<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     Of The Securities Exchange Act of 1934




For the quarter ended  September  30, 1999    Commission file number   33-20417
                     ----------------------                          -----------


                            Capital Directions, Inc.
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Michigan                                     38-2781737
-------------------------------         ---------------------------------------
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)


 322 South Jefferson St., Mason, Michigan                  48854-0130
------------------------------------------                ------------
 (Address of principal executive offices)                  (Zip Code)


Registrant's telephone number, including area code:    (517) 676-0500
                                                       --------------


                                      None
              -----------------------------------------------------
                  Former name, former address and former fiscal
                       year, if changed since last report


Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such 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
                                      ---   ---

As of October 30, 1999 the registrant had outstanding 596,622 shares of common
stock having a par value of $5 per share.
<PAGE>   2
                            CAPITAL DIRECTIONS, INC.
                               INDEX TO FORM 10-Q


<TABLE>
<CAPTION>

                                                                                        Page
PART I - FINANCIAL INFORMATION                                                          Number
<S>                                                                                     <C>
   Item 1. Consolidated Balance Sheets
           September 30, 1999 and December 31, 1998.....................................   1

           Consolidated Statement of Income for the three and nine month
           periods ended September 30, 1999 and 1998....................................   2

           Consolidated Statement of Cash Flows for the nine month
           periods ended September 30, 1999 and 1998....................................   3

           Consolidated Statement of Changes in Shareholders' Equity
           for the nine months ended September 30, 1999.................................   4

           Notes to Interim Consolidated Financial Statements...........................   5-6

   Item 2. Management's Discussion and Analysis of Financial
           Condition and Results of Operations..........................................   6-11

PART II - OTHER INFORMATION

   Item 1. Legal Proceedings............................................................   11

   Item 2. Changes in Securities .......................................................   11

   Item 3. Defaults Upon Senior Securities .............................................   11

   Item 4. Submission of Matters to a Vote of Security Holders..........................   11

   Item 5. Other Information............................................................   11

   Item 6. Exhibits and Reports on Form 8-K.............................................   11

   Item 7. Signatures...................................................................   12

           Index to Exhibits............................................................   13
</TABLE>
<PAGE>   3
PART I - FINANCIAL INFORMATION

                            CAPITAL DIRECTIONS, INC.
                           CONSOLIDATED BALANCE SHEETS

--------------------------------------------------------------------------------
(In thousands)

<TABLE>
<CAPTION>
                                                                       September 30,    December 31,
                                                                          1999             1998
                                                                          ----             ----
                                                                       (Unaudited)
<S>                                                                    <C>               <C>
Assets
   Cash and non interest bearing deposits                             $   3,144         $   2,695
   Interest bearing deposits                                                 15                26
   Federal funds sold                                                       100               600
                                                                      ---------          --------
       Total cash and cash equivalents                                    3,259             3,321
   Securities available for sale                                         10,619             5,320
   Securities held to maturity (fair value of $6,484
     as of December 31, 1998)                                                 -             6,276
   Federal Home Loan Bank (FHLB) stock                                      975               787
                                                                      ---------          --------
   Total investment securities                                           11,594            12,383
   Loans:
    Commercial and agricultural                                           4,956             5,547
    Installment                                                           3,393             3,368
    Real estate mortgages                                                78,912            73,000
                                                                      ---------          --------
          Total loans                                                    87,261            81,915
         Allowance for loan losses                                       (1,040)           (1,011)
                                                                      ---------         ---------
          Net loans                                                      86,221            80,904
         Premises and equipment, net                                        777               784
   Accrued income and other assets                                        3,294             2,837
                                                                      ---------         ---------
          Total assets                                                $ 105,145         $ 100,229
                                                                      =========         =========

Liabilities and Shareholders' Equity
Liabilities
   Deposits:
     Non interest bearing                                             $  10,392         $  10,288
     Interest bearing                                                    62,558            62,101
                                                                      ---------         ---------
       Total deposits                                                    72,950            72,389
   Federal funds purchased                                                    -                 -
   Long-term FHLB borrowing                                              19,005            15,593
   Other liabilities                                                      1,566             1,250
                                                                      ---------         ---------
       Total liabilities                                                 93,521            89,232
Shareholders' Equity
   Common stock:  $5 par value, 1,300,000 shares authorized;
    596,622 outstanding September 30, 1999 and 595,123
    outstanding December 31, 1998                                         2,983             2,976
   Additional paid in capital                                             2,576             2,561
   Retained earnings                                                      6,014             5,418
   Net unrealized gains/(losses) on securities available for sale,
    net of tax of $26 as of September 30, 1999 and $22 as of
    December 31, 1998                                                        51                42
                                                                      ---------         ---------
       Total shareholders' equity                                        11,624            10,997
                                                                      ---------         ---------
          Total liabilities and shareholders' equity                  $ 105,145         $ 100,229
                                                                      =========         =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       1
<PAGE>   4
                            CAPITAL DIRECTIONS, INC.
                  CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

--------------------------------------------------------------------------------
(In thousands, except per share data)

<TABLE>
<CAPTION>
                                                             Three Months Ended        Nine Months Ended
                                                               September 30,            September 30,
                                                            1999          1998        1999        1998
                                                            ----          ----        ----        ----
<S>                                                       <C>          <C>         <C>          <C>
Interest and Dividend Income
    Interest and fees on loans                            $  1,714     $   1,497   $   5,052    $   4,265
    Federal funds sold                                          18            52          30          109
    Interest and dividends on investment securities:
       Taxable                                                 123           160         372          511
       Tax exempt                                               45            53         154          155
       Other interest income                                     0             1           3            7
                                                          --------     ---------   ---------    ---------
            Total interest income                            1,900         1,763       5,611        5,047
Interest Expense
    Deposits                                                   589           635       1,763        1,870
    Short-term borrowings                                        2             -          17            1
    Long-term borrowings                                       280           186         790          425
                                                          --------     ---------   ---------    ---------
         Total interest expense                                871           821       2,570        2,296
                                                          --------     ---------   ---------    ---------
Net Interest Income                                          1,029           942       3,041        2,751
Provision for loan losses                                       15            (5)         33          (22)
                                                          --------     ---------   ---------    ---------
Net interest income after provision for loan losses          1,014           947       3,008        2,773
Non Interest Income
    Service charges on deposit accounts                         74            56         206          196
    Net gain (loss) on sale of loans                             -             4           -            3
    Net gain (loss) on sale and call of securities               -             -           -          (18)
    Other income                                                59            80         216          243
                                                          --------     ---------   ---------    ---------
         Total non interest income                             133           140         422          424
Non Interest Expense
    Salaries and employee benefits                             327           345       1,020        1,069
    Premises and equipment                                      75            78         231          233
    Other operating expense                                    183           183         606          537
                                                          --------     ---------   ---------    ---------
         Total non interest expense                            585           606       1,857        1,839

Income before income tax expense                               562           481       1,573        1,358
Income tax expense                                             172           142         474          396
                                                          --------     ---------   ---------    ---------

Net Income                                                $    390     $     339   $   1,099    $     962
                                                          ========     =========   =========    =========

Average common shares outstanding                          596,622       595,056     596,053      595,056
Basic earnings per common share                               0.65          0.57        1.84         1.62
Diluted earnings per common share                             0.66          0.57        1.84         1.61
Dividends per share of common stock, declared                 0.28          0.27        0.82         0.69
</TABLE>

See accompanying notes to consolidated financial statements.

                                        2
<PAGE>   5
                            CAPITAL DIRECTIONS, INC.
                CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

--------------------------------------------------------------------------------
(In thousands)

<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                September 30,
                                                                             1999            1998
                                                                             ----            ----
<S>                                                                    <C>              <C>
Cash Flows From Operating Activities
    Net income                                                         $   1,099        $     962
    Adjustments to reconcile net income to net cash from
    operating activities
       Depreciation                                                           90               83
       Provision for loan losses                                              33              (22)
       Net amortization (accretion) on securities                              9               57
       Loans originated for sale                                               -           (1,051)
       Proceeds from loans originated for sale                                 -            1,053
       Net gain on sale of loans originated for sale                           -               (2)
       Net gain (loss) on sales of non-residential loans                       -               (1)
       Net gain (loss) on securities                                           -               18
       Changes in assets and liabilities:
          Accrued interest receivable                                       (115)             (71)
          Accrued interest payable                                            11               46
          Other assets                                                      (346)            (244)
          Other liabilities                                                  291              237
                                                                       ---------        ---------
            Net cash from operating activities                             1,072            1,065

Cash Flows From Investing Activities
    Securities available for sale:
       Purchases                                                          (2,627)          (6,820)
       Maturities, calls and principal payments                            3,155            6,320
    Securities held to maturity:
       Purchases                                                               -           (1,246)
       Maturities, calls and principal payments                              265            1,888
    Proceeds from sale of non-residential loans                                -               68
    Net change in loans                                                   (5,350)         (12,816)
    Premises and equipment expenditures                                      (83)            (127)
                                                                       ---------        ---------
          Net cash from investing activities                              (4,640)         (12,733)

Cash Flows From Financing Activities
    Net change in deposits                                                   561            4,964
    Federal funds purchased                                                    -             (450)
    Proceeds from long-term FHLB borrowings                                4,000           11,264
    Repayment of long-term FHLB borrowings                                  (588)             (86)
    Proceeds from shares issued upon exercise of stock options                22                -
    Dividends paid                                                          (489)            (360)
                                                                       ---------        ---------
          Net cash from financing activities                               3,506           15,332
                                                                       ---------        ---------
Net Change in Cash and Cash Equivalents                                      (62)           3,664
Cash and Cash Equivalents at Beginning of Year                             3,321            2,188
                                                                       ---------        ---------
Cash and Cash Equivalents at End of Period                             $   3,259        $   5,852
                                                                       =========        =========

Supplemental Disclosure of Cash Flow Information
     Cash paid during the year for:
       Interest                                                        $   2,559        $   2,243
       Income taxes - federal                                          $     474        $     412
</TABLE>

See accompanying notes to consolidated financial statements.

                                        3
<PAGE>   6
                            CAPITAL DIRECTIONS, INC.
           CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited)
              For the nine months ended September 30, 1999 and 1998

--------------------------------------------------------------------------------
(In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                                   Net
                                                                                Unrealized
                                                                                 Gain On
                                                                                Securities      Total
                                                      Additional                 Available      Share-
                                          Common        Paid-In      Retained     For Sale,    Holders'
                                           Stock        Capital      Earnings    Net of Tax     Equity
                                           -----        -------      --------    ----------     ------
<S>                                       <C>          <C>           <C>          <C>          <C>
Balance, January 1, 1998                  $   2,975    $   2,561     $  4,652     $     28     $  10,216

Net income                                        -            -          962            -           962

Other comprehensive income, net:
   Net change in unrealized gain on
   securities available for sale, net of
   tax of $(1)                                    -            -            -           36            36
                                                                                               ---------
Comprehensive income                                                                                 998
Cash dividends ($.415 per share)                                         (407)                      (407)
                                          ---------    ---------     --------     --------     ---------

Balance, September 30, 1998               $   2,975    $   2,561     $  5,207     $     64     $  10,807
                                          =========    =========     ========     ========     =========



Balance, January 1, 1999                  $   2,976    $   2,561     $  5,418     $     42     $  10,997

Net income                                        -            -        1,099            -         1,099

Other comprehensive income, net:
   Net change in unrealized gain on
   securities available for sale, net of
   tax of $26                                     -            -            -            9             9
                                                                                               ---------
Comprehensive income                                                                               1,108
Issuance of 999 shares of common stock
   upon exercise of stock options                 7           15            -            -            22
Cash dividends ($.84 per share)                                          (503)                      (503)
                                          ---------    ---------     --------     --------     ---------

Balance, September 30, 1999               $   2,983    $   2,576     $  6,014     $     51     $  11,624
                                          =========    =========     ========     ========     =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        4
<PAGE>   7
                            CAPITAL DIRECTIONS, INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.    In the opinion of management of the Registrant, the accompanying
      Consolidated Financial Statements contain all adjustments (consisting only
      of normal recurring items) necessary to present fairly the consolidated
      financial position of the Registrant as of September 30, 1999 and December
      31, 1998, the results of operations and cash flows for the nine month
      periods ended September 30, 1999 and 1998, and the changes in
      shareholders' equity for the nine month periods ended September 30, 1999
      and 1998.

2.    The results of operations for the nine months ended September 30, 1999 are
      not necessarily indicative of the results to be expected for the full
      year.

3.    The accompanying unaudited Consolidated Financial Statements and the notes
      thereto should be read in conjunction with the Notes to Consolidated
      Financial Statements and the notes included therein, for the fiscal
      year-end 1998, included in the Registrant's 1998 Annual Report.

4.    During the second quarter of 1999, the Bank transferred securities from
      the held to maturity portfolio to the available for sale portfolio in
      accordance with the provisions of Statement of Financial Accounting
      Standards No. 133, Accounting for Derivative Instruments and Hedging
      Activities. At the date of transfer, these securities had an amortized
      cost of $6,010,847 and increased the unrealized gain on securities
      available for sale and shareholders' equity by $125,575, net of tax of
      $64,689.

5.    Management determines the adequacy of the allowance for loan losses based
      on an evaluation of the loan portfolio, recent loss experience, historical
      performance, current economic conditions, current analyses of asset
      quality and other pertinent factors. Non-performing loans are defined as
      all loans which are accounted for as non-accrual; loans 90 days or more
      past due and still accruing interest; or loans which have been
      renegotiated due to the borrowers' inability to comply with the original
      terms. As of September 30, 1999, non-performing loans totaled $136,000 or
      .15% of total loans. This represents a decrease of $237,000 from the
      $373,000 balance at December 31, 1998.

<TABLE>
<CAPTION>
                                                            September 30,      December 31,
                  Non-performing loans                          1999               1998
                  --------------------                          ----               ----
<S>                                                           <C>               <C>
                  Non-accrual                                 $ 118,000         $243,000
                  90 days or more past due                       18,000          130,000
                  Renegotiated                                        -                -
                                                              ---------         --------
                       Total                                  $ 136,000         $373,000
                                                              =========         ========

                  Non-performing loans as a percent of:
                       Total loans                                  .16%             .46%
                       Allowance for loan losses                  13.08%           36.89%
</TABLE>

                                       5
<PAGE>   8
      Analysis of the allowance for loan losses
      The following table summarizes changes in the allowance for loan losses
      arising from loans charged- off, recoveries on loans previously
      charged-off, and addition or reductions to the allowance which have been
      charged or credited to expense.

<TABLE>
<CAPTION>
                  (In thousands)                               Nine              Twelve
                                                              Months             Months
                                                               Ended             Ended
                                                              Sept. 30,        December 31,
                                                                1999               1998
                                                                ----               ----
<S>                                                           <C>               <C>
                  Balance at beginning of period              $   1,011         $  1,035


                  Charge-offs                                       (29)             (30)
                  Recoveries                                         25               29
                                                              ---------         --------
                      Net charge-offs                                (4)              (1)
                  Additions (reductions) to allowance
                  for loan losses                                    33              (23)
                                                              ---------         --------

                  Balance at end of period                    $   1,040         $  1,011
                                                              =========         ========


    Average loans outstanding during the period               $  85,886         $ 69,172
                                                              =========         ========

    Loans outstanding at end of period                        $  87,261         $ 81,915
                                                              =========         ========

    Allowance as a percent of:
      Total loans at end of period                                 1.19%            1.23%
                                                              =========         ========

      Non-performing loans at end of period                      764.71%          271.05%
                                                              =========         ========

    Net charge-offs as a percent of:
      Average loans outstanding                                    .00%              .00%
                                                              ========          ========

      Allowance for loan losses                                    .38%              .10%
                                                              ========          ========
</TABLE>

6.    The provision for income taxes represents federal income tax expense
      calculated using annualized rates on taxable income generated during the
      respective periods.

Item 2.  Management's discussion and analysis of financial condition and results
         of operations

     The following discussion and analysis of financial condition and results of
     operations provides additional information to assess the Consolidated
     Financial Statements of the Registrant and its wholly-owned subsidiaries.
     Capital Directions, Inc. is a one-bank holding company which commenced
     operations on July 22, 1988. This was facilitated by the acquisition of
     100% of the outstanding shares of Mason State Bank in an exchange of common
     stock. The Company and its subsidiaries provide banking and financial
     services in the banking industry. Substantially all revenue and services
     are derived from banking products and services. The Bank's primary services
     include accepting retail deposits and making residential, consumer and
     commercial loans.

     The corporation is not aware of any market or institutional trends, events
     or circumstances that will have or are reasonably likely to have a material
     effect on liquidity, capital resources, or results of operations except as
     discussed herein.
                                        6
<PAGE>   9

     Financial condition  (In thousands)
     Assets totaled $105,145 at September 30, 1999. The 4.9% increase of $4,916
     from $100,229 at December 31, 1998 resulted primarily from continued strong
     growth in mortgage lending. This growth was supported largely by an
     increase in interest bearing deposits.

     Cash and cash equivalents have decreased $62 or 1.87% in the nine month
     period from December 31, 1998 to September 30, 1999. This is a result of
     reducing excess available funds which are normally sold as an overnight
     investment of federal funds.

     Total outstanding loans have increased $5,346 during the first nine months
     of 1999. This is an increase of 6.53% from December 31, 1998. The majority
     of this growth has been in the residential real estate portfolio. All new
     loans booked in 1999 have been held within the loan portfolio. As
     additional demand for real estate lending is realized, management may
     consider selling newly issued loans on the secondary market.

     The allowance for loan losses increased $29 or 2.87% during the nine month
     period ending September 30, 1999. At September 30, 1999 the allowance as a
     percent of outstanding loans was 1.19% compared to 1.23% at December 31,
     1998. Management continues to maintain the allowance for loan losses at a
     level considered appropriate to absorb losses inherent in the portfolio.

     Total deposits as of September 30, 1999 compared to year-end 1998 increased
     $561 or 0.77%. The largest portion of this increase was concentrated in
     interest bearing accounts. Average total deposits have increased $4,753 or
     7.01% since year-end 1998.

     Total shareholders' equity increased $627 or 5.70% in the first nine months
     of 1999. Net income of $1,099, stock transactions from the exercise of
     options of $22 and net unrealized gains on available for sale securities of
     $9 have increased shareholders' equity, while dividends of $503 reduced
     shareholders' equity. Book value per share was $19.50 at September 30, 1999
     compared to $18.48 at December 31, 1998.

     Results of operations (In thousands)

     For the third quarter of 1999 and 1998, net income totaled $390 and $339,
     respectively. During the nine month periods of 1999 and 1998, net income
     totaled $1,099 and $962, respectively. The increases in earnings during
     these periods are principally the result of increases in net interest
     income. These increases in revenue were partially offset by increases in
     non interest expense, the provision for loan losses and income tax expense.
     Basic earnings per share for the year to date were $1.84, and diluted
     earnings per share were $1.84, compared to $1.62, and $1.61 for the same
     period in 1998. For the third quarter of 1999 basic earnings per share were
     $0.65, and diluted earnings per share were $0.66, compared to $0.57 and
     $0.57 for the same period of 1998. Average earning assets increased to
     $98,268 or 17.73% from September 30, 1998 to September 30, 1999. The
     average yield on earning assets decreased to 7.76% for the period ended
     September 30, 1999 from 8.22% for the comparable period in 1998. Average
     costs for rate related liabilities decreased 24 basis points to 3.78% at
     September 30, 1999 from 4.02% at September 30, 1998. Net interest margin
     decreased to 4.26% for the first nine months of 1999 compared to 4.54% in
     the same period of 1998. This is a result of a lower rate environment.

     The provision for loan losses was $15 during the third quarter of 1999
     compared to $(5) for the same period of 1998. For the nine months ended
     September 30, the provision was $33 in 1999 compared to $(22) in 1998. This
     increase is consistent with the growth of the loan portfolio.

     Non interest income decreased $7 or 0.05% during the third quarter of 1999
     when compared to the third quarter of 1998. Decreases in loan servicing
     income, investment center income and change in cash value on life insurance
     contributed to this decline. Increases in ATM fee income and service

                                        7
<PAGE>   10

     charges on deposit accounts partially offset this decline. Non interest
     income for the nine month period ended September 30, 1999 decreased $2 or
     0.47% when compared to 1998. The 1998 totals included a loss of $18
     incurred on investment securities. Decreases in loan servicing income,
     investment center income and cash value on life insurance impacted
     year-to-date earnings. ATM income and service charges on deposit accounts
     partially offset these decreases.

     Non interest expense decreased $21 or 3.47% when comparing the third
     quarter of 1999 to 1998. Decreased expenses were realized for salaries and
     employee benefits. For the nine months ended September 30, 1999 non
     interest expense increased $18 or 0.98% compared to the same period in
     1998. Salaries and benefits declined $49 or 4.58% as well as marketing
     expenses, which declined $4 or 11.76%. Increases were realized in data
     processing, consulting fees, telephone and correspondent fees.

     The federal income tax provision for the third quarter of 1999 was $172, up
     $30 for the same period in 1998. Year-to-date the income tax provision has
     increased by $78 or 19.7%. This increase reflects a higher taxable income
     for 1999.

     Liquidity and interest rate risk

     The primary objective of asset/liability management is to assure the
     maintenance of adequate liquidity and maximize net interest income by
     maintaining appropriate maturities and balances between interest sensitive
     earning assets and interest bearing liabilities. Liquidity management
     ensures sufficient funds are maintained to meet the cash withdrawal
     requirements of depositors and the credit demand of borrowers.

     Sources of liquidity include federal funds sold, investment security
     maturities and principal payments. A net average balance of $1,406,000 in
     federal funds sold was maintained during the third quarter of 1999. As a
     member of the Federal Home Loan Bank system, the Bank has access to an
     alternate funding source, lower cost for credit services, and an additional
     tool to manage interest rate risk. During the first nine months of 1999,
     the Bank used this source of funding to offset new mortgage loan demand.
     Other sources of liquidity include internally generated cash flow,
     repayments and maturities of loans, borrowing and normal deposit growth.
     The primary source of funds for the parent company is the upstream of
     dividends from the Bank. Management believes these sources of liquidity are
     sufficient for the Bank and parent company to continue current business
     plans.

     At September 30, 1999 the securities available for sale were valued at
     $10,619,000. It is not anticipated that management will use these funds due
     to the optional sources that may be available.

     Interest rate sensitivity management seeks to maximize net interest margin
     through periods of changing interest rates. The Bank develops strategies to
     assure desired levels of interest sensitive assets and interest bearing
     liabilities mature or reprice within selected time frames.

     Strategies include the use of variable rate loan products in addition to
     managing deposit accounts and maturities in the investment portfolio. The
     following table, using recommended regulatory standards, reflects the "rate
     sensitive position" or the difference between loans and investments, and
     liabilities that mature or reprice within the next year and beyond. The
     financial industry has generally referred to this difference as "GAP" and
     its handling as "GAP Management". Throughout the third quarter of 1999, the
     results of the GAP analysis were within the Bank's policy guidelines. At
     September 30, 1999, the percentage of rate sensitive assets to rate
     sensitive liabilities within the one-year time horizon was 67%.

     The following table shows the Corporation's GAP position as of September
     30, 1999. The Corporation has a liability sensitive position of
     approximately $14,077,000 which indicates higher net interest income may be
     earned if rates decrease during the period. Due to the limitations of GAP
     analysis, modeling is also used to enhance measurement and control.

                                        8
<PAGE>   11

GAP Measurement (Dollars in thousands)

<TABLE>
<CAPTION>
                  0-30      31-90     2nd      3rd       4th      Annual    1-3        3-5    Over 5
                  Days      Days    Quarter  Quarter   Quarter    Total     Years     Years    Years    Total
                  ----      ----    -------  -------   -------    -----     -----     -----    -----    -----
<S>               <C>      <C>       <C>     <C>       <C>       <C>       <C>       <C>       <C>      <C>
Assets
------

Loans             $ 8,786  $ 2,900   $4,050  $  4,476  $  4,010  $ 24,222  $ 11,210  $15,128   $42,849  $ 93,409

Loan repayment
offset                  -        -        -         -         -         -         -         -        -    -6,148

Allowance for
loan losses             -        -        -         -         -         -         -         -        -    -1,040

Investments         1,475      789      226       525     1,131     4,146     3,076     3,879    1,293    12,394

Mortgage-
backed
repayments              -        -        -         -         -         -         -         -        -      -800

Short-term
Investments           115        -        -         -         -       115         -         -        -       115

Other non-
earning assets          -        -        -         -         -         -         -         -        -     7,215
                  -------  -------   ------  --------  --------  --------  --------  --------  -------  --------

  Total           $10,376  $ 3,689   $4,276  $  5,001  $  5,141  $ 28,483  $ 14,286  $ 19,007  $44,142  $105,145
                  =======  =======   ======  ========  ========  ========  ========  ========  =======  ========

Liabilities
Non interest
bearing
deposits          $   387  $   763  $ 1,254  $  1,149  $  1,149  $  4,702  $  2,612  $  2,612  $   466  $  10,392

Interest
bearing
deposits           11,116    7,615    5,760     5,975     6,158    36,624    12,951     6,878    6,105     62,558

Federal funds
purchased               -        -        -         -         -         -         -         -        -          -

Long-term
FHLB
borrowings              -      144    1,090         -         -     1,234       863    13,960    2,948     19,005

Other
liabilities             -        -        -         -         -         -         -         -        -      1,566

Capital                 -        -        -         -         -         -         -         -        -     11,624
                  -------  -------  -------  --------  --------  --------  --------  --------  -------  ---------

  Total           $11,503  $ 8,522  $ 8,104  $  7,124  $  7,307  $ 42,560  $ 16,426  $ 23,450  $ 9,519  $ 105,145
                  =======  =======  =======  ========  ========  ========  ========  ========  =======  =========

GAP               $-1,127  $-4,833  $-3,828  $ -2,123  $ -2,166  $-14,077  $ -2,140  $ -4,443  $34,623

Cumulative
GAP               $-1,127  $-5,960  $-9,788  $-11,911  $-14,077  $-14,077  $-16,217  $-20,660  $13,963

GAP ratio              90%      43%      53%       70%      70%        67%     87%         81%     464%
</TABLE>

                                       9
<PAGE>   12
     Capital resources

     The Corporation's capital adequacy is reviewed continuously to ensure that
     sufficient capital is available to meet current and future funding needs
     and comply with regulatory requirements. Shareholders' equity, excluding
     the net unrealized gain on securities available for sale, increased
     $618,000 or 5.64% to $11,573,000 for the first nine months of 1999. This
     represents 11.01% of total assets. At September 30, 1998, the similar ratio
     of shareholders' equity to total assets was 11.19%. Dividends declared per
     common share increased by 21.74% to $.84 per share in 1999 compared to $.69
     in 1998.

     Regulators established "risk-based" capital guidelines that became
     effective December 31, 1990. Under the guidelines, minimum capital levels
     are established for risk-based and total assets based on perceived risk in
     asset categories and certain off balance sheet items, such as loan
     commitments and standby letters of credit. On September 30, 1999, the Bank
     has a "risk-based" total capital to asset ratio of 18.01%. The ratio
     exceeds the requirements established by regulatory agencies as shown below.

<TABLE>
<CAPTION>

                           Capital                         September 30, 1999
                           (Dollars in thousands)    Risk-based        Leverage
<S>                                                  <C>               <C>
                           Actual amount             $    12,544       $   11,504
                           Actual percentage               18.01%           10.85%
                           Required amount           $     5,491       $    4,243
                           Required percentage              8.00%            4.00%
                           Excess amount             $     7,053       $    7,261
</TABLE>

     Bank management does not perceive that future rate changes or inflation
     will have a material impact on capital adequacy. It is the opinion of
     management that capital and shareholders' equity is adequate and will
     continue to be so throughout 1999.

     Impact of Year 2000 compliance
     The approach of the Year 2000 presents potential problems to businesses
     that utilize computer systems in their daily operations. Some computer
     systems may not be able to properly interpret dates after December 31,
     1999, as they may use only two digits to indicate the year. Thus, a date
     using "00" as the year may be recognized as the year 1900 rather than the
     year 2000.

     Capital Directions, Inc. has been working since 1997 to verify that our
     systems are ready for year 2000, or Y2K. A team of Bank professionals meet
     on a regular basis to work through the phases of the Bank's Y2K plan and
     status updates are made quarterly to the Board of Directors. As outlined in
     the plan, the scope of the year 2000 project includes the compliance of all
     operating systems and hardware on all platforms in the areas of both
     information and non-information technology.

     All of our critical systems have been renovated, tested and returned to
     production. Throughout 1999 we will continue testing our systems. This will
     include participation in industry-wide tests, as well as tests with our
     business partners, to verify that information can flow back and forth
     between our companies' systems. In addition, we have developed detailed
     contingency plans to cope with the unexpected. We fully expect the year
     2000 to be business as usual.

     We have hosted several Y2K community outreach programs and will continue
     throughout 1999. Our desire is to inform customers and consumers not only
     as to the Bank's Y2K status; but, also to provide information on the
     banking industry as a whole, as well as to provide information to consumers
     on such services as power, telecommunications, local government, emergency
     services and Y2K fraud awareness.

     Capital Directions expects to spend approximately $45,000 associated with
     the year 2000; 80% of which can be attributed to salaries. The corporation
     earnings have been adequate to handle year 2000

                                       10
<PAGE>   13

     Impact of Year 2000 compliance (continued)
     expenditures with no delay to other capital expenditures. It is difficult
     to predict exact expenses associated with the year 2000 issue and
     additional funds may be needed for unknown expenses that may occur.

     All customers that have a borrowing or deposit relationship in excess of
     $250,000 have been interviewed and an evaluation of their year 2000
     preparedness has been completed. All material customers have successfully
     completed their year 2000 plans. The corporation does not expect to
     experience credit deterioration due to the year 2000 issue. The corporation
     may face a liquidity risk if the public perceives liquidity risk involved
     with the year 2000 and withdraws funds from the banking system. The
     corporation has established lines of credit to handle this uncertainty.

     No one can predict with absolute certainty the outcome of any event.
     However, due to our program, early recognition of the issues and
     commitment, customers can be confident that our thorough preparation will
     enable our computer systems to continue to meet their financial needs.

Part II - Other information

     Item 1.  Legal proceedings

     The Corporation is not involved in any material pending legal proceedings
     to which the Registrant or its subsidiaries is a party or which any of its
     property is subject, except for proceedings which arise in the ordinary
     course of business. In the opinion of management, pending legal proceedings
     will not have a material effect on the consolidated financial statements of
     the Registrant or its subsidiaries as of and for the period ended September
     30, 1999.

     Item 2.  Changes in securities

     During the nine months ended September 30, 1999, there weren't any changes
     in the Registrant's securities, relevant to the requirements of this
     section, that would cause any shareholder's rights to be materially
     modified, limited or qualified.

     Item 3.  Defaults upon senior securities

     No defaults have occurred involving senior securities on the part of the
     Registrant.

     Item 4.  Submission of matters to a vote of security holders

     The annual meeting of security holders of the Company was held April 22,
     1999. Information concerning the matters brought to a vote of security
     holders is contained in the Company's Proxy Statement and Note of Annual
     Meeting of Shareholders held April 22, 1999, as previously filed. There
     have been no further matters submitted to a vote of the Registrant's
     security holders during the nine months ended September 30, 1999.

     Item 5.  Other information

     None

     Item 6.  Exhibits and reports on Form 8-K

      1.   Exhibits required by Item 601 of Regulation S-K See Index to Exhibits
           on page 13.

      2.   Reports on Form 8-K
           No reports on Form 8-K were filed for the three months ended
           September 30, 1999.

                                       11
<PAGE>   14
                                   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.


                            CAPITAL DIRECTIONS, INC.



     Date:  November 9, 1999       By:      /s/      Timothy Gaylord
            ----------------       ---------------------------------
                                            Timothy Gaylord
                                            President


     Date:  November 9, 1999       By:      /s/      Lois A. Toth
            ----------------       -----------------------------------
                                            Lois A. Toth
                                            Treasurer

                                     12
<PAGE>   15
                                Index to Exhibits

The following exhibits are filed or incorporated by reference as part of this
report:

2        Plan of Acquisition, Reorganization, Arrangement, Liquidation or
         Succession - Consolidation Agreement included in Amendment No. 1 to
         Form S-4 Registrant Statement No. 33-20417

3        Instruments Defining the Rights of Security Holders, Including
         Debentures - Not applicable

11       Statement Regarding Computation of Per Share Earnings - Not applicable

15       Letter Regarding Unaudited Interim Financial Information - Not
         applicable

18       Letter Regarding Change in Accounting Principals - Not applicable

19       Previous Unfiled Documents - Not applicable

20       Report Furnished to Security Holders - Not applicable

23       Published Report Regarding Matters Submitted to Vote of Security
         Holders - Not applicable

24       Consents of Experts and Counsel - Not applicable

25       Power of Attorney - Not applicable

27       Financial Data Schedule (filed herewith)

28       Additional Exhibits - Not applicable


                                       13