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 September 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, 2,817,988 Shares Outstanding on November 1, 2006



<PAGE>


                         COMMUNITY FIRST BANCORPORATION

                                    FORM 10-Q

                                      Index

                                                                            Page
PART I -    FINANCIAL INFORMATION

Item 1.     Financial Statements

            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 .....  17
Item 4.     Controls and Procedures ........................................  18

PART II -   OTHER INFORMATION

Item 6.     Exhibits .......................................................  18

SIGNATURE ..................................................................  19




                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1. - Financial Statements

COMMUNITY FIRST BANCORPORATION
Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                                                      (Unaudited)
                                                                                                      September 30,     December 31,
                                                                                                           2006             2005
                                                                                                           ----             ----
                                                                                                          (Dollars in thousands)
Assets
<S>                                                                                                     <C>               <C>
     Cash and due from banks ...................................................................        $   7,928         $  10,063
     Interest bearing balances due from banks ..................................................                8               182
     Federal funds sold ........................................................................            5,891            22,205
                                                                                                        ---------         ---------
         Cash and cash equivalents .............................................................           13,827            32,450
     Securities available-for-sale .............................................................          110,691           102,070
     Securities held-to-maturity (fair value $6,730 for 2006 and $7,671 for 2005) ..............            6,863             7,751
     Other investments .........................................................................              980               948
     Loans .....................................................................................          193,935           169,318
         Allowance for loan losses .............................................................           (2,259)           (2,266)
                                                                                                        ---------         ---------
            Loans - net ........................................................................          191,676           167,052
     Premises and equipment - net ..............................................................            7,997             6,805
     Accrued interest receivable ...............................................................            2,060             1,629
     Other assets ..............................................................................            1,804             2,007
                                                                                                        ---------         ---------

            Total assets .......................................................................        $ 335,898         $ 320,712
                                                                                                        =========         =========

Liabilities
     Deposits
         Noninterest bearing ...................................................................        $  37,919         $  38,061
         Interest bearing ......................................................................          258,350           241,932
                                                                                                        ---------         ---------
            Total deposits .....................................................................          296,269           279,993
     Accrued interest payable ..................................................................            2,147             1,817
     Short-term borrowings .....................................................................                -             3,500
     Long-term debt ............................................................................            5,500             6,500
     Other liabilities .........................................................................               26                47
                                                                                                        ---------         ---------
            Total liabilities ..................................................................          303,942           291,857
                                                                                                        ---------         ---------

Shareholders' equity
     Common stock - no par  value; 10,000,000 shares authorized; issued and
         outstanding - 2,817,988 for 2006 and
         2,798,409 for 2005 ....................................................................           27,039            26,956
     Additional paid-in capital ................................................................              178                 -
     Retained earnings .........................................................................            5,853             3,296
     Accumulated other comprehensive income (loss) .............................................           (1,114)           (1,397)
                                                                                                        ---------         ---------
            Total shareholders' equity .........................................................           31,956            28,855
                                                                                                        ---------         ---------

            Total liabilities and shareholders' equity .........................................        $ 335,898         $ 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 September 30,
                                                                                         --------------------------
                                                                                 Three Months                    Nine Months
                                                                                 ------------                    -----------
                                                                           2006             2005            2006              2005
                                                                           ----             ----            ----              ----
                                                                                     (Dollars in thousands, except per share)

Interest income
<S>                                                                       <C>              <C>              <C>              <C>
     Loans, including fees .....................................          $ 3,567          $ 2,930          $10,000          $ 8,485
     Interest bearing balances due from banks ..................                -                2                4                2
     Securities
       Taxable .................................................              995              843            2,883            2,662
       Tax-exempt ..............................................              178               40              456               92
     Other investments .........................................               14               11               38               31
     Federal funds sold ........................................              188              185            1,011              497
                                                                          -------          -------          -------          -------
         Total interest income .................................            4,942            4,011           14,392           11,769
                                                                          -------          -------          -------          -------

Interest expense
     Time deposits $100M and over ..............................              808              589            2,273            1,492
     Other deposits ............................................            1,809            1,091            5,100            3,002
     Short-term borrowings .....................................                -                -                2               18
     Long-term debt ............................................               55               72              178              211
                                                                          -------          -------          -------          -------
         Total interest expense ................................            2,672            1,752            7,553            4,723
                                                                          -------          -------          -------          -------

Net interest income ............................................            2,270            2,259            6,839            7,046
Provision for loan losses ......................................               15                -               65              215
                                                                          -------          -------          -------          -------
Net interest income after provision ............................            2,255            2,259            6,774            6,831
                                                                          -------          -------          -------          -------

Other income
     Service charges on deposit accounts .......................              404              402            1,150            1,160
     ATM interchange and other fees ............................               96               75              279              215
     Credit life insurance commissions .........................               15                9               37               27
     Other income ..............................................               44               57              171              179
                                                                          -------          -------          -------          -------
         Total other income ....................................              559              543            1,637            1,581
                                                                          -------          -------          -------          -------

Other expenses
     Salaries and employee benefits ............................              804              791            2,452            2,132
     Net occupancy expense .....................................               89               65              237              190
     Furniture and equipment expense ...........................              113               89              317              266
     Amortization of computer software .........................               69               60              202              170
     ATM interchange and related expenses ......................               66               56              208              155
     Directors' fees ...........................................               38               20              162               74
     Other expense .............................................              290              302            1,003            1,071
                                                                          -------          -------          -------          -------
         Total other expenses ..................................            1,469            1,383            4,581            4,058
                                                                          -------          -------          -------          -------

Income before income taxes .....................................            1,345            1,419            3,830            4,354
Income tax expense .............................................              441              489            1,273            1,538
                                                                          -------          -------          -------          -------
Net income .....................................................          $   904          $   930          $ 2,557          $ 2,816
                                                                          =======          =======          =======          =======

Per share*
     Net income ................................................          $  0.32          $  0.33          $  0.91          $  1.01
     Net income, assuming dilution .............................             0.30             0.31             0.86             0.95
</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
                                                             ------------          Additional                 Accumulated
                                                       Number of                     Paid-in    Retained  Other 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 .....................................            -            -            -        2,816            -         2,816
                                                                                                                          ---------
    Unrealized holding gains and losses
      on available-for-sale securities arising
      during the period, net of
      income taxes of $249 .........................            -            -            -            -         (446)         (446)
                                                                                                                          ---------
        Total other comprehensive income (loss) ....            -            -            -            -            -          (446)
                                                                                                                          ---------
          Total comprehensive income ...............            -            -            -            -            -         2,370
                                                                                                                          ---------
Exercise of employee stock options .................        4,875           30            -            -            -            30
                                                        ---------    ---------    ---------    ---------    ---------     ---------
Balance, September 30, 2005 ........................    2,653,105    $  24,246    $       -    $   5,036    $    (945)    $  28,337
                                                        =========    =========    =========    =========    =========     =========



Balance, January 1, 2006 ...........................    2,798,409    $  26,956    $       -    $   3,296    $  (1,397)    $  28,855
                                                                                                                          ---------

Comprehensive income:
    Net income .....................................            -            -            -        2,557            -         2,557
                                                                                                                          ---------
    Unrealized holding gains and losses
      on available-for-sale securities arising
      during the period, net of
      income taxes of $159 .........................            -            -            -            -          283           283
                                                                                                                          ---------
        Total other comprehensive income ...........            -            -            -            -            -           283
                                                                                                                          ---------
          Total comprehensive income ...............            -            -            -            -            -         2,840
                                                                                                                          ---------
Share-based compensation ...........................            -            -          178            -            -           178
Exercise of employee stock options .................       19,579           83            -            -            -            83
                                                        ---------    ---------    ---------    ---------    ---------     ---------
Balance, September 30, 2006 ........................    2,817,988    $  27,039    $     178    $   5,853    $  (1,114)    $  31,956
                                                        =========    =========    =========    =========    =========     =========
</TABLE>
















See accompanying notes to unaudited consolidated financial statements.




                                       5
<PAGE>

COMMUNITY FIRST BANCORPORATION
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                                                (Unaudited)
                                                                                                             Nine Months Ended
                                                                                                                September 30,
                                                                                                                -------------
                                                                                                            2006              2005
                                                                                                            ----              ----
                                                                                                           (Dollars in thousands)
Operating activities
<S>                                                                                                      <C>               <C>
     Net income ................................................................................         $  2,557          $  2,816
     Adjustments to reconcile net income to net
         cash provided by operating activities
            Provision for loan losses ..........................................................               65               215
            Writedowns of foreclosed assets ....................................................                -                25
            Depreciation .......................................................................              273               225
            Amortization of net loan (fees) and costs ..........................................             (143)              (70)
            Securities accretion and premium amortization ......................................              116               202
            Net (gain) or loss on sale of other real estate ....................................              (31)                9
            Increase in interest receivable ....................................................             (431)             (111)
            Increase in interest payable .......................................................              330               413
            (Increase) decrease in prepaid expenses and other assets ...........................              (52)               36
            (Decrease) increase in other accrued expenses ......................................              (21)              118
            Share-based compensation ...........................................................              178                 -
                                                                                                         --------          --------
                Net cash provided by operating activities ......................................            2,841             3,878
                                                                                                         --------          --------

Investing activities
     Purchases of available-for-sale securities ................................................          (24,763)          (46,988)
     Maturities, calls and paydowns of securities available-for-sale ...........................           16,463            43,134
     Maturities, calls and paydowns of securities held-to-maturity .............................              893             1,232
     Purchases of other investments ............................................................              (32)             (162)
     Proceeds of sales of other investments ....................................................                -               225
     Net increase in loans made to customers ...................................................          (24,587)          (10,245)
     Purchases of premises and equipment .......................................................           (1,465)           (2,084)
     Proceeds of sale of other real estate .....................................................              168                58
                                                                                                         --------          --------
                Net cash used by investing activities ..........................................          (33,323)          (14,830)
                                                                                                         --------          --------

Financing activities
     Net increase (decrease) in demand deposits, interest
         bearing transaction accounts and savings accounts .....................................           10,323           (10,095)
     Net increase in certificates of deposit and other
         time deposits .........................................................................            5,953             6,729
     Net (decrease) in short-term borrowings ...................................................           (3,500)           (2,500)
     Repayment of long-term debt ...............................................................           (1,000)                -
     Exercise of employee stock options ........................................................               83                30
                                                                                                         --------          --------
                Net cash provided (used) by financing activities ...............................           11,859            (5,836)
                                                                                                         --------          --------
Decrease in cash and cash equivalents ..........................................................          (18,623)          (16,788)
Cash and cash equivalents, beginning ...........................................................           32,450            39,902
                                                                                                         --------          --------
Cash and cash equivalents, ending ..............................................................         $ 13,827          $ 23,114
                                                                                                         ========          ========

Supplemental Disclosure of Cash Flow Information
Cash paid during the year for:
         Interest, net of $18 capitalized during construction in 2006 ..........................         $  7,223          $  4,310
         Income taxes ..........................................................................            1,347             1,431
     Noncash investing and financing activities:
         Transfer of loans to other real estate ................................................               41                 -
         Other comprehensive income (loss) .....................................................              283              (446)
</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.  Such reclassifications had
no effect on net income or retained earnings for any period.

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  September  30,  2006,  there  were  $481,000  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 September 30,
                                                                                         --------------------------
                                                                               Three Months                      Nine 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 .......................................       $      904       $      930       $    2,557       $    2,816
                                                                       ==========       ==========       ==========       ==========
  Denominator
    Weighted average common shares issued and outstanding ......        2,811,893        2,784,368        2,802,953        2,781,978
                                                                       ==========       ==========       ==========       ==========

        Net income per share, basic ............................       $      .32       $      .33       $      .91       $     1.01
                                                                       ==========       ==========       ==========       ==========

Net income per share, assuming dilution
  Numerator - net income .......................................       $      904       $      930       $    2,557       $    2,816
                                                                       ==========       ==========       ==========       ==========
  Denominator
    Weighted average common shares issued and outstanding ......        2,811,893        2,784,368        2,802,953        2,781,978
    Effect of dilutive stock options ...........................          189,896          202,319          186,040          196,882
                                                                       ----------       ----------       ----------       ----------
               Total shares ....................................        3,001,789        2,986,687        2,988,993        2,978,860
                                                                       ==========       ==========       ==========       ==========

        Net income per share, assuming dilution ................       $      .30       $      .31       $      .86       $      .95
                                                                       ==========       ==========       ==========       ==========
</TABLE>



Share-Based  Compensation  - As of  September  30,  2006,  the  Company  has two
share-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


                                       7
<PAGE>

and employee benefits and directors fees were $38,000 and $17,000, respectively,
for the three month period, and $98,000 and $80,000,  respectively, for the nine
month period ended September 30, 2006.

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  September  30,  2006,  loans  grew by
$7,885,000, or 4.2%, and securities  available-for-sale increased by $4,373,000,
or 4.1%.  Total  deposits  decreased by  $4,137,000,  or 1.4%,  during the third
quarter,  primarily  as a  result  of  normal  seasonal  withdrawals  of  public
deposits.  These uses of cash were funded  primarily  by reducing  the amount of
federal  funds sold by  $14,904,000  during the  quarter.  During the 2006 third
quarter,  the Company  discontinued paying special promotional rates on interest
bearing  transaction  accounts  which  were  offered  earlier  in  the  year  in
conjunction with the opening of a new office in Seneca, SC.

         During  the  first  nine  months  of 2006,  interest  bearing  deposits
increased  by  $16,418,000,  or  6.8%,  due in  part  to the  promotional  rates
mentioned  above.  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  $24,617,000  or 14.5% and securities
available-for-sale increased by $8,621,000 or 8.4%.

         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 September 30, 2006 and 2005

         The Company  recorded  consolidated  net income of $904,000 or $.32 per
share for the third  quarter of 2006.  These  results are slightly less than net
income of $930,000 and earnings per share of $.33 for the third quarter of 2005.
Net income per share,  assuming  dilution was $.30 for the 2006 quarter and $.31
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.

         In the 2006  third  quarter,  the  Company  continued  to incur  higher
expenses  associated  with moving its corporate  offices into, and opening a new
retail banking office in, a newly constructed  building in Seneca, SC during the
2006 second  quarter.  In conjunction  with the opening of this new office,  the
Company  offered  promotional  interest rates on certain deposit  accounts,  and
incurred other  promotional  expenses during the 2006 second and third quarters.
Loans  outstanding  increased  significantly  during  the 2006  second and third
quarters,  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 have also increased.  Salaries and employee benefits
and directors'  fees for the 2006 three month period also include  approximately
$55,000  which  represents  the  effect of  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 September 30,                           2006                2005               Change          Change
                                                                   ----                ----               ------          ------
<S>                                                               <C>                 <C>                 <C>              <C>
Interest income ....................................              $4,942              $4,011              $  931           23.2%
Interest expense ...................................               2,672               1,752                 920           52.5%
                                                                  ------              ------              ------
Net interest income ................................               2,270               2,259                  11            0.5%
Provision for loan losses ..........................                  15                   -                  15             NA
Noninterest income .................................                 559                 543                  16            2.9%
Noninterest expenses ...............................               1,469               1,383                  86            6.2%
Income tax expense .................................                 441                 489                 (48)          -9.8%
                                                                  ------              ------              ------
Net income .........................................              $  904              $  930              $  (26)          -2.8%
                                                                  ======              ======              ======
</TABLE>


Nine Months Ended September 30, 2006 and 2005

         The Company recorded  consolidated net income of $2,557,000 or $.91 per
share for the first nine months of 2006.  These results are less than net income
of $2,816,000  and earnings per share of $1.01 for the same period of 2005.  Net
income per share,  assuming  dilution was $.86 for the 2006 nine months and $.95
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 nine-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 nine month period include approximately  $178,000 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 Nine Months Ended September 30,                            2006                2005               Change          Change
                                                                   ----                ----               ------          ------
<S>                                                               <C>                 <C>                 <C>              <C>
Interest income .....................................             $14,392             $11,769             $ 2,623           22.3%
Interest expense ....................................               7,553               4,723               2,830           59.9%
                                                                  -------             -------             -------
Net interest income .................................               6,839               7,046                (207)          -2.9%
Provision for loan losses ...........................                  65                 215                (150)         -69.8%
Noninterest income ..................................               1,637               1,581                  56            3.5%
Noninterest expenses ................................               4,581               4,058                 523           12.9%
Income tax expense ..................................               1,273               1,538                (265)         -17.2%
                                                                  -------             -------             -------
Net income ..........................................             $ 2,557             $ 2,816             $  (259)          -9.2%
                                                                  =======             =======             =======
</TABLE>




                                       9
<PAGE>


Net Interest Income

         Net interest income is the principal source of the Company's  earnings.
During the second and third quarters 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. The Company discontinued
paying the promotional rates approximately  mid-way through the third quarter of
2006.  Management expects that the Company's net interest income and the related
metrics will return to more normal levels throughout the remainder of 2006.

Three Months Ended September 30, 2006 and 2005

         For the third quarter of 2006, net interest income totaled  $2,270,000,
an increase of $11,000 over the amount for the same period of 2005.  The average
yield  on  interest  earning  assets  increased  to 6.08%  for the 2006  period,
compared  with  5.41% for the 2005  period,  due to higher  rates  earned on all
significant  categories  of  earning  assets.  However,  largely  as a result of
special   promotional   rates,  the  average  rate  paid  for   interest-bearing
liabilities  increased to 4.01% for the 2006 quarter,  compared with 2.90%,  for
the 2005  quarter.  Accordingly,  the average  interest rate spread for the 2006
period was 45 basis points lower than for the 2005 period.


                                       10
<PAGE>
<TABLE>
<CAPTION>

                                                                                 Average Balances, Yields and Rates
                                                                                 Three Months Ended September 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 ................ $      46     $       -     0.00%       $     275    $       2    2.89%
Securities
      Taxable ...........................................   101,222           995     3.90%         100,780          843    3.32%
      Tax exempt (2) ....................................    18,346           178     3.85%           4,967           40    3.20%
                                                          ---------      --------                 ---------    ---------
           Total investment securities ..................   119,568         1,173     3.89%         105,747          883    3.31%
Other investments .......................................       980            14     5.67%             963           11    4.53%
Federal funds sold ......................................    14,246           188     5.24%          21,570          185    3.40%
Loans (2) (3) (4) .......................................   187,669         3,567     7.54%         165,751        2,930    7.01%
                                                          ---------      --------                 ---------    ---------
           Total interest earning assets ................   322,509         4,942     6.08%         294,306        4,011    5.41%
Cash and due from banks .................................     6,331                                   4,710
Allowance for loan losses ...............................    (2,268)                                 (2,317)
Valuation allowance - Available-for-sale securities .....    (2,701)                                 (1,623)
Premises and equipment ..................................     7,815                                   5,682
Other assets ............................................     4,051                                   3,343
                                                          ---------                               ---------
           Total assets ................................. $ 335,737                               $ 304,101
                                                          =========                               =========

Liabilities and shareholders' equity
Interest bearing deposits
      Interest bearing transaction accounts ............. $  51,698     $     406     3.12%       $  36,695    $     112    1.21%
      Savings ...........................................    20,826           118     2.25%          23,993           82    1.36%
      Time deposits $100M and over ......................    72,426           808     4.43%          65,545          589    3.57%
      Other time deposits ...............................   114,100         1,285     4.47%         106,199          897    3.35%
                                                          ---------      --------                 ---------    ---------
           Total interest bearing
             deposits ...................................   259,050         2,617     4.01%         232,432        1,680    2.87%
Long-term debt ..........................................     5,500            55     3.97%           7,500           72    3.81%
                                                          ---------      --------                 ---------    ---------
           Total interest bearing
             liabilities ................................   264,550         2,672     4.01%         239,932        1,752    2.90%
Noninterest bearing demand deposits .....................    38,053                                  34,449
Other liabilities .......................................     2,398                                   1,979
Shareholders' equity ....................................    30,736                                  27,741
                                                          ---------                               ---------
           Total liabilities and shareholders' equity ... $ 335,737                               $ 304,101
                                                          =========                               =========
Interest rate spread ....................................                              2.07%                                2.51%
Net interest income and net yield on earning assets .....               $   2,270      2.79%                   $   2,259    3.05%
Interest free funds supporting earning assets ........... $  57,959                               $  54,374
</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.



                                       11
<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  and 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 on this office, which is estimated to cost approximately  $900,000,
is expected to begin during the fourth quarter of 2006.

Nine Months Ended June 30, 2006 and 2005

         For the  first  nine  months  of  2006,  net  interest  income  totaled
$6,839,000,  a decrease  of $207,000 or 2.9% from the amount for the same period
of 2005. The yield on interest  earning  assets  increased to 5.90% for the 2006
period,  compared with 5.28% 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 all 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 as a result of special  promotional  rates offered beginning in
the second quarter and continuing until  approximately  mid-way though the third
quarter  of  2006,  the  average  rate  paid  for  interest-bearing  liabilities
increased to 3.76% for the 2006 nine-month period,  compared with 2.59%, for the
same period of 2005. Accordingly,  the average interest rate spread for the 2006
period was 55 basis points lower than for the 2005 period.


                                       12
<PAGE>
<TABLE>
<CAPTION>

                                                                                Average Balances, Yields and Rates
                                                                                 Nine Months Ended September 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 ...............   $     103     $       4    5.19%     $     147    $       2      1.82%
Securities
     Taxable ...........................................     100,842         2,883    3.82%       107,176        2,662      3.32%
     Tax exempt (2) ....................................      15,646           456    3.90%         3,665           92      3.36%
                                                            --------     ---------              ---------    ---------
         Total investment securities ...................     116,488         3,339    3.83%       110,841        2,754      3.32%
Other investments ......................................         969            38    5.24%         1,016           31      4.08%
Federal funds sold .....................................      28,776         1,011    4.70%        23,352          497      2.85%
Loans (2) (3) (4) ......................................     179,560        10,000    7.45%       162,555        8,485      6.98%
                                                            --------     ---------              ---------    ---------
         Total interest earning assets .................     325,896        14,392    5.90%       297,911       11,769      5.28%
Cash and due from banks ................................       6,586                                4,670
Allowance for loan losses ..............................      (2,266)                              (2,309)
Valuation allowance - Available-for-sale securities ....      (2,607)                              (1,425)
Premises and equipment .................................       7,451                                4,844
Other assets ...........................................       3,973                                3,229
                                                           ---------                            ---------
         Total assets ..................................   $ 339,033                            $ 306,920
                                                           =========                            =========

Liabilities and shareholders' equity
Interest bearing deposits
     Interest bearing transaction accounts .............   $  44,065     $     903    2.74%     $  36,328    $     260      0.96%
     Savings ...........................................      30,946           617    2.67%        30,826          299      1.30%
     Time deposits $100M and over ......................      73,978         2,273    4.11%        63,854        1,492      3.12%
     Other time deposits ...............................     113,776         3,580    4.21%       104,588        2,443      3.12%
                                                           ---------     ---------              ---------    ---------
         Total interest bearing deposits ...............     262,765         7,373    3.75%       235,596        4,494      2.55%
Short-term borrowings ..................................          26             2   10.28%           958           18      2.51%
Long-term debt .........................................       6,108           178    3.90%         7,500          211      3.76%
                                                           ---------     ---------              ---------    ---------
         Total interest bearing liabilities ............     268,899         7,553    3.76%       244,054        4,723      2.59%
Noninterest bearing demand deposits ....................      37,727                               34,091
Other liabilities ......................................       2,482                                1,823
Shareholders' equity ...................................      29,925                               26,952
                                                           ---------                            ---------
         Total liabilities and shareholders' equity ....   $ 339,033                            $ 306,920
                                                           =========                            =========
Interest rate spread ...................................                              2.14%                                 2.69%
Net interest income and net yield on earning assets ....                 $   6,839    2.81%                  $   7,046      3.16%
Interest free funds supporting earning assets ..........   $  56,997                            $  53,857
</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.


                                       13
<PAGE>

Provision and Allowance for Loan Losses

         The  provision  for loan losses was  $15,000  for the third  quarter of
2006. No provision for loan losses was  recognized  for the 2005 third  quarter.
For the first nine months of 2006, the provision for loan losses was $65,000,  a
decrease of $150,000  from the  $215,000  recorded  for the first nine months of
2005. At September  30, 2006,  the allowance for loan losses was 1.16% of loans,
compared  with 1.34% at December 31, 2005.  The  decreases in the  provision and
allowance were made as a result of significant  decreases in net-charge-offs and
lower levels of nonaccrual loans.

         For the first nine months of 2006,  net  charge-offs  totaled  $72,000,
compared  with $156,000 in net charge offs during the same period of 2005. As of
September 30, 2006, there were $481,000 in nonaccrual loans and no loans 90 days
or more past due and still accruing  interest.  As of September 30, 2005,  there
were  $969,000  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>
                                                                                 Nine Months                           Nine Months
                                                                                    Ended                                 Ended
                                                                                 September 30,        December 31,     September 30,
                                                                                     2006                2005              2005
                                                                                     ----                ----              ----
                                                                                                (Dollars in thousands)
<S>                                                                                <C>                <C>                <C>
Allowance at beginning of period ..........................................        $   2,266          $   2,240          $   2,240
Provision for loan losses .................................................               65                250                215
Net charge-offs ...........................................................              (72)              (224)              (156)
                                                                                   ---------          ---------          ---------
Allowance at end of period ................................................        $   2,259          $   2,266          $   2,299
                                                                                   =========          =========          =========
Allowance as a percentage of loans outstanding at period end ..............             1.16%              1.34%              1.37%
Loans at end of period ....................................................        $ 193,935          $ 169,318          $ 167,934
                                                                                   =========          =========          =========
</TABLE>




                                       14
<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%
Net change .......................            (16)              -             (16)                           (151)
                                          -------        --------         -------                         -------
September 30, 2006 ...............        $   481        $      -         $   481         0.25%           $ 3,659            1.89%
                                          =======        ========         =======                         =======
</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  June 30,  2006,  loans  totaling  $282,000  moved into
potential  problem loans,  of which $135,000 are  collateralized  by real estate
mortgages.  Potential  problem  loans that totaled  $426,000 as of June 30, 2006
were no longer  included in potential  problem  loans as of September  30, 2006,
including  loans  totaling  $14,000 as of June 30,  2006 that were  charged  off
during the third  quarter of 2006.  Management  believes  that the  increase  in
potential problem loans in the first nine months of 2006 reflects  circumstances
unique to each individual borrower.

Noninterest Income

         Noninterest  income  totaled  $559,000  for the third  quarter of 2006,
compared with $543,000 for the 2005 quarter. Service charges on deposit accounts
in the 2006 quarter were  $404,000  representing  an increase of $2,000 from the
prior year period and fees from an overdraft privilege product were $16,000 more
in the 2006 period than in the 2005 period.  Mortgage  brokerage  income in 2006
was approximately  $13,000 less than in the 2005 period.  There were no sales of
any securities in either the 2006 or 2005 period.

         For the nine  months  ended  September  30,  2006,  noninterest  income
totaled  $1,637,000,  compared  with  $1,581,000  for the same  period  of 2005.
Service  charges  on  deposit  accounts  in  the  2006  period  were  $1,150,000
representing  a decrease  of $10,000  from the prior year  period.  Fees from an
overdraft  privilege  product  were  $52,000 more in the 2006 period than in the
2005 period.  Mortgage  brokerage income in 2006 was approximately  $32,000 less
than in the 2005  period.  There were no sales of any  securities  in either the
2006 or 2005 period.  A gain of $31,000 from the sale of  foreclosed  assets was
recognized  in the 2006 period  compared  with a loss of $9,000 on such sales in
the 2005 period.

Noninterest Expenses

         Noninterest  expenses totaled  $1,469,000 for the third quarter of 2006
compared with  $1,383,000 for the same period of 2005,  representing an increase
of $86,000 or 6.2%.  Salaries and  employee  benefits  increased by $13,000,  or
1.6%, to $804,000.  This increase  resulted  primarily  from the  recognition of
share-based  compensation  of $38,000 in the 2006 period due to the  adoption of
SFAS 123(R).  During the 2006 three-month period,  employee bonuses were $13,000
less than in the same period of 2005.

         Occupancy and furniture and equipment expenses for the third quarter of
2006  increased by $48,000  compared  with 2005  primarily  due to the Company's


                                       15
<PAGE>

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  $17,000 of
share-based  compensation  expenses  that  resulted  from the  adoption  of SFAS
123(R). In addition, higher expenses were noted in 2006 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 nine months ended  September  30,  2006,  salaries and employee
benefits increased by $320,000, or 15.0%, over the amount for 2005. Salaries and
employee benefits for 2006 include share-based  compensation  expense of $98,000
resulting from the  implementation of SFAS 123(R). The remainder of the increase
in salaries and benefits is attributable  primarily to an increase in the number
of  employees  for the new  Seneca  office,  higher  costs of  providing  health
insurance benefits, and normal salary increases. Net occupancy and furniture and
equipment expenses increased by an aggregate of $98,000,  or 21.5%. Early in the
second  quarter 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  nine-month  period included  $80,000 of share-based  expenses
resulting from 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  September  30,  2006,  the ratio of loans to total  deposits was
65.5%, compared with 60.5% as of December 31, 2005. Deposits as of September 30,
2006 were $296,269,000, an increase of $16,276,000 or 5.8% 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 $3,101,000  since December 31,
2005 as the result of net  income of  $2,557,000  for the first  nine  months of
2006,  $178,000 of  additional  paid-in  capital  offsetting  the charge made to
earnings as a result of share-based  compensation expenses recognized during the
period  pursuant to SFAS  123(R),  $83,000  added from the  exercise of employee
stock  options,  plus a  $283,000  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 September  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 ..........   15.3%           16.3%         9.8%
Community First Bank ....................   14.7%           15.8%         9.4%
Minimum "well-capitalized" requirement ..    6.0%           10.0%         6.0%
Minimum requirement .....................    4.0%            8.0%         5.0%


                                       16
<PAGE>

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 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:

                                            September 30, 2006
                                            ------------------
                                          (Dollars in thousands)
Loan commitments .........................     $32,054
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 either the nine  months or three  months  ended
September 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 September
30 2006, the model  indicates that net interest  income would increase  $101,000
and net income  would  increase  $68,000 in the next  twelve  months if interest
rates rose by 100 basis points.  Conversely,  net interest income would decrease
$82,000  and net income  would  decrease  $55,000 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 September  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.


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<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 Company's disclosure controls and procedures (as defined in
17  C.F.R.  Sections  240.13a-15(e)  and  240.15d-15(e)),  the  Company'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 6. - Exhibits

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

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





                                       18
<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

November 9, 2006                     /s/ Frederick D. Shepherd, Jr.
-----------------                   --------------------------------------------
     Date                            Frederick D. Shepherd, Jr., Chief Executive
                                       Officer and Chief Financial Officer



                                       19
<PAGE>


                                  EXHIBIT INDEX


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

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







                                       20