<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 March 31, 1998

                                       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 May 13, 1998: 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 March 31, 1998

   Consolidated Balance Sheets at March 31, 1998
   and June 30, 1997                                                      1

   Consolidated Statements of Operations and Changes
   in Retained Earnings for the three months and nine months
   ended March 31, 1998 and 1997                                          2
 
   Consolidated Statements of Cash Flows for the
   nine months ended March 31, 1998 and 1997                              3

   Notes to Consolidated Financial Statements                           4-6




<PAGE>
                        FPA Corporation and Subsidiaries
                           Consolidated Balance Sheets
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                   March 31             June 30
                                                                  ---------            ---------
                                                                    1998                1997*
                                                                  ---------            ---------
                                                                 (Unaudited)
<S>                                                               <C>                  <C>      
Assets
Cash                                                              $   2,361            $   1,582
Receivables
  Trade accounts                                                      7,513                3,223
  Mortgage and other notes                                              387                  404
Real estate held for development and sale:
  Residential properties completed or
    under construction                                               48,359               35,355
  Land held for development or sale
    and improvements                                                 57,222               60,067
Property and equipment, at cost, less
  accumulated depreciation                                            1,892                  507
Deferred charges and other assets                                     6,817                6,475
                                                                  ---------            ---------
                                                                  $ 124,551            $ 107,613
                                                                  =========            =========
Liabilities and Shareholders' Equity
Liabilities
Accounts payable                                                  $  14,063            $  12,759
Accrued expenses                                                      8,520                5,519
Customer deposits                                                     3,873                2,155
Mortgage and other note obligations
  primarily secured by real estate
  held for development and sale                                      64,207               53,637
Subordinated debentures                                                 580                  601
Other notes payable - related parties                                10,481               10,722
Other notes payable                                                   3,687                2,896
Deferred income taxes                                                 2,517                2,587
Minority interests                                                      166                  686
                                                                  ---------            ---------
         Total liabilities                                          108,094               91,562
                                                                  ---------            ---------

Commitments and Contingencies

Shareholders' equity
Preferred stock, $1 par, 500,000
  shares authorized
Common stock, $.10 par, 20,000,000
  shares authorized, 12,698,131
  shares issued at March 31,1998
     and June 30, 1997                                                1,270                1,270
Capital in excess of par value - common stock                        17,726               17,726
Retained earnings (deficit)                                          (1,561)              (1,967)
Treasury stock, at cost (1,342,113
  shares held at March 31,1998
  and June 30, 1997, respectively)                                     (978)                (978)
                                                                  ---------            ---------
Total shareholders' equity                                           16,457               16,051
                                                                  ---------            ---------
                                                                  $ 124,551            $ 107,613
                                                                  =========            =========
</TABLE>
*Reclassified to conform with fiscal 1998 presentation 


                 See notes to consolidated financial statements


<PAGE>

                        FPA Corporation and Subsidiaries
                      Consolidated Statements of Operations
                              and Retained Earnings
                    (In Thousands, except per share amounts)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                 Three Months Ended           Nine Months Ended
                                                      March 31,                    March 31,  
                                            -------------------------     -------------------------
                                                 1998         1997           1998           1997 


<S>                                          <C>            <C>            <C>            <C>     
Earned revenues
  Residential properties                     $ 23,661       $ 19,249       $ 67,837       $ 65,053
  Related party (Note H)                                                      1,472  
  Land sales                                      232          2,728            658          2,728
  Other income                                    393            380          1,152          1,371
                                             --------       --------       --------       --------
                                               24,286         22,357         71,119         69,152
                                             --------       --------       --------       --------
Costs and expenses
  Residential properties                       20,213         16,465         57,806         55,775
  Related party (Note H)                                                      1,459
  Land sales                                      222          3,055            549          3,055
  Other                                           136            118            425            351
  Selling, general and administrative           3,440          2,719          9,839          8,968
  Interest
    Incurred                                    1,855          1,534          5,351          4,505
    Less capitalized                           (1,666)        (1,423)        (4,835)        (3,963)
  Minority interests in income
    (loss) of consolidated subsidiaries           (25)             5           (129)           (23)
                                             --------       --------       --------       --------
                                               24,175         22,473         70,465         68,668
                                             --------       --------       --------       --------
Income (loss) from operations
  before income taxes                             111           (116)           654            484
Income tax expense                                 42                           248             85
                                             --------       --------       --------       --------
Income (loss) from operations
  before extraordinary item                        69           (116)           406            399
                                             --------       --------       --------       --------
Extraordinary item, net                                                                        594
                                             --------       --------       --------       --------
Net income (loss)                                  69           (116)           406            993
Retained earnings (deficit) at
  beginning of period                          (1,630)        (3,067)        (1,967)        (4,176)
                                             --------       --------       --------       --------
Retained earnings (deficit) at
  end of period                              $ (1,561)      $ (3,183)      $ (1,561)      $ (3,183)
                                             --------       --------       --------       --------
Basic earnings (loss) per share:
  Income (loss) before extraordinary
  item                                       $    .01       $   (.01)      $    .04       $    .03
Extraordinary gain                                                                        $    .06
                                             --------       --------       --------       --------
Total                                        $    .01       $   (.01)      $    .04       $    .09
                                             ========       ========       ========       ========

</TABLE>

                 See notes to consolidated financial statements
 


<PAGE>
                        FPA Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                             For the nine months ended
                                                             -------------------------
                                                            3/31/98              3/31/97
                                                            -------              -------
                                                                   (In Thousands)
<S>                                                        <C>                 <C>     
Cash flows from operating activities:
  Net income                                               $    406            $    993
  Adjustments to reconcile net
    income to net cash (used in)
    operating activities:
  Extraordinary gain on early
   extinguishment of debt                                                          (594)
  Depreciation and amortization                                 136                  96
(Increase) decrease in assets:
  Receivables                                                (4,273)                426
  Real estate held for development
    and sale                                                (10,159)             (7,129)
  Deferred charges and other assets                            (342)               (442)
Increase (decrease) in liabilities
  Accounts payable and accrued expenses                       4,305              (1,324)
  Other liabilities                                           1,128                 (93)
                                                           --------            --------
  Net cash used in operating activities                      (8,799)             (8,067)
                                                           --------            --------

Cash flows from investing activities:
  Purchase of property and equipment, net                    (1,521)
                                                           --------         
Cash flows from financing activities:
  Proceeds from mortgages and loans payable                  61,652              63,425
  Repayments of mortgages and loans payable                 (50,553)            (56,662)
  Purchase of treasury stock                                                       (107)
                                                           --------            --------
  Net cash provided by financing acivities                   11,099               6,656
                                                           --------            --------

Net increase (decrease) in cash                                 779              (1,411)
Cash at beginning of year                                     1,582               2,617
                                                           --------            --------
Cash at end of quarter                                     $  2,361            $  1,206
                                                           ========            ========


Supplemental disclosure of cash flow activities:
  Interest paid, net of amounts capitalized                    --                  --   
                                                           ========            ========
  Income taxes paid                                             109                  54
                                                           ========            ========
</TABLE>

<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)      Basic earnings per common share is computed by dividing net income by
         the weighted average number of common shares outstanding. The weighted
         average number of shares used to compute basic earnings per common
         share were 11,356,018 shares for the three and nine month periods ended
         March 31, 1998 and 1997. Diluted earnings per share includes additional
         common shares that would have been outstanding if the dilutive
         potential common shares had been issued. The Company's only dilutive
         shares are certain stock options granted to directors and key employees
         of the Company.

         The following is a reconciliation of common share amounts used in the
         computation of basic and fully diluted shares for the three and nine
         months ended March 31, 1998 and 1997. There were no reconciling items
         to consider for the numerators in the calculations. The income before
         extraordinary items and net income amounts used were the amounts
         reported.
<TABLE>
<CAPTION>

                                                       Three Months Ended                        Nine Months Ended
                                                            March 31                                  March 31
                                                    1998                 1997                1998                 1997
                                                ----------           ----------           ----------           ----------
                                           
<S>                                             <C>                  <C>                  <C>                  <C>       
Total Common Shares issued and
  outstanding (net of 1,342,113
  Treasury Shares)
Basic EPS Shares                                11,356,018           11,356,018           11,356,018           11,356,018

Add:  Effect of assumed shares issued
 under Treasury Stock method
 for Stock Options                                 168,747              210,551              141,439              170,120
                                                ----------           ----------           ----------           ----------

Diluted EPS Shares                              11,524,765           11,566,569           11,497,457           11,526,138
                                                ==========           ==========           ==========           ==========

</TABLE>

         Basic and diluted earnings per share are the same since the Company
does not have a substantial amount of dilutive securities.

         A Convertible Subordinated 7% Note due January 2, 2002 issued to
Jeffrey P. Orleans, Chairman and Chief Executive Officer of the Company, in the
amount of $3,000,000 is convertible into Common Stock at $1.50 per share. This
security was not included in the above computation since the exercise price of
$1.50 exceeds the average market price of the

                                        4

<PAGE>



Company's Common Shares. Its inclusion, using the Treasury Stock method, would
be antidilutive.

(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:

                                                   (In Thousands)
                                          March 31, 1998     June 30, 1997
                                          --------------     -------------

         Under contract for sale              $32,885           $21,300
         Unsold                                15,474            14,055
                                              -------           -------
                                              $48,359           $35,355
                                              =======           =======

(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 and nine month periods ended March 31, 1998 and 1997 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 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>



(G)      Notes Payable - Related Parties include various note obligations, most
         of which are payable to Jeffrey P. Orleans, Chairman and Chief
         Executive Officer of the Company. These obligations bear interest at
         rates ranging from 7% to prime +2%. These obligations have various
         maturity dates through January 1, 2002.

(H)      Related party residential property revenues for the nine months ended
         March 31, 1998 included 27 low income homes with an aggregate sales
         value of $1,472,000 which were purchased by Jeffrey P. Orleans,
         Chairman and Chief Executive Officer of the Company. These transactions
         satisfied, in part, the Company's low income housing requirements in
         Mount Laurel Township, New Jersey. The selling prices for these homes
         which are determined by state statute, are the same as if the homes had
         been sold to unaffiliated third parties.



                                        6

<PAGE>



                        FPA CORPORATION AND SUBSIDIARIES

Item 2. 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 homes, 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 March 31, 1998, the Company had
$54,933,000 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 homes 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 nine months ended March 31, 1998 and 1997, in
the case of revenues earned and new orders, and at the end of the periods
indicated, in the case of backlog.

                                                      Nine Months Ended
                                               March 31, 1998    March 31, 1997
                                               --------------    --------------
                                                 (Dollars in Thousands)

         Revenues Earned                         $69,309             $65,053
           Homes                                     386                 381
           Average Price Per Unit                $   180             $   171
                                                                    
         New Orders                              $99,192             $73,990
           Homes                                     521                 440
           Average Price Per Unit                $   190             $   168
                                                                    
         Backlog                                 $68,142             $49,142
           Homes                                     345                 278
           Average Price Per Unit                $   197             $   177
                                                                
                  New orders for the nine months ended March 31, 1998
increased by 34% to $99,192,000 on 521 orders, compared to $73,990,000 on 440
orders during the nine months ended March 31, 1997. The Company continues to
expand its geographic marketing areas within Pennsylvania and New Jersey. This
increase in new orders resulted from the opening of seven additional selling
communities in fiscal 1998, including two new communities in Chester County,
Pennsylvania. In New Jersey, the Company opened new communities in Mount Laurel,
Evesham

                                        7

<PAGE>



and Southampton Townships in Burlington County, as well as in Princeton Township
in Mercer County, and Gloucester Township in Camden County. The average price
per unit of revenues earned and new orders increased due to a change in product
mix towards higher priced townhouse and single family homes, along with the
settlement of fewer condominiums. The Company expects this trend to continue.

Backlog

                  The dollar value of backlog at March 31, 1998 increased 39% to
$68,142,000 on 345 homes, as compared to the backlog at March 31, 1997 of
$49,142,000 on 278 homes. The Company's continued geographic diversification
with its new communities, coupled with favorable economic conditions and
consumer sentiment, resulted in the increased backlog level. The March 31, 1998
amount represents the highest dollar value of backlog the Company has achieved
in more than a decade.

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 third quarter of fiscal 1998 increased
$1,929,000 as compared to the third quarter of fiscal 1997. Revenues from the
sale of residential properties included 122 homes totaling $23,661,000 during
the quarter ended March 31, 1998, as compared to 111 homes totaling $19,249,000
during the quarter ended March 31, 1997. The expanding geographic scope of the
Company's operations and favorable economic conditions are the primary reasons
for this increase. The increase in average selling price is due to a change in
product mix towards more townhome and single family homes. The Company expects
this trend to continue. The reduction in land sale revenues is due to the timing
of a land sale which was completed during the third quarter of fiscal 1997.

                  Revenues for the nine months ended March 31, 1998 increased
$1,967,000 as compared to the nine months ended March 31, 1997. Revenues from
residential property sales and homes delivered (including related party amounts)
increased by $4,256,000 and five homes, respectively, to $69,309,000 on 386
homes for the nine months ended March 31, 1998. The land sale discussed in the
preceding paragraph accounts for the decrease in related revenues. Residential
property revenues for the nine months ended March 31, 1998 from related parties
included 27 low income homes with an aggregate sales value of $1,472,000 which
were purchased by Jeffrey P. Orleans, Chairman and Chief Executive Officer of
the Company. These transactions satisfied, in part, the Company's low income
housing requirements in Mount Laurel Township, New Jersey. The selling prices
for these homes, which are determined by state statute, are the same as if the
homes

                                        8

<PAGE>



had been sold to unaffiliated third parties. Other income decreased $219,000
primarily as a result of the prior year sale of the Company's interest in a
joint venture.

Costs and Expenses

                  Costs and expenses for the third quarter of fiscal 1998
increased $1,702,000 compared to the third quarter of fiscal 1997. This overall
increase included an increase in cost of real estate sold (including land) of
$915,000 and an increase in selling general and administrative expenses of
$721,000. These increases are consistent with the increases in related revenues
coupled with start-up costs associated with the opening of new communities.

                  Costs and expenses for the nine months ended March 31, 1998
increased $1,797,000 which is consistent with the increase in earned revenues
(i.e., higher unit volume and product mix changes). Costs of real estate sold
(including land and related party amounts) increased only $984,000 (compared to
the related increase in revenues of $2,186,000) due to improved overall profit
margins for land and residential property sales. Selling general and
administrative expenses increased $871,000 which is attributable to start-up
costs associated with the opening of new communities and the increase in
residential property revenues.

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 re-acquired 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 third quarter of fiscal 1998 was $69,000
($.01 per basic share) compared to a net loss of $116,000 ($.01 per basic share)
for the prior year quarter. The increase in revenues, coupled with the increase
in profit margins from land sales and slight increase in profit margins from
residential property sales are the primary reasons for the improvement.

                  Net income for the nine months ended March 31, 1998 was
$406,000 ($.04 per basic share) compared to net income of $993,000 ($.09 per
basic share) for the nine months ended March 31, 1997. The July 1996
extraordinary gain of $594,000 accounts for substantially all of the difference
in net income for the comparable nine month periods. The current year
improvement in income from operations before income taxes (due to improved
profit margins on the sale of land and residential properties) was offset by a
higher income tax rate in fiscal 1998 due to the utilization of certain tax
assets during fiscal 1997 which resulted in a lower effective tax rate.


                                        9

<PAGE>



Litigation


                  During the second quarter of fiscal 1998, a judgment in the
amount of $2,500,000 was rendered against FPA Corporation, and in the amount of
$1,250,000 against the Estate of Marvin Orleans and Jeffrey P. Orleans, trading
as Orleans Construction Company, a partnership (collectively, "OCC") by the
Court of Common Pleas of Bucks County, in an action brought against FPA
Corporation, OCC, and an unrelated party arising out of injuries to two workmen
at an FPA Corporation project during its construction phase. The plaintiffs have
also requested "delay damages" based upon an allegation, which FPA and OCC will
contest, that FPA and OCC inappropriately delayed the trial. Although the amount
of delay damages, if granted, is uncertain, the portion thereof allocable to FPA
and OCC could be as much as approximately $2,250,000 between them. FPA and OCC
have filed post-trial motions challenging the judgment. One of FPA's
subcontractors is insured for up to $2,000,000 under two insurance policies;
that subcontractor's insurance company provided a defense to FPA and OCC and its
limits stand in front of FPA's primary insurance policy. FPA and OCC are insured
up to $1,000,000 under its primary policy in effect at that time, and FPA and
OCC are further insured under an umbrella policy for $15,000,000. The
subcontractor's insurance company, FPA's primary insurance company, and FPA's
excess insurer have acknowledged coverage up to their aggregate policy limits.
Therefore, the full amount of the judgment, including delay damages, is expected
to be satisfied from insurance proceeds.

         Accordingly, the Company has recorded an accrued expense for $2,500,000
for its portion of the judgment discussed above. The Company also has recorded a
receivable for $2,500,000, representing the amount the Company believes it will
recover from the various insurance carriers to satisfy its portion of the
judgment. Based upon the outcome of post-trial motions challenging the judgment
and any potential future award of delay damages, the Company will adjust its
liability and insurance recovery amounts accordingly.

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
         homes;

                                       10

<PAGE>




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

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.





                                       11

<PAGE>



                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.

           The registrant incorporates herein by reference the information
contained in Part 1, Item 2, "Management's Discussion and Analysis of Financial
Condition and Results of Operations Litigation".

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

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



                                       12

<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)

         May 13, 1998                      S/Benjamin D. Goldman
                                           -------------------------------------
                                           Benjamin D. Goldman
                                           President and Chief Operating Officer


         May 13, 1998                      S/Joseph A. Santangelo
                                           -------------------------------------
                                           Joseph A. Santangelo
                                           Treasurer, Secretary and
                                           Chief Financial Officer


                                       13