UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
      of 1934 For the Quarterly Period Ended March 31, 2000


[   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the Transition Period from           to
                                                            -------     --------

      Commission File Number:   0-22445
                                -------

                          FIRSTSPARTAN FINANCIAL CORP.
             (Exact name of Registrant as specified in its charter)

           Delaware                                      56-2015272
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


             380 East Main Street, Spartanburg, South Carolina 29302
                     (Address of principal executive office)

                                 (864) 582-2391
                         (Registrant's telephone number)

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  [   ]



Indicate the number of shares  outstanding  of each of the  issuer's  classes of
Common Stock, as of the latest practicable date.

          Common Stock Outstanding: 3,746,270 shares as of May 5, 2000.



<PAGE>

                  FIRSTSPARTAN FINANCIAL CORP. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                Table of Contents

                                                                                             Page
<S>        <C>                                                                              <C>
Part I.    Financial Information
-------    ---------------------

Item 1.    Financial Statements (unaudited)

           Consolidated Balance Sheets at March 31, 2000 and June 30, 1999                      1

           Consolidated Statements of Income for the Three- and Nine-Month Periods
           Ended March 31, 2000 and 1999                                                        2

           Consolidated Statements of Stockholders' Equity for the Nine-Month Periods
           Ended March 31, 2000 and 1999                                                        3

           Consolidated Statements of Cash Flows for the Nine-Month Periods Ended
           March 31, 2000 and 1999                                                             4-5

           Notes to Consolidated Financial Statements                                           6

Item 2.    Management's  Discussion  and Analysis of Financial  Condition and
           Results of Operations                                                               7-13

Item 3.    Quantitative and Qualitative Disclosures About Market Risk                           13

Part II.   Other Information
--------   -----------------

Item 1.    Legal Proceedings                                                                    14

Item 2.    Changes in Securities and Use of Proceeds                                            14

Item 3.    Default Upon Senior Securities                                                       14

Item 4.    Submission of Matters to a Vote of Security Holders                                14-15

Item 5.    Other Information                                                                    15

Item 6.    Exhibits and Reports on Form 8-K                                                     15

Signatures                                                                                      16
</TABLE>


<PAGE>
ITEM 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                 FirstSpartan Financial Corp. and Subsidiaries
                          Consolidated Balance Sheets
                             (Dollars In Thousands)
                                   (Unaudited)
                                                                                     March 31,                  June 30,
Assets                                                                                 2000                       1999
                                                                                  ----------------           ----------------
<S>                                                                              <C>                        <C>
   Cash                                                                          $          13,881           $         14,638
   Federal funds sold and overnight interest-bearing deposits                                6,062                     43,782
                                                                                  ----------------            ---------------
             Total cash and cash equivalents                                                19,943                     58,420
   Investment securities available-for-sale - at fair value (amortized cost:
      $33,976 and $23,489 at March 31, 2000 and June 30, 1999, respectively)                33,527                     23,344
   Mortgage-backed securities held-to-maturity - at amortized cost (fair value:
      $31 and $55 at March 31, 2000 and June 30, 1999, respectively)                            30                         54
   Loans receivable, net                                                                   491,836                    435,181
   Loans held-for-sale - at lower of cost or market (market value: $1,704
       and $9,089 at March 31, 2000 and June 30 1999, respectively)                          1,685                      8,984
   Office properties and equipment, net                                                     10,310                     10,370
   Federal Home Loan Bank of Atlanta stock  - at cost                                        3,612                      3,612
   Accrued interest receivable                                                               4,121                      3,203
   Real estate acquired in settlement of loans                                                 213                        348
   Other assets                                                                              7,310                      2,209
                                                                                  ----------------            ---------------

                Total Assets                                                     $         572,587           $        545,725
                                                                                  ================            ===============
Liabilities and Stockholders' Equity

   Liabilities:
     Deposit accounts                                                            $         417,832           $        406,011
     Advances from borrowers for taxes and insurance                                           734                      1,004
     Advances from Federal Home Loan Bank of Atlanta                                        70,000                     34,000
     Other borrowings                                                                        9,079                     35,000
     Other liabilities                                                                       5,583                      3,669
                                                                                  ----------------            ---------------
                Total liabilities                                                          503,228                    479,684
                                                                                  ----------------            ---------------
   Stockholders' Equity:
     Preferred stock, $0.01 par value:
       Authorized - 250,000 shares;  none issued or outstanding
          at March 31, 2000 and June 30, 1999                                                   --                         --
     Common stock, $0.01 par value:
       Authorized - 12,000,000 shares;  issued: 4,430,375 at March 31,
          2000 and June 30, 1999; outstanding:  3,787,970
          at March 31, 2000 and June 30, 1999                                                   44                         44
     Additional paid-in capital                                                             42,850                     42,648
     Retained earnings                                                                      56,899                     54,905
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                              <C>                        <C>
     Treasury stock - at cost (642,405 shares at
          March 31, 2000 and June 30, 1999)                                                (20,955)                   (20,955)
     Unearned restricted stock                                                              (3,792)                    (4,660)
     Unallocated ESOP stock                                                                 (5,408)                    (5,851)
     Accumulated other comprehensive loss                                                     (279)                       (90)
                                                                                  ----------------            ---------------
                Total stockholders' equity                                                  69,359                     66,041
                                                                                  ----------------            ---------------

                Total Liabilities and Stockholders' Equity                       $         572,587           $        545,725
                                                                                  ================            ===============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       1

<PAGE>
<TABLE>
<CAPTION>
                FirstSpartan Financial Corp. and Subsidiaries
                       Consolidated Statements of Income
                 (Dollars In Thousands, Except Per Share Data)
                                  (Unaudited)


                                                                 Three Months Ended                  Nine Months Ended
                                                                       March 31,                         March 31,
                                                           -------------------------------   -------------------------------
                                                                2000            1999             2000             1999
                                                           ---------------  --------------   --------------   --------------
<S>                                                       <C>              <C>              <C>              <C>
Investment Income:
   Interest on loans                                      $          9,520  $         8,751   $      27,523   $       26,079
   Interest and dividends on investment securities,
     mortgage-backed securities, and other                             713             796            2,546            2,780
                                                           ---------------  --------------   --------------   --------------
          Total investment income                                   10,233            9,547          30,069           28,859
                                                           ---------------  --------------   --------------   --------------


Interest Expense:
   Deposit accounts                                                  4,285           4,138           12,652           12,726
   Other borrowings                                                    137              --              368               --
   Federal Home Loan Bank of Atlanta advances                          869             357            2,374            1,004
                                                           ---------------  --------------   --------------   --------------
          Total interest expense                                     5,291           4,495           15,394           13,730
                                                           ---------------  --------------   --------------   --------------

Net Interest Income                                                  4,942           5,052           14,675           15,129

Provision for Loan Losses                                              200             200              467              600
                                                           ---------------  --------------   --------------   --------------

Net Interest Income After Provision for Loan Losses                  4,742           4,852           14,208           14,529
                                                           ---------------  --------------   --------------   --------------

Non-interest Income:
    Service charges and fees                                           761             537            2,227            1,503
    Gain on sale of mortgage loans                                      40             366              218            1,025
    Other, net                                                         162             181              568              430
                                                           ---------------  --------------   --------------   --------------
          Total non-interest income, net                               963           1,084             3,013           2,958
                                                           ---------------  --------------   --------------   --------------

Non-interest Expense:
    Employee compensation and benefits                               1,882           1,780            5,649            5,274
    Federal deposit insurance premium                                   48              82              218              245
    Occupancy and equipment expense                                    392             378            1,171            1,105
    Computer services                                                  150             126              446              321
    Advertising and promotions                                         125             143              374              429
    Office supplies, postage, printing, etc.                           217             208              574              570
    Other                                                              490             491            1,595            1,347
                                                           ---------------  --------------   --------------   --------------
          Total non-interest expense                                 3,304           3,208           10,027            9,291
                                                           ---------------  --------------   --------------   --------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                       <C>              <C>              <C>              <C>
Income Before Income Taxes                                           2,401           2,728            7,194            8,196

Provision for Income Taxes                                             964           1,117            2,862            3,303
                                                           ---------------  --------------   --------------   --------------

Net Income                                                $          1,437  $        1,611   $        4,332   $        4,893
                                                           ===============  ==============   ==============   ==============

Basic and Diluted Earnings Per Share                      $           0.43  $         0.46   $         1.29   $         1.32
                                                           ===============  ==============   ==============   ==============

Weighted Average Shares Outstanding                              3,374,280       3,484,336        3,363,135        3,717,550
                                                           ===============  ==============   ==============   ==============
</TABLE>

See accompanying notes to consolidated financial statements.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                  FirstSpartan Financial Corp. and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
                  For Nine Months Ended March 31, 2000 and 1999
                        (In Thousands Except Share Data)

                                                  Common Stock          Additional                                 Unearned
                                             ------------------------    Paid-In       Retained      Treasury     Restricted
                                                Shares       Amount      Capital       Earnings       Stock         Stock
                                             ------------  ----------  ------------  ----------   ------------   ------------

<S>                                            <C>        <C>         <C>           <C>          <C>             <C>
Balance, June 30, 1998                         4,253,160  $       44  $     87,624  $   52,662   $     (8,113)   $        --
                                             ------------  ----------  ------------  ----------   ------------   ------------

Net income                                            --          --            --       4,893             --             --
Unrealized loss on securities
 available-for-sale, net of taxes                     --          --            --          --             --             --
                                             ------------  ----------  ------------  ----------   ------------   ------------
     Total comprehensive income                       --          --            --       4,893             --             --
                                             ------------  ----------  ------------  ----------   ------------   ------------
Issuance of treasury stock to MRDP               177,215          --          (670)         --          8,113         (7,443)
ESOP stock committed for release                      --          --           279          --             --             --
Purchase of treasury stock                      (642,405)         --            --          --        (20,955)            --
Dividends ($0.55 per share)                           --          --            --      (2,035)            --             --
Prorata vesting of restricted stock                   --          --            --          --             --          1,081
                                             ------------  ----------  ------------  ----------   ------------   ------------

Balance, March 31, 1999                        3,787,970  $       44  $     87,233  $   55,520   $    (20,955)   $    (6,362)
                                             ============  ==========  ============  ==========   ============   ============



Balance, June 30, 1999                         3,787,970  $       44  $     42,648  $   54,905   $    (20,955)   $    (4,660)
                                             ------------  ----------  ------------  ----------   ------------   ------------

Net income                                            --          --            --       4,332             --             --
Unrealized loss on securities
 available-for-sale, net of taxes                     --          --            --          --             --             --
                                             ------------  ----------  ------------  ----------   ------------   ------------
     Total comprehensive income                       --          --            --       4,332             --             --
                                             ------------  ----------  ------------  ----------   ------------   ------------
ESOP stock committed for release                      --          --           202          --             --             --
Dividends ($0.70 per share)                           --          --            --      (2,338)            --             --
Prorata vesting of restricted stock                   --          --            --          --             --            868
                                             ------------  ----------  ------------  ----------   ------------   ------------

Balance, March 31, 2000                        3,787,970  $       44  $     42,850  $   56,899   $    (20,955)   $    (3,792)
                                             ============  ==========  ============  ==========   ============   ============

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                  FirstSpartan Financial Corp. and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
                  For Nine Months Ended March 31, 2000 and 1999
                        (In Thousands Except Share Data)
                                                              Accumulated
                                                                 Other
                                               Unallocated    Comprehen-      Total
                                                   ESOP          sive      Stockholders'
                                                  Stock          Loss        Equity
                                              -------------  ------------  ----------

<S>                                          <C>            <C>           <C>
Balance, June 30, 1998                       $     (6,442)  $       (14)  $   125,761
                                              -------------  ------------  -----------

Net income                                              --            --        4,893
Unrealized loss on securities
 available-for-sale, net of taxes                       --           (22)         (22)
                                              -------------  ------------  -----------
     Total comprehensive income                         --           (22)       4,871
                                              -------------  ------------  -----------
Issuance of treasury stock to MRDP                      --            --           --
ESOP stock committed for release                       443            --          722
Purchase of treasury stock                              --            --      (20,955)
Dividends ($0.55 per share)                             --            --       (2,035)
Prorata vesting of restricted stock                     --            --        1,081
                                              -------------  ------------  -----------

Balance, March 31, 1999                       $     (5,999)  $       (36)  $  109,445
                                              =============  ============  ===========



Balance, June 30, 1999                        $     (5,851)  $       (90)  $   66,041
                                              -------------  ------------  -----------

Net income                                              --            --        4,332
Unrealized loss on securities
 available-for-sale, net of taxes                       --          (189)        (189)
                                              -------------  ------------  -----------
     Total comprehensive income                         --          (189)       4,143
                                              -------------  ------------  -----------
ESOP stock committed for release                       443            --          645
Dividends ($0.70 per share)                             --            --       (2,338)
Prorata vesting of restricted stock                     --            --          868
                                              -------------  ------------  -----------

Balance, March 31, 2000                       $     (5,408)  $      (279)  $   69,359
                                              =============  ============  ===========
</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>
                 FirstSpartan Financial Corp. and Subsidiaries
                     Consolidated Statements of Cash Flows
                             (Dollars In Thousands)
                                   (Unaudited)
                                                                                      Nine Months Ended
                                                                                           March 31,
                                                                                 ---------------------------
                                                                                     2000             1999
                                                                                 ------------    ------------
<S>                                                                            <C>            <C>
Cash Flows from Operating Activities:
    Net income                                                                 $      4,332   $       4,893
    Adjustments to reconcile net income to net
       cash provided by operating activities:
       Provision for loan losses                                                        467             600
       Deferred income tax provision (benefit)                                           60            (443)
       Amortization of deferred income                                                  (35)           (419)
       Amortization of loan servicing assets                                            143              87
       (Accretion) amortization of  (discounts) premiums on
          investment and mortgage-backed securities                                     (25)              5
       Depreciation                                                                     619             588
       Allocation of ESOP stock at fair value                                           645             722
       Prorata vesting of restricted stock                                              868           1,081
       Loss on disposal of property and equipment                                        --              13
       Gain on sale of real estate acquired in settlement of loans                      (20)             --
       Decrease (increase) in loans held-for-sale                                     7,299          (4,054)
       Increase in other assets                                                      (6,162)         (1,292)
       Increase (decrease) in other liabilities                                       1,699            (531)
                                                                                ------------    -----------
               Net cash provided by operating activities                              9,890           1,250
                                                                                ------------    -----------

Cash Flows from Investing Activities:
     Net loan originations and principal collections                                (14,559)         31,387
     Purchases of loans                                                             (42,742)        (50,084)
     Purchases of investment securities available-for-sale                          (10,463)        (13,471)
     Proceeds from maturities of investment securities available-for-sale                --           2,500
     Principal repayments and proceeds from maturities of mortgage-
        backed securities                                                                25              28
     Purchase of Federal Home Loan Bank of Atlanta stock                                 --            (166)
     Proceeds from sale of real estate acquired in settlement of loans                  369              --
     Purchases of property and equipment                                               (562)         (2,363)
     Proceeds from sale of property and equipment                                         3               3
                                                                                ------------    -----------
               Net cash used in investing activities                                (67,929)        (32,166)
                                                                                ------------    -----------
Cash Flows from Financing Activities:
     Net increase in deposits                                                        11,821          30,860
     Dividends paid                                                                  (2,338)         (2,035)
     Advances from Federal Home Loan Bank of Atlanta                                 48,000          10,000
     Repayment of advances from Federal Home Loan Bank of Atlanta                   (12,000)             --
     Other borrowings                                                                 9,158              --
     Principal payments on other borrowings                                         (35,079)             --
     Purchases of treasury stock                                                         --         (20,955)
                                                                                ------------    -----------
               Net cash provided by financing activities                       $     19,562   $      17,870
                                                                                ------------    -----------
</TABLE>

                                       4
<PAGE>
<TABLE>
<CAPTION>
                 FirstSpartan Financial Corp. and Subsidiaries
                     Consolidated Statements of Cash Flows
                             (Dollars In Thousands)
                                   (Unaudited)

                                                                                        Nine Months Ended
                                                                                             March 31,
                                                                                      2000                1999
                                                                                ----------------     --------------
<S>                                                                            <C>                  <C>
Net Decrease in Cash and Cash Equivalents                                      $        (38,477)    $      (13,046)

Cash and Cash Equivalents at Beginning of Period                                         58,420             48,968
                                                                                ----------------     --------------

Cash and Cash Equivalents at End of Period                                     $         19,943     $       35,922
                                                                                ================     ==============

Supplemental Disclosures of Cash Flow Information:

     Cash paid during the period for:

          Interest                                                             $         15,364     $       13,449
                                                                                ================     ==============
          Income taxes                                                         $          1,872     $        4,609
                                                                                ================     ==============
     Transfers from loans to real estate acquired in settlement of loans       $            214     $            2
                                                                                ================     ==============
     Change in unrealized loss on investment securities available-for-sale     $           (304)     $         (34)
                                                                                ================     ==============
     Change in deferred taxes related to unrealized loss on investment
         securities available-for-sale                                         $            115     $           12
                                                                                ================     ==============
     Issuance of common stock to MRDP                                          $             --     $        7,443
                                                                                ================     ==============
</TABLE>


See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

                  FIRSTSPARTAN FINANCIAL CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

1.             Basis of Presentation

               FirstSpartan Financial Corp. ("FirstSpartan" or the "Company"), a
               Delaware  corporation,  is the holding  company for First Federal
               Bank ("First Federal" or the "Bank"), a federally chartered stock
               savings bank.

               The accompanying consolidated financial statements of the Company
               have been prepared in accordance with  instructions to Form 10-Q.
               Accordingly,  they  do not  include  all of the  information  and
               footnotes  required by generally accepted  accounting  principles
               for complete  financial  statements.  However,  such  information
               reflects all adjustments  (consisting  solely of normal recurring
               adjustments)  which are, in the opinion of management,  necessary
               for a fair  statement of results for the interim  periods.  Also,
               certain   June  30,  1999   balance   sheet   amounts  have  been
               reclassified to conform to the March 31, 2000 presentation.

               The results of operations for the three- and  nine-month  periods
               ended  March  31,  2000  are not  necessarily  indicative  of the
               results to be expected  for the year ending  June 30,  2000.  The
               consolidated  financial  statements  and notes thereto  should be
               read in  conjunction  with the audited  financial  statements and
               notes thereto  contained in the Annual Report to Stockholders for
               the year ended June 30, 1999.

2.             Earnings Per Share

               Earnings per share ("EPS") has been computed  based upon weighted
               average  common shares  outstanding  of 3,374,280 and  3,484,336,
               respectively,  for the three months ended March 31, 2000 and 1999
               and weighted  average common shares  outstanding of 3,363,135 and
               3,717,550, respectively, for the nine months ended March 31, 2000
               and 1999.  The  Company had no  dilutive  securities  outstanding
               during the three- and nine-month periods ended March 31, 2000 and
               1999;  therefore,  diluted  EPS is the same as basic  EPS for all
               periods presented.


3.             Share Repurchases

               On April  11,  2000,  the  Company  announced  its  intention  to
               repurchase  up to 10%, or 378,797  shares,  of its common  stock,
               primarily through open market broker  transactions.  As of May 5,
               2000,  41,700  shares had been  purchased at an average  price of
               $17.04 per share.

                                        6

<PAGE>

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

Private Securities Litigation Reform Act Safe Harbor Statement

               This Quarterly Report contains forward-looking  statements within
               the meaning of the federal  securities laws. These statements are
               not historical  facts,  rather  statements based on the Company's
               current expectations  regarding its business strategies and their
               intended  results  and its  future  performance.  Forward-looking
               statements  are preceded by terms such as "expects,"  "believes,"
               "anticipates," "intends," and similar expressions.

               Forward-looking   statements   are  not   guarantees   of  future
               performance.  Numerous  risks and  uncertainties  could cause the
               Company's  actual results,  performance,  and  achievements to be
               materially  different  from  those  expressed  or  implied by the
               forward-looking statements.  Factors that may cause or contribute
               to  these  differences  include,   without  limitation,   general
               economic  conditions,  including changes in market interest rates
               and  changes in  monetary  and  fiscal  policies  of the  federal
               government; legislative and regulatory changes; and other factors
               disclosed   periodically  in  the  Company's   filings  with  the
               Securities and Exchange Commission.

               Because   of   the   risks   and   uncertainties    inherent   in
               forward-looking  statements,  readers are  cautioned not to place
               undue reliance on them,  whether  included in this report or made
               elsewhere from time to time by the Company or on its behalf.  The
               Company  assumes no  obligation  to update any  forward-  looking
               statements.

Comparison of Financial Condition at March 31, 2000 and June 30, 1999

               Total  assets  were  $572.6  million at March 31, 2000 and $545.7
               million at June 30,1999,  an increase of $26.9 million or 5%. The
               primary components of this increase are $56.6 million, or 13%, in
               loans  receivable,  net,  $10.2  million,  or 44%, in  investment
               securities available-for-sale,  and $5.1 million in other assets,
               offset by  decreases of $38.5  million,  or 66%, in cash and cash
               equivalents and $7.3 million in loans held-for-sale. The majority
               of the decrease in cash and cash  equivalents was attributable to
               uses of cash in investing  activities  of $67.9  million.  A more
               detailed   reconciliation   may  be  found  in  the  Consolidated
               Statements  of Cash  Flows for the nine  months  ended  March 31,
               2000. Loans receivable,  net, increased  primarily as a result of
               an  increase of $39.5  million in  mortgage  loans since June 30,
               1999.  Included in the $39.5 million  increase were  increases of
               $13.5 million in commercial mortgage loans, $14.5 million in one-
               to  four-family  mortgage  loans,  $9.8  million in  construction
               loans,  and  $1.6  million  in  land  development   loans.  Loans
               receivable, net, also increased due to a $9.5 million increase in
               non-mortgage commercial loans and a $7.3 million increase in home
               equity loans.

               Deposit  accounts  increased  $11.8 million to $417.8  million at
               March 31, 2000 from  $406.0  million at June 30,  1999.  Advances
               from the FHLB of Atlanta increased $36.0 million to $70.0 million
               at March 31,  2000 from $34.0  million at June 30,  1999 and were
               used principally to fund repayment of other borrowings.

                                        7

<PAGE>
               Stockholders'  equity  increased by $3.4 million to $69.4 million
               at March 31, 2000 from $66.0 million at June 30, 1999. Items that
               increased  stockholders'  equity were the allocation of shares in
               the  amount of $1.5  million  under  the  Bank's  Employee  Stock
               Ownership Plan ("ESOP") and restricted  stock plan and net income
               of $4.3  million  for the  nine  months  ended  March  31,  2000.
               Offsetting  these  increases  to  stockholders'  equity  was  the
               payment of dividends of $2.3 million.

               Non-performing  assets increased by $2.4 million to $4.3 million,
               or 0.75% of total assets, at March 31, 2000 from $1.9 million, or
               0.34% of total  assets,  at June 30,  1999.  The increase was due
               primarily  to  the  placement  of  $3.3  million  in  speculative
               construction  loans  outstanding to several  partnerships  with a
               common general  partner/builder on non-accrual status in December
               1999  after  all  of  the   partnerships   declared   chapter  11
               bankruptcy. Legal proceedings are continuing (including filing of
               bankruptcy plans and foreclosure,  as applicable) with respect to
               these partnerships.  The principal balances ultimately  collected
               will depend on the sales  price and cost to complete  each of the
               units in the housing  developments.  Due to the ongoing nature of
               the  legal  proceedings  as of the  date  of the  filing  of this
               report,  management  is unable to  estimate  with  precision  the
               amount of principal  that will  ultimately  be collected on these
               loans.  However,  based on information  currently  available,  it
               appears that an amount less than the total principal balance will
               be  collected.  It is  further  believed  any such  loss  will be
               absorbed by the allowance for loan losses  without any additional
               loan loss provision.

Comparison  of  Operating  Results for the Three Months Ended March 31, 2000 and
March 31, 1999

               Net Income. Net income decreased $200,000 to $1.4 million for the
               three months ended March 31, 2000 from $1.6 million for the three
               months  ended  March 31,  1999.  The  principal  item  decreasing
               earnings  for the  quarter  was  the  expected  reduction  in net
               interest income on the funds used to pay the cash distribution of
               $12.00 per share last June. Other items decreasing net income for
               the quarter were a decrease in non-interest  income and increased
               non-interest expense.  Earnings per share for the current quarter
               did  not  decrease  in the  same  proportion  as net  income  due
               principally  to the effect of share  purchases  by the  Company's
               ESOP with $4.3 million it received from the $12.00 per share cash
               distribution.  Shares  held in the  ESOP but not yet  awarded  to
               participants  are not  considered  to be  outstanding  shares for
               computation of earnings per share until awarded to participants.

               Net  Interest  Income.  Net  interest  income  decreased  to $4.9
               million  for the three  months  ended  March  31,  2000 from $5.1
               million for the three months  ended March 31, 1999.  As discussed
               above,  net interest income was reduced due to the payment of the
               cash  distribution  in  June.  The  total  cash  outlay  for  the
               distribution  was  approximately  $45.5 million and its effect is
               estimated to have decreased net income by approximately $400,000,
               or 25%, when comparing the current and prior year quarters.

               The cash  distribution was funded partially with cash equivalents
               and also  through  borrowings.  As described  below,  the average
               balance of interest-earning  assets increased even though a large
               amount  of   interest-earning   assets  were  used  in  the  cash
               distribution.  Also described below, interest-bearing liabilities
               increased   in   greater   proportion   than  the   increase   in
               interest-earning assets. This was due to the funding of a portion
               of the cash distribution with borrowings.  Since interest-earning
               assets  increased  (principally an increase in loans  receivable,
               net) the spread  earned on those assets served to offset the loss
               of  net   interest   income  on  the  funds  used  for  the  cash
               distribution.
                                        8

<PAGE>
               The average balance of interest-earning assets was $526.3 million
               during  the  quarter  ended  March 31,  2000  compared  to $508.5
               million  during the  quarter  ended March 31,  1999.  The average
               yield  increased  to 7.78% from 7.51% for the prior year  quarter
               due to higher market interest rates in recent quarters.

               The average balance of interest-bearing  liabilities increased to
               $483.2  million during the three months ended March 31, 2000 from
               $420.9  million during the three months ended March 31, 1999. The
               average cost of interest-bearing  liabilities  increased to 4.39%
               from  4.33%  for the prior  year  quarter  due to  higher  market
               interest rates in recent quarters.  The cost of  interest-bearing
               liabilities  is expected to  increase if current  interest  rates
               prevail or increase.  Due to the  inability  to predict  interest
               rates,  the  amount  of  increase  in the  cost of  deposits  and
               borrowings, if any, cannot be quantified.

               Net yield on  interest-earning  assets decreased to 3.76% for the
               quarter  ended March 31,  2000 from 3.97% for the  quarter  ended
               March 31, 1999 due primarily to the above  mentioned  increase in
               the average  balance of  interest-bearing  liabilities as well as
               the increase in the average cost.

               Provision for Loan Losses. Provisions for loan losses are charges
               to  earnings  to bring the total  allowance  for loan losses to a
               level  considered  by  management  as  adequate  to  provide  for
               estimated  loan losses based on  management's  evaluation  of the
               collectibility  of the loan  portfolio.  The  allowance  for loan
               losses  represents  an amount that  management  believes  will be
               adequate to absorb  estimated  losses  inherent in the total loan
               portfolio which may become  uncollectible.  Factors considered in
               assessing the adequacy of the allowance  include  historical loss
               experience,  delinquency trends, characteristics of specific loan
               types,  growth  and  composition  of the loan  portfolios,  loans
               classified under OTS regulations,  and other factors.  Management
               also  considers  the level of  problem  assets  that the  Company
               classifies  in  accordance  with  regulatory  requirements.   The
               Company  gives greater  weight to the level of classified  assets
               than to the level of non-performing  assets  (non-accrual  loans,
               accruing loans  contractually  past due 90 days or more, and real
               estate acquired in settlement of loans) because classified assets
               include not only non-performing assets but also performing assets
               that  otherwise  exhibit,  in  management's  judgment,  potential
               credit weaknesses.

               The  provision  for loan losses was  $200,000  for both the three
               months  ended  March  31,  2000 and 1999.  Non-performing  assets
               increased  primarily  because of a related group of  construction
               loans,  however,  management  did not believe that an increase in
               the provision for loan losses was warranted for these loans.  See
               "Comparison of Financial Condition at March 31, 2000 and June 30,
               1999."  Management deemed  the  allowance  for loan  losses to be
               adequate  at March  31,  2000.  Based on the  uncertainty  in the
               estimation  process,   however,   management's  estimate  of  the
               allowance  for loan losses may change in the near term.  Further,
               the allowance  for loan losses is subject to periodic  evaluation
               by various  regulatory  authorities  and could be  adjusted  as a
               result of their examinations.

               The allowance for loan losses  increased to $3.3 million at March
               31,  2000 from  $2.9  million  at June 30,  1999 and was 0.62% of
               gross loans  receivable  at March 31,  2000  compared to 0.61% at
               June 30, 1999.  Also,  the ratio of allowance  for loan losses to
               non-performing  loans  decreased  to 81.1% at March 31, 2000 from
               190.4%  at  June  30,  1999  due  primarily  to the  increase  in
               non-performing loans described above.

                                        9

<PAGE>
               Non-interest  Income.   Non-interest  income  decreased  to  $1.0
               million  for the three  months  ended  March  31,  2000 from $1.1
               million for the three  months  ended March 31,  1999.  Fee income
               increased to $761,000 from $537,000 principally due to the growth
               in  checking  accounts.  Gains  from the sale of  mortgage  loans
               decreased  to $40,000 in the three  months  ended  March 31, 2000
               from $366,000 in the three months ended March 31, 1999, primarily
               due to the larger number of loan  refinancings  occurring  during
               the  period of lower  market  interest  rates in the  prior  year
               quarter.  The loan  refinancings  resulted  in a large  amount of
               fixed-rate  (principally  30-year  term) loans that were sold for
               interest  rate  risk  management.  The  Bank  periodically  sells
               fixed-rate loans in response to interest rate changes,  liquidity
               needs, and other factors. Management cannot predict whether there
               will be any such gains in the future.

               Non-interest  Expense.  Non-interest expense was $3.3 million for
               the three  months  ended March 31, 2000  compared to $3.2 million
               for the same period in 1999. The increase  consisted  principally
               of increased personnel costs and various other operating expenses
               associated with the growth of the Company.

               Income Taxes.  The provision for income taxes decreased  $153,000
               to $964,000 for the three months ended March 31, 2000 compared to
               the three months  ended March 31, 1999,  primarily as a result of
               lower income before income taxes.

Comparison  of  Operating  Results for the Nine Months  Ended March 31, 2000 and
March 31, 1999

               Net Income. Net income decreased $600,000 to $4.3 million for the
               nine months  ended March 31, 2000 from $4.9  million for the nine
               months  ended  March 31,  1999.  The  principal  item  decreasing
               earnings for the nine-month period was the expected  reduction in
               net   interest   income  on  the  funds  used  to  pay  the  cash
               distribution of $12.00 per share last June. Other items affecting
               net  income for the  nine-month  period  were a  decrease  in the
               provision for loan losses,  increased non-interest expense, and a
               decrease in the provision  for income  taxes.  Earnings per share
               for the current  nine- month  period did not decrease in the same
               proportion  as net income due to a  reduction  in average  shares
               outstanding. Share repurchases in the prior year period decreased
               average  shares  outstanding  during the  current  year period by
               approximately   245,000  shares.   The  remainder  of  the  share
               reduction was due principally to the effect of share purchases by
               the Company's  ESOP with $4.3 million it received from the $12.00
               per share cash distribution.  Shares held in the ESOP but not yet
               awarded to  participants  are not  considered  to be  outstanding
               shares for  computation  of earnings  per share until  awarded to
               participants.

               Net Interest Income.  Net interest income  decreased  $400,000 to
               $14.7 million for the nine months ended March 31, 2000 from $15.1
               million for the nine months  ended March 31,  1999.  As discussed
               above,  net interest income was reduced due to the payment of the
               cash  distribution in June and the repurchase of stock during the
               first and second  quarters  of fiscal  year 1999.  The total cash
               outlay for the distribution was  approximately  $45.5 million and
               its  effect  is  estimated  to  have   decreased  net  income  by
               approximately  $1.2 million,  or 24%, when  comparing the current
               and prior  year  nine-  month  periods.  The  impact of the stock
               repurchases   is  estimated  to  have  decreased  net  income  by
               approximately  $195,000,  or 4%, when  comparing  the current and
               prior year periods.

                                       10

<PAGE>
               The cash distribution and share repurchases were funded partially
               with cash equivalents and also through  borrowings.  As described
               below,  the  average  balance  of  interest-earning   assets  did
               increase  even though a large amount of  interest-earning  assets
               were used in the cash  distribution and share  repurchases.  Also
               described  below,   interest-bearing   liabilities  increased  in
               greater proportion than the increase in interest-earning  assets.
               This was due to the funding of a portion of the cash distribution
               and share  repurchases  with borrowings.  Since  interest-earning
               assets did increase (principally an increase in loans receivable,
               net) the spread  earned on those assets served to offset the loss
               of  net   interest   income  on  the  funds  used  for  the  cash
               distribution and the share repurchases.

               The average balance of interest-earning assets was $521.6 million
               during the nine months  ended  March 31, 2000  compared to $505.6
               million  during the nine months ended March 31, 1999. The average
               yield increased to 7.69% from 7.61% for the prior year period due
               to higher market interest rates in recent quarters.

               The average balance of interest-bearing  liabilities increased to
               $478.2  million  during the nine months ended March 31, 2000 from
               $408.2 million during the nine months ended March 31, 1999,  more
               than   offsetting   a   decrease   in   the   average   cost   of
               interest-bearing liabilities to 4.27% from 4.48%. The decrease in
               the average cost is attributable to deposits that repriced during
               lower  market  rates in late  1998 and  throughout  much of 1999.
               Recent increases in market interest rates have not yet had a full
               impact on deposits since a large portion of deposits have not yet
               repriced at prevailing market interest rates as they have not yet
               reached their contractual maturity.  The cost of interest-bearing
               liabilities  is expected to  increase if current  interest  rates
               prevail or increase; however, the amount cannot be quantified.

               Net yield on  interest-earning  assets decreased to 3.75% for the
               nine  months  ended March 31, 2000 from 3.99% for the nine months
               ended  March  31,  1999  due  primarily  to the  above  mentioned
               increase in the average balance of interest-bearing liabilities.

               Provision  for Loan  Losses.  The  provision  for loan losses was
               $467,000  for the nine months  ended  March 31, 2000  compared to
               $600,000  for  the  nine  months   ended  March  31,  1999.   See
               "Comparison of Operating Results for the Three Months Ended March
               31, 2000 and March 31, 1999 -  Provision  for Loan  Losses" for a
               discussion of management's  process for determining the provision
               for loan losses.

               Non-interest  Income.  Non-interest  income was $3.0  million for
               both the three  months  ended March 31,  2000 and 1999.  Although
               total non-interest income was unchanged there were changes in the
               components of non-interest  income.  Fee income increased to $2.2
               million  from  $1.5  million  principally  due to the  growth  in
               checking accounts. The growth in fee income,  however, was offset
               by a  decrease  in  gains  from  the  sale of  mortgage  loans to
               $218,000  in the nine  months  ended  March  31,  2000  from $1.0
               million in the nine  months  ended  March 31,  1999 which was due
               primarily  to the larger  number of loan  refinancings  occurring
               during the  period of lower  market  interest  rates in the prior
               year period.  The Bank  periodically  sells  fixed-rate  loans in
               response to interest rate  changes,  liquidity  needs,  and other
               factors. Management cannot predict whether there will be any such
               gains in the future.

               Non-interest Expense.  Non-interest expense was $10.0 million for
               the nine months ended March 31, 2000 compared to $9.3 million for
               the same period in 1999.  The increase  consisted  principally of
               increased  personnel costs and various other  operating  expenses
               associated with the growth of the Company.

                                       11
<PAGE>
               Income Taxes.  The provision for income taxes decreased  $441,000
               to $2.9 million for the nine months ended March 31, 2000 compared
               to the nine months ended March 31, 1999, primarily as a result of
               lower income before income taxes.

Liquidity and Capital Resources

               The  Company's  primary  sources of funds are customer  deposits,
               proceeds  from  principal and interest  payments from loans,  the
               sale of loans, maturing securities, FHLB of Atlanta advances, and
               other borrowings.  While maturities and scheduled amortization of
               loans  are a  predictable  source  of  funds,  deposit  flows and
               mortgage  prepayments are influenced  greatly by general interest
               rates,  other  economic  conditions,  and  competition.   Federal
               regulations  require the Bank to  maintain  an adequate  level of
               liquidity to ensure the  availability of sufficient funds to fund
               loan  originations,  deposit  withdrawals  and to  satisfy  other
               financial   commitments.   Currently,   the  federal   regulatory
               liquidity  requirement  for  the  Bank is the  maintenance  of an
               average  daily  balance  of  liquid  assets  (cash  and  eligible
               investments) equal to at least 4% of the average daily balance of
               net  withdrawable  deposits  and  short-term   borrowings.   This
               liquidity  requirement is subject to periodic change. The Company
               and the Bank generally  maintain  sufficient  cash and short-term
               investments  to meet  short-term  liquidity  needs.  At March 31,
               2000, cash and cash equivalents  totaled $19.9 million,  or 3% of
               total   assets,   and   investment   securities   classified   as
               available-for-sale  with  maturities  of one year or less totaled
               $18.1 million, or 3% of total assets. At March 31, 2000, the Bank
               also  maintained an uncommitted  credit facility with the FHLB of
               Atlanta,  which provides for immediately available advances up to
               an aggregate amount of approximately $97.1 million of which $70.0
               million had been advanced.

               FirstSpartan  is not subject to any separate  regulatory  capital
               requirements. As of March 31, 2000, the Bank's regulatory capital
               was in excess of all applicable regulatory requirements. At March
               31,  2000,  under  applicable  regulations,   the  Bank's  actual
               tangible,  core and risk-based  capital ratios were 10.9%,  10.9%
               and 16.7%,  respectively,  compared to regulatory requirements of
               1.5%, 3.0% and 8.0%, respectively.

               At March 31, 2000,  the Company had loan  commitments  (excluding
               undisbursed   portions   of   interim   construction   loans)  of
               approximately  $7.1 million  ($1.2 million at fixed rates ranging
               from 8.25% to 9.25%). In addition,  at March 31, 2000, the unused
               portion of lines of credit (principally variable-rate home equity
               lines of credit) extended by the Company was approximately  $54.6
               million.   Furthermore,  at  March  31,  2000,  the  Company  had
               certificates  of deposit  scheduled to mature in one year or less
               of $157.3 million.  Based on historical  experience,  the Company
               anticipates that a majority of such  certificates of deposit will
               be renewed at maturity.

Item 3.        Quantitative and Qualitative Disclosures About Market Risk

               As of March 31, 2000,  there have been no material changes in the
               quantitative  and  qualitative  disclosures  about  market  risks
               presented  in the  Company's  Annual  Report on Form 10-K for the
               fiscal year ended June 30, 1999.

                                       12
<PAGE>

                  FIRSTSPARTAN FINANCIAL CORP. AND SUBSIDIARIES

Part II.  Other Information

Item 1.           Legal Proceedings
                  -----------------
                  The Company is not  involved  in any pending  legal
                  proceedings  other than routine  legal  proceedings
                  occurring  in  the  ordinary  course  of  business.
                  Management   believes   that  such  routine   legal
                  proceedings,  in the aggregate, are not material to
                  the  Company's  financial  condition  or results of
                  operations.

Item 2.           Changes in Securities and Use of Proceeds
                  -----------------------------------------
                  Not applicable

Item 3.           Defaults Upon Senior Securities
                  -------------------------------
                  Not applicable

Item 4.           Submission of Matters to a Vote of Security Holders
                  ---------------------------------------------------
                  Not applicable

Item 5.           Other Information
                  -----------------
                  Not applicable


                                       13

<PAGE>
<TABLE>
<CAPTION>
Item 6.  Exhibits and Reports on Form 8-K
         ---------------------------------
         (a)    Exhibits
<S>             <C>             <C>
                 (3) (a)        Certificate of Incorporation of the Registrant*
                 (3) (b)        Bylaws of the Registrant*
                (10) (a)        Employment Agreement with Billy L. Painter
                (10) (b)        Employment Agreement with Hugh H. Brantley
                (10) (c)        Employment Agreement with J. Stephen Sinclair
                (10) (d)        Employment Agreement with R. Lamar Simpson
                (10) (e)        Severance Agreement with Rand Peterson**
                (10) (f)        Severance Agreement with Thomas Bridgeman**
                (10) (g)        Severance Agreement with Katherine A. Dunleavy***
                (10) (h)        Employee Severance Compensation Plan**
                (10) (i)        Employee Stock Ownership Plan**
                (10) (j)        Registrant's 1997 Stock Option Plan****
                (10) (k)        Registrant's Management Recognition and Development Plan****
                (10) (l)        Severance Agreement with J. Timothy Camp*****
                (21)            Subsidiaries of the Registrant**
                (27)            Financial Data Schedule

         (b)    Reports on Form 8-K:

                None.
</TABLE>

-------------------------
*      Filed as an exhibit to the  Registrant's  Registration  Statement on Form
       S-1 (333-23015) and incorporated herein by reference.
**     Filed as an exhibit to the  Registrant's  Annual  Report on Form 10-K for
       the fiscal year ended June 30, 1997 and incorporated herein by reference.
***    Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q for
       the quarter ended December 31, 1997 and incorporated herein by reference.
****   Filed as an exhibit to the Registrant's  Annual Meeting  Definitive Proxy
       Statement dated December 12, 1997 and incorporated herein by reference.
*****  Filed as an exhibit to the  Registrant's  Form 10-Q for the quarter ended
       December 31, 1999 and incorporated herein by reference.

                                       14

<PAGE>


                                   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.


                                                 `
                                   FirstSpartan Financial Corp.

Date: May 12, 2000                 By: /S/ Billy L. Painter
     ---------------------             ----------------------------
                                      Billy L. Painter
                                      President and Chief Executive Officer


Date: May 12, 2000                 By:/S/ R. Lamar Simpson
     ---------------------            -----------------------------
                                      R. Lamar Simpson
                                      Treasurer, Secretary and Chief Financial
                                      Officer


                                       15