UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 25049

                                    FORM 10-Q

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

     For the quarterly period ended        December 31, 1997
                                     -------------------------------------------
                                  
                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

         For the transition period from                  to
                                        ---------------     ----------------

                        Commission File Number 0-27620
                                               -------

                           Green Street Financial Corp
                           ---------------------------
             (Exact name of registrant as specified in its charter)

            North Carolina                               56-1951478
            --------------                               ----------
      (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                   Identification No.)

                                241 Green Street
                     Fayetteville, North Carolina 28301-5051
               --------------------------------------------------
               (Address of principal executive office) (Zip code)

                                 (910)-483-3681
                                 --------------
                         (Registrant's telephone number)

                                       N/A
                                       ---
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate  by  check x  whether  the  registrant  (1)  has  filed  all  reports
required  to be filed by Section 13 or 15(d) of the  Securities  and  Exchange
Act of 1934 during the  preceding 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
                                                          ---------      -------

As of February 6, 1998 there were issued and outstanding 4,298,125 shares of the
Registrant's common stock, no par value.

<PAGE>

                   Green Street Financial Corp and Subsidiary

                                    CONTENTS

<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION                                                        Pages

<S>                                                                                   <C>        
    Item 1.  Condensed Consolidated Financial Statements

               Statements of  financial  condition  at  September  30,  1997 and
                    December 31, 1997 (unaudited)                                      1-2

               Statements of income for the three months ended December 31, 1996
                    (unaudited)  and December 31, 1997  (unaudited)                     3 

               Statements of cash flows for the three months ended  December 31,
                    1996 (unaudited) and December 31, 1997 (unaudited)                 4-5

               Notes to condensed consolidated financial statements                    6-7

    Item 2.   Management's   Discussion  and  Analysis  of  Financial Condition 
                and Results of Operations                                             8-10

PART II - OTHER INFORMATION

    Item 1.  Legal Proceedings                                                          11
    Item 2.  Changes in Securities                                                      11
    Item 3.  Defaults upon Senior Securities                                            11
    Item 4.  Submission of Matters to a Vote of Security Holders                        11
    Item 5.  Other Information                                                          11
    Item 6.  Exhibits and Reports on Form 8-K                                           11

    Signatures                                                                          12

</TABLE>


<PAGE>



GREEN STREET FINANCIAL CORP AND SUBSIDIARY


CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31, 1997 and September 30, 1997
                                                    December 31,   September 30,
ASSETS                                                1997               1997
--------------------------------------------------------------------------------
                                                    (Unaudited)
Cash and short-term cash investments:
  Interest-earning                                 $ 24,138,855     $ 29,414,597

  Noninterest-earning                                   242,924          555,043
    Federal funds sold                                3,140,000        3,118,000
Investment securities:
  Held to maturity , at amortized cost               19,500,000       13,500,000
  Nonmarketable equity securities                     1,170,889        1,170,889
Loans receivable, net                               130,233,244      128,945,951
Accrued interest receivable, investments                254,535          222,716
Property and equipment, net                             308,985          306,794
Prepaid expenses and other assets                       710,310          727,688
                                                   -----------------------------




         Total Assets                              $179,699,742     $177,961,678
                                                   =============================


See Notes to Condensed Consolidated Financial Statements.


                                       1


<PAGE>

<TABLE>
<CAPTION>

                                                      December 31        September 30,
LIABILITIES AND STOCKHOLDERS' EQUITY                      1997               1997
--------------------------------------------------------------------------------------
                                                        (Unaudited)
<S>                                                     <C>            <C>          
Liabilities:
  Deposits                                             $114,347,656    $ 112,641,893
  Advance payments by borrowers for taxes and               530,266          250,662
  insurance
  Income taxes payable                                      408,700          243,000
  Accrued expenses and other liabilities                    251,104          375,080
  Dividends payable                                         472,794        1,117,513
  Deferred compensation                                     383,252          387,847
                                                       -----------------------------
         Total liabilities                              116,393,772      115,015,995
                                                       -----------------------------
Stockholders' equity:
  Preferred stock, no par value, authorized
    1,000,000 shares;  none issued                               -                -
  Common stock, no par value, authorized
    10,000,000 shares; issued  4,298,125 shares                  -                -
  Additional paid-in capital                             41,871,684       41,816,239
  Note receivable, ESOP                                  (2,145,000)      (2,210,000)
  Retained earnings, substantially restricted            23,579,286       23,339,444
                                                       -----------------------------
         Total  stockholders' equity                     63,305,970       62,945,683
                                                       -----------------------------
         Total liabilities and stockholders' equity    $179,699,742    $ 177,961,678
                                                       =============================

</TABLE>


                                       2


<PAGE>


GREEN STREET FINANCIAL CORP AND SUBSIDIARY


CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended December 31, 1997 and 1996


                                                                 
                                                        1997            1996
--------------------------------------------------------------------------------
Interest and dividend income:
  Loans                                              $2,623,634     $ 2,528,716
  Investments                                           717,908         726,962
                                                     --------------------------
         Total interest income                        3,341,542       3,255,678
Interest expense                                      1,459,877       1,368,773
                                                     --------------------------
         Net interest income                          1,881,665       1,886,905
Provision for loan losses                                    -               - 
                                                     --------------------------
          Net interest income after provision for 
           loan losses                                1,881,665       1,886,905
                                                     --------------------------
                                                                    
Noninterest income                                       20,779          27,156
                                                     --------------------------
Noninterest expense:                                                
  Compensation and employee benefits                    589,578         572,745
  Other                                                 217,375         297,460
                                                     --------------------------
                                                        806,953         870,205
                                                     --------------------------
         Income before income taxes                   1,095,491       1,043,856
                                                                    
Income taxes                                            406,450         403,865
                                                     --------------------------
         Net income                                  $  689,041     $   639,991
                                                     ==========================
                                                                    
                                                                    
Basic earnings per share                             $  0.17        $      0.16
                                                     ==========================
Diluted earnings per share                           $  0.17        $      0.16
                                                     ==========================
 
Dividends paid per share                             $  0.11        $      0.10
                                                     ==========================
                                                               
See Notes to Condensed Consolidated Financial Statements.

                                       3


<PAGE>


GREEN STREET FINANCIAL CORP AND SUBSIDIARY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended December 31, 1997 and 1996

                                                                      
                                                         1997           1996
-------------------------------------------------------------------------------
Cash Flows From Operating Activities
  Net income                                         $   689,041    $  639,991
  Adjustments to reconcile net income to net
    cash provided by operating activities:
    Depreciation and amortization                         9,000          9,679
    Net gain on disposal of real estate acquired
       in settlement of loans                              --          (12,354)
    Increase in deferred income taxes                     3,000        321,000
    Increase (decrease) in deferred compensation         (4,595)        (3,602)
    ESOP compensation charged to paid-in capital         55,445         34,840
    Changes in assets and liabilities:
      (Increase) decrease in:
        Prepaid expenses and other assets                17,378        (60,617)
        Accrued interest receivable                     (31,819)       111,531
      Increase (decrease) in:
        Accrued expenses and other liabilities         (126,976)        52,451
        Accrued SAIF assessment                            --         (792,868)
        Income taxes payable                            165,700         38,400
                                                     -----------    ----------
         Net cash provided by operating activities      776,174        338,451
                                                     -----------    ----------
                                                                           
  Net increase in loans receivable                   (1,287,293)      (384,531)
  Proceeds from sale of real estate acquired in 
  settlement of loans                                      --           46,779
  Proceeds from maturities of held to maturity        3,000,000     12,000,000
  investment securities
    Purchase of held to maturity investment          
      securities                                     (9,000,000)          --
  Purchase of property and equipment                    (11,191)        (2,578)
                                                     -----------    ----------
         Net cash provided by (used in) investing    
           activities                                (7,298,484)    11,659,670
                                                     -----------    ----------
                                                                  

                                       4


<PAGE>


GREEN STREET FINANCIAL CORP AND SUBSIDIARY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended December 31, 1997 and 1996

<TABLE>
<CAPTION>

                                                                       1997          1996
-----------------------------------------------------------------------------------------------

<S>                                                               <C>             <C>         
Cash Flows From Financing Activities
  Net increase in deposits                                        $  1,705,763    $    502,410
  Principal payment for ESOP debt                                       65,000          65,000
  Cash dividends paid                                               (1,093,918)     (1,012,781)
  Increase in advance payments by borrowers
     for taxes and insurance                                           279,604         276,273
                                                                  ----------------------------
         Net cash used in financing activities                         956,449        (169,098)
                                                                  ----------------------------
         Net increase (decrease) in cash and cash                   
           equivalents                                              (5,565,861)     11,829,023
Cash and cash equivalents:
  Beginning                                                         33,087,640      35,481,906
                                                                  ----------------------------
  Ending                                                          $ 27,521,779    $ 47,310,929
                                                                  ============================
  Cash and cash equivalents:
     Cash and short-term investments:
     Interest-bearing                                             $ 24,138,855    $ 45,838,379
     Noninterest-bearing                                               242,924         237,412
     Federal funds sold                                              3,140,000       1,235,138
                                                                  ----------------------------
                                                                  $ 27,521,779    $ 47,310,929
                                                                  ============================
Supplemental Disclosures of Cash Flow Information
  Cash payments for:
    Interest                                                      $  1,462,315    $  1,364,072
                                                                  ============================
    Income taxes                                                  $    223,750    $     19,643
                                                                  ============================
Supplemental Disclosure of Non-cash Investing and
Financing
  Activities:
    Dividends declared and accrued                                $    472,794    $    405,763
                                                                  ============================
</TABLE>

See  Notes  to  Condensed   Consolidated   Financial Statements.

                                       5

<PAGE>


GREEN STREET FINANCIAL CORP AND SUBSIDIARY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

--------------------------------------------------------------------------------
Note 1.  Nature of Business

Green Street Financial Corp (the  "Corporation") was incorporated under the laws
of the State of North  Carolina for the purpose of becoming the savings and loan
holding company of Home Federal Savings and Loan Association (the  "Association"
or "Home  Federal")  in  connection  with the  Association's  conversion  from a
federally chartered mutual savings and loan association to a federally chartered
stock  savings and loan  association,  pursuant to its Plan of  Conversion.  The
Corporation was organized in December 1995 to acquire all of the common stock of
Home Federal upon its conversion to stock form. A  subscription  offering of the
Corporation's  shares  closed on April 3, 1996,  at which  time the  Corporation
acquired all of the shares of the  Association  and  commenced  operations.  The
financial  statements of the Corporation  are presented on a consolidated  basis
with those of Home Federal,  although the  Corporation did not own any shares of
the Association and had no assets, liabilities, equity or operations at any date
prior to April 3, 1996.

The Corporation has no operations and conducts no business of its own other than
owning Home Federal,  investing its portion of the net proceeds  received in the
Conversion,  and lending funds to the Employee Stock Ownership Plan (the "ESOP")
which was formed in connection  with the Conversion.  The principal  business of
the  Association  is accepting  deposits from the general public and using those
deposits  and other  sources of funds to make loans  secured by real  estate and
other forms of collateral  located in the  Association's  primary market area of
Cumberland and Robeson counties in North Carolina.

Home  Federal's  results of  operations  depend  primarily  on its net  interest
income,  which is the difference  between interest income from  interest-earning
assets and interest expense on interest-bearing  liabilities.  The Association's
operations are also affected by noninterest income, such as miscellaneous income
from loans,  customer  deposit  account  service  charges,  and other sources of
revenue.  The Association's  principal operating  expenses,  aside from interest
expense,  consist of  compensation  and  associated  benefits,  federal  deposit
insurance  premiums,   occupancy  costs,  advertising,  and  other  general  and
administrative expenses.


Note 2.  Basis of Presentation

The accompanying  unaudited  consolidated  financial  statements (except for the
statement of financial  condition at September 30, 1997,  which is audited) have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information  and  with  the  instructions  to Form  10-Q and
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  In the opinion of management,  all adjustments  (none of
which  were  other  than  normal  recurring   accruals)  necessary  for  a  fair
presentation of the financial position and results of operations for the periods
presented  have been  included.  The results of  operations  for the three month
period ended December 31, 1997 are not necessarily  indicative of the results of
operations  that may be expected  for the year ended  September  30, 1998 or any
other interim period.

                                       6

<PAGE>

GREEN STREET FINANCIAL CORP AND SUBSIDIARY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

--------------------------------------------------------------------------------
Note 2.  Basis of Presentation (Continued)

The  accounting  policies  followed  are as set  forth in Note 1 of the Notes to
Consolidated Financial Statements in the 1997 annual report of the Corporation.


Note 3.  Dividends Declared

On December 29,  1997,  the Board of  Directors  of the  Corporation  declared a
dividend of $ .11 a share for  stockholders of record as of January 12, 1998 and
payable on January 23, 1998. The dividends declared were accrued and reported as
other liabilities in the December 31, 1997  consolidated  statement of financial
condition.


Note 4.  Earnings Per Share

As required, the Corporation adopted statement of Financial Accounting Standards
No. 128 during the quarter ended December 31, 1997. This statement requires dual
presentation of basic and diluted earnings per share (EPS) with a reconciliation
of the  numerator  and  denominator  of the EPS  computations.  Basic  per share
amounts are based on the weighted  average  shares of common stock  outstanding.
Diluted  earnings per share assume the  conversion,  exercise or issuance of all
potential  common stock  instruments  such as options,  warrants and convertible
securities,  unless  the  effect is to reduce a loss or  increase  earnings  per
share.  Accordingly,   this  presentation  has  been  adopted  for  all  periods
presented.  The basic and diluted  weighted  average shares  outstanding  are as
follows:

                                                        1997        1996      
                                                     ----------------------
Weighted average shares outstanding                   4,298,125  4,298,125
Less unallocated ESOP shares                            217,750    240,500
                                                     ----------------------
   Weighted average outstanding shares used for       4,080,375  4,057,625
   basic EPS
Plus incremental shares from assumed issuance
  of stock options                                       83,330     14,526
                                                     ----------------------
   Weighted average outstanding shares used for      
   diluted EPS                                        4,163,705  4,072,151
                                                     ======================

                                       7
<PAGE>


GREEN STREET FINANCIAL CORP AND SUBSIDIARY

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

--------------------------------------------------------------------------------
Comparison of Financial Condition at December 31, 1997 and September 30, 1997:

Total  assets  increased  by $1.7  million  during  the first  quarter to $179.7
million at December 31, 1997.  The only  significant  change in the component of
the Corporation's  assets during the quarter was that $6.0 million in short term
interest  earning  assets were placed in  investment  securities at December 31,
1997. Investments and other short term interest earning assets amounted to $47.9
million at December 31,  1997.  Net loans  receivable  increased by $1.3 million
during the  quarter  and  amounted  to $130.2  million  at  December  31,  1997.
Approximately 99% of the Corporation's  assets were interest earning at December
31, 1997, and approximately 72% of such interest earning assets were held in the
form of loans receivable.

Savings  deposits  increased by $1.7 million  during the quarter and amounted to
$114.3  million  at  December  31,  1997.  The  Association  had  no  borrowings
outstanding  during or at the end of the three month period  ended  December 31,
1997,  but has  guaranteed  the  repayment  of the  ESOP's  note  payable to the
Corporation  which  was  originated  on April 3,  1996 in order  for the ESOP to
purchase  260,000 shares of common stock in the Corporation.  The  Corporation's
note  receivable  from the ESOP,  which amounted to $2.1 million at December 31,
1997 net of a $65,000 principal  repayment during the quarter,  is reported as a
reduction of stockholders' equity. Retained earnings increased by $.2 million to
$23.6 million at December 31, 1997,  which is attributable to the  Corporation's
consolidated  earnings  during the three  months ended  December 31, 1997,  less
dividends accrued for the quarter.

At December 31, 1997, the Corporation's  stockholders'  equity amounted to $63.3
million,  which as a  percentage  of total  assets  was  35.2%.  As a  Federally
chartered  savings and loan  association,  the  Association  is required to meet
three separate capital standards established by the Office of Thrift Supervision
(OTS). The  Association's  stand-alone  equity was $44.9 million at December 31,
1997 and was substantially in excess of all such capital requirements.

The  Association's  level of nonperforming  loans,  defined as loans past due 90
days or  more,  as a  percentage  of  loans  outstanding,  was  .10% and .13% at
December 31, 1997 and September 30, 1997, respectively.  The Association's level
of nonperforming  loans was .15% at December 31, 1996.  During the quarter ended
December 31, 1997,  the  Association's  level of  nonperforming  loans  remained
consistently low in relation to prior periods and total loans  outstanding,  and
the Association did not incur any loan losses. Based on management's analysis of
the adequacy of its allowances at December 31, 1997, no additional provision for
loan losses was made during the quarter.


                                       8

<PAGE>

GREEN STREET FINANCIAL CORP AND SUBSIDIARY

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

--------------------------------------------------------------------------------
Comparison of Operating Results for the Three Months Ended December 31, 1997 and
1996:

General.  Net income for the three  month  period  ended  December  31, 1997 was
$689,000,  a 7.7%  increase  over the $640,000  earned during the same period in
1996. As discussed below, the increase in net income was primarily  attributable
to a decrease in noninterest expense for the 1997 quarter.

Interest income.  Interest income increased by $86,000 from $3.3 million for the
three months ended  December 31, 1996 to $3.4 million for the three months ended
December  31,  1997.  The  increase  was  attributable  to  a  higher  level  of
interest-earning  assets  outstanding  during the first  quarter of this year in
comparison to the same quarter a year earlier.

Interest  expense.  Interest expense  increased by $91,000 from $1.4 million for
the three  months  ended  December 31, 1996 to $1.5 million for the three months
ended December 31, 1997. The primary cause for this increase was the increase in
savings  deposits from $111.9  million at December 31, 1996 to $114.3 million at
December 31, 1997. In addition,  the Association's  average cost of funds, which
approximated 4.90% for the quarter ended December 31, 1996, was approximately 22
basis points higher in the quarter ended December 31, 1997.

Net interest income.  Net interest income remained constant for the three months
ended  December 31, 1997  compared to the three months ended  December 31, 1996.
There was a minimal decrease of $5,000 in the December 31, 1997 quarter from the
December 31, 1996 quarter.

Provision for loan losses. Based on management's analysis of the adequacy of its
allowances  at December 31, 1997 and 1996,  no  provisions  for loan losses were
made during the quarters.  Provisions,  which are charged to operations, and the
resulting loan loss allowances are amounts the Association's management believes
will  be  adequate  to  absorb   losses  on  existing   loans  that  may  become
uncollectible.  Loans are  charged off against  the  allowance  when  management
believes that collectibility is unlikely. The evaluation to increase or decrease
the  provision  and  resulting  allowances  is  based  both on prior  loan  loss
experience  and other  factors,  such as changes in the nature and volume of the
loan portfolio,  overall portfolio quality, and current economic conditions. The
Association's  level of  nonperforming  loans has remained  consistently  low in
relation to prior periods and total loans  outstanding,  and the Association did
not charge off any loans during either of the three month periods ended December
31, 1997 and 1996.  At December 31,  1997,  the  Association's  level of general
valuation  allowances  for loan losses  amounted to $255,000,  which  management
believes is adequate to absorb potential losses in its loan portfolio.

Noninterest  income.  Noninterest  income has  historically  been  immaterial in
relation to the Association's overall operations. Noninterest income amounted to
$27,000  and  $21,000  for the  quarters  ended  December  31,  1996  and  1997,
respectively.

Noninterest  expense.  Noninterest  expense decreased by $63,000 to $807,000 for
the three month period ended  December 31, 1997 from $870,000 for the comparable
quarter in 1996.  The decrease in noninterest  expense is  principally  due to a
decrease in deposit insurance expense. Total deposit insurance expense decreased
form  $81,000  in the  1996  quarter  to  $29,000  in the  1997  quarter.  Other



                                       9

<PAGE>

GREEN STREET FINANCIAL CORP AND SUBSIDIARY

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

--------------------------------------------------------------------------------
noninterest  expense decreased by $37,000 during the current quarter as compared
to the same quarter a year earlier due  primarily to other  expenses  associated
with operating as a public company in 1996.

As a part of the Conversion,  the Corporation  established an ESOP that acquired
260,000 shares of the stock offered in the Conversion with funds provided in the
form of a loan from the  Corporation.  The loan is  expected to be repaid over a
ten year period with funds  provided by the  Association  sufficient to amortize
the debt. The expense  associated  with the ESOP is reported in accordance  with
SOP 93-6 "Employers' Accounting for Employee Stock Ownership Plans."

Capital  Resources and Liquidity.  The term  "liquidity"  generally refers to an
organization's  ability to generate  adequate amounts of funds to meet its needs
for cash. More specifically for financial  institutions,  liquidity insures that
adequate funds are available to meet deposit withdrawals,  fund loan and capital
expenditure commitments,  maintain reserve requirements, pay operating expenses,
and  provide  funds  for debt  service,  dividends  to  stockholders,  and other
institutional  commitments.  Funds  are  primarily  provided  through  financial
resources from operating activities,  expansion of the deposit base, borrowings,
through  the sale or  maturity  of  investments,  the  ability  to raise  equity
capital, or maintenance of shorter term interest-earning deposits.

During  the  three  month  period  ended  December  31,  1997,   cash  and  cash
equivalents, a significant source of liquidity,  decreased by approximately $5.6
million.  The  decrease is primarily a result of the purchase of $6.0 million of
investment securities during the quarter.

As a federally chartered savings association, Home Federal must maintain a daily
average balance of liquid assets equal to at least 4% of  withdrawable  deposits
and short-term  borrowings.  The  Association's  liquidity ratio at December 31,
1997, as computed  under OTS  regulations,  was  considerably  in excess of such
requirements.  Given its excess  liquidity  and its  ability to borrow  from the
Federal Home Loan Bank, the  Association  believes that it will have  sufficient
funds  available to meet the  anticipated  future loan  commitments,  unexpected
deposit withdrawals, and other cash requirements.

Year 2000 Issue.  The Year 2000 Issue relates to whether  computer  systems will
properly  recognize and process date sensitive  information on and after January
1, 2000.  Systems that do not properly recognize such information could generate
erroneous data or fail. The Company is heavily  dependent on computer systems in
the conduct of  substantially  all of its  business  activities.  The Company is
conducting a comprehensive  review of its computer  systems,  including its core
processing  systems maintained by an independent data processing service center,
to  identify  the systems  that could be  affected by the Year 2000 Issue.  Upon
completion of the assessment phase of the review, management expects to identify
the  corrective  action  required  to ensure  that the  Company's  internal  and
vendor-maintained systems that are date sensitive are Year 2000 compliant and to
test all such systems prior to the year 2000.

Because  the  Company  has not  completed  its review of the  computer  systems,
management  is unable to estimate  the cost of making all its systems  Year 2000
compliant.

                                       10

<PAGE>



                           Part II. OTHER INFORMATION

      Item 1.     Legal Proceedings

                  The  Company is not  engaged in any legal  proceedings  at the
                  present time. From time to time, the Association is a party to
                  legal proceedings within the normal course of business wherein
                  it  enforces  its  security  interest in loans made by it, and
                  other matters of a similar nature.

      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) 27. Financial Data Schedule (electronic filing only)

                  (b) No reports  on 8-K were  filed for the  period  covered by
                      this report.

                                       11


<PAGE>


SIGNATURES

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

                                                 Green Street Financial Corp

      Dated      February 11, 1998           By: s/s H. D. Reaves, Jr. 
            -------------------------            -----------------------------
                                                 H. D. Reaves, Jr.
                                                 President and CEO

      Dated      February 11, 1998           By: s/s   John   C. Pate
            -------------------------            -----------------------------
                                                 John C. Pate
                                                 Senior Vice President and CFO