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 September 30, 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: 3,720,270 shares as of November 5, 2000.



<PAGE>



                  FIRSTSPARTAN FINANCIAL CORP. AND SUBSIDIARIES

                                Table of Contents

<TABLE>
<CAPTION>
<S>          <C>                                                                                         <C>
                                                                                                         Page
Part I.      Financial Information

Item 1.        Financial Statements (unaudited)

               Consolidated Balance Sheets at September 30, 2000 and June 30, 2000                         1

               Consolidated Statements of Income for the Three-Month Periods Ended
                September 30, 2000 and 1999                                                                2

               Consolidated Statements of Stockholders' Equity for the Three-Month Period
               Ended September 30, 2000 and 1999                                                           3

               Consolidated Statements of Cash Flows for the Three-Month Periods Ended
               September 30, 2000 and 1999                                                                4-5

               Notes to Consolidated Financial Statements                                                 6-8

Item 2.        Management's Discussion and Analysis of Financial Condition and Results of
               Operations                                                                                 8-11

Item 3.        Quantitative and Qualitative Disclosures About Market Risk                                  11

Part II.     Other Information

Item 1.        Legal Proceedings                                                                           12

Item 2.        Changes in Securities and Use of Proceeds                                                   12

Item 3.        Default Upon Senior Securities                                                              12

Item 4.        Submission of Matters to a Vote of Security Holders                                         12

Item 5.        Other Information                                                                           12

Item 6.        Exhibits and Reports on Form 8-K                                                            13

Signatures                                                                                                 14
</TABLE>


<PAGE>

ITEM 1.  FINANCIAL STATEMENTS

                 FirstSpartan Financial Corp. and Subsidiaries
                          Consolidated Balance Sheets
                       (In Thousands, Except Share Data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                       September 30,           June 30,
                                                                                           2000                  2000
                                                                                     ----------------       ---------------
<S>                                                                                  <C>                    <C>
Assets

   Cash                                                                                $  13,667              $  13,375
   Federal funds sold and overnight interest-bearing deposits                              5,794                  7,231
                                                                                       ---------              ---------
             Total cash and cash equivalents                                              19,461                 20,606
   Investment securities available-for-sale - at fair value (amortized cost:
      $38,024 and $34,239 at September 30, 2000 and June 30, 2000, respectively)          37,661                 33,693
   Loans receivable, net                                                                 512,029                503,095
   Loans held-for-sale - at lower of cost or market (market value: $2,078
       and $1,967 at September 30, 2000 and June 30, 2000, respectively)                   2,050                  1,933
   Office properties and equipment, net                                                   10,587                 10,241
   Federal Home Loan Bank of Atlanta stock  - at cost                                      4,100                  4,100
   Real estate acquired in settlement of loans                                               798                    478
   Other assets                                                                           12,116                 11,511
                                                                                       ---------              ---------

                Total Assets                                                           $ 598,802              $ 585,657
                                                                                       =========              =========

Liabilities and Stockholders' Equity

   Liabilities:
     Deposit accounts                                                                  $ 430,596              $ 419,619
     Advances from Federal Home Loan Bank of Atlanta                                      81,000                 82,000
     Other borrowings                                                                      9,169                  8,763
     Other liabilities                                                                     7,348                  5,891
                                                                                       ---------              ---------
                Total liabilities                                                        528,113                516,273
                                                                                       ---------              ---------
   Stockholders' Equity:
     Preferred stock, $0.01 par value:
       Authorized - 250,000 shares;  none issued or outstanding
          at September 30, 2000 and June 30, 2000                                             --                     --
     Common stock, $0.01 par value:
       Authorized - 12,000,000 shares;  issued: 4,430,375 at September 30,
          2000 and June 30, 2000; outstanding:  3,720,270 at September 30,
          2000 and June 30, 2000                                                              44                     44
     Additional paid-in capital                                                           42,987                 42,894
     Retained earnings                                                                    58,336                 57,674
     Treasury stock - at cost (710,105  shares at September 30,
          2000 and June 30, 2000)                                                        (22,126)               (22,126)
     Unearned restricted stock                                                            (3,213)                (3,502)
     Unallocated ESOP stock                                                               (5,113)                (5,261)
     Accumulated other comprehensive loss                                                   (226)                  (339)
                                                                                       ---------              ---------
                Total stockholders' equity                                                70,689                 69,384
                                                                                       ---------              ---------
                Total Liabilities and Stockholders' Equity                             $ 598,802              $ 585,657
                                                                                       =========              =========
</TABLE>


See accompanying notes to consolidated financial statements.

                                       1


<PAGE>

                 FirstSpartan Financial Corp. and Subsidiaries
                       Consolidated Statements of Income
                       (In Thousands, Except Share Data)
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                                   Three Months Ended
                                                                                      September 30,
                                                                           ----------------------------------
                                                                                 2000              1999
                                                                           ----------------  ----------------
<S>                                                                        <C>               <C>
Investment Income:
   Interest on loans                                                      $   10,421          $    8,837
   Interest and dividends on investment securities,
     mortgage-backed securities, and other                                       841                 950
                                                                          ----------          ----------
          Total investment income                                             11,262               9,787
                                                                          ----------          ----------
Interest Expense:
   Deposit accounts                                                            5,008               4,194
   Other borrowings                                                              151                 127
   Federal Home Loan Bank of Atlanta advances                                  1,263                 698
                                                                          ----------          ----------
          Total interest expense                                               6,422               5,019
                                                                          ----------          ----------

Net Interest Income                                                            4,840               4,768

Provision for Loan Losses                                                        100                 100
                                                                          ----------          ----------

Net Interest Income After Provision for Loan Losses                            4,740               4,668
                                                                          ----------          ----------
Non-interest Income:
    Service charges and fees                                                     910                 724
    Gain on sale of mortgage loans                                                79                  99
    Other, net                                                                   225                 200
                                                                          ----------          ----------
          Total non-interest income, net                                       1,214               1,023
                                                                          ----------          ----------
Non-interest Expense:
    Employee compensation and benefits                                         1,910               1,909
    Federal deposit insurance premium                                             49                  84
    Occupancy and equipment expense                                              384                 403
    Computer services                                                            172                 154
    Advertising and promotions                                                    97                 155
    Office supplies, postage, printing, etc                                      182                 178
    Other                                                                        759                 517
                                                                          ----------          ----------
          Total non-interest expense                                           3,553               3,400
                                                                          ----------          ----------

Income Before Income Taxes                                                      2401               2,291

Provision for Income Taxes                                                       914                 921
                                                                          ----------          ----------

Net Income                                                                $    1,487          $    1,370
                                                                          ==========          ==========

Basic and Diluted Earnings Per Share                                      $     0.45          $     0.41
                                                                          ==========          ==========

Weighted Average Shares Outstanding - Basic                                3,328,870           3,351,990
                                                                          ==========          ==========

Weighted Average Shares Outstanding - Diluted                              3,330,728           3,351,990
                                                                          ==========          ==========
</TABLE>


See accompanying notes to consolidated financial statements.

                                       2

<PAGE>

                  FirstSpartan Financial Corp. and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
             For the Three Months Ended September 30, 2000 and 1999
                        (In Thousands, Except Share Data)

<TABLE>
<CAPTION>



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

Net income                                       --              --              --           1,370             --             --
Unrealized loss on securities
 available-for-sale, net of taxes                --              --              --              --             --             --
                                          ---------       ---------       ---------       ---------      ---------      ---------
     Total comprehensive income                  --              --              --           1,370             --             --
                                          ---------       ---------       ---------       ---------      ---------      ---------
ESOP stock committed for release                 --              --              96              --             --             --
Dividends ($0.20 per share)                      --              --              --            (665)            --             --
Prorata vesting of restricted stock              --              --              --              --             --            290
                                          ---------       ---------       ---------       ---------      ---------      ---------

Balance September 30, 1999                3,787,970       $      44       $  42,744       $  55,610      $ (20,955)     $  (4,370)
                                          =========       =========       =========       =========      =========      =========


Balance, June 30, 2000                    3,720,270       $      44       $  42,894       $  57,674      $ (22,126)     $  (3,502)
                                          ---------       ---------       ---------       ---------      ---------      ---------

Net income                                       --              --              --           1,487             --             --
Unrealized gain on securities
 available-for-sale, net of taxes                --              --              --              --             --             --
                                          ---------       ---------       ---------       ---------      ---------      ---------
     Total comprehensive income                  --              --              --           1,487             --             --
                                          ---------       ---------       ---------       ---------      ---------      ---------
ESOP stock committed for release                 --              --              93              --             --             --
Dividends ($0.25 per share)                      --              --              --            (825)            --             --
Prorata vesting of restricted stock              --              --              --              --             --            289
                                          ---------       ---------       ---------       ---------      ---------      ---------

Balance September 30, 2000                3,720,270       $      44       $  42,987       $  58,336      $ (22,126)     $  (3,213)
                                          =========       =========       =========       =========      =========      =========
</TABLE>



<TABLE>
<CAPTION>
                                                           Accumulated
                                                              Other
                                                            Comprehen-
                                          Unallocated         sive           Total
                                             ESOP            (Loss)       Stockholders'
                                            Stock            Income          Equity
                                          ---------        ---------        ---------
<S>                                       <C>              <C>              <C>
Balance, June 30, 1999                    $  (5,851)       $     (90)       $  66,041
                                          ---------        ---------        ---------

Net income                                       --               --            1,370
Unrealized loss on securities
 available-for-sale, net of taxes                --              (60)             (60)
                                          ---------        ---------        ---------
     Total comprehensive income                  --              (60)           1,310
                                          ---------        ---------        ---------
ESOP stock committed for release                147               --              243
Dividends ($0.20 per share)                      --               --             (665)
Prorata vesting of restricted stock              --               --              290
                                          ---------        ---------        ---------

Balance September 30, 1999                $  (5,704)       $    (150)       $  67,219
                                          =========        =========        =========


Balance, June 30, 2000                    $  (5,261)       $    (339)       $  69,384
                                          ---------        ---------        ---------

Net income                                       --               --            1,487
Unrealized gain on securities
 available-for-sale, net of taxes                --              113              113
                                          ---------        ---------        ---------
     Total comprehensive income                  --              113            1,600
                                          ---------        ---------        ---------
ESOP stock committed for release                148               --              241
Dividends ($0.25 per share)                      --               --             (825)
Prorata vesting of restricted stock              --               --              289
                                          ---------        ---------        ---------

Balance September 30, 2000                $  (5,113)       $    (226)       $  70,689
                                          =========        =========        =========
</TABLE>


                                       3




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


                                                                               Three Months Ended
                                                                                  September 30,
                                                                           ---------------------------
                                                                              2000              1999
                                                                           ----------        ---------
<S>                                                                          <C>             <C>
Cash Flows from Operating Activities:
    Net income                                                               $  1,487        $  1,370
    Adjustments to reconcile net income to net
       cash provided by operating activities:
       Provision for loan losses                                                  100             100
       Accretion (amortization) of deferred income                                 44             (54)
       Amortization of loan servicing assets                                       55              45
       Accretion of  discounts on investment securities                            --              (1)
       Depreciation                                                               203             207
       Allocation of ESOP stock at fair value                                     241             243
       Prorata vesting of restricted MRDP stock                                   289             290
       Gain on disposal of property and equipment                                  (8)             --
       Gain on sale of real estate acquired in settlement of loans                (21)             --
       (Increase) decrease in loans held-for-sale                                (117)          4,489
       Increase in other assets                                                  (660)         (5,468)
       Increase in other liabilities                                            1,387           2,275
                                                                             --------        --------
               Net cash provided by operating activities                        3,000           3,496
                                                                             --------        --------

Cash Flows from Investing Activities:
     Net loan originations and principal collections                            6,168          (2,381)
     Purchase of loans                                                        (15,426)        (13,350)
     Purchase of investment securities available-for-sale                      (3,785)         (1,012)
     Proceeds from sale of real estate acquired in settlement of loans             46              42
     Improvements on real estate acquired in settlement of loans                 (165)             --
     Purchase of property and equipment                                          (549)           (318)
     Proceeds from sale of property and equipment                                   8              --
                                                                             --------        --------
               Net cash used in investing activities                          (13,703)        (17,019)
                                                                             --------        --------

Cash Flows from Financing Activities:
     Net increase in deposits                                                  10,977           1,997
     Dividends paid                                                              (825)           (665)
     Advances from Federal Home Loan Bank of Atlanta                            2,000          25,000
     Repayment of Advances from Federal Home Loan Bank of Atlanta              (3,000)             --
     Other borrowings                                                             406              --
     Principal payments on other borrowings                                        --         (35,000)
                                                                             --------        --------
               Net cash provided by (used in) financing activities           $  9,558        $ (8,668)
                                                                             --------        --------
</TABLE>


                                       4

<PAGE>

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


                                                                                   Three Months Ended
                                                                                      September 30,
                                                                                  2000             1999
                                                                                ---------        ---------
<S>                                                                              <C>             <C>
Net Decrease in Cash and Cash Equivalents                                        $ (1,145)       $(22,191)

Cash and Cash Equivalents at Beginning of Period                                   20,606          58,420
                                                                                 --------        --------
Cash and Cash Equivalents at End of Period                                       $ 19,461        $ 36,229
                                                                                 ========        ========

Supplemental Disclosures of Cash Flow Information:
     Cash paid during the period for:
          Interest                                                               $  6,268        $  5,121
                                                                                 ========        ========
          Income taxes                                                           $     --        $     --
                                                                                 ========        ========
     Transfers from loans to real estate acquired in settlement of loan          $    180        $     42
                                                                                 ========        ========
     Change in unrealized loss on investment securities available-for-sale       $    183        $    (96)
                                                                                 ========        ========
     Change in deferred taxes related to unrealized loss on
         investment securities available-for-sale                                $    (70)       $     36
                                                                                 ========        ========
</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 the  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,  2000   balance   sheet   amounts  have  been
               reclassified to conform to the September 30, 2000 presentation.

               The results of operations for the three- and  nine-month  periods
               ended  September 30, 2000 are not  necessarily  indicative of the
               results to be expected  for the year ending  June 30,  2000.  The
               unaudited  consolidated  financial  statements  and notes thereto
               should  be  read  in  conjunction  with  the  audited   financial
               statements  and notes  thereto  contained in the Annual Report on
               Form 10-K for the year ended June 30, 2000.

2.             Pending Merger

               On  September  5,  2000,  the  Corporation  and BB&T  Corporation
               ("BB&T")  entered  into an Agreement  and Plan of  Reorganization
               (the  "Agreement")  pursuant to which the Corporation  will merge
               with and into BB&T. Pursuant to the terms of the Agreement,  each
               share of the Corporation's common stock issued and outstanding at
               the  effective  time of the merger will  become and be  converted
               into the  right  to  receive  one  share  of BB&T  common  stock.
               Consummation  of the merger is  subject  to  various  conditions,
               including the approval of the Corporation's  stockholders and the
               receipt of all requisite regulatory approvals.

               In connection with the Agreement, the Corporation granted to BB&T
               a stock option  pursuant to a stock option  agreement dated as of
               September 5, 2000,  which under  certain  defined  circumstances,
               would enable BB&T to purchase 740,300 shares of the Corporation's
               common  stock,  subject to  adjustment,  at a price of $21.25 per
               share.


                                        6

<PAGE>


3.             Earnings Per Share

               The following schedule reconciles the numerators and denominators
               of the basic and diluted earnings per share ("EPS")  computations
               for the  three-month  periods ended  September 30, 2000 and 1999.
               Diluted common shares arise from the potentially  dilutive effect
               of the Company's stock options outstanding.


                                             Quarter Ended September 30,
                                         -----------------------------------
                                              2000                 1999
                                         --------------       --------------
Basic EPS:
Net income                                $1,487,000            $1,370,000
Average common shares outstanding          3,328,870             3,351,990
                                          ----------            ----------
Earnings per share                        $     0.45            $     0.41
                                          ==========            ==========

Diluted EPS:
Net income                                $1,487,000            $1,370,000
                                          ----------            ----------
Average common shares outstanding          3,328,870             3,351,990
Dilutive effect of stock options               1,859                    -
                                          ----------            ---------
Average dilutive shares outstanding        3,330,870             3,351,990
                                          ----------            ----------
Earnings per share                        $     0.45            $     0.41
                                          ==========            ==========


4.             Recently Issued Accounting Standards and Guidance

               In June 1998, the Financial  Accounting  Standards Board ("FASB")
               issued Statement of Financial  Accounting  Standard  ("SFAS") No.
               133,   Accounting   for   Derivative   Instruments   and  Hedging
               Activities.  This statement,  as amended,  establishes accounting
               and  reporting  standards  for  derivative  instruments  and  for
               hedging  activities.  It requires  that an entity  recognize  all
               derivatives  as either assets or liabilities in the balance sheet
               and measure those  instruments at fair value.  The accounting for
               changes in the fair  value of a  derivative  (that is,  gains and
               losses)  depends  on the  intended  use of  the  derivative.  The
               Company  adopted this statement as of July 1, 2000.  SFAS No. 133
               had no effect on the Company's  financial  position or results of
               operations.

               In December 1999, the Securities and Exchange  Commission ("SEC")
               issued  Staff  Accounting   Bulletin  ("SAB")  No.  101,  Revenue
               Recognition  in Financial  Statements  which  summarizes  certain
               views of the SEC staff  related to the  application  of generally
               accepted   accounting   principles   with   respect   to  revenue
               recognition  in  financial  statements.  SAB No. 101, as amended,
               must be adopted by the  Company no later than April 1, 2001.  The
               Company believes that adoption of SAB No. 101 will not materially
               affect its financial position or results of operations.


                                        7

<PAGE>




               In September  2000, the FASB issued SFAS No. 140,  Accounting for
               Transfers and Servicing of Financial  Assets and  Extinguishments
               of  Liabilities.  This new  statement  replaces  SFAS  No.125 and
               provides  further  standards  on  accounting  and  reporting  for
               transfers and servicing of financial  assets and  extinguishments
               of liabilities. SFAS No. 140 is effective for transfers occurring
               after   March  31,   2001  and  for   disclosures   relating   to
               securitization  transactions  and  collateral  for  fiscal  years
               ending after December 15, 2000. The Company has not completed the
               analysis  of the  impact  that  this  standard  may  have  on the
               Company's financial statements.


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 September 30, 2000 and June 30, 2000

               Total assets were $598.8 million at September 30, 2000 and $585.7
               million at June 30, 2000, an increase of $13.1 million or 2%. The
               primary  components of this increase are $8.9 million,  or 2%, in
               loans  receivable,  net, and $4.0 million,  or 12%, in investment
               securities  available-for-sale.  Loans receivable, net, increased
               primarily  as a result of an increase of $6.2 million in mortgage
               loans since June 30, 2000.  Included in the $6.2 million increase
               were  increases of $2.1 million in commercial  mortgage loans and
               $5.2 million in one- to  four-family  mortgage  loans offset by a
               decline of $1.0  million  in  construction  and land  development
               loans combined.  Loans  receivable,  net, also increased due to a
               $2.0 million increase in non-mortgage commercial loans.

               Deposit  accounts  increased  $11.0 million to $430.6  million at
               September 30, 2000 from $419.6 million at June 30, 2000 primarily
               as a result of an increase in certificates of deposit.


                                        8

<PAGE>



               Stockholders'  equity  increased by $1.3 million to $70.7 million
               at September 30, 2000 from $69.4 million at June 30, 2000.  Items
               that increased stockholders' equity were the allocation of shares
               in the  amount  of  $530,000  under  the  Bank's  Employee  Stock
               Ownership Plan ("ESOP") and restricted  stock plan and net income
               of $1.5 million for the three months  ended  September  30, 2000.
               Offsetting  these  increases  to  stockholders'  equity  was  the
               payment of dividends of $825,000.

               Non-performing  assets increased by $2.1 million to $6.0 million,
               or 1.00%  of total  assets,  at  September  30,  2000  from  $3.9
               million, or 0.67% of total assets, at June 30, 2000. The increase
               was  due  primarily  to  increases  of  $1.1  million  in one- to
               four-family  mortgage  loans on non-accrual  status,  $580,000 in
               construction  loans  contractually  past  due 90 days  and  still
               accruing,  and $320,000 in real estate  acquired in settlement of
               loans.

Comparison  of Operating  Results for the Three Months Ended  September 30, 2000
and September 30, 1999

               Net Income. Net income increased $100,000 to $1.5 million for the
               three months ended  September  30, 2000 from $1.4 million for the
               three  months  ended  September  30, 1999.  The  principal  items
               increasing  earnings  for  the  quarter  were  increases  in  net
               interest income and non-interest  income offset by an increase in
               non-interest expense.

               Net Interest Income. Net interest income increased by $72,000 for
               the three months ended  September  30, 2000 from the three months
               ended  September 30, 1999.  Investment  income  increased by $1.5
               million,  or 15%,  to $11.3  million for the three  months  ended
               September  30, 2000 from $9.8  million for the three months ended
               September 30, 1999. The increase in investment  income was offset
               by an increase in interest  expense of $1.4  million,  or 28%, to
               $6.4 million for the three months ended  September  30, 2000 from
               $5.0 million for the three months ended September 30, 1999.

               The average balance of interest-earning assets was $556.7 million
               during the quarter  ended  September  30, 2000 compared to $516.1
               million during the quarter ended  September 30, 1999. The average
               yield  increased  to 8.09% from 7.59% for the prior year  quarter
               due to higher market interest rates in recent quarters.

               The average balance of interest-bearing  liabilities increased to
               $513.3 million  during the three months ended  September 30, 2000
               from $470.9 million  during the three months ended  September 30,
               1999. The average cost of interest-bearing  liabilities increased
               to 4.96%  from  4.23% 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 3.48% for the
               quarter ended September 30, 2000 from 3.70% for the quarter ended
               September 30, 1999.




                                        9

<PAGE>



               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  $100,000  for both the three
               months ended September 30, 2000 and 1999.  Non-performing  assets
               increased  primarily  because  of a  related  group  of  one-  to
               four-family mortgage 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
               September  30,  2000 and June 30,  2000.  Management  deemed  the
               allowance  for loan losses to be adequate at September  30, 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 $3.6  million  at
               September  30,  2000 from $3.5  million at June 30,  2000 and was
               0.65% of gross loans receivable at September 30, 2000 compared to
               0.64% at June 30, 2000. The ratio of allowance for loan losses to
               non-performing  loans  decreased to 68.5% at  September  30, 2000
               from 100.9% at June 30,  2000 due  primarily  to the  increase in
               non-performing loans described above.


               Non-interest  Income.   Non-interest  income  increased  to  $1.2
               million for the three months ended  September  30, 2000 from $1.0
               million for the three months ended September 30, 1999. Fee income
               increased to $910,000 from $724,000 principally due to the growth
               in checking accounts.

               Non-interest  Expense.  Non-interest expense was $3.6 million for
               the three  months  ended  September  30,  2000  compared  to $3.4
               million for the same period in 1999.  The increase was  primarily
               due to expenses incurred relating to the pending merger with BB&T
               Corporation which was announced September 6, 2000.

               Income Taxes. The provision for income taxes was $914,000 for the
               three months ended  September  30, 2000  compared to $921,000 for
               the three months ended September 30, 1999.



                                       10

<PAGE>


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 September 30,
               2000, cash and cash equivalents  totaled $19.5 million,  or 3% of
               total   assets,   and   investment   securities   classified   as
               available-for-sale  with  maturities  of one year or less totaled
               $18.6 million,  or 3% of total assets. At September 30, 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  $149.6 million of which
               $81.0 million had been advanced.

               FirstSpartan  is not subject to any separate  regulatory  capital
               requirements.  As of September  30, 2000,  the Bank's  regulatory
               capital was in excess of all applicable regulatory  requirements.
               At September 30, 2000, under applicable  regulations,  the Bank's
               actual tangible,  core and risk-based  capital ratios were 10.0%,
               10.0%   and   15.3%,   respectively,   compared   to   regulatory
               requirements of 1.5%, 3.0% and 8.0%, respectively.

               At  September  30,  2000,   the  Company  had  loan   commitments
               (excluding undisbursed portions of interim construction loans) of
               approximately  $3.7 million  ($1.0 million at fixed rates ranging
               from 7.625% to 9.500%).  In addition,  at September 30, 2000, the
               unused portion of lines of credit (principally variable-rate home
               equity lines of credit) extended by the Company was approximately
               $60.5  million.  Furthermore,  at September 30, 2000, the Company
               had  certificates  of deposit  scheduled to mature in one year or
               less of  $234.5  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 September 30, 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, 2000.

                                       11

<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







                                       12

<PAGE>



Item 6.  Exhibits and Reports on Form 8-K
         (a) Exhibits

              (2) (a)   Agreement and Plan of Reorganization by and Between
                        BB&T Corporation and FirstSpartan Financial Corp.*******
              (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*****
             (23)       Consent of Deloitte & Touche LLP
             (21)       Subsidiaries of the Registrant**
             (27)       Financial Data Schedule

         (b) Reports on Form 8-K:

        On September 8, 2000, the Company filed a Form 8-K to report that
        the Company and BB&T  Corporation  had entered  into a definitive
        merger  agreement  on  September  5,  2000.  A copy of the merger
        agreement  and the related  stock option  agreement  are filed as
        exhibits to the Form 8-K.




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

*              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.
******         Filed as an exhibit to the Registrant's Form 10-Q for the quarter
               ended March 31, 2000 and incorporated herein by reference.
******         Filed as an exhibit to the Registrant's Current Report on Form
               8-K, filed on September 8, 2000, and incorporated herein by
               reference.

                                       13

<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: November 13, 2000             By: /s/ Billy L. Painter
     ------------------                ---------------------------------------
                                       Billy L. Painter
                                       President and Chief Executive Officer


Date: November 13, 2000             By: /s/ R. Lamar Simpson
     ------------------                ---------------------------------------
                                       R. Lamar Simpson
                                       Treasurer, Secretary and
                                       Chief Financial Officer



                                       14