Community Bankshares Inc. - SC - Announces 30.2% Increase in Earnings for Second Quarter of 2002.

Business Editors

ORANGEBURG, S.C.--(BUSINESS WIRE)--July 25, 2002

Growth In Non-Interest Income and Improving Margins

Helps to Drive Earnings

Community Bankshares Inc., (AMEX:SCB), announced consolidated net income of $1,211,000 or $.37 per share for the second quarter of 2002 compared to $930,000 or $.29 per share for the same quarter in 2001, an increase of $281,000 or 30.2%.

Consolidated net income for the six-months ended June 30, 2002 was $2,336,000 or $.71 per share, compared to $1,831,000 or $.57 per share for the same period in 2001, an increase of $505,000 or 27.6%.

"Non-interest income and improved margins were primary factors in the growth of earnings during the first half of 2002," said E. J. Ayers, Chairman and CEO of Community Bankshares. "Our largest bank, Orangeburg National Bank, was recently recognized as one of the best performing banks in its national peer group for return on equity. Sumter National Bank opened its first branch office earlier this year and is still increasing earnings compared to last year. Florence National Bank has crossed over $50 million in assets and will celebrate its fourth anniversary this summer. Community Resource Mortgage is actively growing its market presence in Columbia, Sumter and Anderson and is looking to grow elsewhere."

Ayers concluded, "We are delighted to tell you that on July 1, 2002 the Bank of Ridgeway, the oldest community bank in the state, became part of our corporate family. This acquisition brings $79 million in assets to the company, increasing Community Bancshares' total assets to more than $400 million. The acquisition of the Ridgeway bank and Community Resource Mortgage last year increases our presence in the fast growing I-77 corridor in the northern part of the Columbia metropolitan market. Our company is now represented in Orangeburg, Sumter, Florence, Columbia, Anderson, Ridgeway, Blythewood and Winnsboro. We are excited to be a part of all these South Carolina communities."

At June 30, 2002 consolidated assets for CBI totaled $326 million compared to $285 million at the same time in 2001, an increase of $41 million or 14.2%. Gross loans totaled $245 million compared to $208 million the prior year, an increase of $37 million or 17.9%. Deposits totaled $261 million compared to $232 million the prior year, an increase of $29 million or 12.1%.

Community Bankshares' 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 the Bank of Ridgeway, Community Resource Mortgage, Florence National Bank, Sumter National Bank, and Orangeburg National Bank.

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 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, and uncertainties associated with the development of technology. Investors are directed to the company's 2001 annual report, which is available from the company without charge for a more complete description of the company's business.

                   CONSOLIDATED FINANCIAL HIGHLIGHTS
                              (unaudited)

All amounts in thousands,
 except per share data

                                  Six months ended      Quarter ended
                                        June 30,            June 30,
Income statement summary           2002      2001       2002      2001
------------------------           ----      ----       ----      ----
Net interest income              $5,844    $5,356     $3,027    $2,652
Provision for loan losses        $  355    $  277     $  186    $  135
Non-interest income              $3,483    $1,243     $1,796    $  692

Non-interest expense             $5,322    $3,489     $2,744    $1,777
Income tax provision             $1,314    $1,002     $  682    $  502
   Net income                    $2,336    $1,831     $1,211    $  930
Basic earnings per common share:
   Average shares                 3,300     3,200      3,300     3,200
   Earnings per share            $ 0.71    $ 0.57     $ 0.37    $ 0.29
Diluted earnings per common share:
   Average shares                 3,405     3,218      3,383     3,217
   Earnings per share            $ 0.69    $ 0.57     $ 0.36    $ 0.29
Cash dividends per share         $ 0.16    $ 0.14     $ 0.08    $ 0.07


                                                       June 30,
Balance Sheet summary                            2002          2001
---------------------                            ----          ----
Gross loan                                  $245,290         $208,094
Total assets                                $325,693         $285,222
Total deposits                              $260,618         $232,499
Shareholders' equity                        $ 29,469         $ 24,750
Common shares outstanding                      3,304            3,204
Book value per share                        $   8.92         $   7.72