NEWS RELEASE

Contact:          B. L. Rakes, President & CEO
                  Mary G. Staples, PFO
                  (540) 343-0135

Date:             November 7. 1997


                              FOR IMMEDIATE RELEASE
                              ---------------------


             SWVA BANCSHARES, INC. ANNOUNCES FIRST QUARTER EARNINGS


         Roanoke, Virginia, November 7, 1997: SWVA Bancshares, Inc., the holding
company of Southwest  Virginia Savings Bank, FSB, Roanoke,  Virginia,  announced
earnings for the first quarter of fiscal year 1998.

         Net income for the quarter  ended  September  30, 1997 was  $116,000 or
$0.24 per share  with  return on  average  assets of .66% and  return on average
equity of 5.44%.

         Net income increased  $310,000 or 159.79%,  from a loss of $194,000 for
the three  months ended  September  30, 1996 to income of $116,000 for the three
months ended September 30, 1997. The increase in net income was primarily due to
a one-time  federal  deposit  insurance  assessment  during the 1996  period and
increased net interest income.

         Interest income increased $138,000, or 11.00% from $1.3 million for the
three months ended September 30, 1996 to $l.4 million for the three months ended
September 30, 1997. The increase was mainly due to increased  interest earned on
fixed rate mortgage loans and investments.

         Interest  expense  increased  $74,000 or 11.49% from  $644,000  for the
three  months  ended  September  30, 1996 to $718,000 for the three months ended
September 30, 1997.  The increase was due mainly to an increase in interest paid
on borrowed funds and interest paid on deposits.

         Net interest  income  increased by $64,000 or 10.47% from  $611,000 for
the three months ended September 30, 1996 to $675,000 for the three months ended
September  30,  1997 due  mainly to  additional  interest  earned on fixed  rate
mortgage loans and investments.

         The Bank made an addition of $24,000 to the provision for



<PAGE>



credit losses for the three months ended  September  30, 1997.  The addition was
made due to a loss of  $44,000  on a  delinquent  real  estate  loan.  After the
deduction  for  the  loss,   the  allowance  for  credit  losses  was  $197,000.
Non-performing loans on September 30, 1997 totaled $112,000,  which consisted of
two real estate mortgage loans.

         Non-interest income decreased slightly by $1,000, or 1.15% from $87,000
for the three  months ended  September  30, 1996 to $86,000 for the three months
ended September 30, 1997.

         Non-interest expense decreased by $342,000, or 38.34% from $892,000 for
the three months ended September 30, 1996 to $550,000 for the three months ended
September 30, 1997,  mainly due to a $355,000 special federal deposit  insurance
assessment  during the three months ended September 30, 1996. This was partially
offset by a $24,000 increase in other expenses.

         The Company's assets and stockholders' equity amounted to $72.2 million
and $8.2 million, respectively, at September 30, 1997.

         Southwest  Virginia Savings Bank, FSB is a federally  chartered savings
bank,  the  deposits  of which are  insured  by the FDIC to the  fullest  extent
provided by law. The Bank is headquartered  in Roanoke,  Virginia and operates 5
full-service  banking  facilities  and a  mortgage  origination  office  serving
Roanoke City,  Roanoke County,  Salem City and adjacent  counties.  The Bank has
served the community since 1927.

         The Bank exceeds all current  regulatory capital ratio requirements and
continues to meet the "well capitalized" regulatory definition, the highest such
rating.

         SWVA Bancshares,  Inc's common stock shares are listed over-the-counter
through the  National  Daily  Quotation  System "Pink  Sheets"  under the symbol
"SWVB".

<PAGE>
                              SWVA BANCSHARES, INC.
                  (Dollars in thousands, except per share data)

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                  Sept 30
                                                                  -------
                                                         1997               1996
                                                         ----               ----
                                                               (unaudited)
<S>                                                    <C>                <C>  
Interest income                                          1,393              1,255
Interest expense                                           718                644
                                                         -----              -----

      Net interest income                                  675                611
Provision for credit losses                                 24                  0
                                                         -----              -----

      Net interest income after
       provision for credit losses                         651                611
Noninterest income                                          86                 87
Noninterest expense                                        550                892
                                                         -----              -----

      Income before income taxes                           187               (194)
Provision for income taxes                                  71                  0
                                                         -----              -----

Net Income                                              $  116             $ (194)
                                                        ======             ====== 

     Earnings per common share                          $ 0.24               (0.38)
Return on average assets                                   .66%              (1.11)%
Return on average equity                                  5.44%              (8.60)%
Interest rate spread                                      3.59%              3.57%
Net interest margin                                       4.03%              3.92%
Noninterest expense to average assets                     3.25%              5.28%

</TABLE>



                     CONDENSED CONSOLIDATED BLAANCE SHEETS

<TABLE>
<CAPTION>
                                                        Sept 30          June 30
                                                       --------------------------
                                                         1997              1997
                                                       --------          --------
                                                               (unaudited)
<S>                                                    <C>               <C>     
Cash and investments                                   $ 10,726          $  6,580
Mortgage-backed and related securities                    9,548            10,074
Loans held for sale                                         533               727
Loans receivable, net                                    48,990            50,982
Property and equipment, net                               1,644             1,666
Other assets                                                746               724
                                                        -------           -------
      Total assets                                      $72,187           $70,753
                                                        =======           =======

Deposits                                                $58,650           $57,933
Advances FHLB                                             4,500             3,500
Accrued expenses and other liabilities                      854               718
Stockholders' Equity                                      8,183             8,602
                                                        -------           -------
      Total liabilities and stockholders' equity        $72,187           $70,753
                                                        =======           =======

Nonaccrual and 90 days past due loans                   $   112           $    60

Total nonperforming assets                              $   112           $    60
                                                        =======           =======


Allowance for credit losses
      to nonperforming assets                            176.23%           416.99%
Nonperforming loans to total loans                          .23%              .10%
Nonperforming assets to total assets                        .16%              .08%
Book value per share                                     $16.01  (1)        16.83 (1)

</TABLE>



(1)      Book value per share has been calculated by taking Stockholders' Equity
         and dividing by the number of shares outstanding. Shares outstanding on
         September 30, 1997 and June 30, 1997 were 510,984.