UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

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

For the quarterly period ended June 30, 1997

                                       OR

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

For the transaction period from ____________________ to _______________________

                         Commission file number: 0-19045

                            COMSOUTH BANKSHARES, INC.
             (Exact name or registrant as specified in its charter)

             South Carolina                                57-0853342
(State or other jurisdiction of                         (IRS Employer
 incorporation or organization)                        Identification No. )

                        1136 Washington Street, Suite 200
                         Columbia, South Carolina 29201
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (803) 343-2144
              (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 [  ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of July 31, 1997:

Common Stock, No Par Value                                    1,541,559
            Class                                          Number of Shares



                                       1
<PAGE>


                            COMSOUTH BANKSHARES, INC.

                                      INDEX

PART I.   Financial Information

Item 1.   Financial Statements                                          Page No.

    Consolidated Balance Sheets -
          June 30, 1997 and December 31, 1996 ................................ 3

    Consolidated Statements of Operations for the Three months
          and Six months ended June 30, 1997 and June 30, 1996 ............... 4

    Consolidated Statements of Cash Flows for the Six months 
          ended June 30, 1997 and June 30, 1996 .............................. 5

    Notes to Consolidated Financial Statements ............................... 6

Item 2.   Management's Discussion and Analysis of 
          Financial Condition and Results of Operations ...................... 7

PART II.  Other Information

Item 1.   Legal Proceedings ..................................................11

Item 4.   Submission of Matters to a Vote of Security Holders.................11

Item 6.   Exhibits and Reports on Form 8-K ...................................11

Signature ....................................................................12

























                                       2
<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                            COMSOUTH BANKSHARES, INC.
                           CONSOLIDATED BALANCE SHEETS
                              June 30, December 31,
<TABLE>
<CAPTION>

                                                                                                  1997                      1996
                                                                                                  ----                      ----
                                                                                              (Unaudited)
ASSETS
<S>                                                                                         <C>                       <C>          
Cash and due from banks ........................................................            $  10,896,609             $   9,441,553
Federal funds sold .............................................................                   75,000                 3,650,000
                                                                                            -------------             -------------
   Total cash and cash equivalents .............................................               10,971,609                13,091,553
Investment securities:
   Held-to-maturity, at amortized cost (fair value of
   $16,301,135 in 1997 and $13,035,431 in 1996) ................................               16,334,249                13,071,927
   Available-for-sale, at fair value (amortized cost of
   $25,932,312 in 1997 and $21,070,548 in 1996) ................................               25,901,886                21,034,568
Loans receivable:
   (less allowance for loan losses 1997 - $1,847,433;
   1996 - $1,802,402) ..........................................................              128,621,398               113,879,003
Premises and equipment .........................................................                1,416,339                 1,489,159
Accrued interest receivable ....................................................                1,649,975                 1,343,298
Other assets ...................................................................                  673,970                   724,956
                                                                                            -------------             -------------
Total Assets ...................................................................            $ 185,569,426             $ 164,634,464
                                                                                            =============             =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits
   Noninterest bearing demand ..................................................               32,358,813                35,677,721
   NOW, money market and savings ...............................................               65,484,501                56,290,307
   Time deposits of $100,000 or more ...........................................               30,942,453                26,984,224
   Time deposits less than $100,000 ............................................               29,246,199                23,442,953
   Other time deposits .........................................................                3,146,489                 3,012,613
                                                                                            -------------             -------------
Total deposits .................................................................              161,178,455               145,407,818
Federal funds purchased and securities sold under
   agreements to repurchase ....................................................                6,247,090                 2,674,394
U.S. Treasury tax and loan accounts ............................................                1,133,967                   784,106
Note payable ...................................................................                1,080,000                 1,200,000
Accrued interest ...............................................................                  468,128                   446,225
Other liabilities ..............................................................                  713,946                   481,099
                                                                                            -------------             -------------
Total Liabilities ..............................................................              170,821,586               150,993,642
                                                                                            -------------             -------------
Stockholders' Equity
Preferred Stock
   (no par value, 50,000,000 shares authorized; no
    shares issued or outstanding)
Special stock
   (no par value, 50,000,000 shares authorized; no
   shares issued or outstanding)
Common Stock
   (no par value, 50,000,000 shares authorized; shares
    issued and outstanding - 1,541,080 in 1997 and
    1,532,826 in 1996) .........................................................               13,674,811                13,616,611
Retained earnings ..............................................................                1,093,110                    47,958
Unrealized loss on investment securities available-for-
    sale, net of applicable deferred income taxes ..............................                  (20,081)                  (23,747)
                                                                                            -------------             -------------
Total Stockholders' Equity .....................................................               14,747,840                13,640,822
                                                                                            -------------             -------------
Total Liabilities and Stockholders' Equity .....................................            $ 185,569,426             $ 164,634,464
                                                                                            =============             =============
</TABLE>


                                       3
<PAGE>


                            COMSOUTH BANKSHARES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATION
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                   Three Months ended                         Six Months ended
                                                                         June 30,                                 June 30,
                                                                 1997               1996                1997                 1996
                                                                 ----               ----                ----                 ----
Interest income:            
<S>                                                         <C>                 <C>                 <C>                 <C>        
Interest and fees on loans .........................        $ 2,909,529         $ 2,282,245         $ 5,563,297         $ 4,477,596
Investment securities ..............................            656,084             426,528           1,195,600             795,523
Federal funds sold .................................             24,261              38,408              72,476              84,875
                                                            -----------         -----------         -----------         -----------
   Total interest income ...........................          3,589,874           2,747,181           6,831,373           5,357,994
                                                            -----------         -----------         -----------         -----------

Interest expense:
Deposits ...........................................          1,496,236           1,136,585           2,923,631           2,279,096
Federal funds purchased and
   securities sold under agreements
   to repurchase ...................................             53,823              12,058              98,598              31,742
U.S. Treasury tax and loan accounts ................              4,848               7,607              14,616              16,480
Note payable .......................................             23,108              12,652              46,358              12,652
                                                            -----------         -----------         -----------         -----------
   Total interest expense ..........................          1,578,015           1,168,902           3,083,203           2,339,970
                                                            -----------         -----------         -----------         -----------

Net interest income ................................          2,011,859           1,578,279           3,748,170           3,018,024
Provision for loan losses ..........................             90,000              40,000             105,000              50,000
                                                            -----------         -----------         -----------         -----------
Net interest income after provision
   for loan losses .................................          1,921,859           1,538,279           3,643,170           2,968,024

Noninterest income:
Lending operations and services ....................            337,641             255,228             634,188             506,512
Service charges on deposit accounts ................            171,021             134,345             334,286             255,954
Other ..............................................             17,928              21,619              40,571              40,802
                                                            -----------         -----------         -----------         -----------
    Total noninterest income .......................            526,590             411,192           1,009,045             803,268
                                                            -----------         -----------         -----------         -----------

Noninterest expense:
Salaries and employee benefits .....................            757,732             661,023           1,483,464           1,339,428
Occupancy expenses .................................            107,589             108,765             215,227             216,992
Furniture and equipment ............................            127,978              95,627             237,552             188,478
Advertising and marketing ..........................             32,842              21,154              56,900              44,767
Other ..............................................            575,198             397,848             975,852             764,288
                                                            -----------         -----------         -----------         -----------
   Total noninterest expense .......................          1,601,339           1,284,417           2,968,995           2,553,953
                                                            -----------         -----------         -----------         -----------

Income before provision for
   income taxes ....................................            847,110             665,054           1,683,220           1,217,339
Income tax expense .................................           (322,118)           (251,183)           (638,068)           (409,402)
                                                            -----------         -----------         -----------         -----------
Net income .........................................        $   524,992         $   413,871         $ 1,045,152         $   807,937
                                                            ===========         ===========         ===========         ===========
Earnings per share:
   On common and common
      equivalents ..................................        $       .33         $       .30         $       .65         $       .58
                                                            ===========         ===========         ===========         ===========
   On a fully diluted basis ........................        $       .32         $       .30         $       .64         $       .58
                                                            ===========         ===========         ===========         ===========
</TABLE>


                                       4
<PAGE>



                            COMSOUTH BANKSHARES, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                     Six Months ended June 30,
                                                                                                   1997                     1996
                                                                                                   ----                     ----
Cash flows from operating activities:
<S>                                                                                           <C>                      <C>         
Net income .......................................................................            $  1,045,152             $    807,937
Adjustments to reconcile net income to cash
   provided by operating activities:
Depreciation and amortization ....................................................                 186,286                  149,325
Provision for loan losses ........................................................                 105,000                   50,000
Deferred tax benefit .............................................................                 (50,000)
Amortization of premium and accretion of discount
    on investment securities .....................................................                   6,521                    3,546
Increase in interest receivable ..................................................                (306,677)                (183,686)
Decrease in other assets .........................................................                  49,343                   20,087
Increase (decrease) in interest payable ..........................................                  21,903                  (92,301)
Increase (decrease) in other liabilities .........................................                 247,602                 (574,829)
                                                                                              ------------             ------------
Cash provided by operating activities ............................................               1,355,130                  130,079
                                                                                              ------------             ------------

Cash flows from investing activities:
Purchase of investments, held-to-maturity ........................................              (3,281,875)              (1,499,400)
Purchase of investments, available-for-sale ......................................              (4,862,625)              (9,872,019)
Maturities of investments, held-to-maturity ......................................                  13,894                4,339,855
Net increase in loans ............................................................             (14,862,395)              (9,252,709)
Purchase of premises and equipment ...............................................                (113,467)                (348,542)
                                                                                              ------------             ------------
Cash used for investing activities ...............................................             (23,106,468)             (16,632,815)
                                                                                              ------------             ------------

Cash flows from financing activities:
Net increase in deposits .........................................................              15,770,637                6,147,426
Increase in federal funds purchased and securities
    sold under agreements to repurchase ..........................................               3,572,696                  511,399
Repayment (proceeds)of note payable ..............................................                (120,000)                 700,000
Increase in U.S. Treasury, tax and loan accounts .................................                 349,861                  742,674
Proceeds from issuance of common stock ...........................................                  58,200                    5,316
                                                                                              ------------             ------------
Cash provided by financing activities ............................................              19,631,394                8,106,815
                                                                                              ------------             ------------

Decrease in cash and cash equivalents ............................................              (2,119,944)              (8,395,921)
Cash and cash equivalents at beginning of period .................................              13,091,553               17,249,878
                                                                                              ------------             ------------
Cash and cash equivalents at end of period .......................................            $ 10,971,609             $  8,853,957
                                                                                              ============             ============

Supplemental disclosure of cash flow information:
Cash paid for interest ...........................................................            $  3,061,300             $  2,432,270
Cash paid for taxes ..............................................................            $    736,837             $    977,606
Noncash adjustments to report investment securities,
  available-for-sale at fair value:
Investment securities, available-for-sale ........................................            $    (30,426)            $   (270,014)
Other assets .....................................................................                  10,345                   91,805
Unrealized loss on investment securities, available-for-
   sale, net of applicable deferred income taxes .................................            $    (20,081)            $   (178,209)

</TABLE>

                                       5
<PAGE>

                            COMSOUTH BANKSHARES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The unaudited interim financial statements reflect all adjustments which are, in
the  opinion  of  management,   necessary  for  the  fair  presentation  of  the
consolidated  statements of operations and of cash flows for the interim periods
presented.  Such  adjustments  are of a normal  recurring  nature.  The  interim
financial  statements,  including  related notes,  should be read in conjunction
with the financial statements for the year ended December 31, 1996, appearing in
the Corporation's 1996 Annual Report and included in the Corporation's Form 10-K
Annual Report for the year ended  December 31, 1996.  The  unaudited  results of
operations  for the six month period ended June 30, 1997 may not  necessarily be
indicative of the results for the year that will end December 31, 1997.

NOTE 1 - LOAN COMMITMENTS

At June 30,  1997,  standby  letters  of credit of  $2,100,000  and  undisbursed
amounts of lines of credit of $19,810,000 were outstanding.

NOTE 2 - NOTES PAYABLE

During 1996, the Corporation  established a $1,200,000  revolving line of credit
with another  financial  institution.  The line of credit  expires  December 31,
2001.  Interest is variable at the lender's  prime rate minus  one-half  percent
(8.0% at June 30, 1997) with interest payments due quarterly. The line of credit
is  collateralized  by 550,000  shares of Bank of  Charleston's  ("BOC")  common
stock.  At  June  30,  1997,  the  Corporation  had an  outstanding  balance  of
$1,080,000  on this line of credit;  quarterly  payments  of  $60,000  were made
during March and June 1997.

The line of credit agreement contains certain covenants. The principal financial
covenants require the Corporation to maintain the allowance for loan losses at a
minimum of 100% of  non-performing  assets;  tangible  equity to total assets at
least  equal  to 8% for BOC  and at  least  equal  to 6% for  Bank  of  Columbia
("BOCL");  non-performing  loans  plus OREO to loans  receivable  plus OREO at a
ratio no greater than 1.80%; and maintain a return on average assets of at least
1%. The Corporation is also restricted from paying any dividends unless approved
by the lender.
The Corporation was in full compliance with all of the covenants at quarter end.

At June 30, 1997, BOCL had approximately $11.0 million and BOC had approximately
$10.1  million in standby  credit  available  from  other  banks for  short-term
borrowings.

NOTE 3 - STOCK OPTIONS

On April  29,1997,  6,425 options were granted to  non-employee  directors at an
exercise  price of $15.33 per share.  The average  high/low  price for  ComSouth
Bankshares,  Inc.  Common Stock for the 30 days prior to the  measurement  date,
April 29,1997 was $15.33.  The board granted 3,500 options to certain  employees
on January 28, 1997 at an option  price of $15.125  with an  expiration  date of
January 27,  2002.  The  closing  price for the stock was $15.125 on January 28,
1997. In addition, the board granted 2,000 options to certain employees on April
29, 1997. These options were granted with an option price of $15.875,  which was
the closing  price of the stock on April 29,  1997,  and an  expiration  date of
April 28,  2002.  A total of 8,161  options  were  exercised  during  the period
January  1, 1997 to April 27,  1997 at an  average  exercise  price of $7.27 per
share.


                                       6
<PAGE>

NOTE 4 - ALLOWANCE FOR CREDIT LOSSES

The Corporation adopted SFAS No. 114, "Accounting by Creditors for Impairment of
a Loan" and SFAS No. 118,  "Accounting  by Creditors for  Impairment of a Loan -
Income  Recognition and Disclosure" on January 1, 1995. These standards  address
the  accounting  for  certain  loans when it is  probable  that all  amounts due
pursuant  to  the  contractual   terms  of  the  loan  will  not  be  collected.
Individually  identified  impaired loans are measured based on the present value
of payments expected to be received, using the historical effective loan rate as
the discount rate.  Loans that are to be foreclosed or that are solely dependent
on the collateral for repayment may  alternatively be measured based on the fair
value of the  collateral for such loans or on observable  market prices.  If the
recorded  investment in the loan exceeds the measure of fair value,  a valuation
allowance is established as a component of the allowance for credit losses.  The
adoption of the  standards did not have a material  impact on the  Corporation's
financial position or results of operations.  Currently,  the Banks have $48,000
in loans classified as impaired loans.

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

Statements  included  in  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of  Operations  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.  The Corporation  cautions readers that forward looking
statements,  including without  limitation,  those relating to the Corporation's
future business prospects,  revenues, working capital, liquidity, capital needs,
interest costs, and income,  are subject to certain 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
Corporation's reports filed with the Securities and Exchange Commission.

GENERAL

ComSouth  Bankshares,  Inc.  (the  "Corporation")  is a registered  bank holding
company  incorporated on May 15, 1987 pursuant to the laws of the State of South
Carolina.  It presently  conducts its business through its two bank subsidiaries
(the "Banks"),  Bank of Columbia,  NA and Bank of  Charleston,  NA. On March 21,
1996,  the  Corporation  listed its common stock on the American  Stock Exchange
under the ticker symbol CSB.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity  is the  ability  to  meet  current  and  future  obligations  through
liquidation  or maturity of existing  assets or the  acquisition  of  additional
liabilities. The Corporation's primary source of liquidity is funds derived from
the deposit gathering operations of the Corporation's two subsidiary banks - BOC
and BOCL,  with  additional  funds  provided from maturing  loans and investment
securities,  sales of temporary  investments,  or sales of investment securities
classified  as  available-for-sale.  These  funds  are used to pay  interest  on
deposits  and to fund deposit  outflows.  Any  remaining  funds are utilized for
investments and to fund loan commitments and  disbursements,  to repay debt, and
to fund  operating  expenses.  Negative  funds  positions may be dealt with by a
combination of actions  including  borrowing  from other banks or  rediscounting
qualifying  loans with the Federal  Reserve  Bank.  At June 30,  1997,  BOCL had
approximately $11.0 million while BOC had approximately $10.1 million in standby
credit available to them from other financial institutions.  Management believes
that a sufficient  liquidity balance is maintained through the operations of its
asset  and  liability  management  program.  Additionally,  the  standby  credit
facilities provide adequate protection in the event of negative cash flows.

At June 30, 1997 and December 31, 1996,  liquid  assets of  approximately  $53.2
million and $47.2  million,  respectively,  were  available  to meet demands for
deposit withdrawals, undisbursed amounts on lines of credit ("loan commitments")
of $19,810,000  and  $21,396,000,  respectively,  and letters of credit totaling
$2,100,000 and $1,689,000,  respectively.  The amount of liquid assets available
at June 30, 1997 includes cash and cash  equivalents of $11,000,000,  a decrease
of $2,100,000 from the December 31, 1997 amount of $13,100,000. This decrease in
cash and cash  equivalents is attributable  to management's  decision to improve
earnings  by  reducing  investments  in  short-term  federal  funds  in favor of
increasing investments in investment securities.


                                       7
<PAGE>


Reliance is being placed upon continued  deposit growth as the principal  source
of funds.  Management is committed to pay competitive market rates for deposits.
Deposits were approximately  $161.2 million at June 30, 1997, compared to $145.4
million at December 31, 1996.  Of the total deposit base of the  Corporation  at
June 30, 1997,  approximately $30.9 million, or 19.2%, consisted of Certificates
of Deposits  in amounts of $100,000  and higher  ("Jumbo  Certificates").  These
Jumbo  Certificates  are  typically  issued  to  local  customers  and  none are
brokered.

While most of the large time deposits are acquired from  customers with standing
relationships  with the Banks, it is a common industry  practice not to consider
these types of deposits as core deposits because their retention can be expected
to be  heavily  influenced  by  rates  offered,  and  they  therefore  have  the
characteristics  of  shorter-term  purchased  funds.  Certificates of deposit of
$100,000 and over involve the maintenance of an appropriate matching of maturity
distribution and a diversification of sources to achieve an appropriate level of
liquidity.  Management  believes that the  Corporation's  liquidity  position is
relatively  strong and is adequate to meet the withdrawal  demand of these Jumbo
Certificates.

One of the  principal  uses of funds is to meet loan  demand at BOCL and BOC. At
June 30, 1997, total loans  outstanding were  approximately  $130.5 million,  as
compared to $115.7 million at December 31, 1996.  During the first six months of
1997, both Banks have  experienced  strong loan growth.  The economic picture in
the markets serviced by both Banks appears to be good.

Both BOCL and BOC maintain a loan  classification  system to monitor exposure to
potential  loan  losses.  Management  of the Banks  reviews the  adequacy of the
allowance  each  quarter  to  identify  problem  loans  in  connection  with its
assessment of the overall quality of the respective loan portfolios. At June 30,
1997, the allowance for loan losses at BOCL and BOC was  approximately  $992,000
and $856,000,  respectively. At December 31, 1996, the allowance for loan losses
at BOCL and BOC was  approximately  $971,000 and $831,  000,  respectively.  The
Comptroller  of the Currency  ("OCC"),  the Banks' primary  regulator,  requires
national banks to maintain a Tier 1 (primarily  stockholders' equity) risk-based
capital ratio of 4.0% and a total risk-based  capital ratio of 8.0%. At June 30,
1997,  the Tier I capital  ratio for BOCL was 10.0% and the total  capital ratio
was 11.2%,  while BOC had a Tier I ratio of 13.4% and a total  capital  ratio of
14.5%.

The  Corporation's  primary  regulator,  the Board of  Governors  of the Federal
Reserve  (the  "Board"),  has issued  guidelines  requiring a minimum risk based
capital  ratio of 8.0%,  of which at least 4.0% must  consist of Tier I capital.
The Corporation's Tier I capital ratio was 11.3% and its total capital ratio was
12.5% at June 30, 1997. These ratios are well within  guidelines  established by
the Corporation's primary regulator.

RATE SENSITIVITY

In order to address  volatility in interest rates, the Corporation  maintains an
interest  sensitivity  management program, the objective of which is to maintain
reasonably  stable  growth in net  interest  income  despite  changes  in market
interest  rates.  The Interest  Rate  Sensitivity  Gap ("GAP") is defined as the
excess of interest  sensitive  assets over interest  sensitive  liabilities that
mature or reprice  within  specified  time  frames.  The GAP is a measure of the
Corporation's  risk of  significant  changes in net income at any point in time.
Adjustable rate loans, short term loans and temporary  investments represent the
majority of the Corporation's  interest  sensitive assets.  Money market deposit
accounts,  NOW  accounts,  savings  accounts  and  certificates  of deposit with
maturities of less than one year  represent  the majority of interest  sensitive
liabilities.

In addition to gap analysis,  management utilizes simulation modeling techniques
to  project  potential  earnings  impact  due  to  rate  changes.  Based  on the
combination of the gap analysis and  simulation  modeling,  management  believes
that any  reasonably  expected  rate change would not have a material  impact on
earnings.

                                       8
<PAGE>

RESULTS OF OPERATIONS

For the first six months of 1997,  the  Corporation is reporting net earnings of
$1,045,000  or $.65 per fully  diluted  share,  compared to $808,000 or $.58 per
share for the same period of 1996.

For the first six  months of 1997 loans  outstanding  grew by 12.8% with 8.7% of
this growth being  realized in the second  quarter.  Deposit  growth of 10.9% or
$15,800,000  was used to fund the loan  growth for the first six months of 1997.
Although this strong growth created  pressure on management to gather  deposits,
efforts were  concentrated  on the  acquisition of core deposits as the ratio of
certificate  of deposits to total  deposits only increased to 37% as compared to
35% at year-end 1996.

The  Corporation  had total  revenues of  $7,840,000  and  $6,161,000  and total
expenses of $6,795,000 and $5,353,000 for the six months ended June 30, 1997 and
1996,  respectively.  Summarized  below is an  analysis  of the  composition  of
revenues and expenses for the six months period ended June 30, 1997 and 1996.
<TABLE>
<CAPTION>

                                                                                     Six Months Ended June 30,
                                                                              1997                                1996
                                                                              ----                                ----
<S>                                                                <C>                  <C>            <C>                 <C>  
Interest on loans ......................................           $5,563,000            71.0%         $4,478,000           72.7%
Interest on investment securities ......................            1,196,000            15.2%            795,000           12.9%
Interest on temporary investments ......................               72,000              .9%             85,000            1.4%
Non-interest income ....................................            1,009,000            12.9%            803,000           13.0%
                                                                   ----------           -----          ----------          -----

Total Revenues .........................................           $7,840,000           100.0%         $6,161,000          100.0%
                                                                   ==========           =====          ==========          =====
</TABLE>

Increased  revenues  provided  by interest on loans is the result of strong loan
growth realized by both banks during the first six months of 1997. As previously
noted,  however,  most of this loan growth  occurred  during the second  quarter
which  caused a decline in this  category's  percentage  to total  revenues as a
major  portion  of the  deposit  growth  in the  first  quarter  of the year was
invested in investment securities.  In addition, funds which typically were held
in temporary  investments  for the purpose of  supporting  loan growth were also
invested in  investment  securities.  As can readily be seen by the above table,
the  decline in revenue  ratios  provided  by  interest  on loans and  temporary
investments  has  been  offset  by an  increase  in  the  investment  securities
category.

Income derived from the Business Manager product was a major factor contributing
to the  growth in  non-interest  income  as fees  generated  from  this  product
increased by approximately $150,000 over the same six month period of 1996. This
product provides immediate cash flow to small businesses through the purchase by
the  Banks of such  businesses'  receivables.  The  Banks are paid a fee for the
billing and collection of these receivables and retain full recourse against the
seller of the purchased receivables in case of default.

In  addition,  fees derived from  deposit  services  increased by  approximately
$75,000  over the same six month  period  last  year as a result of the  deposit
growth realized between the two periods.


                                       9
<PAGE>

Operating  Expenses for the six month  periods ended June 30, 1997 and 1996 were
as shown in the following table:
<TABLE>
<CAPTION>


                                                                                       Six Months Ended June 30,
                                                                                1997                                 1996
                                                                                ----                                 ----
<S>                                                                <C>                  <C>            <C>                  <C>  
Interest on deposits ...................................           $2,924,000            43.0%         $2,279,000            42.6%
Interest on note payable and
   securities sold under agreements
   to repurchase .......................................              157,000             2.3%             61,000             1.1%
Provision for loan losses ..............................              105,000             1.6%             50,000              .9%
Salaries and employee benefits .........................            1,484,000            21.8%          1,339,000            25.0%
Occupancy expenses .....................................              215,000             3.2%            217,000             4.1%
Furniture and equipment expenses .......................              238,000             3.5%            188,000             3.5%
Legal and regulatory ...................................              422,000             6.2%            354,000             6.6%
Printing and supplies ..................................               85,000             1.3%             87,000             1.5%
Advertising and marketing ..............................               57,000              .8%             45,000              .8%
Other ..................................................            1,108,000            16.3%            739,000            13.9%
                                                                   ----------           -----          ----------           -----

Total Operating Expenses ...............................           $6,795,000           100.0%         $5,353,000           100.0%
                                                                   ==========           =====          ==========           =====
</TABLE>


The change in interest paid on deposits is principally  due to the strong growth
in deposits as rates paid on deposits  remained  basically  the same for the two
periods.  Interest on notes  payable and  securities  sold under  agreements  to
repurchase  increased as the outstanding  balance in this category  increased by
$4.3 million  between the two periods.  Strong loan growth  during the six month
period and in  particular  the second  quarter  resulted  in an  increase to the
provision  for loan losses.  The  increase in salaries and employee  benefits is
primarily  due to  increased  staffing  needed to support  the  strong  loan and
deposit growth. The change in legal and regulatory  expenses is due to increased
activity in the defense of pending  lawsuits during the period.  The increase in
other  expenses  is mostly due to federal  income  tax  expense as tax  expenses
increased by $230,000 between the two periods as a result of higher earnings.

NET INTEREST INCOME

Net interest income represents the difference  between interest earned on assets
and the interest paid on liabilities.  It traditionally  constitutes the largest
source of a financial institution's earnings.

Net  interest  income  for the six  months  ended  June  30,  1997  and 1996 was
$3,748,000 and $3,018,000, respectively. The average yield on earning assets was
8.4% and 8.5%, the average rate paid on interest  bearing  liabilities  was 4.7%
and 4.6%, and the  annualized net interest  margin was 4.6% and 4.8% for the six
months ended June 30, 1997 and 1996, respectively.

SECOND QUARTER EARNINGS

Earnings for the second  quarter of 1997 were $525,000 or $.33 per fully diluted
share, up 27 percent over the $414,000 or $.30 per share reported for the second
quarter  of 1996.  Net  interest  income  showed an  increase  of  approximately
$435,000 between the two periods. This increase is the result of the strong loan
growth  realized by both banks during the period as the net interest  margin for
each period was relatively the same.

Total non-interest income increased by $116,000 between the two quarters as fees
generated  by the  Business  Manager  program  increased  by $74,000 and deposit
service fees  increased by $37,000 over the same period last year. The increased
fees from the  Business  Manager  program  were the  result of  increased  sales
efforts for the product and the increase in fees  derived from deposit  services
resulted from the deposit growth realized between the two periods.


                                       10
<PAGE>

Total  non-interest  expenses  increased by $370,000  for the second  quarter of
1997, compared to the same quarter in 1996. Federal income tax expense increased
by  $70,000  due to  improved  earnings  for the second  quarter of 1997.  Other
factors contributing to the increase of non-interest  expenses were salaries and
employee  benefits which increased by $95,000 due to additional  staff needed to
support the loan and  deposit  growth.  Legal fees  increased  by  approximately
$95,000 due to increased activity during the second quarter of 1997 related to a
pending  lawsuit.  Additionally,  furniture  and fixture  expenses  increased by
$30,000  over the same  period  last year due to  purchases  made as a result of
remodeling the Bank of Columbia  lobby and equipment  needed for the increase in
staff.

                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

On July 7, 1997,  the judge  handling the  shareholder  litigation by the former
director of the Corporation and the Bank of Columbia against the Corporation and
eight of its former and present  directors  granted the defendants'  motions for
summary  judgment and dismissed  the suit.  The plaintiff has asked the judge to
reconsider  his order and has stated that he plans to appeal if the order is not
withdrawn.  The sixteen other nearly  identical  suits are still pending against
the  Corporation  and  the  same  eight  former  and  present  directors  of the
Corporation. Although the plaintiffs do not seek to recover any damages from the
Corporation,  the Corporation may,  nevertheless,  incur significant expenses to
indemnify the defendant  directors and former  directors  pursuant to applicable
law. These suits have  previously been reported in the  Corporation's  Form 10-Q
for the quarter  ended March 31,  1997.  On July 21, 1997,  another  shareholder
filed a suit similar to the others  against the same eight  directors and former
directors.  That  suit  does  not  name  the  Corporation  as a  party,  but the
Corporation may also incur  significant  expenses to indemnify the directors and
former directors pursuant to applicable law.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        (a)  Annual Meeting:   April 29, 1997
        (b)  The following directors were elected at the annual meeting:

                                                            VOTES
                                                   FOR               AGAINST
                   LaVonne N. Phillips             1,192,242             23,046
                   W. Carlyle Blakeney, Jr.        1,192,242             23,046
                   Arthur P. Swanson               1,145,977             69,311

          The following directors continue their terms of office as directors:

                   Arthur M. Swanson
                   Mason R. Chrisman
                   John C.B. Smith, Jr.
                   R. Lee Burrows, Jr.
                   Charles R. Jackson
                   J. Michael Kapp

        (c)      J.W. Hunt and Company LLP was appointed independent accountants
                 of the  Corporation  for the fiscal  year ending  December  31,
                 1997.  The  stockholders  voted  1,210,216  votes  for  and 506
                 against this appointment, with 4,566 votes abstaining.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8 - K

        (a)  Exhibit 3.3, Amendment to Bylaws.
             Exhibit 27, Financial Data Schedule.
        (b)  No reports on Form 8-K have been filed during the quarter.



                                       11
<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.

                                        COMSOUTH BANKSHARES, INC.
                                                      (Registrant)

Date: 8-13-97                           By:s/Harry R. Brown
                                           ------------------------------
                                                 (Harry R. Brown)
                                                 Chief Financial Officer,
                                                 Chief Operating Officer,
                                                 Secretary and Treasurer




                                       12
<PAGE>


EXHIBIT INDEX

Exhibit 3.3                          Amendment to Bylaws

Exhibit 27                           Financial Data Schedule





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