Securities and Exchange Commission
                             Washington, D.C. 20549


                                    Form 10-Q

                   Quarterly Report Under Section 13 or 15(d)
                     Of the Securities Exchange Act of 1934



For Quarter Ended:                                        Commission File
September 30, 1997                                        Number: 33-67746


                      Virginia First Financial Corporation
             (Exact Name of Registrant as Specified in its Charter)


               Virginia                                   54-1678497
(State or Other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                          Identification Number)


       Franklin and Adams Streets, Petersburg, Virginia      23804-2009
           (Address of Principal Executive Office)           (Zip Code)


                          804-733-0333 or 804-748-5847
              (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
requirements for the past 90 days. Yes X No


At October 1, 1997,  5,813,552  shares of common  stock of the  Registrant  were
outstanding.



<PAGE>



                      Virginia First Financial Corporation
                          Quarterly Report on Form 10-Q
                               September 30, 1997


                                      Index

Part I.  Financial Information                                          Page No.

   Item 1         Consolidated Statements of Earnings for the
                  three-month periods ended September 30, 1997
                  and September 30, 1996                                   3

                  Consolidated Statements of Financial Condition
                  as of September 30, 1997, June 30, 1997, and
                  September 30, 1996                                       4

                  Consolidated Statements of Cash Flows for the
                  three-month periods ended September 30, 1997
                  and September 30, 1996                                   5

                  Selected Notes to Consolidated Financial Statements      6


   Item 2         Management's Discussion and Analysis of
                  Financial Condition and Results of Operations            7


Part II.  Other Information


   Item 6         Exhibits and Reports on Form 8-K                         21


                  Signatures                                               22




                                        2

<PAGE>


                          Part I. Financial Information
              Virginia First Financial Corporation and Subsidiaries
                       Consolidated Statements of Earnings
<TABLE>
<CAPTION>

                                                                     Three Months Ended
                                                                         September 30,
                                                           ----------------------------------------
    (In thousands, except share data)                             1997                    1996
                                                           ------------------    ------------------
                                                                 (Unaudited)           (Unaudited)
<S>                                                                   <C>                 <C>     
    Interest Income
    Interest and fees on loans                                        17,146              $ 14,757
    Interest on securities                                               524                   703
    Other interest income                                                262                   224
                                                             ----------------       ---------------
              Total interest income                                   17,932                15,684

    Interest Expense
    Deposits                                                           7,567                 6,797
    Borrowings                                                         2,234                 1,711
                                                             ----------------       ---------------
              Total interest expense                                   9,801                 8,508
                                                             ----------------       ---------------
    Net interest income                                                8,131                 7,176
    Provision for loan losses                                            695                   562
                                                             ----------------       ---------------
    Net interest income after provsion for loan losses                 7,436                 6,614

    Noninterest Income
    Loan servicing and fee income                                        238                   343
    Financial service fees                                               784                   642
    Gain on the sale of loans                                          2,062                   748
    Loss on sale of other real estate owned                              (36)                   48
    Other income                                                          72                   132
                                                             ----------------       ---------------
              Total noninterest income                                 3,120                 1,913
    Noninterest Expense
    Personnel costs                                                    2,960                 2,655
    Occupancy, net                                                       462                   407
    Equipment                                                            437                   333
    Advertising                                                          297                    81
    SAIF deposit insurance premiums                                       93                 3,474
    Data processing                                                      522                   465
    Amortization of intangibles                                           72                    62
    Other                                                              1,105                   943
                                                             ----------------       ---------------
              Total noninterest expense                                5,948                 8,420
                                                             ----------------       ---------------
    Earnings before income tax expense                                 4,608                   107
    Income tax expense (benefit)                                       1,852                   (89)
                                                             ----------------       ---------------
              Net Earnings                                           $ 2,756                 $ 196
                                                             ================       ===============

              Net Earnings Per Share                                  $ 0.46                $ 0.03
                                                             ================       ===============

</TABLE>



                                        3

<PAGE>
                         Part I. Financial Information
              Virginia First Financial Corporation and Subsidiaries
                 Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>


                                                                         September 30             June 30,            September 30
(In thousands, except share data)                                             1997                 1997                   1996
                                                                     ------------------     ------------------     -----------------
                                                                         (Unaudited)              (Note)               (Unaudited)
<S>                                                                   <C>                   <C>                    <C>             
Assets

Cash and cash equivalents                                             $         36,961      $          26,738      $         25,580
Investments held to maturity                                                     6,557                  6,543                 6,626
Investements available for sale                                                 18,463                 27,706                40,724
Loans, net of unearned income and discounts                                    672,379                685,366               641,667
Less: allowance for loan losses                                                 (9,840)                (9,295)               (8,087)
                                                                        ---------------       ----------------       ---------------
     Net loans                                                                 662,539                676,071               633,580
Loans held for sale                                                             99,859                 92,495                48,753
Real estate owned, net                                                           6,658                  7,647                 5,884
Office properties and equipment, net                                             9,538                  9,644                 8,916
Accrued interest receivable, net                                                 5,386                  5,781                 5,300
Other assets                                                                     7,596                  5,778                 5,995
                                                                                            --
                                                                     ==================       ================     =================
          Total assets                                                $        853,557      $         858,403      $        781,358
                                                                     ==================     ==================     =================


Liabilities and Stockholders' Equity

Deposits                                                              $        645,921      $         600,205      $        572,391
Notes payable and other borrowings                                                 604                    611                10,141
Advances from Federal Home Loan Bank                                           124,552                181,552               126,552
Advance payments by borrowers for taxes and insurance                            3,190                  3,397                 2,775
Accrued expenses and other liabilities                                          10,154                  6,146                 8,386
                                                                     ------------------       ----------------     -----------------
          Total liabilities                                                    784,421                791,911               720,245
                                                                     ------------------     ------------------     -----------------

Stockholders' equity:
  Preferred stock of $1 par value.  Authorized 5,000,000 shares;
     none issued                                                              -                      -                     -
  Common stock of $1 par value.  Authorized 20,000,000 shares;
     issued and outstanding 5,813,762 shares at September 30, 1997,
     5,810,462 at June 30, 1996 and 5,5743372 at September 30, 1996              5,814                  5,810                 5,743
  Additional paid-in capital                                                     9,069                  9,115                 8,471
  Retained earnings - substantially restricted                                  54,390                 51,478                46,996
  Net unrealized gain (loss) on securities available for sale, 
     net of taxes                                                                 (137)                    89                   (97)
                                                                     ------------------       ----------------     -----------------
          Total stockholders' equity                                            69,136                 66,492                61,113
                                                                     ------------------     ------------------     -----------------

          Total liabilities and stockholders' equity                  $        853,557      $         858,403      $        781,358
                                                                     ==================     ==================     =================
</TABLE>





NOTE:  The Consolidated Statements of Condition for June 30, 1997, has been 
       taken from the Audited Financial Statements.

       The  accompanying  notes  are  an  integral  part  of  these  unaudited
       Consolidated Financial Statements.

                                        4

<PAGE>

                          Part I. Financial Information
              Virginia First Financial Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                            September 30,
                                                                              ----------------------------------------
        (In thousands, except share data)                                            1997                    1996
                                                                              ------------------     -----------------
                                                                                    (Unaudited)           (Unaudited)
<S>                                                                                    <C>                   <C>     
        Operating Activities:
        Net earnings                                                                    $ 2,756                 $ 196
        Adjustment to reconcile net earnings to net cash
             provided by operating activities:
                  Deprecation and amortization                                              372                   303
                  Provision for loan losses                                                 695                   574
                  Loans held for sale:
                       Originations and purchases                                      (213,646)             (109,247)
                       Gain on sales                                                     (2,062)                 (748)
                       Proceeds from sales                                              208,344               106,709
                 (Increases) in other assets                                             (1,423)                 (593)
                  Increase in accrued expense and other liabilities                       4,008                   911
                  Other-net                                                                   0                     0
                                                                                ----------------       ---------------
                       Net cash (used)provided by operating activities                     (956)               (1,895)
                                                                                ----------------       ---------------
        Investing Activities:
        Net decrease (increase) in loans                                                 12,633               (18,585)
        Securities held to maturity:
             Purchases                                                                        0               (12,745)
             Principal collected                                                             27                    26
        Securities available for sale:
             Principal collected                                                          2,733                   755
             Proceeds from sale                                                           6,455
        Decrease(increase) in real estate owned                                             989                   472
        Decrease(increase) in fixed assets                                                 (106)                 (377)
                                                                                ----------------       ---------------
                       Net cash provided by (used in) investing activities               22,731               (30,454)
                                                                                ----------------       ---------------
        Financing Activities:
        Net increase (decrease) in savings, checking and
             money market deposit accounts                                               (8,937)               (5,318)
        Net increase in certificates of deposit                                          54,653                 4,173
        Borrowings resulting from:
             Securities sold under repurchase agreements                                      0                18,544
             Advances from Federal Home Loan Bank                                        12,000               130,400
             Other                                                                        4,515                 4,295
        Repayments of borrowings attributable to:
             Securities sold under repurchase agreements                                      0                (9,030)
             Advances from Federal Home Loan Bank                                       (69,000)             (105,900)
             Other                                                                       (4,522)               (4,307)
        Net increase in mortgage escrow funds                                              (207)                  607
        Proceeds from issuance of common stock                                              115                    33
        Cash dividends paid                                                                (169)                 (143)
                                                                                ----------------       ---------------
                       Net cash provided by financing activities                        (11,552)               33,354
                                                                                ----------------       ---------------

                       Net increase in cash and due from banks                           10,223                 1,005
        Cash and due from banks at beginning of period                                   26,738                24,575
                                                                                ================       ===============
        Cash and due from bank at end of period                                        $ 36,961              $ 25,580
                                                                                ================       ===============

        Supplemental Disclosures of Cash Flow Information:
        Cash payments of interest                                                       $ 9,728               $ 8,454
                                                                                ================       ===============

        Cash payments of income taxes                                                   $ 1,510               $ 2,895
                                                                                ================       ===============

</TABLE>


                                        5

<PAGE>



              Virginia First Financial Corporation and Subsidiaries
               Selected Notes to Consolidated Financial Statements

Note 1:           The interim condensed consolidated financial statements are 
                  unaudited  but,  in the  opinion of  management,  reflect  all
                  adjustments  necessary for a fair  presentation of results for
                  such periods. All such adjustments are of a normal,  recurring
                  nature.  The results of operations  for any interim period are
                  not necessarily indicative of results for the full year. These
                  consolidated   financial   statements   should   be   read  in
                  conjunction  with the  consolidated  financial  statements and
                  notes thereto contained in the Company's Annual Report for the
                  year  ended  June  30,  1997   ("fiscal   year   1997").   The
                  accompanying   consolidated  financial  statements  for  prior
                  periods reflect certain  reclassifications in order to conform
                  to the fiscal year 1997 presentation.

Note 2:           For  purposes of  computing  net  earnings  per share,  the
                  weighted average number of shares outstanding for the quarters
                  ended September 30, 1997 and 1996 were 5,996,924 and 5,842,856
                  respectively.

Note 3:           Regulatory Capital of Virginia First Savings Bank:

<TABLE>
<CAPTION>
                                                                                                  Excess
                                                                                                   Over
                                                    Actual                   Required          Requirement
                                                    ------                   --------          -----------
                                               Amount  Percent            Amount Percent     Amount    Percent
                                               ------  -------            --------------     ------    -------
(In thousands)
September 30, 1997
------------------

<S>                                          <C>         <C>            <C>        <C>       <C>          <C>  
Tangible capital                             $66,033     7.76%          $12,766    1.50%     $53,267      6.26%
Core capital                                  66,127     7.77            34,046    4.00       32,081      3.77

Risk-based capital                            73,730    12.16            48,505    8.00       25,225      4.16

September 30, 1996
------------------

Tangible capital                             $58,543    7.52%         $ 11,681    1.50%     $46,862      6.02%

Core capital                                  58,758    7.54            31,158    4.00       27,600      3.54

Risk-based capital                            65,668   11.88            44,226    8.00       21,442      3.88

</TABLE>







                                        6

<PAGE>



                          Part I. Financial Information
              Virginia First Financial Corporation and Subsidiaries


Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations


General

         Virginia First Financial  Corporation  (the "Company") was incorporated
in Virginia in 1993 to serve as the holding  company of Virginia  First  Savings
Bank,  F.S.B.  (the "Savings Bank").  The Savings Bank is a federally  chartered
capital stock savings bank with its principal  offices in Petersburg,  Virginia.
The  Savings  Bank,  incorporated  in  1888,  is  one of  the  oldest  financial
institutions in the Commonwealth of Virginia.

         The  Company's  principal  business  activities,  which  are  conducted
through the Savings Bank, are attracting  checking and savings deposits from the
general public through its retail banking  offices and  originating,  servicing,
investing in and selling loans secured by first mortgage liens on  single-family
dwellings,  including  condominium units. The Company also lends funds to retail
banking customers by means of home equity and installment  loans, and originates
residential  construction  loans  and  loans  secured  by  commercial  property,
multi-family  dwellings and  manufactured  housing units. The Company invests in
certain U.S.  Government and agency obligations and other investments  permitted
by applicable  laws and  regulations.  The operating  results of the Company are
highly dependent on net interest income,  the difference between interest income
earned on loans and  investments  and the cost of checking and savings  deposits
and borrowed funds.

         Deposit accounts up to $100,000 are insured by the Savings  Association
Insurance Fund and  administered  by the Federal Deposit  Insurance  Corporation
(the  "FDIC").  The Savings  Bank is a member of the Federal Home Loan Bank (the
"FHLB")  of  Atlanta.  The  Company  and the  Savings  Bank are  subject  to the
supervision, regulation and examination of the Office of Thrift Supervision (the
"OTS") and the FDIC. The Savings Bank is also subject to the  regulations of the
Board of Governors of the Federal Reserve System governing  reserves required to
be maintained against deposits.

         The  Company's  only  direct  subsidiary  is the  Savings  Bank and the
Company  has no  material  assets or  liabilities,  except  for the stock of the
Savings Bank. The Savings Bank has three active subsidiaries;  one is engaged in
real estate  development  and another is a title  insurance  agency.  The third,
American Finance and Investment,  Inc. is a mortgage banking company originating
mortgages on an automated basis through a computer network  presently  available
to potential customers in forty-four states and through tele-marketing.

                                        7

<PAGE>




         The following  commentary  discusses major  components of the Company's
business  and  presents  an overview of the  Company's  consolidated  results of
operations during the three-month periods ended September 30, 1997 and 1996, and
its consolidated financial position at September 30, 1997 and 1996, and June 30,
1997. The Company  operates on a June 30 fiscal year. This discussion  should be
reviewed  in  conjunction  with  the  consolidated   financial   statements  and
accompanying notes and other statistical  information presented in the Company's
Annual Report for the fiscal year ended June 30, 1997.

Results of Operations

         Virginia  First  recorded net earnings for the first  quarter of fiscal
year 1998 ending  September 30, 1997, of $2,756,000 or $.46 per share.  Earnings
for the  comparable  quarter of first quarter  fiscal year 1997 were $196,000 or
$.03 per share. The fiscal first quarter earnings annualized  represent a return
on assets of 1.50% and a return on equity of 18.59%.

         The earnings for the first quarter of last fiscal year were  negatively
impacted by a one-time charge of $3,149,000,  pre-tax,  for the recapitalization
of the SAIF  deposit  insurance  fund.  On an after tax basis the impact of this
charge  on  earnings  was  $1,954,000  or $.34 pr share.  Normalizing  the first
quarter 1997  earnings  for this charge  would have  resulted in net earnings of
$2,150,000.  The net  earnings  for  the  current  quarter  of  $2,756,000  then
represents an increase of $606,000 or 28.2%.


Financial Condition

         Total assets were  $853,557,000  at September  30, 1997,  compared with
$858,403,000 at June 30, 1997, and $781,358,000 at September 30, 1996.  Deposits
were $645,921,000 at September 30, 1997,  compared with $600,205,000 at June 30,
1997, and $572,391,000 at September 30, 1996.

         At  September   30,   1997,   stockholders'   equity  was   $69,136,000
representing  a book value of $11.89 per share,  compared with  $66,492,000 or a
book value of $11.44 per share at June  30,1997.  Virginia  First  exceeded  all
regulatory  capital  requirements  at September 30, 1997 and was classified as a
"well capitalized" institution by regulators.

Net Interest Income

         Net  interest  income for the first  quarter of fiscal year 1998 ending
September 30, 1997, was $8,131,000,  an increase of $955,000, or 13.3%, compared
with the first quarter of the last year's fiscal year.  The net interest  income
for the first  quarter of the current  fiscal  year  represents  a net  interest
margin of 3.92% compared with a 3.89% net interest  margin for the first quarter
of last year.


                                        8

<PAGE>



         The net  interest  margin  improvement  came as a result  of a 14 basis
point  improvement  in the overall  yield on earning  assets with only a 7 basis
point  increase in the overall cost of deposits and  borrowings.  An analysis of
the  components  of this  improvement  between the effect of changing  volume of
earning assets and  interest-bearing  liabilities and the actual rates earned or
paid follows in this  section.  The following  table reflect the average  yields
earned  and rates  paid by the  Company  during the  three-month  periods  ended
September 30, 1997 and September 30, 1996.

<TABLE>
<CAPTION>

         (In thousands)
Three-Month Periods
Ended September 30                                                 1997                                  1996
------------------                                 -------------------------------------   ----------------------------------
                                                                  Interest                             Interest
                                                     Average       Income/       Yield/     Average    Income/       Yield/
                                                     Balance       Expense        Rate      Balance    Expense        Rate
<S>                                                 <C>            <C>            <C>       <C>         <C>           <C>  
Interest-earning assets;                                                                   
    Loans                                           $ 773,564      $ 17,096       8.77%     $671,075    $14,757       8.72%
    Mortgage-backed securities and                                                         
      collateralized mortgage obligations              10,115           173       6.79        23,132                  6.45
    Investments                                        19,559           377       7.65        20,608        327       6.30
    Other interest-earning assets                      18,444           262       5.64        16,434        224       5.41
                                                      -------        ------       ----       -------     ------       ----
        Total interest-earning assets                 821,682        17,908       8.65       731,249     15,684       8.51
                                                      -------        ------       ----       -------     ------       ----
                                                                                           
                                                                                           
Noninterest-earning assets:                                                                
    Cash and cash equivalents                          11,711                                  7,841
    Office properties and equipment, net                9,629                                  8,781
    Other assets                                       18,553                                 16,190
    Allowance for loan losses                          (9,487)                                (7,690
                                                       ------                                 ------
                                                                                                                            
                                                                                           
         Total assets                               $ 852,088                               $756,371
                                                    =========                               ========
                                                                                                                            
                                                                                           
Interest-bearing liabilities:                                                              
    Checking and money market                                                              
       deposit accounts                             $ 105,563           984       3.70      $ 98,267        922       3.72
    Savings deposits                                   66,925           572       3.39        69,114        592       3.40
    Certificates                                      418,347         5,997       5.69       367,609      5,283       5.70
    Federal Home Loan Bank advances                   152,432         2,229       5.80       113,906      1,601       5.58
    Other borrowings                                      383             4       4.14         8,048        110       5.42
                                                      -------        ------       ----       -------     ------       ----
         Total interest-bearing liabilities           743,650         9,786       5.22       656,944      8,508       5.14
                                                      -------        ------       ----       -------     ------       ----
                                                                                           
Noninterest-bearing liabilities:                                                           
    Deposits                                           25,966                                 24,650
    Other                                              13,889                                 12,145
                                                      -------                                -------
                                                                                           
         Total liabilities                            783,505                                693,739
Stockholders' equity                                   68,583                                 62,632
                                                      -------                                -------
                                                                                                                            
                                                                                           
         Total liabilities and                                                             
             stockholders' equity                   $ 852,088                               $756,371
                                                    =========                               ========
                                                                                           
                                                                                           
Net interest income                                               $   8,122                            $  7,176
                                                                  =========                            ========

Interest rate spread                                                   3.43%                               3.37%
                                                                       ====                                ==== 

Net interest margin                                                    3.92%                               3.89%
                                                                       ====                                ==== 
</TABLE>


                                        9

<PAGE>



The  Company's  net  interest  income is  affected  by changes  in both  average
interest  rates  and  the  average  volumes  of   interest-earning   assets  and
interest-bearing  liabilities.  Total interest income increased by $2,224,000 in
the first  quarter of fiscal year 1998  compared with the first quarter of 1977.
Total  interest  expense  increased by $1,258,000 in the first quarter of fiscal
year 1998 compared with a year ago. Thus net interest income was $946,000 higher
this year compared to a year ago.

         The following tables show the amounts of the changes in interest income
and expense which can be  attributed  to rate (change in rate  multiplied by old
volume) and volume (change in volume multiplied by old rate) for the three-month
periods ended September 30, 1997 versus  September 30, 1976.. The changes in net
interest  income due to both  volume and rate  changes  have been  allocated  to
volume and rate in proportion to the  relationship of absolute dollar amounts of
the change of each. The table  demonstrates  that nearly all the increase in net
interest income in the  comparative  quarters is a result of the increase in the
volume of  earning  assets  and that the same  holds  true for the  increase  in
interest  expense--coming  from an  increase  in the volume of  interest-bearing
liabilities.  The impact of the interest rate environment and changes in deposit
interest rates had virtually no effect on net interest income in the comparative
quarters.

(In thousands)
Three-Month Periods
Ended September 30                                Fiscal Year 1998 Versus 1997
                                                   Increase (Decrease) Due to
                                                   --------------------------
                                                 Volume       Rate       Total
                                                 ------       ----       -----
Loans and loans held for sale                   $ 2,242      $  83      $ 2,325
Mortgage-backed securities and
  collateralized mortgage obligations              (211)        20         (191)
Investments                                         (17)        70           53
Other interest-earning assets                        27         10           37
                                                -------      -----      -------
     Total interest-earning assets                2,041        183        2,224

Checking and money market
   deposit accounts                                  68         (5)          63
Savings deposits                                    (18)        (2)         (20)
Certificates                                        751        (10)         741
Federal Home Loan Bank advances                     562         63          625
Other borrowings                                   (105)       (26)        (131)
                                                 ------      -----      -------
   Total interest-bearing liabilities             1,258         20        1,278
                                                -------      -----      -------

Net interest income                             $   783      $ 163      $   946
                                                =======      =====      =======









                                       10

<PAGE>



         Asset/Liability  Management.  Management strives to manage the maturity
or  repricing  match  between  assets and  liabilities.  The degree to which the
Company is  "mismatched" in its maturities is a primary measure of interest rate
risk. In periods of stable interest rates,  net interest income can be increased
by financing  higher  yielding  long-term  mortgage  loan assets with lower cost
short-term  deposits  and  borrowings.  Although  such a strategy  may  increase
profits in the short run, it increases  the risk of exposure to rising  interest
rates and can result in funding  costs  rising  faster  than asset  yields.  The
Company  attempts to limit its  interest  rate risk by selling a majority of the
fixed rate mortgage loans that it originates.

         Management  has  traditionally  utilized the GAP analysis in evaluating
and  monitoring  its interest  rate risk  position.  In 1997,  this approach was
enhanced  by  also  utilizing  such  interest  rate  risk  evaluation  tools  as
simulation modeling,  rate shock analysis,  and market value of equity analysis.
The Company's interest rate risk profile is asset sensitive  indicating that net
interest  income would increase in a rising rate  environment  and decrease in a
declining rate  environment.  In a rising rate  environment it is estimated that
the net interest  margin would improve by 4-5% assuming  continued  asset growth
and consistent deposit mix. Concurrently, in a declining rate environment, it is
estimated  that  net  interest  income  could  decline  by  3-5%  given  similar
assumptions  with respect to asset growth/mix and deposit mix. In a rapid rising
or declining rate environment,  the impact on net interest income is about 1- 2%
greater than the above exposure.

         The rate  shock  analysis  and  market  value of equity  analysis  also
indicates that the Company's  exposure to changing interest rates are manageable
and are within acceptable limits as determined by management.

         The following table is a matix depicting the Company gap position as of
September 30, 1997. The matrix shows the assets that reprice in various  periods
along the top line with the longest assets to the left and the shortest,  or the
earliest amount of assets repricing to the right. The liabilities and equity are
on the left vertical line with the non-maturity  and longest  liabilities at the
top and declining to the most frequent  repricing  liabilities.  By matching the
assets that reprice in each time period shown  against the  liabilities  for the
same period,  if the assets equal the  liabilities in the same repricing  period
the amount will fall in the  horizontal  line. To the extent that the Company is
asset sensitive,  the amount of mis-match falls above the line and to the extent
that the Company is liability sensitive the amount of such mis-match falls below
the line.

         As can  be  seen  from  the  matrix  the  Company  is  asset  sensitive
indicating net interest income will be greater in a rising rate  environment and
less in a declining rate environment. The simulation results noted above confirm
and quantify this rate sensitivity.



                                       11

<PAGE>

                              Match Funding Matrix
                           Virginia First Savings Bank
                               September 30, 1997
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------

                    Assets    60+ Months   36 - 59 Months   24 - 35 Months  12 - 23 Months  10 - 11 Months   7 - 9 Months  
---------------------------------------------------------------------------------------------------------------------------
<S>                <C>          <C>            <C>              <C>             <C>             <C>            <C>         
  Liabilities & 
  Equity                        120,552        43,135           53,649          50,329          69,770         68,667      
---------------------------------------------------------------------------------------------------------------------------
    60+ Months     110,413      110,413                                                                                    
---------------------------------------------------------------------------------------------------------------------------
  36 - 59 Months    63,502       10,139        43,135           10,228                                                     
---------------------------------------------------------------------------------------------------------------------------
  24 - 35 Months    78,787                                      43,421          35,366                                     
---------------------------------------------------------------------------------------------------------------------------
  12 - 23 Months    76,118                                                      14,963          61,155                     
---------------------------------------------------------------------------------------------------------------------------
  10 - 11 Months   110,171                                                                       8,615         68,667      
---------------------------------------------------------------------------------------------------------------------------
   7 - 9 Months     72,201                                                                                                 
---------------------------------------------------------------------------------------------------------------------------
   4 - 6 Months     84,749                                                                                                 
---------------------------------------------------------------------------------------------------------------------------
   2 - 3 Months    105,392                                                                                                 
---------------------------------------------------------------------------------------------------------------------------
      1 Month       44,697                                                                                                 
---------------------------------------------------------------------------------------------------------------------------
        O/N        107,500                                                                                                 
===========================================================================================================================
       Total       853,530      120,552        43,135           53,649          50,329          69,770          68,667     
===========================================================================================================================
</TABLE>



                  
                  
<TABLE>
<CAPTION>
                  
---------------------------------------------------------------------------------- 
                                                                                   
                   4 - 6 Months    2 - 3 Months    1 Month       O/N        Total  
---------------------------------------------------------------------------------- 
<S>                  <C>             <C>         <C>         <C>          <C>      
  Liabilities &                                                                    
  Equity             71,609          95,609      217,651     62,559       853,530  
---------------------------------------------------------------------------------- 
    60+ Months                                                            110,413  
---------------------------------------------------------------------------------- 
  36 - 59 Months                                                           63,502  
---------------------------------------------------------------------------------- 
  24 - 35 Months                                                           78,787  
---------------------------------------------------------------------------------- 
  12 - 23 Months                                                           76,118  
---------------------------------------------------------------------------------- 
  10 - 11 Months     32,889                                               110,171  
---------------------------------------------------------------------------------- 
   7 - 9 Months      38,720          33,481                                72,201  
---------------------------------------------------------------------------------- 
   4 - 6 Months                      62,128       22,621                   84,749  
---------------------------------------------------------------------------------- 
   2 - 3 Months                                  105,392                  105,392  
---------------------------------------------------------------------------------- 
      1 Month                                     44,697                   44,697  
---------------------------------------------------------------------------------- 
        O/N                                       44,941     62,559       107,500  
================================================================================== 
       Total         71,609          95,609      217,651     62,559       853,530  
================================================================================== 
                                                                                   
                  
</TABLE>

                                       12

<PAGE>



          Loan Portfolio.  The Company's  portfolio of loans held for investment
totaled $672,379,000 at September 30, 1997,  representing 80.4% of total assets.
The following table sets forth information at the dates indicated concerning the
composition of the Company's loan portfolio, by type:
<TABLE>
<CAPTION>

                                                  September 30, 1997          June 30, 1997            September 30, 1996
                                             -------------------------   ------------------------   -------------------------
                                                               Percent                   Percent                     Percent
                                                                 of                         of                          of
                                                               Gross                       Gross                      Gross
(In thousands)                                 Amount          Loans        Amount         Loans        Amount        Loans
                                             ---------         -----      ---------        -----      ---------       -----
<S>                                            <C>             <C>         <C>             <C>         <C>             <C>   
First mortgage loans:
   Residential - fixed rate                   $ 65,992           9.8%     $ 67,489           9.8%     $ 71,344          11.1%
   Residential - adjustable rate               285,502          42.2       292,943          42.6       282,792          43.9
                                               -------          ----       -------          ----       -------          ----
        Total residential                      351,494          52.0       360,432          52.4       354,136          55.0
                                               -------          ----       -------          ----       -------          ----

   Commercial - fixed rate                      16,730           2.5        16,248           2.4        16,407           2.6
   Commercial - adjustable rate                 29,063           4.3        30,548           4.4        31,214           4.8
                                               -------          ----       -------          ----       -------          ----
        Total commercial                        45,793           6.8        46,796           6.8        47,621           7.4
                                               -------          ----       -------          ----       -------          ----

   Construction - fixed rate                    20,123           3.0        15,877           2.3        14,104           2.2
   Construction - adjustable rate              115,839          17.1       126,105          18.3       106,452          16.5
                                               -------          ----       -------          ----       -------          ----
        Total construction                     135,962          20.1       141,982          20.6       120,556          18.7
                                               -------          ----       -------          ----       -------          ----
Total first mortgage loans                     533,249          78.9       549,210          79.8       522,313          81.1
                                               -------          ----       -------          ----       -------          ----
Second mortgage loans:
   Fixed rate                                   22,343           3.3        22,159           3.2        19,609           3.0
   Adjustable rate                              31,687           4.7        31,668           4.6        30,125           4.7
                                               -------          ----       -------          ----       -------          ----
        Total second mortgage loans             54,030           8.0        53,827           7.8        49,734           7.7
                                               -------          ----       -------          ----       -------          ----

Loans on savings accounts                        2,011            .3         2,190           0.3         1,832           0.3
                                               -------          ----       -------          ----       -------          ----

Installment loans:
   Fixed rate                                   83,594          12.1        80,442          11.7        67,012          10.4
   Adjustable rate                               2,783            .4         2,890           0.4         3,173           0.5
                                               -------          ----       -------          ----       -------          ----
        Total installment loans                 75,531          12.8        83,332          12.1        70,185          10.9
                                               -------          ----       -------          ----       -------          ----

Gross Loans                                    675,667         100.0%      668,559         100.0%      644,064         100.0%
                                                               =====                       =====                       =====

Less:
   Unearned discount                             1,586                         581                         167
   Deferred income                               1,702                       2,612                       2,230
                                               -------                    --------                    --------
                                                 3,288                       3,193                       2.397
                                               -------                    --------                    --------
Total net loans                               $672,379                    $685,366                    $641,667
                                              ========                    ========                    ========

</TABLE>

                                       13

<PAGE>



         Provision for Loan Losses.  The Company  provided  $695,000  during the
first quarter of fiscal year 1998 as additions to the allowance for loan losses,
compared with $562,000 in the first quarter of fiscal year 1997. In establishing
the level of the allowance for loan losses,  the Company considers many factors,
including general economic conditions,  loan loss experience,  historical trends
and other circumstances, both internal and external. The amount of the provision
for loan  losses is  established  based on  evaluations  of the  adequacy of the
allowance for loan losses.  The Company  considers the size and risk exposure of
each segment of the loan  portfolio.  For secured  loans,  management  considers
estimates  of the fair value of the  collateral,  considering  the  current  and
currently  anticipated future operating or sales conditions.  Such estimates are
particularly  susceptible to changes that could result in a material  adjustment
to future results of operations. Factors such as independent appraisals, current
economic  conditions and the financial  condition of borrowers are  continuously
evaluated to determine whether the Company's  investment in such assets does not
exceed their estimated values. The Company's policy is to establish both general
and specific allowances for loan losses.
         The following  table  presents the activity in the Company's  allowance
for loan losses and  selected  loan loss data for the first six months of fiscal
years 1997 and 1996:
<TABLE>
<CAPTION>

(In thousands)
Three-Month Period
Ended September 30                                         1997                          1996
------------------                                      ---------                     ---------

<S>                                                     <C>                           <C>      
Balance at beginning of period                          $    9,295                    $   7,527
Provision charged to expense                                   695                          562
Loans charged off:
  Residential real estate                                       -                            -
  Commercial real estate                                        -                            -
  Construction                                                  -                            -
  Consumer and other loans                                     175                           15
                                                        ----------                 ------------
      Total charge-offs                                        175                           15
                                                        ----------                 ------------
Recoveries of loans previously charged off:
  Residential real estate                                       -                            -
  Construction                                                  -                            -
  Consumer and other loans                                      25                           13
                                                        ----------                  -----------
      Total recoveries                                          25                           13
                                                        ----------                  -----------

      Net charge-offs                                          150                            2
                                                        ----------                  -----------

Balance at end of period                                $    9,840                    $   8,087
                                                        ==========                    =========

Average loans held for investment                       $  665,744                    $ 631,275
Loans held for investment at period end                    672,380                      641,667
Ratio of provision for loan losses to
    average loans held for investment                        0.40%                        0.09%
Ratio of net charge-offs to average
    loans held for investment                                0.07%                        0.00%
Ratio of allowance for loan losses to loans
    held for investment at period end                        1.46%                        1.26%
</TABLE>



                                       14

<PAGE>



         While the Company's  management believes that its present allowance for
loan losses is adequate, future adjustments may be necessary.

         The allowance for loan losses is a general allowance  applicable to all
loan categories;  however, management has allocated the allowance to the various
portfolios to provide an indication of the relative risk  characteristics of the
total loan portfolio.  The allocation is based on the same  judgmental  criteria
discussed  earlier in  determining  the level of the allowance and should not be
interpreted  as an  indication  that  charge offs for the balance of fiscal year
1997  will  occur in  these  amounts,  or  proportions,  or that the  allocation
indicates future trends.  The allocation of the allowance at September 30, 1997,
June 30, 1997 and  September  30, 1996 and the ratio of the related  outstanding
loan balances to total loans held for investment are as follows:
<TABLE>
<CAPTION>

         (In thousands)                      September 30, 1997         June 30, 1997         September 30, 1996
                                           ----------------------   --------------------    ----------------------
                                                        Ratio of               Ratio of                   Ratio of
                                                        Loans to               Loans to                   Loans to
                                                      Total Loans             Total Loans                Total Loan
                                                        Held for                Held for                  Held for
                                           Allowance   Investment   Allowance  Investment    Allowance   Investment
                                           ---------   ----------   ---------  ----------    ---------   ----------

<S>                                          <C>          <C>        <C>          <C>         <C>           <C>   
         Residential real estate             $ 1,700       60.0%     $ 1,640       63.1%      $ 1,485        62.7%
         Commercial real estate                3,000        6.8        2,880         7.8        2,672          7.4
         Construction                          3,700       20.1        3,400        19.4        2,500         18.7
         Consumer and other loans              1,440       13.1        1,375         9.7        1,430         11.2
                                             -------      -----      -------      ------      -------       ------
                                             $ 9,840      100.0%     $ 9,295      100.0%      $ 8,087       100.0%
                                             =======      ======     =======      ======      =======       ======
</TABLE>




                                       15

<PAGE>



         Investments.  The Company  classifies a large portion of its investment
securities  and   mortgage-backed   securities  as  available  for  sale.   Such
secutitites are reported on a fair value basis, with unrealized gains and losses
excluded  from  earnings but reported as a separate  component of  stockholders'
equity,  net of deferred tax  provision.  Management  believes the available for
sale  classification  allows the most  flexibility in meeting  liquidity  needs,
adjusting  interest rate risk and controlling  balance sheet trends. The Company
could experience  volatility in its capital account in future periods because of
market  price  fluctuation  in its  investment  securities  and  mortgage-backed
securities holdings.

         The  amortized  cost  and  fair  value  of  the  Company's   investment
securities and mortgage-backed  securities  (including  collateralized  mortgage
obligations, or "CMOs") are as follows:
<TABLE>
<CAPTION>

(In thousands)                   September 30, 1997     June 30, 1997     September 30, 1996
                                 ------------------  ------------------   ------------------ 

                                 Amortized   Fair    Amortized    Fair     Amortized     Fair
                                     Cost    Value     Cost      Value       Cost       Value
                                     ----    -----     ----      -----       ----       -----
<S>                                <C>       <C>       <C>       <C>       <C>         <C>    
Investment Securities(1)

         Held to maturity:
            FHLB notes              $  -    $    -    $    -    $    -      $   -      $   -
            Municipal bonds          6,148     6,148     6,174     6,226      6,253      6,253
                                   -------   -------   -------   -------   --------    -------

                                     6,148     6,148     6,174     6,226      6,253      6,253
                                   -------   -------   -------   -------   --------    -------

         Available for sale:

            FHLB notes               3,956     3,998     6,453     6,461      8,943      8,932
            FNMA bonds                 -         -         -         -          -          -
                                   -------   -------   -------   -------   --------    -------
                                                                              8,943      8,932
Net unrealized gain(loss)               42       -           8       -          (11)       -
                                   -------   -------   -------   -------   --------    -------

                                     3,998     3,998     6,461     6,461      8,932      8,932
                                   -------   -------   -------   -------   --------    -------

                                   $10,146   $10,146   $12,635   $12,687   $ 15,185    $15,185
                                   =======   =======   =======   =======   ========    =======
</TABLE>


         (1) Excludes investment in the Federal Home Loan Bank stock.






                                       16

<PAGE>


<TABLE>
<CAPTION>

Mortgage-Backed Securities
<S>                                <C>             <C>           <C>             <C>           <C>           <C>    
         Held to maturity:
            FHLMC                  $    367        $   379       $    369        $   383       $   373       $   381
            Other                       -              -              -              -             -             -
                                   --------        -------       --------        -------       -------       -------
                                        367            379            369            383           373           381
                                   --------        -------       --------        -------       -------       -------
         Available for sale:
             FHLMC                    6,710          6,680            -              -             -             -             
             FHLB                       -              -              -              -           2,834        12,836
             Agency MBS                 -              -           12,032         12,167        12,105        11,958
                                   --------        -------       --------        -------       -------       -------
                                      6,710          6,680         12,032         12,167        24,939        24,794
             Net unrealized
                  Losses                (30)            -             135            -            (145)          -
                                   --------        -------       --------        -------       -------       -------
                                      6,680          6,680         12,167         12,167        24,794        24,794
                                   --------        -------       --------        -------       -------       -------

Total MBS Securities               $  7,047        $ 7,059       $ 12,536        $12,550       $25,167       $25,175
                                   ========        =======       ========        =======       =======       =======

</TABLE>



             Noninterest  Income.  Financial service fees increased by $142,000,
or 22.1% in the first quarter of fiscal 1998 compared to the same quarter in the
previous  year.  The  increase is  primarily  attributed  to and increase in the
number of accounts and revenue from implementation of an ATM surcharge fee.

             Sales of real estate owned yielded a loss of $36,000  compared to a
net gain of $48,000 in the same quarter of the previous fiscal year.

             Loan  servicing and fee income  declined from $343,000 in the first
quarter of fiscal 1977  compared  with  $238,000  for the first  quarter of this
fiscal  year.  The sale of loan  servicing  in fiscal  1996  with only  residual
balances of loans remaining has resulted in a declining source of revenue.

             The gain on the sale of loans  represents  the  largest  source  of
noninterest  income to the Company.  Gains on sale of loans in the first quarter
of fiscal 1998  amounted to  $2,062,000,  an increase of  $1,314,000,  or 275.5%
increase.  The  increase is due to  substantially  higher  volume of loans being
originated and then sold servicing released.


             Noninterest  Expenses.  Total  noninterest  expense  for the  first
quarter of fiscal 1998 was  $5,948,000  compared with  $8,420,000  for the first
quarter of last  fiscal  year.  However,  in the first  quarter of last year the
Company paid the on-time  assessment to recapitalize the SAIF fund in the amount
of $3,149,000. Excluding this one-time charge,

                                       17

<PAGE>



expenses would have been up over last year by $677,000 or 12.8%. The increase is
primarily attributable to American Finance and Investments which was acquired in
December of 1996. AFI for the quarter has salary expense of $536,000,  Occupancy
and  equipment  expense of $90,000 and  Advertising  expense of $224,000.  These
expense in the first  quarter of the current  fiscal  year are greater  than the
overall increase in expenses.

             By  individual  expense   categories,   personnel  costs  increased
$305,000,  Advertising increased $216,000,  Occupancy expense increased $54,000,
equipment  expense by $158,000,  and other  expenses by $73,000.  Excluding  the
increases  in expenses  due to the  acquisition  of AFI,  the Company  generally
operated on a lower expense level than in the first quarter of last fiscal year.

Financial Condition

             Liquidity and Capital  Resources.  The primary sources of funds for
the Company consist of checking and savings deposits,  loan sale fundings,  loan
repayments,  borrowings  from the FHLB  and  others,  and  funds  provided  from
operations.  Deposits totaled $645,921,000 at September 30, 1997, an increase of
$45,716,000,  or 7.6%, over the  $600,205,000 at June 30, 1997.  Certificates of
deposit  grew by  $47,222,000  in the first  quarter of fiscal year 1998,  while
savings  deposits  declined by $936,000 and  checking  and money market  deposit
accounts declined by $570,000.  The principal reason for the decline in checking
deposits due to special  promotional CD programs and general  changes in deposit
balances.
             Advances from the FHLB decreased by $57,000,000 to  $124,552,000 at
September 30, 1997,  compared to  $181,552,000  at June 30, 1997. The decline in
borrowings is directly attributable to the increase in deposits discussed above.
The Company has access to advances from the FHLB  generally  secured by pledging
mortgage loans and its stock in the FHLB.

             At September 30, 1997, the Savings Bank's net worth under generally
accepted accounting principles ("GAAP") was $69,136,000. OTS Regulations require
that savings  institutions  maintain the following capital levels:  (1) tangible
capital of at least 1.5% of total adjusted  assets,  (2) core capital of 4.0% of
total  adjusted  assets,  and (3)  overall  risk-based  capital of 8.0% of total
risk-weighted assets.










                                       18

<PAGE>



             As of September  30, 1997,  the Savings Bank  satisfied  all of the
regulatory capital requirements, as shown in the following table reconciling the
Savings Bank's GAAP capital to regulatory capital:
                                                                         Risk -
                                             Tangible      Core          Based
             (In thousands)                  Capital      Capital       Capital
             --------------                  -------      -------       -------

             GAAP capital                    $ 69,116     $ 69,116     $ 69,116
             Non-allowable assets:
             Goodwill                          (2,088)      (2,088)      (2,088)
                 Other intangible assets          (92)         -            -
                  Equity in subsidiaries         (893)        (893)        (893)
             Additional capital items:
                      Unrealized gain on
                    debt securities, net           (8)          (8)          (8)
                 General loss allowances          -            -          7,603
                                             --------     --------     --------
             Regulatory capital - computed     66,035       66,127       73,730
             Minimum capital requirement       12,766       34,046       48,505
                                             --------     --------     --------
             Excess regulatory capital       $ 53,269     $ 32,081     $ 25,225
                                             ========     ========     ========

             Ratios:
             Regulatory capital - computed       7.76%        7.77%       12.16%
             Minimum capital requirement         1.50         4.00         8.00
                                             --------     --------     --------
             Excess regulatory capital           6.26%        3.77%        4.16%
                                             ========     ========     ========






                                       19

<PAGE>



Asset Quality
             The following table sets forth  information  regarding  non-accrual
loans and real estate owned held by the Company at the dates indicated:
<TABLE>
<CAPTION>

              (In thousands)                            September 30,      June 30,     September 30
                                                             1997            1997           1996
                                                        -------------    ------------   ------------
<S>                                                         <C>            <C>            <C>     
              Non-accrual loans:
                 Residential mortgage                       $ 7,637        $ 7,419        $  5,709
                 Commercial mortgage                          1,061          1,061           1,747
                 Construction                                12,585          3,092           3,283
                 Consumer non-mortgage                        3,170            507           1,487
                                                            -------        -------        --------
                                                                                        
                Total non-accrual loans                      14,453         12,079          12,226
                Specific loss allowances                        -              -               -
                                                            -------        -------        --------
                    Total non-accrual loans, net             14,453         12,079          12,226
                                                            -------        -------        --------
                                                                                        
              Real estate acquired through foreclosure:                                 
                 One to four family                                                     
                    residential units                         4,897          5,903           3,047
                 Residential land/lots                          992            934           1,747
                 Shopping/retail centers                        582            623           1,707
                 Office buildings                               -              -               -
                 Commercial land                                187            187             192
                                                            -------        -------        --------
                Total real estate acquired                                              
                   through foreclosure                        6,658          7,647           6,693
                Specific and general                                                    
                 allowances for losses                          -              -              (809)
                                                            -------        -------        --------
                    Total real estate acquired through                                  
                              foreclosure, net                6,658          7,647           5,884
                                                            -------        -------        --------
                                                                                        
              Total non-performing assets                   $21,111        $19,726        $ 17,397
                                                            =======        =======        ========
                                                                                        
                                                                                        
              Non-accrual loans to gross loans                 2.15%          1.76%           1.77%
                                                                                        
              Total non-performing assets to sum of                                     
                gross loans and real estate acquired                                    
                through foreclosure                            3.11%          2.85%           2.50%
                                                                                        
              Total non-performing assets to total assets      2.47%          2.30%           2.23%
</TABLE>


              The net  amount  of  interest  income  foregone  during  the first
quarters of fiscal years 1998 and 1997 on loans classified as non-performing was
$218,172 and $170,000, respectively.




                                       20

<PAGE>





                           Part II. Other Information
              Virginia First Financial Corporation and Subsidiaries




Item 6.     Exhibits and Reports on Form 8-K

  (a)         Exhibits - None

  (b)         Reports  on Form 8-K - There were no reports on Form 8-K filed for
              the three months ended September 30, 1997.




                                       21

<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.



                      Virginia First Financial Corporation
                      ------------------------------------
                                  (Registrant)







                  Date: November 13, 1997 /s/ Charles A. Patton
                                          ----------------------
                                Charles A. Patton
                                  President and
                             Chief Executive Officer






                   Date: November 13, 1997 /s/ William J. Vogt
                                           ---------------------
                                 William J. Vogt
                            Senior Vice President and
                             Chief Financial Officer












                                       22