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 June 30, 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

      -------------------------------------------------------------------
              (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 June 30, 1999: 537,563

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.............................................15

     Item 6.  Exhibits and Reports on Form 8-K..............................15

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




                                      -2-
<PAGE>
                          PART I. FINANCIAL INFORMATION
                      QUITMAN BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                 ----------------------------------------------
<TABLE>
<CAPTION>
                                     ASSETS
                                     ------
                                                                                    JUNE 30,        SEPTEMBER 30,
                                                                                      1999              1998
                                                                                   ------------    --------------
                                                                                   (Unaudited)
<S>                                                                               <C>                  <C>
Cash and Cash Equivalents:
   Cash and amounts due from depository
      institutions                                                                 $  1,016,442         168,404
   Interest-bearing deposits in other banks                                             744,784         203,462
                                                                                   ------------    ------------
         Total Cash and Cash Equivalents                                              1,761,226         371,866
Investment securities:
   Available-for-sale                                                                 6,237,801       5,640,709
   Held-to-maturity                                                                         -0-         200,000
Loans receivable - net of allowance for loan
   losses and deferred origination fees                                              39,508,464      36,397,067
Office properties and equipment, at cost, net of
   accumulated depreciation                                                           1,621,062         681,453
Real estate and other property acquired
   in settlement of loans                                                               342,923             -0-
Accrued interest receivable                                                             448,843         447,854
Investment required by law-stock in Federal
   Home Loan Bank, at cost                                                              286,700         239,800
Cash value of life insurance                                                            447,911         337,813
Other assets                                                                            173,222          45,182
                                                                                   ------------    ------------
         Total Assets                                                              $ 50,828,152      44,361,744
                                                                                   ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
Liabilities:
   Deposits                                                                        $ 41,657,612      34,954,584
   Advances from Federal Home Loan Bank                                               1,000,000             -0-
   Accrued interest payable                                                             337,939         275,028
   Income taxes payable                                                                  47,597          24,660
   Other liabilities                                                                    130,036         143,719
                                                                                   ------------    ------------
      Total Liabilities                                                              43,173,184      35,397,991
                                                                                   ------------    ------------

Stockholders' Equity:
   Common stock,  $.10 par value,  4,000,000
      shares  authorized,  661,250 shares
      issued and 537,563 shares outstanding
      June 30, 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                                                                  3,413,630       3,256,097
   Accumulated other comprehensive income (loss)                                        (59,016)         35,119
                                                                                      9,556,151       9,492,753
   Receivable from employee stock ownership plan                                       (502,550)       (529,000)
   Treasury stock, 123,687 shares at cost (-0- September
      30, 1998)                                                                      (1,398,633)            -0-
      Total Stockholders' Equity                                                      7,654,968       8,963,753
         Total Liabilities and Stockholders' Equity                                $ 50,828,152      44,361,744
                                                                                   ============    ============
</TABLE>

                                      -3-
<PAGE>
                      QUITMAN BANCORP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                     (UNAUDITED)             (UNAUDITED)
                                                 THREE MONTHS ENDED        NINE MONTHS ENDED
                                                       JUNE 30,                JUNE 30,
                                                 ---------------------------------------------
                                                    1999        1998        1999        1998
                                                 ---------   ---------   ---------   ---------
<S>                                             <C>           <C>       <C>         <C>
Interest Income:
   Loans receivable:
      First mortgage loans                       $ 834,731     753,663   2,424,872   2,252,991
      Consumer and other loans                      52,523      33,067     155,849      90,787
   Interest on FHLMC Pool                               40          62         136         204
   Investment securities                            92,270      66,848     270,168     192,406
   Interest-bearing deposits                         9,442      52,784      24,304      79,037
   Federal funds sold                                  -0-         351         482         419
                                                 ---------   ---------   ---------   ---------
         Total Interest Income                     989,006     906,775   2,875,811   2,615,844
                                                 ---------   ---------   ---------   ---------

Interest Expense:
   Deposits                                        553,394     511,219   1,603,401   1,552,550
   Interest on Federal Home Loan
      Bank advances                                    -0-         -0-      11,546      36,621
                                                 ---------   ---------   ---------   ---------
         Total Interest Expense                    553,394     511,219   1,614,947   1,589,171
                                                 ---------   ---------   ---------   ---------

Net Interest Income                                435,612     395,556   1,260,864   1,026,673

Provision for loan losses                              -0-       6,000      10,000      24,000
                                                 ---------   ---------   ---------   ---------

Net Interest Income After Provision for Losses     435,612     389,556   1,250,864   1,002,673
                                                 ---------   ---------   ---------   ---------

Non-Interest Income:
   Gain (loss) on sale of securities                   -0-         -0-       1,094          18
   Late charges on loans                             8,411       8,220      27,137      24,396
   Service charges                                  11,902       1,755      21,538       5,465
   Insurance commissions                             5,168         410       5,725       1,252
   Other income                                      2,065         -0-       4,640       2,079
   Gain on sale of other real estate                   -0-       4,090         -0-       7,102
   Gain on sale of fixed assets                     84,019         -0-      84,019         -0-
                                                 ---------   ---------   ---------   ---------
         Total Non-Interest Income                 111,565      14,475     144,153      40,312
                                                 ---------   ---------   ---------   ---------

Non-Interest Expense:
   Compensation                                    113,136      82,202     292,324     232,848
   Other personnel expenses                        100,358      71,254     197,177     152,532
   Occupancy expenses of premises                    9,854       5,079      21,420      15,509
   Furniture and equipment expenses                 40,329      32,746     113,175      80,005
   Federal deposit insurance                         5,525       5,432      16,286      16,137
   Advertising                                       9,504       7,058      34,509      37,418
   Legal expense                                    15,425       7,462      41,624       8,962
   Accounting and auditing                          10,810       8,275      37,360      22,664
   Office supplies and printing                     18,828      10,519      39,373      22,859
   Business occupation and other taxes              11,707       7,877      41,451      28,929
   Charitable contributions                          1,171         379       8,268      29,743
   Other operating expenses                         45,180      19,679     113,498      83,277
                                                 ---------   ---------   ---------   ---------
         Total Non-Interest Expense                381,827     257,962     956,465     730,883
                                                 ---------   ---------   ---------   ---------

Income Before Income Taxes                         165,350     146,069     438,552     312,102
Provision for Income Taxes                          71,084      50,829     168,606     113,211
                                                 ---------   ---------   ---------   ---------
Net Income                                      $   94,266      95,240     269,946     198,891
                                                 =========   =========   =========   =========
Earnings Per Share (Basic and Diluted)          $      .19         .14         .49         .30
                                                 =========   =========   =========   =========
</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-           198,891       -0-            -0-               -0-       198,891

Common stock
 issued 661,250 shares           66,125   6,134,619               -0-       -0-            -0-               -0-     6,200,744

Other comprehensive
  income                            -0-         -0-               -0-     6,739            -0-               -0-         6,739

ESOP loan guaranteed                -0-         -0-               -0-       -0-      (529,000)               -0-      (529,000)
                              ---------   ---------         ---------   -------      --------         ----------    ----------


Balances, June 30, 1998,
 (Unaudited)                  $  66,125   6,134,619         3,151,451    12,732      (529,000)               -0-     8,835,927
                              =========   =========         =========  ========    ==========         ==========    ==========


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

Net income                          -0-         -0-           269,946       -0-            -0-               -0-       269,946

Dividends                           -0-         -0-          (112,413)      -0-            -0-               -0-      (112,413)

Other comprehensive
  income (loss)                     -0-         -0-               -0-   (94,135)           -0-               -0-       (94,135)

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

Treasury stock
  acquired, 123,687 shares          -0-         -0-               -0-       -0-            -0-       (1,398,633)    (1,398,633)
                              ---------   ---------           -------  --------     ----------       ----------     ----------


Balances, June 30, 1999,
 (Unaudited)                  $  66,125   6,135,412         3,413,630   (59,016)      (502,550)      (1,398,633)     7,654,968
                              =========   =========         =========   =======     ==========       ==========     ==========
</TABLE>

                                      -5-
<PAGE>






                      QUITMAN BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
<TABLE>
<CAPTION>
                                                              NINE MONTHS ENDED JUNE 30,
                                                              --------------------------
                                                                  1999           1998
                                                             ------------    -----------
                                                              (Unaudited)    (Unaudited)
<S>                                                         <C>                <C>
Cash Flows From Operating Activities:
-------------------------------------
   Net income                                                $   269,946        198,891
   Adjustments to reconcile net income to net cash
      provided by operating activities:
      Depreciation                                                74,304         55,934
      Provision for loan losses                                   10,000         24,000
      Amortization (Accretion) of securities                      10,615          9,756
      Gain on sale of foreclosed assets                              -0-         (7,102)
      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            (989)       (34,883)
      Increase (Decrease) in accrued interest payable             62,911         38,005
      Increase (Decrease) in other liabilities                   (28,717)        14,515
      Increase (Decrease) in income taxes payable                 (8,409)       (42,556)
      (Increase) Decrease in other assets                        (31,352)       (12,689)
                                                             -----------    -----------
         Net cash provided (used) by operating activities        355,402        243,871
                                                             -----------    -----------

Cash Flows From Investing Activities:
-------------------------------------
   Capital expenditures                                       (1,013,913)      (394,608)
   Purchase of available-for-sale securities                  (3,126,358)    (2,432,535)
   Proceeds from sale of foreclosed property                         -0-        256,709
   Proceeds from maturity of held-to-maturity securities         200,000        600,000
   Proceeds from maturity of available-for-sale securities       100,000        550,000
   Proceeds from sale of available-for-sale securities         2,150,000            -0-
   Purchase of stock in Federal Home Loan Bank                   (46,900)       (12,100)
   Net (increase) decrease in loans                           (3,464,320)    (1,665,112)
   Principal collected on mortgage-backed securities             127,115         19,090
   Increase in cash value of life insurance                     (110,098)      (102,559)
                                                             -----------    -----------
         Net cash provided (used) by investing activities     (5,184,474)    (3,181,115)
                                                             -----------    -----------

Cash Flows From Financing Activities:
-------------------------------------
   Net increase (decrease) in deposits                         6,703,028        114,651
   Proceeds from Federal Home Loan Bank advances               2,000,000        300,000
   Principal collected on receivable from ESOP                    26,450            -0-
   Purchase of treasury stock                                 (1,398,633)           -0-
   Payment on Federal Home Loan advances                      (1,000,000)    (1,600,000)
   Common stock issued                                               -0-      6,200,744
   Dividends paid                                               (112,413)           -0-
                                                             -----------    -----------
         Net cash provided (used) by financing activities      6,218,432      5,015,395
                                                             -----------    -----------

Net Increase (Decrease) in cash and cash equivalents           1,389,360      2,078,151
Cash and Cash Equivalents at Beginning of Period                 371,866        656,808
                                                             -----------    -----------
Cash and Cash Equivalents at End of Period                   $ 1,761,226      2,734,959
                                                             ===========    ===========
Supplemental Disclosures of Cash Flows Information:
---------------------------------------------------
   Cash Paid During The Period:
      Interest                                               $ 1,552,036      1,551,166
      Income taxes                                               185,014        163,435
   Non-Cash Investing Activities:
      Increase (Decrease) in other comprehensive income          (94,135)         6,739

</TABLE>

                                      -6-
<PAGE>
                      QUITMAN BANCORP, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 -----------------------------------------------
<TABLE>
<CAPTION>
                                                     (UNAUDITED)            (UNAUDITED)
                                                 THREE MONTHS ENDED       NINE MONTHS ENDED
                                                       JUNE 30,              JUNE 30,
                                                --------------------------------------------
                                                  1999        1998        1999        1998
                                                --------    --------    --------    --------

<S>                                            <C>           <C>        <C>         <C>
Net Income                                      $ 94,266      95,240     269,946     198,891
                                                --------    --------    --------    --------

Other Comprehensive Income, Net of Tax:
   Unrealized gains (losses) on securities:
      Unrealized holding gains (losses)
        arising during the period                (55,046)     (4,114)    (93,041)      6,757
      Reclassification adjustment for (gains)
        losses included in net income                -0-         -0-      (1,094)        (18)
                                                --------    --------    --------    --------

   Other Comprehensive Income (Loss)             (55,046)     (4,114)    (94,135)      6,739
                                                --------    --------    --------    --------

Comprehensive Income                            $ 39,220      91,126     175,811     205,630
                                                ========    ========    ========    ========
</TABLE>

                                      -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 nine month period ended June 30, 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 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),

                                      -8-
<PAGE>

         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 127,290 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 June 30,  1999,  the  Company had  repurchased  123,687
         shares of its common stock at a cost of $1,398,633.

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     NINE MONTHS ENDED
                                                                                                 JUNE 30,             JUNE 30,
                                                                                        ----------------------   ------------------
                                                                                             1999        1998      1999      1998
                                                                                        ------------   -------   -------   -------

<S>                                                                                   <C>             <C>      <C>       <C>
(a)    Net income available to shareholders                                            $      94,266    95,240   269,946   198,891
                                                                                        ------------   -------   -------   -------
         Denominator:
           Weighted-average shares outstanding                                               556,585   661,250   600,543   661,250
           Less:  ESOP weighted-average shares
           unallocated                                                                        50,255       -0-    51,137       -0-
                                                                                        ------------   -------   -------   -------

(b)    Basic EPS weighted-average shares
         outstanding                                                                         506,330   661,250   549,406   661,250

         Effect of dilutive securities                                                           -0-       -0-       -0-       -0-


(c)    Diluted EPS weighted-average shares
         outstanding                                                                         506,330   661,250   549,406   661,250
                                                                                        ============   =======   =======   =======

         Basic earnings per share (a/b)                                                 $        .19       .14       .49       .30
                                                                                        ============   =======   =======   =======

         Diluted earnings per share (a/c)                                               $        .19       .14       .49       .30
                                                                                        ============   =======   =======   =======
</TABLE>


                                      -9-
<PAGE>



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

Comparison of Financial Condition at June 30, 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;  disruption  in data  processing  caused by
computer  malfunctions  associated  with the year 2000 that may be greater  than
expected; 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 $6.5 million or 14.5% 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 $1,308,785 as result of net income for the nine months
ended June 30,  1999,  changes in other  comprehensive  income,  reduction  of a
guaranty of a loan to the Bank's  employee  stock  ownership  plan,  purchase of
123,687  shares  of  treasury  stock at a cost of  $1,398,633,  and  payment  of
dividends in the amount of $112,413.

Non-Performing Assets and Delinquencies

Loans  accounted  for on a non-accrual  basis  increased to $234,428 at June 30,
1999 from $103,213 at September  30, 1998.  The increase was the result of eight
loans being  reclassified to performing loans,  eight loans being foreclosed and
twenty-one  loans being added to non-accrual.  The allowance for loan losses was
$38,000 at June 30, 1999.

                                      -10-
<PAGE>



Comparison of the Results of Operations for the Three Months Ended June 30, 1999
and 1998

Net Income.  Net income  decreased  by $1,000 or 1.1% from net income of $95,000
for the three  months ended June 30, 1998 to net income of $94,000 for the three
months ended June 30, 1999.  This  decrease is primarily the result of increased
income tax expense.  The annualized return on average assets decreased from .86%
to .77% for the three months ended June 30, 1998 and 1999, respectively.

Net  Interest  Income.  Net  interest  income  increased  $46,000 or 11.82% from
$390,000  for the three  months  ended June 30, 1998 to  $436,000  for the three
months ended June 30, 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  $82,000 for the three months ended
June 30,  1999  compared  to the same  three  months  ended June 30,  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 15.32%.  This increase in average  interest-earning  assets
added  an  additional   $82,000  of  interest  income.   The  average  yield  on
interest-earning  assets  decreased  moderately  to 8.6% from 9.1% for the three
months ended June 30, 1999 and 1998, respectively.

Interest Expense.  Interest expense increased $4,200 from $511,000 for the three
months ended June 30, 1998 to $553,000 for the three months ended June 30, 1999.
The  increase  in interest  expense  was due to an increase in  interest-bearing
liabilities  of $4.8  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 $2.0  million,  from the
three months ended June 30, 1998 to the three months ended June 30, 1999.

Non-Interest Income.  Non-interest income increased by $97,000 primarily from an
increase in service charges,  $10,000 and miscellaneous income, $3,000, and gain
on sale of fixed assets $84,000.

Non-Interest  Expense.  Non-interest expense increased by $124,000 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 $60,000  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  $21,000,
increased $64,000.

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

Income Taxes.  Income tax expense amounted to $51,000 for the three months ended
June 30, 1998 compared to $71,000 for the three months ended June 30, 1999.

Comparison of the Results of Operations  for the Nine Months Ended June 30, 1999
and 1998

Net Income. Net income increased by $71,000 or 35.7% from net income of $199,000
for the nine months  ended June 30, 1998 to net income of $270,000  for the same
nine months of fiscal 1999.  This  increase is primarily the result of increased
interest income that more than offset increases in non-interest expense and gain


                                      -11-
<PAGE>

realized  on the sale of fixed  assets  of  $84,000.  The  annualized  return on
average  assets  increased  from .64% to .76% for the nine months ended June 30,
1998 and 1999, respectively.

Net Interest  Income.  Net interest  income  increased  $248,000 or 24.8%,  from
$1,003,000  for the nine months ended June 30, 1998 to  $1,251,000  for the nine
months ended June 30, 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  $260,000 for the nine months ended
June 30, 1999 compared to the same nine months ended June 30, 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 14.4%.  This  increase in average  interest-earning  assets
added  an  additional   $260,000  of  interest  income.  The  average  yield  on
interest-earning  assets  decreased  moderately  to 8.6%  from 8.9% for the nine
months ended June 30, 1999 and 1998, respectively.

Interest  Expense.  Interest expense  increased  $26,000 from $1,589,000 for the
nine months ended June 30, 1998 to $1,615,000 for the nine months ended June 30,
1999.  The  decrease in  interest  expense  was  attributable  to an increase in
interest-bearing liabilities of $2.9 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 $3 million
from the nine months ended June 30, 1998 to the nine months ended June 30, 1999.

Non-Interest Income. Non-interest income increased by $104,000 primarily from an
increase in service  charges on deposit  accounts of  $16,000,  late  charges of
$3,000,  gain on sale of fixed assets $84,000,  miscellaneous  income $8,000 and
partially offset by a decrease in gain in sale of other real estate of $7,000.

Non-Interest  Expense.  Non-interest expense increased by $226,000 primarily due
to increased compensation and other personnel expense, occupancy,  furniture and
equipment expense and expense of the parent company.  Our compensation and other
personnel  expense  increased an aggregate of $104,000  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  increased by $59,000 because it
only existed for three months in the prior period.  Due to construction of a new
bank  building  and  purchase  of new  furniture,  fixtures  and  equipment  our
occupancy, furniture and equipment expense increased an aggregate of $39,000.

Income Taxes.  Income tax expense amounted to $113,000 for the nine months ended
June 30, 1998 compared to $168,000 for the nine months ended June 30, 1999.

Liquidity and Capital Resources

Management  monitors our risk-based capital and leverage capital ratios in order
to assess compliance with regulatory guidelines.  At June 30, 1999, the Bank had
tangible capital,  leverage,  and total risk-based capital of 12.27%, 12.27% and
19.20%,  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.

                                      -12-
<PAGE>

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.

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.  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 has been completed.  The cost of the new facility and land
was  $1,060,000.  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 were  partially
offset  by the  sale of our  existing  office.  We also  have  installed  an ATM
machine, and are now offering that service.

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

                  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

1999 Restricted Stock Plan:

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

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

                  Not applicable.


                                      -14-
<PAGE>



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

               (a)  Exhibit 10.3 - Quitman Bancorp,  Inc. 1999 Stock Option Plan
                    Incorporated   by  reference  to  Exhibit  A  to  the  proxy
                    statement for the special  meeting of  stockholders  held on
                    April 13, 1999 (SEC File Number 0-23763).

                    Exhibit 10.4 - Quitman Federal Savings Bank Restricted Stock
                    Plan and  Trust  Agreement.  Incorporated  by  reference  to
                    Exhibit B to the proxy  statement for the special meeting of
                    stockholders  held  on  April  13,  1999  (SEC  File  Number
                    0-23763).


               (b)  A Form 8-K (Item  7),  dated as of May 25,  1999,  was filed
                    during  the  quarter   concerning  the  authorization  of  a
                    repurchase plan.



                                      -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:    August 12, 1999         By:     /s/Melvin E. Plair
                                         ---------------------------
                                         Melvin E. Plair
                                         President and Chief Executive Officer
                                         (Principal Executive and Financial
                                           Officer)
                                         (Duly Authorized Officer)


         August 12, 1999         By:     /s/Peggy L. Forgione
                                         ---------------------------
                                         Peggy L. Forgione
                                         Vice President and Controller
                                         (Chief Accounting Officer)