 for the
three months ended December 31, 1995, from $628,425 for the three months ended
December 31, 1994. Miscellaneous expenses increased primarily due to the
growth in NOW accounts while other noninterest expenses increased commensurate
with the growth of the Bank.
  
Taxes.  Taxes increased to $321,818 for the three months ended December 31,
l995, from $295,122 for the three months ended December 31, 1994, due to the
increase in income before taxes.   

Nine Months Ended December 31, 1995 and 1994
--------------------------------------------

General.  Net income for the nine months ended December 31, 1995 was
$1,568,909 compared to $1,298,066 for the nine months ended December 31, l994.

Interest Income.  Total interest income increased to $9,227,066 for the nine
months ended December 31, 1995, from $7,368,327 for the nine months ended
December 31, 1994, due primarily to an increase in the yield on loans and
investments.

Interest Expense.  Total interest expense increased to $4,867,595 for the nine
months ended December 31, 1995, from $3,595,143 for the nine months ended
December 31, 1994.  Interest on deposits increased to $3,723,119 for
the nine months ended December 31, 1995, from $2,943,439 for the same period
last year due primarily to a higher cost of savings for the nine months ended
December 31, 1994. Interest expense on borrowed money increased to $1,144,476
for the nine months ended December 31, 1995, from $651,704 for the nine months
ended December 31, 1994, due to higher rates on such borrowings and increased
average borrowings from the Federal Home Loan Bank of Atlanta.

Provision for Loan Losses.  The provision for loan losses increased to $99,220
for the nine months ended December 31, 1995, from $76,237 for the same period
last year due primarily to an increase in losses and reserves on consumer
loans and credit cards . Due to the growth in the loan portfolio and the
economic uncertainty presently existing, management feels it is prudent to
monitor unallocated reserves and make additions as  appropriate to provide for
possible unforseen losses.      
              
Noninterest Income.  Noninterest income increased to $338,165 for the nine
months ended December 31, 1995, from $295,559 for the nine month period ended
December 31, 1994, due to an increase in the volume of fees and service
charges on checking accounts.

Noninterest Expenses.  Noninterest expenses increased to $2,087,067 for the
nine months ended December 31, 1995, from $1,902,210 for the same period last
year. The increase is related generally to the growth of the institution and
increased checking account volume.




<PAGE>

Taxes.  Taxes increased to $942,440 for the nine months ended December 31,
1995, from $792,230 for the nine months ended December 31, 1994,
due to an increase in income before taxes for the nine months ended December
31, 1995. 
<PAGE>
<PAGE>

                            PART II.  OTHER INFORMATION


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

         Not Applicable.

Item 5.  Other Information

         Not Applicable.

Item 6.  Exhibits and Reports on Form 8-K

        Exhibit 27 - Financial Data Schedule Page 13

                   
<PAGE>
<PAGE>

                                    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:  March 20, 1996                              
                                   By: (s) R. Jerry Giles                      
                                       -------------------------------
                                        R. Jerry Giles
                                        Chief Financial Officer
                                        (Duly Authorized Officer)









































                                       II-1