UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934

         For the quarterly period ended March 31, 1998

                                                       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 Number: 0-22444

                               WVS Financial Corp.
             ------------------------------------------------------ 
             (Exact name of registrant as specified in its charter)

                 Pennsylvania                             25-1710500
        -------------------------------              ----------------------
        (State or other jurisdiction of                (I.R.S. Employer
        incorporation or organization)               Identification Number)

                   9001 Perry Highway
                Pittsburgh, Pennsylvania                     15237
                ------------------------                  ----------
                 (Address of principal                    (Zip Code)
                   executive offices)

                                 (412) 364-1911
                         -------------------------------
                         (Registrant's telephone number,
                              including area code)

         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  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 requirement for the past 90 days.    YES [ X ]    NO    [   ]

         Shares  outstanding as of May 8, 1998 : 1,808,250  shares Common Stock,
$.01 par value.
<PAGE>
                       WVS FINANCIAL CORP. AND SUBSIDIARY

                                      INDEX

PART I.                    Financial Information                                

Item 1.                    Financial Statements

                           Consolidated Statements of Financial
                           Condition as of March 31, 1998
                           and June 30, 1997 (Unaudited)                        

                           Consolidated Statements of Income
                           for the Three and Nine Months Ended
                           March 31, 1998 and 1997 (Unaudited)                  

                           Consolidated Statements of Cash Flows
                           for the Nine Months Ended March 31,
                           1998 and 1997 (Unaudited)                            

                           Consolidated Statements of Changes in
                           Stockholders' Equity for the Nine Months
                           Ended March 31, 1998 (Unaudited)                     

                           Notes to Unaudited Consolidated
                           Financial Statements                                 

Item 2.                    Management's Discussion and Analysis of
                           Financial Condition and Results of
                           Operations for the Three and Nine Months
                           Ended March 31, 1998                                 

Item 3.                    Quantitative and Qualitative Disclosures
                           about Market Risk                                    

PART II.                   Other Information                                    

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

<PAGE>
<TABLE>
<CAPTION>
                            WVS FINANCIAL CORP. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                        (UNAUDITED)
                                      (in thousands)


                                                                  March 31,     June 30,
                                                                    1998          1997
                                                                 ---------      ---------
<S>                                                              <C>            <C>   
          Assets  
Cash and due from banks ....................................     $     493      $     667
Interest-earning demand deposits ...........................            --          1,904
Investment securities available-for-sale
   (amortized cost of $3,627 and $3,689) ...................         3,724          3,553
Investment securities held-to-maturity
   (market value of $75,294 and $83,889) ...................        75,021         83,995
Mortgage-backed securities available-for-sale
   (amortized cost of $19,363 and $18,417) .................        19,524         18,280
Mortgage-backed securities held-to-maturity
   (market value of $28,217 and $19,381) ...................        27,725         19,210
Federal Home Loan Bank stock, at cost ......................         4,416          3,927
Net loans receivable .......................................       162,003        158,134
Accrued interest receivable ................................         2,942          2,809
Real estate owned ..........................................          --             --
Premises and equipment .....................................         1,207          1,298
Deferred taxes and other assets ............................           759            916
                                                                 ---------      ---------
          TOTAL ASSETS .....................................     $ 297,814      $ 294,693
                                                                 =========      =========

          Liabilities and Stockholders' Equity
Liabilities:
Savings Deposits:
   Non-interest-bearing accounts ...........................     $   6,574      $   7,283
   NOW accounts ............................................        15,533         15,177
   Savings accounts ........................................        36,820         36,591
   Money market accounts ...................................        11,413         12,103
   Certificates of deposit .................................        94,719         99,725
                                                                 ---------      ---------
   Total savings deposits ..................................       165,059        170,879
Federal Home Loan Bank advances ............................        86,945         77,857
Other borrowings ...........................................         7,020          6,784
Advance payments by borrowers for taxes and insurance ......         2,522          3,531
Accrued interest payable ...................................         2,160          1,768
Other liabilities ..........................................         1,374            985
                                                                 ---------      ---------
   TOTAL LIABILITIES .......................................       265,080        261,804
                                                                 ---------      ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>                                                              <C>            <C>  
Stockholders' equity:
Preferred stock:
   5,000,000 shares, no par value per share, authorized;
      none outstanding .....................................            --             --
Common stock:
   10,000,000 shares, $.01 par value per share,
      authorized;  1,808,050 and 1,747,280 shares issued and
      outstanding ..........................................            18             17
Additional paid-in capital .................................        18,344         17,236
Retained earnings, substantially restricted ................        14,988         16,900
Unallocated shares - Recognition and Retention Plans .......          (454)          (631)
Unallocated shares - Employee Stock Ownership Plan .........          (332)          (453)
                                                                 ---------      ---------
                                                                    32,564         33,069
Unrealized gain (loss) on available-for-sale securities ....           170           (180)
                                                                 ---------      ---------
   TOTAL STOCKHOLDERS' EQUITY ..............................        32,734         32,889
                                                                 ---------      ---------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......     $ 297,814      $ 294,693
                                                                 =========      =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                                      WVS FINANCIAL CORP. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF INCOME
                                                  (UNAUDITED)
                                                (in thousands)


                                                      Three Months Ended               Nine Months Ended
                                                            March 31,                       March 31,
                                                 ---------------------------     ----------------------------
                                                      1998            1997            1998             1997
                                                 -----------     -----------     -----------      -----------
<S>                                              <C>             <C>             <C>              <C>   
INTEREST AND DIVIDEND INCOME:
     Loans .................................     $     3,301     $     3,077     $     9,867      $     9,240
     Investment securities .................           1,484           1,412           4,534            4,085
     Mortgage-backed securities ............             650             670           1,914            2,060
     Interest-earning deposits with
       other institutions ..................              15              13              50               68
     Federal Home Loan Bank stock ..........              65              49             184              131
                                                 -----------     -----------     -----------      -----------
          Total interest and dividend income           5,515           5,221          16,549           15,584
                                                 -----------     -----------     -----------      -----------

INTEREST EXPENSE:
     Deposits ..............................           1,686           1,737           5,222            5,277
     Borrowings ............................           1,194             913           3,551            2,666
     Advance payments by borrowers for
       taxes and insurance .................              12              12              27               28
                                                 -----------     -----------     -----------      -----------
          Total interest expense ...........           2,892           2,662           8,800            7,971
                                                 -----------     -----------     -----------      -----------

NET INTEREST INCOME ........................           2,623           2,559           7,749            7,613
PROVISION FOR LOAN LOSSES ..................            --              --              (120)              60
                                                 -----------     -----------     -----------      -----------

NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES ............................           2,623           2,559           7,869            7,553
                                                 -----------     -----------     -----------      -----------

NON-INTEREST INCOME:
     Service charges on deposits ...........              57              48             166              151
     Investment securities gains ...........              --              --              --               26
     Other .................................              41              30             127              107
                                                 -----------     -----------     -----------      -----------
          Total non-interest income ........              98              78             293              284
                                                 -----------     -----------     -----------      -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      WVS FINANCIAL CORP. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF INCOME
                                                  (UNAUDITED)
                                                (in thousands)
                                                 (continued)


                                                      Three Months Ended               Nine Months Ended
                                                            March 31,                       March 31,
                                                 ---------------------------     ----------------------------
                                                      1998            1997            1998             1997
                                                 -----------     -----------     -----------      -----------
<S>                                              <C>             <C>             <C>              <C>   
NON-INTEREST EXPENSE:
     Salaries and employee benefits ........             894             748           2,564            2,077
     Occupancy and equipment ...............              97             101             303              310
     Deposit insurance premium .............              26              28              81            1,266
     Data processing .......................              43              45             128              130
     Correspondent bank service charges ....              30              27              89               85
     Other .................................             186             177             552              539
                                                 -----------     -----------     -----------      -----------
          Total non-interest expense .......           1,276           1,126           3,717            4,407
                                                 -----------     -----------     -----------      -----------

INCOME BEFORE INCOME TAXES .................           1,445           1,511           4,445            3,430
INCOME TAXES ...............................             571             597           1,640            1,354
                                                 -----------     -----------     -----------      -----------
NET INCOME .................................     $       874     $       914     $     2,805      $     2,076
                                                 ===========     ===========     ===========      ===========
EARNINGS PER SHARE:
     Basic .................................     $      0.50     $      0.54     $      1.63      $      1.23
     Diluted ...............................     $      0.49     $      0.52     $      1.58      $      1.19

AVERAGE SHARES OUTSTANDING:
     Basic .................................       1,756,814       1,683,634       1,723,023        1,681,347
     Diluted ...............................       1,796,616       1,748,689       1,778,412        1,742,095
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                               WVS FINANCIAL CORP. AND SUBSIDIARY
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (UNAUDITED)
                                         (in thousands)

                                                                           Nine Months Ended
                                                                                March 31,
                                                                        ----------------------
                                                                           1998          1997
                                                                        --------      --------
<S>                                                                     <C>           <C>
OPERATING ACTIVITIES

Net income ........................................................     $  2,805      $  2,076
Adjustments to reconcile net income to cash provided by operating
activities:
   Provision for loan losses ......................................         (120)           60
   Gain on sale of Real Estate Owned ..............................         --              (8)
   Gain on sale of investments and mortgage-backed securities .....         --             (26)
   Depreciation and amortization, net .............................           97           102
   Amortization of discounts, premiums and deferred loan fees .....          (47)           66
   Amortization of ESOP, RRP and deferred and unearned compensation          776           368
   Increase in accrued interest receivable ........................         (133)         (202)
   Increase in accrued interest payable ...........................          392           521
   Decrease in accrued and deferred taxes .........................          411           322
   Other, net .....................................................           53           178
                                                                        --------      --------
      Net cash provided by operating activities ...................        4,234         3,457
                                                                        --------      --------

INVESTING ACTIVITIES

Available-for-sale:
   Purchases of investments and mortgage-backed securities ........      (18,434)       (1,158)
   Proceeds from repayments of investments and mortgage-backed
      securities ..................................................       15,457         1,519
   Proceeds from sale of investments and mortgage-backed securities        2,192         1,665
Held-to-maturity:
   Purchases of investments and mortgage-backed securities ........      (83,413)      (59,887)
   Proceeds from repayments of investments and mortgage-backed
      securities ..................................................       83,961        40,211
Net Increase in loans receivable ..................................       (3,890)       (2,430)
Sale of real estate owned .........................................         --              73
Increase in FHLB stock ............................................         (489)       (1,292)
Net purchases of premises and equipment ...........................           (6)          (68)
                                                                        --------      --------
   Net cash used for investing activities .........................       (4,622)      (21,367)
                                                                        --------      --------

</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                                WVS FINANCIAL CORP. AND SUBSIDIARY
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                            (UNAUDITED)
                                          (in thousands)

                                                                              Nine Months Ended 
                                                                                  March 31,
                                                                           ----------------------
                                                                             1998          1997
                                                                          --------      --------
<S>                                                                       <C>           <C>
FINANCING ACTIVITIES

Net decrease in transaction and passbook accounts ...................         (814)       (1,940)
Net decrease in certificates of deposit .............................       (5,006)         (845)
Net increase in FHLB borrowings .....................................        9,088        25,832
Net increase (decrease) in other borrowings .........................          236        (4,121)
Net decrease in advance payments by borrowers for taxes and insurance       (1,009)       (1,235)
Net proceeds from issuance of common stock ..........................          631             5
Cash dividends paid .................................................       (4,816)         (814)
                                                                          --------      --------
      Net cash (used for) provided by financing activities ..........       (1,690)       16,882
                                                                          --------      --------

      Decrease in cash and cash equivalents .........................       (2,078)       (1,028)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD ................        2,571         2,727
                                                                          --------      --------

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD ......................     $    493      $  1,699
                                                                          ========      ========
                                                                      
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

   Cash paid during the period for:
      Interest on deposits, escrows and borrowings ..................     $  8,408      $  7,450
      Income taxes ..................................................        1,236           986

   Noncash item:
      Foreclosed mortgage loans transferred to real estate owned ....         --              64

</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                                               WVS FINANCIAL CORP. AND SUBSIDIARY
                                   CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                           (UNAUDITED)
                                                         (in thousands)

                                                                                        
                                                                                              Net                                  
                                                                                          Unrealized     Retained 
                                              Additional     Unallocated    Unallocated       Gain       Earnings-                
                                  Common        Paid-in      Shares Held    Shares Held    (Loss) on   Substantially  
                                   Stock        Capital       by ESOP         by RRP      Securities    Restricted       Total 
                                   -----        -------       -------         ------      ----------    ----------       ----- 
<S>                              <C>           <C>            <C>           <C>           <C>           <C>            <C>
Balance at June 30, 1997 ...     $     17      $ 17,236       $   (453)     $   (631)     $   (180)     $ 16,900       $ 32,889

Release of earned Employee
Stock Ownership Plan (ESOP)
shares .....................                        305            121                                                      426
  
Accrued compensation expense
for Recognition and
Retention Plans (RRP) ......                                                     177                                        177

Tax benefit from stock
grants issued under RRP ....                        173                                                                     173

Exercise of Stock Options ..            1           630                                                                     631

Change in unrealized loss,
net of income taxes of $181.                                                                  350                           350

Cash dividends declared
($2.70 per share) ..........                                                                             (4,717)         (4,717)

Net income .................                                                                              2,805           2,805
                                 --------      --------       --------      --------      --------      --------       --------

Balance at March 31, 1998 ..     $     18      $ 18,344      $   (332)     $   (454)     $    170      $ 14,988        $ 32,734
                                 ========      ========      ========      ========      ========      ========        ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
                       WVS FINANCIAL CORP. AND SUBSIDIARY

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       BASIS OF PRESENTATION

         The accompanying  unaudited consolidated financial statements have been
         prepared  in  accordance  with  the  instructions  for  Form  10-Q  and
         therefore  do not include  information  or  footnotes  necessary  for a
         complete  presentation of financial  condition,  results of operations,
         and  cash  flows  in  conformity  with  generally  accepted  accounting
         principles.   However,  all  adjustments  (consisting  only  of  normal
         recurring  adjustments)  which,  in  the  opinion  of  management,  are
         necessary for a fair  presentation  have been included.  The results of
         operations  for the three and nine months  ended March 31, 1998 are not
         necessarily  indicative  of the results  which may be expected  for the
         entire fiscal year.

2.       EARNINGS PER SHARE

         In February  1997,  the  Financial  Accounting  Standards  Board (FASB)
         issued  Statement of Financial  Accounting  Standards No. 128 "Earnings
         Per Share".  Statement No. 128 replaced the previously reported primary
         and fully  diluted  earnings per share with basic and diluted  earnings
         per share.  Unlike primary earnings per share, basic earnings per share
         excludes any dilutive  effects of options,  warrants,  and  convertible
         securities.  Diluted  earnings  per share  differs  from fully  diluted
         earnings per share in that average period market prices are utilized in
         calculating weighted average common stock equivalents instead of period
         ending market prices.

         All  earnings  per  share  amounts  have  been  presented,   and  where
         necessary, restated to conform to the Statement No. 128 requirements.

3.       LITIGATION

         On March 27, 1995,  the United  States  District  Court for the Western
         District of  Pennsylvania  entered an Opinion and Orders  dismissing in
         its entirety a lawsuit  brought by Plaintiff  William S. Karn, who is a
         depositor of the Savings Bank and a shareholder  of the Company,  which
         alleged,  among other things,  antitrust and securities laws violations
         in connection  with the Savings Bank's mutual - to - stock  conversion.
         The court also  dismissed  this same  Plaintiff's  federal  claims in a
         second and  substantially  similar lawsuit while remanding to the Court
         of Common Pleas of Allegheny County any cognizable state law claims. On
         February 6, 1998 the state law claims were dismissed.

         The Company is involved with various other legal actions arising in the
         ordinary course of business.  Management  believes the outcome of these
         matters will have no material effect on the consolidated  operations or
         consolidated financial condition of WVS.
<PAGE>
4.       RECENT ACCOUNTING PRONOUNCEMENTS

         In July 1997 the Financial  Accounting Standards Board issued Statement
         of Financial  Accounting  Standards No. 130,  "Reporting  Comprehensive
         Income".  Statement  No. 130 is effective  for fiscal  years  beginning
         after  December 15, 1997.  This  statement  establishes  standards  for
         reporting and presentation of  comprehensive  income and its components
         (revenues, expenses, gains and losses) in a full set of general purpose
         financial  statements.  It requires  that all items are  required to be
         recognized  under  accounting  standards as components of comprehensive
         income be reported in a financial  statement that is presented with the
         same  prominence  as other  financial  statements.  Statement  No.  130
         requires  that  companies  (i)  classify  items of other  comprehensive
         income by their  nature in a financial  statement  and (ii) display the
         accumulated  balance  of other  comprehensive  income  separately  from
         retained earnings and additional  paid-in capital in the equity section
         of the statement of financial condition.  Reclassification of financial
         statements for earlier periods provided for  comprehensive  purposes is
         required.
<PAGE>
                       WVS FINANCIAL CORP. AND SUBSIDIARY

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 1998


         When used in this Form 10-Q,  or, in future filings by the Company with
the Securities and Exchange Commission, in the Company's press releases or other
public  or  shareholder  communications,  or in oral  statements  made  with the
approval of an authorized  executive officer,  the words or phrases "will likely
result",  "are expected to",  "will  continue",  "is  anticipated",  "estimate",
"project"  or similar  expressions  are  intended to  identify  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995.  Such  statements  are  subject  to  certain  risks  and  uncertainties
including changes in economic  conditions in the Company's market area,  changes
in policies by regulatory  agencies,  fluctuations in interest rates, demand for
loans in the  Company's  market area and  competition  that could  cause  actual
results  to differ  materially  from  historical  earnings  and those  presently
anticipated  or projected.  The Company  wishes to caution  readers not to place
undue reliance on any such  forward-looking  statements,  which speak only as of
the date made.  The Company  wishes to advise  readers  that the factors  listed
above  could  affect the  Company's  financial  performance  and could cause the
Company's  actual  results  for  future  periods to differ  materially  from any
opinions or statements  expressed  with respect to future periods in any current
statements.

         The  Company  does  not  undertake,   and  specifically  disclaims  any
obligation, to publicly release the result of any revisions which may be made to
forward-looking  statements to reflect events or circumstances after the date of
statements or to reflect the occurrence of anticipated or unanticipated events.


GENERAL

         WVS Financial  Corp.  ("WVS" or the  "Company")  is the parent  holding
company of West View  Savings  Bank ("West  View" or the  "Savings  Bank").  The
Company was  organized  in July 1993 as a  Pennsylvania-chartered  unitary  bank
holding  company and  acquired  100% of the common  stock of the Savings Bank in
November 1993.

         West View Savings Bank is a Pennsylvania-chartered,  SAIF-insured stock
savings bank conducting  business from six offices in the North Hills suburbs of
Pittsburgh.  Originally  organized under  Pennsylvania  law in 1908 as West View
Building Loan  Association,  West View changed its name to West View Savings and
Loan   Association   in  1954.  In  June  1992,   West  View  converted  from  a
Pennsylvania-chartered    mutual    savings   and   loan    association   to   a
Pennsylvania-chartered  mutual  savings bank.  The Savings Bank converted to the
stock form of ownership in November 1993.  The Savings Bank had no  subsidiaries
at March 31, 1998.

         The  operating  results of the Company  depend  primarily  upon its net
interest  income,  which is  determined  by the  difference  between  income  on
interest-earning  assets,  principally  loans,  mortgage-backed  securities  and
investment  securities,  and interest expense on  interest-bearing  liabilities,
which consists primarily of deposits and borrowings. The Company's net income is
also  affected by its  provision  for loan  losses,  as well as the level of its
non-interest   income,   including  loan  fees  and  service  charges,  and  its
non-interest expenses, such as compensation and employee benefits, income taxes,
deposit insurance and occupancy costs.
<PAGE>
         The  Company's   strategy   focuses  on  traditional   thrift  lending,
maintaining asset quality and increasing core earnings.


FINANCIAL CONDITION


         The  Company's  assets  totaled  $297.8  million  at March 31,  1998 as
compared to $294.7  million at June 30, 1997.  The $3.1 million or 1.1% increase
in total assets was  primarily  comprised of a $3.9 million or 2.4%  increase in
net loans  receivable  and a $1.4  million or 1.1%  increase in  investment  and
mortgage-backed  securities,  including  Federal Home Loan Bank ("FHLB")  stock,
which  was   partially   offset  by  a  $1.9   million  or  100%   decrease   in
interest-earning demand deposits. The Company's total liabilities increased $3.3
million or 1.3% to $265.1 million as of March 31, 1998 from $261.8 million as of
June 30, 1997.  The $3.3 million  increase in total  liabilities  was  primarily
comprised of a $9.3 million or 11.0% increase in Federal Home Loan Bank Advances
and other  borrowings  which was  partially  offset  by a $5.8  million  or 3.4%
decrease in total deposits.  Total stockholders'  equity decreased $200 thousand
or 6.1% to $32.7  million as of March 31, 1998 from $32.9 million as of June 30,
1997,  primarily  due to $2.8  million of Company net income for the nine months
ended  March 31,  1998,  which  was  offset by $4.7  million  in cash  dividends
declared on the Company's common stock.


         ASSET AND  LIABILITY  MANAGEMENT.  The  Company  continued  a  strategy
designed to reduce the interest rate  sensitivity of its financial assets to its
financial  liabilities.  The primary  elements  of this  strategy  include:  (i)
expanding  the  Company's  investment  growth  program in order to  enhance  net
interest  income;  (ii)  maintaining  the Company's  level of short-term  liquid
investments by funding loan  commitments and purchasing  longer-term  investment
securities;  (iii) emphasizing the retention of lower-cost  savings accounts and
other core deposits; (iv) pricing the Company's certificates of deposit and loan
products  nearer to the market  average  rate as  opposed to the upper  range of
market offered rates.

         The Company has continued its  investment  growth  program,  originally
initiated in the third  quarter of fiscal 1994,  in order to realize  additional
net interest income.  Under this strategy, a longer-term callable or noncallable
investment  security,  or  mortgage-backed  security,  is  purchased  and funded
through the use of short-term non-deposit liabilities, such as FHLB advances and
short-term  borrowings.  With  this  strategy,  the  Company  increases  its net
interest  income,  but also  faces the risk,  during  periods  of rising  market
interest  rates,  that it may experience a decline in net interest income if the
rate  paid  on its  various  borrowings  rises  above  the  rate  earned  on the
investment security purchased. In order to mitigate this exposure, the Board has
placed certain restrictions on the investment growth program, including: (i) the
average outstanding daily balance of total borrowings,  computed quarterly,  may
not exceed  $125.0  million;  (ii) suitable  investments  shall be restricted to
those meeting the credit quality criteria  outlined in the Company's  investment
policy;  (iii)  each  security  purchased  (excluding  commercial  paper)  shall
initially  yield a minimum of  seventy-five  basis points above the  incremental
rate  paid on  short-term  borrowings,  at the  time of  purchase;  and (iv) the
Company's  total borrowed  funds  position may not exceed $150 million.  In most
cases, the initial yield spread earned on investment security purchases exceeded
approximately one hundred to one hundred and forty basis points.
<PAGE>
         The Company has  continued to purchase  bonds with  optional  principal
redemption  features  ("callable  bonds")  in order to  capture  additional  net
interest income. Callable bonds generally provide investors with higher rates of
return than  noncallable  bonds  because the issuer has the option to redeem the
bonds before maturity.  While this strategy affords WVS the current  opportunity
to improve its net interest income, during a period of declining interest rates,
such as was  experienced  during the quarter  ended March 31, 1998,  the Company
would be exposed to the risk that the  investment  will be redeemed prior to its
final stated maturity.  In order to mitigate this risk, the Company has funded a
significant   portion  of  its  purchases  of  callable  bonds  with  short-term
borrowings.  Approximately  $15.5  million  of  callable  agency  bonds  with an
estimated  weighted  average rate of 7.5% were called  during the quarter  ended
March 31, 1998.  During the quarter ended March 31, 1998, the Company  purchased
approximately  $22.0  million of  callable  bonds with an  approximate  weighted
average yield to call and maturity of 6.4% and 7.3%, respectively.  The callable
agency bond purchases, totaling $22.0 million, are summarized by initial term to
call as follows:  $7.0 million  within three  months,  $5.0 million with greater
than three  months and within six months,  $9.0  million  with  greater than six
months and within  twelve  months,  and $1.0  million  with  greater than twelve
months and within twenty-four months.

         During the quarter  ended March 31,  1998,  the Company  increased  its
mortgage-backed  securities  holdings  by $11.7  million.  At March 31, 1998 the
Company held $47.2 million of  mortgage-backed  securities  with an  approximate
yield of 7.0%. The  mortgage-backed  securities  purchases were made in order to
earn a  higher  yield  with an  expected  average  life  profile  comparable  to
longer-term callable agency bonds.

         The Company also makes available for origination  residential  mortgage
loans with interest rates which adjust pursuant to a designated index,  although
customer acceptance has been somewhat limited in the Savings Bank's market area.
The  Company  will  continue  to offer  land  acquisition  and  development  and
shorter-term   construction  loans,  primarily  on  residential  properties,  to
partially increase its loan asset sensitivity.

         During the nine months  ended  March 31,  1998,  the  Company  borrowed
approximately  $53.4 million from the FHLB in the way of various borrowings with
a weighted  average rate of 5.40% and $38.6 million in other  borrowings  with a
weighted average rate of 5.62%. During the nine months ended March 31, 1998, the
Company  repaid  $44.3  million  of FHLB  advances  and $38.3  million  of other
borrowings.  Due to a decline in market  interest  rates  during the nine months
ended March 31, 1998, the Company  increased its use of FHLB Convertible  Select
advances.  FHLB  Convertible  Select  advances offer fixed rate funding during a
portion of the advance term.  After this initial  period,  the FHLB may elect to
convert the advance to variable  interest rate,  generally on a quarterly basis.
If the FHLB  elects to convert  the  advance,  the Company may repay the advance
without  penalty.  The Company  believes that FHLB  Convertible  Select advances
offer an attractive  funding  alternative  to short-term  fixed rate advances or
broker repurchase agreements under present market conditions.

         As of March 31, 1998, the  implementation  of these asset and liability
management  initiatives  resulted in the  following:  (i) an  aggregate of $53.2
million or 32.8% of the Company's net loan  portfolio  had  adjustable  interest
rates or maturities  of less than 12 months;  (ii) $18.2 million or 38.5% of the
Company's portfolio of mortgage-backed  securities (including CMOs) were secured
by  floating  rate  securities;  (iii)  $3.2  million  or 4.1% of the  Company's
investment  securities  portfolio had scheduled  maturities of one year or less;
and (iv) $75.0 million or 95.3% of the Company's investment securities portfolio
was comprised of callable bonds.
<PAGE>
         The effect of interest rate changes on a financial institution's assets
and liabilities may be analyzed by examining the extent to which such assets and
liabilities  are "interest rate  sensitive"  and by monitoring an  institution's
interest rate  sensitivity  "gap".  An asset or liability is said to be interest
rate sensitive within a specific time period if it will mature or reprice within
a given  time  period.  A gap is  considered  positive  when the  amount of rate
sensitive  assets  exceeds the amount of rate  sensitive  liabilities.  A gap is
considered  negative when the amount of interest sensitive  liabilities  exceeds
the amount of interest  sensitive  assets.  During a period of falling  interest
rates, a positive gap would tend to adversely affect net interest income,  while
a  negative  gap would tend to result in an  increase  in net  interest  income.
During a period of rising interest rates, a positive gap would tend to result in
an increase in net interest income, while a negative gap would tend to adversely
affect net interest income.

         The  Company's  one  year  cumulative  interest  rate  sensitivity  gap
amounted to a negative  28.0% of total assets at March 31, 1998 as compared to a
negative 13.3% at June 30, 1997, in each instance,  based on certain assumptions
by management  with respect to the repricing of certain assets and  liabilities.
At March 31, 1998, the Company's  interest-earning  assets maturing or repricing
within one year  totaled  $88.6  million  while the  Company's  interest-bearing
liabilities  maturing  or  repricing  within one year  totaled  $171.8  million,
providing  a  deficiency  of  interest-earning   assets  over   interest-bearing
liabilities of $83.2 million. At March 31, 1998, the percentage of the Company's
assets to liabilities maturing or repricing within one year was 51.5%.


RESULTS OF OPERATIONS


         General.  WVS reported net income of $874 thousand and $2.8 million for
the three and nine months  ended March 31,  1998.  Net income  decreased  by $40
thousand or 4.4% for the three months ended March 31, 1998 when  compared to the
same period in 1997.  The decrease was  primarily  the result of a $146 thousand
increase in employee salaries and benefits expense which was partially offset by
a $64 thousand  increase in net  interest  income,  a $20  thousand  increase in
non-interest  income and a $26  thousand  decrease  in income tax  expense.  Net
income  increased by $729  thousand or 35.1% for the nine months ended March 31,
1998 when  compared  to the same  period  in 1997.  The $729  thousand  or 35.1%
increase in net income was principally the result of a $690 thousand decrease in
non-interest  expense, a $180 thousand decrease in the provision for loan losses
and a $136 thousand increase in net interest income,  which was partially offset
by a $286 thousand increase in income tax expense.  The decrease in non-interest
expense for the nine months ended March 31, 1998 was primarily  attributable  to
one-time items in 1997, including a $1.1 million one-time charge to recapitalize
the Savings Association Insurance Fund ("SAIF"), which was partially offset by a
$487  thousand  increase in employee  compensation  expense.  The $136  thousand
increase in net  interest  income for the nine  months  ended March 31, 1998 was
chiefly   attributable  to  increases  in  interest  earned  on  investment  and
mortgage-backed  securities  and net loans  receivable of $356 thousand and $627
thousand,  respectively,  and a $55  thousand  decrease in  interest  expense on
deposits,  which was partially  offset by an $885 thousand  increase in interest
expense on Federal Home Loan Bank Advances and other borrowings.
<PAGE>
         Net Interest Income. The Company's net interest income increased by $64
thousand or 2.5% for the three months ended March 31, 1998 when  compared to the
same period in 1997. The increase resulted from a $294 thousand or 5.6% increase
in  interest  income  which  was  partially  offset by a $230  thousand  or 8.6%
increase in interest  expense.  For the nine months  ended March 31,  1998,  net
interest  income  increased by $136 thousand or 1.8%,  when compared to the same
period in 1997.  The increase  resulted  from a $965 million or 6.2% increase in
interest income which was partially offset by an $829 thousand or 10.4% increase
in interest expense.

         Interest  Income.  Interest on net loans  receivable  increased by $224
thousand or 7.3% for the three months ended March 31, 1998 when  compared to the
same  period in 1997.  The  increase  was  attributable  to an increase of $11.7
million in the average balance of net loans  receivable  outstanding,  which was
partially offset by a decrease in the weighted average yield earned on net loans
receivable  of 3 basis  points for the three  months  ended  March 31, 1998 when
compared to the same period in 1997. Interest on net loans receivable  increased
by $627  thousand or 6.8% for the nine months ended March 31, 1998 when compared
to the same period in 1997.  The increase was  attributable  to a $11.2  million
increase in the average balance of outstanding  loans which was partially offset
by a 4 basis point decrease in the weighted  average yield earned on outstanding
loans for the nine months  ended March 31,  1998.  The  increases in the average
loan balance outstanding for the three and nine months ended March 31, 1998 were
primarily  attributable  to  higher  levels of real  estate  and  consumer  loan
originations.

         Interest on  mortgage-backed  securities  decreased  by $20 thousand or
3.0% for the three months ended March 31, 1998 when  compared to the same period
in 1997.  The  decrease  was  attributable  to a $441  thousand  decrease in the
average balance of mortgage-backed  securities  outstanding and a 12 basis point
decrease in the weighted average yield earned on mortgage-backed  securities for
the three months ended March 31, 1998 when  compared to the same period in 1997.
Interest on mortgage-backed  securities  decreased $146 thousand or 7.1% for the
nine months ended March 31, 1998. The decrease was primarily  attributable  to a
$2.7  million  decrease in the  average  balance of  mortgage-backed  securities
outstanding and a 3 basis point decrease in the weighted average yield earned on
mortgage-backed  securities  for the nine  months  ended  March  31,  1998  when
compared to the same  period in 1997.  The  decrease  in the average  balance of
mortgage-backed securities outstanding was due to principal repayment during the
period. The decrease in the weighted average yield earned,  during both periods,
was  principally  attributable to higher levels of premium  amortization  due to
faster rates of principal repayment, when compared to the same period in 1997.

         Interest and dividend  income on  interest-bearing  deposits with other
institutions,   investment   securities   and  FHLB  Stock  ("other   investment
securities")  increased by $90 thousand or 6.1% for the three months ended March
31, 1998 when compared to the same period in 1997. The increase was attributable
to a $4.7 million increase in the average balance of other investment securities
outstanding,  which was  partially  offset by a 21 basis  point  decrease in the
weighted  average  yield  earned on other  investment  securities  for the three
months ended March 31, 1998 when  compared to the same period in 1997.  Interest
on other  investment  securities  increased  $484 thousand or 11.3% for the nine
months  ended  March 31,  1998 when  compared  to the same  period in 1997.  The
increase in interest income on other investment securities was attributable to a
$7.0  million  increase in the average  balance of other  investment  securities
outstanding  and a 68 basis point increase in the weighted  average yield earned
<PAGE>
on other  investment  securities  for the nine months  ended March 31, 1998 when
compared to the same period in 1997.  The  increases  in the average  balance of
other investment securities during both three and nine month periods ended March
31, 1998 was principally  attributable to purchases of commercial  paper,  which
were made in order to capitalize on seasonally high calendar year end commercial
paper rates and for liquidity management.

         Interest Expense. Interest expense on deposits and escrows decreased by
$51  thousand or 2.9% and  decreased  by $56  thousand or 1.1% for the three and
nine  months  ended  March 31,  1998,  respectively,  when  compared to the same
periods in 1997.  The  decrease in interest  expense on deposits and escrows was
principally  attributable  to a $3.7 million  decrease in the average balance of
interest-bearing  deposits and escrows for the three months ended March 31, 1998
when  compared to the same period in 1997.  For the nine months  ended March 31,
1998,  the decrease in interest  expense on deposits  and escrows was  primarily
attributable   to  a  $2.5   million   decrease  in  the   average   balance  of
interest-bearing  deposits and escrows which was partially  offset by a 10 basis
point increase in the average yield paid on deposits and escrows,  when compared
to the same period in 1997.

         Interest  expense on other  borrowings  increased by $281  thousand and
increased  by $885  thousand for the three and nine months ended March 31, 1998,
respectively, when compared to the same periods in 1997. The increase associated
with both periods is primarily  attributable to funding the Company's investment
growth program.

         Provision  for Loan Losses.  A provision  for loan losses is charged to
earnings  to  bring  the  total  allowance  to a level  considered  adequate  by
management  to  absorb   potential   losses  in  the   portfolio.   Management's
determination  of the adequacy of the allowance is based on an evaluation of the
portfolio,  past loan loss  experience,  current  economic  conditions,  volume,
growth and composition of the loan portfolio, and other relevant factors.

         For the three months ended March 31, 1998 and 1997, the Company made no
provision for loan losses. The Company's  provision for loan losses decreased by
$180  thousand for the nine months ended March 31,  1998,  when  compared to the
same  period in 1997.  The  decrease in  provision  for loan losses for the nine
months  ended  March 31,  1998 was  primarily  due to a recovery  of  previously
established  loan loss reserves  attributable to the payoff of a commercial loan
participation.  At March 31, 1998, the Company's total allowance for loan losses
amounted  to $1.9  million  or 1.2% of the  Company's  total loan  portfolio  as
compared to $2.0 million, or 1.3% at June 30, 1997.

         Non-Interest   Income.  Total  non-interest  income  increased  by  $20
thousand  and $9 thousand  for the three and nine months  ended March 31,  1998,
respectively,  when  compared  to the same  periods  in 1997.  The  increase  in
non-interest  income  for the three and nine  months  ended  March 31,  1998 was
primarily attributable to increased service charges on automated teller machines
and  transaction  accounts.  The  increase in  non-interest  income for the nine
months  ended  March  31,  1998 was  partially  offset by the  absence  of a $26
thousand gain from the sale of securities in 1997.

         Non-Interest   Expense.   Total  non-interest  expense  increased  $150
thousand or 13.3% and  decreased  $690  thousand or 15.7% for the three and nine
months ended March 31, 1998, respectively,  when compared to the same periods in
1997.
<PAGE>
         Federal deposit  insurance  premiums  decreased $2 thousand or 7.1% and
$1.2  million  or 95.6% for the  three and nine  months  ended  March 31,  1998,
respectively,  when  compared to the same periods in 1997.  The decrease for the
quarter ended March 31, 1998 was primarily  attributable to normal and recurring
levels of SAIF  premiums  based upon  deposit  size.  The  decrease for the nine
months  ended March 31, 1998 was  principally  attributable  to the absence of a
$1.1 million  one-time  charge to  recapitalize  the SAIF as required by federal
law.

         Compensation and employee  benefits expense  increased $146 thousand or
19.5% and  increased  $487 thousand or 23.4% for the three and nine months ended
March 31, 1998,  respectively,  when  compared to the same periods in 1997.  The
increase for the quarter ended March 31, 1998 was primarily  attributable  to an
$88 thousand  increase in ESOP  expense and a $50 thousand  increase in employee
compensation  expense. The increase for the nine months ended March 31, 1998 was
principally  attributable to a $280 thousand increase in ESOP expense and a $131
thousand increase in employee compensation expense. In accordance with generally
accepted  accounting  principles,  ESOP costs  totaling  $104  thousand and $305
thousand  were  added  back to the  additional  paid  in  capital  component  of
stockholders'  equity  during the quarter and nine months  ended March 31, 1998,
respectively.

         Income Tax  Expense.  Income tax expense  decreased  by $26 thousand or
4.6% and increased by $286 thousand or 21.1% for the three and nine months ended
March 31, 1998,  respectively,  when  compared to the same periods in 1997.  The
change in income tax expense,  for both  periods,  was  attributable  to varying
levels of taxable income during the three and nine months ended March 31, 1998.


LIQUIDITY AND CAPITAL RESOURCES


         Net cash provided by operating  activities  totaled $4.2 million during
the nine months ended March 31, 1998. Net cash provided by operating  activities
was primarily  comprised of $2.8 million of net income, a $776 thousand increase
in ESOP,  RRP and  deferred and unearned  compensation  amortization  and a $411
thousand decrease in accrued and deferred income taxes.

         Funds used for  investing  activities  totaled $4.6 million  during the
nine months  ended March 31,  1998.  The primary  uses of funds  during the nine
months ended March 31, 1998 consisted of $101.8 million used for the purchase of
investment  and  mortgage-backed  securities  and a $3.9 million net increase in
loans receivable, which were partially offset by the receipt of $99.4 million of
proceeds  from the  repayment of principal on  investments  and  mortgage-backed
securities.

         Funds used for financing  activities  totaled $1.7 million for the nine
months  ended March 31,  1998.  Primary  financial  uses  include a $5.8 million
decrease in deposits,  a $1.0 million  decrease in advance payments by borrowers
for taxes and insurance, and $4.8 million of cash dividends disbursed, which was
partially  offset  by a  $9.3  million  increase  in  FHLB  advances  and  other
borrowings.  Financial  institutions  generally,  including  the  Company,  have
experienced a certain degree of depositor  disintermediation to other investment
alternatives.   Management   believes  that  the  degree  of   disintermediation
experienced by the Company has not had a material  impact on overall  liquidity.
As of March 31, 1998,  $70.3  million or 42.6% of the Company's  total  deposits
consisted  of core  deposits.  Management  has  determined  that it currently is
maintaining  adequate  liquidity  and  continues to match  funding  sources with
lending and investment opportunities.
<PAGE>
         The  Company's  primary  sources of funds are  deposits,  amortization,
prepayments  and maturities of existing  loans,  mortgage-backed  securities and
investment  securities,  funds from operations,  and funds obtained through FHLB
borrowings.  At March 31, 1998, the total approved loan commitments  outstanding
amounted to $1.7  million.  At the same date  commitments  under unused lines of
credit amounted to $7.2 million and the unadvanced portion of construction loans
approximated  $13.1 million.  Certificates of deposit scheduled to mature in one
year or less at March 31, 1998 totaled $59.9 million. Management believes that a
significant portion of maturing deposits will remain with the Company.

         Historically,  the Company used its sources of funds  primarily to meet
its  ongoing  commitments  to pay  maturing  savings  certificates  and  savings
withdrawals,  fund loan  commitments  and  maintain a  substantial  portfolio of
investment  securities.  The Company has been able to generate  sufficient  cash
through the retail deposit market,  its traditional  funding source, and through
FHLB  advances and other  borrowings,  to provide the cash utilized in investing
activities.  The Company has established a $15.0 million line of credit with the
FHLB,  which is  scheduled to mature on March 25, 1999 and is subject to various
conditions,  including the pledging and delivery of acceptable  collateral.  The
primary  purpose  of the  line of  credit  is to serve  as a  back-up  liquidity
facility  for the Company,  however,  the Company does from time to time utilize
the line of credit to purchase investment securities and fund other commitments.
In addition, the Company has access to the Federal Reserve Bank discount window.
Management  believes that the Company currently has adequate liquidity available
to respond to liquidity demands.

         On April 28,  1998 the  Company's  Board of  Directors  declared a cash
dividend of $0.30 per share,  payable May 22, 1998 to  shareholders of record at
the  close  of  business  on  May  11,  1998.   Dividends  will  be  subject  to
determination and declaration by the Board of Directors, which take into account
the  Company's  financial  condition,  statutory  and  regulatory  restrictions,
general  economic  conditions and other factors.  There can be no assurance that
dividends  will in fact be paid on the  Common  Stock  or that,  if  paid,  such
dividends will not be reduced or eliminated in future periods.

         As of March 31, 1998,  WVS  Financial  Corp.  exceeded  all  regulatory
capital requirements and maintained Tier I and total risk-based capital equal to
$32.6  million  or 22.2% and $34.4  million  or  23.5%,  respectively,  of total
risk-weighted  assets,  and Tier I leverage capital of $32.6 million or 11.1% of
average quarterly assets.

         Nonperforming assets consist of nonaccrual loans and real estate owned.
A loan is placed on nonaccrual  status when, in the judgment of management,  the
probability of collection of interest is deemed  insufficient to warrant further
accrual.  When a loan is placed on  nonaccrual  status,  previously  accrued but
uncollected interest is deducted from interest income. The Company normally does
not accrue interest on loans past due 90 days or more, however,  interest may be
accrued if management believes that it will collect on the loan.

         The   Company's   nonperforming   assets  at  March  31,  1998  totaled
approximately $600 thousand or 0.2% of total assets as compared to $274 thousand
or 0.1% of total assets as of June 30, 1997.  Nonperforming  assets at March 31,
1998 consisted of $480 thousand in commercial real estate loans, $52 thousand in
single-family  loans,  and $68  thousand in  consumer  loans.  Approximately  $9
thousand of additional  interest income would have been recorded during the nine
months ended March 31, 1998, if the Company's  nonaccrual and restructured loans
had been current in accordance  with their  original loan terms and  outstanding
throughout the nine months ended March 31, 1998.
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's  primary  market risk exposure is interest rate risk and,
to a lesser  extent,  liquidity  risk.  All of the  Company's  transactions  are
denominated in U.S.  dollars with no specific  foreign  exchange  exposure.  The
Savings  Bank has no  agricultural  loan assets and  therefore  would not have a
specific  exposure to changes in commodity  prices.  Any impacts that changes in
foreign  exchange  rates and commodity  prices would have on interest  rates are
assumed to be exogenous and will be analyzed on an ex post basis.

         Interest-rate risk ("IRR") is the exposure of a banking  organization's
financial condition to adverse movements in interest rates.  Accepting this risk
can be an important  source of  profitability  and  shareholder  value,  however
excessive levels of IRR can pose a significant  threat to the Company's earnings
and capital base.  Accordingly,  effective risk management that maintains IRR at
prudent levels is essential to the Company's safety and soundness.

         Evaluating  a financial  institution's  exposure to changes in interest
rates includes  assessing  both the adequacy of the  management  process used to
control  IRR  and  the  organization's  quantitative  level  of  exposure.  When
assessing  the  IRR  management  process,  the  Company  seeks  to  ensure  that
appropriate  policies,  procedures,  management information systems and internal
controls are in place to maintain  IRR at prudent  levels with  consistency  and
continuity.  Evaluating  the  quantitative  level of IRR  exposure  requires the
Company  to assess  the  existing  and  potential  future  effects of changes in
interest  rates  on its  consolidated  financial  condition,  including  capital
adequacy, earnings, liquidity, and, where appropriate, asset quality.

         The Federal Reserve Board,  together with the Office of the Comptroller
of the Currency and the Federal Deposit Insurance  Corporation,  adopted a Joint
Agency Policy  Statement on  Interest-Rate  Risk,  effective  June 26, 1996. The
policy statement  provides  guidance to examiners and bankers on sound practices
for  managing  interest  rate  risk,  which  will  form the  basis  for  ongoing
evaluation  of the  adequacy of  interest-rate  risk  management  at  supervised
institutions.  The policy statement also outlines  fundamental elements of sound
management  that have been  identified  in prior  Federal  Reserve  guidance and
discusses  the   importance  of  these  elements  in  the  context  of  managing
interest-rate  risk.  Specifically,  the guidance emphasizes the need for active
board  of  director  and  senior   management   oversight  and  a  comprehensive
risk-management  process that  effectively  identifies,  measures,  and controls
interest-rate  risk.  Financial  institutions derive their income primarily from
the excess of interest  collected  over interest  paid. The rates of interest an
institution  earns on its  assets  and  owes on its  liabilities  generally  are
established  contractually  for a period of time.  Since market  interest  rates
change over time, an  institution is exposed to lower profit margins (or losses)
if it  cannot  adapt to  interest-rate  changes.  For  example,  assume  that an
institution's assets carry intermediate- or long-term fixed rates and that those
assets were funded with short-term liabilities. If market interest rates rise by
the time the  short-term  liabilities  must be  refinanced,  the increase in the
institution's interest expense on its liabilities may not be sufficiently offset
if  assets  continue  to earn at the  long-term  fixed  rates.  Accordingly,  an
institution's  profits could decrease on existing assets because the institution
will either have lower net interest income or, possibly,  net interest  expense.
Similar  risks  exist when  assets  are  subject  to  contractual  interest-rate
ceilings,  or rate  sensitive  assets  are  funded  by  longer-term,  fixed-rate
liabilities in a decreasing-rate environment.
<PAGE>
         Several  techniques  might  be  used  by  an  institution  to  minimize
interest-rate risk. One approach used by the Company is to periodically  analyze
its assets and  liabilities and make future  financing and investment  decisions
based on payment streams, interest rates, contractual maturities,  and estimated
sensitivity  to actual or  potential  changes  in market  interest  rates.  Such
activities fall under the broad definition of  asset/liability  management.  The
Company's primary asset/liability management technique is the measurement of the
Company's  asset/liability  gap-that  is, the  difference  between the cash flow
amounts of interest-sensitive assets and liabilities that will be refinanced (or
repriced) during a given period. For example, if the asset amount to be repriced
exceeds the  corresponding  liability amount for a certain day, month,  year, or
longer period,  the institution is in an asset-sensitive  gap position.  In this
situation,  net interest  income would increase if market interest rates rose or
decrease if market interest rates fell. If, alternatively, more liabilities than
assets will  reprice,  the  institution  is in a  liability-sensitive  position.
Accordingly, net interest income would decline when rates rose and increase when
rates fell.  Also, these examples assume that  interest-rate  changes for assets
and liabilities are of the same magnitude,  whereas actual interest-rate changes
generally differ in magnitude for assets and liabilities.

         An  institution  could  also  manage  interest-rate  risk  by:  selling
existing assets or repaying certain liabilities;  matching repricing periods for
new assets and  liabilities  for example,  by  shortening  terms of new loans or
investments;  hedging existing assets, liabilities, or anticipated transactions.
An institution might also invest in more complex financial  instruments intended
to hedge or otherwise change  interest-rate risk.  Interest-rate  swaps, futures
contracts,  options on futures, and other such derivative financial  instruments
often are used for this  purpose.  Because  these  instruments  are sensitive to
interest-rate  changes,  they  require  management  expertise  to be  effective.
Financial  institutions  are also  subject to  prepayment  risk in falling  rate
environments.  For example,  mortgage  loans and other  financial  assets may be
prepaid by a debtor so that the debtor may refund its  obligations at new, lower
rates.  The Company has not purchased  derivative  financial  instruments in the
past and does not  presently  intend to purchase  such  instruments  in the near
future.  Prepayments  of assets  carrying  higher  rates  reduce  the  Company's
interest  income and overall asset yields.  A large portion of an  institution's
liabilities may be short term or due on demand,  while most of its assets may be
invested in long-term  loans or investments.  Accordingly,  the Company seeks to
have in place  sources of cash to meet  short-term  demands.  These funds can be
obtained by  increasing  deposits,  borrowing,  or selling  assets.  Also,  FHLB
advances and wholesale borrowings have become increasingly  important sources of
liquidity for the Company.

         The following table provides  information about the Company's financial
instruments that are sensitive to changes in interest rates as of March 31, 1998
based on the information  and  assumptions  set forth in the notes.  The Company
believes that the  assumptions  utilized,  which are based on  statistical  data
provided  by a federal  regulatory  agency in the  Company's  market  area,  are
reasonable.  The Company had no  derivative  financial  instruments,  or trading
portfolio,  as of March 31, 1998.  The expected  maturity  date values for loans
receivable,   mortgage-backed   securities,   and  investment   securities  were
calculated  by  adjusting  the  instrument's   contractual   maturity  date  for
expectations  of  prepayments,  as set forth in the notes.  Similarly,  expected
maturity date values for  interest-bearing  core deposits were calculated  based
upon estimates of the period over which the deposits would be outstanding as set
forth in the notes.  With respect to the Company's  adjustable rate instruments,
expected  maturity  date values  were  measured by  adjusting  the  instrument's
<PAGE>
contractual  maturity date for expectations of prepayments,  as set forth in the
notes. From a risk management  perspective,  however,  the Company believes that
repricing  dates, as opposed to expected  maturity dates, may be a more relevant
metric in analyzing the value of such instruments.  Similarly, substantially all
of the  Company's  investment  securities  portfolio  is  comprised  of callable
government agency  securities.  Company borrowings were tabulated by contractual
maturity dates and without regard to any conversion or repricing dates.
<TABLE>
<CAPTION>
                                                     EXPECTED MATURITY DATE-QUARTER ENDED MARCH 31,
                                        ---------------------------------------------------------------------
                                                                                                       There-                 Fair
                                          1999        2000        2001        2002         2003        after       Total      Value
                                        --------    --------    --------    --------     --------    --------    --------   --------
<S>                                     <C>        <C>           <C>        <C>          <C>         <C>         <C>        <C>
ON-BALANCE SHEET
 FINANCIAL INSTRUMENTS
Interest-earning assets:
  Loans receivable (1)(2)(3)(4)
  Fixed rate .........................  $ 27,325    $ 16,818    $ 12,636    $ 10,802     $  8,162    $ 42,508    $118,251   $121,612
    Average interest rate ............      8.36%       8.02%       7.91%       7.86%        7.78%       7.53%

  Adjustable rate ....................     9,061       7,678       6,496       5,483        4,619      12,519      45,856     48,989
    Average interest rate(5) .........      8.15%       8.15%       8.16%       8.17%        8.18%       7.88%
  Mortgage-backed securities
  Fixed rate .........................       106         310        --           130        1,628      26,799      28,973     29,150
    Average interest rate ............      6.42%       6.37%       0.00%       8.04%        5.96%       7.17%

  Adjustable rate ....................      --          --          --          --           --        18,115      18,115     18,591
    Average interest rate(6) .........      0.00%       0.00%       0.00%       0.00%        0.00%       6.91%

  Investments(7) .....................     3,154        --          --          --           --        79,910      83,064     83,434
    Average interest rate ............      6.78%       0.00%       0.00%       0.00%        0.00%       7.42%

  Interest-bearing deposits ..........      --          --          --          --           --          --          --         --
    Average interest rate ............      0.00%       0.00%       0.00%       0.00%        0.00%       0.00%
                                        --------    --------    --------    --------     --------    --------    --------   --------
        Total ........................  $ 39,646    $ 24,806    $ 19,132    $ 16,415     $ 14,409    $179,851    $294,259   $301,776


Interest-bearing liabilities:
  Interest-bearing deposits
   and escrows(8)(9)(10) .............  $ 87,771    $ 21,980    $ 21,980    $  7,090     $  7,090    $ 21,670    $167,581   $167,795
    Average interest rate ............      4.53%       4.25%       4.25%       3.49%        3.49%       2.33%

  Borrowings .........................     9,577       8,000        --        35,000       16,500      24,888      93,965     93,415
    Average interest rate ............      5.76%       5.89%       0.00%       5.69%        5.89%       5.08%
                                        --------    --------    --------    --------     --------    --------    --------   --------
        Total ........................  $ 97,348    $ 29,980    $ 21,980    $ 42,090     $ 23,590    $ 46,588    $261,546   $261,210

</TABLE>
<PAGE>
(1)  Net of  undisbursed  loan  proceeds and does not include net deferred  loan
     fees or the allowance for loan losses.
(2)  For  single-family  residential  loans,  assumes  annual  amortization  and
     prepayment rate at 15% for adjustable rate loans,  and 10% to 37% for fixed
     rate loans. For  multi-family  residential  loans and other loans,  assumes
     amortization and prepayment rate of 12%.
(3)  For second mortgage loans,  assumes annual amortization and prepayment rate
     of 18%.
(4)  Consumer loans assumes amortization and prepayment rate of 13%.
(5)  Substantially  all of the  Company's  adjustable  rate loans  reprice on an
     annual basis based upon changes in the one-year  constant maturity treasury
     index with various market based annual and lifetime  interest rate caps and
     floors.
(6)  Substantially  all  of  the  Company's   adjustable  rate   mortgage-backed
     securities  reprice on a monthly  basis based upon changes in the one month
     LIBOR index with various lifetime caps and floors.
(7)  Totals  include the  Company's  investment in Federal Home Loan Bank stock.
     Amounts  adjusted  to  reflect  called   investment   securities   totaling
     approximately $1,145.
(8)  For regular savings accounts, assumes an annual decay rate of 17% for three
     years or less,  16% for more than three through five years and 14% for more
     than five years.
(9)  For NOW accounts, assumes an annual decay rate of 37% for one year or less,
     32% for more than one  through  three  years  and 17% for more  than  three
     years.
(10) For money market deposit accounts,  assumes an annual decay rate of 79% for
     one year or less and 31% for more than one year.
 

         The Company's  loans  receivable  increased from $160.7 million at June
30, 1997 to $164.1  million at March 31,  1998.  The $3.4  million  increase was
primarily  funded  through cash  provided by  operations  during the nine months
ended March 31, 1998. The Savings Bank's  interest-bearing  deposits and escrows
decreased  from $174.4  million at June 30, 1997 to $167.6  million at March 31,
1998.  The $6.8 million or 3.9%  decrease was primarily  attributable  to a $5.0
million  decrease in time deposits,  a $1.0 million  decrease in escrows,  and a
$700 thousand decrease in non-interest bearing deposit accounts.
<PAGE>
         The table below provides  information  about the Company's  anticipated
transactions comprised of firm loan commitments and other commitments, including
undisbursed  letters  and  lines  of  credit.  The  Company  used no  derivative
financial  instruments to hedge such  anticipated  transactions  as of March 31,
1998.



                            Anticipated Transactions
                            ------------------------



Undisbursed construction and
    land development loans
      Fixed rate                                         $5,567
                                                           8.83%

      Adjustable rate                                     7,534 
                                                           9.44%
Undisbursed lines of credit
      Adjustable rate                                     7,249
                                                           8.42%
Loan origination commitments
      Fixed rate                                          1,338
                                                           7.97%

      Adjustable rate                                       343
                                                           7.44%
Letters of credit
      Adjustable rate                                        82
                                                          11.50%
                                                        -------
                                                        $22,113


         The  Company  believes  that  there  were no  material  changes  to the
Company's anticipated transactions during the quarter ended March 31, 1998.
<PAGE>
PART II - OTHER INFORMATION



ITEM 1.           Legal Proceedings

                  See  discussion  contained  in Note 3 of  Notes  to  Unaudited
                  Consolidated Financial Statements.

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

                  On April 28, 1998, the Company's Board of Directors declared a
                  2 for 1 stock split  payable May 22, 1998 to  shareholders  of
                  record at the close of business on May 11, 1998.

ITEM 6.           Exhibits and Reports on Form 8-K

                  (a)      The following  exhibit is filed as  part of this form
                           10-Q, and this list includes the Exhibit Index.
                           

                Number                  Description                  
                ------                  -----------                 
 
                  11              Statement re computation of per     
                                  share earnings                      
                                                                      
                                                                      
                                                                      
                  27              Financial data schedule             
                                                                              
                  (b)       Not applicable.                  
                                                                              
<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.



                                            WVS FINANCIAL CORP.



May 8, 1998                                 BY: /s/Robert C. Sinewe
-----------                                     -------------------
Date                                            Robert C. Sinewe
                                                President and Chief Executive
                                                Officer



May 8, 1998                                 BY: /s/David J. Bursic
-----------                                     ------------------
Date                                            David J. Bursic
                                                Senior Vice President, Treasurer
                                                and Chief Financial Officer