SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A
                                 AMENDMENT NO. 1

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                     For the fiscal year ended June 30, 2002

                          Commission File No.: 0-24479

                               AF BANKSHARES, INC.
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

          Federally Chartered                                  56-2098545
        STATE OF INCORPORATION                            IRS EMPLOYER NUMBER

                               21 East Ashe Street
                      West Jefferson, North Carolina 28694
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

Issuer's telephone, including area code:  (336) 246-4344

Securities registered pursuant to Section 12(g) of the Exchange Act:

                     Common Stock, par value $0.01 per share
                                 TITLE OF CLASS

         Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /

         Indicate by check mark there is no disclosure of delinquent filers
pursuant to Item 405 of Regulation S-B contained herein and no disclosure will
be contained, to the best of registrant's knowledge in definitive proxy or
information statements incorporated by reference in part III of this Form
10-KSB, or any amendment to this Form 10-KSB. /X/

         The revenues for the issuer's fiscal year ended June 30, 2002 are
$14,430,793.

         The issuer had 1,049,378 shares of common stock outstanding as of
August 31, 2002. The aggregate value of the voting stock held by non-affiliates
of the issuer, computed by reference to the price at which the common stock was
sold on August 31, 2002 was $5,739,394.

                      DOCUMENTS INCORPORATED BY REFERENCE.
         Portions of the Annual Report to Stockholders for the year ended June
30, 2002 are incorporated by reference into Part I and II of this Form 10-KSB.

         Portions of the Proxy Statement for the 2002 Annual Meeting of
Stockholders are incorporated by reference into Part III of this Form 10-KSB.

         Transitional Small Business Disclosure Format.  Yes  / /   No  /X/

<PAGE>


                                EXPLANATORY NOTE

         This Form 10-KSB/A for the fiscal year ended June 30, 2002 is being
amended to include the Independent Auditors' Report of McGladrey & Pullen, LLP
as of June 30, 2001. No other changes have been made to this Form 10-KSB.

                                       2

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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  2.1    Agreement and Plan of Reorganization dated September
                         15, 1997 by and among Ashe Federal Bank, AF Bankshares,
                         Inc. and Ashe Interim Savings Bank (Incorporated by
                         reference to the Registration Statement on Form 8-A, as
                         filed with the SEC on June 16, 1998 (the "Form 8-A")).

                  3.1    Federal Stock Charter of the Company (Incorporated by
                         reference to Exhibit 3.1 of the Form 8-A).

                  3.2    Bylaws of the Company (Incorporated by reference to
                         Exhibit 3.2 of the Form 8-A).

                  4.1    Common Stock Certificate of the Company (Incorporated
                         by reference to Exhibit 4.3 of the Form 8-A).

                  10.1   Employment Agreement with James A. Todd, President and
                         Chief Executive Officer (Incorporated by reference to
                         the Company's Annual Report on Form 10-KSB for the year
                         ended June 30, 1998).

                  10.2   Employment Agreement with Melanie Paisley Miller,
                         Executive Vice President, Chief Financial Officer,
                         Secretary and Treasurer (Incorporated by reference to
                         the Company's Annual Report on Form 10-KSB for the year
                         ended June 30, 1998).

                  10.3   Employment Agreement with Martin G. Little, Senior Vice
                         President and Chief Lending Officer (Incorporated by
                         reference to the Company's Annual Report on Form 10-KSB
                         for the year ended June 30, 1998).

                  10.4   Employee Stock Ownership Plan of Ashe Federal Bank
                         (Incorporated by reference to the Company's Annual
                         Report on Form 10-KSB for the year ended June 30,
                         1998).

                  13.1   2002 Annual Report to Stockholders.*

                  21.1   Subsidiary Information is incorporated herein by
                         reference to "Part I - Subsidiary Activities of the
                         Company's Annual Report on Form 10-KSB for the year
                         ended June 30, 2002."*

                  99.1   Section 906 of the Sarbanes-Oxley Act of 2002 CEO
                         Certification


                  99.2   Section 906 of the Sarbanes-Oxley Act of 2002 CFO
                         Certification

                  99.3   Proxy Statement for the 2002 Annual Meeting of
                         Stockholders for AF Bankshares, Inc. (Incorporated by
                         reference to the Schedule 14A previously filed with the
                         SEC on September 27, 2002).

                  99.4   Independent Auditors' Report of McGladrey & Pullen LLP
                         as of June 30, 2001

                                        3

<PAGE>

         (b)     REPORTS ON FORM 8-K

                 No reports on Form 8-K were filed during the fourth quarter of
the fiscal year ended June 30, 2002.

----------

*Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the year ended June 30, 2002 as filed with the SEC on September 30, 2002.


                                       4
<PAGE>

                                   SIGNATURES

         Pursuant to the Requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Bank has duly caused this report to be signed on its
behalf by the undersigned, thereto duly authorized.

                                     AF BANKSHARES, INC.
                                     (Registrant)


Date:  October 18, 2002              By: /s/ James A. Todd
                                        ----------------------------------------
                                        James A. Todd
                                        President and Chief Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
                                                            Date

/s/ James A. Todd                                        October 18, 2002
------------------------------------------------
James A. Todd
President, Chief Executive Officer and Director
(Principal Executive Officer)


 /s/ Melanie Paisley Miller                              October 18, 2002
------------------------------------------------
Melanie Paisley Miller
Executive Vice President, Secretary, Treasurer
     and Chief Financial Officer
(Principal Financial Officer)


 /s/ Jan R. Caddell                                      October 18, 2002
------------------------------------------------
Jan R. Caddell - Director


                                                         October __, 2002
------------------------------------------------
Kenneth R. Greene - Director


 /s/ Donald R. Moore                                     October 18, 2002
------------------------------------------------
Donald R. Moore - Director


/s/ Wayne R. Burgess                                     October 18, 2002
------------------------------------------------
Wayne R. Burgess - Director


 /s/ Jimmy D. Reeves                                     October 18, 2002
------------------------------------------------
Jimmy D. Reeves - Director


                                                         October __, 2002
------------------------------------------------
Michael M. Sherman - Director


/s/ Jerry L. Roten                                       October 18, 2002
------------------------------------------------
Jerry L. Roten - Director


                                                         October __, 2002
------------------------------------------------
John D. Weaver - Director

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                                 CERTIFICATIONS


         I, James A. Todd certify that:

1.       I have reviewed this annual report on Form 10-KSB/A of AF Bankshares,
         Inc.;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report; and

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report.

Date:  October 18, 2002                  /s/ James A. Todd
                                         ---------------------------------------
                                         James A. Todd
                                         President and Chief Executive Officer


<PAGE>


         I, Melanie Paisley Miller, certify that:

1.       I have reviewed this annual report on Form 10-KSB/A of  AF Bankshares,
         Inc.;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report; and

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report.

Date:  October 18, 2002       /s/ Melanie Paisley Miller
                              ---------------------------------------
                              Melanie Paisley Miller
                              Executive Vice President, Secretary,
                              Treasurer and Chief Financial Officer