<PAGE>


                       U.S. SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549
                                     FORM 10-QSB

(Mark One)

XXX   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
---   OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997.

      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
---   OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO__________.
                                           
                            Commission File Number 0-24554
                                           
                         Canterbury Park Holding Corporation
           ---------------------------------------------------------------
             (Exact name of business issuer as specified in its charter)
                                           

          Minnesota                                    41-1775532
-------------------------------                   ------------------------
(State or other jurisdiction of                       (IRS Employer
 incorporation or organization)                     Identification No.)

1100 Canterbury Road, Shakopee, Minnesota       55379
-----------------------------------------    ----------
 (Address of principal executive offices)     (Zip Code)

                                (612) 445-7223
                        -----------------------------
                         (Issuer's Telephone Number)

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 report), and (2) has been
subject to such filing requirements for the past 90 days.   YES  X   NO 
                                                                ---     ---

The Company had 2,972,382 shares of common stock, $.01 par value per share,
outstanding as of May 9, 1997.

<PAGE>

                         Canterbury Park Holding Corporation
                                           
                                        INDEX
                                           
                                                                           Page
                                                                           ----

PART 1.   FINANCIAL INFORMATION

          Item 1.   FINANCIAL STATEMENTS

                    Consolidated Balance Sheets as of
                    March 31, 1997 and December 31, 1996...................  3

                    Consolidated Statements of Operations for the periods 
                    ended March 31, 1997 and 1996..........................  4

                    Consolidated Statements of Cash Flows for the periods 
                    ended March 31, 1997 and 1996..........................  5

                    Notes to Consolidated Financial Statements.............  6

          Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS...................  7


PART II.  OTHER INFORMATION................................................ 11

          Signatures....................................................... 11
          
          Exhibit 1 EARNINGS PER SHARE SCHEDULE............................ 12

<PAGE>

                  CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY
                                           
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996 (UNAUDITED)
--------------------------------------------------------------------------------

                                                   MARCH 31,        DECEMBER 31,
                                                     1997              1996
ASSETS

CURRENT ASSETS
    Cash                                          $  292,356         $  296,671
    Accounts receivable, net of allowance for 
      uncollectible accounts                         326,026            186,834
    Inventory                                         78,376             72,731
    Deposits                                          31,553             20,000
    Prepaid expenses                                  91,377             81,367
                                                  ----------         ----------
              Total current assets                   819,688            657,603

PROPERTY AND EQUIPMENT, net of accumulated 
    depreciation of $2,178,870 and $1,981,468, 
    respectively                                   8,456,540          8,631,754

INTANGIBLE ASSETS, net of accumulated amortization 
    of $11,059 and $9,925, respectively               11,641             12,775
                                                  ----------         ----------
                                                  $9,287,869         $9,302,132
                                                  ----------         ----------
                                                  ----------         ----------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                              $  708,958         $  623,930
    Accrued wages and payroll taxes                  135,723            161,272
    Accrued interest                                 110,204            149,387
    Advance from shareholder (Note 2)                839,071          1,609,754
    Accrued property taxes                           467,547            370,916
    Payable to horsepersons                          673,515            560,555
                                                  ----------         ----------
              Total current liabilities            2,935,018          3,475,814

COMMITMENTS AND CONTINGENCIES (Note 3)

STOCKHOLDERS' EQUITY
    Common stock, $.01 par value, 10,000,000 
      shares authorized, 2,967,382 and 2,961,382, 
      respectively, shares issued and outstanding     29,674             29,614
    Additional paid-in capital                     7,890,304          7,879,551
    Accumulated deficit                           (1,567,127)        (2,082,847)
                                                  ----------         ----------
              Total stockholders' equity           6,352,851          5,826,318
                                                  ----------         ----------
                                                  $9,287,869         $9,302,132
                                                  ----------         ----------
                                                  ----------         ----------

See notes to consolidated financial statements.

                                       3

<PAGE>

              CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY
                   
CONSOLIDATED STATEMENTS OF OPERATIONS
PERIODS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)
-------------------------------------------------------------------------------

                                               THREE MONTHS      THREE MONTHS
                                                  ENDED              ENDED
                                              MARCH 31, 1997    MARCH 31, 1996

OPERATING REVENUES:
   Pari-mutuel                                 $  2,746,646      $  2,634,991
   Concessions                                      401,650           380,568
   Admissions and parking                            59,301            65,639
   Programs and racing forms                        131,089           138,105
   Other operating revenue                           61,881            71,430
                                               ------------      ------------
                                                  3,400,567         3,290,733

OPERATING EXPENSES:
   Pari-mutuel expenses
        Statutory purses                            250,467           183,402
        Host track fees                             457,735           459,932
        Pari-mutuel taxes                            11,736           158,184
        Minnesota breeders' fund                    142,566           140,270
   Salaries and benefits                            709,467           594,847
   Cost of concession sales                         118,127            92,526
   Cost of publication sales                        152,794           165,200
   Depreciation and amortization                    208,060           196,366
   Utilities                                        157,893           148,569
   Repairs, maintenance and supplies                 98,170            52,384
   Property taxes                                    96,631            95,985
   Advertising and marketing                         94,641            87,484
   Other operating expenses                         345,247           331,470
                                               ------------      ------------
                                                  2,843,534         2,706,619

NONOPERATING (EXPENSES) REVENUES:
   Interest expense                                 (41,316)          (62,253)
   Other, net                                             3               920
                                               ------------      ------------
                                                    (41,313)          (61,333)
                                               ------------      ------------

INCOME BEFORE INCOME TAX EXPENSE                    515,720           522,781

INCOME TAX EXPENSE (Note 1)
                                               ------------      ------------

NET INCOME                                     $    515,720      $    522,781
                                               ------------      ------------
                                               ------------      ------------

NET INCOME PER COMMON AND
   COMMON EQUIVALENT SHARE (Note 1)            $        .13      $        .15
                                               ------------      ------------
                                               ------------      ------------

WEIGHTED AVERAGE NUMBER OF COMMON AND 
  COMMON EQUIVALENT SHARES OUTSTANDING            5,076,975         4,733,796
                                               ------------      ------------
                                               ------------      ------------

See notes to consolidated financial statements.

                                       4

<PAGE>

              CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY
                                           
CONSOLIDATED STATEMENTS OF CASH FLOWS
PERIODS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)
-------------------------------------------------------------------------------

                                               THREE MONTHS       THREE MONTHS 
                                                  ENDED               ENDED    
                                              MARCH 31, 1997     MARCH 31, 1996


CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                   $  515,720         $  522,781
   Adjustments to reconcile net income to 
      net cash provided by operations:
        Depreciation and amortization              208,060            196,366
        (Increase) decrease in accounts 
          receivable                              (139,192)           108,161
        (Increase) decrease in other current 
          assets                                   (27,208)            15,535
        Increase in accounts payable and 
          accrued expenses                          59,479              6,410
        (Decrease) increase in accrued interest    (39,183)            51,960
        Increase in accrued property taxes          96,631             95,985
        Increase (decrease) in payable to 
          horsepersons                             112,960            (83,845)
                                                ----------         ----------
           Net cash provided by operations         787,267            913,353


CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property and equipment             (62,903)           (13,222)
   Proceeds from sale of property and equipment, 
     net                                            31,191             22,500
                                                ----------         ----------
        Net cash (used in) provided by 
          investing activities                     (31,712)             9,278

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of common stock           10,813
   Payment on advance from shareholder, net       (770,683)          (828,007)
                                                ----------         ----------
        Net cash used in financing
          activities                              (759,870)          (828,007)

NET INCREASE (DECREASE) IN CASH                     (4,315)            94,624

CASH AT BEGINNING OF PERIOD                        296,671            388,571
                                                ----------         ----------

CASH AT END OF PERIOD                           $  292,356         $  483,195
                                                ----------         ----------
                                                ----------         ----------


See notes to consolidated financial statements.

                                       5

<PAGE>

                CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY
                                           
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PERIODS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    The summary of significant accounting policies is included in the notes to
    consolidated financial statements in the 1996 Annual Report on Form 10-KSB.
    
    INCOME TAXES - Income tax expense is computed by applying the estimated
    annual effective tax rate to the year-to-date income.  For the periods
    ending March 31,1997 and 1996, income tax expense of approximately $220,000
    and $224,000, respectively, is offset by a reduction in the valuation
    allowance recorded on the deferred tax asset related to the Company's net
    operating loss carryforward.
    
    EARNINGS PER SHARE - Earnings per share for the three months ended March 31,
    1997 and 1996 are calculated using the modified treasury stock method. In
    February 1997, the Financial Accounting Standards Board issued Statement of
    Financial Accounting Standards No. 128 (SFAS 128) "Earnings Per Share,"
    which is effective for periods ending after December 15, 1997. SFAS 128
    revises the standards for computing and presenting earnings per share (EPS).
    The Company will continue to apply APB Opinion No. 15 to compute the EPS
    through the effective date. EPS for the first quarter of 1997 computed under
    SFAS 128 would have resulted in basic and diluted earnings per share of
    $0.17.
    
    UNAUDITED FINANCIAL STATEMENTS - The consolidated balance sheet as of March
    31, 1997, the consolidated statements of operations for the three months
    ended March 31, 1997 and 1996, the consolidated statements of cash flows
    for the three months ended March 31, 1997 and 1996, and the related
    information contained in these notes have been prepared by management
    without audit.  In the opinion of management, all accruals (consisting of
    normal recurring accruals) which are necessary for a fair presentation of
    financial position and results of operations for such periods have been
    made.  Results for an interim period should not be considered as indicative
    of results for a full year.
    
2.  RELATED-PARTY TRANSACTIONS

    At March 31, 1997, the Company had a $3,000,000 line of credit arrangement
    with the Company's majority shareholder, of which $839,071 was outstanding. 
    The interest rate for borrowings under the line of credit was prime plus
    2%.  The line of credit may be canceled on 90 days notice.  Management 
    believes that funds available under this line of credit, or any other line 
    of credit which replaces it, along with funds generated from simulcast 
    operations, will be sufficient to satisfy its liquidity and capital resource
    requirements during 1997.  If the line of credit is not replaced, the 
    Company's majority shareholder has agreed not to terminate the line of 
    credit prior to March 31, 1998.    

3.  CONTINGENCIES

    In accordance with an Earn Out Note, given to the prior owner of the
    racetrack as part of the consideration paid by the Company to acquire the
    racetrack, if (i) off-track betting becomes legally permissible in the
    State of Minnesota and (ii) the Company begins to conduct off-track betting
    with respect to or in connection with its operations, the Company will be
    required to pay to the IMR Fund, L.P. the greater of $700,000 per operating
    year, as defined, or 20% of the net pretax profit, as defined, for each of
    five operating years.  At the date (if any) that these two conditions are
    met, the five minimum payments will be discounted back to their present
    value and the sum of those discounted payments will be recorded as an
    increase to the purchase price.  The purchase price will be further
    increased if payments become due under the 20% of Net Pre-Tax Profit
    calculation.  The first payment is to be made 90 days after the end of the
    third operating year in which off-track betting is conducted by the
    Company.  Remaining payments would be made within 90 days of the end of
    each of the next four operating years.

                                       6

<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
                                
GENERAL

    Canterbury Park Holding Corporation (the "Company") owns and operates 
Canterbury Park (the "Racetrack"), the only pari-mutuel horse racing facility 
in the State of Minnesota.  The Company's revenues for the period from 
January 1, 1997 to March 31, 1997 and January 1, 1996 to March 31, 1996 were 
derived primarily from pari-mutuel take-out on races simulcast to Canterbury 
Park from racetracks throughout the country.  In 1997 the Company intends to 
conduct approximately 324 simulcast racing days.  In addition, the Company 
plans to conduct 56 days of live racing at the Racetrack from May 17, 1997 to 
September 1, 1997.  During live race meets, the Company earns pari-mutuel 
take-out on live Thoroughbred, Quarter Horse and Harness races at the 
Racetrack.  The Company earns additional pari-mutuel revenue from 
broadcasting its live races to out-of-state racetracks around the country.

    In addition to pari-mutuel revenues, the Company generates revenues from 
admissions,  parking, publication sales, concessions, advertising, special 
events and other sources.

    On April 11, 1996, legislation became effective in Minnesota which, 
beginning July 1, 1996, exempted the first $12 million of pari-mutuel 
take-out from the 6% pari-mutuel tax.  The legislation is effective until 
July 1, 1999 and benefits the horsepersons' purse fund as well as the Company 
during a statutorily mandated twelve-month period beginning July 1 and ending 
the following June 30.  Effective July 1, 1996, pari-mutuel taxes have been 
estimated for the 12-month period from July 1, 1996 through June 30, 1997 and 
an estimated annual effective tax rate has been applied to pari-mutuel 
take-out generated since July 1, 1996.

    The legislation referred to above also provides that winning pari-mutuel 
tickets which are not cashed within one year of the end of the respective 
race meet will become the property of the Company.  The legislation is 
effective through December 31, 1999 after which uncashed winning tickets will 
again be remitted to the State of Minnesota.  The Company is recording 
revenue associated with the uncashed winning tickets at the time, based on 
historical experience, that management can reasonably estimate the amount of 
additional winning tickets from a race meet that will be presented for 
payment.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 
1996:

    During the first three months of 1997 the Company conducted 84 simulcast 
racing days compared to 77 days in 1996.  Total wagering handle for the 
quarters ended March 31, 1997 and 1996 was $13,327,955 and $13,290,549, 
respectively. Total attendance for the periods ending March 31, 1997 and 1996 
was 41,122 and 40,069, respectively, resulting in an average of 490 and 520 
patrons per simulcast day, respectively, and per-patron wagering of $324 and 
$331, respectively.

    During February and March of 1997, the Company conducted simulcast racing 
on seven days per week, compared to six days per week during the first 
quarter of 1996.  This change was in response to patron requests to provide 
simulcast racing on Tuesdays.  While attendance on Tuesdays met management's 
expectations, average attendance on these Tuesdays was lower than the average 
attendance on all other days, thus lowering the average per-day attendance 
and handle while total attendance and handle increased. 

                                       7

<PAGE>

    Pari-mutuel revenue (gross wagering after deducting statutorily mandated 
amounts from the handle to be paid to winning bettors or "take-out") for the 
periods ending March 31, 1997 and 1996 was $2,672,324 and $2,634,991, 
respectively.  Total pari-mutuel expenses including state pari-mutuel taxes, 
contributions to the Minnesota Breeders' Fund, statutory purses and host fees 
were $862,504 and $941,788 for the periods ending March 31, 1997 and 1996, 
respectively.  Pari-mutuel tax expense for the quarter was $11,726, or 93% 
lower during the three months ended March 31, 1997 compared to the three 
months ended March 31, 1996 due primarily to the legislation described above. 
The Company has applied an estimated annual effective tax rate to the 
pari-mutuel take-out generated from July 1, 1996 through March 31, 1997.

    Statutory purse expense increased $67,065, or 36.6%, compared to 1996. 
This increase is primarily attributable to the legislation exempting the 
first $12 million of take-out from the State of Minnesota pari-mutuel tax.  
The effect of this legislation during the first three months of 1997 was to 
increase the Racetrack's net pari-mutuel revenue, thereby increasing the 
amounts paid to the horsepersons for purses during these non-racing season 
months.

    Concession revenues were approximately $21,000, or 5.5%, higher than the 
comparable period in 1996 due partly to higher attendance during the first 
quarter of 1997 compared to 1996, and partly to the increasing popularity of 
special events hosted by the facility.  During the first three months of 1997 
Canterbury Park hosted two major competitive snowmobile races, the All Canada 
show, the Minnesota Resort and Camping Show, a trade show and private 
parties. Comparatively, the first quarter of 1996 included two major 
snowmobile races but also a three-day arts and crafts fair held on March 
29-31, 1996.  In 1997, this extremely popular and well-attended arts and 
crafts fair was held on April 4-7 and the rental and concessions revenues 
will consequently be reflected in the second quarter financial results.

    Operating expense levels (excluding pari-mutuel expenses) increased by 
approximately $216,000, or 12.25%, compared to 1996.  During the first 
quarter of 1996, prior to the enactment of the legislation described 
previously, the Company had just ended its second straight fiscal year with 
cumulative losses of $2,153,996.  During the first quarter of 1996, the 
Company mandated extremely tight expense controls with spending occurring for 
only the most necessary of services, repairs, maintenance and supplies.  In 
addition, after the 1995 live meet, certain reductions and consolidations of 
full-time staff were enacted to reduce wage expenses for the Company.  
Subsequent to those reductions, hiring was kept to a minimum.

    With the enactment of the legislation described above, and in view of the 
support of the State of Minnesota and the general public, the Company was 
able to refocus its goals from short-term to long-term.  This emphasis on 
long-range planning necessitated a comprehensive review of major systems 
throughout the facility and of personnel levels, to ascertain that the 
Company's long-term goals could be met.  Long-term goals of the Company 
include maximizing the potential of the facility with special events, 
increasing public awareness and support for horse racing, hosting annual live 
race meets, and providing high quality services and information to patrons.  
This change in emphasis is reflected primarily in increases in salaries and 
benefits, repairs, maintenance and supplies, marketing and advertising for 
Tele-racing and other expense categories.

    Net income was $515,720 for the three months ended March 31, 1997 
compared to $522,781 in 1996.  There is no estimated income tax expense for 
the three months ended 

                                       8

<PAGE>

March 31, 1997 because management does not anticipate net income for the year 
ended December 31, 1997 to exceed the net operating loss carryforwards  of 
$1,649,000 available at December 31, 1996.  In addition, due to the 
seasonality of purse expense and to the additional expenses that will be 
incurred in connection with live racing, the Company does not expect to 
generate operating profits during the second and third quarters of fiscal 
year 1997.

LIQUIDITY AND CAPITAL RESOURCES:

    During the period January 1, 1997 through March 31, 1997, cash provided 
by operating activities was $787,267, which resulted principally from net 
income of $515,720 and depreciation and amortization of $208,060.

    Cash used in financing activities during the first three months of 1997 
consists primarily of payments totaling $770,683 reducing the Company's line 
of credit with Mr. Sampson.  

    Net cash used in investing activities for the first quarter of 1997 
results primarily from improvements to the facility of approximately $62,903, 
partially offset by proceeds received upon the sale of excess video equipment 
of $31,191.

    The Company is required by statute to segregate a portion of funds 
received from wagering on simulcast and live horse races for future payment 
as purses for live horse races at the Racetrack or other uses of Minnesota's 
horsepersons' association.  Pursuant to an agreement with the MHBPA, during 
the three months ended March 31, 1997 and 1996, the Company has transferred 
into a trust account or paid directly to the MHBPA approximately $200,000 and 
$250,000 respectively. At March 31, 1997, the Company had an additional 
liability to MHBPA of approximately $664,000.  This liability will be paid 
with interest in 1997 in accordance with the agreement.

    The Company believes that the funds to be generated from operations 
together with funds available under its $3,000,000 line of credit with Mr. 
Sampson will be sufficient to satisfy its liquidity and capital resource 
requirements for the next twelve months.  The Company anticipates that it may 
pay down a portion of the borrowings under the line of credit with funds 
generated from operations and borrow additional amounts under the line of 
credit as funds are needed for working capital purposes.  The Company is also 
attempting to obtain a credit facility from a traditional lender to replace 
the line of credit with Mr. Sampson.  Mr. Sampson has advised the Company 
that if it is unable to obtain a credit facility from a traditional lender, 
then he will keep his line of credit in place until March 31, 1998.  As of 
May 9, 1997, borrowings under the line of credit were $517,762.

OPERATING PLAN:

    The Company plans a live race meet in 1997 which will consist of a 26-day 
mixed meet of Thoroughbred and Quarter Horse racing, a 27-day 
Thoroughbred-only meet, and three days of live harness racing over Labor Day 
weekend.

    The Company's ability to operate profitably in 1997 will largely depend 
on its ability to maintain levels of attendance and wagering handle for live 
and simulcast racing at levels similar to 1996.  The Company will also need 
to maintain operating expenses at levels similar to 1996.  In addition, the 
Company is emphasizing the expansion of special events in order to maximize 

                                       9

<PAGE>

the potential of the facility year-round.  Legislation which became effective 
in 1996 relating to the pari-mutuel tax and uncashed winning tickets will 
supplement cash flows in 1997, the first full fiscal year that the 
legislation will be in effect.

    Legislation was recently introduced at the 1997 Minnesota Legislative 
Session which would permit the Minnesota State Lottery to operate up to 1,500 
video lottery terminals at the Canterbury Park Racetrack.  The proposal is 
primarily structured to provide a source of financing for a new outdoor 
baseball stadium for the Minnesota Twins.  Recent public polling has shown 
that public support is strong but the legislative session is nearing its 
conclusion and the issue is not likely to be resolved until the 1998 
legislative session.  No assurance can be given that the proposed legislation 
will be enacted and, if enacted, the Company is unable to provide any 
estimates as to the financial impact this legislation would have on the 
Company.

FACTORS AFFECTING FUTURE PERFORMANCE:

    From time to time, in reports filed with the Securities and Exchange 
Commission, in press releases, and in other communications to shareholders or 
the investing public, the Company may comment on anticipated future financial 
performance.  Such forward-looking statements, including statements contained 
in this Report on Form 10-QSB, are subject to risks and uncertainties which 
may adversely affect future financial performance, including, but not limited 
to, fluctuations in attendance at the Racetrack, changes in the level of 
wagering by patrons, legislative and regulatory changes, the impact of 
wagering products introduced by competitors, higher than expected expenses, 
and other risks applicable to the horse racing industry generally.


                                      10

<PAGE>

                                       PART II
                                  OTHER INFORMATION
                     
Item 1.    LEGAL PROCEEDINGS

           None

Item 2.    CHANGES IN SECURITIES

           None

Item 3.    DEFAULTS UPON SENIOR SECURITIES

           None

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

           None

Item 5.    OTHER INFORMATION

           None

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)       Exhibits

                     Exhibit 1  EARNINGS PER SHARE SCHEDULE

           (b)       Reports on Form 8-K

                     None

                                      SIGNATURES
                                           
                                           
    Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly cause this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                Canterbury Park Holding Corporation


Dated:  May 9, 1997             /s/ Randall D. Sampson
                                -----------------------------------------------
                                Randall D. Sampson, 
                                President, Chief Executive Officer and Treasurer

                                      11

<PAGE>

EXHIBIT 1.    EARNINGS PER SHARE SCHEDULE

                    
                                                 THREE MONTHS     THREE MONTHS 
                                                     ENDED            ENDED    
                                                   MARCH 31,        MARCH 31,  
                                                      1997            1996     

Calculation of net income under the modified 
  treasury stock method:

     Primary

        Net Income                                  $515,720         $522,781

        Assumed interest expense reduction            41,316           62,253

        Assumed interest income increase              92,899          101,785
                                                 -----------      -----------
                                                    $649,935         $686,819
                                                 -----------      -----------
                                                 -----------      -----------

Calculation of weighted average number of 
  common and common equivalent shares
  outstanding under the modified treasury 
  stock method:

        Weighted average shares outstanding        2,962,526        2,939,271

        Common stock equivalents                   2,114,449        1,794,525
                                                 -----------      -----------
                                                   5,076,975        4,733,796
                                                 -----------      -----------
                                                 -----------      -----------

        Net income per common and common 
          equivalent share                           $  0.13          $  0.15
                                                 -----------      -----------
                                                 -----------      -----------


                                      12