U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                      For the quarter ended March 31, 2003

                        Commission File Number 33-6658-C

                                Pioneer Railcorp

             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

            Iowa                                                 37-1191206
 -------------------------------------------------------------------------------
(State or other jurisdiction of                              (IRS Employer ID #)
 incorporation or organization)

                      1318 S. Johanson Rd Peoria, IL 61607
               ---------------------------------------------------
               (Address of principal executive offices) (Zip code)

                   Registrant's telephone number: 309-697-1400

                 Securities       registered  pursuant  to Section  12(g) of the
                                  Act:

 Title of each Class                   Name of each exchange on which registered
--------------------------------------------------------------------------------
Common Stock, Class A                        NASDAQ , Chicago Stock Exchange

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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.

Indicate by checkmark whether the Registrant is an accelerated filer (as defined
by Rule 12b-2 of the Exchange Act). YES [  ]  NO [ X ]

                                    4,492,212

             ------------------------------------------------------
             (Shares of Common Stock outstanding on March 31, 2003)

                                       1
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS



                        PIONEER RAILCORP AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME
                     Quarters Ended March 31, 2003 and 2002
                                    UNAUDITED

                                                           First Quarter

                                                     ---------------------------
                                                         2003          2002
                                                     ---------------------------

Operating revenue ................................   $ 3,896,652    $ 3,705,524
                                                     ---------------------------

Operating expenses

   Maintenance of way ............................       304,152        234,979
   Maintenance of equipment ......................       355,239        372,170
   Transportation expense ........................       855,155        669,264
   Administrative expense ........................     1,015,497      1,014,441
   Depreciation & amortization ...................       543,551        513,082
                                                     ---------------------------
                                                       3,073,594      2,803,936
                                                     ---------------------------

Operating income .................................       823,058        901,588
                                                     ---------------------------

Other income & expense

   Other (income) expense ........................      (199,383)      (202,478)
   Interest expense, equipment ...................       112,055        116,153
   Interest expense, other .......................       130,937        149,120
   Net (gain) loss on sale of fixed assets .......        (6,155)        11,268
                                                     ---------------------------
                                                          37,454         74,063
                                                     ---------------------------

Income before income taxes .......................       785,604        827,525

Provision for income taxes .......................       330,000        374,000
                                                     ---------------------------

Income before minority interest in preferred
   stock dividends of consolidated subsidiaries ..   $   455,604    $   453,525

Minority interest in preferred stock dividends of
    consolidated subsidiaries ....................   $    22,659    $    31,308
                                                     ---------------------------

Net income .......................................   $   432,945    $   422,217
                                                     ===========================

Basic earnings per common share ..................   $      0.10    $      0.09
                                                     ===========================

Diluted earnings per common share ................   $      0.10    $      0.09
                                                     ===========================

Cash dividends per common share ..................   $      0.00    $    0.0000
                                                     ===========================

See notes to unaudited consolidated financial statements

                                       2
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2003 and DECEMBER 31, 2002
                                    UNAUDITED

<TABLE>

                                                           March 31      December 31
                                                             2003           2002
                                                        ----------------------------
<S>                                                     <C>             <C>
ASSETS

Current Assets

   Cash .............................................   $  1,293,504    $  1,148,461
   Accounts receivable, less allowance
     for doubtful accounts 2003 $20,783; 2002 $27,481      2,986,408       3,041,573
   Inventories ......................................        298,702         287,763
   Prepaid expenses .................................        168,725         214,606
   Income tax refund claims .........................        333,041         337,419
   Deferred taxes ...................................         12,000          12,000
                                                        ----------------------------
        Total current assets ........................      5,092,380       5,041,822
Investments, cash value of life insurance ...........        222,660         214,627
Property and Equipment less accumulated

  depreciation 2003 $12,591,869; 2002 $12,066,096 ...     27,339,015      27,793,573
Other assets ........................................        331,472         161,833
Goodwill ............................................      1,017,430       1,017,430
Total assets ........................................   $ 34,002,957    $ 34,229,285
                                                        ============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities

   Current maturities of long-term debt .............   $  2,725,905    $  2,716,801
   Notes payable ....................................              0          91,816
   Accounts payable .................................      2,135,108       2,346,751
   Income tax payable ...............................        172,725               0
   Accrued liabilities ..............................      1,029,772         950,968
                                                        ----------------------------
        Total current liabilities ...................      6,063,510       6,106,336
                                                        ----------------------------

Long-term debt, net of current maturities ...........     11,314,340      11,911,244
                                                        ----------------------------

Deferred revenue ....................................      1,858,595       2,027,811
                                                        ----------------------------

Deferred income taxes ...............................      5,794,025       5,637,000
                                                        ----------------------------

Minority interest in subsidiaries ...................        751,000         751,000
                                                        ----------------------------

Stockholders' Equity

   Common stock .....................................          4,612           4,612
   In Treasury 2003 120,305 shares; 2002 99,005 .....           (120)            (99)
                                                        ----------------------------
   Outstanding 2003 4,492,212; 2002 4,513,512 .......          4,492           4,513
   Additional paid-in capital .......................      2,009,441       2,009,441
   Retained earnings ................................      6,207,554       5,781,940
                                                        ----------------------------
        Total stockholders' equity ..................      8,221,487       7,795,894
                                                        ----------------------------

Total liabilities and stockholders equity ...........   $ 34,002,957    $ 34,229,285
                                                        ============================
</TABLE>

See notes to unaudited consolidated financial statements

                                       3
<PAGE>

                        PIONEER RAILCORP AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Quarters Ended March 31, 2003 and 2002
                                    UNAUDITED

<TABLE>

                                                                   First Quarter

                                                           --------------------------
                                                                2003         2002
                                                           --------------------------
<S>                                                        <C>            <C>
Cash Flows From Operating Activities

Net income .............................................   $   432,945    $   422,217
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Minority interest in preferred stock dividends of
    consolidated subsidiaries ..........................        22,659         31,308
  Depreciation and amortization ........................       543,551        513,082
  Increase in cash value life insurance ................        (8,033)        (7,030)
  (Gain) loss on sale of property & equipment ..........        (6,155)        11,268
  Deferred taxes .......................................       157,025              0
  Change in assets and liabilities, net of effects from
    acquisition of subsidiaries
    (Increase) decrease accounts receivable ............        55,165        237,148
    (Increase) decrease inventories ....................       (10,939)         1,347
    (Increase) decrease prepaid expenses ...............        45,881         60,792
    (Increase) decrease other assets ...................      (170,634)         2,542
    Increase (decrease) accounts payable ...............      (211,643)      (772,733)
    (Increase) decrease income tax refund claims .......         4,378              0
    Increase (decrease) income tax payable .............       172,725        351,000
    Increase (decrease) deferred revenue ...............      (169,216)             0
    Increase (decrease) accrued liabilities ............        78,804        (96,069)
                                                           --------------------------
         Net cash provided by operating activities .....       936,513        754,872
                                                           --------------------------

Cash Flows From Investing Activities

  Proceeds from sale of property & equipment ...........        78,536          8,990
  Purchase of property & equipment .....................      (160,375)      (195,678)
                                                           --------------------------
         Net cash (used in) investing activities .......       (81,839)      (186,688)
                                                           --------------------------

Cash Flows From Financing Activities

  Proceeds from short-term borrowings ..................             0        341,000
  Proceeds from long-term borrowings ...................        97,450        256,660
  Payments on short-term borrowings ....................       (91,816)      (398,712)
  Payments on long-term borrowings .....................      (685,250)      (535,524)
  Purchase of common stock for treasury ................       (30,015)           (62)
  Preferred stock dividend payments to minority interest             0        (17,300)
                                                           --------------------------
         Net cash (used in) financing activities .......      (709,631)      (353,938)
                                                           --------------------------

Net increase (decrease) in cash ........................       145,043        214,246

Cash, beginning of period ..............................     1,148,461        976,678
                                                           --------------------------

Cash, end of period ....................................   $ 1,293,504    $ 1,190,924
                                                           ==========================
</TABLE>

See notes to unaudited consolidated financial statements

                                       4
<PAGE>

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
PIONEER RAILCORP AND SUBSIDIARIES

NOTE 1.   STATEMENTS

The  accompanying   Consolidated  Statements  of  Income,  Balance  Sheets,  and
Statements of Cash Flows are unaudited. The interim financial statements reflect
all adjustments (consisting only of normal recurring accruals) which are, in the
opinion of  management,  necessary  for a fair  statement of the results for the
interim  periods   presented.   These  interim  statements  should  be  read  in
conjunction with the latest  financial  statements and notes thereto included in
the Company's  latest Annual  Report on Form 10-KSB and  subsequent  Form 10-QSB
filings.  The  results  of  operations  for the  interim  periods  should not be
considered indicative of results to be expected for the full year.

NOTE 2.   SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements include Pioneer Railcorp (Pioneer) and its
wholly-owned  and controlled  subsidiaries  (collectively,  "the Company").  The
Company's  railroad  operations  segment  consists  of  wholly-owned  short line
railroad  subsidiaries  that offer  similar  services and includes the following
wholly-owned  subsidiaries:  West Michigan Railroad Co. (WMI), Michigan Southern
Railroad  Company  (MSO),  Fort Smith Railroad Co. (FSR),  Alabama  Railroad Co.
(ALAB),  Mississippi Central Railroad Co. (MSCI), Alabama & Florida Railway Co.,
Inc. (AF), Decatur Junction Railway Co. (DT),  Vandalia Railroad Company (VRRC),
Keokuk  Junction  Railway Co. (KJRY),  Shawnee  Terminal  Railway Company (STR),
Pioneer  Industrial  Railway Co. (PRY),  The Garden City Western  Railway,  Inc.
(GCW), Indiana Southwestern Railway Co. (ISW), Kendallville Terminal Railway Co.
(KTR), Elkhart & Western Railroad Co. (EWR),  Gettysburg & Northern Railroad Co.
(GET),  Pioneer  Resources,  Inc. (PRI),  Pioneer  Railroad  Equipment Co., Ltd.
(PREL), Pioneer Air, Inc. (PAR), and Pioneer Railroad Services,  Inc. (PRS). The
Company's  equipment  leasing segment leases  railcars,  locomotives,  and other
railroad equipment to affiliated and unaffiliated entities and includes only the
wholly-owned  subsidiary  Pioneer Railroad Equipment Co., Ltd. (PREL). All other
Company  operations  are  classified  as  corporate  and include  the  following
wholly-owned  subsidiaries:  Pioneer  Resources,  Inc. (PRI),  Pioneer Air, Inc.
(PAR), and Pioneer Railroad Services,  Inc. (PRS). All significant  intercompany
balances and transactions have been eliminated in consolidation.

Stock  options and  warrants:  The  Company's  accounting  for stock options and
warrants is in  accordance  with APB Opinion No. 25 and related  interpretations
which  generally  requires  that the  amount of  compensation  cost that must be
recognized,  if any, is the quoted market price of the stock at the  measurement
date,  less the amount  the  grantee is  required  to pay to acquire  the stock.
Alternatively,  SFAS 123 employs  fair value  based  measurement  and  generally
results in the recognition of compensation for all awards of stock to employees.
SFAS 123 does not  require an entity to adopt  those  provisions,  but,  rather,
permits  continued  application  of APB 25. While the Company has elected not to
adopt the fair value  recognition and measurement  provisions of SFAS 123, it is
required to make certain disclosures pursuant to SFAS 123.

Had  compensation  cost for the stock-based  compensation  plans been determined
based on the grant date fair  values of awards  (the  method  described  in FASB
Statement No. 123) reported net income, and earnings per common share would have
been reduced to the pro forma amounts shown below.

<TABLE>
                                                                                 Quarter Ended
                                                                                    March 31,

                                                                              ----------------------
                                                                               2003           2002
                                                                              ----------------------
<S>                                                                           <C>           <C>
Net income:
  As reported .............................................................   $432,945      $422,217
  Deduct: Stock based compensation expense determined
    under fair value based method for all awards, net of
    tax effect ............................................................         --            --
                                                                              ----------------------
  Proforma ................................................................   $432,945      $422,217
                                                                              ======================
Basic earnings per common share:
  As reported .............................................................   $    .10      $    .09
  Proforma ................................................................   $    .10      $    .09

Diluted earnings per common share:
  As reported .............................................................   $    .10      $    .09
  Proforma ................................................................   $    .10      $    .09
</TABLE>

                                       5
<PAGE>

NOTE 3. CONTINGENCIES

As of the date of this Form  10-QSB,  management  is not  aware of any  incident
which is likely to  result in a  liability  that  would  materially  affect  the
Company's  consolidated  financial  position  or results of  operation.  Readers
should make reference to Part II, Item 1 of this 10-QSB, regarding contingencies
surrounding a switching  revenue dispute between the Keokuk Junction Railway Co.
and the  Burlington  Northern  Santa Fe Railway for  revenues  generated  by the
Company between March 1, 1999 and May 1, 2001 of approximately $663,000.

NOTE 4. ACCOUNTING PRONOUNCEMENTS

In August  2001,  the FASB  issued  Statement  No.  143,  "Accounting  for Asset
Retirement  Obligations." FASB No. 143 amends FASB No. 19, "Financial Accounting
and  Reporting  by Oil and Gas  Producing  Companies."  It  addresses  financial
accounting  and  reporting for  obligations  associated  with the  retirement of
tangible,  long-lived  assets and the associated asset retirement  costs, and is
effective for financial  statements issued for fiscal years beginning after June
15,  2002.  The  adoption  of SFAS 143 did not  have a  material  impact  on the
Company's March 31, 2003 consolidated  financial  statements and is not expected
to  have a  material  impact  on the  Company's  future  consolidated  financial
statements.

In January 2003, FASB Interpretation No. 46, "Consolidation of Variable Interest
Entities" (FASB Interpretation No. 46), was issued. It clarifies the application
of Accounting Research Bulletin No. 51, "Consolidated  Financial Statements," to
certain  entities  in which  the  equity  investors  do not  have a  controlling
financial interest or do not have sufficient equity at risk. FASB Interpretation
No. 46 is effective on January 31, 2003, for entities  acquired after such date.
The effective  date for entities  acquired on or before January 31, 2003 is July
1, 2003.  The Company has not  completed  its full  assessment of the effects of
FASB Interpretation No. 46 on its financial statements and so it is uncertain as
to the impact.

NOTE 5. SEGMENT INFORMATION

Description of products and services from reportable segments:

Pioneer Railcorp has two reportable segments,  railroad operations and equipment
leasing  operations.  All other  operations are classified as corporate  support
services for purposes of this disclosure.

Measurement of segment profit or loss and segment assets:

The accounting  policies of the segments are the same as those  described in the
summary of significant  accounting policies.  Pioneer Railcorp evaluates segment
profit based on operating income  including  intersegment  revenues,  but before
provision  for income  taxes,  items of other income and  expense,  and minority
interest in preferred stock dividends of consolidated subsidiaries.

Intersegment transactions:

Intersegment   transactions  are  recorded  at  cost  and  are  eliminated  from
consolidated financial results.

                                       6
<PAGE>

Factors management used to identify the reportable segments:

Pioneer  Railcorp's  reportable  segments  consist  of  wholly-owned  short line
railroad  subsidiaries  that offer  similar  services  and a railroad  equipment
subsidiary that leases railcars,  locomotives,  and other railroad  equipment to
affiliated  and  unaffiliated  entities.  The  corporate  operations  consist of
support services provided to the operating segments.

                                                     First Quarter
                                               --------------------------
                                                  2003            2002
                                               --------------------------
Revenues from external customers
   Railroad operations .....................   $ 3,006,441    $ 2,951,530
   Equipment leasing operations ............       884,975        750,131
   Corporate support services ..............         5,236          3,863
                                               -------------------------
      Total revenues from external customers     3,896,652    $ 3,705,524
                                               ==========================

Intersegment revenues
   Railroad operations .....................   $         0    $         0
   Equipment leasing operations ............        99,600         99,600
   Corporate support services ..............     1,406,031      1,404,399
                                               --------------------------
      Total intersegment revenues ..........   $ 1,505,631    $ 1,503,999
                                               ==========================

Segment profit
   Railroad operations .....................   $ 1,160,680    $ 1,319,626
   Equipment leasing operations ............       500,547        397,921
   Corporate support services ..............       667,462        688,040
                                               --------------------------
      Total segment profit .................     2,328,689      2,405,587

Reconciling items
    Intersegment revenues ..................    (1,505,631)    (1,503,999)
    Income taxes ...........................      (330,000)      (374,000)
    Minority interest ......................       (22,659)       (31,308)
    Other income(expense), net .............       (37,454)       (74,063)
                                               --------------------------
       Total consolidated net income .......   $   432,945    $   422,217
                                               ==========================


Note 6. EARNINGS PER COMMON SHARE

Following is  information  about the  computation of the earnings per share(EPS)
data for the quarters ended March 31, 2003 and 2002:

<TABLE>
                                                   Income          Shares       Per Share
                                                 (Numberator)   (Denominator)     Amount
                                                 ----------------------------------------
                                                   For the Quarter Ended March 31, 2003
                                                 ----------------------------------------
<S>                                              <C>            <C>             <C>
Basic EPS
Income available to common stockholders .....     $ 432,945       4,504,814     $   0.10
                                                                                ========
Effect of Diluted Securities

Employee stock options ......................            --              --
                                                  -------------------------
Diluted EPS
Income available to common stockholders
  plus assumed conversions ..................     $ 432,945       4,504,814     $   0.10
                                                  ======================================

                                                   For the Quarter Ended March 31, 2002
                                                  --------------------------------------
Basic EPS
Income available to common stockholders .....     $ 422,217       4,528,462     $   0.09
                                                                                ========
Effect of Diluted Securities

Employee stock options ......................            --              --
                                                  -------------------------
Diluted EPS
Income available to common stockholders
  plus assumed conversions ..................    $ 422,217    4,528,462    $   0.09
                                                 =======================================

</TABLE>

                                       7
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

This management's  discussion and analysis of financial condition and results of
operations  references  the  Company's  two  operating  segments.  The Company's
railroad  operations  segment  consists  of  wholly-owned  short  line  railroad
subsidiaries  that offer similar  services and the Company's  equipment  leasing
segment leases railcars, locomotives, and other railroad equipment to affiliated
and  unaffiliated  entities.  All other  operations  are classified as corporate
support services for purpose of these discussions.  All information provided for
each  operating  segment is  presented  after  elimination  of all  intersegment
transactions, therefore reflecting its share of consolidated results.

Pioneer Railcorp, an Iowa corporation, is a railroad holding company. As used in
this Form 10-QSB,  unless the context requires otherwise,  the term "Company" or
"PRC" refers to the parent, Pioneer Railcorp and its subsidiaries: West Michigan
Railroad  Co.  (WMI),  Michigan  Southern  Railroad  Company  (MSO),  Fort Smith
Railroad Co. (FSR),  Alabama Railroad Co. (ALAB),  Mississippi  Central Railroad
Co. (MSCI),  Alabama & Florida Railway Co., Inc. (AF),  Decatur Junction Railway
Co. (DT), Vandalia Railroad Company (VRRC),  Keokuk Junction Railway Co. (KJRY),
Shawnee Terminal Railway Company (STR),  Pioneer  Industrial  Railway Co. (PRY),
The Garden City Western Railway,  Inc. (GCW),  Indiana  Southwestern Railway Co.
(ISW),  Kendallville  Terminal Railway Co. (KTR), Elkhart & Western Railroad Co.
(EWR), Gettysburg & Northern Railroad Co. (GET), Pioneer Resources,  Inc. (PRI),
Pioneer  Railroad  Equipment  Co., Ltd.  (PREL),  Pioneer Air, Inc.  (PAR),  and
Pioneer Railroad Services, Inc. (PRS)

Summary: First Quarter 2003 Compared to First Quarter 2002

The Company's net income in the first quarter 2003 was $432,900,  an increase of
$10,700 from the first  quarter  2002 which had net income of $422,200.  Revenue
increased by $191,000 or 5% to  $3,897,000  from  $3,706,000  in the same period
last year.  Operating  expense  increased by $270,000 or 10%, to $3,074,000 from
$2,804,000 in the same period last year.  Operating income decreased by $79,000,
or 9% to $823,000 from $902,000 in the same period last year.

Operating  income  decreased  $159,000  in the  first  quarter  2003  due to the
Company's railroad operations.  The decrease from the railroads is the result of
increased revenue of $55,000 offset by increased operating expenses of $214,000,
primarily  from  increased   maintenance  of  way  expense  and  also  increased
transportation expense as further discussed below. In addition, operating income
was increased  approximately $103,000 in the first quarter 2003 by the Company's
equipment  leasing  operations,  primarily  from an increase in revenue from the
utilization  of its railcar  fleet by  non-affiliated  railroads.  In  addition,
corporate support services decreased  operating income by approximately  $22,000
in the  period  resulting  primarily  from a $69,000  increase  in health  costs
related to claims incurred under the Company's  self-funded  health plan,  which
offset  other  administrative  expense  reductions  from  decreased  payroll for
support services.

Revenue:

Revenue  increased in the first  quarter 2003 by $191,000,  or 5%, to $3,897,000
from $3,706,000 in the same period last year. The railroad operations  increased
revenue by approximately $55,000 in the period. The equipment leasing operations
had a  $135,000  increase  in revenue in the  period  resulting  primarily  from
increased  revenue from the  utilization of its railcar fleet by  non-affiliated
railroads.  Corporate  services  increased revenue  approximately  $1,000 in the
quarter as a result of subscription sales to its publication The Short Line.

Operating Expense:

Operating  expense  increased  in the first  quarter 2003 by $270,000 or 10%, to
$3,074,000 from $2,804,000 in the prior year. The railroad operations  increased
operating  expense  by  approximately  $214,000  in the  period  primarily  from
increased maintenance of way expense and also increased  transportation  expense
as further discussed below. The equipment leasing operations increased operating
expense  approximately  $32,000,  primarily from increased  maintenance expenses
associated with its railcar and locomotive fleet. In addition, corporate support
services  increased  operating  expense by  approximately  $24,000 in the period
resulting  primarily  from a $69,000  increase in health costs related to claims
incurred  under the  Company's  self-funded  health  plan,  which  offset  other
administrative expense reductions from decreased payroll for support services.

                                       8
<PAGE>

Maintenance of way and structure  expense (MOW) includes all expenses related to
track  maintenance;  including  payroll,  track materials,  signal  maintenance,
vegetation control,  and bridge  maintenance.  Maintenance of way and structures
expense  (MOW)  increased  $69,000 or 30% to $304,000  from $235,000 in the same
period  last  year.  Railroad  operations  had an  increase  of  $71,000  of MOW
primarily  resulting from increased track  materials  purchased and switch point
maintenance. Corporate services decreased MOW by $2,000.

Maintenance  of equipment  expense (MOE)  includes  expenses  related to railcar
repair expenses for both foreign and Company owned railcars;  including payroll,
car  repair  parts,  processing  fees  for  Company  owned  railcars,  and  also
maintenance to Company owned  vehicles.  Maintenance of equipment  expense (MOE)
decreased $17,000, or 6% to $355,000 from $372,000 in the same period last year.
The equipment leasing operations had an increase in MOE of approximately  $6,000
associated with maintaining the Company's railcar fleet. The railroad operations
had decreased MOE of $13,000 as a result of increased payroll and material costs
for repairs to foreign rail cars. In addition,  MOE was  decreased  $10,000 from
corporate  support  services  as a  result  of  decreased  payroll  for  support
services.

Transportation  expense  (TRAN)  includes  expenses  related  to train  movement
operations  including  payroll,  locomotive  fuel and supplies  expense,  repair
expenses to Company owned  locomotives,  car hire expense,  derailment  expense,
lading and damage  claims,  switching  services  purchased,  and joint  facility
expenses with other carriers.  Transportation expense (TRAN) increased $186,000,
or 28% to $855,000  from  $669,000 in the same  period last year.  The  railroad
operations  had increased  TRAN of $165,000.  This increase is the result of the
Company's  decision  to  fill  all  available   locomotive  fuel  tanks  due  to
anticipated  increases in the price of diesel fuel as a result of the war. Prior
to this  action,  the fuel  tanks in  Company  locomotives  were  kept at levels
approximately  50%  of the  fuel  tank  capacity.  In the  future,  the  Company
locomotives will continue to be refueled to full capacity. The equipment leasing
operations  had a  $28,000  increase  in TRAN as a  result  of  increased  costs
associated with maintaining the Company's  locomotive  fleet. In addition,  TRAN
was decreased  $7,000 from  corporate  support  services  resulting from reduced
usage of the corporate plane.

General  &  administration  expense  (ADMIN)  includes  general  manger  payroll
expenses,  legal expenses,  bad debt expense  related to interline  settlements,
liability insurance,  utilities,  postage and freight,  real estate taxes, dues,
licenses and fees, vehicle insurance, freight to move company owned railcars and
locomotives,  health and dental insurance  expense,  audit fees,  printing,  and
corporate   headquarters  support  service  payroll  for  executive  management,
accounting,  operations, marketing, real estate, legal, and other support staff.
General & administration  expense (ADMIN)  increased  $1,000, to $1,015,000 from
$1,014,000 in the same period last year. The railroad  operations had a decrease
of $34,000 in ADMIN expense in the period primarily as a result of reduced legal
fees. The equipment  leasing  operations  decreased  ADMIN $7,000 as a result of
decreased  expenses  related  to  repositioning  the  Company's  railcar  fleet.
Corporate  support  services  increased  ADMIN  expense by $42,000 in the period
resulting  primarily  from a $69,000  increase in health costs related to claims
incurred  under the  Company's  self-funded  health  plan,  which  offset  other
administrative expense reductions from decreased payroll for support services.

Depreciation  and  amortization  expense  increased  $31,000  to  $544,000  from
$513,000  in the  same  period  last  year.  The  equipment  leasing  operations
increased  depreciation expense  approximately $5,000 related to the acquisition
of railcars and  locomotives.  The railroad  operations  increased  depreciation
$24,000,  resulting  primarily from 2002 track  improvements to the Gettysburg &
Northern Railroad Co. Corporate support services increased depreciation $2,000.

Other Income and Expense Income Statement Line Item Discussion:

In the first quarter 2003 other income and expense  decreased $3,000 to $199,000
of income  compared to  $202,000  of income in the same period last year.  Other
income relates primarily to lease income for the use of railroad  property.  The
Company  continues  to place a strong  emphasis on  identifying  and  collecting
revenues from third parties  occupying  Company  property.  In addition to lease
income,  other income and expense includes revenues  generated from scrap sales,
and other miscellaneous non-operating revenues and expenses, primarily generated
by the Company's railroad operations.

Interest  expense related to equipment  financing  decreased $4,000 in the first
quarter  2003 to  $112,000  compared  to  $116,000 in the same period last year.
Other  interest  expense,  which  primarily  relates  to  the  financing  of the
Company's  railroad  operations,  decreased $18,000 to $131,000 from $149,000 in
the prior year.  These  decreases are the result of the pay down of principal on
outstanding financing agreements.

                                       9
<PAGE>

In the first  quarter 2003 the Company had a gain from fixed asset  dispositions
of $6,000,  primarily from the  disposition of several  railcars,  compared to a
loss on fixed asset dispositions of $11,000 in the same period last year.

Impact of New Accounting Pronouncements:

The Company is not aware of any recent accounting  standard issued,  but not yet
required to be adopted by the Company,  that would have a material effect on its
financial position or results of operations. See Note 4 for further discussions.

Liquidity and Capital Resources:

The Company  primarily  uses cash  generated  from  operations  to fund  working
capital  needs and relies on long-term  financing  for  railcars,  new operating
subsidiaries,  and other  significant  capital  expenditures.  The  Company  has
working capital facilities totaling  $1,100,000,  all of which was available for
use at the end of the first quarter 2003.

Long-term  equipment  financing has historically  been readily  available to the
Company for its railcar  acquisition  program.  The Company  believes it will be
able to continue obtaining  long-term equipment financing should the need arise.
The Company's  plans for new debt in the  foreseeable  future is contingent upon
new railroad acquisitions and increased needs and/or opportunities for railcars.

On July 1, 1995, the Company's  stock split and warrant  issuance became payable
to  shareholders.  The 2 for 1 stock split increased the number of shares issued
and  outstanding  from  2,099,142 to  4,198,284.  At the same time  shareholders
became  entitled  to purchase  an  additional  4,198,284  shares  through  stock
warrants  issued by the  Company as  dividends.  One warrant was issued for each
share of common stock held after the split,  entitling  the holder to purchase 1
share of common  stock for $2.00 per share.  The shares  purchased  through  the
exercise of the warrants  must be held for 1 year from date of  purchase.  As of
March 31, 2003, a total of 68,766 warrants  originally issued had been exercised
to date and the Company realized $137,532 on the exercise of those warrants.

On June 26,  1996,  the  Company's  shareholders  approved a stock  option  plan
permitting the issuance of 407,000 shares of common stock. Options granted under
the plan are  incentive  based  except for the options  granted to the CEO whose
options are non-qualified. The options became fully vested and exercisable as of
July 1, 2001. The options are exercisable at prices ranging from $2.75 to $3.03,
based  upon the  trading  price on the  date of the  grant,  in whole or in part
within 10 years from the date of grant. As of March 31, 2003, a total of 155,000
options are outstanding under this plan.

In 1999,  Pioneer  Railcorp's  Board of  Directors  authorized  and approved the
repurchase  of up to one million  shares  (1,000,000)  of the  Company's  common
stock. As of March 31, 2003, a total of 120,305 shares had been repurchased at a
cost of $171,743. The Company plans to continue buying back its common stock but
believes  the  repurchase  will  be on a  more  limited  scope  then  previously
anticipated  due to the  capital  requirements  and the  trading  volume  of the
Company's stock.

The Company  generally  anticipates  that the outcomes  involving  current legal
proceedings  will not  materially  affect the Company's  consolidated  financial
position  or results  of  operation.  However,  with  respect  to the  Company's
trackage  rights  dispute with a Class I railroad  discussed in Part II, Item 1,
the  Company's  management  has  made  no  provision  for any  estimated  losses
associated  with respect to $660,000 of fees charged from March 1999 through May
2001 as it is not  possible  to  ascertain  the  outcome of this  matter.  It is
possible  however,  that an  unfavorable  outcome could have a material  adverse
effect on the Company's financial position and results of operations.

The Company  believes its cashflow from  operations  and its  available  working
capital  credit  lines,  will be more than  sufficient to meet  liquidity  needs
through at least the next 12 months.

Balance Sheet and Cash Flow Items:

The Company's operating  activities in the first quarter 2003 generated positive
cash flow of $937,000,  compared to positive  cashflow of $755,000 in 2002.  Net
cash from  operating  activities  for the first quarter 2003 was generated  from
$433,000 of net income,  increased by $544,000 of depreciation and amortization,
a decrease in accounts  receivable of $55,000,  a decrease in deferred  taxes of
$157,000,  and an  increase  in income tax  payable of  $173,000.  Net cash from
operating activities was reduced in the period by a decrease in accounts payable
of  $212,000,  a decrease in deferred  revenue of $169,000 and a decrease in net
cash of $226,000 from changes in various other operating  assets and liabilities

                                       10
<PAGE>

In the first quarter 2003, the Company  purchased and capitalized  approximately
$160,000 of fixed  assets and  capital  improvements.  The  Company  capitalized
approximately  $40,000 of track  structure  additions  and  improvements.  Other
capital  expenditures  in 2002  include  approximately  $48,000  for railcar and
locomotive betterments, $24,000 for utility trucks, $42,0000 for bridge upgrades
and $6,000 of various or equipment items. The capital  expenditures  were funded
with working capital.

Item 4. CONTROLS AND PROCEDURES

The Company's Chief Executive Officer and Chief Financial Officer have
concluded:

(a) Based on their evaluations as of a date within 90 days of the filing date of
this report, the principal  executive officer and principal financial officer of
the Company have concluded that the Company's disclosure controls and procedures
(as defined in Rules 13a-14(c) and 15d-14(c) under the Securities  Exchange Act)
are effective to ensure that information required to be disclosed by the Company
in reports that the Company files or submits under the  Securities  Exchange Act
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the rules and forms of the SEC.

(b) There were no significant  changes in the Company's  internal controls or in
other factors that could significantly affect these internal controls subsequent
to the date of their most recent  evaluation,  including any corrective  actions
with regard to significant deficiencies and material weaknesses.

PART II.  OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

In the course of business, the Company experiences crossing accidents,  employee
injuries,  delinquent and/or disputed accounts, and other incidents,  which give
rise to claims  that may result in  litigation.  Management  vigorously  pursues
settlement and release of such claims, but at any one time, some such incidents,
which could  result in lawsuits by and against the Company,  remain  unresolved.
Management believes it has valid claims for, or good defenses to, these actions.
Management considers such claims to be a routine part of the Company's business.

The Company is presently involved in litigation surrounding trackage rights with
a Class I railroad regarding fees charged between March 1999 and May 2001 by the
Company  for the Class I  carrier's  access  to and  usage of a  segment  of the
Company's  tracks as a means of gaining access to certain  trackage owned by the
Class I railroad.  The Surface Transportation Board (STB), in a decision in June
2001,  ruled  that the  Class I  railroad  could  have  access  to and cross the
Company's  tracks  in  order to get to the  branch  line  owned  by the  Class I
railroad. The STB did not set compensation or other terms and conditions as part
of its decision and ordered the two parties to negotiate  terms and  conditions,
and ordered  that if no  agreement  could be reached,  that the STB would make a
ruling.  From March 1999  through  May 2001,  the  Company  charged  the Class I
railroad approximately $660,000 for access to the Company's track. From May 2001
through June,  2002,  the Company did not charge the Class I railroad for access
to the segment of the Company's track in question. In June 2002, the Washington,
D.C.  Circuit Court of Appeals  vacated the June 2001 STB  decision.  On July 1,
2002,  the Class I filed another  petition with the STB  requesting the Board to
again  grant it the right to use the  Company's  tracks  and to set the terms of
compensation,  asserting  different  grounds  than  that set  forth in the STB's
original June 22, 2001 order that was vacated by the court. Since that time, the
Company  and the  Class I  railroad  have been in  discussions  to  resolve  the
trackage  rights  dispute,  but no  agreement  has  yet  been  reached.  Per the
Company's agreement,  the Class I railroad commenced  utilization of the segment
of the Company's  track on July 1, 2002 and currently  pays the Company $125 per
car for traffic on the segment of the track in question. The Company has charged
$317,000 since July 1, 2002. By agreement of the two parties, these current fees
are being  accounted for as deferred  revenue on the balance sheet pending final
resolution  of the matter.  On May 9, 2003,  the STB voted in an open hearing to
again grant the Class I railroad  trackage rights over the Company's  tracks. No
written decision was issued,  but one is expected shortly.  In its vote, the STB
did not  address  the issue of past  compensation  but  directed  the parties to
negotiate over the  appropriate per car charge for the future use by the Class I
of the trackage  rights.  The Company  intends to continue to vigorously  defend
itself in this  matter and is likely to appeal the STB's  decision.  As of March
31, 2003, it is not possible to ascertain the ultimate financial impact, if any,
upon the Company.  Management  has made no provision  for any  estimated  losses
associated  with this  matter.  In the event  that the STB makes an  unfavorable
ruling  against the Company  with  respect to the  $660,000 of fees charged from
March 1999 through May 2001,  it is possible,  however,  that the outcome  could
have a material adverse effect on the Company's  financial  position and results
of operations.

                                       11
<PAGE>

As of May 9, 2003, management and legal counsel are unable to determine what the
outcome  of the  litigation  may be and  whether  there  will be any  adverse or
favorable financial consequences.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters  were  submitted to a vote of security  holders in the first  quarter
2003.

Item 5.   OTHER INFORMATION

None.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

Exhibit 99 - Certification

No reports were filed on Form 8-K during the first three months 2003.


                                       12
<PAGE>

SIGNATURES

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

PIONEER RAILCORP
(Registrant)


                              /s/ Guy L. Brenkman
       05/12/03               -------------------------
        DATE                  GUY L. BRENKMAN
                              PRESIDENT & CEO


                              /s/ J. Michael Carr
      05/12/03                -------------------------
       DATE                   J. MICHAEL CARR
                              TREASURER & CHIEF
                              FINANCIAL OFFICER


                                       13
<PAGE>

CERTIFICATIONS

Certification by the Chief Executive Officer:

I, Guy L. Brenkman certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Pioneer Railcorp;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 12, 2003


/s/ Guy L. Brenkman

-----------------------
Guy L. Brenkman
Chief Executive Officer

                                       14
<PAGE>

Certification by the Chief Financial Officer:

I, J. Michael Carr, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Pioneer Railcorp;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and c)presented in this
          quarterly  report  our  conclusions  about  the  effectiveness  of the
          disclosure  controls and procedures  based on our evaluation as of the
          Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report  whether  there  were  significant  changes  in  internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 12, 2003


/s/ J. Michael Carr

-----------------------
J. Michael Carr
Chief Financial Officer

                                       15