SECURITIES AND EXCHANGE COMMISSION
                       ----------------------------------

                              Washington, DC 20549
                              --------------------


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


                                    FORM 10-Q

(Mark One)

------
  X          Quarterly  report pursuant to section 13 or 15(d) of the Securities
------       Exchange Act of 1934


             For the quarterly period ended June 30, 2000

                                       OR

------       Transition report pursuant to section 13 or 15(d) of the Securities
------       Exchange Act of 1934


                         Commission file number 0-17353

                            FMS FINANCIAL CORPORATION
                            -------------------------
             (Exact name of registrant as specified in its charter)

New Jersey                                                  22-2916440
----------                                                 -------------
(State or other jurisdiction of                            (IRS Employer
incorporation or organization)                           Identification No.)

3 Sunset Road, Burlington, New Jersey                           08016
--------------------------------------------                   -------
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code: (609) 386-2400

     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  reports),  and (2) has been
subject to such filing requirements for the past 90 days. YES  X   NO    .
                                                              ---     ---

     As of July 31, 2000 there were issued and outstanding  6,762,268  shares of
the registrant's Common Stock, par value $.10 per share.


<PAGE>

                    FMS FINANCIAL CORPORATION AND SUBSIDIARY
                    ----------------------------------------

                          QUARTERLY REPORT ON FORM 10-Q
                          -----------------------------

                                  JUNE 30, 2000
                                  -------------

                                TABLE OF CONTENTS
                                -----------------
                                                                            Page
                                                                            ----
PART I - Financial Information
------------------------------

         Item 1 - Financial Statements

               Consolidated  Statements  of  Financial  Condition as of
                   June 30, 2000 (unaudited) and December 31, 1999............1

               Consolidated  Statements of Income (unaudited)
                   for the three and six months ended June 30, 2000
                   and June 30, 1999..........................................2

               Consolidated  Statements  of Cash Flows  (unaudited)
                   for the six months ended June 30, 2000 and June 30,
                   1999.......................................................3

               Consolidated Statement of Changes in Stockholders'
                   Equity for the six months ended June 30, 2000
                   (unaudited)................................................4

         Item 2 - Management's Discussion and Analysis of
                  Financial Condition and Results of Operations.............5-15

         Item 3 - Disclosure about Market Risk................................15

PART II - Other Information
---------------------------

         Item 1 - Legal Proceedings...........................................16

         Item 2 - Changes in Securities.......................................16

         Item 3 - Defaults Upon Senior Securities.............................16

         Item 4 - Submission of Matters to a Vote of Security Holders.........16

         Item 5 - Other Information...........................................16

         Item 6 - Exhibits and Reports on Form 8-K............................16






<PAGE>
FMS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                                                          June 30, 2000          December 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
                                                                                          (Unaudited)
ASSETS
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                                  <C>                     <C>
     Cash and amounts due from depository institutions                                $        25,378,978     $         20,489,516
     Interest-bearing deposits                                                                      2,317                   82,493
     Short term funds                                                                          11,883,435               25,703,862
                                                                                    ----------------------   ----------------------
        Total cash and cash equivalents                                                        37,264,730               46,275,871
     Investment securities held to maturity                                                   230,165,806              220,307,242
     Investment securities available for sale                                                  43,650,749               49,307,116
     Loans, net                                                                               297,703,594              299,694,517
     Mortgage-backed securities held to maturity                                              113,847,027              121,424,419
     Accrued interest receivable:
        Loans                                                                                   1,509,558                1,398,470
        Mortgage-backed securities                                                                806,433                  836,699
        Investments                                                                             3,664,768                3,628,622
     Federal Home Loan Bank stock                                                               4,861,410                4,861,410
     Real estate held for development, net                                                         87,926                   87,926
     Real estate owned,  net                                                                      436,060                  448,541
     Office properties and equipment, net                                                      23,449,392               20,686,272
     Deferred income taxes                                                                      2,372,865                2,264,587
     Excess cost over fair value of net assets acquired                                            41,496                   55,328
     Prepaid expenses and other assets                                                          1,147,084                  959,819
     Subordinated debentures issue cost,  net                                                     235,091                  263,765
                                                                                    ----------------------   ----------------------
TOTAL ASSETS                                                                          $       761,243,989     $        772,500,604
                                                                                    ======================   ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------------------------
Liabilities:
     Deposits                                                                         $       614,436,675     $        603,892,117
     Securities sold under agreements to repurchase                                            80,000,000               90,000,000
     Advances from the Federal Home Loan Bank                                                   6,305,644               16,337,031
     10% Subordinated debentures, due 2004                                                     10,000,000               10,000,000
     Advances by borrowers for taxes and insurance                                              2,260,589                2,204,704
     Accrued interest payable                                                                   1,365,515                1,437,348
     Dividends payable                                                                            202,868                  215,519
     Other liabilities                                                                          2,006,875                2,316,882
                                                                                    ----------------------   ----------------------
Total liabilities                                                                             716,578,166              726,403,601
                                                                                    ----------------------   ----------------------
Commitments and contingencies
Stockholders' Equity:
     Preferred stock - $.10 par value 5,000,000 shares  authorized;  none issued
     Common stock - $.10 par value 10,000,000 shares authorized; shares
        issued 7,897,891 and 7,897,791 and shares outstanding 6,762,268 and
        7,183,978 as of June 30, 2000 and December 31, 1999, respectively                         789,789                  789,779
     Paid-in capital in excess of par                                                           8,217,654                8,217,535
     Accumulated comprehensive loss - net of deferred income taxes                             (1,347,896)              (1,167,810)
     Retained earnings                                                                         44,343,242               42,108,955
     Less:  Treasury stock (1,135,623 and 713,813 shares, at cost, as of
       June 30, 2000 and December 31, 1999, respectively)                                      (7,336,966)              (3,851,456)
                                                                                     --------------------     --------------------
Total stockholders' equity                                                                     44,665,823               46,097,003
                                                                                     --------------------     --------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                           $        761,243,989     $        772,500,604
                                                                                     ====================     ====================
</TABLE>

See notes to consolidated financial statements.

                                       1
<PAGE>
FMS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                                               Three Months ended                    Six Months ended
                                                                    June 30,                             June 30,
                                                        ----------------------------------   ---------------------------------
                                                           2000                1999             2000               1999
-----------------------------------------------------------------------------------------    ---------------------------------
INTEREST  INCOME:                                                (Unaudited)                         (Unaudited)
<S>                                                 <C>               <C>                <C>               <C>
Interest income on:
    Loans                                            $    5,889,175    $       5,914,577  $   11,644,715    $      11,574,220
    Mortgage-backed securities                            1,974,460            1,563,110       4,018,311            3,059,153
    Investments                                           5,128,211            4,221,455      10,105,440            8,219,334
                                                     ---------------   ------------------ ---------------   ------------------
Total interest income                                    12,991,846           11,699,142      25,768,466           22,852,707
                                                     ---------------   ------------------ ---------------   ------------------
INTEREST EXPENSE:
Interest expense on:
    Deposits                                              5,059,084            4,410,701      10,000,347            8,744,607
    Subordinated debentures                                 264,337              264,337         528,674              528,674
    Borrowings                                            1,326,777            1,371,151       2,736,997            2,730,773
                                                     ---------------   ------------------ ---------------   ------------------
Total interest expense                                    6,650,198            6,046,189      13,266,018           12,004,054
                                                     ---------------   ------------------ ---------------   ------------------
NET INTEREST INCOME                                       6,341,648            5,652,953      12,502,448           10,848,653
PROVISION FOR LOAN LOSSES                                    60,000               60,000         120,000              120,000
                                                     ---------------   ------------------ ---------------   ------------------
NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                                       6,281,648            5,592,953      12,382,448           10,728,653
                                                     ---------------   ------------------ ---------------   ------------------
OTHER INCOME (EXPENSE):
    Loan service charges and other fees                      25,919               28,130          61,663               61,275
    Gain on sale of loans                                       547                1,220             805                1,333
    Gain (Loss) on disposal of fixed assets                       0              244,731           (122)              244,731
    Real estate owned operations, net                       (14,368)              (5,874)         (1,167)             (12,839)
    Service charges on accounts                             650,633              644,096       1,267,215            1,216,604
    Other income                                             44,680               41,115          93,717               93,517
                                                     ---------------   ------------------ ---------------   ------------------
Total other income                                          707,411              953,418       1,422,111            1,604,621
                                                     ---------------   ------------------ ---------------   ------------------
OPERATING EXPENSES:
    Salaries and employee benefits                        2,928,504            2,494,568       5,738,291            4,914,489
    Occupancy and equipment                                 979,910              859,277       1,953,033            1,743,403
    Purchased services                                      447,317              365,773         876,262              732,769
    Federal deposit insurance premiums                       30,589               76,744          60,717              152,132
    Professional fees                                       116,539              200,139         234,262              278,750
    Advertising                                              55,366               55,008         111,235              103,456
    Other                                                   363,345              315,365         697,226              679,780
                                                     ---------------   ------------------ ---------------   ------------------
Total operating expenses                                  4,921,570            4,366,874       9,671,026            8,604,779
                                                     ---------------   ------------------ ---------------   ------------------
INCOME BEFORE INCOME TAXES                                2,067,489            2,179,497       4,133,533            3,728,495

INCOME TAXES:
Current                                                     729,931              530,862       1,491,557            1,000,859
Deferred                                                     13,703              256,342          (7,068)             348,713
                                                     ---------------   ------------------ ---------------   ------------------
Total income taxes                                          743,634              787,204       1,484,489            1,349,572

NET INCOME                                           $    1,323,855    $       1,392,293  $    2,649,044    $       2,378,923
                                                     ===============   ================== ===============   ==================
BASIC EARNINGS PER COMMON SHARE                      $         0.19    $            0.19  $         0.38    $            0.33
                                                     ===============   ================== ===============   ==================
DILUTED EARNINGS PER COMMON SHARE                    $         0.19    $            0.19  $         0.37    $            0.33
                                                     ===============   ================== ===============   ==================

Weighted average common shares outstanding                6,894,205            7,210,673       7,022,678            7,220,658

Potential dilutive effect of the exercise of stock
options                                                      67,933               82,098          70,377               82,029
                                                     ---------------   ------------------ ---------------   ------------------
Adjusted weighted average common shares outstanding       6,962,138            7,292,771       7,093,055            7,302,687
                                                     ===============   ================== ===============   ==================
</TABLE>
See notes to consolidated financial statements.

                                       2
<PAGE>

FMS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Six Months ended
                                                                                                          June 30
                                                                                       -------------------------------------------
                                                                                                2000                   1999
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                        (Unaudited)
<S>                                                                                   <C>                     <C>
OPERATING ACTIVITIES:
Net income                                                                             $         2,649,044     $        2,378,923
Adjustments to reconcile net income to net cash provided
   by operating activities:
Provision for loan losses                                                                          120,000                120,000
Depreciation and amortization                                                                    1,003,199              1,024,751
Realized (gains) and losses on:
     Sale of loans and loans held for sale                                                            (805)                (1,333)
     Disposal and sale of fixed assets                                                                 122               (244,731)
     Sale of real estate owned                                                                     (26,260)                     0
Increase in accrued interest receivable                                                           (116,968)              (239,743)
Increase in prepaid expenses and other assets                                                     (187,265)              (581,494)
(Decrease) Increase in accrued interest payable                                                    (71,833)                60,309
(Decrease) Increase in other liabilities                                                          (310,007)               270,469
(Decrease) Increase in deferred income taxes                                                        (7,067)               348,713
Other                                                                                               28,049                      0
                                                                                       --------------------    -------------------
     Net cash provided by operating activities                                                   3,080,209              3,135,864
                                                                                       --------------------    -------------------
INVESTING ACTIVITIES:
Proceeds from sale of:
     Education loans                                                                               180,041                  1,446
     Real estate owned                                                                             335,349                348,731
     Office property and equipment                                                                     403                      0
Principal collected and proceeds from maturities of investment securities held to maturity      62,875,873             33,205,167
Proceeds from maturities of investment securities available for sale                             5,367,035             47,233,392
Principal collected on mortgage-backed securities held to maturity                              10,714,226             14,651,267
Principal collected on loans, net                                                               25,899,642             33,398,033
Loans originated or acquired                                                                   (24,517,726)           (31,533,616)
Purchase of investment securities and mortgage-backed securities held to maturity              (76,013,447)          (101,378,437)
Purchase of investment securities and mortgage-backed securities available for sale                      0             (4,056,040)
Purchase of office property and equipment                                                       (3,589,013)            (1,169,204)
                                                                                       --------------------    -------------------
     Net cash provided (used) by investing activities                                            1,252,383             (9,299,261)
                                                                                       --------------------    -------------------
FINANCING ACTIVITIES:
Net increase in demand deposits and savings accounts                                            15,408,288             17,318,262
Net (decrease) increase in time deposits                                                        (4,863,730)             4,778,909
Net decrease in FHLB advances                                                                  (10,031,387)               (31,290)
Repayment of securities sold under agreements to repurchase                                    (10,000,000)                     0
Increase (Decrease) in advances from borrowers for taxes and insurance                              55,885                 (9,492)
Purchase of treasury stock                                                                      (3,485,510)              (230,402)
Dividends paid on common stock                                                                    (427,408)              (433,220)
Net proceeds from issuance of common stock                                                             129                    645
                                                                                       --------------------    -------------------
     Net cash (used) provided by financing activities                                          (13,343,733)            21,393,412
                                                                                       --------------------    -------------------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                                (9,011,141)            15,230,015
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                  46,275,871             29,896,391
                                                                                       --------------------    -------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                               $        37,264,730     $       45,126,406
                                                                                       ====================    ===================
Supplemental Disclosures:
     Cash paid for:
         Interest on deposits, advances, and other borrowings                          $        13,337,851     $       11,943,745
         Income taxes                                                                            1,559,143              1,435,238
     Non-cash investing and financing activities:
         Dividends declared and not paid at quarter end                                            202,868                216,270
         Non-monetary transfers from loans to real estate acquired
            through foreclosure                                                                    324,657                      0


</TABLE>

See notes to consolidated financial statements.

                                       3
<PAGE>

FMS FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY   (Unaudited)
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Accumulated                             Total
                                           Common shares  Common     Paid-in    comprehensive    Retained     Treasury Stockholders'
                                           outstanding    stock      capital       income       earnings       stock     Equity
------------------------------------------------------------------------------------------------------------------------------------

<S>                                        <C>           <C>       <C>         <C>           <C>          <C>          <C>
Balances at December 31, 1999               7,183,978     $789,779  $8,217,535  $(1,167,810)  $42,108,955  $(3,851,456) $46,097,003
Net Income                                                                                      2,649,044                 2,649,044
Other comprehensive income
  Unrealized loss on
    securities available for sale                                                  (180,086)                               (180,086)
                                                                                                                        ------------
Total comprehensive income                                                                                                2,468,958
                                                                                                                        ------------
Dividends declared                                                                               (414,757)                 (414,757)

Exercise of stock options                         100           10         119                                                  129
Purchase of common stock                     (421,810)                                                      (3,485,510)  (3,485,510)

------------------------------------------------------------------------------------------------------------------------------------
Balances at June 30, 2000                   6,762,268     $789,789  $8,217,654  $(1,347,896)   $44,343,242 $(7,336,966) $44,665,823
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


See notes to consolidated financial statements.

                                       4
<PAGE>

ITEM 2: MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999.

FMS Financial Corporation (the "Corporation") may from time to time make written
or oral  "forward-looking  statements",  including  statements  contained in the
Corporation's  filings with the  Securities and Exchange  Commission  (including
this quarterly report on FORM 10-Q and the exhibits thereto),  in its reports to
stockholders and in other  communications by the Corporation,  which are made in
good faith by the  Corporation  pursuant to the "safe harbor"  provisions of the
Private Securities Litigation Reform Act of 1995.

These  forward-looking  statements  involve  risks  and  uncertainties,  such as
statements of the Corporation's plans, objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Corporation's  control).  The following  factors,  among
others, could cause the Corporation's financial performance to differ materially
from the plans, objectives,  expectations, estimates and intentions expressed in
such  forward-looking  statements:  the strength of the United States economy in
general  and the  strength  of the  local  economies  in which  the  Corporation
conducts operations;  the effects of, and changes in, trade, monetary and fiscal
policies and laws, including interest rate policies of the board of governors of
the federal  reserve  system,  inflation,  interest  rate,  market and  monetary
fluctuations;  the timely  development  of and  acceptance  of new  products and
services of the  Corporation  and the perceived  overall value of these products
and services by users,  including the features,  pricing and quality compared to
competitors'  products and  services;  the  willingness  of users to  substitute
competitors' products and services for the Corporation's  products and services;
the success of the  Corporation in gaining  regulatory  approval of its products
and services,  when required;  the impact of changes in financial  services laws
and  regulations  (including  laws  concerning  taxes,  banking,  securities and
insurance);  technological changes,  acquisitions;  changes in consumer spending
and saving  habits;  year 2000  issues and the  success  of the  Corporation  at
managing the risks involved in the foregoing.

The  Corporation  cautions that the foregoing  list of important  factors is not
exclusive.  The  Corporation  does not  undertake to update any  forward-looking
statement,  whether written or oral, that may be made from time to time by or on
behalf of the Corporation.

GENERAL

In the opinion of management,  the accompanying unaudited consolidated financial
statements of FMS Financial  Corporation contain all adjustments,  consisting of
normal recurring  accruals,  necessary for a fair  presentation of its financial
condition, results of operations, cash flows and changes in stockholders' equity
for the periods and dates indicated. The results of operations for the three and
six months ended June 30, 2000 are not  necessarily  indicative of the operating
results for the full fiscal year or any other future interim period.

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with the instructions for FORM 10-Q, and therefore, do not include
all  information  and  notes  necessary  for a fair  presentation  of  financial
condition, results of operations and statements of cash flows in conformity with
generally  accepted  accounting  principles.  These statements should be read in
conjunction  with the  consolidated  statements  and  related  notes  which  are
incorporated  by reference to the  Corporation's  annual report on FORM 10-K for
the year ended December 31, 1999. The consolidated  financial statements include
the Corporation's sole subsidiary, Farmers & Mechanics Bank ("the Bank").

                                       5
<PAGE>

FINANCIAL CONDITION -

Total  Assets - at June 30,  2000 were  $761.2  million as  compared  with total
assets at December 31, 1999 of $772.5 million.

Investment  Securities  Held to  Maturity  -  increased  $9.9  million to $230.2
million at June 30, 2000 from $220.3  million at December 31, 1999 primarily due
to the net purchases of $10.0 million of reverse repurchase  agreements and $2.0
million in U.S. Agency notes,  partially offset by $2.2 million in CMO principal
paydowns during the six months ended June 30, 2000.  Investment  securities held
to maturity  at June 30, 2000  consisted  entirely of fixed rate  securities.  A
comparison of cost and approximate  market values of investment  securities held
to maturity as of June 30, 2000 and December 31, 1999 follows:

<TABLE>
<CAPTION>
                                                 June 30, 2000                                     December 31, 1999
                       ------------------------------------------------------------------  ----------------------------------
                                              Gross           Gross         Estimated                           Estimated
                           Amortized       Unrealized      Unrealized         Market           Amortized          Market
                              Cost            Gains          Losses           Value               Cost            Value
                       ------------------------------------------------------------------  ----------------------------------
<S>                    <C>               <C>           <C>              <C>                <C>              <C>
U. S. Gov't Agencies   $    172,615,610  $           0 $    (8,220,865) $    164,394,745   $    170,610,811 $    161,851,452
CMO's                        45,906,959              0      (2,179,290)       43,727,669         48,187,121       46,481,467
Reverse Repurchase           10,074,932              0                0       10,074,932                  0                0
Municipal bonds               1,568,305          2,461                0        1,570,766          1,509,310        1,509,954
                       ------------------------------------------------------------------  ----------------------------------
Total                  $    230,165,806  $       2,461 $   (10,400,155) $    219,768,112   $    220,307,242 $    209,842,873
                       ==================================================================  ==================================
</TABLE>

Investment  Securities  Available  for Sale -  decreased  $5.6  million to $43.7
million at June 30, 2000 from $49.3  million at December 31, 1999 as a result of
$5.4 million of principal  paydowns on CMOs and MBSs during the six months ended
June 30,  2000.  Investment  securities  available  for sale  consisted of $40.2
million in fixed rate  securities and $3.5 million in adjustable rate securities
at June  30,  2000.  A  comparison  of cost and  approximate  market  values  of
investment  securities  available  for sale as of June 30, 2000 and December 31,
1999 follows:


<TABLE>
<CAPTION>
                                             June 30, 2000                                   December 31, 1999
                      ------------------------------------------------------------  -------------------------------
                                         Gross          Gross         Estimated                        Estimated
                         Amortized     Unrealized     Unrealized       Market          Amortized        Market
                            Cost         Gains          Losses          Value             Cost           Value
                      ------------------------------------------------------------  -------------------------------
<S>                  <C>            <C>          <C>             <C>               <C>            <C>
U. S. Gov't Agencies  $   10,292,191 $          0 $     (491,888) $     9,800,303   $   10,291,646 $     9,725,031
CMO's                     32,805,871        2,340     (1,574,553)      31,233,658       38,024,766      36,816,550
MBS's                      2,660,411            0        (43,623)       2,616,788        2,817,131       2,765,535
                      ------------------------------------------------------------  -------------------------------
Total                 $   45,758,473 $      2,340 $   (2,110,064) $    43,650,749   $   51,133,543 $    49,307,116
                      ============================================================  ===============================
</TABLE>

                                       6
<PAGE>

Loans,  net -  decreased  $2.0  million to $297.7  million at June 30, 2000 from
$299.7  million  at  December  31,  1999.   This  decrease  was  the  result  of
approximately $25.9 million of principal collected on loans, partially offset by
$24.5 million of loans originated during the six months ended June 30, 2000. The
following  table  shows  loans  receivable  by  major  categories  at the  dates
indicated.

                                         June 30,        December 31,
                                           2000              1999
                                   -------------------------------------

Mortgage loans (1-4  dwelling)      $    233,199,755  $     236,912,182
Construction loans                           123,171            972,533
Commercial construction                      342,179          3,934,937
Consumer loans                             3,374,240          3,273,792
Commercial real estate                    56,964,983         52,543,711
Commercial business                        8,342,006          6,790,348
                                   -------------------------------------
Subtotal                                 302,346,334        304,427,503
                                   -------------------------------------
Less:
    Deferred loan fees                       774,939            892,019
    Allowance for possible
     loan losses                           3,867,801          3,840,967
                                   -------------------------------------
Net Loans Receivable                $    297,703,594  $     299,694,517
                                   =====================================


At June 30, 2000, the recorded investment in loans for which impairment has been
recognized  in  accordance  with SFAS Nos.  114 and 118 totaled  $2.8 million of
which  $1.1  million  related  to loans  that  were  individually  measured  for
impairment with a valuation allowance of $425 thousand and $1.7 million of loans
that were collectively measured for impairment with a valuation allowance of $77
thousand.  For  the six  months  ended  June  30,  2000,  the  average  recorded
investment in impaired loans was approximately $3.0 million. The Bank recognized
$96 thousand of interest income on impaired  loans,  all of which was recognized
on the cash basis. The Bank had $3.9 million in total reserves for possible loan
losses at June 30, 2000,  representing  approximately  141% of non-accrual loans
and 1.28% of total loans.

As of June 30, 2000 the Bank had outstanding  loan  commitments of $5.8 million,
of  which  $2.6  million  represented  variable  rate  loans  and  $3.2  million
represented fixed rate loans. The Bank intends to fund these commitments through
scheduled  amortization  of loans  and  mortgage-backed  securities,  additional
borrowings  and if necessary  the sale of  investment  securities  available for
sale.

                                       7
<PAGE>

Non-Performing  Assets.  The following  table sets forth  information  regarding
non-accrual  loans,  troubled debt  restructured and real estate owned assets by
the Bank.

<TABLE>
<CAPTION>
Non-Performing Assets:
                                                              June 30,         December 31,
                                                                2000               1999
                                                            ----------          ----------
                                                                    (In Dollars)
<S>                                                       <C>                <C>
Loans accounted for on a non-accrual basis:
Mortgage loans:
     One-to-four family                                       $923,417           $1,386,096
     Commercial real estate                                  1,822,706            1,510,167
     Consumer and other                                          5,459              236,781
                                                            ----------           ----------
         Total mortgage non-accrual loans                   $2,751,582           $3,133,044
                                                            ----------           ----------

     Troubled debt restructuring                              $444,177             $462,250
     Real estate owned, net                                    436,060              448,541
     Other non-performing assets                                87,926               87,926
                                                            ----------           ----------
     Total non-performing assets, net                       $3,719,745           $4,131,761
                                                            ==========           ==========

     Total non-accrual loans to net loans                        0.92%                1.05%
                                                            ==========           ==========
     Total non-accrual loans to total assets                     0.36%                0.41%
                                                            ==========           ==========
     Total non-performing assets to total assets                 0.49%                0.53%
                                                            ==========           ==========
</TABLE>

                                       8
<PAGE>

Mortgage-Backed  Securities  Held to Maturity - decreased $7.6 million to $113.8
million at June 30, 2000 from $121.4  million at December 31, 1999. The decrease
is the result of principal  paydowns of $10.7 million,  partially  offset by the
purchase  of $3.2  million  FNMA  adjustable  rate  securities.  Mortgage-backed
securities at June 30, 2000 consisted of $69.4 million in fixed rate  securities
and $44.4 million in adjustable rate securities. Mortgage-backed securities held
to maturity at June 30, 2000 and December 31, 1999 are summarized below:

<TABLE>
<CAPTION>
                                      June 30, 2000                                    December 31, 1999
            ----------------------------------------------------------------------------------------------------
                                  Gross         Gross
                 Amortized      Unrealized    Unrealized       Estimated          Amortized        Estimated
                   Cost           Gains         Losses        Market Value          Cost         Market Value
            ----------------------------------------------------------------  ----------------------------------

<S>          <C>              <C>          <C>             <C>                <C>             <C>
GNMA         $    35,716,311  $    173,845 $    (906,962)  $     34,983,194   $    37,742,389 $      36,940,635

FNMA              48,706,738       405,435    (1,046,306)        48,065,867        50,801,575        49,845,090

FHLMC             29,423,978       333,496       (70,266)        29,687,208        32,880,455        33,029,307
            ----------------------------------------------------------------  ----------------------------------
Total        $   113,847,027  $    912,776 $  (2,023,534)  $    112,736,269   $   121,424,419 $     119,815,032
            ================================================================  ==================================

</TABLE>


Deposits  -  increased  $10.5  million to $614.4  million at June 30,  2000 from
$603.9  million at December 31, 1999 as a result of an increase in  non-interest
bearing  checking  accounts of $12.7 million,  savings accounts of $8.8 million,
and money market  accounts of $382 thousand,  partially  offset by a decrease in
checking accounts of $6.5 million,  and certificates of deposit of $4.9 million.
Non-interest  checking  accounts  increased  due  to  the  promotions  of  "Free
Personal" and "Free Business" checking accounts. Interest credited to depositors
accounts for the six months ended June 30, 2000 amounted to $10.0  million.  The
following tables set forth certain information  concerning deposits at the dates
indicated.

<TABLE>
<CAPTION>

                                            June 30, 2000                            December 31, 1999
                             -------------------------------------------------------------------------------------
                                               Percent     Weighted                       Percent     Weighted
                                               of Total    Average                       of Total      Average
                                     Amount    Deposits      Rate              Amount    Deposits       Rate
                             -------------------------------------------------------------------------------------
<S>                            <C>           <C>          <C>            <C>            <C>           <C>
Non-interest checking             $95,173,937   15.49%      0.00%           $82,504,184   13.66%        0.00%
Checking accounts                 100,087,185   16.29%      2.95%           106,541,028   17.64%        2.26%
Savings accounts                  116,017,215   18.88%      2.68%           107,207,225   17.75%        2.67%
Money market accounts              65,966,090   10.74%      2.74%            65,583,704   10.86%        2.76%
Certificates                      237,192,248   38.60%      4.98%           242,055,976   40.09%        4.92%
                             -------------------------------------------------------------------------------------
   Total Deposits                $614,436,675  100.00%      3.28%          $603,892,117   100.00%       3.20%
                             =====================================================================================
</TABLE>
                                       9
<PAGE>

Borrowings - at June 30, 2000 amounted to $96.3 million. Borrowings consisted of
$10.0 million of 10% Subordinated  Debentures,  $80.0 million in securities sold
under the agreement to repurchase with a weighted average interest rate of 5.57%
and $6.3  million in Federal  Home Loan Bank  Advances  with a weighted  average
interest  rate of 5.49%.  At December  31, 1999  borrowings  consisted  of $10.0
million of 10%  Subordinated  Debentures,  $90.0 million  securities  sold under
agreements to repurchase with a weighted average rate of 5.62% and $16.3 million
in Federal Home Loan Bank  Advances  with a weighted  average  interest  rate of
6.00%.


RESULTS OF OPERATIONS -

General

The earnings of the Corporation  depend primarily upon the level of net interest
income,  which is the difference between interest earned on its interest-earning
assets such as loans and investments,  and the interest paid on interest-bearing
liabilities,  such as deposits  including  non-interest  checking  accounts  and
borrowings. Net interest income is a function of the interest rate spread, which
is the difference between the weighted average yield earned on  interest-earning
assets and the weighted average rate paid on  interest-bearing  liabilities,  as
well  as  the  average  balance  of  interest-earning   assets  as  compared  to
interest-bearing  liabilities.  Net  income  is also  affected  by  non-interest
income,  such as gains (losses) on the sale of loans and investments,  provision
for loan  losses and real estate  owned,  service  charges  and other fees,  and
operating  expenses:  such as salaries and employee benefits,  deposit insurance
premiums, depreciation,  occupancy and equipment expense, and purchased services
expense.

The Corporation  recorded net income for the three months ended June 30, 2000 of
$1.3 million, or $.19 diluted earnings per share as compared to $1.4 million, or
$.19 diluted earnings per share for the comparable period in 1999.  Earnings for
the six months ended June 30, 2000 were $2.6 million,  or $.37 diluted  earnings
per share as compared to $2.4  million,  or $.33 diluted  earnings per share for
the comparable period in 1999.

Interest Rate Spread

The Bank's  interest  income is affected by the  difference  or  "interest  rate
spread" between yields received by the Bank on its  interest-earning  assets and
the  interest  rates  paid  by  the  Bank  on its  interest-bearing  liabilities
including non-interest checking accounts. Net interest income is affected by (i)
the spread between the yield earned on interest-earning  assets and the interest
rates paid on interest-bearing deposits including non-interest checking accounts
and borrowings  (liabilities) and (ii) the relative amounts of  interest-earning
assets  versus  interest-bearing  liabilities.  The Bank's  interest rate spread
varies over time because income from investment  securities and  mortgage-backed
securities  depends  upon the amount  invested  during the period and the yields
earned on such securities.  The yield on loans receivable changes principally as
a result of existing mortgage loan repayments, adjustable rate loan adjustments,
sales and the interest rates and volume of new mortgage loans.  Interest expense
on  certificates  of deposit  changes,  due to their  periodic  maturity and the
prevailing current market interest rates.

                                       10
<PAGE>
The following table sets forth certain information relating to the Corporation's
average balance sheet and reflects the average yield on assets and average rates
paid on liabilities for the periods indicated. Such yields and rates are derived
by dividing income or expense by the average balance of interest-earning  assets
or interest-bearing liabilities, respectively, for the periods presented:

Average Balances, Interest and Yields/Rates
<TABLE>
<CAPTION>
                                                               Three Months Ended June 30,
                                    --------------------------------------------------------------------------------
                                                         2000                                1999
                                    ---------------------------------------  ---------------------------------------
                                          Average                Average        Average                   Average
                                          Balance     Interest  Yield/Rate      Balance    Interest      Yield/Rate
                                    ---------------  ---------  ----------   ----------- -----------    ------------
                                                                 (Dollars in Thousands)
<S>                             <C>                 <C>          <C>        <C>          <C>            <C>
Interest-earning assets:
     Loans receivable            $         302,691   $  5,889       7.78%     $  301,611  $   5,915        7.84%
     Mortgage-backed securities            117,653      1,975       6.71%         91,559      1,563        6.83%
     Investment securities                 304,911      5,128       6.73%        276,545      4,221        6.11%
                                 ------------------  ---------   ---------    ----------- ----------   ----------
Total interest-earning
        assets                             725,255     12,992       7.17%        669,715     11,699        6.99%
                                 ------------------  ---------   ---------    ----------- ----------   ----------
Interest-bearing
liabilities:
     Deposits                              618,582      5,059       3.27%        555,372      4,411        3.18%
     Borrowings                             93,551      1,327       5.67%         96,340      1,371        5.69%
     Subordinated debentures                10,000        264      10.56%         10,000        264       10.56%
                                 ------------------  ---------   ---------    ----------- ----------   ----------
Total interest-bearing
        liabilities              $         722,133      6,650       3.68%     $  661,712      6,046        3.65%
                                 ==================  ---------   ---------    =========== ----------   ----------
Net interest income                                  $  6,342                             $   5,653
                                                     =========                            ==========
Interest rate spread                                                3.48%                                  3.33%
                                                                 =========                             ==========
Net yield on average interest-earning assets                        3.50%                                  3.38%
                                                                 =========                             ==========
Ratio of average interest-
     earning assets to average interest-bearing
     liabilities                                                  100.43%                                101.21%
                                                                 =========                             ==========
</TABLE>
<TABLE>
<CAPTION>
                                                                   Six Months Ended June 30,
                                   -----------------------------------------------------------------------------------
                                                        2000                                   1999
                                   ------------------------------------------    -------------------------------------
                                          Average                  Average         Average                 Average
                                          Balance    Interest     Yield/Rate       Balance    Interest    Yield/Rate
                                   ---------------  ---------     -----------    ----------  ----------  -------------
                                                                    (Dollars in Thousands)
<S>                            <C>                 <C>              <C>         <C>         <C>            <C>
Interest-earning assets:
     Loans receivable           $         302,734   $  11,645          7.69%     $ 301,039   $  11,574        7.69%
     Mortgage-backed securities           120,102       4,018          6.69%        88,853       3,059        6.89%
     Investment securities                307,756      10,105          6.57%       266,829       8,219        6.16%
                                ------------------  ----------    -----------    ----------  ----------  -----------
Total interest-earning
        assets                            730,592      25,768          7.05%       656,721      22,852        6.96%
                                ------------------  ----------    -----------    ----------  ----------  -----------
Interest-bearing liabilities:
     Deposits                             612,251      10,000          3.27%       544,705       8,745        3.21%
     Borrowings                            96,615       2,737          5.67%        96,456       2,730        5.66%
     Subordinated debentures               10,000         529         10.58%        10,000         529       10.58%
                                ------------------  ----------    -----------    ----------  ----------  -----------
Total interest-bearing
        liabilities             $         718,866      13,266          3.69%     $ 651,161      12,004        3.69%
                                ==================  ----------    -----------    ==========  ----------  -----------
Net interest income                                 $  12,502                                $  10,848
                                                    ==========                               ==========
Interest rate spread                                                   3.36%                                  3.27%
                                                                  ===========                            ===========
Net yield on average interest-earning assets                           3.42%                                  3.30%
                                                                  ===========                            ===========
Ratio of average interest-
     earning assets to average interest-bearing
     liabilities                                                     101.63%                                100.85%
                                                                  ===========                            ===========
</TABLE>
                                       11
<PAGE>

Rate/Volume Analysis

The following  table describes the extent to which changes in interest rates and
changes in volume of interest-earning  assets and  interest-bearing  liabilities
have affected the Bank's interest income and interest expense during the periods
indicated.  For each category of  interest-earning  assets and  interest-bearing
liabilities,  information is provided on changes  attributable to (i) changes in
rate,  (ii)  changes in volume and (iii)  total  changes in rate and volume (the
combined  effect of changes in both volume and rate, not separately  identified,
has been  allocated  to rate).  Due to the fact that  average  balances on loans
include  non-performing loans which reduce the computed yield, a higher level of
non-performing loans affects both the changes due to volume and rate.

<TABLE>
<CAPTION>
                                           Three Months Ended               Six Months Ended
                                                June 30,                        June 30,
                                          2000 compared to 1999            2000 compared to 1999
                                    -------------------------------- -------------------------------
                                        Increase (Decrease) due to:     Increase (Decrease) due to:
                                        Rate      Volume      Total      Rate     Volume     Total
                                    -------------------------------- -------------------------------
                                                              (In Thousands)
<S>                                 <C>        <C>        <C>        <C>        <C>       <C>
Interest income:
  Loans receivable                   $   (47)        21    $   (26)   $     6         65   $    71
  Mortgage-backed securities             (33)       445        412       (117)     1,076       959
  Investment securities                  474        433        907        625      1,261     1,886
                                     -----------------------------    ----------------------------
   Total change - interest income        394        899      1,293        514      2,402     2,916
                                     -----------------------------    ----------------------------
Interest expense:
  Deposits                               146        502        648        171      1,084     1,255
  Borrowings                              (4)       (40)       (44)         2          5         7
  Subordinated debentures                  0          0          0          0          0         0
                                     -----------------------------    ----------------------------
   Total change - interest expense       142        462        604        173      1,089     1,262
                                     -----------------------------    ----------------------------
Net change in net interest income    $   252    $   437    $   689    $   341    $ 1,313   $ 1,654
                                     =============================    ============================

</TABLE>

Net  Interest  Income - for the three and six months ended June 30, 2000 totaled
$6.3 million and $12.5 million,  respectively. Net interest income for the three
months  ended June 30,  2000  increased  $689  thousand  as compared to the same
period in 1999 due  primarily  to an increase in interest  income on  investment
securities of $907  thousand and  mortgage-backed  securities of $412  thousand,
partially  offset  by an  increase  in  interest  expense  on  deposits  of $648
thousand.

The increase in interest income on investment  securities was due to an increase
in the average  balance of the portfolio of $28.4 million to $304.9  million for
the three months ended June 30, 2000 from $276.5  million for the same period in
1999, which resulted in a volume increase of $433 thousand. The average yield of
the investment portfolio increased 62 basis points to 6.73% for the three months
ended June 30, 2000 from 6.11% for the same period in 1999, which resulted in an
interest income increase of $474 thousand due to rate changes.

The average  balance of the MBSs  increased  $26.1 million to $117.7 million for
the three months  ended June 30, 2000 from $91.6  million for the same period in
1999,  which resulted in a volume  increase in interest income of $445 thousand.
The average  yield of the  portfolio  decreased 12 basis points to 6.71% for the
three  months  ended June 30,  2000 from 6.83%  during the same  period in 1999,
which  resulted  in a $33  thousand  decrease  in  interest  income  due to rate
changes.

                                       12
<PAGE>


Interest expense on deposits  increased $648 thousand for the three months ended
June 30,  2000  compared  to the same  period in 1999.  The  average  balance of
deposits  increased  $63.2 million to $618.6 million for the three months  ended
June 30, 2000 from $555.4 million for the same period in 1999, which resulted in
a volume  increase in interest  expense of $502 thousand.  The weighted  average
rates paid on deposits  increased 9 basis  points to 3.27% for the three  months
ended June 30, 2000 from 3.18% for the same period in 1999, which resulted in an
increase in interest expense of $146 thousand due to rate changes.

Net  interest  income for the six  months  ended June 30,  2000  increased  $1.7
million primarily due to an increase in interest income on investment securities
of $1.9  million and  mortgage-backed  securities  of $959  thousand,  partially
offset by an  increase  in  interest  expense  on  deposits  of $1.3  million as
compared to the same period in 1999.

The increase in interest income on investment  securities was due to an increase
in the average  balance of the portfolio of $41.0 million to $307.8  million for
the six months  ended June 30, 2000 from  $266.8  million for the same period in
1999,  which resulted in a volume  increase in interest  income of $1.3 million.
The average yield on the investment portfolio increased 41 basis points to 6.57%
for the six months  ended June 30,  2000 from 6.16% for the same period in 1999,
which  resulted in an increase in interest  income of $625  thousand due to rate
changes.  The  increase in the average  balance from June 1999 through June 2000
was  primarily  due to  purchases  during this  period of $66.2  million of U.S.
Agency Notes and $10.1 million of Reverse Repurchase Agreement, partially offset
by $30.6 million of CMO principal paydowns.

The  increase in interest  income on  mortgage-backed  securities  was due to an
increase  in the average  balance of the  portfolio  of $31.2  million to $120.1
million for the six months  ended June 30,  2000 from $88.9  million for the six
months ended June 30, 1999. The increase in the average balance of the portfolio
resulted in a $1.1 million increase in interest income. The average yield on the
portfolio  decreased  20 basis points to 6.69% for the six months ended June 30,
2000 from 6.89% for the same  period in 1999,  which  resulted  in a decrease in
interest  income of $117  thousand  due to rate  changes.  The  increase  in the
average balance was due to $44.6 million of purchases, partially offset by $22.6
of principal paydowns from June 1999 through June 2000.

The  increase in interest  expense on deposits  was the result of an increase in
the average  balance of deposits of $67.6 million to $612.3  million for the six
months  ended June 30,  2000 from  $544.7  million  for the same period in 1999,
which  resulted in a volume  increase in interest  expense of $1.1 million.  The
average  yield on deposits  increased 6 basis points to 3.27% for the six months
ended June 30, 2000 from 3.21% for the same period in 1999, which resulted in an
increase in interest expense of $171 thousand due to rate changes.

Provision  for Loan Losses - for the three months  ended June 30, 2000  remained
constant at $60 thousand  from 1999 to 2000.  The total  provision for potential
loan losses remained constant at $120 thousand for the six months ended June 30,
2000 and 1999. At June 30, 2000 the allowance for possible loan losses  amounted
to $3.9 million compared to $3.5 million at June 30, 1999. The  determination of
the  allowance  level for loan losses is based on  management's  analysis of the
risk  characteristics of various  classifications  of loans,  previous loan loss
experience,  estimated  fair  value of the  underlying  collateral  and  current
economic conditions.  The Corporation will continue to monitor its allowance for
loan losses and make future  adjustments to the allowance  through the provision
for loan losses as economic conditions dictate.  Management continues to offer a
wider variety of loan products

                                       13
<PAGE>

coupled with the continued change in the mix of the products offered in the loan
portfolio from lower  yielding loans (i.e.,  one to four family loans) to higher
yielding loans (i.e., commercial real estate mortgage,  commercial construction,
consumer,  and commercial  business) which have a higher degree of risk than one
to four family loans.  Although the Corporation maintains its allowance for loan
losses at a level that it  considers  to be adequate to provide for the inherent
risk of loss in its loan portfolio, there can be no assurance that future losses
will not exceed estimated amounts or that additional  provisions for loan losses
will not be required in future  periods due to the higher  degree of credit risk
which might result from the change in the mix of the loan portfolio. Most of the
Bank's lending  activity is with customers  located within  southern New Jersey.
Generally,  the loans are secured by real  estate  consisting  of single  family
residential  properties.  While this represents a concentration  of credit risk,
the credit losses arising from this type of lending  compare  favorably with the
Bank's  credit  loss  experience  on its  portfolio  as a  whole.  The  ultimate
repayment of these loans is dependent to a certain  degree on the local  economy
and real estate market.

Other Income - for the three and six month  periods  ended June 30, 2000 totaled
$707  thousand  and $1.4  million,  respectively.  Other income  decreased  $246
thousand in the three month period and $183  thousand in the first six months of
2000 when compared to the same period in 1999.  Gain on disposal of fixed assets
decreased  $245 thousand for the three and six month periods ended June 30, 2000
as compared to the same  periods in 1999.  This  decrease is due to the May 1999
sale of a two-acre  parcel of land for a $245 thousand gain.  Service charges on
accounts  increased  $51  thousand  for the six months  ended  June 30,  2000 as
compared to the same period in 1999 due to increased  volume of service  charges
on accounts.

Operating  Expenses - for the three and six month  periods  ended June 30,  2000
amounted to $4.9  million  and $9.7  million,  respectively  as compared to $4.4
million and $8.6 million for the same periods in 1999.

Salaries and Employee  Benefits - for the three and six month periods ended June
30, 2000 were $2.9  million and $5.7  million,  as compared to $2.5  million and
$4.9 million for the same periods in 1999.  The increases were due to additional
staff in four new branches opened since the second quarter of 1999. Average full
time  equivalent  employees at June 30, 2000 were 418 as compared to 373 at June
30, 1999.

Occupancy  and  Equipment - for the three and six month  periods  ended June 30,
2000 totaled $980 thousand and $2.0 million,  respectively,  as compared to $859
thousand and $1.7 million for the same periods in 1999.  The  increases  are the
result of additional  depreciation  and occupation  expenses on the new branches
opened  as well as  other  facility  improvements  and  new  computer  equipment
additions between the quarters ended June 30, 2000 and June 30, 1999.

Purchased  Services - for the three and six month  periods  ended June 30,  2000
amounted to $447 thousand and $876 thousand,  respectively,  as compared to $366
thousand and $733 thousand for the same periods in 1999.  ATM charges  increased
$73  thousand  for the first six months of 2000  compared  to the same period in
1999.  Check  processing  costs  increased $48 thousand for the six months ended
June 30,  2000  compared  to the same  period in 1999 due to higher  transaction
volume.

                                       14
<PAGE>

Professional  Fees - for the three and six month  periods  ended  June 30,  2000
totaled  $117  thousand  and $234  thousand,  respectively,  as compared to $200
thousand and $279 thousand for the same periods in 1999. The decrease during the
year is due to legal  costs  incurred  relating  to the sale of land  during May
1999.


ITEM 3:  DISCLOSURE ABOUT MARKET RISK

There were no  significant  changes for the six months  ended June 30, 2000 from
the  information  presented in the annual report on Form 10-K for the year ended
December 31, 1999.

























                                       15
<PAGE>



PART II.       OTHER INFORMATION
               -----------------

         Item 1:       Legal Proceedings
         -------       -----------------

                       None

         Item 2:       Changes in Securities
         -------       ---------------------

                       None

         Item 3:       Defaults Upon Senior Securities
         -------       -------------------------------

                       The Annual Meeting of Shareholders of the Corporation was
                       held on April 17,  2000 and the  following  matters  were
                       voted upon:

                       Proposal I - Election of  Directors  with terms to expire
                       in 2003.

                                                     FOR             WITHHELD
                                              -------------------  -------------

                       Vincent R. Farias          6,233,542           168,952
                       James C. Lignana           6,235,459           167,554
                       Wayne H Page               6,224,059           178,954


                       Proposal   II   -   To   ratify   the    appointment   of
                       PricewaterhouseCoopers    LLP   as   auditors   for   the
                       Corporation for the 2000 fiscal year.

                                FOR               AGAINST            ABSTAIN
                         -------------------  ---------------     --------------

                             6,395,931               2,090            6,036


         Item 4:       Submission of Matters to Vote of Security of Holders
         -------       ----------------------------------------------------

                       None

         Item 5:       Other Information
         -------       -----------------

                       None

         Item 6:       Exhibits and Reports on Form 8-K
         -------       --------------------------------

            (a)       (27) Financial Data Schedule (Electronic data filing only)


                                       16
<PAGE>

                                S I G N A T U R E





     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.





FMS FINANCIAL CORPORATION




Date: August 10, 2000
                                       /s/ Craig W. Yates
                                       -----------------------------------------
                                       Craig W. Yates
                                       President and Chief Executive Officer
                                       (Principal Executive Officer)



Date: August 10, 2000
                                       /s/ Channing L. Smith
                                       -----------------------------------------
                                       Channing L. Smith
                                       Vice President and
                                       Chief Financial Officer
                                       (Principal Financial Officer)