UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

- -------------------------------------------------------------------------------
                                    Form 10-Q

          X        Quarterly Report Under Section 13 or 15(d) of the Securities
      ---------    Exchange Act of 1934
                   For the quarterly period ended September 30, 2000

                   Transition Report Under Section 13 or 15(d) of the Exchange
      ---------    Act

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

                         EAGLE FINANCIAL SERVICES, INC.
             (Exact name of registrant as specified in its charter)

          Virginia                                           54-1601306
(State or other jurisdiction of                            (I.R.S. employer
incorporation or organization)                            identification no.)


          Post Office Box 391
          Berryville, Virginia                                 22611
(Address of principal executive offices)                     (Zip Code)

                                 (540) 955-2510
              (Registrant's telephone number, including area code)

Indicate by check mark whether the  registrant  (1) has filed all  documents and
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

The  number  of  shares of the  Registrant's  Common  Stock  ($2.50  par  value)
outstanding as of November 9, 2000 was 1,442,098.


                                        1


                         EAGLE FINANCIAL SERVICES, INC.

                               INDEX TO FORM 10-Q

PART I.  FINANCIAL INFORMATION

Item 1.      Financial Statements    .......................................  3

                 Consolidated Balance Sheets as of
                 September 30, 2000 and December 31, 1999    ...............  3

                 Consolidated Statements of Income for the Three
                 and Nine Months Ended September 30, 2000 and 1999    ......  4

                 Consolidated Statements of Shareholders' Equity
                 for the Nine Months Ended September 30, 2000 and 1999 ...... 5

                 Consolidated Statements of Cash Flows for
                 the Nine Months Ended September 30, 2000 and 1999    ......  6

                 Notes to Consolidated Financial Statements    .............  7

Item 2.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations    ..............  8

Item 3.      Quantitative and Qualitative Disclosures
             about Market Risk    ..........................................  9


PART II.  OTHER INFORMATION

Item 1.      Legal Proceedings    .........................................  10
Item 2.      Changes in Securities and Use of Proceeds    .................  10
Item 3.      Defaults Upon Senior Securities    ...........................  10
Item 4.      Submission of Matters to a Vote of Security Holders    .......  10
Item 5.      Other Information    .........................................  10
Item 6.      Exhibits and Reports on Form 8-K    ..........................  11


                                        2


PART I.  FINANCIAL INFORMATION

Item 1.      Financial Statements

                  Eagle Financial Services, Inc. and Subsidiary
                           Consolidated Balance Sheets
                    As of September 30, 2000 and December 31, 1999



                                                (Unaudited)
                                               Sep 30, 2000       Dec 31, 1999
                                             ---------------    ---------------
                                                          
Assets
Cash and due from banks                      $    5,835,752     $    6,420,162
Federal funds sold                                        0                  0
Securities available for sale                    12,169,296         11,100,666
Securities held to maturity (fair value:
  2000, $25,911,280; 1999, $28,582,990)          26,550,879         29,487,192

Loans, net allowance for loan losses
   of $1,308,640 in 2000 and
   $1,122,616 in 1999                           139,889,222        123,694,599
Bank premises and equipment, net                  4,889,051          3,997,919
Other assets                                      4,053,727          3,677,223
                                             ---------------    ---------------
           Total assets                      $  193,387,927     $  178,377,761
                                             ===============    ===============
Liabilities and Shareholders' Equity
Liabilities
    Deposits:
       Noninterest bearing demand deposits   $   27,223,561     $   22,883,062
       Interest bearing demand deposits,
          money market and savings accounts      53,421,275         55,145,407
       Time deposits                             82,556,120         70,860,009
                                             ---------------    ---------------
          Total deposits                     $  163,200,956     $  148,888,478
    Federal funds purchased and securities
       sold under agreements to repurchase        5,436,624          6,160,852
    Federal Home Loan Bank advances               5,000,000          5,000,000
    Other liabilities                             1,015,982            867,583
    Commitments and contingent liabilities                0                  0
                                             ---------------    ---------------
           Total liabilities                 $  174,653,562     $  160,916,913
                                             --------------     ---------------
Shareholders' Equity
    Preferred Stock, $10 par value;
        500,000 shares authorized
        and unissued                         $            0     $            0
    Common Stock, $2.50 par value;
         authorized 5,000,000 shares;
         issued 2000, 1,442,098; issued
         1999, 1,432,797 shares                   3,605,245          3,581,992
    Surplus                                       2,804,750          2,602,005
    Retained Earnings                            12,427,797         11,407,018
    Accumulated other comprehensive loss           (103,427)          (130,167)
                                             ---------------    ---------------
           Total shareholders' equity        $   18,734,365     $   17,460,848
                                             ---------------    ---------------
           Total liabilities and
              shareholders' equity           $  193,387,927     $  178,377,761
                                             ===============    ===============



                                        3


                  Eagle Financial Services, Inc. and Subsidiary
                  Consolidated Statements of Income (Unaudited)
                  For the Periods Ended September 30, 2000 and 1999



                                                     Three Months Ended                  Nine Months Ended
                                                        September 30                       September 30
                                                     2000             1999              2000             1999
                                                ---------------  ---------------   ---------------  ---------------
                                                                                        
    Interest Income
      Interest and fees on loans                $    2,901,450   $    2,222,801    $    8,102,528   $    6,265,983
      Interest on federal funds sold                     7,872              826            12,223           14,426
      Interest on securities held to maturity:
          Taxable interest income                      266,267          297,335           825,801          864,020
          Interest income exempt from
            federal income taxes                       102,361          117,959           314,374          324,538
      Interest and dividends on securities
        available for sale:
          Taxable interest income                      136,813          141,471           378,389          461,699
          Interest income exempt from
             federal income taxes                       18,378            7,106            51,033           17,970
          Dividends                                     37,946           28,297           100,355           78,319
      Interest on deposits in banks                        253              407             1,751              898
                                                ---------------  ---------------   ---------------  ---------------
                Total interest income           $    3,471,340   $    2,816,196    $    9,786,454   $    8,027,853
                                                ---------------  ---------------   ---------------  ---------------
    Interest Expense
      Interest on deposits                      $    1,437,355   $      999,097    $    3,884,128   $    2,896,336
      Interest on federal funds purchased and
          securities sold under agreements
          to repurchase                                 44,119           75,455           217,970          132,476
      Interest on Federal Home Loan
          Bank advances                                 63,122           63,122           188,004          187,308
                                                ---------------  ---------------   ---------------  ---------------

                Total interest expense          $    1,544,596   $    1,137,674    $    4,290,102   $    3,216,120
                                                ---------------  ---------------   ---------------  ---------------

                Net interest income             $    1,926,744   $    1,678,522    $    5,496,352   $    4,811,733
      Provision For Loan Losses                         90,000           80,000           260,000          230,000
                                                ---------------  ---------------   ---------------  ---------------

                Net interest income after
                provision for loan losses       $    1,836,744   $    1,598,522    $    5,236,352   $    4,581,733
                                                ---------------  ---------------   ---------------  ---------------

    Other Income
      Trust Department income                   $       85,595   $       99,602    $      250,961   $      263,788
      Service charges on deposits                      185,025          192,150           549,277          475,556
      Other service charges and fees                   259,241          252,553           757,817          668,612
      Other operating income                            28,653           24,637            75,843           82,915
                                                ---------------  ---------------   ---------------  ---------------

                                                $      558,514   $      568,942    $    1,633,898   $    1,490,871
                                                ---------------  ---------------   ---------------  ---------------
    Other Expenses
      Salaries and wages                        $      727,565   $      683,186    $    2,137,122   $    1,993,103
      Pension and other employee benefits              187,866          140,987           519,178          341,499
      Occupancy expenses                               124,272          103,563           370,187          324,565
      Equipment expenses                               181,079          139,621           475,424          406,478
      Stationary and supplies                           74,069           49,460           155,833          150,484
      Credit card expense                               52,467           52,744           147,711          130,459
      ATM network fees                                  35,424           63,130           101,188          131,389
      Postage                                           31,164           34,164           109,123          103,535
      Other operating expenses                         300,831          281,284           855,023          832,709
                                                ---------------  ---------------   ---------------  ---------------

                                                $    1,714,737   $    1,548,139    $    4,870,789   $    4,414,221
                                                ---------------  ---------------   ---------------  ---------------

               Income before income taxes       $      680,521   $      619,325    $    1,999,461   $    1,658,383
    Income Tax Expense                                 177,127          163,979           490,587          399,825
                                                ---------------  ---------------   ---------------  ---------------

                Net Income                      $      503,394   $      455,346    $    1,508,874   $    1,258,558
                                                ===============  ===============   ===============  ===============
    Earnings Per Share,
      (basic and assuming dilution)             $         0.35   $         0.32    $         1.05   $         0.89
                                                ===============  ===============   ===============  ===============



                                        4


                 Eagle Financial Services, Inc. and Subsidiary
           Consolidated Statements of Shareholders' Equity (Unaudited)
              For the Nine Months Ended September 30, 2000 and 1999



                                                                                 Accumulated
                                                                                    Other
                                         Common                     Retained    Comprehensive Comprehensive
                                         Stock        Surplus       Earnings    Income (Loss)     Income          Total
                                      ------------  ------------  ------------  ------------   ------------   --------------
                                                                                            
Balance, December 31, 1998            $ 3,545,853   $ 2,307,615   $10,262,104   $    77,929                     $16,193,501
Comprehensive income:
  Net income                                                        1,258,558                  $ 1,258,588        1,258,558
  Other comprehensive income:
    Unrealized (loss) on
      securities available for
      sale, net of deferred
      income taxes of $106,336                                                     (206,416)      (206,416)        (206,416)
                                                                                               ------------
    Total comprehensive income                                                                 $ 1,052,142
                                                                                               ============
  Issuance of common stock, dividend
    investment plan (5,991 shares)         14,976       144,375                                                     159,351
  Dividends declared ($0.18 per share)                               (397,696)                                     (397,696)
  Fractional shares purchased                 (11)         (152)                                                       (166)
                                      ------------  ------------  ------------  ------------                  --------------
Balance, September 30, 1999           $ 3,560,815   $ 2,451,838   $11,122,966   $  (128,487)                     $17,007,132
                                      ============  ============  ============  ============                  ==============

Balance, December 31, 1999            $ 3,581,992   $ 2,602,005   $11,407,018   $  (130,167)                    $17,460,848
Comprehensive income:
  Net income                                                        1,508,874                  $ 1,508,874        1,508,874
  Other comprehensive income:
    Unrealized gain on
      securities available for
      sale, net of deferred
      income taxes of $13,776                                                        26,740         26,740           26,740
                                                                                                ------------
    Total comprehensive income                                                                  $ 1,535,614
                                                                                                ============
  Issuance of common stock, employee
    Benefit plan (2,100 shares)              5,250       34,832                                                      40,082
  Issuance of common stock, dividend
    investment plan (7,207 shares)          18,018      168,061                                                     186,079
  Dividends declared ($0.22 per share)                                (488,095)                                    (488,095)
  Fractional shares purchased                  (15)        (148)                                                       (163)
                                       ------------  ------------  ------------  -----------                    ------------
Balance, September 30, 2000            $ 3,605,245  $ 2,804,750    $12,427,797   $ (103,427)                    $18,734,365
                                       ============  ============  ============  ===========                   =============



                                        5


                  Eagle Financial Services, Inc. and Subsidiary
                Consolidated Statements of Cash Flows (Unaudited)
              For the Nine Months Ended September 30, 2000 and 1999



                                                         Nine Months Ended
                                                           September 30
                                                      2000             1999
                                                  -------------   -------------
                                                            
Cash Flows from Operating Activities
  Net income                                      $  1,508,874    $  1,258,558
  Adjustments to reconcile net income to
   net cash provided by operating activities:
    Depreciation and amortization                      443,683         335,304
    Amortization of intangible assets                   33,788          42,149
    (Gain) Loss on equity investment                    (9,402)          7,511
    Provision for loan losses                          260,000         230,000
    Loss on sale of other real estate owned              1,184               0
    Premium amortization on securities, net             46,532          60,516
    Changes in assets and liabilities:
      (Increase) in other assets                      (594,595)       (523,798)
      Increase (decrease) in other liabilities         148,399         (22,599)
                                                  -------------   -------------
      Net cash provided by operating activities   $  1,838,463    $  1,387,641
                                                  -------------   -------------
Cash Flows from Investing Activities
  Proceeds from maturities and principal
   payments on securities held to maturity        $  2,894,917    $  6,793,349
  Proceeds from maturities and principal
   payments on securities available for sale         2,790,838       4,123,775
  Purchases of securities held to maturity                   0      (8,453,579)
  Purchases of securities available for sale        (3,824,088)     (1,329,057)
  Purchases of bank premises and equipment          (1,263,771)       (155,608)
  Proceeds from sale of other real estate owned        107,701               0
  Net (increase) in loans                          (16,454,623)    (18,144,293)
                                                  -------------   -------------
      Net cash (used in) investing activities     $(15,749,026)   $(17,165,413)
                                                  -------------   -------------
Cash Flows from Financing Activities
  Net increase in demand deposits,
   money market and savings accounts              $  2,616,367    $  6,158,611
  Net increase (decrease) in certificates
     of deposits                                    11,696,111      (1,547,943)
  Net increase (decrease) in federal funds
     purchased and securities sold under
     agreements to repurchase                         (724,228)      9,501,877
  Proceeds from issuance of common stock to ESOP        40,082               0
  Cash dividends paid                                 (302,016)       (238,345)
  Fractional shares purchased                             (163)           (166)
                                                  -------------   -------------
      Net cash provided by financing activities   $ 13,326,153     $13,874,034
                                                  -------------   -------------
      (Decrease) in cash and cash equivalents     $   (584,410)    $(1,903,738)

Cash and Cash Equivalents
  Beginning                                          6,420,162       7,636,475
                                                  -------------   -------------
  Ending                                          $  5,835,752    $  5,732,737
                                                  =============   =============

Supplemental Disclosures of Cash Flow Information
  Cash payments for:
    Interest                                      $  4,275,531    $  3,251,490
                                                  =============   =============
    Income taxes                                  $    528,950    $    505,627
                                                  =============   =============

Supplemental Schedule of Non-Cash Investing and
 Financing Activities:
   Issuance of common stock,
    dividend investment plan                      $    186,079    $    159,351
                                                  =============   =============
   Unrealized gain (loss) on securities
    available for sale                            $     40,516   $   (312,752)
                                                  =============   =============




                                        6


                         EAGLE FINANCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000

(1)      The accompanying  unaudited financial  statements have been prepared in
         accordance with generally accepted  accounting  principals from interim
         financial  information  and  with  the  instructions  to Form  10-Q and
         Article 10 of Regulation S-X.  Accordingly,  they do not include all of
         the information and footnotes required by generally accepted accounting
         principles.

(2)      In the opinion of  management,  the  accompanying  unaudited  financial
         statements contain all adjustments (consisting of only normal recurring
         accruals)  necessary  to present  fairly the  financial  position as of
         September 30, 2000 and December 31, 1999, and the results of operations
         and cash flows for the three and nine months ended  September  30, 2000
         and 1999. The statements  should be read in conjunction  with the Notes
         to Financial Statements included in the Company's Annual Report for the
         year ended December 31, 1999.

(3)      The results of  operations  for the three and nine month  periods ended
         September  30, 2000 and 1999,  are not  necessarily  indicative  of the
         results to be expected for the full year.

(4)      Securities  held to maturity and available for sale as of September 30,
         2000 and December 31, 1999, are:


                                   September 30, 2000          Dec 31, 1999
Held to Maturity                     Amortized Cost           Amortized Cost
- ----------------                     --------------           --------------
                                                        
U.S. Treasury securities             $      121,983           $      121,982
Obligations of U.S. government
 corporations and agencies                3,503,696                3,508,336
Mortgage-backed securities                8,433,765                9,610,658
Obligations of states and political
 subdivisions                            14,491,435               16,246,216
                                     --------------           --------------
                                     $   26,550,879           $   29,487,192
                                     ==============           ==============

                                   September 30, 2000             Dec 31, 1999
                                       Fair Value                  Fair Value
                                     --------------           --------------
U.S. Treasury securities             $      124,059           $      124,517
Obligations of U.S. government
 corporations and agencies                3,455,780                3,443,285
Mortgage-backed securities                8,202,997                9,265,569
Obligations of states and political
 subdivisions                            14,128,444               15,749,619
                                     --------------           --------------
                                     $   25,911,280           $   28,582,990
                                     ==============           ==============




                                   September 30, 2000             Dec 31, 1999
Available for Sale                   Amortized Cost             Amortized Cost
- ------------------                   --------------           --------------
                                                        
Obligations of U.S. government
 corporations and agencies           $    3,252,195           $    3,753,082
Mortgage-backed securities                5,289,360                4,621,081
Obligations of states and political
 Subdivisions                             1,493,976                1,080,608
Other                                     2,290,472                1,843,118
                                     --------------           --------------
                                     $   12,326,003           $   11,297,889
                                     ==============           ==============

                                   September 30, 2000             Dec 31, 1999
                                       Fair Value                  Fair Value
                                     --------------           --------------
Obligations of U.S. government
 corporations and agencies           $    3,232,485           $    3,722,667
Mortgage-backed securities                5,253,753                4,496,760
Obligations of states and political
 Subdivisions                             1,488,163                1,049,296
Other                                     2,194,895                1,831,943
                                     --------------           --------------
                                     $   12,169,296           $   11,100,666
                                     ==============           ==============


(5)     Net loans at  September 30, 2000 and December 31, 1999 are summarized as
        follows (In Thousands):


                                                Sept 30, 2000        Dec 31, 1999
                                               ---------------     ---------------
                                                            
Loans secured by real estate:
  Construction and land development            $        5,139      $        4,138
  Secured by farmland                                   5,536               6,057
  Secured by 1-4 family residential                    74,608              64,566
  Nonfarm, nonresidential loans                        25,525              23,457
Loans to finance agricultural production                  589                 495
Commercial and industrial loans                        11,494               9,952
Loans to individuals                                   16,923              14,745
Loans to U.S. state and political subdivisions          1,329               1,343
All other loans                                            66                 102
                                               ---------------     ---------------
Gross loans                                    $      141,209      $      124,855

Less:
  Unearned income                                         (11)                (37)
  Allowance for loan losses                            (1,309)             (1,123)
                                               ---------------     ---------------
Loans, net                                     $      139,889      $      123,695
                                               ===============     ===============


(6)     Allowance for Loan Losses


                                              Sep 30 2000      Sep 30, 1999      Dec 31, 1999
                                            --------------    --------------    --------------
                                                                       
Balance, beginning                          $   1,122,616     $     925,171     $     925,171
Provision charged to operating expense            260,000           230,000           335,000
Recoveries added to the allowance                  27,150            80,978            99,746
Loan losses charged to the allowance             (101,126)         (188,182)         (237,301)
                                            --------------    --------------    --------------
Balance, ending                             $   1,308,640     $   1,047,967     $   1,122,616
                                            ==============    ==============    ==============


(7)     New Accounting Pronouncements

There are no new accounting pronouncements to disclose within this Form 10-Q.


                                        7



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

PERFORMANCE SUMMARY

Net  income  of the  company  for the  first  nine  months  of 2000 and 1999 was
$1,508,874  and  $1,258,558,  respectively.  This is an  increase of $230,316 or
19.89%.  Net interest  income after provision for loan losses for the first nine
months of 2000 and 1999 was $5,236,352 and $4,581,733,  respectively. This is an
increase of $654,619 or 14.29%.  Total other income increased  $143,027 or 9.59%
from  $1,490,871  for the first nine months of 1999 to $1,633,898  for the first
nine months of 2000.  Total  other  expenses  increased  $456,568 or 10.34% from
$4,414,221  during the first nine months of 1999 to $4,870,789  during the first
nine months of 2000.

Earnings  per common share  outstanding  (basic and diluted) was $1.05 and $0.89
for the nine months ended September 30, 2000 and 1999, respectively.  Annualized
return on average assets for the nine month periods ended September 30, 2000 and
1999 was 1.10% and 1.07%, respectively.  Annualized return on average equity for
the nine month periods ended  September 30, 2000 and 1999 was 11.18% and 10.14%,
respectively.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

The provision for loan losses is based upon management's  estimate of the amount
required to maintain an adequate  allowance  for loan losses  reflective  of the
risks in the loan  portfolio.  The Company reviews the adequacy of the allowance
for loan  losses  monthly  and  utilizes  the  results of these  evaluations  to
establish the provision for loan losses.  The allowance is maintained at a level
believed by management to absorb  potential  losses in the loan  portfolio.  The
methodology  considers  specific  identifications,  specific and estimate pools,
trends in  delinquencies,  local and regional  economic trends,  concentrations,
commitments,  off balance sheet  exposure and other  factors.  The provision for
loan  losses  for the nine  month  periods  ended  September  30,  2000 and 1999
increased  $30,000 from $230,000 in 1999 to $260,000 in 2000.  The allowance for
loan losses  increased  $186,024 or 16.57%  during the first nine months of 2000
from  $1,122,616 at December 31, 1999 to  $1,308,640 at September 30, 2000.  The
allowance as a percentage of total loans increased from 0.90% as of December 31,
1999 to 0.93% as of  September  30,  2000.  The Company had net  charge-offs  of
$73,976 and $107,204  for the first nine months of 2000 and 1999,  respectively.
The ratio of net charge-offs to average loans decreased from 0.10% for the first
nine months of 1999 to 0.06% for the first nine months of 2000.

The coverage of the  allowance  for loan losses over  non-performing  assets and
loans 90 days past due and still  accruing  interest  increased  from 123.68% at
December 31, 1999 to 329.35% at September 30, 2000.  Loans past due greater than
90 days and still accruing interest decreased from $642,299 at December 31, 1999
to $194,892 at September 30, 2000.

Loans are viewed as  potential  problem  loans  when  management  questions  the
ability of the borrower to comply with current repayment terms.  These loans are
subject to  constant  review by  management  and their  status is  reviewed on a
regular  basis.  The  amount  of  problem  loans as of  September  30,  2000 was
$687,568.  Most of these loans are well secured and management  expects to incur
only immaterial losses on their disposition.

BALANCE SHEET

Total assets  increased  $15.0 million or 8.41% from $178.4  million at December
31, 1999 to $193.4  million at September  30, 2000.  Securities  decreased  $1.9
million  or 4.60%  during the first  nine  months of 2000 from $40.6  million at
December 31, 1999 to $38.7 million at September 30, 2000. Loans, net of unearned
discounts  increased  $16.4 million or 13.12% during the same period from $124.8
million at December 31, 1999 to $141.2 million at September 30, 2000.

Total liabilities  increased $13.8 million or 8.54% during the first nine months
of 2000 from $160.9  million at December 31, 1999 to $174.7 million at September
30, 2000. Total deposits increased $14.3 million or 9.61% during the same period
from $148.9 at December 31, 1999 to $163.2 million at September 30, 2000.  Total
shareholders'  equity  increased  $1.2  million  or 7.29%  during the first nine
months of 2000 from  $17.5  million at  December  31,  1999 to $18.7  million at
September 30, 2000.

SHAREHOLDERS' EQUITY

The  Company  continues  to  be  a  well  capitalized   financial   institution.
Shareholders' equity per share increased $0.80 or 6.56% from $12.19 per share at
December  31, 1999 to $12.99 per share at September  30,  2000.  During 1999 the
Company paid $0.38 per share in dividends. The Company's total dividends for the
first three  quarters  of 2000 were $0.34 per share.  The Company has a Dividend
Investment  Plan that reinvests the dividends of  participating  shareholders in
Company  stock.  The Company  also  sponsors a 401(k)  savings  plan under which
eligible  employees  may choose to save up to 15 percent  of their  salary.  The
Company  matches  50  percent  (up to 6 percent  of the  employee's  salary)  of
employee contributions with Company common stock.

LIQUIDITY AND MARKET RISK

Asset and  liability  management  assures  liquidity  and  maintains the balance
between rate sensitive assets and  liabilities.  Liquidity  management  involves
meeting the present and future  financial  obligations  of the Company  with the
sale or maturity of assets or through the occurrence of additional  liabilities.
Liquidity  needs are met with cash on hand,  deposits  in banks,  federal  funds
sold,  securities classified as available for sale and loans maturing within one
year.  Total liquid  assets were $49.1  million at September  30, 2000 and $42.6
million  at  December  31,  1999.  These  represent  25.39%  and 26.46% of total
liabilities as of September 30, 2000 and December 31, 1999, respectively.

There have been no material changes in Quantitative and Qualitative  Disclosures
about Market Risk as reported at December 31, 1999 in the Company's Form 10-K.

YEAR 2000

The Y2K issue  involved the risk that  computer  programs  and computer  systems
would  not be able to  perform  without  interruption  into  the year  2000.  If
computer  systems did not correctly  recognize the date change from December 31,
1999 to January 1, 2000,  computer  applications that rely on a date field could
have failed or created erroneous  results.  All computer programs and systems at
the Company  operated  without  problems when the date changed from December 31,
1999 to January 1, 2000.  While the Company  will  continue to monitor  computer
programs and systems, no Y2K related problems are expected to occur.

To date, the Company has expensed approximately $25,000 related to the Year 2000
issue.  Most of these costs are associated with the testing of mission  critical
software and upgrading the Bank's ATM's.  Any remaining  expenses related to Y2K
are not  expected  to  have a  material  effect  on the  Company's  consolidated
financial statements.

FORWARD LOOKING STATEMENTS

Certain statements contained in this annual report that are not historical facts
may be forward looking statements. The forward looking statements are subject to
certain  risks and  uncertainties  which  could cause  actual  results to differ
materially  from  historical or expected  results.  Readers are cautioned not to
place undue reliance on these forward looking statements.



                                        8


Item 3.      Quantitative and Qualitative Disclosures about Market Risk

             The information required by Part I, Item 3., is incorporated herein
by reference to the section titled LIQUIDITY AND MARKET RISK within Part I, Item
2  "Management's  Discussion and Analysis of Financial  Condition and Results of
Operation."


                                        9


PART II.  OTHER INFORMATION

Item 1.      Legal Proceedings.

               None.

Item 2.      Changes in Securities and Use of Proceeds.

               None.

Item 3.      Defaults Upon Senior Securities.

               None.

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

               None.

Item 5.      Other Information.

               None.


                                       10


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

(a)    Exhibits

       The following exhibits, when applicable, are filed with this Form 10-Q or
       incorporated by reference to previous filings.

            Number                    Description
            ---------                 -----------------------------------------

            Exhibit 2.                Not applicable.

            Exhibit 3.             (i)  Articles  of  Incorporation  of
                                        Registrant   (incorporated   herein   by
                                        reference to Exhibit 3.1 of Registrant's
                                        Form   S-4    Registration    Statement,
                                        Registration No. 33-43681.)

                                   (ii) Bylaws   of   Registrant   (incorporated
                                        herein by  reference  to Exhibit  3.2 of
                                        Registrant's   Form   S-4   Registration
                                        Statement, Registration No. 33-43681)

            Exhibit 4.                 Not applicable.

            Exhibit 10.                Material Contracts.

                  10.1                 Description  of  Executive   Supplemental
                                       Income Plan (incorporated by reference to
                                       Exhibit  10.1  to  the  Company's  Annual
                                       Report  on Form  10-K for the year  ended
                                       December 31, 1996).

                  10.2                 Lease  Agreement  between  Bank of Clarke
                                       County     (tenant)    and     Winchester
                                       Development   Company   (landlord)  dated
                                       August 1, 1992 for the  branch  office at
                                       625 East Jubal Early  Drive,  Winchester,
                                       Virginia    (incorporated    herein    by
                                       reference   to   Exhibit   10.2   of  the
                                       Company's  Annual Report on Form 10-K for
                                       the year ended December 31, 1995).

                  10.3                 Lease  Agreement  between  Bank of Clarke
                                       County     (tenant)    and     Winchester
                                       Development Company (landlord) dated July
                                       1, 1997 for an  office at 615 East  Jubal
                                       Early   Drive,    Winchester,    Virginia
                                       (incorporated   herein  by  reference  to
                                       Exhibit 10.3 of the  Company's  Quarterly
                                       Report on Form 10-Q for the quarter ended
                                       June 30, 1997).

                  10.5                 Lease  Agreement  between  Bank of Clarke
                                       County   (tenant)  and  Winchester   Real
                                       Estate Management,  Inc. (landlord) dated
                                       March 20,  2000 for the branch  office at
                                       190   Campus   Boulevard,    Suite   120,
                                       Winchester, Virginia (incorporated herein
                                       by  reference  to  Exhibit  10.5  of  the
                                       Company's  Quarterly  Report on Form 10-Q
                                       for the quarter ended March 31, 2000).

            Exhibit 11.                Computation of Per Share Earnings
                                       (incorporated herein as Exhibit 11).

            Exhibit 15.                Not applicable.

            Exhibit 18.                Not applicable.

            Exhibit 19.                Not applicable.

            Exhibit 22.                Not applicable.

            Exhibit 23.                Not applicable.

            Exhibit 24.                Not applicable.

            Exhibit 27.                Financial Data Schedule
                                       (incorporated herein as Exhibit 27).

            Exhibit 99.                Not applicable.

(b) Reports on Form 8-K.

     No  reports  on Form 8-K were  filed by the  registrant  during  the second
quarter of 2000.


                                       11


SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                  EAGLE FINANCIAL SERVICES, INC.


Date:          November 9, 2000     /s/ JOHN R. MILLESON
                                    --------------------------
                                    John R. Milleson
                                    President and Chief Executive
                                     Officer


Date:          November 9, 2000     /s/ JAMES W. MCCARTY, JR.
                                    --------------------------
                                    James W. McCarty, Jr.
                                    Vice President, Chief Financial
                                    Officer, and Secretary/Treasurer


                                       12