SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB
(Mark One)

[X]               QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1999

                                       OR

|_|               TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE ACT OF 1934

                  For the transition period from __________ to __________.

                                            Commission File No. 0-23763


                              Quitman Bancorp, Inc.
       ------------------------------------------------------------------
        (Exact name of Small Business Issuer as Specified in Its Charter)

Georgia                                                          58-2365866    
---------------------------------------------                -------------------
(State or Other Jurisdiction of Incorporation                 (I.R.S. Employer
 or Organization)                                            Identification No.)

                 602 East Screven Street, Quitman, Georgia 31643
        -----------------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (912) 263-7538
        -----------------------------------------------------------------
                 Issuer's Telephone Number, Including Area Code

            Formerly 100 West Screven Street, Quitman, Georgia 31643
        -----------------------------------------------------------------

(Former  Name,  Former  Address,  and Former  Fiscal Year, if Changed Since Last
Report)

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

     Number of shares of Common Stock outstanding as of March 31, 1999: 562,063

Transitional Small Business Disclosure Format (check one)

                                    YES          NO    X
                                        -------     ------- 


<PAGE>
                              QUITMAN BANCORP, INC.

                                    Contents

                                                                        Page(s)
                                                                        -------
PART I - FINANCIAL INFORMATION

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

     Item 2.  Management's Discussion and Analysis or Plan of Operation....10


PART II - OTHER INFORMATION

     Item 1.  Legal Proceedings............................................14

     Item 2.  Changes in Securities and Use of Proceeds....................14

     Item 3.  Defaults upon Senior Securities..............................14

     Item 4.  Submission of Matters to a Vote of Security Holders..........14

     Item 5.  Other Information............................................14

     Item 6.  Exhibits and Reports on Form 8-K.............................14

     Signatures............................................................16

                                      - 2 -

<PAGE>

                          PART I. FINANCIAL INFORMATION
                      QUITMAN BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------

                                     ASSETS
                                     ------
<TABLE>
<CAPTION>
                                                                                      MARCH 31,    SEPTEMBER 30,
                                                                                        1999           1998    
                                                                                   ------------    ------------
                                                                                     (Unaudited)
<S>                                                                                <C>             <C>    
Cash and Cash Equivalents:
   Cash and amounts due from depository
      institutions                                                                 $    189,205         168,404
   Interest-bearing deposits in other banks                                             884,205         203,462
                                                                                   ------------    ------------
         Total Cash and Cash Equivalents                                              1,073,410         371,866
Investment securities:
   Available-for-sale                                                                 5,924,607       5,640,709
   Held-to-maturity                                                                         -0-         200,000
Loans receivable - net of allowance for loan
   losses and deferred origination fees                                              37,727,045      36,397,067
Office properties and equipment, at cost, net of
   accumulated depreciation                                                           1,378,612         681,453
Real estate and other property acquired
   in settlement of loans                                                               155,700             -0-
Accrued interest receivable                                                             445,245         447,854
Investment required by law-stock in Federal
   Home Loan Bank, at cost                                                              286,700         239,800
Cash value of life insurance                                                            423,070         337,813
Other assets                                                                            186,896          45,182
                                                                                   ------------    ------------
         Total Assets                                                              $ 47,601,285      44,361,744
                                                                                   ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Liabilities:
   Deposits                                                                        $ 39,151,363      34,954,584
   Accrued interest payable                                                             287,529         275,028
   Income taxes payable                                                                 100,623          24,660
   Other liabilities                                                                     64,099         143,719
                                                                                   ------------    ------------
      Total Liabilities                                                              39,603,614      35,397,991
                                                                                   ------------    ------------

Stockholders' Equity:
   Common stock,  $.10 par value,  4,000,000 
   shares  authorized,  661,250 shares
   issued and 562,063 shares  outstanding 
   March 31, 1999 (661,250  September 30, 1998)                                          66,125          66,125
   Preferred stock, no par value, 1,000,000
      shares authorized, no shares issued
      or outstanding                                                                        -0-             -0-
   Additional paid in capital                                                         6,135,412       6,135,412
   Retained Earnings                                                                  3,431,773       3,256,097
   Accumulated other comprehensive income (loss)                                         (3,970)         35,119
                                                                                      9,629,340       9,492,753
   Receivable from employee stock ownership plan                                       (502,550)       (529,000)
   Treasury stock, 99,187 shares at cost (-0- September
      30, 1998)                                                                      (1,129,119)            -0-
      Total Stockholders' Equity                                                      7,997,671       8,963,753
         Total Liabilities and Stockholders' Equity                                $ 47,601,285      44,361,744
                                                                                   ============    ============
</TABLE>

                                      - 3 -

<PAGE>

                      QUITMAN BANCORP, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                        ---------------------------------
<TABLE>
<CAPTION>
                                                      (UNAUDITED)             (UNAUDITED)
                                                  THREE MONTHS ENDED       SIX MONTHS ENDED
                                                      MARCH 31,               MARCH 31,        
                                               ------------------------ -----------------------
                                                   1999         1998       1999        1998   
                                               ----------    ---------   ---------  -----------
Interest Income:
   Loans receivable:
<S>                                            <C>           <C>       <C>         <C>      
      First mortgage loans                       $ 801,461     741,700   1,590,141   1,499,330
      Consumer and other loans                      49,008      28,492     103,326      57,720
   Interest on FHLMC Pool                               45          68          95         142
   Investment securities                            89,017      62,830     177,898     125,558
   Interest-bearing deposits                         8,800      20,503      14,862      26,253
   Federal funds sold                                  126         -0-         482          68
                                                 ---------   ---------   ---------   ---------
         Total Interest Income                     948,457     853,593   1,886,804   1,709,071
                                                 ---------   ---------   ---------   ---------

Interest Expense:
   Deposits                                        530,856     529,440   1,050,008   1,041,331
   Interest on Federal Home Loan
      Bank advances                                  1,385      15,401      11,546      36,622
                                                 ---------   ---------   ---------   ---------
         Total Interest Expense                    532,241     544,841   1,061,554   1,077,953
                                                 ---------   ---------   ---------   ---------

Net Interest Income                                416,216     308,752     825,250     631,118

Provision for loan losses                              -0-       9,000      10,000      18,000
                                                 ---------   ---------   ---------   ---------

Net Interest Income After Provision for Losses     416,216     299,752     815,250     613,118
                                                 ---------   ---------   ---------   ---------

Non-Interest Income:
   Gain (loss) on sale of securities                   -0-         -0-       1,094          18
   Late charges on loans                             9,763       7,421      18,725      16,175
   Service charges                                   5,665       1,611       9,635       3,710
   Insurance commissions                               196         408         557         843
   Other income                                      2,014         -0-       2,577       2,079
   Gain on sale of other real estate                   -0-         -0-         -0-       3,012
                                                 ---------   ---------   ---------   ---------
         Total Non-Interest Income                  17,638       9,440      32,588      25,837
                                                 ---------   ---------   ---------   ---------

Non-Interest Expense:
   Compensation                                     91,881      77,901     179,188     150,646
   Other personnel expenses                         62,573      38,250      96,819      81,278
   Occupancy expenses of premises                    5,471       4,936      11,566      10,430
   Furniture and equipment expenses                 35,057      31,055      72,845      47,259
   Federal deposit insurance                         5,511       5,402      10,762      10,705
   Advertising                                      15,275       6,978      25,005      30,360
   Legal expense                                    13,619         750      26,198       1,500
   Accounting and auditing                          13,250       8,825      26,550      14,389
   Office supplies and printing                     11,433       6,933      20,546      12,340
   Business occupation and other taxes              12,730       9,006      29,655      21,052
   Charitable contributions                          1,103         325       7,097      29,364
   Other operating expenses                         33,406      35,478      68,409      63,598
                                                 ---------   ---------   ---------   ---------
         Total Non-Interest Expense                301,309     225,839     574,640     472,921
                                                 ---------   ---------   ---------   ---------

Income Before Income Taxes                         132,545      83,353     273,198     166,034
Provision for Income Taxes                          45,797      27,221      97,522      62,382
                                                 ---------   ---------   ---------   ---------
Net Income                                       $  86,748      56,132     175,676     103,652
                                                 =========   =========   =========   =========
Earnings Per Share (Basic and Diluted)           $     .16         N/A         .31         N/A
                                                 =========   =========   =========   =========
</TABLE>

                                      - 4 -

<PAGE>



                      QUITMAN BANCORP, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 -----------------------------------------------
<TABLE>
<CAPTION>
                                                                    ACCUMULATED
                                                                       OTHER
                                          ADDITIONAL               COMPREHENSIVE      RECEIVABLE
                                   COMMON  PAID IN    RETAINED         INCOME             FROM         TREASURY
                                   STOCK   CAPITAL    EARNINGS         (LOSS)             ESOP           STOCK        TOTAL   
                                   -----  ---------  ---------         ------             ----           -----        -----   
<S>                           <C>        <C>        <C>               <C>           <C>           <C>             <C>      
Balances, September 30, 1997  $      -0-    -0-      2,952,560          5,993             -0-             -0-        2,958,553

Net income                           -0-    -0-        103,652            -0-             -0-             -0-          103,652

Other comprehensive income           -0-    -0-            -0-         10,853             -0-             -0-           10,853
                               ---------  ---------  ---------         ------           ------          -------     ----------

Balances, March 31, 1998,
 (Unaudited)                  $      -0-    -0-      3,056,212         16,846             -0-             -0-        3,073,058
                               =========  ========= ==========         ======        =========     ===========      ==========

Balances, September 30, 1998  $   66,125  6,135,412  3,256,097         35,119        (529,000)            -0-        8,963,753

Net income                           -0-    -0-        175,676            -0-             -0-             -0-          175,676

Other comprehensive income (loss)    -0-    -0-            -0-        (39,089)            -0-             -0-          (39,089)

Change in receivable from employee
 stock ownership plan                -0-    -0-            -0-            -0-          26,450             -0-           26,450

Treasury stock acquired, 99,187
 shares                              -0-    -0-            -0-            -0-             -0-      (1,129,119)      (1,129,119)
                               ---------  ---------  ---------         ------        ---------     ------------     ----------
Balances, March 31, 1999,
 (Unaudited)                  $   66,125  6,135,412  3,431,773         (3,970)       (502,550)     (1,129,119)       7,997,671
                               =========  ========= ==========         ======        ========      ==========      ==========

</TABLE>
                                      - 5 -

<PAGE>

                      QUITMAN BANCORP, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                                SIX MONTHS ENDED MARCH 31, 
                                                                -------------------------- 
                                                                   1999           1998    
                                                                   ----           ----    
                                                                (Unaudited)   (Unaudited)
<S>                                                          <C>              <C>      
Cash Flows From Operating Activities:
   Net income                                                 $   175,676        103,652
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation                                                 42,410         35,059
      Provision for loan losses                                    10,000         18,000
      Amortization (Accretion) of securities                        5,000          8,438
      Gain on sale of foreclosed assets                               -0-         (3,012)
      Gain on sale of securities                                   (1,094)           -0-
      Deferred income taxes                                        (1,813)           -0-
   Change in Assets and Liabilities:
      (Increase) Decrease in accrued interest receivable            2,609         19,313
      Increase (Decrease) in accrued interest payable              12,501          8,465
      Increase (Decrease) in other liabilities                    (94,654)       (39,412)
      Increase (Decrease) in income taxes payable                  20,853        (24,667)
      (Increase) Decrease in other assets                         (49,620)      (187,615)
                                                              -----------    -----------
         Net cash provided (used) by operating activities         121,868        (61,779)
                                                              -----------    -----------

Cash Flows From Investing Activities:
   Capital expenditures                                          (749,569)      (176,926)
   Purchase of available-for-sale securities                   (2,476,137)      (230,102)
   Proceeds from sale of foreclosed property                          -0-         66,927
   Proceeds from maturity of held-to-maturity securities          200,000        100,000
   Proceeds from maturity of available-for-sale securities        100,000        100,000
   Proceeds from sale of available-for-sale securities          1,950,000            -0-
   Purchase of stock in Federal Home Loan Bank                    (46,900)       (12,100)
   Net (increase) decrease in loans                            (1,485,678)        94,939
   Principal collected on mortgage-backed securities               79,107          8,593
   Increase in cash value of life insurance                       (85,257)       (79,682)
                                                              -----------    -----------
         Net cash provided (used) by investing activities      (2,514,434)      (128,351)
                                                              -----------    -----------

Cash Flows From Financing Activities:
   Net increase (decrease) in deposits                          4,196,779      6,859,146
   Proceeds from Federal Home Loan Bank advances                1,000,000        300,000
   Principal collected on receivable from ESOP                     26,450            -0-
   Purchase of treasury stock                                  (1,129,119)           -0-
   Payment on Federal Home Loan Bank advances                  (1,000,000)    (1,600,000)
                                                              -----------    -----------
         Net cash provided (used) by financing activities       3,094,110      5,559,146
                                                              -----------    -----------

Net Increase (Decrease) in cash and cash equivalents              701,544      5,369,016
Cash and Cash Equivalents at Beginning of Period                  371,866        656,808
                                                              -----------    -----------
Cash and Cash Equivalents at End of Period                    $ 1,073,410      6,025,824
                                                              ===========    ===========

Supplemental Disclosures of Cash Flows Information:
   Cash Paid During The Period:
      Interest                                                $ 1,049,053      1,069,488
      Income taxes                                                 89,064         90,109
   Non-Cash Investing Activities:
      Increase (Decrease) in unrealized gains on available-
         for-sale securities                                      (59,226)        19,531
</TABLE>

                                      - 6 -

<PAGE>



                      QUITMAN BANCORP, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 -----------------------------------------------

<TABLE>
<CAPTION>
                                                    (UNAUDITED)            (UNAUDITED)
                                                 THREE MONTHS ENDED     SIX MONTHS ENDED
                                                      MARCH 31,              MARCH 31,       
                                                --------------------   --------------------
                                                  1999        1998       1999        1998   
                                                --------    --------   --------    --------   
<S>                                            <C>           <C>       <C>         <C>    
Net Income                                      $ 86,748      56,132    175,676     103,652
                                                --------    --------   --------    --------

Other Comprehensive Income, Net of Tax:
   Unrealized gains (losses) on securities:
      Unrealized holding gains (losses)
        arising during the period                (27,902)      6,600    (37,995)     10,871
      Reclassification adjustment for (gains)
        losses included in net income                -0-         -0-     (1,094)        (18)
                                                --------    --------   --------    --------

   Other Comprehensive Income (Loss)             (27,902)      6,600    (39,089)     10,853
                                                --------    --------   --------    --------

Comprehensive Income                            $ 58,846      62,732    136,587     114,505
                                                ========    ========   ========    ========
</TABLE>

                                      - 7 -

<PAGE>

                      QUITMAN BANCORP, INC. AND SUBSIDIARY

                          Notes to Financial Statements
                                   (Unaudited)

Note 1 - Basis of Preparation
-----------------------------

         The financial  statements  included  herein for the periods ended March
         31, 1999 are for Quitman  Bancorp,  Inc. and Subsidiary.  The financial
         statements included herein for the periods ended March 31, 1998 are for
         Quitman Federal Savings Bank (the "Bank").

         The  accompanying  unaudited  financial  statements  were  prepared  in
         accordance  with  instructions  for Form  10-QSB and  therefore  do not
         include all  disclosures  necessary for a complete  presentation of the
         statements of financial condition,  statements of income, statements of
         comprehensive  income and  statements of cash flow in  conformity  with
         generally  accepted  accounting  principles.  However,  all adjustments
         which  are,  in the  opinion  of  management,  necessary  for the  fair
         presentation  of the interim  financial  statements have been included.
         All such adjustments are of a normal recurring nature. The statement of
         income for the six month period ended March 31, 1999 is not necessarily
         indicative of the results which may be expected for the entire year.

         It is suggested that these  unaudited  financial  statements be read in
         conjunction  with the audited  consolidated  financial  statements  and
         notes thereto for Quitman  Bancorp,  Inc. and  Subsidiary  for the year
         ended September 30, 1998.

Note 2 - Plan of Conversion
---------------------------

         On October 14,  1997,  the Bank's  Board of  Directors  approved a plan
         ("Plan") to convert from a federally-chartered mutual savings bank to a
         federally-chartered  stock  savings  bank  subject to  approval  by the
         Bank's  members.  The Plan,  which  included  formation  of the holding
         company,  Quitman Bancorp,  Inc., was subject to approval by the Office
         of Thrift  Supervision  (OTS) and included the filing of a registration
         statement  with the SEC. The conversion was completed on April 2, 1998.
         Actual  conversion  costs were  accounted  for as a reduction  in gross
         proceeds.

         The Plan called for the common stock of the Bank to be purchased by the
         holding  company and for the common stock of the holding  company to be
         offered to  various  parties  in an  offering  at a price of $10.00 per
         share.

         The  stockholders  of the  holding  company  approved a proposed  stock
         option  plan and a proposed  restricted  stock plan at a meeting of the
         stockholders  on  April  13,  1999.  Shares  issued  to  directors  and
         employees  under these plans may be from authorized but unissued shares
         of common stock or they may be  purchased  in the open  market.  In the
         event  that  options  or shares  are issued  under  these  plans,  such
         issuances will be included in the earnings per share calculation; thus,
         the interests of existing stockholders would be diluted.

         The Bank may not declare or pay a cash  dividend if the effect  thereof
         would  cause its net  worth to be  reduced  below  either  the  amounts
         required for the liquidation  account discussed below or the regulatory
         capital requirements imposed by federal regulations.

         At the time of conversion,  the Bank established a liquidation  account
         (which is a  memorandum  account  that does not  appear on the  balance
         sheet) in an amount equal to its retained income as

                                      - 8 -

<PAGE>
         reflected  in the latest  balance  sheet  used in the final  conversion
         prospectus.  The liquidation account will be maintained for the benefit
         of eligible  account  holders who  continue to maintain  their  deposit
         accounts in the Bank after the  conversion.  In the event of a complete
         liquidation  of  the  Bank  (and  only  in  such  an  event),  eligible
         depositors  who  continue  to  maintain  accounts  shall be entitled to
         receive  a  distribution  from  the  liquidation   account  before  any
         liquidation may be made with respect to common stock.


Note 3 - Stock Repurchase
-------------------------

         The Company has adopted a stock repurchase  program that allows for the
         repurchase,  from time to time,  of up to 99,187 (15%) shares of common
         stock.  Any  shares  repurchased  may be used  for  general  and  other
         corporate purposes,  including the issuance of shares upon the exercise
         of stock options.  On March 11, 1999,  the Company  completed its stock
         repurchase  program,  having  repurchased  99,187  shares of its common
         stock at a cost of $1,129,119.


Note 4 - Earnings Per Share
---------------------------

         The following table sets forth the reconciliation of the numerators and
         denominators  of  the  basic  and  diluted  earnings  per  share  (EPS)
         computations:
<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED           SIX MONTHS ENDED
                                                              MARCH 31,                   MARCH 31,       
                                                      ------------------------    --------------------------
                                                          1999          1998        1999            1998   
                                                      ----------      --------    ---------      -----------


<S>                                                  <C>              <C>         <C>              <C>
(a)   Net income available to shareholders            $   86,748         N/A        175,676          N/A  
                                                      ----------       -------    ---------        -------
         Denominator:
           Weighted-average shares outstanding           588,712         N/A        622,522          N/A
           Less:  ESOP weighted-average shares
           unallocated                                    50,255         N/A         51,578          N/A  
                                                      ----------       -------    ---------        -------

(b)   Basic EPS weighted-average shares
         outstanding                                     538,457         N/A        570,944          N/A

         Effect of dilutive securities                       -0-         N/A            -0-          N/A  

(c)   Diluted EPS weighted-average shares
         outstanding                                     538,457         N/A        570,444          N/A  
                                                      ==========       =======    =========        =======

         Basic earnings per share (a/b)               $      .16         N/A             .31         N/A  
                                                       =========       =======  ============       =======

         Diluted earnings per share (a/c)             $      .16         N/A             .31         N/A  
                                                       =========       =======  ============       =======
</TABLE>

                                      - 9 -

<PAGE>

       ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Comparison of Financial Condition at March 31, 1999 and September 30, 1998

Quitman Bancorp, Inc. (the "Company") may from time to time make written or oral
"forward-looking  statements"  including  statements  contained in the Company's
filings with the Securities and Exchange  Commission  (including  this report on
Form 10-QSB), in its reports to stockholders and in other  communications by the
Company,  which  are made in good  faith by the  Company  pursuant  to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.

These  forward-looking  statements  involve  risks  and  uncertainties,  such as
statements  of the  Company's  plans,  objectives,  expectations,  estimates and
intentions,  that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's  financial  performance to differ  materially from the
plans,   objectives,   expectations,   estimates  and  intentions  expressed  in
forward-looking statements: the strength of the United States economy in general
and  the  strength  of  the  local  economies  in  which  the  Company  conducts
operations;  the effect of, and changes in, trade,  monetary and fiscal policies
and laws,  including  interest  rate  policies of the Board of  Governors of the
Federal  Reserve  System,  inflation,  interest  rate and  market  and  monetary
fluctuations;  the timely  development  of and  acceptance  of new  products and
services of the Company and the perceived  overall  value of these  products and
services by users,  including  the  features,  pricing  and quality  compared to
competitors'  products and  services;  the  willingness  of users to  substitute
competitors' products and services for the Company's products and services;  the
success of the  Company in  gaining  regulatory  approval  of its  products  and
services,  when required;  the impact of changes in financial services' laws and
regulations   (including  laws  concerning   taxes,   banking,   securities  and
insurance);  technological changes,  acquisitions;  changes in consumer spending
and  saving  habits;  and the  success  of the  Company  at  managing  the risks
described above involved in the foregoing.

The Company cautions that these important factors are not exclusive. The Company
does not undertake to update any forward-looking  statement,  whether written or
oral, that may be made from time to time by or on behalf to the Company.

Total assets  increased by $3.2 million or 7.3% due primarily to the increase in
cash and cash  equivalents,  office properties and equipment and loans resulting
from funds  received from capital  stock issued by Quitman  Bancorp,  Inc.,  the
Bank's newly formed holding company.

Total  equity  decreased  by $966,082 as result of net income for the six months
ended   March  31,   1999,   changes   in  the   unrealized   gain  or  loss  on
available-for-sale  securities,  reduction of a guaranty of a loan to the Bank's
employee stock  ownership  plan, and purchase of 99,187 shares of treasury stock
at a cost of $1,129,119.

Non-Performing Assets and Delinquencies

Loans  accounted for on a non-accrual  basis  increased to $360,755 at March 31,
1999 from $103,213 at September  30, 1998.  The increase was the result of seven
loans being  reclassified to performing  loans and fourteen loans being added to
non-accrual. The allowance for loan losses was $380,000 at March 31, 1999.

                                     - 10 -

<PAGE>

Comparison  of the Results of  Operations  for the Three  Months Ended March 31,
1999 and 1998

Net Income.  Net income increased by $31,000 or 55.4% from net income of $56,000
for the three months ended March 31, 1998 to net income of $87,000 for the three
months ended March 31, 1999.  This increase is primarily the result of increased
interest  income that was reduced by an increase in  non-interest  expense.  The
annualized  return on average  assets  increased from .54% to .74% for the three
months ended March 31, 1998 and 1999, respectively.

Net  Interest  Income.  Net  interest  income  increased  $107,000 or 34.6% from
$309,000  for the three  months  ended March 31, 1998 to $416,000  for the three
months ended March 31, 1999.  The increase was  primarily  due to an increase in
loans resulting from the approximately  $6.2 million in net proceeds received in
April, 1998 from our initial public offering.

Interest Income.  Interest income  increased  $42,000 for the three months ended
March 31, 1999  compared to the same three  months  ended  March 31,  1998.  The
increase  in  interest  income was  primarily  due to an increase in the average
balance of  interest-earning  assets.  The average  balance of  interest-earning
assets  increased by 18.42%.  This increase in average  interest-earning  assets
added  an  additional   $95,000  of  interest  income.   The  average  yield  on
interest-earning  assets  decreased  moderately  to 8.5% from 9.1% for the three
months ended March 31, 1999 and 1998, respectively.

Interest Expense. Interest expense decreased $13,000 from $545,000 for the three
months  ended March 31, 1998 to $532,000  for the three  months  ended March 31,
1999.   The   decrease   in   interest   expense  was  due  to  an  increase  in
interest-bearing  liabilities of $1.4 million and a slight  decrease in the cost
of funds of 40 basis points (100 basis points  equals 1%). The average  balances
of deposits  and  advances  from the Federal  Home Loan bank  increased  by $1.5
million,  from the three  months  ended March 31, 1998 to the three months ended
March 31, 1999.

Non-Interest  Income.  Non-interest income increased by $8,200 primarily from an
increase in late  charges,  $2,300  service  charges,  $4,100 and  miscellaneous
income, $1,800.

Non-Interest Expense. Non-interest expense increased by $75,000 primarily due to
increased  compensation  and other  personnel  expense,  furniture and equipment
expense and other  operating  expenses.  Our  compensation  and other  personnel
expense  increased an  aggregate  of $38,000  between the periods as a result of
year-end pay raises,  hiring of additional  employees and  contributions  to the
Bank's Employee Stock Ownership Plan formed in April of 1998. Other non-interest
expenses  including  expenses  of the Parent  Company in the amount of  $24,839,
increased $32,521.

As a result of our new bank  building  opening on April 26, 1999,  we expect our
non-interest  expense to  increase.  Also,  on April 13, 1999 we  implemented  a
restricted  stock plan and a stock option plan which will  further  increase our
non-interest expense.

Income Taxes.  Income tax expense amounted to $27,000 for the three months ended
March 31, 1998 compared to $46,000 for the three months ended March 31, 1999.

Comparison of the Results of Operations  for the Six Months Ended March 31, 1999
and 1998

Net Income. Net income increased by $72,000 or 69.2% from net income of $104,000
for the six months  ended March 31, 1998 to net income of $176,000  for the same
six months of fiscal 1999.  This  increase is primarily  the result of increased
interest income that more than offset increases in non-interest expense. The

                                     - 11 -

<PAGE>

annualized  return on  average  assets  increased  from .51% to .76% for the six
months ended March 31, 1998 and 1999, respectively.

Net Interest  Income.  Net interest  income  increased  $194,000 or 30.1%,  from
$631,000  for the six months ended March 31, 1998 to $815,000 for the six months
ended  March  31,  1999.  The  increase  was  primarily  due to an  increase  in
residential mortgages and consumer loans and a decrease in the cost of funds.

Interest  Income.  Interest income  increased  $178,000 for the six months ended
March 31,  1999  compared  to the same six  months  ended  March 31,  1998.  The
increase in interest  income was  primarily  attributable  to an increase in the
average   balance  of   interest-earning   assets.   The   average   balance  of
interest-earning   assets   increased  by  16.42%.   This  increase  in  average
interest-earning  assets added an additional  $178,000 of interest  income.  The
average yield on interest-earning  assets decreased moderately to 8.6% from 9.1%
for the six months ended March 31, 1999 and 1998, respectively.

Interest Expense. Interest expense decreased $16,000 from $1,078,000 for the six
months  ended March 31, 1998 to  $1,062,000  for the six months  ended March 31,
1999.  The  decrease in  interest  expense  was  attributable  to an increase in
interest-bearing  liabilities of $.6 million and a decrease in the cost of funds
of 40 basis  points  (100 basis  points  equals  1%).  The  average  balances of
deposits and advances  from the Federal Home Loan Bank  increased by $.6 million
from the six months ended March 31, 1998 to the six months ended March 31, 1999.

Non-Interest  Income.  Non-interest income increased by $6,800 primarily from an
increase  in service  charges on deposit  accounts  of $7,900,  late  charges of
$2,500 and  partially  offset by a decrease in gain in sale of other real estate
of $3,000.

Non-Interest  Expense.  Non-interest expense increased by $101,000 primarily due
to increased compensation and other personnel expense, and expense of the parent
company,  which did not exist during the six months  ended March 31,  1998.  Our
compensation  and other  personnel  expense  increased  an  aggregate of $44,000
between the periods as a result of year-end pay raises, our hiring of additional
employees and  contributions to the Bank's Employee Stock Ownership Plan created
in April of 1998.  The Parent  Company's  operating  expenses for the six months
ended March 31, 1999 were $48,000.

Income  Taxes.  Income tax expense  amounted to $62,000 for the six months ended
March 31, 1998 compared to $98,000 for the six months ended March 31, 1999.

Liquidity and Capital Resources

Management  monitors our risk-based capital and leverage capital ratios in order
to asses compliance with regulatory guidelines.  At March 31, 1999, the Bank had
tangible capital,  leverage,  and total risk-based capital of 12.94%, 12.94% and
20.12%,  respectively,  which exceeded the OTS's minimum  requirements of 1.50%,
3.00% and 8.00%, respectively.

We are taking  necessary steps to be certain our data  processing  equipment and
software  will  properly  function  on January 1, 2000,  the date that  computer
problems are expected to develop  worldwide on computer systems that incorrectly
identify the year 2000 and incorrectly compute interest, payment or delinquency.
Accurate data processing is essential to our operations.

We have examined our computers to determine  whether they will properly function
on January 1, 2000 and do not believe that we will experience  material costs to
upgrade our computers.  We have ordered and installed an upgrade to our computer
system that is intended to solve the Year 2000 Computer software issue.

                                     - 12 -

<PAGE>

We installed this upgrade during the first calendar quarter of 1998.  Testing of
this software through December 31, 2000 has been completed.

There was no malfunction of the software during testing. If a malfunction of the
software is  discovered,  we plan to  implement  "manual  processing"  until our
software  becomes Y2K compliant.  We have ordered packages of all forms required
to  handle  loans,  deposits  and  operations.  Detailed  plans  for the  manual
operation of Quitman Federal Savings bank are in progress.

Non-information  technology such as: heating,  air  conditioning  and door locks
have been tested. These areas will not be impacted.

We have made  contact  with our  Commercial  Borrowers  regarding  the Year 2000
issue,  advising  them of the  potential  problem.  As the  majority of our loan
portfolio is 1 to 4 family  dwellings,  we do not feel our commercial  borrowers
will be an issue.

Our new bank building is near completion. The estimated cost of the new facility
and land is $960,000.  We are exploring whether to purchase land and construct a
branch. Although no definite plans have been made, if a new branch is built, the
land  and  construction  costs  could  total  approximately  $600,000.  We  have
sufficient  liquid  assets to pay for these  costs.  These costs will  partially
offset  by the sale of our  existing  office.  We also have  sufficient  capital
resources to install an ATM  machine,  and are planning to offer that service in
the future.

                                     - 13 -

<PAGE>

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
         -----------------

                  Not applicable.

Item 2.  Changes in Securities and Use of Proceeds
         -----------------------------------------

                  Not applicable.

Item 3.  Defaults Upon Senior Securities
         -------------------------------

                  Not applicable.

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

                  Our annual meeting of the stockholders was held on January 27,
                  1999. At the meeting,  six directors were elected for terms to
                  expire in 2000, 2001 and 2002 and the selection of independent
                  auditors was approved. We have a total of six directors.

                  The results of voting are shown for each matter considered.

Director Election:

Nominee                             Votes For  Votes Withheld   Broker Non-Votes

2000 Term Expiration:
Claude R. Butler                     443,895        7,092             -0-
Walter B. Holwell                    443,895        7,092             -0-

2001 Term Expiration:
Daniel M. Mitchell                   443,895        7,092             -0-
John W. Romine                       443,895        7,092             -0-

2002 Term Expiration:
Robert L. Cunningham, III            443,895        7,092             -0-
Melvin E. Plair                      443,895        7,092             -0-

Auditor Ratification:
Votes For                            439,745
Votes Against                        300
Abstentions                          4,942
Broker Non-Votes                     -0-

                  We held a special  meeting of  stockholders on April 13, 1999.
                  At the meeting,  a stock  option plan and a  restricted  stock
                  plan were approved by stockholders.

                  The results of voting are shown for each matter considered.

                                     - 14 -

<PAGE>



1999 Stock Option Plan:

Votes For                                           358,693
Votes Against                                       60,694
Abstentions                                         4,967
Broker Non-Votes                                    10,350

1999 Restricted Stock Plan:

Votes For                                           369,143
Votes Against                                       60,594
Abstentions                                         4,967

Item 5.  Other Information
         -----------------

                  Not applicable.

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

         (a)      None.

         (b)      None.



                                     - 15 -

<PAGE>


                                   SIGNATURES


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


                                  QUITMAN BANCORP, INC.



Date: May 11, 1999                    By: /s/Melvin E. Plair
                                          ------------------------------------
                                          Melvin E. Plair
                                          President and Chief Executive Officer
                                          (Principal Executive and Financial
                                            Officer)
                                          (Duly Authorized Officer)



Date: May 11, 1999                    By: /s/Peggy L. Forgione
                                          ------------------------------------
                                          Peggy L. Forgione
                                          Vice President and Controller
                                          (Chief Accounting Officer)


                                     - 16 -