<PAGE>

                                                                          Page 1
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                  FORM 10-KSB

        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

Commission file number:  0-7765
                         ------

                              CROWELL & CO., INC.
-------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)

                     Georgia                                    58-1021933
                     -------                                    ----------
          (State or other jurisdiction of                     (I.R.S. Employer
          incorporation or organization)                     Identification No.)

         432 South Belair Road, Augusta, GA                        30907
         ----------------------------------                        -----
       (Address of Principal executive offices)                  Zip Code

Issuer's telephone number including area code:  (706) 855-1099
                                                --------------

Securities registered pursuant to Section 12 (b) of the Act:  None
                                                              ----


Securities registered pursuant to Section 12 (g) of the  Act:
Common Stock, Without Par Value
-------------------------------
      (Title of Class)

Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act during the past 12
months and (2) has been subject to such filing requirements for the past
90 days.     Yes X   No _____
                ---

Check if  there is no disclosure of delinquent filers under Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.     X
                                  ---

Issuer's revenues for its most recent fiscal year:  $6,985,400.

The aggregate market value of the voting stock held by non-affiliates is unknown
to registrant.  Registrant is unaware of any sales or purchases of its stock
during the 60 day period ending March 31, 1997.

The number of shares outstanding of issuer's common equity as of March 3, 1997,
is 2,520,835.


The Index of Exhibits is on page 37.
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                                                                          Page 2

                               TABLE OF CONTENTS


                                    PART 1                                PAGE

ITEM  1  Description of Business   .....................................    3

ITEM  2  Description of Properties   ...................................    5

ITEM  3  Legal Proceedings   ...........................................    8

ITEM  4  Submission of Matters to a Vote of Security Holder  ...........    8


                                  PART II

ITEM  5  Market for Common Equity and Related Stockholder Matters  .....    9

ITEM  6  Management's Discussion and Analysis or Plan of Operation   ...    9

ITEM  7  Financial Statements   ........................................   12

ITEM  8  Changes and Disagreements With Accountants on Accounting and
         Financial Disclosure  .........................................   25


                                 PART III

ITEM  9  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act  ............   26

ITEM 10  Executive Compensation   ......................................   27

ITEM 11  Security Ownership of Certain Beneficial Owners and Management    27

ITEM 12  Certain Relationships and Related Transactions   ..............   29

ITEM 13  Exhibits List and Reports on Form 8-K   .......................   30

         Signatures   ..................................................   32

         Index of Exhibits  ............................................   33
<PAGE>

                                                                          Page 3

                        ITEM 1.  DESCRIPTION OF BUSINESS


   GENERAL
        Crowell & Co., Inc., is a Georgia corporation ("Crowell") which was
   incorporated in 1968.  The offices of Crowell are located at 432 South Belair
   Road, Augusta, Georgia 30907.  The telephone number is (706) 855-1099.

        The principal business of Crowell and its subsidiaries, Keystone Homes,
   Inc.  and Ivey Homes, Inc., (together, the "Company") is home-building and
   the development of residential properties for resale. Crowell primarily
   develops residential properties.  Additionally, Crowell owns and operates
   Petersburg Racquet Club, a tennis and swimming facility located in Crowell's
   largest development.  Crowell also provides property appraisal services.
   Crowell's business plan is to acquire new properties for development in
   profitable markets based on current and expected demand.  Analysis and
   acquisition of new properties are ongoing. On June 1, 1995, Crowell sold its
   residential real estate brokerage division to Meybohm Realty, Inc.
   ("Meybohm").  (See Dispositions of Assets on page 4.)  Crowell retained its
   commercial brokerage division in the sale.  Crowell sold its computer
   division, United Data Systems ("UDS") to Chin Yu on December 16, 1996.

        Crowell acquires and develops land for home-building primarily in
   Columbia County, Georgia.  Columbia County is in east central Georgia and is
   included in the Augusta Metropolitan Statistical Area ("MSA").  This MSA
   contains Richmond, Columbia, and McDuffie Counties in Georgia and Aiken and
   Edgefield Counties in South Carolina.  The population of this MSA was
   approximately 480,000 in 1996.  Columbia County had a population of
   approximately 85,000 in 1996. While Columbia County is primarily a suburban
   and rural community, the industrial base is growing as local political and
   business leaders have made intensive efforts to lure new industries.  Crowell
   believes Columbia County is highly desirable for homebuyers for many reasons,
   including the county's high quality school system and accessibility to
   employment, shopping, and entertainment.

        The operations of Crowell's Ivey Homes, Inc. ("Ivey") and Keystone
   Homes, Inc. ("Keystone") subsidiaries were combined during 1996.  The
   consolidated operations will be referred to as Keystone.  Keystone (a wholly
   owned subsidiary of Crowell) builds single family homes on a presold and
   speculative basis. Keystone builds in all of Crowell's developments and in
   one of Home Sites, Ltd.'s (a Georgia limited partnership of which Otis L.
   Crowell, President and Chairman of the Board, and majority shareholder of
   Crowell, is the general partner) developments.  Generally, Keystone does not
   build outside of Crowell or Home Sites developments.  The revenues of
   Keystone constituted 90% of the total revenues of the Company for the fiscal
   year ended December 31, 1996.

        Keystone purchases developed lots for home construction from Home Sites,
   Ltd. ("Home Sites").  For the years ended December 31, 1996 and 1995, such
   purchases amounted to $79,500 and $292,700, respectively.  Crowell also
   provides management services to Home Sites.  For the years ended December 31,
   1996 and 1995,
<PAGE>

                                                                          Page 4

   management fees earned by the Company amounted to $5,430 and $35,522,
   respectively.

        Currently, Keystone's home prices (which includes lot costs) range from
   approximately $90,000 to $200,000.  Square footage in these homes ranges from
   1,400 to 3,000 square feet.  Keystone builds single family detached homes.
   Keystone uses either concrete slabs or flooring systems in the construction
   of its homes and exterior materials may be brick or vinyl siding.

        Keystone's backlog at December 31, 1996, was approximately $857,000.
   Backlog represents the dollar amount of sales pending on signed contracts
   where Keystone has not completed construction of the homes under contract.
   Construction was approximately 67% complete on these contracts at December
   31, 1996.  Management believes all backlog at December 31, 1996, will be
   completed during 1997.

        All operations of the Company are domestic.

   DISPOSITIONS OF ASSETS

        On June 1, 1995, Crowell sold its residential real estate brokerage
   division ("Division") to Meybohm. Crowell sold the Division in order to
   concentrate managerial and financial resources on development and home-
   building.  The sales price of the Division was $100,000 in cash, plus
   payments based on various percentages of former Crowell agent earnings,
   listings, and pending sale contracts transferred from Crowell to Meybohm for
   one year from the date of sale.  In addition, the sales price included
   payments not to exceed $60,000 per year for the right to exclusively market
   Crowell and related entities' developments for a period of two years.  The
   net book value of the division was approximately $21,000 at the time of the
   sale.  This amount is included as cost in the $79,000 gain on the disposal of
   the Division.  All other payments received under the sales agreement are
   reflected in the loss from discontinued operations.  There was no material
   relationship between Crowell and Meybohm at the time of the sale. No income
   tax was generated from the sale of the Division because of the operating loss
   incurred by Crowell for 1995.  Total revenue from the residential brokerage
   division for the years ended December 31, 1995 and 1994, was $528,473 and
   $1,760,149, respectively.

        On December 16, 1996 Crowell sold United Data Systems, Inc., ("UDS"), a
   computer software company that developed software for use in the real estate
   industry.  The sales price of UDS was $200,000 which was received in the form
   of $80,000 in cash and a note receivable of $120,000 which is secured by all
   sold and future assets of UDS.  The net book value of UDS was approximately
   $40,000.  Therefore, Crowell recognized a gain of approximately $160,000 on
   the sale.  The purchaser of UDS was Chin U. Yu ("Chin").  There was no
   substantial material relationship between Crowell and Chin at the time of the
   sale.  No income tax was generated from the sale of UDS because of the
   operating loss incurred  by Crowell for 1996.  Total revenue for UDS for the
   years ended December 31, 1996 and 1995 was $421,199 and $562,713,
   respectively.

   COMPETITION
<PAGE>

                                                                          Page 5

        The Company competes with other individuals and entities involved in
   real estate development and residential real estate construction, many of
   which have greater capital resources than Crowell.  Such competitors may have
   greater diversity in terms of both the types of properties under development
   and geographic locations of properties, and therefore, are better able to
   avoid adverse developments in the single family residential development and
   construction business in the MSA.

        Crowell competes with several other developers in Columbia County.  Lot
   prices are determined by market conditions because Crowell does not have
   sufficient market share to dictate price.  Crowell competes by strategically
   analyzing housing availability and demand throughout the MSA and acquiring
   properties based on this analysis.

        Because Keystone is the primary builder in several subdivisions
   developed by Crowell and Home Sites, Keystone is not subject to the lot
   acquisition problems that some of its competitors face.  Therefore, Keystone
   is able to concentrate on building efficiencies and customer needs.
   Keystone's home prices are determined by market conditions and are affected
   by demand, land acquisition costs, and the cost of labor and materials.

   SOURCES AND AVAILABILITY OF RAW MATERIALS

        There is an adequate supply of building materials available in the
   Augusta, Georgia area.  Major suppliers of the Company are Howard Lumber
   Company, Maner Builders Supply Company, Hutto Plumbing, Inc., Looper Cabinet
   Company, Inc., Claussen Concrete, Wickes Lumber Company, American Carpet One,
   Augusta Lighting and Design Center, Smith's Landscape Nursery, and D'Antignac
   & Merritt.

   EMPLOYEES

        As of December 31, 1996, the Company and its subsidiaries had
   approximately 18 employees, 11 of which were full time employees.  The
   Company has one commercial real estate agent and one appraisal agent.

        The Company leases its executive office space from the President of
   Crowell.  The leases are further described in Item 12.



                       ITEM 2.  DESCRIPTION OF PROPERTIES

        At December 31, 1996, the principal properties held by the Company, all
   of which are located in Columbia County, Georgia, unless otherwise noted,
   included:
<TABLE>
<CAPTION>
                              Project/
          Mortgage           Subdivision                     Existing                  Mortgage
         Description            Name          Location         Use     Planned Use     Balance
        ------------         -----------     ----------       -------  -----------    ----------
<S>                             <C>              <C>           <C>       <C>              <C>
29.72 acres undeveloped land    None          Fury's Ferry Rd  None     Residential    $       *

9.4 acres undeveloped land      None          Fury's Ferry Rd  None      Commercial/           *
                                                                         Shopping Ctr

1.41 acres undeveloped land     None          The Pass Rd      None      Commercial            *
</TABLE>
<PAGE>

                                                                          Page 6

<TABLE>
<CAPTION>
                               Project/
         Mortgage            Subdivision                     Existing                  Mortgage
        Description            Name          Location         Use     Planned Use     Balance
        ------------         -----------     ----------       -------  -----------    ----------
<S>                             <C>              <C>           <C>       <C>              <C>
50.57 acres land under          Chaparral     Clark Pointe Rd  None      Residential     224,181
 development

31 developed lots               Chaparral     The Pass Rd                Residential      64,908

28 developed lots               Bakers Ferry  The Pass Rd                Residential           0

12 developed lots               The Boulders  The Pass Rd                Residential       7,000

20.23 acres undeveloped land    None          The Pass Rd      None      Residential           *
 at Petersburg Racquet Club

Petersburg Racquet Club         Petersburg    The Pass Rd      Recreation                541,461
                                Racquet Club                   facility

Homes under construction        Bakers Ferry  The Pass Rd      Sales                   1,062,618
                                                               inventory

Homes under construction        The Boulders  The Pass Rd      Sales                     500,445
                                                               inventory

Homes under construction        Bridlewood    Fury's Ferry Rd  Sales                      98,950
                                                               inventory

Homes under construction        Asbury Hill   Richmond County  Sales                     296,191
                                                               inventory

Homes under construction        Chaparral     Clark Pointe Rd  Sales                     231,187
                                                               inventory

Rental Homes                    None          Various          Sales                      69,828
                                                               inventory              __________

 Total mortgage debt                                                                  $3,566,459
                                                                                     ===========
</TABLE>
______________
* Aggregate mortgage debt was $469,690 at December 31, 1996.

        The Company holds title on the above properties in fee simple.  All land
   is properly zoned for its listed potential use.  Management believes that
   Crowell and Keystone are in compliance with all wetlands, setback, and zoning
   regulations.  Management believes that all properties are adequately insured.

        The interest expense for the year ended December 31, 1996, on the
   mortgage debt was $324,005 (including capitalized interest).  A similar
   payment for 1997 can be expected although the amount will vary depending on
   several factors including lot sales and interest rate changes.  The principal
   outstanding is reduced by a certain agreed-upon amount as each property is
   sold in order for the lender to release its secured interest in the property
   being sold. The interest rates on the mortgages range from 8.5% to 10.0%.
   The development loans are renewed on an annual basis.  The mortgage on
   Petersburg Racquet Club is amortized monthly and will be fully amortized in
   2009.  (For additional information on the Company's mortgage debt, see Item
   6. Management's Discussion and Analysis or Plan of Operation.)
<PAGE>

                                                                          Page 7

        The Company's investment in different types of real estate is not
   restricted except where restricted by the Company's ability to obtain
   financing.  See Item 1 for a description of the Company's real estate
   development activities.

   POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

        The following is a discussion of investment policies, financing policies
   and policies with respect to certain other activities of the Company.
   Although the Company  has no formal written policies with respect to such
   activities, the following discussion outlines the Company's objectives and
   informal policies with respect to these activities, which have been
   determined by the Board of Directors of the Company and may be changed from
   time to time at the discretion of the Board of Directors without a vote of
   the shareholders of the Company.

        Investment Policies.  The Company's primary objective with regard to
   real estate is to acquire raw land in the Augusta, Georgia area for the
   purpose of developing the land into separate homesites and home-building,
   which homes are built on a presold or speculative basis.  (See Description of
   Properties.)  However, future development or investment activities may not be
   limited to this specific geographic area or to residential real estate.  The
   Company's policy is to develop or acquire raw land or developed residential
   lots where management believes that opportunities exist for acceptable
   investment returns.  The Company may expand or develop existing properties or
   sell such properties in whole or in part as determined by management.

        The Company may also participate with other entities in property
   ownership, through joint ventures or other types of co-ownership.  The
   Company's equity investments in such properties may be subject to existing
   mortgage financing and other indebtedness which would have priority over the
   equity of the Company.  The Company may issue securities to persons in
   exchange for properties.  The Company also may invest in securities of
   entities engaged in real estate activities or securities of other issuers,
   including for the purpose of exercising control over such entities, although
   it has not done so in the past several years.  The Company may acquire all or
   substantially all of the securities or assets of other entities where such
   investments would be consistent with the Company's investment policies.

        Financing Policies.  The Company uses internally generated and borrowed
   funds to purchase real estate.  In  reaching such financing decisions,
   management considers traditional conventional mortgage debt-to-asset ratios.
   Borrowings may be in the form of bank borrowings, publicly and privately
   placed debt instruments, or purchase money obligations to the sellers of
   properties, any of which indebtedness may be unsecured or may be secured by
   any or all of the assets of the Company and may have full or limited recourse
   to all or any portion of the assets of the Company.  The Company has not
   established any limit on the number of mortgages that may be placed on any
   single property or on its portfolio as a whole, but mortgage financing
   instruments usually limit additional indebtedness on such properties.  To the
   extent that the Board of Directors of the Company determines to sell
   additional capital, the Company may raise such capital through equity
   offerings, debt financings or any other method.

        Policies with Respect to Other Activities.  The Company has authority to
   offer and sell shares of its capital stock or other securities and to
   repurchase or otherwise
<PAGE>

                                                                          Page 8

   reacquire its shares or any other securities and may engage in such
   activities in the future, although it has no present intention of offering or
   selling any securities or repurchasing any of the shares of Crowell Common
   Stock. The Company has no material outstanding loans to other entities or
   persons, including officers and directors. The Company may in the future make
   loans to joint ventures in which it participates in order to meet working
   capital needs of the venture. The Company has not engaged and does not intend
   to engage in the future in trading, underwriting or agency distribution or
   sale of securities of other issuers. Additionally, the Company has not
   invested in the securities of other issuers for the purpose of exercising
   control in the past three years; however, the Company may make such
   investments in the future. The Company intends to make investments in such a
   way that it will not be treated as an investment company under the Investment
   Company Act of 1940.



                           ITEM 3.  LEGAL PROCEEDINGS

        The Company is not a party to any legal proceedings except routine
   litigation that is incidental to its business.



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

        No matters were submitted to a vote of the Company's security holders
   during the quarter ended December 31, 1996.
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                                                                          Page 9
                                    PART II

                     ITEM 5.  MARKET FOR COMMON EQUITY AND
                          RELATED STOCKHOLDER MATTERS

        There is no public trading market for the securities of Crowell.  As of
   December 31, 1996, there were approximately 740 holders of record of
   Crowell's Common Stock, without par value. No dividends have been paid on
   Crowell's Common Stock for more than two years and it is anticipated that
   Crowell will not pay dividends in the foreseeable future.

        Crowell did not issue or sell any shares of Common Stock during 1996
   that were not registered under the Securities Act of 1933, as amended.



                 ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                              OR PLAN OF OPERATION

   OVERVIEW

        The primary objective of the Company's management is to maximize
   shareholder wealth.  The Company attempts to accomplish this objective by
   increasing total revenues and controlling expenses.  Management believes that
   existing corporate structure is adequate to support increased sales.  In
   addition, management believes revenues can be increased most rapidly by
   increasing home-building efforts.

        The statements in this report regarding future sales, expenses, and
   other items relating to the future of the Company constitute Forward Looking
   Statements under the Private Securities Litigation Reform Act of 1995.
   Actual results may differ materially from the Company's expectations as a
   result of a number of factors, including the national and local economy,
   market conditions, competition, real estate demand, availability of
   financing, interest rates, and weather conditions.

   RESULTS OF OPERATION

        Management continually monitors inventory levels in relation to customer
   demand in order to build the needed number of homes.   Management believes
   that housing inventory needs are dynamic and that a specific inventory level
   must be matched with anticipated consumer demand.  Therefore, there is no
   specific amount of inventory which will always be the optimum.

        Home sales decreased by $155,759, or 2.5%, and commercial brokerage
   commissions increased by $68,905, or 50.2% for the year ended December 31,
   1996, as compared to the year ended December 31, 1995.  The slight decrease
   in home sales primarily resulted from selling fewer homes in 1996 than in
   1995.  The increase in commercial brokerage commissions resulted from the
   brokerage of more property sales in 1996.
<PAGE>

                                                                         Page 10


        Gross profit percent on home sales increased to 9% in 1996 from 5% in
   1995. The increase in gross profit percentage on home sales resulted
   primarily from lower lot acquisition costs in 1996 as compared to 1995.

        Gross profit percent on commercial brokerage commissions increased from
   30% in 1995 to 31% in 1996.

        Gross profit on lot sales increased from 36% in 1995 to 49% in 1996.
   The increase in gross profit percentage on lot sales resulted primarily from
   lower lot costs in 1996 as compared to 1995.

        Salaries decreased  in 1996 as compared to 1995 by $5,143, or 1%,
   because of employee attrition.  Management believes salary expense will be
   less in 1996 than in 1997 because of the loss of several employees during
   1996.  The Company does not plan to replace employees lost through attrition.

        Depreciation expense decreased by $10,920 or 17% in 1996 as compared to
   1995 because several assets have been fully depreciated.  Management believes
   depreciation expense will increase in 1997 based on projected increased
   depreciation caused by additions at Petersburg Racquet Club ("PRC").

        Taxes and licenses decreased by $29,951, or 46%, in 1996 as compared to
   1995.  The decrease in taxes and licenses resulted primarily from the
   decrease in properties held in 1996 as compared to 1995 and a timing
   difference in recording property taxes expensed.

        Building occupancy decreased by $1,685 in 1996 as compared to 1995.

        Office expense decreased in 1996 by $31,735 or 23% as compared to 1995.
   The decrease in office expenses in 1996 as compared to 1995 resulted
   primarily from the decrease in the number of employees and the decrease in
   number of Company operations.

        Advertising and promotion decreased by $1,982, or 10%, in 1996 as
   compared to 1995.

        Legal and accounting expenses decreased by $17,155, or 40%, in 1996 as
   compared to 1995.  The decrease in legal and accounting fees resulted
   primarily from the reduction in audit fees and smaller use of attorneys in
   1996 as compared to 1995.

        Communications expenses decreased by $1,281, or 6%, in 1996 as compared
   to 1995 because of lower long distance rates.

        Overall operating expenses decreased by $99,852 for 1996 as compared to
   1995.  The overall decreases in 1996 as compared to 1995 resulted primarily
   from decreases in taxes and licenses, office expenses, and legal and
   accounting expenses.

        Interest income decreased by $44,768 in 1996 as compared to 1995 because
   a note receivable in the amount of approximately $260,000 was collected in
   1995.

        Interest expense from continuing operations decreased by $151,639 in
   1996 as compared to 1995 because of the decrease in housing inventory carried
   throughout the year.

   LIQUIDITY AND CAPITAL RESOURCES

        The Company expects to sell land it presently owns to meet liquidity
   needs as it has done in the past.  Together with revenues from other sources,
   such sales would be expected to generate sufficient cash to meet the
   Company's liquidity requirements.  At
<PAGE>

                                                                         Page 11

   December 31, 1996, available cash and proceeds from land, lot, and home sales
   were expected to be sufficient to meet the Company's requirements until
   spring of 1996 when home sales typically improve and provide cash for
   operations.

        The Company has obtained financing historically by borrowing from
   conventional lending sources using land acquired for development as security
   for loans.

        Current and future liquidity needs are expected to be met by use of the
   proceeds from lot and land sales and the proceeds from loans, using lands
   purchased for development as collateral.  Existing development loans and
   commitments available to the Company have been made by various financial
   institutions and are secured by the improved lots held for resale.  (See Item
   2. Description of Properties.)  The interest rates on the development loans
   are the prime rates of the lenders (8.0% in December 1996) plus 1.0 to 1.5%.
   Payments of interest are due monthly or quarterly and a portion of the
   principal is repaid as each lot is sold.  The existing loans terminate in the
   years ending December 31, 1997 and 1998, at which time all principal and
   accrued interest are payable. There are no penalties for prepayment.
   Management expects to renew the  development loans at that time.

        Residential home construction costs are financed through the use of
   additional commitments using the improved lots as collateral.  Lot
   acquisition costs and home construction costs are financed by construction
   loans from a number of conventional lending sources, generally lending 90 to
   95% of the costs of the home, secured by the lot and improvements, at rates
   of 9.25% to 9.75% as of December 31, 1996.  These loans are paid upon the
   sale of the home.  These loans are negotiated and closed on a project-by-
   project and lot-by-lot basis.

        In addition to the development loans, the Company has a loan agreement
   with an Augusta, Georgia savings and loan institution for a currently
   outstanding amount of approximately $541,461 at a rate of one percent over
   the institution's base lending rate (8.5% at December 31, 1996).

        Financing arrangements for long-term needs have not been made because
   such arrangements in the land development business are generally made on a
   project-by-project basis.  Debt service on existing loans (loan balances
   totaled $3,566,459 as of December 31, 1996) and funds for operations are
   expected to be met from the proceeds of lot sales, land sales, home sales and
   real estate brokerage commissions.  Notes maturing in 1997 total $2,483,111.
   The Company historically has renewed these notes annually although there are
   no assurances that such loans will be renewed by the financial institution.
   The notes will eventually be repaid from proceeds of land, lot, and home
   sales.  (See Item 7. Financial Statements for additional details regarding
   notes payable.)

        The Company's financial condition at December 31, 1996, is substantially
   equivalent to that of December 31, 1995.  Stockholders' equity as of December
   31, 1995, was $755,024 as compared to $741,869 at December 31, 1996.

        Properties held for resale decreased from $3,929,197 at December 31,
   1995 to $3,493,117 at December 31, 1996, a decrease of $436,080, or 11%,
   which reflects the decrease in inventory to adjust to decreased sales.
   Properties held for resale will increase and decrease as management
   determines and builds the level of inventory needed to satisfy customer
   demand.
<PAGE>

                                                                         Page 12


        Cash decreased by $206,070, or 77%, at December 31, 1966, from December
   31, 1995. (See Item 7 Financial Statements - Consolidated Statements of Cash
   Flows.)

        Receivables increased from $127,076 at December 31, 1995, to $161,907 at
   December 31, 1996, an increase of $34,831, or 27%, because of the addition of
   a note receivable in connection with the sale of UDS.

        Other assets decreased from $53,516 at December 31, 1995, to $43,332 at
   December 31, 1996, a decrease of $10,184, or 19%.

        Notes payable decreased from $3,808,908 at December 31, 1995, to
   $3,566,459 at December 31, 1996, a decrease of $242,449, or 6%,  because of a
   decrease in inventory levels.  Notes payable will increase and decrease in
   direct proportion to the level of housing inventory maintained by the
   Company.

        Accounts payable and accrued liabilities decreased from $198,327 at
   December 31, 1995, to $71,544 at December 31, 1996, a decrease of $126,783 or
   64%, because proceeds from home sales and collections on asset sales were
   used to pay liabilities.

        The Company has net operating loss carryforwards available of
   approximately $2,060,000 to offset against future federal taxable income.
   The current value of these carryforwards computed at maximum federal and
   state income tax rates is approximately $800,000.  This amount is not
   reflected in the financial statements.

   IMPACT OF INFLATION

      Although inflationary pressures were moderate in 1996 and 1995, the
   Company continues to seek ways to reduce the impact of inflation.  To the
   extent permitted by competition, the Company passes increased costs on to
   customers by increasing sales prices of residential lots and homes.

   SEASONALITY

        The Company typically sells more homes during the second and third
   quarters of the year than during the remainder of the year.



                         ITEM 7.  FINANCIAL STATEMENTS

   The following consolidated financial statements of Crowell & Co., Inc., and
   subsidiaries are included herein:

    Report of Independent Certified Public Accountants
    Consolidated Balance Sheets - December 31, 1996 and 1995
    Consolidated Statements of Operations - Years ended December 31, 1996 and
        1995
    Consolidated Statements of Changes in Stockholders' Equity - Years ended
        December 31, 1996 and 1995
    Consolidated Statements of Cash Flows - Years ended December 31, 1996 and
        1995
    Notes to Consolidated Financial Statements - Years ended December 31, 1996
        and 1995
<PAGE>

                                                                         Page 13


   REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

   To the Board of Directors
   Crowell & Co., Inc., and Subsidiaries
   Augusta, Georgia

        We have audited the accompanying consolidated balance sheets of Crowell
   & Co., Inc., and subsidiaries as of December 31, 1996 and 1995, and the
   related consolidated statements of operations, changes in stockholders'
   equity and cash flows for the years then ended.  These financial statements
   are the responsibility of the Company's management.  Our responsibility is to
   express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with generally accepted auditing
   standards.  Those standards require that we plan and perform the audit to
   obtain reasonable assurance about whether the financial statements are free
   of material misstatement.  An audit includes examining, on a test basis,
   evidence supporting the amounts and disclosures in the financial statements.
   An audit also includes assessing the accounting principles used and
   significant estimates made by management, as well as evaluating the overall
   financial statement presentation.  We believe that our audits provide a
   reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above
   present fairly, in all material respects, the financial position of Crowell &
   Co., Inc., and subsidiaries as of December 31, 1996 and 1995, and the results
   of their operations and their cash flows for the years then ended, in
   conformity with generally accepted accounting principles.


   CHERRY, BEKAERT & HOLLAND, L. L. P.


   Augusta, Georgia
   March 21, 1997
<PAGE>

                                                                         Page 14

                     CROWELL & CO., INC., AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>

                                                              December 31,
                                                         ----------------------
                                                            1996        1995
                                                         ----------  ----------
<S>                                                      <C>         <C>

   PROPERTIES HELD FOR RESALE
    Homes under construction and for sale                $2,276,944  $2,445,971
    Developed residential land                            1,016,939   1,103,676
    Land held for future development                        199,234     379,550
                                                         ----------  ----------
                                                          3,493,117   3,929,197
                                                         ----------  ----------

   CASH, including escrow funds of $6,434 and $25,689
    in 1996 and 1995, respectively                           62,494     268,564
                                                         ----------  ----------


   RECEIVABLES
    Notes                                                   126,316      30,766
    Accounts and other                                       35,591      96,310
                                                         ----------  ----------
                                                            161,907     127,076
                                                         ----------  ----------


   PROPERTY AND EQUIPMENT
    Rental homes                                             90,000     124,000
     Petersburg Racquet Club                              1,059,993     706,547
     Computer equipment and software                              0     153,269
     Furniture, fixtures and equipment                      146,903     206,268
                                                         ----------  ----------
                                                          1,296,896   1,190,084
    Less accumulated depreciation                           677,874     806,178
                                                         ----------  ----------
                                                            619,022     383,906
                                                         ----------  ----------

   OTHER ASSETS                                              43,332      53,516
                                                         ----------  ----------

                                                         $4,379,872  $4,762,259
                                                         ==========  ==========

</TABLE>

See notes to consolidated financial statements.
<PAGE>

                                                                         Page 15

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                            December 31,
                                                        ----------------------
                                                          1996        1995
                                                        ----------  ----------
<S>                                                     <C>         <C>
   NOTES PAYABLE TO BANKS                              $3,566,459   $3,808,908
                                                       ----------   ----------

   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
   Accounts payable                                        21,155       78,083
   Accrued expenses                                        42,905       89,874
   Customer deposits                                        7,484       30,370
                                                       ----------   ----------
                                                           71,544      198,327
                                                       ----------   ----------
    TOTAL LIABILITIES                                   3,638,003    4,007,235
                                                       ----------   ----------
COMMITMENTS

STOCKHOLDERS' EQUITY
  Capital stock:
    Preferred, voting and non-participating,
      without par value; 10,000,000 shares
      authorized, 1,011,899 designated to
      Series A and Series B
    Series A preferred, 8% cumulative, stated
      value $1 per share; callable at $1 per
      share plus accumulated dividends,
      convertible into common stock at the rate
      of 1 share for 4 preferred shares;
      authorized 2,000,000 shares; issued and
      outstanding 525,000 shares; accumulated
      dividends $105,000 ($0.20 per share)                525,000      525,000
    Series B preferred, 8% cumulative, stated value
      $1 per share; callable at $1 per share plus
      accumulated dividends, convertible into common
      stock at the rate of 1 share for 4 preferred
      shares; authorized 486,899 shares; issued and
      outstanding 486,899 shares; accumulated dividends
      $116,856 ($0.24 per share)                          486,899      486,899
    Common, without par value; 50,000,000 shares
      authorized; 2,520,835 shares issued and
      outstanding  at December 31, 1996 and 1995.         696,774      696,776
Additional paid-in capital  Preferred stock - Series A     33,648       33,648
Accumulated deficit                                    (1,000,452)    (987,299)
                                                       ----------   ----------
  TOTAL STOCKHOLDERS' EQUITY                              741,869      755,024
                                                       ----------   ----------
                                                       $4,379,872   $4,762,259
                                                       ==========   ==========
</TABLE>
<PAGE>

                                                                         Page 16

                     CROWELL & CO., INC., AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                        Year ended December 31,
                                                       -------------------------
                                                           1996         1995
                                                       ------------  -----------
<S>                                                    <C>           <C>
   REVENUES
    Home sales                                          $6,253,268   $6,409,027
    Brokerage commissions                                  206,255      137,350
    Other income                                           270,977      277,344
    Lot sales                                              254,900       71,600
                                                        ----------   ----------
                                                         6,985,400    6,895,321
                                                        ----------   ----------
   COST OF REVENUES
    Homes                                                5,721,184    6,073,514
    Agent commissions                                      142,395       95,778
    Other                                                   31,617       37,477
    Lots                                                   129,408       45,700
                                                        ----------   ----------
                                                         6,024,604    6,252,469
                                                        ----------   ----------
   OPERATING EXPENSES
    Salaries                                               597,184      602,327
    Depreciation                                            54,388       65,308
    Taxes and license                                       35,836       65,787
    Building occupancy                                     105,530      107,215
    Advertising and promotion                               17,798       19,780
    Office expense                                         105,223      136,958
    Legal and accounting                                    25,992       43,147
    Communications                                          19,488       20,769
                                                        ----------   ----------
                                                           961,439    1,061,291
                                                        ----------   ----------

        OPERATING LOSS                                        (643)    (418,439)
                                                        ----------   ----------

   FINANCIAL INCOME (EXPENSE)
    Interest income                                            941       45,709
    Interest expense                                      (246,370)    (398,009)
                                                        ----------   ----------
                                                          (245,429)    (352,300)
                                                        ----------   ----------

    LOSS FROM CONTINUING OPERATIONS                       (246,072)    (770,739)
                                                        ----------   ----------

   DISCONTINUED OPERATIONS
    Income (loss) from residential brokerage division      69,686       (76,450)
    Gain on disposal of residential brokerage division           0       79,000
    Income from computer division                            3,306       64,709
    Gain on disposal of computer division                  159,927            0
                                                        ----------   ----------
                                                           232,919       67,259
                                                        ----------   ----------

    NET LOSS                                               (13,153)    (703,480)
                                                        ==========   ==========

   EARNINGS PER COMMON SHARE:
    Weighted average number of common shares
     outstanding                                         2,520,835    2,520,835
    Primary earnings per share
     Loss from continuing operations                    $    ( .13)  $     (.34)
     Income from discontinued operations                       .09          .03
                                                        ----------   ----------

    NET LOSS PER COMMON SHARE                           $     (.04)  $     (.31)
                                                        ==========   ==========

</TABLE>

   See notes to consolidated financial statements.
<PAGE>

                                                                         Page 17

                     CROWELL & CO., INC., AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>
                                                                              Additional
                                            Capital Stock Issued                Paid-In
                                            --------------------                Capital
                                 Preferred       Preferred                     Preferred    Accumulated
                                 Series A         Series B          Common      Series A      Deficit
                                 ---------  --------------------  ----------  -----------  --------------
<S>                              <C>        <C>                   <C>         <C>          <C>
   BALANCE, DECEMBER 31, 1994     $525,000              $486,899   $696,776       $33,648    $  (283,819)

   Net loss                              -                     -          -             -       (703,480)
                                 ---------  --------------------   --------   -----------    -----------

   BALANCE, DECEMBER 31, 1995     $525,000              $486,899   $696,776       $33,648    $  (987,299)


   Purchase of Stock                     -                     -         (2)            -              -
   Net loss                              -                     -          -             -        (13,153)
                                 ---------  --------------------   --------   -----------    -----------

   BALANCE, DECEMBER 31, 1996     $525,000              $486,899   $696,774       $33,648    $(1,000,452)

</TABLE>


See notes to consolidated financial statements.
<PAGE>

                                                                         Page 18

                     CROWELL & CO., INC., AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                       Years ended December 31,
                                                      --------------------------
                                                          1996          1995
                                                      ------------  ------------
<S>                                                   <C>           <C>
   CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                          $   (13,153)  $  (703,480)
    Adjustments to reconcile net income to net cash
       provided by operating activities:
      Depreciation and amortization                        54,388        74,526
      (Gain) loss on disposal of assets                  (159,927)       45,065
      Changes in assets and liabilities:
      (Increase) decrease in:
        Properties held for resale                        436,080     1,743,951
        Accounts and other receivables                     60,719       (20,022)
        Home sale notes receivable                         24,450        53,301
        Other assets                                       10,184       122,109
      Increase (decrease) in
        Accounts payable                                  (56,928)        5,111
        Accrued expenses                                  (46,969)      (36,501)
        Customer deposits                                 (22,886)      (74,656)
                                                      -----------   -----------
         NET CASH PROVIDED BY (USED IN) OPERATING
          ACTIVITIES                                      285,958     1,209,404
                                                      -----------   -----------

   CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from sale of assets                           80,000       100,000
    Purchase of property and equipment                   (329,579)      (17,265)
    Collections on notes receivable                             0       452,222
                                                      -----------   -----------
         NET CASH PROVIDED BY INVESTING ACTIVITIES       (249,579)      534,957
                                                      -----------   -----------

   CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from bank loans                            4,679,657     4,294,615
    Payments of bank loans and other debt              (4,922,106)   (6,000,744)
                                                      -----------   -----------
      NET CASH USED IN FINANCING ACTIVITIES              (242,449)   (1,706,129)
                                                      -----------   -----------

   NET INCREASE (DECREASE) IN CASH                       (206,070)       38,232

   CASH AT BEGINNING OF YEAR                              268,564       230,332
                                                      -----------   -----------

   CASH AT END OF YEAR                                $    62,494   $   268,564
                                                      ===========   ===========

   SUPPLEMENTARY DISCLOSURES

    Interest paid (net of amount capitalized)         $   262,853   $   384,119
    Income taxes paid                                           0         5,503
    Note receivable from disposal of assets               120,000             0

</TABLE>

   See notes to consolidated financial statements.
<PAGE>

                                                                         Page 19

                     CROWELL & CO., INC., AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1996 AND 1995


   NOTE 1 - DESCRIPTION OF BUSINESS

        The principal operations of Crowell & Co., Inc., and its subsidiaries
   (the "Company") are development of residential properties for resale, home-
   building, and providing commercial real estate brokerage services.  The
   Company acts as a general contractor on all development and home-building.

        Crowell & Co., Inc. ("Crowell"), the parent company, primarily develops
   residential properties in the Augusta, Georgia, metropolitan statistical
   area.  Additionally Crowell owns and operates Petersburg Racquet Club, a
   tennis and pool facility located in Crowell's largest development.  Crowell
   also provides property appraisal services and commercial real estate
   brokerage services.

        Ivey Homes, Inc. ("Ivey"), and Keystone Homes, Inc. ("Keystone"), both
   wholly owned subsidiaries of Crowell, build single-family and multi-family
   homes on a presold and speculative basis in the Augusta, Georgia,
   metropolitan statistical area.  The operations of Ivey and Keystone were
   combined in 1996.

        The Company incurred losses from continuing operations of $246,072 and
   $770,739 in 1996 and 1995, respectively.  The Company sold two of its
   divisions during 1996 and 1995, and management has initiated other internal
   changes which management believes will help return the Company to
   profitability.  However, the real estate market in the Augusta area is
   subject to fluctuations beyond the Company's control.  As discussed in Note
   5, the Company also has additional borrowing capacity under its financing
   arrangements.

        All operations of Crowell and its subsidiaries are domestic.


   NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   PRINCIPLES OF CONSOLIDATION

        The consolidated financial statements include the accounts of the
   Company and its wholly owned subsidiaries.  All material intercompany
   accounts and transactions are eliminated in consolidation.

   ACCOUNTING ESTIMATES

        The preparation of the financial statements in conformity with generally
   accepted accounting principles requires management to make estimates and
   assumptions that affect the reported amounts of assets and liabilities and
   disclosure of contingent assets and liabilities at the date of the financial
   statements and the reported amounts of revenues and expenses during the
   reporting period.  Actual results could differ from those estimates.
<PAGE>

                                                                         Page 20

   LOSS PER SHARE

        The loss per common share is computed using the weighted average of the
   number of shares outstanding during the years ended December 31, 1996 and
   1995.  Because inclusion of convertible preferred stock would have an anti-
   dilutive effect on the loss per common share, the convertible preferred stock
   is excluded from the computation of the loss per common share assuming full
   dilution.  The preferred dividend accrued is subtracted from the net loss for
   the purposes of computing the loss per common share regardless of whether the
   preferred dividend is paid.

   RECEIVABLES

        The Company uses the allowance method for recording bad debt.  At
   December 31, 1996 and 1995,  an allowance for collectible receivables was not
   considered necessary.

   PROPERTY AND EQUIPMENT

        Property and equipment are stated at cost.  Maintenance and repairs are
   charged to expense.  Improvements that significantly increase the lives of
   assets are capitalized and depreciated or amortized over their estimated
   useful lives.  Gains or losses on disposals are credited or charged to
   operations.

   DEPRECIATION

        Depreciation of property and equipment is computed on the straight-line
   and declining-balance methods for both financial reporting and income tax
   purposes.

   PROPERTIES HELD FOR RESALE

        Properties held for resale are stated at the lower of cost or market
   using the specific identification method.  Certain property purchases and
   sales are treated as cash transactions for the statements of cash flows.

   CUSTOMER DEPOSITS

        A portion of the Company's cash is reserved for the repayment of
   security deposits, excess cash owed to property owners on property management
   accounts and earnest money received on pending real estate sales contracts.

   CAPITALIZED INTEREST

        The Company capitalizes the portion of interest incurred during the
   construction period for funds borrowed to develop properties and construct
   residential homes.  Such interest is charged to properties and expensed as a
   cost of sale as properties are sold.

   REVENUE RECOGNITION

        The Company recognizes revenues on sales of residential lots, land, and
   homes at the time of closing and receipt of cash.

        The Company uses the completed contract method on Company-constructed
   homes.  This method is used because the typical home is completed in six
   months or less and the financial position and results of operations do not
   vary significantly from those which would result from the use of the
   percentage of completion method.  A contract is considered complete at the
   time of closing and receipt of cash.
<PAGE>

                                                                         Page 21

        Contract costs include all direct materials and labor costs, allocated
   common cost of land and development and those indirect costs related to
   contract performance, including interest on borrowings.  General and
   administrative costs are charged to expense as incurred.

        The Company recognizes commissions earned on real estate brokerage
   transactions at the time of closing.

   RECLASSIFICATIONS

        Certain 1995 amounts have been reclassified to conform with the
   financial statement presentation used in 1996.  These reclassifications had
   no effect on net income.

NOTE 3- NOTES RECEIVABLE

<TABLE>
<CAPTION>
                                                                 December 31,
                                                              -------------------
                                                                1996       1995
                                                              --------   --------
<S>                                                           <C>        <C>
    Note receivable from an individual due in
     quarterly installments with interest at 8.8%,
     secured by all assets of UDS.  (See Note 9)              $120,000   $     -
    Various second mortgage notes receivable on
     homes sold by Ivey at interest rates of 9.0%
     to 11.0%, due at various dates through 1997.             $  6,315   $30,766
                                                              --------  --------

                                                              $126,315   $30,766
                                                              ========  ========
</TABLE>
        In the opinion of management, the fair value of the above financial
   instruments does not materially differ from the face value.


   NOTE 4 - COMMITMENTS AND CONTINGENCIES

        The Company leases its office space from the majority stockholder.  On
   June 1, 1989, the Company entered into three (3) operating lease agreements
   each with a term of twenty (20) years.  The leases provide that the Company
   pay all property taxes, insurance and maintenance plus an annual rental.  The
   total minimum rental commitment at December 31, 1996, under these leases is
   $1,837,200, which is due as follows:
<TABLE>
<CAPTION>

  Year ending December 31,
 ------------------------
 <S>                                    <C>
           1997                           $  127,200
           1998                              127,200
           1999                              130,800
           2000                              133,200
           2001                              135,600
        Thereafter                         1,183,200
                                          ----------
                                          $1,837,200
                                          ==========
</TABLE>
<PAGE>

                                                                         Page 22

        The total rental expense for these leases included in the consolidated
   statements of income for the years ended December 31, 1996 and 1995, was
   $122,400 and $120,000, respectively.

NOTE 5 - NOTES PAYABLE

<TABLE>
<CAPTION>
                                                              December 31,
                                                          ---------------------
                                                             1996       1995
                                                          ---------  ----------
<S>                                                       <C>         <C>
   To banks
    Secured by residential properties held for resale,
     maturing at various dates through 1998, at interest
     rates from prime plus 1.0% to 1.5% (8.5% to 10.0% at
     December 31, 1996 and 1995).                         $2,955,170  $3,345,402
    Secured by Petersburg Racquet Club property, maturing
     2009, at an interest rate of  8.5% and 7.5% at
     December 31, 1996 and 1995, respectively.               541,461     330,082
    Secured by single-family homes held for resale and
     rental, maturing at various dates through 1998, at
     interest rates of 9.0% to 11.0%.                         69,828     133,424
                                                          ----------  ----------

                                                          $3,566,459  $3,808,908
                                                          ==========  ==========
</TABLE>

        In the opinion of management, the fair value of the above financial
   instruments does not materially differ from the face value.

        Under provisions of financing arrangements outstanding at December 31,
   1996, the Company has unused commitments for financing of approximately
   $940,000.  These additional amounts are available upon request and approval
   of development progress and are subject to the same terms and obligations as
   those existing on December 31, 1996.  The majority stockholder has personally
   guaranteed all bank loans.  In addition, the president of Ivey has personally
   guaranteed all of Ivey's bank loans, which amounts to additional guarantees
   of $1,667,674 as of December 31, 1996.  The president of Keystone has
   personally guaranteed all of Keystone's bank loans which amounts to
   additional guarantees of $591,544.

   Maturities of debt are as follows:
<TABLE>
<CAPTION>

  Year ending December 31,
  ------------------------
 <S>                                    <C>
           1997                           $2,483,111
           1998                              596,256
           1999                               34,883
           2000                               37,967
           2001                               41,323
        Thereafter                           372,919
                                          ----------
                                          $3,566,459
                                          ==========
</TABLE>

        Capitalized interest (see Note 2) was approximately $78,000 and $58,000
   for the years ended December 31, 1996 and 1995, respectively.  All other
   interest incurred was recognized as financial expense in the consolidated
   statements of income.
<PAGE>

                                                                         Page 23

   NOTE 6 - INCOME TAX MATTERS

        For the years ended December 31, 1996 and 1995, Crowell filed
   consolidated income tax returns with its subsidiaries Ivey and Keystone.

        For the years ended December 31, 1996 and 1995, no income tax provision
   was made because of the net losses the Company incurred.

        As of December 31, 1996, and for the year then ended, the Company had no
   significant temporary or permanent differences to report.  For the year ended
   December 31, 1995, the Company collected the remainder of a note receivable
   recorded on the cash basis for income tax purposes in the amount of
   approximately $260,000.  No income tax was incurred by the collection because
   of the net loss incurred by the Company.

        The Company adopted SFAS No. 109 as of January 1, 1995.  Under the asset
   and liability method of SFAS 109, deferred tax assets and liabilities are
   recognized for temporary differences between the financial reporting basis of
   assets and liabilities and their respective tax bases.  Deferred tax assets
   and liabilities are measured using enacted tax rates expected to apply to
   taxable income in the years in which those temporary differences are expected
   to be recovered or settled.  Under SFAS 109, the effect on deferred tax
   assets and liabilities of a change in tax rates is recognized in income in
   the period that includes the enactment date. The adoption of SFAS No. 109 had
   no significant effect on income for the year ended December 31, 1995.

        Deferred tax assets and liabilities at December 31, 1996 and 1995,
   consist of the following:
<TABLE>
<CAPTION>
                                                      Years ended December 31,
                                                         ---------------------
                                                           1996         1995
                                                         --------     --------
<S>                                                      <C>           <C>
   Deferred tax assets
    Federal and state net operating loss
     carryforwards                                      $ 800,000     $ 800,000
    Less valuation allowance                             (800,000)     (800,000)
                                                        ---------     ---------
   Net deferred tax asset                               $       -     $       -
                                                        =========     =========
</TABLE>

        Remaining net operating loss carryforwards of $2,058,248 expire in
   varying amounts between December 31, 2002, and December 31, 2011, and are
   subject to Internal Revenue Code Section 382 limitations relating to a
   corporation's ability to use net operating loss carryforwards subsequent to a
   change in ownership.  An expiration schedule is as follows:

<TABLE>
<CAPTION>
   Year ending December 31
   -----------------------
<S>                                 <C>
            2002                   $  320,346
            2003                      597,531
            2004                      154,945
            2005                      294,482
            2010                      683,502
            2011                        7,442
                                   ----------
                                   $2,058,248
                                   ==========
</TABLE>
<PAGE>

                                                                         Page 24

   NOTE 7 - INDUSTRY SEGMENT DATA

        The Company conducts its operations in the principal industries of real
   estate development and home-building.

        The real estate development segment consists principally of the
   development of residential properties for resale and construction of single-
   family and multi-family housing.  In addition, the real estate development
   segment operates a tennis and pool facility.

        The real estate brokerage segment consists of commission revenue and
   related expenses for primarily commercial real estate sales.

        Any significant intersegment revenues for the periods presented have
   been eliminated. Various industry segment data is as follows:

<TABLE>
<CAPTION>

                                            Year ended December 31,
                                               1996         1995
                                           ------------  -----------
<S>                                        <C>           <C>
   Net sales
    Real estate development                 $6,779,145   $6,757,971
    Real estate brokerage                      206,255      137,350
                                            ----------   ----------
      Net sales                             $6,985,400   $6,895,321
                                            ==========   ==========

   Operating income (loss)
    Real estate development                 $  (36,946)  $ (422,838)
    Real estate brokerage                       36,303        4,399
                                            ----------   ----------
      Operating income (loss)               $     (643)  $ (418,439)
                                            ==========   ==========

   Capital expenditures
    Real estate development                 $  324,215   $    5,741
    Real estate brokerage                            -            -
                                            ----------   ----------
      Net capital expenditures              $  324,215   $    5,741
                                            ==========   ==========

   Depreciation and amortization
    Real estate development                 $   54,388   $   65,308
    Real estate brokerage                            -            -
                                            ----------   ----------
      Net depreciation and amortization     $   54,388   $   65,308
                                            ==========   ==========

   Assets employed
    Real estate development                 $4,379,872   $4,661,515
    Real estate brokerage                            -            -
                                            ----------   ----------
                                            $4,379,872   $4,661,515
                                            ==========   ==========

</TABLE>

   NOTE 8 - RELATED PARTY TRANSACTIONS

        Keystone purchases developed lots for home construction from Home Sites,
   Ltd. ("Home Sites"), an entity related by common control.  For the years
   ended December 31, 1996 and 1995, such purchases amounted to $79,500 and
   $292,700, respectively.  Crowell also provides management services to Home
   Sites.  For the years ended December 31, 1996 and 1995, management fees
   earned by the Company amounted to $5,430 and $35,522, respectively.
<PAGE>

                                                                         Page 25

        An officer of the company also received real estate commissions on Home
   Sites property sold by Crowell in the amount of $34,457 for the year ended
   December 31, 1995.


   NOTE 9 - DISCONTINUED OPERATIONS

        On June 1, 1995, Crowell sold its residential real estate brokerage
   division ("Division") to Meybohm Realty, Inc. ("Meybohm), another real estate
   brokerage firm located in the Augusta area, with an effective closing date of
   June 1, 1995. The sales price of the Division was $100,000 in cash, plus
   payments based on various percentages of former Crowell agent earnings,
   listings, and pending sale contracts transferred from Crowell to Meybohm for
   one year from the date of sale.  In addition, the sales price included
   payments not to exceed $60,000 per year for the right to exclusively market
   Crowell and related entities' developments for a period of two years. The net
   book value of the division was approximately $21,000 at the time of the sale.
   This amount is included as cost in the $79,000 gain on the disposal of the
   Division.  All other payments received under the sales agreement are
   reflected in the loss from discontinued operations.  There was no material
   relationship between Crowell and Meybohm at the time of the sale.  No income
   tax was incurred from the sale of the Division because of the operating loss
   incurred by Crowell for 1995.  Total revenue from the residential brokerage
   division for the year ended December 31, 1995, was $528,473.

        On December 16, 1996 Crowell sold United Data Systems, Inc., ("UDS"), a
   computer software company.  The sales price of UDS was $200,000 which was
   received in the form of $80,000 in cash and a note receivable of $120,000
   which is secured by all sold and future assets of UDS.  The net book value of
   UDS was approximately $40,000.  Therefore, a gain of approximately $160,000
   was recognized on the sale.  The purchaser of UDS was Chin U. Yu ("Chin").
   There was no material relationship between Crowell and Chin at the time of
   the sale.  No income tax was incurred from the sale of UDS because of the
   operating loss incurred  by Crowell for 1996.  Total revenue for UDS for the
   years ended December 31, 1996 and 1995 was $421,199 and $562,713,
   respectively.



            ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                         ON ACCOUNTING AND FINANCIAL DISCLOSURE

        Within the two year period ended December 31, 1996, there have been no
   changes in independent certified public accountants or disagreements with
   accountants on matters of accounting or financial disclosure.
<PAGE>

                                                                         Page 26

                                    PART III


               ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
                              AND CONTROL PERSONS

        Set forth below is certain information as of March 3, 1997, about each
   of the directors and executive officers of Crowell.
<TABLE>
<CAPTION>

      Name                  Age   Office
     ------                 ---   ------
<S>                         <C>   <C>

   Otis L. Crowell           62   Director, President and Chairman of the
                                  Board

   O. Lamar Crowell, Jr.     30   Director and Vice President

   Mark L. Gilliam           35   Director, Vice President, Secretary and Chief
                                  Financial  Officer
</TABLE>

        Mr. Crowell has served as President and as a Director of Crowell or its
   predecessor since 1969, and Chairman of the Board of Crowell since March
   1988.

        Mr. Crowell, Jr., has served as Vice President and as a Director of
   Crowell since July, 1996.  Mr. Crowell, Jr., has served as President of
   Keystone Homes since April 1995.  For five years prior to his appointment as
   President of Keystone, Mr. Crowell served as a manager with Crowell and Ivey.

        Mr. Gilliam has served as Vice President, Secretary and Chief Financial
   Officer of Crowell since October 1992.  From December 1987 to October 1992,
   Mr. Gilliam practiced public accounting with the firms of Cherry, Bekaert &
   Holland and Cleveland, Anderson & Company for three and two years,
   respectively.

        The term of each officer and director is for one year and expires on the
   third Wednesday in June; however, the term of each officer and director
   continues until his successor is elected and qualified.  There is no
   agreement or understanding between any officer and director and any other
   person pursuant to which any officer or director was selected as an officer
   or director.  Mr. Crowell, Jr., is the son of Mr. Crowell.

   COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

        Section 16(a) of the Securities Exchange Act of 1934, as amended, and
   regulations of the SEC thereunder require Crowell's executive officers and
   directors and persons who own more than 10% of Crowell's Common Stock, as
   well as certain affiliates of such persons, to file initial reports of
   ownership and reports of changes in ownership with the SEC.  Executive
   officers, directors  and persons owning more than 10% of Crowell's Common
   Stock are required by SEC regulation to furnish Crowell with copies of all
   Section 16(a) forms they file.  Based solely on its review of the copies of
   such forms received by it and written representations that no other reports
   were required for those persons, Crowell believes that during the fiscal year
   ended
<PAGE>

                                                                         Page 27

   December 31, 1996, Crowell's executive officers, directors and owners of more
   than 10% of its Common Stock complied with all filing requirements.



                        ITEM 10. EXECUTIVE COMPENSATION

   COMPENSATION SUMMARY

        The following table summarizes by category, for the fiscal years ended
   December 31, 1996, 1995, and 1994, the total compensation paid to the Chief
   Executive Officer of the Company.  No other executive officer of the Company
   received salary and bonus for the fiscal year ended December 31, 1996, in an
   amount in excess of $100,000:
<TABLE>
<CAPTION>

           Name and              Year Ended
      Principal Position        December 31,   Salary
     --------------------      -------------- --------
<S>                             <C>           <C>
     Otis L. Crowell              1996        $120,000
     President and                1995         120,000
     Chief Executive Officer      1994         120,000
</TABLE>

        The directors of the Company are not compensated for services rendered
   in such capacities.



               ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                               OWNERS AND MANAGEMENT

        The following table sets forth, as of February 29, 1997, information
   with respect to the beneficial ownership of shares of Common and Preferred
   Stock of the Company by each person known to be the beneficial owner of more
   than 5% of the outstanding shares of Common and Preferred stock and the
   holdings of directors and executive officers individually and as a group.
   Beneficial ownership as reported in the table has been determined in
   accordance with Securities Exchange Commission ("SEC") regulations and
   includes shares of Common Stock which may be acquired within 60 days upon the
   exercise of outstanding stock options and the conversion of shares of
   Preferred Stock of the Company.  The named persons have sole voting and
   investment power with regard to the shares shown as owned by such persons.
   Pursuant to SEC regulations, all shares not currently outstanding which are
   subject to options or conversion privileges exercisable within 60 days are
   deemed to be outstanding for the purpose of computing the "Percent of Class"
   held by the holder thereof but are not deemed to be outstanding for the
   purpose of computing the "Percent of Class" held by any other shareholder of
   the Company.
<PAGE>

                                                                         Page 28

<TABLE>
<CAPTION>


                                Common Stock       Series A Preferred   Series B Preferred        Combined Voting
                                Beneficially       Stock Beneficially   Stock Beneficially       Power (Common and
                               Owned (Percent        Owned (Percent       Owned (Percent        Preferred Considered
     Name and Address          of Class)/(1)/        of Class)/(2)/        of Class)/(3)/       as a Single Class)/(4)/
---------------------------  ------------------  --------------------  ----------------------  --------------------------
<S>                          <C>                 <C>                   <C>                     <C>
   Florice Clark/(5)/                   121,725                   -                 486,899                         4.4%
    3554 Old Ferry Road                    (4.6%)                                      (100%)
    Martinez, GA  30907

   Otis L. Crowell*/(5)/              1,876,622              87,500                       -                        67.7%
    3750 Evans to Locks Road              (73.8%)             (16.7%)
    Augusta, GA  30907

   Mark L. Gilliam*                       1,250                   -                       -                           +
    3696 El Cordero Road                      +
    Martinez, GA  30907

   Robert M. Hunter/(5)/                 70,000             280,000                       -                         2.5%
    3801 High Hampton Drive                (2.7%)             (53.3%)
    Martinez, GA  30907

   Dennis Stanfield                     161,436                   -                       -                         5.8%
    P.O. Box 4501                          (6.0%)
    Martinez, GA  30907

   Robert M. Hunter, Jr.                 13,125              52,500                       -                           +
    3 Beech Lane                              +               (10.0%)
    Morristown, NJ  07960

   Beverly H. Taylor                     13,125              52,500                       -                           +
    688 Woodhall Abbey Court                  +               (10.0%)
    Martinez, GA  30907

   Ben W. Hunter                         13,125              52,500                       -                           +
    3109 West Road                            +               (10.0%)
    Martinez, GA 30907

   All executive officers             1,877,872                   -                       -                        68.7%
    and directors as a group              (73.4%)
    (3 persons)
</TABLE>


   + Less than 1.0%
   * Executive officer or director

   (1) Based on 2,520,835 shares of Common Stock outstanding on February 29,
       1996.

   (2) Based on 525,000 shares of Series A Preferred Stock outstanding on
       February 29, 1996.  Holders of the Series A Preferred Stock vote on the
       basis of one vote for each four shares of Series A Preferred Stock held
       with holders of Common Stock and holders of Series B Preferred Stock, all
       voting as a single class.  The Series A Preferred Stock is not registered
       under Section 12 of the Securities Exchange Act of 1934, and in providing
<PAGE>

                                                                         Page 29

       ownership information the Company has relied on its stock transfer
       records, which may not correspond to beneficial ownership. To the extent
       that the Company is aware of beneficial ownership that is different from
       ownership as reflected by the stock transfer records, such beneficial
       ownership information has been provided.

   (3) Based on 486,899 shares of Series B Preferred Stock outstanding on
       February 29, 1996.  Holders of the Series A Preferred Stock vote on a one
       vote for each four shares of Series B Preferred Stock held with holders
       of Common Stock and holders of Series A Preferred Stock, all voting as a
       single class.  The Series B Preferred Stock is not registered under
       Section 12 of the Securities Exchange Act of 1934, and in providing
       ownership information the Company has relied on its stock transfer
       records, which may not correspond to beneficial ownership.  To the extent
       that the Company is aware of beneficial ownership that is different from
       ownership as reflected by the stock transfer records, such beneficial
       ownership information has been provided.

   (4) Based on one vote per share for Common Stock and one vote per four shares
       for Series A and B Preferred Stock.

   (5) The shares of Common Stock beneficially owned by the indicated persons
       include shares which may be acquired upon the conversion of outstanding
       shares of Series A or B Preferred Stock, as the case may be, as follows:
       Ms. Clark - 121,725 shares; Mr. Crowell - 21,875 shares; and Mr. Robert
       M. Hunter - 70,000 shares; Mr. Robert M. Hunter, Jr. - 13,125 shares; Ms.
       Beverly H. Taylor - 13,125 shares; and Mr. Ben W. Hunter - 13,125 shares.



            ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        The Company leases its office space from Otis L. Crowell, who serves as
   the President of Crowell.  On June 1, 1989, Crowell entered into three (3)
   operating lease agreements each with a term of twenty (20) years.  The leases
   provide that the Company will pay all property taxes, insurance and
   maintenance plus an annual rental fee.  The total minimum rental commitment
   at December 31, 1996, under these leases is $1,837,200, which is due as
   follows:
<TABLE>
<CAPTION>

          <S>          <C>
          1997         $  127,200
          1998            127,200
          1999            130,800
          2000            133,200
          2001            135,600
          2002-2009     1,183,200
                       ----------
                       $1,837,200
                       ==========
</TABLE>

        The total rental expense for these leases included in the consolidated
   statements of income for each year ended December 31, 1996 and 1995, was
   $122,400 and $120,000, respectively.

        Keystone purchases developed lots for home construction from Home Sites.
   For the years ended December 31, 1996 and 1995, such purchases amounted to
   $79,500 and $292,700, respectively.  Crowell also provides management
   services to Home Sites.  For the years ended December 31, 1996 and 1995,
   management fees earned by the Company amounted to $5,430 and $35,522,
   respectively.
<PAGE>

                                                                         Page 30

        The President of Crowell, Otis L. Crowell, received real estate
   commissions on Home Sites property sold by Crowell in the amount of $34,457
   for the year ended December 31, 1995.



                   ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

   (a) Exhibits

       The exhibits listed below are filed as part of or incorporated by
       reference in this report. Where such filing is made by incorporation by
       reference to a previously filed report or registration statement, such
       report or registration statement is identified in parenthesis. (See the
       Index of Exhibits included with the exhibits filed as part of this
       report.)

       3(i)  Restated Articles of Incorporation of the Company dated October 7,
             1995, (Exhibit 3(i) to the Company's Registration Statement on Form
             S-4, No. 33-70282, as declared effective by the SEC on January 14,
             1995)

       3(ii) Bylaws of the Company, as amended through March 15, 1995 (Exhibit
             3.7 to the Company's Annual Report on Form 10-KSB for the year
             ended December 31, 1992, as amended by Form 8 dated April 14, 1995)

       4.1   Specimen form of the Company's Common Stock Certificate (Exhibit
             4.1 to the Company's Registration Statement on Form S-4, No.
             33-70282, as declared effective by the SEC on January 14, 1995)

       4.2   Appendix A to the Company's Restated Articles of Incorporation
             setting forth the rights, preferences, and limitations of holders
             of the Company's Class A Preferred Stock (included in Exhibit 3(i))

       4.3   Appendix B to the Company's Restated Articles of Incorporation
             setting forth the rights, preferences, and limitations of holders
             of the Company's Class B Preferred Stock (included in Exhibit 3(i))

       10.1  Management Compensation Agreements

            (a) Stock Option Agreement dated February 21, 1989, by and between
                the Company (as successor to The Mid-South Corporation) and J.
                W. Ivey, Jr. (Exhibit 10.2 to the Company's Annual Report on
                Form 10-KSB for the year ended December 31, 1992, as amended by
                Form 8 dated April 14, 1995)

       10.2  Lease Agreement dated June 1, 1989, by and between Otis L. Crowell
             and the Company regarding the premises located at 2848 Washington
             Road, Augusta, Georgia (Exhibit 10.13 to the Company's Annual
             Report on Form 10-KSB for the year ended December 31, 1992, as
             amended by Form 8 dated April 14, 1995)
<PAGE>

                                                                         Page 31


       10.3  Lease Agreement dated June 1, 1989, by and between Otis L. Crowell
             and the Company regarding the premises located at 432 South Belair
             Road, Martinez, Georgia (Exhibit 10.4 to the Company's Annual
             Report on Form 10-KSB for the year ended December 31, 1992, as
             amended by Form 8 dated April 14, 1995)

       10.4  Lease Agreement dated June 1, 1989, by and between Otis L. Crowell
             and the Company regarding the premises located at 454 West
             Martintown Road, North Augusta, South Carolina (Exhibit 10.5 to the
             Company's Annual Report on Form 10-KSB for the year ended December
             31, 1992, as amended by Form 8 dated April 14, 1995)

       10.5  Agreement for Purchase and Sale of Real Property dated October 21,
             1995, between the Company and Sovran Strategic Investments, L.P.
             (Exhibit 10.5 to the Company's Registration Statement on Form S-4,
             No. 33-70282, as declared effective by the SEC on January 14, 1995)

       10.6  Agreement to purchase business dated May 9, 1995, between the
             Company and Meybohm Realty, Inc.  (Exhibit 10.6 to the Company's
             Annual Report on Form 10-KSB for the year ended December 31, 1995.)

       10.7  Post Closing Agreement between the Company and Meybohm Realty, Inc.
             (Exhibit 10.7 to the Company's Annual Report on Form 10-KSB for the
             year ended December 31, 1995.)

       10.8  Sub-Lease Agreement dated May 24, 1995, between the Company and
             Meybohm Realty, Inc. (Exhibit 10.8 to the Company's Annual Report
             on Form 10-KSB for the year ended December 31, 1995.)

       10.9  Sub-Lease Agreement dated June 29, 1995, between the Company and
             Healthmaster Home Health Care, Inc. (Exhibit 10.9 to the Company's
             Annual Report on Form 10-KSB for the year ended December 31, 1995.)

       10.10 Agreement to purchase business dated December 16, 1996, between the
             Company and Chin U. Yu (filed herewith)

       11    Computation of earnings per share

       21    Subsidiaries

       23.1  Consent of Cherry, Bekaert & Holland, L. L. P., Independent
             Certified Public Accountants

       27    Financial Data Schedule


   b)  Reports on Form 8-K.

      The Company filed one report on Form 8-K during the Quarter ended December
      31, 1996.

                  Date of Report              Item Reported
                  --------------              -------------
                December 16, 1996     Sale of United Data Systems, Inc.

   No financial statements were filed with this report.
<PAGE>

                                                                         Page 32

                                   SIGNATURES


        In accordance with Section 13 or 15 (d) of the Exchange Act, the
   registrant caused this report to be signed on its behalf by the undersigned,
   thereunto duly authorized.

                                            CROWELL & CO., INC.



   DATE March 28, 1997                     /s/  Otis L. Crowell
        --------------                          ---------------
                                                Otis L. Crowell, President
                                                and Chairman of the Board


      In accordance with the Exchange Act, this report has been signed below by
   the following persons on behalf of the registrant and in the capacities and
   on the dates indicated.



   DATE March 28, 1997                     /s/  Otis L. Crowell
        --------------                          ---------------
                                                Otis L. Crowell, President
                                                and Chairman of the Board


   DATE March 28, 1997                     /s/  Mark L. Gilliam
        --------------                          ---------------
                                                Mark L. Gilliam, Director, Vice
                                                President, Secretary and Chief
                                                Financial Officer


   DATE March 28, 1997                     /s/  O. Lamar Crowell, Jr.
        --------------                          ---------------------
                                                O. Lamar Crowell, Jr., Director
<PAGE>

                                                                         Page 33

                               INDEX OF EXHIBITS


   10.10  Agreement to purchase business dated December 16, 1996, between the
          Company and Chin U. Yu.

      11  Computation of earnings per share

      21  Subsidiaries

    23.1  Consent of Cherry, Bekaert & Holland, L. L. P., Independent Certified
          Public Accountants

      27  Financial Data Schedule