<SUBMISSION>
<ACCESSION-NUMBER>0001005150-00-001423
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20001106
<FILING-DATE>20001004
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AF BANKSHARES INC
<CIK>0001064025
<ASSIGNED-SIC>6770
<IRS-NUMBER>562098545
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>000-24479
<FILM-NUMBER>734585
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>206 SOUTH JEFFERSON AVENUE
<STREET2>PO BOX 26
<CITY>WEST JEFFERSON
<STATE>NC
<ZIP>28694
<PHONE>3362464344
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>206 SOUTH JEFFERSON AVENUE
<STREET2>PO BOX 26
<CITY>WEST JEFFERSON
<STATE>NC
<ZIP>28694
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>DEFINITVE 14A
<TEXT>




                                  SCHEDULE 14A
                                 (RULE 14a-101)
                     INFORMATION REQUIRED IN PROXY STATEMENT

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential,  for  Use  of  the  Commission  Only  (as  permitted  by  Rule
    14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12


                               AF BANKSHARES, INC.
                ------------------------------------------------
                (Name of Registrant as Specified In Its Charter)


     (Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X]  No fee required.
[ ]  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),  or 14a-6(i)(2) or
     Item 22(a)(2) of Schedule 14A.
[ ]  $500 per  each  party  to the  controversy pursuant  to  Exchange  Act Rule
     14a-6(i)(3).
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

     1)   Title of each class of securities to which transaction applies:

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

     2)   Aggregate number of securities to which transaction applies:

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

     3)   Per unit  price  or other  underlying  value of  transaction  computed
          pursuant to Exchange  Act Rule 0-11 (Set forth the amount on which the
          filing fee is calculated and state how it was determined.):

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

     4)   Proposed maximum aggregate value of transaction:

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

     5)   Total fee paid:

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

[ ]  Fee paid previously with preliminary materials.
[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2)  and identify the filing for which the  offsetting  fee was paid
     previously.  Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.

     1)   Amount Previously Paid:

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

     2)   Form, Schedule or Registration Statement No.:

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

     3)   Filing Party:

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

     4)   Date Filed:

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


<PAGE>


                        [AF BANKSHARES, INC. LETTERHEAD]




                                                       October 3, 2000


Dear Shareholder:

     You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of AF  Bankshares,  Inc.,  which will be held on  November 6, 2000 at 6:00 p.m.,
local  time,  at the  Executive  Offices of AF  Bankshares,  Inc.,  21 East Ashe
Street, West Jefferson, North Carolina 28694.

     The attached  Notice of the 2000 Annual Meeting of  Shareholders  and Proxy
Statement  describe the formal  business to be transacted at the Annual Meeting.
Directors and officers of AF Bankshares,  Inc., as well as a  representative  of
McGladrey & Pullen, LLP, the accounting firm appointed by the Board of Directors
to be AF Bankshares, Inc.'s independent auditors for the fiscal year ending June
30,  2001,  will be  present at the  Annual  Meeting  to respond to  appropriate
questions.

     The Board of  Directors  of AF  Bankshares,  Inc.  has  determined  that an
affirmative vote on each matter to be considered at the Annual Meeting is in the
best  interests of AF  Bankshares,  Inc. and its  shareholders  and  unanimously
recommends a vote "FOR" each of these matters.

     Please  complete,  sign and return the enclosed proxy card promptly whether
or not you plan to attend the Annual Meeting.  YOUR VOTE IS IMPORTANT REGARDLESS
OF THE  NUMBER OF SHARES  YOU OWN.  VOTING BY PROXY  WILL NOT  PREVENT  YOU FROM
VOTING  IN PERSON  AT THE  ANNUAL  MEETING,  BUT WILL  ASSURE  THAT YOUR VOTE IS
COUNTED IF YOU ARE UNABLE TO ATTEND.

     On  behalf of the  Board of  Directors  and the  employees  of AF Bank,  AF
Insurance Services, Inc., AF Brokerage,  Inc. and AF Bankshares,  Inc., we thank
you for your continued support.


                                         Sincerely yours,

                                         /s/ James A. Todd
                                         -------------------------------------
                                         James A. Todd
                                         President and Chief Executive Officer


<PAGE>


                               AF BANKSHARES, INC.
                               21 EAST ASHE STREET
                      WEST JEFFERSON, NORTH CAROLINA 28694
                                 (336) 246-4344

                NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS


                   DATE:  MONDAY, NOVEMBER 6, 2000
                   TIME:  6:00 P.M.
                   PLACE: 21 EAST ASHE STREET
                          WEST JEFFERSON, NORTH CAROLINA  28694


     At our Annual Meeting we will ask you to:

     o    Elect three directors to serve for a three-year term;

     o    Ratify the  appointment  of  McGladrey  & Pullen,  LLP as  independent
          auditors for the fiscal year ending June 30, 2001; and

     o    Transact  any other  business as may  properly  come before the Annual
          Meeting.

     You  may  vote  at the  Annual  Meeting  if you  were a  shareholder  of AF
Bankshares, Inc. at the close of business on September 8, 2000, the record date.


                                  By Order of the Board of Directors


                                  /s/ Melanie Paisley Miller
                                  ---------------------------------
                                  Melanie Paisley Miller
                                  Secretary

West Jefferson, North Carolina
October 3, 2000



================================================================================
       YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR  SHARES BE REPRESENTED  REGARDLESS  OF THE NUMBER OF SHARES YOU OWN.
THE BOARD OF DIRECTORS  URGES YOU TO SIGN,  DATE AND MARK THE  ENCLOSED  PROXY
CARD PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE. RETURNING THE PROXY CARD
WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE ANNUAL MEETING.
================================================================================

<PAGE>


                               GENERAL INFORMATION


GENERAL

     We have sent you this Proxy  Statement and enclosed  proxy card because the
Board of Directors is soliciting your proxy to vote at the Annual Meeting.  This
Proxy  Statement  summarizes  the  information  you will need to know to cast an
informed  vote at the  Annual  Meeting.  You do not need to  attend  the  Annual
Meeting  to vote your  shares.  You may  simply  complete,  sign and  return the
enclosed proxy card and your votes will be cast for you at the Annual Meeting.

     We began mailing this Proxy Statement, the Notice of Annual Meeting and the
enclosed proxy card on or about October 3, 2000 to all shareholders  entitled to
vote. If you owned AF  Bankshares,  Inc.'s common stock at the close of business
on  September 8, 2000,  the record date,  you are entitled to vote at the Annual
Meeting.  On the  record  date,  there  were  1,049,378  shares of common  stock
outstanding.

     On  October 4, 1996,  AF Bank  completed  its  reorganization  into  mutual
holding  company  form and its initial  public  offering of shares of its common
stock.  On June 16, 1998, AF Bank  reorganized  into a two- tier mutual  holding
company  structure  pursuant  to a plan of  reorganization.  As a result  of the
reorganization,  AF Bank became the  wholly-owned  subsidiary of AF  Bankshares,
Inc. and shareholders of AF Bank became shareholders of AF Bankshares, Inc. in a
share for share exchange.

     AsheCo,  M.H.C.  is the majority owner of AF Bankshares,  Inc.,  and, as of
September 8, 2000,  the record date,  owns 538,221  shares of common stock of AF
Bankshares,  Inc. which constitutes  approximately 51.3% of the total issued and
outstanding common stock of AF Bankshares, Inc.

QUORUM

     A quorum of  shareholders  is  necessary  to hold a valid  meeting.  If the
holders of at least a majority of the total number of the outstanding  shares of
common stock of AF Bankshares,  Inc.  entitled to vote are represented in person
or by proxy at the Annual Meeting, a quorum will exist. Shares underlying broker
non- votes will not be counted as having been voted in person or by proxy.

VOTING RIGHTS

     You are  entitled  to one vote at the Annual  Meeting  for each share of AF
Bankshares,  Inc.'s  common  stock  that you  owned as of record at the close of
business on  September 8, 2000.  As provided in AF  Bankshares,  Inc.'s  Federal
Stock  Charter,  if you  beneficially  own in excess  of 10% of the  outstanding
shares  of  common  stock,  you will not be  entitled  to a vote for each of the
excess shares.  A person or entity  beneficially  owns shares if an affiliate or
associate  owns the shares or if a person  acting in concert with that person or
entity owns the shares. The number of shares you own (and may vote) is listed on
the proxy card.

     You may vote your  shares at the Annual  Meeting in person or by proxy.  To
vote in  person,  you must  attend the  Annual  Meeting  and obtain and submit a
ballot,  which we will provide to you at the Annual  Meeting.  To vote by proxy,
you must  complete,  sign and return the  enclosed  proxy card.  If you properly
complete your proxy card and send it to us in time to vote, your "proxy" (one of
the  individuals  named on your proxy  card)  will vote your  shares as you have
directed.  IF YOU SIGN THE PROXY  CARD BUT DO NOT MAKE  SPECIFIC  CHOICES,  YOUR
PROXY WILL VOTE YOUR SHARES FOR EACH OF THE  PROPOSALS  IDENTIFIED IN THE NOTICE
OF THE ANNUAL MEETING.

     If any  other  matter  is  presented,  your  proxy  will  vote  the  shares
represented  by all properly  executed  proxies on such matters as a majority of
the Board of Directors determines. As of the date of this Proxy


<PAGE>


Statement,  we know of no other  matters  that may be  presented  at the  Annual
Meeting, other than those listed in the Notice of the Annual Meeting.

     If you are a shareholder  whose shares are not registered in your own name,
you will need appropriate  documentation from your shareholder of record to vote
personally at the Annual Meeting. Examples of such documentation would include a
broker's statement, letter or other document that will confirm your ownership of
shares of AF Bankshares, Inc.

VOTE REQUIRED

PROPOSAL 1:          The three  nominees for director who receive the most votes
Elect Three          will be  elected. So, if you do not vote for a nominee,  or
Directors            you indicate "withhold  authority"  for any nominee on your
                     proxy card, your vote will not count "for" or "against" the
                     nominee.  You may not vote your shares cumulatively for the
                     election of directors.


PROPOSAL 2:          The affirmative vote of a majority of the shares present in
Ratify Appointment   person or by proxy at the Annual  Meeting  and  entitled to
of Independent       vote on this proposal is required to ratify the appointment
Public Accountants   of  McGladrey  &  Pullen,  LLP,  as  AF  Bankshares, Inc.'s
                     independent   certified  public  accountants.  So,  if  you
                     "abstain"  from  voting,  it has the same effect  as if you
                     voted "against" this proposal.

EFFECT OF BROKER NON-VOTES

     If your broker holds  shares that you own in "street  name," the broker may
vote your shares on the two  proposals  listed above even if the broker does not
receive  instructions  from  you.  If your  broker  does  not vote on any of the
proposals,  this will  constitute a "broker  non-vote."  Here is the effect of a
"broker non- vote":

o    PROPOSAL 1: Elect Three  Directors.  A broker non-vote would have no effect
     on the outcome of this  proposal  because only a plurality of votes cast is
     required to elect a director.

o    PROPOSAL 2: Ratify Appointment of Independent Public Accountants.  A broker
     non-vote would have no effect on the outcome of this proposal.

VOTE BY MHC

     As indicated  above and under  "Security  Ownership  of Certain  Beneficial
Owners" AsheCo,  M.H.C. owns  approximately  51.3% of the shares of common stock
entitled to vote at the Annual  Meeting.  AsheCo,  M.H.C.  has  indicated  to AF
Bankshares,  Inc.  that it intends  to vote its  shares of common  stock FOR the
election of AF Bankshares, Inc.'s nominees for director and FOR the ratification
of the appointment of the independent auditors, thereby ensuring a quorum at the
Annual  Meeting,  and the  likelihood  of the election of such  nominees and the
ratification of the appointment of the independent auditors.

REVOKING YOUR PROXY

     You may revoke your proxy at any time before it is exercised by:

     o    Filing with the Secretary of AF Bankshares, Inc. a letter revoking the
          proxy;
     o    Submitting another signed proxy with a later date; or
     o    Attending the Annual Meeting and voting in person, provided you file a
          written  revocation  with the Secretary of the Annual Meeting prior to
          the voting of such proxy.

<PAGE>


SOLICITATION OF PROXIES

     AF  Bankshares,  Inc.  will pay the costs of  soliciting  proxies  from its
shareholders.  Directors,  officers or  employees  of AF  Bankshares,  Inc.  may
solicit proxies by:

     o    mail;
     o    telephone; and
     o    other forms of communication.

     We will also reimburse  persons,  firms and corporations  holding shares in
their names or in the name of their nominees,  which are  beneficially  owned by
others,  for the expenses  they incur in forwarding  the proxy  materials to and
obtaining proxies from such beneficial owners.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     The following table contains common stock ownership information for persons
known to AF Bankshares,  Inc. to "beneficially own" 5% or more of AF Bankshares,
Inc.'s  common  stock as of June 30,  2000.  In  general,  beneficial  ownership
includes  those shares that a person has the power to vote,  sell,  or otherwise
dispose.  Beneficial  ownership  also  includes  that number of shares  which an
individual  has the right to acquire  within 60 days (such as stock  options) of
the date this table was  prepared.  Two or more  persons may be  considered  the
beneficial owner of the same share. We obtained the information  provided in the
following  table from filings with the SEC and with AF Bankshares,  Inc. In this
proxy  statement,  "voting  power" is the power to vote or direct  the voting of
shares,  and  "investment  power"  includes  the power to  dispose or direct the
disposition of shares.

<TABLE>
<CAPTION>
                                                            AMOUNT OF      PERCENT OF SHARES
                         NAME AND ADDRESS                   BENEFICIAL      OF COMMON STOCK
 TITLE OF CLASS         OF BENEFICIAL OWNER                 OWNERSHIP         OUTSTANDING
----------------    ------------------------------       ---------------  --------------------
<S>                <C>                                   <C>              <C>
Common Stock        AsheCo, M.H.C.                           538,221             51.3%
                    21 East Ashe Street
                    West Jefferson, North Carolina
                    28694
</TABLE>



<PAGE>


     SECURITY OWNERSHIP OF MANAGEMENT

     The  following  table shows the number of shares of AF  Bankshares,  Inc.'s
common stock beneficially owned by each director and executive officer,  and all
directors and executive  officers of AF Bankshares,  Inc. as a group, as of June
30, 2000. Except as otherwise indicated, each person and each group shown in the
table has sole voting and investment  power with respect to the shares of common
stock listed next to their name.

<TABLE>
<CAPTION>
                                                               AMOUNT AND NATURE           PERCENT OF
                                                                 OF BENEFICIAL            COMMON STOCK
       NAME                         POSITION                  OWNERSHIP(1)(2)(3)(4)       OUTSTANDING(5)
-------------------          -------------------------        ---------------------       --------------
<S>                         <C>                                <C>                         <C>
James A. Todd                Director, President and                   24,552                  2.3%
                             Chief Executive Officer

Jan R. Caddell               Director, Chairman of the                  7,300                    *
                             Board of Directors

Kenneth R. Greene            Director                                   6,380                    *

William O. Ashley, Jr.       Director                                   7,300                    *

Wayne R. Burgess             Director                                   7,373                    *

Frank E. Roland              Director                                   7,300                    *

Jerry L. Roten               Director                                   6,840                    *

John D. Weaver               Director                                   7,300                    *
                                                                   ----------              -------
All directors and executive officers                                  138,240                 13.5%
as a group (10 persons)
</TABLE>
---------------------
* Less than one percent of Outstanding Common Stock.

(1)  All persons shown in the above table have sole voting and investment power,
     except as otherwise indicated.
(2)  The figures  shown for Mr. Todd  include  1,593  shares held in trust by AF
     Bank, as trustee,  pursuant to the Employee  Stock  Ownership  Plan of Ashe
     Federal  Bank  ("ESOP"),  which shares have been  allocated  to Mr.  Todd's
     account  under the ESOP and as to which he has sole  voting  power,  but no
     investment power, except in limited circumstances. The figure shown for all
     directors and executive  officers as a group includes the shares  allocated
     to Mr.  Todd's  account  under the ESOP and 2,117  shares  allocated to the
     accounts  of the  other  executive  officers,  as to which  such  executive
     officers have sole voting power, but no investment power, except in limited
     circumstances. Such figure also includes (a) 11,820 shares allocated to the
     accounts of other  participants  in the ESOP,  as to which AF Bank,  as the
     ESOP trustee, and AF Bank's Compensation  Committee  (consisting of Messrs.
     Greene and  Burgess),  which  serves as the ESOP  Committee,  has no voting
     power and shared investment power, and (b) 21,842 shares that have not been
     allocated  to  participants'  accounts  under  the  ESOP,  as to which  the
     executive  officers  have shared voting  power,  but no  investment  power,
     except in limited  circumstances,  the ESOP  trustee has shared  voting and
     investment  power and the ESOP  Committee  has no voting  power and  shared
     investment  power.  Except for the  shares  allocated  to their  individual
     accounts,  each executive  officer  disclaims  beneficial  ownership of the
     shares  held in the  ESOP,  and  each  member  of the  Board  of  Directors
     disclaims beneficial ownership of the shares held in the ESOP.
(3)  Includes 920 shares of unvested  restricted  stock  granted to each outside
     director and 7,184 shares of unvested  restricted stock granted to Mr. Todd
     pursuant to the Ashe Federal Bank 1997  Recognition and Retention Plan (the
     "RRP").  Each  recipient of a restricted  stock award has sole voting power
     but no investment power over the unvested shares of common stock covered by
     the award.
(4)  Includes  581 shares of common  stock which may be acquired by each outside
     director  pursuant to vested options granted to them under the Ashe Federal
     Bank 1997 Stock Option Plan (the "Stock Option Plan").  Also includes 4,280
     shares of  common  stock  which Mr.  Todd may  acquire  pursuant  to vested
     options granted to him under the Stock Option Plan.
(5)  Percentages  with  respect  to each  person or group of  persons  have been
     calculated  on the basis of  1,049,378  shares of common  stock,  the total
     number of shares of AF  Bankshares,  Inc.'s common stock  outstanding as of
     June 30, 2000,  plus the number of shares of common stock which such person
     or group has the right to acquire within 60 days after July 31, 1999.
<PAGE>


                  DISCUSSION OF PROPOSALS RECOMMENDED BY BOARD


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

                                   PROPOSAL 1

                              ELECTION OF DIRECTORS

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

GENERAL

     The Board has  nominated  three  persons for  election as  directors at the
Annual Meeting. Each nominee is currently serving on AF Bankshares, Inc.'s Board
of Directors.  If you elect the nominees, they will hold office until the Annual
Meeting in 2003, or until their successors have been elected.

     We know of no reason why any  nominee may be unable to serve as a director.
If any  nominee  is unable to serve,  your  proxy may vote for  another  nominee
proposed  by the  Board.  If for any  reason  these  nominees  prove  unable  or
unwilling to stand for election,  the Board will  nominate  alternates or reduce
the size of the Board of Directors to  eliminate  the vacancy.  The Board has no
reason to believe that its nominees would prove unable to serve if elected.

NOMINEES AND CONTINUING DIRECTORS

<TABLE>
<CAPTION>
                                                  DIRECTOR           TERM         POSITION(S) HELD WITH THE
NOMINEES                           AGE(1)         SINCE(2)          EXPIRES                COMPANY
------------------------------     ------         --------          -------      ----------------------------
<S>                               <C>            <C>               <C>           <C>
Jan R. Caddell................      60             1981              2000         Director, Chairman of the Board
Kenneth R. Greene.............      53             1988              2000         Director
James A. Todd.................      56             1994              2000         Director, President and Chief
                                                                                  Executive Officer

CONTINUING DIRECTORS
------------------------------
Frank E. Roland...............      77             1989              2001         Director
Jerry L. Roten................      54             1992              2001         Director
William O. Ashley, Jr.........      71             1965              2002         Director
Wayne R. Burgess..............      60             1989              2002         Director
John D. Weaver................      77             1990              2002         Director
</TABLE>
------------------------------
(1)  As of June 30, 2000.
(2)  Includes term as a director of AF Bank.

     The  principal  occupation  and  business  experience  of each  nominee for
election as director and each  Continuing  Director are set forth below.  Unless
otherwise indicated, each of the following persons has held his present position
for the last five years.


<PAGE>


NOMINEES FOR ELECTION AS DIRECTOR

     James A. Todd was a Senior Examination Officer at the OTS before joining AF
Bank in 1994.

     Kenneth R. Greene has over 20 years  experience  in the concrete  sales and
building-supply  business,  and he is  currently  the  principal  owner  at East
Jefferson Builders Mart.

     Jan R. Caddell is President  and General  Manager of Caddell  Broadcasting,
Inc. and its commercial radio station, WKSK.

CONTINUING DIRECTORS

     Wayne R. Burgess is a  part-owner,  Vice  President  and Manager of Burgess
Furniture of West Jefferson, North Carolina.

     William O. Ashley, Jr. served as Managing Officer,  Secretary and Treasurer
of AF Bank from 1964 to 1994.

     Frank E. Roland retired from the U.S.  Postal Service in 1985 and has since
served as a director of Ashe Memorial Hospital,  Riverview  Community Center and
Skyline Telephone Membership Corporation.  He has also served on the Ashe County
Bond Authority.

     Jerry L. Roten has served as the Clerk of the Superior Court of Ashe County
for the past 14 years.

     John D. Weaver is  Vice-President  of Weaver Tree Farm,  Inc., a retail and
wholesale Christmas tree farm.

================================================================================
         THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ALL
                   OF THE NOMINEES FOR ELECTION AS DIRECTORS.
================================================================================


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

                                   PROPOSAL 2

                         RATIFICATION OF APPOINTMENT OF
                              INDEPENDENT AUDITORS

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


     The  Board of  Directors  has  appointed  McGladrey  &  Pullen,  LLP as our
independent  public auditors for AF Bankshares,  Inc. for the fiscal year ending
June 30,  2001,  and we are asking  shareholders  to ratify the  appointment.  A
representative  of  McGladrey  & Pullen,  LLP is  expected  to attend the Annual
Meeting and will be available to respond to appropriate questions.

================================================================================
         THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
           RATIFICATION OF THE APPOINTMENT OF MCGLADREY & PULLEN, LLP
                 AS INDEPENDENT AUDITORS FOR AF BANKSHARES, INC.
================================================================================

<PAGE>

               INFORMATION ABOUT BOARD OF DIRECTORS AND MANAGEMENT


BOARD OF DIRECTORS

     AF  Bankshares,  Inc.'s  Board of  Directors  currently  consists  of eight
members. AF Bankshares, Inc.'s Federal Stock Charter and Bylaws provide that the
Board of  Directors  shall be divided  into three  classes,  as nearly  equal in
number as possible. The terms of three directors expire at the Annual Meeting.

     The Board of Directors  oversees our business and monitors the  performance
of our management.  In accordance with our corporate governance procedures,  the
Board of Directors does not involve  itself in the  day-to-day  operations of AF
Bankshares, Inc. AF Bankshares, Inc.'s executive officers and management oversee
the  day-to-day  operations of AF Bankshares,  Inc. Our directors  fulfill their
duties and responsibilities by attending regular meetings of the Board which are
held on a monthly basis.  Our directors also discuss  business and other matters
with the President,  other key executives,  and our principal  external advisers
(legal counsel, auditors, financial advisors and other consultants).

     The Board of Directors of AF Bankshares,  Inc. held twelve regular meetings
during the fiscal year ended June 30, 2000. Each incumbent  director attended at
least 75% of the meetings of the Board of Directors plus  committee  meetings on
which that particular director served during this period.

COMMITTEES OF THE BOARD

     The Board of Directors of AF Bankshares, Inc. has established the following
committees:


NOMINATING          The  Nominating  Committee  nominates  candidates  for Board
COMMITTEE           membership.

                    Directors   Greene  and  Roten   serve  as  members  of  the
                    committee. Membership changes annually.

                    The  Nominating  Committee  met one time in the 2000  fiscal
                    year.

COMPENSATION        The Compensation  Committee  establishes the compensation of
COMMITTEE           the Chief Executive Officer. The Compensation Committee also
                    establishes directors' fees and bonuses.

                    Directors Greene, Burgess and Ashley serve as members of the
                    committee.

                    The Compensation  Committee met two times in the 2000 fiscal
                    year.

AUDIT               The  Audit  Committee   meets  when  AF  Bank's   regulatory
COMMITTEE           examiners and AF  Bankshares,  Inc.'s  auditors  begin their
                    review  process and when the examiners and auditors  present
                    their reports to AF Bankshares, Inc. and AF Bank.

                    Directors Roland, Burgess and Weaver serve as members of the
                    committee.

                    The Audit Committee met four times in the 2000 fiscal year.

     The Board of Directors,  acting as the nominating committee, met in August,
2000 to select the nominees for election as directors at the Annual Meeting. See
"Information About Shareholder Proposals" for a discussion of the procedures for
shareholder nominations for director.


<PAGE>


DIRECTORS' COMPENSATION

     Director's Fees.  Currently,  each non-employee  director of AF Bankshares,
Inc. receives the following fees:

o    fees of $500 per month with no extra fees received for  committee  meetings
     attended; and
o    fees of $5,000 per year if a director  has attended a minimum of 75% of the
     aggregate  number of Board and committee  meetings called during the fiscal
     year.

     The Chairman of the Board also receives a fee of $600 per month.  Directors
of both AF  Bankshares,  Inc.  and AF Bank  will not be  compensated  for  their
services on the Board of AF Bankshares, Inc.

     Retirement  Plans.  AF Bank has adopted a nonqualified  Retirement Plan for
Board Members of AF Bank (the "Directors'  Retirement Plan"), which will provide
benefits to each eligible  outside  director  commencing on his  termination  of
Board service at or after age 65. Each outside director  automatically becomes a
participant  in the Directors'  Retirement  Plan. An eligible  outside  director
retiring at or after age 65 will be paid an annual  retirement  benefit equal to
the annual rate of retainer paid to outside  directors  immediately prior to his
termination of Board service,  multiplied by a fraction,  the numerator of which
is the number of his years of service as an outside director  (including service
as a  director  or trustee  of AF Bank or any  predecessor)  not in excess of 10
years and the  denominator of which is 10. An individual  who  terminates  Board
service  after  having  served as an outside  director for 10 years may elect to
begin  collecting  benefits  under the  Directors'  Retirement  Plan at or after
attainment of age 55, but the annual retirement  benefits payable to him will be
reduced pursuant to the Directors'  Retirement Plan's early retirement reduction
formula  to  reflect  the  commencement  of  benefit  payments  prior to age 65.
Benefits are generally  paid for a fixed period of 10 years,  but a director may
elect to convert  such  benefit to a single life or joint and  survivor  annuity
based on actuarial  factors  specified in the Directors  Retirement Plan. Upon a
change in control,  participants will receive an immediate lump sum distribution
of a benefit that is the actuarial equivalent of a single life annuity providing
an annual payment equal to the annual rate of retainer paid to outside directors
immediately  prior to the  change  of  control  multiplied  by a  fraction,  the
numerator of which is the director's year of service not in excess of 10 and the
denominator of which is 10.

     Recognition  and  Retention  Plan and Stock Option Plan.  In addition,  our
directors are eligible to participate  in the Stock Option Plan and  Recognition
and Retention Plan. These stock benefit plans are discussed under  "--Benefits,"
"Stock Option Plan" and "Recognition and Retention Plan."

EXECUTIVE OFFICERS

     The following individuals are executive officers of AF Bankshares, Inc. and
hold the offices set forth opposite their names.

<TABLE>
<CAPTION>
        NAME                       AGE         POSITION HELD WITH AF BANKSHARES, INC.
----------------------             ---       ----------------------------------------
<S>                               <C>       <C>
James A. Todd                      56        President and Chief Executive Officer

Melanie Paisley Miller             29        Executive Vice President, Secretary,
                                             Treasurer and Chief Financial Officer

Stephen R. Hooks                   53        Executive Vice President

Martin G. Little                   37        Senior Vice President and
                                             Chief Lending Officer
</TABLE>


<PAGE>


     The Board of Directors elects the executive officers of AF Bankshares, Inc.
and AF Bank,  annually.  The elected officers hold office until their respective
successors  have been  elected and  qualified,  or until death,  resignation  or
removal  by the  Board of  Directors.  AF  Bankshares,  Inc.  has  entered  into
Employment  Agreements with its executive  officers which set forth the terms of
their employment. See "--Employment Agreements."

     Biographical information of executive officers of AF Bankshares, Inc. or AF
Bank who are not directors is set forth below.

     Melanie  Paisley  Miller  served as Secretary and Treasurer of AF Bank from
August  1995 to April  1996,  at which time her title was changed to Senior Vice
President,  Secretary, Treasurer and Chief Financial Officer of AF Bank. On July
1, 1998, Ms. Miller's title was changed to Executive Vice-President,  Secretary,
Treasurer and Chief Financial  Officer of AF Bankshares,  Inc. Ms. Miller served
as  corporate  secretary  of AF Bank from July  1994 to August  1995,  and as an
administrative  assistant  from March 1994 to July 1994.  Ms.  Paisley Miller is
also a Certified Public Accountant.

     Stephen R. Hooks joined AF Bankshares,  Inc. as an Executive Vice President
in September,  1998. Mr. Hooks is also the President, Chief Executive Officer of
AF  Brokerage,  Inc. Mr. Hooks is the  President of the Phoenix  Group,  Ltd., a
company which provides  financial and  development  services to companies in the
real estate industry.

     Martin G. Little  served as Vice  President/Branch  Manager of AF Bank from
1994 to April 1996, at which time his title was changed to Senior Vice President
and Retail Banking  Manager of AF Bank. In 1997, his title was changed to Senior
Vice President and Chief Lending Officer. Mr. Little also served as Loan Officer
of AF Bank from 1987 to 1994.

EXECUTIVE COMPENSATION

     The following table sets forth the compensation paid by AF Bankshares, Inc.
and its subsidiaries for services  rendered in all capacities  during the fiscal
years ended June 30, 2000,  1999 and 1998 to the President  and Chief  Executive
Officer of AF  Bankshares,  Inc. and AF Bank. No other  executive  officer of AF
Bankshares,  Inc.  had salary and bonus  during the fiscal  years ended June 30,
2000, 1999, and 1998 aggregating in excess of $100,000.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                                 LONG TERM COMPENSATION
                                                                                   -----------------------------------------------
                                                 ANNUAL COMPENSATION(1)                      AWARDS           PAYOUTS
                                     --------------------------------------------  -----------------------   --------
                                                                        OTHER       RESTRICTED
                                                                        ANNUAL        STOCK                    LTIP      ALL OTHER
                                               SALARY                COMPENSATION     AWARDS      OPTIONS     PAYOUTS  COMPENSATION
   NAME AND PRINCIPAL POSITIONS        YEAR    ($)(1)     BONUS($)        ($)        ($)(2)       (#)(3)        ($)       ($)(4)
-----------------------------------  --------  ------     --------  -------------  ----------     --------   --------  ------------
<S>                                  <C>      <C>        <C>        <C>            <C>           <C>         <C>       <C>
James A. Todd                          2000    $115,000   $15,000         --              --           --       --         $ 6,188
President and Chief Executive Officer  1999    $115,000   $10,000         --              --           --       --         $ 8,623
                                       1998    $ 82,400   $12,000         --        $332,242       $7,134       --         $16,693
</TABLE>
-----------------------
                              (footnotes to the table continue on the next page)


<PAGE>


(1)  Includes  amounts,  if any, deferred pursuant to Section 401(k) of the Code
     under AF Bank's 401(k) Plan.
(2)  Pursuant  to the RRP,  Mr.  Todd was awarded  17,959  shares of  restricted
     stock,  as of December 8, 1997,  which vest in 20%  increments on an annual
     basis, beginning on December 8, 1997. Dividends attributable to such shares
     are held in the trust fund and are held for distribution in accordance with
     the terms of the restricted stock award. The value of the 17,959 restricted
     share  award  shown in the table  above for the fiscal year ending June 30,
     1998 is based on the closing  price of a share of common  stock on December
     8,  1997,  the date of  grant,  which was  $18.50.  At June 30,  2000,  the
     aggregate fair market value of the restricted  stock award made to Mr. Todd
     was  $143,672,  based on a closing  price of $8.00 per  share.  During  the
     fiscal year ended June 30, 1997,  neither AF Bank, nor AF Bankshares,  Inc.
     maintained any restricted  stock plans.  In the case of death,  disability,
     retirement  or a change in control,  as defined in the RRP, all  restricted
     stock awards become immediately exercisable.
(3)  Includes  7,134  shares of common stock  subject to options  granted to Mr.
     Todd,  pursuant to the Stock  Option Plan on December 8, 1997.  The options
     granted  under the Stock Option Plan are intended to qualify as  "incentive
     stock options"  under Section 422 of the Internal  Revenue Code, as amended
     (the "Code") to the maximum  extent  possible,  and any options that do not
     qualify will constitute non- qualified stock options. The Stock Option Plan
     provides  for  options to become  exercisable  in five equal  installments,
     beginning on December 8, 1997, and generally remain  exercisable  until the
     tenth  anniversary  of the grant  date.  In the case of death,  disability,
     retirement or a change in control, as defined in the Stock Option Plan, all
     options granted become immediately exercisable.
(4)  Includes (i) $1,620,  $1,620 and $725 for fiscal years ended June 30, 2000,
     1999,  and 1998,  respectively,  representing  the dollar value of premiums
     paid by AF Bank with respect to term life insurance  (other than group term
     insurance  coverage  under a plan available to  substantially  all salaried
     employees) for the benefit of the executive officer;  (ii) an allocation of
     230, 412 and 478 shares to Mr. Todd's account under the ESOP for the fiscal
     years ended June 30, 2000, 1999 and 1998, respectively, with a total market
     value of $1,840,  $4,532 and $8,843 as of June 30,  2000,  1999,  and 1998,
     respectively,  see  "--Benefits--Employee  Stock Ownership Plan and Trust;"
     and (iii) a matching  contribution of $2,728,  $2,471 and $7,125 for fiscal
     year ended June 30,  2000,  1999 and 1998,  respectively,  under the 401(k)
     plan.

CERTAIN EMPLOYEE BENEFIT PLANS AND EMPLOYMENT AGREEMENTS

     Employment  Agreements.  AF Bank is a party to an Employment Agreement with
each of Mr. Todd,  Ms.  Miller and Mr.  Little  ("Senior  Executive(s)").  These
Employment  Agreements  establish the respective  duties and compensation of the
Senior  Executives  and are  intended  to  ensure  that AF Bank  will be able to
maintain a stable and competent  management  base.  The continued  success of AF
Bank depends to a significant  degree on the skills and competence of the Senior
Executives.

     The  Employment  Agreements  provide for three-year  terms.  The Employment
Agreements  provide  that,  prior to the first  anniversary  of the  Agreement's
effective  date and each  anniversary  of such  date  thereafter,  the  Board of
Directors may, with the Senior  Executive's  concurrence,  extend the Employment
Agreements  for an additional  year, so that the remaining  terms shall be three
years,  after conducting a performance  evaluation of the Senior Executive.  The
Employment  Agreements  provide that the Senior  Executive's base salary will be
reviewed annually. This review is performed by the Compensation Committee of the
Board  in the case of the  President  and  Chief  Executive  Officer  and by the
President  and  Chief  Executive  Officer  in  the  case  of  the  other  Senior
Executives.  The Senior Executive's base salary may be increased on the basis of
her or his job performance  and the overall  performance of AF Bank. Each Senior
Executive may receive a bonus based upon  achievement of prescribed  performance
criteria.  In addition to base salary,  the Employment  Agreements  provide for,
among other  things,  entitlement  to  participation  in stock,  retirement  and
welfare  benefit  plans  and  eligibility  for  fringe  benefits  applicable  to
executive  personnel such as fees for club and organization  memberships  deemed
appropriate  by AF Bank and the  Senior  Executive.  The  Employment  Agreements
provide  for  termination  by AF Bank at any time for  cause as  defined  in the
Employment  Agreements.  In the event AF Bank  chooses to  terminate  the Senior
Executive's  employment for reasons other than for cause, or in the event of the
Senior Executive's resignation from AF Bank upon:

o    the Board's or the shareholder's  failure to re-appoint,  elect or re-elect
     the Senior Executive to her or his current offices;
o    a material change in the Senior Executive's compensation, functions, duties
     or responsibilities;
o    a "change of control" as defined in the Employment Agreements; or
o    a  material  breach of the  Employment  Agreement  by AF Bank,  the  Senior
     Executive; or


<PAGE>


o    in the event of death,  her or his  beneficiary  is  entitled to a lump sum
     cash  payment in an amount  equal to the  remaining  base  salary and bonus
     payments due to the Senior  Executive and the additional  contributions  or
     benefits that would have been earned under any employee benefit plans of AF
     Bank, AF  Bankshares,  Inc.,  or the MHC during the remaining  terms of the
     Employment Agreements.

     AF Bank  would  also  continue  the  Senior  Executive's  life,  health and
disability  insurance  coverage  for  the  remaining  terms  of  the  Employment
Agreements.  AF Bank's  Employment  Agreements  have  restrictions on the dollar
amount of compensation  and benefits  payable to a Senior Executive in the event
of termination  following a "change in control." In general, for purposes of the
Employment Agreements and the plans maintained by AF Bank, a "change in control"
will  generally  be deemed to occur when a person or group of persons  acting in
concert  acquires  beneficial  ownership  of 25% or more of any  class of equity
security,  such as common  stock of AF  Bankshares,  Inc.,  or in the event of a
tender offer, exchange offer, merger or other form of business combination, sale
of assets or  contested  election  of  directors  which  results  in a change in
control of the majority of the Board of Directors of AF Bank.  Cash and benefits
paid to a  Senior  Executive  under  the  Employment  Agreements  together  with
payments  under  other  benefit  plans  following  a "change in  control"  of AF
Bankshares,  Inc. or AF Bank may constitute an "excess  parachute" payment under
Section 280G of the Code, resulting in the imposition of a 20% excise tax on the
recipient  and the  denial  of the  deduction  for  such  excess  amounts  to AF
Bankshares,  Inc. or AF Bank. As a result,  no payments or benefits will be paid
to an  Executive  following a "change in  control"  to the extent such  payments
would constitute an "excess parachute payment" under Section 280G of the Code.








<PAGE>


     Employee  Stock  Ownership  Plan  and  Trust.   AF  Bankshares,   Inc.  has
established  and  adopted,  for the benefit of eligible  employees,  an ESOP and
related trust.  All salaried  employees of AF Bank and AF  Bankshares,  Inc. are
eligible to become participants in the ESOP. The ESOP purchased 36,942 shares of
common stock issued in connection with the MHC Reorganization  and Offering.  In
order to fund the ESOP's purchase of such common stock,  the ESOP borrowed funds
from an unaffiliated lender equal to the balance of the aggregate purchase price
of the common stock.  Although  contributions to the ESOP are discretionary,  AF
Bankshares,  Inc.  intends  to  make  annual  contributions  to the  ESOP  in an
aggregate amount at least equal to the principal and interest requirement on the
debt.  This loan is for a term of six years,  bears  interest  at the prime rate
minus one-half of one percent,  and calls for level annual payments of principal
plus accrued interest  designed to amortize the loan over its term.  Prepayments
are also permitted.

     Shares  purchased by the ESOP were pledged as collateral  for the loan, and
are held in a suspense account until released for allocation among  participants
in the ESOP as the loan is repaid.  The pledged shares will be released annually
from the suspense account in an amount proportional to the repayment of the ESOP
loan for each  plan  year.  The  released  shares  will be  allocated  among the
accounts of participants on the basis of the participants'  compensation for the
year of allocation.  Benefits provided to participants  under the ESOP generally
become 100% vested  after three years of service;  prior to such time,  benefits
are 0% vested.  Participants will become  immediately vested upon termination of
employment due to death,  retirement at age 65, permanent disability or upon the
occurrence  of a  change  in  control.  Forfeitures  will be  reallocated  among
remaining  participating  employees,  in the same  proportion as  contributions.
Vested  benefits  may be paid in a single sum or  installment  payments  and are
payable upon death, retirement at age 65, disability or separation from service.

     The  ESOP  Committee,  which  is  currently  comprised  of  members  of the
Compensation  Committee,  may instruct the trustee regarding investment of funds
contributed to the ESOP. The ESOP trustee,  subject to its fiduciary  duty, must
vote all allocated  shares held in the ESOP in accordance with the  instructions
of the participating employees. Under the ESOP, unallocated shares will be voted
in a manner  calculated  to most  accurately  reflect  the  instructions  it has
received from participants regarding the allocated stock as long as such vote is
in accordance with the provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). The ESOP may purchase additional shares of common
stock in the future.







<PAGE>


STOCK OPTION PLAN

     The Stock  Option Plan was adopted by the Board of Directors of AF Bank and
approved by AF Bank's  shareholders at the 1997 Annual  Meeting.  AF Bankshares,
Inc.  assumed  sponsorship  of the Stock  Option  Plan  pursuant  to the Plan of
Reorganization on the effective date of the  Reorganization.  The purpose of the
Stock Option Plan continues to be to promote the growth of AF Bankshares,  Inc.,
AF Bank and other affiliates by linking the incentive  compensation of officers,
key executives and directors with the  profitability of AF Bankshares,  Inc. The
Stock Option Plan is not subject to ERISA and is not a  tax-qualified  plan.  AF
Bankshares,  Inc. has reserved an aggregate of 21,322 shares of common stock for
issuance upon the exercise of stock options granted under the Plan.

     The  Stock  Option  Plan is  administered  by the  members  of the  Board's
Compensation Committee who are disinterested directors ("Option Committee").  In
general,  both  "incentive  stock options" and non-  qualified  stock options to
purchase  common  stock of AF  Bankshares,  Inc.  ("Options")  may be granted to
eligible  officers and outside  directors,  subject to the  restrictions  of the
Code.  The  Option  Committee  has  discretion  under the Stock  Option  Plan to
establish  certain  material  terms  of the  Options  granted  to  officers  and
employees   provided  such  grants  are  made  in  accordance  with  the  Plan's
requirements.  All Options granted to outside directors are by automatic formula
grant and the Option  Committee  has no  discretion  over the material  terms of
these grants.  As of the effective  date of the Stock Option Plan,  each outside
director of AF  Bankshares,  Inc.  was granted a  non-qualified  stock option to
purchase an  aggregate  of 969 shares of common  stock at an  exercise  price of
$18.50 per share.

     All stock options  granted under the Plan  generally vest in 20% increments
over a five year period  subject to automatic  full vesting upon the  optionee's
death,  disability or  retirement or upon a change in control of AF  Bankshares,
Inc.,  as defined in the Stock  Option  Plan,  beginning  December  8, 1997.  AF
Bankshares,  Inc.  believes the use of a vesting  schedule will  encourage  each
option  recipient  to  remain  in the  service  of AF  Bankshares,  Inc.  (or an
affiliate)  and  contribute  to its  profitability  in order  to enjoy  the full
economic benefit of the Option.  All costs of the Stock Option Plan are borne by
AF  Bankshares,  Inc. AF  Bankshares,  Inc.  has  reserved the right to amend or
terminate  the Plan,  in whole or in part,  subject to the  requirements  of all
applicable laws.

     The following  table  provides the value of Mr. Todd's  options at June 30,
2000 as well as the  total  options  currently  granted  to him  under the Stock
Option Plan. Mr. Todd did not exercise any vested options during the fiscal year
ended June 30, 2000.

     AGGREGATED OPTIONS IN 2000 FISCAL YEAR AND 2000 FISCAL YEAR END OPTIONS

<TABLE>
<CAPTION>
                                                  NUMBER OF SECURITIES           VALUE OF UNEXERCISED
                                                 UNDERLYING UNEXERCISED              IN-THE-MONEY
                                                 OPTIONS/SARS AT FISCAL         OPTIONS/SARS AT FISCAL
                                                        YEAR-END                      YEAR-END(1)
                                                           (#)                            ($)
NAME                                            EXERCISABLE/UNEXERCISABLE      EXERCISABLE/UNEXERCISABLE
----                                            -------------------------      -------------------------
<S>                                                <C>                             <C>
James A. Todd
President and Chief Executive Officer.......          4,280 /2,854                        N/A
</TABLE>
-------------
(1)  The closing price per share of common stock on June 30, 2000 was $8.00, and
     all options have an exercise  price of $18.50 per share,  and, as such, all
     options are "out-of-the-money."


<PAGE>


RECOGNITION AND RETENTION PLAN

     The RRP was adopted by the Board of Directors of AF Bank and approved by AF
Bank's  shareholders at the 1997 Annual  Meeting.  AF Bankshares,  Inc.  assumed
sponsorship of the RRP pursuant to the Plan of  Reorganization  on the effective
date of the Reorganization.  Similar to the Stock Option Plan, the RRP functions
as a long-term incentive  compensation program for eligible officers and outside
directors  of AF  Bankshares,  Inc.,  AF Bank and other  affiliates.  The RRP is
administered  by the  members  of the  Board's  Compensation  Committee  who are
disinterested   directors   ("RRP   Committee").   All  costs  and  expenses  of
administering the RRP are paid by AF Bankshares, Inc.

     As required by the terms of the RRP, AF Bankshares,  Inc. has established a
trust ("Trust") and has issued 53,678 shares of common stock, the maximum number
of restricted stock awards ("Restricted Stock Awards") that may be granted under
the RRP, to the Trust from previously authorized, but unissued shares. Shares of
common stock subject to a Restricted Stock Award are held in the Trust until the
Award vests at which time the shares of common stock attributable to the portion
of the Award that have  vested are  distributed  to the Award  holder.  An Award
recipient is entitled to exercise  voting rights and receive cash dividends with
respect to the shares of common stock  subject to his Award,  whether or not the
underlying  shares have vested.  If an  individual  award  recipient  terminates
service prior to full vesting of the Restricted Stock Awards granted pursuant to
the RRP, the shares  subject to the award will be  forfeited  and returned to AF
Bankshares, Inc.

     Restricted Stock Awards are granted under the RRP on a discretionary  basis
to  eligible  officers  and  executives  selected by the RRP  Committee  and are
awarded to outside  directors  pursuant  to the terms of the RRP.  As of July 1,
2000,  each outside  director  has been  granted a  Restricted  Stock Award with
respect to 2,300 shares of common stock. All outstanding Restricted Stock Awards
will vest and become distributable at the rate of 20% per year, over a five year
period, commencing on December 8, 1997, subject to automatic full vesting on the
date of the Award holder's  death,  disability or retirement or upon a change in
control of AF Bankshares, Inc.

     AF Bankshares, Inc. may amend or terminate the RRP, in whole or in part, at
any time, subject to the requirements of all applicable laws.

TRANSACTIONS WITH CERTAIN RELATED PERSONS

     The Financial  Institutions  Reform,  Recovery and  Enforcement Act of 1989
("FIRREA") requires that all loans or extensions of credit to executive officers
and directors must be made on substantially the same terms,  including  interest
rates  and  collateral,   as  those   prevailing  at  the  time  for  comparable
transactions  with the general  public and must not involve more than the normal
risk of repayment or present other unfavorable  features. AF Bank makes loans to
executive  officers,  directors and their  affiliates that are no more favorable
and in the  ordinary  course of business  and that do not involve  more than the
normal risk of collectibility or present unfavorable  features.  AF Bank intends
that any transactions in the future between AF Bank and its executive  officers,
directors, holders of 10% or more of the shares of any class of its common stock
and  affiliates  thereof,  will contain terms no less  favorable to AF Bank than
could have been obtained by it in arm's-length  negotiations  with  unaffiliated
persons and will be approved by a majority of independent  outside  directors of
AF Bank not having any interest in the transaction.



<PAGE>


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section  16(a) of the  Exchange  Act requires  that AF  Bankshares,  Inc.'s
directors,  executive officers,  and any person holding more than ten percent of
AF  Bankshares,  Inc.'s  common  stock file with the SEC  reports  of  ownership
changes,  and that such individuals  furnish AF Bankshares,  Inc. with copies of
the reports.

     Based  solely on its review of the copies of such forms  received by it, or
written  representations  from certain reporting  persons,  AF Bankshares,  Inc.
believes  that all of our  executive  officers and  directors  complied with all
Section 16(a) filing requirements applicable to them.


                             ADDITIONAL INFORMATION

INFORMATION ABOUT SHAREHOLDER PROPOSALS

     If you wish to submit  proposals to be included in our proxy  statement for
the 2001 Annual Meeting of  Shareholders,  we must receive them by June 1, 2001,
pursuant  to the proxy  soliciting  regulations  of the SEC.  SEC rules  contain
standards  as to what  shareholder  proposals  are  required  to be in the proxy
statement.  Any such proposal will be subject to 17 C.F.R.  ss.240.14a-8  of the
rules and regulations promulgated by the SEC.

     In addition, under AF Bankshares,  Inc.'s Bylaws, if you wish to nominate a
director or bring other business before an annual meeting:

o    You must be a shareholder of record and have given timely notice in writing
     to the  Secretary  of AF  Bankshares,  Inc. To be timely,  a  shareholder's
     notice must be  delivered  to or received by the  Secretary  not later than
     five days prior to the date of the annual meeting.
o    Your notice must contain specific information required in our Bylaws.


                                 By Order of the Board of Directors,

                                 /s/ Melanie Paisley Miller
                                 ----------------------------------------------
                                 Melanie Paisley Miller
                                 Executive Vice President, Secretary, Treasurer
                                 and Chief Financial Officer


West Jefferson, North Carolina
October 3, 2000

TO ASSURE  THAT YOUR  SHARES  ARE  REPRESENTED  AT THE  ANNUAL  MEETING,  PLEASE
COMPLETE,  SIGN,  DATE AND PROMPTLY  RETURN THE  ACCOMPANYING  PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.


<PAGE>



AF BANKSHARES, INC.                                              REVOCABLE PROXY


         THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
           AF BANKSHARES, INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS
                         TO BE HELD ON NOVEMBER 6, 2000.


     The undersigned shareholder of AF Bankshares, Inc. hereby appoints Frank E.
Roland and Jerry L. Roten,  each of them, with full powers of  substitution,  to
represent and to vote as proxy, as designated,  all shares of common stock of AF
Bankshares,  Inc. held of record by the undersigned on September 8, 2000, at the
2000 Annual Meeting of  Shareholders  (the "Annual  Meeting") to be held at 6:00
p.m.,  local time, on November 6, 2000, or at any  adjournment  or  postponement
thereof,  upon the  matters  described  in the  accompanying  Notice of the 2000
Annual Meeting of Shareholders and Proxy  Statement,  dated October 3, 2000, and
upon such other  matters as may  properly  come before the Annual  Meeting.  The
undersigned hereby revokes all prior proxies.

     This Proxy,  when properly  executed,  will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF ALL NOMINEES  LISTED IN ITEM 1 AND FOR THE PROPOSAL
LISTED IN ITEM 2.

            PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
                AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.




<PAGE>

<TABLE>
<S>                                                                                              <C>                          <C>
     --------------------------------------------------------------------------------------
      The Board of Directors unanimously  recommends a vote "FOR" all of the nominees named       Please mark your vote as
      in Item 1 and a vote "FOR" the proposal in Item 2.                                          indicated in this example   /X/
     --------------------------------------------------------------------------------------
                                                                                                      I will attend the
                                                                                                       Annual Meeting         / /
</TABLE>
<TABLE>
<S>                                     <C>             <C>       <C>                                      <C>    <C>      <C>
1.  Election of three Directors.              FOR        WITHHOLD  2.  Ratification of the appointment
    NOMINEES: Jan R. Caddell, Kenneth     All nominees   for all       of McGladrey & Pullen, LLP as        FOR   AGAINST   ABSTAIN
    R. Greene and James A. Todd for       (except as     nominees      independent auditors for the         / /     / /       / /
    terms of three years each;            otherwise                    fiscal year ending June 30, 2001.
                                          indicated)
                                              / /          / /

    INSTRUCTION: TO WITHHOLD AUTHORITY
    to vote for any individual nominee,
    write that nominee's name in the
    space provided:
                                                                    The undersigned  hereby acknowledges receipt of  the  Notice of
    ___________________________________                             the  2000  Annual  Meeting   of   Shareholders   and  the Proxy
                                                                    Statement,  dated   October 3, 2000   for   the   2000   Annual
                                                                    Meeting.

                                                                    _______________________________________________________________

                                                                    _______________________________________________________________
                                                                    (Signature(s)


                                                                    Dated:___________________________________________________, 2000
                                                                    Please sign exactly as your  name appears on this  proxy. Joint
                                                                    owners  should  each  sign  personally. If signing as attorney,
                                                                    executor,  administrator,  trustee  or guardian, please include
                                                                    your full title. Corporate or  partnership  proxies  should  be
                                                                    signed by an authorized officer.
</TABLE>
</TEXT>
</DOCUMENT>
</SUBMISSION>
