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 December 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

         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 December 31, 1999: 507,262

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
                 ----------------------------------------------
<TABLE>
<CAPTION>
                                     ASSETS
                                     ------
                                                             DECEMBER 31,      SEPTEMBER 30,
                                                                 1999             1999
                                                             ------------       ----------
                                                              (Unaudited)
<S>                                                         <C>               <C>
Cash and Cash Equivalents:
   Cash and amounts due from depository
      institutions                                           $  1,879,447       1,706,799
   Interest-bearing deposits in other banks                       367,452         261,896
                                                             ------------    ------------
         Total Cash and Cash Equivalents                        2,246,899       1,968,695
Investment securities:
   Available-for-sale                                           6,218,972       6,558,701
Loans receivable - net of allowance for loan
   losses and deferred origination fees                        42,180,302      41,120,768
Office properties and equipment, at cost, net of
   accumulated depreciation                                     1,571,042       1,601,398
Real estate and other property acquired
   in settlement of loans                                         134,075         139,045
Accrued interest receivable                                       445,651         514,290
Investment required by law-stock in Federal
   Home Loan Bank, at cost                                        286,700         286,700
Cash value of life insurance                                      544,755         482,354
Other assets                                                      240,013         170,198
                                                             ------------    ------------
         Total Assets                                        $ 53,868,409      52,842,149
                                                             ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Liabilities:
   Deposits                                                  $ 42,475,897      41,993,095
   Advances from Federal Home Loan Bank                         3,500,000       2,500,000
   Accrued interest payable                                       358,863         303,512
   Income taxes payable                                            62,241           1,312
   Other liabilities                                               29,630         369,230
                                                             ------------    ------------
      Total Liabilities                                        46,426,631      45,167,149
                                                             ------------    ------------

Stockholders' Equity:
   Common stock,  $.10 par value,                               4,000,000
      shares  authorized,  661,250 shares
      issued and 507,262 shares outstanding
      December 31, 1999 (533,960 September 30,
      1999)                                                        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                                            3,524,217       3,491,984
   Accumulated other comprehensive income (loss)                 (115,802)        (77,699)
                                                             ------------    ------------
                                                                9,609,952       9,615,822
   Receivable from employee stock ownership plan                 (449,650)       (502,550)
   Treasury stock, 15,000 shares at cost                       (1,718,524)     (1,438,272)
                                                             ------------    ------------
      Total Stockholders' Equity                                7,441,778       7,675,000
                                                             ------------    ------------
         Total Liabilities and Stockholders' Equity          $ 53,868,409      52,842,149
                                                             ============    ============
</TABLE>

                                       3
<PAGE>
                      QUITMAN BANCORP, INC. AND SUBSIDIARY

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

                                                        QUARTER ENDED
                                                         DECEMBER 31,
                                                  -------------------------
                                                     1999            1998
                                                 -----------     ----------
                                                 (Unaudited)     (Unaudited)
Interest Income:
   Loans receivable:
      First mortgage loans                       $   883,821        788,680
      Consumer and other loans                        70,323         54,318
   Interest on FHLMC Pool                                 31             50
   Investment securities                              99,109         88,880
   Interest-bearing deposits                           5,590          6,062
   Federal funds sold                                    -0-            356
                                                 -----------    -----------
         Total Interest Income                     1,058,874        938,346
                                                 -----------    -----------

Interest Expense:
   Deposits                                          575,614        519,152
   Interest on Federal Home Loan
      Bank advances                                   41,446         10,161
                                                 -----------    -----------
         Total Interest Expense                      617,060        529,313
                                                 -----------    -----------

Net Interest Income                                  441,814        409,033

Provision for loan losses                             15,000         10,000
                                                 -----------    -----------

Net Interest Income After Provision for Losses       426,814        399,033
                                                 -----------    -----------

Non-Interest Income:
   Gain (loss) on sale of securities                  (7,060)         1,094
   Gain on sale of other real estate                   1,576            -0-
   Service charges                                    22,619          3,971
   Insurance commissions                               3,377            361
   Other income                                       13,779          9,524
                                                 -----------    -----------
         Total Non-Interest Income                    34,291         14,950
                                                 -----------    -----------

Non-Interest Expense:
   Compensation                                      126,852         87,307
   Other personnel expenses                           63,190         34,246
   Occupancy expenses of premises                     12,206          6,095
   Furniture and equipment expenses                   53,320         37,788
   Federal deposit insurance                           6,069          5,251
   Advertising                                        11,475          9,730
   Office supplies                                    11,577          9,113
   Legal expense                                      14,699         12,580
   Charitable contributions                           11,973          5,994
   Accounting and auditing                            13,150         13,300
   Other operating expenses                           75,671         51,926
                                                 -----------    -----------
         Total Non-Interest Expense                  400,182        273,330
                                                 -----------    -----------

Income Before Income Taxes                            60,923        140,653
Provision for Income Taxes                            28,690         51,171
                                                 -----------    -----------
Net Income                                       $    32,233         89,482
                                                 ===========    ===========
Earnings Per Share (Basic and Diluted)           $       .07    $       .15
                                                 ===========    ===========

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

Net income                                 -0-         -0-      89,482         -0-          -0-         -0-        89,482

Other comprehensive income (loss)          -0-         -0-         -0-    (11,187)          -0-         -0-       (11,187)

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

Treasury stock acquired, 15,000
 shares                                    -0-         -0-         -0-         -0-          -0-   (165,000)      (165,000)
                                     ---------   ---------   ---------    --------     --------  ----------     ---------
Balances, December 31, 1998,
 (Unaudited)                            66,125   6,135,412   3,345,579      23,932    (502,550)   (165,000)     8,903,498
                                        ======   =========   =========      ======    ========    ========      =========

Balance, September 30, 1999             66,125   6,135,412   3,491,984     (77,699)   (502,550) (1,438,272)     7,675,000

Net income                                 -0-         -0-      32,233         -0-          -0-         -0-        32,233

Other comprehensive income (loss)          -0-         -0-         -0-     (38,103)         -0-         -0-       (38,103)

Change in receivable from employee
 stock ownership plan                      -0-         -0-         -0-         -0-       52,900         -0-        52,900

Treasury stock acquired, 26,698
 shares                                    -0-         -0-         -0-         -0-          -0-    (280,252)     (280,252)
                                     ---------   ---------   ---------    --------     --------  ----------     ---------
Balances, December 31, 1999,
 (Unaudited)                         $  66,125   6,135,412   3,524,217    (115,802)    (449,650) (1,718,524)    7,441,778
                                     =========   =========   =========    ========     ========  ==========     =========
</TABLE>


                                      5
<PAGE>
                      QUITMAN BANCORP, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                               QUARTER ENDED DECEMBER 31,
                                                              ---------------------------
                                                                  1999            1998
                                                              ------------    -----------
                                                               (Unaudited)    (Unaudited)
<S>                                                          <C>            <C>
Cash Flows From Operating Activities:
   Net income                                                 $    32,233         89,482
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation                                                 37,192         20,941
      Provision for loan losses                                    15,000         10,000
      Amortization (Accretion) of securities                        2,659          1,949
      Gain on sale of foreclosed assets                            (1,576)           -0-
      Gain (loss) on sale of securities                             7,060         (1,094)
      Deferred income taxes                                            33         (3,832)
   Change in Assets and Liabilities:
      (Increase) Decrease in accrued interest receivable           68,639         22,488
      Increase (Decrease) in accrued interest payable              55,351         53,316
      Increase (Decrease) in other liabilities                   (119,600)      (135,923)
      Increase (Decrease) in income taxes payable                    (860)         8,581
      (Increase) Decrease in other assets                          11,570        (18,500)
                                                              -----------    -----------
         Net cash provided (used) by operating activities         107,701         47,408
                                                              -----------    -----------

Cash Flows From Investing Activities:
   Capital expenditures                                            (6,836)      (368,040)
   Purchase of available-for-sale securities                     (319,977)    (1,766,388)
   Proceeds from sale of foreclosed property                       12,500            -0-
   Proceeds from maturity of held-to-maturity securities              -0-        200,000
   Proceeds from maturity of available-for-sale securities            -0-        100,000
   Proceeds from sale of available-for-sale securities            342,634      1,400,000
   Net (increase) decrease in loans                            (1,080,488)      (372,692)
   Principal collected on mortgage-backed securities               29,621         40,520
   Increase in cash value of life insurance                       (62,401)       (59,259)
                                                              -----------    -----------
         Net cash provided (used) by investing activities      (1,084,947)      (825,859)
                                                              -----------    -----------

Cash Flows From Financing Activities:
   Net increase (decrease) in deposits                            482,802      1,533,841
   Proceeds from Federal Home Loan Bank advances                1,000,000      1,000,000
   Principal collected on receivable from ESOP                     52,900         26,450
   Purchase of treasury stock                                    (280,252)      (165,000)
                                                              -----------    -----------
   Net cash provided (used) by financing activities             1,255,450      2,395,291
                                                              -----------    -----------

Net Increase (Decrease) in cash and cash equivalents              278,204      1,616,840
Cash and Cash Equivalents at Beginning of Period                1,968,695        371,866
                                                              -----------    -----------
Cash and Cash Equivalents at End of Period                    $ 2,246,899    $ 1,988,706
                                                              ===========    ===========

Supplemental Disclosures of Cash Flows Information:
   Cash Paid During The Period:
      Interest                                                $   561,709        475,997
      Income taxes                                                 26,680         56,848
   Non-Cash Investing Activities:
      Increase (Decrease) in unrealized gains on available-
         for-sale securities                                      (57,732)       (16,950)

</TABLE>
                                      6
<PAGE>
                      QUITMAN BANCORP, INC. AND SUBSIDIARY

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


                                             QUARTER ENDED DECEMBER 31,
                                             --------------------------
                                                 1999         1998
                                              -----------   ---------
                                              (Unaudited)  (Unaudited)

Net Income                                      $ 32,233      89,482
                                                --------    --------

Other Comprehensive Income, Net of Tax:
   Unrealized gains (losses) on securities:
      Unrealized holding gains (losses)
        arising during the period                (45,163)    (12,281)
      Reclassification adjustment for (gains)
        losses included in net income              7,060      (1,094)
                                                --------    --------

   Other Comprehensive Income (Loss)             (38,103)    (11,187)
                                                --------    --------

Comprehensive Income (Loss)                     $ (5,870)     78,295
                                                ========    ========

                                      7
<PAGE>
                      QUITMAN BANCORP, INC. AND SUBSIDIARY

                          Notes to Financial Statements
                                   (Unaudited)

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

     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 three month period ended
     December 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, 1999.

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  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

                                        8
<PAGE>

     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 153,988 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.  As of
     December 31, 1999, the Company had repurchased 153,988 shares of its common
     stock at a cost of $1,718,524.


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:

                                                            THREE MONTHS ENDED
                                                               DECEMBER 30,
                                                         -----------------------
                                                           1999            1998
                                                         -------         -------

     (a) Net income available to shareholders             32,233          89,482
                                                         -------         -------

          Denominator:
            Weighted-average shares outstanding          526,447         655,598

          Less: ESOP weighted-average shares
                unallocated                               50,255          52,900
                                                         -------         -------
      (b) Basic EPS weighted-average shares outstanding  476,192         602,698

          Effect of dilutive securities                    1,524             -0-
                                                         -------         -------
      (c) Diluted EPS weighted-average shares
          outstanding                                    474,668         602,698
                                                         =======         =======

          Basic earnings per share                           .07             .15
                                                         =======         =======

          Diluted earnings per share                         .07             .15
                                                         =======         =======

                                        9
<PAGE>

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

Comparison of Financial Condition at December 31, 1999 and September 30, 1999

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 $1.0 million or 1.9% due primarily to the increase in
cash and cash  equivalents,  office properties and equipment and loans resulting
from funds  received  from an increase in  deposits  and Federal  Home Loan Bank
advances.

Total equity  decreased by $233,222 as result of net income for the three months
ended December 31, 1999, changes in other comprehensive  income,  reduction of a
guaranty of a loan to the Bank's  employee stock  ownership plan and purchase of
26,698 shares of treasury stock at a cost of $280,336.

Non-Performing Assets and Delinquencies

Loans accounted for on a non-accrual basis decreased to $149,910 at December 31,
1999 from $228,113 at September  30, 1999.  The increase was the result of three
loans  being  reclassified  to  performing  loans and two loans  being  added to
non-accrual. The allowance for loan losses was $404,000 at December 31, 1999.

                                       10
<PAGE>
Comparison of the Results of Operations  for the Three Months Ended December 31,
1999 and 1998

Net Income.  Net income  decreased  by $57,000 or 64% from net income of $89,000
for the three  months  ended  December 31, 1998 to net income of $32,000 for the
three months ended  December 31, 1999.  This decrease is primarily the result of
increased  interest  income  that was  reduced by an  increase  in  non-interest
expense. The annualized return on average assets decreased from .78% to .24% for
the three months ended December 31, 1998 and 1999, respectively.

Net Interest Income. Net interest income increased $33,000 or 8.1% from $409,000
for the three  months  ended  December 31, 1998 to $442,000 for the three months
ended  December 31, 1999. The increase was primarily due to an increase in loans
and a moderate increase in rates.

Interest Income.  Interest income increased  $121,000 for the three months ended
December 31, 1999 compared to the same three months ended December 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 11.8%.  This  increase in average  interest-earning  assets
added  an  additional   $121,000  of  interest  income.  The  average  yield  on
interest-earning  assets  increased  moderately  to 8.7% from 8.6% for the three
months ended December 31, 1999 and 1998, respectively.

Interest Expense. Interest expense increased $88,000 from $529,000 for the three
months ended  December 31, 1998 to $617,000 for the three months ended  December
31,  1999.  The  increase in interest  expense was due to an increase in average
interest-bearing  liabilities of $9 million and a slight decrease in the cost of
funds of 42 basis points (100 basis points  equals 1%). The average  balances of
deposits and advances  from the Federal Home Loan bank  increased by $9 million,
from the three months ended December 31, 1998 to the three months ended December
31, 1999.

Non-Interest Income.  Non-interest income increased by $19,000 primarily from an
increase in service  charges,  $19,000 and  miscellaneous  income,  $9,000,  and
offset by a decrease in gain/loss on securities of $8,000.

Non-Interest  Expense.  Non-interest expense increased by $127,000 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 $68,000  between the periods as a result of
year-end pay raises,  hiring of additional  employees and  contributions  to the
Bank's  Restricted  Stock Plan  approved  in April of 1999.  Other  non-interest
expenses, including  expenses  of  the Parent  Company in the amount of $22,000,
increased $24,000.

Our expenses have  increased  because of the cost  associated  with our Employee
Stock Ownership Plan, Restricted Stock Plan, and Stock Option Plan, and the cost
of being a public company.  We also offered checking  accounts and the use of an
automated  teller  machine (an "ATM") to our customers  during fiscal 1999.  Our
preparation cost for these products and the cost of soliciting  checking account
funds has also  increased  our  expenses.  We have not yet  received  sufficient
checking account funds or other income to offset these additional costs.

Although no definite plans have been made, we are exploring  whether to purchase
land and construct a branch.  We would likely hire experts or spend money before
we commit to purchasing land or constructing a new branch.  If we decided not to
build a new  branch,  any money  that we had  spent up to that  time  would be a
non-interest expense and would negatively affect our income.


                                       11
<PAGE>

Non-interest  expense has  increased as a result of a staffing and  equipping of
the new bank building  opened in April 1999. We expect a reduction in net income
(and possibly  losses)  compared to prior periods as a result of these  expenses
until the new  building  results in higher  overall  levels of loan and  deposit
activity to off-set the additional  expenses.  We believe this expansion  should
enhance  shareholder value and hope that the decrease in earnings will not be as
great  following the end of year 2000.  Our statement of beliefs  concerning our
expansion is a forward  looking  statement.  The Private  Securities  Litigation
Reform  Act of 1995 (the  "Act")  provides  protection  to us in making  certain
forward looking  statements that are accompanied by the factors that could cause
actual results to differ materially from the forward looking statement.  As with
any  expansion,  if the new office or  additional  personnel  do not  ultimately
result in increased  loan and deposit  activity and increased net income,  these
expenses  would continue to have an adverse effect on net income past the end of
year 2000. Our  non-interest  expense would further increase if we built the new
branch discussed in the prior paragraph.

Income Taxes.  Income tax expense amounted to $51,171 for the three months ended
December 31, 1998  compared to $28,690 for the three  months ended  December 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 December 31, 1999, the Bank
had tangible capital,  leverage,  and total risk-based capital of 11.78%, 11.78%
and 18.05%,  respectively,  which  exceeded the OTS's  minimum  requirements  of
1.50%, 4.00% and 8.00%, respectively.

On April 20, 1999, the Board of Directors approved a dividend of $.20 per share,
payable  May 24,  1999 to  shareholders  of  record on May 10,  1999.  While the
Company  paid this  dividend  from its cash funds,  the primary  source of funds
available for the payment of cash  dividends by the Company are  dividends  from
the subsidiary bank.  Holders of the common stock of the Company are entitled to
share ratably in dividends,  if and when,  declared by the Board of Directors of
the Company,  out of funds  legally  available  therefore.  Federal  banking law
provides  that a  savings  bank  may , by  providing  prior  regulatory  notice,
generally pay dividends  during a calendar year in an amount equal to net income
for the calendar year plus retained net income for the preceding two years.  Any
amount in excess of that  level  requires  prior  regulatory  approval  from the
Office of Thrift Supervision (the "OTS"). The OTS may disapprove any dividend if
the  Bank  is   undercapitalized   or  the   dividend   would  render  the  Bank
undercapitalized.  The OTS may also  disapprove  any dividend  for,  among other
reasons, safety and soundness concerns. Also, the Bank may not pay a dividend if
the payment  would cause its net worth to be reduced  below the amount  required
for the  liquidation  account  established  at the time of the conversion of the
Bank from mutual to stock form.

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 cost would total approximately  $600,000. We have sufficient liquid
assets to pay for these costs.

Pursuant to FASB No. 130 the Company is required to record  changes in the value
of its  investment  portfolio  as regards  unrealized  gains or losses  that may
result from  movements in interest  rates.  For the quarter  ended  December 31,
1999, the savings bank showed  unrealized  losses,  net of tax effect,  totaling
$38,000 due to increases in interest  rates as the National Money Market reacted
to actions by the Federal Open Market Committee.  Management does not anticipate
the realization of the above loss. The unrealized  loss does however  negatively
impact the Company's  capital.  The unrealized  losses, net of applicable taxes,
combined with net  operating  income of $32,000,  a reduction in the  receivable
from the Bank's  Employee Stock Ownership Plan of $52,900 and the acquisition of
26,698 shares of treasury  stock at a cost of $280,000  yields

                                       12
<PAGE>

a net decrease in the  Company's  capital of $233,000.  However,  because of the
treasury  stock  acquisition  reducing  the  number of  shares  of common  stock
outstanding  the book value per share of common stock  increased  from $14.37 on
September  30,  1999 to $14.67 as of  December  31,  1999.  The  Bank's  capital
continues  to exceed  regulatory  requirements  and  continues to be adequate to
support future asset growth.

                                       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 18, 2000.
          At the meeting, two directors were elected for terms to expire in 2003
          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

2003 Term Expiration:
Claude R. Butler                 405,088             550              -0-
Walter B. Holwell                405,778             300              -0-

Auditor Ratification:
Votes For                        415,890
Votes Against                        -0-
Abstentions                          113
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.

1999 Stock Option Plan:

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

                                       14
<PAGE>



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: February 11, 2000              By:   /s/Melvin E. Plair
                                           -------------------------------------
                                           Melvin E. Plair
                                           President and Chief Executive Officer
                                           (Principal Executive and Financial
                                             Officer)
                                           (Duly Authorized Officer)



Date: February 11, 2000              By: /s/Peggy L. Forgione
                                           -------------------------------------
                                           Peggy L. Forgione
                                           Vice President and Controller
                                           (Chief Accounting Officer)

                                       16