UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 29549

                                    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 September 30, 1996

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

For the transition period from _______________ to ______________

Commission file number: 0-19045

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

South Carolina                                                    57-0853342
(State or other jurisdiction of                              (I.R.S. 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 October 31, 1996:

Common Stock, No Par Value                            1,387,626
        Class                                         Number of Shares


<PAGE>

                            COMSOUTH BANKSHARES, INC.

                                      INDEX
PART I.  Financial Information                                          Page No.

 Item 1.  Financial Statements

          Consolidated Balance Sheets-
            September 30, 1996 and December 31, 1995 . . . . . . . . . . .    1

          Consolidated  Statements of Operations
            Three months and nine months ended
            September 30, 1996 and September 30, 1995 . . . . . . . . . .     2

          Consolidated Statements of Changes in
            Stockholders' Equity -
            Nine months ended September 30, 1996 and
            September 30, 1995 . . . . . . . . . . . . . . . . . . . . . .    3

          Consolidated Statements of Cash Flows -
            Nine months ended September 30, 1996 and
            September 30, 1995 . . . . . . . . . . . . . . . . . . . . . .    4

          Notes to Consolidated Financial Statements . . . . . . . . . . .  5-6 

 Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations . . . . . . . . . . . . .   7-11

PART II.  Other Information

 Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . .   12

 Item 2.  Stock Dividend . . . . . . . . . . . . . . . . . . . . . . . . .    12

 Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . .    12

          Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

                                       i
<PAGE>
Item 1.  Financial Statements

                               COMSOUTH BANKSHARES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                               September 30                                 December 31,
                                                                  1996                                         1995
                                                                  ----                                         ----
                                                               (Unaudited)
ASSETS
<S>                                                           <C>                                          <C>        
Cash and due from banks                                       $  9,147,390                                 $ 10,979,878
Federal funds sold                                                                                            6,270,000
Investment securities held-to-
  maturity, at amortized cost (fair
  value: 1996 - $6,413,093;
  1995 - $9,333,599)                                             6,460,432                                    9,319,839
Investment securities available-for-
  sale, at fair value (amortized
  cost: 1996 - $21,345,510;
  1995 - $12,671,841)                                           21,152,807                                   12,815,394
Loans
  (less allowance for loan losses:
  1996 - $1,800,167; 1995 -
  $1,784,508)                                                  106,250,881                                   91,024,087
Premises and equipment                                           1,556,324                                    1,287,558
Accrued interest receivable                                      1,020,608                                    1,104,905
Other assets                                                       588,679                                      620,967
                                                              ------------                                 ------------
Total Assets                                                  $146,177,121                                 $133,422,628
                                                              ============                                 ============ 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposit:
Noninterest bearing deposits                                  $ 25,455,122                                 $ 24,246,101
NOW, money market and savings                                   52,796,252                                   49,321,293
Time deposits of $100,000 or more                               17,377,815                                   18,785,241
Time deposits less than $100,000                                29,748,340                                   23,255,643
Other time                                                       2,455,958                                    2,154,512
                                                              ------------                                 ------------ 
Total deposits                                                 127,833,487                                  117,762,790
Short-term borrowings                                            2,428,161                                    1,754,912
Note payable                                                       900,000
U.S. Treasury tax and loan accounts                              1,207,886                                      438,486
Other liabilities                                                  890,823                                    1,587,302
                                                              ------------                                 ------------ 
Total liabilities                                              133,260,357                                  121,543,490
                                                              ------------                                 ------------ 
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 - 1,386,626 in 1996 and
  1,385,701 in 1995)                                            11,835,461                                   11,830,145
Accumulated profit (deficit)                                     1,208,619                                      (45,752)
Unrealized (loss) gain on investment
  securities available-for-sale, net
  of tax                                                          (127,316)                                      94,745
                                                              ------------                                 ------------
Total Stockholders' Equity                                      12,916,764                                   11,879,138
                                                              ------------                                 ------------
Total Liabilities and Stockholders'
  Equity                                                      $146,177,121                                 $133,422,628
                                                              ============                                 ============ 
</TABLE>
                                       1
<PAGE>
                               COMSOUTH BANKSHARES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     Three Months ended                            Nine Months ended
                                                      September 30,                                  September 30,
                                                  1996               1995                   1996                 1995
                                                  ----               ----                   ----                 ----
Interest Income:
<S>                                           <C>                   <C>                 <C>                  <C>       
Interest and fees on
  loans                                       $2,419,860            $2,046,206          $6,897,456           $5,589,103
Investment securities                            433,217               356,277           1,228,740              956,882
Federal funds sold                                13,148                42,067              98,023              116,600
                                              ----------            ----------          ----------           ----------
  Total Interest Income                        2,866,225             2,444,550           8,224,219            6,662,585
                                              ----------            ----------          ----------           ----------
Interest Expense:
Interest on deposits                           1,179,283             1,100,158           3,458,379            2,874,679
Securities sold under
  agreements to repurchase                        30,566                10,797              62,308               65,651
U.S. Treasury tax and
  loan                                             8,339                10,634              24,819               25,009
Note payable                                      14,467                                    27,119                  233
                                              ----------            ----------          ----------           ----------
  Total Interest Expense                       1,232,655             1,121,589           3,572,625            2,965,572
                                              ----------            ----------          ----------           ----------

Net interest income                            1,633,570             1,322,961           4,651,594            3,697,013
Provision for loan losses                              0                65,000              50,000              105,000
                                              ----------            ----------          ----------           ----------
Net interest income
  after provision for
  loan losses                                  1,633,570             1,257,961           4,601,594            3,592,013
                                              ----------            ----------          ----------           ---------- 
Noninterest Income:
Lending operations
  and services                                    98,021               199,543             342,537              403,018
Service charges on
  deposit accounts                               138,056               109,691             394,010              326,548
Gain on sale of
  real estate owned                                                                                               8,063
Other                                            164,969               124,446             467,767              307,372
                                              ----------            ----------          ----------           ---------- 
  Total Noninterest Income                       401,046               433,680           1,204,314            1,045,001
                                              ----------            ----------          ----------           ---------- 
Noninterest Expense:
Salaries and employee
  benefits                                       659,361               647,257           1,998,789            1,827,242
Occupancy expenses                               109,230               107,382             326,222              320,609
Furniture and equipment
  expenses                                       110,282                89,819             298,760              254,034
Advertising and marketing                         23,192                20,509              67,959               62,695
Other                                            468,310               239,818           1,232,598              884,005
                                              ----------            -----------         ----------           ---------- 
  Total Noninterest Expense                    1,370,375             1,104,785           3,924,328            3,348,585
                                              ----------            -----------         ----------           ---------- 
Income before provision
  for income taxes                               664,241               586,856           1,881,580            1,288,429
Income tax expense                              (217,807)             (271,670)           (627,209)            (332,787)
                                              ----------            ----------          ----------           ---------- 
Net Income                                    $  446,434          $    315,186          $1,254,371           $  955,642
                                              ==========          ============          ==========           ==========
Earnings per common share:
Net income per
  common share                                     $0.32                 $0.23               $0.90                $0.70
                                              ==========          ============          ==========           ========== 
</TABLE>
                                       2
<PAGE>


                               COMSOUTH BANKSHARES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                  Unrealized
                                                                                                  Gain(loss)
                                                                                Accumulated          on                   Total
                                                    Common Stock                  Profit          Investment           Stockholders'
                                             Shares              Amount          (Deficit)        Securities               Equity
                                             ------              ------          ---------        ----------               ------
Balance at
<S>                                         <C>              <C>              <C>                 <C>                   <C>       
  December 31, 1994                         1,368,456        $11,711,421      ($1,426,885)        ($180,560)             10,103,976
Rounding Adjustment                               145              1,090           (1,090)
Change in unrealized
  gain on investment
  securities
  available-for-
  sale, net of tax                                                                                  191,926                 191,926
Issuance of Common Stock                          700              4,116                                                      4,116
Net income                                                                        955,642                                   955,642
                                            ---------        -----------      -----------          --------             ----------- 
Balance at September 30, 1995               1,369,301        $11,716,627        ($472,333)          $11,366             $11,255,660
                                            =========        ===========      ===========          ========             =========== 

Balance at
  December 31, 1995                         1,385,701        $11,830,145         ($45,752)          $94,745             $11,879,138
Change in unrealized
  loss on investment
  securities
  available-for-
  sale, net of tax                                                                                 (222,061)               (222,061)
Issuance of common 
  stock                                           925              5,316                                                      5,316
Net income                                                                      1,254,371                                 1,254,371
                                            ---------        -----------      -----------         ---------             ----------- 
Balance at September 30, 1996               1,386,626        $11,835,461      $ 1,208,619         ($127,316)            $12,916,764
                                            =========        ===========      ===========         =========             =========== 

</TABLE>

                                       3
<PAGE>

                               COMSOUTH BANKSHARES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                       Nine Months ended September 30,
                                                                  1996                                1995
                                                                  ----                                ----
Cash flows from operating activities:
<S>                                                           <C>                              <C>     
Net income                                                    $ 1,254,371                       $  955,642
Adjustments to reconcile net income to
  cash provided by operating activities:
Depreciation and amortization                                     237,696                          213,536
Provision for loan losses                                          50,000                          105,000
Deferred Tax Benefit                                              (75,000)
Amortization of premium and accretion
  of discount on investment securities                              6,368                           16,436
Decrease (increase) in interest receivable                         84,297                         (197,540)
Decrease in other assets                                          172,874                           52,979
(Decrease) increase in interest payable                          (107,441)                         293,334
(Decrease) increase in other liabilities                         (540,230)                         294,585
                                                              -----------                       ----------

Cash provided by operating activities                           1,082,935                        1,733,972
                                                              -----------                       ----------

Cash flows from investing activities:
Purchases of investment securities,
  held-to-maturity                                             (1,499,400)
Purchases of investment securities,
  available-for-sale                                          (11,174,538)                     (10,380,950)
Maturities of investment securities,
  held-to-maturity                                              4,353,109                        3,739,743
Maturities of investment securities,
  available-for-sale                                            2,500,000                           19,100
Net increase in loans                                         (15,276,794)                     (16,522,268)
Purchases of premises and equipment                              (506,462)                        (256,938)
                                                              -----------                     ------------ 

Cash used for investing activities                            (21,604,085)                     (23,401,313)
                                                              -----------                     ------------ 

Cash flows from financing activities:
Net increase in deposits                                       10,070,697                       26,595,223
Increase in (maturities of) short-term
  borrowings                                                      673,249                         (487,481)
Proceeds (payments) of note payable                               900,000                         (125,000)
Increase in U.S. treasury tax and
  loan accounts                                                   769,400                        1,083,409
Proceeds from issuance of common stock                              5,316                            4,116
                                                              -----------                     ------------ 
Cash provided by financing activities                          12,418,662                       27,070,267
                                                              -----------                     ------------ 
(Decrease) increase in cash and
  cash equivalents                                             (8,102,488)                       5,402,926
Cash and cash equivalents
  at beginning of period                                       17,249,878                        5,106,898
                                                              -----------                     ------------ 
Cash and cash equivalents at end of period                    $ 9,147,390                     $ 10,509,824
                                                              ===========                     ============ 
Supplemental disclosures of cash flow information:
Cash paid for interest                                         $3,680,066                       $2,672,238
Cash paid for taxes                                            $1,244,155                          $78,624
Noncash adjustments to report investment
  securities available-for-sale at fair value:
Investment securities, available-for-sale                       ($192,703)                         $17,222
Other assets (other liabilities)                                   65,387                           (5,856)
Unrealized (loss) gain on available-for-sale
  securities, net of tax                                        ($127,316)                         $11,366
</TABLE>

                                       4
<PAGE>
                               COMSOUTH BANKSHARES

                   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 balance sheet and 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,  1995,  appearing  in the  Corporation's  1995  Annual  Report and
included  in the  Corporation's  Form  10-K  Annual  Report  for the year  ended
December 31, 1995. The unaudited results of operations for the nine month period
ended  September 30, 1996 may not  necessarily  be indicative of the results for
the year that will end December 31, 1996.

NOTE 1 - LOAN COMMITMENTS

     At  September  30,  1996,  standby  letters  of  credit of  $1,770,000  and
undisbursed amounts of lines of credit of $21,454,000 were outstanding.

NOTE 2 - NOTES PAYABLE

     During 1995 the Corporation established a $500,000 revolving line of credit
with another financial  institution.  The line of credit was based on a variable
rate of  interest  at the  lender's  prime rate and was  scheduled  to expire on
August 15, 1996. The line of credit was collateralized by 200,000 shares of Bank
of Columbia  common stock.  In addition,  the line of credit  contained  certain
covenants  with which the  Corporation  and its  subsidiaries  were  required to
comply.

     In April 1996,  the  Corporation  negotiated  a  $1,200,000  term loan with
another financial  institution with a final expiration of December 31, 2001. The
interest on the loan is a variable  rate of interest at the lender's  prime rate
less  1/2 of one  percent.  The loan may have  multiple  advances,  however  all
advances must be made by December 31, 1996. Payments are scheduled to be $60,000
plus  interest  per quarter  beginning  March 31,  1997 until final  maturity on
December 31, 2001.  The loan is secured by 550,000  shares of Bank of Charleston
Common Stock. In addition,  the loan agreement  contains certain  covenants with
which the Corporation and its subsidiaries are required to comply. The principal
financial  covenants  require the  Corporation and each subsidiary to maintain a
loan loss  reserve  to  non-performing  assets  ratio of a least  100%,  and the
tangible  equity  to  total  assets  must  equal  or  exceed  8% for the Bank of
Charleston ("BOC") and equal or exceed 6% for the Bank of Columbia ("BOCL"). The
Corporation must maintain a  non-performing  loans plus OREO to total loans plus
OREO ratio of no greater than 1.80% and must maintain a return on average assets
of no less than 1%.

     Additional  covenants  restrict the Corporation  from incurring  additional
debt, from paying  shareholder  dividends,  unless agreed to by the lender,  and
require full payment to the lender, if demanded, in the event of a change in the
ownership of the  Corporation.  As of September 30, 1996, the Corporation was in
compliance with the covenants.

                                       5
<PAGE>
     During April 1996, the Corporation took an advance of $500,000 on this loan
to pay off the  $500,000  advanced  on the  revolving  line of credit  discussed
above.  As a result  of the  payoff,  the  $500,000  revolving  line of  credit,
discussed  in  the  first  paragraph  of  this  section  was  terminated  by the
Corporation.  The  Corporation  took an  additional  advance of  $200,000 on the
$1,200,000  loan in  September,  1996 and has a current  outstanding  balance of
$900,000 on the loan.

     At September 30, 1996,  BOCL had available  approximately  $8.9 million and
BOC had available  approximately $9.5 million in standby credit from other banks
for short-term borrowing.

NOTE 3 - 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.  Measurement  may  also be based 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 do not have any loans  classified as impaired
loans.

NOTE 4 - INCOME TAXES

     Deferred tax assets and (liabilities)  and the related valuation  allowance
arising in  accordance  with SFAS No. 109 at  September  30,  1996 and  December
31,1995 are as follows:
<TABLE>
<CAPTION>
                                                      September 30,             December 31,
                                                          1996                      1995
                                                          ----                      ----
<S>                                                    <C>                         <C>     
Allowance for loan losses                              $548,755                    $467,986
Excess tax over book depreciation                        32,890                      88,727
State income tax net operating loss
  carryforward                                                                       95,302
Unrealized loss on available-for-sale
  securities - SFAS 115                                  65,387                           0
                                                       --------                    -------- 
Gross deferred tax asset                                647,032                     652,015
                                                       --------                    -------- 
Accretion of discounts on bonds                          (8,763)                    (17,864)
Adjustments from accrual to cash basis
  for tax reporting                                                                 (34,737)
Unrealized gain on available-for-sale
  securities - SFAS 115                                                             (48,808)
                                                       --------                    -------- 
Gross deferred tax liability                             (8,763)                   (101,409)
                                                       --------                    -------- 
Net deferred tax asset before
 valuation allowance                                    638,269                     550,606
Less valuation allowance                               (158,137)                   (260,624)
                                                       --------                    -------- 
Net deferred tax asset                                 $480,132                    $289,982
                                                       ========                    ======== 
</TABLE>
                                       6

<PAGE>

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

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,  N.A.  ("BOCL") and Bank of  Charleston,  N.A.
("BOC").  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,  investment
securities  and  sales of  temporary  investments.  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 are dealt
with by a  combination  of  actions  including  borrowing  from  other  banks or
rediscounting  qualifying  loans with the Federal Reserve Bank. At September 30,
1996,  BOCL had  approximately  $8.9 million  while BOC had  approximately  $9.5
million in standby credit  available to them from other financial  institutions.
Management  believes that a sufficient  liquidity balance is maintained  through
the operation of its asset and liability management program.  Additionally,  the
standby credit facilities  provide adequate  protection in the event of negative
cash flows.

     At September 30, 1996 and December 31, 1995, liquid assets of approximately
$30.3 million and $30.1  million,  respectively,  were available to meet demands
for  deposit  withdrawals,   undisbursed  amounts  on  lines  of  credit  ("loan
commitments") of $21,454,000 and $16,068,000 respectively, and letters of credit
totaling $1,770,000 and $1,584,000 respectively.

     Deposit growth is the principal  source of funds.  The Banks  generally pay
competitive  market  rates for  deposits.  Deposits  were  approximately  $127.8
million at September 30, 1996,  which compares to $117.8 million at December 31,
1995.  Of the total  deposit  base of the  Corporation  at  September  30, 1996,
approximately  $17,378,000  (or 13.6%) was comprised of Certificates of Deposits
in amounts $100,000 and higher ("Jumbo Certificates").  These Jumbo Certificates
are primarily issued to local customers and none are brokered deposits.

     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
$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  expected  withdrawal  demand of
these Jumbo Certificates.

                                       7
<PAGE>

     One of the principal  uses of funds is to meet loan demand at BOCL and BOC.
At  September  30,  1996,  total loans  outstanding  were  approximately  $108.0
million,  as compared to $92.8  million at December 31,  1995.  During the first
nine  months of 1996,  both Banks  have  experienced  strong  loan  growth.  The
economic picture in the markets serviced by both Banks appears to be stable.

     BOCL and BOC each  maintain a loan  classification  system to monitor their
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
September  30,  1996,  the  allowance  for  loan  losses  at  BOCL  and  BOC was
approximately $1,009,000 and $791,000,  respectively.  At December 31, 1995, the
allowance  for loan  losses  at BOCL and BOC was  approximately  $1,030,000  and
$755,000, respectively.

     The  Comptroller  of the Currency  ("OCC"),  the Banks'  primary  regulator
requires  national banks to maintain a Tier 1 (primarily  shareholder's  equity)
risk based  capital  ratio of 4.0% and a total risk based capital ratio of 8.0%.
However,  the OCC  reserves  the  right to  require  higher  capital  ratios  in
individual  banks on a case by case  basis  when,  in its  judgment,  additional
capital is warranted. At September 30, 1996, the Tier 1 risk based capital ratio
for BOCL was 9.8% and the total risk based  capital  ratio was 11.1%,  while BOC
had a Tier 1 risk based  capital  ratio of 13.6% and a total risk based  capital
ratio of 14.8%.

     The Corporation's primary regulator,  the Board of Governors of the Federal
Reserve Board (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 1 capital.
The Corporation's  Tier 1 risk based capital ratio was  approximately  11.9% and
its total risk based  capital  ratio was  approximately  13.1% at September  30,
1996. These ratios are well within  guidelines  established by the Corporation's
primary regulator.

RATE SENSITIVITY

     In order to address the  volatility  in  interest  rates  experienced,  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.

     As  of  September  30,  1996,  the   Corporation  had  a  negative  gap  of
approximately  8% at the  one  year  interval.  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 a rate change within  generally
forseeable parameters would not have a material impact on earnings.

                                       8
<PAGE>

RESULTS OF OPERATIONS

     For the first nine months of 1996, the Corporation recorded net earnings of
$1,254,000  or $.90 per share,  compared  to  $956,000 or $.70 per share for the
same period of 1995.  Improved net interest  income,  resulting from strong loan
growth in both Banks  since the fourth  quarter  of 1995,  was the major  factor
contributing to the increase in earnings.

For the first nine  months of 1996 loans  outstanding  have grown by 16.4% while
deposits have grown by 8.6%.

     The  Corporation  had total revenues of $9,428,000 and $7,708,000 and total
expenses of $7,547,000 and  $6,420,000  for the nine months ended  September 30,
1996 and 1995, respectively.  Summarized below is an analysis of the composition
of revenues and expenses for the nine months ended September 30, 1996 and 1995.

                                         Nine Months Ended September 30,

                                         1996                       1995
                                         ----                       ----

Interest on loans             $6,897,000       73.2%      $5,589,000       72.5%

Interest on investment
securities                     1,229,000       13.0%         957,000       12.4%

Interest on temporary
investments                       98,000        1.0%         117,000        1.5%

Non-interest income            1,204,000       12.8%       1,045,000       13.6%
                              ----------      ------      ----------      ------

Total Revenues                $9,428,000      100.0%      $7,708,000      100.0%
                              ==========      ======      ==========      ======


     The  increase in income  provided by  interest  on loans is  primarily  the
result of the strong  loan growth  realized  by both Banks as loans  outstanding
increased by approximately  31% between the two periods.  Investment  securities
income is up as a result of increased  yields  realized on new purchases and the
reinvestment  of  maturing  securities.   Investment  securities  are  typically
purchased for a two to five year period,  as a result,  the Corporation was able
to reinvest maturing securities  purchased prior to prime rate increases in 1994
at much higher yields.  The decline in interest on temporary  investments is the
direct result of the strong loan growth  experienced by the Banks as these funds
were reallocated to fund the loan growth.

     The change in  non-interest  income is almost entirely due to growth in the
Business Manager Product, a fee based receivables billing and collection service
offered by the Banks to their customers. The Bank of Charleston has continuously
had  success  with the product  since its  implementation  in 1994.  The Bank of
Columbia  began to offer the  product in early 1995 and has  experienced  steady
growth in the product since its introduction into the Columbia market place.

                                       9
<PAGE>

                                            Nine Months Ended September 30,
                                            1996                      1995
                                            ----                      ----

Interest on deposits              $3,458,000      45.8%     $2,875,000     44.8%

Interest on notes payable
 and securities sold under
 agreements to repurchase            114,000       1.5%         91,000      1.4%

Provision for loan losses             50,000        .7%        105,000      1.6%

Salaries and employee
 benefits                          1,999,000      26.5%      1,827,000     28.5%

Occupancy expenses                   326,000       4.3%        321,000      5.0%

Furniture and equipment
 expenses                            299,000       4.0%        254,000      4.0%

Legal and Regulatory                 551,000       7.3%        342,000      5.3%

Printing and Supplies                124,000       1.6%         97,000      1.5%

Advertising and marketing             68,000        .9%         63,000      1.0%

Other                                558,000       7.4%        445,000      6.9%
                                  ----------     ------     ----------    ------

Total Expenses                    $7,547,000     100.0%     $6,420,000    100.0%
                                  ==========     ======     ==========    ======


     The  increase in  interest on deposits  during the period was the result of
deposit growth by both banks to support the funding needs required by the strong
loan demand.  The increase in interest on the notes  payable  category is mostly
due to the  $900,000  borrowing  by the  holding  company  during  the period to
support  short  falls in its cash  flow due to  payment  of legal  expenses  and
corporate  taxes.  The  increase  in salary and wages  expense was the result of
annual merit  increases  and the addition of clerical  staff to support the loan
and deposit growth.  Activity significantly  increased during this period in the
defense of the  pending  lawsuit  filed by a former  director  resulting  in the
higher expense noted in the Legal and Regulatory category.  However, the efforts
made in this defense  appeared to bring what management  believes to be positive
results  concerning  the suit.  More  information is provided in Part II - Other
Information,  Item 1. Legal  Proceeding  concerning  this suit.  Other  expenses
increased as a result of a loss  recognized  during the third quarter of $25,000
on a counterfeit  check, a loss of approximately  $23,000 on the sale during the
third  quarter of a piece of other real  estate  held  (OREO) and the  remainder
principally due to various  expenses such as temporary  employees to support the
strong growth  during the period.  The decrease in the provision for loan losses
reflected  management's  assessment  that  the  quality  of the  loan  portfolio
continued to be strong and no additional provision was warranted.

                                       10
<PAGE>

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 nine months ended  September 30, 1996 and 1995
was $4,651,000 and $3,697,000, respectively. The average yield on earning assets
was 8.6% and 8.7%,  the average rate paid on interest  bearing  liabilities  was
4.6% and 4.7%, and the annualized net interest  margin was 4.8% and 4.9% for the
nine months ended September 30, 1996 and 1995, respectively.

     In an effort to minimize any earnings  impact as a result of rate  changes,
management  concentrated on maintaining a relatively  stable net interest margin
during the period,  as can be seen by the minimal  change in the margin  between
the two periods.

THIRD QUARTER EARNINGS

     Earnings for the third quarter of 1996 were $446,000 or $.32 per share,  up
41 percent over the $315,000 or $.23 per share reported for the third quarter of
1995. Net interest income showed an increase of  approximately  $310,000 between
the two periods.  This increase is the result of the strong loan growth realized
by both Banks  during the second  half of 1995 and the first nine months of 1996
as the net interest margin for each period was basically the same.

     Total  non-interest  income declined by  approximately  $30,000 between the
periods as fees generated by the mortgage lending function decreased by $100,000
due to the  downsizing of the function in the Bank of Columbia  during the first
half of 1996.  Business  Manager fees  increased by $45,000 over the same period
last year as the BOC program  continued to perform well.  BOCL  implemented  the
product in the first quarter of 1996, and has begun to realize  revenue from its
efforts as well.  Additionally,  fees from deposit services increased by $20,000
between  the two  periods as a result of the  strong  deposit  growth  since the
previous year.

     Total  non-interest  expense,  including  income tax expense,  increased by
approximately  $212,000  in the third  quarter of 1996 as  compared  to the same
quarter  in 1995.  The  major  factors  contributing  to this  increase  were an
increase of $125,000 in legal fees as a result of increased  activity in the law
suit  during  the  third  quarter  1996,  the  increase  in  other  expenses  of
approximately $45,000 is primarily due to a loss incurred on a counterfeit check
of $25,000 and a loss of $23,000 on the sale of a piece of OREO property  during
the quarter.

                                       11
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDING

     Reference  is made to the  discussions  under  "Legal  Proceedings"  in the
Corporation's  Forms 10-Q for each of the quarters ended March 31, 1996 and June
30, 1996.

     On October 8, 1996, the judge handling the  stockholder  litigation by Carl
Almond  against the  Corporation  and eight of its present and former  directors
ruled that the  plaintiff  could not maintain the suit as a class action or as a
derivative  suit.  Only the  individual  claims of the named  plaintiff  will be
covered by the suit.  Those  claims  will  continue to be  vigorously  defended.
Plaintiff has requested that the judge reconsider his ruling.

     On or about  November  5,  1996,  through  November  9,  1996,  five  other
stockholders of the Corporation,  James E. Finley, William Blaylock,  William S.
Minter,  Jr., William S. Minter,  III, and Vernon E. Sanders  instituted  nearly
identical  suits  against  the  Corporation  and the same  directors  and former
directors of the Corporation  who are defendants in the suit  referenced  above.
The suits were  instituted  in the Court of Common  Pleas for  Richland  County,
South  Carolina and make  essentially  the same  allegations  as the Carl Almond
lawsuit and seek damages on account of the alleged  activities  of the defendant
directors.  The  plaintiffs  do  not  seek  to  recover  any  damages  from  the
Corporation but the Corporation may, nevertheless, incur significant expenses to
indemnify the defendant directors pursuant to applicable law.

ITEM 2.  STOCK DIVIDEND

     At its October 29, 1996 Board of Directors  Meeting,  the board  declared a
ten percent (10%) stock  dividend for holders of record as of November 15, 1996.
The dividend is to be paid on December 2, 1996.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibit 27, Financial Data Schedule

(b)  No reports on Form 8-K have been filed during the quarter.


                                       12
<PAGE>

                                   SIGNATURES

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

                                            COMSOUTH BANKSHARES, INC.
                                                           (Registrant)

                                                  Harry R. Brown
Date: 11/13/96                              By: --------------------------------
                                                  (Harry R. Brown)
                                                  Chief Financial Officer,
                                                  Chief Operating Officer,
                                                  Secretary and Treasurer
                                                   (Principal Financial Officer)


                                       13
<PAGE>


                                  EXHIBIT INDEX

Exhibit 27                               Financial Data Schedule


                                       14