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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


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

    For the quarterly period ended March 31, 1997

                                       OR

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



                          Commission File Number 0-7163


                          AMERICAN FILTRONA CORPORATION
                                  (Registrant)



            Virginia                                        54-0574583
    (State of incorporation)                             (I.R.S. employer
                                                        identification no.)


  3951 WESTERRE PARKWAY, SUITE 300
  RICHMOND, VIRGINIA                                                  23233
        (Executive offices)                                        (Zip code)



Registrant's telephone number:  804-346-2400



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 at least the past 90 days. Yes. X No.



Number of shares of common stock outstanding as of May 6, 1997: 3,816,629




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<PAGE>
                          AMERICAN FILTRONA CORPORATION




                                      INDEX



                                                                        Page No.
                                                                        --------

          Part I. Financial Information

            Condensed Consolidated Balance Sheet                          3

            Condensed Consolidated Statement of Income                    4

            Condensed Consolidated Statement of Cash Flows                5

            Notes to Condensed Consolidated Financial
              Statements                                                  5

            Management's Discussion and Analysis of
              Financial Statements                                        6


          Part II. Other Information                                      7

          Signatures                                                      7



















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<PAGE>
                          PART I. FINANCIAL INFORMATION

                          AMERICAN FILTRONA CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEET
                March 31, 1997 (Unaudited) and December 31, 1996
<TABLE>
<CAPTION>


                                                             1997             1996
                                                          -----------      -----------
                           ASSETS
<S> <C>
Current assets
   Cash and equivalents                                  $ 44,197,689     $ 43,267,438
   Accounts receivable                                     21,048,142       17,573,501
   Inventories                                             18,293,910       18,621,047
   Prepaid expenses and deferred income taxes               3,243,314        2,889,743
                                                         ------------     ------------
      Total current assets                                 86,783,055       82,351,729

Property, plant and equipment                              27,073,032       27,699,964

Other assets
   Excess cost over net assets of businesses acquired       4,585,196        4,692,821
   Notes receivable                                         2,434,843        2,434,843
   Other assets                                               354,376          374,536
                                                         ------------     ------------
                                                            7,374,415        7,502,200
                                                         ------------     ------------
                                                         $121,230,502     $117,553,893
                                                         ============     ============



            LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
   Accounts payable                                      $ 14,469,086     $ 15,342,954
   Accrued expenses                                         5,047,745        5,165,485
   Income taxes                                             2,824,969        1,367,795
                                                         ------------     ------------
      Total current liabilities                            22,341,800       21,876,234

Other liabilities
   Deferred income taxes                                    1,046,647          516,417
   Other liabilities                                          354,191        1,764,276
                                                         ------------     ------------
                                                            1,400,838        2,280,693

Shareholders' equity
   Common stock, $1 par value                               3,816,629        3,754,758
   Additional capital                                       2,542,910          926,673
   Retained earnings                                       92,238,150       89,703,400
   Cumulative translation adjustment                       (1,109,825)        (987,865)
                                                         ------------     ------------
                                                           97,487,864       93,396,966
                                                         ------------     ------------
                                                         $121,230,502     $117,553,893
                                                         ============     ============
</TABLE>


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<PAGE>

                          AMERICAN FILTRONA CORPORATION

                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
               Three-Month Periods Ended March 31, 1997 and 1996
                                   (Unaudited)




                                                      1997             1996
                                                   -----------      -----------

          Revenues
             Net sales                             $52,966,728      $47,700,214
             Investment income                         368,431          329,985
                                                   -----------      -----------
                                                    53,335,159       48,030,199

          Costs and expenses
             Cost of products sold                  41,784,987       38,459,662
             Selling, research,
              administrative and
              general                                5,896,761        5,187,476
                                                   -----------      -----------
                                                    47,681,748       43,647,138
                                                   -----------      -----------

          Income before income taxes                 5,653,411        4,383,061

          Income taxes                               2,050,000        1,550,000
                                                   -----------      -----------

          Net income                               $ 3,603,411      $ 2,833,061
                                                   ===========      ===========

          Average shares outstanding                 3,805,358        3,737,391

          Earnings per share                              $.95            $ .76

          Dividends per share                             $.28            $.265











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<PAGE>
                          AMERICAN FILTRONA CORPORATION

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
               Three-Month Periods Ended March 31, 1997 and 1996
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                              1997            1996
                                                          -----------     -----------
<S> <C>
Operating
   Net income                                             $ 3,603,411     $ 2,833,061
   Reconciling items
      Depreciation and amortization                         1,488,919       1,515,984
      Deferred income taxes                                   254,999        (245,571)
      (Decrease) from noncash working capital              (2,760,277)     (1,904,386)
      Other - net                                          (1,449,820)        145,656
                                                          -----------     -----------
                                                            1,137,232       2,344,744

Investing
   Acquisitions of property, plant and equipment             (816,428)     (1,388,286)


Financing
   Issuance of common stock                                 1,678,109          87,900
   Repurchase of common stock                                       -         (20,981)
   Dividends paid                                          (1,068,662)       (990,118)
                                                          -----------     -----------
                                                              609,447        (923,199)
                                                          -----------     -----------
Net increase in cash and equivalents                      $   930,251     $    33,259
                                                          ===========     ===========
</TABLE>



              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A. BASIS OF PRESENTATION

The accompanying  unaudited condensed  consolidated financial statements include
all adjustments (consisting only of normal recurring accruals) which the Company
considers  necessary  to  present  fairly  the  financial  position,  results of
operations, and cash flows for the interim periods.

The results of operations  for the  three-month  period ended March 31, 1997 are
not necessarily indicative of the results to be expected for the entire year.

The financial  statements have been prepared in accordance with  instructions to
Form 10-Q and, therefore, do not include all information and notes necessary for
a fair presentation in conformity with generally accepted accounting principles.
For additional  information regarding significant  accounting policies and other
financial data see the Company's December 31, 1996 Form 10-K.







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<PAGE>

NOTE B. MERGER OF COMPANY

On February 19, 1997 the Company entered into a definitive merger agreement with
WBT Holdings,  LLC (WBT Holdings),  a limited liability company owned by several
trusts  of which a  director  of the  Company  is a  co-trustee.  The  agreement
provides for a merger between the Company and a  wholly-owned  subsidiary of WBT
Holdings in which  shareholders  of the Company (except for WBT Holdings and its
affiliates)  will  receive a per share  cash price of $46.52.  In  addition  WBT
Holdings  has  executed a definitive  acquisition  agreement  with Bunzl plc, an
international  paper and plastics  group  quoted on the London  Stock  Exchange,
pursuant to which, following the merger, the Company will sell its bonded fibers
business to Bunzl plc for $72,450,000 in cash,  subject to certain  adjustments.
Consummation of any transaction would be subject to normal  regulatory  filings,
shareholder approval, and certain other conditions.

NOTE C. INVENTORIES

At March 31, 1997 and December 31, 1996 inventories consisted of (in thousands):

                                                            1997        1996
                                                            ----        ----
FIFO
   Finished products                                      $11,006     $10,522
   Work in process                                          1,444       1,448
   Raw materials                                            8,360       9,098
                                                          -------     -------
                                                           20,810      21,068
Less excess of FIFO over LIFO
   inventory value                                          2,516       2,447
                                                          -------     -------
                                                          $18,294     $18,621
                                                          =======     =======


Inventories stated at LIFO approximated $9,210 (1996 - $9,103).


          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS

The Company has entered into a definitive  merger  agreement  which provides for
its  shareholders  to receive a per share  cash  price of $46.52  (see Note B of
Notes to Condensed Consolidated Financial Statements).

BALANCE SHEET

The Company's  strong  financial  condition and liquidity were maintained in the
1997 first  quarter.  Cash and  equivalents  represented  36% of total assets at
March 31, 1997 compared to 37% at December 31, 1996. The ratio of current assets
to current liabilities was 3.9 at March 31, 1997 compared to 3.8 at December 31,
1996.  The accounts  receivable  increase from the  historically  lower year-end
amount reflects the higher level of business activity in the quarter. The change
in other  liabilities  arose  primarily from the January,  1997  distribution of
performance  shares for the  three-year  period ended  December 31, 1996 and the
adjustment of related deferred income taxes.


INCOME STATEMENT

Comparison Between Three-Month Periods Ended March 31, 1997 and 1996

Net sales  increased  11%  between the first  quarters of each year.  The bonded
fibers  segment  had  higher  sales  in  each of its  product  lines  with  very
significant  increases in tobacco filters and diagnostic test device components.

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<PAGE>

The  plastic  products  segment  growth  resulted  from a solid  increase by the
plastic  extrusion  companies which more than offset the expected lower sales of
the Canadian flexible packaging company. Investment income increased 12% between
the first quarters primarily as a result of the higher level of investments.

Cost of products sold increased 9% while selling,  research,  administrative and
general  expenses  increased  at a somewhat  higher rate.  However,  the overall
increase was also 9% for total costs and expenses.

Bonded fibers segment operating  earnings  increased very  substantially for the
1997  first  quarter  because  of  the  higher  sales  and  improved   operating
efficiencies.  The plastic  products segment recorded a strong rise in operating
earnings.  Overall  performance of the plastic extrusion companies was very good
and the Canadian flexible packaging company posted a profit compared to a modest
loss in 1996's first quarter.  The  combination of these factors  produced a 29%
increase in pretax income.

Income taxes increased 32% reflecting the higher level of income and estimate of
the effective tax rate for 1997. Therefore,  net income and related earnings per
share increased by 27% and 25%.


                           PART II. OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

     (b) Reports on Form 8-K -- The Company filed Current Reports on Form 8-K on
         February 14, 1997 and February 28, 1997.




                                   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.




                                    AMERICAN FILTRONA CORPORATION
                                             (Registrant)





Date       May 6, 1997               /s/ John D. Barlow, Jr.
                                    -------------------------------------------
                                    John D. Barlow, Jr., Vice President-Finance
                                             (Chief Financial Officer)



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