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 September 30, 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 November 6, 1998:  3,558,720  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 September 30, 1998 and June 30, 1998
                           (Unaudited)                               

                           Consolidated Statements of Income for the
                           Three Months Ended September 30, 1998
                           and 1997 (Unaudited)    

                           Consolidated Statements of Cash Flows
                           for the Three Months Ended September 30,
                           1998 and 1997 (Unaudited)   

                           Consolidated Statements of Changes in
                           Stockholders' Equity for the Three Months
                           Ended September 30, 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 Months Ended September 30, 1998    

Item 3.           Quantitative and Qualitative Disclosures About
                  Market Risk for the Three Months Ended
                  September 30, 1998            

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)


                                                                  September 30,     June 30, 
                                                                      1998            1998 
                                                                   ---------       ---------
<S>                                                                <C>             <C>      
          Assets
Cash and due from banks                                            $     684       $     699
Interest-earning demand deposits                                         907           1,807
Investment securities available-for-sale
   (amortized cost of $9,642 and $17,481)                              9,625          17,519
Investment securities held-to-maturity
   (market value of $88,248 and $63,996)                              87,716          63,749
Mortgage-backed securities available-for-sale
   (amortized cost of $15,750 and $18,842)                            16,046          19,041
Mortgage-backed securities held-to-maturity
   (market value of $32,820 and $27,777)                              32,281          27,273
Federal Home Loan Bank stock, at cost                                  5,099           4,675
Net loans receivable                                                 153,981         157,737
Accrued interest receivable                                            2,961           2,414
Real estate owned                                                       --              --
Premises and equipment                                                 1,150           1,179
Deferred taxes and other assets                                        1,059             961
                                                                   ---------       ---------
          TOTAL ASSETS                                             $ 311,509       $ 297,054
                                                                   =========       =========

          Liabilities and Stockholders' Equity
Liabilities:
Savings Deposits:
   Non-interest-bearing accounts                                   $   7,467       $   7,528
   NOW accounts                                                       14,609          15,347
   Savings accounts                                                   36,811          37,966
   Money market accounts                                              11,356          13,259
   Certificates of deposit                                            94,466          93,570
                                                                   ---------       ---------
   Total savings deposits                                            164,709         167,670
Federal Home Loan Bank advances                                       91,500          88,857
Other borrowings                                                      17,654             889
Advance payments by borrowers for taxes and insurance                    955           3,312
Accrued interest payable                                               2,134           1,874
Other liabilities                                                      1,568           1,474
                                                                   ---------       ---------
   TOTAL LIABILITIES                                                 278,520         264,076
                                                                   ---------       ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                              WVS FINANCIAL CORP. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                         (UNAUDITED)
                                        (in thousands)
                                         (continued)


                                                                  September 30,     June 30, 
                                                                      1998            1998 
                                                                   ---------       ---------
<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;
   3,663,120 and 3,617,120 shares issued and outstanding                  37              36
Additional paid-in capital                                            18,658          18,386
Retained earnings, substantially restricted                           15,557          15,143
Treasury stock: 48,400 shares at cost                                   (749)           --
Unallocated shares - Recognition and Retention Plans                    (406)           (432)
Unallocated shares - Employee Stock Ownership Plan                      (292)           (312)
                                                                   ---------       ---------
                                                                      32,805          32,821
Unrealized gain on available-for-sale securities                         184             157
                                                                   ---------       ---------
   TOTAL STOCKHOLDERS' EQUITY                                         32,989          32,978
                                                                   ---------       ---------
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $ 311,509       $ 297,054
                                                                   =========       =========
                                                                                                    
</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
                                                                       September 30,
                                                                --------------------------
                                                                   1998            1997
                                                                ----------      ----------
<S>                                                             <C>             <C>       
INTEREST AND DIVIDEND INCOME:
     Loans                                                      $    3,189      $    3,266
     Investment securities                                           1,481           1,568
     Mortgage-backed securities                                        788             641
     Interest-earning deposits with other institutions                  15              14
     Federal Home Loan Bank stock                                       81              61
                                                                ----------      ----------
          Total interest and dividend income                         5,554           5,550
                                                                ----------      ----------

INTEREST EXPENSE:
     Deposits                                                        1,689           1,784
     Borrowings                                                      1,342           1,178
     Advance payments by borrowers for taxes and insurance               7               7
                                                                ----------      ----------
          Total interest expense                                     3,038           2,969
                                                                ----------      ----------

NET INTEREST INCOME                                                  2,516           2,581
PROVISION FOR LOAN LOSSES                                             --              --
                                                                ----------      ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                  2,516           2,581
                                                                ----------      ----------

NON-INTEREST INCOME:
     Service charges on deposits                                        61              52
     Investment securities gains                                      --              --
     Other                                                              41              38
                                                                ----------      ----------
          Total non-interest income                                    102              90
                                                                ----------      ----------

NON-INTEREST EXPENSE:
     Salaries and employee benefits                                    691             757
     Occupancy and equipment                                            94             102
     Deposit insurance premium                                          26              27
     Data processing                                                    46              43
     Correspondent bank service charges                                 29              31
     Other                                                             175             166
                                                                ----------      ----------
          Total non-interest expense                                 1,061           1,126
                                                                ----------      ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                       WVS FINANCIAL CORP. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                                 (in thousands)
                                   (continued)
                                                                    Three Months Ended
                                                                       September 30,
                                                                --------------------------
                                                                   1998            1997
                                                                ----------      ----------
<S>                                                             <C>             <C>       
INCOME BEFORE INCOME TAXES                                           1,557           1,545
INCOME TAXES                                                           607             610
                                                                ----------      ----------

NET INCOME                                                      $      950      $      935
                                                                ==========      ==========

EARNINGS PER SHARE:
     Basic                                                      $     0.26      $     0.27
     Diluted                                                    $     0.26      $     0.26

AVERAGE SHARES OUTSTANDING:
     Basic                                                       3,596,067       3,407,641
     Diluted                                                     3,627,719       3,531,472

</TABLE>
                 See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                               WVS FINANCIAL CORP. AND SUBSIDIARY
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (UNAUDITED)
                                         (in thousands)
                                                                          Three Months Ended
                                                                             September 30,
                                                                       -----------------------
                                                                         1998           1997
                                                                       --------       --------

<S>                                                                    <C>            <C>     
OPERATING ACTIVITIES
Net income                                                             $    950       $    935
Adjustments to reconcile net income to cash provided by operating
       activities:
   Depreciation and amortization, net                                        29             33
   Amortization of discounts, premiums and deferred loan fees              (161)            11
   Amortization of ESOP, RRP and deferred and unearned
      compensation                                                           88            161
   (Increase) decrease in accrued interest receivable                      (547)           121
   Increase in accrued interest payable                                     260            364
   Decrease in accrued and deferred taxes                                    36             94
   Other, net                                                               (43)           (42)
                                                                       --------       --------
      Net cash provided by operating activities                             612          1,677
                                                                       --------       --------

INVESTING ACTIVITIES
Available-for-sale:
   Purchases of investments and mortgage-backed securities              (14,136)        (2,838)
   Proceeds from repayments of investments and mortgage-backed
       securities                                                        25,229          1,037
Held-to-maturity:
   Purchases of investments and mortgage-backed securities              (54,094)       (15,571)
   Proceeds from repayments of investments and mortgage-backed
       securities                                                        25,062         31,088
Decrease (increase) in net loans receivable                               3,813         (2,377)
Sale of real estate owned                                                  --             --
(Increase) decrease in FHLB stock                                          (424)           255
Purchases of premises and equipment                                        --               (1)
                                                                       --------       --------
      Net cash (used for) provided by investing activities              (14,550)        11,593
                                                                       --------       --------

</TABLE>
          See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                            WVS FINANCIAL CORP. AND SUBSIDIARY
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (UNAUDITED)
                                      (in thousands)
                                                                   Three Months Ended
                                                                      September 30,
                                                                 -----------------------
                                                                   1998           1997
                                                                 --------       --------
<S>                                                                <C>            <C>    
FINANCING ACTIVITIES
Net decrease in transaction and passbook accounts                  (3,857)        (3,552)
Net increase (decrease) in certificates of deposit                    896         (1,871)
Net increase (decrease) in FHLB borrowings                          2,643         (9,025)
Net increase in other borrowings                                   16,764          2,998
Net decrease in advance payments by borrowers for taxes and
   insurance                                                       (2,356)        (2,425)
Net proceeds from issuance of common stock                            230              9
Funds used for purchase of treasury stock                            (749)          --
Cash dividends paid                                                  (548)          (329)
                                                                 --------       --------
      Net cash provided by (used for) financing activities         13,023        (14,195)
                                                                 --------       --------

      Decrease in cash and cash equivalents                          (915)          (925)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD                2,506          2,571
                                                                 --------       --------

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD                   $  1,591       $  1,646
                                                                 ========       ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

   Cash paid during the period for:

      Interest on deposits, escrows and borrowings               $  2,778       $  2,605

      Income taxes                                                    585            625


</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)

                                                                                                    Accum.
                                                                                     Unallocated    Other     Retained
                                               Additional               Unallocated     Shares     Compre-    Earnings- 
                                  Common        Paid-in      Treasury   Shares Held      Held      hensive   Substantially 
                                   Stock        Capital       Stock       by ESOP       by RRP     Income     Restricted      Total
                                  --------     --------     --------    --------     --------     --------    --------     --------
<S>                               <C>          <C>          <C>         <C>          <C>          <C>         <C>          <C>     
Balance at June 30, 1998          $     36     $ 18,386     $   --      $   (312)    $   (432)    $    157    $ 15,143     $ 32,978

Comprehensive income:
  Net income                                                                                                       950          950
  Other comprehensive
    income:
     Change in unrealized
       holding gains on
       securities net of income                                                                         27                       27
       tax of $14                                                                                                          --------

Comprehensive income                                                                                                            977

Purchase of shares for
treasury stock                                                  (749)                                                          (749)

Release of earned
Employee Stock Ownership
Plan (ESOP) shares                                   43                       20                                                 63

Accrued compensation
expense for Recognition and
Retention Plans (RRP)                                                                      26                                    26

Exercise of Stock Options                1          229                                                                         230

Cash dividends declared
($0.15 per share)                                                                                                 (536)        (536)
                                  --------     --------     --------    --------     --------     --------    --------     --------

Balance at September 30, 1998     $     37     $ 18,658     $   (749)   $   (292)    $   (406)    $    184    $ 15,557     $ 32,989
                                  ========     ========     ========    ========     ========     ========    ========     ========

</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 months  ended  September  30,  1998,  are not
         necessarily  indicative  of the results  which may be expected  for the
         entire fiscal year.


2.       EARNINGS PER SHARE

         The  following  table sets forth the  computation  of basic and diluted
         earnings per share.
<TABLE>
<CAPTION>
                                                                       Three Months Ended September 30,
                                                                             1998            1997
                                                                         -----------     -----------
<S>                                                                        <C>             <C>      
Weighted average common shares outstanding                                 3,657,120       3,495,451

Average unearned ESOP shares                                                 (61,053)        (87,810)
                                                                         -----------     -----------

Weighted average common shares and common stock equivalents used to
calculate basic earnings per share                                         3,596,067       3,407,641


Additional common stock equivalents (stock options) used to calculate
diluted earnings per share                                                    31,652         123,831
                                                                         -----------     -----------

Weighted average common shares and common stock equivalents used to
calculate diluted earnings per share                                       3,627,719       3,531,472
                                                                         ===========     ===========
Net income                                                               $   950,122     $   934,692
                                                                         ===========     ===========

Earnings per share:
   Basic                                                                 $      0.26     $      0.27
   Diluted                                                               $      0.26     $      0.26
</TABLE>
<PAGE>
3.       REPURCHASE OF COMMON STOCK

         On July 28, 1998,  the Board of Directors  authorized the repurchase of
         up to 183,156 shares, or approximately  five percent,  of the Company's
         outstanding  common  stock  during the next twelve  months.  During the
         quarter ended  September  30, 1998,  48,400 shares of common stock were
         repurchased.  The repurchased shares will be held in treasury stock and
         may be reserved for issuance  pursuant to the  Company's  stock benefit
         plans.

4.       LITIGATION

         The Company is  involved  with  various  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.

5.       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.

         In June 1998, the Financial Accounting Standards Board issued Statement
         of Financial  Accounting  Standards No. 133, "Accounting for Derivative
         Instruments and Hedging Activities".  The statement provides accounting
         and reporting standards for derivative  instruments,  including certain
         derivative  instruments  embedded in other contracts,  by requiring the
         recognition of those items as assets or liabilities in the statement of
         financial  position,   recorded  at  fair  value.  Statement  No.  133,
         precludes a held-to-maturity security from being designated as a hedged
         item, however, at the date of initial application of this statement, an
         entity is permitted to transfer any held-to-maturity  security into the
         available-for-sale  or trading categories.  The unrealized holding gain
         or loss on such  transferred  securities  shall be reported  consistent
         with the  requirements  of Statement No. 115,  "Accounting  for Certain
         Investments in Debt and Equity Securities". Such transfers do not raise
         an issue  regarding an entity's intent to hold other debt securities to
         maturity in the future.  This statement  applies  prospectively for all
         fiscal  quarters of all years  beginning  after June 15, 1999.  Earlier
         adoption is  permitted  for any fiscal  quarter  that begins  after the
         issue date of this statement.
<PAGE>
                       WVS FINANCIAL CORP. AND SUBSIDIARY

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998




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 September 30,1998.

         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  expense  on  interest-bearing  liabilities,  which
consist primarily of deposits.  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.

         The  Company's   strategy   focuses  on  traditional   thrift  lending,
maintaining asset quality and increasing core earnings.

FINANCIAL CONDITION


         The Company's  assets  totaled  $311.5 million at September 30, 1998 as
compared to $297.1 million at June 30, 1998. The $14.4 million or 4.87% increase
in total assets was primarily  comprised of a $18.5 million or 14.0% increase in
investment  and  mortgage-backed  securities,  including  Federal Home Loan Bank
("FHLB") stock, which was partially offset by a $3.8 million or 2.4% decrease in
net loans receivable.

         The Company's  total  liabilities  increased  $14.4 million or 5.47% to
$287.5 million as of September 30, 1998 from $264.1 million as of June 30, 1998.
The $14.4 million  increase in total  liabilities  was primarily  comprised of a
$19.4  million or 21.6%  increase in Federal  Home Loan Bank  advances and other
borrowings  which was  partially  offset by a $3.0  million or 1.8%  decrease in
deposits and a $2.4 million or 71.2% decrease in escrow deposits.
<PAGE>
         Total  stockholders'  equity  remained  essentially  unchanged at $33.0
million as of  September  30, 1998 as  compared to $33.0  million as of June 30,
1998.  Capital  expenditures for the Company's stock repurchase program and cash
dividends  totaled $749 thousand and $536 thousand,  respectively,  which offset
Company comprehensive income and stock option proceeds of $977 thousand and $230
thousand, respectively, for the quarter ended September 30, 1998.

          ASSET AND  LIABILITY  MANAGEMENT.  The  Company  continued  a strategy
designed to better match the interest rate  sensitivity of its financial  assets
to its financial liabilities. The primary elements of this strategy include: (1)
expanding  the  Company's  investment  growth  program in order to  enhance  net
interest  income;  (2)  maintaining  the Company's  level of  short-term  liquid
investments by funding loan  commitments and purchasing  longer-term  investment
securities;  (3)  emphasizing the retention of lower-cost  savings  accounts and
other core deposits;  and (4) 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: (1) the
average outstanding daily balance of total borrowings,  computed quarterly,  may
not exceed  approximately  $125.0  million;  (2) suitable  investments  shall be
restricted  to  those  meeting  the  credit  quality  criteria  outlined  in the
Company's investment policy; (3) each security purchased 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 (4) the  Company's  total
borrowed  funds  position  may not exceed  $150.0  million.  In most cases,  the
initial  yield  spread  earned  on  investment   security   purchases   exceeded
approximately eighty to one hundred basis points.

         During the quarter ended September 30, 1998, the Company  increased its
mortgage-backed  securities holdings by $2.0 million. At September 30, 1998, the
Company held $48.3 million of  mortgage-backed  securities  with an  approximate
yield of 6.9%. The  mortgage-backed  securities  purchases were made in order to
mitigate the principal calls on the Company's callable bond portfolio and earn a
higher yield with an expected  average life profile  comparable  to  longer-term
callable agency bonds.

         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 September 30, 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 FHLB advances and
short-term borrowings. Approximately $19.7 million of callable agency bonds with
<PAGE>
an estimated weighted average rate of 7.37% were called during the quarter ended
September  30, 1998.  During the quarter ended  September 30, 1998,  the Company
purchased  approximately  $46.2  million of callable  bonds with an  approximate
weighted  average  yield to call and maturity of 6.43% and 7.09%,  respectively.
The callable  agency bond purchases,  totaling $46.2 million,  are summarized by
initial term to call as follows: $20.0 million within three months, $3.1 million
with greater than three months and within six months, $22.4 million with greater
than six months and within twelve months and $675  thousand  within  twenty-four
months.

         During the  quarter  ended  September  30,  1998,  the  Company  repaid
approximately  $10.4  million  of FHLB  advances  and  $665  thousand  of  other
short-term   borrowings  with  weighted   average  rates  of  5.35%  and  4.45%,
respectively,  and increased FHLB advances and other borrowings by approximately
$13.0 million and $17.4 million,  respectively,  with weighted  average rates of
5.27% and 5.54%,  respectively.  Due to the continued decline in market interest
rates  experienced  during  the  quarter  ended  September  30,  1998,  and  the
associated increase in the amount of investment securities redeemed, the Company
shortened  the maturity  structure of its  incremental  borrowings to reduce its
cost of funds and to better  match the  maturities  of its  borrowings  with the
possible early repayment of a portion of its investment portfolio. 

         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  selectively  offer  commercial  real estate,  land
acquisition and development and shorter-term  construction  loans,  primarily on
residential properties, to partially increase its loan asset sensitivity. Due to
relatively low fifteen and thirty year mortgage loan yields, the Company intends
to emphasize  higher  yielding home equity and small  business loans to existing
customers and seasoned prospective customers.

         As of  September  30,  1998,  the  implementation  of these  asset  and
liability management initiatives resulted in the following:  (1) an aggregate of
$51.6  million  or 33.5% of the  Company's  net loan  portfolio  had  adjustable
interest rates or maturities of less than 12 months;  (2) $17.6 million or 36.5%
of  the   Company's   portfolio   of   mortgage-backed   securities   (including
collateralized  mortgage  obligations  - "CMOs") were  secured by floating  rate
securities;  (3) $7.4 million or 7.63% of the  Company's  investment  securities
portfolio had scheduled maturities of one year or less; and (4) $87.7 million or
90.1% of the Company's investment securities portfolio was comprised of callable
bonds.

         The effect of interest rate changes on a financial institution's assets
and liabilities may be analyzed by examining the "interest rate  sensitivity" of
the assets and  liabilities  and by  monitoring an  institution's  interest rate
sensitivity  "gap".  An asset or liability is 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.
<PAGE>
         The  Company's  one  year  cumulative  interest  rate  sensitivity  gap
amounted to a negative  13.8% of total assets at September 30, 1998, as compared
to a  negative  24.6% at June  30,  1998,  in each  instance,  based on  certain
assumptions  by management  with respect to the repricing of certain  assets and
liabilities.  At  September  30, 1998,  the  Company's  interest-earning  assets
maturing or repricing within one year totaled $150.7 million while the Company's
interest-bearing  liabilities  maturing  or  repricing  within one year  totaled
$193.6  million,   providing  a  deficiency  of  interest-earning   assets  over
interest-bearing  liabilities  of $42.9  million.  At September  30,  1998,  the
percentage of the Company's  assets to liabilities  maturing or repricing within
one year was 0.78%.

RESULTS OF OPERATIONS


         General.  WVS reported net income of $950 thousand,  or $0.26 per share
(basic and diluted),  for the three months ended September 30, 1998, as compared
to $935  thousand or $0.27 basic and $0.26 diluted per share for the same period
in 1997.  Net income  increased $15 thousand or 1.60% for the three months ended
September 30, 1998,  when compared to the same period in 1997.  The increase was
primarily  attributable to a $12 thousand increase in non-interest  income and a
$3 thousand  decrease in income tax expense,  while a $65  thousand  decrease in
non-interest expense offset a $65 thousand decrease in net interest income.

         Net Interest Income. The Company's net interest income decreased by $65
thousand  or 2.52%  during the three  months  ended  September  30,  1998,  when
compared to the same period in 1997.  The decrease  resulted from a $69 thousand
or 2.32% increase in total interest  expense which was partially  offset by a $4
thousand or 0.07% increase in total  interest  income for the three months ended
September 30, 1998, when compared to the same period in the prior year.

         Interest  Income.  Interest on net loans  receivable  decreased  by $77
thousand or 2.36% for the three months ended  September 30, 1998,  when compared
with the same period in 1997.  The  decrease was  attributable  to a decrease of
$5.2 million in the average balance of loans  receivable  outstanding  which was
partially  offset by an increase in the weighted  average  yield earned on loans
receivable of 7 basis points for the three months ended September 30, 1998, when
compared to the same period in 1997.  The  decrease in the average  loan balance
outstanding was  attributable to an increased level of mortgage loan prepayments
due to the substantial decline of market interest rates. During this period, the
Company chose to emphasize the  origination of home equity and  commercial  real
estate  loans to  seasoned  borrowers  in order to better  balance the yield and
maturity profile of the loan portfolio.

         Interest on  mortgage-backed  securities  increased by $147 thousand or
22.93% for the three months ended  September  30, 1998,  when  compared with the
same  period in 1997.  The  increase  was  attributable  to an increase of $10.0
million in the average balance of mortgage-backed  securities  outstanding which
was partially  offset by a decrease of 22 basis points in weighted average yield
earned during the three months ended  September  30, 1998,  when compared to the
same period in 1997. The Company  believes that this  conservative  approach has
contributed to the overall yield of the mortgage-backed securities portfolio.

         Interest and dividend  income on  interest-bearing  deposits with other
institutions,   investment   securities   and  FHLB  stock  ("other   investment
securities")  decreased  $66  thousand  or  4.02%  for the  three  months  ended
September 30, 1998,  when compared to the same period in 1997.  The decrease was
attributable  to a  decrease  in the  weighted  average  yield  earned  on other
<PAGE>
investment  securities  of 89 basis  points  which  was  partially  offset by an
increase of $7.2 million in the average balance of other  investment  securities
outstanding  for the three months ended September 30, 1998, when compared to the
same period in 1997.  The  increase in the average  balance of other  investment
securities was principally  attributable  to purchases of investment  securities
under the  Company's  investment  growth  program.  The decrease in the weighted
average yield earned was consistent with market  conditions for the three months
ended September 30, 1998.

         Interest Expense. Interest expense on deposits and escrows decreased by
$95  thousand or 5.33% for the three  months  ended  September  30,  1998,  when
compared with the same period in 1997. The decrease was principally attributable
to a  decrease  in the  weighted  average  yield  paid of 15 basis  points and a
decrease  of $3.2  million  in the  average  balance  of  deposits  and  escrows
outstanding  for the three months ended September 30, 1998, when compared to the
same period in 1997.  The average  yield paid on deposits  decreased  due to the
overall decline in market interest rates.

         Interest  expense on FHLB  advances and other  borrowings  increased by
$164  thousand or 13.92% for the three months  ended  September  30, 1998,  when
compared to the same period in 1997. The increase was primarily  attributable to
a $14.9  million or 18.44%  increase in the average  balance of such  borrowings
outstanding,  partially  offset by a 23 basis  point  decrease  in the  weighted
average rate paid. The increased  amount of borrowings  outstanding  was used to
fund the Company's  investment  growth  program and the decrease in the weighted
average rate paid was a result of the declining market rates.

         Provision  for Loan Losses.  A provision  for loan losses is charged to
earnings to  maintain  the total  allowance  at 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 periodic  evaluation
of the loan portfolio considering past experience,  current economic conditions,
volume, growth and composition of the loan portfolio and other relevant factors.

         The Company did not record a provision for possible losses on loans for
the three months ended September 30, 1998, and September 30, 1997. The Company's
total  allowance  for loan losses at  September  30,  1998,  and June 30,  1998,
amounted to $1.9 million or 1.1% of the Company's total loan portfolio.

         Non-Interest  Income.  Total non-interest income increased $12 thousand
or 13.33% during the three months ended September 30, 1998, when compared to the
same  period in 1997,  primarily  due to a $9  thousand  increase in the service
charges on deposits and a $3 thousand increase in other income including ATM fee
and loan late charge income.

         Non-Interest Expense. Total non-interest expense decreased $65 thousand
or 5.77% during the three months ended  September 30, 1998, when compared to the
same period in 1997.

         Compensation  and  employee  benefits  decreased  $66 thousand or 8.72%
during the quarter ended September 30, 1998, when compared to the same period in
1997.  The decrease was  primarily  attributable  to a $76 thousand  decrease in
Employee  Stock  Ownership  Plan  ("ESOP")   amortization  and  Recognition  and
Retention  Plan ("RRP")  expense  partially  offset by a $13  thousand  increase
relating to the Profit Sharing Plan.
<PAGE>
         Other  non-interest  expense  (e.g.  director's  compensation  expense,
advertising,  provision for loss on real estate owned,  legal expense,  transfer
agent  expense,  etc.)  increased $9 thousand or 5.42% during the quarter  ended
September 30, 1998, when compared to the same period in 1997.

LIQUIDITY AND CAPITAL RESOURCES


         Net cash provided by operating  activities totaled $612 thousand during
the three  months  ended  September  30,  1998.  Net cash  provided by operating
activities  was primarily  comprised of $950  thousand of net income,  which was
partially offset by a $287 thousand net increase in accrued interest.

         Funds used for investing  activities  totaled $14.6 million  during the
three months ended  September  30, 1998.  Primary uses of funds during the three
months ended  September  30, 1998 include  $68.2  million used for  purchases of
investment and  mortgage-backed  securities  which was partially offset by $50.3
million of proceeds from repayments of investment and mortgage-backed securities
and a $3.8 million decrease in net loans receivable.

         Funds  provided by financing  activities  totaled $13.0 million for the
three months ended September 30, 1998. Primary financial sources include a $16.8
million increase in other borrowings and a $2.6 million increase in Federal Home
Loan Bank advances,  which were partially  offset by a $3.9 million  decrease in
deposits and a $2.4 million  decrease in advance payments by borrowers for taxes
and insurance.  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 September 30, 1998, $70.2 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 is seeking to better match funding  sources
with lending and investment opportunities.

         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
short-term   borrowings.   At  September  30,  1998,  the  total  approved  loan
commitments  outstanding  amounted to $2.0 million. At the same date commitments
under unused lines of credit amounted to $8.0 million and the unadvanced portion
of  construction  loans  approximated  $13.1  million.  Certificates  of deposit
scheduled to mature in one year or less at September  30,  1998,  totaled  $65.3
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
<PAGE>
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 may 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 October 27, 1998, the Company's Board of Directors  declared a cash
dividend of $0.16 per share payable November 19, 1998, to shareholders of record
at the  close of  business  on  November  9,  1998.  Dividends  are  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
future 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 September 30, 1998, WVS Financial  Corp.  exceeded all regulatory
capital requirements and maintained Tier I and total risk-based capital equal to
$32.8  million  or 21.5% and $34.7  million  or  22.7%,  respectively,  of total
risk-weighted  assets,  and Tier I leverage capital of $32.8 million or 10.9% 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 September  30,  1998,  totaled
approximately  $697  thousand  or 0.22%  of total  assets  as  compared  to $603
thousand or 0.21% of total assets as of June 30, 1998.  Nonperforming  assets at
September 30, 1998,  consisted of $481 thousand in commercial real estate loans,
$144  thousand in  single-family  loans,  and $72  thousand  in consumer  loans.
Approximately $6 thousand of additional interest income would have been recorded
during the three months ended  September 30, 1998,  if the Company's  nonaccrual
and  restructured  loans had been current in accordance with their original loan
terms and outstanding throughout the quarter ended September 30, 1998.

YEAR 2000 COMPLIANCE

         The  Company  outsources  substantially  all  of  its  data  processing
requirements and it is to a large extent  dependent upon vendor  cooperation for
systems used in its day-to-day  business.  The Company,  in conjunction with its
vendors, is testing its computer systems and requiring  representations from its
vendors  that the  products  provided  are or will be year 2000  compliant.  The
Company has developed a plan of action to help ensure that its  operational  and
financial systems will not be adversely affected by year 2000  software/hardware
failures due to processing errors arising from calculations  using the year 2000
date. All hardware and software products are expected to be compliant by the end
of calendar 1998. In the unlikely event that the systems tested do not, in fact,
operate properly when the year 2000 does arrive, all customer accounts, deposits
<PAGE>
and loans, as well as accounting systems,  will be maintained manually to ensure
business  continuation  while systems are being corrected.  The Company does not
expect  material  expenditures  to be  incurred  to address the year 2000 issue.
Based upon current estimates, the Company does not expect to incur more than $75
thousand (pre-tax) in Year 2000 remediation  expenses.  Any year 2000 compliance
failures,  which are currently unknown,  could result in additional  expenses or
business disruption to the Company.

FORWARD LOOKING STATEMENTS

         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.

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  and net interest  income 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.
<PAGE>
         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.

         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,  repaying  certain  liabilities  or matching  repricing  periods for new
assets  and  liabilities  (for  example,  by  shortening  terms of new  loans or
investments).  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,
<PAGE>
borrowing,  or selling assets. Also, FHLB advances and wholesale borrowings have
become  increasingly  important sources of liquidity for the Company.  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.
Prepayments of assets carrying higher rates reduce the Company's interest income
and overall  asset  yields.  An  institution  might also invest in more  complex
financial  instruments  intended to hedge, or otherwise change the interest rate
risk of existing assets, liabilities, or anticipated transactions. 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. The Company has not purchased derivative financial instruments in the
past and does not  presently  intend to purchase  such  instruments  in the near
future.

         The following table provides  information about the Company's financial
instruments  that are sensitive to changes in interest rates as of September 30,
1998,  based on the  information  and  assumptions  in the notes.  The Company's
assumptions  are based on  statistical  data  provided  by a federal  regulatory
agency in the  Company's  market area,  and are believed to be  reasonable.  The
Company had no  derivative  financial  instruments  or trading  portfolio  as of
September  30, 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.  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.  With respect to the Company's  adjustable  rate
instruments,  expected  maturity  date values were  measured  by  adjusting  the
instrument's   contractual   maturity  date  for  expectations  of  prepayments.
Substantially all of the Company's investment  securities portfolio is comprised
of callable  government agency securities.  From a risk management  perspective,
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.
Company  borrowings  were  tabulated by  contractual  maturity dates and without
regard to any conversion or repricing dates.
<PAGE>
<TABLE>
<CAPTION>
                                         EXPECTED MATURITY DATE-QUARTER ENDED SEPTEMBER 30,
                                               

                                                                                                   There-                    Fair
                                   1999           2000        2001         2002        2003        after       Total         Value
                                 --------       -------      -------     -------      ------      -------     --------      --------
ON-BALANCE SHEET 
FINANCIAL INSTRUMENTS
<S>                              <C>            <C>          <C>         <C>          <C>         <C>         <C>           <C>  
Interest-earning assets:
  Loans receivable (1)(2)(3)(4)
  Fixed rate                     $ 31,004       $18,862      $13,391     $10,747      $7,697      $29,871     $111,572      $125,233
    Average interest rate            8.25%         7.96%        7.85%       7.80%       7.69%        7.50%
  Adjustable rate                  14,553         9,677        6,668       4,769       3,535        5,164       44,366       49,575
    Average interest rate(5)         7.93%         8.02%        8.13%       8.23%       8.33%        8.37%

  Mortgage-backed securities
  Fixed rate                            1           210            0         166       2,088       27,970       30,435       30,877
    Average interest rate            6.62%         6.40%           0%       7.21%       6.02%        7.01%
  Adjustable rate                       0             0            0           0           0       17,596       17,596       17,989
    Average interest rate(6)            0%            0%           0%          0%          0%        6.84%

  Investments(7)                   61,411             0            0           0       1,009       40,037      102,457      102,972
    Average interest rate            6.93%            0%           0%          0%       5.73%        6.31%

  Interest-bearing deposits           907             0            0           0           0            0          907          907
    Average interest rate            5.35%            0%           0%          0%          0%           0%
                                 --------       -------      -------     -------      ------      -------     --------      --------
        Total                    $107,876       $28,749      $20,059     $15,682     $14,329     $120,638     $307,333     $327,553
                                 
Interest-bearing liabilities:
  Interest-bearing deposits
   and escrows(8)(9)(10)           $91,415      $19,387      $19,387      $7,144      $7,144      $21,187     $165,664     $166,405
    Average interest rate             4.56%        3.93%        3.93%       3.51%       3.51%        2.34%

  Borrowings                        25,654            0        5,000      46,500           0       32,000      109,154      110,598
    Average interest rate             5.61%           0%        5.87%       5.75%          0%        5.07%
                                 --------       -------      -------     -------      ------      -------     --------      --------
        Total                     $117,069      $19,387      $24,387     $53,644      $7,144      $53,187     $274,818     $277,003
                                     
</TABLE>

(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 14% to 39% 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.
<PAGE>
(7) Totals  include the  Company's  investment  in Federal Home Loan Bank stock.
Amounts  adjusted to reflect  investment  securities  called through October 31,
1998,  totaling  approximately  $30.9 million and $23.0  million  expected to be
called by December 31, 1998.
(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  investment  securities  increased  from $85.9 million at
June 30, 1998,  to $102.4  million at September  30, 1998.  The $16.5 million or
19.2% increase was primarily  attributable to investment  security  purchases of
$61.3 million,  partially offset by $19.7 million of callable  government agency
bonds called and $20.6 million of commercial paper maturities during the quarter
ended  September  30, 1998.  The Savings  Bank's  interest-bearing  deposits and
escrows remained  constant at $163.5 million at June 30, 1998, and September 30,
1998.  Borrowings  increased  from  $89.7  million at June 30,  1998,  to $109.2
million  at  September  30,  1998.  The $19.4  million  or 21.63%  increase  was
primarily  attributable  to  the  purchase  of  securities  through  the  use of
borrowings under the Company's investment growth program. The Company intends to
continue to pursue its investment growth program,  as market conditions  permit,
according to parameters discussed under "Asset and Liability Management".

         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 September 30,
1998.


                            Anticipated Transactions
                            ------------------------
Undisbursed construction and
    Land development loans
      Fixed rate                                    $     4,700
                                                           8.63%
      Adjustable rate                                     8,364
                                                           9.45%
Undisbursed lines of credit
      Adjustable rate                                     8,034
                                                           9.11%
Loan origination commitments
      Fixed rate                                          1,589
                                                           8.83%
      Adjustable rate                                       400
                                                           8.43%
Letters of credit
      Adjustable rate                                        45
                                                           11.5%
                                                     ----------
                                                     $   23,132

         The  Company  believes  that  there  were no  material  changes  to the
Company's anticipated transactions during the quarter ended September 30, 1998.
<PAGE>
PART II - OTHER INFORMATION

ITEM 1.       Legal Proceedings

              The Company is involved with various 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.

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

              (a) An annual  meeting of  stockholders  was held on  October  27,
                  1998.

              (b) Not applicable.

              (c) Two matters were voted upon at the annual stockholder  meeting
                  held on October  27,  1998:  Item 1:  Proposal  to elect three
                  directors for a four-year  term or until their  successors are
                  elected  and  qualified;   Item  2:  Proposal  to  ratify  the
                  appointment by the Board of Directors of S. R. Snodgrass, A.C.
                  as the  Company's  independent  auditors  for the fiscal  year
                  ending June 30, 1999.

                  Each of the two proposals received stockholder  approval.  The
                  voting  record  with  respect  to  each  item  voted  upon  is
                  enumerated below:

 
                       Nominee
 Item Number      (If Applicable)             FOR         AGAINST       ABSTAIN
 -----------      ---------------             ---         -------       -------

      1           David L. Aeberli         3,037,743       256,244
                  John M. Seifarth         3,034,001       259,986
                  Margaret VonDerau        3,043,093       250,894
 
      2           Election of Auditors     3,276,287         9,666        8,034


                  There were no broker non-votes cast with respect to any matter
                  voted upon.

              (d) Not applicable.
 
ITEM 5.       Other Information

              The Company has  previously  reported  that Robert C. Sinewe,  the
              former  President and Chief  Executive  Officer of the Company and
              the Savings Bank,  had terminated his service with the Company and
              the  Savings  Bank  on  June  19,  1998.  The  Company  previously
<PAGE>
              characterized Mr. Sinewe's termination as his retirement. However,
              Mr. Sinewe has objected to this  reference and has stated that his
              resignation  was at the  request  of the Board of  Directors.  The
              Board   requested   Mr.   Sinewe's    resignation   due   to   its
              dissatisfaction  with his job  performance  as well as the Board's
              loss of  confidence  in his  ability  to lead the  Company  in the
              future.

              As previously disclosed, the Company and Mr. Sinewe negotiated and
              entered  into a Severance  and Release  Agreement,  dated June 19,
              1998,  pursuant  to  which  Mr.  Sinewe  resigned  as an  officer,
              employee  and director of the Company and the Savings Bank and the
              Company agreed to pay Mr. Sinewe an aggregate of $556,200, payable
              in a lump sum  payment of  $135,000  and  $421,200,  payable in 72
              equal semi-monthly  installments through June 30, 2001, in lieu of
              any rights or benefits due Mr. Sinewe  pursuant to his  employment
              agreement or otherwise as a result of his employment.  The Company
              recorded this entire  expense during the year ended June 30, 1998.
              A copy of the  Severance  and Release  Agreement is attached as an
              exhibit to this Form 10-Q.

ITEM 6.       Exhibits and Reports on Form 8-K

              (a)     The  following  exhibits  are  filed as part of this  Form
                      10-Q, and this list includes the Exhibit Index.

                      Number            Description                         
                      ------            -----------                         
                        10.1            Employment Agreement between        
                                        WVS Financial Corp. and David J.
                                        Bursic*

                        10.2            Employment Agreement between        
                                        WVS Financial Corp. and Margaret
                                        VonDerau*

                        10.3            Employment Agreement between        
                                        WVS Financial Corp. and Edward M.
                                        Wielgus*

                        10.4            Severance and Release Agreement     
                                        between WVS Financial Corp. and
                                        Robert C. Sinewe*

                         27             Financial Data Schedule             

*Management Contract or Compensatory Plan or Arrangement.

               (b)    The Company filed a Current Report on Form 8-K, dated July
                      29, 1998,  reporting under Item 5 that the Company's Board
                      of Directors  authorized  the  repurchase of up to 183,156
                      shares,  or approximately  five percent,  of the Company's
                      outstanding common stock. Repurchases are authorized to be
                      made  during the next twelve  months as market  conditions
                      warrant.  All repurchased  shares will be held as treasury
                      stock and may be  reserved  for  issuance  pursuant to the
                      Company's stock benefit plans.
<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.



November 6, 1998                              BY:     /s/David J. Bursic
----------------                                      ------------------
Date                                                  David J. Bursic
                                                      President and Chief
                                                      Executive Officer
                                                      (Principal Executive and
                                                      Financial Officer)