SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D. C. 20549


                                   FORM 10-Q



MARK ONE
-------------------------------------------------------------------------------
X
-------------------------------------------------------------------------------
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT 
OF 1934

         For the Quarterly Period Ended September 30, 1996

                                   OR

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

-------------------------------------------------------------------------------
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934



Commission File Number:  0-26196



                    FIDELITY FINANCIAL BANKSHARES CORPORATION
             (exact name of registrant as specified in its charter)

          Virginia                                         54-1746028
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 of incorporation)

2809 Emerywood Parkway, Suite 500, Richmond, VA          23294_
  (Address of principal executive offices)             (Zip Code)

           Registrant's Telephone Number - (804) 756-0200

Indicate the number of shares  outstanding of each of the  issuer's  classes of
capital stock, as of the latest practicable date:

                 Common Stock,  Par Value $1.00 per share,
         2,298,467 shares outstanding as of November 12, 1996


Indicate by check mark whether the registrant(1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceeding 12 months(or for such shorter period that the  registrant  was
required to file such  reports), and (2) has been subject to such  filing
requirement for the past 90 days.

                           Yes   X           No


<PAGE>


                   FIDELITY FINANCIAL BANKSHARES CORPORATION

                                   INDEX


                    PART I - FINANCIAL INFORMATION

                                                                  Page Number
ITEM 1   Consolidated Financial Statements

         Consolidated Statements of Financial Condition                3

         Consolidated Statements of Operations                       4 - 5

         Consolidated Statements of Cash Flows                         6

         Notes to Consolidated Financial Statements                  7 - 9

ITEM 2   Management's Discussion and Analysis of                    10 - 13
         Financial Condition and Results of Operations


                                 PART II - OTHER INFORMATION

ITEM 1   Legal Proceedings                                            14

ITEM 2   Changes in Securities                                        14

ITEM 3   Defaults Upon Senior Securities                              14

ITEM 4   Submission of Matters to a Vote of Security Holders          14

ITEM 5   Other Information                                            14

ITEM 6   Exhibits and Reports on Form 8-K                             14


                   SIGNATURES


<PAGE>

FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except share data)
<TABLE>
<CAPTION>

                                                   September 30,    December 31,
                                                      1996             1995
                                                   -------------    -----------
ASSETS                                              (unaudited)

<S>                                                <C>            <C>            
 Cash and due from banks                             $   3,675     $    5,067
 Investment securities available-for-sale               30,199         36,649
 Investment securities held-to-maturity                  4,492          6,462
 Mortgage-backed securities available-for-sale           8,294          4,871
 Loans receivable, net                                 269,303        247,194
 Loans receivable held-for-sale                          2,184          4,147
 Real estate acquired in settlement of loans, net        1,203            822
 Premises and equipment, net                             4,575          4,681
 Accrued interest receivable                             2,183          2,108
 Prepaid expenses and other assets                       3,125          2,412
                                                   ------------   ------------

                                                     $  329,233   $   314,413
                                                   ============   ============


LIABILITIES AND STOCKHOLDERS' EQUITY                   

LIABILITIES
 Deposits                                           $  249,184      $ 239,121
 Advances from the Federal Home Loan Bank               44,414         37,210
 Securities sold under agreements to repurchase          2,905          8,115
 Advance payments by borrowers for taxes and             1,121            867
   insurance
Other liabilities                                        3,862          2,263
                                                      ---------      ---------

                      Total Liabilities                301,486        287,576
                                                      ---------      ---------


STOCKHOLDERS' EQUITY

 Preferred stock, $1.00 par value per share 
  (1,000,000 shares authorized; none issued)            -               -
 Common stock, $1.00 par value per share 
  (4,000,000 shares authorized; 2,298,467
  and 2,276,992 shares issued and
  outstanding at September 30, 1996 and 
  December 31, 1995, respectively)                     2,298             2,277
 Additional paid-in capital                            9,679             9,632
 Retained earnings                                    15,995            14,912
 Net unrealized gain (loss) on securities 
  available-for-sale                                   (225)                16
                                                     --------         ---------

               Total Stockholders' Equity             27,747            26,837
                                                   ------------    ------------

                                            $       329,233   $       314,413
                                              ==============    ==============
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>


         FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

(Dollars in thousands, except per share data)
                                                                                  Three Months Ended
                                                                                      September 30,
                                                                         ---------------------------------
                                                                                 1996                1995
                                                                         -------------       -------------
                                                                         (unaudited)         (unaudited)
Interest Income
<S>                                                                      <C>                 <C>         
      Real estate loans                                                  $      5,044        $      4,870
      Other loans                                                                 931                 965
      Mortgage-backed securities                                                  162                 102
      Investment securities                                                       240                 294
      Other investments                                                           336                 289
                                                                            ----------         -----------

           Total interest income                                                6,713               6,520
                                                                            ----------         -----------

Interest Expense
      Deposits                                                                  2,937               2,915
      Short-term borrowings                                                       187                 383
      Long-term borrowings                                                        481                 356
                                                                            ----------         -----------

           Total interest expense                                               3,605               3,654
                                                                            ----------         -----------

Net Interest Income                                                             3,108               2,866
Provision for loan losses                                                         225                  88
                                                                            ----------         -----------

Net Interest Income After Provision for Loan Losses                             2,883               2,778
                                                                            ----------         -----------

Noninterest income
      Gain on sale of loans and mortgage-backed
           securities, net                                                         26                  35
      Gain on sale of investment securities available-for-sale, net                 -                   -
      Operations of real estate acquired in settlement of loans                     -                  (1)
      Other                                                                       184                 159
                                                                            ----------         -----------

           Total noninterest income                                               210                 193
                                                                            ----------         -----------

Noninterest expense
      Compensation and employee benefits                                        1,068               1,033
      Occupancy and equipment                                                     333                 322
      FDIC insurance premiums                                                     140                 130
      FDIC assessment to recapitalize SAIF Fund                                 1,490                   -
      Data processing services                                                    113                  54
      Professional services                                                       141                  47
      Marketing                                                                    28                  20
      Other                                                                       147                 130
                                                                            ----------         -----------

           Total noninterest expense                                            3,460               1,736
                                                                            ----------         -----------

Earnings (Loss) Before Income Taxes                                              (367)              1,235
Income tax expense (benefit)                                                     (136)                452
                                                                            ----------         -----------

Net Earnings (Loss)                                                      $       (231)       $        783
                                                                            ==========         ===========


Net Earnings (Loss) Per Share                                            $       (.11)    $           .34
                                                                            ==========       =============


Dividends Declared Per Share                                             $        .05     $           .04
                                                                            ==========       =============
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

   FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF OPERATIONS


(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                                 Nine Months Ended
                                                                                    September 30,
                                                                         --------------------------------
                                                                                1996               1995
                                                                         -------------      -------------
                                                                            (unaudited)        (unaudited)

<S>                                                                         <C>                <C>         
 Interest Income  
  Real estate loans                                                     $     14,784       $     14,210
  Other loans                                                                  2,755              2,802
  Mortgage-backed securities                                                     419                295
  Investment securities                                                          795                836
  Other investments                                                              993                818
                                                                          -----------        -----------

       Total interest income                                                  19,746             18,961
                                                                          -----------        -----------

Interest Expense
 Deposits                                                                     8,795              8,170
 Short-term borrowings                                                          737              1,000
 Long-term borrowings                                                         1,208              1,130
                                                                         -----------        -----------

      Total interest expense                                                 10,740             10,300
                                                                         -----------        -----------

Net Interest Income                                                           9,006              8,661
Provision for loan losses                                                       385                283
                                                                           -----------        -----------

Net Interest Income After Provision for Loan Losses                           8,621              8,378
                                                                           -----------        -----------

Noninterest income
 Gain (loss) on sale of loans and mortgage-backed
      securities, net                                                         94                (29)
 Gain on sale of investment securities available-for-sale, net                26                  -
 Operations of real estate acquired in settlement of loans                   (12)                (3)
 Other                                                                       530                497
                                                                      -----------        -----------

      Total noninterest income                                               638                465
                                                                      -----------        -----------

Noninterest expense
 Compensation and employee benefits                                        3,114              3,015
 Occupancy and equipment                                                   1,006                962
 FDIC insurance premiums                                                     411                369
 FDIC special assessment to recapitalize SAIF Fund                         1,490                  -
 Data processing services                                                    307                286
 Professional services                                                       221                116
 Marketing                                                                    59                 67
 Other                                                                       438                371
                                                                      -----------        -----------

      Total noninterest expense                                            7,046              5,186
                                                                      -----------        -----------

Earnings Before Income Taxes                                               2,213              3,657
Income tax expense                                                           809              1,338
                                                                      -----------        -----------

Net Earnings                                                        $      1,404       $      2,319
                                                                      ===========        ===========


Net Earnings Per Share                                              $         .61       $      1.03
                                                                       ===========       ===========


Dividends Declared Per Share                                        $         .14        $        .11
                                                                        ===========        ===========
</TABLE>

      See accompanying notes to consolidated financial statements.


<PAGE>



    FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CASH FLOWS


(Dollars in thousands)
<TABLE>
<CAPTION>
                                                                           Nine Months Ended
                                                                              September 30,
                                                               --------------------------------------
                                                                          1996                 1995
                                                                  -----------------    ----------------
                                                                       (unaudited)         (unaudited)

<S>                                                                       <C>                  <C>           
Operating activities
 Net income                                                          $     1,404      $        2,319
 Adjustments to reconcile net income to net cash absorbed
    by operating activities:
      Provision for loan losses                                              385                 283
      Depreciation and amortization                                          353                 354
      Originations of loans held-for-sale                                (21,588)            (16,052)
      Purchase of mortgage-backed securities                              (3,815)                  -
      Proceeds from sale of loans held-for-sale                            3,389               6,299
      Proceeds from sale of mortgage-backed securities
         available-for-sale                                               16,544               6,931
      (Increase) decrease in prepaid expenses and other assets              (777)                156
      (Increase) decrease in excess servicing                                (11)                 34
      Increase (decrease) in deferred loan fees                              103                 (57)
      Increase in other liabilities                                        1,599                 437
      Other, net                                                              40                 (26)
                                                                      -----------       -------------

           Net cash provided (absorbed)  by operating activities          (2,374)                678
                                                                      -----------       -------------

Investing activities
 Maturities of investment securities held-to-maturity                      2,000                   -
 Purchase of investment securities available-for-sale                     (2,000)             (1,002)
 Proceeds from sales of investment securities available-for-sale           3,000                   -
 Loan and mortgage-backed securities principal repayments                112,683              84,002
 Loan disbursements                                                     (131,795)            (90,612)
 Loans purchased                                                               -              (3,445)
 Redemption of stock in FHLB                                                   -                 127
 Purchase of premises and equipment                                         (235)               (168)
                                                                      -----------       -------------

           Net cash absorbed by investing activities                     (16,347)            (11,098)
                                                                      -----------       -------------

Financing activities
 Cash dividends paid                                                        (297)               (268)
 Exercise of stock options                                                    68                 168
 Net increase in deposits                                                 10,063              19,383
 Net (decrease) increase in short-term borrowings                         (5,210)              8,066
 Proceeds from FHLB advances                                              63,345              62,615
 Repayment of  FHLB advances                                             (56,141)            (73,050)
 Increase in advance payments by borrowers for
    taxes and insurance                                                      254                 274
                                                                      -----------       -------------

           Net cash provided by financing activities                      12,082              17,188
                                                                      -----------       -------------

Increase (decrease) in cash and cash equivalents                         (6,639)              6,768

Cash and cash equivalents at beginning of period                         31,558              19,671
                                                                     -----------       -------------

Cash and cash equivalents at end of period                      $        24,919      $       26,439
                                                                  ==============       =============
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>




   FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES

     NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 1996

1.  Consolidated Financial Statements

    The accompanying consolidated financial statements include the accounts
    of  Fidelity  Financial  Bankshares  Corporation  and its  wholly-owned
    subsidiary,   Fidelity  Federal  Savings  Bank  and  its  wholly-owned,
    subsidiary    Fidelity   Service    Corporation    (collectively   "the
    Corporation").  All significant  intercompany balances and transactions
    have been eliminated in consolidation.

    The  reorganization of Fidelity Federal Savings Bank ( the "Bank") into
    the holding  company form of ownership was completed  effective May 26,
    1995, following regulatory and stockholder approval.

    Earnings per share of common  stock are computed  based on the weighted
    average  number of shares  outstanding  for the  period.  The  weighted
    average number of shares  outstanding  were 2,294,098 and 2,276,222 for
    the three months ended September 30, 1996 and 1995,  respectively.  For
    the nine months ended September 30, 1996 and 1995 the weighted  average
    number  of   shares   outstanding   were   2,286,773   and   2,256,036,
    respectively.

2.  Basis of Presentation

    The accompanying  unaudited consolidated financial statements have been
    prepared in accordance with generally  accepted  accounting  principles
    for interim  financial  information  and with the  instructions to Form
    10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
    all of the  information  and footnotes  required by generally  accepted
    accounting principles for complete financial statements.

    In the opinion of management of the Corporation, all adjustments (which
    include  only  normal   recurring   accruals)   necessary  for  a  fair
    presentation  of  the  consolidated   financial  statements  have  been
    included.  The results of operations for the three month and nine month
    periods ended September 30, 1996 are not necessarily  indicative of the
    results  which  may be  expected  for  the  entire  year.  For  further
    information,   refer  to  the  consolidated  financial  statements  and
    footnotes thereto included in the  Corporation's  annual report for the
    year ended December 31, 1995.

3.  Stockholders' Equity and Dividend Restrictions

    Payment  of  dividends  to the  Corporation  by the Bank is  limited by
    federal  regulations.  See Note 13 in Notes to  Consolidated  Financial
    Statements of the 1995 annual report for information  regarding payment
    of cash dividends.

    On September 30, 1996, the Board of Directors declared a quarterly cash
    dividend of $.05 per share, payable October 31, 1996 to stockholders of
    record  October 17, 1996.  On July 31, 1996,  the  Corporation  paid to
    stockholders of record July 17, 1996, a quarterly cash dividend of $.05
    per share. On April 30, 1996, the  Corporation  paid to stockholders of
    record April 16, 1996, a quarterly cash dividend of $.04 per share.


<PAGE>


           FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES

               NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 SEPTEMBER 30, 1996

4. Supplemental Disclosures of Cash Flow Information

   Total  interest paid for the three months ended  September 30, 1996 and
   1995 was $3,590,000 and $3,659,000,  respectively.  For the nine months
   ended September 30, 1996 and 1995,  total interest paid was $10,786,000
   and $10,305,000, respectively.

   Total income taxes paid for the three months ended  September  30, 1996
   were  $574,000  as  compared to  $312,000  for the three  months  ended
   September  30, 1995.  Total income taxes paid for the nine months ended
   September  30,  1996  and  September  30,  1995  were   $1,313,000  and
   $1,114,000, respectively.

   Loans  receivable  exchanged  for  mortgage-backed  securities  totaled
   $6,189,000 and $6,201,000 for the three months ended September 30, 1996
   and 1995,  respectively.  For the nine months ended  September 30, 1996
   and 1995, loans  receivable  exchanged for  mortgage-backed  securities
   totaled $16,836,000 and $6,201,000, respectively.

   Real estate  acquired in  settlement  of loans  during the three months
   ended  September  30, 1996 was  $249,000 as compared to $88,000 for the
   comparable  period in 1995. Real estate acquired in settlement of loans
   during the nine months ended  September  30, 1996 and 1995 was $381,000
   and $88,000, respectively.

   For purposes of reporting cash flows, cash and cash equivalents include
   cash,  adjustable rate mortgage mutual funds,  FHLB overnight funds and
   federal funds.
<TABLE>
5.       Loans Receivable
<S>                                        <C>               <C>
                                           September 30,      December 31,
                                          ----------------------------------
  (Dollars in thousands)                     1996                1995
                                          ---------------      -------------
                                            (unaudited)
  Real estate loans
         First mortgage conventional
             One to four family               $ 117,067     $  107,103
             Multifamily                         12,706         12,240
             Nonresidential                      48,215         46,415
             Construction and development        72,767         61,103
         Second mortgage conventional               773            750
                                               ---------     ----------
             Total real estate loans            251,528        227,611
  Less
         Loans in process                        21,494         17,467
         Deferred loan fees, net                    878            754
         Allowance for loan losses                1,707          2,032
                                               ---------     ----------
             Net real estate loans              227,449        207,358
                                               ---------     ----------
  Other Loans
         Consumer and installment                16,700         16,991
         Commercial                              26,468         23,723
                                               ---------     ----------
             Total other loans                   43,168         40,714
  Less
         Deferred loan fees, net                  (172)          (152)
         Allowance for loan losses                1,486          1,030
                                               ---------     ----------
             Net other loans                     41,854         39,836
                                               ---------     ----------
                                              $ 269,303     $  247,194
                                               =========     ==========
</TABLE>


<PAGE>


       FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES

          NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                   SEPTEMBER 30, 1996


6. Impaired Loans

   As of January 1, 1995, the Corporation  adopted  Statement of Financial
   Accounting  Standards  (SFAS)  No.  114  Accounting  by  Creditors  for
   Impairment  of a Loan,  as  amended  by SFAS  No.  118.  Under  the new
   standard, a loan is considered  impaired,  based on current information
   and events,  if it is probable that the  Corporation  will be unable to
   collect the  scheduled  payments  of  principal  or  interest  when due
   according  to  the  contractual  terms  of  the  loan  agreement.   The
   measurement of impaired  loans is generally  based on the present value
   of expected  future cash flows  discounted at the historical  effective
   interest rate, except that all collateral-dependent  loans are measured
   for impairment based on the fair value of the collateral.

   As of September 30, 1996 the Corporation's recorded investment in loans
   for which  impairment has been  recognized in accordance  with SFAS No.
   114 totaled $647,000,  as compared to none for the same period in 1995.
   For the  quarters  ended  September  30,  1996 and  1995,  the  average
   recorded   investment   in  impaired   loans  was  $648,000  and  none,
   respectively.  For the nine months ended  September  30, 1996 and 1995,
   the average  recorded  investment  in impaired  loans was  $505,000 and
   none, respectively. For the quarter and nine months ended September 30,
   1996,  interest income recognized on impaired loans totaled $13,000 and
   $30,000,  respectively,  as  compared  to none  for the two  comparable
   periods in 1995.

7. Merger Agreement

   On August 22, 1996, Fidelity Financial Bankshares  Corporation signed a
   definitive  agreement to be acquired by Southern  National  Corporation
   (NYSE: SNB) in a stock transaction,  currently expected to be accounted
   for as a purchase. In connection with the acquisition, Fidelity Federal
   Savings  Bank will be merged  into BB&T  (Branch  Banking and Trust) of
   Virginia,  one of  three  banking  subsidiaries  operated  by  Southern
   National under the BB&T name. Fidelity Financial Bankshares Corporation
   President  Barry D. Crawford will become the Regional  President of the
   Richmond  Region,  which  will be one of  sixteen  regions  in the BB&T
   system that includes the Carolinas and  Virginia.  The  transaction  is
   expected  to be  completed  during  the  first  quarter  of 1997 and is
   subject to  approval of  regulators  and the  stockholders  of Fidelity
   Financial Bankshares Corporation and customary closing conditions.



<PAGE>


           FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES

                  MANAGEMENT'S DISCUSSION AND ANALYSIS
              OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                              SEPTEMBER 30, 1996

Fidelity Financial  Bankshares  Corporation ("the Corporation") was incorporated
in Virginia in 1995 to serve as the holding company of Fidelity  Federal Savings
Bank  ("the Bank").  The   stockholders  of  the  Bank  approved  the  Plan  of
Reorganization at the Fidelity Federal Annual Meeting on April 25, 1995, and the
reorganization  was  consummated  on May 26,  1995  with the Bank  becoming  the
wholly-owned subsidiary of Fidelity Financial Bankshares Corporation.  The Bank,
incorporated in 1986, is a federally  chartered  capital stock savings bank with
its principal offices in Richmond, Virginia.

This  Management's  Discussion and Analysis  should be read in conjunction  with
Management's  Discussion  and  Analysis  contained in the  Corporation's  annual
report to stockholders, which focuses upon relevant matters occurring during the
year  commencing  January 1, 1995 and ending  December  31,  1995.  The  ensuing
discussion focuses upon material matters as of and for the three months and nine
months ended September 30, 1996.

FINANCIAL CONDITION AND CAPITAL ADEQUACY

FINANCIAL CONDITION

Assets of the Corporation were $329.2 million at September 30, 1996, an increase
of 5% over assets of $314.4 million at December 31, 1995.  Loans  receivable and
mortgage-backed  securities  totaled  $279.8  million at September  30, 1996, an
increase of 9% over loans  receivable and  mortgage-backed  securities of $256.2
million at December  31,  1995.  Deposits  increased  4% from $239.1  million at
December 31, 1995, to $249.2 million at September 30, 1996. Stockholders' equity
totaled $27.7 million at September  30, 1996,  which  represents a book value of
$12.07 per share.

Loan  disbursements  increased  sharply  during the three and nine months  ended
September 30, 1996 as compared to the same period in 1995.  Closings were $ 54.7
million for the quarter  ended  September 30, 1996, as compared to $38.0 million
for the same period of 1995. For the nine months ended  September 30, 1996, loan
disbursements  totaled $162.5  million,  increasing  from $112.7 million for the
comparable period of 1995.

Deposit  growth has occurred as the Bank has  aggressively  priced its six month
and longer  certificates of deposit. Of the $10.1 million growth in deposits for
the nine months, the nine month and longer certificates  increased $8.1 million,
while certificates  under nine months and transaction  accounts and money market
deposit accounts collectively increased $2.0 million.

CAPITAL ADEQUACY

The following  regulatory capital requirements of the Bank are based on analysis
of the applicable regulations,  but interpretative guidance may alter the Bank's
analysis.  Based  upon the  following  levels  of  regulatory  capital  the Bank
continues  to  meet  the  regulatory  definition  of  "well  capitalized."  This
classification  is  determined  solely  for the  purposes  of  applying  certain
regulations  and may not  constitute  an accurate  representation  of the Bank's
overall financial condition.


<PAGE>


      FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES

                 MANAGEMENT'S DISCUSSION AND ANALYSIS
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                        SEPTEMBER 30, 1996

CAPITAL ADEQUACY, (Continued)

At September 30, 1996, the Bank's tangible capital totaled  $25,842,000,  (7.85%
of adjusted  assets) which  exceeded the  regulatory  requirement of $4,936,000,
(1.50% of adjusted assets) by $20,906,000.

The Bank's core capital at September 30, 1996,  totaled  $25,842,000,  (7.85% of
adjusted assets) which exceeded the regulatory  requirement of $9,871,000 (3.00%
of adjusted assets) by $15,971,000.

The  risk-based  capital of the Bank was  $27,952,000  (11.86% of  risk-weighted
assets) at September 30, 1996,  which  exceeded the  regulatory  requirement  of
$18,858,000 (8.00% of risk-weighted assets) by $9,094,000.

RESULTS OF OPERATIONS

On September 30, 1996, President Clinton signed into law, legislation  requiring
a special  assessment to recapitalize  the Savings  Association  Insurance Fund.
Thrift institutions or non-thrift  institutions which had acquired deposits from
thrift  institutions  over the years were levied this one time charge.  To cover
this special SAIF  assessment,  the Corporation  recorded an after tax charge of
$945,000,  or $.41 per share.  Annual FDIC  premiums  will be reduced due to the
recapitalization  and  pretax  savings  are  projected  to be  $400,000  for the
Corporation in 1997.

The  Corporation  incurred a loss for the quarter  ended  September 30, 1996, of
$231,000 or $.11 per share as  compared to net  earnings of $783,000 or $.34 per
share for the comparable  period in 1995. The principal  reason for the loss was
the one-time special SAIF recapitalization assessment of $945,000 after-tax, and
to a lesser extent,  after-tax expenses  associated with the pending merger with
Southern National Corporation of $48,000.  Excluding these charges, earnings for
the third quarter of 1996,  would have been $762,000 or $.33 per share,  down 3%
from $783,000 or $.34 per share for 1995.


For the nine months ended  September 30, 1996,  earnings were $1,404,000 or $.61
per share, compared to $2,319,000 or $1.03 per share in 1995. Excluding the SAIF
assessment and merger expenses, earnings would have been $2,397,000 or $1.05 per
share.

Net interest income increased 8% from $2,866,000 in the third quarter of 1995 to
$3,108,000 in the comparable  period of 1996. Such increase occurred because the
net interest  margin  increased from 3.81% in the third quarter of 1995 to 3.92%
in the third quarter of 1996, and average interest-earning assets increased from
$298.5  million in the third quarter of 1995 to $315.7  million in 1996. For the
nine months ended  September  30, 1996,  net interest  income  increased 4% from
$8,661,000  in 1995 to  $9,006,000  in  1996,  due to the  increase  in  average
interest  earning  assets from $292.1 million in 1995 to $308.9 million in 1996,
which more than offset a decrease in the net  interest  margin from 3.96% in the
first nine months 1995 to 3.89% in the first nine months 1996.


<PAGE>


              FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES

                       MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                              SEPTEMBER 30, 1996

RESULTS OF OPERATIONS, (Continued)

Nonperforming  assets  increased to $3.8 million or 1.14% of assets at September
30, 1996 from $2.9 million or .91% of assets at December 31, 1995. Nonperforming
assets at September  30, 1996 consist of real estate  acquired in  settlement of
loans of $1.2 million and nonperforming loans of $2.6 million.  During the third
quarter of 1996, the Corporation experienced some weakness in one segment of its
commercial  business loan portfolio  related to a single  customer  relationship
totaling $4.9 million in loans at September 30, 1996.  The  collateral  for such
loans includes certain leases. Subsequent to September 30, 1996, the Corporation
exercised   certain   collateral   rights   and  took   control  of  the  leases
collateralizing the customers' loans and transferred  servicing of the leases to
a  subcontractor.  As of September  30,  1996,  the Bank has recorded a specific
reserve of $.6 million related to resolution of the entire customer relationship
of $4.9 million.

The  provision  for loan losses was $225,000 and $385,000 for the third  quarter
and nine months ended  September  30, 1996,  as compared to $88,000 and $283,000
for the  comparable  periods in 1995.  During the third  quarter and nine months
ended  September 30, 1996, net loan  chargeoffs  totaled  $142,000 and $254,000,
respectively, as compared to $5,000 and $64,000,  respectively,  for the similar
periods of 1995.  The total  allowance for loan losses at September 30, 1996 was
$3,193,000 or 1.16% of loans  receivable,  as compared to $3,062,000 or 1.20% of
loans  receivable  at December 31,  1995.  The total  allowance  for loan losses
amounted  to 84% of  nonperforming  assets  and 125% of  nonperforming  loans at
September 30, 1996.

Noninterest  income for the  quarter  ended  September  30,  1996 was  $210,000,
compared to $193,000 for the third quarter of 1995.  The primary reason for such
increase was an increase in loan servicing fees and prepayment  penalties.  This
was  partially  offset  by a  decrease  in  gains  on  the  sale  of  loans  and
mortgage-backed securities from $35,000 in 1995 to $26,000 in 1996.

Noninterest  income for the nine months  ended  September  30, 1996 was $638,000
increasing  from  $465,000 for the same period in 1995.  The primary  reason for
such  increase was the gain on sale of loans and  mortgage-backed  securities of
$94,000 in 1996, compared to a loss of $29,000 in 1995. In addition, the gain on
sale of investment securities available-for-sale was $26,000 in 1996 compared to
none in 1995.

Included in noninterest expenses for the quarter and nine months ended September
30, 1996, was the one-time special SAIF  recapitalization  pretax  assessment of
$1,490,000  and pretax merger  expenses of $76,000.  Excluding  these  expenses,
noninterest  expenses  increased 9% from $1,736,000 in the third quarter of 1995
to $1,894,000 in 1996. For the nine months ended September 30, 1996, noninterest
expenses,  excluding the special SAIF assessment and merger expenses,  increased
6% from $5,186,000 for 1995 to $5,480,000 in 1996.

Income tax benefit for the quarter  ended  September 30, 1996 was $136,000 or an
effective  benefit  rate of 37.1% as  compared  to an expense of  $452,000 or an
effective rate of 36.6% for the  comparable  period in 1995. For the nine months
ended  September 30, 1996,  income tax expense was $809,000 or an effective rate
of 36.6%,  compared to  $1,338,000  or an  effective  rate of 36.6% for the same
period in 1995.


<PAGE>


          FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES

                        MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                SEPTEMBER 30, 1996

LIQUIDITY

Liquidity  represents  the  Bank's  ability  to fund  loans and  withdrawals  of
deposits.  Total assets  qualifying as regulatory  liquidity as of September 30,
1996 were  $18.8  million.  This is $5.1  million  in  excess of the  regulatory
required  liquidity amount of $13.7 million.  The Bank is in compliance with all
regulatory liquidity requirements at September 30, 1996.

The Bank  increased  its  advances  from the FHLB and other  borrowings  by $2.0
million  from  December  31,  1995 to  September  30,  1996.  Such  increase  in
borrowings was used to fund the growth in loans  receivable and  mortgage-backed
securities.



<PAGE>


                      FIDELITY FINANCIAL BANKSHARES CORPORATION

                           PART II - OTHER INFORMATION


ITEM 1.  Legal Proceedings

          The   Corporation   is  not  engaged  in  any  material  legal
          proceedings at the present time.

ITEM 2.  Changes in Securities

            Not Applicable

ITEM 3.  Defaults Upon Senior Securities

            Not Applicable

ITEM 4.  Submission of Matters to a Vote of Security Holders

            Not Applicable

ITEM 5.  Other Information

            Not Applicable

ITEM 6.  Exhibits and Reports on Form 8-K

     (a)      Exhibits Are Not Applicable

     (b)      A  Form  8-K  was  filed  during  the  quarter  ended
              September   30,   1996  for  the  August   22,   1996
              announcement of the Corporation and Southern National
              Corporation   ("SNC")   entering  into  a  definitive
              agreement, whereby SNC will acquire the Corporation.




<PAGE>

                                     SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                            FIDELITY FINANCIAL BANKSHARES CORPORATION



              /s/ Barry D. Crawford
              Barry D. Crawford
              President, Principal Executive Officer
              and a Director

              DATE: November 13, 1996




              /s/ Gerald L. Martin
              Gerald L. Martin
              Executive Vice President,  Principal
              Financial Officer, Treasurer and a
              Director

              DATE: November 13, 1996




              /s/ William S. Miller, Jr.
              William S. Miller, Jr.
              Principal Accounting Officer

              DATE: November 13, 1996