<PAGE>

                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549


                                  FORM 10-QSB


(Mark One)
[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
For the quarterly period ended  September 30, 2001

[_}  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT

For the transition period from ________________ to ________________

                         Commission file number 04863

                    Southern Investors Service Company, Inc.
                    ----------------------------------------
       (Exact name of small business issuer as specified in its charter)

             Delaware                                 74-1223691
-------------------------------------   ------------------------------------
  (State or other jurisdiction of       (I.R.S. Employer Identification No.)
   incorporation or organization)

2727 North Loop West, Suite 200, Houston, Texas            77008
-----------------------------------------------        ------------
   (Address of principal executive offices)              (Zip Code)

                                (713) 869-7800
                           Issuer's telephone number


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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes  [X]   No
                                                               ------   ------
               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.  Yes         No
                                                   ------     ------

                     APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 3,168,929 shares of Common Stock
$1.00 Par Value, per share, as of November 12, 2001.

Transitional Small Business Disclosure Format (Check One):
 Yes       No  [X]
    ------   ------
<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

  The Consolidated Financial Statements included herein have been prepared by
Southern Investors Service Company, Inc., (the Company), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading.  It is suggested that these
Consolidated Financial Statements be read in conjunction with the Consolidated
Financial Statements and notes thereto included in the Company's latest annual
report on Form 10-KSB.  In the opinion of the management of the Company, all
adjustments necessary to present a fair statement of the results for the interim
periods have been made.

<PAGE>

           SOUTHERN INVESTORS SERVICE COMPANY, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2001
                             (Thousands of Dollars)
                                  (Unaudited)

<TABLE>
<S>                                                        <C>

ASSETS

CASH                                                       $  2,309
EQUITY IN REAL ESTATE JOINT VENTURES, NET                       286
NOTES RECEIVABLE AND OTHER ASSETS                                19
                                                           --------
                                                           $  2,614
                                                           ========

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES:
 Notes payable                                             $  4,897
 Accounts payable and accrued expenses                        2,778
                                                           --------
    Total liabilities                                         7,675
                                                           --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
  Preferred stock, $1 par, 1,000,000
    shares authorized, none issued                              ---
  Common stock, $1 par, 10,000,000 shares authorized,
    3,281,331 shares issued                                   3,281
  Additional paid-in capital                                  3,031
  Retained deficit                                          (11,247)
 Less treasury stock, 112,402 shares, at cost                  (126)
                                                           --------
  Total stockholders' deficit                                (5,061)
                                                           --------
                                                           $  2,614
                                                           ========
</TABLE>

        The accompanying notes are an integral part of this statement.
<PAGE>

           SOUTHERN INVESTORS SERVICE COMPANY, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF (LOSS) INCOME
                            (Thousands of Dollars)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                          Three Months Ended          Nine Months Ended
                                            September  30,              September  30,
                                       ----------------------        --------------------
                                         2001            2000          2001          2000
                                       ------          ------        ------        ------
<S>                                    <C>             <C>           <C>           <C>
RESORT REVENUES                        $  ---          $  ---        $  ---        $1,039

OTHER REVENUES                            ---              24            30            34
                                       ------          ------        ------        ------
                                          ---              24            30         1,073
                                       ------          ------        ------        ------

RESORT OPERATING EXPENSES                 ---             ---           ---           967

OTHER OPERATING EXPENSES                   26              23           122           130
                                       ------          ------        ------        ------
                                           26              23           122         1,097
                                       ------          ------        ------        ------

(LOSS) INCOME FROM OPERATIONS             (26)              1           (92)          (24)

INTEREST EXPENSE                          (75)            (85)         (242)         (279)

INTEREST INCOME                            18              32            75            62

GAIN ON SALE OF RESORT
  OPERATIONS                              ---             ---           ---           755

NET (LOSS) INCOME                      $  (83)         $  (52)       $ (259)       $  514
                                       ======          ======        ======        ======

(LOSS) INCOME
 PER COMMON SHARE                      $ (.03)         $ (.02)       $ (.08)       $  .16
                                       ======          ======        ======        ======

AVERAGE NUMBER OF
 SHARES OUTSTANDING                   3,168,929      3,168,929     3,168,929    3,168,929
                                      =========      =========     =========    =========
</TABLE>

       The accompanying notes are an integral part of these statements.
<PAGE>

           SOUTHERN INVESTORS SERVICE COMPANY, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Thousands of Dollars)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                 Nine Months
                                                             Ended September 30,
                                                             -------------------
                                                               2001        2000
                                                             --------    -------
<S>                                                          <C>         <C>
Cash flows from operating activities:
 Net (loss) income                                             $ (259)   $  514
 Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
    Gain from sale of resort development                          ---      (755)
    Depreciation and amortization                                 ---        66
    Recognition of deferred profit                                (28)      ---
 Change in assets and liabilities:
   Resort development, net                                        ---      (302)
   Decrease in accounts receivable and other assets               113       334
   Increase (decrease) in accounts payable, accrued
    expenses and other                                            187      (124)
                                                               ------    ------
      Net cash provided by (used in) operating activities          13      (267)
                                                               ------    ------
Cash flows from investing activities:
  Proceeds from sale of resort development, net                   ---     3,155
                                                               ------    ------
Cash flows from financing activities:
 Payments on notes payable, net                                   (38)     (650)
                                                               ------    ------

Net (decrease) increase in cash                                   (25)    2,238

Beginning cash                                                  2,334        69
                                                               ------    ------

Ending cash                                                    $2,309    $2,307
                                                               ======    ======
Interest paid in cash                                          $    8    $  243
                                                               ======    ======
</TABLE>

       The accompanying notes are an integral part of these statements.
<PAGE>

           SOUTHERN INVESTORS SERVICE COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 (Unaudited)

(1)  HISTORICAL AND CURRENT BUSINESS CONDITIONS

     Southern Investors Service Company, Inc., (the Company) was incorporated
under the laws of the State of Delaware in 1972.  Prior to 1990, the Company was
engaged in the ownership and development of real estate primarily in the
Houston, Texas area.  The operations of the Company were significantly reduced
during 1990, as a result of various debt settlements with lenders and other
creditors.  These settlements resulted in the transfer of substantially all of
the Company's holdings to its creditors.  The Company's operations since 1990
have been primarily limited to attempts to settle or restructure the Company's
remaining liabilities.  During 1998 and prior years, the Company's operations
included the management of residential developments and two office buildings
owned by others.  During 1998, the majority of these residential projects were
sold by the owners and therefore the Company no longer is managing these
projects.  Effective January 1, 1999, the Company ceased all management activity
and all employees related to this activity were terminated.  Until May of 2000,
the Company's primary activity had been the operation of a resort property in
west Texas known as Lajitas located in the Big Bend region in Texas (Lajitas).

Although there were sporadic efforts to sell Lajitas prior to 1999, only a few
potential buyers ever seriously examined the property or conducted any due
diligence.  With debt of more than $4,780,000 that had matured and was currently
due, the Company determined in late 1999 that the sale of Lajitas, its sole
remaining operating asset, would facilitate the Company's ability to settle its
existing liabilities most favorably.  The Company's decision to sell Lajitas at
that time was also influenced by its perception that a strong marketplace
favored sellers of specialty properties.  After considering the efficacy of the
Company's past efforts and reviewing sales of other specialty properties, the
Company determined that the best alternative would be to sell the property
through an auction process.  As a result, the Company retained the National
Auction Group, Inc., (National Auction) to conduct an auction of Lajitas.  The
auction was conducted on February 24, 2000, and the sale of the Lajitas property
closed on May 2, 2000.  During 2000, the Company realized a gain on the sale of
Lajitas of $755,000 and received net cash proceeds of approximately $2.4
million, after the payment of a mortgage note related to the property sold.

CONTINUED OPERATIONS

     The Company will attempt to use the net proceeds from the sale of Lajitas
to settle or restructure existing debt, of which approximately $4,825,000 has
matured and is currently due, and to realize the carrying amount of its
remaining noncash assets.  However, there can be no assurance the Company will
be able to settle or restructure existing debt and realize the carrying amount
of its remaining noncash assets.  In addition, the Company's operating income is
not sufficient to meet its current expenses, including interest.  Management is
currently reviewing possible options to settle
<PAGE>

the Company's existing liabilities with its available resources.  These options
include, but are not limited to, continued negotiations with various creditors
to settle their accounts for cash payments at substantially less than the amount
due, the settlement of liabilities through the transfer of assets to creditors
in satisfaction of their claims and a possible plan under the U.S. Bankruptcy
Code or possible liquidation of the Company.  The consolidated financial
statements do not include any adjustments, which could be significant, relating
to the recoverability of asset carrying amounts or the amount and classification
of liabilities that might be necessary if the Company is unable to continue as a
going concern.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The accompanying unaudited consolidated financial statements have been
prepared in accordance with the significant accounting policies included in the
notes to the Company's latest annual report on Form 10-KSB.  These consolidated
financial statements should be read in conjunction with those notes.

(3)  RECENTLY ISSUED ACCOUNTING STANDARDS

     Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets", was issued August 2001.  SFAS
No. 144 addresses accounting and reporting for the impairment or disposal of
long-lived assets by requiring that one accounting model be used for assets to
be disposed of by sale, whether previously held and used or newly acquired, and
by broadening the presentation of discontinued operations to include more
disposal transactions.  The statement is effective for fiscal years beginning
after December 15, 2001.  The Company will adopt this pronouncement in the first
quarter of 2002 and does not expect adoption to have a material impact on the
Company's results of operations or financial position.

Item 2.   Management's Discussion and Analysis or Plan of Operation.

RESULTS OF OPERATIONS

     The net (loss) for the first nine months of 2001 was ($259,000) or ($.08)
per share compared to a net income of $514,000 or $.16 per share during the
first nine months of 2000.

There were no resort revenues and expenses during the first nine months of 2001,
due to the sale of the Lajitas property during May 2000.  The sale resulted in a
gain of $755,000.

The increase in interest income is due to the investment of the cash proceeds
from the sale of Lajitas.

The decrease in interest expense is due primarily to the repayment of certain
notes payable in connection with the sale of Lajitas during 2000.  In addition,
the Company has made payments of $38,000 during 2001.
<PAGE>

OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES AND UNCERTAINTIES

     The Company will attempt to use the net proceeds from the sale of Lajitas
to settle or restructure existing debt, of which approximately $4,825,000 has
matured and is currently due, and to realize the carrying amount of its
remaining assets.  However, there can be no assurance the Company will be able
to settle or restructure existing debt and realize the carrying amount of its
remaining noncash assets.  In addition, the Company's operating income is not
sufficient to meet its current expenses, including interest.  Management is
currently reviewing possible options to settle the Company's existing
liabilities with its available resources.  These options include, but are not
limited to, continued negotiations with various creditors to settle their
accounts for cash payments at substantially less than the amount due, the
settlement of liabilities through the transfer of assets to creditors in
satisfaction of their claims and a possible plan under the U.S. Bankruptcy Code
or possible liquidation of the Company.  The consolidated financial statements
do not include any adjustments, which could be significant, relating to the
recoverability of asset carrying amounts or the amount and classification of
liabilities that might be necessary if the Company is unable to continue as a
going concern.

FORWARD LOOKING STATEMENTS

     This report contains "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.  All statements other than
statements of historical fact included in this section and elsewhere in this
report are forward looking statements and, although the Company believes that
the expectations reflected in such forward looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
The Company's business and financial results are subject to various risks and
uncertainties, including the Company's ability to settle or restructure its
remaining debt and other obligations and to generate positive cash flow to cover
its operating expenses, that may cause actual results to differ materially from
the Company's expectations.  The Company does not intend to provide updated
information other than as otherwise required by applicable law.  All subsequent
written and oral forward looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
cautionary statements contained in this paragraph and elsewhere in this report.
<PAGE>

                          PART II - OTHER INFORMATION


ITEM 1.   Legal Proceedings

None

ITEM 2.   Changes in Securities

None

ITEM 3.   Default upon Senior Securities

None

ITEM 4.   Submission of Matters to a Vote of Security Holders

None

ITEM 5.   Other Information

     On October 17, 2001, John D. Weil resigned from the Company's Board of
Directors (the "Board") as well as the Board's Audit Committee and its
Compensation Committee.  Eric M. Schumann, Senior Vice President - Finance, of
the Company, has been appointed to fill the vacancies on the Board, the Audit
Committee and the Compensation Committee resulting from Mr. Weil's resignation.

ITEM 6.   Exhibits and Reports on Form 8-K

None
<PAGE>

                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                         SOUTHERN INVESTORS SERVICE COMPANY, INC.



                           /s/ Walter M. Mischer, Jr.
                         -----------------------------------------
                         WALTER M. MISCHER, JR.
                         President - Principal Executive Officer
                         Date:  November 12, 2001





                           /s/ Eric Schumann
                         -------------------------------------------
                         ERIC SCHUMANN
                         Senior Vice President - Finance
                         Principal Financial and Accounting Officer
                         Date:  November 12, 2001