Edgar Filing: COMMUNITY BANKSHARES INC /SC/

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934.
(Amendment No. )

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14a-6(e)(2)
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COMMUNITY BANKSHARES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

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COMMUNITY BANKSHARES, INC.
791 Broughton Street
Post Office Box 2086
Orangeburg, South Carolina 29115

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held May 16, 2005

TO THE SHAREHOLDERS:

Notice is hereby given that the Annual Meeting of the Shareholders (the
"Annual Meeting") of Community Bankshares, Inc., a South Carolina corporation
(the "Company"), will be held at Orangeburg National Bank, 791 Broughton Street,
Orangeburg, South Carolina at 3:00 p.m., on Monday, May 16, 2005, for the
following purposes:

(1) To elect five directors to each serve three-year terms and one
director to serve a two year term; and

(2) To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.

Only record holders of Common Stock of the Company at the close of
business on March 25, 2005, are entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.

You are cordially invited and urged to attend the Annual Meeting in
person. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE. IF YOU NEED ASSISTANCE IN COMPLETING YOUR PROXY, PLEASE CALL THE
COMPANY AT (803) 535-1060 or (888) 329-1060. IF YOU ARE THE RECORD OWNER OF YOUR
SHARES AND ATTEND THE ANNUAL MEETING AND DESIRE TO REVOKE YOUR PROXY AND VOTE IN
PERSON, YOU MAY DO SO. IN ANY EVENT, A PROXY MAY BE REVOKED BY THE RECORD OWNER
OF SHARES AT ANY TIME BEFORE IT IS EXERCISED.

THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF ALL THE PROPOSALS PRESENTED.

By Order of the Board of Directors

William W. Traynham
President

Orangeburg, South Carolina
April 15, 2005

Community Bankshares, Inc.
791 Broughton Street
Post Office Box 2086
Orangeburg, South Carolina 29116-2086

PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
to be Held May 16, 2005

-------------------------------------------------

This Proxy Statement is furnished to shareholders of Community Bankshares,
Inc., a South Carolina corporation (herein, unless the context otherwise
requires, together with its subsidiaries, the "Company"), in connection with the
solicitation of proxies by the Company's Board of Directors for use at the
Annual Meeting of Shareholders to be held at Orangeburg National Bank, 791
Broughton Street, Orangeburg, South Carolina at 3:00 p.m. on Monday, May 16,
2005, or any adjournment thereof (the "Annual Meeting"), for the purposes set
forth in the accompanying Notice of Annual Meeting of Shareholders.

Solicitation of proxies may be made in person or by mail, telephone or
other electronic means by directors, officers and regular employees of the
Company. The Company may also ask banking institutions, brokerage firms,
custodians, nominees and fiduciaries to forward solicitation materials to the
beneficial owners of Common Stock of the Company held of record by such persons,
and the Company will reimburse the reasonable forwarding expenses. The cost of
solicitation of proxies will be paid by the Company. This Proxy Statement was
first mailed to shareholders on or about April 15, 2005.

The Company's principal executive offices are located at 791 Broughton
Street, Orangeburg, South Carolina 29115. The Company's telephone number is
(803) 535-1060 or (888) 329-1060.

ANNUAL REPORT

The Annual Report on Form 10-K covering the Company's fiscal year ended
December 31, 2004, including financial statements, constitutes the Company's
Annual Report to Shareholders and is included (without exhibits) with this Proxy
Statement. Such Annual Report does not form any part of the material for
solicitation of proxies.

REVOCATION OF PROXY

Any record shareholder who returns the accompanying proxy may revoke such
proxy at any time prior to its exercise (a) by giving written notice to the
Company of such revocation, (b) by voting in person at the meeting, or (c) by
executing and delivering to the Company a later dated proxy. Attendance at the
Annual Meeting will not in itself constitute revocation of a proxy. Any written
notice or proxy revoking a proxy should be sent to Community Bankshares, Inc.,
PO Box 2086, Orangeburg, South Carolina 29116-2086, Attention: William W.
Traynham, President. Written notice of revocation or delivery of a later dated
proxy will be effective upon receipt thereof by the Company.

QUORUM AND VOTING

The Company's only voting security is its no par value Common Stock
("Common Stock"), each share of which entitles the holder thereof to one vote on
each matter to come before the Annual Meeting. At the close of business on March
25, 2005, (the "Record Date"), the Company had issued and outstanding 4,403,016
shares of Common Stock, which were held of record by approximately 2,183
persons. Only shareholders of record at the close of business on the Record Date
are entitled to notice of and to vote on matters that come before the Annual
Meeting. Shares of the Common Stock may be transferred subsequent to the Record
Date. However, all votes must be cast in the names of holders of record on the
Record Date.

The presence in person or by proxy of the holders of one-third of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum at the Annual Meeting. If a share is
represented for any purpose at the Annual Meeting by the presence of the
registered owner or a person holding a valid proxy for the registered owner, it
is deemed to be present for the purposes of establishing a quorum. Therefore,
valid proxies which are marked "Abstain" or "Withhold" or as to which no vote is
marked, including proxies submitted by brokers that are the record owners of
shares (so-called "broker non-votes"), will be included in determining the
number of votes present or represented at the Annual Meeting. If a quorum is not
present or represented at the meeting, the shareholders entitled to vote,
present in person or represented by proxy, have the power to adjourn the meeting
from time to time, without notice other than an announcement at the meeting,
until a quorum is present or represented. Directors, officers and regular
employees of the Company may solicit proxies for the reconvened meeting in
person or by mail, telephone or other electronic means. At any such reconvened
meeting at which a quorum is present or represented, any business may be
transacted that might have been transacted at the meeting as originally noticed.

If a quorum is present at the meeting, directors will be elected by a
plurality of the votes cast by shares present and entitled to vote at the
meeting. "Plurality" means that if there are more nominees than positions to be
filled, the individuals who receive the largest number of votes cast for the
positions to be filled will be elected as directors. Votes that are withheld or
shares that are not voted in the election of directors will have no effect on
the outcome of election of directors. Cumulative voting will not be permitted.

If a quorum is present, all other matters which may be considered and
acted upon by the holders of Common Stock at the Annual Meeting will be approved
if the votes cast in favor of the proposal at the Annual Meeting exceed the
votes cast against the proposal.

ACTIONS TO BE TAKEN BY THE PROXIES

If the shareholder appropriately specifies how the proxy is to be voted,
it will be voted in accordance with the shareholder's specifications. If the
shareholder does not specify how the proxy is to be voted, the proxy will be
voted "FOR" the election of the persons named in this Proxy Statement as the
Board of Directors' nominees for election to the Board of Directors. As to any
other matter of business which may be brought before the Annual Meeting, a vote
may be cast pursuant to the accompanying proxy in accordance with the best
judgment of the persons voting the same, but the Board of Directors does not
know of any such other business.

SHAREHOLDER PROPOSALS

Any shareholder of the Company who wishes to present a proposal for action
at the 2006 Annual Meeting of Shareholders must deliver the proposal to the
executive offices of the Company, P.O. Box 2086, Orangeburg, South Carolina
29116, Attention: William W. Traynham, President. Any shareholder who wishes for
the Company to include any such proposal in its proxy statement and form of
proxy for the 2006 Annual Meeting of Shareholders must deliver the proposal to
the executive offices of the Company to Mr. Traynham's attention no later than
December 16, 2005. If any shareholder proposal is not received by Mr. Traynham
by March 1, 2006, proxies solicited by the Board of Directors of the Company
will be voted on the proposal in the discretion of the designated proxy agents.
Only proper proposals that are timely received will be included in the Company's
proxy statement and proxy.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 15, 2005, the number and
percentage of outstanding shares beneficially owned by (i) each director,
director nominee and ex officio director of the Company, (ii) each person named
in the Summary Compensation Table, and (iii) all executive officers and
directors of the Company as a group. No person is known by the Company to own
more than 5% of the outstanding Common Stock.

Position in the Company and Number of Shares % of Common
Name the Banks* Beneficially Owned Stock Ownership
---- --------------------------- ------------------ ---------------

E. J. Ayers, Jr. Director CBI, ONB and CRM; 96,280 (1) 2.19%
Chairman CBI and CRM

Keith W. Buckhouse President, CEO and Director
FNB*** 6,000 (2) **

Alvis J. Bynum Director CBI and SNB; Vice
Chairman CBI 32,685 (3) **

Martha Rose C. Carson Director CBI and ONB 66,629 (4) 1.51%

Anna O. Dantzler Director CBI and ONB 93,500 (5) 2.12%

A. Wade Douroux President, CEO and Director
CRM*** 69,818 (6) 1.59%

Thomas B. Edmunds Director CBI and BR 20,000 (7) **

Samuel L. Erwin CEO and Director, CBI 10,000 (8) **

Charles E. Fienning Director nominee for CBI,
Chairman SNB 16,198 (9) **

J. M. Guthrie Director CBI; Chairman ONB 170,000 (10) 3.86%

William A. Harwell President, CEO and Director,
BR*** 33,862 (11) **

Richard L. Havekost Director CBI and FNB 12,450 (12) **

Phil Peter Leventis Director CBI and SNB 41,523 (13) **

J. V. Nicholson, Jr. Director CBI, Chairman BR 135,000 (14) 3.07%

Samuel F. Reid, Jr. Director CBI and ONB 53,702 (15) 1.22%

Robert B. Smith President, CEO and Director
SNB*** 14,331 (16) **

William W. Traynham, Jr. President and CFO, CBI*** 65,511 (17) 1.48%

J. Otto Warren, Jr. Director CBI and ONB 176,519 (18) 4.01%

Wm. Reynolds Williams Chairman FNB, Director CBI 6,610 (19) **

Michael A. Wolfe President, CEO and Director,
ONB*** 59,801 (20) 1.35%

All executive officers and
directors as a group (20
persons) 1,180,419 (21) 25.86%

* CBI - the Company; ONB - Orangeburg National Bank; SNB - Sumter National
Bank; FNB - Florence National Bank; BR - Bank of Ridgeway; CRM - Community
Resource Mortgage
** Less than one percent.
*** Ex officio director of CBI

(1) Includes 1,680 shares owned by Nancy R. Ayers, Mr. Ayers' wife; 2,030
shares owned by an IRA for the benefit of Nancy R. Ayers; 1,680 shares
held by an IRA for the benefit of Mr. Ayers; and 5,000 shares subject
to stock options which are currently exercisable.
(2) Includes 5,000 stock options which are currently exercisable.
(3) Includes 5,874 shares owned by Marjorie F. Bynum, Mr. Bynum's wife; and
8,150 shares subject to stock options which are currently exercisable.
(4) Includes 10,250 shares subject to stock options which are currently
exercisable.
(5) Includes 10,500 shares held jointly with Charlton Ardis, Mrs.
Dantzler's son; and 10,250 shares subject to stock options which are
currently exercisable.
(6) Includes 5,000 stock options which are currently exercisable.
(7) Includes 10,000 shares held by Lucy Edmunds, Mr. Edmund's wife.
(8) Includes 10,000 stock options which are currently exercisable.
(9) Includes 4,993 shares owned by Suzanne S. Fienning, Mr. Fienning's
wife.
(10) Includes 159,750 shares owned jointly with Lou D. Guthrie, Mr.
Guthrie's wife; and 10,250 shares subject to stock options which are
currently exercisable.
(11) Includes 14,100 shares owned jointly with Kathryn Harwell, Mr.
Harwell's wife; 13,100 shares held in IRA's for benefit of Mr. Harwell;
and 5,000 shares subject to stock options which are currently
exercisable.
(12) Includes 4,050 stock options which are currently exercisable.
(13) Includes 8,510 owned by LPT Enterprises, a limited partnership; 24,863
shares held in IRA's for the benefit of Mr. Leventis; and 8,150 shares
subject to stock options that are currently exercisable.
(14) Includes 67,500 shares owned by Ellen Nicholson, Mr. Nicholson's wife.
(15) Includes 14,052 shares held by Mr. Reid as trustee for his children;
16,800 shares owned by Rosa G. Reid, Mr. Reid's wife; and 10,250 shares
subject to stock options which are currently exercisable.
(16) Includes 1,893 shares held in a retirement account for benefit of Mr.
Smith; and 12,433 shares subject to stock options which are currently
exercisable.
(17) Includes 18,436 shares owned jointly with Margaret S. Traynham, Mr.
Traynham's wife; 2,180 shares owned jointly with children; and 23,650
shares subject to stock options which are currently exercisable.
(18) Includes 53,010 shares owned by Mildred J. Warren, Mr. Warren's wife;
and 10,250 shares subject to stock options which are currently
exercisable.
(19) Includes 740 shares owned jointly with Mary T. Williams, Mr. Williams'
wife; and 4,050 shares subject to stock options which are currently
exercisable.
(20) Includes 2,301 shares owned by Mr. Wolfe's wife, Joye McGrady Wolfe, as
custodian for minor children; and 10,250 shares subject to stock
options which are currently exercisable.
(21) Includes 173,533 shares subject to stock options which are currently
exercisable.

ELECTION OF DIRECTORS

The Bylaws of the Company provide for a Board of Directors consisting of
not less than nine nor more than twenty-four directors divided into three
classes each serving three-year staggered terms. The number of directors is
currently fixed by the Board at thirteen. Four directors have been nominated for
re-election by the shareholders at the 2005 Annual Meeting to serve for
three-year terms, one new nominee has been nominated for election by the
shareholders to serve a three-year term, and one director has been nominated to
serve for a two year term. All directors serve until their successors are
elected and qualified to serve. All of the nominees, except Charles Fienning,
are presently directors of the Company and have served continuously since first
becoming directors. Mr. Fienning is Chairman of the Board of Sumter National
Bank, and was recommended to the Nominating Committee as a nominee by a
non-management director.

Should any of the nominees become unable or unwilling to serve upon
election, the proxy agents intend to vote for the election, in his or her stead,
of such other person or persons as the Board of Directors of the Company may
recommend. The Board of Directors has no reason to believe that any of the
proposed directors will be unable or unwilling to serve if elected.

MANAGEMENT
Directors

The table below sets forth the age, business experience for the past five
years, and term in office for each of the directors of the Company. Each of the
directors of the Company, except Mr. Erwin, is also a director of one or more of
the Company's subsidiaries as shown in the table on page 3. Mr. Erwin is an ex
officio, non-voting member of each bank subsidiary board and is a board member
of Community Resource Mortgage. There are no family relationships among any of
the directors or executive officers of the Company.

Name (and age) Director Since Business Experience During the Past 5 Years
-------------- --------------- -------------------------------------------

Nominees for Election to Serve Until 2008

Thomas B. Edmunds (67) 2002 Retired financial consultant, Merrill Lynch
Columbia, S.C.

Martha Rose C. Carson (69) 1987* President, Marty Rae, Inc.; apparel and furniture retailers
Orangeburg, S.C.

J. M. Guthrie (77) 1987* President, Superior Motors, Inc.; Vice President, Superior
Orangeburg, S.C. Honda car dealerships; Chairman of the Board of Directors of
Orangeburg National Bank since March 1998

Wm. Reynolds Williams (59) 1998 Attorney, Managing Partner, Willcox, Buyck & Williams,
Florence, S.C. P.A.; Chairman of the Board of Directors of Florence
National Bank since July 1998

Charles E. Fienning (61) President and Chief Executive Officer of Sumter Packaging
Sumter, S.C. Corporation since 1984; Chairman of the Board of
Directors of Sumter National Bank since March 2005.

Nominee for Election to Serve Until 2007

Samuel L. Erwin (37) 2005 Chief Executive Officer of the Company since January 2005;
Senior Vice President and Commercial Relationship Manager
for Carolina National Bank from June 2002 to December
2004; Senior Vice President and Market President for
First Union National Bank from January 2000 to June 2002.

Current Directors Whose Terms Expire in 2007

Anna O. Dantzler (65) 1994 Retired since 1989; former customer service representative
Orangeburg, S.C. for Orangeburg National Bank

Richard L. Havekost (64) 1998 Licensed professional engineer; Principal in Raldex, Inc.
Florence S.C. (investor in motel properties); Principal and Secretary
of RDBP, Inc. (retail beverage store); 1967-1993,
employed by Nucor Corp. in various capacities, including
Vice President of Nucor Corp. and General Manager of the
Florence Division

Samuel F. Reid, Jr. (56) 1994 Attorney, Horger, Barnwell & Reid
Orangeburg, S.C.

Current Directors Whose Terms Expire in 2006

E. J. Ayers, Jr. (72) 1987* Chairman of the Board of Directors of the Company since
Orangeburg, S.C. January, 1999; Chief Executive Officer of the Company
from January 1999 until December 2004; retired President,
C.M. Dukes Oil Co., oil distributor and auto parts supplier

Avis J. Bynum (67) 1996 Retired President, Cities Supply Co., waterwork supplies
Sumter, S.C. distributor

J. Otto Warren, Jr. (77) 1987* President, Warren and Griffin Lumber Co., Inc. and Home
Orangeburg, S.C. Builder's Supply Co., Inc., builders' supply and lumber
manufacturer

J. V. Nicholson, Jr. (60) 2002 Retired dentist; Chairman Bank of Ridgeway since 2001;
Ridgeway, S.C. Chairman Ridgeway Bankshares from 2001 to June 2002

--------------------
* Includes service as Director of Orangeburg National Bank prior to formation of
the Company in 1992.

Executive Officers

Information about Mr. Erwin, the Chief Executive Officer of the Company
is set forth above under "--Directors." Mr. Erwin and Mr. Traynham are the only
executive officers of the Company. Mr. Traynham (49) has served as President and
Chief Financial Officer of the Company since 1992.

Attendance at Meetings of the Board of Directors and Shareholder Meetings

The Board of Directors of the Company held 10 meetings during 2004.
Each director, except Wm. Reynolds Williams, attended at least 75% of the total
number of meetings of the Board of Directors and committees on which he or she
served during the period in 2004 for which he or she served as director.

The Company encourages, but does not require, its directors to attend
annual meetings of shareholders. Last year, 14 of the Company's 18 directors
attended the annual meeting of shareholders.

Board Member Independence

The American Stock Exchange's Listing Standards require that a majority
of the members of the Board of Directors be independent as defined by Section
121A of the Exchange's Listing Standards. The Company has determined that the
following directors are independent under the listing standards: Alvis J. Bynum,

Martha Rose C. Carson, Anna O. Dantzler, Thomas B. Edmunds, J. M. Guthrie,
Richard L. Havekost, Phil P. Leventis, J. V. Nicholson, Jr., Samuel F. Reid,
Jr., J. Otto Warren, and Wm. Reynolds Williams.

As part of a restructuring of its corporate governance, the Board of
Directors decided in 2004 to reduce the number of members of the Board who are
employed by the Company or any of its subsidiaries. Accordingly, effective
January 31, 2005, William W. Traynham, William A. Harwell, Robert B. Smith,
Michael A. Wolfe, A. Wade Douroux, and Keith W. Buckhouse resigned as members of
the Board of Directors of the Company. Mr. Traynham continues to serve as
president of the Company, and each of Messrs. Harwell, Smith, Wolfe, Douroux and
Buckhouse continues to serve as president of one of the Company's subsidiaries.
The Board has also appointed each of these persons to serve as a non-voting ex
officio director of the Company. The Board believes that these changes in its
governance structure provide the Company with the benefit of having a Board
comprised almost entirely of non-employee directors (Samuel L. Erwin, the Chief
Executive Officer, is the only remaining employee director), while at the same
time retaining access to the collective experience, knowledge and advice of the
Company's president and the presidents of its subsidiaries.

Committees of the Board of Directors

Audit Committee

The Company has an Audit Committee established in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee
is comprised of Alvis J. Bynum, Thomas B. Edmunds (chairman), Anna O. Dantzler,
Richard L. Havekost, and J. V. Nicholson, Jr., all of whom are non-employee
directors. Each member of the Audit Committee is independent as defined in
Section 121A of the American Stock Exchange's listing standards, as modified or
supplemented, and also meets the independence standards of the Securities and
Exchange Commission's Rule 10A-3(b). The Audit Committee is responsible for
appointment of the independent auditors and oversees the internal and external
audit function. The Audit Committee met eight times in 2004. The Audit Committee
acts pursuant to a written charter adopted by the Board of Directors, a copy of
which was attached to the 2004 Proxy Statement.

Compensation Committee

The Company has a Compensation Committee comprised of Wm. Reynolds
Williams, J. M. Guthrie, Samuel F. Reid, J. V. Nicholson and Alvis J. Bynum
(chairman). Each member of the Compensation Committee is independent as defined
in Section 121A of the American Stock Exchange's listing standards, as modified
or supplemented. The Compensation Committee makes recommendations to the Board
of Directors concerning the compensation for the senior officers of the Company.
The Compensation Committee met five times during 2004.

Governance and Nominating Committee

The Board of Directors formed a separate Governance and Nominating
committee in December 2004, which did not meet during 2004. The committee
operates pursuant to a charter approved by the Board of Directors, a copy of
which is available on the Company's website at www.communitybanksharesinc.com.
The Committee is comprised of Alvis J. Bynum, Martha Rose Carson, Thomas B.
Edmunds, Richard L. Havekost, and Samuel F. Reid (chairman). Each member of the
Governance and Nominating Committee is independent as defined in Section 121A of
the American Stock Exchange's listing standards, as modified or supplemented.

In recommending director candidates, the Committee takes into
consideration such factors as it deems appropriate based on the Company's
current needs. These factors generally include diversity, age, skills such as
understanding of banking and general finance, decision-making ability,
inter-personal skills, experience with businesses and other organizations of
comparable size, community activities and relationships, commitment to a
significant financial investment in the Company, and the interrelationship
between the candidate's experience and business background and other Board
members' experience and business background, as well as the candidate's ability
to devote the required time and effort to serve on the Board.

The Committee will consider for nomination by the Board director
candidates recommended by shareholders if the shareholders comply with the

following requirements. If a shareholder wishes to recommend a candidate to the
Committee for consideration as a Board of Directors' nominee, such shareholder
must submit in writing to the Committee the recommended candidate's name, a
brief resume setting forth the recommended candidate's business and educational
background and qualifications for service, and a notarized consent signed by the
recommended candidate stating the recommended candidate's willingness to be
nominated and to serve. This information must be delivered to the Chairman of
the Committee at the Company's address and must be received no later than
January 15 in any year for a potential candidate to be considered as a potential
Board of Directors' nominee. The Committee may request further information if it
determines a potential candidate may be an appropriate nominee. Director
candidates recommended by shareholders that comply with these requirements will
receive the same consideration that the Committee's candidates receive.

Director candidates recommended by shareholders will not be considered
for recommendation by the Committee as potential Board of Directors' nominees if
the shareholder recommendations are received later than January 15 in any year.
However, shareholders may nominate director candidates for election at the
annual meeting, but no person who is not already a director may be elected at an
annual meeting of shareholders unless that person is nominated in writing at
least 30 days prior to the meeting. Such nominations, other than those made by
or on behalf of the existing management of the Company, must be made in writing
and must be delivered or mailed to the President of the Company, not less than
30 days prior to any meeting of Shareholders called for the election of
Directors. Nominations not made in accordance with this requirement may be
disregarded by the presiding officer of the meeting, and upon his instructions,
the vote tellers shall disregard all votes cast for each such nominee.

Shareholder Communications with the Board of Directors

Any shareholder who wishes to send communications to the Board of
Directors should mail them addressed to the intended recipient by name or
position in care of: Corporate Secretary, Community Bankshares, Inc., PO Box
2086, Orangeburg, South Carolina 29116. Upon receipt of any such communications,
the Corporate Secretary will determine the identity of the intended recipient
and whether the communication is an appropriate shareholder communication. The
Corporate Secretary will send all appropriate shareholder communications to the
intended recipient. An "appropriate shareholder communication" is a
communication from a person claiming to be a shareholder in the communication
the subject of which relates solely to the sender's interest as a shareholder
and not to any other personal or business interest.

In the case of communications addressed to the Board of Directors, the
Corporate Secretary will send appropriate shareholder communications to the
Chairman of the Board. In the case of communications addressed to the
independent or outside directors, the Corporate Secretary will send appropriate
shareholder communications to the Chairman of the Audit Committee. In the case
of communications addressed to committees of the Board, the Corporate Secretary
will send appropriate shareholder communications to the Chairman of such
committee.

MANAGEMENT COMPENSATION

Executive Officer Compensation

The following table summarizes for the years ended December 31, 2004,
2003 and 2002 the compensation awarded to, earned by or paid to the Chairman and
Chief Executive Officer of the Company, the President of the Company and to the
current chief executive officers of the Company's subsidiaries who earned, were
awarded or paid compensation greater than $100,000 in 2004.

Summary Compensation Table

Long-Term
Compensation
------------
Awards
Annual ------
Compensation(1) Securities
--------------- Underlying All Other
Year Salary Bonus Options Compensation (2)
---- ------ ----- ------- ----------------

E. J. Ayers, Jr. (3) 2004 $ 86,000 $10,569 - $3,346
Chairman of Community Bankshares; Chief 2003 82,000 25,554 5,000 2,460
Executive Officer 2002 82,000 28,182 - 2,460

William W. Traynham 2004 $139,000 $50,000 - $5,432
President of Community Bankshares 2003 135,000 42,072 5,000 4,333
2002 135,000 46,396 - 4,050

Michael A. Wolfe 2004 $139,000 $50,000 - $5,463
President and Chief Executive Officer of 2003 135,000 42,072 5,000 4,050
Orangeburg National Bank 2002 135,000 46,396 - 4,050

Robert B. Smith (4) 2004 $136,415 $12,000 10,000 $4,407
President and Chief Executive Officer of 2003 130,000 9,640 3,500 4,189
Sumter National Bank 2002 120,500 8,840 3,880

Keith Buckhouse (5) 2004 $112,493 $14,236 10,000 $ -
President and Chief Executive Officer of
Florence National Bank

William A. Harwell (6) 2004 $139,000 $17,083 - $4,170
President and Chief Executive Officer of 2003 135,000 42,072 5,000 3,248
Bank of Ridgeway 2002 67,500 23,198 - 4,098

A. Wade Douroux 2004 $125,000 $ - - $3,750
President and Chief Executive Officer 2003 125,000 98,000 5,000 3,248
Community Resource Mortgage Inc 2002 96,000 85,396 - 2,750

(1) Perquisites and other personal benefits paid to each such person did not
exceed in the aggregate the lesser of $50,000 or 10% of his annual salary
and bonus.
(2) This column sets forth Company contributions made on behalf of the named
executive officers to the 401(k) plan maintained by the Company for all
eligible employees.
(3) Mr. Ayers retired as CEO of the Company in December 2004, but he continues
to serve as Chairman of the Board in 2005.
(4) Mr. Smith became president of the Sumter bank on June 25, 2004. Prior to
that time, he was the senior loan officer for the bank.
(5) Mr. Buckhouse became an officer of the Company March 1, 2004.
(6) Mr. Harwell became an officer of the Company July 1, 2002.

Option Grants in Fiscal 2004

Individual Grants(1)
--------------------
Potential realizable
Number of % of Total value at assumed
Securities Options annual rates of stock
Underlying Granted to Exercise price appreciation for
Options Employees Price Expiration option term
Name Granted in 2004 (per share) Date -----------
---- ------- ------- ----------- ---- 5% 10%
-- ---

Robert B. Smith (1) 10,000 37% $17.30 7/26/2014 $108,799 $275,717
Keith Buckhouse (2) 10,000 37% $17.90 3/29/2014 $112,572 $285,280

(1) The options were granted at the fair market price on July 26, 2004, the
date of the grant, become exercisable on July 26, 2005, and expire on
July 26, 2014.
(2) The options were granted at the fair market price on March 29, 2004,
the date of the grant, became exercisable on March 29, 2005, and expire
on March 29, 2014.

Aggregated Option Exercises in 2004 and 2004 Year End Option Values

The following table sets forth information about stock options held at
December 31, 2004 by the executive officers listed in the Summary Compensation
Table. No options were exercised in 2004.

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options 12/31/04 Options 12/31/04(1)
---------------- -------------------
Name Exercisable(2) Unexercisable Exercisable Unexercisable
---- -------------- ------------- ----------- -------------

E. J. Ayers 15,250 - $ 65,217 $ -
Keith W. Buckhouse 5,000 5,000 2,000 2,000
A. Wade Douroux 5,000 - - -
William A. Harwell 5,000 - - -
Robert B. Smith 12,433 10,000 67,485 10,000
William W. Traynham 23,650 - 154,938 -
Michael A. Wolfe 23,650 - 154,938 -

----------------------
(1) Based on a fair value of $18.30 per share, the closing price of a share of
the Company's common stock on December 31, 2004.
(2) The table below summarizes the number of options held by each officer, the
option price and the vesting dates.

Number
of
Optionee Options Option Price Vesting Date
-------- ------- ------------ ------------

E. J. Ayers 5,250 $12.83 2/17/2000
5,000 $11.00 2/26/2002
5,000 $18.85 10/27/2004

Keith W. Buckhouse 10,000 $17.90 3/29/2005

A. Wade Douroux 5,000 $18.85 10/27/2004

William A. Harwell 5,000 $18.85 10/27/2004

Robert B. Smith 2,520 $ 7.62 4/27/1998
3,413 $12.83 2/17/2000
3,000 $11.00 2/26/2002
3,500 $18.85 10/27/2004
10,000 $17.30 7/26/2005

William W. Traynham 8,400 $ 7.62 4/27/1998
5,250 $12.83 2/17/2000
5,000 $11.00 2/26/2002
5,000 $18.85 10/27/2004

Michael A. Wolfe 8,400 $ 7.62 4/27/1998
5,250 $12.83 2/17/2000
5,000 $11.00 2/26/2002
5,000 $18.85 10/27/2004

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee for the year ended December
31, 2004 were Richard L. Havekost, Chair, Alvis J. Bynum, Thomas B. Edmunds, J.
M. Guthrie, Phil P. Leventis, J. V. Nicholson, Samuel F. Reid and Wm. Reynolds
Williams.

The law firm of Horger, Barnwell & Reid, L.L.P., in which Samuel F.
Reid is a partner, provided legal services to the Company in 2004, and is
continuing to provide legal services to the Company in 2005. The law firm of
Willcox, Buyck & Williams, P.A. in which Wm. Reynolds Williams is a member,
provided legal services to the Company in 2004, and is continuing to provide
legal services to the Company in 2005.

Board Report on Executive Officer Compensation

The Compensation Committee is required to report to the shareholders
the basis for the Compensation Committee's action in establishing compensation
for Community Bankshares' and its subsidiaries' executive officers.

The Community Bankshares compensation program is designed to retain and
reward executive officers that are capable of leading Community Bankshares in
achieving its business objectives in an industry characterized by complexity,
competitiveness and change. The compensation of Community Bankshares' and its
subsidiaries' executive officers is reviewed and approved annually by the
Compensation Committee.

Annual compensation for Community Bankshares' Chief Executive Officer
and other senior executive officers consists of three elements.

o A base salary that is determined by individual contribution
and performance, and which is designed to provide a base level
of compensation comparable to that provided key executives of
other financial institutions of similar size and performance.

o A short-term cash incentive program that is directly linked to
individual performance and to Community Bankshares'
performance. One-half of the officer's incentive is determined
by the applicable subsidiary and one-half by Community
Bankshares. Incentive payments for the President and the Chief
Executive Officer of Community Bankshares are determined by
the Board of Directors of Community Bankshares.

o A long-term incentive program that provides from time to time
stock options to executive officers. Stock option grants
provide an incentive that focuses the executive's attention on
managing Community Bankshares from the perspective of a
stockholder with an equity stake in the business. The economic
value of any stock option granted is directly tied to the
future performance of Community Bankshares' stock and will
provide value to the recipient only when the price of
Community Bankshares' stock increases over the option grant
price.

For Community Bankshares' key executives, base salary is targeted to
approximate average salaries for individuals in similar positions with similar
levels of responsibilities who are employed by other banking organizations of
similar size and financial performance. During 2004, Community Bankshares set
the base salary for Mr. Ayers, who was then the Chief Executive Officer, at
$86,000. During 2004 the Committee set the base salary for each of Mr. Wolfe,
President of Orangeburg National Bank, Mr. Smith, President of Sumter National
Bank, Mr. Harwell, President of the Bank of Ridgeway, Mr. Buckhouse, President
of Florence National Bank, and Mr. Traynham, President of Community Bankshares
at $139,000.

The Compensation Committee annually reviews national, regional,
statewide, and local peer group salary data (to the extent available) to assist
it in setting appropriate levels of the Chief Executive Officer's and other
executive officers' base salaries. A second factor considered by the
Compensation Committee in setting and adjusting base salary was Community
Bankshares' 2004 financial performance. For purposes of computing the size of
the bonus pool, the Committee annually sets a base level of consolidated income
before taxes, which was $5.9 million for 2004. Income earned above that level is
multiplied by a factor of 4.5% to determine the amount available for incentive
payments to senior officers. This performance indicator is updated annually
based on current economic conditions and expectations.

For Community Bankshares' key executives, the Compensation Committee
considered cash incentive bonuses based on 2004 results payable in 2005 that
ranged to over 36% of base salary. The plan is designed so that over time
incentive payments may be as much as 40% of base pay. For purposes of
determining the cash incentive bonus payable during 2005 for 2004, Community
Bankshares considered actual operating results and individual performances of
the involved officers. After deliberation, the committee decided that the loan
losses incurred during 2004 were primarily associated with the actions of one
former loan officer and they elected to alter the computation by adding back $2
million to the formula (the effect of which would be to add $90,000 to the bonus
pool) for purposes of computing individual officer bonus amounts. They further
decided to recognize individual performance on the part of Messrs. Wolfe and
Traynham by authorizing payments beyond the parameters of the revised formula.
The Committee completed its recommendations and the Boards of Directors approved
them in January 2005.

During 2005, Mr. Smith was paid a bonus for 2004 performance of $12,000
- $8,542 was associated with his tenure as President of the Sumter bank, the
balance was associated with his service as the bank's senior credit officer; Mr.
Buckhouse was paid a bonus of $14,236; Mr. Harwell was paid a bonus of $17,083;
Mr. Wolfe was paid a bonus of $50,000; Mr. Traynham was paid a bonus of $50,000;
and Mr. Ayers was paid a bonus of $10,569. Mr. Buckhouse assumed his office in
March 2004. Mr. Smith assumed his office in June 2004.

Further, during 2004 the Board of Community Bankshares approved the
grant of 10,000 stock options each to Messrs. Buckhouse and Smith, in
conjunction with their assumption of their banks' presidencies.

This report is provided as a summary of current Board practice with
regard to annual compensation review and authorization of executive officer
compensation and with respect to specific action taken for the Chief Executive
Officer.

Richard L. Havekost, Chairman Phil P. Leventis
Alvis J. Bynum J. V. Nicholson, Jr.
Thomas B. Edmunds Samuel F. Reid, Jr.
J. M. Guthrie Wm. Reynolds Williams

Shareholder Return Performance Graph

The Company is required to provide its shareholders with a line graph
comparing the Company's cumulative total shareholder return with a performance
indicator of the overall stock market and either a published industry index or a
Company-determined peer comparison. Shareholder return (measured through
increases in stock price and payment of dividends) is often a benchmark used in
assessing corporate performance and the reasonableness of compensation paid
executive officers.

The performance graph below compares the Company's cumulative total
return over the most recent five year period with the Russell 2000 Index
(reflecting overall stock market performance for small cap stocks) and the SNL
Southeast Bank Index (reflecting changes in banking industry stocks in the
southeastern U. S.), and a peer group index consisting of all the publicly
traded banks and thrifts in South Carolina. Returns are shown on a total return
basis, assuming the reinvestment of dividends and a beginning stock index price
of $100 per share The total five year return was calculated for each of the
banks in the peer group taking into consideration changes in stock price, cash
dividends, stock dividends and stock splits since December 31, 1999. The
individual results were then weighted by the market capitalization of each bank
relative to the entire peer group. Values presented for the Company are based on
transactions as reported through the American Stock Exchange

The peer group consists of the following South Carolina publicly traded
financial institutions: .

Company City State
------- ---- -----
SCBT Financial Corporation Columbia SC
Community Capital Corp. Greenwood SC
South Financial Group, Inc. (The) Greenville SC
First Citizens Bancorporation, Inc. Columbia SC
First Community Corporation Lexington SC
Peoples Bancorporation, Inc. Easley SC
Southcoast Financial Corporation Mt. Pleasant SC
Union Financial Bancshares, Incorporated Union SC
Summit Financial Corporation Greenville SC
Greenville First Bancshares, Inc. Greenville SC
HCSB Financial Corporation Loris SC
Community First Bancorporation Walhalla SC
First South Bancorp, Inc. Spartanburg SC
First Reliance Bancshares, Inc. Florence SC
Beach First National Bancshares, Inc. Myrtle Beach SC
First National Bancshares, Inc. Spartanburg SC
Greer Bancshares Incorporated Greer SC
Grandsouth Bancorporation Greenville SC
Bank of South Carolina Corporation Charleston SC
Coastal Banking Company, Inc. Beaufort SC
People's Community Capital Corporation Aiken SC
New Commerce BanCorp Greenville SC
Security Federal Corporation Aiken SC
Coastal Financial Corporation Myrtle Beach SC
First Financial Holdings, Inc. Charleston SC
Great Pee Dee Bancorp, Inc. Cheraw SC

Community Bankshares, Inc.

Period Ending
-------------
Index 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
----- -------- -------- -------- -------- -------- --------

Community Bankshares, Inc. 100.00 90.53 109.62 139.83 169.23 164.44
Russell 2000 100.00 96.98 99.39 79.03 116.38 137.71
SNL Southeast Bank Index 100.00 100.41 125.09 138.18 173.52 205.78
Community Bankshares Peer Group 100.00 85.67 111.50 135.49 182.77 215.69

Employment Agreements

The Company has entered into employment agreements with its Chief
Executive Officer, Samuel L. Erwin, its President, William W. Traynham, and each
of the presidents of its subsidiaries, Keith W. Buckhouse, A. Wade Douroux,
William A. Harwell, Robert B. Smith, and Michael A. Wolfe. Each agreement was
for an initial term of three years (except Mr. Harwell's, which was for an
initial term of five years), and, at the end of the initial term, each agreement
automatically renews for an additional year unless notice that it will not renew
is given as provided in the agreement. Each agreement provides for a base
salary; eligibility for bonuses and participation in incentive compensation
plans as determined by the Board; benefits such as club dues, 401(k) plan
participation and contribution matching, health and dental insurance,
reimbursement of employment related expenses, vacation, and participation in
other benefits generally provided to Company employees. In addition, Mr. Erwin's
agreement provides for the granting of stock options, an automobile allowance,
and life insurance. Each agreement has terms dealing with payments to the
executives upon termination under various circumstances, including upon a change
of control of the Company, and terms dealing with noncompetition and
confidentiality of Company information.

The foregoing descriptions of the Employment Agreements are merely
summaries of such agreements and are qualified in their entirety by reference to
the agreements, which are included in the Company's filings with the Securities
and Exchange Commission.

Director Compensation

Community Bankshares Inc. paid directors' fees of $400 per month during
2004. Orangeburg National Bank and Sumter National Bank paid directors' fees of
$600 per month during 2004. Florence National Bank paid directors' fees of $500
per month during 2004. The Bank of Ridgeway paid directors' fees of $500 per
month during 2004. Community Resource Mortgage Inc. paid directors' fees of $200
per month during 2004. The Company and its subsidiaries only pay directors' fees
to outside directors. The foregoing directors' fees totaled $298,000 for
Community Bankshares Inc. and its subsidiaries in 2004.

1997 Stock Option Plan

The 1997 Stock Option Plan, as amended, reserves a total of 785,600
shares for issuance under the Plan. Options may be granted pursuant to the plan
to persons who are employees of the Company or any subsidiary (including
officers and directors who are employees) at the time of grant. At December 31,
2004, the Company and its subsidiaries had 182 employees. Non-employee directors
are also permitted to participate in the Plan. Such non-employee directors are
only eligible to be granted non-qualified stock options.

All incentive stock options must have an exercise price not less than
the fair market value of the Common Stock at the date of grant, as determined by
the Board of Directors. Non-qualified options will have such exercise prices as
may be determined by the Board of Directors at the time of grant, and such
exercise prices may be less than fair market value. The Board of Directors may
set other terms for the exercise of the options but may not grant to any one
holder more than $100,000 of incentive stock options (based on the fair market
value of the optioned shares on the date of the grant of the option) which first
become exercisable in any calendar year. The Board of Directors also selects the
employees to receive grants under the plan and determines the number of shares
covered by options granted under the plan. No options may be exercised after ten
years from the date of grant, options may not be transferred except by will or
the laws of descent and distribution, and options may be exercised only while
the optionee is an employee of the Company, within three months after the date
of termination of employment, or within twelve months of death or disability.
The number of shares reserved for issuance under the Plan, the number of shares
covered by outstanding options, the exercise price and the exercise date of
options will be adjusted in the event of changes in the number of outstanding
shares of common stock effected without receipt of consideration by the Company.
The Board of Directors may amend, suspend or terminate the Plan, but may not
increase (except as discussed above) the maximum number of shares reserved for
issuance under the Plan, or materially modify the eligibility requirements under
the Plan without shareholder approval or ratification. The plan will terminate
on March 16, 2007, and no options will be granted thereunder after that date.

As of March 16, 2005, there were outstanding incentive options to
purchase 320,735 shares and nonqualified options to purchase 149,850 shares. The
market value of the Common Stock on March 16, 2005 was $18.05 per share.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The banks have loan and deposit relationships with some of the
directors of the Company and some of the directors of the subsidiaries of the
Company and with companies with which the directors are associated as well as
members of the immediate families of the directors ("Affiliated Persons"). (The
term "members of the immediate families" for purposes of this paragraph includes
each person's spouse, parents, children, siblings, mothers and fathers-in-law,
sons and daughters-in-law, and brothers and sisters-in-law.) The total loans
outstanding to these parties at December 31, 2004, were $6,795,000. Loans to
Affiliated Persons were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not, at the time they were made involve more than the normal risk of
collectibility or present other unfavorable features.

The law firm of Horger, Barnwell & Reid, L.L.P. in which Samuel F.
Reid, a director of the Company, is a partner, provided legal services to the
Company in 2004, and is continuing to provide legal services to the Company in
2005. The law firm of Willcox, Buyck & Williams, P.A. in which Wm. Reynolds
Williams, a director of the Company, is a member also provided legal services to
the Company in 2004, and is continuing to provide legal services to the Company
in 2005.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE

As required by Section 16(a) of the Securities Exchange Act of 1934,
the Company's directors, its executive officers and certain individuals are
required to report periodically their ownership of the Company's Common Stock
and any changes in ownership to the Securities and Exchange Commission. Based on
a review of Forms 3, 4 and 5 and written representations made to the Company, it
appears that all such reports for these persons were filed in a timely fashion
during 2004, except Messrs. Traynham, Wolfe, Leventis and Williams were each
late in filing a Form 5 with respect to one transaction. It is the Company's
practice to assist directors with filing of Section 16(a) reports.

INDEPENDENT PUBLIC ACCOUNTANTS

The Audit Committee has appointed J. W. Hunt & Company, LLP,
independent certified public accountants, as independent auditors for the
Company and its subsidiaries for the current fiscal year ending December 31,
2005. A representative of J. W. Hunt & Company, LLP is expected to be present at
the 2005 Annual Meeting and will be given the opportunity to make a statement on
behalf of the firm if he or she so desires, and will respond to appropriate
questions from shareholders.

Fees Billed by Independent Auditors

The following table sets forth the aggregate fees billed by J.W. Hunt &
Company, LLP, the Company's independent auditors for audit services rendered in
connection with the consolidated financial statements and reports for the fiscal
years ended December 31, 2004 and December 31, 2003, and for other services
rendered during fiscal years 2004 and 2003, on behalf of the Company and its
subsidiaries, as well as all out-of-pocket costs incurred in connection with
these services, which have been billed to the Company.

Fee Category 2004 % of Total 2003 % of Total
------------ ---- ---------- ---- ----------

Audit Fees $ 94,700 83% $ 92,050 80%
Audit-Related Fees 7,550 7% 12,900 11%
Tax Fees:
Tax compliance/preparation 11,550 10% 10,200 9%
Other tax services
- -
------ ------
Total Tax Fees 11,550 10% 10,200 9%
------ ------
All Other Fees
- -
------ ------

Total Fees $113,800 100% $115,150 100%
======== ========

Total Fees

Audit Fees: Audit fees include fees billed for professional services
rendered for the audit of the Company's consolidated financial statements and
review of the interim condensed consolidated financial statements included in
quarterly reports, and services that are normally provided by the Company's
independent auditor in connection with statutory and regulatory filings or
engagements, and attest services, except those not required by statute or
regulation.

Audit-Related Fees: Audit-related fees include fees billed for
assurance and related services that are reasonably related to the performance of
the audit or review of the Company's consolidated financial statements and are
not reported under "Audit Fees". These services include employee benefit plan
audits, attest services that are not required by statute or regulation,

consultations concerning financial accounting and reporting standards, and
agreed upon procedures required by various government agencies, such as the
Federal Home Loan Bank or the Department of Housing and Urban Development.

Tax Fees: Tax fees include fees for tax compliance/preparation and
other tax services. Tax compliance/preparation fees include fees billed for
professional services related to federal and state tax compliance.

All Other Fees: All other fees would include fees for services other
than those reported above. No other services were provided by J.W. Hunt &
Company, LLP in either year.

In making its decision to appoint J.W. Hunt & Company, LLP as the
Company's independent auditors for the fiscal year ending December 31, 2005, the
Audit Committee considered whether services other than audit and audit-related
services provided by that firm are compatible with maintaining the independence
of J.W. Hunt & Company, LLP.

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors

The Audit Committee pre-approves all audit and permitted non-audit
services (including the fees and terms thereof) provided by the independent
auditors, subject to possible limited exceptions for non-audit services
described in Section 10A of the Securities Exchange Act of 1934, which are
approved by the Audit Committee prior to completion of the audit. The Committee
may delegate to one or more designated members of the Committee the authority to
pre-approve audit and permissible non-audit services, provided such pre-approval
decision is presented to the full Committee at its next scheduled meeting.

General pre-approval of certain audit, audit-related and tax services
is granted by the Committee at the first quarter Audit Committee meeting. The
Committee subsequently reviews fees paid. Specific pre-approval is required for
all other services, of which there were none during the year. During 2004, all
audit and permitted non-audit services were pre-approved by the Committee.

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors has reviewed and
discussed with management the Company's audited financial statements for the
year ended December 31, 2004. The Audit Committee has discussed with the
Company's independent auditors, J. W. Hunt & Company, LLP, the matters required
to be discussed by Statement on Auditing Standards 61, as modified or
supplemented. The Audit Committee has also received the written disclosures and
the letter from J. W. Hunt & Company, LLP, required by Independence Standards
Board Standard No. 1, as modified or supplemented, and has discussed with J. W.
Hunt & Company, LLP, their independence. Based on the review and discussions
referred to above, the Audit Committee recommended to the Board of Directors
that the audited financial statements be included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2004 for filing with the Securities
and Exchange Commission.

Alvis J. Bynum Richard L. Havekost
Anna O. Dantzler J. V. Nicholson, Jr.
Thomas B. Edmunds, Chair

AVAILABILITY OF ANNUAL REPORT ON FORM 10-K

A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 2004, including financial statements (but not including exhibits),
is being provided free of charge with this Proxy Statement to each shareholder
of record. Copies of exhibits to the Form 10-K will be provided upon written
request to William W. Traynham, President, Community Bankshares, Inc., Post
Office Box 2086, Orangeburg, South Carolina 29116, at a charge of 20(cent) per
page. Copies of the Form 10-K and exhibits may also be downloaded from the
Securities and Exchange Commission website at http://www.sec.gov. The 10-K is
also available on the Company's website at www.communitybanksharesinc.com.

REFERENCES TO OUR WEBSITE ADDRESS

References to the Company's website address throughout this Proxy
Statement and the accompanying materials are for informational purposes only, or
to fulfill specific disclosure requirements of the Securities and Exchange
Commission's rules or the American Stock Exchange. These references are not
intended to, and do not, incorporate the contents of our website by reference
into this Proxy Statement or the accompanying materials.

OTHER BUSINESS

The Board of Directors of the Company does not know of any other
business to be presented at the Annual Meeting. If any other matters are
properly brought before the Annual Meeting, however, it is the intention of the
persons named in the accompanying proxy to vote such proxy in accordance with
their best judgment.

PROXY

COMMUNITY BANKSHARES, INC.

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS - Monday, May 16, 2005

E. J. Ayers and William W. Traynham or either of them, with full power of
substitution, are hereby appointed as agent(s) of the undersigned to vote as
proxies all of the shares of Common Stock of Community Bankshares, Inc. held of
record by the undersigned on the Record Date at the Annual Meeting of
Shareholders to be held on May 16, 2005, and at any adjournment thereof, as
follows:

1. Election of [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
Directors. below to vote for all nominees
listed below

[ ] WITHHOLD AUTHORITY only on the following nominees:

_____________________________________________________

Instructions: To withhold authority to vote for any
individual(s), write the nominee's(s') name(s) on the
line above.

NOMINEES: Three Year Terms: Thomas B. Edmunds, Martha Rose C. Carson, J. M.
Guthrie, Wm. Reynolds Williams and Charles E.
Fienning

Two Year Term: Samuel L. Erwin

2. And, in the discretion of said agents, upon such other business as may
properly come before the meeting, and matters incidental to the conduct of
the meeting. (Management at present knows of no other business to be
brought before the meeting.)

THE PROXIES WILL BE VOTED AS INSTRUCTED. IF NO CHOICE IS INDICATED WITH RESPECT
TO A MATTER WHERE A CHOICE IS PROVIDED, THIS PROXY WILL BE VOTED "FOR" SUCH
MATTER.

Please sign exactly as name appears below. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title. If more than one
trustee, all should sign. All joint owners must sign.

Dated: _______________, 2005 _________________________________________

_________________________________________