TYSONS FINANCIAL CORP, SB-2/A, 1996-05-14

TYSONS FINANCIAL CORP
SB-2/A, 1996-05-14
NATIONAL COMMERCIAL BANKS

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1996

REGISTRATION NO. 333-3130

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 2

TO
FORM SB-2

REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933

TYSONS FINANCIAL CORPORATION

(Name of small business issuer as specified in its charter)

<TABLE>

<S> <C> <C>
VIRGINIA 6021 54-1527945
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

</TABLE>

8200 GREENSBORO DRIVE

SUITE 100
MCLEAN, VIRGINIA 22102

(703) 556-0015

(Address and telephone number of principal executive offices)

TERRIE G. SPIRO
TYSONS FINANCIAL CORPORATION

SUITE 100

8200 GREENSBORO DRIVE
MCLEAN, VIRGINIA 22102

(703) 556-0015

(Name, address and telephone number of agent for service)

COPIES TO:

<TABLE>

<S> <C>

FRANCIS X. GALLAGHER, JR., ESQ. GEORGE P. WHITLEY, ESQ.
VENABLE, BAETJER AND HOWARD, LLP LECLAIR RYAN
2010 CORPORATE RIDGE ROAD, STE 400 707 EAST MAIN STREET, 11TH FLOOR
MCLEAN, VIRGINIA 22102 RICHMOND, VIRGINIA 23219
(703) 760-1600 (804) 783-2003
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement is declared effective.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [box]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [box]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [box]

CALCULATION OF REGISTRATION FEE

PROPOSED MAXIMUM PROPOSED MAXIMUM

TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE
TO BE REGISTERED REGISTERED (1) PER SHARE (2) OFFERING PRICE (2)
<S> <C> <C> <C>
Common Stock, par value $5.00
per share................. 345,000 shares (1) $9.00 $3,105,000

TITLE OF SECURITIES AMOUNT OF
TO BE REGISTERED REGISTRATION FEE

<S> <C>
Common Stock, par value $5.00

per share................. $1,071
</TABLE>

(1) Includes 45,000 shares subject to an option granted to the Underwriter to
cover over-allotments, if any.

(2) Estimated solely for purposes of determining the registration fee.

<PAGE>

TYSONS FINANCIAL CORPORATION
CROSS REFERENCE SHEET

SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY PART I OF FORM SB-2

ITEM NUMBER AND CAPTION PROSPECTUS HEADING

1. Front of Registration Statement and Outside

Front Cover of Prospectus....................... Outside Front Cover Page of Prospectus

2. Inside Front and Outside Back Cover Pages of

Prospectus...................................... Inside Front and Outside Back Cover Pages of Prospectus

3. Summary Information and Risk Factors............ Prospectus Summary; Risk Factors; The Company

4. Use of Proceeds................................. Use of Proceeds

5. Determination of Offering Price................. Outside Front Cover Page of Prospectus; Market Information;
Underwriting

6. Dilution........................................ Dilution

7. Selling Security Holders........................ Not applicable

8. Plan of Distribution............................ Outside Front Cover of Prospectus; Underwriting

9. Legal Proceedings............................... Business -- Legal Proceedings

10. Directors, Executive Officers, Promoters and
Control Persons................................. Management

11. Security Ownership of Certain Beneficial Owners

and Management.................................. Security Ownership of Certain Beneficial Owners and Management

12. Description of Securities....................... Description of Capital Stock

13. Interest of Named Experts and Counsel........... Not applicable

14. Disclosure of Commission Position on
Indemnification for Securities Act

Liabilities..................................... Not applicable

15. Organization Within Last Five Years............. Not applicable

16. Description of Business......................... Business; Supervision and Regulation

17. Management's Discussion and Analysis or Plan of

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

18. Description of Property......................... Business -- Properties

19. Certain Relationships and Related

Transactions.................................... Management -- Certain Relationships and Related Transactions

20. Market for Common Equity and Related Stockholder

Matters......................................... Outside Front Cover Page of Prospectus; Market Information;
Description of Capital Stock

21. Executive Compensation.......................... Executive Compensation

22. Financial Statements............................ Index to Consolidated Financial Statements

23. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure............. Not applicable

</TABLE>

<PAGE>

TYSONS FINANCIAL CORPORATION
CROSS REFERENCE SHEET

SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY GUIDE 3

ITEM NUMBER AND CAPTION PROSPECTUS HEADING

I. Distribution of Assets, Liabilities and
Stockholders' Equity; Interest Rates and
Interest Differentials

A. Average Balance Sheets...................... Management's Discussion and Analysis of Financial Condition and
Results of Operations

B. Net Interest Earnings....................... Management's Discussion and Analysis of Financial Condition and
Results of Operations

C. Changes in Interest Earnings and Interest

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

II. Investment Portfolio

A. Book Value of Investments................... Management's Discussion and Analysis of Financial Condition and
Results of Operations

B. Maturity Analysis........................... Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Interest Rate Sensitivity

C. Securities Representing Ten Percent of

Stockholders' Equity........................ Not applicable

III. Loan Portfolio

A. Types of Loans.............................. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Composition of Loan Portfolio

B. Maturities and Sensitivities of Changes in

Interest Rates.............................. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Interest Rate Sensitivity

C. Risk Elements............................... Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Loan Quality

D. Other Interest Bearing Assets............... Not applicable

IV. Summary of Loan Loss Experience................. Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Loan Quality

V. Deposits........................................ Management's Discussion and Analysis of Financial Condition and
Results of Operations

VI. Return on Equity and Assets..................... Selected Consolidated Financial Information

VII. Short-Term Borrowings........................... Not applicable
</TABLE>

<PAGE>

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

PRELIMINARY PROSPECTUS DATED MAY 14, 1996

SUBJECT TO COMPLETION

300,000 SHARES
[TYSONS FINANCIAL CORPORATION LOGO]

COMMON STOCK

Tysons Financial Corporation, a Virginia corporation (the "Company"), is
offering for sale 300,000 shares of its Common Stock, $5.00 par value per share
(the offering made hereby is referred to herein as the "Offering"). Prior to the
Offering, there has been no public market for the Common Stock. Application has
been made to quote the Common Stock on The Nasdaq SmallCap Market under the
proposed symbol "TYSN."

It is currently anticipated that the public offering price will range from
$8.00 to $9.00 per share of Common Stock. See "Underwriting" for information
concerning the factors considered in determining the public offering price.

SEE "RISK FACTORS" ON PAGE 7 FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE

SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS

PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THE SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF ANY BANK OR NON-BANK SUBSIDIARY OF THE COMPANY AND ARE

NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, BANK
INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY.

[CAPTION]
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UNDERWRITING

PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS (1) COMPANY (2)

<S> <C> <C> <C>
Per Share........................................... $ $ $
Total (3)........................................... $ $ $
</TABLE>

(1) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."

(2) Before deducting offering expenses payable by the Company estimated at
$ .

(3) The Company has granted the Underwriter a 30-day option to purchase up to
45,000 additional shares of Common Stock on the same terms and conditions
set forth above, solely to cover over-allotments, if any. If such option is
exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."

The shares of Common Stock are being offered by the Underwriter subject to
prior sale, when, as and if delivered to and accepted by it and subject to
certain other conditions. The Underwriter reserves the right to withdraw,
cancel, or modify the Offering without notice and to reject any order in whole
or in part. It is expected that delivery of certificates representing the shares
of Common Stock will be made against payment therefor on or about , 1996 at the
offices of Scott & Stringfellow, Inc., Richmond, Virginia.

SCOTT & STRINGFELLOW, INC.

The date of this Prospectus is , 1996.

<PAGE>

[MAP OF MARYLAND, D.C. AND VIRGINIA]
[MAP OF MID-ATLANTIC REGION]

<PAGE>

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

AVAILABLE INFORMATION

The Company complies with the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports, proxy or information statements and other information
with the Securities and Exchange Commission (the "Commission"). The Company has
filed with the Commission a Registration Statement on Form SB-2 (herein,
together with all amendments and exhibits, the "Registration Statement") under
the Securities Act with respect to the Common Stock offered by this Prospectus.
This Prospectus contains information concerning the Company but does not contain
all of the information set forth in the Registration Statement. Such reports,
proxy or information statements, Registration Statement and other information
filed by the Company with the Commission can be inspected without charge at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
St., N.W., Washington, D.C. 20549, and at the Regional Offices of the Commission
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, following approval of the Common Stock for quotation on The
Nasdaq SmallCap Market, reports and other information concerning the Company may
be inspected at the offices of The Nasdaq Stock Market, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.

The Company furnishes to its shareholders annual reports containing
consolidated financial statements for each fiscal year audited by an independent
accounting firm and unaudited quarterly reports.

Unless the context otherwise requires, references to the Company include
Tysons Financial Corporation and Tysons National Bank, its only operating
subsidiary.

<PAGE>

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SUBJECT TO, THE
MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
INCLUDED ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE DEFINED HEREIN,
CAPITALIZED TERMS USED IN THIS SUMMARY HAVE THE RESPECTIVE MEANINGS ASSIGNED TO
THEM ELSEWHERE IN THIS PROSPECTUS. POTENTIAL INVESTORS SHOULD READ THIS
PROSPECTUS CAREFULLY IN ITS ENTIRETY.

THE COMPANY

Tysons Financial Corporation (the "Company") was incorporated in Virginia
on December 29, 1989 as a bank holding company to own and control all of the
capital stock of Tysons National Bank (the "Bank"), a national banking
association. The Bank commenced operations on July 1, 1991. The headquarters of
the Company and the Bank are located in an area known as Tysons Corner. Tysons
Corner is approximately 13 miles due west of Washington, D.C. and within 20 to
30 minutes from other locations such as Dulles International Airport, Washington
National Airport and suburban Maryland. In May of 1995, the Bank acquired
certain assets and assumed certain liabilities of Suburban Bank of Virginia,
N.A. ("Suburban Bank"), which resulted in the expansion of the Bank and the
addition of a branch in Reston, Virginia. At March 31, 1996, the Company had
total assets of $76,349,000, total loans of $43,579,000, total deposits of
$70,942,000 and stockholders' equity of $4,444,000. See "Business."

The Bank engages in a general commercial banking business with particular
emphasis on the needs of professionals, entrepreneurs, and small to medium-sized
businesses located in its primary service area. The Bank offers a comprehensive
range of banking services that are generally offered by other full service banks
and savings and loan associations. Such services include commercial and personal
checking accounts, Automated Teller Machine (ATM) card services for the MOST,
Cirrus and Exchange ATM networks, savings accounts, and other time deposits
including individual retirement accounts and certificates of deposit. The Bank
also provides loans to businesses, including both secured and unsecured
short-term loans for working capital purposes, term loans for fixed assets and
expansion needs such as real estate acquisition and improvements, real estate
construction loans, and other commercial loans suitable to the needs of its
business customers. Loans to individuals which are offered by the Bank include
short-term mortgage loans and installment loans for personal use such as
education and personal investments, or for the purchase of automobiles or other
consumer items. The Bank also acts as an issuing agent for U.S. savings bonds,
travelers' checks and cashier's checks. In addition, the Bank offers its
customers bank-by-mail and direct deposit services, safe deposit services, wire
transfer services and a courier service which picks up non-cash customer
deposits.

The Bank draws most of its customer deposits and conducts most of its
lending transactions from and within a primary service area in the Tysons
Corner/Reston corridor of Fairfax County, Virginia. The large cosmopolitan
population that lives and works in this corridor and in surrounding suburbs, as
well as the area's accessibility, make retailing a significant enterprise. High
technology firms are also located within this corridor. These firms include
businesses engaged in operations research, computer programming and information
management. The Bank actively targets and solicits relationships from the
professional staff employed by these enterprises. The corridor also attracts a
significant amount of professional firms, including accounting and law firms.
The Bank actively solicits banking relationships with these firms as well as
their professional staff. The Company's Reston branch is approximately nine
miles west of the Company's Tysons Corner branch. The Reston area is
experiencing increases in its large residential community and growing commercial
business sectors which are expected to contribute to the overall growth of the
Company.

<PAGE>

THE OFFERING

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<S> <C>
Common Stock Offered.................................................... 300,000 shares(1)

Common Stock Outstanding After the Offering............................. 968,619 shares(1)

Estimated Net Proceeds to the Company................................... $ (1)

Use of Proceeds......................................................... For general corporate purposes, including to
provide additional equity capital to support future
growth, including possible future acquisitions of
other financial institutions, their branches or
deposits. There are currently no agreements or
understandings with respect to any such
acquisitions. Pending their longer-term uses, the
net proceeds will be invested in short-term
investment grade obligations. See "Use of
Proceeds."

Investment Considerations............................................... Prospective investors in the Common Stock should
consider the information discussed under the
heading "Risk Factors."

Proposed Nasdaq SmallCap Market Symbol.................................. "TYSN"
</TABLE>

(1) Assumes no exercise of the Underwriter's over-allotment option to purchase
up to 45,000 shares of Common Stock. See "Underwriting." Excludes
approximately 247,150 shares of Common Stock issuable upon exercise of
outstanding and currently exercisable options and warrants as of April 30,
1996, at a weighted average exercise price of approximately $9.90 per share.

<PAGE>

SUMMARY CONSOLIDATED FINANCIAL DATA

THREE MONTHS ENDED YEARS ENDED
MARCH 31, DECEMBER 31,

1996 1995 1995 1994 1993
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Interest income................................ $ 1,426,556 $ 699,147 $ 4,460,454 $ 2,103,403 $ 1,557,265
Interest expense............................... 533,773 195,602 1,522,450 576,454 457,614
Net interest income............................ 892,783 503,545 2,938,004 1,526,949 1,099,651
Provision for loan losses...................... -- 12,766 393,580 90,300 95,990
Non-interest income............................ 80,499 54,334 339,226 137,489 81,956
Non-interest expense........................... 782,346 533,639 2,566,052 1,712,557 1,465,128
Income (loss) before income taxes.............. 190,936 11,474 317,598 (138,419) (379,511)
Income tax benefit............................. (87,000) -- (250,000) -- --
Net income (loss).............................. $ 277,936 $ 11,474 $ 567,598 $ (138,419) $ (379,511)

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DATA, AT PERIOD-END:

Total assets................................... $76,348,834 $36,518,261 $70,611,299 $38,989,191 $30,933,146
Total loans, net............................... 43,578,806 24,530,606 43,774,810 23,750,090 15,927,504
Total deposits................................. 70,941,894 32,311,287 65,493,157 34,894,472 26,684,423
Total stockholders' equity..................... 4,444,248 3,508,503 4,140,469 3,385,692 4,120,992

PER COMMON SHARE DATA:

Net income (loss).............................. $ 0.44 $ 0.02 $ 0.92 $ (0.22) $ (0.57)
Book value..................................... 6.65 5.25 6.19 5.06 6.16
Tangible book value............................ 5.04 5.25 4.53 5.06 6.16
Number of shares of common stock outstanding,

at period-end............................... 668,619 668,619 668,619 668,619 668,619

PERFORMANCE RATIOS (1):

Return on average assets....................... 1.57% 0.13% 1.07% (0.43)% (1.46)%
Return on average stockholders' equity......... 26.00% 1.35% 15.45% (3.68)% (8.15)%
Net interest margin............................ 5.47% 6.17% 5.97% 5.15% 4.55%

CAPITAL RATIOS:

Capital to risk-weighted assets, at period end:

Tier 1 capital ratio........................ 7.66% 15.39% 7.34% 15.40% 22.40%
Total capital ratio......................... 8.84% 16.60% 8.59% 16.60% 23.60%
Tier 1 leverage ratio....................... 5.36% 11.15% 5.46% 11.40% 14.20%

ASSET QUALITY RATIOS:

Allowance for loan losses, at period-end, to:

Loans....................................... 1.31% 1.25% 1.32% 1.24% 1.28%
Non-performing assets....................... 187.40% 431.60% 219.75% (2) 295.02%
Net charge-offs to average total loans......... 0.01% (3) 0.30% (3) 0.46%
Non-performing assets to total assets, at
period-end.................................. 0.40% 0.20% 0.38% (2) 0.23%
</TABLE>

(1) Annualized for the three months ended March 31, 1996 and 1995.

(2) There were no non-performing assets at the end of the period indicated.

(3) There were no net charge-offs during the period indicated.

<PAGE>

RISK FACTORS

PROSPECTIVE INVESTORS SHOULD REVIEW AND CONSIDER CAREFULLY THE FOLLOWING
INVESTMENT CONSIDERATIONS, TOGETHER WITH THE OTHER INFORMATION CONTAINED IN THIS
PROSPECTUS, IN EVALUATING AN INVESTMENT IN THE COMMON STOCK.

LIMITED HISTORY OF PROFITABILITY; NO ASSURANCE OF CONTINUED PROFITABILITY

Since the Company's sole business activity for the foreseeable future will
be to act as the holding company of the Bank, the profitability of the Company
will be dependent on the results of the operations of the Bank. From the
commencement of its operations in 1991 through the quarter ended June 30, 1994,
the Company did not report net income. Although the Company's operations have
been profitable since the quarter ended September 30, 1994, there can be no
assurance that it will be as profitable or profitable at all in the future.
Among many factors which could adversely affect the Company's financial
performance are government regulation, increased competition, and unfavorable
economic conditions. See " -- Government Regulation," " -- Competition," and "
- -- Economic Conditions and Monetary Policy."

OFFERING PRICE NOT BASED SOLELY ON MARKET PRICES

The offering price of the Common Stock has been determined by negotiations
between the Company and the Underwriter based on certain factors including the
current market for the Common Stock, an evaluation of assets, earnings and other
established criteria of value, as well as the comparisons of the relationships
between market prices and book values of other financial institutions of a
similar size and asset quality. Such decision will not be solely based upon an
actual trading market for the Common Stock; accordingly, there can be no
assurance that the Common Stock may be resold at or above the offering price.

See "Underwriting."

LACK OF TRADING MARKET

Prior to the Offering, there has been no public market for the Common Stock
of the Company. Although application has been made to quote the Common Stock on
the Nasdaq SmallCap Market upon completion of the Offering, there can be no
assurance that an active trading market will develop or, if developed, will be
sustained following the Offering. See "Market Information."

DEPENDENCE ON KEY PERSONNEL

The Company is dependent on the continued services of Terrie G. Spiro,
President and Chief Executive Officer of the Company and the Bank, and certain
other senior officers. Although the Company believes that it has sufficiently
experienced management personnel to accommodate the loss of any senior officer,
the loss of one or more of these senior officers' services could have a material
adverse effect on the Company. The Company maintains a key-person insurance
policy on the life of Ms. Spiro. Upon Ms. Spiro's death, proceeds of $200,000
under the policy are payable to the Company. The Company has entered into an
employment agreement with Ms. Spiro. See "Management -- Executive
Compensation -- Employment Contracts and Termination of Employment Agreements."

LIMITATIONS ON PAYMENT OF DIVIDENDS

The Company has not paid cash dividends on its Common Stock and dividends
are not currently contemplated for the foreseeable future. There can be no
assurances as to whether or when the Company may commence the payment of cash
dividends. See "Dividends." In addition, because the Company's principal
business operations are conducted through the Bank, cash available to pay
dividends would be derived primarily, if not entirely, from dividends paid to it
by the Bank. The Bank's ability to pay dividends to the Company and the
Company's ability to pay dividends to shareholders on the Common Stock are also
subject to and limited by certain legal and regulatory restrictions. See
"Dividends" and "Business -- Supervision and Regulation -- Dividends."

<PAGE>

RISK OF LOAN LOSSES

The risk of credit losses on loans varies with, among other things, general
economic conditions, the type of loan being made, the creditworthiness of the
borrower over the term of the loan and, in the case of a collateralized loan,
the value and marketability of the collateral for the loan. Management maintains
an allowance for loan losses based upon, among other things, historical
experience, an evaluation of economic conditions and regular reviews of
delinquencies and loan portfolio quality. Based upon such factors, management
makes various assumptions and judgments about the ultimate collectibility of the
loan portfolio and provides an allowance for loan losses based upon a percentage
of the outstanding balances and for specific loans when their ultimate
collectibility is considered questionable. If management's assumptions and
judgments prove to be incorrect and the allowance for loan losses is inadequate
to absorb future losses, or if the bank regulatory authorities require the Bank
to increase the allowance for loan losses, the Bank's earnings could be
significantly and adversely affected. Because certain lending activities involve
greater risks, the percentage applied to specific loan types may vary.
Commercial loans may involve greater risk than real estate mortgage loans. As of
March 31, 1996, the Bank had a total of $12,574,000 in commercial loans and a
total of $12,069,000 in commercial real estate loans. Of this amount,
$24,592,000 was either fully or partially secured and $51,000 was unsecured.

As of March 31, 1996, the allowance for loan losses was $579,000, which
represented 1.31% of outstanding loans, net of unearned income. At such date,
the Company had non-accrual loans totaling $309,000. The Bank actively manages
its non-performing loans in an effort to minimize credit losses and monitors its
asset quality to maintain an adequate allowance for credit losses. Although
management believes that its allowance for loan losses is adequate, there can be
no assurance that the allowance will prove sufficient to cover future loan
losses. Further, although management uses the best information available to make
determinations with respect to the allowance for loan losses, future adjustments
may be necessary if economic conditions differ substantially from the
assumptions used or adverse developments arise with respect to the Bank's
non-performing or performing loans. Material additions to the Bank's allowance
for loan losses would result in a decrease in the Bank's net income, possibly
its capital, and could have a material adverse effect on the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Loan Quality."

CONTROL BY MANAGEMENT

A total of 222,783 shares of Common Stock is beneficially owned by the
directors and executive officers of the Company, or 33.3% of the Common Stock
outstanding before the Offering. In addition, warrants and stock options to
purchase an aggregate of 92,642 shares of Common Stock are held by the directors
and executive officers. If all warrants and stock options were exercised, the
directors and executive officers would own approximately 41.4% of the Common
Stock outstanding before the Offering. The Underwriter may offer shares of
Common Stock in the Offering to the directors and executive officers. As
described in "Underwriting," the Underwriter has accepted the Company's request
to sell up to 28,625 shares of Common Stock to persons designated by the Company
at the public offering price set forth on the cover page of this prospectus. It
is expected that the directors and executive officers will purchase
substantially all of such shares. Accordingly, assuming that the directors and
executive officers purchase such shares, such persons would beneficially own an
aggregate of 251,408 shares of Common Stock or approximately 26.0% of the
outstanding Common Stock following the Offering (assuming no exercise of the
Underwriter's over-allotment option.) If all warrants and options held by
directors and executive officers were exercised, assuming that the directors and
executive officers purchase the 28,625 shares noted above, such persons would
beneficially own an aggregate of 344,050 shares of Common Stock or 32.4% of the
outstanding Common Stock following the Offering (assuming no exercise of the
Underwriter's over-allotment option). See "Management -- Security Ownership of
Certain Beneficial Owners and Management."

CERTAIN PROTECTIVE PROVISIONS; POSSIBLE ISSUANCES OF PREFERRED STOCK

The Articles of Incorporation of the Company contain certain provisions
designed to enhance the ability to the Board of Directors to deal with attempts
to acquire control of the Company. In addition, the Virginia Stock Corporation
Act contains certain anti-takeover provisions that apply to corporations
organized under Virginia law that have more than 300 shareholders of record,
which the Company will likely have upon completion of the Offering. Moreover,
pursuant to the Company's Articles of Incorporation, shares of preferred stock
may be issued in the future without further shareholder approval and upon such
terms and conditions, and having such rights, privileges and preferences, as the
Board of Directors may determine. While these provisions may provide flexibility
in connection with acquisitions and other corporate purposes, they could
discourage or make more difficult a merger, tender offer or proxy contest, even
though certain shareholders may wish to participate in such a transaction.
Further, such provisions could potentially adversely affect the market price of
the Common Stock. See "Description of Capital Stock."

<PAGE>

As described in "Description of Capital Stock -- Certain Protective
Provisions," Virginia law prohibits certain "affiliated transactions" between a
Virginia corporation and an "Interested Shareholder" (generally, a person who
beneficially owns 10% or more of the voting power of a Virginia corporation)
unless such transactions are approved by the affirmative vote of the holders of
two-thirds of the voting shares other than the "Interested Shareholder."
Further, Virginia law provides that shares of a Virginia corporation with 300 or
more shareholders acquired in a "control share acquisition" have no voting
rights except to the extent approved by a majority of votes entitled to be cast
on the matter, excluding shares of stock held by the acquiror or by officers and
directors who are employees of the corporation. Shareholders beneficially owning
more than 5% of the Common Stock who are not directors or executive officers own
an aggregate of 192,512 shares, or 28.8% of the Common Stock outstanding before
the Offering. Further, as described in " -- Control by Management," a total of
222,783 shares of Common Stock (or 33.3% of the Common Stock outstanding before
the Offering) is beneficially owned by directors and executive officers, and the
Company expects that such persons will purchase additional shares in the
Offering. In addition, shareholders beneficially owning more than 5% of the
Common Stock who are not directors or executive officers hold an aggregate of
98,700 warrants to purchase Common Stock (or 12.9% of the Common Stock
outstanding before the Offering), and directors and executive officers hold an
aggregate of 92,642 warrants and options to purchase Common Stock (or 12.2% of
the Common Stock outstanding before the Offering.) Accordingly, the composition
of the Company's shareholder base may have a significant impact on the ability
of an Interested Shareholder to secure the necessary vote in order to effect an
affiliated transaction, and on the ability of an acquiror in a control share
acquisition to gain voting rights for control shares. See "Description of
Capital Stock."

COMPETITION

The Company operates in a competitive environment, competing for deposits
and loans with commercial banks, thrift institutions and other financial
institutions. Numerous mergers and consolidations involving banks in the market
in which the Bank operates have occurred recently, resulting in an
intensification of competition in the banking industry in the Company's
geographical market. The Company also competes with money market mutual funds
for funds from depositors. Many of the Company's competitors possess greater
financial resources or have substantially higher lending limits than does the
Company.

Recent changes in Federal banking laws are expected to facilitate
interstate branching and merger activity among banks. Since September 1995, with
exceptions, certain bank holding companies are authorized to acquire banks
throughout the United States. In addition, on and after June 1, 1997, certain
banks will be permitted to merge with banks organized under the laws of
different states. Such changes may result in an even greater degree of
competition in the banking industry and the Company may be brought into
competition with institutions with which it does not presently compete. There
can be no assurance that the profitability of the Company will not be adversely
affected by the increased competition which may characterize the banking
industry in the future. See "Business -- Competition."

ECONOMIC CONDITIONS AND MONETARY POLICY

The operating results of the Company will depend to a great extent upon the
rate differentials which result from the difference between the income it
receives from its loans, securities and other earning assets and the interest
expense it pays on its deposits and other interest-bearing liabilities. These
rate differentials are highly sensitive to many factors beyond the control of
the Company, including general economic conditions and the policies of various
governmental and regulatory authorities, in particular the Board of Governors of
the Federal Reserve System (the "Federal Reserve"). Also, adverse changes in
general economic conditions could impair borrowers' ability to repay loans as
they mature, thus reducing the income the Company receives from its loans and
reducing the amount of the rate differentials.

Like other depository institutions, the Company is affected by the monetary
policies implemented by the Federal Reserve and other federal instrumentalities.
A primary instrument of monetary policy employed by the Federal Reserve is the
restriction on expansion of the money supply through open market operations
including the purchase and sale of government securities and the adjustment of
reserve requirements. These actions may at times result in significant
fluctuations in interest rates, which could have adverse effects on the
operations of the Company. In particular, the Company's ability to make loans
and attract deposits, as well as public demand for loans, could be adversely
affected. See "Business -- Supervision and Regulation -- Governmental Monetary
Policies and Economic Controls."

<PAGE>

GOVERNMENT REGULATION

The Company and the Bank are subject to extensive governmental supervision
and regulation. Certain regulatory authorities have broad discretion in
connection with their supervision, examination and enforcement activities and
policies. Among other powers, the regulatory authorities may impose restrictions
on the operation of a financial institution, may require the classification of
assets by an institution and may dictate an increase in an institution's
allowance for loan losses. Any change in the applicable statutes, regulations or
policies or in the regulatory structure, whether by the Federal Reserve, the
Office of the Comptroller of the Currency (the "OCC"), the Federal Deposit
Insurance Corporation (the "FDIC"), or Congress, could have a material impact on
the Company and the Bank and their operations. See "Business -- Supervision and
Regulation."

DILUTION

Purchasers of Common Stock in the Offering will experience immediate
dilution in book value per share and tangible book value per share from the
public offering price. At March 31, 1996, the Company's book value per share was
$6.65. After giving effect to the 300,000 shares of Common Stock at an estimated
price of $8.50 per share and to the payment of estimated offering expenses, the
pro forma book value per share would have been $6.88. This would represent an
immediate increase in book value of $0.23 per share to existing shareholders and
an immediate dilution to new investors of $1.62 per share. "Tangible book value
per share" is determined by dividing the difference between the total amount of
tangible assets and the total amount of liabilities by the number of outstanding
shares of Common Stock. At March 31, 1996, the Company's tangible book value per
share was $5.04. After giving effect to the sale of 300,000 shares of Common
Stock at an estimated price of $8.50 per share and to the payment of estimated
offering expenses, the pro forma tangible book value per share at March 31, 1996
would have been $5.77. This would represent an immediate increase in tangible
book value of $0.73 per share to existing shareholders and an immediate dilution
to new investors of $2.73 per share.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby are estimated to be approximately $ ($ if the Underwriter's
over-allotment option is exercised in full.) The net proceeds will be available
for general corporate purposes, including to provide additional equity capital
to support future growth, including the financing of possible future
acquisitions of other financial institutions, their branches or deposits. There
are currently no agreements or understandings with respect to any such
acquisitions. As a result of the receipt of the proceeds, the Company expects
that the Bank's legal lending limit for any one borrower will be increased from
$719,000 to approximately $1,000,000. Pending their longer-term uses, the net
proceeds will be invested in short-term investment grade obligations.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
March 31, 1996, and as adjusted to give effect to the sale of shares of the
Common Stock offered hereby (after giving effect to the payment of estimated
offering expenses):

MARCH 31, 1996

OUTSTANDING AS ADJUSTED

<S> <C> <C>
(IN THOUSANDS)

Long-term debt...................................................................................... $ 425 $ 425

STOCKHOLDERS' EQUITY:

Common Stock, $5 par value; 10,000,000 shares authorized;

668,619 shares issued and outstanding, 968,619 as adjusted (1).................................... 3,343 4,843
Additional paid-in capital (1)...................................................................... 3,072
ESOP Trust.......................................................................................... (413) (413)
Accumulated deficit................................................................................. (1,580) (1,580)
Unrealized gain on investment securities available for sale......................................... 22 22
Total stockholders' equity (1)...................................................................... 4,444
Total capitalization................................................................................ $ 4,869
</TABLE>

(1) Assumes that the Underwriter's over-allotment option for 45,000 shares is
not exercised. If the Underwriter's over-allotment option is exercised in
full, Common Stock, additional paid-in capital and total stockholders'
equity would be $ , $ and $ , respectively.

<PAGE>

DIVIDENDS

The Company has not declared or paid any dividends. The Company expects
that it will retain all earnings, if any, generated by its operations for the
development and growth of its business and does not currently anticipate paying
any cash dividends on its Common Stock in the foreseeable future. Any future
determination as to payment of cash dividends will be at the discretion of the
Company's Board of Directors and will depend on the Company's earnings,
financial condition, capital requirements and other factors deemed relevant by
the Board of Directors.

The payment of dividends by the Company depends largely upon the ability of
the Bank to declare and pay dividends to the Company because the principal
source of the Company's revenue will be dividends paid by the Bank. In
considering the payment of dividends the Board of Directors will take into
account the Company's financial condition, results of operations, tax
considerations, costs of expansion, industry standards, economic conditions and
need for funds, as well as governmental policies and regulations applicable to
the Company and the Bank. For example, the National Bank Act limits dividend
payments by national banks, which in turn could limit the Company's ability to
pay dividends. No assurance can be given that the Bank's earnings will enable
the Bank (and therefore the Company) to pay cash dividends. Distributions paid
by the Company to shareholders will be taxable to the shareholders as dividends,
to the extent of the Company's accumulated or current earnings and profits. See
also the discussion under "Business -- Supervision and Regulation."

MARKET INFORMATION

Prior to this Offering, there has been no established public trading market
for the Common Stock. Although the Company expects to receive approval for
quotation of its Common Stock on The Nasdaq SmallCap Market, there can be no
assurance that an active trading market for the Common Stock will develop and
continue after the Offering. The quotation of the Common Stock on The Nasdaq
SmallCap Market is conditioned upon the Company meeting certain asset, capital
and surplus, stock price and public float tests. To satisfy the initial listing
requirements for trading in The Nasdaq SmallCap Market, a company must have
total assets of at least $4,000,000, capital and surplus of at least $2,000,000,
a bid price of $3 per share (subject to certain exceptions), at least 300
shareholders and at least 100,000 publicly held shares of Common Stock (shares
not held, directly or indirectly, by any officer, director or person
beneficially owning more than 10% of the total shares outstanding). The
quotation of the Common Stock on The Nasdaq SmallCap Market is also conditioned
on there being two registered and active market makers for the Common Stock.
Arrangements have been made for this requirement to be met, and the Company
believes that it will meet the respective asset, capital and surplus and public
float of The Nasdaq SmallCap Market.

See "Underwriting" for information concerning the factors considered in
determining the public offering price. There can be no assurance that the public
offering price will correspond to the price at which the Common Stock will trade
in the public market subsequent to the Offering. Trades in the Common Stock have
occurred infrequently on a local basis and generally involved a relatively small
number of shares. Based on information made available to it, the Company
believes that the selling price for the Common Stock ranged during 1994, from
$8.50 to $10.00; during 1995, from $6.50 to $8.25; and from January 1, 1996
through April 30, 1996, from $6.875 to $7.125. Such transactions may not be
representative of all transactions during the indicated periods or of the actual
fair market value of the Common Stock at the time of such transaction due to the
infrequency of trades and the limited market for the Common Stock.

At April 30, 1996, there were 668,619 shares of Common Stock outstanding
held by approximately 277 holders of record.

<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The selected financial data of the Company set forth below has been derived
from the Company's consolidated financial statements included herein and
previously published historical financial statements of the Company not
appearing herein. The Company's financial statements as of December 31, 1995 and
1994 and for the two years then ended have been audited by KPMG Peat Marwick
LLP, as indicated in its report included herein. The results for the year ended
December 31, 1995 include results relating to the Suburban Bank transaction for
the period from May 15, 1995 through December 31, 1995. The selected financial
data with respect to the three months ended March 31, 1995 and 1996, has been
derived from the unaudited consolidated financial statements included herein
which, in the opinion of the management of the Company, include all adjustments,
consisting of only normal recurring adjustments, necessary for a fair
presentation of the results of operations and the financial position at and for
each of the interim periods presented. Operating results for the three months
ended March 31, 1996, are not necessarily indicative of the results that may be
obtained for the entire year ending December 31, 1996. This selected
consolidated financial data of the Company does not purport to be complete and
is qualified in its entirety by more detailed financial information and the
financial statements contained elsewhere herein.

THREE MONTHS ENDED YEARS ENDED
MARCH 31, DECEMBER 31,

Net income (loss).............................. $ 0.44 $ 0.02 $ 0.92 $ (0.22) $ (0.57)
Book value..................................... 6.65 5.25 6.19 5.06 6.16
Tangible book value............................ $ 5.04 $ 5.25 $ 4.53 $ 5.06 $ 6.16
Number of shares of Common Stock outstanding,

at period-end............................... 668,619 668,619 668,619 668,619 668,619
PERFORMANCE RATIOS (1):
Return on average assets....................... 1.57% 0.13% 1.07% (0.43)% (1.46)%
Return on average stockholders' equity......... 26.00% 1.35% 15.45% (3.68)% (8.15)%
Net interest margin............................ 5.47% 6.17% 5.97% 5.15% 4.55%
CAPITAL RATIOS:

Capital to risk-weighted assets, at period end:

Allowance for loan losses, at period-end, to:

(1) Annualized for the three months ended March 31, 1996 and 1995.

(2) There were no non-performing assets at the end of the period indicated.

(3) There were no net charge-offs during the period indicated.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1995 AND 1994

OVERVIEW

The following discussion of the Company's financial condition and results
of operations should be read in conjunction with the Company's financial
statements and related notes and other statistical information included
elsewhere herein. Results reflect the operations of the Company and the Bank,
during the years ended December 31, 1995 and 1994.

The year ended December 31, 1995 represented the Company's most successful
year since the July 1, 1991 commencement of operations by the Bank. Record
earnings of $568,000 for the year were posted, and the Company recorded net
income for each of the fiscal quarters during the year ended December 31, 1995.
On a per share basis, earnings were $0.92 per share in 1995 as compared to a
$(0.22) loss in 1994 and $(0.57) loss in 1993. Return on average assets was
1.07% in 1995, (0.43)% in 1994 and (1.46)% in 1993. Return on average equity was
15.45% in 1995, (3.68)% in 1994 and (8.15)% in 1993. Equity to average assets
was 7.77% in 1995, 10.62% in 1994 and 15.86% in 1993.

The Company's total assets were $70,611,000 as of December 31, 1995 as
compared to $38,989,000 as of December 31, 1994 which represented an increase of
81.1%. The 1995 growth of $31,622,000 exceeded the growth of $8,056,000 from
December 31, 1993 to December 31, 1994 and was primarily due to the Suburban
Bank transaction. See "Business -- General." The Bank's overall asset size and
customer base, both individual and business, increased significantly during
1995.

Total loans, net of allowance for loan losses, at December 31, 1995 were
$43,775,000 as compared to $23,750,000 at December 31, 1994, which represented
an increase of 84.3%. Of the 1995 growth of $20,025,000, $13,000,000 is
attributable to the Suburban Bank transaction. The remaining $7,000,000 increase
in loans is due to the Bank's continued focus on its core lending activities
such as commercial loans, real estate programs, home equity lines of credit, and
consumer loans. The Bank's focus on real estate programs including home equity
lines of credit primarily accounted for the net loan growth in 1994. Average
loans as a percentage of average total earning assets increased from 1994 to
1995, representing 71.4% of total earning assets as of December 31, 1995, as
compared to 64.0% as of December 31, 1994.

Federal funds sold and cash and due from banks at December 31, 1995 totaled
$14,399,000 compared to $6,242,000 at December 31, 1994, representing an
increase of $8,157,000, or 131%. Cash and due from banks increased by
$3,300,000, or 150% and federal funds sold increased by $4,900,000, or 120%
during such period. The increase was attributable to the increase in overall
volume of the Bank's deposit base as a result of the Suburban Bank transaction,
the addition of Suburban Bank's Reston Branch and the Bank's internal growth
during 1995. In addition, the Bank experienced significant deposit transactions
in escrow accounts at year-end. From 1993 to 1994, federal funds sold decreased
by $1,300,000, or 24.5% and interest-bearing deposits decreased by $500,000, or
62.5%. The decreases were the result of a shift in funds from such lower
yielding assets to higher yielding loans.

Total deposits were $65,493,000 at December 31, 1995, up from $34,894,000
at December 31, 1994, representing an increase of 87.7%. The growth of
$30,599,000 was primarily the result of the acquisition of $20,100,000 of
deposits from Suburban Bank. The remaining increase was the result of an
increase in the overall customer base related to the Bank's normal growth and
marketing efforts. Interest-bearing deposit accounts accounted for the largest
increase, up $24,530,000.

RESULTS OF OPERATIONS

The Company's net income for the year ended December 31, 1995, was
$568,000, a $706,000 increase from the $138,000 loss for the year ended December
31, 1994. The net income and loss represent a return on average assets of 1.07%
in 1995 as compared to (0.43)% in 1994. Return on average equity improved to
15.45% in 1995 from (3.67)% in 1994. The primary reason for the $706,000
increase in net income from 1994 to 1995 is the growth in assets and liabilities
during 1994 and 1995. Average assets rose from $31,871,000 in 1994 to
$53,313,000 in 1995. One significant source of the increase in assets and
liabilities during 1995 was the purchase of $13,000,000 in loans and acquisition
of $20,100,000 of deposits from Suburban Bank. The growth in assets and
liabilities contributed to a $1,400,000, or 92.4%, increase in net interest
income and a $200,000, or 147%, increase in non-interest income while management
was able to limit growth in non-interest expenses to $850,000, or 50%.

<PAGE>

In addition, the Company recognized a net income tax benefit of $250,000 in
1995, as compared to zero in 1994, related to a reduction in the deferred tax
asset valuation allowance. Based upon the Company's profitability in 1995 and
projected profitability for 1996, management decided that 100% valuation
allowance was no longer needed against the deferred tax asset. See Note (5) to
the Company's Consolidated Financial Statements and " -- Income Tax Benefit."
Also in 1995, the Company made a provision of $394,000 for loan losses, as
compared to a $90,000 provision in 1994. See " -- Loan Quality."

Net income per share in 1995 was $0.92, which is a significant improvement
from the $(0.22) net loss per share in 1994.

NEW ACCOUNTING STANDARDS

For a discussion of changes in accounting principles and new accounting
standards, see Note (1) of the Notes to the Company's Consolidated Financial
Statements.

NET INTEREST INCOME/MARGINS

The primary source of revenue for the Company is net interest income, which
is the difference between income earned on interest-earning assets, such as
loans and investment securities, and interest incurred on interest-bearing
sources of funds, such as deposits and borrowings. The level of net interest
income is determined primarily by the average balances ("volume") of
interest-earning assets and the various rate spreads between the
interest-earning assets and the Company's funding sources. Table 1: "Comparative
Average Balances -- Yields and Rates" below indicates the Company's average
volume of interest-earning assets and interest-bearing liabilities for 1995 and
1994 and average yields and rates. Changes in net interest income from period to
period result from increases or decreases in the volume of interest-earning
assets and interest-bearing liabilities, increases or decreases in the average
rates earned and paid on such assets and liabilities, the ability to manage the
earning-asset portfolio, and the availability of particular sources of funds,
such as non-interest bearing deposits. Table 2: "Rate/Volume Variance" below
indicates the changes in the Company's net interest income as a result of
changes in volume and rates from 1994 to 1995 and from 1993 to 1994.

Net interest income was $2,938,000 for 1995, a 92.4% increase from the
$1,527,000 earned in 1994. Earning assets averaged $49,200,000 in 1995, a 66.2%
increase as compared to $29,600,000 in 1994. The increase in net interest income
is due to the growth of the loan portfolio, primarily attributable to the
purchase of the Suburban Bank loan portfolio, an increase in the volume of
investment securities, and increases in yields in the majority of earning asset
categories due to market rate increases, including the prime rate, throughout
1995. Average loans as a percentage of total average earning assets increased to
71.4% in 1995 as compared with 64.0% in 1994. Total average investment
securities as a percentage of total average earning assets decreased in 1995
representing 17.8% of total average earning assets as compared to 27.8% of total
average earning assets in 1994. Average federal funds sold increased to 10.5% of
total average earning assets in 1995 from 6.1% in 1994. The shift in composition
to higher yielding assets, as well as the overall increase in average earning
assets, improved net interest income, net interest spreads and net interest
margins for the Company in 1995.

Interest income on loans of $3,621,000 in 1995 represented an increase of
$2,006,000, or 124.2% from $1,615,000 in 1994, constituting the largest dollar
increase in interest income and reflecting an increase in the average balance of
loans to $35,127,000 in 1995 from $18,981,000 in 1994. The increase in net
interest income was also a result of an improvement in the net interest spread.
The net interest spread, which is the difference between the yield on earning
assets and the cost of interest-bearing liabilities, improved to 5.00% in 1995
from 4.19% in 1994.

The key performance measure for net interest income is the "net interest
margin," or net interest income divided by average earning assets. The Company's
net interest margin increased to 5.97% for 1995 from 5.15% for 1994 and 4.55%
for 1993. The Company's net interest margin is affected by loan pricing, credit
administration, and deposit pricing. Both the 1995 and 1994 increases were the
result of a combination of factors, including an upward trend in non-interest
bearing sources as a percentage of total deposits and an increase in
higher-yielding assets, primarily loans, as a component of average earning
assets.

<PAGE>

TABLE 1: COMPARATIVE AVERAGE BALANCES -- YIELDS AND RATES

1995 1994
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATES BALANCE EXPENSE RATES

<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)

Assets:

Loans (net of unearned income)(1)(2)................. $35,127 $ 3,621 10.31% $18,981 $1,615 8.51%
Investment securities:
Available-for-sale................................ 3,727 239 6.41 1,915 118 6.16
Held-to-maturity.................................. 5,032 290 5.76 6,315 270 4.28
Federal funds sold................................... 5,155 301 5.84 1,809 75 4.15
Interest bearing bank balances....................... 155 9 5.81 623 25 4.01
Total earning assets(3).............................. 49,196 $ 4,460 9.07% 29,643 $2,103 7.09%
Allowance for loan losses............................ (407) (236)
Other assets......................................... 4,524 2,464
Total assets......................................... $53,313 $31,871
Liabilities and stockholders' equity:
Deposits:

Interest-bearing demand........................... $ 5,371 $ 125 2.33% $ 3,568 $ 84 2.35%
Savings........................................... 3,860 119 3.08 3,551 97 2.73
Money market accounts............................. 15,086 511 3.39 8,808 232 2.63
Time deposits..................................... 12,608 716 5.68 3,603 136 3.77
Total interest-bearing deposits...................... 36,925 1,471 3.98 19,530 549 2.81
Federal funds purchased.............................. 34 2 5.88 29 1 3.45
Other borrowed funds................................. 452 49 10.84 286 26 9.09
Total interest-bearing liabilities................... 37,411 $ 1,522 4.07% 19,845 $ 576 2.90%
Demand deposits...................................... 11,874 8,101
Other liabilities.................................... 354 164
Stockholders' equity................................. 3,674 3,761
Total liabilities and stockholders' equity........... $53,313 $31,871
Interest rate spread

(Average rate earned less average rate paid)......... 5.00% 4.19%
Net interest income

(Interest earned less interest paid)................. $ 2,938 $1,527
Net interest margin

(Net interest income/total earning assets)........... 5.97% 5.15%
</TABLE>

(1) Loans on non-accrual are included in the calculation of average balance.

(2) Interest income on loans includes loan fee amortization of $53,064 and
$59,393 for the periods ended December 31, 1995 and 1994, respectively.

(3) From inception through December 31, 1995, the Company made no loans or
investments that qualify for tax-exempt treatment and, accordingly, has no
tax-exempt income.

<PAGE>

Changes in interest income and interest expense can result from variances
in both volume and rates. The Company has an asset and liability management
policy designed to provide a proper balance between rate sensitive assets and
rate sensitive liabilities, to attempt to maximize interest margins and to
provide adequate liquidity for anticipated needs.

The following table presents the changes in the Company's net interest
income as a result of changes in volume and rate from 1994 to 1995 and from 1993
to 1994.

TABLE 2: RATE/VOLUME ANALYSIS

1995 COMPARED TO 1994 1994 COMPARED TO 1993
(VARIANCES IN) (VARIANCES IN)

NET NET

AVERAGE AVERAGE INCREASE/ AVERAGE AVERAGE INCREASE/
VOLUME RATE (DECREASE) VOLUME RATE (DECREASE)

<S> <C> <C> <C> <C> <C> <C>
Interest Income:
Loans............................................. $1,606,452 $399,119 $2,005,571 $405,936 $(2,147) $403,789
Investment securities:

Available-for-sale.............................. 115,961 5,282 121,243 117,743 -- 117,743
Held-to-maturity................................ (62,051) 81,885 19,834 59,588 23,087 82,675
Federal funds sold................................ 185,330 41,363 226,693 (89,050) 37,474 (51,576)
Interest bearing bank balances.................... (23,599) 7,309 (16,290) (8,487) 1,994 (6,493)
Total interest income........................ 1,822,093 534,958 2,357,051 485,730 60,408 546,138
Interest Expense:
Interest bearing demand accounts.................. 42,044 (469) 41,575 15,502 (2,561) 12,941
Savings........................................... 8,881 12,691 21,572 (2,192) (4,378) (6,570)
Money market...................................... 199,183 79,917 279,100 43,907 (223) 43,684
Time deposits..................................... 482,366 97,808 580,174 37,355 3,918 41,273
Federal funds purchased........................... 331 194 525 1,598 -- 1,598
Other borrowed funds.............................. 17,180 5,870 23,050 25,914 -- 25,914
Total interest expense....................... 749,985 196,011 945,996 122,084 (3,244) 118,840
Change in net interest income..................... $1,072,108 $338,947 $1,411,055 $363,646 $63,652 $427,298
</TABLE>

Note: The change in interest income due to both rate and volume has been
allocated proportionally between volume and rate. Loan fees are included
in the interest income computation.

NON-INTEREST INCOME

Non-interest income consists of revenues generated from service charges on
deposit accounts, as well as loan servicing fees on real estate mortgages, wire
transfer fees, official check fees, and collection fees. Non-interest income in
1995 was $339,000, an increase of $202,000, or 147%, from $137,000 in 1994. The
increase was primarily due to volume increases in the number of deposit accounts
as a result of the Suburban Bank transaction, which generated more check
activity and increased fee income. A less significant increase from 1993 to 1994
of $56,000 or 67.8%, was primarily due to overall volume increases in the number
of deposit accounts. Deposit service charges accounted for 69.5% and 62.5% of
total non-interest income for 1995 and 1994, respectively.

TABLE 3: NON-INTEREST INCOME

1995 1994
AMOUNT % CHANGE AMOUNT % CHANGE

<S> <C> <C> <C> <C>
Deposit service charges...................................................... $235,626 174.1% $ 85,975 88.2%
Other operating income....................................................... 103,600 101.1 51,514 42.0
Total non-interest income.................................................. $339,226 146.7% $137,489 67.8%
Non-interest income as a percent of average total assets................... 0.6% 0.4%
</TABLE>

NON-INTEREST EXPENSE

Non-interest expense totaled $2,566,000 for 1995, as compared to $1,713,000
for 1994, an increase of $853,000, or 49.8%. Although total non-interest expense
increased during 1995, non-interest expense as a percentage of average total
assets decreased to 4.8% in 1995 as compared to 5.4% in 1994.

Salaries and employee benefits continued to account for the largest
component of non-interest expense, comprising 49.7% of total non-interest
expenses for 1995 and 47.4% in 1994. Salaries and employee benefits increased by
$465,000, or 57.3%, from 1994 to 1995, and increased by $127,000, or 18.6%, from
1993 to 1994. The increase in 1995 was mainly

<PAGE>

attributable to increased staffing as a result of the addition of the Reston
branch, and the 1994 increase was reflective of increases in staffing, wage
increases, and increases in employee health insurance. In addition, the 1994
salaries and employee benefits also increased due to the funding of the
leveraged ESOP during June 1994.

Data processing expenses increased by $113,000, or 100.7%, from 1994 to
1995, as compared to an increase of $31,000, or 37.8%, from 1993 to 1994. The
increases in data processing expenses are primarily volume driven. The increase
during 1995 was related to the addition of the Reston branch and the overall
increase in the Bank's transaction volume during 1995.

Occupancy and equipment expenses increased by $92,000, or 44.2%, from 1994
to 1995, as compared to a decrease of $38,000, or 15.3%, from 1993 to 1994. The
increase in 1995 was due to the addition of the Reston branch in conjunction
with the Suburban Bank transaction. The decrease from 1993 to 1994 was
reflective of the double lease situation which existed during the second quarter
of 1993 when the Company occupied its current premises in McLean, Virginia,
while maintaining its previous lease in Vienna, Virginia, creating a two month
overlap of rental expenses which no longer existed during 1994.

Legal and professional expenses increased by $55,000, or 32.6%, from 1994
to 1995, as compared to an increase of $27,000, or 18.7%, from 1993 to 1994. The
increase in 1995 was primarily due to the increase in audit fees paid to the
external auditors and regulators. The 1994 increase was a result of legal fees
incurred in the funding of the leveraged ESOP and an increase in the OCC audit
fee which was a result of the increase in the Bank's asset size.

Amortization of the premium paid for deposits totaling $77,000 in 1995
resulted from the $1,200,000 premium recorded in the Suburban Bank transaction.
The premium is being amortized over a 10 year period based upon the Company's
estimated life of the acquired deposit base.

Business development expenses increased by $37,000, or 47.8% in 1995. The
increase was primarily attributable to the increase in advertisement relating to
the opening of the Reston branch and distribution of information packets to
customers relating to the Suburban Bank transaction. From 1993 to 1994, business
development expenses decreased by $43,000, or 36.0%. This decrease was
reflective of the Company's curtailment of its advertising campaign from 1993 to
1994 limiting marketing via the media.

The following table presents the principal components of non-interest
expense for the last two fiscal years.

TABLE 4: NON-INTEREST EXPENSES

1995 1994
AMOUNT % CHANGE AMOUNT % CHANGE

<S> <C> <C> <C> <C>
Salaries and employee benefits........................................... $1,276,468 57.3% $ 811,389 18.6%
Data processing.......................................................... 226,010 100.7 112,617 37.8
Occupancy and equipment.................................................. 299,394 44.2 207,560 (15.3)
Office and operations expenses........................................... 287,041 3.1 278,301 87.5
Legal and professional................................................... 223,657 32.6 168,623 18.7
Amortization of premium paid for deposits................................ 76,849 100.0 -- --
Deposit insurance........................................................ 62,831 10.1 57,087 31.4
Business development..................................................... 113,802 47.8 76,980 (36.0)
Total non-interest expense............................................. $2,566,052 49.8% $1,712,557 16.9%
Non-interest expense as a percentage of average total assets............. 4.8% 5.4%
</TABLE>

INCOME TAX BENEFIT

The Company recognized a net income tax benefit of $250,000 in 1995, as
compared to zero in 1994, related to a reduction in the deferred tax asset
valuation allowance. This accounted for $250,000 of the $706,000 change in net
income from 1994 to 1995. Subject to future profitability, the Company expects
to record additional tax benefits until the net operating losses are depleted.
See Note (5) to the Consolidated Financial Statements.

Prior to December 31, 1995, management determined that a valuation
allowance was necessary for the entire amount of the deferred tax asset. This
decision was based on the lack of sufficient profitable operating history of the
Company. Based upon the profitability of the Company in 1995 and projected
profitability of the Company during 1996, management reassessed the need for a
valuation allowance and recorded a net $250,000 deferred tax asset, which is the
amount management considers is more likely than not to be realized.

<PAGE>

COMPOSITION OF LOAN PORTFOLIO

Because loans are expected to produce higher yields than investment
securities and other interest-earning assets, the absolute volume of loans and
the volume as a percentage of total earning assets is an important determinant
of net interest margin. During 1995, average loans were $35,127,000 and
constituted 71.4% of average earning assets and 65.9% of average total assets.
This represents increases of $16,146,000, or 85.1% over 1994 average loans of
$18,981,000 which represented 64.0% of average earning assets and 59.6% of
average total assets. At December 31, 1995, the Company's loan to deposit ratio
was 67.7% as compared to 68.9% at December 31, 1994 and 60.5% at December 31,
1993. Loan growth during 1995 of $20,000,000 was significantly less than total
deposit growth of $31,000,000 which contributed to the decrease in the loan to
deposit ratio.

The change in the Bank's loan portfolio composition as of December 31, 1995
was primarily due to the purchase of loans from Suburban Bank, specifically the
increases in residential real estate and consumer loans. Despite the changes in
loan mix, commercial loans still represent the largest category with 32.2% of
the total loan portfolio. Residential real estate loans experienced the largest
volume increase of $6,260,000 representing 20.7%, or $9,230,000 of total loan
portfolio as of December 31, 1995.

The following table sets forth the composition of the Company's loan
portfolio, and the related percentage composition of total loans, as of December
31, 1995 and 1994.

TABLE 5: LOAN PORTFOLIO COMPOSITION

DECEMBER 31, 1995 DECEMBER 31, 1994
TYPE OF LOANS AMOUNT % OF TOTAL AMOUNT % OF TOTAL
<S> <C> <C> <C> <C>
Commercial............................................................. $14,352,202 32.2% $ 8,988,648 37.2%
Real estate-construction............................................... 1,990,779 4.5 1,570,020 6.5
Residential real estate................................................ 9,225,299 20.7 2,962,999 12.3
Commercial real estate................................................. 12,311,371 27.7 8,313,797 34.4
Consumer............................................................... 6,638,593 14.9 2,303,388 9.6
Total loans....................................................... 44,518,244 100.0% 24,138,852 100.0%
Less:
Unearned income...................................................... 158,906 91,013
Loans net of unearned income......................................... 44,359,338 24,047,839
Allowance for loan losses............................................ 584,528 297,749
Net loans......................................................... $43,774,810 $23,750,090
</TABLE>

Approximately 88.4% of the Company's commercial and real estate loans have
adjustable rates, the majority of which are tied to the prime rate. This allows
the Bank to adjust the interest rates on its loans to the current interest rate
environment, whereas fixed rates do not allow this flexibility. If interest
rates were to increase in the future, the interest earned on loans would
improve, and if rates were to fall, the interest earned would decline, thus
impacting the Company's income. See also the discussion under " -- Liquidity and
Interest Rate Sensitivity" below.

[The remainder of this page intentionally left blank]

<PAGE>

The following table sets forth the maturity distribution, classified
according to sensitivity to changes in interest rates, for commercial and real
estate components of the Company's loan portfolio at December 31, 1995. Some of
the loans may be renewed or repaid prior to maturity. Therefore, the following
table should not be used as a forecast of future cash collections.

TABLE 6: MATURITY SCHEDULE OF SELECTED LOANS

AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)

<S> <C> <C> <C> <C>
MORE THAN 1 YEAR
UP TO 1 YEAR TO 5 YEARS 5+ YEARS TOTAL
Commercial............................................................. $ 13,053 $ 1,250 $ 49 $14,352
Real estate............................................................ 19,539 3,313 675 23,527
Total................................................................ $ 32,592 $ 4,563 $ 724 $37,879
Fixed interest rate.................................................... $ 176 $ 3,507 $ 724 $ 4,407
Variable interest rate................................................. 32,416 1,056 -- 33,472
Total................................................................ $ 32,592 $ 4,563 $ 724 $37,879

1994

MORE THAN 1 YEAR

UP TO 1 YEAR TO 5 YEARS 5+ YEARS TOTAL
<S> <C> <C> <C> <C>
Commercial............................................................. $ 5,137 $ 3,617 $ 234 $ 8,988
Real estate............................................................ 2,070 7,843 2,934 12,847
Total................................................................ $ 7,207 $ 11,460 $3,168 $21,835
Fixed interest rate.................................................... $ 417 $ 740 $ -- $ 1,157
Variable interest rate................................................. 6,790 10,720 3,168 20,678
Total................................................................ $ 7,207 $ 11,460 $3,168 $21,835
</TABLE>

The scheduled repayments as shown above are reported in the maturity
category in which the payment is due.

LOAN QUALITY

The Bank attempts to manage the risk characteristics of its loan portfolio
through various control processes, such as credit evaluation of borrowers,
establishment of lending limits and application of lending procedures, including
the holding of adequate collateral and the maintenance of compensating balances.
However, the Bank seeks to rely primarily on the cash flow of its borrowers as
the principal source of repayment. Although credit policies are designed to
minimize risk, management recognizes that loan losses will occur and that the
amount of these losses will fluctuate depending on the risk characteristics of
the loan portfolio as well as general and regional economic conditions.

The allowance for loan losses represents a reserve for potential losses in
the loan portfolio. The adequacy of the allowance for loan losses is evaluated
periodically based on a review of all significant loans, with a particular
emphasis on non-accruing, past due and other loans that management believes
require special attention. As of December 31, 1995, the Company had one loan for
$266,000 in non-accrual loans as compared to zero as of December 31, 1994.

For significant problem loans, management's review consists of evaluation
of the financial strengths of the borrower and the guarantor, the related
collateral, and the effects of economic conditions. Specific reserves against
the remaining loan portfolio are based on analysis of historical loan loss
ratios, loan charge-offs, delinquency trends, and previous collection
experience, along with an assessment of the effects of external economic
conditions. Table 8: "Allowance for Loan Loss Allocation," which is set forth
below, indicates the specific reserves allocated by loan type and also the
general reserves included in the year-end 1995 allowance for loan losses.

The provision for loan losses is a charge to earnings in the current period
to replenish the allowance and to maintain it at a level management has
determined to be adequate. The Company's provision for loan losses for 1995 was
$394,000, a significant increase of $304,000, or 337.8%, from the $90,000
provision in 1994. The Bank's total loan balance increased to $44,359,000 as of
December 31, 1995 as compared to $24,048,000 as of December 31, 1994. The
increase in provision for loan losses during 1995 was related primarily to the
growth in the loan portfolio.

<PAGE>

The Bank charged off $107,000 in 1995 as compared to no charge-offs in
1994. These charge-offs resulted from three commercial loans and two consumer
loans. Commercial loans accounted for 95.5%, or approximately $102,000, of total
charge-offs, and consumer loans comprised the remaining 4.5%, or approximately
$5,000. There were no recoveries on loans previously charged off during 1995, as
compared to recoveries of $934 during 1994. The following Table 7: "Allowance
for Loan Losses" summarizes the allowance activities for the years ended
December 31, 1995 and 1994.

TABLE 7: ALLOWANCE FOR LOAN LOSSES

1995 1994
<S> <C> <C>
Allowance for loan losses, January 1........................................................... $ 297,749 $ 206,515
Loans charged off:

Commercial................................................................................... (102,036) --
Real estate.................................................................................. -- --
Consumer..................................................................................... (4,765) --
Total loans charged off................................................................... (106,801) --
Recoveries..................................................................................... -- 934
Net (charge-offs) recoveries................................................................. (106,801) 934
Provision for loan losses...................................................................... 393,580 90,300
Allowance for loan losses, December 31......................................................... $ 584,528 $ 297,749

Loans (net of discount):

Year-end balance.......................................................................... $44,359,338 $24,047,839
Average balance during the year........................................................... $35,126,817 $18,981,218
Allowance as a percent of year-end loan balance................................................ 1.32% 1.24%
Percent of average loans:
Provision for loan losses................................................................. 1.12% 0.48%
Net charge-offs........................................................................... (0.30)% 0.00%
</TABLE>

As of December 31, 1995, the allowance for loan losses was 1.32% of
outstanding loans, which was a slight increase from the December 31, 1994
percentage of 1.24%. Management's judgment as to the level of future losses on
existing loans is based on management's internal review of the loan portfolio,
including an analysis of the borrowers' current financial position, the
consideration of current and anticipated economic conditions and their potential
effects on specific borrowers, an evaluation of the existing relationships among
loans, potential loan losses, the present level of the loan loss allowance, and
results of examinations by independent consultants. In determining the
collectibility of certain loans, management also considers the fair value of any
underlying collateral. However, management's determination of the appropriate
allowance level is based upon a number of assumptions about future events, which
are believed to be reasonable, but which may or may not prove valid. Thus, there
can be no assurance that charge-offs in future periods will not exceed the
allowance for loan loss or that additional increases in the loan loss allowance
will not be required. The following Table 8: "Allowance for Loan Loss
Allocation" summarizes the allocation of allowance by loan type.

TABLE 8: ALLOWANCE FOR LOAN LOSS ALLOCATION

AS OF DECEMBER 31, 1995:

<S> <C> <C>
AMOUNT % OF TOTAL

Commercial......................................................................................... $ 87,442 14.96%
Real estate........................................................................................ 105,024 17.97
Consumer........................................................................................... 42,840 7.33
Unallocated........................................................................................ 349,222 59.74
Total............................................................................................ $584,528 100.00%

AS OF DECEMBER 31, 1994:
AMOUNT % OF TOTAL

<S> <C> <C>
Commercial......................................................................................... $109,894 36.91%
Real estate........................................................................................ 90,512 30.40
Consumer........................................................................................... 12,422 4.17
Unallocated........................................................................................ 84,921 28.52
Total............................................................................................ $297,749 100.00%
</TABLE>

<PAGE>

Non-performing loans are defined as non-accrual and renegotiated loans.
When real estate acquired by foreclosure and held for sale is included with
non-performing loans, such real estate is recorded as a non-performing asset.
Non-performing assets as of December 31, 1995, were comprised of one loan
totaling $266,000. The non-performing loan as of December 31, 1995, was
classified for regulatory purposes as substandard, and as such, management had
allocated a portion of its allowance for possible loan losses for future
potential loss. There were no non-performing loans as of December 31, 1994.
Table 9: "Non-Performing Assets" presents information on these assets for the
past two years, and Table 10: "Foregone Interest" illustrates the corresponding
interest lost on non-performing assets.

The Company adopted the provisions of Statements of Financial Accounting
Standards No. 114 (SFAS 114), Accounting by Creditors for Impairment of Loan, as
amended by Statements of Financial Accounting Standards No. 118 (SFAS 118),
Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosure, effective January 1, 1995. SFAS 114 and 118 require that impaired
loans, which consist of all modified loans and other loans for which collection
of all contractual principal and interest is not probable, be measured based on
the present value of expected cash flows discounted at the loan's effective
interest rate or the fair value of the collateral.

At December 31, 1995, there was one impaired loan with an unpaid principal
balance of $266,000. This loan is on non-accrual, but has no related impairment
reserve. The average balance of impaired loans during 1995 was $334,000, which
had an average impairment reserve of $26,000. No income was recognized on
impaired loans during 1995.

As a result of management's ongoing review of the loan portfolio, loans are
classified as non-accrual when collection of full principal and interest under
the original terms is not expected. These loans are classified as non-accrual,
even though the presence of collateral or the borrower's financial strength may
be sufficient to provide for ultimate repayment. Interest on non-accrual loans
is recognized only when received. Table 10: "Foregone Interest" indicates the
amount of interest that would have been recorded had all loans classified as
non-accrual been current in accordance with their original terms and the amount
of interest actually accrued.

TABLE 9: NON-PERFORMING ASSETS

AS OF DECEMBER
31,

<S> <C> <C>
1995 1994

Loans on non-accrual basis............................................................................... $266,000 $ --
Renegotiated or restructured loans....................................................................... -- --
Real estate acquired by foreclosure...................................................................... -- --
Total non-performing assets............................................................................ $266,000 $ --
</TABLE>

TABLE 10: FOREGONE INTEREST

FOR THE YEAR
ENDED DECEMBER

31,

<S> <C> <C>
1995 1994

Interest income that would have been accrued at original terms........................................... $ 13,465 $ --
Interest recognized...................................................................................... $ -- $ --
</TABLE>

CAPITAL RESOURCES

Stockholders' equity was $4,140,000 as of December 31, 1995, as compared to
$3,386,000 as of December 31, 1994. The $754,000 increase, or 22.3%, was the
result of net income of $568,000 and an unrealized gain on investment securities
available-for-sale of $137,000. The remaining increase in stockholders' equity
was due to the repayment of the long-term liability relating to the Employee
Stock Ownership Plan. No dividends have been declared by the Company since its
inception. See also the discussion under "Business -- Supervision and
Regulation." In addition, no stock warrants have been exercised and no options
under the Stock Option Plan have been exercised.

To date, the Company has provided its capital requirements through the
funds received from its initial stock offering which was completed in 1991. In
the future, the Company may consider raising capital from time to time through
an offering of Common Stock or other securities, such as the Offering. Under the
Federal Reserve's capital regulations, for as long as the Company's assets are
under $150 million, the Company's capital ratios are reviewed on a bank-only
basis. The Bank exceeded its capital adequacy requirements as of December 31,
1995 and 1994. See also the capital regulations discussion and capital analysis
table under "Business -- Supervision and Regulation." The Company continually
monitors its capital adequacy ratios to assure that the Bank remains within the
guidelines.

<PAGE>

LIQUIDITY AND INTEREST RATE SENSITIVITY

The primary objective of asset/liability management is to ensure the steady
growth of the Company's primary earnings component, net interest income. Net
interest income can fluctuate with significant interest rate movements. To
lessen the impact of these rate swings, management endeavors to structure the
balance sheet so that repricing opportunities exist for both assets and
liabilities in roughly equivalent amounts at approximately the same time
intervals. Imbalances in these repricing opportunities at any point in time
constitute interest rate sensitivity.

The measurement of the Company's interest rate sensitivity, or "gap," is
one of the principal techniques used in asset/liability management.
Interest-sensitive gap is the dollar difference between assets and liabilities
which are subject to interest-rate pricing within a given time period, including
both floating rate or adjustable rate instruments and instruments which are
approaching maturity.

In theory, interest rate risk can be diminished by maintaining a nominal
level of interest rate sensitivity. In practice, this is made difficult by a
number of factors, including cyclical variations in loan demand, different
impacts on interest-sensitive assets and liabilities when interest rates change,
and the availability of funding sources. Accordingly, the Company undertakes to
manage the interest-rate sensitivity gap by adjusting the maturity of and
establishing rate prices on the earning asset portfolio and certain
interest-bearing liabilities to keep it in line with management's expectations
relative to market interest rates. Management generally attempts to maintain a
balance between rate-sensitive assets and liabilities as the exposure period is
lengthened to minimize the overall interest rate risk to the Company.

The Bank's Executive Committee which oversees the asset/liability
management function meets periodically to monitor and manage the structure of
the balance sheet, control interest rate exposure, and evaluate pricing
strategies for the Company. The asset mix of the balance sheet is continually
evaluated in terms of several variables: yield, credit quality, appropriate
funding sources and liquidity. Management of the liability mix of the balance
sheet focuses on expanding the various funding sources.

The interest rate sensitivity position at year-end 1995 is presented in
Table 11: "Rate Sensitivity Analysis." The difference between rate-sensitive
assets and rate-sensitive liabilities, or the interest rate sensitivity gap, is
shown at the bottom of the table. The Company would benefit from increasing
market rates of interest when it is asset sensitive and would benefit from
decreasing market rates of interest when it is liability sensitive. At year-end
1995, the Company had an asset sensitive gap (more assets than liabilities
subject to repricing within the stated timeframe) of $7,300,000 which represents
19.8% of earning assets over a 30 day period. This suggests that if interest
rates should increase over this period, the net interest margin would improve,
and if interest rates should decrease, the net interest margin would decline.
Since all interest rates and yields do not adjust at the same velocity, the gap
is only a general indicator of interest rate sensitivity. The analysis presents
only a static view of the timing of maturities and repricing opportunities,
without taking into consideration that changes in interest rates do not affect
all assets and liabilities equally. Net interest income may be impacted by other
significant factors in a given interest rate environment, including changes in
the volume and mix of earning assets and interest-bearing liabilities.

[The remainder of this page intentionally left blank.]

<PAGE>

TABLE 11: RATE SENSITIVITY ANALYSIS

DECEMBER 31, 1995
TOTAL

30 DAYS 31-90 91-180 181 DAYS- ONE YEAR 1 YR.+ OR
OR LESS DAYS DAYS ONE YEAR OR LESS NON-SENSITIVE TOTAL

<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)

EARNING ASSETS:

Federal funds sold............................. $ 8,910 $ -- $ -- $ -- $ 8,910 $ -- $ 8,910
Interest bearing deposits...................... -- -- 100 -- 100 -- 100
Investment securities:

Available-for-sale........................... -- 249 250 540 1,039 3,927 4,966
Held-to-maturity............................. -- 679 473 651 1,803 3,471 5,274
Loans:

Revolving.................................... 29,319 698 1,631 1,183 32,831 1,247 34,078
Fixed........................................ 67 9 18 218 312 9,703 10,015
Total earning assets...................... 38,296 1,635 2,472 2,592 44,995 18,348 63,343

SOURCE OF FUNDS:

Savings........................................ 3,215 -- -- -- 3,215 -- 3,215
NOW accounts................................... 6,457 -- -- -- 6,457 -- 6,457
Money market accounts.......................... 20,488 -- -- -- 20,488 -- 20,488
CDs............................................ 421 1,069 1,374 4,598 7,462 5,549 13,011
CDs 100,000 & over............................. -- 613 -- 704 1,317 1,821 3,138
IRAs........................................... 30 141 307 432 910 655 1,565
Total rate-sensitive deposits................ 30,611 1,823 1,681 5,734 39,849 8,025 47,874
Long-term borrowings........................... 425 -- -- -- 425 -- 425
Total rate-sensitive liabilities............. 31,036 1,823 1,681 5,734 40,274 8,025 48,299
Noninterest-bearing liabilities................ -- -- -- -- -- 11,550 11,550

Interest rate sensitivity gap.................. $ 7,260 $ (188) $ 791 $(3,142) $ 4,721
Cumulative interest rate gap................... $ 7,260 $7,072 $7,863 $ 4,721
Ratio of rate sensitive assets to rate

sensitive liabilities........................ 123.39% 89.69% 147.06% 45.20% 111.72 %
</TABLE>

Liquidity represents the ability to provide steady sources of funds for
loan commitments and investment activities, as well as to provide sufficient
funds to cover deposit withdrawals and payment of debt and operating
obligations. These funds can be obtained by converting assets to cash or by
attracting new deposits. Cash flows from financing activities, which included
funds received from new and existing depositors, provided a large source of
liquidity in 1995 and 1994 as increases in deposits totaled $30,600,000 and
$8,200,000, respectively. The Bank seeks to rely primarily on core deposits from
customers to provide stable and cost-effective sources of funding to support
asset growth. The Bank also seeks to augment such deposits with higher yielding
certificates of deposit. Certificates of deposit of $100,000 or more are
summarized by maturity in Table 12: "Maturity of Time Deposits $100,000 or
More." Other sources of funds available to the Bank include short-term
borrowings, primarily in the form of federal funds purchased.

TABLE 12: MATURITY OF TIME DEPOSITS $100,000 OR MORE

DECEMBER 31,
1995 1994

<S> <C> <C>
Under 3 months...................................................................................... $ 613,000 $100,000
3 to 6 months....................................................................................... -- --
6 to 12 months...................................................................................... 704,000 552,000
Over 12 months...................................................................................... 1,821,000 203,000
Total............................................................................................... $3,138,000 $855,000
</TABLE>

<PAGE>

In the normal course of business, the Bank enters into various off balance
sheet credit facilities with its customers, including commitments to extend
credit at a future date and letters of credit. Details of the commitments of
this nature may be found in Note 12 of the accompanying Notes to Consolidated
Financial Statements. Since many of the commitments can be expected to expire
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements.

Average liquid assets (cash and amounts due from banks, interest-bearing
deposits in other banks, federal funds sold, investment securities and other
short-term investments) were 35.4% of average deposits for 1995, as compared to
45.8% for 1994. Liquidity levels declined during 1995 as funds were shifted into
less liquid, higher yielding, loans. Average loans were 72.0% of average
deposits for 1995, as compared to 68.7% for 1994. Average deposits were 99.2% of
average earning assets for 1995 as opposed to 93.3% for 1994. As noted in Table
6: "Maturity Schedule of Selected Loans," approximately $37,879,000, or 85.1%,
of the loan portfolio consisted of commercial loans and real estate loans. Of
this amount, $32,592,000, or 86.0%, matures within one year.

Table 13: "Maturity Distribution and Yields of Investment Securities"
indicates that $1,303,000, or 24.7%, of held-to-maturity investment securities
and $403,000, or 8.1%, or available-for-sale investment securities mature within
one year or less. Securities maintained in the available-for-sale portfolio may
be sold prior to maturity in order to provide the Company and the Bank with
increased liquidity. Available-for-sale investment securities totaled $4,966,000
and $3,455,000 as of December 31, 1995 and 1994, respectively.

TABLE 13: MATURITY DISTRIBUTION AND YIELDS OF INVESTMENT SECURITIES

DECEMBER 31, 1995

AVAILABLE-FOR-SALE HELD-TO-MATURITY
BOOK VALUE YIELD BOOK VALUE YIELD

<S> <C> <C> <C> <C>
U.S. TREASURY:
One year or less.................................................................. $ -- -- $ 475,196 5.60 %
Over one through five years....................................................... -- -- 997,252 5.81
Over five through ten years....................................................... -- -- -- --
Over ten years.................................................................... -- -- -- --
Total U.S. Treasury............................................................. -- -- 1,472,448 5.74
U.S. GOVERNMENT-SPONSORED AGENCIES:
One year or less.................................................................. 248,357 4.90 % 297,634 6.57
Over one through five years....................................................... 747,562 6.24 2,250,265 6.01
Over five through ten years....................................................... 1,328,017 6.96 -- --
Over ten years.................................................................... -- -- -- --
Total U.S. Government-Sponsored Agencies........................................ 2,323,936 6.51 2,547,899 6.08
OTHER SECURITIES:
One year or less.................................................................. 154,200 6.00 530,257 4.74
Over one through five years....................................................... 668,938 6.84 224,958 5.02
Over five through ten years....................................................... 562,564 7.04 289,000 4.98
Over ten years.................................................................... 1,256,135 6.71 209,288 4.70
Total Other Securities.......................................................... 2,641,837 6.77 1,253,503 4.84
Total Investment Securities....................................................... $4,965,773 6.65 $5,273,850 5.66
</TABLE>

<PAGE>

THREE MONTHS ENDED MARCH 31, 1996 AND 1995

OVERVIEW

Net income for the first quarter of 1996 reached $278,000 for an increase
of $267,000 as compared to the same period in 1995. Earnings per share for the
first quarter of 1996 were $0.44 as compared to $0.02 for the same period in
1995. Return on average assets was 1.57% for the first quarter of 1996 and 0.13%
for the same period of 1995. Return on average equity was 26.00% for the first
quarter of 1996 as compared to 1.35% for the same period in 1995. Equity to
average assets for the first quarter of 1996 was 6.24% as compared to 9.85% for
the same period in 1995.

As of March 31, 1996 the Company's total assets were $76,349,000 as
compared to $70,611,000 as of December 31, 1995, which represented an increase
of 8.1%. The 1996 first quarter growth of $5,673,000 was primarily due to the
growth of deposits from new and existing customers. The Bank's overall asset
size and customer base, both individual and business, increased significantly
during 1995, which trend continued into the first quarter of 1996.

Total loans, net of allowance for loan losses, at March 31, 1996 were
$43,579,000 as compared to $43,775,000 at December 31, 1995, which represented a
decrease of $196,000. Growth in loans was inhibited by the severe winter weather
of January and February 1996. Although some new loans were funded, outstanding
balances on loans were reduced or paid off resulting in the reduced outstanding
loan balances at March 31, 1996. Changes in the balances of total loans from
December 31, 1995 to March 31, 1996 include an increase in equity lines of
credit of $1,314,000 with smaller increases in real estate construction and
consumer loans, offset by a decrease of $1,779,000 in commercial loans and
smaller decreases in commercial real estate loans. The composition of the loan
portfolio as of March 31, 1996 and December 31, 1995 is presented below.

TABLE 1: COMPOSITION OF LOAN PORTFOLIO

MARCH 31, 1996 DECEMBER 31, 1995
% OF % OF

LOAN CATEGORY AMOUNT TOTAL AMOUNT TOTAL
<S> <C> <C> <C> <C>
Commercial.................................................................... $12,573,682 28.4 $14,352,202 32.2
Real estate-construction...................................................... 2,343,543 5.3 1,990,779 4.5
Real estate-residential....................................................... 10,539,026 23.8 9,225,299 20.7
Real estate-commercial........................................................ 12,068,975 27.2 12,311,371 27.7
Consumer...................................................................... 6,788,433 15.3 6,638,593 14.9
Gross loans................................................................... 44,313,659 100.0 44,518,244 100.0
Less:

Unearned income............................................................. (156,098) (158,906)
44,157,561 44,359,338
Allowance for loan losses................................................... (578,755) (584,528)
Net loans..................................................................... $43,578,806 $43,774,810
</TABLE>

Average loans as a percentage of average total earning assets decreased to
66.4% at March 31, 1996, as compared to 71.9% as of December 31, 1995 due to the
growth in deposits which exceeded loan growth. Table 2 below is a summary of the
composition of earning assets as of March 31, 1996, as compared to December 31,
1995.

TABLE 2: SUMMARY OF EARNING ASSETS

MARCH 31, 1996 DECEMBER 31, 1995
% OF % OF

EARNING ASSETS AMOUNT TOTAL AMOUNT TOTAL
<S> <C> <C> <C> <C>
Federal funds sold............................................................ $13,200,000 19.9 $ 8,910,000 14.1
Interest bearing deposits in banks............................................ 100,000 0.1 100,000 0.1
Investment securities:

Available-for-sale.......................................................... 5,050,936 7.6 4,965,773 7.9
Held-to-maturity............................................................ 4,504,951 6.8 5,273,850 8.4
Loans, net of unearned income................................................. 43,578,806 65.6 43,774,810 69.5
Total earning assets.......................................................... $66,434,693 100.0 $63,024,433 100.0
</TABLE>

<PAGE>

Federal funds sold and cash and due from banks at March 31, 1996 totaled
$20,963,000 compared to $14,399,000 at December 31, 1995, representing an
increase of $6,564,000, or 45.6%. Cash and due from banks increased by
$2,274,000, or 41.4% and federal funds sold increased by $4,290,000, or 48.1%
during such period. The increase was primarily attributable to increased
balances in certain customer escrow accounts.

Total deposits were $70,942,000 at March 31, 1996, up from $65,493,000 at
December 31, 1995, representing an increase of 8.3%. The growth of $5,449,000
was primarily the result of increased balances in certain customer escrow
accounts. Non-interest bearing deposits, which represent 28.1% of deposits,
increased by $2,371,000 while interest-bearing deposit accounts, which represent
71.9% of deposits, increased $3,078,000.

RESULTS OF OPERATIONS

The Company's net income for the first quarter of 1996 was $278,000, a
$267,000 increase from the $11,000 net income for the same period in 1995. This
net income represented a return on average assets of 1.57% for the first quarter
of 1996 as compared to 0.13% for the same period in 1995. Return on average
equity improved to 26.00% in the quarter ended March 31, 1996 from 1.35% for the
same period in 1995. The Company's growth in assets and liabilities was the
primary reason for the increase in net income. Average assets rose from
$35,605,000 in the first quarter of 1995 to $71,193,000 in the first quarter of
1996. One significant source of the increase in assets and liabilities was the
purchase on May 15, 1995, of $13,000,000 in loans and assumption of $20,100,000
of deposits from Suburban Bank. Net interest income for the quarter ended March
31, 1996 increased by $389,000, or 77.3%, over the same period of 1995.
Non-interest income for the first quarter of 1996 increased by $26,000, or 48.2%
over the same period in 1995, while non-interest expenses increased by $249,000
or 46.6%.

There was no provision for loan losses in the first quarter of 1996.
Because there was no growth or deterioration in the Bank's loan portfolio, the
allowance for loan losses, which represents 1.31% of outstanding loans, is
considered adequate by management.

The Company recognized an income tax benefit of $87,000 in the first
quarter of 1996. The income tax benefit relates to a reduction in the deferred
tax asset valuation allowance based upon the Company's profitability in 1995 and
projected profitability over the next twelve months. There was no tax benefit
recorded in the first quarter of 1995.

Net income per share was $0.44 for the quarter ended March 31, 1996 which
was a significant improvement from the $0.02 net income per share for the same
period of 1995.

NET INTEREST INCOME

Net interest income was $893,000 for the quarter ended March 31, 1996, a
77.2% increase from the net interest income of $504,000 earned during the same
period of 1995. Earning assets averaged $65,631,000 in the first quarter of
1996, a 98.2% increase as compared to $33,114,000 in the first quarter of 1995.
The increase in net interest income is due to the growth of the loan portfolio,
primarily attributable to the purchase of the Suburban Bank loan portfolio, an
increase in the volume of investment securities and federal funds sold, and
increases in yields on the loan portfolio and the investment securities due to
market rate increases throughout 1995. Average loans as a percentage of total
average earning assets decreased to 66.4% in the first quarter of 1996 as
compared with 71.9% in the same period of 1995. Total average investment
securities as a percentage of total average earning assets decreased to 15.3%
for the first quarter of 1996, as compared to 25.0% in the same period in 1995.
Average federal funds sold increased to 18.3% of total average earning assets
for the first quarter of 1996 as compared to 3.1% for the same period in 1995.

Interest income on loans of $1,104,000 for the first quarter of 1996
increased by $533,000, or 93.3% from $571,000 for the same period in 1995,
constituting the largest dollar increase in interest income and reflecting an
increase in the average balance of loans ($43,589,000 for the first quarter of
1996 as compared to $23,512,000 for the same period in 1995). The net interest
spread, which is the difference between the yield on earning assets and the cost
of interest-bearing liabilities, decreased to 4.52% in the first quarter of 1996
as compared to 5.17% for the same period in 1995. The lower net interest spread
was attributable to the increase in deposits for the first quarter of 1996 that
had not yet been disbursed into loans. To the extent that balances are moved
from lower yielding federal funds sold to loans, the yield on earning assets is
expected to increase.

<PAGE>

NON-INTEREST INCOME

Non-interest income in the first quarter of 1996 was $80,000, an increase
of $26,000, or 48.1%, from $54,000 for the same period of 1995. The increase was
primarily due to volume increases in the number of deposit accounts as a result
of the Suburban Bank transaction, which generated more check activity and
increased fee income. Deposit service charges accounted for 63.0% and 48.9% of
total non-interest income for the quarters ended March 31, 1996 and 1995,
respectively.

NON-INTEREST EXPENSE

Non-interest expense totaled $782,000 for the quarter ended March 31, 1996,
as compared to $534,000 for the same period of 1995, an increase of $248,000, or
46.4%. Although total non-interest expense increased during the first quarter of
1996, non-interest expense as a percentage of average total assets decreased to
1.1% in the first quarter of 1996 as compared to 1.5% for the same period in
1995.

Salaries and employee benefits continued to account for the largest
component of non-interest expense, comprising 50.0% of total non-interest
expenses for the first quarter of 1996 and 51.6% for the same period of 1995.
Salaries and employee benefits increased by $116,000, or 42.2%, for the first
quarter of 1996 as compared to the same period in 1995. The increase was mainly
attributable to increased staffing as a result of the addition of the Reston
Branch and additional operations staff necessary to efficiently service the
increased customer base.

Operations expense increased $47,000 or 45.2% primarily due to increased
data processing expenses. Data processing expenses for the first quarter of 1996
increased by $29,000, or 80.6%, as compared to the same period in 1995. The
increases in data processing expenses are primarily volume driven. The increase
was related to the addition of the Reston Branch and the overall increase in the
Bank's transaction volume.

Occupancy and equipment expenses for the first quarter of 1996 increased by
$33,000, or 57.9% as compared to the same period in 1995. The increase was due
to the addition of the Reston branch.

Administrative expense increased by $52,000 or 53.1% primarily due to
increased legal and professional expenses. The increase was primarily due to an
increase in fees paid to the external auditors and regulators as a result of the
increase in the Bank's asset size.

INCOME TAX BENEFIT

The Company recognized a net income tax benefit of $87,000 in the first
quarter of 1996, as compared to zero in the first quarter of 1995, related to a
reduction in the deferred tax asset valuation allowance. Subject to future
profitability, the Company expects to record additional tax benefits until the
net operating loss carryforwards are depleted.

Prior to December 31, 1995, management determined that a valuation
allowance was necessary for the entire amount of the deferred tax asset. This
decision was based on the lack of sufficient profitable operating history of the
Company. Based upon the profitability of the Company in 1995 and projected
profitability of the Company during 1996, management reassessed the need for a
valuation allowance and recorded a net $337,000 deferred tax asset, which is the
amount management considers is more likely than not to be realized.

LOAN QUALITY

As of March 31, 1996, the Company had two non-accrual loans totaling
$309,000 as compared to zero as of March 31, 1995. With respect to one such
non-accrual loan of $266,000, the Bank subsequently held a foreclosure sale and
has entered into a sale agreement pursuant to which the Bank expects to recover
the full amount of principal, interest and expenses.

The Company made no provision for loan losses for the first quarter of 1996
as compared to $13,000 in the first quarter of 1995. The Bank's total loan
balances remained constant with no significant deterioration in the loan
portfolio and therefore management determined no additional provision was
necessary.

As of March 31, 1996, the allowance for loan losses amounted to $579,000,
which represented 1.31% of outstanding loans as compared to 1.32% at December
31, 1995. Non-performing assets as of March 31, 1996 consisted of the two
non-accrual loans totaling $309,000. The non-performing loans were classified
for regulatory purposes as substandard, and as such, management had allocated a
portion of its allowance for possible loan losses for future potential loss.
There were $72,000 in non-performing assets as of March 31, 1995.

<PAGE>

CAPITAL RESOURCES

Stockholders' equity was $4,444,000 as of March 31, 1996 as compared to
$4,140,000 as of December 31, 1995. The $304,000 increase, or 7.3%, was the
result of net income of $277,000 and an increase in the unrealized gain on
investment securities available-for-sale. The remaining increase in
stockholders' equity was due to a payment on the long-term liability relating to
the Employee Stock Ownership Plan. No dividends have been declared by the
Company since its inception. In addition, no stock warrants have been exercised
and no options under the Stock Option Plan have been exercised.

To date, the Company has provided its capital requirements through the
funds received from its initial stock offering which was completed in 1991. In
the future, the Company may consider raising capital from time to time through
an offering of Common Stock or other securities, such as the Offering. Under the
Federal Reserve's capital regulations, for as long as the Company's assets are
under $150 million, the Company's capital ratios are reviewed on a bank-only
basis. The Bank exceeded its capital adequacy requirements as of March 31, 1996
and December 31, 1995. The Company continually monitors its capital adequacy
ratios to assure that the Bank remains within the guidelines.

LIQUIDITY AND INTEREST RATE SENSITIVITY

At March 31, 1996 the Company had an asset sensitive gap (more assets than
liabilities subject to repricing within the stated timeframe) of $8,536,000
which represents 11.0% of earning assets over a 30 day period. This suggests
that if interest rates were to increase over this period, the net interest
margin would improve, and if interest rates were to decrease, the net interest
margin would decline. Since all interest rates and yields do not adjust at the
same velocity, the gap is only a general indicator of interest rate sensitivity.
The analysis presents only a static view of the timing of maturities and
repricing opportunities, without taking into consideration that changes in
interest rates do not affect all assets and liabilities equally. Net interest
income may be impacted by other significant factors in a given interest rate
environment, including changes in the volume and mix of earning assets and
interest-bearing liabilities.

Cash flows from financing activities, which included funds received from
new and existing depositors, provided a large source of liquidity in the first
quarter of 1996 as increases in deposits totaled $5,449,000. The first quarter
of 1995 experienced a reduction in deposits of $2,583,000 and cash maintained in
federal funds sold was reduced to offset this decline. The Bank seeks to rely
primarily on core deposits from customers to provide stable and cost-effective
sources of funding to support asset growth. Other sources of funds available to
the Bank include short-term borrowings, primarily in the form of federal funds
purchased. At March 31, 1996 the Bank had $227,000 in letters of credit and
$12,365,000 in unfunded loan commitments.

Average liquid assets (cash and amounts due from banks, interest-bearing
deposits in other banks, federal funds sold, investment securities and other
short-term investments) were 39.6% of average deposits for the first quarter of
1996, as compared to 36.9% for the same period in 1995. Liquidity levels
increased in the middle of 1995 with the purchases of deposits from Suburban
Bank. The level of liquidity reduced back to levels held before the purchase as
funds were shifted into less liquid, higher yielding loans. Average loans were
66.7% of average deposits for the first quarter of 1996, as compared to 75.9%
for the first quarter of 1995. Average deposits were 100.5% of average earning
assets for the three months ended March 31, 1996 as opposed to 94.8% for the
same period of 1995.

Securities maintained in the available-for-sale portfolio may be sold prior
to maturity in order to provide the Company and the Bank with increased
liquidity. Available-for-sale investment securities totaled $5,051,000 and
$4,966,000 as of March 31, 1996 and 1995, respectively.

[The remainder of this page intentionally left blank]

<PAGE>

BUSINESS

GENERAL

The Company was incorporated in Virginia on December 29, 1989 as a bank
holding company to own and control all of the capital stock of the Bank, a
national banking association. The Bank commenced its operations on July 1, 1991.
The headquarters of the Company and the Bank are located in an area known as
Tysons Corner. Tysons Corner is approximately 13 miles due west of Washington,
D.C. and within 20 to 30 minutes from other locations such as Dulles
International Airport, Washington National Airport and suburban Maryland. The
Bank also operates a branch in Reston, Virginia. At March 31, 1996, the Company
had total assets of $76,349,000, total loans of $43,579,000, total deposits of
$70,942,000 and stockholders' equity of $4,444,000.

On February 2, 1995, the Company entered into an agreement with Suburban
Bank to acquire certain assets and assume certain liabilities of Suburban Bank.
The Suburban Bank transaction was completed as of May 15, 1995. As a result, the
Company's deposits increased by approximately $20,000,000 and loans increased by
approximately $13,000,000. The Company paid a premium of approximately
$1,200,000 for the deposits acquired. This premium is being amortized over a 10
year period based upon management's estimated life of acquired deposits. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

The executive offices of the Company and the main office of the Bank are
located at 8200 Greensboro Drive, Suite 100, McLean, Virginia 22102, telephone

number (703) 556-0015.

PRIMARY MARKET AREA

The Bank draws most of its customer deposits and conducts most of its
lending transactions from and within a primary service area in the Tysons
Corner/Reston corridor in Fairfax County, Virginia. The large cosmopolitan
population that lives and works in this corridor and in surrounding suburbs, as
well as the area's accessibility, make retailing a significant enterprise. High
technology firms are also located within this corridor. These firms include
businesses engaged in operations research, computer programming and information
management. The Bank actively targets and solicits relationships from the
professional staff employed by these enterprises. The corridor also attracts a
significant amount of professional firms, including accounting and law firms.
The Bank actively solicits banking relationships with these firms as well as
their professional staff.

In conjunction with the Suburban Bank transaction, the Company acquired an
additional branch located in Reston, Virginia which is approximately nine miles
west of the Company's existing location. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The Reston area is
experiencing increases in its large residential community and growing commercial
business sectors which are expected to contribute to the overall growth of the
Company.

BANKING SERVICES

The Bank also provides loans to businesses, including both secured and
unsecured short-term loans for working capital purposes, term loans for fixed
assets and expansion needs such as real estate acquisition and improvements,
real estate construction loans, and other commercial loans suitable to the needs
of its business customers. Loans to individuals which are offered by the Bank
include short-term mortgage loans and installment loans for personal use such as
education and personal investments, or for the purchase of automobiles or other
consumer items. The Bank also acts as an issuing agent for U.S. savings bonds,
travelers' checks and cashier's checks. In addition, the Bank offers its
customers bank-by-mail and direct deposit services, safe deposit services, wire
transfer services and a courier service which picks up non-cash customer
deposits. There were no significant changes to the services the Bank offers as a
result of the Suburban Bank transaction.

<PAGE>

LENDING ACTIVITIES

GENERAL. At March 31, 1996, the Bank's loan portfolio totaled $43,579,000,
representing approximately 57.6% of its total assets of $76,349,000. The
categories of loans in the Company's portfolio are commercial, commercial and
residential real estate, and consumer. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Composition of Loan
Portfolio."

COMMERCIAL LOANS. The Bank originates secured and unsecured loans for
business purposes. Additionally, commercial business loans are made to provide
short-term working capital and acquisition capital to businesses in the forms of
lines of credit and term loans which may be secured by accounts receivable,
inventory, equipment or other assets. At March 31, 1996, $12,574,000 or 28.4% of
the Bank's total loan portfolio consisted of commercial business loans. The
financial condition and cash flow of commercial borrowers are closely monitored
by the submission of corporate financial statements, personal financial
statements, income tax returns and other documents. The frequency of submissions
of required information depends upon the size and complexity of the credit and
the collateral which secures the loan. Financial statements are analyzed using a
financial spreadsheet software program. It is also the Bank's general policy to
obtain personal guarantees from the principals of its business borrowers.

COMMERCIAL REAL ESTATE LOANS. The Bank also originates commercial loans
secured by real estate. At March 31, 1996, $12,069.00 or 27.2% of the Bank's
total loan portfolio consisted of commercial real estate loans. Such loans are
primarily secured by owner-occupied office condominiums, retail buildings and
warehouses and general purpose business space. Although terms vary, the Bank's
commercial real estate loans generally have maturities of five years or less.

RESIDENTIAL REAL ESTATE LOANS. The Bank originates adjustable and
fixed-rate residential mortgage loans, home equity loans and business and
personal loans secured by residential real estate in order to provide a full
range of products to its customers. Home equity loans are originated by the Bank
for typically up to 80% of the appraised value, less the amount of any existing
prior liens on the property. Home equity loans generally have maximum terms of
15 years and the interest rate is generally adjustable. The Bank secures these
loans with mortgages on the borrowers' homes (generally a second mortgage). At
March 31, 1996, $10,539,000 or 23.8% of the Bank's total loan portfolio
consisted of loans secured by residential real estate.

CONSUMER LOANS. The Bank offers a variety of consumer loans in order to
provide a full range of financial services to its customers. The consumer loans
offered by the Bank include loans that are secured by personal property,
including automobiles. At March 31, 1996, $6,788,000 or 15.6% of the Bank's
total loan portfolio consisted of consumer loans.

CREDIT ADMINISTRATION

The Bank employs extensive written policies and procedures to enhance
management of credit risk. The loan portfolio is managed under a specifically
defined credit process. This process includes formulation of a portfolio
management strategy, guidelines for underwriting standards and risk assessment,
procedures for on-going identification and management of credit deterioration,
and regular portfolio reviews to estimate loss exposure and to ascertain
compliance with the Bank's policies. The Bank's loan approval policies provide
for various levels of individual officer lending authority. In general, lending
authority currently granted by the Bank to any one individual is $50,000. A
combination of approvals from certain officers may lend up to an aggregate of
$200,000. The Board's Loan Committee is authorized to approve loans up to the
Bank's internal lending limit (currently $650,000), and the approval of the full
Board is required for loans which exceed the Bank's internal lending limit up to
the Bank's legal lending limit (currently $719,000, expected to increase to
approximately $1 million as a result of the Offering).

A major element of credit risk management is the diversification of risk.
The Bank's objective is to maintain a diverse but well-balanced loan portfolio
to minimize the impact of any single event or set of circumstances.
Concentration parameters are based upon individual risk factors, industry
categories, policy constraints, economic conditions, collateral and products.
The Bank generally does not make loans outside its market area unless the
borrower has an established relationship with the Bank and conducts its
principal business operations within the Bank's market area. Consequently, the
Bank and its borrowers are directly affected by the economic conditions
prevailing in its market area. However, given the diversity and balance within
the Bank's loan portfolio, management does not believe that there is any
significant aggregation or concentration of loans related to any one industry,
client or sector which would adversely impact the overall performance of the
Bank's loan portfolio.

<PAGE>

COMPETITION

The Bank encounters strong competition among financial institutions in the
northern Virginia and metropolitan Washington, D.C. area for both loans and
deposits. Competition also exists with savings and loan associations, credit
unions, mutual funds, and insurance companies. Principal competitors include
other community commercial banks in the northern Virginia area, and larger
financial institutions with branches in the Bank's primary service area. This
intense competition is expected to continue as bank mergers and acquisitions of
smaller banks into larger institutions in the Washington, D.C. metropolitan area
may be expected to continue for the foreseeable future.

The areas of business activities in which banking and non-bank institutions
may engage have been expanding in recent years. Consequently, to the extent that
other banks and financial institutions engage in such activities, the
competition for deposits and loans has increased and may be expected to increase
in the future.

EMPLOYEES

The Company conducts its operations through its subsidiary, the Bank.
Consequently, the Company has no employees. At March 31, 1996, the Bank had 28
full-time employees and 2 part-time employees.

DESCRIPTION OF PROPERTY

The Company's, as well as the Bank's, main office is located on the ground
floor of a 14 story office building in a two building office park at 8200
Greensboro Drive, Suite 100 in McLean, Virginia. The Company occupies
approximately 7,000 square feet of space at this location pursuant to a lease
with 8200 Greensboro Associates. The term of the lease is from May 1, 1993
through April 30, 2003. In addition, in conjunction with the purchase of
Suburban Bank, the Bank assumed the lease for the Reston branch. The Reston
location occupies approximately 2,000 square feet of space on the ground level
of a multi-story office complex. The lease expires in 1997.

In management's opinion, the current facilities are adequate for the
present and near term future operations of the Company and the Bank. See Note
(6) to the Company's financial statements, Commitments and Contingencies, for
information relating to commitments under the long-term lease.

LEGAL PROCEEDINGS

Neither the Company nor the Bank is a party to, nor is any of their
property the subject of, any material pending legal proceedings incidental to
the business of the Company and its subsidiary other than those arising in the
ordinary course of business. Although the amount of any ultimate liability with
respect to such matters cannot be determined, in the opinion of management, any
such liability will not have a material adverse effect on the consolidated
financial position or results of operations of the Company.

<PAGE>

MANAGEMENT

The following table sets forth certain information with respect to the
directors, and executive officers of the Company and the Bank. The Company's
articles of incorporation and by-laws provide for staggered terms for the Board
of Directors. The Board of Directors has been divided into three classes so
that, after their initial terms, approximately one-third of the directors are
elected to a three-year term at each annual shareholders meeting. Except as
otherwise indicated, each person has been or was engaged in his present or last
principal occupation, in the same or a similar position, for more than five
years.

NAME AGE POSITION HELD AND PRINCIPAL OCCUPATIONS
<S> <C> <C>
Joel M. Birken 48 Mr. Birken has been a Class I director of the Company and a
director of the Bank since April 1995. He is a founding shareholder
of the law firm of Rees, Broome & Diaz, P.C., and has practiced law
with that firm in Vienna, Virginia since 1974.

David M. Cordingley 49 Mr. Cordingley joined the Company in May 1996 as Vice President of
Branch Administration and Business Development. He has over 20
years experience in banking including the founding of Bank 1st,
N.A. in McLean, Virginia in 1987. Additionally, Mr. Cordingley
spent 15 years in various positions with First American Bank of
Virginia. Mr. Cordingley graduated from C.W. Post College in
Greenvale, New York with a B.A. in Economics.

Michael Farnum 50 Mr. Farnum has been a Class II director of the Company and a
director of the Bank since 1991. He has been, since 1991, self-
employed with the Farnum Company and concentrates on the sale and
leasing of commercial and industrial real estate. From 1973 to
1991, he was vice president and sales manager of two regional real
estate firms, including Weaver Bros., Inc.

Alben G. Goldstein, M.D. 50 Dr. Goldstein has been a Class I director of the Company since
1989 and a director of the Bank since 1991. He has been the owner
and senior physician of the Arthritis Associates of Northern
Virginia, P.C. for more than the past five years.

Zachary A. Kaye, M.D. 48 Dr. Kaye has been a Class I director of the Company since 1989
and a director of the Bank since 1991. He is currently a physician
in sole practice in Woodbridge, Virginia. He has been an
individual practitioner for more than the past fifteen years.

Beth W. Newburger(1) 58 Ms. Newburger has been a Class II director of the Company and a
director of the Bank since 1991. She has been President of Corabi
International Telemetrics, Inc., a biomedical instrumentation
company, for more than the past five years. She was appointed
Chief of Staff, White House Office of Women's Initiatives and
Outreach in October 1995 and assumed the position of Deputy
Administrator, General Services Administration on April 15, 1996.

J. Patrick Rowland 58 Mr. Rowland has been a Class III director and Vice Chairman of the
Board of Directors of the Company since 1989, and a director and
Chairman of the Board of the Bank since 1991. Since January 1995,
he has been a business consultant with offices in Washington, D.C.
Prior to this, Mr. Rowland was director of government relations
for the Borg-Warner Security Corporation from September of 1993 to
December of 1994. For five years prior to that, he was the
Chairman of Rowland & Sellery, a Washington, D.C. business
consulting firm.

Richard Schwartz(2) 66 Mr. Schwartz has been a Class III director and Chairman of the
Board of the Company, and director and Vice Chairman of the Bank,
since 1991. He is the founder, and for more than the past five
years, President of Boat Owners Association of The United States
("BOAT/U.S."). He is also the Chairman of the Board and CEO, of
Boat America Corporation, a service company. Mr. Schwartz is an
attorney and is admitted to the New York, Florida, and District of
Columbia Bars, and the Supreme Court of the United States.
</TABLE>

<PAGE>

NAME AGE POSITION HELD AND PRINCIPAL OCCUPATIONS
<S> <C> <C>

William C. Sellery, Jr. 48 Mr. Sellery has been a Class II director of the Company since 1989
and director of the Bank since 1991. He has been President of
Sellery Associates, Inc., since September 1993. Prior to this, he
was president of Rowland & Sellery, Inc., a Washington D.C.
business consulting firm, from 1988 to 1993.

Samuel E. Smith, Jr. 40 Mr. Smith joined the Bank in June 1994 as its Vice President of
Credit Administration and Operations. Mr. Smith previously was
Assistant Vice President at Citizens Bank of Washington from 1991
to 1994. From 1986 to 1991, Mr. Smith served as Assistant Vice
President of Citizens Bank of Virginia.

Terrie G. Spiro 40 Ms. Spiro, who is the founding President, has been President/CEO
and a Class III director of the Company since 1989, and
President/CEO and director of the Bank since 1991. Ms. Spiro has
over sixteen years of commercial banking experience. Prior to the
founding of the Company, Ms. Spiro was President/CEO of Sports
2000, Inc., which she founded in 1986.

St. Clair J. Tweedie 58 Mr. Tweedie has been a Class II director of the Company and a
director of the Bank since 1991. He is currently a management
consultant. Prior to this, he was the Director of Government
Relations for American Cyanamid Company for more than the past
five years.

Janet A. Valentine 43 Ms. Valentine has served as Senior Vice President and Chief
Financial Officer of the Bank since February 1996. From 1991 to
1996, she was Vice President and Controller at Patriot National
Bank of Virginia. Ms. Valentine has over 18 years of experience in
bank financial reporting, budgeting and management.

Stephen A. Wannall 48 Mr. Wannall was elected to serve as a Class I director of the
Company and a director of the Bank in December 1995. He is the
Managing Shareholder of Brown, Dakes & Wannall, P.C., an
accounting firm located in Northern Virginia. Mr. Wannall is a
Certified Public Account and has over twenty years of experience
in public accounting.

</TABLE>

(1) Ms. Newburger is married to Mr. Schwartz.

(2) Mr. Schwartz is married to Ms. Newburger.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There are no agreements in existence or anticipated between any Director or
officer of the Bank or the Company relating to the premises, furnishings,
equipment, fixtures or any other property or service of the Bank or the Company.
During 1995 certain directors and executive officers were indebted to the Bank.
This indebtedness resulted from loans made in the ordinary course of business on
substantially the same terms (including interest rates and collateral) as those
prevailing at the time for comparable transactions with unrelated parties and
did not involve more than the normal risk of collectibility or present other
unfavorable features. As of March 31, 1996, loans to directors and executive
officers of the Company, and their affiliates, including loans guaranteed by
such persons and unfunded commitments made, aggregated $1,124,000, or
approximately 25.7% of stockholders' equity of the Company.

In June 1994, the Company funded its ESOP with a loan provided by Richard
Schwartz, a director of the Company. The original amount of the loan totaled
$500,000 and terms of the loan include quarterly principal payments of $12,500
and quarterly interest payments at prime plus 2% with a final payment on June 1,
1998. In management's opinion, the loan is at market terms. The outstanding
balance at December 31, 1995, was $425,000.

Joel M. Birken, a Director of the Company, is a shareholder in the law firm
of Rees, Broome & Diaz, P.C., which regularly acts as counsel to the Company and
the Bank. During the fiscal years ended 1994 and 1995, Rees, Broome & Diaz, P.C.
performed legal services for the Bank and was paid $28,855 and $99,490,
respectively.

<PAGE>

EXECUTIVE COMPENSATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

The following table sets forth for the fiscal years ended December 31,
1993, 1994 and 1995, the cash compensation paid or accrued by the Company and
the Bank, as well as certain other compensation paid or accrued for those years,
for services in all capacities to the chief executive officer of the Company and
the Bank, Terrie G. Spiro (the "Named Executive Officer"). No executive officer
of the Company or the Bank, other than Ms. Spiro, earned total annual
compensation, including salary and bonus, for the fiscal year ended December 31,
1995, in excess of $100,000.

SUMMARY COMPENSATION TABLE

LONG-TERM

COMPENSATION
ANNUAL SECURITIES

COMPENSATION(1)(2) UNDERLYING ALL OTHER

NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION($)
<S> <C> <C> <C> <C> <C>
Terrie G. Spiro -- 1995 105,663 40,000 3,000 18,609(3)
President and Chief 1994 102,731 0 6,000 14,383
Executive Officer 1993 97,700 5,000 0 13,519
</TABLE>

(1) See "Option Grants," "Option Exercises and Year-End Values" and "Stock
Option Plan" for disclosure regarding outstanding stock options.

(2) In accordance with SEC rules, perquisites constituting less than the lesser
of $50,000 or 10% of total salary and bonuses are not reported.

(3) Comprises employer contributions of term life insurance premium of $184,
disability insurance premium of $2,401, health insurance premium of $2,304,
car lease payments of $6,316, fuel and parking allowance of $3,600, and club
dues of $3,804.

OPTION GRANTS

Options granted to the Named Executive Officer during 1995 are set forth in
the following table. For disclosure regarding the terms of stock options, see
"Stock Option Plan."

POTENTIAL
REALIZABLE

OPTION GRANTS IN LAST FISCAL YEAR VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF

NUMBER OF PERCENT OF STOCK PRICE
SHARES TOTAL OPTIONS APPRECIATION

UNDERLYING GRANTED TO EXERCISE FOR OPTION
OPTIONS EMPLOYEES PRICE EXPIRATION TERM(2)

NAME GRANTED (#) IN 1995 ($/SHARE)(1) DATE 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Terrie G. Spiro 3,000 46.15 8.75 1/06 16,508 41,836
</TABLE>

(1) The exercise price of each option was the fair market value of the
underlying Common Stock on the date of the grant, as determined by the Board
of Directors of the Company.

(2) Future value of current-year grants assuming the indicated percentage rates
per year over the applicable option term. The actual value realized may be
greater than or less than the potential realizable values set forth in the
table.

<PAGE>

OPTION EXERCISES AND YEAR-END VALUES

No stock options were exercised by the Named Executive Officer during 1995.
There were no stock appreciation rights outstanding during 1995. The following
table sets forth certain information regarding unexercised options held by the
Named Executive Officer as of December 31, 1995:

AGGREGATED FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED

UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END (#) FISCAL YEAR-END ($)(1)

NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C>
Terrie G. Spiro 9,000(2) 0 N/A N/A
</TABLE>

(1) Value determined by Board of Directors of the Company.

(2) The exercise price of these options is $8.75 per share.

COMPENSATION OF DIRECTORS

Directors of the Company receive no compensation for their services as
directors. Directors of the Bank, except for Ms. Spiro, who is the President and
CEO of the Company and the Bank, receive $150 for every meeting attended, paid
quarterly in arrears.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AGREEMENTS

In February 1990, Terrie G. Spiro and the Company executed an employment
agreement. An amendment to the employment agreement was signed in April 1992.
The following is a summary of the material terms of the employment agreement and
the amendment. The term of employment was deemed to have commenced July 1, 1991,
and continues for a period of five years unless terminated. After completion of
the initial five years, the agreement will automatically be extended for an
additional year, and shall thereafter be extended on a year-to-year basis unless
either party gives notice of intention to terminate. In March of 1996 the
Company and Ms. Spiro agreed to extend the employment agreement until June 30,
1997. According to the terms of the employment agreement, Ms. Spiro receives a
base salary of $90,000 and benefits including, but not limited to, individual
contributory health insurance, term life insurance policy, the cost of annual
dues to the Army Navy Country Club, and initiation fee and dues for membership
in the Tower Club. Ms. Spiro's employment agreement entitles her to receive
incentive stock options equal to one-half of one percent, per year for six
years, of the initial stock issue, and such options are to be awarded based on
the Bank achieving certain performance objectives. The first year was based on
achieving the pro forma financial results contained in the application to
charter the Bank filed with the OCC. Years two through six are based on
attaining the Bank's annual budget and return on assets standards. The maximum
amount of stock options to which Ms. Spiro will be entitled will be three
percent of the initial stock issue. The employment agreement and amendment also
provide for incentive bonus compensation if, during each calendar year, the Bank
meets certain performance objectives, including but not limited to: (i) asset
quality; (ii) asset growth; and (iii) return on assets. In the event of a
hostile takeover or a change in control of the Company or the Bank, the Company
will continue to pay Ms. Spiro's salary and bonuses for the longer of 12 months
from the date of such takeover or change of control or until June 30, 1997. The
Company maintains a key-person insurance policy on the life of Ms. Spiro. Upon
Ms. Spiro's death, proceeds of $200,000 under the policy are payable to the
Company.

STOCK OPTION PLAN

During 1992, the Board of Directors of the Company adopted, and the
shareholders approved, the Tysons Financial Corporation Stock Option Plan (the
"Plan"). The Plan provides that restricted stock and stock options may be
granted for the purchase of up to 160,058 shares of Common Stock, subject to
adjustment upon changes in capitalization. The Company has granted stock options
to acquire an aggregate of 12,400 shares of Common Stock to Terrie G. Spiro
pursuant to the Plan. Options to purchase 6,000 shares were granted to Ms. Spiro
on April 5, 1994; options to purchase 3,000 shares were granted on January 25,
1995 and options to purchase 3,400 shares were granted on February 21, 1996. In
addition, on January 25, 1995, and January 23, 1996, the Company granted stock
options to acquire an aggregate of 5,500 shares of Common Stock to various other
officers of the Company pursuant to the Plan. With the exception of the options
granted in 1996, which will have an exercise price per share of the offering
price in this Offering, all options granted to date have an exercise price of
$8.75. The options were immediately exercisable and expire 10 years from the
grant date. No other stock options or restricted

<PAGE>

stock has been granted pursuant to the Plan. The Plan is intended as an
incentive for and as a means of encouraging share ownership by persons who are
employees or directors of the Company or the Bank. Options may be granted to
employees or directors of the Company or the Bank or any subsidiary of the
Company or the Bank and may be granted either as incentive stock options (which
qualify for certain favorable tax consequences), or as non-qualified stock
options. Incentive stock options may not be transferred except by will or by the
laws of descent and distribution, and during an optionee's lifetime may be
exercised only by the optionee (or by his or her guardian or legal
representative, should one be appointed). The transferability of non-qualified
stock options will be determined in each case by the stock option committee
described below.

The Plan is administered by a committee consisting of at least two members
of the Board of Directors. Insofar as discretionary options or shares of
restricted stock are granted to persons who are subject to Section 16 of the
Exchange Act, the committee will consist of at least two directors who within
the preceding year have not received discretionary grants under the Plan. The
committee determines the employees and directors who will receive options or
restricted stock and, based on each such person's position and current and
potential contribution to the Company or the Bank, the amount of restricted
stock or the number of shares that will be covered by their options. The
committee also determines the periods of time (not exceeding ten years from the
date of grant in the case of an incentive stock option) during which options
will be exercisable and determines whether termination of an optionee's
employment under various circumstances would terminate options granted under the
Plan to that person. In addition, the committee determines the restriction
period and vesting conditions, the consequences of any termination of
employment, and the other terms of any grant of restricted stock. The option
price per share is an amount determined by the Board of Directors but will not
be less than 100% of the fair market value per share on the date of grant for
incentive stock options. The option price is payable in full upon exercise. The
Company and the Bank receive no consideration upon the granting of an option.

The Board of Directors has the right at any time to terminate or amend the
Plan, but no such action may terminate options already granted or otherwise
affect the rights of any optionee under any outstanding option without the
optionee's consent. Without shareholder approval, the Board of Directors may not
adopt any amendment of the Plan that would (i) increase the total number of
shares issuable pursuant to incentive stock options under the Plan or materially
increase the total number of shares of Common Stock subject to options, (ii)
change or modify the class of employees eligible to receive incentive stock
options that may participate in the Plan or materially change or modify the
class of persons that may participate, or (iii) otherwise materially increase
the benefits accruing to participants thereunder.

EMPLOYEE STOCK OWNERSHIP PLAN

Effective January 1, 1993, the Company established the Tysons Financial
Corporation Employee Stock Ownership Plan (the "ESOP") for all eligible
employees. The ESOP covers all salaried employees of the Company or its
subsidiaries, 21 years of age or older, who work a minimum of 1,000 hours per
year and who have completed at least one year of service with the Company.
Contributions are at the discretion of, and determined annually by, the Board of
Directors based on the Company's performance. Contributions are not to exceed
the maximum amount deductible under the applicable section of the Internal
Revenue Code of 1986 (the "Code"). Contributions under the ESOP will be used to
purchase Common Stock which is allocated to participants on the basis of the
participant's compensation for the year compared to total compensation of all
eligible employees. An employee's interest in the amount contributed becomes 20%
vested after three years of service and increases incrementally to become 100%
vested after seven years of service.

During the second quarter of 1994, the ESOP purchased shares of the
Company's Common Stock using $500,000 of funds borrowed from a director of the
Company. The long-term borrowing of $500,000 requires quarterly principal
payments of $12,500 and quarterly interest payments of prime plus 2% with a lump
sum payment in June 1998. As of December 31, 1995, the outstanding balance of
the loan was $425,000.

<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of April 30, 1996, certain information
as to each person who was known to be the beneficial owner of more than 5% of
the Company's Common Stock, followed by certain information as to the beneficial
ownership of the directors individually and by all directors and executive
officers of the Company as a group.

NUMBER OF PERCENT OF

NAME OF BENEFICIAL OWNER SHARES OWNED (1) CLASS (2)
<S> <C> <C>

James L. Bowman 40,000(3) 5.81%
P.O. Box 6
Stephens City, WV 22655

Glaize Developments 45,000(3) 6.53%
Fred L. Glaize III
P.O. Box 2598
Winchester, VA 22601

Estate of G. Richard Pfitzner 40,696(3) 5.91%
4510 Asdee Lane
Woodbridge, VA 22192

John Patrick Rowland 52,940(3) 7.75%
9435 Lakeside Drive
Vienna, VA 22182

Richard Schwartz 36,167(3) 5.32%
880 South Pickett Street
Alexandria, VA 22304

William C. Sellery, Jr. 47,518(3) 6.95%
1023 15th St. NW 7th Floor
Washington, D.C. 20005

St. Clair J. Tweedie 36,720(3) 5.37%
2665 Marcey Road
Arlington, VA 22207

Tysons Financial ESOP Trust 57,051 8.53%
8200 Greensboro Drive, Suite 100
McLean, VA 22102

Nicholas Van Nelson 38,979(3) 5.75%
1023 15th Street, N.W. 7th Floor
Washington, D.C. 20005

Yari V. Vondrich 34,743(3) 5.08%
1501 Moran Road
Sterling, VA 22170

Steven A. Zecola 34,743(3) 5.08%
6502 Heather Brook Court
McLean, VA 22101

Joel M. Birken 3,050 0.45%

Michael Farnum 15,731(3) 2.34%

Alben G. Goldstein, M.D. 16,637(3) 2.47%

Zachary A. Kaye, M.D. 8,686(3) 1.29%

Beth W. Newburger 13,054(3) 1.94%

Terrie G. Spiro 26,671(3) 3.87%

Stephen A. Wannall 200 0.03%

Officers and directors as a group 315,425(4) 41.43%
</TABLE>

(SEE FOOTNOTES ON NEXT PAGE)

<PAGE>

(1) Information relating to beneficial ownership of Common Stock is based upon
"beneficial ownership" concepts set forth in rules of the Commission under
Section 13(d) of the Exchange Act. Under these rules, a person is deemed to
be a "beneficial owner" of a security if that person has or shares "voting
power," which includes the power to vote or direct the voting of such
security, or "investment power," which includes the power to dispose or to
direct the disposition of such security. A person is also deemed to be a
beneficial owner of any security of which that person has the right to
acquire beneficial ownership within sixty days. Under the rules, more than
one person may be deemed to be a beneficial owner of the same securities,
and a person may be deemed to be a beneficial owner of securities as to
which he has no beneficial interest. For instance, beneficial ownership
includes spouses, minor children and other relatives residing in the same
household, and trusts, partnerships, corporations or deferred compensation
plans which are affiliated with the principal. Included in the amount of
shares beneficially owned are shares issuable upon the exercise of stock
purchase warrants that were issued to the organizers of the Bank and the
Company. The stock purchase warrants entitle the holder of the warrants to
purchase Common Stock at $10.00 per share at any time during the term of the
warrant. The warrants became exercisable on January 2, 1992, and have a term
of ten years from July 1, 1991, the date the Bank opened for business. In
the event of a capital call upon the Bank, the OCC will require the warrants
to be exercised at a price no less than current book value or be forfeited.

(2) Percent is calculated by treating shares subject to options or warrants held
by the named individual for whom the percentage is calculated which are
exercisable within 60 days of March 15, 1996, as if outstanding, but
treating shares subject to warrants or options held by others as not
outstanding.

(3) Includes: warrants to purchase 20,000 shares held by Mr. Bowman; warrants to
purchase 4,054 shares held by Mr. Farnum; warrants to purchase 20,000 shares
held by Glaize Developments; warrants to purchase 5,160 shares held by Dr.
Goldstein; warrants to purchase 3,686 shares held by Dr. Kaye; warrants to
purchase 4,054 shares held by Ms. Newburger; warrants to purchase 20,000
shares held by the estate of Mr. Pfitzner; warrants to purchase 14,743
shares held by Mr. Rowland; warrants to purchase 10,688 shares held by Mr.
Schwartz; warrants to purchase 14,743 shares held by Mr. Sellery; warrants
to purchase 7,371 shares and stock options to purchase 12,400 shares held by
Ms. Spiro; warrants to purchase 14,743 shares held by Mr. Tweedie; warrants
to purchase 9,214 shares held by Mr. Van Nelson; warrants to purchase 14,743
shares held by Mr. Vondrich; and warrants to purchase 14,743 shares held by
Mr. Zecola.

(4) Includes total warrants of 79,242 and stock options of 13,400.

SUPERVISION AND REGULATION

The Company and the Bank are subject to state and federal banking laws and
regulations which impose specific requirements or restrictions on and provide
for general regulatory oversight with respect to virtually all aspects of
operations. These laws and regulations are generally intended for the protection
of depositors. The following is a brief summary of certain statutes, rules and
regulations affecting the Company and the Bank. To the extent that the following
summary describes statutory or regulatory provisions, it is qualified in its
entirety by reference to the particular statutory and regulatory provisions.

Beginning with the enactment of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 ("FIRREA") and following with the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA"), numerous additional
regulatory requirements have been placed on the banking industry in the past
several years, and additional changes have been proposed. The operations of the
Company and the Bank may be affected by legislative changes and the policies of
various regulatory authorities. The Company is unable to predict the nature or
the extent of the effect on its business and earnings that fiscal or monetary
policies, economic control, or new federal or state legislation may have in the
future.

THE COMPANY

The Company is a bank holding company within the meaning of the federal
Bank Holding Company Act of 1956, as amended (the "BHCA") and the Virginia
Banking Act (the "Virginia Act").

THE BHCA. Under the BHCA, the Company is subject to periodic examination by
the Board of Governors of the Federal Reserve System (the "Federal Reserve") and
is required to file periodic reports of its operations and such additional
information as the Federal Reserve may require. The Company's and the Bank's
activities are limited to banking, managing or

<PAGE>

controlling banks, furnishing services to or performing services for its
subsidiaries, or engaging in any other activity that the Federal Reserve
determines to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto.

With certain limited exceptions, the BHCA requires every bank holding
company to obtain the prior approval of the Federal Reserve before (i) acquiring
substantially all the assets of any bank, (ii) acquiring direct or indirect
ownership or control of any voting shares of any bank if after such acquisition
it would own or control more than 5% of the voting shares of such bank (unless
it already owns or controls the majority of such shares), or (iii) merging or
consolidating with another bank holding company.

In addition, and subject to certain exceptions, the BHCA and the Federal
Change in Bank Control Act, together with regulations thereunder, require
Federal Reserve approval (or, depending on the circumstances, no notice of
disapproval) prior to any person or company acquiring "control" of a bank
holding company, such as the Company. Control is conclusively presumed to exist
if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company. With respect to corporations with
securities registered under the Exchange Act, under Federal Reserve regulations
control will be rebuttably presumed to exist if a person acquires at least 10%
of any class of voting securities of the corporation. The regulations provide a
procedure for challenge of the rebuttable control presumption. The Company does
not currently have a class of securities registered under the Exchange Act, but
would be required to register its Common Stock under the Exchange Act once it
has more than 500 shareholders of record.

Under the BHCA, the Company is generally prohibited from engaging in, or
acquiring direct or indirect control of more than 5% of the voting shares of any
company engaged in, non-banking activities, unless the Federal Reserve, by order
or regulation, has found those activities to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. Some of the
activities that the Federal Reserve has determined by regulation to be proper
incidents to the business of banking include making or servicing loans and
certain types of leases, engaging in certain insurance and discount brokerage
activities, performing certain data processing services, acting in certain
circumstances as a fiduciary or investment or financial advisor, owning savings
associations, and making investments in certain corporations or projects
designed primarily to promote community welfare.

In accordance with Federal Reserve policy, the Company is expected to act
as a source of financial strength and commit resources to support the Bank.
Under the BHCA, the Federal Reserve may require a bank holding company to
terminate any activity or relinquish control of a non-bank subsidiary (other
than a non-bank subsidiary of a bank) upon the Federal Reserve Board's
determination that such activity or control constitutes a serious risk to the
financial soundness or stability of any subsidiary depository institution of the
bank holding company. Further, federal bank regulatory authorities have
additional discretion to require a bank holding company to divest itself of any
bank or non-bank subsidiary if the agency determines that divestiture may aid
the depository institution's financial condition. The Company currently does not
have any subsidiaries other than the Bank.

In the liquidation or other resolution by any receiver of a bank insured by
the FDIC, the claims of depositors have priority over the general claims of
other creditors. Hence, in the event of the liquidation or other resolution of a
banking subsidiary of the Company (such as the Bank), the general claims of the
Company as creditor of such banking subsidiary would be subordinate to the
claims of the depositors of such banking subsidiary, even if the claims of the
Company were not by their terms so subordinated.

THE VIRGINIA ACT. All Virginia bank holding companies must register with
the Virginia State Corporation Commission (the "Virginia Commission") under the
Virginia Act. A registered bank holding company must provide the Virginia
Commission with information regarding the financial condition, operations,
management, and intercompany relationships of the holding company and its
subsidiaries. The Virginia Commission may also require additional information it
deems necessary to keep itself informed about whether the provisions of Virginia
law and the regulations and orders issued thereunder by the Virginia Commission
have been complied with, and may make examinations of any bank holding company
and its subsidiaries.

Under Virginia law, the prior approval of the Virginia Commission must be
obtained for any Virginia bank holding company to acquire direct or indirect
ownership or control of more than 5% of the voting securities of any financial
institution or other financial institution holding company located within or
without the State of Virginia. In addition, Virginia law allows interstate
banking in Virginia by permitting out-of-state banking organizations to acquire
Virginia banking organizations if Virginia banking organizations are allowed to
acquire banking organizations in their states, and the Virginia banking
organization to be acquired has been in existence and continuously operated as a
bank for a period of two years. As a result of

<PAGE>

this reciprocal banking provision, banking organizations in other states have
entered the Virginia market through acquisitions of Virginia institutions. Under
federal legislation, effective September 29, 1995, bank holding companies are
generally permitted to acquire banks in any states.

THE BANK

GENERAL. The Bank operates as a national banking association incorporated
under the laws of the United States and is subject to examination by the Office
of the Comptroller of the Currency (the "OCC"). Deposits in the Bank are insured
by the Federal Deposit Insurance Corporation (the "FDIC") up to a maximum amount
(generally $100,000 per depositor, subject to aggregation rules.) The OCC and
the FDIC regulate or monitor all areas of the Bank's operations, including
security devices and procedures, adequacy of capitalization and loss reserves,
loans, investments, borrowings, deposits, mergers, issuances of securities,
payment of dividends, interest rate risk management, establishment of branches,
corporate reorganizations, maintenance of books and records, and adequacy of
staff training to carry on safe lending and deposit gathering practices. The OCC
requires the Bank to maintain certain capital ratios and imposes limitations on
the Bank's aggregate investment in real estate, bank premises, and furniture and
fixtures. The Bank is currently required by the OCC to prepare quarterly reports
on the Bank's financial condition and to conduct an annual audit of its
financial affairs in compliance with minimum standards and procedures prescribed
by the OCC.

Under FDICIA, all insured institutions must undergo regular on-site
examination by their appropriate banking regulator. The cost of examinations of
insured depository institutions and any affiliates may be assessed by the
appropriate agency against each institution or affiliate as it deems necessary
or appropriate. Insured institutions are required to submit annual reports to
the FDIC and the appropriate agency or agencies. FDICIA also directs the FDIC to
develop with other agencies a method for insured depository institutions to
provide supplemental disclosure of the estimated fair market value of assets and
liabilities, to the extent feasible and practicable, in any balance sheet,
financial statement, report of condition or any other report of any insured
depository institution. FDICIA also requires the federal banking regulatory
agencies to prescribe, by regulation, standards for all insured depository
institutions and depository institution holding companies relating, among other
things, to: (i) internal controls, information systems, and audit systems; (ii)
loan documentation; (iii) credit underwriting; (iv) interest rate risk exposure;
and (v) asset quality.

TRANSACTIONS WITH AFFILIATES AND INSIDERS. The Bank is subject to the
provisions of Section 23A of the Federal Reserve Act, which places limits on the
amount of loans or extensions of credit to, or investments in, or certain other
transactions with, affiliates including the Company. In addition, limits are
placed on the amount of advances to third parties collateralized by the
securities or obligations of affiliates. Most of these loans and certain other
transactions must be secured in prescribed amounts. The Bank is also subject to
the provisions of Section 23B of the Federal Reserve Act that, among other
things, prohibits an institution from engaging in transactions with certain
affiliates unless the transactions are on terms substantially the same, or at
least as favorable to such institution or its subsidiaries, as those prevailing
at the time for comparable transactions with non-affiliated companies. The Bank
is subject to restrictions on extensions of credit to executive officers,
directors, certain principal shareholders, and their related interests. Such
extensions of credit (i) must be made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with third parties and (ii) must not involve more than the normal
risk of repayment or present other unfavorable features.

BRANCHING. National banks are required by the National Bank Act to adhere
to branch banking laws applicable to state banks in the states in which they are
located. Under current Virginia law, the Bank may open branch offices throughout
Virginia with the prior approval of the OCC. In addition, with prior approval of
the OCC and any other agency as appropriate under the circumstances, the Bank
will be able to acquire existing banking operations in Virginia.

Under the federal legislation discussed above, effective June 1, 1997, a
bank may merge or consolidate across state lines, unless both of the states
involved either authorize such merger or consolidation at an earlier date or
either of the states involved elects to prohibit such merger or consolidation
prior to May 31, 1997. Under the federal legislation also, states may authorize
banks from other states to engage in branching across state lines DE NOVO and by
acquisition of branches without acquiring a whole banking institution. The
Virginia General Assembly passed an "opt-in" law which adopts the general
legislation regarding interstate mergers before it automatically takes effect on
June 1, 1997. Virginia has also "opted-in" to interstate branching subject to
the limitations discussed above. The Virginia "opt-in" law became effective on
July 1, 1995.

COMMUNITY REINVESTMENT ACT. The Federal Community Reinvestment Act requires
that, in connection with examinations of financial institutions within their
jurisdiction, the Federal Reserve, the FDIC, the OCC, or the Office of Thrift
Supervision (the "OTS") shall evaluate the record of the financial institutions
in meeting the credit needs of their local communities,

<PAGE>

including low and moderate income neighborhoods, consistent with the safe and
sound operation of those institutions. These factors are also considered in
evaluating mergers, acquisitions, and applications to open a branch or facility.

OTHER REGULATIONS. Interest and certain other charges collected or
contracted for by the Bank are subject to state usury laws and certain federal
laws concerning interest rates. The Bank's loan operations are also subject to
certain federal laws applicable to credit transactions, such as the federal
Truth-In-Lending Act governing disclosures of credit terms to consumer
borrowers, the Home Mortgage Disclosure Act of 1975 requiring financial
institutions to provide information to enable the public and public officials to
determine whether a financial institution is fulfilling its obligation to help
meet the housing needs of the community it serves, the Equal Credit Opportunity
Act prohibiting discrimination on the basis of race, creed or other prohibited
factors in extending credit, the Fair Credit Reporting Act of 1978 governing the
use and provision of information to credit reporting agencies, the Fair Debt
Collection Act governing the manner in which consumer debts may be collected by
collection agencies, and the rules and regulations of the various federal
agencies charged with the responsibility of implementing such federal laws. The
deposit operations of the Bank also are subject to the Right to Financial
Privacy Act, which imposes a duty to maintain confidentiality of consumer
financial records and prescribes procedures for complying with administrative
subpoenas of financial records, and the Electronic Funds Transfer Act and
Regulation E issued by the Federal Reserve Board to implement that act, which
govern automatic deposits to and withdrawals from deposit accounts and
customers' rights and liabilities arising from the use of automated teller
machines and other electronic banking services.

DEPOSIT INSURANCE

The deposits of the Bank are currently insured to a maximum of $100,000 per
depositor, subject to certain aggregation rules. The FDIC has implemented a
risk-related assessment system for deposit insurance premiums. All depository
institutions have been assigned to one of nine risk assessment classifications
based upon certain capital and supervisory measures. Except to the extent
indicated below, the deposits of the Bank are subject to the rates of the Bank
Insurance Fund ("BIF") of the FDIC. On August 8, 1995, in view of the success in
recapitalizing the BIF, the FDIC reduced the lowest assessment rate for the BIF
from $0.23 per $100 of domestic deposits to $0.04, so that the revised schedule
of BIF assessment rates now ranges from $0.04 per $100 of domestic deposits to
$0.31 (the highest rate remaining unchanged). Based upon the Bank's current risk
classification, the Bank is now required to pay a BIF assessment of $0.10 per
$100 of domestic deposits. This reduction in the lowest BIF assessment rate is
effective retroactive to June 1, 1995 (the FDIC having determined that the BIF
achieved the statutory required reserve ratio of 1.25% on May 31, 1995).

DIVIDENDS

The principal source of the Company's cash revenues comes from dividends
received from the Bank. The amount of dividends that may be paid by the Bank to
the Company depends on the Bank's earnings and capital position and is limited
by federal law, regulations, and policies. In addition, the Federal Reserve has
stated that bank holding companies should refrain from or limit dividend
increases or reduce or eliminate dividends under circumstances in which the bank
holding company fails to meet minimum capital requirements or in which its
earnings are impaired.

As a national bank, the Bank may not pay dividends from its
paid-in-capital. All dividends must be paid out of undivided profits then on
hand, after deducting expenses, including reserves for losses and bad debts. In
addition, a national bank is prohibited from declaring a dividend on its shares
of common stock until its surplus equals its stated capital, unless there has
been transferred to surplus no less than one-tenth of the bank's net profits of
the preceding two consecutive half-year periods (in the case of an annual
dividend). The approval of the OCC is required if the total of all dividends
declared by a national bank in any calendar year exceeds the total of its net
profits for that year combined with its retained net profits for the preceding
two years, less any required transfers to surplus. Under FDICIA, the Bank may
not pay a dividend if, after paying the dividend, the Bank would be
undercapitalized. See "Capital Regulations" below.

CAPITAL REGULATIONS

The federal bank regulatory authorities have adopted risk-based capital
guidelines for banks and bank holding companies that are designed to make
regulatory capital requirements more sensitive to differences in risk profile
among banks and bank holding companies, account for off-balance sheet exposure,
and minimize disincentives for holding liquid assets. The resulting capital
ratios represent qualifying capital as a percentage of total risk-weighted
assets and off-balance sheet items. The guidelines are minimums, and the federal
regulators have noted that banks and bank holding companies contemplating
significant expansion programs should not allow expansion to diminish their
capital ratios and should maintain ratios well in excess of the minimums. The
current guidelines require all bank holding companies and federally-regulated
banks to maintain a minimum risk-based total capital ratio equal to 8%, of which
at least 4% must be Tier 1 capital. Tier 1 capital includes

<PAGE>

common shareholders' equity, qualifying perpetual preferred stock, and minority
interests in equity accounts of consolidated subsidiaries, but excludes goodwill
and most other intangibles and excludes the allowance for loan and lease losses.
Tier 2 capital includes the excess of any preferred stock not included in Tier 1
capital, mandatory convertible securities, hybrid capital instruments,
subordinated debt and intermediate-term preferred stock, and general reserves
for loan and lease losses up to 1.25% of risk-weighted assets.

Under these guidelines, banks' and bank holding companies' assets are given
risk-weights of 0%, 20%, 50%, and 100%. In addition, certain off-balance sheet
items are given credit conversion factors to convert them to asset equivalent
amounts to which an appropriate risk-weight will apply. These computations
result in the total risk-weighted assets. Most loans are assigned to the 100%
risk category, except for first mortgage loans fully secured by residential
property and, under certain circumstances, residential construction loans, both
of which carry a 50% rating. Most investment securities are assigned to the 20%
category, except for municipal or state revenue bonds, which have a 50% rating,
and direct obligations of or obligations guaranteed by the United States
Treasury or United States Government agencies, which have a 0% rating.

The federal bank regulatory authorities have also implemented a leverage
ratio, which is Tier 1 capital as a percentage of average total assets less
intangibles, to be used as a supplement to the risk-based guidelines. The
principal objective of the leverage ratio is to place a constraint on the
maximum degree to which a bank holding company may leverage its equity capital
base. The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100
to 200 basis points.

FDICIA established a capital-based regulatory scheme designed to promote
early intervention for troubled banks and requires the FDIC to choose the least
expensive resolution of bank failures. FDICIA's capital-based regulatory
framework contains five categories of compliance with regulatory capital
requirements, including "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized." To qualify as a "well capitalized" institution, a bank or
bank holding company must have a leverage ratio of no less than 5%, a Tier 1
risk-based ratio of no less than 6%, and a total risk-based capital ratio of no
less than 10%, and the bank must not be under any order or directive from the
appropriate regulatory agency to meet and maintain a specific capital level.

Under the FDICIA regulations, the applicable agency can treat an
institution as if it were in the next lower category if the agency determines
(after notice and an opportunity for hearing) that the institution is in an
unsafe or unsound condition or is engaging in an unsafe or unsound practice. The
degree of regulatory scrutiny of a financial institution will increase, and the
permissible activities of the institution will decrease, as it moves downward
through the capital categories. Institutions that fall into one of the three
undercapitalized categories may be required to (i) submit a capital restoration
plan; (ii) raise additional capital; (iii) restrict their growth, interest rates
on deposits, and other activities; (iv) improve their management; (v) eliminate
management fees; or (vi) divest themselves of all or part of their operations.
Bank holding companies controlling financial institutions can be called upon to
boost the institutions' capital and to partially guarantee the institution's
performance under their capital restoration plans. As of December 31, 1995 and
1994, the Company and the Bank met regulatory minimum capital requirements.

In August of 1995, the federal bank regulatory agencies revised their
capital adequacy guidelines to provide explicitly for consideration of interest
rate risk in the overall determination of a bank's minimum capital requirement.
The intended effect is to ensure that banking institutions effectively measure
and monitor their interest rate risk and that they maintain adequate capital for
the risk. A banking institution deemed to have excessive interest rate risk
exposure may be required to maintain additional capital. The Company does not
believe that this revision in the capital adequacy guidelines will have a
material adverse effect on the Company.

These capital guidelines can affect the Company in several ways. If the
Bank begins to grow at a rapid pace, a premature "squeeze" on capital could
occur, making a capital infusion necessary. The requirements could impact the
Company's ability to pay dividends. The Company's present capital levels are
adequate. When the Company received regulatory approval to acquire certain
assets and assume certain deposits and other liabilities of Suburban Bank, the
Company's leverage and risk-based capital ratios decreased due to the overall
increase in asset size. Although the Company anticipates that its current level
of capital will be adequate to absorb anticipated growth, this is based on
management's expectations and there can be no assurance that the level of
capital will remain adequate. In addition, rapid growth, poor loan portfolio
performance, or poor earnings performance or a combination of these factors
could change the Bank's capital position in a relatively short period of time.

<PAGE>

The following table shows the leverage and risk-based regulatory capital
ratios at December 31, 1995, and December 31, 1994, for the Bank.

ANALYSIS OF CAPITAL

REQUIRED REQUIRED ACTUAL ACTUAL EXCESS EXCESS
AMOUNT % AMOUNT % AMOUNT %

<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)

As of December 31, 1995

Tier 1 risk-based capital ratio............................. $1,873 4.00% $3,436 7.34 % $1,563 3.34 %
Total risk-based capital ratio.............................. $3,745 8.00% $4,021 8.59 % $ 276 0.59 %
Tier 1 leverage ratio....................................... $1,887 3.00% $3,436 5.46 % $1,549 2.46 %

As of December 31, 1994

Tier 1 risk-based capital ratio............................. $1,029 4.00% $3,969 15.40 % $2,940 11.40 %
Total risk-based capital ratio.............................. $2,057 8.00% $4,267 16.60 % $2,210 8.60 %
Tier 1 leverage ratio....................................... $1,040 3.00% $3,969 11.40 % $2,929 8.40 %
</TABLE>

FDICIA requires the federal banking regulators to revise the risk-based
capital standards to provide for explicit consideration of interest-rate risk,
concentration of credit risk, and the risks of non-traditional activities. It is
uncertain what effect these regulations, when implemented, would have on the
Company and the Bank.

GOVERNMENTAL MONETARY POLICIES AND ECONOMIC CONTROLS

The Company is affected by monetary policies of regulatory agencies,
including the Federal Reserve, which regulates the national money supply in
order to mitigate recessionary and inflationary pressures. Among the techniques
available to the Federal Reserve are engaging in open market transactions in
United States Government securities, changing the discount rate on bank
borrowings, changing reserve requirements against bank deposits and limiting
interest rates that banks may pay on time and savings deposits. These techniques
are used in varying combinations to influence the overall growth of bank loans,
investments and deposits. Their use may also affect interest rates charged on
loans or paid on deposits. The effect of governmental policies on the earnings
of the Company cannot be predicted; however, modest short-term changes should
have little effect so long as the Company maintains its current interest
sensitivity gap position.

RECENT LEGISLATIVE DEVELOPMENTS

From time to time, various bills are introduced in the United States
Congress with respect to the regulation of financial institutions, including
proposals to consolidate the federal bank regulatory agencies. Certain of these
proposals, if adopted, could significantly change the regulation of banks and
the financial services industry. The Company cannot predict whether any of these
proposals will be adopted or, if adopted, how these proposals would affect the
Company.

<PAGE>

DESCRIPTION OF CAPITAL STOCK

The authorized capital of the Company consists of 10,000,000 shares of
Common Stock, par value $5.00 per share (the "Common Stock") and 10,000,000
shares of preferred stock, par value $.01 per share (the "Preferred Stock"). As
of March 31, 1996, there were issued and outstanding 668,619 shares of Common
Stock, which were held by approximately 277 owners of record, and there were
247,150 shares issuable upon the exercise of options and warrants to purchase
Common Stock. The shares of Common Stock to be issued hereby will be fully paid
and non-assessable. Upon completion of the Offering, the Company expects that
the Common Stock will be traded on The Nasdaq SmallCap Market under the symbol
"TYSN." Upon completion of the Offering, American Stock Transfer & Trust Company
will serve as transfer agent and registrar for the Common Stock.

COMMON STOCK

The holders of Common Stock are entitled to receive dividends when and as
declared by the Board out of funds legally available therefor. Upon dissolution
of the Company, the holders of Common Stock are entitled to share pro rata in
the Company's net assets after payment or provision for payment of all debts and
liabilities of the Company, and after provisions for any class of Preferred
Stock or other senior security which may be issued by the Company.

The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders and may not cumulate their votes
for the election of directors. Subject to the voting rights of the holders of
Preferred Stock, if any, the exclusive voting power for all purposes is vested
in the holders of the Common Stock. Each share of Common Stock is entitled to
participate on a pro rata basis in dividends and other distributions. The
holders of Common Stock do not have preemptive rights to subscribe for
additional shares that may be issued by, and no share is entitled in any manner
to any preference over any other share.

PREFERRED STOCK

The Company has the authority, exercisable by its Board of Directors and
without shareholder approval, to issue, in one or more series, shares of
Preferred Stock from time to time and in such series and with such preferences,
limitations and relative rights as may be determined by the Board of Directors
for such purposes and for such consideration as it may deem advisable.
Accordingly, the Board of Directors, without shareholder approval, may authorize
the issuance of one or more series of Preferred Stock with the same voting power
as the holders of Common Stock.

The creation and issuance of any series of Preferred Stock and the relative
rights, designations and preferences of such series, if and when established,
will depend upon, among other things, the future capital needs of the Company,
then existing market conditions and other factors that, in the judgment of the
Board of Directors, might warrant the issuance of Preferred Stock. As of the
date of this Prospectus, the Company has no arrangements, undertakings or plans
with respect to the issuance of Preferred Stock.

CERTAIN PROTECTIVE PROVISIONS

GENERAL. The Company's Articles of Incorporation and the Virginia Stock
Corporation Act (the "Virginia SCA") contain certain provisions designed to
enhance the ability of the Board of Directors to deal with attempts to acquire
control of the Company. These provisions, and the ability of the Board of
Directors to issue shares of Preferred Stock and to set the voting rights,
preferences and other terms thereof, may be deemed to have an anti-takeover
effect and may discourage takeover attempts which have not been approved by the
Board of Directors (including takeovers which certain shareholders may deem to
be in their best interest). These provisions also could discourage or make more
difficult a merger, tender offer or proxy contest, even though such transaction
may be favorable to the interests of shareholders, and could potentially
adversely affect the market price of the Common Stock.

The following briefly summarizes protective provisions contained in the
Articles and provided by the Virginia SCA. This summary is necessarily general
and is not intended to be a complete description of all the features and
consequences of those provisions, and is qualified in its entirety by reference
to the Articles and the statutory provisions contained in the Virginia SCA.

STAGGERED BOARD TERMS. The Articles of Incorporation provide that the Board
of Directors be divided into three classes as nearly equal in number as
possible, with one class to be elected annually for a term of three years and
until their successors are elected and qualified. Vacancies occurring in the
Board of Directors by reason of death, written resignation, retirement,
disqualification or removal may be filed by the Board of Directors, and any
directors so chosen shall hold office until the next

<PAGE>

election of directors by the shareholders. Pursuant to the By-laws, directors
may be removed with or without cause only at a meeting called for the purpose of
removing the director and for which due notice is given and only by a vote of
the holders of a majority of the outstanding shares entitled to vote.

AFFILIATED TRANSACTIONS. Virginia law prohibits certain "affiliated
transactions" (including a merger, consolidation, share exchange or, in certain
circumstances, an asset transfer, guaranty or issuance or reclassification of
equity securities) between a Virginia corporation and an "Interested
Shareholder." An Interested Shareholder is (a) a person who beneficially owns
10% or more of the voting power of any class of the corporation's shares or (b)
an affiliate or associate of the corporation who, at any time within the
three-year period prior to the date in question, was an Interested Shareholder.
Such affiliated transactions are prohibited for three years after the date on
which the Interested Shareholder became an Interested Shareholder unless such
transaction is approved by the affirmative vote of a majority of the
disinterested directors and by the affirmative vote of the holders of two-thirds
of the voting shares other than those owned by the Interested Shareholder.
Thereafter, any such affiliated transactions must be approved by the affirmative
vote of the holders of two-thirds of the voting shares of the corporation other
than voting shares held by the Interested Shareholder with whom the affiliated
transaction is to be effected, unless, among other things, the transaction was
approved by a majority of the disinterested directors or the corporation's
shareholders receive a minimum price (as defined in Virginia law) for their
shares and the consideration is received in cash or in the same form as
previously paid by the Interested Shareholder for its shares. These provisions
of Virginia law do not apply, however, to affiliated transactions with an
Interested Shareholder whose acquisition of voting shares making such person an
Interested Shareholder was approved in advance by a majority of the
disinterested directors.

A Virginia corporation may adopt an amendment to its charter or by-laws
electing not to be subject to the special voting requirements of the foregoing
legislation. Any such amendment would have to be approved by the affirmative
vote of the holders of at least a majority of the shares entitled to vote that
are not owned by an Interested Shareholder. The Company has not adopted such an
amendment.

CONTROL SHARE ACQUISITIONS. Virginia law provides that shares of a Virginia
corporation with 300 or more shareholders, acquired in a "control share
acquisition" have no voting rights except to the extent approved by a vote of a
majority of the votes entitled to be cast on the matter, excluding shares of
stock owned by the acquiror or by officers or directors who are employees of the
corporation. A control share acquisition means, subject to certain exceptions,
the acquisition of beneficial ownership of voting shares of stock which, if
aggregated with all other shares of stock which then have voting rights and are
beneficially owned by such a person, would entitle the acquiror to exercise
voting power in electing directors within one of the following ranges of voting
power: (a) 20% or more but less than 33 1/3%; (b) 33 1/3% or more but less than
a majority; or (c) a majority of all voting power. The acquisition of shares of
stock in addition to shares which an acquiring person is entitled to vote as a
result of having previously obtained shareholder approval does not constitute a
control share acquisition, unless as a result of such acquisition, the voting
power of the shares beneficially owned by the acquiror would exceed the range in
respect of which voting rights had previously been granted.

A person who has made, or proposes to make, a "control share acquisition,"
upon satisfaction of certain conditions (including an undertaking to pay
expenses), may compel the board of directors to call a special meeting of
shareholders to be held within 50 days of demand therefor to consider the voting
rights of the shares.

If voting rights are not approved at the meeting or if the acquiring person
does not deliver a control share acquisition statement as permitted by statute,
then, subject to certain conditions and limitations, the corporation may redeem
any or all of the shares acquired in the control share acquisition. The
redemption price for such shares is the number of such shares multiplied by the
dollar amount (rounded to the nearest cent) equal to the average per share
price, including any brokerage commissions, transfer taxes and soliciting
dealer's fees, paid by the acquiring person for such shares. If voting rights
for such shares are approved at a shareholders' meeting and the acquiror becomes
entitled to vote a majority of the shares entitled to vote, all other
shareholders may exercise appraisal rights. The fair value of the stock as
determined for purposes of such appraisal rights may not be less than the
highest price per share paid in the control share acquisition, and certain
limitations and restrictions otherwise applicable to the exercise of dissenters'
rights do not apply in the context of a "control share acquisition."

The control share acquisition statute does not apply (a) to shares acquired
pursuant to a merger, plan of share exchange, or tender or exchange offer, if
the corporation is a party to such transaction or agreement therefor, (b) to
shares acquired directly from the corporation, from a wholly owned subsidiary of
the corporation, or from a corporation having beneficial ownership of shares
representing at least a majority of the voting power in electing directors, or
(c) to acquisitions previously approved or exempted by a provision in the
charter or by-laws of the corporation. The Company has not adopted such a
provision in its Articles of Incorporation or By-Laws.

<PAGE>

INDEMNIFICATION AND LIMITATION OF LIABILITY

The By-laws of the Company grant the Company the power to indemnify any
director and officer of the Company against judgments, penalties, fines,
settlements or reasonable expenses incurred by such director or officer in
connection with any action, suit or proceeding to which he may be made a party
by reason of his service in such capacity if: 1) he conducted himself in good
faith and believed a) in the case of conduct in his official capacity with the
Company, that his conduct was in its best interests and b) in all other cases,
that his conduct was at least not opposed to its best interests, and 2) in case
of any criminal proceeding, he had no reasonable cause to believe his conduct
was unlawful. The Company has also entered into Indemnification Agreements with
each director by which the Company agrees to indemnify such director to the full
extent allowed by Virginia law. Such agreements prohibit indemnification of a
director for several reasons, including a director's knowing violation of the
criminal law, willful misconduct or unlawful distribution.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling pursuant to the
foregoing provisions, the Company has been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.

The Articles of Incorporation of the Company include provisions eliminating
the personal liability of directors to the Company or its shareholders for
breach of the director's duty of care or other duty as a director except for
acts or omissions which involve willful misconduct or a knowing violation of the
criminal law or of any federal or state securities law or liability for unlawful
distributions under Virginia law. In addition, the Company has provisions in its
By-laws limiting the liability of directors and officers in any proceeding
brought by or in the right of the Company or brought by or on behalf of the
Company's shareholders to the greater of (i) $100,000, or (ii) the amount of
cash compensation received by the officer or director from the Company during
the twelve months immediately preceding the act or omission for which liability
was imposed. The By-laws also provide that the liability of an officer or
director shall not be limited if such person engaged in unlawful distributions,
willful misconduct or a knowing violation of the criminal law or any federal or
state securities law.

SHARES AVAILABLE FOR FUTURE SALE

Upon the completion of the Offering, the Company will have 968,619 shares
of Common Stock outstanding (1,013,619 if the Underwriter's over-allotment
option is exercised in full). Of these shares, all of the 300,000 shares of
Common Stock sold in this Offering (345,000 if the Underwriter's over-allotment
option is exercised in full) will generally be freely transferable by persons
other than affiliates of the Company, without restrictions of further
registration under the Securities Act. Further, the Company has granted
outstanding options to purchase 18,900 shares of the Common Stock under its
stock option plan (and has 141,158 shares available for future grants of options
under the plan) and has issued warrants to purchase 228,250 shares of Common
Stock. The shares issuable upon the exercise of such options and warrants will
constitute "restricted securities" within the meaning of Rule 144 under the
Securities Act. In general, under Rule 144 as currently in effect, a person who
has beneficially owned restricted securities for at least two years is entitled
to sell within any three-month period a number of shares that does not exceed
the greater of 1% of the then outstanding shares of the Common Stock
(approximately 9,700 shares immediately after this Offering, assuming that the
Underwriter's over-allotment option is not exercised) or the average weekly
trading volume in the Common Stock in the over-the-counter market during the
four calendar weeks preceding the date on which notice of such sale was filed
under Rule 144. Sales under Rule 144 are also subject to certain provisions
relating to the manner and notice of sale and availability of current public
information about the Company. Affiliates may sell shares not constituting
restricted securities in accordance with the foregoing volume limitations and
other restrictions, but without regard to the two-year holding period.

Further, under Rule 144(k), after three years have elapsed from the later
of the date restricted securities were acquired from the Company and the date
they were acquired from an affiliate, a holder of such restricted securities who
is not an affiliate at the time of the sale and has not been an affiliate for at
least three months prior to the sale would be entitled to sell the shares
immediately without regard to the volume limitations and other conditions
described above.

The Company and its executive officers and directors have agreed not to
offer, sell, grant any option to purchase or otherwise dispose of any securities
of the Company for a period of 90 days after this Offering is completed without
the prior consent of the Underwriter other than certain transfers between
related parties or entities. No predictions can be made as to the effect, if
any, that market sales of Common Stock or the availability of Common Stock for
sale will have on the market price prevailing from time to time. The sale of a
substantial number of shares of Common Stock or the availability of Common Stock
for sale could adversely affect the market price of the Common Stock prevailing
from time to time and may

<PAGE>

make it more difficult for the Company to sell equity securities in the future
at a time and price which it deems appropriate. See "Security Ownership of
Directors and Executive Officers" and "Underwriting."

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement between
the Company and Scott & Stringfellow, Inc. (the "Underwriter"), the Underwriter
has agreed to purchase from the Company, and the Company has agreed to sell to
the Underwriter, 300,000 shares of Common Stock.

The Underwriting Agreement provides that the obligations of the Underwriter
thereunder are subject to approval of certain legal matters by counsel and to
various other conditions. The nature of the Underwriter's obligation is such
that it is committed to purchase and pay for all the shares of Common Stock if
any are purchased.

The Underwriter proposes to offer the shares of Common Stock directly to
the public at the public offering price set forth on the cover page of this
prospectus and to certain securities dealers at such price less a concession not
in excess of $ per share of Common Stock. The Underwriter may allow, and such
selected dealers may reallow, a concession not in excess of $ per share of
Common Stock to certain brokers and dealers.

The Underwriter has a 30-day option to purchase from the Company up to
45,000 additional shares of Common Stock at a public offering price, less the
underwriting discount, as set forth on the cover page of this prospectus. To the
extent the Underwriter exercises this option, the Underwriter will be committed,
subject to certain conditions, to purchase such additional shares of Common
Stock. The Underwriter may exercise such option only to cover over-allotments
made in connection with the sale of the 300,000 shares of Common Stock offered
hereby.

The Underwriter has informed the Company that it does not intend to confirm
sales to any account over which it exercises discretionary authority.

It is expected that one of the selected dealers will be Folger Nolan
Fleming Douglas Incorporated. George Hill, Vice President of Folger Nolan,

serves as an Advisory Director to the Bank.

Of the 300,000 shares of Common Stock to be sold pursuant to the Offering,
the Underwriter has accepted the Company's request to sell up to 28,625 shares
to persons designated by the Company at the public offering price set forth on
the cover page of this Prospectus. Specifically, it is expected that Mr. Birken
will purchase 9,375 shares, Mr. Farnum will purchase 6,250 shares, certain
members of Mr. Hill's family will purchase 5,000 shares, Dr. Kaye will purchase
1,000 shares, Ms. Spiro will purchase 1,000 shares and Mr. Wannall will purchase
1,000 shares. Although such persons are not legally bound to make such
purchases, it is expected that the directors and executive officers will
purchase all or substantially all of such shares. Accordingly, assuming that the
directors and executive officers purchase such shares, such persons would
beneficially own an aggregate of 251,408 shares of Common Stock or 26.0% of the
outstanding Common Stock following the Offering (assuming no exercise of the
Underwriter's over-allotment option.) If all warrants and options held by
directors and executive officers were exercised, assuming that the directors and
executive officers purchase the 28,625 shares noted above, such persons would
beneficially own an aggregate of 344,050 shares of Common Stock or 32.4% of the
outstanding Common Stock following the Offering (assuming no exercise of the
Underwriter's option). The Company and its executive officers and the directors
have agreed that they will not dispose of any shares of Common Stock of the
Company (other than by gift to a person who agrees not to sell, or by operation
of law) for a period of 90 days after the date hereof without the written
consent of the Underwriter.

The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriter may be required to make in respect thereof.

Prior to the Offering, there has been no public market for the Common
Stock. Consequently, the public offering price has been determined by
negotiation between the Company and the Underwriter. Among the factors
considered in such negotiations were the history of, and the prospects for, the
Company and the industry in which it competes, an assessment of the Company's
management, the past earnings of the Company and the trend and future prospects
of such earnings, the present state of the Company's development, the general
condition of the securities markets at the time of the offering, and the market
prices of publicly-traded common stock of comparable companies in recent
periods.

The foregoing is a summary of the principal terms of the Underwriting
Agreement and does not purport to be complete. Reference is made to a copy of
the Underwriting Agreement which will be filed as an exhibit to the Registration
Statement.

<PAGE>

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Venable, Baetjer and Howard, LLP, McLean, Virginia. Certain legal
matters in connection with the Offering will be passed upon for the Underwriter
by LeClair Ryan, A Professional

Corporation, Richmond, Virginia.

EXPERTS

The Consolidated Financial Statements of the Company at December 31, 1995
and 1994, and for the years then ended are included herein in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public accountants,
appearing elsewhere herein, and upon the authority of such firm as experts in
accounting and auditing.

<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>

<S> <C>
Report of Independent Auditors....................................................................................... F-2

Consolidated Statements of Financial Condition as of December 31, 1995 and 1994...................................... F-3

Consolidated Statements of Operations for the two years ended December 31, 1995...................................... F-4

Consolidated Statements of Changes in Stockholder's Equity for the two years ended December 31, 1995................. F-5

Consolidated Statements of Cash Flows for the two years ended December 31, 1995...................................... F-6

Notes to Consolidated Financial Statements for the two years ended December 31, 1995................................. F-7

Consolidated Statement of Financial Condition as of March 31, 1996 (unaudited)....................................... F-20

Consolidated Statements of Operations for the three months ended March 31, 1996 and March 31, 1995 (unaudited)....... F-21

Consolidated Statements of Cash Flows for the three months ended March 31, 1996 and March 31, 1995 (unaudited)....... F-22
</TABLE>

F-1

<PAGE>

INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS
TYSONS FINANCIAL CORPORATION:

We have audited the accompanying consolidated statements of financial
condition of Tysons Financial Corporation and subsidiary as of December 31, 1995
and 1994, and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Tysons
Financial Corporation and subsidiary as of December 31, 1995 and 1994, and the
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.

KPMG PEAT MARWICK LLP

Washington, D.C.
January 19, 1996

F-2

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31, 1995 AND 1994

1995 1994
<S> <C> <C>

ASSETS

Cash and due from banks (note 6)............................................................. $ 5,489,076 2,191,640
Federal funds sold (note 13)................................................................. 8,910,000 4,050,000
Interest-bearing deposits in other banks..................................................... 100,000 300,000
Investment securities available-for-sale, at fair value (note 3)............................. 4,965,773 3,454,654
Investment securities held-to-maturity, at cost, fair value of $5,300,167 in 1995

and $4,599,020 in 1994 (note 3)........................................................... 5,273,850 4,754,520
Loans, net (note 4).......................................................................... 43,774,810 23,750,090
Property and equipment, net.................................................................. 319,845 248,064
Premium paid for deposits acquired (note 2).................................................. 1,108,471 --
Accrued interest receivable and other assets................................................. 669,474 240,223
Total assets......................................................................... $70,611,299 38,989,191
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Deposits:

Noninterest-bearing demand................................................................ $17,618,859 11,550,392
NOW and money market accounts............................................................. 26,945,735 15,427,139
Savings................................................................................... 3,215,240 3,432,596
Certificates of deposit, $100,000 and over................................................ 3,137,699 854,582
Certificates of deposit, under $100,000................................................... 14,575,624 3,629,763
Total deposits............................................................................ 65,493,157 34,894,472
Accrued interest payable and other liabilities............................................... 552,673 234,027
Long-term debt (notes 8 and 11).............................................................. 425,000 475,000
Total liabilities.................................................................... 66,470,830 35,603,499
STOCKHOLDERS' EQUITY:
Common stock, par value $5; 10,000,000 shares authorized;

668,619 shares issued and outstanding (notes 9 and 10).................................... 3,343,095 3,343,095
Additional paid-in capital................................................................... 3,071,860 3,071,860
ESOP Trust, 48,595 shares (note 11).......................................................... (425,000) (475,000)
Accumulated deficit.......................................................................... (1,864,784) (2,432,382)
Unrealized gain (loss) on investment securities available-for-sale........................... 15,298 (121,881)
Total stockholders' equity........................................................... 4,140,469 3,385,692
Commitments and contingencies (notes 7 and 12)
Total liabilities and stockholders' equity........................................... $70,611,299 38,989,191
</TABLE>

See accompanying notes to consolidated financial statements.

F-3

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1995 AND 1994

1995 1994
<S> <C> <C>
INTEREST INCOME:

Loans........................................................................................... $3,620,751 1,615,180
Investment securities:
Available-for-sale........................................................................... 238,986 117,743
Held-to-maturity............................................................................. 290,491 270,657
Federal funds sold.............................................................................. 301,564 74,871
Deposits in other banks......................................................................... 8,662 24,952
Total interest income............................................................................. 4,460,454 2,103,403
INTEREST EXPENSE:
Interest on deposits:

NOW and money market accounts................................................................ 636,423 315,748
Savings accounts............................................................................. 118,976 97,404
Certificates of deposit, under $100,000...................................................... 579,103 105,329
Certificates of deposit, $100,000 and over................................................... 136,861 30,461
Interest on federal funds purchased and other short-term borrowings............................. 2,123 1,598
Interest on long-term debt (note 8)............................................................. 48,964 25,914
Total interest expense............................................................................ 1,522,450 576,454
Net interest income............................................................................... 2,938,004 1,526,949
Provision for loan losses (note 4)................................................................ 393,580 90,300
Net interest income after provision for loan losses............................................... 2,544,424 1,436,649
Service charge income............................................................................. 235,626 85,975
Other income...................................................................................... 103,600 51,514
Other operating expenses (note 14)................................................................ 2,566,052 1,712,557
Income (loss) before income taxes................................................................. 317,598 (138,419)
Income tax benefit................................................................................ (250,000) --
NET INCOME (LOSS)................................................................................. $ 567,598 (138,419)
NET INCOME (LOSS) PER SHARE....................................................................... $ 0.92 (0.22)
Weighted average shares outstanding............................................................... 616,926 638,247
</TABLE>

See accompanying notes to consolidated financial statements.

F-4

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1995 AND 1994

UNREALIZED
GAIN

ADDITIONAL (LOSS) ON
COMMON PAID-IN ESOP ACCUMULATED INVESTMENT

SHARES STOCK CAPITAL TRUST DEFICIT SECURITIES TOTAL

<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1993.......... 668,619 $3,343,095 3,071,860 -- (2,293,963 ) -- 4,120,992
ESOP Trust (note 11)................ -- -- -- (475,000) -- -- (475,000)
Net loss............................ -- -- -- -- (138,419 ) -- (138,419)
Unrealized loss on investment
securities available-for-sale..... -- -- -- -- -- (121,881) (121,881)
BALANCE, DECEMBER 31, 1994.......... 668,619 3,343,095 3,071,860 (475,000) (2,432,382 ) (121,881) 3,385,692
ESOP Trust (note 11)................ -- -- -- 50,000 -- -- 50,000
Net income.......................... -- -- -- -- 567,598 -- 567,598
Unrealized gain on investment
securities available-for-sale..... -- -- -- -- -- 137,179 137,179
BALANCE, DECEMBER 31, 1995.......... 668,619 $3,343,095 3,071,860 (425,000) (1,864,784 ) 15,298 4,140,469
</TABLE>

See accompanying notes to consolidated financial statements.

F-5

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1995 AND 1994

1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)............................................................................ $ 567,598 (138,419)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization............................................................. 167,471 47,928
Provision for loan losses................................................................. 393,580 90,300
Income tax benefit........................................................................ (250,000) --
Compensation expense for ESOP Trust....................................................... 50,000 25,000
Increase in accrued interest receivable and other assets.................................. (409,423) (66,466)
Increase in accrued interest payable and other liabilities................................ 291,997 106,296
Net cash provided by operating activities................................................. 811,223 64,639
CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of available-for-sale securities................................................... (1,891,809) (3,656,728)
Purchases of held-to-maturity securities..................................................... (2,960,241) (2,089,000)
Proceeds from maturities and principal payments of available-for-sale securities............. 514,396 80,193
Proceeds from maturities and principal payments of held-to-maturity securities............... 2,464,166 4,216,752
Net decrease in interest-bearing deposits in banks........................................... 200,000 500,000
Acquisition of deposits net of assets and cash acquired...................................... 5,846,618 --
Purchase of property and equipment........................................................... (101,821) (98,340)
Net increase in loan portfolio............................................................... (7,172,268) (7,912,886)
Net cash used in investing activities..................................................... (3,100,959) (8,960,009)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits..................................................................... 10,497,172 8,210,049
Proceeds from long-term debt issuance........................................................ -- 500,000
Repayments of long-term debt................................................................. (50,000) (25,000)
Funding of ESOP Trust........................................................................ -- (500,000)
Net cash provided by financing activities................................................. 10,447,172 8,185,049
Net increase (decrease) in cash and cash equivalents........................................... 8,157,436 (710,321)
CASH AND CASH EQUIVALENTS, beginning of year................................................... 6,241,640 6,951,961
CASH AND CASH EQUIVALENTS, end of year......................................................... $14,399,076 6,241,640
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid................................................................................ $ 1,451,528 565,455
Income taxes paid............................................................................ -- --
</TABLE>

The Company acquired loans of $13,032,431, equipment of $43,965, other
assets of $19,828, and assumed deposits of $20,101,513 and liabilities of
$26,649. The Company paid a premium of $1,185,320 for deposits acquired.

See accompanying notes to consolidated financial statements.

F-6

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1995 AND 1994

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Tysons Financial Corporation (the "Company") was incorporated December 29,
1989 under the laws of the Commonwealth of Virginia as a holding company whose
activities consist of investment in its wholly owned subsidiary, Tysons National
Bank (the "Bank"). In connection with the formation of the Company, 10,000,000
shares of $5 par value stock were authorized and 668,619 shares were originally
issued. The Bank commenced regular operations on July 1, 1991 as a national
banking association primarily supervised by the Office of the Comptroller of the
Currency. The Bank is a member of the Federal Reserve System and the Federal
Deposit Insurance Corporation.

BASIS OF FINANCIAL STATEMENT PRESENTATION

The financial statements have been prepared on the accrual basis and in
conformity with generally accepted accounting principles. In preparing the
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the
balance sheet and revenues and expenses for the period. Actual results could
differ significantly from those estimates.

CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and the Bank. All significant intercompany accounts and transactions have been
eliminated in consolidation.

CASH AND CASH EQUIVALENTS

For purposes of reporting cash flows, the Company has defined cash and cash
equivalents as those amounts included in cash and due from banks and federal
funds sold.

INVESTMENT SECURITIES

The Company classifies its debt and marketable equity securities in one of
three categories: trading, available-for-sale, or held-to-maturity. Trading
securities are bought and held principally for the purpose of selling them in
the near term. Held-to-maturity securities are those securities for which the
Company has the ability and intent to hold until maturity. All other securities
not classified as trading or held-to-maturity are classified as
available-for-sale. The Company does not engage in trading activities and,
accordingly, has no trading portfolio.

Available-for-sale securities are recorded at fair value. Unrealized
holding gains and losses on available-for-sale securities are excluded from
earnings and are reported as a separate component of stockholders' equity until
realized.

A decline in the market value of any available-for-sale or held-to-maturity
security below cost that is deemed other than temporary is charged to earnings,
resulting in the establishment of a new cost basis for the security.

Held-to-maturity securities are recorded at cost, adjusted for the
amortization or accretion of premiums or discounts. Premiums and discounts are
amortized or accreted over the life of the related security as an adjustment to
yield using the effective interest method. Dividend and interest income are
recognized when earned. Realized gains and losses for securities classified as
available-for-sale and held-to-maturity are included in earnings and are derived
using the specific identification method for determining the cost of securities
sold.

Prepayment of the mortgages securing the collateralized mortgage
obligations may affect the maturity date and yield to maturity. The Company uses
actual principal prepayment experience and estimates of future principal
prepayments in calculating the yield necessary to apply the effective interest
method.

INCOME RECOGNITION ON LOANS

Interest on loans is credited to income as earned on the principal amount
outstanding. When, in management's judgment, the full collectibility of
principal or interest on a loan becomes uncertain, that loan is placed on
nonaccrual. Any accrued but uncollected interest on nonaccrual loans is charged
against current income. Interest income is then recognized as cash is received.

F-7

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- Continued
Interest accruals are resumed on such loans only when they are brought

fully current with respect to principal and interest and when, in the judgment
of the management, the loans have demonstrated a new period of performance and
are estimated to be fully collectible as to both principal and interest.

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is a valuation allowance available for losses
incurred on loans. It is established through charges to earnings in the form of
provisions for loan losses. Loan losses are charged to the allowance for loan
losses when a determination is made that collection is unlikely to occur.
Recoveries are credited to the allowance at the time of recovery.

Prior to the beginning of each year, and quarterly during the year,
management estimates whether the allowance for loan losses is adequate to absorb
losses that can be anticipated in the existing portfolio. Based on these
estimates, an amount is charged to the provision for loan losses to adjust the
allowance to a level determined to be adequate to absorb currently anticipated
losses.

Management's judgment as to the level of future losses on existing loans is
based on management's internal review of the loan portfolio, including an
analysis of the borrowers' current financial position, the consideration of
current and anticipated economic conditions and their potential effects on
specific borrowers, an evaluation of the existing relationships among loans,
potential loan losses, and the present level of the loan loss allowance; and
results of examinations by independent consultants. In determining the
collectibility of certain loans, management also considers the fair value of any
underlying collateral. In addition, various regulatory agencies, as an integral
part of their examination process, periodically review the Bank's allowance for
loan losses. Such agencies may require the Bank to recognize additions to the
allowance based on their judgments about information available to them at the
time of their examination.

LOAN FEES

Loan origination fees and direct loan origination costs are deferred and
amortized as an adjustment to yield over the life of the loan.

PROPERTY AND EQUIPMENT

Property, leasehold improvements, and equipment are stated at cost, less
accumulated depreciation and amortization. Amortization of leasehold
improvements is computed using the straight-line method over the estimated
useful lives of the improvements or the lease term, whichever is shorter.
Depreciation of property and equipment is computed using the straight-line
method over their estimated useful lives ranging from 3 to 25 years.

INCOME TAXES

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Deferred tax assets are recognized subject to management's
judgment that realization of the asset is more likely than not.

INCOME PER COMMON SHARE

Income per common share is computed by dividing net income by the weighted
average number of common and common equivalent shares (using the treasury stock
method) outstanding during the year. Shares held by the ESOP Trust are included
in the income per common share calculation as they become committed to be
released. Common equivalent shares include stock options and warrants and have
no material dilutive effect at December 31, 1995.

F-8

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- Continued

NEW ACCOUNTING STANDARDS

On January 1, 1995, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 114, ACCOUNTING BY CREDITORS FOR
IMPAIRMENT OF A LOAN, as amended by SFAS No. 118, ACCOUNTING BY CREDITORS FOR
IMPAIRMENT OF A LOAN -- INCOME RECOGNITION AND DISCLOSURES. These new standards
require that impaired loans, within the scope of the statement, be measured
based on the present value of expected future cash flows, discounted at the
loan's effective interest rate, or the fair value of the collateral if the loan
is collateral dependent. Implementation of these new standards did not have a
material impact on the Company's results of operations or financial position.

On December 31, 1995, the Company implemented SFAS No. 107, DISCLOSURES
ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS. The statement requires the disclosure
of the fair value of financial instruments held or used by the Company.

On December 31, 1995 the Company implemented SFAS No. 119, DISCLOSURE ABOUT
DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS. The
statement requires disclosures about the amounts, nature and terms of derivative
financial instruments. It also requires that a distinction be made between
financial instruments held or issued for trading purposes and for purposes other
than trading.

In March 1995, the Financial Accounting Standards Board (FASB) issued SFAS
No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED
ASSETS TO BE DISPOSED OF, which is effective beginning in 1996. SFAS No. 121
requires that assets to be held and used be evaluated for impairment whenever
events or circumstances indicate that the carrying value may not be recoverable.
SFAS No. 121 also requires that assets to be disposed of be reported at the
lower of cost or fair value less selling costs. Implementation of SFAS No. 121
will not have a material impact on the Company's results of operations or
financial position.

In May 1995, the FASB issued SFAS No. 122, ACCOUNTING FOR MORTGAGE
SERVICING RIGHTS, which is effective beginning in 1996. SFAS No. 122 provides
accounting for mortgage servicers that sell or securitize loans and retain
servicing rights. The Company does not sell or securitize mortgage loans and
therefore implementation of SFAS No. 122 will not have a material impact.

In October 1995, the FASB issued SFAS No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION, which is effective beginning in 1996. SFAS No. 123 encourages
companies to record an expense for all stock compensation awards based on fair
value at grant date; however, companies may elect to continue to follow the
accounting standards existing prior to SFAS No. 123 with the additional
requirement that they disclose pro forma net income and earnings per share as if
they had adopted the expense recognition provisions of SFAS No. 123. The Company
plans to follow the existing accounting standards for these plans.

RECLASSIFICATIONS

Certain amounts for 1994 have been reclassified to conform to the
presentation for 1995.

(2) ACQUISITION

On May 12, 1995, the Company acquired certain assets and deposits from
Suburban Bank of Virginia, N.A., including its Reston, Virginia branch,
comprising approximately $13 million of loans and $20.1 million of deposits. All
assets acquired and liabilities assumed were recorded at fair value at the date
of acquisition.

The Company paid a premium of approximately $1.2 million for the deposits
acquired. This premium is being amortized on a straight-line basis over 10 years
based on management's estimate of the life of deposits acquired. The Company
reviews the unamortized balance of the premium on a quarterly basis for possible
impairment when events or changed circumstances may affect the underlying basis
of the liabilities assumed. Amortization of the premium was $76,849 in 1995.

F-9

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(3) INVESTMENT SECURITIES

The carrying value and fair value of investment securities held-to-maturity
at December 31, 1995 and 1994, are as follows:

1995 1994
CARRYING FAIR CARRYING FAIR

VALUE VALUE VALUE VALUE

<S> <C> <C> <C> <C>
U.S. Treasury securities................................................. $1,472,448 1,481,736 725,510 711,156
Obligations of U.S. government sponsored agencies........................ 2,547,899 2,558,408 2,553,192 2,455,281
Mortgage-backed securities of federal agencies........................... 755,215 763,305 936,051 925,570
Collateralized mortgage obligations...................................... 498,288 496,718 539,767 507,013
$5,273,850 5,300,167 4,754,520 4,599,020
</TABLE>

The carrying value and fair value of held to maturity investment securities
at December 31, 1995 and 1994, by contractual maturity are shown in the
following table. Expected maturities may differ from contractual maturities
because many issuers have the right to call or prepay obligations with or
without call or prepayment penalties.

1995 1994
CARRYING FAIR CARRYING FAIR

VALUE VALUE VALUE VALUE

<S> <C> <C> <C> <C>
Maturing within 1 year................................................... $1,303,087 1,308,130 999,615 984,922
After 1 but within 5 years............................................... 3,472,475 3,495,319 3,215,138 3,107,085
After 5 but within 10 years.............................................. 289,000 289,000 -- --
After 10 years........................................................... 209,288 207,718 539,767 507,013
$5,273,850 5,300,167 4,754,520 4,599,020
</TABLE>

Gross unrealized losses in investment securities held to maturity at
December 31, 1995 and 1994 were $5,569 and $156,288, respectively. Gross
unrealized gains were $31,886 and $788 at December 31, 1995 and 1994,
respectively. There were no sales or transfers of held-to-maturity securities
during the years ended December 31, 1995 and 1994.

The carrying value and amortized cost of available-for-sale securities at
December 31, 1995 and 1994, are shown below. Because available-for-sale
securities are marked-to market, the carrying value is equal to fair value.

1995 1994
CARRYING AMORTIZED CARRYING AMORTIZED
VALUE COST VALUE COST

<S> <C> <C> <C> <C>
Obligations of U.S. government agencies.................................. $1,328,017 1,315,409 -- --
Obligations of U.S. government-sponsored agencies........................ 995,919 1,000,000 944,375 1,000,000
Collateralized mortgage obligations...................................... 2,487,637 2,480,866 2,333,979 2,400,235
Marketable equity securities............................................. 154,200 154,200 176,300 176,300
Total............................................................... $4,965,773 4,950,475 3,454,654 3,576,535
</TABLE>

F-10

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(3) INVESTMENT SECURITIES -- Continued

The carrying value and amortized cost of available-for-sale investment
securities by contractual maturity at December 31, 1995 and 1994, are shown
below. Expected maturities may differ from contractual maturities because many
issuers have the right to call or prepay obligations with or without call or
prepayment penalties.

1995 1994
CARRYING AMORTIZED CARRYING AMORTIZED
VALUE COST VALUE COST

<S> <C> <C> <C> <C>
Maturing within 1 year................................................... $ 248,357 250,000 -- --
After 1 but within 5 years............................................... 1,416,500 1,407,050 1,766,227 1,835,129
After 5 but within 10 years.............................................. 1,890,581 1,886,909 250,625 257,943
After 10 years........................................................... 1,256,135 1,252,316 1,261,502 1,307,163
Marketable equity securities............................................. 154,200 154,200 176,300 176,300
Total.................................................................... $4,965,773 4,950,475 3,454,654 3,576,535
</TABLE>

Gross unrealized losses in the available for sale securities at December
31, 1995 and 1994 were $14,712 and $121,881, respectively. Gross unrealized
gains were $30,010 at December 31, 1995 and there were no gross unrealized gains
at December 31, 1994.

There were no sales or transfers of available-for-sale securities during
the years ended December 31, 1995 and 1994.

Securities with carrying values of $661,371 and $365,957 at December 31,
1995 and 1994, respectively, were pledged to secure Treasury tax and loan
payments and for other purposes as required by law.

As a member of the Federal Reserve System, the Bank is required to hold
stock in the Federal Reserve Bank of Richmond. This stock is carried at cost
since no active trading markets exist.

(4) LOANS RECEIVABLE

The loan portfolio at December 31, 1995 and 1994 consists of the following:

1995 1994
<S> <C> <C>
Commercial....................................................................................... $14,352,202 8,988,648
Real estate -- construction...................................................................... 1,990,779 1,570,020
Real estate -- residential....................................................................... 9,225,299 2,962,999
Real estate -- commercial........................................................................ 12,311,371 8,313,797
Consumer......................................................................................... 6,638,593 2,303,388
44,518,244 24,138,852

Unearned income.................................................................................. (158,906) (91,013)
44,359,338 24,047,839
Allowance for loan losses........................................................................ (584,528) (297,749)
Loans, net....................................................................................... $43,774,810 23,750,090
</TABLE>

Analysis of the activity in the allowance for loan losses is as follows:

1995 1994

<S> <C> <C>
Balance, beginning of year............................................................................ $ 297,749 206,515
Provision for loan losses............................................................................. 393,580 90,300
Loans charged off..................................................................................... (106,801) --
Recoveries............................................................................................ -- 934
Balance, end of year.................................................................................. $ 584,528 297,749
</TABLE>

F-11

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(4) LOANS RECEIVABLE -- Continued

Loans on which the accrual of interest has been discontinued or reduced
amounted to $265,661 at December 31, 1995. Interest lost on these nonaccrual
loans was approximately $13,465 for 1995. There were no nonaccrual loans at
December 31, 1994.

The Company adopted SFAS 114 and 118 on January 1, 1995, which require that
impaired loans, which consist of all modified loans and other loans for which
collection of all contractual principal and interest is not probable, be
measured based on the present value of expected cash flows discounted at the
loan's effective interest rate or the fair value of the collateral. Prior
periods have not been restated. All loans receivable have been evaluated for
collectibility under the provisions of these statements.

At December 31, 1995, the Company had one impaired loan with an unpaid
principal balance of $265,661. The loan is on nonaccrual but has no related
impairment reserve. The average balance of impaired loans during 1995 was
$334,000, which had an average impairment reserve of $26,000.

All of the Bank's loans, commitments and standby letters of credit have
been granted to customers located in the Washington, D.C. metropolitan area. The
concentrations of credit by type of loan are set forth above. The Bank, as a
matter of policy, does not extend credit, net of participated amounts, to any
single borrower or group of related borrowers in excess of $550,000.

(5) INCOME TAXES

Deferred income tax assets and liabilities are recognized for differences
between financial statement and tax bases of assets and liabilities that will
result in future tax consequences. A valuation allowance is required to reduce
deferred tax assets to an amount more likely than not realizable. Prior to
December 31, 1995 management determined that a valuation allowance was
appropriate for the entire amount of the deferred tax asset. This decision was
based on the lack of sufficient profitable operating history of the Company.

Based upon the profitability of the Company in 1995 and projected
profitability of the Company in 1996, management reassessed the need for a
valuation allowance. Based upon the change in circumstances, management recorded
a net tax deferred asset of $250,000, which represents management's estimate of
the amount of deferred tax asset which is more likely than not to be realized.
In making this determination, management reviewed the Company's recent earnings
trend, projected 1996 pretax income and the estimated amount of deferred tax
asset which will be realized during 1996. On a quarterly basis, management will
reassess the required valuation allowance considering all factors which
influence the realizability of the deferred tax asset including current pretax
income, projected pretax income and the accuracy of previous estimates of
taxable income.

The provision for income tax for the years ended December 31, 1995 and 1994
consists of:

1995 1994
<S> <C> <C>
Current income tax expense....................................................................... $ -- --
Deferred income tax benefit...................................................................... (250,000) --
Income tax benefit............................................................................... $(250,000) --
</TABLE>

A reconciliation of tax at the statutory federal tax rate to the income tax
provision is presented below for the years ended December 31, 1995 and 1994:

1995 1994
<S> <C> <C>
Tax applicable to total income at statutory rate................................................. $ 107,983 (47,062)
Adjustments due to:

Nondeductible expenses......................................................................... 5,416 3,882
Change in valuation allowance.................................................................. (363,399) 34,682
Other.......................................................................................... -- 8,498
Income tax benefit............................................................................... $(250,000) --
</TABLE>

F-12

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(5) INCOME TAXES -- Continued

Deferred tax assets and liabilities consist of the following at December
31, 1995 and 1994:

1995 1994

<S> <C> <C>
Premium paid for deposits acquired................................................................... $ 9,337 --
Bad debt expense..................................................................................... 148,092 78,991
Amortization......................................................................................... 27,668 83,006
Contributions carryforward........................................................................... -- 877
Net operating loss carryforward...................................................................... 509,661 640,183
Gross deferred tax assets............................................................................ 694,758 803,057
Less -- valuation allowance.......................................................................... (407,790) (771,189)
Gross deferred tax liability-depreciation............................................................ 36,968 31,868
Net deferred tax assets.............................................................................. $ 250,000 --
</TABLE>

At December 31, 1995, the Company has a net operating loss carryforward of
approximately $1.5 million that may be offset against future taxable income, of
which $0.1 million, $0.7 million, $0.5 million and $0.2 million expires in 2006,
2007, 2008 and 2009, respectively.

(6) REGULATORY MATTERS

The Bank, as a national bank, is subject to the dividend restrictions set
forth by the Comptroller of the Currency. Under such restrictions, the Bank may
not, without the prior approval of the Comptroller of the Currency, declare
dividends in excess of the sum of the current year's earnings (as defined) plus
the retained earnings (as defined) from the prior two years. At December 31,
1995 and 1994, there were no earnings against which dividends could be charged.

The Bank is required to maintain a minimum average reserve balance with the
Federal Reserve Bank. The average amount of the required reserve was $1,046,000
and $695,000 for 1995 and 1994, respectively.

As a member of the Federal Reserve Bank system, the Bank is required to
subscribe to shares of $100 par value Federal Reserve Bank stock equal to 6
percent of the Bank's capital and surplus. The Bank is required to pay for
one-half of the subscription. The remaining amount is subject to call when
deemed necessary by the Board of Governors of the Federal Reserve.

The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") requires the regulators to stratify institutions into five quality
tiers based upon their relative capital strengths and to increase progressively
the degree of regulation over the weaker institutions, limits the pass through
deposit insurance treatment of certain types of accounts, adopts a "truth in
savings" program, calls for the adoption of risk-based premiums on deposit
insurance and requires the Bank to observe insider credit underwriting products
no less strict than those applied to comparable noninsider transactions.

At December 31, 1995 and 1994, the Company and its subsidiary bank met all
regulatory capital requirements. The key measures of capital are: (1) Tier I
capital (stockholders' equity less certain deductions) as a percent of total
risk adjusted assets; (2) Tier I capital as a percent of total assets, and (3)
total capital (Tier I capital plus the allowance for loan losses up to certain
limitations) as a percent of total risk adjusted assets.

(7) COMMITMENTS AND CONTINGENCIES

The Bank entered into a lease for office space at its current location for
a term of ten years beginning May 1993. This lease is subject to 3 percent
annual increases, as well as allocations of real estate taxes and certain
operating expenses. In addition, the Company assumed certain liabilities
associated with the Suburban Bank transaction, including the lease on the Reston
location beginning May 15, 1995, which expires March 31, 1997. The Reston lease
is also subject to annual increases as well as allocations of real estate taxes
and operating expenses.

Minimum future rental payments under the noncancelable operating leases, as
of December 31, 1995 for each of the next five years and in the aggregate, are
as follows:

F-13

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(7) COMMITMENTS AND CONTINGENCIES -- Continued

YEAR ENDING DECEMBER 31, AMOUNT
<S> <C>
1996........................................................................ $ 212,438
1997........................................................................ 150,805
1998........................................................................ 132,237
1999........................................................................ 135,177
2000........................................................................ 138,010
Thereafter.................................................................. 333,175
$1,101,842

</TABLE>

The total rent expense was $162,286 and $121,353 in 1995 and 1994,
respectively.

(8) RELATED-PARTY TRANSACTIONS

Officers, directors, employees and their related business interests are
loan customers in the ordinary course of business. In management's opinion,
these loans are made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable loans with other
persons and do not involve more than normal risk of collectibility or present
other unfavorable features.

Analysis of activity for loans to related parties is as follows:

1995 1994

<S> <C> <C>
Balance, beginning of year.................................................. $ 557,900 151,200
New loans................................................................... 659,100 424,900
Loans paid off or paid down................................................. (135,700) (18,200)
Balance, end of year........................................................ $1,081,300 557,900
</TABLE>

Effective January 1, 1993, the Company established an Employee Stock
Ownership Plan (ESOP), as further described in Note 11. During June 1994, the
Company purchased 32,949 and 22,722 shares of its common stock from several of
the Company's current and former directors, respectively, at $8.75 per share,
for the ESOP.

The loan used to fund the ESOP was provided by a director of the Company in
the original amount of $500,000. As of December 31, 1995 the outstanding balance
of the loan was $425,000. In management's opinion, the loan is at market terms.
The loan requires quarterly principal payments of $12,500, quarterly interest
payments at prime plus 2 percent, and a balloon payment for the remaining
principal balance on June 1, 1998.

(9) STOCK WARRANTS

Associated with the Company's initial public offering, the organizers were
granted one warrant for each share of common stock purchased for cash in the
offering. The stock purchase warrants entitle the holder of the warrants to
purchase Company stock at $10 per share, at any time during the term of the
warrant. The warrants expire on July 1, 2001.

In the event of a capital call upon the Bank, the Office of the Comptroller
of the Currency will require the Company stock warrants to be exercised at a
price no less than current book value or the warrants will be forfeited. The
Company had 228,250 stock warrants issued and outstanding at December 31, 1995.

No warrants have been exercised.

(10) STOCK OPTION PLAN

In 1992, the stockholders approved a stock option plan that provides for
incentive stock options, non-qualified stock options, and restricted stock. A
designated committee of the Board of Directors is authorized to grant options to
employees, officers, directors and advisory board members. At December 31, 1995,
160,058 shares of common stock have been reserved for this plan. On April 5,
1994, the Board of Directors granted to the President of the Company options to
purchase 6,000 shares of common stock. On January 25, 1995, the Company granted
the President of the Company options to purchase 3,000

F-14

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(10) STOCK OPTION PLAN -- Continued

shares of common stock and also granted additional stock options to acquire an
aggregate of 3,500 shares of common stock to various other officers of the
Company pursuant to the plan. The options were immediately exercisable and
expire 10 years from the grant date. All options are exercisable at $8.75 per
share, which was the fair market value of the stock on both option grant dates.

(11) EMPLOYEE STOCK OWNERSHIP PLAN

The Company has established the Employee Stock Ownership Plan and Trust
(ESOP) which became effective on January 1, 1993, for employees of the Bank who
have at least one year of credited service and have attained the age of
twenty-one (21). The ESOP is to be funded by the Bank's annual contributions
made in cash or common stock. Contributions to the plan are made at the
discretion of the Board of Directors. Shares purchased by the ESOP are held in a
suspense account for allocation among the participants as the loan is repaid. As
described in note 8, during 1994 the ESOP purchased 57,171 shares of company
stock using $500,000 of funds borrowed from a director of the Company.
Compensation expense relating to the ESOP for 1995 and 1994 was $50,000 and
$25,000, respectively. No dividends have been declared on the Company's stock;
therefore dividends had no effect on the compensation expense relating to the
ESOP. As of December 31, 1995, 8,576 shares have been allocated to participants.
The fair value of unearned shares at December 31, 1995 is approximately
$425,000. For purposes of calculating earnings per share (EPS) the number of
shares of common stock outstanding is reduced by the number of shares held by
the ESOP Trust. Shares are included in EPS calculations as they become committed
to be released.

Contributions to the ESOP and shares released from the suspense account are
allocated among the participants on the basis of salary in the year of
allocation. Benefits become 20 percent vested after the third year of credited
service, with an additional 20 percent vesting each year thereafter until 100
percent vesting after seven years. For any year in which the aggregate of
benefits to key employees exceeds 60 percent of the aggregate benefits accrued
to non-key employees, benefits allocated to participants in that year will
become 20 percent vested after two years, increasing to 100 percent after 6
years. Forfeitures will be reallocated annually among remaining participating
employees. Benefits may be payable upon retirement, separation from service,
disability or death.

(12) FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK

The Company is a party to financial instruments with off-balance-sheet risk
in the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit and standby
letters of credit and financial guarantees. Commitments to extend credit are
agreements to lend to a customer so long as there is no violation of any
condition established in the contract. Commitments usually have fixed expiration
dates up to one year or other termination clauses and may require payment of a
fee. Since many of the commitments are expected to expire without being drawn
upon, the total commitment amounts do not necessarily represent future cash
requirements.

Standby letters of credit are conditional commitments issued by the Company
to guarantee the performance of the contractual obligations by a customer to a
third party. The majority of these guarantees extend until satisfactory
completion of the customer's contractual obligations. All standby letters of
credit outstanding at December 31, 1995, are collateralized.

Those instruments represent obligations of the Company to extend credit or
guarantee borrowings, therefore, they are not recorded on the consolidated
statements of financial condition. The rates and terms of these instruments are
competitive with others in the market in which the Company operates. Almost all
of these instruments as of December 31, 1995 have floating rates, therefore
significantly mitigating the market risk.

Those instruments may involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized in the consolidated
statements of financial condition. Credit risk is defined as the possibility of
sustaining a loss because the other parties to a financial instrument fail to
perform in accordance with the terms of the contract. The Company's maximum
exposure to credit loss under standby letters of credit and commitments to
extend credit is represented by the contractual amounts of those instruments.

F-15

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(12) FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK -- Continued

CONTRACTUAL
AMOUNT

<S> <C>
Financial instruments whose contract amounts represent potential credit risk:

Commitments to extend credit...................................................... $13,021,100
Standby letters of credit......................................................... 237,900
</TABLE>

At December 31, 1995, the Company did not have any financial instruments
whose contractual amounts exceed the amount of credit risk.

The Company uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet instruments. The Company
evaluates each customer's creditworthiness on a case-by-case basis and requires
collateral to support financial instruments when deemed necessary. The amount of
collateral obtained upon extension of credit is based on management's evaluation
of the counterparty. Collateral held varies but may include deposits held by the
Company; marketable securities; accounts receivable; inventory; property, plant
and equipment; and income-producing commercial properties.

(13) SIGNIFICANT CONCENTRATIONS OF CREDIT

At December 31, 1995, the Company had federal funds sold to five
correspondent banks totaling approximately $8,910,000, each of which had a
balance of $910,000 or more. These are overnight investments and are rolled-over
on a daily basis. The Company does not normally require collateral for this type
of investment.

(14) OTHER OPERATING EXPENSES

Other operating expenses consist of the following:

1995 1994
<S> <C> <C>
Salaries and employee benefits.................................................................... $1,276,468 811,389
Occupancy and equipment........................................................................... 299,394 207,560
Office and operations expenses.................................................................... 287,041 278,301
Data processing................................................................................... 226,010 112,617
Legal and professional fees....................................................................... 223,657 168,623
Business development.............................................................................. 113,802 76,980
Amortization of premium paid for deposits......................................................... 76,849 --
Deposit insurance................................................................................. 62,831 57,087
$2,566,052 1,712,557

</TABLE>

(15) DISCLOSURES OF FAIR VALUE OF FINANCIAL INSTRUMENTS

The assumptions used and the estimates disclosed represent management's
best judgment of appropriate valuation methods. These estimates are based on
pertinent information available to management as of December 31, 1995. In
certain cases, fair values are not subject to precise quantification or
verification and may change as economic and market factors, and management's
evaluation of those factors change.

Although management uses its best judgment in estimating the fair value of
these financial instruments, there are inherent limitations in any estimation
technique. Therefore, these fair value estimates are not necessarily indicative
of the amounts that the Company would realize in a market transaction. Because
of the wide range of valuation techniques and the numerous estimates which must
be made, it may be difficult to make reasonable comparisons of the Company's
fair value information to that of other financial institutions. It is important
that the many uncertainties discussed above be considered when using the
estimated fair value disclosures and to realize that because of these
uncertainties, the aggregate fair value amount should in no way be construed as
representative of the underlying value of the Company.

F-16

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(15) DISCLOSURES OF FAIR VALUE OF FINANCIAL INSTRUMENTS -- Continued

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following summarizes the significant methodologies and assumptions used
in estimating the fair values presented in the accompanying table.

CASH AND CASH EQUIVALENTS

The carrying amount of cash and cash equivalents was used as a
reasonable estimate of fair value.

INVESTMENTS

Fair values of the Company's investment portfolio were based on actual
quoted prices or prices quoted for similar financial instruments.

LOANS

In order to determine the fair market value for loans, the loan
portfolio was segmented based on loan type, credit quality and maturities.
For certain variable rate loans with no significant credit concerns and
frequent repricings, estimated fair values are based on current carrying
values. The fair values of other loans are estimated using discounted cash
flow analysis, using interest rates that were offered as of December 31,
1995 for loans with similar terms to borrowers of similar credit quality.

DEPOSITS

The fair value of deposits with no stated maturity is equal to the
amount payable on demand. The fair value of certificates of deposit are
estimated using discounted cash flow analysis using interest rates that
were offered as of December 31, 1995.

LONG-TERM DEBT

As described in Note 8, the long-term debt is variable rate at market
terms; therefore, the carrying amount was used as a reasonable estimate of
fair value.

COMMITMENTS

The fair value of these financial instruments is based on the credit
quality and relationship, fees, interest rates, probability of funding,
compensating balance and other convenants or requirements. These
commitments generally have fixed expiration dates expiring within one year.
Many commitments are expected to, and typically do, expire without being
drawn upon. The rates and terms of these instruments are competitive with
others in the market in which the Company operates. The carrying amounts
are reasonable estimates of the fair value of these financial instruments.
The carrying amounts of these instruments are zero at December 31, 1995.

Fair Value of Financial Instruments as of December 31, 1995:

DECEMBER 31, 1995

CARRYING ESTIMATED
AMOUNT FAIR VALUE

(DOLLARS IN THOUSANDS)

Financial assets:

Cash and cash equivalents............................................................................ $ 14,499 14,499
Investments.......................................................................................... 10,240 10,266
Loans................................................................................................ 43,775 43,910
Financial liabilities:

Noninterest-bearing demand deposits.................................................................. 17,619 17,619
NOW and money market accounts........................................................................ 26,945 26,945
Savings.............................................................................................. 3,215 3,215
Certificates of deposit.............................................................................. 17,713 17,963
Long-term debt....................................................................................... 425 425
Commitments.......................................................................................... -- --
</TABLE>

F-17

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(16) HOLDING COMPANY ONLY FINANCIAL STATEMENTS

BALANCE SHEETS AS OF DECEMBER 31, 1995 AND 1994:

<S> <C> <C>
ASSETS 1995 1994

ASSETS:

Cash.......................................................................................... $ 11,373 20,396
Investment in subsidiary bank................................................................. 4,560,187 3,847,096
TOTAL ASSETS.................................................................................... $ 4,571,560 3,867,492
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:

Long term debt................................................................................ $ 425,000 475,000
Other liabilities............................................................................. 6,091 6,800
TOTAL LIABILITIES............................................................................... 431,091 481,800
STOCKHOLDERS' EQUITY
Common stock.................................................................................. 3,343,095 3,343,095
Additional paid-in capital.................................................................... 3,071,860 3,071,860
Employee stock ownership plan trust........................................................... (425,000) (475,000)
Retained earnings............................................................................. (1,849,486) (2,554,263)
TOTAL STOCKHOLDERS' EQUITY...................................................................... 4,140,469 3,385,692
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY...................................................... $ 4,571,560 3,867,492
</TABLE>

STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994:

1995 1994
<S> <C> <C>

INCOME:

Equity in undistributed earnings of subsidiary................................................ $ 575,911 (122,038)
Other income.................................................................................. -- 458
Total income.................................................................................... 575,911 (121,580)
Expenses........................................................................................ 8,313 16,839
NET INCOME (LOSS)............................................................................... $ 567,598 $ (138,419)
</TABLE>

F-18

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

(16) HOLDING COMPANY ONLY FINANCIAL STATEMENTS -- Continued STATEMENTS OF CASH
FLOWS FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994:

1995 1994

<S> <C> <C>
OPERATING ACTIVITIES:

Net income (loss)................................................................................. $ 567,598 (138,419)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity in undistributed net income (loss) of subsidiary........................................ (575,911) 122,038
Compensation expense for ESOP trust............................................................ 50,000 25,000
Other.......................................................................................... (710) 1,036
Net cash provided by operating activities......................................................... 40,977 9,655
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on ESOP trust debt....................................................................... (50,000) (25,000)
Net cash used by financing activities............................................................. (50,000) (25,000)
INCREASE (DECREASE) IN CASH......................................................................... (9,023) (15,345)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR........................................................ 20,396 35,741
CASH AND CASH EQUIVALENTS, END OF YEAR.............................................................. $ 11,373 20,396
</TABLE>

F-19

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

MARCH 31, 1996 AND DECEMBER 31, 1995

DECEMBER
MARCH 31, 31,

1996 1995

(UNAUDITED)

ASSETS

Loans, net..................................................................................... $43,578,806 43,774,810
Investment securities available-for-sale, at fair value........................................ 5,050,936 4,965,773
Investment securities held-to-maturity, at cost, fair value of $4,514,739 in 1996 and

$5,300,167 in 1995........................................................................... 4,504,951 5,273,850
Interest-bearing deposits in other banks....................................................... 100,000 100,000
Federal funds sold............................................................................. 13,200,000 8,910,000
Cash and due from banks........................................................................ 7,763,166 5,489,076
Property and equipment, net.................................................................... 350,230 319,845
Premium paid for deposits acquired............................................................. 1,075,542 1,108,471
Accrued interest receivable and other assets................................................... 725,203 669,474
Total assets......................................................................... $76,348,834 70,611,299
LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Deposits:

Noninterest-bearing demand................................................................ $19,990,003 17,618,859
NOW and money market accounts............................................................. 29,724,506 26,945,735
Savings................................................................................... 2,942,231 3,215,240
Certificates of deposit, $100,000 and over................................................ 2,861,740 3,137,699
Certificates of deposit, under $100,000................................................... 15,423,414 14,575,624
Total deposits............................................................................... 70,941,894 65,493,157
Accrued interest payable and other liabilities............................................... 550,192 552,673
Long-term debt............................................................................... 412,500 425,000
Total liabilities.................................................................... 71,904,586 66,470,830
STOCKHOLDERS' EQUITY:
Common stock, par value $5; 10,000,000 shares authorized; 668,619 shares issued and

outstanding............................................................................... 3,343,095 3,343,095
Additional paid-in capital................................................................... 3,071,860 3,071,860
ESOP Trust, 47,166 shares in 1996 and 48,595 shares in 1995.................................. (412,500) (425,000)
Accumulated deficit.......................................................................... (1,580,184) (1,864,784)
Unrealized gain on investment securities available-for-sale.................................. 21,977 15,298
Total stockholders' equity........................................................... 4,444,248 4,140,469
Total liabilities and stockholders' equity........................................... $76,348,834 70,611,299
</TABLE>

F-20

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

CONSOLDIATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995

THREE MONTHS THREE MONTHS
ENDED MARCH ENDED MARCH

31, 1996 31, 1995

(UNAUDITED)

<S> <C> <C>
INTEREST INCOME:

Loans......................................................................................... $1,104,019 570,524
Investment securities:
Available-for-sale......................................................................... 85,739 51,587
Held-to-maturity........................................................................... 74,361 59,651
Federal funds sold............................................................................ 160,850 14,628
Deposits in other banks....................................................................... 1,587 2,757
Total interest income........................................................................... 1,426,556 699,147
INTEREST EXPENSE:
Interest on deposits:

NOW and money market accounts.............................................................. 224,999 100,083
Savings accounts........................................................................... 23,309 28,374
Certificates of deposit, under $100,000.................................................... 221,704 11,362
Certificates of deposit, $100,000 and over................................................. 52,886 42,071
Interest on short-term borrowings............................................................. -- 969
Interest on long-term debt.................................................................... 10,875 12,743
Total interest expense.......................................................................... 533,773 195,602
Net interest income............................................................................. 892,783 503,545
Provision for loan losses....................................................................... -- 12,766
Net interest income after provision for loan losses............................................. 892,783 490,779
NON-INTEREST INCOME:

Service charge income......................................................................... 50,747 26,585
Other income.................................................................................. 29,752 27,749
Total non-interest income....................................................................... 80,499 54,334
NON-INTEREST EXPENSE:
Salaries and employee benefits................................................................ 390,797 275,107
Occupancy, equipment and depreciation......................................................... 90,050 57,421
Operations expense............................................................................ 151,249 103,578
Administration expense........................................................................ 150,250 97,533
Total non-interest expense...................................................................... 782,346 533,639
Income before income taxes...................................................................... 190,936 11,474
Income tax benefit.............................................................................. (87,000) --
NET INCOME...................................................................................... $ 277,936 11,474
NET INCOME PER SHARE............................................................................ $ 0.44 0.02
Weighted average shares outstanding............................................................. 619,935 614,307
</TABLE>

F-21

<PAGE>

TYSONS FINANCIAL CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995

THREE MONTHS THREE MONTHS
ENDED MARCH ENDED MARCH
31, 1996 31, 1995

(UNAUDITED)
<S> <C> <C>

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income.................................................................................... $ 277,935 11,474
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization.............................................................. 57,718 22,328
Provision for loan losses.................................................................. -- 12,766
Income tax benefit......................................................................... (87,000) --
Compensation expense for ESOP Trust........................................................ 12,500 12,500
Decrease in accrued interest receivable and other assets................................... 31,269 10,941
Increase (decrease) in accrued interest payable and other liabilities...................... (2,481) 54,798
Net cash provided by operating activities................................................ 289,941 124,807
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale securities.................................................... (454,679) --
Purchases of held-to-maturity securities...................................................... (494,063) --
Proceeds from maturities and principal payments of available-for-sale securities.............. 373,405 47,838
Proceeds from maturities and principal payments of held-to-maturity securities................ 1,265,355 291,250
Net decrease in interest-bearing deposits in banks............................................ -- 100,000
Purchase of property and equipment............................................................ (53,883) --
Net decrease (increase) in loan portfolio..................................................... 201,777 (793,282)
Net cash used in investing activities.................................................... 837,912 (354,194)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits........................................................... 5,448,737 (2,583,184)
Repayments of long term debt.................................................................. (12,500) (12,500)
Net cash provided by (used in) financing activities...................................... 5,436,237 (2,595,684)
Net increase (decrease) in cash and cash equivalents............................................ 6,564,090 (2,825,071)
CASH AND CASH EQUIVALENTS, beginning of period.................................................. 14,399,076 6,241,640
CASH AND CASH EQUIVALENTS, end of period........................................................ $ 20,963,166 3,416,569
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid................................................................................. $ 510,773 180,649
Income taxes paid............................................................................. -- --
</TABLE>

F-22

<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE
UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY
OFFER TO BUY ANY SECURITIES OFFERED IN ANY JURISDICTION TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER.

TABLE OF CONTENTS

PAGE

<S> <C>
Available Information................................ 3
Prospectus Summary................................... 4
Risk Factors......................................... 7
Dilution............................................. 10
Use of Proceeds...................................... 10
Capitalization....................................... 10
Dividends............................................ 11
Market Information................................... 11
Selected Consolidated Financial Data................. 12
Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 13
Business............................................. 29
Management........................................... 32
Executive Compensation............................... 34
Security Ownership of Certain Beneficial Owners and
Management......................................... 37
Supervision and Regulation........................... 38
Description of Capital Stock......................... 44
Underwriting......................................... 47
Legal Matters........................................ 48
Experts.............................................. 48
Index to Financial Statements........................ F-1
</TABLE>

UNTIL , 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

300,000 SHARES
[TYSONS FINANCIAL CORPORATION LOGO]

COMMON STOCK

PROSPECTUS
SCOTT & STRINGFELLOW, INC.

, 1996

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

(a) Section 13.1-697 of the Corporations Title of the Annotated Code of
Virginia permits a corporation to indemnify its present and former directors,
among others, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their services in those or other
capacities, unless it is established that (a) the director failed to conduct
himself in good faith and he did not believe (i) in the case of conduct in his
official capacity with the corporation, that his conduct was in the
corporation's best interests or (ii) in all other cases, that his conduct was
not at least opposed to its best interests; (b) the director or officer actually
received an improper personal benefit; or (c) in the case of any criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful. Virginia law permits a corporation to indemnify a
present and former officer to the same extent as a director. In addition,
Section 13.1-699 of the Corporations Title of the Annotated Code of Virginia
permits a corporation to pay or reimburse, in advance of the final disposition
of a proceeding, reasonable expenses (including attorney's fees) incurred by a
present or former director or officer made a party to the proceeding by reason
of his service in that capacity, provided that the corporation shall have
received (a) a written affirmation by the director or officer of his good faith
belief that he has met the standard of conduct necessary for indemnification by
the corporation; (b) a written undertaking by or on his behalf to repay the
amount paid or reimbursed by the corporation if it shall ultimately be
determined that the standard of conduct was not met; and (c) a determination is
made that the facts then known to those making the determination would not
preclude indemnification.

The Registrant has provided for indemnification of directors, officers,
employees, and agents in Article VI of its By-Laws. This provision reads as
follows:

ARTICLE VI

INDEMNIFICATION

SECTION 6.1 INDEMNIFICATION. The association will have the power to
indemnify any person, the person's heirs, executors, or administrators, who
was or is a party or who is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (other than an action by
or in the right of the association), by reason of the fact that the person
is or was a director, officer, employee, or agent of the association, or is
or was serving at the request of the association as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or
other enterprise, against judgments, penalties, fines, settlements or
reasonable expenses (including attorney's fees) incurred in connection with
such action, suit, or proceeding, if: 1) The person acted in good faith and
believed a) in the case of conduct in an official capacity with the
association, that such conduct was in the association's best interests and
b) in all other cases, that his or her conduct was at least not opposed to
the association's best interests; and 2) in the case of any criminal
proceeding, the person had no reasonable cause to believe his or her
conduct was unlawful.

The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent
will not, of itself, create a presumption that the person did not act in a
manner which he or she believed in good faith to be in or not opposed to
the best interests of the association and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his or her
conduct was unlawful.

SECTION 6.2 INDEMNIFICATION FOR CERTAIN ACTIONS. The association may
elect not to indemnify any person who was or is a party or who is
threatened to be made a party to any threatened, pending, or completed
action or suit by, or in the right of, the association to procure a
judgment in its favor, by reason of the fact that the person is or was a
director, officer, employee, or agent of the association or is or was
serving at the request of the association as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan, or other
enterprise, against reasonable expenses (including attorneys' fees)
incurred in connection with: 1) a proceeding by or in the right of the
association in which the person was adjudged liable to the association; or
2) any other proceeding charging improper personal benefit to the person,
whether or not involving action in an official capacity, in which the
person was adjudged liable on the basis that personal benefit was
improperly received.

II-1

<PAGE>

SECTION 6.3 MANDATORY INDEMNIFICATION. To the extent that a director,
officer, employee, or agent of the association entirely prevails, on the
merits or otherwise, in defense of any action, suit, or proceeding referred
to in the foregoing Section 6.1 and 6.2 of these by-laws or in defense of
any claim, issue, or matter therein, the person will be indemnified against
reasonable expenses (including attorneys' fees) incurred in connection
therewith.

SECTION 6.4 FINDINGS OF INDEMNIFICATION. Any indemnification under
subsections 6.1 and 6.2 of these by-laws (unless ordered by a court) will
be made by the association only as authorized in the specific case, upon a
determination that indemnification of the director, officer, employee, or
agent is proper in the circumstances because the person has met the
applicable standard of conduct as set forth in subsections 6.1 and 6.2.

Such determinations will be made:

(a) by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit, or proceeding;

(b) if such a quorum is not obtainable, by majority vote of a committee
duly designated by the Board of Directors, (in which designation
directors who are parties may participate), consisting solely of two or
more directors not at the time parties to the proceeding;

(c) by special legal counsel selected by the Board of Directors or its
committee or if a quorum of the Board of Directors cannot be obtained
and a committee cannot be designated, selected by majority vote of the
full Board of Directors, in which selection directors who are parties
may participate; or

(d) by the shareholders, but shares owned by or voted under the control
of directors who are at the same time parties to the proceeding may not
be voted on the determination.

SECTION 6.5 PAYMENT OF EXPENSES IN ADVANCE. Reasonable expenses
incurred in defending any action, suit, or proceeding referred to above may
be paid by the association in advance of the final disposition of such
action, suit, or proceeding as authorized in the specific case upon receipt
of a written affirmation of a good faith belief from the person indicating
that the appropriate standard of conduct was met and the person also
furnishes a written undertaking by or on behalf of the director, trustee,
officer, employee or agent to repay such amount if it will ultimately be
determined that there is no entitlement to indemnification by the
association as provided above.

SECTION 6.6 LIMITATION ON INDEMNIFICATION. Notwithstanding anything
contained herein, such indemnification provisions shall not allow the
indemnification of directors, officers or employees of the association
against expenses, penalties or other payments incurred in an administrative
proceeding or action instituted by an appropriate bank regulatory agency
which proceeding or action results in a final order assessing civil money
penalties or requiring affirmative action by an individual or individuals
in the form of payments to the association.

The Registrant has also entered into Indemnification Agreements
(collectively, the "Agreements") with each director by which the Registrant
agrees to indemnify such director to the full extent allowed by Virginia law.
The Agreements prohibit indemnification of a director for several reasons
including a director's knowing violation of the criminal law, willful misconduct
or unlawful distribution under 12 U.S.C. 60.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, office or controlling person is connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.

(b) Virginia law permits a corporation to limit by provision in its
articles of incorporation or bylaws the liability of directors and officers to
the corporation or to any stockholder for damages arising out of a single
transaction, occurrence or course of conduct the lesser of (a) the monetary
amount, including the limitation of liability, specified in the corporation's
articles or bylaws or (b) the greater of (i) $100,000 or (ii) the cash
compensation received by the officer or director from the corporation in the 12
months immediately preceding the act or omission giving rise to liability.

II-2

<PAGE>

The Registrant has limited the liability of its directors for money damages
in Article XIII of its Articles of Incorporation. This section reads as follows:

LIMITATIONS ON LIABILITY

No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of the
director's duty of care or other duty as a director, except that this provision
shall not limit any liability for

(i) acts or ommissions which involve willful misconduct or a knowing
violation of the criminal law or of any federal or state securities law, or

(ii) liability for unlawful distributions under Section 13.1-692 of
the Virginia Stock Corporation Act.

The Registrant has limited the liability of its directors and officers for
money damages in Article V of its By-Laws. This provision reads as follows:

LIMITATION OF LIABILITY OF OFFICERS AND DIRECTORS

SECTION 5.1 LIMITED LIABILITY. In any proceeding brought by or in the
right of the association or brought by or on behalf of shareholders of the
association, the damages assessed against an officer or director arising
out of a single transaction, occurrence or course of conduct shall not
exceed the greater of (i) $100,000 or (ii) the amount of cash compensation
received by the officer or director from the association during the twelve
months immediately preceding the act or omission for which liability was
imposed.

SECTION 5.2 EXCEPTIONS TO LIMITED LIABILITY. The liability of an
officer or director shall not be limited if the officer or director engaged
in unlawful distributions, willful misconduct or a knowing violation of the
criminal law or any federal or state securities law, including, without
limitation, any claim of unlawful insider trading or manipulation of the
market for any security, as set forth in Virginia Stock Corporation Act
Sections 13.1-692 and 13.1-692.1.

SECTION 5.3 LIMITATION OR ELIMINATION OF LIABILITY. No limitation on
or elimination of liability may be affected by any amendment of the
articles of association or bylaws with respect to any act or omission
occurring before such amendment.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses, other than underwriting discounts and commissions,
in connection with the Offering are as follows:

<TABLE>

<S> <C>
SEC Registration Fee.......................................................... $ 1,071
Nasdaq Fees................................................................... 6,000
Blue Sky Fees and Expenses.................................................... 4,600*
Printing Expenses............................................................. 10,000*
Legal Fees and Expenses....................................................... 50,000*
Accounting Fees and Expenses.................................................. 65,000*
Transfer Agent Fees and Expenses.............................................. 10,000*
Miscellaneous................................................................. 10,000*
Total......................................................................... $156,471*
</TABLE>

* Estimated.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

None.

ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

<TABLE>

<S> <C>

1(a) Form of Underwriting Agreement.

3(a) Articles of Incorporation (incorporated by reference to Exhibit 3(a) to
the Company's Registration Statement No. 33-33051-A on Form S-18).

</TABLE>

II-3

<PAGE>

<TABLE>

<S> <C>

3(b) By-Laws of the Company.

5 Opinion of Venable, Baetjer and Howard, LLP regarding legality of shares.

10(b) Organizers' Agreement (incorporated by reference to Exhibit 10(b) to the
Company's Registration Statement No. 33-33051-A on Form S-18).

10(c) Employment Agreement between the Company and Terrie G. Spiro
(incorporated by reference to Exhibit 10(c) to the Company's Registration
Statement No. 33-33051-A on Form S-18).

10(d) Lease Terms Letter (incorporated by reference to Exhibit 10(d) to the
Company's Registration Statement No. 33-33051-A on Form S-18).

10(e) Escrow Agreement (incorporated by reference to Exhibits 10(e), 10e.1 and
10e.2 to the Company's Registration Statement No. 33-33051-A on Form
S-18).

10(f) Consolidation Agreement (incorporated by reference to Exhibit 10(f) to
the Company's Registration Statement No. 33-33051-A on Form S-18).

10(g) Stock Option Plan of the Company (incorporated by reference to the
exhibits to the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1992).

10(h) Employee Stock Ownership Plan of the Company (incorporated by reference
to the exhibits to the Company's Financial Corporation Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1993).

10(i) Amended Employment Agreement between the Company and Terrie G. Spiro
(incorporated by reference to the exhibits to the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1992).

10(j) Lease Agreement dated October 12, 1992, between the Company and
Eighty-Two Hundred Greensboro Associates (incorporated by reference to
the exhibits to the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1992).

10(k) Purchase and Assumption Agreement dated as of February 2, 1995, between
Tysons National Bank and Suburban Bank of Virginia, N.A., and joined in
by the Company and Suburban Bancshares, Inc. (incorporated by reference
from the Company's Current Report on Form 8-K as filed with the
Commission on May 26, 1995).

21 Subsidiaries of the Company (incorporated by reference from the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1990,
Exhibit 21).

23(a) Consent of KPMG Peat Marwick LLP.

23(b) Consent of Venable, Baetjer and Howard, LLP (included in Exhibit 5).
</TABLE>

ITEM 28. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes to provide to the
Underwriter at the Closing Date specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A of the Securities Act and contained in a form of prospectus filed
by the Registrant under Rule 424(b) of the Securities Act is part of this
registration statement as of the time the Commission declared it effective.

II-4

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in McLean, Commonwealth of
Virginia, on May 14, 1996.

TYSONS FINANCIAL CORPORATION

By: /s/ TERRIE G. SPIRO
TERRIE G. SPIRO

PRESIDENT AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)

Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE

/s/ TERRIE G. SPIRO President, Chief Executive Officer, and Director May 14, 1996
TERRIE G. SPIRO (Principal Executive Officer)

* Director May 14, 1996
JOEL M. BIRKEN

* Director May 14, 1996

MICHAEL FARNUM

* Director May 14, 1996

ALBEN G. GOLDSTEIN

* Director May 14, 1996
ZACHARY A. KAYE

* Director May 14, 1996

BETH W. NEWBURGER

Director May 14, 1996

J. PATRICK ROWLAND

* Director May 14, 1996

RICHARD SCHWARTZ

* Director May 14, 1996

WILLIAM C. SELLERY, JR.

* Director May 14, 1996

ST. CLAIR J. TWEEDIE
</TABLE>

II-5

<PAGE>

SIGNATURE TITLE DATE

<S> <C> <C>
* Director May 14, 1996
STEPHEN A. WANNALL

/s/ JANET A. VALENTINE Chief Financial Officer May 14, 1996
JANET A. VALENTINE (Principal Financial and Accounting Officer)

* By: /s/ TERRIE G. SPIRO
TERRIE G. SPIRO
ATTORNEY-IN-FACT

</TABLE>

II-6

<PAGE>

EXHIBIT INDEX

SEQUENTIALLY

EXHIBIT DOCUMENT NUMBERED PAGE
<S> <C> <C>

1(a) Form of Underwriting Agreement.

3(a) Articles of Incorporation (incorporated by reference to Exhibit 3(a) to
the Company's Registration Statement No. 33-33051-A on Form S-18).

3(b) By-Laws of the Company.

5 Opinion of Venable, Baetjer and Howard, LLP regarding legality of
shares.

10(b) Organizers' Agreement (incorporated by reference to Exhibit 10(b) to the
Company's Registration Statement No. 33-33051-A on Form S-18).

10(c) Employment Agreement between the Company and Terrie G. Spiro
(incorporated by reference to Exhibit 10(c) to the Company's
Registration Statement No. 33-33051-A on Form S-18).

10(d) Lease Terms Letter (incorporated by reference to Exhibit 10(d) to the
Company's Registration Statement No. 33-33051-A on Form S-18).

10(e) Escrow Agreement (incorporated by reference to Exhibits 10(e), 10e.1 and
10e.2 to the Company's Registration Statement No. 33-33051-A on Form
S-18).

10(f) Consolidation Agreement (incorporated by reference to Exhibit 10(f) to
the company's Registration Statement No. 33-33051-A on Form S-18).

10(g) Stock Option Plan of the Company (incorporated by reference to the
exhibits to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1992).

10(h) Employee Stock Ownership Plan of the Company (incorporated by
reference to the exhibits to the Company's Financial Corporation
Annual Report on Form 10-KSB for the fiscal year ended December
31, 1993).

10(i) Amended Employment Agreement between the Company and Terrie G.
Spiro (incorporated by reference to the exhibits to the Company's
Annual Report on Form 10-KSB for the fiscal year ended December
31, 1992).

10(j) Lease Agreement dated October 12, 1992, between the Company and
Eighty-Two Hundred Greensboro Associates (incorporated by
reference to the exhibits to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1992).

10(k) Purchase and Assumption Agreement dated as of February 2, 1995,
between Tysons National Bank and Suburban Bank of Virginia, N.A.,
and joined in by the Company and Suburban Bancshares, Inc.
(incorporated by reference from the Company's Current Report on
Form 8-K as filed with the Commission on May 26, 1995).

21 Subsidiaries of the Company (incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, Exhibit 21).

23(a) Consent of KPMG Peat Marwick LLP.

23(b) Consent of Venable, Baetjer and Howard, LLP (included in Exhibit 5).
</TABLE>

- 22 -

[Form of Underwriting Agreement]
300,000 Shares

TYSONS FINANCIAL CORPORATION

Common Stock

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

Underwriting Agreement

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

SCOTT & STRINGFELLOW, INC.

909 East Main Street

Richmond, Virginia 23219 May __, 1996

Dear Sirs:

Tysons Financial Corporation, a Virginia corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to Scott & Stringfellow, Inc. (the "Underwriter") an aggregate of 300,000 shares
(the "Firm Securities") of Common Stock, $5.00 par value, of the Company (the
"Common Stock") and, at the election of the Underwriter, up to 45,000 additional
shares (the "Optional Securities") of Common Stock. The Firm Securities and the
Optional Securities that the Underwriter elects to purchase pursuant to Section
2 hereof are collectively called the "Securities."

1. Representations and Warranties.

The Company represents and warrants to, and agrees with the Underwriter
that:

(a) The Company meets the requirements for use of Form SB-2 under the
Securities Act of 1933, as amended (the "Act") in connection with the
transactions contemplated by this Underwriting Agreement (the "Agreement"); a
registration statement on Form SB-2 (File No. 333-3130) and as a part thereof a
preliminary prospectus, in respect of the Securities has been filed with the
Securities and Exchange Commission (the "Commission") in the form heretofore
delivered to you; such registration statement, as amended, has been declared
effective by the Commission; no other document with respect to such registration
statement has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of such registration statement has been issued and
no proceeding for that purpose has been instituted or threatened by the
Commission (any preliminary prospectus included in such registration statement
or filed with the Commission pursuant to Rule 424(a) under the Act being
hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a) of this
Agreement and deemed by virtue of Rule 430A under the Act to be a part of the
registration statement at the time it was declared effective, each as amended at
the time such part became effective, being herein called collectively the
"Registration Statement" and the final prospectus, in the form first filed
pursuant to Rule 424(b), being hereinafter called the "Prospectus");

(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and the most recent Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter through
you expressly for use therein;

(c) The Registration Statement conforms, and the Prospectus and any
amendments or supplements thereto will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable filing
date as to the Prospectus and any amendment or supplement thereto contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by the Underwriter expressly for use
therein;

(d) Neither the Company nor its wholly-owned subsidiary bank, Tysons
National Bank, a national banking association (the "Bank"), has sustained since
the date of the latest audited financial statements included in the Prospectus
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or expressly contemplated in the Prospectus;

(e) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise set forth or
expressly contemplated therein, (i) there has not been any change in the capital
stock or long term debt of the Company or the Bank or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, shareholders'
equity or results of operations of the Company and the Bank taken as a whole and
(ii) there have been no transactions entered into by the Company or the Bank,
other than transactions entered into in the ordinary course of business, that
are material with respect to the Company and the Bank taken as a whole;

(f) The Company and the Bank have good and marketable title to all real
property and good and marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company and the Bank; and any real property and
buildings held under lease by the Company and the Bank are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and the Bank;

(g) The Company and the Bank have been duly incorporated and are
validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, with power and authority (corporate
and other) to own or lease their respective properties and conduct their
respective businesses as described in the Prospectus; and each has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, except where the failure to so qualify would not result in a
material adverse effect on the Company and the Bank taken as a whole; and each
of the Company and the Bank holds all material licenses, certificates,
authorizations and permits from governmental authorities necessary for the
conduct of its business as described in the Prospectus;

(h) The Company has an authorized capitalization as set forth in the
Prospectus; all of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and nonassessable and
conform to the description of the capital stock of the Company contained in the
Prospectus; there are no preemptive or other rights to subscribe for or to
purchase any securities of the Company under the Articles of Incorporation of
the Company or under Virginia law; except as described in the Prospectus, there
are no warrants, options or other rights to purchase any securities of the
Company which have been granted by the Company; and neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any securities of the Company;

(i) All outstanding shares of capital stock of the Bank are owned by
the Company free and clear of any perfected security interest and any other
security interests, claims, liens or encumbrances; and, other than the Bank, the
Company does not own or control, directly or indirectly, any corporation,
association or other entity;

(j) The Securities have been duly authorized and, when issued and
delivered against payment therefor as provided herein, will be validly issued
and fully paid and nonassessable and will conform to the description of the
Securities contained in the Prospectus;

(k) The issuance and sale of the Securities being issued at each
Delivery Date (as hereinafter defined) by the Company and the performance of
this Agreement and the consummation by the Company of the other transactions
herein contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or the Bank pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Company
or the Bank is a party or by which the Company or the Bank is bound or to which
any of the property or assets of the Company or the Bank is subject, nor will
such action result in any violation of the provisions of the Articles of
Incorporation or By-laws of the Company or the Bank or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or the Bank or any of their properties; and no
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issuance
and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, except such consents, approvals,
authorizations, orders, registrations or qualifications as may be required under
the Act, under state securities or Blue Sky laws, and under the rules of the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the purchase and distribution of the Securities by the Underwriter;

(l) There are no legal or governmental proceedings pending to which the
Company or the Bank is a party or of which any their property or assets is
subject, which, if determined adversely to the Company or the Bank, would
individually or in the aggregate, have a material adverse effect on the
financial position, shareholders' equity or results of operations of the Company
and the Bank taken as a whole and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
by others;

(m) KPMG Peat Marwick LLP, which has certified certain financial
statements of the Company and the Bank, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder;

(n) All employee benefit plans established, maintained or contributed
to by the Company or the Bank comply in all material respects with all
applicable requirements of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") and no such plan has incurred or assumed an "accumulated
funding deficiency" within the meaning of Section 302 of ERISA or has incurred
or assumed any material liability to the Pension Benefit Guaranty Corporation;

(o) The consolidated financial statements of the Company, together with
related notes, as set forth in the Registration Statement present fairly the
consolidated financial position and the results of operations of the Company at
the indicated dates and for the indicated periods; such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods presented except as noted in such
financial statements and the notes thereon, and all adjustments necessary for a
fair presentation of results for such periods have been made; and the selected
financial information included in the Prospectus presents fairly the information
shown therein and has been compiled on a basis consistent with the financial
statements presented therein;

(p) The Company and the Bank have filed all federal, state, local and
foreign income and franchise tax returns that have been required to filed (or
have received extensions with respect thereto) other than those filings being
contested in good faith, and have paid, or made adequate reserves for, all taxes
indicated by said returns and all assessments received by them to the extent
that such taxes have become due and are not being contested in good faith;

(q) No relationship, direct or indirect, exists between or among the
Company and the Bank, on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or the Bank, on the other
hand, that is required by the Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or by the rules and regulations under either of
such acts to be described in the Registration Statement and the Prospectus which
is not so described;

(r) The Company and the Bank have not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities;

(s) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company in accordance with its terms; and

(t) The Securities have been approved for trading, subject to notice of
issuance, on the SmallCap Market of the Nasdaq System.

2. Purchase and Sale of the Securities.

Subject to the terms and conditions herein set forth, (a) the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, at a purchase price per share of $_____, the Firm Securities and
(b) in the event and to the extent that the Underwriter shall exercise its
election to purchase the Optional Securities as provided below, the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, at the purchase price set forth in clause (a) of this Section 2,
that portion of the Optional Securities as to which such election shall have
been exercised.

The Company grants the Underwriter the right to purchase at its
election up to 45,000 Optional Securities, at the purchase price per share set
forth in the preceding paragraph, for the sole purpose of covering
overallotments in the sale of the Firm Securities. Any such election to purchase
the Optional Securities may be exercised no more than once by written notice
from you to the Company, given within a period of 30 days after the date of this
Agreement, setting forth the aggregate amount of the Optional Securities to be
purchased and the date on which such Optional Securities are to be delivered, as
determined by you but in no event earlier than the First Delivery Date (as
defined in Section 4 hereof) or, unless you otherwise agree in writing, earlier
than two or later than seven business days after the date of such notice.

3. Offering by the Underwriter

Upon authorization by you of the release of the Firm Securities, the
Underwriter proposes to offer the Firm Securities for sale upon the terms and
conditions set forth in the Prospectus.

4. Delivery and Payment.

Certificates in definitive form for the Securities to be purchased by
the Underwriter hereunder, and in such denominations and registered in such
names as you may request upon at least two business days' prior notice to the
Company, shall be delivered by or on behalf of the Company to you for the
account of each Underwriter, against payment of the purchase price therefor by
certified or official bank check in next day funds (unless the Company desires
settlement in same day funds, in which case the Company shall pay the
Underwriter for any costs associated with settlement in same day funds), all at
the offices of Scott & Stringfellow, Inc., 909 East Main Street, Richmond,
Virginia. The time and date of such delivery and payment shall be, with respect
to the Firm Securities, 10:00 a.m., Richmond, Virginia time, on
__________________, 1996, or at such other time and date as you and the Company
may agree upon writing and, with respect to the Optional Securities, 10:00 a.m.,
Richmond, Virginia time, on the date specified by you in the written notice of
the Underwriter's election to purchase such Optional Securities, or at such
other time and date as you and the Company may agree upon in writing. Such time
and date for delivery of the Firm Securities is herein called the "First
Delivery Date," such time and date for delivery of the Optional Securities, if
not the First Delivery Date, is herein called the "Second Delivery Date," and
each such time and date for delivery is herein called a "Delivery Date." Such
certificates will be made available to the Underwriter for checking and
packaging at least twenty-four hours prior to each Delivery Date at the offices
of Scott & Stringfellow, Inc. in Richmond, Virginia or such other location as
you may designate.

5. Agreements of the Company.

The Company agrees with the Underwriter:

(a) To prepare the Prospectus in a form reasonably approved by you and
to file such Prospectus pursuant to Rule 424(b) under the Act within the time
period prescribed or, if applicable, such earlier time as may be required by
Rule 430A under the Act; to make no amendment or supplement to the Registration
Statement or Prospectus which shall be reasonably disapproved by you promptly
after reasonable notice thereof; to advise you, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies thereof; to
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission subsequent to the date
of the Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities; to advise you, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal;

(b) Promptly from time to time to take such actions as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you have requested and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;

(c) To furnish the Underwriter with copies of the Registration
Statement and the Prospectus in such quantities as you may from time to time
reasonably request during such period following the date hereof as a prospectus
is required to be delivered in connection with offers or sales of Securities,
and, if the delivery of a prospectus is required and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in order to comply with
the Act, to notify you and upon your request prepare and furnish without charge
to the Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or effect such
compliance;

(d) As soon as practicable, but not later than the Availability Date
(as defined below), to make generally available to its security holders and
deliver to you an earnings statement covering a period of at least 12 months
beginning after the effective date of the Registration Statement which will
satisfy the provisions of Section 11(a) of the Act (for the purpose of this
subsection 5(d) only, "Availability Date" means the 45th day after the end of
the fourth fiscal quarter following the fiscal quarter that includes the
effective date of the Registration Statement, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year, "Availability Date"
means the 90th day after the end of such fourth fiscal quarter);

(e) To furnish to the holders of the Securities as soon as practicable
after the end of the each fiscal year an annual report (including a balance
sheet and statements of operations, changes in stockholders' equity and cash
flows of the Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), consolidated
summary financial information of the Company and its consolidated subsidiaries
for such quarter in reasonable detail;

(f) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed or the
National Association of Securities Dealers, Inc.; and (ii) such additional
information concerning the business and financial condition of the Company as
you may from time to time reasonably request;

(g) For a period of 90 days from the effective date of the Registration
Statement, not to offer, sell, contract to sell or otherwise dispose of any
securities of the Company which are substantially similar to the Securities
(other than the Securities or pursuant to (i) employee stock option or
stockholder dividend reinvestment plans, (ii) merger and acquisition
transactions, or (iii) currently outstanding warrants) without your prior
written consent;

(h) To apply the net proceeds from the sale of the Securities for
the purposes set forth in the Prospectus; and

(i) To use its best efforts to cause the Common Stock to be approved
for quotation on the Nasdaq SmallCap Market (the "Nasdaq System").

6. Payment of Expenses.

The Company agrees with the Underwriter that the Company will pay or
cause to be paid the following, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriter and dealers; (ii) the cost of printing or reproducing
this Agreement, the Blue Sky Survey and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriter in connection
with such qualification and in connection with the Blue Sky Survey; (iv) the
filing fees incident to securing any required review by the NASD of the terms of
the sale of the Securities; (v) the cost of preparing stock certificates; (vi)
the costs or expenses of any transfer agent or registrar; (vii) all fees
relating to the quotation of the Securities on the Nasdaq System; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that except as provided in this Section, Section 8 and
Section 10 hereof, the Underwriter will pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Securities by them, and any advertising expenses connected with any offers
they may make.

7. Conditions to Obligations of the Underwriter.

The obligations of the Underwriter hereunder, as to the Securities to
be delivered at each Delivery Date, shall be subject, in its discretion, to the
condition that all representations and warranties and other statements of the
Company are, at and as of the date hereof and each Delivery Date, true and
correct and the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:

(a) The Registration Statement is effective; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and within the
time period required by Rule 424(b); no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or, to the knowledge of the Company,
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;

(b) On each Delivery Date, LeClair Ryan, counsel for the Underwriter,
shall have furnished to you such opinion or opinions, dated such dates, with
respect to the incorporation of the Company, the validity of the Securities
being issued on such Delivery Date, the Registration Statement, the Prospectus,
and other related matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;

(c) On each Delivery Date, Venable, Baetjer and Howard, LLP, counsel
for the Company, shall have furnished to you their written opinion, dated such
dates, in form and substance satisfactory to you, to the effect that:

(i) The Company and the Bank have been duly incorporated and
are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, with corporate power
and authority to own or lease their respective properties and conduct
their businesses as described in the Prospectus; and the Company and
the Bank are duly qualified to do business and are in good standing in
each jurisdiction in which it owns or leases properties or conducts
business so as to require such qualification;

(ii) The Company has an authorized capitalization as set forth
under the caption "Description of Capital Stock" in the Prospectus, and
all of the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and nonassessable and
conform to the description contained in the Prospectus; there are no
preemptive or similar rights to subscribe for or to purchase any
securities of the Company under the Articles of Incorporation of the
Company or under Virginia law; except as described in the Prospectus,
there are no warrants or options to purchase any securities of the
Company which have been granted by the Company; to the best of such
counsel's knowledge, neither the filing of the Registration Statement
nor the offering or sale of the Securities as contemplated by this
Agreement gives rise to any rights for or relating to the registration
of any securities of the Company; and the form of the certificates
evidencing the Securities complies with all formal requirements of
Virginia law;

(iii) The Registration Statement has been declared effective
under the Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or
threatened under the Act;

(iv) The Securities have been duly authorized and, when issued
and delivered against payment therefor as provided herein, will be
validly issued and fully paid and nonassessable and conform to the
description of the Securities contained in the Prospectus, as amended
or supplemented;

(v) All outstanding shares of capital stock of the
Bank are owned by the Company free and clear of any perfected
security interests, claims, liens or encumbrances;

(vi) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending to which the Company or the
Bank is a party or of which any property or assets of the Company or
the Bank is subject which, if determined adversely to the Company or
Bank, would individually or in the aggregate, have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and the Bank taken as a whole; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;

(vii) This Agreement has been duly authorized, executed and
delivered by the Company;

(viii) The issue and sale of the Securities and the
performance of this Agreement by the Company and the consummation of
the other transactions contemplated by this Agreement will not result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or Bank pursuant to, any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or Bank is a party or by which the Company
or Bank is bound or to which any of the property or assets of the
Company or Bank is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation or By-laws
of the Company or of any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body having
jurisdiction over the Company or Bank or any of their properties;

(ix) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is
required for the issuance and sale of the Securities by the Company or
the consummation by the Company of the other transactions contemplated
by this Agreement, except such as have been obtained under the Act,
such as may be required under state securities or Blue Sky laws, and
under the rules of the NASD in connection with the purchase and
distribution of the Securities by the Underwriter; and

(x) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior to
such Delivery Date (other than the financial statements and related
schedules and other financial and statistical information included
therein and information furnished for use therein by the Underwriter,
as to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Act and the rules
and regulations thereunder; nothing has come to their attention which
leads them to believe that, as of the effective date of the
Registration Statement and as of each Delivery Date, either the
Registration Statement or the Prospectus or, as of its date, any
further amendment or supplement thereto made by the Company prior to
the Delivery Date (in each case, other than the financial statements
and the related schedules and other financial and statistical
information included therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. With respect to such statement,
such counsel may state that their belief is based upon the procedures
set forth therein, but is without independent check or verification.

In rendering such opinion, such counsel may rely as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the Company and
the Bank and public officials.

(d) At 10:00 a.m., Richmond, Virginia time, on the date of this
Agreement and also at each Delivery Date, KPMG Peat Marwick LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex I hereto;

(e) (i) Neither the Company nor the Bank shall have sustained since the
date of the latest audited financial statements included in the Prospectus, any
loss or interference with their business taken as a whole from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or expressly contemplated in the Prospectus, and (ii) since the respective
dates as of which information is given in the Prospectus there shall not have
been any change in the capital stock or long-term debt of the Company or the
Bank or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, shareholders'
equity or results of operation of the Company or the Bank taken as a whole
otherwise than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is in your judgment so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities being issued at such
Delivery Date on the terms and in the manner contemplated by the Prospectus; and

(f) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or the Nasdaq System; (ii) a general
moratorium on commercial banking activities in New York or Virginia declared by
federal, New York State or Virginia authorities; (iii) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if any such event specified in
this clause (iii) would have such a materially adverse effect, in your judgment,
as to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities on the terms and in the manner contemplated in
the Prospectus; or (iv) such a material adverse change in general economic,
political, financial or international conditions affecting financial markets in
the United States having a material adverse impact on trading prices of
securities in general, as, in your judgment, makes it impracticable or
inadvisable to proceed with the offering or delivery of the Securities on the
terms and in the manner contemplated in the Prospectus; or (v) any suspension of
trading of the Company's Common Stock on the Nasdaq System;.

(g) The Company shall have furnished or caused to be furnished to you
copies of agreements between the Company and each of the executive officers and
directors of the Company specified by you, in form and content satisfactory to
you, pursuant to which such persons agree not to offer, sell, or contract to
sell, or otherwise dispose of, any shares of Common Stock beneficially owned by
them or any securities convertible into, or exchangeable for, Common Stock on or
before the 90th day after the date of this Agreement without your prior written
consent;

(h) The Company shall have furnished or caused to be furnished to you
on the date of this Agreement and on the Delivery Date certificates of officers
of the Company satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of the date hereof and the Delivery
Date, as to the performance by the Company of all of its obligations hereunder
to be performed at or prior to the Delivery Date, as to the matters set forth in
subsections (a) and (e) of this Section and as to such other matters as you may
reasonably request; and

(i) The Common Stock shall have been approved for trading on the
Nasdaq System.

8. Indemnification and Contribution.

(a) The Company will indemnify and hold harmless the Underwriter
against any losses, claims damages or liabilities, joint or several, to which
the Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any breach of any representation, warranty, agreement
or covenant of the Company herein contained or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the Underwriter
for any legal or other expenses reasonably incurred by it in connection with
investigating, preparing to defend or defending, or appearing as a third party
witness in connection with, any such action or claims as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by you expressly
for use therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.

(b) The Underwriter will indemnify and hold harmless the Company
against any losses, claims damages or liabilities, joint or several, to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, Registration Statement or Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you expressly
for use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating, preparing
to defend or defending, or appearing as a third party witness in connection
with, any such action or claim as such expenses are incurred. This indemnity
agreement will be in addition to any liability which the Underwriter may
otherwise have. The Company acknowledges that for purposes of this Section 8 the
statement set forth in first sentence of the last paragraph on the cover page of
the Prospectus, the statement on page 2 of the Prospectus concerning
stabilization and over-allotment by the Underwriter, and under the heading
"Underwriting" in the Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by you for inclusion in the Preliminary
Prospectus or the Prospectus, and you confirm that such statements are correct.

(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection, unless and to the extent that such
indemnifying party did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; provided, however, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that representation of such
indemnified party and the indemnifying party would present such counsel with a
conflict of interest under applicable standards of professional conduct due to
actual or potential differing interests between them, the indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. It is understood that the
indemnifying party shall, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm or attorneys together with appropriate
local counsel at any time for all indemnified parties not having actual or
potential differing interests with any indemnified party. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
appoint counsel to defend such action and approval by the indemnified party of
such counsel, the indemnifying party will not be liable for any settlement
entered into without its consent and will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii). Notwithstanding the immediately preceding sentence and the
third preceding sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement.

(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriter on
the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriter on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
and footnote (3) thereto on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Underwriter on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriter agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. Notwithstanding the
provisions of this subsection (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriter' obligations under this subsection (f) are
several in proportion to their respective underwriting obligations and not
joint.

(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director, employee and
agent of the Underwriter and each person, if any, who controls the Underwriter
within the meaning of the Act; and the obligations of the Underwriter under this
Section 8 shall be in addition to any liability which the Underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.

9. Representations and Warranties to Survive.

The respective indemnities, agreements, representations, warranties and
other statements of the Company and the Underwriter, as set forth in this
Agreement or made by them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation (or any statement as to the results
thereof) made by the Underwriter or any controlling person of the Underwriter,
or the Company, or any officer or director or controlling person of the Company,
and shall survive delivery of and payment for the Securities.

10. Termination and Payment of Expenses.

(a) This Agreement shall be subject to termination in your absolute
discretion, by notice given to the Company prior to the delivery of any payment
for the Securities, if prior to such time there shall have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or the Nasdaq System; (ii) a general
moratorium on commercial banking activities in New York or Virginia declared by
federal, New York State or Virginia authorities; (iii) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if any such event specified in
this clause (iii) would have such a materially adverse effect, in your judgment,
as to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities on the terms and in the manner contemplated in
the Prospectus; (iv) such a material adverse change in general economic,
political, financial or international conditions affecting financial markets in
the United States having a material adverse impact on trading prices of
securities in general, as, in your judgment, makes it impracticable or
inadvisable to proceed with the payment for and delivery of the Securities on
the terms and in the manner contemplated in the Prospectus; or (v) any
suspension of trading of the Company's Common Stock on the Nasdaq System.

(b) If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to the Underwriter except as
provided in Section 6 and Section 8 hereof; but if for any other reason the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriter set forth in Section 7 hereof is not
satisfied, because of any termination pursuant to this Section 10 or because of
any refusal, inability or failure on the part of the Company to perform any
agreements herein or comply with the provisions hereof other than by reason of a
default by the Underwriter, the Company will be responsible for and will
reimburse the Underwriter upon demand for all out-of-pocket expenses, including
fees and disbursements of counsel, reasonably incurred by the Underwriter in
connection with the proposed purchase, sale and delivery of the Securities.
Nothing in this Section 10 shall be deemed to relieve the Underwriter of its
liability, if any, to the Company for damages occasioned by its default
hereunder.

11. Notices.

All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriter shall be sufficient in all respects if delivered or sent by mail,
telex or facsimile transmission to Scott & Stringfellow, Inc., 909 East Main
Street, Richmond, Virginia 23219, Attention: Corporate Finance Department; and
if to the Company shall be sufficient in all respects if delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Prospectus, Attention: Terrie G. Spiro. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.

12. Successors.

This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriter and the Company and, to the extent provided in Sections 8
and 10 hereof, the officers and directors of the Company, the officers and
directors, employees and agents of the Underwriter and each person who controls
the Company or the Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from the Underwriter shall be deemed a successor or assign by reason
merely of such purchase.

13. Time of the Essence.

Time shall be of the essence in this Agreement.

14. Business Day.

As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.

<PAGE>

15. Applicable Law.

This Agreement shall be construed in accordance with the laws of the
State of New York.

16. Captions.

The captions included in this Agreement are included solely for
convenience of reference and shall not be deemed to be a part of this Agreement.

17. Counterparts.

This Agreement may be executed by any one or more of the parties in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.

If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Underwriter and the Company.

Very truly yours,

TYSONS FINANCIAL CORPORATION

By: ____________________________
Terrie G. Spiro
President and Chief Executive Officer

Accepted as of the date hereof at Richmond, Virginia:

SCOTT & STRINGFELLOW, INC.

By: __________________________
Name: _______________________
Title: ________________________

<PAGE>

ANNEX I

Pursuant to Section 7(d) of the Underwriting Agreement, KPMG Peat
Marwick LLP shall furnish letters to the Underwriter to the effect that:

1. They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable

published rules and regulations thereunder;

2. In their opinion, the consolidated audited financial statements
audited by them and included in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder;

3. On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the latest unaudited financial statements made available by the
Company, inspection of the minute books of the Company and the Bank since the
date of the latest audited financial statements included in the Prospectus,
inquiries of officials of the Company and the Bank responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:

(A) the unaudited consolidated financial statements included
in the Registration Statement or the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and published rules and regulations thereunder
or are not presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited consolidated financial statements included in the Registration
Statement or Prospectus;

(B) (i) as of a specified date not more than five calendar
days prior to the date of delivery of such letter, there have been any
changes in the capital stock, short-term debt or long-term debt of the
Company, or any decreases in consolidated total assets or stockholders'
equity as compared with amounts shown on the most recent consolidated
balance sheet included in the Registration Statement or Prospectus, and
(ii) for the period from the date of the most recent consolidated
financial statements included in the Registration Statement or
Prospectus to such specified date there were any decreases in
consolidated net interest income or the total or per share amounts of
net income as compared with the corresponding period in the preceding
year, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and

4. In addition to the audit referenced in their report included in the
Registration Statement and the Prospectus and the limited procedures, inspection
of minute books, inquiries and other procedures referred to above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information which are derived from the
general accounting records of the Company and the Bank, which appear in any
Preliminary Prospectus, the Prospectus, or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representative, and
have compared certain of such amounts, percentages and financial information
with the accounting records of the Company and have found them to be in
agreement.

AMENDED AND RESTATED

BYLAWS

TYSONS FINANCIAL CORPORATION

(Last Revised April 17, 1996)

<PAGE>

BYLAWS

TABLE OF CONTENTS

ARTICLE ONE - OFFICES.......................................................1

Section 1.1 Registered Office............................................1

Section 1.2 Other Offices................................................1

ARTICLE TWO - SHAREHOLDERS MEETINGS.........................................1

Section 2.1 Place of Meetings............................................1

Section 2.2 Annual Meetings..............................................1

Section 2.3 Substitute Annual Meetings...................................1

Section 2.4 Special Meetings.............................................1

Section 2.5 Notice of Meetings...........................................1

Section 2.6 Quorum.......................................................2

Section 2.7 Voting of Shares.............................................2

Section 2.8 Proxies......................................................2

Section 2.9 Presiding Officer............................................2

Section 2.10 Adjournments................................................3

Section 2.11 [Reserved]..................................................3

Section 2.12 Nominations of Directors....................................3

Section 2.13 Matters Considered at Annual Meetings.......................4

Section 2.14 Proposals by Shareholders...................................5

ARTICLE THREE - THE BOARD OF DIRECTORS......................................5

Section 3.1 General Powers...............................................5

Section 3.2 Requirements.................................................5

Section 3.3 Number and Election..........................................5

Section 3.4 Staggered Board of Directors and Terms of Office.............5

Section 3.5 Oath of Directors............................................6

Section 3.6 Removal......................................................6

Section 3.7 Vacancies....................................................6

Section 3.8 Compensation.................................................6

Section 3.9 Committees of the Board of Directors.........................6

Section 3.10 Honorary and Advisory Directors.............................6

ARTICLE FOUR - MEETINGS OF THE BOARD OF DIRECTORS...........................7

Section 4.1 Regular Meetings.............................................7

Section 4.2 Special Meetings.............................................7

Section 4.3 Place of Meetings............................................7

Section 4.4 Notice of Meetings...........................................7

Section 4.5 Quorum.......................................................7

Section 4.6 Vote Required for Action.....................................7

Section 4.7 Action by Directors Without a Meeting........................8

ARTICLE FIVE - NOTICE AND WAIVER............................................8

Section 5.1 Procedure....................................................8

Section 5.2 Waiver.......................................................8

ARTICLE SIX - OFFICERS......................................................8

Section 6.1 Number.......................................................8

Section 6.2 Election and Term............................................9

Section 6.3 Compensation.................................................9

Section 6.4 Removal......................................................9

Section 6.5 Chairman of the Board........................................9

Section 6.6 President....................................................9

Section 6.7 Officer in Place of President................................9

Section 6.8 Secretary....................................................9

Section 6.9 Treasurer....................................................9

ARTICLE SEVEN - DIVIDENDS..................................................10

Section 7.1 Time and Conditions of Declaration..........................10

Section 7.2 Share Dividends.............................................10

ARTICLE EIGHT - SHARES.....................................................10

Section 8.1 Authorization and Issuance of Shares........................10

Section 8.2 Share Certificates..........................................10

Section 8.3 Rights of Corporation With Respect to Registered Owners.....11

Section 8.4 Transfer of Shares..........................................11

Section 8.5 Duty of Corporation to Register Transfer....................11

Section 8.6 Lost, Stolen, or Destroyed Certificates.....................11

Section 8.7 Fixing of Record Date.......................................12

Section 8.8 Record Date if None Fixed...................................12

ARTICLE NINE - LIMITATION OF LIABILITY OF

OFFICERS AND DIRECTORS.....................................................12

Section 9.1 Limited Liability...........................................12

Section 9.2 Exceptions to Limited Liability.............................12

Section 9.3 Limitation or Elimination of Liability......................13

ARTICLE TEN - INDEMNIFICATION..............................................13

SECTION 10.1 Indemnification...............................................13

Section 10.2 Indemnification for Certain Actions........................13

Section 10.3 Mandatory Indemnification..................................14

Section 10.4 Findings of Indemnification................................14

Section 10.5 Payment of Expenses in Advance.............................14

ARTICLE ELEVEN - MISCELLANEOUS.............................................15

Section 11.1 Inspection of Books and Records............................15

Section 11.2 Fiscal Year................................................16

Section 11.3 Seal.......................................................16

Section 11.4 Annual Statements..........................................16

Section 11.5 Contracts, Checks, Drafts, Reports, Etc....................16

Section 11.6 Legal Restrictions.........................................16

Section 11.7 Conflict...................................................16

ARTICLE TWELVE - AMENDMENTS................................................17

Section 12.1 Power to Amend By-Laws.....................................17

Section 12.2 Conditions.................................................17

Section 12.3 Inspection.................................................17

<PAGE>

ARTICLE ONE

Offices

Section 1.1 Registered Office. The corporation will maintain its
registered office in Fairfax County, Virginia. In the event the main office is
relocated then the registered office will follow the main office and will be
designated by the Board of Directors.

Section 1.2 Other Offices. In addition to the registered office, the
corporation also may have offices at such other place or places as the Board of
Directors may from time to time select, or as the business of the corporation
may require or make desirable.

ARTICLE TWO

Shareholders Meetings

Section 2.1 Place of Meetings. Meetings of the shareholders of the
corporation may be held at any place as set forth in the notice thereof or if no
place is so specified, then at the registered office of the corporation.

Section 2.2 Annual Meetings. The annual meeting of the shareholders of
the corporation will be held at a time determined by resolution of the Board of
Directors for the purpose of electing directors and transacting any and all
business that may properly come before the meeting.

Section 2.3 Substitute Annual Meetings. If the annual meeting is not
held on the day designated in Section 2.2, any business, including the election
of directors, which might properly have been acted upon at the meeting may be
transacted at any subsequent shareholders meeting held pursuant to these by-laws
or held pursuant to a court order requiring a substitute annual meeting.

Section 2.4 Special Meetings. Special meetings of shareholders or a
special meeting in lieu of the annual meeting of shareholders may be called at
any time by the President, Chairman of the Board, or the Board of Directors.

Section 2.5 Notice of Meetings. Unless waived as contemplated in
Section 5.2, or by attendance at the meeting, either in person or by proxy, for
any purpose other than to object at the beginning of the meeting to the
transaction of business at the meeting, a written or printed notice of each
shareholders meeting stating the place, day and hour of the meeting will be
delivered not less than ten days, nor more than sixty days, before the date
thereof, except that notice of a shareholders meeting to act on an amendment of
the articles of incorporation, a plan of merger or share exchange, a proposed
sale of assets pursuant to Virginia Stock Corporation Act, ss. 13.1-724, or the
dissolution of the corporation shall be given not less than twenty-five (25) nor
more than sixty (60) days before the meeting date. Notice of meetings will be
delivered personally, by mail, or by telegram, charges prepaid, by or at the
direction of the Chairman, President, Secretary, or the officer or persons
calling the meeting, to each shareholder of record entitled to vote at such
meeting. In the case of an annual or substitute annual meeting, the notice of
the meeting need not state the purpose or purposes of the meeting unless the
purpose or purposes constitute a matter which the Virginia Stock Corporation
Code requires to be stated in the notice of the meeting. In the case of a
special meeting, the notice of the meeting shall state the general nature of the
business to be transacted and the purpose or purposes for which the meeting is
called.

Section 2.6 Quorum. At all meetings of the shareholders, the presence,
in person or by proxy, of the holders of more than a majority of the shares
outstanding and entitled to vote will constitute a quorum. If a quorum is
present, action on a matter (other than the election of directors) is approved
if the votes cast in favor of the action exceed the votes cast opposing the
action unless a different vote is required by the Virginia Stock Corporation
Code, by the articles of incorporation of the corporation or by these by-laws.
Directors are elected by a plurality of the votes cast by the shares entitled to
vote in the election at a meeting at which a quorum is present. The shareholders
at a meeting at which a quorum is once present may continue to transact business
at the meeting or at any adjournment thereof, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum. If a meeting cannot be
organized for lack of a quorum, those shareholders present may adjourn the
meeting to such time and place as they may determine.

Section 2.7 Voting of Shares. Each outstanding share having voting
rights will be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders. Voting on all matters will be by voice vote or by show
of hands unless any qualified voter, prior to the voting on any matter, demands
vote by ballot, in which case each ballot will state the name of the shareholder
voting and the number of shares voted by him, and if such ballot be cast by
proxy, it shall also state the name of such proxy.

Section 2.8 Proxies. A shareholder entitled to vote pursuant to Section
2.7 may vote in person or by proxy executed in writing by the shareholder or by
his attorney in fact. A proxy will not be valid after eleven months from the
date of its execution, unless a longer period is expressly stated therein. If
the validity of any proxy is questioned it must be submitted to the secretary of
the shareholders meeting for examination or to a proxy officer or committee
appointed by the person presiding at the meeting. The secretary of the meeting
or, if appointed, the proxy officer or committee, will determine the validity of
any proxy submitted and references by the secretary in the minutes of the
meeting to the regularity of a proxy will be received as prima facie evidence of
the facts stated for the purpose of establishing the presence of a quorum at
such meeting and for all other purposes.

Section 2.9 Presiding Officer. The Chairman of the Board of Directors
or, in the absence of a Chairman of the Board of Directors, the President, will
serve as chairman of every shareholders meeting unless some other person is
elected to serve as chairman by a majority vote of the shares represented at the
meeting. The chairman will appoint such persons as he deems required to assist
with the meeting.

Section 2.10 Adjournments. Any meeting of the shareholders, whether or
not a quorum is present, may be adjourned by the holders of a majority of the
voting shares represented at the meeting to reconvene at a specific time and
place. Except as otherwise provided by Section 2.6, or unless the meeting is
adjourned under circumstances where a new record date is or must be set, it
shall not be necessary to give any notice of the reconvened meeting or of the
business to be transacted, if the time and place of the reconvened meeting are
announced at the meeting which was adjourned. At any such reconvened meeting,
any business may be transacted which could have been transacted at the meeting
which was adjourned.

Section 2.11 [Reserved]

Section 2.12 Nominations of Directors.

(a) Nominations by Shareholders. Nominations, other than those
made by or on behalf of the existing management of the
Company, shall be made by a shareholder who is entitled to
vote for the nominee at the subject election, shall be in
writing, and shall be delivered or mailed to the president of
the Company not less than 120 days in advance of the date of
the Company's proxy statement released to shareholders in
connection with the previous year's annual meeting of
shareholders. Such notification shall contain the following
information:

(1) The name, age and business and residence
addresses of each proposed nominee.

(2) The principal place of business or
occupation of each proposed nominee during
the last five years.

(3) With respect to each proposed nominee, any
affiliation with or material interest in the
Company or any transaction involving the
Company, and any affiliation with or
material interest in any person or entity
having an interest materially adverse to the
Company.

(4) The name and residence address of the
notifying shareholder.

(5) The number of shares of common stock of the
Company owned by the notifying shareholder.

(6) The sworn or certified statement of the
shareholder that the nominating shareholder
is entitled to vote for the election of the
nominee at the subject meeting, that the
nominee has consented to being nominated,
and that the shareholder believes the
nominee will stand for election and serve if
elected.

(b) Additional Nomination Requirements. Notwithstanding
subsection (a) of this Section 2.12, if the Company or any
banking subsidiary of the Company is subject to the
requirements of Section 914 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989, then no person
may be nominated by a shareholder for election as a director
of any meeting of shareholders unless the shareholder
furnishes the written notice required by subsection (a) of
this Section 2.12 to the secretary of the Company at least 60
days prior to the date of the meeting and the nominee has
received regulatory approval to serve as a director prior to
the date of the meeting.

(c) Procedures. The chairman of any meeting of shareholders at
which one or more directors are to be elected may disregard
any nomination not made in accordance with this Section 2.12,
and upon the chairman's instructions, the vote tellers shall
disregard all votes cast for such nominees. The chairman of
any such meeting, for good cause shown and with proper regard
for the orderly conduct of business at the meeting, may waive
in whole or in part the operation of this Section 2.12.

Section 2.13 Matters Considered at Annual Meetings. Notwithstanding
anything to the contrary in these Bylaws, the only business that may be
conducted at an annual meeting of shareholders shall be business brought before
the meeting (a) by or at the direction of the Board of Directors prior to the
meeting, (b) by or at the direction of the Chairman of Board or the President,
or (c) by a shareholder of the Company who is entitled to vote with respect to
the business and who complies with the notice procedures set forth in this
Section 2.13. For business to be brought properly before an annual meeting by a
shareholder, the shareholder must have given timely notice of the business in
writing to the Secretary of the Company. To be timely, a shareholder's notice
shall be delivered or mailed to and received at the principal offices of the
Company not less than 120 days in advance of the date of the Company's proxy
statement released to shareholders in connection with the previous year's annual
meeting of shareholders except that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed by more than 30
calendar days from the date contemplated at the time of the previous year's
proxy statement, a nomination shall be delivered or mailed to and received at
the principal offices of the Company a reasonable time before the solicitation
is made.

Section 2.14 Proposals by Shareholders. If any shareholder of the
Company notifies the Company that such shareholder intends to present a proposal
for action at a forthcoming meeting of the Company's shareholders and requests
that the Company include the proposal in its proxy statement and such
shareholder complies with all the requirements of Rule 14a-8 promulgated under
the Securities Exchange Act of 1934, the Company shall consider inclusion of
such proposal in the proxy statement unless it determines that the proposal is
inappropriate for consideration by the shareholders at the meeting.

ARTICLE THREE

The Board of Directors

Section 3.1 General Powers. All corporate powers will be exercised by
or under the authority of, and the business and affairs of the corporation will
be managed under the direction of, the Board of Directors. In addition to the
powers and authority expressly conferred upon it by these by-laws, the Board of
Directors may exercise all such powers of the corporation, except for any action
as may be required by law, by any legal agreement among shareholders, by the
articles of incorporation, or by these by-laws to be taken or done by the
shareholders.

Section 3.2 Requirements. Each director of the corporation will be a
natural person eighteen years of age or older and will be a United States
citizen, but need not be a resident of the State of Virginia.

Section 3.3 Number and Election. The Board of Directors of the
corporation will never at any one time consist of less than five or more than
twenty-five individuals, with the exact number to be fixed and determined from
time to time by resolution of the Board of Directors or by resolution of the
shareholders at any annual or special meeting of the shareholders. Except as
provided in Section 3.7, the directors will be elected by a plurality of votes
cast by the shares entitled to vote in the election at the annual meeting of
shareholders in which a quorum is present.

Section 3.4 Staggered Board of Directors and Terms of Office. The terms
of office of directors will be staggered by dividing the total number of
directors into three classes, with each class accounting for one-third, as near
as may be, of the total. The terms of directors in the first class expire at the
first annual shareholders meeting after their election, the terms of the second
class expire at the second annual shareholders meeting after their election, and
the terms of the third class expire at the third annual shareholders meeting
after their election. At each annual shareholders meeting held thereafter,
directors shall be chosen for a term of three years to succeed those whose terms
expire. If the number of directors is changed, any increase or decrease shall be
so apportioned among the classes as to make all classes as nearly equal in
number as possible, and when the number of directors is increased and any newly
created directorships are filled by the board, the terms of the additional
directors shall expire at the next election of directors by the shareholders.
Each director, except in the case of his earlier death, written resignation,
retirement, disqualification or removal, shall serve for the duration of his
term, as staggered, and thereafter until his successor shall have been elected
and qualified.

Section 3.5 Oath of Directors. Before assuming office, each director
will take an oath or affirmation that he will diligently and honestly perform
his duties in the administration of the corporation and that he will not permit
a willful violation of laws by the corporation.

Section 3.6 Removal. The entire Board of Directors or any individual
director may be removed from office with or without cause by the affirmative
vote of the holders of a majority of the shares entitled to vote at an election
of directors. A director may be removed by the shareholders only at a meeting
called for the purpose of removing the director and the meeting notice must
state that the purpose, or one of the purposes of the meeting, is removal of the
director.

Section 3.7 Vacancies. A vacancy occurring in the Board of Directors
through death, written resignation, retirement, disqualification or removal may
be filled by the affirmative vote of a majority of the directors remaining in
office though less than a quorum of the Board of Directors. The term of a
director elected by the Board of Directors to fill a vacancy expires at the next
shareholders meeting at which directors are elected.

Section 3.8 Compensation. Directors may receive such compensation for
their service as directors as may from time to time be fixed by vote of the
Board of Directors. A director may also serve the corporation in a capacity
other than that of director and receive compensation, as determined by the Board
of Directors, for services rendered in such other capacity.

Section 3.9 Committees of the Board of Directors. The Board of
Directors, by resolution adopted by a majority of a quorum of the Board of
Directors, may designate from among its members an executive committee and one
or more other committees, each consisting of one or more directors. Each
committee will have the authority of the Board of Directors in regard to the
business of the corporation to the extent set forth in the resolution
establishing such committee, subject to the limitations set forth in State and
Federal laws and regulations.

Section 3.10 Honorary and Advisory Directors. The Board of Directors of
the corporation may appoint any individual as an Honorary Director, Director
Emeritus, Advisory Director or member of any advisory board established by the
Board of Directors. Any individual so appointed by the Board of Directors will
be compensated as provided by the Board of Directors but such individual may not
vote at any meeting of the Board of Directors or be counted in determining a
quorum as provided in Section 4.5 and shall not have responsibility or be
subject to any liability imposed upon a director or otherwise be deemed a
director.

ARTICLE FOUR

Meetings of the Board of Directors

Section 4.1 Regular Meetings. An annual organizational meeting of the
Board of Directors will be held on the day of and after the annual meeting of
the shareholders of the corporation. In the event the annual shareholders
meeting is not held as provided by Section 2.2, such organizational meeting will
be held at a time as is herein provided for regular meetings. Regular meetings
of the Board of Directors will be held as otherwise provided by resolution of
the Board of Directors.

Section 4.2 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the President, Chairman of the
Board, or by any two directors in office at that time.

Section 4.3 Place of Meetings. Directors may hold their meetings at any
place within or without the State of Virginia as the Board of Directors may from
time to time establish for their regular meetings, or as set forth in the notice
of special meetings, or in the event of a meeting held pursuant to waiver of
notice, as set forth in the waiver.

Section 4.4 Notice of Meetings. No notice will be required for any
regularly scheduled meeting of the directors of the corporation. Unless waived
as contemplated in Section 5.2, the Chairman, President or Secretary of the
corporation, or any director thereof, will give notice to each director of each
special meeting stating the time, place and day of the meeting. Such notice will
be given by mailing notice of the meeting at least two days before the date of
the meeting, or by telephone, telegram, or personal delivery at least two days
before the date of the meeting. Notice will be deemed to have been given by
telegram or cablegram at the time notice is filed with the transmitting agency.
Attendance by a director at a meeting will constitute a waiver of notice of such
meeting, except where a director attends a meeting for the express purpose of
objecting at the beginning of the meeting to the transaction of business because
the meeting is not lawfully called and the director does not thereafter vote for
or assent to action taken at the meeting.

Section 4.5 Quorum. At meetings of the Board of Directors, a majority
of the directors then in office will be necessary to constitute a quorum for the
transaction of business.

Section 4.6 Vote Required for Action. Except as otherwise provided in
these by-laws, the articles of incorporation, or by law, the act of a majority
of the directors present at a meeting at which a quorum is present at the time
will be the act of the Board of Directors.

Section 4.7 Action by Directors Without a Meeting. Any action which may
be taken at any meeting of the Board of Directors, or at any meeting of a
committee of directors, may be taken without a meeting if a written consent
thereto will be signed by all directors, or all the members of the committee, as
the case may be, and if such written consent is filed with the minutes of the
proceedings of the Board or the committee. Such consent will have the same force
and effect as a unanimous vote of the Board of Directors or the committee.

ARTICLE FIVE

Notice and Waiver

Section 5.1 Procedure. Whenever these by-laws require notice to be
given to any shareholder or director, the notice will be given as prescribed in
Sections 2.5 or 4.4, whichever is applicable. Whenever notice is given to a
shareholder or director by United States mail, the notice will be sent first
class mail by depositing the same in a post office or letter box in a postage
prepaid, sealed envelope, addressed to the shareholder or director at his last
known address, and such notice will be deemed to have been given at the time the
same is deposited in the mail.

Section 5.2 Waiver. Except as limited by the Virginia Stock Corporation
Code, whenever any notice is required to be given to any shareholder or director
by law, by the articles of incorporation, or these by-laws, a waiver thereof in
the proxy of such shareholder or otherwise given in writing, whether before or
after the meeting to which the waiver pertains, will be effective and binding on
such shareholder or director; provided, however, that no such waiver will apply
by its terms to more than one required notice.

ARTICLE SIX

Officers

Section 6.1 Number. The officers of the corporation may consist of a
President, one or more Vice Presidents, Secretary and Treasurer. In addition,
the Board of Directors may from time to time elect or provide for the
appointment of such other officers or assistant officers as it deems necessary
for the efficient management of the corporation, or as will otherwise be
required by law or regulation. Duly appointed officers may also appoint one or
more officers or assistant officers. Any two or more offices may be held by the
same person. The Board of Directors will have the power to establish and specify
the duties for all officers of the corporation.

Section 6.2 Election and Term. All officers will be elected by the
Board of Directors and will serve at the will of the Board of Directors and
until their successors have been elected and have qualified, or until their
earlier death, written resignation, removal, retirement or disqualification.

Section 6.3 Compensation. The compensation of all officers of the
corporation will be fixed by the Board of Directors or by a committee of the
Board of Directors, if such committee is designated and assigned such authority
as provided in Section 3.8.

Section 6.4 Removal. Any officer or agent elected by the Board of
Directors may be removed by a majority of the Board of Directors with or without
cause without prejudice of any contract right of such officer.

Section 6.5 Chairman of the Board. The Board of Directors, in its
discretion, may elect a Chairman of the Board of Directors who will preside and
act as chairman at all meetings of the shareholders and the Board of Directors
and who will perform such other duties as the Board of Directors may from time
to time direct. The President will act as Chairman of the Board of Directors
unless another director is elected Chairman.

Section 6.6 President. The President will be the chief executive
officer of the corporation and will have general control and supervision over
the business and affairs of the corporation. He will see that all orders and
resolutions of the Board of Directors are carried into effect. He also will
perform such other duties as may be delegated to him from time to time by the
Board of Directors.

Section 6.7 Officer in Place of President. The Board of Directors may
designate an officer who will, in the absence or disability of the President, or
at the direction of the President, perform the duties and exercise the powers of
the President.

Section 6.8 Secretary. The secretary will keep accurate records of the
acts and proceedings of all meetings of shareholders, directors and committees
of directors. He shall have authority to give all notices required by law or by
these by-laws. He will be custodian of the corporate books, records, contracts
and other documents. The Secretary may affix the corporation's seal to any
lawfully executed documents requiring it and will sign such instruments as may
require his signature.

Section 6.9 Treasurer. The Treasurer will have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements, in books belonging to the corporation, and will
deposit all monies and other valuable effects in the name and to the credit of
the corporation, in such depositories as may be designated by the Board of
Directors.

ARTICLE SEVEN

Dividends

Section 7.1 Time and Conditions of Declaration. Dividends on the
outstanding shares of the corporation may be declared by the Board of Directors
at any regular or special meeting and paid in cash or property unless: 1) the
corporation would be unable to pay its debts as they come due in the usual
course of business; or 2) the corporation's total assets would be less than the
sum of its total liabilities plus the amount that would be needed, if the
corporation were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the distribution.

Section 7.2 Share Dividends. Shares may be issued pro rata and without
consideration to the shareholders. The same dividends must be fully paid and
nonassessable. If the Board of Directors does not fix the record date for
determining shareholders entitled to a share dividend, it is the date the Board
of Directors authorize the share dividend.

ARTICLE EIGHT

Section 8.1 Authorization and Issuance of Shares. The maximum number of
shares of any class of the corporation which may be issued and outstanding will
be set forth from time to time in the articles of incorporation of the
corporation. The Board of Directors may increase or decrease the number of
issued and outstanding shares of the corporation within the maximum number of
shares authorized by the articles of incorporation.

Section 8.2 Share Certificates. The interest of each shareholder in the
corporation may be evidenced by a certificate or certificates representing
shares of the corporation which will be in such form as the Board of Directors
may from time to time adopt it accordance with Virginia law. Share certificates
will reference the state of incorporation. Each certificate must be signed by
the President or a Vice President and the Secretary or an Assistant Secretary
and may be sealed with the seal of the corporation or a facsimile thereof;
provided, however, that where such certificate is signed by a transfer agent, or
registered by a registrar, the signatures of such officers may be facsimiles. In
case any officer or officers who will have signed or whose facsimile signature
will have been placed upon a share certificate will have ceased for any reason
to be such officer or officers of the corporation before such certificate is
issued, such certificate may be issued by the corporation with the same effect
as if the person or persons who signed such certificate or whose facsimile
signatures will have been used thereon had not ceased to be such officer or
officers.

Section 8.3 Rights of Corporation With Respect to Registered Owners.
Prior to due presentation for transfer or registration of its shares, the
corporation may treat the registered owner of the shares as the person
exclusively entitled to vote such shares, to receive any dividend or other
distribution with respect to such shares, and for all other purposes; and the
corporation will not be bound to recognize any equitable or other claim to or
interest in such shares on the part of any other person, whether or not it will
have express or other notice thereof, except as otherwise provided by law.

Section 8.4 Transfer of Shares. Transfers of shares will be made upon
the stock transfer books of the corporation only upon direction of the person
named in the share certificate representing the shares to be transferred, or by
an attorney of such person lawfully constituted in writing; and before a new
certificate is issued, the old certificate will be surrendered for cancellation
or, in the case of a certificate alleged to have been lost, stolen, or
destroyed, the provisions of Section 8.6 of these by-laws will have been
satisfied.

Section 8.5 Duty of Corporation to Register Transfer. Notwithstanding
any of the provisions of Section 8.4 of these by-laws, the corporation is under
a duty to register the transfers of its shares only if:

(a) the share certificate is endorsed by the appropriate
person or persons; and

(b) reasonable assurance is given that these endorsements are
genuine and effective; and

(d) any applicable law relating to the collection of taxes has
been complied with; and

(e) the transfer is in fact rightful or is to a bona fide
purchaser.

Section 8.6 Lost, Stolen, or Destroyed Certificates. Any person
claiming a share certificate to be lost, stolen, or destroyed will make an
affidavit or affirmation of the fact in such manner as the Board of Directors
may require and will, if the Board of Directors so requires, give the
corporation a bond of indemnity in form and amount, and with one or more
sureties satisfactory to the Board of Directors, as the Board of Directors may
require, whereupon an appropriate new certificate may be issued in lieu of the
one alleged to have been lost, stolen, or destroyed.

Section 8.7 Fixing of Record Date.

(a) For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors may fix
in advance a date as the record date, such date to be not more
than seventy days prior to the date on which the particular
action, requiring such determination of shareholders, is to be
taken.

(b) A determination of shareholders entitled to notice of or
to vote at a shareholders meeting is effective for any
adjournment of the meeting unless the Board of Directors fixes
a new record date which it shall do if the meeting is
adjourned to a date more than 120 days after the date fixed
for the original meeting.

(c) If a court orders a meeting adjourned to a date more than
120 days after the date fixed for the original meeting, it may
provide that the original record date continues in effect or
it may fix a new record date.

Section 8.8 Record Date if None Fixed. If no record date is fixed as
provided in Section 8.7 of these by-laws, then the record date for any
determination of shareholders which may be proper or required by law will be the
date on which notice is mailed in the case of a shareholders meeting, or the
date on which the Board of Directors adopts a resolution declaring a dividend in
the case of a payment of a dividend.

ARTICLE NINE

Limitation of Liability of Officers and Directors

Section 9.1 Limited Liability. In any proceeding brought by or in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the damages assessed against an officer of director arising out of
a single transaction, occurrence or course of conduct shall not exceed the
greater of (i) $100,000 or (ii) the amount of cash compensation received by the
officer or director from the corporation during the twelve months immediately
preceding the act or omission for which liability was imposed.

Section 9.2 Exceptions to Limited Liability. The liability of an
officer or director shall not be limited if the officer or director engaged in
unlawful distributions, willful misconduct or a knowing violation of the
criminal law or any federal or state securities law, including, without
limitation, any claim of unlawful insider trading or manipulation of the market
for any security, as set forth in Virginia Stock Corporation Act Sections
13.1-692 and 13.1-692.1.

Section 9.3 Limitation or Elimination of Liability. No limitation on or
elimination of liability may be affected by any amendment of the articles of
incorporation or by-laws with respect to any act or omission occurring before
such amendment.

ARTICLE TEN

Indemnification

Section 10.1 Indemnification. The corporation will have the power to
indemnify any person, his heirs, executors, or administrators, who was or is a
party or who is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the corporation),
by reason of the fact that he is or was a director, officer, employee, or agent
of the corporation or is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise, against judgments, penalties, fines, settlements or
reasonable expenses (including attorneys' fees) incurred by him in connection
with such action, suit or proceeding, if: 1) he conducted himself in good faith
and believed a) in the case of conduct in his official capacity with the
corporation, that his conduct was in its best interests and b) in all other
cases, that his conduct was at least not opposed to its best interests; and 2)
in the case of any criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful.

The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent will
not, of itself, create a presumption that the person did not act in a manner
which he believed in good faith to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful.

Section 10.2 Indemnification for Certain Actions. The corporation may
elect not to indemnify any person who was or is a party or who is threatened to
be made a party to any threatened, pending, or completed action or suit by, or
in the right of, the corporation to procure a judgment in its favor, by reason
of the fact that he is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise, against reasonable expenses (including attorneys' fees)
incurred by him in connection with: 1) a proceeding by or in the right of the
corporation in which he was adjudged liable to the corporation; or 2) any other
proceeding charging improper personal benefit to him, whether or not involving
action in his official capacity, in which he was adjudged liable on the basis
that personal benefit was improperly received by him.

Section 10.3 Mandatory Indemnification. To the extent that a director,
officer, employee, or agent of the corporation entirely prevails, on the merits
or otherwise, in defense of any action, suit, or proceeding referred to in the
foregoing Sections 10.1 and 10.2 of these by-laws or in defense of any claim,
issue, or matter therein, he will be indemnified against reasonable expenses
(including attorneys' fees) incurred by him in connection therewith.

Section 10.4 Findings of Indemnification. Any indemnification under
Sections 10.1 and 10.2 of these by-laws (unless ordered by a court) will be made
by the corporation only as authorized in the specific case, upon a determination
that indemnification of the director, officer, employee, or agent is proper in
the circumstances because he has met the applicable standard of conduct as set
forth in Sections 10.1 and 10.2. Such determination will be made:

(a) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action,
suit, or proceeding;

(b) if such a quorum is not obtainable, by majority vote of a
committee duly designated by the Board of Directors, (in which
designation directors who are parties may participate),
consisting solely of two or more directors not at the time
parties to the proceeding;

(c) by special legal counsel selected by the Board of
Directors or its committee or if a quorum of the Board of
Directors cannot be obtained and a committee cannot be
designated, selected by majority vote of the full Board of
Directors, in which selection directors who are parties may
participate; or

(d) by the shareholders, but shares owned by or voted under
the control of directors who are at the time parties to the
proceeding may not be voted on the determination.

Section 10.5 Payment of Expenses in Advance. Reasonable expenses
incurred in defending any action, suit, or proceeding referred to above may be
paid by the corporation in advance of the final disposition of such action,
suit, or proceeding as authorized in the specific case upon receipt of a written
affirmation of his good faith belief that he has met the appropriate standard of
conduct and furnishes a written undertaking by or on behalf of the director,
trustee, officer, employee or agent to repay such amount if it will ultimately
be determined that he is not entitled to be indemnified by the corporation as
provided above.

ARTICLE ELEVEN

Miscellaneous

Section 11.1 Inspection of Books and Records

(a) The corporation will keep a copy of the articles of
incorporation, by-laws, all amendments to the articles of
incorporation and by-laws currently in effect, resolutions
adopted by either its shareholders or Board of Directors
increasing or decreasing the number of directors, the
classification of directors, if any, and the names and
residence addresses of all members of the Board of Directors,
resolutions adopted by its Board of Directors creating one or
more classes or series of shares, and fixing their relative
rights, preferences and limitations, if shares issued pursuant
to those resolutions are outstanding and any resolutions
adopted by the Board of Directors that affect the size of the
Board of Directors, the minutes of all shareholders meetings,
executed waivers of notice of meetings, and executed written
consents evidencing all actions taken by shareholders without
a meeting for the past three years, all written communications
to shareholders generally within the past three years, a list
of the names and business addresses of its current directors
and officers, and its most recent annual report delivered to
the state corporation commission. These records will at all
times be open to inspection and copying by all shareholders,
their agents or attorneys (including a beneficial owner whose
shares are held in a voting trust or by a nominee on his
behalf) at the corporation's principal office during normal
business hours upon written notice at least five business days
before the date on which the shareholder wishes to inspect and
copy the records.

(b) A shareholder may inspect and copy excerpts from minutes
of any meeting of the Board of Directors, records of any
action of a committee of the Board of Directors while acting
in place of the Board of Directors on behalf of the
corporation, minutes of any meeting of the shareholders,
records of action taken by the shareholders or Board of
Directors without a meeting, accounting records of the
corporation, and the record of shareholders if:

(1) the shareholder has been a shareholder of record
for at least six (6) months immediately preceding his
demand or is the holder of record of at least five
(5) percent of all of the outstanding shares;

(2) the shareholder's demands are made in good faith
and for proper purpose;

(3) the shareholder describes with reasonable
particularity his purpose and the records the
shareholder desires to inspect; and

(4) the records are directly connected with the
shareholder's purpose.

The shareholder is entitled to inspect and copy the above
mentioned items during regular business hours, upon written
notice at least five (5) business days before the date on
which the shareholder wishes to inspect and copy the items, at
a reasonable location specified by the corporation.

(c) Inspection of the books and records of the corporation are
subject to ss. 13.1-771 of the Virginia Stock Corporation Act.

Section 11.2 Fiscal Year. The fiscal year of the corporation will be
the calendar year.

Section 11.3 Seal. The corporate seal will be in such form as the
Board of Directors may from time to time determine.

Section 11.4 Annual Statements. The corporation will prepare such
financial statement showing the results of its operations during its fiscal year
as will be required by applicable laws, rules and regulations. Upon receipt of
written request, the corporation promptly shall mail to any shareholder of
record a copy of the most recent such financial statement.

Section 11.5 Contracts, Checks, Drafts, Reports, Etc. Such of the
officers or employees of the corporation as may from time to time be designated
by the Board of Directors or by the executive committee, if one has been
designated, will have power and authority to sign contracts, checks, drafts and
like instruments and to endorse checks, bills of exchange, orders, drafts and
vouchers made payable or endorsed to the corporation, whether in its own right
or in any fiduciary capacity. No officer or employee, however, may on behalf of
the corporation, execute or deliver any check, draft or other like instrument in
favor of himself.

Section 11.6 Legal Restrictions. All matters covered in these by-laws
will be subject to such restrictions as will be imposed on this corporation by
applicable state and Federal laws, rules and regulations, including, but not
limited to, the Virginia Stock Corporation Code and the Bank Holding Company Act
of 1956.

Section 11.7 Conflict. The articles of incorporation of this
corporation will control in the event of any conflict between such articles of
incorporation and these by-laws.

ARTICLE TWELVE

Amendments

Section 12.1 Power to Amend By-Laws. The Board of Directors will have
power to alter, amend or repeal these by-laws or adopt new by-laws, but any
by-laws adopted by the Board of Directors may be altered, amended or repealed,
and new by-laws adopted, by the shareholders. The shareholders may prescribe
that any by-law or by-laws adopted by them will not be altered, amended or
repealed by the Board of Directors.

Section 12.2 Conditions. Action taken by the shareholders with respect
to by-laws will be taken by an affirmative vote of a majority of all shares
entitled to elect directors, and action by the Board of Directors with respect
to by-laws will be taken by an affirmative vote of a majority of all directors
then holding office.

Section 12.3 Inspection. A copy of the by-laws, with all amendments
thereto, will at all times be kept in a convenient place in the main office of
the corporation and will be open to inspection by all shareholders during normal
business hours. The directors may furnish a copy of the by-laws, and all
amendments thereto, to all shareholders; provided that all amendments and
alterations of these by-laws made by the Board of Directors will be furnished to
the shareholders at the first meeting of the shareholders thereafter.

April 17, 1996

EXHIBIT 5

Venable, Baetjer and Howard, LLP

2010 Corporate Ridge, Suite 400

McLean, Virginia 22102

May 14, 1996

Tysons Financial Corporation
8200 Greensboro Drive, Suite 100

McLean, Virginia 22102

Ladies and Gentlemen:

We have acted as counsel to Tysons Financial Corporation, a Virginia
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form SB-2 of the Company (the "Registration
Statement") filed with the Securities and Exchange Commission (the
"Commission"), relating to the registration under the Securities Act of 1933, as
amended (the "Securities Act"), of 345,000 shares (the "Shares") of the
Company's common stock, par value $5.00 per share.

In connection with this opinion, we have considered such questions of
law as we have deemed necessary as a basis for the opinions set forth below, and
we have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of the following: (i) the Registration
Statement; (ii) the Articles of Incorporation and By-laws of the Company, as
amended and as currently in effect; (iii) certain resolutions of the Board of
Directors of the Company relating to the issuance of the Shares and the other
transactions contemplated by the Registration Statement; and (iv) such other
documents as we have deemed necessary or appropriate as a basis for the opinion
set forth below. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies. As
to any facts material to this opinion that we did not independently establish or
verify, we have relied upon statements and representations of officers and other
representatives of the Company and others.

Based upon the foregoing, we are of the opinion that when issued and
paid for in the manner contemplated by the Registration Statement, the Shares
will be validly issued, fully paid and nonassessable.

The law covered by the opinion set forth above is limited to the law of
the Commonwealth of Virginia and the federal law of the United States of
America.

We hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement and to the reference to our name under
the caption "Legal Matters" in the Prospectus constituting a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act, or the Rules and Regulations of the Commission thereunder.

Very truly yours,

/S/ VENABLE, BAETJER AND HOWARD, LLP

COMPUTATION OF PER SHARE EARNINGS (LOSS)

<TABLE>
<CAPTION>
For the Quarter For the Years December 31,
March 31 --------------------------
1996 1995 1994
<S> <C> <C> <C>
Number of shares of common stock
outstanding (weighted average) 668,619 668,619 668,619

Shares held in ESOP trust (weighted average) 48,108 51,693 30,372

Weighted average number of shares outstanding
during the period 620,511 616,926 638,247

Fully diluted weighted average number of shares
outstanding during the period 620,511 616,926 638,247

Income (loss) for the period $ 277,936 $ 567,598 $ (138,419)

Income (loss) per share:
Primary $ 0.44 $ 0.92 $ (0.22)

Fully Diluted $ 0.44 $ 0.92 $ (0.22)
</TABLE>

Exhibit 23(a)

The Board of Directors and Shareholders
Tysons Financial Corporation:

We consent to the use of our reports included herein and to the reference to
our firm under the heading "Experts" in the prospectus.

/s/ KPMG PEAT MARWICK LLP

Washington, D.C.
May 14, 1996