SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-QSB

  [U] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

          For the quarterly period ended   MARCH 31, 2003
                                       OR
  [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

         For the transition period from _______________________ to


                           Commission File No: 0-24479

                               AF Financial Group
                               ------------------
        (Exact name of small business issuer as specified in its charter)

         Federally Chartered                        56-2098545
         -------------------                        ----------
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
 incorporation or organization)

                               21 East Ashe Street
                      West Jefferson, North Carolina 28694
                      ------------------------------------
               (Address of principal executive office) (Zip code)

                                 (336) 246-4344
                                 --------------
                           (Issuer's telephone number)

                              _____________________
         (Former name, former address and former fiscal year, if changed
                               since last report)

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

Indicate by check U whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act).
Yes / /       No /U/

As of April 30, 2003 there were 1,053,678 shares of the Registrant's common
stock issued and 1,049,838 shares of the Registrant's common stock outstanding,
$.01 par value

Transitional Small Business Disclosure Format:   Yes / /   No /U/


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                               AF FINANCIAL GROUP
                                    CONTENTS


PART I - FINANCIAL INFORMATION                                                                       Pages
                                                                                                     -----
         Item 1.  Financial Statements

<S>                                                                                                  <C>
Condensed Consolidated Statements of Financial Condition as of
March 31, 2003 (unaudited) and June 30, 2002                                                          1
Condensed  Consolidated  Statements  of Income and Comprehensive
Income for the Three and Nine Months ended March 31, 2003 and 2002 (unaudited)                        2
Condensed Consolidated Statements of Cash Flows for the Nine Months ended
March 31, 2003 and 2002 (unaudited)                                                                   3 - 4
Notes to Condensed Consolidated financial statements                                                  5 - 8

        Item 2.  Management's Discussion and Analysis                                                 9 - 14
        Item 3.  Controls and Procedures                                                              14

PART II - OTHER INFORMATION

        Item 1.  Legal Proceedings                                                                    15
        Item 2.  Changes in Securities and Use of Proceeds                                            15
        Item 3.  Defaults upon Senior Securities                                                      15
        Item 4.  Submission  of  Matters  to a Vote of Security Holders                               15
        Item 5.  Other Information                                                                    15
        Item 6.  Exhibits and Reports on Form 8-K                                                     15
        Signatures                                                                                    16


</TABLE>

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AF FINANCIAL GROUP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

MARCH 31, 2003 AND JUNE 30, 2002

ASSETS

                                                                    March         June 30,
                                                                    2003            2002
                                                                 (Unaudited)        Note
----------------------------------------------------------------------------------------------
<S>                                                          <C>               <C>
Cash and cash equivalents:
   Interest-bearing deposits                                 $      8,157,596  $    4,868,508
   Noninterest-bearing deposits                                     6,205,679       6,351,065
Securities held to maturity                                           100,000         100,000
Securities available for sale                                       7,396,161      10,272,145
Federal Home Loan Bank stock                                        1,357,400       1,049,400
Loans receivable, net                                             155,723,700     143,553,436
Real estate owned                                                      57,064         263,035
Office properties and equipment, net                                8,128,702       5,972,706
Accrued interest receivable on loans                                  777,895         857,311
Accrued interest receivable on investment securities                   57,895         128,396
Prepaid expenses and other assets                                   1,727,458       1,569,957
Deferred income taxes, net                                            450,901         460,019
Intangible assets                                                   1,615,446       1,615,446
                                                                ------------------------------
                            TOTAL ASSETS                     $    191,755,897  $  177,061,424
                                                                ==============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
   Savings deposits                                          $    149,194,118  $  136,768,838
   Notes payable                                                    1,318,460       1,264,624
   Note payable - ESOP                                                144,420         181,420
   Advances from Federal Home Loan Bank                            21,146,122      18,909,924
   Accounts payable and other liabilities                           1,545,310       1,768,576
   Redeemable common stock held by the ESOP, net of
      unearned ESOP shares                                            417,797         391,239
  Capital Securities                                                5,000,000       5,000,000
                                                                ------------------------------
                            TOTAL LIABILITIES                     178,766,227     164,284,621
                                                                ------------------------------
Commitments and Contingencies

Stockholders' Equity:
    Common stock, par value $.01 per share; authorized 5,000,000
          shares; 1,053,678 issued and 1,049,838 outstanding
          shares at March 31, 2003 and June 30, 2002                   10,537          10,537
   Additional paid-in capital                                       4,614,020       4,602,930
   Retained earnings, substantially restricted                      8,388,439       8,200,866
   Accumulated other comprehensive income (loss)                       51,554          37,350
                                                                ------------------------------
                                                                   13,064,550      12,851,683

    Less the cost of 3,840 shares of treasury stock                   (74,880)        (74,880)
                                                                ------------------------------
                            TOTAL STOCKHOLDERS' EQUITY             12,989,670      12,776,803
                                                                ------------------------------
                            TOTAL LIABILITIES AND
                            STOCKHOLDERS' EQUITY               $  191,755,897  $  177,061,424
                                                                ==============================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

Note: The Condensed Consolidated Statement of Financial Condition as of June 30,
2002 has been taken from audited financial statements at that date.
<PAGE>

<TABLE>
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AF FINANCIAL GROUP AND SUBSIDIARIES


CONDENSED  CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
Three and Nine Months Ended March 31, 2003 and 2002

                                                    Three Months Ended           Nine Months Ended
                                                         March 31,                  March 31,
-------------------------------------------------------------------------------------------------------
                                                    2003          2002           2003         2002
-------------------------------------------------------------------------------------------------------
<S>                                            <C>            <C>            <C>           <C>
Interest and dividend income:
  Loans                                        $ 2,623,889    $ 2,646,340     $8,213,007    $8,054,120
  Investment securities                             87,477        140,365        276,942       432,837
  Interest-bearing deposits                         22,668         39,704         48,192       164,565
                                               --------------------------------------------------------
                  TOTAL INTEREST INCOME          2,734,034      2,826,409      8,538,141     8,651,522
                                               --------------------------------------------------------
Interest expense:
  Deposits                                         834,985        960,043      2,621,429     3,355,209
  Federal Home Loan Bank advances                  264,501        233,192        788,032       700,695
  Notes payable                                     17,232         17,809         51,778        55,936
  Capital Securities                               123,152        125,923        382,979       367,372
                                               --------------------------------------------------------
                                                 1,239,870      1,336,967      3,844,218     4,479,212
                                               --------------------------------------------------------
                  NET INTEREST INCOME            1,494,164      1,489,442      4,693,923     4,172,310
Provision for loan losses                           35,000        111,500        182,700       400,400
                                               --------------------------------------------------------
                  NET INTEREST INCOME
                  AFTER PROVISION FOR
                  LOAN LOSSES                    1,459,164      1,377,942      4,511,223     3,771,910
                                                -------------------------------------------------------
Noninterest income:
  Insurance commissions                            712,723        571,266      1,842,023     1,562,462
  Gain on sale of investments
  available for sale                                 3,181           --            3,181       138,997
  Other                                            286,230        215,946        845,113       630,656
                                               --------------------------------------------------------
                                                 1,002,134        787,212      2,690,317     2,332,115
                                               --------------------------------------------------------
Noninterest expense:
  Compensation and employee benefits             1,251,986      1,164,340      3,965,330     3,715,108
  Occupancy and Equipment                          299,424        252,256        861,841       732,047
  Deposit insurance premiums                         5,530          5,608         16,950        16,677
  Computer processing charges                      122,183        129,517        391,039       366,356
  Amortization                                        --           39,156           --         114,301
  Other                                            433,962        430,330      1,338,213     1,241,478
                                               --------------------------------------------------------
                                                 2,113,085      2,021,207      6,573,373     6,185,967
                                               --------------------------------------------------------
                  INCOME (LOSS)
                  BEFORE INCOME TAXES              348,213        143,947        628,167       (81,942)
  Income taxes                                     151,217         53,068        287,415       (35,166)
                                               --------------------------------------------------------
                  NET INCOME (LOSS)                196,996         90,879        340,752       (46,776)
                                               --------------------------------------------------------
  Other comprehensive income (loss),
  net of tax:
    Unrealized gain (loss) on securities,
    net of tax:                                    (11,650)       (76,849)        14,204      (147,442)
       Less:  reclassification adjustment
       for gains included in net income,
       net of tax                                    2,195           --            2,195        95,908
                                               --------------------------------------------------------
                 COMPREHENSIVE INCOME (LOSS)   $   183,151    $    14,030    $   352,761   $  (290,126)
                                               ===========    ===========    ===========   ===========
  Basic Earnings per share of
  common stock (Note 3)                        $      0.19    $      0.09    $      0.33   $     (0.05)
                                               ===========    ===========    ===========   ===========
  Diluted Earnings per share of
  common stock (Note 3)                        $      0.19    $      0.09    $      0.33   $     (0.05)
                                               ===========    ===========    ===========   ===========
  Basic weighted average
  shares outstanding                           $ 1,041,708    $ 1,038,008    $ 1,040,776   $ 1,036,074
                                               ===========    ===========    ===========   ===========
  Diluted weighted average
  shares outstanding                           $ 1,041,708    $ 1,038,008    $ 1,040,776   $ 1,036,074
                                               ===========    ===========    ===========   ===========
  Cash dividends per share                     $      0.05    $      0.05    $      0.15   $      0.15
                                               ===========    ===========    ===========   ===========

</TABLE>


  See Notes to Condensed Consolidated Financial Statements.

<PAGE>
AF FINANCIAL GROUP AND SUBSIDIARIES




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<CAPTION>

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED MARCH 31, 2003 AND 2002


                                                                             Nine Months Ended
                                                                          2003            2002
-------------------------------------------------------------------------------------------------
<S>                                                                  <C>             <C>
Cash Flows from Operating Activities
    Net income (loss)                                                $    340,752    $    (46,776)
    Adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
    Provision for loan losses and REO                                     182,700         400,400
    Provision for depreciation                                            579,461         456,403
    Amortization of goodwill and non compete covenants                         --         114,302
    Change in operating assets and liabilities:
      Accrued interest receivable                                         149,917          29,705
      Accrued interest payable                                             (3,110)        (73,595)
      Prepaid and other assets                                            (27,082)        (48,475)
      Accounts payable and other liabilities                             (223,266)       (264,935)
      Other                                                                (5,908)        (59,631)
                                                                     ----------------------------
                         NET CASH PROVIDED BY OPERATING ACTIVITIES        993,464         507,398
                                                                     ----------------------------
Cash Flows from Investing Activities
    Proceeds from certificates of deposit                                    --            99,000
    Increase in Federal Home Loan Bank stock                             (308,000)           --
    Purchases of securities available for sale                         (3,230,687)     (7,703,681)
    Proceeds from securities available for sale                         6,114,711       3,876,304
    Net originations of loans receivable                              (12,352,964)    (12,174,803)
    Purchases of office properties and equipment                       (2,742,948)     (1,740,491)
    Purchase of goodwill and noncompete agreements                           --          (190,000)
    Proceeds from sale of real estate owned                               273,520            --
                                                                     ----------------------------
                         NET CASH USED IN INVESTING ACTIVITIES        (12,246,368)    (17,833,671)
                                                                     ----------------------------
Cash Flows from Financing Activities
    Net increase in savings deposits                                   12,297,971      15,618,160
    FHLB Advances                                                       2,236,198         (38,694)
    Notes Payable                                                          16,836        (296,207)
    Proceeds from capital securities                                         --         5,000,000
    Dividends paid                                                       (154,399)       (155,263)
                                                                     ----------------------------
                         NET CASH PROVIDED BY FINANCING ACTIVITIES     14,396,606      20,127,996
                                                                     ----------------------------
                         NET INCREASE IN CASH AND CASH EQUIVALENTS      3,143,702       2,801,723
Cash and cash equivalents:
    Beginning                                                          11,219,573      12,567,765
                                                                     ----------------------------
    Ending                                                           $ 14,363,275    $ 15,369,488
                                                                     ============================
</TABLE>

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<TABLE>
<CAPTION>

AF FINANCIAL GROUP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)
NINE MONTHS ENDED MARCH 31, 2003 AND 2002

                                                                                          Nine Months Ended
                                                                                     2003                  2002
-----------------------------------------------------------------------------------------------------------------
Supplemental Schedule of Cash and Cash Equivalents
<S>                                                                         <C>                 <C>
    Cash:
       Interest-bearing deposits                                            $      8,157,596    $      9,686,974
       Noninterest-bearing                                                         6,205,679           5,682,514
                                                                              -----------------------------------
                                                                            $     14,363,275    $     15,369,488
                                                                              ===================================
Supplemental Disclosures of Cash Flow Information
    Cash payments for:
       Interest                                                             $      3,847,328    $      4,456,615
                                                                              ===================================
       Income taxes                                                         $        133,893    $        265,772
                                                                              ===================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


<PAGE>


                               AF FINANCIAL GROUP
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.NATURE OF BUSINESS

AF Financial Group (the "Company") is a federally chartered stock holding
company for AF Bank (the "Bank") which conducts business from its main office
located in West Jefferson, North Carolina, with branches in Boone, Jefferson,
Sparta, Warrensville, and West Jefferson, North Carolina. The Company has an
insurance subsidiary headquartered in West Jefferson, North Carolina, operating
as AF Insurance Services, Inc., with branches in Boone, Elkin, Jefferson,
Lenoir, Sparta, West Jefferson, and North Wilkesboro, North Carolina. The
Company has a broker/dealer subsidiary headquartered in West Jefferson, North
Carolina, operating as AF Brokerage, Inc., which serves Ashe, Alleghany, Wilkes
and Watauga counties; as well as Union County, North Carolina through a third
party arrangement with a bank in Monroe, North Carolina.

On April 15, 1996, the Board of Directors of Ashe Federal Bank adopted a Plan of
Reorganization and the related Stock Issuance Plan pursuant to which the Bank
exchanged its federal mutual savings bank charter for a federal stock savings
bank charter, conducted a minority stock offering and formed AsheCo, MHC a
mutual holding company which owned more than 50% of the common stock issued by
the Bank. The Bank conducted its minority stock offering in July and August of
1996 and the closing occurred on October 4, 1996. The Bank sold 461,779 shares
of common stock in the minority stock offering, which includes 36,942 shares
sold to its Employee Stock Ownership Plan (the "ESOP"), and issued 538,221
shares to the mutual holding company.

At the Bank's annual meeting held on December 8, 1997, the shareholders of Ashe
Federal Bank approved the Ashe Federal Bank 1997 Stock Option Plan; the Ashe
Federal Bank 1997 Recognition and Retention Plan; a change in the Bank's federal
stock charter, changing the corporate name to AF Bank; and a plan of
reorganization providing for the establishment of AF Bankshares, Inc., as a
federally chartered stock holding company and parent of the Bank. On June 16,
1998, the Bank completed its reorganization into a two-tier mutual holding
company and became a wholly owned subsidiary of the Company as the Company
became a majority owned subsidiary of AsheCo, MHC.

At the Company's annual meeting held on November 4, 2002, stockholders approved
a resolution to amend Section I of the Company's federal stock charter to change
the Company's name from AF Bankshares, Inc. to AF Financial Group. Management
believes that the name "AF Financial Group" more accurately reflects its
transition from a primarily banking institution to a comprehensive financial
services provider and that the new name will enable prospective clients and
customers to identify the Company more accurately as a full-service financial
services provider.

Management believes the Company's customers perceive "financial services" to
encompass five broad categories: funds transfer including checking accounts;
insured savings instruments; credit/lending services; insurance; and investment
services. Further, management believes that failure to offer insurance and
brokerage services in addition to traditional `banking only' services would
impair the Company's growth, making retention of existing customers more
difficult. The Company continues to seek opportunities to increase market
penetration for its products and services, primarily in northwestern North
Carolina. During the three-month period ending September 30, 1998, the Company
established a securities brokerage subsidiary, AF Brokerage, Inc., that
currently conducts brokerage services from two offices in West Jefferson, and by

                                       5
<PAGE>

appointment in the Company's other office locations. AF Brokerage, Inc. applied
to the NASD for membership in the third quarter of 1998 and was granted
membership on October 22, 1999. AF Brokerage, Inc. commenced operation in the
fourth quarter of 2000 as an independent broker/dealer. During the fiscal year
ended June 30, 2002, AF Brokerage entered into a service contract with a
non-affiliated community bank in Monroe, North Carolina, to provide investment
services to that bank's customers through a dual employee arrangement. This move
signaled the first step in the brokerage firm's intent to enter and expand its
business into the arena of third party providers to non-competitive client
financial institutions in North Carolina.

Management continues to evaluate acquisitions and business opportunities that
will provide access to new customers and expanded markets, and which will
enhance the Company's long term value and earnings potential. Management
believes penetration into new (especially contiguous) markets increases the
opportunity to deliver products from all the Company's subsidiaries to a broader
market base, thereby making the insurance and brokerage subsidiaries more
profitable investments by increasing the economies of scale, as well as
improving the economies of scope; while at the same time adding to the products
available for delivery to the Company's customers.

Management is equally committed to protecting and expanding the Company's market
share in existing markets. As evidence of this continuing commitment, on October
24, 2001 AF Bank opened the only financial institution outlet located inside the
Wal-Mart in West Jefferson, North Carolina. In May 2002 the Company opened a
freestanding full-service branch adjacent to Wal-Mart in West Jefferson, North
Carolina. Thus, customers now enjoy the convenience of banking where they shop,
as well as having access to a comprehensive array of financial services at the
freestanding branch office (including an ATM, drive-through lanes, and a
commercial depository). Also, the Company has just added a new Customer Call
Center allowing customers to speak with a banking representative by phone from 7
a.m. until 10 p.m. Monday through Friday.

During the quarter ended December 31, 2002, the Company added online
banking to the services it offers. Later in the year, the Company plans to add
check imaging to its services menu. Both of these important new services are
designed to strengthen existing customer financial relationships, as well as
attract new customers and clients. Online banking gives customers the ability to
bank directly through their computers -- 24 hours a day, seven days a week.
Check imaging will provide the Company's checking customers with the
space-saving option of receiving imaged statements showing their cancelled
checks, instead of dealing with bulky stacks of returned checks each month.

Additionally, the Company acquired land in Boone, North Carolina to construct a
Financial Service Center, expected to be completed during the 2004 fiscal year.
The new Financial Center is expected to cost approximately $6.7 million and will
combine banking, insurance and investments into one convenient location in the
Watagua County market. Two floors of the proposed four-story facility will be
offered for lease to the professional and medical communities. The Company has
executed a contract with a general contractor to construct the Financial Center
at a cost of approximately $5.0 million. The estimated completion date of the
project is June 30, 2004. The Company continues to seek opportunities to
increase the market penetration of its services.

During the year ended June 30, 1999, the Company purchased 6,300 shares of its
common stock for a total price of $113,750. In the same year, the Company issued
2,000 of these shares. During the year ended June 30, 2002, the Company issued
460 of these shares. Management does not plan to acquire additional shares until
it has a specific purpose for additional stock purchases.

                                       6
<PAGE>

NOTE 2. BASIS OF PRESENTATION

The accompanying unaudited financial statements (except for the statement of
financial condition at June 30, 2002, which is extracted from audited financial
statements) have been prepared in accordance with accounting principles
generally accepted in the United States ("US GAAP") for interim financial
information and with the instructions to Form 10-QSB of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by US GAAP for complete financial statements. In the opinion of management, all
adjustments (none of which were other than normal recurring accruals) necessary
for a fair presentation of the financial position and results of operations for
the periods presented have been included. The results of operations for the
three and nine-month period ended March 31, 2003 are not necessarily indicative
of the results of operations that may be expected for the Company's fiscal year
ending June 30, 2003.

The accounting policies which follow are as set forth in Note 1 of the Notes to
Financial Statements in the Company's 2002 financial statements, which are
included by reference in the Company's Form 10-KSB for the year ended June 30,
2002.

NOTE 3. EARNINGS PER SHARE

The Company's basic and diluted earnings per
share for the three and nine-month period ended March 31, 2003 are based on
weighted averages of 1,041,708 and 1,040,776 shares, respectively, assumed to be
outstanding for the period. Options to purchase 21,322 shares of common stock at
$18.50 per share were outstanding during the third quarter of the fiscal year
ending June 2003, and because the average market price is lower than the
exercise price of $18.50, the incremental shares are not considered dilutive and
are not included in the calculation of diluted earnings per share. Shares owned
by the Company's ESOP that have not been committed to be released are not
considered to be outstanding for the purposes of computing earnings per share.
Earnings per share have been calculated in accordance with Statement of Position
93-6 "Employers' Accounting for Employee Stock Ownership Plans" and Statement of
Financial Accounting Standards Number 128.

NOTE 4. FEDERAL HOME LOAN BANK ADVANCES AND NOTES PAYABLE

The Company had advances outstanding of $21,146,122 and $18,909,924 at March 31,
2003 and June 30, 2002, respectively, from the Federal Home Loan Bank ("the
FHLB"). Interest at March 31, 2003 is payable at rates ranging from 3.50% to
6.87%. Pursuant to collateral agreements with the FHLB, advances are
collateralized by the Bank's stock in the FHLB and qualifying first mortgage
loans. Advances of $146,122 are due January 2007, $5.0 million is due September
2010, $7.0 million is due November 2010, $4.0 million is due January 2011 and
$5.0 million is due September 2012.

The Company had Notes Payable outstanding of $1,318,460 and $1,264,624 at March
31, 2003 and June 30, 2002, respectively. Interest at March 31, 2003 is payable
at rates ranging from 1.16% to 5.50% with maturities between 1 and 7 years.

NOTE 5. CAPITAL SECURITIES

On July 16, 2001, AF Capital Trust (the "Trust"), a Delaware business
trust formed by the Company, completed the sale of $5.0 million of 10.25%
Capital Securities (liquidation amount of $1,000 per security) (the "Capital
Securities") in a private placement as part of a pooled capital securities
transaction. The Trust also issued Common Securities to the Company and used the
net proceeds from the offering to purchase a like amount of 10.25% Junior
Subordinated Deferrable Interest Debentures (the "Subordinated Debentures") of
the Company. The Subordinated Debentures are the sole assets of the Trust and
are eliminated, along with the related income statement effects, from the
consolidated financial statements of the Company. The Company contributed $3.0
million of the proceeds from the sale of the Subordinated Debentures to the Bank
as Tier I Capital to support the Bank's growth. Total expenses associated with
the offering

                                       7

<PAGE>

approximating $183,517 were included in other assets and are being amortized on
a straight-line basis over the life of the Subordinated Debentures.


The Capital Securities accrue and pay distributions semi-annually on January
25th and July 25th of each year, commencing on January 25, 2002, at a fixed
annual rate of 10.25% of the stated liquidation amount of $1,000 per Capital
Security. The Company has fully and unconditionally guaranteed all of the
obligations of the Trust, including the semi-annual distributions and payments
on liquidation or redemption of the Capital Securities.

The Capital Securities are mandatorily redeemable upon the maturing of the
Subordinated Debentures on July 25, 2031 or upon earlier redemption as provided
in the Indenture. The Company has the right to redeem the Subordinated
Debentures, in whole or in part, on any January 25th or July 25th on or after
July 25, 2006 at the liquidation amount, plus any accrued but unpaid interest to
the redemption date.

NOTE 6. DIVIDENDS DECLARED

On March 17, 2003, the Board of Directors of the
Company declared a dividend of $0.05 a share for stockholders of record as of
March 28, 2003 and payable on April 10, 2003. The dividends declared were
accrued and reported in accounts payable and other liabilities in the March 31,
2003 Consolidated Statement of Financial Condition. AsheCo, MHC, the mutual
holding company, did not waive the receipt of dividends declared by the
Company.

NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS

On July 1, 2002, the Company adopted the provisions of Financial Accounting
Standards Board Statement 142, GOODWILL AND OTHER INTANGIBLE ASSETS. Under the
provisions of the Statement, on July 1, 2002, the Company eliminated the
amortization of goodwill and other intangibles that are determined to have an
indefinite life. On March 31, 2003, the Company had no impairment of goodwill,
but will reevaluate the carrying value of goodwill and other intangible assets
at least annually. The Company expects to perform this reevaluation as of March
31 in each of its fiscal years.


                                       8
<PAGE>



                               AF FINANCIAL GROUP
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
THIS FORM 10-QSB CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS CONSISTING OF
ESTIMATES WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
OTHER BUSINESS OF THE COMPANY, THAT ARE SUBJECT TO VARIOUS FACTORS WHICH COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE ESTIMATES. THESE FACTORS
INCLUDE: CHANGES IN GENERAL, ECONOMIC AND MARKET CONDITIONS; THE DEVELOPMENT OF
AN ADVERSE INTEREST RATE ENVIRONMENT THAT ADVERSELY AFFECTS THE INTEREST RATE
SPREAD OR OTHER INCOME ANTICIPATED FROM THE COMPANY'S OPERATIONS AND
INVESTMENTS; AND DEPOSITOR AND BORROWER PREFERENCES. THE COMPANY DISCLAIMS ANY
OBLIGATION TO PUBLICLY ANNOUNCE FUTURE EVENTS OR DEVELOPMENTS THAT MAY AFFECT
THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.

Background and Introduction

Management believes it is important to view the quarterly financial
results of the Company within the larger context of the Company's long-term
strategic business plan. Doing so helps keep short-term results in clearer
perspective, and underscores management's commitment to the LONG-TERM
profitability and success of the Company.

It is management's view that the Company's success in the 21st Century depends
in large part upon its ability to compete far beyond the narrow boundaries
imposed upon banking during most of the 20th Century. In fact, the transition
from "banking" to "financial services provider" has impacted every major
competitor of the Company to some degree. The Gramm-Leach-Bliley Financial
Services Modernization Act is an excellent example of regulatory and
governmental support of this viewpoint.

Management has long recognized the dramatically changing dynamics of the
delivery system for financial services in this country. Both individuals and
businesses now look to a broadening array of sources for needed (or wanted)
financial products. Individuals and families are opening FDIC insured savings
accounts at brokerage houses; they are purchasing mutual funds and annuities
through offices of banking organizations; and they are using the services of
non-bank financial planners to plan their retirements and their children's
education needs. Companies are increasingly taking their cash management
function to independent brokers or insurance company representatives; they are
investing idle cash through discount brokerages on the internet; and they are
establishing letters and lines of credit with investment bankers, indirect
credit companies and others.

The Company now has a foundation to successfully compete in its established
markets. In all AF Bank markets, the Company has the capability to deliver
comprehensive insurance services through its insurance subsidiary and the
potential to deliver securities services through AF Brokerage, Inc. In order to
project an image as a full service financial provider to potential clients and
customers, the Company's stockholders approved a resolution to amend the
Company's federal stock charter to change the Company's name from AF Bankshares,
Inc., to AF Financial Group. The challenge facing management is to provide the
most economical, efficient - and most importantly - DESIRABLE platform to offer
AF customers, clients and prospects these services. It is a challenge management
is working hard to meet.

To enhance and expand its service delivery channels,
the Company recently introduced a new Call Center, allowing banking customers
access to a live banking representative by telephone from 7 a.m. until 10 p.m.,
Monday through Friday and Online Banking to provide customers with the ability
to bank directly through their computers 24 hours a day, seven days a week.
Also, Check Imaging is scheduled for introduction during the current calendar
year, giving checking customers the added option of receiving imaged statements
showing all their cancelled checks -- instead of

                                       9

<PAGE>

bulky stacks of returned checks each month. These, and other planned
improvements, are all intended to improve the viability and DESIRABILITY of the
Company's delivery platform.

In coming years, management believes that the Company's established foundation
and emerging platform will drive the Company's long-term viability as a
competitively superior financial services provider in all markets.

Comparison of Financial Condition at March 31, 2003 and June 30, 2002:

Total assets increased by $14.7 million, or 8.3%, to $191.8 million at March 31,
2003 from $177.1 million at June 30, 2002. The increase in assets was primarily
the result of an increase of $12.2 million, or 8.5%, in loans receivable, net,
an increase of $3.1 million, or 28.0%, in cash and cash equivalents and an
increase of $2.2 million, or 36.1%, in office properties and equipment, net,
from June 30, 2002 to March 31, 2003. The increase in net loans receivable is
typical for the Bank, which operates in lending markets that have had sustained
loan demand over the last several years. The increase in net office properties
and equipment was primarily due to the purchase and improvements of property in
Boone, North Carolina to construct a new Financial Service Center. Increases in
net loans outstanding, cash and cash equivalents and net office properties and
equipment, were primarily funded by an increase of $12.4 million in savings
deposits and a $2.2 million increase in advances from the Federal Home Loan
Bank.

Securities available for sale decreased $2.9 million or 28.0% to $7.4 million at
March 31, 2003 from $10.3 million at June 30, 2002. This decrease was due to
maturing investments and management's decision to use the liquidity to fund loan
demand. At March 31, 2003, the Company's investment portfolio had approximately
$51,554 in net unrealized gains. At March 31, 2003 the Company had $800,000 in
cash and cash equivalents and $2.2 million in securities available for sale
pledged as security for municipal deposits.

The Bank's deposits increased by $12.4 million, or 9.1%, from $136.8 million at
June 30, 2002 to $149.2 million at March 31, 2003. Management believes that the
increase in deposits is attributable to its continuing marketing efforts
directed towards increasing balances in savings and transaction accounts and in
smaller, stable certificates of deposits. Management intends to focus its
marketing efforts and to offer new products to increase the lower cost core
deposits.

At March 31, 2003, retained earnings had increased $187,573, or 2.3%, to $8.4
million as a result of net income of $340,752, an increase in the fair market
value of ESOP stock in the amount of $1,220, and a reduction for dividends of
$154,399. At March 31, 2003, the Bank's regulatory capital amounted to $17.3
million compared to $16.6 million at June 30, 2002, which was in excess of
regulatory capital requirements at such date.

The Bank's level of non-performing loans, defined as loans past due 90 days or
more, increased to $762,202 at March 31, 2003 compared to $460,041 at June 30,
2002. The Bank recognized net charge offs of approximately $178,700 during the
nine-month period ended March 31, 2003 compared to net charge offs of $242,700
for the comparable period ended March 31, 2002. The level of net charge offs was
attributable to recent negative economic events on the local level, principally
related to factory closings in two of the Company's primary markets and the
higher unemployment due to the closings. As a result and based on management's
analysis of its allowances, a $182,700 provision for loan loss allowance was
made during the nine-month period ended March 31, 2003. Similar loan loss
provisions in future periods are uncertain; however, management expects to have
a similar level of provision expense for the fourth quarter of the current
fiscal year.

                                       10
<PAGE>

COMPARISON OF OPERATING RESULTS FOR THE THREE AND NINE MONTHS ENDED MARCH 31,
2003 AND 2002:

The Company had net income for the three-month period ended March 31, 2003 of
$196,996 compared to net income of $90,879 during the same period in 2002. The
Company had net income of $340,752 for the nine-month period ended March 31,
2003 compared to a net loss of $46,776 during the nine-month period ended March
31, 2002. Changes in net income during the comparable three and nine month
periods were attributable to: an increase in the net interest income after
provision for loan losses and an increase in insurance commissions. The
increases in income were partially offset by increased compensation expense and
occupancy expenses associated with the remodeling costs of the Sparta facility
and the new Financial Center located on Mount Jefferson Road in West Jefferson,
North Carolina. In management's opinion, there has not been a material change in
interest rate risk from the end of the Company's most recent fiscal year.

Interest Income. Interest income decreased by $92,375 or 3.3% from $2,826,409
for the three-month period ended March 31, 2002 to $2,734,034 for the
three-month period ended March 31, 2003. Interest income decreased by $113,381
or 1.3% from $8,651,522 for the nine-month period ended March 31, 2002 to
$8,538,141 for the nine-month period ended March 31, 2003. Interest income from
loans decreased $22,451 or 0.9% from $2,646,340 for the three-month period ended
March 31, 2002 to $2,623,889 for the three-month period ended March 31, 2003.
Interest income from loans increased $158,887 or 2.0% from $8,054,120 for the
nine-month period ended March 31, 2002 to $8,213,007 for the nine-month period
ended March 31, 2003. The increase in interest income from loans for the
nine-month period was attributable to a change in the volume and rate of net
loans receivable. This increase was offset by decreases in interest income from
investment securities and interest bearing accounts in the three and nine month
period ended March 31, 2003. Even though the weighted average rate on portfolio
loans declined from the prior periods, the interest income from the increase in
outstanding balances outweighs the decline in income resulting from the decline
in the weighted average rate; therefore, during the nine months ended March 31,
2003, income generated from the increase in balances (volume) offset the decline
in earnings resulting from the decline in weighted average rate.

Interest Expense. Interest expense decreased by $97,097 or 7.3% to $1,239,870
for the three-month period ended March 31, 2003 from $1,336,967 for the three
months ended March 31, 2002. Interest expense decreased by $634,994 or 14.2% to
$3,844,218 for the nine-month period ended March 31, 2003 from $4,479,212 for
the nine-month period ended March 31, 2002. Interest expense on deposits
decreased by $125,058 or 13.0% to $834,985 for the three months ended March 31,
2003 from $960,043 for the three months ended March 31, 2002. Interest expense
on deposits decreased by $733,780 or 21.9% to $2,621,429 for the nine-month
period ended March 31, 2003 from $3,355,209 for the nine-month period ended
March 31, 2002. These decreases are the result of the 0.4% decrease in the
institution's weighted average rate of deposits during the nine-month period
ended March 31, 2003.

Net Interest Income. Net interest income increased by $4,722 or 0.3% from
$1,489,442 for the three-month period ended March 31, 2002 to $1,494,164 for the
three-month period ended March 31, 2003. Net interest income increased by
$521,613 or 12.5% from $4,172,310 for the nine-month period ended March 31, 2002
to $4,693,923 for the nine-month period ended March 31, 2003. The increase is a
result of a drop in the institution's weighted average rate paid for deposits
and the increase in net loans outstanding, partially offset by the reduction of
the weighted average loan rates.

PROVISION FOR LOAN LOSSES. Management made additional provision in the amount of
$35,000 to the allowance for loan losses during the three-month period ended
March 31, 2003, compared to a $111,500 provision for loan losses made during the
three-month period ended March 31, 2002. Management made additional provision in
the amount of $182,700 to the allowance for loan losses during the nine-month
period ended March 31, 2003, compared to a $400,400 provision for loan

                                       11
<PAGE>

losses made during the nine-month period ended March 31, 2002. Provisions for
loan losses, which are charged to operations and resulting loan loss allowances,
are amounts that the Bank's management believes will be adequate to absorb
potential losses on existing loans that may become uncollectible. Loans are
charged off against the allowance when management believes that collection is
unlikely. The evaluation to increase or decrease the provisions for loan losses
and resulting allowances is based both on prior loan loss experience and other
factors, such as changes in the nature and volume of the loan portfolio, overall
portfolio quality and current economic conditions.

The Bank made provisions for loan loss allowances during the three and nine
month period ended March 31, 2003 based upon an analysis of the quality of its
loan portfolio. At March 31, 2003, the Bank's level of general valuation
allowances for loan losses amounted to $1,135,267 which management believes is
adequate to absorb any existing losses in its loan portfolio.

Non-Interest Income. Non-interest income increased by $214,922 or 27.3% from
$787,212 for the three-month period ended March 31, 2002 to $1,002,134 for the
three months ended March 31, 2003. Non-interest income increased by $358,202 or
15.4% from $2,332,115 for the nine-month period ended March 31, 2002 to
$2,690,317 for the nine-month period ended March 31, 2003. The increase in
non-interest income during the three and nine month period ended March 31, 2003
was primarily attributable to increased revenues generated from insurance sales
and increases in transaction fees on deposit accounts during the three and nine
months ended March 31, 2003. The increased revenue generated from insurance
sales is due to widening market penetration, along with an increase in premiums
and is expected to continue to produce new growth in non-interest income. The
increase in transaction fees on deposit accounts is primarily attributable to an
increase in the number of transaction accounts and more aggressive fee
collection efforts.

Non-Interest Expense. Non-interest expense increased by $91,878 or 4.6% from
$2,021,207 for the three months ended March 31, 2002 to $2,113,085 for the three
months ended March 31, 2003. Non-interest expense increased by $387,406 or 6.3%
from $6,185,967 for the nine-month period ended March 31, 2002 to $6,573,373 for
the nine-month period ended March 31, 2003. Increases in non-interest expense
for the three and nine-month period ended March 31, 2003 are primarily
attributable to an increase in compensation costs and occupancy expenses
associated with the remodeling costs of the Sparta facility and increased
staffing for the Financial Service Center located on Mount Jefferson Road in
West Jefferson, North Carolina. Compensation costs increased by $87,646 or 7.5%
for the three-month period ended March 31, 2003. Compensation costs increased
$250,222 or 6.7% for the nine-month period ended March 31, 2003. Occupancy costs
increased by $47,168 or 18.7% for the three-month period ended March 31, 2003.
Occupancy costs increased by $129,794 or 17.7% for the nine-month period ended
March 31, 2003.

CAPITAL RESOURCES AND LIQUIDITY:

The term "liquidity" generally refers to an organization's ability to generate
adequate amounts of funds to meet its needs for cash. More specifically for
financial institutions, liquidity ensures that adequate funds are available to
meet deposit withdrawals, fund loan demand and capital expenditure commitments,
maintain reserve requirements, pay operating expenses, and provide funds for
debt service, dividends to stockholders, and other institutional commitments.
The Company's primary sources of funds consist of deposits, borrowings,
repayment and prepayment of loans, sales and participations of loans, maturities
of securities and interest-bearing deposits, and funds provided from operations.
While scheduled repayments of loans and maturities of securities are predictable
sources of funds, deposit flows and loan prepayments are greatly influenced by
the general level of interest rates, economic conditions, and competition. The
Company uses its liquidity resources primarily to fund existing and future loan
commitments, to fund net deposit outflows, to invest in other interest-earning
assets, to maintain liquidity, and to meet operating expenses. For additional
information about cash flows from the Company's operating, financing

                                       12

<PAGE>

and investing activities, see "Condensed Consolidated Statements of Cash Flow."

Liquidity management is both a daily and long-term function of management. If
the Company requires funds beyond its ability to generate them internally, the
Company believes it could borrow additional funds from the FHLB and use the
wholesale deposit markets. At March 31, 2003, the Company had borrowings of
$21.1 million from the FHLB.

The Company anticipates that it will have sufficient funds available to meet its
current loan origination commitments. Certificates of deposit scheduled to
mature in one year or less totaled $49.5 million at March 31, 2003. Based upon
historical experience, management believes that a significant portion of such
deposits will remain with the Bank.

As of March 31, 2003, cash and cash equivalents, a significant source of
liquidity, totaled $14.4 million. The OTS regulations require the Company to
maintain sufficient liquidity to ensure its safe and sound operation. The
Company's liquidity position is in excellent shape by any objective benchmark or
comparison.

Asset/Liability Management.

The Company's asset/liability management is focused primarily on evaluating and
managing the Company's net interest income in relation to various risk criteria.
Factors beyond the Company's control, such as the effects of changes in market
interest rates and competition, may also have an impact on the management of
interest rate risk.

In the absence of other factors, the Company's overall yield on interest-earning
assets will increase as will its cost of funds on its interest-bearing
liabilities when market rates increase over an extended period of time.
Inversely, the Company's yields and cost of funds will decrease when market
rates decline. The Company is able to manage these fluctuations to some extent
by attempting to control the maturity or rate adjustments of its
interest-earning assets and interest-bearing liabilities over given periods of
time. One of the Company's tools to monitor interest rate risk is the
measurement of sensitivity of the net portfolio value to changes in interest
rates.

In order to minimize the potential effects of adverse material and prolonged
increases in market interest rates on the Company's operations, management has
implemented an asset/liability program designed to improve the Company's
interest rate risk exposure. The program emphasizes the originations of three
and five-year fixed rate balloon mortgages, adjustable rate mortgages, selling
long term fixed rate loans to the secondary market, shorter term consumer and
commercial loans, the investment of excess cash in short or intermediate term
interest-earning assets and the solicitation of deposit accounts that can be
repriced rapidly.

Although the Company's asset/liability management program has generally helped
to decrease the exposure of its earnings to interest rate increases, the
residual effect of reducing the Company's historical exposure to interest rate
increases is a heightened exposure to interest rate decreases. Additionally, a
decline in rates for earning assets may occur more rapidly than a decline in
funding costs. Certificates of deposit typically have terms ranging from three
to thirty six months. Consequently, the rates paid for these deposits cannot be
adjusted until the maturity date. Loans priced at prime or a margin thereto
provide for adjusting rates immediately when market rates change. In a rising
rate environment, that ability to make immediate rate adjustments serves to
protect the net interest margin against increases in rates at a more rapid speed
than the increase in funding. In a declining rate environment, the rates on
prime rate based loans decrease immediately while certificate rates lag causing
the interest margin to decline until the certificates mature offering an
opportunity for repricing.

                                       13
<PAGE>

Management believes that the Company's asset/liability management program
continues to function as a useful financial management tool; adequately
providing for the safe, sound and prudent management of the Company's exposure
to changes in interest rates.

Impact of Inflation and Changing Prices.

The financial statements and accompanying footnotes have been prepared in
accordance with GAAP, 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 due to inflation.
The assets and liabilities of the Company are primarily monetary in nature and
changes in market interest rates have a greater impact on the Company's
performance than do the effects of inflation.

Critical Accounting Policies and Estimates

The notes to the Company's audited consolidated financial statements for the
year ended June 30, 2002 included in the Company's 2002 Annual Report on Form
10-KSB contain a summary of significant accounting policies. The Company has not
experienced any material change in the critical accounting policies since June
30, 2002. The Company's policies with respect to the methodology for
determination of the allowance for loan losses and asset impairment judgments
involve a high degree of complexity. Management must make difficult and
subjective judgments which often require assumptions or estimates about highly
uncertain matters. Changes in these judgments, assumptions, or estimates would
cause reported results to differ materially. These critical policies and their
application are reviewed periodically with the Company's Audit Committee and
Board of Directors

Item 3. Controls and Procedures

During the 90-day period prior to the filing date of this report, management,
including the Company's President and Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of the design and operation of
the Company's disclosure controls and procedures. Based upon, and as of the date
of that evaluation, the President and Chief Executive Officer and Chief
Financial Officer concluded that the disclosure controls and procedures were
effective, in all material respects, to ensure that information required to be
disclosed in the reports the Company files and submits under the Exchange Act is
recorded, processed, summarized and reported as and when required.

There have been no significant changes in the Company's internal controls or in
other factors which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation. There were no significant
deficiencies or material weaknesses identified in the evaluation and therefore,
no corrective actions were taken.

                                       14

<PAGE>


                               AF FINANCIAL GROUP
 Part II.  OTHER INFORMATION

Item 1. Legal Proceedings
        The Company is not engaged in any material legal proceedings at the
        present time other than those proceedings within the normal course of
        business.

Item 2. Changes in Securities and Use of Proceeds
        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

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

(b)  Reports on Form 8-K

        The Company filed a Current Report on Form 8-K with the Commission on
        January 27, 2003. The Form 8-K announced the change in the Company's
        name to AF Financial Group from AF Bankshares, Inc. and the
        appointment of Claudia L. Kelley, Ph.D. to the Board of Directors of
        the Company.

                                       15

<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.

                                       AF FINANCIAL GROUP

Dated May 13, 2003                     By: /s/ James A. Todd
      ------------                         ------------------------------------
                                           James A. Todd
                                           President and Chief Executive Officer

Dated May 13, 2003                     By: /s/ Melanie Paisley Miller
      ------------                         ------------------------------------
                                           Melanie Paisley Miller
                                           Executive Vice President, Secretary,
                                           Treasurer and Chief Financial Officer


                                       16
<PAGE>

CERTIFICATIONS

         I, James A. Todd certify that:

1. I have reviewed this quarterly report on Form 10-QSB of AF Financial Group;

2. Based on my knowledge, this quarterly
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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

     (b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

     (c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

     (a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

     (b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 13, 2003                  /s/ James A. Todd
      ------------                  -------------------------------------------
                                    James A. Todd President and Chief Executive



                                       17
<PAGE>

Officer I, Melanie Paisley Miller, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of AF Financial Group;

2. Based on my knowledge, this quarterly 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 quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report.

4. The registrant's other
certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:

     (a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

     (b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

     (c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

     (a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

     (b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses. Date:

Date: May 13, 2003                  /s/ Melanie Paisley Miller
      ------------                  -------------------------------------------
                                    Executive Vice President, Secretary,
                                    Treasurer and Chief Financial Officer
<PAGE>


EXHIBIT  99.1

CERTIFICATION
(Pursuant  to 18  U.S.C.  Section  1350)

The undersigned hereby certifies that (i) the foregoing Quarterly Report on Form
10-QSB filed by AF Financial Group (the "Company") for the quarter ended March
31, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, and (ii) the information contained in that
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.


                               AF FINANCIAL GROUP


Dated May 13, 2003                     By: /s/ James A. Todd
      ------------                         ------------------------------------
                                           James A. Todd
                                           President and Chief Executive Officer

Dated May 13, 2003                     By: /s/ Melanie Paisley Miller
      ------------                         ------------------------------------
                                           Melanie Paisley Miller
                                           Executive Vice President, Secretary,
                                           Treasurer and Chief Financial Officer


A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.