Community Bankshares Inc. (SC) Announces Mortgage Division Restructuring.

ORANGEBURG, S.C. -- Community Bankshares Inc., (AMEX:SCB), parent of Community Resource Bank, N.A. (the Bank), announced Friday that the Bank was restructuring its mortgage division, which operates as Community Resource Mortgage, resulting in the elimination of up to 14 jobs.

The reduction in staff results primarily from an exit from the wholesale mortgage brokerage business, which handled home mortgages originated through unaffiliated, outside brokers. Community Resource Mortgage will instead focus exclusively on direct-to-consumer lending through its offices and the bank's branch offices throughout central South Carolina and the Pee Dee.

The reduction in staff represents 40% of the mortgage division's employees and 6% of the bank's total number of employees. On a dollar basis, these reductions represent approximately $1 million of noninterest expense, which is approximately 8% of the Bank's annual compensation expense and approximately 5% of total annual noninterest expense.

Samuel L. Erwin, CEO of Community Bankshares and the Bank, stated, "The present economic environment presents significant challenges to the banking industry. In the face of these challenges it is important we continually analyze and adjust our approach to the business of banking. An ongoing and important part of that business is providing our customers with residential mortgage loans. Historically, we have provided direct-to-consumer mortgages through our branch offices and retail loan officers. We have also handled mortgages originated from outside, unaffiliated brokers through our wholesale division. We determined the returns and risks from the wholesale mortgage brokerage function did not justify that line of business. We regret the loss of jobs, but believe these changes will provide for less risk going forward and, in all probability, a less volatile earnings stream for the Bank."

Donna L. (Sissie) Childress, President of Community Resource Mortgage, a 30 year veteran of the industry, stated, "The best and worst thing about the mortgage business is its cyclical nature. Given that fundamental, the keys to long term survival and prosperity for mortgage lenders are to respond quickly and decisively to changing circumstances and, secondly, to do whatever you do extremely well - we cannot be all things to all people. That is why we are making these changes. Our restructured and refocused mortgage division has a group of top notch mortgage lenders that will ensure we continue to provide our retail customers with the highest quality mortgage products and services."

Community Bankshares, Inc.'s common stock is traded on the American Stock Exchange under the ticker symbol SCB. Community Bankshares Inc., based in Orangeburg, South Carolina, is the holding company for Community Resource Bank N.A.

This press release contains forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and several factors could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements relate to anticipated revenues, gross margins, earnings and profitability, adequacy of the allowance for loan losses, the probability of future large provisions to the allowance for loan losses, success of mortgage services marketing, improvement of mortgage services efficiency, and growth of the market for our services and products. The following factors, among others, could cause actual results to differ from those indicated in the forward-looking statements: uncertainties associated with market acceptance of and demand for the company's services and products, impact of competitive products and pricing, dependence on third party suppliers, changes in the economic circumstances of borrowers, deteriorations of the economies of the markets in which the company's customers are located, and uncertainties associated with the development of technology. Investors are directed to the company's 2006 annual report, which is available from the company without charge or from its website, www.communitybanksharesinc.com, for a more complete description of the company's business.