EXHIBIT 13



<PAGE>
                               [GRAPHIC OMITTED]







                                      2000
                                  ANNUAL REPORT


<PAGE>



                              SWVA BANCSHARES, INC.
                               2000 ANNUAL REPORT

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

TABLE OF CONTENTS

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



Corporate Profile and Related Information......................................1


Stock Market Information.......................................................1


Selected Financial and Other Data..............................................3


President's Message............................................................4


Management's Discussion and Analysis of
  Financial Condition and Results of Operations................................6


Report of Independent Auditors................................................13


Consolidated Financial Statements.............................................14


Notes to Consolidated Financial Statements....................................20


Office Locations..............................................................50


Directors and Executive Officers..............................................50


Other Corporate Information...................................................50

                                        i

<PAGE>

                              SWVA BANCSHARES, INC.

Corporate Profile and Related Information

         SWVA  Bancshares,  Inc.  (the  "Company")  is the  parent  company  for
Southwest  Virginia  Savings  Bank,  FSB  ("Southwest  Virginia  Savings" or the
"Bank").  The Company was formed as a Virginia  corporation  in June 1994 at the
direction  of the Bank to acquire all of the capital  stock that the Bank issued
upon  its  conversion  from the  mutual  to the  stock  form of  ownership  (the
"Conversion")  in  connection  with  a  $5.7  million  initial  public  offering
completed on October 7, 1994. The Company is a unitary  savings and loan holding
company which, under existing laws,  generally is not restricted in the types of
business  activities  in which it may engage  provided  that the Bank  retains a
specified amount of its assets in housing- related  investments.  At the present
time, since the Company does not conduct any active  business,  the Company does
not intend to employ any person  other than  officers  but  utilizes the support
staff and facilities of the Bank from time to time.

         Southwest  Virginia  Savings  is  a  federally   chartered  stock  Bank
headquartered  in Roanoke,  Virginia.  The Bank was founded in 1927 as Southwest
Virginia  Building  and  Loan  Association  and  originally   chartered  by  the
Commonwealth  of Virginia.  In 1990, a federal charter was obtained and the name
was changed to Southwest  Virginia  Savings  Bank,  FSB. Its deposits  have been
federally  insured  since  1945.  The  Bank  is  a  community  oriented  savings
institution  offering a variety of  financial  services to meet the needs of the
communities  that it serves.  Southwest  Virginia  Savings conducts its business
from its main office in Roanoke, Virginia, four full service branch offices, one
of which is also  located in the City of  Roanoke,  one in the City of Salem and
two in the County of Roanoke, and a loan production office in Roanoke County.

         The Bank is primarily  engaged in the business of  attracting  deposits
from the general public and originating loans secured by first mortgages on one-
to four-family  residences as well as loans for  nonresidential and multi-family
real estate purposes,  construction loans, consumer loans,  commercial loans and
other loans.


Stock Market Information

         Since its issuance in October 1994, the Company's common stock has been
traded  over-the-counter  with trades reported in the National  Quotation Bureau
"pink sheets" under the trading symbol of "SWVB".  The following  table reflects
high and low bid  information  as  furnished  by a local  brokerage  firm.  This
information reflects inter-dealer prices,  without retail mark-up,  mark-down or
commission, and may not represent actual trades.

                                               HIGH             LOW
                                               ----             ---

        July 1 - September 30, 1998           20.380           15.500
        October 1 - December 31, 1998         17.250           10.000
        January 1 - March 31, 1999            16.030           13.500
        April 1 - June 30, 1999               15.500           13.000
        July 1 - September 30, 1999           14.500           12.750
        October 1 - December 31, 1999         12.750           11.250
        January 1 - March 31, 2000            12.000           09.130
        April 1 - June 30, 2000               10.500           09.130


                                        1

<PAGE>


         The number of  shareholders  of record of common  stock as of August 4,
2000 was  approximately  215.  This does not  reflect  the  number of persons or
entities who held stock in "street" name through  various  brokerage  firms.  At
August 4, 2000, there were 423,612 shares outstanding.

         Declarations  of  dividends  by the Board of  Directors  of the Company
depend upon a number of factors,  including the amount of cash and liquid assets
held by the Company,  investment  opportunities  available to the Company or the
Bank, capital requirements, regulatory limitations, the Company's and the Bank's
results of operations and financial  condition,  tax  considerations and general
economic conditions. Certain of these restrictions are discussed in notes 12 and
14 to the consolidated financial statements.


                                Dividends Declared and Paid

<TABLE>
<CAPTION>
                                Amount Per
Date Declared                   Common Share        Record Date                 Date Payable
-------------                   ------------        -----------                 ------------
<S>                               <C>             <C>                         <C>
February 1, 1995                   $0.15            March 1, 1995               March 31, 1995
July 28, 1995                      $0.15            August 31, 1995             September 30, 1995
February 21, 1996                  $0.15            March 11, 1996              March 31, 1996
August 21, 1996                    $0.15            September 9, 1996           September 30, 1996
February 19, 1997                  $0.15            March 14, 1997              March 31, 1997
August 20, 1997                    $0.15            September 15, 1997          September 30, 1997
September 3, 1997                  $1.00            September 15, 1997          September 30, 1997
February 18, 1998                  $0.15            March 20, 1998              March 31, 1998
August 19, 1998                    $0.20            September 15, 1998          September 30, 1998
February 25, 1999                  $0.20            March 15, 1999              March 31, 1999
August 18, 1999                    $0.20            September 15, 1999          September 30, 1999
February 16, 2000                  $0.20            March 15, 2000              March 31, 2000
August 16, 2000                    $0.20            September 15, 2000          September 30, 2000

</TABLE>


                                        2

<PAGE>
<TABLE>
<CAPTION>
                                               SELECTED FINANCIAL AND OTHER DATA


-----------------------------------------------------------------------------------------------------
Financial Condition (Dollars in Thousands)
At June 30,                                      2000       1999       1998       1997       1996
-----------------------------------------------------------------------------------------------------

<S>                                          <C>        <C>        <C>        <C>        <C>
Total assets                                   $83,961    $81,714    $84,387    $70,753    $66,987
Loans receivable, net                           53,610     45,576     48,211     50,982     46,757
Mortgage-backed & investment securities         22,356     23,817     22,886     10,074      7,939
Interest-bearing deposits                        1,685      6,278      5,897      5,304      3,841
Cash and cash equivalents                        2,060      2,454      3,193      1,276      5,262
Savings deposits                                64,748     62,094     68,288     57,933     57,643
Borrowed funds                                  11,700     12,000      7,000      3,500       --
Equity capital/stockholders' equity              6,742      6,791      8,327      8,602      8,675

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

Summary of Operations (Dollars in Thousands)
Year Ended June 30,                              2000       1999       1998       1997       1996
-----------------------------------------------------------------------------------------------------

Interest income                                  6,028    $ 5,791    $ 5,808    $ 5,310    $ 4,906
Interest expense                                 3,313      3,338      3,226      2,673      2,622
   Net interest income                           2,715      2,453      2,582      2,637      2,284
Provision for credit losses                         13         13         33         23       --
                                               -------    -------    -------    -------    -------
  Net interest income after provision for
      credit losses                              2,702      2,440      2,549      2,614      2,284
Noninterest income                                 467        575        428        398        455
                                               -------    -------    -------    -------    -------
Noninterest expense                              2,586      2,493      2,198      2,392      2,242
                                               -------    -------    -------    -------    -------
Income before income taxes                         583        522        779        620        497
Provision for income taxes                         187        177        318        206        191
                                               -------    -------    -------    -------    -------
     Net income                                $   396    $   345    $   461    $   414    $   306
                                               =======    =======    =======    =======    =======
-----------------------------------------------------------------------------------------------------

Other Selected Data
Year Ended June 30,                              2000       1999       1998       1997       1996
-----------------------------------------------------------------------------------------------------

Return on average assets                          0.48%      0.42%      0.59%      0.60%      0.46%
Return on average equity                          5.96       4.41       5.41       4.87       3.50
Interest rate spread                              3.19       2.65       3.10       3.55       3.17
Non-performing assets to total loans              0.00       0.13       0.00       0.10       0.00
Non-performing assets to total assets             0.22       0.07       0.00       0.08       0.00
Allowance for credit losses to total loans        0.39       0.45       0.43       0.43       0.40

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

Per share data
Year Ended June 30,                              2000       1999       1998       1997       1996

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

Basic earnings per share                       $   .99    $   .78    $   .97    $   .85    $   .60
Diluted earnings per share                         .99        .78        .95        .85        .60
Stockholders' equity                             15.91      14.89      16.76      16.83      15.97
Dividends                                          .40        .40       1.30        .30        .30
Dividend payout ratio                               49%        51%       134%        35%        50%
Average equity to average assets ratio            8.03       9.43      10.98      12.26      13.08

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

</TABLE>

                                        3
<PAGE>

                               President's Message


Dear Shareholder:

 We are pleased to provide this Annual  Report for 2000.  This past year was one
of change and  challenges . . . continued  change in our  corporate  culture and
challenges  in the  marketplace  as  well as  ongoing  challenges  in  providing
delivery of premier financial services to our customers.

Our change in culture is a change in how we do business. This change became more
pronounced in Year 2000.  As we began to alter our role as a traditional  thrift
and became more mainstream as a broad range financial  services provider we were
able to attract new personal and business relationships that have been essential
in our earnings  growth this year and will be the  foundation  of our  continued
growth going  forward.  This past year our earnings began to reflect our efforts
in generation of new retail and commercial  business and simultaneous  reduction
of our traditional dependence on residential mortgage production.  During fiscal
2000 our  mortgage  volume  was lower  than the  previous  year due to a reduced
demand in mortgage  refinancing,  however our retail and commercial lenders more
than offset the drop with an increase in their  volume.  Our  earnings  improved
14.8% to $396,000  which  yielded an Earnings Per Share of $0.99 and a Return on
Average Equity of 5.96%.  Both of these  profitability  measures are the highest
since  conversion from mutual to stock and most important is the upward earnings
trend that has been established. Total Assets of $84 million is only a 3% growth
over last year,  however our lack of asset growth has been a  reflection  of our
concentration  on not  renewing  high cost  certificates  of deposit and thereby
improving our net interest margin.  Total Loans grew $8 million to $53.6 million
- an increase of 17.6%.  The bank's  commercial loan department is concentrating
on the small business  sector which we feel is the foundation of stable commerce
in any thriving  community.  The  consumer  emphasis has been in the home equity
arena resulting in a 44.68% increase in that segment of business.

One of our major priorities for 2000 was to continue improvement in our delivery
of  financial  services.  This  means  getting  the right  product  to the right
customer  which  determines  the  effectiveness  of our being  someone's bank of
choice.  We  introduced  the STAR ACCOUNT as our new  multi-tiered  relationship
account,  revamped our home equity line and renamed it STARLINE,  and introduced
check imaging on our deposit accounts.  Further,  transaction  volume at our new
ATMs at the  Crossroads,  Oak Grove and Vinton offices  improved  throughout the
year,  and the  availability  of these ATMs  enabled us to greatly  increase our
number of debit cards.

Initiatives for the coming year include new commercial  checking options,  a new
senior citizens banking package to be called STARPLUS and a new ATM at our Salem
office.  The new commercial  checking package and the Salem ATM are underway and
we hope to have  them  available  by  mid-Fall,  2000.  Also,  we have  joined a
consortium  of 67  community  banks in  Virginia  for  purpose of  entering  the
insurance agency business which will allow us to offer the insurance products of
a general agency.

As we anticipate opportunities and challenges in the future, bank management and
your Board are committed to positioning  Southwest Virginia Savings Bank to meet
tomorrow's  needs and demands of our  customers.  In connection  with our normal
strategic planning process we have devoted  particular  attention to the rapidly
changing  nature  of  banking  and  the  continuous   increase  in  competition.
Recognizing  the technology and human  resource  challenges  that lie before us,
alternative  strategies have been identified and evaluated.  As a result of this
process,  on August 8, 2000 we were pleased to announce our planned  affiliation
with FNB  Corporation,  parent company of First National Bank  headquartered  in
Christiansburg, Virginia. Under the terms of the agreement, shareholders of SWVA
will receive  consideration valued at $20.25 for each share of our common stock.
The  agreement  will be presented  for  stockholder  approval at the 2000 Annual
Meeting of Shareholders,  currently scheduled to be held in December, 2000. Both
First National Bank and Southwest  Virginia Savings Bank will continue operating
under their respective

                                        4

<PAGE>



managements  with  their  current  names  as  wholly-owned  subsidiaries  of FNB
Corporation.  Each bank will be  managed  by its own Board of  Directors  and we
anticipate bank customers will see no change in day to day operations other than
our bank will be able to offer an expanded  financial  services  menu due to the
increased technology capabilities available to us.

We believe that FNB  Corporation's  banking  philosophy fits extremely well with
the  strong  community  commitment  that our bank has  consistently  maintained.
Southwest  Virginia  Savings Bank has been serving the Roanoke Valley since 1927
and First National Bank has been serving the New River Valley since 1905 . . . a
combined  total of 168 years in  extending  quality  banking  to  customers  and
communities in Southwest Virginia.

After  completion  of the deal we will be able to offer,  or provide  access to,
products and services  that we currently do not have  available.  These  include
cash management,  commercial leasing,  discount  brokerage,  personal investment
services and personal and corporate trust services. This merger strengthens both
banks' operations along the I-81 corridor. The economic, political, cultural and
academia ties joining the two valleys are already  strong,  yet the future holds
enormous opportunities.

To our  shareholders  we perceive  benefit  from the  improved  liquidity of FNB
Corporation's stock and the value associated with a growing  organization.  Once
merged we will have combined assets of $650 million and capital of $60 million.

We are very  fortunate to have a strong and committed  Board of Directors and we
are fortunate to have a management team and staff that are enthusiastic, skilled
and responsive. It is their dedication and contributions that ensure the success
of our organization.

To our  shareholders  and customers we extend  appreciation  for your  continued
investment and business. We look forward to continue serving each of you.

                                               Sincerely,



                                               /s/D. W. Shilling
                                               ---------------------------------
                                               D. W. Shilling
                                               President & CEO




                                        5

<PAGE>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

         The business of the Bank consists of receiving  monetary  deposits from
the general public and  reinvesting  those funds typically in its primary market
area in the form of mortgage  loans secured by one- to  four-family  residences,
nonresidential and multi-family real estate loans, construction, commercial, and
consumer  loans.  The Bank also  purchases  U.S.  government  and federal agency
securities,  mortgage-  backed and  mortgage-related  securities  and invests in
interest-bearing deposits with other insured financial institutions.

         Currently,  the Bank's primary market area consists of Roanoke  County,
the City of Roanoke,  the City of Salem,  and the County of Botetourt.  The Bank
regards this area as its "basic"  lending  area,  but loans are also made in the
adjoining counties of Bedford and Franklin.

         The largest  component of the Bank's net income is net interest income,
which  is  the  difference   between  interest  income  and  interest   expense.
Consequently,  the Bank's  earnings are  dependent  on its net interest  income,
which is determined by the difference  ("interest rate spread") between rates of
interest  earned  on  interest-earning  assets  and  rates of  interest  paid on
interest-bearing  liabilities,  and the  relative  amounts  of  interest-earning
assets and interest-bearing  liabilities. The Bank's net income is also affected
by its provision for losses on loans and  investments,  as well as the amount of
noninterest  income and noninterest  expense,  such as compensation  and related
expenses,  federal deposit insurance premiums,  data processing costs, occupancy
expenses, and income taxes. Earnings of the Bank also are affected significantly
by general economic and competitive  conditions,  particularly changes in market
interest rates,  government  policies and actions of regulatory  authorities and
demand for financing of real estate and other types of loans.

Management Strategy

         The   Bank's   goal  is  to   serve   its   local   community   with  a
consumer-oriented  philosophy  dedicated to providing  financial services to its
customers. The principal components of the Bank's management strategy, which are
designed to achieve its goal, are discussed below.

         The  Bank  has  been a  traditional  lender  for  one-  to  four-family
residential  loans since its founding in 1927.  This past fiscal year,  the Bank
generated a total of $26.4 million in mortgage  loans of which $9.9 million were
sold in the  secondary  market and $16.5  million  were  retained  in the Bank's
portfolio.  These  types  of loans  make up  61.25%  of the  Bank's  total  loan
portfolio.  Financing homes for its community continues to be the Bank's primary
lending function,  however  management has initiated new focus in commercial and
consumer  loans during the past two years for  purposes of expanding  the Bank's
financial  menu,  improving  loan yields,  and obtaining a better balance in the
loan portfolio.  The Bank's  commercial loan department is  concentrating on the
small business sector which is the foundation of stable commerce in any thriving
community.  Excellent  progress  has been  made in  introducing  the Bank to the
commercial market resulting in a growing pipeline of new business and prospects.
The consumer emphasis has been in the home equity arena resulting in an increase
of home  equity  lines of credit  from  $4.7  million  at June 30,  1999 to $6.8
million at June 30, 2000,  representing  a 44.68%  increase.  Consumer loans for
other needs and purposes also  increased as management  and staff  solicited new
business.  Value-added  use of media  and  enhanced  cross-sell  efforts  led to
greatly  improved  results as total  consumer and commercial  loans  outstanding
increased more than 67.28% over the preceding year.


                                        6

<PAGE>

         The Bank  historically has maintained good asset quality.  Its emphasis
on one-to-four family mortgages and its underwriting  policies and practices are
intended to maintain this quality.  The new emphasis on commercial  and consumer
loans may add credit risk to the loan portfolio due to the risk inherent  nature
of the loans.  However,  policies are in place and practices are being monitored
in order to minimize credit risk which includes an appropriate  increase in loan
loss provision in the next fiscal year.  Management  feels the Bank's  increased
loan loss  provision  and capital  adequacy  justify and support the  additional
risk.  At June 30, 2000,  the Bank had $186,000 in  non-performing  assets.  The
Bank's ratio of non-performing loans to total assets at June 30, 2000 was 0.22%.

         One of the  reasons the Bank  converted  to a stock Bank was to support
growth in deposits and lending activities,  which would also leverage the Bank's
existing branch network,  facilities, and personnel resources. The assets of the
Company increased $29.1 million, or 53.01%, from $54.9 million at June 30, 1994,
to $84.0 million at June 30, 2000. The increase was due primarily to an increase
in loans  receivable  of $13.2  million  and an  increase  of $15.2  million  in
mortgage backed and investment securities.

         During fiscal year 2001,  management expects to increase the portion of
originated residential mortgage loans that is to be retained in our portfolio in
order to increase  earning  assets with  attractive  yields and to enhance asset
growth. This growth will be funded by a mix of deposit growth and borrowings.

Asset and Liability Management

         The Bank  continues to manage  interest  rate risk. It has managed this
risk on the  asset  side of its  balance  sheet  with  adjustable-rate  mortgage
("ARM") loans and government-related  securities.  As regards the Bank's present
and future  portfolio  of  commercial  loans,  pricing  will  generally  be of a
variable nature based on appropriate money market indexes. Commercial term loans
with longer maturities will generally reprice every 3 to 5 years. Consumer loans
generally  have a maturity of 3 years or less while home equity  lines of credit
are of a variable  nature.  On the liability side of its balance sheet, the Bank
has depended on  certificates of deposit of one year or less to fund the lending
operation, however management is seeking lower cost of funding primarily through
new  deposit  products  to attract  new  checking  account  customers.  Further,
management  will continue to manage  interest rates paid for deposits in term of
achieving  appropriate  interest rate margins.  Historically the Bank has relied
upon the cash flows from its  deposits and  mortgage  repayments  as its primary
source of funds although in 1997, the Bank began to use borrowings from the FHLB
to support funding needs and to help manage interest rate risk.

                                        7

<PAGE>
Average Balance Sheet

         The  following  table sets forth  certain  information  relating to the
Bank's  average  balance  sheet and  reflects  the  average  yield on assets and
average cost of  liabilities  for the periods  indicated and the average  yields
earned and rates paid.  Such yields and costs are derived by dividing  income or
expense by the average balance of assets or liabilities,  respectively,  for the
periods presented. Average balances are derived from daily average balances.

<TABLE>
<CAPTION>
                                                                              For the Year Ended June 30
                                                       ------------------------------------------------------------------------
                                                                2000                                     1999
                                                       --------------------------------         -------------------------------
                                                       Average                Average           Average                Average
                                                       Balance    Interest   Yield/Cost         Balance   Interest   Yield/Cost
                                                       -------    --------   ----------         -------   --------   ----------
                                                                                (Dollars in Thousands)
<S>                                                    <C>       <C>          <C>              <C>        <C>         <C>
Interest-earning assets:
   Loans receivable, net (1)                            $49,988    $4,076         8.15%         $47,834     $3,856       8.06%
   Investments and mortgage-backed
   securities:
      Held to maturity, at cost                             268        21         7.84              298         23        7.84
      Available for sale, FMV (2)                        22,060     1,555         7.05           21,267      1,313        6.17
   Other investments (3)                                  6,059       376         6.21           10,514        599        5.70
                                                        -------    ------                       -------     ------
      Total interest-earning assets                      78,375     6,028         7.69           79,913      5,791        7.25
                                                        -------    ------                                   ------

Non-interest earning assets                               4,358                                   3,050
                                                        -------                                 -------
      Total assets                                      $82,733                                 $82,963
                                                         ======                                 =======

Interest-bearing liabilities:
   Interest-bearing demand accounts                       5,827        87         1.49          $ 6,083         87        1.43
   Regular savings & club accounts                        8,568       257         3.00            7,865        235        2.99
   Money market deposit accounts                          2,975        75         2.52            3,130         87        2.78
   Certificates of deposit                               45,853     2,330         5.08           46,555      2,439        5.24
   Borrowed funds                                        10,338       564         5.46            9,043        490        5.42
                                                        -------    ------                       -------     ------
      Total interest-bearing liabilities                 73,561     3,313         4.50           72,676      3,338        4.59
                                                                   ------                                   ------
Non-interest-bearing demand accounts                      1,358                                   1,398
Non-interest bearing liabilities                          1,172                                   1,064
Equity                                                    6,642                                   7,825
                                                        -------                                 -------
      Total liabilities and equity                      $82,733                                 $82,963
                                                        =======                                 =======
Net-interest income                                                $2,715                                   $2,453
                                                                   ======                                    =====
Interest rate spread (4)                                                          3.19                                    2.65
Net yield on interest-earning assets (5)                                          3.46                                    3.07
Ratio of average interest-earning assets to
average interest-bearing liabilities                                            106.55                                  109.96
Average equity to average total assets                                            8.03                                    9.43
</TABLE>

(1)  Includes loans held for sale and non-accrual loans.
(2)  Calculations based on historical cost.
(3)  Includes FHLB Overnight Account.
(4)  Interest rate spread represents the difference between the average yield on
     interest-earning   assets  and  the  average  cost  of  interest-   bearing
     liabilities.
(5)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.

                                        8
<PAGE>
Rate/Volume Analysis

         The table below sets forth  certain  information  regarding  changes in
interest income and interest expense of the Bank for the periods indicated.  For
each category of interest-earning and interest-bearing liabilities,  information
is provided on changes attributable to (i) changes in volume (changes in average
volume  multiplied by old rate);  (ii) changes in rate multiplied by old average
volume);  (iii) and changes in rate volume  (changes in rate  multiplied  by the
change in volume).
<TABLE>
<CAPTION>

                                    ---------------------------------------------------------------------
                                                       For the Year Ended June 30,
                                    ---------------------------------------------------------------------
                                              2000 vs. 1999                    1999 vs. 1998
                                    --------------------------------    ---------------------------------
                                                               (In Thousands)
                                                      Rate/                               Rate/
                                    Volume    Rate    Volume     Net    Volume    Rate    Volume     Net
                                    ------    ----    ------     ---    ------    ----    ------     ---
<S>                                <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>
Interest income:
  Loans receivable, net             $ 174    $  44    $   2    $ 220    $(143)   $(189)   $   6    $(326)
  Mortgage backed securities
  and investments:
    Held to maturity, at cost          (2)       -        -       (2)      (3)       -        -       (3)
    Available for sale, FMV            49      186        7      242      404      (55)     (22)     327
  Other investments                  (254)      54      (23)    (223)     117     (111)     (21)     (15)
                                    -----    -----    -----    -----    -----    -----    -----    -----
    Total interest-earning assets     (33)     284      (14)     237      375     (355)     (37)     (17)
                                    -----    -----    -----    -----    -----    -----    -----    -----

Interest expense:
  Deposits:
    Interest-bearing demand
     accounts                          (4)       4        -        -       19      (20)      (4)      (5)
    Regular savings & club
     accounts                          21        1        1       23       10        3        -       13
    Money market deposit
     accounts                          (4)      (8)       -      (12)      (1)      (6)       -       (7)
    Certificates of deposit           (37)     (73)       1     (109)     (50)     (72)       1     (121)
  Borrowed funds                       70        3        -       73      272      (20)     (20)     232
                                    -----    -----    -----    -----    -----    -----    -----    -----
    Total interest-bearing
      liabilities                      46      (73)       2      (25)     250     (115)     (23)     112
                                    -----    -----    -----    -----    -----    -----    -----    -----

Change in net interest income       $ (79)   $ 357    $ (16)   $ 262    $ 125    $(240)   $ (14)   $(129)
                                    =====    =====    =====    =====    =====    =====    =====    =====

</TABLE>
                                        9

<PAGE>
                        Comparison of Financial Condition
                          and Results of Operations for
               Fiscal Years Ended June 30, 2000 and June 30, 1999

         Total  assets at June 30, 2000 were $84.0  million as compared to $81.7
million at June 30,  1999,  an increase of $2.3  million.  The  increase was due
primarily to additional loans added to the Bank's portfolio.

         Cash and cash  equivalents  decreased  $400,000 to $2.1 million at June
30, 2000 and interest bearing deposits and investments decreased $4.6 million to
$1.7 million at June 30,  2000,  due mainly to a need for these funds to support
loan growth.  Net loans receivable  increased $8.0 million from $45.6 million at
June 30, 1999 to $53.6  million at June 30, 2000,  due  primarily to  additional
mortgage  loans added to the Bank's  portfolio and continued  growth in consumer
and  commercial  loans.  Loans held for sale  increased  $381,000 at year end to
$857,000,  due to increased  loan demand during the final quarter of fiscal year
2000.

         At June 30, 2000, three loans were added to foreclosed  property due to
their  delinquency  status at year end. These loans are secured by single family
real estate and no loss is anticipated.

         On the liability side, deposits increased $2.7 million to $64.7 million
at June 30, 2000 primarily through special certificate of deposit promotions and
the Bank's new relationship account -- The Star Account. At June 30, 2000, there
were $11.7  million in advances  outstanding  from the Federal Home Loan Bank of
Atlanta, a decrease of $300,000 from June 30, 1999.

         Net Income. Net income for the year ended June 30, 2000 was $396,000 as
compared to $345,000 for the year ended June 30,  1999,  an increase of $51,000.
The increase was mainly due to increased  net interest  income.  Basic per share
earnings  for the year ended June 30,  2000 rose to $0.99  verus $0.78 in fiscal
1999.  This is the Bank's  highest EPS since  conversion to stock from mutual in
1994.

         Interest Income.  Interest income increased $237,000 for the year ended
June 30, 2000.  Interest  income was $6.0 million at June 30, 2000. The increase
was mainly a result in the  increase in  earnings  on a larger  loan  portfolio,
particularly in consumer and commercial loans.

         Interest Expense. Interest expense for the year ended June 30, 2000 was
$3.3  million.  There was a decrease in interest  paid on deposits  offset by an
increase in the interest rate paid on borrowed funds.

                                       10

<PAGE>

         Net  Interest  Income.  Net interest  income  increased  $262,000.  The
increase was due mainly to increased income on a larger loan portfolio.

         Provision  for Credit  Losses.  The Bank made an addition of $13,000 to
the  provision  for credit  losses for the year ended June 30, 2000.  During the
quarter ended June, 2000, a $5,000 loss on two consumer loans was charged to the
allowance for credit losses.  The balance in the allowance for credit losses was
$210,000 on June 30, 1999 and  $218,000 on June 30,  2000.  As of June 30, 2000,
the Bank's allowance for loan losses was 0.34% of total loans.

         Noninterest Income. Noninterest income decreased $108,000 from $575,000
for the year ended June 30, 1999 to $476,000  for the year ended June 30,  2000.
The decrease was mainly due to lower fee volume on sale of mortgage loans offset
by an increase in loan and other customer service fees.

         Noninterest  Expense.  Noninterest  expense increased from $2.5 million
for the year ended  June 30,  1999 to $2.6  million  for the year ended June 30,
2000,  an  increase  of  $93,000.  This was  mainly due to  increased  personnel
expense,  data processing and  advertising  expenses and a reduction in premiums
for Federal deposit insurance.

         Management  continues  their  efforts to expand the Banks  products and
services as well as improve its delivery system to enhance quality service. This
years focus on increasing  retail loan  production  has resulted in doubling the
volume of home equity lines  outstanding  and the new Commercial Loan Department
is now  generating  new business and has a significant  amount of commitments to
fund as  well as a  growing  pipeline  of  proposals.  Management  will  also be
focusing on  non-interest  income  through new  revenue  sources  such as credit
insurance,  title  insurance,  credit  cards,  ATM  exchange  fees and  improved
activity   analysis  on  commercial   deposit   accounts.   Management   expects
non-interest  expense to continue to increase as new equipment and improved data
processing  are  necessary  in order to  provide  a quality  level of  financial
services.  During the year, all expense  categories will be reviewed such as our
method of check  clearing.  The  thrust on  non-interest  income/expenses  is to
improve the Bank's  efficiency  ratio and  thereby  increase  profitability  and
enhance shareholder value.

         Provision for Income Taxes. The provision for income taxes for the year
ended June 30, 2000 was $187,000 as compared to $177,000 for the year ended June
30,  1999.  The increase  was due to  increased  income  offset by a tax savings
associated with municipal bonds.

                                       11

<PAGE>

Liquidity and Capital Resources

         The Bank's  primary  sources of funds are deposits  and  proceeds  from
principal  and  interest  payments  on  loans  and  mortgage-backed  securities.
Additional  sources of liquidity are advances from the FHLB of Atlanta and other
borrowings.  The Bank may utilize FHLB of Atlanta borrowing in the future during
periods  when  management  believes  that such  borrowings  provide a lower cost
source of funds than deposit accounts and the Bank desires liquidity in order to
help expand its lending operations.  Borrowings are also used to purchase assets
to leverage capital.

         The Bank's  most  liquid  assets are cash and  cash-equivalents,  which
include investments in highly liquid, short-term investments,  such as overnight
investments in the Federal Home Loan Bank of Atlanta. At June 30, 2000, cash and
cash equivalents totaled $2.1 million.

         At June 30,  2000,  the Bank  had  $42.1  million  in  certificates  of
deposits  due  within  one  year  and $3.4  million  due in two to three  years.
Management estimates that the Bank will retain the deposits or replace them with
new deposits.  At June 30, 2000, the Bank had $2.0 million in  outstanding  loan
commitments.  The Bank intends to fund these commitments with present liquidity,
proceeds from loan repayments, and loan sales in the secondary market.

         Regulations   require  that  the  Bank  maintain  specified  levels  of
liquidity.  The liquidity is measured as a ratio of cash and certain investments
to  withdrawable  savings.  At June 30,  2000,  the minimum  level of  liquidity
required by regulations was 4.00%.  The Bank's  liquidity ratio at June 30, 2000
was 36.58% and at June 30, 1999 was 30.11%.

         The Bank is required to maintain  specified amounts of capital pursuant
to the  Financial  Institutions  Reform,  Recovery and  Enforcement  Act of 1989
("FIRREA")  and  regulations  promulgated  by the  OTS.  The  capital  standards
generally  require the  maintenance of regulatory  capital  sufficient to meet a
tangible  capital  requirement,  a core  capital  requirement  and a  risk-based
capital  requirement.  At June 30,  2000,  the Bank's  tangible and core capital
totaled $7.3 million.  This amount exceeded the tangible capital  requirement of
$1.3 million by $6.0 million and the core capital requirement of $2.6 million by
$4.7  million on that date.  At June 30,  2000,  the Bank's  risk-based  capital
totaled $7.5 million,  which exceeded its risk-based capital requirement of $3.9
million by $3.6 million.

Impact of Inflation and Changing Prices

         The  financial  statements  and  related  data  have been  prepared  in
accordance  with  generally  accepted  accounting  principles  which require the
measurement of financial  position and operating  results in terms of historical
dollars without  consideration  for changes in the relative  purchasing power of
money over time caused by inflation.

         Unlike industrial  companies,  nearly all of the assets and liabilities
of a financial  institution are monetary in nature. As a result,  interest rates
have a more  significant  impact on a financial  institution's  performance than
general levels of inflation.  Interest rates do not necessarily move in the same
direction or in the same magnitude as the price of goods and services since such
goods and services  are  affected by  inflation.  In the current  interest  rate
environment,  liquidity  and the  maturity  structure  of the Bank's  assets and
liabilities are critical to the maintenance of acceptable performance levels.


                                       12

<PAGE>

[LOGO]
--------------------
CHERRY
BEKAERT &
HOLLAND
--------------------
CERTIFIED PUBLIC
ACCOUNTANTS &
CONSULTANTS
--------------------


                         Report of Independent Auditors



The Board of Directors and Stockholders
SWVA Bancshares, Inc.
Roanoke, Virginia


We have audited the accompanying  consolidated statements of financial condition
of SWVA Bancshares,  Inc. and Subsidiaries (the "Company"),  as of June 30, 2000
and 1999,  and the  related  consolidated  statements  of income,  comprehensive
income, changes in stockholders' equity, and cash flows for each of the years in
the three-year  period ended June 30, 2000.  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of SWVA Bancshares,
Inc. and  Subsidiaries,  as of June 30, 2000 and 1999,  and the results of their
operations and their cash flows for each of the years in the  three-year  period
ended June 30, 2000 in conformity with generally accepted accounting principles.



                                   /s/Cherry, Bekaert & Holland, L.L.P.


Lynchburg, Virginia
August 14, 2000

                                       13

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                 Consolidated Statements of Financial Condition
                             June 30, 2000 and 1999
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                                     2000            1999
                                                                                                -------------   -------------
<S>                                                                                             <C>             <C>
Assets
   Cash and cash equivalents                                                                      $    2,060      $    2,454
   Interest-bearing deposits                                                                           1,685           6,278
   Investment and mortgage-backed securities
      Held to maturity, at amortized cost (fair value of $254 in 2000 and $292 in 1999)                  254             283
      Available for sale, at fair value                                                               21,517          22,934
      Restricted at cost                                                                                 585             600
   Loans held for sale                                                                                   857             476
   Loans receivable, net                                                                              53,610          45,576
   Foreclosed property                                                                                   186               -
   Property and equipment, net                                                                         1,681           1,688
   Accrued interest receivable                                                                           607             594
   Prepaid expenses and other assets                                                                     919             831
                                                                                                  ----------      ----------
          Total assets                                                                            $   83,961      $   81,714
                                                                                                  ==========      ==========
Liabilities and stockholders' equity
Liabilities
   Deposits                                                                                       $   64,748      $   62,094
   Advances from Federal Home Loan Bank                                                               11,700          12,000
   Advances from borrowers for taxes and insurance                                                       208             210
   Other liabilities and deferred income                                                                 563             619
                                                                                                  ----------      ----------
          Total liabilities                                                                           77,219          74,923
                                                                                                  ----------      ----------
Commitments and contingencies

Stockholders' equity
   Preferred stock, par value $.10.  Authorized 275,000 shares, none issued
   Common stock, par value $.10.  Authorized 2,225,000 shares, 423,612
     shares outstanding for 2000 and 1999                                                                 42              42
   Additional paid-in capital                                                                          2,824           2,838
   Retained earnings, substantially restricted                                                         5,152           4,908
   Unrealized holding loss on securities, available for sale                                      (      895)     (      515)
   Less unearned ESOP shares, 18,258 for 2000 and 22,823 shares for 1999                          (      182)     (      228)
   Less unearned MSBP shares, 11,767 for 2000 and 14,895 shares for 1999                          (      199)     (      254)
                                                                                                  -----------     -----------
          Total stockholders' equity                                                                   6,742           6,791
                                                                                                  ----------      ----------
          Total liabilities and stockholders' equity                                              $   83,961      $   81,714
                                                                                                  ==========      ==========
</TABLE>


See notes to consolidated financial statements.

                                       14

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
           Consolidated Statements of Changes in Stockholders' Equity
                    Years ended June 30, 2000, 1999 and 1998
                    (In thousands, except shares outstanding)
<TABLE>
<CAPTION>

                                                                               Unrealized
                                                                                Holding
                                       Common Stock                            Gain (Loss)
                                ----------------------  Additional            on Securities    Unearned   Unearned
                                  Shares                 Paid-in    Retained    Available       ESOP       MSBP
                                  Outstanding  Amount    Capital    Earnings    For Sale        Shares     Shares     Total
                                ------------- -------- -----------  ---------  ------------   ---------- ---------- ----------

<S>                               <C>       <C>       <C>          <C>        <C>            <C>        <C>        <C>
Balance at June 30, 1997           510,984   $    51   $    4,286   $  4,904   $        29    $ (  319)  $ (  349)  $   8,602

   Net income                            -         -            -        461             -           -          -         461

   Change in unrealized gain on
      available for sale securities      -         -            -          -            29           -          -          29

   Repurchase of common stock     ( 14,097)   (    1)   (     292)         -             -           -          -    (    293)

   Allocated/earned ESOP shares          -         -           47          -             -          45          -          92

   Allocated/earned MSBP shares          -         -            9          -             -           -         50          59

   Dividends declared and paid
      ($1.30 per share)                  -         -            -     (  623)            -           -          -    (    623)
                                  --------    ------    ---------    -------    ----------   ---------   ---------  ---------

Balance at June 30, 1998           496,887        50        4,050      4,742            58      (  274)    (  299)      8,327

   Net income                            -         -            -        345             -           -          -         345

   Change in unrealized gain on
      available for sale securities      -         -            -          -    (      573)          -          -    (    573)

   Repurchase of common stock     ( 73,275)   (    8)   (   1,202)         -             -           -          -    (  1,210)

   Allocated/earned ESOP shares          -         -           12          -             -          46          -          58

   Allocated/earned MSBP shares          -         -    (      22)         -             -           -         45          23

   Dividends declared and paid
      ($0.40 per share)                  -         -            -     (  179)            -           -          -    (    179)
                                  --------    ------    ---------    -------    ----------   ---------   ---------  ---------

Balance at June 30, 1999           423,612        42        2,838      4,908          (515)     (  228)    (  254)      6,791

   Net income                            -         -            -        396             -           -          -         396

   Change in unrealized gain on
      available for sale securities      -         -            -          -          (380)          -          -        (380)

   Allocated/earned ESOP shares          -         -     (      2)         -             -          46          -          44

   Allocated/earned MSBP shares          -         -     (     12)         -             -           -         55          43

   Dividends declared and paid
      ($0.40 per share)                  -         -            -     (  152)            -           -          -    (    152)
                                  --------    ------    ---------    -------    ----------   ---------   ---------  ---------
Balance at June 30, 2000           423,612    $   42    $   2,824    $ 5,152    $ (    895)  $  (  182)  $ (  199) $    6,742
                                  ========    ======    =========    =======    ==========   =========   =========  =========
</TABLE>

See notes to consolidated financial statements.

                                       15

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                        Consolidated Statements of Income
                    Years ended June 30, 2000, 1999, and 1998
                      (In thousands, except per-share data)
<TABLE>
<CAPTION>
                                                                                      2000          1999            1998
                                                                                 -------------  -------------   -------------
<S>                                                                             <C>            <C>             <C>
Interest income
   Loans                                                                         $      4,076   $      3,856    $       4,182
   Mortgage-backed and related securities                                                 631            592              284
   U.S. government obligations including agencies                                         826            675              705
   Interest on municipal bonds                                                            119             69               23
   Other investments, including overnight deposits                                        376            599              614
                                                                                   ----------     ----------      -----------
          Total interest income                                                         6,028          5,791            5,808
                                                                                   ----------     ----------      -----------
Interest expense
   Deposits                                                                             2,748          2,848            2,968
   Borrowed funds                                                                         565            490              258
                                                                                   ----------     ----------      -----------
          Total interest expense                                                        3,313          3,338            3,226
                                                                                   ----------     ----------      -----------
          Net interest income                                                           2,715          2,453            2,582

Provision for credit losses                                                                13             13               33
                                                                                   ----------     ----------      -----------
          Net interest income after provision for credit losses                         2,702          2,440            2,549
                                                                                   ----------     ----------      -----------
Noninterest income
   Loan and other customer service fees                                                   244            158              137
   Gain on sale of mortgage loans                                                         121            324              210
   Gross rental income                                                                    102            102               98
   Other                                                                                    -     (        9)     (        17)
                                                                                   ------------   ----------      -----------
          Total noninterest income                                                        467            575              428
                                                                                   ----------     ----------      -----------
Noninterest expense
   Personnel                                                                            1,476          1,435            1,285
   Office occupancy and equipment                                                         339            335              297
   Data processing                                                                        250            232              179
   Federal insurance of accounts                                                           25             40               38
   Advertising                                                                            116             90               63
   Other                                                                                  380            361              336
                                                                                   ----------     ----------      -----------
          Total noninterest expenses                                                    2,586          2,493            2,198
                                                                                   ----------     ----------      -----------
Income before income tax expense                                                          583            522              779

Provision for income taxes                                                                187            177              318
                                                                                   ----------     ----------      -----------
           Net income                                                            $        396   $        345    $         461
                                                                                   ==========     ==========      ===========

Basic earnings per share                                                         $        .99   $        .78    $         .97

Diluted earnings per share                                                       $        .99   $        .78    $         .95

</TABLE>

See notes to consolidated financial statements.

                                       16
<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                 Consolidated Statements of Comprehensive Income
                    Years ended June 30, 2000, 1999, and 1998
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                     2000          1999            1998
                                                                                 -------------  -------------   -------------

<S>                                                                             <C>            <C>             <C>
Net income                                                                       $        396   $        345    $         461

Other comprehensive income, net of tax
   Unrealized gains (losses) on securities                                         (      380)    (      573)              29
                                                                                   ----------     ----------      -----------
          Comprehensive income                                                   $         16   $ (      228)   $         490
                                                                                   ==========     ==========      ===========

</TABLE>


See notes to consolidated financial statements.

                                       17

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                    Years ended June 30, 2000, 1999, and 1998
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                     2000           1999            1998
                                                                                 -------------  -------------   -------------
<S>                                                                             <C>            <C>             <C>
Operating activities
   Net income                                                                    $        396   $        345    $        461
   Adjustments to reconcile net income to net cash provided by
     (used in) operating activities
         ESOP shares allocated                                                             46             46              92
         MSBP shares allocated                                                             55             45              59
         Provision for credit losses                                                       13             13              33
         Provision for depreciation and amortization                                      114            106              96
         Provision (benefit) for deferred income tax                                        3              3      (       19)
         Loans originated for sale                                                 (   10,191)    (   29,286)     (   20,467)
         Proceeds from sales of loans originated for sale                               9,931         30,742          19,796
         Gain on sale of loans                                                     (      121)    (      325)     (      210)
         Loss on disposal of property and equipment                                         -              -               1
         Net increase (decrease) in other assets                                          103     (       64)     (      302)
         Net increase (decrease) in other liabilities                              (       74)            44              35
         Net gain on sale of investments, available for sale                                -     (       18)     (       17)
                                                                                   ----------     -----------     -----------

          Net cash provided by (used in) operating activities                             275          1,651      (      442)
                                                                                   ----------     ----------      -----------
Investing activities
   Proceeds from sale of property and equipment                                             2              -               -
   Proceeds from sale of FHLB stock                                                       109            411               -
   Proceeds from maturity of investments and interest-bearing deposits                  6,080          6,087           6,793
   Proceeds from sale of investments, available for sale                                    -         11,490           6,257
   Purchase of investments and interest-bearing deposits                           (    1,487)    (    6,468)     (    6,887)
   Purchase of investments, available for sale                                              -     (   17,527)     (   20,408)
   Purchase of FHLB stock                                                          (       94)    (       50)              -
   Purchase of property and equipment                                              (      108)    (      132)     (       91)
   Net (increase) decrease in loans                                                (    6,332)         3,936           3,080
   Purchase of loans                                                               (    1,900)    (    1,313)     (      343)
   Principal repayments on mortgage-backed securities                                     859          3,759           1,018
                                                                                   ----------     ----------      ----------

          Net cash provided by (used in) investing activities                      (    2,871)           193      (   10,581)
                                                                                   ------------   ----------      -----------
Financing activities
   Proceeds from advances                                                               8,200          7,000           7,000
   Curtailment of advances and other borrowings                                    (    8,500)    (    2,000)     (    3,500)
   Net increase (decrease) in savings deposits                                          2,654     (    6,194)         10,356
   Repurchase of stock                                                                      -     (    1,210)     (      293)
   Dividends paid                                                                  (      152)    (      179)     (      623)
                                                                                   ------------   -----------     -----------

          Net cash provided by (used in) financing activities                           2,202     (    2,583)         12,940
                                                                                   ----------     -----------     ----------

          Increase (decrease) in cash and cash equivalents                         (      394)    (      739)          1,917

Cash and cash equivalents at beginning of year                                          2,454          3,193           1,276
                                                                                   ----------     ----------      ----------

Cash and cash equivalents at end of year                                         $      2,060   $      2,454    $      3,193
                                                                                   ==========     ==========      ==========
</TABLE>

                                   (continued)

                                       18
<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                    Years ended June 30, 2000, 1999, and 1998
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                      2000           1999            1998
                                                                                 -------------  -------------   -------------
<S>                                                                             <C>            <C>             <C>
Supplemental disclosures:
   Cash paid for
      Interest on deposits and borrowed funds                                    $      3,343   $      3,290    $      3,193
                                                                                   ==========     ==========      ==========

      Income taxes                                                               $        185   $        330    $        440
                                                                                   ==========     ==========      ==========


   Other non-cash activities
      Gross unrealized gain (loss) on securities, available for sale             $ (    1,356)  $ (      780)   $         93
      Deferred income taxes                                                               461            265      (       35)
                                                                                   ----------     ----------      -----------

             Net unrealized gain (loss)                                          $ (      895)  $ (      515)   $         58
                                                                                   ===========    ===========     ==========
</TABLE>

See notes to consolidated financial statements.

                                       19

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


SWVA  Bancshares,  Inc.  (Parent  Company),  is a unitary thrift holding company
whose principal asset is its wholly-owned subsidiary, Southwest Virginia Savings
Bank, FSB (Bank).  The Bank is a federally  chartered  stock Bank as provided by
the United States Home Owner's Loan Act. The Bank has five locations in Roanoke,
Virginia  and  the  surrounding   area.  In  these   financial   statements  the
consolidated group is referred to collectively as the "Company".

The Office of Thrift  Supervision  (OTS) is the primary  regulator for federally
chartered savings  associations,  as well as savings and loan holding companies.
The  Federal  Deposit  Insurance  Corporation  (FDIC)  is  the  federal  deposit
insurance  administrator for both banks and savings  associations.  The FDIC has
specified  authority to prescribe  and enforce such  regulations  and issue such
orders  as it deems  necessary  to  prevent  actions  or  practices  by  savings
associations  that pose a serious  threat to the Savings  Association  Insurance
Fund (SAIF).

The  accounting  and reporting  policies of the Company  conform with  generally
accepted  accounting  principles  (GAAP).  A brief  description of the Company's
significant accounting policies is presented as follows.


Note 1 - Summary of significant accounting policies

Basis of consolidation

The consolidated  financial  statements include the accounts of SWVA Bancshares,
Inc.,  Southwest  Virginia  Savings  Bank,  its  wholly-owned  subsidiary,   and
Southwest Virginia Service Corporation, the wholly-owned subsidiary of the Bank.
All material  intercompany accounts and transactions have been eliminated in the
consolidation.  The  Company  also  presents  herein  condensed  Parent  Company
financial  information.  Prior year amounts are  reclassified  when necessary to
conform with current year classifications.

Estimates

The  preparation  of  financial  statements  in  conformity  with GAAP  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

Material  estimates that are  particularly  susceptible  to  significant  change
relate to the  determination  of the allowance  for credit losses on loans.  The
estimation process may include management obtaining  independent  appraisals for
significant collateral properties,  but the ultimate collectibility and recovery
of carrying  amounts are  susceptible to changes in local real estate market and
other local economic conditions.

Management  uses available  information to recognize  credit losses on loans and
real estate acquired in settlement of loans currently, while future additions to
the allowances may be necessary  based on changes in local economic  conditions.
In  addition,  regulatory  agencies,  as an integral  part of their  examination
process,  periodically  review the Bank's allowances for credit losses on loans.
Such  agencies  may require the Bank to recognize  additions  to the  allowances
based on their  judgments  about  information  available  to them at the time of
their examination.  Because of these factors, it is possible that the allowances
for credit losses on loans could change materially.


                                       20

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 1 - Summary of significant accounting policies (continued)

Cash equivalents

For purposes of the statements of cash flows,  the Company  considers all highly
liquid debt  instruments  with original  maturities,  when  purchased,  of three
months or less to be cash  equivalents.  Cash and cash equivalents for the three
years  presented  include  cash on hand and  demand  deposits.  Certificates  of
deposit with initial  maturities  greater than three months are shown separately
as interest-bearing deposits.

Investment securities

Statement of Financial  Accounting  Standards  No. 115,  Accounting  for Certain
Investments  in  Debt  and  Equity  Securities  (SFAS  115),   requires  certain
securities to be classified as "held to maturity",  "trading" or "available  for
sale", according to management's intent and ability, at the time of purchase.

Debt securities  classified as "held to maturity" are carried at cost,  adjusted
for  amortization  of premium and  accretion  of discount  over the terms of the
securities,  as long as the Company has the ability and  maintains  the positive
intent to hold such securities to maturity. If such securities are sold prior to
maturity,  gains or losses are  recognized  in the year of sale by the  specific
identification method.

Trading securities, if any, are carried at fair value. Realized gains and losses
on sales and  unrealized  changes in fair  values are  included  in  noninterest
income.

Due to the nature of, and  restrictions  placed upon the Company's  common stock
investment in the Federal Home Loan Bank of Atlanta,  these securities have been
classified as restricted equity securities and carried at cost. These restricted
securities are not subject to the investment  security  classifications  of SFAS
115.

Marketable  equity  securities not classified as "trading" or  "restricted"  and
debt securities not classified as "trading" or "held to maturity" are carried at
fair value,  if  marketable,  with  unrealized  gains and losses  excluded  from
earnings and reported as a separate component of stockholders' equity.  Realized
gains and losses on sales are  included in  noninterest  income and are computed
under the specific identification method.

Mortgage-backed and related securities

Mortgage-backed securities, held to maturity,  represent participating interests
in pools of  long-term  first  mortgage  loans  originated  and  serviced by the
issuers of the  securities.  These  securities  are carried at unpaid  principal
balances,  adjusted for  unamortized  premiums and discounts as the Bank has the
ability and intent to hold such  securities to maturity.  Premiums and discounts
are amortized using the interest method over the remaining period to contractual
maturity,  adjusted for  anticipated  prepayments.  If such  securities are sold
prior  to  maturity,   gains  and  losses  are  determined  using  the  specific
identification method.

Securities  classified as available for sale are carried at their current market
value.  The difference  between the amortized cost and current market value, net
of deferred  income tax, is reflected  as a component  of equity  capital and is
designated as unrealized holding gain/loss on securities available for sale.

                                       21

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 1 - Summary of significant accounting policies (continued)

Loans held for sale

Mortgage  loans  originated  and intended for sale in the  secondary  market are
carried  at the lower of cost or  estimated  fair  value in the  aggregate.  Net
unrealized  losses  are  recognized  in a  valuation  allowance  by  charges  to
noninterest income. As of June 30, 2000 and 1999 and for each of the three years
ended June 30,  2000,  1999,  and 1998,  these loans were  originated  with firm
commitments from independent  third parties to be acquired at fixed prices. As a
result, no unrealized gains or losses have been recognized.

Loans and allowances for credit losses

The  Company  adopted the  provisions  of  Statements  of  Financial  Accounting
Standards  No.114,  Accounting by Creditors for Impairment of a Loan (SFAS 114),
and  Accounting by Creditors for Impairment of a Loan - Income  Recognition  and
Disclosures  (SFAS 118),  as of July 1, 1996.  The  adoption has had no material
effect on the financial position or operating results of the Company nor does it
have any effect on the comparability of financial statement information.

Loans  receivable  that  management  has the intent and  ability to hold for the
foreseeable  future,  or until maturity or pay off, are carried at their face or
par values,  net of unearned  discounts,  participation or whole-loan  interests
owned by  others,  unearned  loan fees,  undisbursed  loans in  process,  and an
allowance for credit losses.

Valuation  allowances  for estimated  credit losses on loans are  established by
charges to income when any material and estimable  decline in value is deemed to
have occurred.  The determination of the adequacy of the valuation  allowance is
based on a detailed  analysis  of  individual  loans  with known or  anticipated
adverse performance  characteristics,  and includes  consideration of historical
patterns,   industry  experience,   current  economic  conditions,   changes  in
composition and risk  characteristics  of the loan portfolio,  and other factors
deemed relevant to the collectibility of the loans currently outstanding. A loan
is considered  impaired when,  based on current  information  and events,  it is
probable  that all amounts due  according to the  contractual  terms of the loan
agreement will not be  collectible.  Allowances for impaired loans are generally
determined  based on collateral  values or the present  value of estimated  cash
flows.  The  allowance is increased by a provision for credit  losses,  which is
charged to expense, and reduced by charge-offs, net of recoveries.

Loans that are 90 days or more past due are  individually  reviewed for ultimate
collectibility.  Interest  determined  to be  uncollectible  on  loans  that are
contractually  past due is charged off, or an allowance is established  based on
management's  periodic  evaluation.  The allowance is established by a charge to
interest  income  equal  to all  interest  previously  accrued,  and  income  is
subsequently  recognized  only to the extent  that cash  payments  are  received
until,  in  management's  judgment,  the  borrower's  ability  to make  periodic
interest  and  principal  payments is back to normal,  in which case the loan is
returned to accrual status.

Foreclosed real estate

Foreclosed  real  estate  owned,  if  any,  consists  of  property  acquired  by
foreclosure on delinquent loans or by deed in lieu of foreclosure. Such property
is  recorded  initially  at the lower of cost or fair value and is  subsequently
maintained at the lower of cost or fair value minus the estimated costs to sell.

                                       22

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 1 - Summary of significant accounting policies (continued)

Property, equipment and depreciation

The various  classes of property are stated at cost and are  depreciated  by the
straight-line  method over their  estimated  useful  lives of 10 to 50 years for
buildings  and  improvements  and 3 to 12 years  for  furniture,  fixtures,  and
equipment.   Repairs  are  expensed  as  incurred.   The  cost  and  accumulated
depreciation of property are eliminated from the accounts upon disposal, and any
resulting gain or loss is included in the determination of net income.

Income taxes

Deferred  income taxes are  recognized  for the tax  consequences  of "temporary
differences" by applying enacted  statutory tax rates applicable to future years
to  differences  between the financial  statement  carrying  amounts and the tax
bases of existing  assets and  liabilities.  The effect of a change in tax rates
upon  deferred  taxes is  recognized  in income in the period that  includes the
enactment date.

Prior to 1996,  Banks that met certain  definitional  tests and other conditions
prescribed by the Internal  Revenue Code were allowed,  within  limitations,  to
deduct  from  taxable  income an  allowance  for bad debts  based on actual loss
experience,  a percentage of taxable  income (8%) before such  deduction,  or an
amount based on a percentage of eligible loans. The cumulative bad debt reserve,
upon which no taxes have been paid,  was  approximately  $1.6 million as of June
30, 2000.

As a result of 1996 tax  legislation,  the Company will compute its tax bad debt
deduction by use of the actual charge-off  method,  for tax years beginning with
July 1, 1996. According to the legislation, "applicable excess reserves" must be
recaptured as taxable  income over five years  beginning  with fiscal year 1997.
Thrifts can delay those payments by two years if they meet a residential lending
requirement.  The  amount to be  recaptured  is the  excess  of the  accumulated
reserves  since  1987 over the amount  allowed  by use of the actual  charge-off
method for those years.  Since the Bank has provided deferred taxes on those bad
debt  reserves  accumulated  since 1987,  management  does not believe  that the
legislation will have a material effect on the Company's financial statements.

Loan origination fees, costs, discounts and premiums

Loan  origination  fees  are  accounted  for in  accordance  with  Statement  of
Financial  Accounting  Standards No. 91, Accounting for  Nonrefundable  Fees and
Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of
Leases  (SFAS 91).  Under SFAS 91,  loan  origination  and  commitment  fees and
certain  direct loan  origination  costs are  deferred.  Upon the  expiration of
unfunded commitments,  the related fees are recognized into income as loan fees.
Loan  origination  fees on  funded  commitments  and  related  direct  costs are
amortized into income on loans as yield adjustments over the contractual life of
related loans using the level-yield method.

Discounts  and premiums on loans  purchased are  recognized  in interest  income
using the level-yield method over the average life of the loan.

                                       23

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 1 - Summary of significant accounting policies (continued)

Sales of mortgage loans, mortgage-related securities and foreclosed real estate

Gains and losses on the sales of loans,  participation  interest  in loans,  and
foreclosed real estate are accounted for by imputing gain or loss on those sales
where a yield  rate  guaranteed  to the buyer is more or less than the  contract
interest  rate  being  collected,  in the case of loans,  and  where  foreclosed
property is sold on financing  terms more or less  favorable than the prevailing
market terms for similar  property.  Such gains or losses are  recognized in the
financial  statements  for the year of sale.  The Bank services  loans that have
been sold with  servicing  retained.  Such loan balances are not included in the
accompanying consolidated statements of financial condition.

Advertising

The Company expenses most advertising costs as incurred. Such expenses are shown
in the  consolidated  statements  of income.  As of June 30, 2000 and 1999,  the
Company's  statements of financial  condition for each period included $6,000 of
prepaid advertising.

Fair values of financial instruments

The  following  methods and  assumptions  were used by the Company in estimating
fair values of financial instruments as disclosed herein:

Cash and  short-term  instruments - The carrying  amounts of cash and short-term
instruments approximate their fair value.

o   Available-for-sale  and  held-to-maturity   securities  -  Fair  values  for
    securities,  excluding  restricted  equity  securities,  are based on quoted
    market  prices.   The  carrying  values  of  restricted   equity  securities
    approximate fair values.

o   Loans   receivable   -  Fair  values  are  based  on  carrying   values  for
    variable-rate  loans that reprice  frequently and have no significant change
    in credit  risk.  Fair  values for  certain  mortgage  loans  (for  example,
    one-to-four family residential) and other consumer loans are based on quoted
    market  prices of similar  loans  sold in  conjunction  with  securitization
    transactions, adjusted for differences in loan characteristics.  Fair values
    for  commercial  real  estate  and  commercial  loans  are  estimated  using
    discounted cash flow analyses and interest rates currently being offered for
    loans with similar terms to borrowers of similar credit quality. Fair values
    for impaired  loans are  estimated  using  discounted  cash flow analyses or
    underlying collateral values, where applicable.

o   Deposit  liabilities - The fair values disclosed for demand deposits are, by
    definition,  equal to the  amount  payable on demand at the  reporting  date
    (that is, their carrying  amounts).  The carrying amounts of  variable-rate,
    fixed-term   money-market   accounts  and   certificates  of  deposit  (CDS)
    approximate  their  fair  values at the  reporting  date.  Fair  values  for
    fixed-rate CDS are estimated using a discounted cash flow  calculation  that
    applies interest rates currently being offered on certificates to a schedule
    of aggregated expected monthly maturities on time deposits.



                                       24

<PAGE>

                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 1 - Summary of significant accounting policies (continued)

o    Short-term  borrowings - The carrying  amounts of federal funds  purchased,
     borrowings under  repurchase  agreements,  and other short-term  borrowings
     maturing within 90 days approximate their fair values. Fair values of other
     short-term  borrowing are  estimated  using  discounted  cash flow analyses
     based on the  Company's  current  incremental  borrowing  rates for similar
     types of borrowing arrangements.

o    Long-term  debt - The  fair  values  of the  Company's  long-term  debt are
     estimated  using  discounted  cash  flow  analyses  based on the  Company's
     current  incremental   borrowing  rates  for  similar  types  of  borrowing
     arrangements.

o    Accrued  interest - The carrying  amounts of accrued  interest  approximate
     their fair values.

o    Off-balance-sheet  instruments - Fair values for off-balance-sheet  lending
     commitments  are based on fees  currently  charged  to enter  into  similar
     agreements,  taking into account the remaining  terms of the agreements and
     counterparties' credit standings.

Conversion to stock ownership

At a  special  meeting  on July 20,  1994,  the  members  of the  Bank  approved
management's  plan to convert the Bank from a Federal  Mutual to a Federal Stock
Bank. The plan called for the formation of SWVA Bancshares, Inc. which would own
the stock of the Bank upon its  conversion  to a stock  form of  ownership.  The
stock of the Parent  Company would then be offered  through a  Subscription  and
Community Offering to the Bank's  tax-qualified  employee stock plans,  eligible
account  holders and  others.  The  transaction  was in the form of a pooling of
interests.

On October 7, 1994,  the Parent  Company issued 570,590 shares of $.10 par value
common  stock at $10 per share and became the  parent  company of the Bank.  Net
proceeds,  after deducting  conversion  expenses and underwriters'  discounts of
$469,000,  were $5.2 million and are  reflected  as common stock and  additional
paid-in  capital  in  the  accompanying  consolidated  statements  of  financial
condition.  The Parent  Company's  Articles  of  Incorporation  contain  certain
limitations on voting rights and other "anti- takeover" provisions.

As part of the  conversion  to stock form,  the Bank  formed an  Employee  Stock
Ownership Plan (ESOP) for eligible  employees.  The ESOP purchased 45,647 common
shares of the Parent Company issued in the conversion, which purchase was funded
by a loan  from the  Parent  Company.  In  accordance  with  generally  accepted
accounting  principles,  the unpaid balance of the ESOP loan has been eliminated
on the Company's consolidated  statements of financial condition.  Stockholders'
equity has been reduced by the aggregate  purchase  price of the shares owned by
the ESOP net of the shares  committed to be released.  Contributions to the ESOP
by the Bank are made to fund the principal and interest  payments on the debt of
the ESOP. As of June 30, 1999, a total of 27,389 shares had been released.



                                       25

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 1 - Summary of significant accounting policies (continued)

In February  1998,  the FASB issued  Employers'  Disclosures  about Pensions and
Other Postretirement  Benefits (SFAS 132), which revises employers'  disclosures
about pension and other  postretirement  benefit plans. SFAS 132 does not change
the  measurement  or  recognition  of  those  plans,  but  requires   additional
information  on changes in benefit  obligations  and fair values of plan assets,
and eliminates certain  disclosures  previously required by SFAS Nos. 87, 88 and
106. SFAS 132 is effective for fiscal years  beginning  after December 15, 1997.
SFAS 132 has not had a material effect on the Company's financial statements.

In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities,  which is required
to be adopted in years  beginning after June 15, 2000. The Bank expects to adopt
the new Statement effective July 1, 2000. The Statement will require the Bank to
recognize all derivatives on the balance sheet at fair value.  Derivatives  that
are not hedges must be adjusted to fair value through income. If a derivative is
a hedge,  depending on the nature of the hedge, changes in the fair value of the
derivatives will either be offset against the change in fair value of the hedged
asset,  liability,  or firm commitment through earnings,  or recognized in other
comprehensive  income  until the hedged  item is  recognized  in  earnings.  The
ineffective  portion of a derivative's  change in fair value will be immediately
recognized in earnings.  The Bank does not enter into  derivative  contracts and
does  anticipate  that the adoption of this  Statement  will have a  significant
effect on its results of operations or financial position.

Reclassifications

Certain items in the 1998 and 1999 financial  statements have been  reclassified
to afford comparability with the 2000 financial statements.

                                       26

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 2 - Investment securities

Investments consisting of U.S. government,  mortgage-backed and other securities
at June 30 of each year were as follows in thousands:

<TABLE>
<CAPTION>
                                                                                            2000
                                                                 ------------------------------------------------------------
                                                                                                  Gross Unrealized
                                                                    Amortized     --------------------------------------------
                                                                       Cost         Gain           Loss           Fair Value
                                                                 --------------  -------------  -------------   -------------
<S>                                                             <C>             <C>            <C>             <C>
Securities, held to maturity
   FHLMC participation certificates                              $          254  $           -  $           -   $         254
                                                                    -----------    -------------  -----------     -----------
Securities, available for sale
   Municipal bonds                                                        2,446              -            188           2,258
   U.S. Government and agency bonds                                      12,000              -            874          11,126
   GNMA mortgage-backed securities                                        7,904              -            296           7,608
   FNMA mortgage-backed securities                                          524              1              -             525
                                                                    -----------    -----------    -----------     -----------
                                                                         22,874              1         1, 358          21,517
                                                                    -----------    -----------    -----------     -----------
          Total securities                                       $       23,128  $           1  $      1, 358   $      21,771
                                                                    ===========    ===========    ===========     ===========
</TABLE>


<TABLE>
<CAPTION>
                                                                                            1999
                                                                 ------------------------------------------------------------
                                                                                                  Gross Unrealized
                                                                    Amortized     --------------------------------------------
                                                                       Cost         Gain           Loss           Fair Value
                                                                 --------------  -------------  -------------   -------------
<S>                                                             <C>             <C>            <C>             <C>
Securities, held to maturity
   FHLMC participation certificates                              $          283  $           9  $           -   $         292
                                                                    -----------    -----------    -----------     -----------
Securities, available for sale
   Municipal bonds                                                        2,442              -             96           2,346
   U.S. Government and agency bonds                                      12,000              -            524          11,476
   GNMA mortgage-backed securities                                        8,591              -            179           8,412
   FNMA mortgage-backed securities                                          681             19              -             700
                                                                    -----------    -----------    -----------     -----------
                                                                         23,714             19            799          22,934
                                                                    -----------    -----------    -----------     -----------
          Total securities                                       $       23,997  $          28  $         799   $      23,226
                                                                    ===========    ===========    ===========     ===========
</TABLE>


                                       27

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 2 - Investment securities (continued)

The amortized cost and estimated fair value of debt securities at June 30, 2000,
by contractual  maturity,  were as follows in thousands.  Expected maturities of
mortgage-backed  securities  will differ  from  contractual  maturities  because
borrowers may have the right to call or prepay  obligations with or without call
or prepayment penalties.

<TABLE>
<CAPTION>
                                                                         Held to Maturity             Available for Sale
                                                                 -----------------------------  -----------------------------
                                                                    Amortized                     Amortized
                                                                     Cost          Fair Value      Cost           Fair Value
                                                                 --------------  -------------  -------------   -------------
<S>                                                             <C>             <C>            <C>             <C>
        Due in one year or less                                  $            -  $           -  $           -   $           -
        Due after one year through five years                                 -              -              -               -
        Due after five years through ten years                                -              -          2,500           2,412
        Due after ten years                                                   -              -         11,946          10,972
        Mortgage-backed and related securities                              254            254          8,428           8,133
                                                                    -----------    -----------    -----------     -----------

                                                                 $          254  $         254  $      22,874   $      21,517
                                                                   ============    ===========    ===========     ===========
</TABLE>

Proceeds from maturities of interest-bearing  deposits and investments were $6.1
million in 2000, $6.1 million in 1999, and $6.8 million in 1998.  Gross realized
gains and losses on redemption of investments are summarized below in thousands:

<TABLE>
<CAPTION>
                                                                                     2000          1999             1998
                                                                                 -------------  -------------   -------------

<S>                                                                             <C>            <C>             <C>
        Gross realized gains                                                     $          -   $           -   $           -
        Gross realized losses                                                               -     (        18)    (        17)
                                                                                   ----------     -----------     -----------

                  Net realized gains (losses)                                    $          -   $ (        18)  $ (        17)
                                                                                   ==========     ===========     ===========
</TABLE>

Cost was determined by the specific identification method.



                                       28

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 3 - Loans receivable

Loans receivable at June 30 of each year were as follows in thousands:

                                                   2000           1999
                                               -------------   -------------
        Mortgage loans
           Residential, one to four family     $      33,872   $      32,342
           Residential, multifamily                    4,014           4,187
           Nonresidential and land                     5,459           2,071
           Construction                                4,781           4,024
                                                 -----------     -----------
                                                      48,126          42,624
                                                 -----------     -----------
        Non-mortgage loans
           Consumer loans
              Secured personal                         1,774           1,483
              Unsecured personal                         165              92
              Auto                                       568             177
              Home improvement                            19              38
              Equity line                              3,262           2,316
              Other                                      120              80
           Commercial
              Unsecured                                  202               -
              Secured                                  1,068             105
                                                 -----------     -----------
                                                       7,178           4,291
                                                 -----------     -----------
                  Total loans                         55,304          46,915
                                                 -----------     -----------
        Less
           Deferred loan fees                             27              42
           Undisbursed loans in process                1,449           1,087
           Allowance for credit losses                   218             210
                                                 -----------     -----------
                                                       1,694           1,339
                                                 -----------     -----------
                  Loans receivable, net        $      53,610   $      45,576
                                                 ===========     ===========

Real estate loans  pledged as  collateral  for Federal Home Loan Bank of Atlanta
advances  totaled  $11.7  million  and $12 million as of June 30, 2000 and 1999,
respectively.

                                       29

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 3 - Loans receivable (continued)

Mortgage  loans  serviced  for  others  are  not  included  in the  accompanying
statements of financial condition.  The unpaid principal balances of these loans
at June 30 of each year are summarized as follows in thousands:

<TABLE>
<CAPTION>
                                                                                      2000           1999            1998
                                                                                 -------------  -------------   -------------

<S>                                                                             <C>            <C>             <C>
        Federal Home Loan Mortgage Corporation (FHLMC)                           $         244  $         292   $         321
        Virginia Housing Development Authority (VHDA)                                        -            800             614
                                                                                   -----------    -----------     -----------

                                                                                 $         244  $       1,092   $         935
                                                                                   ===========    ===========     ===========

</TABLE>
Custodial  escrow balances at June 30 of each year maintained in connection with
the foregoing loans serviced are summarized as follows in thousands:
<TABLE>
<CAPTION>
                                                                                                    2000           1999
                                                                                                -------------   -------------

<S>                                                                                            <C>             <C>
        FHLMC                                                                                   $          6    $           7
        VHDA                                                                                               -                6
                                                                                                  -----------     -----------
                                                                                                $          6    $          13
                                                                                                  ===========     ===========
</TABLE>

Activity in the  allowance  for credit losses for the years ended June 30, 2000,
1999, and 1998 is summarized as follows in thousands:
<TABLE>
<CAPTION>

                                                                                     2000           1999           1998
                                                                                 -------------  -------------   -------------

<S>                                                                             <C>            <C>             <C>
        Balance at beginning of year                                             $        210   $        207    $        217
        Provision charged to operations                                                    13             13              33
        Charge-offs                                                                (        5)   (        10)    (        43)
                                                                                   -----------    -----------     -----------

                  Balance at end of year                                         $        218   $        210    $        207
                                                                                   ==========     ==========      ==========
</TABLE>

                                       30

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 3 - Loans receivable (continued)

The  following  table sets forth the maturity of the loan  portfolio at June 30,
2000 in thousands. The table does not include prepayments or scheduled principal
repayments.

<TABLE>
<CAPTION>
                                           Residential
                                  --------------------------
                                    One to Four     Multi-       Nonresidential                     Consumer
                                     Family         Family        and Land         Construction    and Other        Total
                                  -------------  -----------  -----------------  --------------  ------------   -------------
<S>                              <C>            <C>          <C>                <C>             <C>            <C>
Amounts due
   Within 3 months                $          -   $         -  $               -  $        1,295  $        672   $       1,967
   3 months to 1 year                        4             -                  -           2,331           478           2,813
                                    -----------    ---------    ---------------    ------------    ----------     -----------
          Total due within 1 year            4             -                  -           3,626         1,150           4,780
                                    -----------    ---------    ---------------    ------------    ----------     -----------
   After 1 year
      1 to 3 years                          151            -                104             905           963           2,123
      3 to 5 years                          322            -              2,135             250           539           3,246
      5 to 10 years                       3,024          749              1,735               -         1,034           6,542
      10 to 20 years                      7,432        2,643              1,390               -         3,492          14,957
      Over 20 years                      22,939          622                 95               -             -          23,656
                                    -----------    ---------    ---------------    ------------    ----------     -----------

          Total due after 1 year         33,868        4,014              5,459           1,155         6,028          50,524
                                    -----------    ---------    ---------------    ------------    ----------     -----------

          Total due               $      33,872  $     4,014  $           5,459  $        4,781  $      7,178          55,304
                                    ===========    =========    ===============    ============    ==========     -----------
Less
   Allowance for loan loss                                                                                                218
   Loans in process                                                                                                     1,449
   Deferred loan fees                                                                                                      27
                                                                                                                  -----------
                                                                                                                        1,694
                                                                                                                  -----------
          Loans receivable, net                                                                                 $      53,610
                                                                                                                  ===========
</TABLE>

The following table sets forth the dollar amount (in thousands) of all loans due
after June 30,  2001,  which have  predetermined  interest  rates and which have
floating or adjustable interest rates.

                                                  Floating or
                                     Fixed        Adjustable
                                     Rates          Rates          Total
                                 -------------  -------------   -------------

      One to four family         $       8,165  $      25,703   $      33,868
      Multifamily                        3,031            983           4,014
      Nonresidential and land            5,235            224           5,459
      Construction                         255            900           1,155
      Consumer and other                 2,384          3,644           6,028
                                   -----------    -----------     -----------
                                 $      19,070  $      31,454   $      50,524
                                   ===========    ===========     ===========

                                       31

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998

Note 4 - Foreclosed property

At June 30, 2000, 3 loans were  classified as foreclosed  property.  These loans
are secured by single family real estate.

There was no foreclosed  real estate acquired in settlement of loans at June 30,
1999.

The net loss on foreclosed  real estate at June 30 of each year consisted of the
following in thousands:
<TABLE>
<CAPTION>
                                                                                      2000           1999            1998
                                                                                 -------------  -------------   -------------
<S>                                                                             <C>            <C>             <C>
        Net loss on sale of foreclosed real estate                               $           -  $           -   $         43
                                                                                   ===========    ===========     ===========
</TABLE>

Note 5 - Property, equipment and depreciation

Property and equipment at June 30 of each year were as follows in thousands:

<TABLE>
<CAPTION>
                                                                                                    2000           1999
                                                                                                -------------   -------------
<S>                                                                                            <C>             <C>
        Land                                                                                    $         573   $         575
        Office buildings and improvements                                                               1,816           1,794
        Furniture, fixtures and equipment                                                               1,143           1,057
                                                                                                  -----------     -----------
                                                                                                        3,532           3,426
        Less accumulated depreciation                                                                   1,851           1,738
                                                                                                  -----------     -----------
                     Property and equipment, net                                                $       1,681   $       1,688
                                                                                                  ===========     ===========
</TABLE>
Accumulated depreciation at June 30 of each year was as follows in thousands:

<TABLE>
<CAPTION>
                                                                                                    2000            1999
                                                                                                -------------   -------------
<S>                                                                                            <C>             <C>
        Office buildings and improvements                                                       $         975   $         937
        Furniture, fixtures and equipment                                                                 876             801
                                                                                                  -----------     -----------
                                                                                                $       1,851   $       1,738
                                                                                                  ===========     ===========
</TABLE>

Depreciation  expense for the years ended June 30, 2000,  1999,  and 1998 was as
follows in thousands:
<TABLE>
<CAPTION>
                                                                                     2000           1999            1998
                                                                                 -------------  -------------   -------------
<S>                                                                             <C>            <C>             <C>
         Office buildings and improvements                                       $          37  $          36   $          37
         Furniture, fixtures and equipment                                                  76             70              55
                                                                                   -----------    -----------     -----------
                                                                                 $         113  $         106   $          92
                                                                                   ===========    ===========     ===========
</TABLE>

                                       32
<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 6 - Accrued interest receivable

Accrued interest receivable at June 30 of each year was as follows in thousands:

<TABLE>
<CAPTION>
                                                                                                     2000           1999
                                                                                                -------------   -------------

<S>                                                                                            <C>             <C>
         Accrued interest on loans                                                              $         311   $         261
         Accrued interest on investments                                                                  296             333
                                                                                                  -----------     -----------

                                                                                                $         607   $         594
                                                                                                  ===========     ===========
</TABLE>
Note 7 - Deposits

Savings  deposits at June 30 of each year,  summarized by interest rate, were as
follows in thousands:

<TABLE>
<CAPTION>
                                                                              2000                           1999
                                                                 -----------------------------  -----------------------------
                                                                      Amount       Percent          Amount        Percent
                                                                 --------------  -------------  -------------   -------------
<S>                                                             <C>                <C>         <C>                <C>
    Negotiable order of withdrawal deposits
       Non-interest bearing                                      $        1,840        2.84%    $       1,284         2.07%
       1.49%                                                              5,265        8.13             5,434         8.75
       1.98%                                                                 81         .13                 -         0.00
       2.47%                                                              1,230        1.90                 -         0.00
       2.52%                                                              2,668        4.12             3,233         5.21
                                                                    -----------    --------       -----------     --------

                                                                         11,084       17.12             9,951        16.03
                                                                    -------------  --------       -----------     --------

    Passbooks and statement deposits, 3.00% for each year                 8,104       12.52             8,688        13.99
                                                                    -----------    --------       -----------     --------

    Certificates of deposit and other term deposits
       3.00% to 4.00%                                                        80          .12            1,489         2.40
       4.01% to 5.00%                                                     8,978        13.87           23,367        37.63
       5.01% to 6.00%                                                    16,234        25.07           18,399        29.63
       6.01% to 7.00%                                                    20,268        31.30              200          .32
                                                                    -----------    ---------      -----------     --------

              Total term deposits                                        45,560        70.36           43,455        69.98
                                                                    -----------    ---------      -----------     --------

              Total deposits                                     $       64,748       100.00%   $      62,094       100.00%
                                                                    ===========    =========      ===========     ========
</TABLE>

The aggregate amounts of certificates of deposit with a denomination of $100,000
or more were $6.9  million,  $5.6  million,  and $5.8  million at June 30, 2000,
1999, and 1998, respectively.

Certain deposit accounts were pledged as collateral for $194,000,  $197,000, and
$207,000 of consumer loans at June 30, 2000, 1999, and 1998, respectively.

                                       33

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 7 - Deposits (continued)

Maturities  of  certificates  of deposit  are  scheduled  for each  fiscal  year
indicated as follows in thousands:

<TABLE>
<CAPTION>
                                                     2001            2002            2003         After 2004      Total
                                                  -------------  --------------  -------------  -------------   -------------

<S>                                              <C>            <C>             <C>            <C>             <C>
        3.00% to 4.00%                            $          80  $            -  $           -  $           -   $          80
        4.01% to 5.00%                                    7,569           1,232            151             26           8,978
        5.01% to 6.00%                                   15,897             301             36              -          16,234
        6.01% to 7.00%                                   18,581           1,687              -              -          20,268
                                                    -----------     -----------    -----------    -----------     -----------

                                                  $      42,127  $        3,220  $         187  $          26   $      45,560
                                                    ===========     ===========    ===========    ===========     ===========
</TABLE>

Interest  expense on deposits for the years ended June 30, 2000,  1999, and 1998
is summarized as follows in thousands:

<TABLE>
<CAPTION>
                                                                                     2000           1999            1998
                                                                                 -------------  -------------   -------------

<S>                                                                             <C>            <C>             <C>
        Money market                                                             $          75  $          87   $          93
        Regular savings                                                                    255            234             224
        Interest checking                                                                   87             87              92
        Club accounts                                                                        1              1               1
        Certificates of deposit                                                          2,330          2,439           2,558
                                                                                   -----------    -----------     -----------

                                                                                 $       2,748  $       2,848   $       2,968
                                                                                   ===========    ===========     ===========

</TABLE>

Note 8 - Borrowed funds

The following  table sets forth certain  information  regarding  advances at the
dates or for the periods indicated in thousands:

<TABLE>
<CAPTION>
                                                                                                    2000            1999
                                                                                                -------------   -------------
         FHLB-Atlanta advances
<S>                                                                                            <C>             <C>
            Balance outstanding at end of year                                                  $      11,700   $      12,000
            Average balance outstanding                                                                10,338           9,043
            Maximum amount outstanding at any month-end during the year                                12,000          12,000

            Weighted-average interest rate during the year                                               6.05%           5.42%
            Weighted-average interest rate at end of year                                                5.46%           5.37%
</TABLE>

                                       34
<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 8 - Borrowed funds (continued)

The following  table sets forth the repayment  schedule at June 30, 2000,  which
includes interest rates and amounts due by year, in thousands:

                Year Due                   Interest Rate            Amount
             ------------                ----------------        -------------

                  2001                        7.40%              $       4,700
                  2008                        4.69%                      3,000
                  2008                        5.51%                      2,000
                  2009                        5.47%                      2,000
                                                                 -------------
                                                                 $      11,700
                                                                 =============

As of June 30, 2000,  the line of credit  approved by the Federal Home Loan Bank
was $16 million, of which $4.3 million remained unused.

Residential  loans  aggregating $11.7 million and $12 million were pledged as of
June 30,  2000 and 1999,  respectively,  as  collateral  for the  advances  from
FHLB-Atlanta under a blanket floating lien agreement.


Note 9 - SAIF premium assessment

Pursuant to the Economic Growth and Paperwork  Reduction Act of 1996 (Act),  the
FDIC imposed a special  assessment on SAIF members to capitalize the SAIF at the
designated  reserve level of 1.25% of insured deposits as of September 30, 1996.
Based on the Company's deposits as of March 31, 1995, the date for measuring the
amount of the special assessment pursuant to the Act, the Company paid a special
assessment of $355,000 on November 27, 1996 to capitalize the SAIF. The FDIC has
lowered the premium for deposit  insurance to a level  necessary to maintain the
SAIF at its required reserve level. The Bank's premium for deposit insurance for
2000 is currently .0003% of assessable deposits and was .0610% in 1999.


Note 10 - Income taxes

The  Bank's  portion  of  the  consolidated   taxable  income  was  computed  by
application  of  Section  593(b)(2)  of the U.S.  Internal  Revenue  Code  which
provides a special deduction for bad debts. The bad debt deduction may be a "tax
preference item" to which a minimum tax may apply.

The 1996 federal tax legislation  repealed the benefits of Section  593(b)(2) of
the U.S.  Internal Revenue Code. For ensuing fiscal years, the Bank will compute
its tax bad debt deduction by use of the "experience method" which is based on a
moving  five-year  average  of actual  loss  experience.  The  legislation  also
provides that "applicable  excess reserves" must be recaptured as taxable income
over five years  beginning in fiscal 1997.  The amount to be  recaptured  is the
excess of the accumulated  reserves since 1987 over the amount allowed by use of
the experience method for those years.

                                       35

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 10 - Income taxes (continued)

The  consolidated  provision for income taxes for the years ended June 30, 2000,
1999, and 1998, consisted of the following elements in thousands:

<TABLE>
<CAPTION>
                                                                                     2000           1999           1998
                                                                                 -------------  -------------   -------------
<S>                                                                             <C>            <C>             <C>
         Tax paid or payable currently
            Federal                                                              $         184  $        159    $        304
            State                                                                            -            15              33
         Income tax deferred, net                                                            3             3     (        19)
                                                                                   -----------    ----------      -----------

                   Total provision for income taxes                              $         187  $        177    $        318
                                                                                   ===========    ==========      ==========
</TABLE>

The  provision  for income taxes  differed  from that  computed at the statutory
corporate rate for the years ended June 30, 2000, 1999 and 1998 as follows:

<TABLE>
<CAPTION>
                                                                                          2000          1999         1998
                                                                                       -----------   -----------  -----------

<S>                                                                                     <C>           <C>          <C>
        Tax at statutory rate                                                              34.0%         34.0%        34.0%
        Increases in taxes resulting from
           State income tax, net of federal tax benefit                                       -           2.0          2.8
           Other                                                                              -           (.1)         1.5
           Tax exempt interest                                                             (6.9)         (6.8)
           Permanent non-deductible expenses                                                3.9           4.3          2.5
                                                                                       --------      --------     --------

                  Total provision for income taxes                                         31.0%         33.4%        40.8%
                                                                                       ========      ========     ========
</TABLE>

The significant  components of the net deferred tax asset (liability) at June 30
of each year were as follows in thousands:

<TABLE>
<CAPTION>
                                                                                                      Liability Method
                                                                                                -----------------------------
                                                                                                   2000            1999
                                                                                                -------------   -------------
<S>                                                                                            <C>             <C>
        Components of the deferred tax asset
           Loan fees                                                                            $           -   $           3
           Pension expense                                                                                 76              76
           Stock bonus plan                                                                                27              24
           Bad debts                                                                                       16              13
           Unrealized losses on securities, available for sale                                            461             265
                                                                                                  -----------     -----------
                                                                                                          580             381
        Valuation allowance                                                                                 -               -
                                                                                                  -----------     -----------
                  Total deferred tax asset                                                                580             381
                                                                                                  -----------     -----------
        Components of the deferred tax liability
           Loan fees                                                                                        2               -
           Accelerated depreciation                                                                         9              10
                                                                                                  -----------     -----------
                  Total deferred tax liability                                                             11              10
                                                                                                  -----------     -----------
                  Net deferred tax asset                                                        $         569   $         371
                                                                                                  ===========     ===========
</TABLE>

                                       36

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 10 - Income taxes (continued)

The  Company's  consolidated  income  tax  returns  for years not  barred by the
statute of limitations are subject to review by tax authorities.


Note 11 - Comprehensive income

Effective  July 1, 1998,  the Company  adopted the  provisions  of  Statement of
Financial  Accounting Standards No. 130, Reporting  Comprehensive  Income, (SFAS
130). This statement requires the reporting of comprehensive  income in addition
to  net  income  from  operations.  Comprehensive  income  is a  more  inclusive
financial  reporting  methodology  that includes  certain  disclosure of certain
financial   information  that  has  historically  not  been  recognized  in  the
calculation of net income.

The before tax and after tax amount,  as well as the tax (expense) is summarized
below:

<TABLE>
<CAPTION>
                                                                                                    Tax
                                                                                    Before        (Expense)        After
                                                                                    Tax            Benefit          Tax
                                                                                 -------------  -------------   -------------
<S>                                                                             <C>            <C>             <C>
       Year ended June 30, 2000
          Unrealized gains (losses) on securities                                $ (       576) $        196    $ (       380)
                                                                                   ===========    ==========      ===========

       Year ended June 30, 1999
          Unrealized gains (losses) on securities                                $ (       874) $        301    $ (       573)
                                                                                   ===========    ==========      ===========

       Year ended June 30, 1998
          Unrealized gains (losses) on securities                                $          44  $ (       15)   $          29
                                                                                   ===========   ===========     ============

</TABLE>

Note 12 - Retirement plans and employee benefit programs

The Company has a multi-employer defined benefit pension plan with The Financial
Institution's  Retirement  Fund.  Pension  expense is the amount of the required
contribution,  and a liability is recognized  for such  contributions  which are
unpaid at the end of the fiscal year.

Pension  expense  for the three  years  ended  June 30,  2000 was as  follows in
thousands:

<TABLE>
<CAPTION>
                                                                                      2000          1999            1998
                                                                                 -------------  -------------   -------------

<S>                                                                             <C>            <C>             <C>
        Pension expense                                                          $           -  $           -   $           -
                                                                                   ===========    ===========     ===========
</TABLE>

The multi-employer  defined benefit plan covers  substantially all employees who
have reached age 21 and who have completed one year of service. The benefits are
based on length of service and high five-year average earnings.  However,  in no
event will the benefits be less than those vested  through June 30, 1992 under a
previous plan.

                                       37

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 12 - Retirement plans and employee benefit programs (continued)

Supplemental executive retirement plan

The Company has a deferred  compensation  agreement  with one principal  officer
which provides for  retirement  benefits  supplementary  to those of the pension
plan. As of June 30, 2000,  the cumulative  accrual under the contracts  totaled
$110,000 and constituted  general  obligations of the Company. At June 30, 1999,
the deferred  compensation  agreement  was with two  principal  officers and the
cumulative  accrual totaled  $230,000.  During the year ended June 30, 2000, the
former President elected to terminate his retirement benefit.

Employee stock ownership plan

At the time of the stock  conversion,  the Bank  established  an Employee  Stock
Ownership  Plan  covering all  full-time  employees  over the age of 21, with at
least 1,000 hours of service  within a plan year.  The ESOP borrowed  funds from
the Company to purchase a total of 45,647 shares of the Company's  common stock,
the loan being  collateralized  by the common stock.  Contributions by the Bank,
along with dividends received on unallocated  shares, are used to repay the loan
with shares being  released from the  Company's  lien  proportional  to the loan
repayments.  Annually  on June 30,  the  released  shares are  allocated  to the
participants  in the  same  proportion  that  their  wages  bear  to  the  total
compensation of all of the participants.  The Company has released 27,389 shares
of the  common  stock as of June 30,  2000.  The  Company  recognized  $8,000 as
accrued  compensation  costs in 2000 and 1999.  The fair value of unearned  ESOP
shares  totaled  $173,000 and $296,000 at June 30, 2000 and 1999,  respectively.
There were no commitments to repurchase ESOP shares.

The Company accounts for its ESOP in accordance with Statement of Position 93-6.
Accordingly,  the shares  pledged as  collateral  are reported as a reduction of
stockholders' equity in the consolidated  statements of financial condition.  As
shares are released from collateral,  the Company reports  compensation  expense
equal  to the  current  market  price  of the  shares,  and  the  shares  become
outstanding  for earnings per share  computations.  Dividends on allocated  ESOP
shares  are  recorded  as  a  reduction  of  retained  earnings;   dividends  on
unallocated ESOP shares are recorded as a reduction of debt.

                                       38

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 12 - Retirement plans and employee benefit programs (continued)

Recognition and retention plan

The stockholders approved the establishment of a Management Stock Bonus Plan and
Trust  (MSBP) on October  25,  1995.  The plan  states  that the Trust shall not
purchase  more than 4% of the  aggregate  shares of common  stock  issued by the
Company in the  mutual-to-stock  conversion of the Bank (22,823 shares).  During
1996,  the Bank  purchased  22,812  shares of the  Company's  common stock at an
average  price of $17.02  per share to be  awarded to  directors,  officers  and
employees in  accordance  with the  provision of the  Recognition  and Retention
Plan.  The costs of the shares  awarded  under the plan are recorded as unearned
compensation,  a contra  equity  account,  and are  recognized  as an expense in
accordance  with the vesting  requirements  under the plan.  For the years ended
June 30, 2000 and 1999, the amounts  included in  compensation  expense were and
$42,000,  for each year.  The status of the shares in this plan at June 30, 2000
is shown as follows:

                                                 Unawarded        Awarded
                                                  Shares          Shares
                                               -------------   -------------

        Balance at June 30, 1998                       4,328         13,209
           Granted                                         -              -
           Vested                                          -     (    2,642)
           Forfeiture                                      -              -
                                                 -----------     ----------

        Balance at June 30, 1999                       4,328         10,567
           Granted                                         -              -
           Vested                                          -     (    3,128)
           Forfeiture                                      -              -
                                                 -----------     -----------

        Balance at June 30, 2000                       4,328          7,439
                                                 ===========     ===========

Stock option plans

The  stockholders  also  approved  the  establishment  of a stock option plan on
October 5, 1995 for directors,  officers and employees. The exercise price under
both plans is $17 per share, the fair market price on the date of the grant. One
is a non-incentive stock option plan, and the other is an incentive stock option
plan.  Rights  to  exercise  options  granted  vest at the rate of 20% per year,
beginning on the first anniversary of the grant. On March 18, 1998, the Board of
Directors  approved the establishment of a stock option plan for directors.  The
exercise  price is $21 per share,  the fair  market  price on the date of grant.
Rights to exercise options are 100% vested as of June 30, 2000.

On April 21, 1999, the Board of Directors  approved the establishment of a stock
option plan for the former  President.  The exercise price is $13 per share, the
fair market price on the date of the grant.  Rights to exercise options are 100%
vested as of June 30, 2000.

                                       39

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 12 - Retirement plans and employee benefit programs (continued)

The weighted-average  option price and weighted-average  remaining term of stock
options awarded and not exercised were as follows as of June 30:

                                             2000            1999
                                          -------------   -------------

        Weighted-average price            $       17.16   $       17.16
        Weighted-average term             $        7.08   $        7.66

A summary of the stock option activity is as follows:

                                           Available  Options       Vested and
                                           for Grant Outstanding   Exercisable
                                          ---------- ------------  -----------

        Balance at June 30, 1998           13,132      26,365          27,684
           Granted                              -           -               -
           Vested                               -     ( 8,792)         18,792
           Exercised                            -           -               -
           Forfeiture                           -           -               -
                                          --------  ---------      ----------

        Balance at June 30, 1999           13,132      17,573          46,476
           Granted                              -           -               -
           Vested                               -     ( 8,781)          8,781
           Exercised                            -           -               -
           Forfeiture                           -           -               -
                                          --------  ---------      ----------

        Balance at June 30, 2000            13,132      8,792          55,257
                                          ========  =========      ==========

The Company  applies APB Opinion 25 in  accounting  for  employee  stock  option
plans. Accordingly, no compensation cost has been recognized in 2000 and 1999.

Pro forma information regarding net income and earnings per share is required by
SFAS 123,  and has been  determined  as if the  Company  had  accounted  for its
employee stock options under the fair value method of that  Statement.  The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions:  risk-free
interest rate of 5.65%;  dividend yields of 3.08%;  volatility  factor of 11.5%;
and a weighted-average expected life of the option of 6.45 years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.

                                       40

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 12 - Retirement plans and employee benefit programs (continued)

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma information follows:

                                             2000          1999        1998
                                         -----------   -----------  -----------

        Pro forma net income             $       381   $       339  $       446
        Pro forma earnings per share
           Basic                         $       .95   $       .76  $       .93
           Diluted                       $       .95   $       .76  $       .88


Note 13 - Financial instruments with off-balance-sheet risk

The Company is party to financial instruments with off-balance-sheet risk in the
normal course of business to meet the financing  needs of its  customers.  These
financial  instruments consist primarily of commitments to extend credit.  These
instruments  involve,  to varying degrees,  elements of credit risk in excess of
the amount recognized in the statements of financial  position.  The contract or
notional  amounts of those  instruments  reflect the extent of  involvement  the
Company has in particular classes of financial instruments.

The  Company's  exposure  to credit loss in the event of  nonperformance  by the
other party to the  financial  instrument  for  commitments  to extend credit is
represented by the contractual notional amount of those instruments. The Company
uses the same credit policies in making commitments and conditional  obligations
as it does for on-balance-sheet instruments.

Commitments  to extend  credit are  agreements  to lend to a customer as long as
there is no violation of any condition established in the contract.  Commitments
generally  have fixed  expiration  dates or other  termination  clauses  and may
require payment of a fee. Since many of the commitments are expected to be drawn
upon, the total commitment amounts generally represent future cash requirements.
The Company evaluates each customer's credit-worthiness on a case-by-case basis.
The amount of  collateral  deemed  necessary  by the Company  upon  extension of
credit  is  based  on  management's  credit  evaluation  of  the  counter-party.
Collateral normally consists of real property.

The Company's  commitments to finance real estate  acquisitions and construction
were $2.0  million at June 30, 2000,  $2.5  million at June 30,  1999,  and $4.1
million at June 30, 1998.  As of June 30, 2000,  the Company had  contracted  to
sell $540,000 of the loans to be financed.  No loss is anticipated.  At June 30,
2000,  outstanding  letters of credit  totaled  $165,000,  and unfunded lines of
credit totaled $4.0 million.  There were no loans sold with recourse in 2000 and
1999.

                                       41

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 14 - Restricted retained earnings

In accordance  with the  regulations  concerning  conversion  from a mutual to a
stock  organization,  the Bank was required to establish a  liquidation  account
equal  to its net  worth  as of the  latest  statement  of  financial  condition
contained in the final prospectus.  Such liquidation account is to be maintained
as of the eligibility  record date (March 31, 1993) or supplemental  eligibility
record  date (June 30,  1994) for the  benefit of  depositors  who  continue  to
maintain  their  deposits  in the Bank  after the  conversion  in the event of a
complete  liquidation of the Bank. If, however, on any annual closing date (June
30) of the Bank,  the amount in any  deposit  account is less than the amount in
such deposit  account on March 30, 1993 or June 30,  1994,  then the interest in
the liquidation account relating to such deposit account would be reduced by the
amount of such reduction,  and such interest will cease to exist if such deposit
account is closed. The Bank may not declare or pay a cash dividend or repurchase
any of its capital stock if the effect  thereof would cause the net worth of the
Bank to be reduced below either the amount required for the liquidation  account
or  the  minimum  regulatory  capital  requirements.   At  June  30,  2000,  the
liquidation account, unadjusted for customer withdrawals,  totaled $4.2 million,
and minimum regulatory capital was $7.3 million. See Note 17 for Bank regulatory
capital requirements.


Note 15 - Earnings per share

The  following  table  sets  forth  the  reconciliation  of the  numerators  and
denominators of the basic and diluted earnings per share (EPS) computations:

<TABLE>
<CAPTION>
                                                                                           Year Ended June 30
                                                                          ---------------------------------------------------
                                                                               2000             1999              1998
                                                                          ----------------  ---------------  ----------------
<S>                                                                      <C>               <C>              <C>
           Numerator:
      (a)  Net income available to shareholders                           $           396   $          345   $            461
                                                                            =============     ============      =============

           Denominator:
           Weighted-average shares outstanding                                    423,612          471,766           509,008
           Less: ESOP weighted-average shares                               (      22,819)   (      27,385)    (      31,951)
                                                                            --------------   --------------    -------------

      (b)  Basic EPS weighted-average shares outstanding                          400,793          444,381           477,057

           Effect of dilutive securities:
           Incremental shares attributable to the Stock Option                          -                -             7,500
              Plan and Management Stock Bonus Plan                                      -                -             2,255
                                                                            -------------    -------------     -------------

      (c)  Diluted EPS weighted-average shares outstanding                        400,793          444,381           486,812
                                                                            =============    =============     =============

           Basic earnings per share (a/b)                                 $           .99   $          .78   $           .97
                                                                            =============     ============      ============

           Diluted earnings per share (a/c)                               $           .99   $          .78   $           .95
                                                                            =============     ============      ============

</TABLE>


                                       42

<PAGE>

                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 16 - Significant group concentrations of credit risk

The Company  grants  residential,  commercial,  and consumer  loans to customers
mainly in the  southwest  region of Virginia.  The Company has a loan  portfolio
consisting  principally of residential  mortgage loans and is not dependent upon
any  particular  economic  sector,  although  the  portfolio  as a whole  may be
affected by general economic factors of the southwest Virginia region.

At June 30, 2000,  the Company had  commercial  bank deposits of $1.3 million in
excess of the Federal Deposit Insurance Corporation insurance limit.


Note 17 - Bank regulatory matters

The Bank is subject to various regulatory capital  requirements  administered by
the federal banking agencies.  Failure to meet minimum capital  requirements can
initiate  certain  mandatory and possibly  additional  discretionary  actions by
regulators  that,  if  undertaken,  could have a direct  material  effect on the
Bank's  financial   statements.   Under  capital  adequacy  guidelines  and  the
regulatory  framework for prompt corrective  action, the Bank must meet specific
capital  guidelines  that involve  quantitative  measures of the Bank's  assets,
liabilities,  and certain off-balance-sheet items as calculated under regulatory
accounting  practices.  The Bank's capital amounts and  classification  are also
subject to  qualitative  judgments  by the  regulators  about  components,  risk
weightings, and other factors.

The  Office  of  Thrift   Supervision's   capital   regulations  require  thrift
institutions to maintain capital at least sufficient to meet three requirements:
tangible  capital,   core  capital,  and  risk-based  capital.   Management  has
determined  that  the  Bank's  capital  meets  and  exceeds  all  three  capital
requirements as follows as of June 30, 2000 and 1999, in thousands. Tangible and
core  capital  levels  are  shown as a  percentage  of  adjusted  total  assets.
Risk-based capital levels are shown as a percentage of risk-weighted assets:

<TABLE>
<CAPTION>
                                                                                         2000
                                                      ------------------------------------------------------------------------
                                                                Tangible                  Core                  Risk-based
                                                                Capital                  Capital                 Capital
                                                      ------------------------------------------------------------------------
<S>                                                  <C>               <C>    <C>              <C>     <C>            <C>
        Regulatory capital computed                   $     7,301       8.52%  $      7,301     8.52%   $     7,518    15.53%
        Minimum capital requirement                         1,285       1.50          2,570     3.00          3,872     8.00
                                                         --------   --------     ---------- --------     ---------- --------

                  Regulatory capital excess           $     6,016       7.02%  $      4,731     5.52%   $     3,646     7.53%
                                                         ========== ========     ========== ========     ========== ========
</TABLE>

<TABLE>
<CAPTION>
                                                                                         1999
                                                      ------------------------------------------------------------------------
                                                                Tangible                  Core                  Risk-based
                                                                Capital                  Capital                 Capital
                                                      ------------------------------------------------------------------------
<S>                                                  <C>               <C>    <C>              <C>     <C>            <C>

        Regulatory capital computed                   $     6,869       8.3%   $     6,869       8.3%  $     7,079      17.7%
        Minimum capital requirement                         1,238       1.5          2,476       3.0         3,205       8.0
                                                         --------     -----      ---------     -----     ---------    ------

                  Regulatory capital excess           $     5,631       6.8%   $     4,393       5.3%  $     3,874       9.7%
                                                         ========     =====      =========     =====     =========    ======
</TABLE>



                                       43

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 18 - Related-party transactions

The  Company  has made  loans in the  ordinary  course of  business  to  various
officers  and  directors.  These  loans  are  generally  collateralized  by  the
individuals'  personal  residences  or by savings  accounts in the Company.  The
aggregate  balances of such loans which exceed $60,000 in aggregate  outstanding
amount to any officer or director for the years ended June 30, 2000,  1999,  and
1998 are summarized as follows in thousands:

<TABLE>
<CAPTION>
                                                 2000            1999            1998
                                            -------------  -------------   -------------
<S>                                        <C>            <C>            <C>
        Beginning balance                   $        194   $       197    $        286
        Additions                                      -             -               -
        Repayments                            (        4)  (         3)    (        89)
                                              ----------   -----------     -----------

                  Ending balance            $        190   $       194    $        197
                                              ==========     =========       =========
</TABLE>

Fees for foreclosures, titles and deeds of trust, paid to a law firm, of which a
director was a principal, aggregated $13,860 and $2,575 for the years ended June
30, 1999, and 1998,  respectively.  No  foreclosure  fees were paid to a related
party in the year ended  June 30,  2000.  Insurance  commissions  received  by a
director from business with or for the Company  aggregated  $4,000 each year for
the years ended June 30, 2000, 1999, and 1998.


Note 19 - Commitments and contingencies

Rental expenses paid under operating leases for a loan office at June 30 of each
year was as follows in thousands:

                                     2000           1999            1998
                                  -------------  -------------   -------------

        Rental expense            $          42  $          42   $          25
                                    ===========    ===========     ===========

The Company  entered into a three-year  lease  agreement for office  space.  The
lease terminates April 30, 2001.

The current minimum annual rental commitments under the noncancelable  operating
lease in effect at June 30, 2000 are as follows in thousands:

                Year Ending                             Amount
             ---------------                        ---------------

                    2001                            $            36
                                                     --------------
                                                    $            36
                                                    ===============

                                       44

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 20 - Disclosures about fair value of financial instruments

The estimated fair values of the Company's  financial  instruments as of June 30
of each year are as follows in thousands:

<TABLE>
<CAPTION>
                                                                            2000                            1999
                                                               -----------------------------    -----------------------------
                                                                 Carrying         Fair            Carrying         Fair
                                                                   Amount         Value             Amount         Value
                                                               -------------   -------------    -------------   -------------
<S>                                                           <C>             <C>              <C>             <C>
        Financial assets
           Cash and cash equivalents                           $       2,060   $       2,060    $       2,454   $       2,454
           Interest-bearing deposits                                   1,685           1,685            6,278           6,278
           Investment securities                                      13,638          13,638           14,105          14,115
           Mortgage-backed securities                                  8,133           8,133            9,112           9,112
           Loans receivable, net                                      53,610          53,739           45,576          45,729

        Financial liabilities
           Deposits                                                   64,748          65,331           62,094          62,094
           Advances from Federal Home Loan Bank                       11,700          11,747           12,000          11,956

        Unrecognized financial instruments
           Commitments to purchase securities                              -               -                -               -
           Standby letters of credit issued                              165             165              521             521

</TABLE>

Note 21 - Proposed merger

On August 8, 2000, the Bank announced a proposed  merger with FNB Corporation of
Christiansburg, Virginia. Terms of the agreement require the stockholders of the
Bank  to  receive  $20.25  in  value,  consisting  of  cash  and  stock  in  FNB
Corporation, subject to certain restrictions. This merger is contingent upon the
approval of the Bank's stockholders and state and federal regulators, as well as
the conditions under the merger agreement.


Note 22 - Other noninterest expense

Other  noninterest  expense for the years ended June 30, 2000, 1999, and 1998 is
shown as follows in thousands:

<TABLE>
<CAPTION>
                                                                                     2000           1999           1998
                                                                                 -------------  -------------   -------------
<S>                                                                             <C>            <C>             <C>
        Other noninterest expense
           Contributions                                                         $           5  $           5   $           7
           Dues and subscriptions                                                           19             18              14
           Insurance                                                                        29             30              31
           Office supplies, telephone and postage                                          135            136             113
           Other expenses                                                                   53             38              41
           Professional fees                                                               108            101             100
           Supervisory fees and assessments                                                 32             33              30
                                                                                   -----------    -----------     -----------

                                                                                 $         381  $         361   $         336
                                                                                   ===========    ===========     ===========
</TABLE>

                                       45

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 23 - Condensed parent company information

The following shows the Parent  Company's  condensed  financial  information (in
thousands) as of and for years of operation ended June 30, 2000 and 1999:

                                 Balance Sheets
<TABLE>
<CAPTION>

                                                                  2000           1999
                                                              -------------  -------------
<S>                                                          <C>            <C>
Assets
        Cash and cash equivalents                             $          83  $          90
        Investment in Bank subsidiary                                 6,222          6,067
        Loan to Bank ESOP                                               183            228
        Loan to Bank subsidiary                                         250            375
        Other assets                                                     42             47
                                                                -----------  -------------

             Total assets                                     $       6,780  $       6,807
                                                                ===========  =============

Liabilities and stockholders' equity
        Liabilities                                           $          38  $          16
        Stockholders' equity                                          6,742          6,791
                                                                -----------  -------------

             Total liabilities and stockholders' equity       $       6,780  $       6,807
                                                                ===========  =============
</TABLE>

                                       46

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 23 - Condensed parent company information (continued)

                             Statement of Operations
<TABLE>
<CAPTION>
                                                                                      2000          1999
                                                                                 ------------   ------------
<S>                                                                             <C>            <C>
Income
     Interest from
        Bank's ESOP loan                                                         $         20   $         22
        Loan to Bank subsidiary                                                            13             22
        Income Tax Refunds                                                                 35              -
                                                                                   ----------     ----------

             Total Income                                                                  68             44
                                                                                   ----------     ----------

Expense
        Directors' compensation                                                            25             26
        Professional fees                                                                  63             58
        Stationery and supplies                                                             1              1
        Other                                                                              20             21
                                                                                   ----------     ----------

             Total Expense                                                                109            106
                                                                                   ----------     ----------

             Net loss before Income taxes and equity in
               Undistributed net income of Bank subsidiary                         (       41)    (       62)

Income tax expense (credit)                                                        (        6)    (       21)
                                                                                   ------------   ------------

                                                                                   (       35)    (       41)

Equity in undistributed net income of Bank subsidiary                                     431            386
                                                                                   ----------     ----------

             Net Income                                                          $        396   $        345
                                                                                  ============   ===========
</TABLE>


                                       47

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998


Note 23 - Condensed parent company information (continued)

                            Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                      2000             1999
                                                                                 ------------   ------------
<S>                                                                             <C>            <C>
Cash flows from operating activitie
    Net Income                                                                   $        396   $        345
    Adjustments
        Equity in undistributed net income of Bank subsidiary                      (      431)    (      386)
        Increase in other assets                                                   (       12)    (       29)
        Increase in other liabilities                                                      22              1
                                                                                 ------------   ------------

             Net cash used in operating activities                                 (       25)    (       69)

Cash flows from investing activities
        Dividends received from Bank subsidiary                                             -          1,200
        Principal repayments from Bank subsidiary                                         170            246
                                                                                 ------------   ------------

             Net cash provided by investing activities                                    170          1,446

Cash flows from financing activities
        Dividends paid                                                             (      152)    (      179)
        Purchase of stock                                                                   -     (    1,210)
                                                                                 ------------   ------------

             Net cash used in financing activities                                 (      152)    (    1,389)
                                                                                 ------------   ------------

             Decrease in cash and cash equivalents                                 (        7)    (       12)

Cash and cash equivalents at beginning of year                                   $         90   $        102
                                                                                 ------------   ------------

Cash and cash equivalents at end of year                                         $         83   $         90
                                                                                 ============   ============
</TABLE>



                                       48

<PAGE>
                     SWVA BANCSHARES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                          June 30, 2000, 1999, and 1998

Note 24 - Selected quarterly financial data (unaudited)

Condensed consolidated financial data for the years ended June 30, 2000 and 1999
is shown as follows in thousands, except per- share data:

<TABLE>
<CAPTION>
                                                                                2000
                                                                 -----------------------------------
                                                                  First    Second    Third   Fourth
                                                                 Quarter   Quarter  Quarter  Quarter
                                                                 -------   -------  -------  -------
<S>                                                              <C>      <C>      <C>      <C>
Total interest income                                             $1,451   $1,506   $1,510   $1,561
Total interest expense                                               789      819      822      883
                                                                  ------   ------   ------   ------

          Net interest income                                        662      687      688      678
Provision for credit losses                                            3        3        3        4
                                                                  ------   ------   ------   ------

          Net interest income after provision for credit losses      659      684      685      674
Other noninterest income                                             131      128       92      116
Noninterest expense                                                  608      647      671      660
                                                                  ------   ------   ------   ------

          Income before income tax expense                           182      165      106      130
Income tax expense                                                    58       58        9       62
                                                                  ------   ------   ------   ------

           Net income                                             $  124   $  107   $   97   $   68
                                                                  ======   ======   ======   ======

Basic earnings per share                                          $  .31   $  .26   $  .24   $  .17
Diluted earnings per share                                           .31      .26      .24      .17
Cash dividends per share                                             .20        -      .20        -
</TABLE>

<TABLE>
<CAPTION>
                                                                                1999
                                                                 -----------------------------------
                                                                  First    Second    Third   Fourth
                                                                 Quarter   Quarter  Quarter  Quarter
                                                                 -------   -------  -------  -------
<S>                                                              <C>      <C>      <C>      <C>
Total interest income                                             $1,493   $1,477   $1,408   $1,413
Total interest expense                                               889      864      795      790
                                                                  ------   ------   ------   ------

          Net interest income                                        604      613      613      623
Provision for credit losses                                            3        3        3        4
                                                                  ------   ------   ------   ------

          Net interest income after provision for credit losses      601      610      610      619
Other noninterest income                                             149      193      125      108
Noninterest expense                                                  613      622      631      627
                                                                  ------   ------   ------   ------

          Income before income tax expense                           137      181      104      100
Income tax expense                                                    52       70       40       15
                                                                  ------   ------   ------   ------

           Net income                                             $   85   $  111   $   64   $   85
                                                                  ======   ======   ======   ======

Basic earnings per share                                          $  .18   $  .24   $  .14   $  .21
Diluted earnings per share                                           .18      .24      .14      .21
Cash dividends per share                                             .20        -      .20        -
</TABLE>

                                       49
<PAGE>
<TABLE>
<CAPTION>
<S>            <C>
                                                     OFFICE LOCATIONS

                                                     Corporate Office
                              SWVA Bancshares, Inc. and Southwest Virginia Savings Bank, FSB
                                                  302 Second Street, S.W.
                                                  Roanoke, VA 24011-1597
                                                      (540) 343-0135

                                   Branch Offices - Southwest Virginia Savings Bank, FSB

                            1006 Hardy Road                               1611 Hershberger Road
                            Vinton, VA                                    Roanoke, VA

                            2133 Electric Road                            40 W. Main Street
                            Roanoke, VA                                   Salem, VA

                                                  Loan Production Office
                                                   Building D, Suite 101
                                                  2847 Penn Forest Blvd.
                                                        Roanoke, VA

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

                                        Board of Directors of SWVA Bancshares, Inc.

                                                        B. L. Rakes
                                                   Chairman of the Board

         F. Courtney Hoge                              James H. Brock                 Michael M. Kessler
         Vice Chairman of the Board              President, Rusco Window Co.          President, Kessler Associates, LTD,
         Insurance Sales Representative                                               a photo processor
         New York Life Insurance Co.

         D. W. Shilling                                Barbara C. Weddle              Glen C. Combs
         Executive Officer                             Executive Officer              Vice President, Acosta Sales,
                                                                                      a food brokerage company

                                        Executive Officers of SWVA Bancshares, Inc.

         D. W. Shilling                              Barbara C. Weddle                Mary G. Staples
         President and Chief                         Senior Vice President            Controller and Treasurer
         Executive Officer                           and Secretary

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

         Special Counsel:                                                             Independent Auditors:
         Malizia Spidi & Fisch, PC                                                    Cherry Bekaert & Holland LLP
         One Franklin Square                                                          828 Main Street, 17th Floor
         1301 K Street, NW, Suite 700 East                                            Lynchburg, VA  24505
         Washington, D.C.  20005

         Special Counsel for                                                          Transfer Agent and Registrar:
         Southwest Virginia Savings Bank, FSB:                                        Registrar & Transfer Company
         Carter Brown & Osborne, P.C.                                                 10 Commerce Drive
         1401 Franklin Road SW                                                        Cranford, NJ  07106
         Roanoke, VA   24016                                                          (908) 272-8511

                                      ------------------------------------------
</TABLE>

SWVA  Bancshares,  Inc.'s  Annual  Report for the year ended June 30, 2000 filed
with the Securities and Exchange  Commission on Form 10-KSB is available without
charge upon written request. For a copy of the Form 10-KSB or any other investor
information,  please write or call Barbara C. Weddle,  Senior Vice President and
Secretary at the Company's Corporate Office in Roanoke, Virginia.



                                                 50