<PAGE>



                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                    For the quarter ended September 30, 1997

                                       OR

[   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
          FROM __________ TO _________.

                           Commission File No. l-6830

                                 FPA CORPORATION
             (Exact name of registrant as specified in its charter)

            Delaware                                59-0874323
(State or other jurisdiction of              (I.R.S. Employer I.D. No.)
 incorporation or organization)

                        One Greenwood Square, Suite #101
                                3333 Street Road
                          Bensalem, Pennsylvania 19020
                    (Address of principal executive offices)
                            Telephone: (215) 245-7500
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (l) 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___

        Number of shares outstanding as of November 13, 1997: 11,356,018
                 (excluding 1,342,113 shares held in Treasury).


<PAGE>






                        FPA Corporation and Subsidiaries
                          Index to Financial Statements

                                                                         PAGE
                                                                        ------
Interim Financial Statements for the quarter
ended September 30, 1997
--------------------------------------------

   Consolidated Balance Sheets at September 30, 1997
   and June 30, 1997                                                       1

   Consolidated Statements of Operations and Changes
   in Retained Earnings for the three months ended
   September 30, 1997 and 1996                                             2

   Consolidated Statements of Cash Flows for the 
   three months ended September 30, 1997 and 1996                          3

   Notes to Consolidated Financial Statements                            4-5







<PAGE>

                        FPA Corporation and Subsidiaries
                           Consolidated Balance Sheets
                                 (in thousands)
<TABLE>
<CAPTION>     
                                                                                 September 30              June 30
                                                                                    1997                     1997
                                                                                    ----                     ----
<S>                                                                               <C>                       <C>
Assets                                                                          (Unaudited)
Cash                                                                            $  1,522                  $  1,582
Receivables
  Trade accounts                                                                   3,309                     3,223
  Mortgage and other notes                                                           401                       404
Real estate held for development and sale:
  Residential properties completed or
    under construction                                                            34,721                    35,355
  Land held for development or sale
    and improvements                                                              56,561                    60,067
Property and equipment, at cost, less
  accumulated depreciation                                                           798                       507
Deferred charges and other assets                                                  6,914                     6,475
                                                                                  ------                    ------
                                                                                $104,226                  $107,613
                                                                                 =======                   =======
Liabilities and Shareholders' Equity
Liabilities
Accounts payable                                                                $ 12,017                  $ 12,759
Accrued expenses                                                                   5,583                     5,519
Amounts due to related parties                                                     2,604                     2,701
Customer deposits                                                                  2,177                     2,155
Mortgage and other note obligations
  primarily secured by real estate
  held for development and sale                                                   50,394                    53,637
Subordinated debentures                                                              580                       601
Other notes payable                                                               11,358                    10,917
Deferred income taxes                                                              2,517                     2,587
Minority interests                                                                   670                       686
                                                                                  ------                    ------
         Total liabilities                                                        87,900                    91,562
                                                                                  ------                    ------

Commitments and contingencies

Shareholders' equity
Preferred stock, $1 par, 500,000
  shares authorized, no shares outstanding
Common stock, $.10 par, 20,000,000
  shares authorized, 12,698,131
  shares issued at September 30, 1997
     and June 30, 1997, respectively                                               1,270                     1,270
Capital in excess of par value - common stock                                     17,726                    17,726
Retained earnings (deficit)                                                       (1,692)                   (1,967)
Treasury stock, at cost (1,342,113
  shares held at September 30, 1997
  and June 30, 1997, respectively)                                                  (978)                     (978)
                                                                                 --------                  --------
Total shareholders' equity                                                        16,326                    16,051
                                                                                 --------                  -------

                                                                               $ 104,226                  $107,613
                                                                                 ========                  =======
</TABLE>

                 See notes to consolidated financial statements


<PAGE>






                        FPA CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        AND CHANGES IN RETAINED EARNINGS
                     (in thousands except per share amounts)
                                   (unaudited)

                                              Three Months Ended
                                                 September 30,
                                              ------------------
                                                 1997     1996
                                              ------------------
Earned revenues
  Residential properties                    $ 24,841     $23,817
  Land sales                                     220
  Other income                                   325         314
                                              ------      ------
                                              25,386      24,131
                                              ------      ------
Costs and expenses
  Residential properties                      21,163      20,438
  Land sales                                     180
  Other                                          142         112
  Selling, general and administrative          3,278       2,978
  Interest:
    Incurred                                   1,726       1,481
    Less capitalized                          (1,562)     (1,259)
  Depreciation and amortization                   32          32
  Minority interests                             (16)        (13)
                                              ------      -------
                                              24,943      23,769
                                              ------      -------
Income from operations
   before income taxes                           443         362
Income tax expense                              (168)        (40)
                                              -------     ------
Income from operations before
  extraordinary items                            275         322
Extraordinary gain or early
  extinguishment of debt                          -          594
                                              -------     ------
  Net income                                     275         916
Retained earnings (deficit), at
   beginning of period                        (1,967)     (4,176)
                                              ------      ------
Retained earnings (deficit), at
   end of period                            $ (1,692)   $ (3,260)
                                              ======      ======

Primary earnings per share                  $    .02    $    .08
                                              ======      ======


                 See notes to consolidated financial statements


                                       -2-


<PAGE>






                        FPA CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (amounts in thousands)
                               (unaudited)                  
                     
                                                       Three Months Ended
                                                          September 30,
                                                       ------------------ 
                                                       1997         1996
                                                       ------------------
Cash flows from operating activities:
  Net income                                        $  275     $    916
  Adjustment to reconcile net income
    to net cash provided by (used in)
    operating activities:
    Extraordinary gain on early
      extinguishment of debt                             -         (594)
    Depreciation and amortization                       32           32
  (Increase) decrease in assets
    Receivables                                        (83)          95
    Real estate held for development and sale        4,140       (1,600)
    Deferred charges and other assets                 (762)         (10)
  Increase (decrease) in liabilities
    Accounts payable and accrued expenses             (678)         237
    Other liabilities                                 (161)        (487)
                                                     ------      -------
      Net cash provided by (used in)
      operating activities                           2,763       (1,411)
                                                     -----        -----
Cash flows from financing activities:
  Proceeds from mortgages and loans payable         15,950       19,553
  Repayments of mortgages and loans payable        (18,773)     (19,042)
  Purchase of treasury stock                                       (107)
                                                    -------      ------
      Net cash provided by (used in)
      financing activities                          (2,823)         404
                                                    -------      ------
  Net decrease in cash                                 (60)      (1,007)
  Cash at beginning of year                          1,582        2,617
                                                    ------       ------
  Cash at end of quarter                            $1,522     $  1,610
                                                    ======       ======

  Supplemental disclosure of cash flow activities:
    Interest paid, net of amounts capitalized       $  -       $    118
                                                    ======       ======
    Income taxes paid                               $   43     $     -
                                                    ======       ======


                 See notes to consolidated financial statements







                                       -3-


<PAGE>

                        FPA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(A)      In July, 1996, the Company completed a transaction to fully satisfy
         notes payable with an outstanding balance of approximately $1,650,000
         and reacquired 183,177 shares of Common Stock in exchange for a cash
         payment of approximately $1,061,000. These shares have been retained by
         the Company as treasury stock. This transaction resulted in an
         extraordinary gain of $594,000 net of income tax expense of
         approximately $100,000.

(B)      Primary earnings per common share is computed by dividing net income or
         loss by the weighted average number of common shares outstanding and
         common stock equivalents. The weighted average number of shares used to
         compute primary earnings per common share were 11,444,597 for the three
         months ended September 30, 1997 and 11,506,098 for the three months
         ended September 30, 1996.

(C)      Supplemental disclosure of non-cash financing activities:

         As discussed in Note A, the Company recorded an extraordinary gain of
         $594,000 during fiscal 1997 on the early retirement of approximately
         $1,650,000 of notes payable for a cash payment of $1,061,000.

(D)      Residential properties completed or under construction consists of the
         following:
<TABLE>
<CAPTION>
                                                             (In Thousands)
                                          September 30, 1997                June 30, 1997
                                          ------------------                -------------
             <S>                               <C>                             <C>
         Under contract for sale             $ 21,701                         $ 21,300
         Unsold                                13,020                           14,055
                                          ------------------                -------------
                                             $ 34,721                         $ 35,355
                                          ==================                =============
</TABLE>

(E)      The above statements are unaudited but include all adjustments which
         the Company considers necessary for a fair presentation of the
         financial statements. All adjustments made for the periods presented
         were of a normal recurring nature. The results of operations for the
         three months ended September 30, 1997 and 1996 are not necessarily
         indicative of the full year.

(F)      In October, 1992, a wholly-owned subsidiary of the Company, Versailles
         at Europa, Inc., was established to act as the General Partner in a
         newly-formed Versailles Associates, L.P. (the "Partnership"). The
         Partnership was formed to purchase and develop a tract of land in
         Cherry Hill, New Jersey. The terms of the Partnership Agreement provide
         that the General Partner be allocated 55% of the net profits and losses
         of the Partnership and have exclusive management and control over the
         development of the property. The financial statements of the
         Partnership

                                       -4-



<PAGE>



         are included in the consolidated financial statements of the Company.
         The limited partner's share of the income and capital from this entity
         has been presented as minority interest in the accompanying
         consolidated financial statements.

         Orleans Construction Corp. (OCC) has entered into a joint venture
         agreement with Bridlewood Associates, L.P., a limited partnership
         formed to develop an 85 acre parcel of land in Mount Laurel, New
         Jersey. OCC is the managing general partner. OCC and the limited
         partner share equally in the profits or losses of the entity. The
         financial statements of the Partnership are included in the
         consolidated financial statements of the Company. The limited partner's
         share of the income and capital from this entity has been presented as
         minority interest in the accompanying consolidated financial
         statements.






                                       -5-


<PAGE>



                        FPA CORPORATION AND SUBSIDIARIES

Item 2.           FPA Corporation and Subsidiaries
                  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations.
                  -----------------------------------------------------------


Liquidity and Capital Resources
-------------------------------

         The Company requires capital to purchase and develop land, to construct
units, fund related carrying costs and overhead and to fund various advertising
and marketing costs to facilitate sales. The Company's sources of capital
include funds derived from operations, sales of assets and various borrowings,
most of which are secured. At September 30, 1997, the Company had $54,343,000
available to be drawn under existing secured revolving and construction loans
for planned development expenditures. These expenditures include site
preparation, roads, water and sewer lines, impact fees and earthwork, as well as
the construction costs of the units and amenities. The Company believes that the
funds generated from operations and financing commitments from commercial
lenders will provide the Company with sufficient capital to meet its operating
needs.

Results of Operations
---------------------

         The following table sets forth certain detail as to residential sales
activity for the three months ended September 30, 1997 and 1996, in the case of
revenues earned and new orders, and at the end of the periods indicated, in the
case of backlog.

                                               Three Months Ended
                                               ------------------
                                  September 30, 1997       September 30, 1996
                                  ------------------       ------------------
                                              (Dollars in Thousands)

Revenues Earned                        $24,841                 $23,817
  Units                                    130                     141
  Average Price Per Unit               $   191                 $   169

New Orders                             $28,809                 $22,487
  Units                                    156                     134
  Average Price Per Unit               $   185                 $   168

Backlog                                $42,228                 $38,876
  Units                                    236                     212
  Average Price Per Unit               $   179                 $   183

                                       -6-


<PAGE>



         New orders for the three months ended September 30, 1997 increased by
28% to $28,809,000 on 156 orders, compared to $22,487,000 on 134 orders during
the three months ended September 30, 1996. The opening of new communities in
Chester and Delaware Counties in Pennsylvania and Mercer County in New Jersey
were the primary reasons for the increase. The average price per unit of
revenues earned and new orders increased due to a change in product mix towards
more townhouse and single family homes. The Company expects this trend to
continue.

         Included in the September 30, 1997 backlog are 26 low income units with
an aggregate sales value of approximately $1,400,000 which are to be acquired by
Jeffrey P. Orleans, Chairman and Chief Executive Officer of the Company. These
transactions will satisfy, in part, the Company's low income housing
requirements in Mount Laurel Township, New Jersey. The inclusion of these units
is the primary reason for the decrease in average price per unit of the
September 30, 1997 backlog, as compared to September 30, 1996.

Inflation
---------

         Inflation can have a significant impact on the Company's liquidity.
Rising costs of land, materials, labor, interest and administrative costs have
generally been recoverable in prior years through increased selling prices. The
Company has been able to increase prices to cover portions of these costs.
However, there is no assurance the Company will be able to continue to increase
prices to cover the effects of inflation in the future.

Operating Revenues
------------------

         Revenues for the first quarter of fiscal 1998 increased $1,255,000
compared to the first quarter of fiscal 1997. Revenues from the sale of
residential properties included 130 homes totaling $24,841,000 during the
quarter ended September 30, 1997, as compared to 141 homes totaling $23,817,000
during the quarter ended September 30, 1996. The trend towards more townhouse
and single family homes, discussed previously, is the reason for the increase in
average selling price. Land sale revenues increased for the three months ended
September 30, 1997 due to the sale, under an existing option agreement, of seven
single family lots in Gloucester Township, New Jersey.

Costs and Expenses
------------------

         Costs and expenses for the first quarter of fiscal 1998 increased
$1,174,000, as compared to the first quarter of fiscal 1997. The increase in
cost of residential properties sold of $725,000 is consistent with the increase
in related revenues. Selling, general and administrative expenses increased as a
result of start-up costs associated with opening of the new communities
previously discussed. Cost of land sales increased due to the timing of the lot
sales discussed in the preceding paragraph. Net interest expense decreased
$58,000
                                       -7-


<PAGE>



primarily as a result of the retirement of the notes payable discussed in the
following paragraph under Extraordinary Items.

Extraordinary Items
-------------------

         In July, 1996, the Company completed a transaction to fully satisfy
notes payable with an outstanding balance of approximately $1,650,000 and
reacquired 183,177 shares of Common Stock in exchange for a cash payment of
approximately $1,061,000. These shares have been retained by the Company as
treasury stock. This transaction resulted in an extraordinary gain of $594,000,
net of income tax expense of approximately $100,000.

Net Income
----------

         Net income for the first quarter of fiscal 1998 was $275,000 ($.02 per
primary share) compared to a net income of $916,000 ($.08 per primary share).
The decrease is primarily due to the July 1996 extraordinary items discussed
previously. The effective tax rate for fiscal 1997 was lower due to the
utilization of various income tax credits and carryforwards. The change in
income tax rate reduced net income by approximately $119,000 for the first
quarter of fiscal 1998, as compared to the comparable period in fiscal 1997.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995.
--------------------------------------------------------------------------------

         The following important factors could cause FPA's actual consolidated
results to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, FPA Corporation:

         o        changes in consumer confidence due to perceived uncertainty of
                  future employment opportunities and other factors;

         o        competition from national and local homebuilders in the 
                  Company's market areas;

         o        building material price fluctuations;

         o        changes in mortgage interest rates charged to buyers of the 
                  Company's units;

         o        changes in the availability and cost of financing for the 
                  Company's operations, including land acquisition;

                                       -8-


<PAGE>



         o        revisions in federal, state and local tax laws which provide 
                  incentives for home ownership;

         o        delays in obtaining land development permits as a result of 
                  (i) federal, state and local environmental and other land 
                  development regulations, (ii) actions taken or failed to be
                  taken by governmental agencies having authority to issue such 
                  permits, and (iii) opposition from third parties; and

         o        increased cost of suitable development land.







                                       -9-


<PAGE>



                           PART II. OTHER INFORMATION

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

         a.       Exhibit 27 - Financial Data Schedule (included in electronic 
filing format only).



                                      -10-


<PAGE>




                        FPA CORPORATION AND SUBSIDIARIES

                                   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.

                                 FPA CORPORATION
                                 ---------------
                                  (Registrant)


November 12, 1997                          /S/ Benjamin D. Goldman
-----------------                          -------------------------------------
     (Date)                                Benjamin D. Goldman
                                           President and Chief Operating Officer


November 12, 1997                          /S/ Joseph A. Santangelo
-----------------                          -------------------------------------
     (Date)                                Joseph A. Santangelo
                                           Treasurer, Secretary and
                                           Chief Financial Officer








                                      -11-