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

                                    FORM 10-Q

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

For Quarterly Period Ended June 30, 2006           Commission File No. 000-29640


                         COMMUNITY FIRST BANCORPORATION
        ------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         South Carolina                                   58-2322486
         --------------                                   ----------
  (State or other jurisdiction of              (IRS Employer Identification No.)
  incorporation or organization)


                             449 HIGHWAY 123 BYPASS
                          SENECA, SOUTH CAROLINA 29678
--------------------------------------------------------------------------------
               (Address of principal executive offices, zip code)


                                 (864) 886-0206
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

     Indicate  by check mark  whether the  registrant  (1) has 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
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

         Yes [X]  No [ ]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

     Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act).

         Yes [ ]  No [X]

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock,  as of the latest  practicable  date:  Common Stock,  no par or
stated value, 2,798,409 Shares Outstanding on July 30, 2006



<PAGE>


                         COMMUNITY FIRST BANCORPORATION

                                    FORM 10-Q

                                      Index

<TABLE>
<CAPTION>
                                                                                                                     Page
PART I -          FINANCIAL INFORMATION

Item 1.           Financial Statements

<S>                                                                                                                    <C>
                  Consolidated Balance Sheets .......................................................................   3
                  Consolidated Statements of Income .................................................................   4
                  Consolidated Statements of Changes in Shareholders' Equity ........................................   5
                  Consolidated Statements of Cash Flows .............................................................   6
                  Notes to Unaudited Consolidated Financial Statements...............................................   7

Item 2.           Management's Discussion and Analysis of Financial Condition and Results of Operations .............   8
Item 3.           Quantitative and Qualitative Disclosures About Market Risk ........................................  16
Item 4.           Controls and Procedures ...........................................................................  17

PART II -         OTHER INFORMATION

Item 4.           Submission of Matters to a Vote of Security Holders................................................  17
Item 6.           Exhibits ..........................................................................................  17

SIGNATURE ...........................................................................................................  18
</TABLE>


                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. - Financial Statements


COMMUNITY FIRST BANCORPORATION
Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                                                      (Unaudited)
                                                                                                        June 30,        December 31,
                                                                                                           2006             2005
                                                                                                           -----            ----
                                                                                                           (Dollars in thousands)
Assets
<S>                                                                                                     <C>               <C>
     Cash and due from banks ...................................................................        $   7,278         $  10,063
     Interest bearing balances due from banks ..................................................               49               182
     Federal funds sold ........................................................................           20,795            22,205
                                                                                                        ---------         ---------
         Cash and cash equivalents .............................................................           28,122            32,450
     Securities available-for-sale .............................................................          106,318           102,070
     Securities held-to-maturity (fair value $7,181 for 2006 and $7,671 for 2005) ..............            7,181             7,751
     Other investments .........................................................................              980               948
     Loans .....................................................................................          186,050           169,318
         Allowance for loan losses .............................................................           (2,269)           (2,266)
                                                                                                        ---------         ---------
            Loans - net ........................................................................          183,781           167,052
     Premises and equipment - net ..............................................................            7,779             6,805
     Accrued interest receivable ...............................................................            1,885             1,629
     Other assets ..............................................................................            2,217             2,007
                                                                                                        ---------         ---------
            Total assets .......................................................................        $ 338,263         $ 320,712
                                                                                                        =========         =========
Liabilities
     Deposits
         Noninterest bearing ...................................................................        $  38,986         $  38,061
         Interest bearing ......................................................................          261,420           241,932
                                                                                                        ---------         ---------
            Total deposits .....................................................................          300,406           279,993
     Accrued interest payable ..................................................................            2,153             1,817
     Short-term borrowings .....................................................................                -             3,500
     Long-term debt ............................................................................            5,500             6,500
     Other liabilities .........................................................................               51                47
                                                                                                        ---------         ---------
            Total liabilities ..................................................................          308,110           291,857
                                                                                                        ---------         ---------
Shareholders' equity
     Common stock - no par value; 10,000,000 shares authorized; issued and
         outstanding - 2,798,409 for 2006 and 2,798,409 for 2005 ...............................           26,956            26,956
     Additional paid-in capital ................................................................              100                 -
     Retained earnings .........................................................................            4,949             3,296
     Accumulated other comprehensive income (loss) .............................................           (1,852)           (1,397)
                                                                                                        ---------         ---------
            Total shareholders' equity .........................................................           30,153            28,855
                                                                                                        ---------         ---------
            Total liabilities and shareholders' equity .........................................        $ 338,263         $ 320,712
                                                                                                        =========         =========
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                       3
<PAGE>

COMMUNITY FIRST BANCORPORATION
Consolidated Statements of Income
<TABLE>
<CAPTION>
                                                                                                    (Unaudited)
                                                                                               Period Ended June 30,
                                                                                               ---------------------
                                                                                  Three Months                     Six Months
                                                                                  ------------                     ----------
                                                                             2006            2005            2006              2005
                                                                             ----            ----            ----              ----
                                                                                     (Dollars in thousands, except per share)
Interest income
<S>                                                                        <C>              <C>              <C>              <C>
     Loans, including fees .....................................           $3,343           $2,829           $6,433           $5,555
     Interest bearing balances due from banks ..................                2                -                4                -
     Securities
       Taxable .................................................              957              876            1,888            1,819
       Tax-exempt ..............................................              158               32              278               52
     Other investments .........................................               13               11               24               20
     Federal funds sold ........................................              330              159              823              312
                                                                           ------           ------           ------           ------
         Total interest income .................................            4,803            3,907            9,450            7,758
                                                                           ------           ------           ------           ------
Interest expense
     Time deposits $100M and over ..............................              733              453            1,465              903
     Other deposits ............................................            1,757              984            3,291            1,911
     Short-term borrowings .....................................                -                5                2               17
     Long-term debt ............................................               61               70              123              140
                                                                           ------           ------           ------           ------
         Total interest expense ................................            2,551            1,512            4,881            2,971
                                                                           ------           ------           ------           ------
Net interest income ............................................            2,252            2,395            4,569            4,787
Provision for loan losses ......................................               25               75               50              215
                                                                           ------           ------           ------           ------
Net interest income after provision ............................            2,227            2,320            4,519            4,572
                                                                           ------           ------           ------           ------
Other income
     Service charges on deposit accounts .......................              382              407              746              758
     Credit related deposit fees ...............................               76               58              146              110
     Credit life insurance commissions .........................               12                7               22               18
     Other income ..............................................               69               79              164              152
                                                                           ------           ------           ------           ------
         Total other income ....................................              539              551            1,078            1,038
                                                                           ------           ------           ------           ------
Other expenses
     Salaries and employee benefits ............................              919              630            1,648            1,341
     Net occupancy expense .....................................               79               61              148              125
     Furniture and equipment expense ...........................              100               89              204              177
     Amortization of computer software .........................               73               52              133              110
     ATM interchange and related expenses ......................               64               53              142               99
     Directors' fees ...........................................               65               27              124               54
     Other expense .............................................              376              440              713              769
                                                                           ------           ------           ------           ------
         Total other expenses ..................................            1,676            1,352            3,112            2,675
                                                                           ------           ------           ------           ------
Income before income taxes .....................................            1,090            1,519            2,485            2,935
Income tax expense .............................................              348              542              832            1,049
                                                                           ------           ------           ------           ------
Net income .....................................................           $  742           $  977           $1,653           $1,886
                                                                           ======           ======           ======           ======
Per share*
     Net income ................................................           $ 0.27           $ 0.35           $ 0.59           $ 0.68
     Net income, assuming dilution .............................             0.25             0.33             0.55             0.63
</TABLE>
-----------------------------
* Per share  information has been  retroactively  adjusted to reflect a 5% stock
dividend effective November 30, 2005.

See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>

COMMUNITY FIRST BANCORPORATION
Consolidated Statements of Changes in Shareholders' Equity

<TABLE>
<CAPTION>
                                                                      (Unaudited)

                                                             Common Stock                                 Accumulated
                                                             ------------       Additional                    Other
                                                        Number of                 Paid-in      Retained   Comprehensive
                                                         Shares        Amount     Capital      Earnings   Income (Loss)     Total
                                                         ------        ------     -------      --------   -------------     -----
                                                                                 (Dollars in thousands)
<S>                                                    <C>          <C>          <C>          <C>          <C>           <C>
Balance, January 1, 2005 ..........................    2,648,230    $   24,216   $        -   $    2,220   $     (499)   $   25,937
                                                                                                                         ----------
Comprehensive income:
    Net income ....................................            -             -            -        1,886            -         1,886
                                                                                                                         ----------
    Unrealized holding gains and losses
      on available-for-sale securities
      arising during the period, net of
      income taxes of $229 ........................            -             -            -            -         (410)         (410)
                                                                                                                         ----------
    Total other comprehensive income ..............                                                                            (410)
                                                                                                                         ----------
      Total comprehensive income ..................                                                                           1,476
                                                                                                                         ----------
Exercise of employee stock options ................          375             2            -            -            -             2
                                                      ----------    ----------   ----------   ----------   ----------    ----------
Balance, June 30, 2005 ............................    2,648,605    $   24,218   $        -   $    4,106   $     (909)   $   27,415
                                                      ==========    ==========   ==========   ==========   ==========    ==========



Balance, January 1, 2006 ..........................    2,798,409    $   26,956   $        -   $    3,296   $   (1,397)   $   28,855
                                                                                                                         ----------
Comprehensive income:
    Net income ....................................            -             -            -        1,653            -         1,653
                                                                                                                         ----------
    Unrealized holding gains and losses
      on available-for-sale securities
      arising during the period, net of
      income taxes of $255 ........................            -             -            -            -         (455)         (455)
                                                                                                                         ----------
    Total other comprehensive income ..............                                                                            (455)
                                                                                                                         ----------
      Total comprehensive income ..................                                                                           1,198
                                                                                                                         ----------
Share-based compensation, net of income
    taxes of $23 ..................................            -             -          100            -            -           100
                                                      ----------    ----------   ----------   ----------   ----------    ----------
Balance, June 30, 2006 ............................    2,798,409    $   26,956   $      100   $    4,949   $   (1,852)   $   30,153
                                                      ==========    ==========   ==========   ==========   ==========    ==========
</TABLE>
















See accompanying notes to unaudited consolidated financial statements.


                                       5
<PAGE>

COMMUNITY FIRST BANCORPORATION
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                                                (Unaudited)
                                                                                                              Six Months Ended
                                                                                                                  June 30,
                                                                                                                  --------
                                                                                                          2006                2005
                                                                                                          ----                ----
                                                                                                          (Dollars in thousands)
Operating activities
<S>                                                                                                     <C>                <C>
     Net income ..............................................................................          $  1,653           $  1,886
     Adjustments to reconcile net income to net
         cash provided by operating activities
            Provision for loan losses ........................................................                50                215
            Depreciation .....................................................................               172                150
            Amortization of net loan fees and costs ..........................................               (80)               (43)
            Securities accretion and premium amortization ....................................                77                 65
            Gain on sale of foreclosed assets ................................................               (31)                 -
            Increase in interest receivable ..................................................              (256)               (89)
            Increase in interest payable .....................................................               336                339
            (Increase) decrease in prepaid expenses and other assets .........................               (91)                62
            Increase in other accrued expenses ...............................................                 3                 95
            Writedowns of foreclosed assets ..................................................                 -                 25
            Share-based compensation .........................................................               100                  -
                                                                                                        --------           --------
                Net cash provided by operating activities ....................................             1,933              2,705
                                                                                                        --------           --------
Investing activities
     Purchases of available-for-sale securities ..............................................           (16,100)           (42,337)
     Maturities, calls and paydowns of securities available-for-sale .........................            11,061             38,659
     Maturities, calls and paydowns of securities held-to-maturity ...........................               574                752
     Purchases of other investments ..........................................................               (32)              (162)
     Net increase in loans made to customers .................................................           (16,699)            (7,896)
     Purchases of premises and equipment .....................................................            (1,146)              (412)
     Proceeds of sale of foreclosed assets ...................................................               168                  -
                                                                                                        --------           --------
                Net cash used by investing activities ........................................           (22,174)           (11,396)
                                                                                                        --------           --------
Financing activities
     Net increase (decrease) in demand deposits, interest
         bearing transaction accounts and savings accounts ...................................            14,160             (3,109)
     Net increase (decrease) in certificates of deposit and other
         time deposits .......................................................................             6,253               (488)
     Decrease in short-term borrowings .......................................................            (3,500)            (2,500)
     Repayments of long-term debt ............................................................            (1,000)                 -
     Exercise of employee stock options ......................................................                 -                  2
                                                                                                        --------           --------
                Net cash provided (used) by financing activities .............................            15,913             (6,095)
                                                                                                        --------           --------
Decrease in cash and cash equivalents ........................................................            (4,328)           (14,786)
Cash and cash equivalents, beginning .........................................................            32,450             39,902
                                                                                                        --------           --------
Cash and cash equivalents, ending ............................................................          $ 28,122           $ 25,116
                                                                                                        ========           ========
Supplemental Disclosure of Cash Flow Information
     Cash paid during the period for
         Interest, net of $18 capitalized during construction during 2006 ....................          $  4,545           $  2,632
         Income taxes ........................................................................               895                956
     Noncash investing and financing activities:
         Other comprehensive income (loss) ...................................................              (455)              (410)
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       6
<PAGE>


COMMUNITY FIRST BANCORPORATION

Notes to Unaudited Consolidated Financial Statements

Accounting  Policies - A summary of significant  accounting policies is included
in Community First  Bancorporation's  (the "Company") Annual Report on Form 10-K
for the year ended  December  31, 2005 filed with the  Securities  and  Exchange
Commission.   Certain  amounts  in  the  2005  financial  statements  have  been
reclassified to conform to the current presentation.

Management  Opinion - In the opinion of management,  the accompanying  unaudited
consolidated  financial statements of Community First Bancorporation reflect all
adjustments  necessary  for a fair  presentation  of the  results of the periods
presented. Such adjustments were of a normal, recurring nature.

Nonperforming  Loans - As of June 30, 2006,  there were  $497,000 in  nonaccrual
loans and no loans 90 days or more past due and still accruing interest.

Earnings Per Share - Basic earnings per common share is computed by dividing net
income  applicable  to common  shares by the weighted  average  number of common
shares  outstanding.   Diluted  earnings  per  share  is  computed  by  dividing
applicable  net  income  by  the  weighted   average  number  of  common  shares
outstanding and any dilutive potential common shares and dilutive stock options.
It is assumed that all dilutive  stock options are exercised at the beginning of
each period and that the proceeds are used to purchase  shares of the  Company's
common stock at the average  market price during the period.  All 2005 per share
information  has  been  retroactively  adjusted  to give  effect  to a 5%  stock
dividend  effective  November 30, 2005.  Net income per share and net income per
share, assuming dilution, were computed as follows:

<TABLE>
<CAPTION>
                                                                                            (Unaudited)
                                                                                        Period Ended June 30,
                                                                                        ---------------------
                                                                          Three Months                          Six Months
                                                                          ------------                          ----------
                                                                    2006               2005                2006              2005
                                                                    ----               ----                ----              ----
                                                                          (Dollars in thousands, except per share amounts)

Net income per share, basic
<S>                                                              <C>                <C>                <C>                <C>
  Numerator - net income ...............................         $      742         $      977         $    1,653         $    1,886
                                                                 ==========         ==========         ==========         ==========
  Denominator
    Weighted average common shares
      issued and outstanding ...........................          2,798,409          2,780,824          2,798,409          2,780,763
                                                                 ==========         ==========         ==========         ==========

      Net income per share, basic ......................         $      .27         $      .35         $      .59         $      .68
                                                                 ==========         ==========         ==========         ==========

Net income per share, assuming dilution
  Numerator - net income ...............................         $      742         $      977         $    1,653         $    1,886
                                                                 ==========         ==========         ==========         ==========
  Denominator
  Weighted average common shares
    issued and outstanding .............................          2,798,409          2,780,824          2,798,409          2,780,763
  Effect of dilutive stock options .....................            206,287            193,383            197,916            195,054
                                                                 ----------         ----------         ----------         ----------
               Total shares ............................          3,004,696          2,974,207          2,996,325          2,975,817
                                                                 ==========         ==========         ==========         ==========

      Net income per share, assuming dilution ..........         $      .25         $      .33         $      .55         $      .63
                                                                 ==========         ==========         ==========         ==========
</TABLE>

Stock-Based  Compensation - As of June 30, 2006, the Company has two stock-based
compensation plans.  Effective January 1, 2006, the Company began accounting for
compensation  expenses  related  to  stock  options  granted  to  employees  and
non-officer  directors  under the  recognition  and  measurement  principles  of
Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based
Payment"("SFAS 123(R)) using the modified prospective  application method. Total
share-based compensation expenses included in salaries and employee benefits and
directors  fees were  $40,000  and  $38,000,  respectively,  for the three month
period,  and $60,000 and $63,000,  respectively,  for the six month period ended
June 30, 2006.

                                       7
<PAGE>

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

Forward Looking Statements

         Statements  included in this report which are not  historical in nature
are intended to be, and are hereby  identified as "forward  looking  statements"
for  purposes  of the safe  harbor  provided  by Section  21E of the  Securities
Exchange Act of 1934, as amended.  Forward-looking statements include statements
concerning plans, objectives,  goals,  strategies,  future events or performance
and underlying  assumptions and other statements which are other than statements
of historical facts. Such forward-looking statements may be identified,  without
limitation,  by the use of the  words  "anticipates,"  "believes,"  "estimates,"
"expects," "intends," "plans," "predicts,"  "projects," and similar expressions.
The Company's expectations,  beliefs and projections are expressed in good faith
and are believed by the Company to have a reasonable  basis,  including  without
limitation,  management's  examination  of  historical  operating  trends,  data
contained in the Company's  records and other data available from third parties,
but  there  can be no  assurance  that  management's  beliefs,  expectations  or
projections  will result or be achieved or  accomplished.  The Company  cautions
readers that  forward-looking  statements,  including without limitation,  those
relating to the Company's recent and continuing  expansion,  its future business
prospects,  revenues, working capital, liquidity, capital needs, interest costs,
income,  and adequacy of the allowance for loan losses, are subject to risks and
uncertainties  that could cause actual results to differ  materially  from those
indicated in the  forward-looking  statements,  due to several important factors
herein  identified,  among others,  and other risks and factors  identified from
time to time in the  Company's  reports filed with the  Securities  and Exchange
Commission.  The Company  undertakes no obligation to publicly  update or revise
any forward-looking statements,  whether as a result of new information,  future
events or otherwise.

Changes in Financial Condition


         During the three months ended June 30, 2006, loans grew by $14,635,000,
or 8.5%.  This growth was funded  primarily  by  reducing  the amount of federal
funds  sold  by  $13,398,000  during  the  quarter.   Interest-bearing  deposits
increased by $2,819,000 during the 2006 second quarter. Average interest bearing
transaction accounts in the second quarter of 2006 were approximately $9,000,000
more than the 2006 first quarter  average  amount,  primarily due to promotional
interest  rates  offered in  conjunction  with the opening of the  Company's new
office in Seneca,  SC. Average savings deposits were  approximately  $16,000,000
less in the second quarter of 2006 than in the first quarter.

         During  the  first  six  months  of  2006,  interest  bearing  deposits
increased by  $19,488,000,  or 8.1%.  These funds were used to repay  short-term
borrowings of $3,500,000  and long-term  debt of  $1,000,000,  to fund growth in
loans,  and to purchase  securities.  Loans increased by $16,732,000 or 9.9% and
securities available-for-sale increased by $4,248,000 or 4.2%.

         The Company  believes that it continues to have sufficient  flexibility
to fund loan requests or make  investments  in securities at attractive  yields,
and to meet normal  demands  for deposit  withdrawals  by its  customers,  while
maintaining  its  exposure to any  further  increases  in  interest  rates at an
acceptable level.

Results of Operations

Three Months Ended June 30, 2006 and 2005

         The Company  recorded  consolidated  net income of $742,000 or $.27 per
share for the second  quarter of 2006.  These results are less than earnings per
share of $.35 for the  second  quarter of 2005.  Net income per share,  assuming
dilution was $.25 for the 2006 quarter and $.33 for the 2005 period.  Net income
per share  amounts for 2005 have been  retroactively  adjusted to reflect a five
percent stock dividend effective November 30, 2005.

         Early in the 2006  second  quarter,  the  Company  moved its  corporate
offices into,  and opened a new retail  banking  office in, a newly  constructed
building in Seneca,  SC. In conjunction with the opening of this new office, the
Company  offered  promotional  interest rates on certain deposit  accounts,  and
incurred other promotional expenses. Loans outstanding increased during the 2006
second  quarter  largely as a result of the opening of the new  banking  office.
Additional personnel were hired to staff the new retail office and occupancy and
other fixed assets expenses also increased.  Salaries and employee  benefits and
directors'  fees for the 2006 three  month  period  also  include  approximately
$78,000  which  represents  the effect of the  adoption of SFAS 123(R) using the
modified prospective method.


                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                                                      Summary Income Statement
                                                                                      ------------------------
                                                                                       (Dollars in thousands)
                                                                                                          Dollar         Percentage
For the Three Months Ended June 30,                                2006                2005               Change           Change
                                                                   ----                ----               ------           ------
<S>                                                              <C>                 <C>                 <C>              <C>
Interest income ....................................             $ 4,803             $ 3,907             $   896           22.9%
Interest expense ...................................               2,551               1,512               1,039           68.7%
                                                                 -------             -------             -------
Net interest income ................................               2,252               2,395                (143)          -6.0%
Provision for loan losses ..........................                  25                  75                 (50)         -66.7%
Noninterest income .................................                 539                 551                 (12)          -2.2%
Noninterest expenses ...............................               1,676               1,352                 324           24.0%
Income tax expense .................................                 348                 542                (194)         -35.8%
                                                                 -------             -------             -------
Net income .........................................             $   742             $   977             $  (235)         -24.1%
                                                                 =======             =======             =======
</TABLE>

Six Months Ended June 30, 2006 and 2005

         The Company recorded  consolidated net income of $1,653,000 or $.59 per
share for the first half of 2006. These results are less than earnings per share
of $.68 for the same period of 2005. Net income per share, assuming dilution was
$.55 for the 2006 six  months and $.63 for the same  period of 2005.  Net income
per share  amounts for 2005 have been  retroactively  adjusted to reflect a five
percent stock dividend effective November 30, 2005.

         The results for the 2006 six-month  period reflect the  promotional and
other  expenses  of the new Seneca  office  building  referred  to above and the
effects of adopting SFAS 123(R).  Salaries and employee  benefits and directors'
fees for the 2006 six month period include  approximately  $123,000 representing
the effect of the adoption of SFAS 123(R) using the modified prospective method.

<TABLE>
<CAPTION>
                                                                                      Summary Income Statement
                                                                                      ------------------------
                                                                                       (Dollars in thousands)
                                                                                                          Dollar         Percentage
For the Six Months Ended June 30,                                  2006                2005               Change           Change
                                                                   ----                ----               ------           ------
<S>                                                               <C>                 <C>                 <C>               <C>
Interest income .....................................             $ 9,450             $ 7,758             $ 1,692            21.8%
Interest expense ....................................               4,881               2,971               1,910            64.3%
                                                                  -------             -------             -------
Net interest income .................................               4,569               4,787                (218)           -4.6%
Provision for loan losses ...........................                  50                 215                (165)          -76.7%
Noninterest income ..................................               1,078               1,038                  40             3.9%
Noninterest expenses ................................               3,112               2,675                 437            16.3%
Income tax expense ..................................                 832               1,049                (217)          -20.7%
                                                                  -------             -------             -------
Net income ..........................................             $ 1,653             $ 1,886             $  (233)          -12.4%
                                                                  =======             =======             =======
</TABLE>


Net Interest Income


         Net interest income is the principal source of the Company's  earnings.
During the second quarter of 2006, the Company offered above-market  promotional
interest rates on certain deposit  products in conjunction with the opening of a
new retail banking office in Seneca,  SC. These promotional rates  significantly
increased the Company's interest expense.  Management expects that the Company's
net interest income and the related metrics,  such as the rates paid on interest
bearing  transaction  accounts  and  savings  deposits,  rates paid on  interest
bearing  liabilities,  and interest rate spread and net yield on earning assets,
will return to more normal levels throughout the remainder of 2006.

Three Months Ended June 30, 2006 and 2005

         For the second quarter of 2006, net interest income totaled $2,252,000,
a decrease of $143,000 or 6.0% from the amount for the same period of 2005.  The
average yield on interest earning assets increased to 6.01% for the 2006 period,
compared  with  5.39% for the 2005  period,  due to higher  rates  earned on all
categories  of  earning  assets.   However,   largely  in  response  to  special
promotional  rates,  the  average  rate  paid for  interest-bearing  liabilities
increased  to 3.89% for the 2006  quarter,  compared  with  2.56%,  for the 2005
quarter.  Accordingly,  the average interest rate spread for the 2006 period was
71 basis points lower than for the 2005 period.

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Average Balances, Yields and Rates
                                                                                     Three Months Ended June 30,
                                                                                     ---------------------------
                                                                                 2006                              2005
                                                                                 ----                              ----
                                                                               Interest                          Interest
                                                                    Average     Income/    Yields/     Average    Income/    Yields/
                                                                    Balances    Expense   Rates(1)     Balances   Expense   Rates(1)
                                                                    --------    -------   --------     --------   -------   --------
                                                                                          (Dollars in thousands)
Assets
<S>                                                               <C>           <C>         <C>       <C>          <C>         <C>
Interest-bearing balances due from banks ......................   $      92     $     2     8.82%     $      82    $    -      0.00%
Securities
     Taxable ..................................................      99,894         957     3.89%       103,935       876      3.42%
     Tax exempt (2) ...........................................      16,283         158     3.94%         3,677        32      3.53%
                                                                  ---------     -------               ---------    ------
         Total investment securities ..........................     116,177       1,115     3.89%       107,612       908      3.42%
Other investments .............................................         980          13     5.38%         1,073        11      4.16%
Federal funds sold ............................................      27,163         330     4.93%        22,109       159      2.92%
Loans (2) (3) (4) .............................................     179,896       3,343     7.54%       163,029     2,829      7.04%
                                                                  ---------     -------               ---------    ------
         Total interest earning assets ........................     324,308       4,803     6.01%       293,905     3,907      5.39%
Cash and due from banks .......................................       6,615                               4,678
Allowance for loan losses .....................................      (2,266)                             (2,330)
Valuation allowance - Available-for-
     sale securities ..........................................      (2,891)                             (1,596)
Premises and equipment ........................................       7,507                               4,424
Other assets ..................................................       3,988                               3,245
                                                                  ---------                           ---------
         Total assets .........................................   $ 337,261                           $ 302,326
                                                                  =========                           =========

Liabilities and shareholders' equity
Interest bearing deposits
     Interest bearing transaction accounts ....................   $  44,578     $   356     3.24%     $  36,320    $   78      0.87%
     Savings ..................................................      28,053         185     2.67%        30,598       103      1.37%
     Time deposits $100M and over .............................      73,060         733     4.07%        61,130       453      3.01%
     Other time deposits ......................................     114,273       1,216     4.32%       102,769       803      3.17%
                                                                  ---------     -------               ---------    ------
         Total interest bearing deposits ......................     259,964       2,490     3.88%       230,817     1,437      2.52%
Short-term borrowings .........................................           -           -     0.00%           879         5      2.31%
Long-term debt ................................................       6,335          61     3.91%         7,500        70      3.79%
                                                                  ---------     -------               ---------    ------
         Total interest bearing liabilities ...................     266,299       2,551     3.89%       239,196     1,512      2.56%
Noninterest bearing demand deposits ...........................      38,705                              34,378
Other liabilities .............................................       2,546                               1,918
Shareholders' equity ..........................................      29,711                              26,834
                                                                  ---------                           ---------
         Total liabilities and shareholders' equity ...........   $ 337,261                           $ 302,326
                                                                  =========                           =========
Interest rate spread ..........................................                              2.12%                             2.83%
Net interest income and net yield
     on earning assets ........................................                 $ 2,252      2.82%                 $2,395      3.30%
Interest free funds supporting earning assets .................   $  58,009                           $  54,709
</TABLE>
(1)  Yields and rates are annualized
(2)  Yields on tax exempt instruments have not been adjusted to a tax-equivalent
     basis.
(3)  Nonaccrual  loans are included in the average  loan  balances and income on
     such loans is recognized on a cash basis.
(4)  Includes immaterial amounts of loan fees.


                                       10
<PAGE>

         The Company continues to pursue a strategy to increase its market share
in its local  market areas in Anderson  and Oconee  Counties of South  Carolina.
Oconee County is served from four offices which are located in Seneca,  Walhalla
and Westminster.  The Company  currently is using its temporary  facility at the
Westminster location.  There presently are no firm plans,  timetables or budgets
for  constructing  a permanent  facility  for this office.  The Anderson  County
market is served  from  offices in  Anderson  and  Williamston.  The  Company is
planning  to open  an  additional  office  on  Highway  81 in  Anderson  County.
Construction is expected to begin during the fourth quarter of 2006.

Six Months Ended June 30, 2006 and 2005

         For the first half of 2006, net interest income totaled  $4,569,000,  a
decrease of  $218,000  or 4.6% from the amount for the same period of 2005.  The
yield  on  interest  earning  assets  increased  to 5.82%  for the 2006  period,
compared  with  5.22% for the 2005  period,  due to higher  rates  earned on all
categories of earning assets,  but especially as related to loans. A significant
portion of the Company's loans are variable rate  instruments  that are repriced
in  response  to changes  in the "prime  rate."  Also,  for loans with  original
anticipated maturities of more than five years, the Company generally includes a
provision that allows it to adjust the interest rate on each loan at least every
five years.

         Largely in response to special  promotional  rates offered beginning in
the  second  quarter  of  2006,  the  average  rate  paid  for  interest-bearing
liabilities  increased to 3.63% for the 2006  six-month  period,  compared  with
2.43%,  for the same  period of 2005.  Accordingly,  the average  interest  rate
spread for the 2006 period was 60 basis points lower than for the 2005 period.


                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Average Balances, Yields and Rates
                                                                                      Six Months Ended June 30,
                                                                                      -------------------------
                                                                                 2006                              2005
                                                                                 ----                              ----
                                                                               Interest                          Interest
                                                                    Average     Income/    Yields/     Average    Income/    Yields/
                                                                    Balances    Expense   Rates(1)     Balances   Expense   Rates(1)
                                                                    --------    -------   --------     --------   -------   --------
                                                                                          (Dollars in thousands)

Assets
<S>                                                              <C>           <C>        <C>        <C>          <C>          <C>
Interest-bearing balances due from banks .....................   $     132     $     4     6.11%     $      82    $     -      0.00%
Securities
     Taxable .................................................     100,649       1,888     3.78%       110,427      1,819      3.32%
     Tax exempt (2) ..........................................      14,274         278     3.93%         3,003         52      3.49%
                                                                 ---------     -------               ---------    -------
         Total investment securities .........................     114,923       2,166     3.80%       113,430      1,871      3.33%
Other investments ............................................         964          24     5.02%         1,044         20      3.86%
Federal funds sold ...........................................      36,162         823     4.59%        24,257        312      2.59%
Loans (2) (3) (4) ............................................     175,438       6,433     7.39%       160,931      5,555      6.96%
                                                                 ---------     -------               ---------    -------
         Total interest earning assets .......................     327,619       9,450     5.82%       299,744      7,758      5.22%
Cash and due from banks ......................................       6,715                               4,649
Allowance for loan losses ....................................      (2,265)                             (2,305)
Valuation allowance - Available-for-
     sale securities .........................................      (2,560)                             (1,324)
Premises and equipment .......................................       7,266                               4,418
Other assets .................................................       3,933                               3,171
                                                                 ---------                           ---------
         Total assets ........................................   $ 340,708                           $ 308,353
                                                                 =========                           =========

Liabilities and shareholders' equity
Interest bearing deposits
     Interest bearing transaction accounts ...................   $  40,185     $   497     2.49%     $  36,930    $   148      0.81%
     Savings .................................................      36,089         499     2.79%        34,299        217      1.28%
     Time deposits $100M and over ............................      74,767       1,465     3.95%        62,995        903      2.89%
     Other time deposits .....................................     113,612       2,295     4.07%       103,769      1,546      3.00%
                                                                 ---------     -------               ---------    -------
         Total interest bearing deposits .....................     264,653       4,756     3.62%       237,993      2,814      2.38%
Short-term borrowings ........................................          38           2    10.61%         2,506         17      1.37%
Long-term debt ...............................................       6,417         123     3.87%         6,439        140      4.38%
                                                                 ---------     -------               ---------    -------
         Total interest bearing liabilities ..................     271,108       4,881     3.63%       246,938      2,971      2.43%
Noninterest bearing demand deposits ..........................      37,562                              34,173
Other liabilities ............................................       2,525                               1,750
Shareholders' equity .........................................      29,513                              25,492
                                                                 ---------                           ---------
         Total liabilities and shareholders' equity ..........   $ 340,708                           $ 308,353
                                                                 =========                           =========
Interest rate spread .........................................                             2.19%                               2.79%
Net interest income and net yield
     on earning assets .......................................                 $ 4,569     2.81%                  $ 4,787      3.22%
Interest free funds supporting earning assets ................   $  56,511                           $  52,806
</TABLE>
--------------------------------------
(1)  Yields and rates are annualized
(2)  Yields on tax exempt instruments have not been adjusted to a tax-equivalent
     basis.
(3)  Nonaccrual  loans are included in the average  loan  balances and income on
     such loans is recognized on a cash basis.
(4)  Includes immaterial amounts of loan fees.


                                       12
<PAGE>


Provision and Allowance for Loan Losses

         The  provision  for loan losses was  $25,000 for the second  quarter of
2006,  compared with $75,000 for the  comparable  period of 2005.  For the first
half of 2006, the provision for loan losses was $50,000,  a decrease of $165,000
from the  $215,000  recorded for the first half of 2005.  At June 30, 2006,  the
allowance  for loan  losses  was 1.22% of loans,  down  slightly  from  1.34% at
December 31, 2005.

         For the first six  months of 2006,  net  charge-offs  totaled  $47,000,
compared  with $118,000 in net charge offs during the same period of 2005. As of
June 30, 2006,  there were $497,000 in nonaccrual  loans and no loans 90 days or
more past due and still  accruing  interest.  As of June 30,  2005,  there  were
$1,158,000 in  nonaccrual  loans and no loans 90 days or more past due and still
accruing  interest.  The activity in the allowance for loan losses is summarized
in the table below:

<TABLE>
<CAPTION>
                                                                             Six Months          Year Ended             Six Months
                                                                               Ended             December 31,              Ended
                                                                            June 30, 2006           2005             June 30, 2005
                                                                            -------------           ----             -------------
                                                                                           (Dollars in thousands)
<S>                                                                          <C>                   <C>                   <C>
Allowance at beginning of period .................................           $   2,266             $   2,240             $   2,240
Provision for loan losses ........................................                  50                   250                   215
Net charge-offs ..................................................                 (47)                 (224)                 (118)
                                                                             ---------             ---------             ---------
Allowance at end of period .......................................           $   2,269             $   2,266             $   2,337
                                                                             =========             =========             =========
Allowance as a percentage of loans outstanding
  at period end ..................................................                1.22%                 1.34%                 1.41%
Loans at end of period ...........................................           $ 186,050             $ 169,318             $ 165,596
                                                                             =========             =========             =========
</TABLE>



                                       13
<PAGE>


Non-Performing and Potential Problem Loans


<TABLE>
<CAPTION>
                                                        90 Days or
                                                       More Past Due       Total             Percentage                   Percentage
                                        Nonaccrual       and Still      Nonperforming         of Total      Potential      of Total
                                            Loans        Accruing          Loans                Loans     Problem Loans     Loans
                                            -----        --------          -----                -----     -------------     -----
                                                                          (Dollars in thousands)
<S>                                       <C>             <C>             <C>                  <C>          <C>             <C>
January 1, 2005 ..................        $ 1,465         $     9         $ 1,474              0.93%        $  1,403        0.89%
Net change .......................           (288)             (9)           (297)                             1,133
                                          -------         -------         -------                           --------
March 31, 2005 ...................          1,177               -           1,177              0.73%           2,536        1.58%
Net change .......................            (19)              -             (19)                               915
                                          -------         -------         -------                           --------
June 30, 2005 ....................          1,158               -           1,158              0.70%           3,451        2.08%
Net change .......................           (189)              -            (189)                              (578)
                                          -------         -------         -------                           --------
September 30, 2005 ...............            969               -             969              0.58%           2,873        1.71%
Net change .......................            (69)              5             (64)                              (725)
                                          -------         -------         -------                           --------
December 31, 2005 ................            900               5             905              0.53%           2,148        1.27%
Net change .......................           (321)             (5)           (326)                               615
                                          -------         -------         -------                           --------
March 31, 2006 ...................            579               -             579              0.34%           2,763        1.61%
Net change .......................            (82)              -             (82)                             1,047
                                          -------         -------         -------                           --------
June 30, 2006 ....................        $   497         $     -         $   497              0.27%        $  3,810        2.05%
                                          =======         =======         =======                           ========
</TABLE>


         Potential problem loans include loans, other than non-performing loans,
that management has identified as having possible credit problems  sufficient to
cast  doubt upon the  abilities  of the  borrowers  to comply  with the  current
repayment  terms.  Since March 31, 2006,  loans totaling  $1,390,000  moved into
potential  problem loans, of which $1,328,000 are  collateralized by real estate
mortgages.  Potential  problem loans that totaled  $454,000 as of March 31, 2006
were no  longer  included  in  potential  problem  loans  as of June  30,  2006,
including  loans  totaling  $68,000 as of March 31,  2006 that were  charged off
during the second quarter of 2006. Other changes,  including  payments  received
and  increases  to, also  occurred  during  the.  Management  believes  that the
increase  in  potential  problem  loans  in the  first  half  of  2006  reflects
circumstances unique to each individual borrower.

Noninterest Income

         Noninterest  income  totaled  $539,000 for the second  quarter of 2006,
compared with $551,000 for the 2005 quarter. Service charges on deposit accounts
in the 2006 second quarter were $382,000 representing a decrease of $25,000 from
the prior year quarter and fees from an overdraft privilege product were $18,000
more in the 2006 second  quarter than in the 2005  quarter.  Mortgage  brokerage
income in the second quarter of 2006 was approximately  $14,000 less than in the
2005 quarter.  There were no sales of any  securities in either the 2006 or 2005
second quarter.

         For the six months  ended June 30,  2006,  noninterest  income  totaled
$1,078,000,  compared  with  $1,038,000  for the same  period  of 2005.  Service
charges  on  deposit  accounts  in the  2006 six  months  period  were  $746,000
representing  a decrease  of $12,000  from the prior year  period.  Fees from an
overdraft privilege product were $36,000 more in the 2006 six months period than
in the 2005 period.  Mortgage brokerage income in the 2006 six months period was
approximately  $14,000 less than in the 2005 period.  There were no sales of any
securities in either the 2006 or 2005 six months period.  A gain of $31,000 from
the sale of foreclosed  assets was recognized in the 2006 period,  but there was
no comparable activity in the 2005 period.

Noninterest Expenses

         Noninterest  expenses totaled $1,676,000 for the second quarter of 2006
compared with $1,352,000 for the same quarter of 2005,  representing an increase
of $324,000 or 24.0%.  Salaries and employee benefits increased by $289,000,  or
45.9%,  to  $919,000.  This  increase  resulted  primarily  from  normal  salary
increases,  which are  granted  from time to time,  increases  in the  number of
employees  associated  with  staffing for Company's new Seneca office and higher
costs of providing  health  insurance  benefits.  Also,  for the 2006 six months
period, this category includes $40,000 of share-based compensation expenses that
resulted from the adoption of SFAS 123(R).  Partially offsetting these increases
was an $85,000 decrease in estimated  employee incentive bonuses in the 2006 six
months period compared with the 2005 period.



                                       14
<PAGE>

         Occupancy and furniture and equipment  expenses for the second  quarter
of 2006  increased by $29,000  compared with the same quarter of 2005  primarily
due to the Company's occupancy of new corporate offices and the opening of a new
full-service  banking office as well as higher maintenance  expenses  associated
with the Company's  equipment.  Directors'  fees for the 2006 three month period
include  $38,000 of  share-based  compensation  expenses  that resulted from the
adoption of SFAS 123(R).  In addition,  higher  expenses  were noted in the 2006
second quarter for stationery,  supplies and promotional expenses resulting from
the opening of the new corporate offices and an additional banking office.  Some
expense  decreases were  experienced in the 2006 three month period for expenses
related to foreclosed assets.

         For the six months ended June 30, 2006,  salaries and employee benefits
increased by $307,000,  or 22.9%, over the amount for the 2005 period.  Salaries
and  employee  benefits  for the 2006 six  months  period  includes  share-based
compensation  expense  of  $60,000  resulting  from the  implementation  of SFAS
123(R).  Net occupancy and  furniture  and  equipment  expenses  increased by an
aggregate of $50,000, or 16.6%. During the first six months of 2006, the Company
moved its corporate offices into a newly constructed  office building in Seneca,
SC that also houses a new full-service banking office. The increases in salaries
and  benefits  and  occupancy  and  furniture  and  fixtures  expenses  resulted
primarily  from those  events.  Directors'  fees for the 2006  six-month  period
included  $63,000 of  share-based  compensation  expenses that resulted from the
adoption of SFAS 123(R).

Liquidity

         Liquidity is the ability to meet current and future obligations through
the  liquidation or maturity of existing assets or the acquisition of additional
liabilities.  The  Company  manages  both  assets  and  liabilities  to  achieve
appropriate  levels  of  liquidity.  Cash  and  short-term  investments  are the
Company's  primary  sources of asset  liquidity.  These funds  provide a cushion
against  short-term  fluctuations  in cash flow from both  deposits  and  loans.
Securities  available-for-sale  are the Company's  principal source of secondary
asset  liquidity.  However,  the  availability  of this source is  influenced by
market conditions.  Individual and commercial deposits are the Company's primary
source of funds for credit  activities.  The Company has significant  amounts of
credit  availability  under its FHLB lines of credit and federal funds purchased
facilities.

         As of June 30,  2006,  the ratio of loans to total  deposits was 61.9%,
compared  with 60.5% as of December 31, 2005.  Deposits as of June 30, 2006 were
$300,406,000,  an increase of $20,413,000 or 7.3% over the amount as of December
31, 2005.  Management believes that the Company's liquidity sources are adequate
to meet its operating needs.

Capital Resources

         The Company's  capital base increased by $1,298,000  since December 31,
2005 as the result of net income of $1,653,000 for the first six months of 2006,
$100,000 added pursuant to share-based  compensation  expenses recognized during
the period,  net of income tax  effects,  less a $455,000  change in  unrealized
gains and losses on  available-for-sale  securities,  net of deferred income tax
effects.

         The  Company  and its banking  subsidiary  (the  "Bank") are subject to
regulatory  risk-based capital adequacy standards.  Under these standards,  bank
holding  companies and banks are required to maintain  certain minimum ratios of
capital to risk-weighted  assets and average total assets.  Under the provisions
of the Federal Deposit Insurance  Corporation  Improvement Act of 1991 (FDICIA),
federal bank regulatory authorities are required to implement prescribed "prompt
corrective actions" upon the deterioration of the capital position of a bank. If
the  capital  position  of an affected  institution  were to fall below  certain
levels, increasingly stringent regulatory corrective actions are mandated.

         The June 30,  2006 risk based  capital  ratios for the  Company and the
Bank are presented in the following table,  compared with the "well capitalized"
and minimum ratios under the regulatory definitions and guidelines:

                                                            Total
                                               Tier 1      Capital      Leverage
                                               ------      -------      --------
Community First Bancorporation .............    15.0%       16.0%         9.4%
Community First Bank .......................    14.4%       15.5%         9.1%
Minimum "well-capitalized" requirement .....     6.0%       10.0%         6.0%
Minimum requirement ........................     4.0%        8.0%         5.0%


Off-Balance-Sheet Arrangements

In the normal  course of business,  the Bank is party to  financial  instruments
with  off-balance-sheet  risk including commitments to extend credit and standby


                                       15
<PAGE>

letters of credit.  Such  instruments  have elements of credit risk in excess of
the amount  recognized in the balance sheet.  The exposure to credit loss in the
event of  nonperformance  by the other parties to the financial  instruments for
commitments to extend credit and standby letters of credit is represented by the
contractual  notional amount of those  instruments.  Generally,  the same credit
policies  used for  on-balance-sheet  instruments,  such as  loans,  are used in
extending loan commitments and standby letters of credit.

Following are the off-balance-sheet financial instruments whose contract amounts
represent credit risk:

                                                   June 30, 2006
                                                   -------------
                                                    (Dollars in
                                                     thousands)
Loan commitments ..............................       $ 28,828
Standby letters of credit .....................          1,384


Loan commitments involve agreements to lend to a customer as long as there is no
violation of any condition  established in the contract.  Commitments  generally
have  fixed  expiration  dates or other  termination  clauses  and some  involve
payment of a fee. Many of the  commitments  are expected to expire without being
fully  drawn;  therefore,   the  total  amount  of  loan  commitments  does  not
necessarily represent future cash requirements. Each customer's creditworthiness
is evaluated on a case-by-case basis. The amount of collateral obtained, if any,
upon  extension  of credit is based on  management's  credit  evaluation  of the
borrower. Collateral held varies but may include commercial and residential real
properties, accounts receivable, inventory and equipment.

Standby  letters  of  credit  are  conditional   commitments  to  guarantee  the
performance of a customer to a third party.  The credit risk involved in issuing
standby  letters  of  credit  is the  same  as  that  involved  in  making  loan
commitments to customers. Many letters of credit will expire without being drawn
upon  and do not  necessarily  represent  future  cash  requirements.  The  Bank
receives fees for loan commitments and standby letters of credit.  The amount of
such fees was not  material  for the three  months or six months  ended June 30,
2006.

As described under "Liquidity,"  management believes that its various sources of
liquidity  provide  the  resources  necessary  for the  Bank to  fund  the  loan
commitments and to perform under standby letters of credit,  if the need arises.
Neither  the  Company  nor the Bank are  involved  in  other  off-balance  sheet
contractual  relationships or transactions  that could result in liquidity needs
or other commitments or significantly impact earnings.

Item 3.  - Quantitative and Qualitative Disclosures About Market Risk

The Company's  exposure to market risk is primarily  related to the risk of loss
from adverse  changes in market prices and rates.  This risk arises  principally
from interest rate risk inherent in the Company's lending, deposit gathering and
borrowing activities. Management actively monitors and manages its interest rate
risk exposure.  Although the Company manages other risks, such as credit quality
and  liquidity  risk in the  normal  course of  business,  management  considers
interest  rate risk to be its most  significant  market risk and this risk could
potentially  have  the  largest  material  effect  on  the  Company's  financial
condition  and  results  of  operations.  Other  types of market  risk,  such as
commodity  price risk and foreign  currency  exchange  risk, do not arise in the
normal course of the Company's community banking operations.

The Company uses a simulation model to assist in achieving  consistent growth in
net interest  income while managing  interest rate risk. As of June 30 2006, the
model indicates that net interest  income would increase  $78,000 and net income
would  increase  $50,000 in the next twelve months if interest rates rose by 100
basis points.  Conversely,  net interest income would decrease  $195,000 and net
income  would  decrease  $125,000  in the next twelve  months if interest  rates
declined by 100 basis  points.  In the current  interest  rate  environment,  it
appears  unlikely that there will be any large changes in interest  rates in the
immediate future. The prospective effects of hypothetical  interest rate changes
are based on a number of  assumptions,  including the relative  levels of market
interest rates and prepayment  assumptions  affecting  loans,  and should not be
relied on as indicative of actual future results.  The prospective  effects also
do not  contemplate  potential  actions that the Company,  its customers and the
issuers of its investment  securities  could undertake in response to changes in
interest rates.

As of June 30, 2006,  there was no  significant  change from the  interest  rate
sensitivity  analysis for the various changes in interest rates calculated as of
December 31, 2005.  The foregoing  disclosures  related to the Company's  market
risk should be read in conjunction with Management's  Discussion and Analysis of
Financial Condition and Results of Operations included in the 2005 Annual Report
on Form 10-K filed with the Securities and Exchange Commission.



                                       16
<PAGE>

Item 4. - Controls and Procedures

Based  on  the  evaluation  required  by  17  C.F.R.  Section  240.13a-15(b)  or
240.15d-15(b) of the issuer's  disclosure controls and procedures (as defined in
17  C.F.R.  Sections  240.13a-15(e)  and  240.15d-15(e)),   the  issuer's  chief
executive  officer and chief  financial  officer  concluded  such  controls  and
procedures, as of the end of the period covered by this report, were effective.

There  has been no change  in the  Company's  internal  control  over  financial
reporting during the most recent fiscal quarter that has materially affected, or
is reasonably likely to materially  affect,  the Company's internal control over
financial reporting.


                           PART II - OTHER INFORMATION

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

         On  Tuesday,  April 25,  2006,  the  shareholders  of  Community  First
Bancorporation held their regular annual meeting. At the meeting, one matter was
submitted to a vote with results as follows:

1. Election of three directors to hold office for three-year terms:

                                                       SHARES VOTED
                                                       ------------
                                                        AUTHORITY      BROKER
         DIRECTORS                           FOR         WITHHELD     NON-VOTES
                                             ---         --------     ---------

         Larry S. Bowman, MD             1,748,850              0       87,375
         William M. Brown                1,748,850              0       87,375
         John R. Hamrick                 1,748,850              0       87,375
         Frederick D Shepherd, Jr.       1,748,428            422       87,375


         The following directors continue to serve until the expiration of their
terms at the  annual  meetings  to be held in the years  indicated  and were not
voted on at the 2006 annual meeting:  Robert H Edwards - 2007, Blake L. Griffith
- 2007, Gary V. Thrift - 2007, James E. McCoy - 2008, James E. Turner - 2008 and
Charles L. Winchester - 2008.


Item 6. - Exhibits

Exhibits               31.  Rule 13a-14(a)/15d-14(a) Certifications

                       32.  Certifications Pursuant to 18  U.S.C. Section 1350



                                       17
<PAGE>


SIGNATURE

         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 FIRST BANCORPORATION

August 11, 2006                           /s/ Frederick D. Shepherd, Jr.
-----------------                         --------------------------------------
     Date                                     Frederick D. Shepherd, Jr., Chief
                                                Executive Officer and Chief
                                                Financial Officer



                                       18
<PAGE>


                                  EXHIBIT INDEX


             31.    Rule 13a-14(a)/15d-14(a) Certifications

             32.    Certifications  Pursuant  to 18  U.S.C. Section 1350







                                       19