SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549


                                    FORM 10-Q


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



For the quarterly period ended June 30, 2001   Commission File number: 000-22054



                           COMMUNITY BANKSHARES, INC.
             (Exact Name of Registrant as Specified in its Charter)

                     South Carolina                      57-0966962
    (State or Other Jurisdiction of         (IRS Employer Identification Number)
      Incorporation or Organization)


               791 Broughton St., Orangeburg, South Carolina 29115
                (Address of Principal Executive Office, Zip Code)


                                 (803) 535-1060
              (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 [ ]

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:

       3,204,220 shares of common stock outstanding as of August 1, 2001.








                             10-Q TABLE OF CONTENTS

                           Part I-Financial Statements                      Page
Item 1  Financial Statements ..............................................   3
Item 2  Management's Discussion and Analysis of Financial Condition and
        Results of Operations .............................................   9
Item 3      Quantitative and Qualitative Disclosures About Market Risk ....  18

                            Part II-Other Information
Item 4  Submission of Matters to a Vote of Security Holders ...............  19
Item 6  Exhibits and Reports on Form 8-K ..................................  20

























                                       2


Part I. Item 1. Financial Statements


            COMMUNITY BANKSHARES, INC. - CONSOLIDATED BALANCE SHEETS



         $ amounts in thousands                                                                       UNAUDITED
                                                                                                       June 30,         December 31,
         ASSETS                                                                                          2001               2000
                                                                                                         ----               ----
Cash and due from other financial institutions:
                                                                                                                    
     Non-interest bearing ..................................................................          $  12,272           $  10,209
     Federal funds sold ....................................................................             23,727               8,130
                                                                                                      ---------           ---------
         Total cash and cash equivalents ...................................................             35,999              18,339
Interest bearing deposits in other banks ...................................................              4,477                 594
Investment securities:
     Securities held to maturity ...........................................................              4,148              12,371
     Securities available for sale .........................................................             27,353              41,195
Loans held for resale ......................................................................                406                 343

Loans ......................................................................................            208,094             195,077
     Less, allowance for loan losses .......................................................             (2,635)             (2,424)
                                                                                                      ---------           ---------
         Net loans .........................................................................            205,459             192,653

Premises and equipment .....................................................................              4,349               4,411
Accrued interest  receivable ...............................................................              1,775               2,330
Deferred income taxes ......................................................................                690                 795
Other assets ...............................................................................                566                 292
                                                                                                      ---------           ---------
         Total assets ......................................................................          $ 285,222           $ 273,323
                                                                                                      =========           =========

         LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
     Non-interest bearing ..................................................................          $  33,781           $  31,219
     Interest bearing ......................................................................            198,718             187,592
                                                                                                      ---------           ---------
         Total deposits ....................................................................            232,499             218,811
Federal funds purchased and securities
     sold under agreements to repurchase ...................................................              8,579               9,352
Federal Home Loan Bank advances ............................................................             17,850              20,350
Other liabilities ..........................................................................              1,544               1,671
                                                                                                      ---------           ---------
         Total liabilities .................................................................            260,472             250,184
                                                                                                      ---------           ---------
Shareholders' equity:
     Common stock
         No par, authorized shares 12,000,000, issued and
         outstanding 3,204,220 in 2001 and 3,199,180 in 2000 ...............................             15,967              15,928
     Retained earnings .....................................................................              8,726               7,342
     Accumulated other comprehensive income (loss) .........................................                 57                (131)
                                                                                                      ---------           ---------
         Total shareholders' equity ........................................................             24,750              23,139
                                                                                                      ---------           ---------
         Total liabilities and shareholders' equity ........................................          $ 285,222           $ 273,323
                                                                                                      =========           =========


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       3


              COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS
                       OF CHANGES IN SHAREHOLDERS' EQUITY
           for the six months ended June 30, 2001 and 2000 (Unaudited)
                            ($ amounts in thousands)




                                                                   Common Stock                         Accumulated
                                                                   ------------                            Other            Total
                                                                                            Retained    Comprehensive  Shareholders'
                                                                Shares         Amount       Earnings     Income (Loss)      Equity
                                                                ------         ------       --------     -------------      ------

                                                                                                          
Balances at Dec. 31, 1999 ...............................     3,191,462     $   14,207     $    6,549     $     (511)    $   20,245
Comprehensive income:
     Net income .........................................                                       1,477                         1,477
     Other comprehensive income (loss) net of tax:
     Unrealized gain (loss) on securities ...............                                                       (134)          (134)
Cash-in-lieu of shares in connection
     with Jan. 31, 2000 stock div .......................          (137)
Market value of shares issued in
     five percent stock dividend ........................             -          1,709         (1,709)                            -
Shares issued under option agreement ....................         2,520             19                                           19
Costs of stock dividend .................................                          (10)                                         (10)
Dividends paid ..........................................             -              -           (319)             -           (319)
                                                             ----------     ----------     ----------     ----------     ----------
Balances at June 30 , 2000 ..............................     3,193,845     $   15,925     $    5,998     $     (645)    $   21,278
                                                             ==========     ==========     ==========     ==========     ==========

Balances at Dec. 31, 2000 ...............................     3,199,180     $   15,928     $    7,342     $     (131)    $   23,139
Comprehensive income:
     Net income .........................................                                       1,831                         1,831
     Other comprehensive income (loss) net of tax:
     Unrealized gain (loss) on securities ...............                                                        188            188
Shares issued under option agreement ....................         5,040             39                                           39
Dividends paid ..........................................             -              -           (447)             -           (447)
                                                             ----------     ----------     ----------     ----------     ----------
Balances at June 30, 2001 ...............................     3,204,220     $   15,967     $    8,726     $       57     $   24,750
                                                             ==========     ==========     ==========     ==========     ==========



THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS






                                       4





         COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF INCOME



                                                                           Six months ended June 30,     Three months ended June 30,
                                                                             2001            2000            2001            2000
         $ amounts in thousands                                            UNAUDITED       UNAUDITED       UNAUDITED       UNAUDITED
                                                                           ---------       ---------       ---------       ---------
Interest and dividend income:
                                                                                                                 
Interest and fees on loans .........................................         $ 9,116         $ 7,763         $ 4,525         $ 4,033
    Deposits with other financial institutions .....................             106              28              78              24
    Investment securities:
      Interest - U. S. Treasury and
        U. S. Government Agencies ..................................           1,194           1,432             469             726
      Dividends ....................................................              69              60              33              31
                                                                             -------         -------         -------         -------
         Total investment securities ...............................           1,263           1,492             502             757
    Federal funds sold and securities
      purchased under agreements to resell .........................             454             188             284              74
                                                                             -------         -------         -------         -------
         Total interest and dividend income ........................          10,939           9,471           5,389           4,888
                                                                             -------         -------         -------         -------

Interest expense:
    Deposits:
      Certificates of deposit of $100,000 or more ..................           1,310           1,073             662             565
      Other ........................................................           3,528           2,831           1,714           1,451
                                                                             -------         -------         -------         -------
         Total deposits ............................................           4,838           3,904           2,376           2,016
    Federal funds purchased and securities
      sold under agreements to repurchase ..........................             149              64              66              40
    Federal Home Loan Bank advances ................................             596             526             295             273
                                                                             -------         -------         -------         -------
         Total interest expense ....................................           5,583           4,494           2,737           2,329
                                                                             -------         -------         -------         -------
Net interest income ................................................           5,356           4,977           2,652           2,559
Provision for loan losses ..........................................             277             338             135             158
                                                                             -------         -------         -------         -------
Net interest income after provision for loan losses ................           5,079           4,639           2,517           2,401
                                                                             -------         -------         -------         -------

Non-interest income:
    Service charges on deposit accounts ............................             928             696             516             349
    Other ..........................................................             315             189             176              99
                                                                             -------         -------         -------         -------
         Total non-interest income .................................           1,243             885             692             448
                                                                             -------         -------         -------         -------
Non-interest expense:
Salaries and employee benefits .....................................           2,102           1,892           1,062             952
    Premises and equipment .........................................             471             456             236             232
    Other ..........................................................             916             879             479             443
                                                                             -------         -------         -------         -------
         Total non-interest expense ................................           3,489           3,227           1,777           1,627
                                                                             -------         -------         -------         -------
Net income before taxes ............................................           2,833           2,297           1,432           1,222
Provision for income taxes .........................................           1,002             820             502             439
                                                                             -------         -------         -------         -------
Net income .........................................................         $ 1,831         $ 1,477         $   930         $   783
                                                                             =======         =======         =======         =======


Basic earnings per common share:
                                                                                                           
    Weighted average shares outstanding ............           3,200,174           3,194,685           3,199,677           3,193,005
    Net income per common share ....................       $        0.57       $        0.46       $        0.29       $        0.25
Diluted earnings per common share:
    Weighted average shares outstanding ............           3,217,819           3,216,207           3,217,443           3,214,555
    Net income per common share ....................       $        0.57       $        0.46       $        0.29       $        0.24






                                       5


       COMMUNITY BANKSHARES, INC. - CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                                                        Six months ended June 30,
                                                                                                        2001               2000
                                                                                                        ----               ----
                                                                                                     (dollar amounts in thousands)
                                                                                                     UNAUDITED           UNAUDITED
Cash flows from operating activities:
                                                                                                                     
Net income .................................................................................           $  1,831            $  1,477
Adjustments to reconcile net income
  to net cash (provided) by operating activities
        Depreciation .......................................................................                218                 240
        Provision for loan losses ..........................................................                277                 338
        Accretion of discounts and
          amortization of premiums -
          investment securities - net ......................................................                (13)                 (5)
        Proceeds from sale of real estate loans held for sale ..............................             (6,352)             (2,337)
        Origination of real estate loans held for sale .....................................              6,289               2,606
Changes in assets and liabilities:
        (Increase) decrease in interest receivable .........................................                555                 198
        (Increase) decrease in other assets ................................................                 98                (828)
        Increase (decrease) in other liabilities ...........................................               (127)                (24)
                                                                                                       --------            --------
Net cash provided (used) by operating activities ...........................................              2,776               1,665
                                                                                                       --------            --------

Cash flows from investing activities:
        Proceeds from maturities and sales of
          investment securities - held to maturity .........................................              8,875               1,500
        Purchases of investment securities - held to maturity ..............................               (652)               (500)
        Proceeds from maturities and sales of
          investment securities - available for sale .......................................             43,716               2,822
        Purchases of investment securities - available for sale ............................            (29,673)             (8,126)
        Net (increase) decrease in interest bearing deposits ...............................             (3,883)               (554)
        Net increase in loans to customers .................................................            (13,083)            (28,233)
        Increase in other real estate owned ................................................               (267)                  -
        Purchase of premises and equipment .................................................               (156)                (67)
                                                                                                       --------            --------
          Net cash provided (used) by investing activities .................................              4,877             (33,158)
                                                                                                       --------            --------

Cash flows from financing activities:
        Net increase in demand, savings, & time deposits ...................................             13,688              17,709
        Net increase  (decrease) in federal funds purchased and
          securities sold under agreements to repurchase ...................................               (773)              1,761
        Sale of common stock ...............................................................                 39                   9
        Increase (repayment) of FHLB advances ..............................................             (2,500)              4,700
        Dividends ..........................................................................               (447)               (319)
                                                                                                       --------            --------
          Net cash provided by financing activities ........................................             10,007              23,860
                                                                                                       --------            --------

Net increase  (decrease) in cash and cash equivalents ......................................             17,660              (7,633)

Cash and cash equivalents -beginning of period .............................................             18,339              20,315
                                                                                                       --------            --------

Cash and cash equivalents -end of period ...................................................           $ 35,999            $ 12,682
                                                                                                       ========            ========



THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS


                                       6


Notes to Unaudited Consolidated Financial Statements

Summary of Significant Accounting Principles

         A summary of significant  accounting policies and the audited financial
statements for 2000 are included in Corporation's Annual Report on Form 10-K for
the year ended December 31, 2000.

Principles of Consolidation

         The consolidated financial statements include the accounts of Community
Bankshares, Inc. (CBI), the parent company, and Orangeburg National Bank, Sumter
National Bank and Florence  National  Bank, its wholly owned  subsidiaries.  All
significant   intercompany  items  have  been  eliminated  in  the  consolidated
statements.

Management Opinion

         The interim financial  statements in this report are unaudited.  In the
opinion of management, all the adjustments necessary to present a fair statement
of the results for the interim period have been made. Such  adjustments are of a
normal and recurring nature.

         The results of operations  for any interim  period are not  necessarily
indicative  of the  results to be expected  for an entire  year.  These  interim
financial  statements  should be read in conjunction  with the annual  financial
statements and notes thereto contained in the 2000 Annual Report on Form 10-K.

Changes in Comprehensive Income Components

         The Financial  Accounting  Standards Board recently issued Statement of
Financial  Accounting  Standards  No.  130,  "Reporting  Comprehensive  Income,"
effective for fiscal years  beginning  after  December 15, 1997.  This Statement
establishes  standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements.  Disclosure as
required by the Statement is as follows:


                                                                                    Before-Tax      Tax (Expense)        Net-of-Tax
                                                                                      Amount         or Benefit            Amount
                                                                                      ------         ----------            ------

Unrealized gains (losses) on securities:
                                                                                                                 
Unrealized holding gains (losses) arising during period ...................         $(977,000)         $ 332,000          $(645,000)
                                                                                    ---------          ---------          ---------

Other comprehensive income, June 30, 2000 .................................         $(977,000)         $ 332,000          $(645,000)
                                                                                    =========          =========          =========

Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period ...................         $  87,000          $ (30,000)         $  57,000
                                                                                    ---------          ---------          ---------

Other comprehensive income, June 30, 2001 .................................         $  87,000          $ (30,000)         $  57,000
                                                                                    =========          =========          =========





                                       7



     COMMUNITY BANKSHARES, INC. - AVERAGE BALANCE SHEETS, YIELDS, AND RATES



    Six months ended June 30,                                            2001                                    2000
    (Dollar amounts in thousands)                                      Interest                                Interest
                                                         Average       Income/      Yields/       Average       Income/     Yields/
                   Assets                                Balance       Expense      Rates         Balance      Expense       Rates
                                                         -------       --------     ------        -------      --------      -----

                                                                                                             
    Interest bearing deposits ........................  $  4,427       $   106         4.79%      $    985      $   28         5.69%
    Investment securities taxable ....................    39,370         1,250         6.35%        46,367       1,476         6.37%
    Investment securities--tax exempt ................       730            13         5.40%           806          16         6.02%
    Federal funds sold ...............................    18,900           454         4.80%         6,062         188         6.20%
    Loans receivable .................................   201,885         9,116         9.03%       170,429       7,763         9.11%
                                                        --------       -------                    --------      ------
    Total interest earning assets ....................   265,312        10,939         8.25%       224,649       9,471         8.43%
    Cash and due from banks ..........................     9,019                                     8,298
    Allowance for loan losses ........................    (2,547)                                   (2,084)
    Premises and equipment ...........................     4,401                                     4,560
    Other assets .....................................     3,159                                     3,085
                                                        --------                                  --------
    Total assets .....................................  $279,344                                  $238,508
                                                        ========                                  ========

    Liabilities and Shareholders' Equity
    Interest bearing deposits
         Savings .....................................  $ 36,526       $   651         3.56%      $ 31,364      $  610         3.89%
         Interest bearing trans.accounts .............    23,063           123         1.07%        20,050         147         1.47%
         Time deposits ...............................   135,934         4,064         5.98%       116,441       3,147         5.41%
                                                        --------       -------                    --------      ------
    Total interest bearing deposits ..................   195,523         4,838         4.95%       167,855       3,904         4.65%
    Short term borrowing .............................     7,391           149         4.03%         3,134          64         4.08%
    FHLB advances ....................................    20,295           596         5.87%        18,311         526         5.75%
                                                        --------       -------                    --------      ------
    Total interest bearing liabilities ...............   223,209         5,583         5.00%       189,300       4,494         4.75%
    Noninterest bearing demand deposits ..............    30,332                                    27,353
    Other liabilities ................................     1,750                                     1,222
    Shareholders' equity .............................    24,053                                    20,633
                                                        --------                                  --------
    Total liabilities and equity .....................  $279,344                                  $238,508
                                                        ========                                  ========

    Interest rate spread                                                               3.24%                                   3.68%

    Net interest income and net yield on                                $5,356         4.04%                    $4,977         4.43%
    earning assets















                                       8




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

Forward Looking Statements

         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.


RESULTS OF  OPERATIONS  FOR THE SIX MONTHS ENDED JUNE 30, 2001  COMPARED TO JUNE
30, 2000

Net Income

         For  the  first  half of 2001  CBI  earned  a  consolidated  profit  of
$1,831,000 compared to $1,477,000 for the first half of 2000, an increase of 24%
or $354,000.  Basic and diluted  earnings per share were $.57 in the 2001 period
compared to $.46 for the 2000 period.

         For the first half of 2001  Orangeburg  National Bank reported a profit
of $1,222,000  compared to $1,104,000 for the first half of 2000, an increase of
10.7% or $118,000.

         For the first half of 2001 Sumter  National  Bank  reported a profit of
$552,000  compared to $393,000 for the first half of 2000,  an increase of 40.5%
or $159,000. The Sumter bank began operation in June 1996.

         For the first half of 2001 Florence  National Bank reported a profit of
$86,000  compared  to net  loss of  $12,000  for the  first  half  of  2000,  an
improvement of $98,000. The Florence bank began operation in July 1998.

         As noted above,  consolidated  net income for the six months ended June
30, 2001, increased from the prior year by 24% or $354,000. The major components
of this increase are discussed  below.  Net interest income before provision for
loan  losses for the six months  ended June 30,  2001  increased  to  $5,356,000
compared  to  $4,977,000  for the same  period in 2000,  an  increase of 7.6% or
$379,000.  For the same  period  the  provision  for loan  losses  was  $277,000
compared  to  $338,000  for the  2000  period,  a  decrease  of 18% or  $61,000.
Non-interest  income for the 2001 period  increased to $1,243,000  from $885,000
for the  2000  period,  a  40.5%  or  $358,000  increase.  Non-interest  expense
increased to $3,489,000 from $3,227,000, an 8.1% or $262,000 increase.







                                       9


Profitability

         Profitability  may be  measured  through  the ROA  (return  on  average
assets) and the ROE (return on average  equity).  Return on assets is the income
for the period divided by the average assets for the period, annualized.  Return
on equity is the  income for the period  divided by the  average  equity for the
period, annualized. Operating results for the six months ended June 30, 2001 and
2000 yield the results in the table shown below.

                                     Period ended June 30,
                                   2001                2000
                                   ----                ----
                                    (dollars in thousands)
Average assets                  $279,344           $238,508
ROA                                 1.31%              1.24%
Average equity                   $24,053            $20,633
ROE                                15.22%             14.32%
Net income                        $1,831             $1,477


Net interest income

         Net interest income, the major component of CBI's income, is the amount
by which interest and fees on interest  earning assets exceeds the interest paid
on interest bearing deposits and other interest bearing funds.  During the first
six months of 2001 net interest income after provision for loan losses increased
to $5,079,000 from  $4,639,000,  a 9.5% or $440,000  increase over the first six
months of 2000. This improvement was mostly the result of a $40 million increase
in the average  volume of earning  assets.  The average yield on earning  assets
decreased  to 8.25% for the 2001  period  from 8.43% for the 2000  period.  This
decline in yield was the result of market  interest  rate  declines.  During the
first half of 2001 the prime lending rate  declined  from 9.5% to 6.75%,  during
the first half of 2000 the prime lending rate increased from 8.75% to 9.5%.

         For the first  six  months  of 2001 the cost of funds  averaged  5.00%,
increased  from  4.75%  for the first six  months of 2000.  The  effect of these
changes was a net interest spread (yield on earning assets less cost of interest
bearing  liabilities) of 3.24% for the first six months of 2001,  decreased from
3.68%  during  the first six  months of 2000.  CBI's net  interest  margin  (net
interest  income  divided by total  earning  assets) was 4.04% for the first six
months of 2001 compared to 4.43% for the first six months of 2000.

Interest Income

         Elsewhere  in this report is a table  comparing  the average  balances,
yields,  and rates for the interest rate sensitive segments of the Corporation's
balance  sheets for the six months ended June 30, 2001 and 2000. A discussion of
that table follows.

         Total interest  income for the first six months of 2001 was $10,939,000
compared  with  $9,471,000  for the same period in 2000,  a 15.5% or  $1,468,000
increase.  The yield on average  earning  assets for the 2001  period was 8.25%,
decreased from 8.43% for the 2000 period.  Total average interest earning assets
for the 2001 period were  $265,312,000  compared  to  $224,649,000  for the 2000
period, an increase of 18.1% or $40,663,000.



                                       10


         The loan portfolio  earned  $9,116,000 for the first six months of 2001
compared  to  $7,763,000  for the same  period  of 2000,  a 17.4% or  $1,353,000
increase.  The yield  decreased  to 9.03% for the 2001 period from 9.11% for the
2000 period.  The average size of the loan  portfolio was  $201,885,000  for the
2001 period compared to $170,429,000  for the 2000 period,  an increase of 18.5%
or $31,456,000 primarily as the result of continuing strong loan demand.

         The taxable  investment  portfolio earned  $1,250,000 for the first six
months in 2001  compared to  $1,476,000  for the same period in 2000, a 15.3% or
$226,000 decrease. The yield decreased to 6.35% in the 2001 period from 6.37% in
the 2000 period.  The average size of the portfolio was  $39,370,000 in the 2001
period  compared  to  $46,367,000  in the 2000  period,  a decrease  of 15.1% or
$6,997,000.  As market interest rates declined during the first half of 2001 the
Corporation had numerous securities called prior to maturity.

         The tax-exempt  investment  portfolio  earned $13,000 for the first six
months in 2001  compared  to $16,000  for the same  period in 2000,  an 18.8% or
$3,000 decrease.  The yield (on a taxable equivalent basis) on the portfolio was
5.4%, a decrease from 6.02%.  The average size of the portfolio was $730,000 for
the 2001 period  compared to $806,000 in the 2000 period,  a decrease of 9.4% or
$76,000.

         Interest bearing deposits in other banks  contributed  $106,000 for the
first six months of 2001 compared to $28,000  during the prior year, an increase
of 279% or $78,000.  The yield on these deposits decreased to 4.79% for the 2001
period  from 5.69% in the 2000  period.  CBI  averaged  $4,427,000  in  interest
bearing  balances in the first six months of 2001 compared to $985,000 the first
six months of the prior year, an increase of 349% or $3,442,000. The increase in
these deposits was the result of declining  market interest rates,  which caused
numerous calls of investment  securities prior to maturity.  The funds resulting
from these calls were temporarily put into interest bearing deposits and federal
funds.

         Federal  funds  sold  earned  $454,000  the  first  six  months of 2001
compared to $188,000  the prior year,  an increase of 142% or  $266,000.  Yields
decreased to 4.80% for the first six months in 2001 from 6.20% for the first six
months in 2000.  For the first six  months  of 2001 CBI  increased  its  average
volume in federal funds sold to $18,900,000 compared to $6,062,000 for the first
six months of 2000, a 212% or $12,838,000 increase.

Interest Expense

         Interest  expense  for the  first  six  months  of 2001 was  $5,583,000
compared to the prior year's  $4,494,000,  a 24.2% or $1,089,000  increase.  The
volume of interest bearing liabilities was $223,209,000 for the first six months
in 2001  compared to  $189,300,000  for the first six months of 2000, a 17.9% or
$33,909,000  increase.  The average rate paid for  interest-bearing  liabilities
during the 2001 period was 5.00%, up from 4.75% for the 2000 period.

         The cost of savings  accounts  was  $651,000 in the first six months in
2001  compared to  $610,000  in the first six months of 2000,  a 6.7% or $41,000
increase.  Average savings deposit  balances were  $36,526,000 for the first six
months in 2001  compared  to  $31,364,000  for the first six months of 2000,  an
increase of 16.5% or $5,162,000.  The average rate paid on these funds decreased
to 3.56% from 3.89%.



                                       11


         Interest bearing  transaction  accounts cost $123,000 for the first six
months in 2001  compared to the prior  year's  $147,000,  a decrease of 16.3% or
$24,000.  The volume of these deposits was  $23,063,000 for the first six months
in 2001  compared  to  $20,050,000  for the first six  months of 2000,  a 15% or
$3,013,000  increase.  The  average  rate paid on these  funds for the first six
months in 2001 decreased to 1.07% from 1.47% for the first six months of 2000.

         Time deposits cost $4,064,000 for the first six months of 2001 compared
to  $3,147,000  for the first six months of the prior year, an increase of 29.1%
or  $917,000.  The  volume  was  $135,934,000  for the first six  months in 2001
compared  to  $116,441,000  for the  first  six  months  of  2000,  a  16.7%  or
$19,493,000  increase.  The average rate paid on these funds  increased to 5.98%
for the first six  months in 2001 from  5.41% for the first six  months in 2000.
This increase runs contrary to market  interest  rates  nationally  but reflects
increased competition for deposits in the Corporation's local markets.

         Short-term borrowings consist of federal funds purchased and securities
sold under  agreements to  repurchase.  This is a relatively  small and volatile
part of the balance  sheet.  It cost  $149,000  for the first six months in 2001
compared  to $64,000  for the first six months of 2000,  an  increase of 133% or
$85,000.  The volume of these  funds was  $7,391,000  in the first six months of
2001 compared to $3,134,000 in the first six months of 2000, an increase of 136%
or  $4,257,000.  The average  rate paid on these funds  decreased  to 4.03% from
4.08%.

         Borrowings  from the Federal Home Loan Bank cost $596,000 for the first
six months in 2001  compared  to $526,000  for the first six months in 2000,  an
increase of 13.3% or $70,000.  The advances averaged $20,295,000 during the 2001
period compared to $18,311,000 for the prior year period,  a 10.8% or $1,984,000
increase. The average rate paid on these funds increased to 5.87% from 5.75%.

Non-Interest Income

         Non-interest income for the first six months of 2001 grew to $1,243,000
compared  to  $885,000  in the first six  months  of 2000,  a 40.5% or  $358,000
increase. Much of this increase resulted from the introduction of a new service,
an automated overdraft courtesy line for customers.

Non-Interest Expense

         For the first six months of 2001  non-interest  expenses  increased  to
$3,489,000 from $3,227,000 for the first six months of 2000, an 8.1% or $262,000
increase.  This  increase is related to higher  levels of business  activity and
included the following components:

         For the 2001  period,  personnel  costs  were  $2,102,000  compared  to
$1,892,000 for the 2000 period, an increase of 11.1% or $210,000;

         For the 2001 period,  premises and  equipment  expenses  were  $471,000
compared to $456,000 for the 2000 period, an increase of 3.3% or $15,000; and

         For the 2001 period, other costs were $916,000 compared to $879,000 for
the 2000 period, an increase of 4.2% or $37,000.


                                       12


Income Taxes

         CBI provided  $1,002,000  for federal and state income taxes during the
first six months of 2001  compared  to $820,000  for the same period in 2000,  a
22.2% or  $182,000  increase.  The  average  tax rate  for the 2001  period  was
approximately 35.4% and for the 2000 period it was approximately 35.7%.

RESULTS OF OPERATIONS FOR THE QUARTERS ENDED JUNE 30, 2001 AND 2000

Net Income

         For the quarter ended June 30, 2001, CBI earned a  consolidated  profit
of $930,000, compared to $783,000 for the comparable period of 2000, an increase
of 18.8% or  $147,000.  Basic  earnings  per share were $.29 in the 2001 period,
compared to $.25 for the 2000 period.  The changes in the items  comprising  net
interest income,  which are discussed below,  resulted from essentially the same
factors  discussed  above  regarding the results of operation for the six months
ended June 30, 2001.

Net interest income

         Net interest  income  before  provision for loan losses for the quarter
ended June 30, 2001, increased to $2,652,000 compared to $2,559,000 for the same
period  in  2000,  an  increase  of 3.6% or  $93,000.  For the same  period  the
provision for loan losses was $135,000 compared to $158,000 for the 2000 period,
a decrease of 14.6% or $23,000.

Interest Income

         Total  interest  income  for the  second  quarter  2001 was  $5,389,000
compared  with  $4,888,000  for the same  period  in 2000,  a 10.2% or  $501,000
increase.

         The loan  portfolio  earned  $4,525,000  for the  second  quarter  2001
compared  to  $4,033,000  for the  same  period  of 2000,  a 12.2%  or  $492,000
increase.

         The investment  portfolio  earned  $469,000 for the second quarter 2001
compared to $726,000 for the 2000 period, a 35.4% or $257,000 decrease.

         Interest  bearing deposits in other banks  contributed  $78,000 for the
second  quarter 2001  compared to $24,000  during the prior year, an increase of
225% or $54,000.

         Federal funds sold earned  $284,000 the second quarter of 2001 compared
to $74,000 the prior year, an increase of 284% or $210,000.

Interest expense

         Interest expense for the second quarter of 2001 was $2,737,000 compared
to the prior year's $2,329,000, a 17.5% or $408,000 increase.





                                       13


Non-interest income and expense

         Non-interest  income  for the 2001  period  was  $692,000  compared  to
$448,000 for the 2000 period,  a 54.5% or $244,000  increase.  This increase was
mostly the result of the  introduction of the new automated  overdraft  service.
Non-interest  expense was $1,777,000 compared to $1,627,000,  a 9.2% or $150,000
increase.

CHANGES IN FINANCIAL POSITION

Investment portfolio

         The  investment  portfolio is comprised of held to maturity  securities
and available  for sale  securities.  CBI and its three banks  usually  purchase
short-term  issues  (ten  years or less) of U. S Treasury  and U. S.  Government
agency  securities  for  investment  purposes.  At June  30,  2001,  the held to
maturity  portfolio totaled  $4,148,000  compared to $12,371,000 at December 31,
2000, a decrease of 66.5% or  $8,223,000.  At June 30, 2001,  the  available for
sale portfolio totaled $27,353,000 compared to $41,195,000 at December 31, 2000,
a decrease of 33.6% or $13,842,000. Most of the decline in the banks' investment
portfolios was due to the call of many securities during the first half of 2001,
which  resulted from the decline in bond market  interest  rates.  The following
chart  summarizes the  investment  portfolios at June 30, 2001, and December 31,
2000.



                                                                                           June 30, 2001
                                                                       Held to maturity                     Available for sale
                                                                  Amortized cost      Fair value       Amortized cost     Fair value
                                                                  --------------      ----------       --------------     ----------
                                                                                       (dollars in thousands)
                                                                                                                
U. S. Government and agencies .................................        $4,148            $4,152            $24,481          $24,561
Tax exempt securities .........................................             -                 -                804              811
Other equity securities .......................................             -                 -              1,981            1,981
                                                                       ------            ------            -------          -------
Total .........................................................        $4,148            $4,152            $27,266          $27,353
                                                                       ======            ======            =======          =======

Unrealized gain ...............................................       $     4                              $    87
                                                                      =======                              =======





                                                                                         December 31, 2000
                                                                       Held to maturity                     Available for sale
                                                                  Amortized cost      Fair value       Amortized cost     Fair value
                                                                  --------------      ----------       --------------     ----------
                                                                                       (dollars in thousands)
                                                                                                                
U. S. Government and agencies .................................         $12,371         $12,217             $38,599         $38,404
Tax exempt securities .........................................               -               -                 814             810
Other equity securities .......................................               -               -               1,981           1,981
                                                                        -------         -------             -------         -------
Total .........................................................         $12,371         $12,217             $41,394         $41,195
                                                                        =======         =======             =======         =======

Unrealized (loss) .............................................         $  (154)                            $  (199)
                                                                        =======                             =======





                                       14


Loan portfolio

         The loan portfolio is primarily  consumer and small business  oriented.
At June 30, 2001 the loan portfolio was $208,094,000 compared to $195,077,000 at
December  31,  2000,  a  6.7%  or  $13,017,000  increase.  The  following  chart
summarizes the loan portfolio at June 30, 2001 and December 31, 2000.


                                            Jun. 30, 2001      Dec. 31, 2000
                                            -------------      -------------
                                                 (dollars in thousands)
Real estate ...........................         $120,418            $113,543
Commercial ............................           56,863              52,264
Loans to individuals ..................           30,813              29,270
                                                --------            --------
Total .................................         $208,094            $195,077
                                                ========            ========



Past Due and Non-Performing Assets and the Allowance for Loan Losses

         CBI closely  monitors past due loans and loans that are in  non-accrual
status  and  other  real  estate  owned.  Below  is a  summary  of past  due and
non-performing assets at June 30, 2001 and December 31, 2000.

                                            Jun. 30, 2001          Dec. 31, 2000
                                            -------------          -------------
                                                    (dollars in thousands)
Past due 90 days + accruing loans ........      $145                      $93
Non-accrual loans ........................      $489                     $238
Impaired loans (included in nonaccrual) ..      $489                     $238
Other real estate owned ..................      $267                       $-

         Management  considers the past due and non-accrual  amounts at June 30,
2001 to be reasonable in relation to the size of the portfolio and manageable in
the normal course of business.  The increase in non-accrual assets is associated
with a  small  number  of  loans  and  is not  indicative,  in  the  opinion  of
management, of any trend.

         CBI had no restructured loans during any of the above listed periods.

Allowance for Loan Losses

         The Corporation  operates three independent  community banks in central
South  Carolina.  Under the  provisions  of the National  Bank Act each board of
directors is responsible  for  determining  the adequacy of its bank's loan loss
allowance.  In addition,  each bank is supervised and regularly  examined by the
Office of the Comptroller of the Currency of the U. S. Treasury Department. As a
normal part of a safety and soundness examination, the OCC examiners will assess
and comment on the adequacy of a national bank's allowance for loan losses.  The
allowance presented in this discussion is on an aggregated basis.

         The nature of community  banking is such that the loan  portfolios will
be predominantly comprised of small and medium size business and consumer loans.
As community banks, there is a natural geographic  concentration of loans within
the Banks' respective  cities or counties.  Management at each bank monitors the
loan  concentrations  and loan portfolio  quality on an ongoing basis including,
but not limited to: quarterly analysis of loan concentrations, monthly reporting


                                       15


of past dues,  non-accruals,  and watch loans,  and quarterly  reporting of loan
charge-offs and recoveries. These efforts focus on historical experience and are
bolstered by quarterly analysis of local and state economic conditions, which is
part of the Banks'  assessment  of the  adequacy  of their  allowances  for loan
losses.

         Management  reviews  its  allowance  for loan  losses  in  three  broad
categories:  commercial,  real estate and installment loans. However, management
does not  believe it would be useful to maintain a separate  allowance  for each
category. Instead management assigns an estimated risk percentage factor to each
category in the computation of the overall allowance. In general terms, the real
estate loan portfolio is subject to the least risk,  followed by the installment
loan  portfolio,  which in turn is followed  by the  commercial  portfolio.  The
Banks'  internal  and  external  loan  review  programs  will  from time to time
identify  loans that are subject to specific  weaknesses  and such loans will be
reviewed for a specific loan loss allowance.

         Based on the current levels of non-performing  and other problem loans,
management  believes that loan charge-offs in 2001 will at least approximate the
2000 levels as such loans progress  through the collection  process.  Management
believes that the  allowance for loan losses,  as of June 30, 2001 is sufficient
to absorb the  expected  charge-offs  and provide  adequately  for the  inherent
losses that remain in the loan  portfolio.  Management  will continue to closely
monitor the levels of non-performing and potential problem loans and address the
weaknesses  in these  credits to enhance  the amount of ultimate  collection  or
recovery  of these  assets.  Management  considers  the  levels  and  trends  in
non-performing  and past due loans in determining how historical loan loss rates
are adjusted.

         The aggregate  allowance for loan losses of the banks and the aggregate
activity with respect to those allowances are summarized in the following table.



                                                                     Six months ended            Year ended         Six months ended
(Dollars in thousands)                                                 June 30, 2001            Dec. 31, 2000        June 30, 2000
                                                                       -------------            -------------        -------------
                                                                                                               
Allowance at beginning of period ...........................               $ 2,424                 $ 1,936              $ 1,936
Provision expense ..........................................                   277                     688                  338
Net charge offs ............................................                   (66)                   (200)                (124)
                                                                           -------                 -------              -------
Allowance at end of period .................................               $ 2,635                 $ 2,424              $ 2,150
                                                                           =======                 =======              =======
Allowance / outstanding loans ..............................                    1.27%                   1.24%                1.16%



         In reviewing  the adequacy of the  allowance for loan losses at the end
of  each  period,  management  of  each  bank  considers  historical  loan  loss
experience,   current  economic   conditions,   loans  outstanding,   trends  in
non-performing  and  delinquent  loans,  and the quality of collateral  securing
problem  loans.  After  charging off all known  losses,  management of each bank
considers the allowance adequate to provide for estimated losses inherent in the
loan portfolio at June 30, 2001.

Deposits

         Deposits were $232,499,000 at June 30, 2001 compared to $218,811,000 at
December 31, 2000, an increase of 6.3% or $13,688,000.



                                       16


         Time deposits  greater than $100,000 were  $48,890,000 at June 30, 2001
compared  to  $38,702,000  at  December  31,  2000,  an  increase  of  26.3%  or
$10,188,000.

Liquidity

         Liquidity is the ability to meet current and future obligations through
liquidation  or maturity of existing  assets or the  acquisition  of  additional
liabilities.  Adequate  liquidity  is  necessary  to meet  the  requirements  of
customers for loans and deposit  withdrawals in a timely and economical  manner.
The most manageable  sources of liquidity are composed of liabilities,  with the
primary  focus of  liquidity  management  being the ability to attract  deposits
within the Orangeburg National Bank, Sumter National Bank, and Florence National
Bank service areas.  Core deposits (total deposits less  certificates of deposit
of $100,000 or more) provide a relatively  stable funding base.  Certificates of
deposit of $100,000 or more are generally more sensitive to changes in rates, so
they must be  monitored  carefully.  Asset  liquidity  is  provided  by  several
sources,  including amounts due from banks,  federal funds sold, and investments
available for sale.

         CBI and its banks maintain an available for sale and a held to maturity
investment  portfolio.  While all these investment securities are purchased with
the intent to be held to maturity, such securities are marketable and occasional
sales may occur prior to maturity as part of the process of asset/liability  and
liquidity  management.  Such sales will generally be from the available for sale
portfolio.  Management deliberately maintains a short-term maturity schedule for
its  investments so that there is a continuing  stream of maturing  investments.
CBI intends to maintain a short-term  investment  portfolio in order to continue
to be  able  to  supply  liquidity  to  its  loan  portfolio  and  for  customer
withdrawals.

         CBI has substantially more liabilities  (mostly deposits,  which may be
withdrawn) which mature in the next 12 months than it has assets maturing in the
same period.  However, based on its historical  experience,  and that of similar
financial  institutions,  CBI believes that it is unlikely that so many deposits
would be withdrawn,  without being replaced by other deposits, that CBI would be
unable to meet its liquidity needs with the proceeds of maturing assets.

         CBI through its banking subsidiaries also maintains federal funds lines
of credit with correspondent  banks, and is able to borrow from the Federal Home
Loan Bank and from the Federal Reserve's discount window.

         CBI through  its banking  subsidiaries  has a  demonstrated  ability to
attract deposits from its markets.  Deposits have grown from $30 million in 1989
to over $232  million  in 2001.  This base of  deposits  is the major  source of
operating liquidity.

         CBI's long term liquidity  needs are expected to be primarily  affected
by the maturing of long-term  certificates of deposit.  At June 30, 2001 CBI had
approximately  $24.6 million and $11.35 million in  certificates  of deposit and
other interest bearing  liabilities  maturing in one to five years and over five
years, respectively. CBI's assets maturing or repricing in the same periods were
$106.3 million and $36.6 million, respectively. CBI expects to be able to manage
its current balance sheet structure without  experiencing any material liquidity
problems.

         In the opinion of  management,  CBI's current and  projected  liquidity
position is adequate.



                                       17


Capital resources

         As  summarized  in the table  below,  CBI  maintains  a strong  capital
position.


                                                                                                                          Minimum
                                                                                                                        required for
                                                                                                                          capital
                                                                                    June 30, 2001    Dec. 31, 2000        adequacy
                                                                                    -------------    -------------        --------
                                                                                                                
Tier 1 capital to average total assets ...............................                  8.67%              8.20%            4.00%
Tier 1 capital to risk weighted assets ...............................                 11.89%             11.10%            4.00%
Total capital to risk weighted assets ................................                 13.07%             12.30%            6.00%


         In the opinion of management,  the Corporation's  current and projected
capital positions are adequate.

Dividends

         CBI  declared  and paid a  quarterly  cash  dividend of seven cents per
share  during the first and  second  quarters  of 2001.  The total cost of these
dividends was $447,000.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

         Achieving  consistent growth in net interest income is the primary goal
of the  Corporation's  asset/liability  function.  The  Corporation  attempts to
control the mix and maturities of assets and  liabilities to achieve  consistent
growth in net interest  income despite  changes in market  interest  rates.  The
Corporation seeks to accomplish this goal while maintaining  adequate  liquidity
and capital. The Corporation's  asset/liability mix is sufficiently  balanced so
that the effect of interest rates moving in either  direction is not expected to
be significant over time.

         The Corporation's  Asset/Liability Committee uses a simulation model to
assist in  achieving  consistent  growth in net interest  income while  managing
interest rate risk.  The model takes into account  interest rate changes as well
as changes in the mix and volume of assets and liabilities.  The model simulates
the  Corporation's  balance sheet and income  statement under several  different
rate  scenarios.  The model's inputs (such as interest rates and levels of loans
and  deposits)  are  updated  on a  quarterly  basis in order to obtain the most
accurate  projection  possible.  The  projection  presents  information  over  a
twelve-month  period. It reports a base case in which interest rates remain flat
and reports  variations  that occur when rates increase and decrease 100 and 200
basis  points.  According  to the model as of June 30, 2001 the  Corporation  is
positioned  so that net interest  income would be expected to increase  $303,000
and net income would be expected to increase  $186,000 in the next twelve months


                                       18


if interest rates rise 100 basis points.  Conversely,  net interest income would
be  expected  to decline  $303,000  and net income  would be expected to decline
$186,000 in the next twelve  months if interest  rates decline 100 basis points.
Computation of  prospective  effects of  hypothetical  interest rate changes are
based on numerous  assumptions,  including  relative  levels of market  interest
rates and loan prepayment, and should not be relied upon as indicative of actual
results.   Further,   the  computations  do  not  contemplate  any  actions  the
Corporation could undertake in response to changes in interest rates.

         As of June 30, 2001 there was no  significant  change from the interest
rate  sensitivity  analysis for the various changes in interest rates calculated
as of December 31, 2000. The foregoing disclosures related to the market risk of
the Corporation  should be read in connection with  Management's  Discussion and
Analysis of Financial  Position and Results of  Operations  included in the 2000
Annual Report on Form 10-K.


Part II--Other Information

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

CBI had an Annual Meeting of Shareholders on April 24, 2001

The following persons were elected to the Board for terms of three years:

Three year term: Anna O. Dantzler,  Richard L. Havekost, William H. Nock, Samuel
F. Reid, and William W. Traynham.

An  amendment  to the 1997 Stock Option Plan was  approved  that  increases  the
number of shares  reserved for issuance under the Plan and permits  non-employee
directors to participate in the Plan.

         The other item  approved  was the  ratification  of J. W. Hunt and Co.,
Certified  Public  Accountants,  as outside  auditors for CBI for the year ended
December 31, 2001.

The vote tally was as follows:



                                                     Total number of                      Voting
                                                         shares                        against or to                     Present at
                                                      eligible to                        withhold        Voting to       meeting and
                                                          vote         Voting for        authority         abstain       not voting
                                                          ----         ----------        ---------         -------       ----------
Election of directors
                                                                                                               
     Anna O. Dantzler .........................        3,198,757        2,202,304               0              0              0
     Richard L. Havekost ......................        3,198,757        2,203,505               0              0              0
     William H. Nock ..........................        3,198,757        2,203,925           6,550              0              0
     Samuel F. Reid ...........................        3,198,757        2,202,770               0              0              0
     William W. Traynham ......................        3,198,757        2,203,925               0              0              0

Amendment to option plan ......................        3,198,757        2,127,099          73,961          4,255              0

Ratification of J. W. Hunt ....................        3,198,757        2,202,004               0          3,311              0









                                       19


Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibit Index

Exhibit No.(from item 601 of S-B)            Description

     None.

b) Reports on Form 8-K.  None.


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.

                                                        DATED: August 13,  2001

COMMUNITY BANKSHARES, INC.

By:  s/  E. J. Ayers, Jr.,
    --------------------------------------------
         E. J. Ayers, Jr.,
         Chief Executive Officer

By:  s/  William W. Traynham
     -------------------------------------------
         William W. Traynham
         President and Chief Financial Officer
         (Principal Accounting Officer)




                                       20