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

                                 FORM 10-KSB (A)

[ X ]       ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934
                    For the fiscal year ended December 31, 1998

[    ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934

                COMMISSION FILE NUMBER         0-22955

                           BAY BANKS OF VIRGINIA, INC.
                 (Name of small business issuer in its charter)

     VIRGINIA                                    54-1838100
(State of Incorporation)              (I.R.S. Employer Identification no.)

                100 SOUTH MAIN STREET, KILMARNOCK, VIRGINIA 22482
               (Address of principal executive offices) (Zip Code)

Issuers telephone number............................................804.435.1171
Securities registered under Section 12(b) of the Exchange Act...............NONE
Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock ($5.00 Par Value)
                                (Title of Class)

      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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  ___.

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the best of the  registrant's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

      State issuer's revenues for its most recent fiscal year........$15,249,477
     Number of shares outstanding as of February 28, 1999..............1,164,728

As of March 29, 1999, the aggregate market value of Common Stock of Bay Banks of
Virginia, Inc. held by non-affiliates was approximately $37,853,660,  based upon
the last sales price per share known to management on February 15, 1999

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's 1998 Annual Report to Shareholders are incorporated
by  reference  into Part II of this Form  10-KSB.  Portions of the  registrant's
definitive Proxy Statement for its' Annual Meeting of Shareholders to be held on
May 17, 1999 are incorporated by reference into Part III of this Form 10-KSB.


<PAGE>

                                Table of Contents

Table        Description
-----        -----------
Table I      Average Balances, Income & Expense, Yields,
             and Rates
Table II     Volume & Rate Analysis of Changes in Net
             Interest Income
Table III    Investment Maturities & Average Yields
Table IV     Types of Loans
Table V      Loan Maturity Schedule of Selected Loans
Table VI     Risk Elements
Table VII    Summary of Allowance for Loan Losses
Table VIII   Allocation of the Allowance for Loan Losses
Table IX     Average Deposits & Rates
Table X      Maturity Schedule of Time Deposits of
             $100,000 or more
Table XI     Return on Equity & Assets
Table XII    Interest Rate Sensitivity Analysis


<PAGE>


                                     Table I
              Average Balances, Income & Expense, Yields, and Rates

<TABLE>
<CAPTION>


                                                     1998                          1997
                                          -----------------------------------------------------------
(Thousands)                               Average   Annual     Yield/     Average   Annual     Yield/
                                          Balance   Income/     Rate      Balance   Income/    Rate
                                                    Expense                         Expense
<S>     <C>
ASSETS:
Investments:
-----------
  Taxable Investments                    $ 33,935  $ 2,128     6.27%    $  28,565  $  1,644     5.76%
  Tax-Exempt Investments (1)             $ 16,885  $ 1,048     9.40%    $  15,923  $    741     7.05%
                                         ------------------------------------------------------------
Total Investments                        $ 50,820  $ 3,176     6.25%    $  44,488  $  2,386     5.36%
Loans (2)                                $110,026  $ 9,523     8.65%    $ 103,398  $  9,391     9.08%
Interest-bearing Deposits                $      0  $     0     0.00%    $       0  $      0     0.00%
Fed Funds Sold                           $ 11,782  $   796     6.76%    $   8,395  $    390     4.65%
                                         ------------------------------------------------------------
Total Interest Earning Assets            $172,628  $13,495     8.13%    $ 156,280  $ 12,166     8.03%
Allowance for Loan Losses                   ($936)                          ($940)
Unrealized Gains & Losses on Investments $    688                            $170
Total Non-Earning Assets                 $ 12,084                       $   8,868
                                         ========                       =========
TOTAL ASSETS                             $184,465                       $ 164,378

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

LIABILITIES & SHAREHOLDERS' EQUITY:
Interest-bearing Deposits:
-------------------------
  Savings Deposits                       $ 67,385  $  3,102    4.60%    $  68,943   $ 3,303     4.79%
  NOW Deposits                           $ 20,334  $    663    3.26%    $  16,642   $   493     2.96%
  CD's (greater than) $100,000           $ 11,153  $    616    5.52%    $   8,634   $   403     4.67%
  CD's (less than) $100,000              $ 39,173  $  2,321    5.92%    $  30,822   $ 1,705     5.53%
  Money Market Deposit Accounts          $ 10,108  $    352    3.49%    $   9,120   $   300     3.28%
                                         ------------------------------------------------------------
Total Interest-bearing Deposits          $148,152  $  7,054    4.76%    $ 134,161   $ 6,203     4.62%
Fed Funds Purchased & Sec Sold to
         Repurchase                      $    293  $     11    3.82%    $     348   $    22     6.24%
                                         ------------------------------------------------------------
Total Interest-Bearing Liabilities       $148,445  $  7,065    4.76%    $ 134,509   $ 6,225     4.63%
Non-Interest-Bearing Liabilities:
--------------------------------
  Demand Deposits                        $ 15,784                       $  11,696
  Other Liabilities                      $    635                       $     434
                                         --------                       ---------
TOTAL LIABILITIES                        $164,864                       $ 146,639
SHAREHOLDER'S EQUITY                     $ 19,600                       $  17,738
                                         ========                       =========
TOTAL LIABILITIES & SHAREHOLDERS'
          EQUITY                         $184,464                       $ 164,377
                                         ------------------------------------------------------------
Net Interest Income/Yield                          $  6,430    4.04%                $ 5,942     4.05%

Notes:
(1)-Yield assumes a federal tax rate of 34%
(2)-Includes Visa Program & nonaccrual loans.
</TABLE>


<PAGE>


                                    Table II
            Volume & Rate Analysis of Changes in Net Interest Income
<TABLE>
<CAPTION>
(Thousands)                                 1998 vs. 1997              1997 vs. 1996
                                           ---------------            ---------------
                                                        Total                     Total
                                         Volume   Rate  Change      Volume  Rate  Change
                                         ------   ----  ------      ------  ----  ------
<S>     <C>
Investments:
  Taxable Investments                   $  309   $ 175  $  484       ($64)  ($37) ($101)
  Tax-Exempt Investments                $   45   $ 262  $  306         $4  ($167) ($163)
                                        -----------------------------------------------
Total Investments                       $  354   $ 437  $  791       ($60) ($204) ($264)
Loans                                   $  602   ($470) $  132       $482   $267   $749
Interest-bearing Deposits               $    0   $   0  $    0       $  0   $  0   $  0
Fed Funds Sold                          $  157   $ 249  $  406       $234  ($181)  $ 53
                                        ===============================================
Total Interest Earning Assets           $1,113   $ 215  $1,329       $656  ($118)  $538

Interest-bearing Deposits:
-------------------------
  Savings Deposits                        ($75)  ($126)  ($200)     ($197) ($219) ($416)
  NOW Deposits                          $  109    $ 60    $169       $ 48   ($14)  $ 34
  CD's (greater than) $100,000          $  118    $ 95    $213       $107    $32   $139
  CD's (less than) $100,000             $  462    $154    $616       $280    $51   $331
  Money Market Deposit Accounts         $   32    $ 20    $ 53        ($9)   $26   $ 17
                                        -----------------------------------------------
Total Interest-bearing Deposits         $  647    $204    $851       $229  ($125)  $104
Fed Funds Purchased & Sec Sold to          ($3)    ($7)   ($11)      $  0    $22   $ 22
   Repurchase                           ===============================================
Total Interest-Bearing Liabilities      $  645    $195    $840       $229  ($103)  $126

Change in Net Interest Income           $  468    $ 20    $488       $427   ($15)  $413

</TABLE>

Notes:
-----
Changes in interest due to volume are calculated by multiplying the change in
volume by the old rate.  Changes in interest due to rates are calculated by
multiplying the change in rates by the new volume.


<PAGE>

                                    Table III
                     Investment Maturities & Average Yields
                                 as of 12/31/98

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------
(Thousands)                            One Year
                                       or Less      One to
                                       or No        Five    Five to     Over Ten
                                       Maturity     Years   Ten Years    Years    Total
--------------------------------------------------------------------------------------------
<S>     <C>
U.S. Agency Securities:
  Book Value                              $0      $ 8,602   $ 6,644     $ 1,391   $16,637
  Market Value                            $0      $ 8,651   $ 6,657     $ 1,403   $16,712
  Weighted average yield                0.00%        5.94%     6.23%       6.22%     6.08%
--------------------------------------------------------------------------------------------
U.S. Treasury Securities:
  Book Value                          $2,999     $    496   $ 1,046     $     0   $ 4,542
  Market Value                        $3,010     $    510   $ 1,046     $     0   $ 4,567

  Weighted average yield                5.63%        6.00%     7.32%       0.00%     6.05%
--------------------------------------------------------------------------------------------
State & Municipal Securities:
  Book Value                         $ 1,862     $  8,856   $12,619     $   812   $24,149
  Market Value                       $ 1,880     $  9,085   $12,922     $   818   $24,705
  Weighted average yield                7.76%        7.55%     7.05%       6.59%     7.27%
--------------------------------------------------------------------------------------------
Other Securities:
  Book Value                         $   761     $  4,141   $ 6,593     $    11   $11,507
  Market Value                       $   765     $  4,209   $ 6,846     $    11   $11,831
  Weighted average yield                6.16%        6.16%     6.26%       0.00%     6.21%
--------------------------------------------------------------------------------------------
Total Securities:
  Book Value                         $ 5,623     $ 22,094   $26,903     $ 2,214   $56,835
  Market Value                       $ 5,655     $ 22,455   $27,472     $ 2,233   $57,815
  Weighted average yield                6.41%        6.63%     6.66%       6.32%     6.61%

</TABLE>

Notes:
Yields on tax-exempt  securities have been computed on a  tax-equivalent  basis,
assuming a tax rate of 34%.

<PAGE>


                        Table IV
                     Types of Loans



(Thousands)                                      12/31/98         12/31/97
                                                 --------         --------
Commercial                                       $ 11,290         $  9,020
Real Estate - Construction                       $  1,519         $  3,014
Real Estate - Mortgage                           $ 83,073         $ 76,541
Installment and Other (includes Visa program)    $ 18,697         $ 16,222
                                                 --------         --------
Total                                            $114,579         $104,796

Notes:
Deferred loan costs & fees not included.
Allowance for loan losses not included.


<PAGE>


                       Table V
            Loan Maturity Schedule of Selected Loans
               as of December 31, 1998

<TABLE>
<CAPTION>
                                                            One Year or Less        One to Five Years      Over Five Years
(Thousands)                                                 Fixed    Variable      Fixed     Variable     Fixed     Variable
                                                             Rate        Rate       Rate         Rate      Rate         Rate
                                                             ----        ----       ----         ----      ----         ----
<S>     <C>
Commercial                                                 $4,893    $ 5,412     $   564     $     0    $   284        $  0
Real Estate - Construction                                 $  773    $     0     $     0     $     0    $     0        $  0
Real Estate - Mortgage                                     $  803    $20,858     $10,195     $40,326    $11,320        $105
Installment and Other (includes Visa program)              $1,311    $ 8,835     $ 6,471     $   114    $ 1,409        $156
                                                           ----------------------------------------------------------------
  Totals                                                   $7,781    $35,105     $17,230     $40,440    $13,013        $261
</TABLE>


Notes:
Loans with immediate repricing are shown in the 'One Year or Less' category.


<PAGE>


                                    Table VI
                                  Risk Elements

(Thousands)                                        12/31/1998   12/31/1997

Non-accrual Loans                                      $   79       $  126
Restructured Loans                                     $    0       $    0
Foreclosed Properties                                  $1,160       $1,379
  Total Non-performing Assets                          $1,238       $1,505

Loans past due 90+ days as to principal or             $  232       $  594
interest payments & accruing interest

For non-accrual & restructured loans, Gross            $    4       $   17
interest income which would have been recorded
under original loan terms for the year ended

For non-accrual & restructured loans, Gross            $    4       $   17
interest income recorded for the year ended

Potential problem loans as of 12/31/98 not             $  236         n/a
reported above:

Notes:

Loans receivable that management has the intent and ability to hold for the
foreseeable future or until maturity or payoff are reported at their outstanding
unpaid principal balances reduced by any charge-offs or specific valuation
accounts and net of any unearned discount and fees and costs on originating
loans.
Loan  origination  fees and  certain  direct  origination  costs for real estate
mortgage loans are capitalized and recognized as an adjustment of the yield of
the related loans.
The accrual of interest on impaired loans is discontinued  when, in management's
opinion, the borrower may be unable to meet payments as they become due.  When
interest accrual is discontinued, all unpaid accrued interest is reversed.
Interest income is subsequently recognized only to the extent cash payments are
received.
The allowance for loan losses is increased by charges to income and decreased by
charge-offs (net of recoveries). Management's periodic evaluation of the
adequacy of the allowance is based on past loan loss  experience, known
and inherent risks in the portfolio, adverse situations that may affect the
borrower's  ability  to  repay,  the  estimated  value  of  any  underlying
collateral, and current economic conditions.

<PAGE>

                                     Table VII
                      Summary of Allowance for Loan Losses

                                                      12/31/98    12/31/97
                                                    -----------------------

Balance, beginning of period                          $    861      $  1,020

Loans charged off:
  Commercial & other                                  $     20      $     15
  Real estate - construction                          $      0      $      0
  Real estate - mortgage                              $     30      $    228
  Installment & Other (including Visa                 $     27      $    125
        program)
Total loans charged off                                   ($77)        ($368)

Recoveries of loans previously charged off:
  Commercial & other                                  $      6      $      0
  Real estate - construction                          $      0      $      0
  Real estate - mortgage                              $      1      $      0
  Installment & Other (including Visa                 $     12      $      6
        program)
Total recoveries                                      $     20      $      6
                                                      -----------------------
Net charge offs                                           ($57)        ($362)

Provision for loan losses                             $    208      $    203
                                                      ======================
Balance, end of period                                $  1,012      $    861

Average loans outstanding during the period           $110,026      $103,398


Ratio of net charge-offs during the                       0.05%         0.35%
period to average loans outstanding
during the period

See Note 1 to Financial Statements, Loans receivable paragraph,for a description
of the factors which influenced management's determination of the provision
charged to operating expense.

<PAGE>

                                   Table VIII

                   Allocation of the Allowance for Loan Losses

                                                   12/31/98          12/31/97

 (Thousands)                                    Amount Percent    Amount Percent
                                                ------ -------    ------ -------
Commercial                                        $90   8.90%       $84   9.76%
Real estate - construction                         $5   0.52%        $9   1.04%
Real estate - mortgage                           $758  74.92%      $659  76.62%
Installment & Other (including Visa program)     $159  15.68%      $108  12.59%
                                               ------ -------      ---- -------
Total                                          $1,012 100.00%      $861 100.00%


<PAGE>

                                    Table IX

                            Average Deposits & Rates

                                                 1998               1997

(Thousands)                                Average   Yield/   Average   Yield/
                                           Balance    Rate    Balance    Rate
                                           -------   ------   -------   ------
Non-interest bearing Demand Deposits       $15,784    0.00%   $11,696   0.00%
Interest bearing Deposits:
  NOW Accounts                             $20,334    3.26%   $16,642   2.96%
  Regular Savings                          $67,385    4.60%   $68,943   4.79%
  Money Market Deposit Accounts            $10,108    3.49%    $9,120   3.28%
Time Deposits:
  CD's $100,000 or more                    $11,153    5.52%    $8,634   4.67%
  CD's (less than) $100,000                $39,173    5.92%   $30,822   5.53%
Total Interest bearing Deposits           $148,152    4.76%  $134,161   4.62%
                                          --------    -----  --------   -----
Total Average Deposits                    $163,936    4.30%  $145,857   4.25%


<PAGE>


                                     Table X

             Maturity Schedule of Time Deposits of $100,000 or more


(Thousands)                                        12/31/98      12/31/97
                                                 ----------     ----------
3 months or less                                   $2,280         $4,700
3-6 months                                         $5,338         $1,978
6-12 months                                        $2,775         $2,212
Over 12 months                                     $2,159         $2,142
                                                 ----------     ----------
  Totals                                          $12,552        $11,032



<PAGE>


                                    Table XI

                            Return on Equity & Assets

                                         1998             1997
                                         ----             ----
Return on Assets                        1.00%            1.21%
Return on Equity                       10.45%           11.64%
Dividend Payout Ratio                  41.93%           36.85%
Equity to Assets Ratio                  9.59%           10.41%


<PAGE>


<TABLE>
<CAPTION>

                                    Table XII
                       Interest Rate Sensitivity Analysis
                                as of 12/31/98

                                                     Within 3        3-12                  Over 5
                                                      Months        Months    1-5 Years     Years      Total
 (Thousands)                                         --------       ------    ---------    ------      -----
<S>        <C>
Fed Funds Sold                                        $12,008       $     0    $     0     $     0     $ 12,008
Investments                                           $ 2,254       $ 3,626    $24,617     $28,307     $ 58,804
Loans                                                 $25,325       $27,487    $49,669     $12,061     $114,542
                                                     ========      ========    =======     =======     ========
Total Earning Assets                                  $39,587       $31,113    $74,286     $40,368     $185,354
NOW Accounts                                          $10,629       $     0    $13,836     $     0     $ 24,465
MMDA's                                                $ 8,173       $     0    $ 3,101     $     0     $ 11,274
Savings                                               $42,491       $     0    $26,531     $     0     $ 69,022
CD's (less than) $100,000                             $ 9,981       $22,233    $ 8,936     $     0     $ 41,150
CD's (greater than or equal to) $100,000              $ 3,550       $ 6,729    $ 2,227     $     0     $ 12,506
                                                     --------       -------    -------     -------     --------
Total Deposits                                        $74,824       $28,962    $54,631     $     0     $158,417
                                                     ========       =======    =======     =======     ========
Fed Funds Purchased & Sec Sold to Repurchase          $   586       $     0    $     0     $     0     $    586
                                                     ========       =======    =======     ========    ========
Total Interest Bearing Liabilities                    $75,410       $28,962    $54,631     $     0     $159,003
Rate Sensitive Gap                                   ($35,823)      $ 2,151    $19,655     $40,368     $ 26,351
Cumulative Gap                                       ($35,823)     ($33,672)  ($14,017)    $26,351



</TABLE>
<PAGE>

Year 2000 Issues:
The company  estimates  the cost of Y2K to be $262  thousand  for the year ended
December  31,  1998.  As this  process  develops,  costs of  implementation  are
estimated to be $75 thousand for 1999 and 2000.  Management  has  developed  and
tested a five-part plan to prepare for potential Year 2000 malfunctions.  System
testing has been performed in accordance with Federal  Reserve Bank  regulations
and FFIEC  guidelines.  Management  anticipates  little or no  disruption in the
delivery of services.  However,  there can be no guarantee  that no  disruptions
will occur as a result of Year 2000.  Presently  management does not expect that
any problems currently anticipated will have a materially adverse impact on its'
business.

Annual Report - page 1:
The name of the  accounting  firm who  opined  on the  financial  statements  is
Eggleston Smith P.C., of Newport News, Virginia.

Annual Report - page 6:
The amount of loans on which the accrual of interest  has been  discontinued  is
disclosed in Note 3 to the Financial  Statements.  In general,  it is the Bank's
policy to place all loans 90 days past due on  nonaccrual  status.  In both 1998
and 1997 the amount of loans 90 days past due and still  accruing  interest  was
not  material.  Those loans were well  secured and in the process of  collection
consistent with regulatory practices.  The amount of these loans is disclosed in
the statistical Guide 3 tables included in this amendment.



<PAGE>

Bay Banks of Virginia
100 South Main Street
Post Office Box 1869
Kilmarnock, Virginia 22482

November 10, 1999

John W. Sniegon, Assistant Chief Accountant
Division of Corporation Finance
Mail Stop 4-8
United States Securities and Exchange Commission
Washington, D.C.  20549

Re:  Form 10-KSB filed March 31, 1999, File No. 0-22955

Dear Mr. Sniegon,

In response to your letter dated August 4, 1999, copy attached,  we have amended
our Form 10-KSB.  A copy of that  amendment is being filed on the EDGAR  system,
and another copy is provided with this letter.

Industry Guide 3
The amendment  includes Guide 3 information for the year ended December 31, 1998
and 1997.

Year 2000 Issues
The Year 2000 issues discussed in your letter are included in the amendment.

Annual Report - page 1
The name of our  accounting  firm,  Eggleston  Smith P.C.,  was omitted due to a
clerical error in the EDGAR process.

Annual Report - page 6
The amount of loans 90 days past due and accruing  interest are disclosed in the
Guide 3 tables  included in this  amendment.  Please refer to the  amendment for
further  information.  We will  include our policy  regarding  such loans in the
notes to financial statements in future reports.

If you have any further  questions or concerns,  you may contact Deb Evans,  our
Regulatory Accountant.

Sincerely,

/s/ Austin L. Roberts, III

Austin L. Roberts, III
President & Chief Executive Officer