<PAGE>

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

                                   FORM 10-Q

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

     For the quarterly period ended          September 30, 1999
                                    --------------------------------------------

                                       OR

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

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

                        Commission File Number 000-23465
                                               ---------

                          Coddle Creek Financial Corp.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

             North Carolina                                56-2045998
             --------------                                ----------
     (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                    Identification No.)


                   347 North Main Street/Post Office Box 117
                       Mooresville, North Carolina 28115
                       ---------------------------------
              (Address of principal executive offices) (Zip code)

                                 (704) 664-4888
                                 --------------
                          (Issuer's telephone  number)

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

Indicate by check X whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.   Yes X      No
                        -----    -----

As of November 1, 1999 there were issued and outstanding 698,756 shares of the
Registrant's common stock, no par value.
<PAGE>

                  CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

                                     INDEX


<TABLE>
<CAPTION>

PART I.    FINANCIAL INFORMATION                                                          Page
                                                                                          ----
<S>                                                                                       <C>
  Item 1.    Financial Statements

  Condensed Consolidated Statements of Financial Condition as of
       September 30, 1999 (Unaudited) and December 31, 1998                                    1

  Condensed Consolidated Statements of Income and Comprehensive Income for
       the Three Months ended September 30, 1999 and 1998 (Unaudited)                          2

  Condensed Consolidated Statements of Income and Comprehensive Income for
       the Nine Months ended September 30, 1999 and 1998 (Unaudited)                           3

  Condensed Consolidated Statements of Cash Flows for the Nine Months
       ended September 30, 1999 and 1998 (Unaudited)                                           4

  Notes to Condensed Consolidated Financial Statements (Unaudited)                         5 - 7

  Item 2.    Management's Discussion and Analysis of Financial Condition and
                        Results of Operations                                             8 - 11

  Item 3.     Quantitative and Qualitative Disclosures about Market Risk                      11

PART II.    OTHER INFORMATION

  Item 1.     Legal Proceedings                                                               12

  Item 2.     Changes in Securities and Use of Proceeds                                       12

  Item 3.     Defaults Upon Senior Securities                                                 12

  Item 4.     Submission of Matters to a Vote of Security Holders                             12

  Item 5.     Other Information                                                               12

  Item 6.     Exhibits and Reports on Form 8-K                                                12

  Signatures                                                                             13 - 14
</TABLE>

This Form 10-Q contains forward-looking statements consisting of estimates with
respect to the financial condition, results of operations and other business of
Coddle Creek Financial Corp. that are subject to various factors which could
cause actual results to differ materially from those estimates.  Factors which
could influence the estimates include changes in the national, regional and
local market conditions, legislative and regulatory conditions, and an adverse
interest rate environment.
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY


CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998

<TABLE>
<CAPTION>

                                                                  September 30,     December 31,
ASSETS                                                                1999              1998
-------------------------------------------------------------------------------------------------
                                                                   (Unaudited)          (Note)
<S>                                                              <C>              <C>
Cash and cash equivalents                                        $  10,108,000    $   8,245,000
Certificates of deposit                                                100,000          100,000
Securities available for sale                                        3,593,000       10,244,000
Securities held to maturity                                          1,282,000        1,381,000
Federal Home Loan Bank stock                                         1,060,000          964,000
Loans receivable, net                                              121,580,000      110,578,000
Office properties and equipment, net                                 1,114,000          999,000
Accrued interest receivable                                            797,000          908,000
Cash value of life insurance                                         1,032,000        1,075,000
Deferred income taxes                                                1,277,000        1,193,000
Prepaid expenses and other assets                                      465,000          124,000
                                                                 ------------------------------
       Total assets                                              $ 142,408,000    $ 135,811,000
                                                                 ==============================
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------------------------------------------------------------------
<S>                                                              <C>              <C>
Liabilities:
 Deposits                                                        $  92,534,000    $  87,569,000
 Note payable                                                       12,000,000             --
 Advances from borrowers for taxes and insurance                       261,000          110,000
 Accounts payable and other liabilities                                995,000          522,000
 Deferred compensation                                               2,522,000        2,491,000
                                                                 ------------------------------
       Total liabilities                                           108,312,000       90,692,000
                                                                 ------------------------------
Stockholders' Equity:
 Preferred stock, authorized 5,000,000 shares; none issued                --               --
 Common stock, no par value, authorized 20,000,000 shares;
   September 30, 1999 issued 698,756 shares, December 31, 1998
   issued 674,475 shares                                                  --               --
 Additional paid-in capital                                         23,098,000       32,461,000
 Retained earnings, substantially restricted                        16,699,000       16,633,000
 Unearned ESOP shares                                               (4,021,000)      (4,021,000)
 Deferred management recognition plan                                 (855,000)            --
 Unearned ESOP compensation                                           (819,000)            --
 Accumulated other comprehensive income (loss)                          (6,000)          46,000
                                                                 ------------------------------
       Total stockholders' equity                                   34,096,000       45,119,000
                                                                 ------------------------------
       Total liabilities and stockholders' equity                $ 142,408,000    $ 135,811,000
                                                                 ==============================

</TABLE>

NOTE:  The Condensed Consolidated Statement of Financial Condition as of
       December 31, 1998 has been taken from the audited financial statements
       at that date.

See Notes to Condensed Consolidated Financial Statements.

                                       1
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
 COMPREHENSIVE INCOME
For the Three Months Ended September 30, 1999 and 1998

<TABLE>
<CAPTION>

                                                                        1999           1998
------------------------------------------------------------------------------------------------
                                                                            (Unaudited)
<S>                                                                 <C>           <C>
Interest income:
 Loans                                                              $  2,384,000  $  2,317,000
 Investment securities                                                    81,000       270,000
 Other                                                                   130,000        38,000
                                                                    --------------------------
                                                                       2,595,000     2,625,000
Interest expense:
 Deposits                                                              1,008,000     1,010,000
                                                                    --------------------------
       Net interest income                                             1,587,000     1,615,000

Provision for loan losses                                                   --          80,000
                                                                    --------------------------
       Net interest income after provision for loan losses             1,587,000     1,535,000
                                                                    --------------------------
Noninterest income                                                        59,000        43,000
                                                                    --------------------------
Noninterest expenses:
 Compensation and employee benefits                                      966,000       542,000
 Net occupancy                                                            (9,000)       74,000
 Deposit insurance premiums                                               14,000        14,000
 Data processing                                                          46,000        41,000
 Other                                                                   162,000       197,000
                                                                    --------------------------
                                                                       1,179,000       868,000
                                                                    --------------------------
       Income before income taxes                                        467,000       710,000
Income taxes                                                             130,000       217,000
                                                                    --------------------------
       Net income                                                        337,000       493,000
Other comprehensive income (loss), unrealized holding
 gains (losses) arising during the period, net of tax                     (3,000)       54,000
                                                                    --------------------------
       Comprehensive income                                         $    334,000  $    547,000
                                                                    ==========================

Basic earnings per share                                            $       0.53  $       0.79
                                                                    ==========================
Diluted earnings per share                                          $       0.53  $       0.79
                                                                    ==========================
Regular dividends per share                                         $       0.63  $       0.25
                                                                    ==========================
Return of capital dividend per share                                $      17.18  $        N/A
                                                                    ==========================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.

                                       2
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
 COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 1999 and 1998

<TABLE>
<CAPTION>

                                                                        1999           1998
------------------------------------------------------------------------------------------------
                                                                            (Unaudited)
<S>                                                                 <C>          <C>
Interest income:
 Loans                                                              $  6,929,000 $  6,680,000
 Investment securities                                                   313,000      699,000
 Other                                                                   320,000      406,000
                                                                    -------------------------
                                                                       7,562,000    7,785,000
Interest expense:
 Deposits                                                              2,962,000    3,091,000
                                                                    -------------------------
       Net interest income                                             4,600,000    4,694,000

Provision for loan losses                                                   --        200,000
                                                                    -------------------------
       Net interest income after provision for loan losses             4,600,000    4,494,000
                                                                    -------------------------
Noninterest income                                                       164,000      137,000
                                                                    -------------------------
Noninterest expenses:
 Compensation and employee benefits                                    2,571,000    1,546,000
 Net occupancy                                                           106,000      181,000
 Deposit insurance premiums                                               42,000       46,000
 Data processing                                                         154,000      135,000
 Other                                                                   467,000      441,000
                                                                    -------------------------
                                                                       3,340,000    2,349,000
                                                                    -------------------------
       Income before income taxes                                      1,424,000    2,282,000
Income taxes                                                             445,000      829,000
                                                                    -------------------------
       Net income                                                        979,000    1,453,000
Other comprehensive income (loss), unrealized holding
 gains (losses) arising during the period, net of tax                    (52,000)      42,000
                                                                    -------------------------
       Comprehensive income                                          $   927,000 $  1,495,000
                                                                    =========================

Basic earnings per share                                             $      1.54  $      2.34
                                                                    =========================
Diluted earnings per share                                           $      1.54  $      2.34
                                                                    =========================
Regular dividends per share                                          $      1.41  $      0.75
                                                                    =========================
Return of capital dividend per share                                 $     17.18  $       N/A
                                                                    =========================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       3
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

<TABLE>
<CAPTION>


                                                                    1999             1998
----------------------------------------------------------------------------------------------------
                                                                         (Unaudited)
<S>                                                             <C>             <C>
Cash Flows From Operating Activities
 Net income                                                     $    979,000    $  1,453,000
 Adjustments to reconcile net income to cash provided by
   operating activities:
   Provision for loan losses                                            --           200,000
   Provision for depreciation                                         69,000          48,000
   Provision for deferred income taxes                               (60,000)       (145,000)
   Amortization and compensation expense for the
    deferred management recognition plan                           1,018,000            --
   ESOP compensation                                                 (50,000)           --
   Changes in assets and liabilities:
    (Increase) decrease in:
          Interest receivable                                        111,000        (168,000)
          Prepaid expenses and other assets                         (341,000)       (141,000)
    Increase (decrease)  in:
          Accounts payable and other liabilities                     220,000         177,000
          Deferred compensation                                       31,000         145,000
                                                                ----------------------------
       Net cash provided by operating activities                   1,977,000       1,569,000
                                                                ----------------------------
Cash Flows From Investing Activities
 Net (increase) decrease in investments                            6,621,000     (12,940,000)
 Net increase in loans receivable                                (11,002,000)     (6,237,000)

 Proceeds from sale of real estate owned                                --            81,000
 Purchases of office properties and equipment                       (184,000)       (102,000)
                                                                ----------------------------
       Net cash used in investing activities                      (4,565,000)    (19,198,000)
                                                                ----------------------------
Cash Flows From Financing Activities
 Net increase (decrease) in deposits                               4,965,000     (13,737,000)
 Borrowings on note payable                                       12,000,000            --
 Loan to ESOP for purchase of stock, net of principal payment           --        (4,216,000)
 Increase in advances from borrowers for taxes and insurance         151,000         168,000
 Return of capital dividend paid                                 (12,005,000)           --
 Cash dividends paid                                                (660,000)       (310,000)
                                                                ----------------------------
       Net cash provided by (used in) financing activities         4,451,000     (18,095,000)
                                                                ----------------------------
       Net increase (decrease) in cash and cash equivalents        1,863,000     (35,724,000)
Cash and cash equivalents:
 Beginning                                                         8,245,000      37,071,000
                                                                ----------------------------
 Ending                                                         $ 10,108,000    $  1,347,000
                                                                ============================

Supplemental Disclosure of Cash Flow Information
 Cash payments for:
   Interest                                                     $  2,982,000    $  3,229,000
   Income taxes                                                      774,000       1,038,000
 Change in accrued dividends                                         253,000         156,000
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

                                       4
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

1.    Nature of Business

On December 30, 1997, pursuant to a Plan of Conversion which was approved by it
members and regulators, Mooresville Savings Bank, Inc., SSB (the "Bank" or
"Mooresville Savings Bank") converted from a North Carolina-chartered mutual
savings bank to a North Carolina-chartered stock savings bank (the "Conversion")
and became a wholly-owned subsidiary of Coddle Creek Financial Corp. (the
"Company").  Coddle Creek was formed to acquire all of the common stock of the
Bank upon its conversion to stock form.  The Company has no operations and
conducts no business of its own other than owning Mooresville Savings, investing
its portion of the net proceeds received in the Conversion, and lending funds to
the Employee Stock Ownership Plan (the "ESOP"), which was established in
connection with the Conversion.  The closing of the offering occurred on
December 30, 1997 and resulted in the issuance of 674,475 shares of common stock
at a price of $50.00 per share, for proceeds of $32,494,000 (net of $1,230,000
in conversion costs).  The Company transferred $14,134,000 of the net proceeds
to Mooresville Savings for the purchase of all of the common stock of the Bank.
The Company then loaned the ESOP trust $4,216,000 to purchase 53,958 shares of
common stock in the open market.

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

Concurrent with the Conversion, and pursuant to North Carolina regulations, the
Bank established a liquidation account in an amount equal to its net worth as
reflected in its latest statement of financial condition contained in the
prospectus used in connection with the Company's initial public offering.  The
liquidation account will be maintained for the benefit of eligible deposit
account holders who continue to maintain their deposit accounts in the Bank
after conversion.  Only in the event of a complete liquidation of the Company
will each deposit account holder be entitled to receive a liquidation
distribution from the liquidation account in the amount of the then current
adjusted subaccount balance for deposit accounts then held before any
liquidation distribution may be made with respect to common stock.  Dividends
paid by the Bank subsequent to the Conversion cannot be paid from this
liquidation account.

In connection with the Conversion, the Bank has agreed with the FDIC that,
within the first three years after completion of the Conversion, neither the
Company nor the Bank will pay any taxable dividend or make any taxable
distribution in excess of their current and retained earnings.  The Company and
the Bank have agreed to notify the FDIC before making a return of capital during
the first three years following the Conversion.

The Bank may not declare or pay a cash dividend on or repurchase any of its
common stock if its net worth would thereby be reduced below either the
aggregate amount then required for the liquidation account or the minimum
regulatory capital requirements imposed by federal and state regulations.  For a
period of five years after its Conversion, the Bank must obtain written approval
from the Administrator of the North Carolina Savings Institutions Division
before declaring or paying a cash dividend on its common stock in an amount  in
excess of one-half of the greater of (i) the Bank's net income for the most
recent fiscal year end, or (ii) the average of the Bank's net income after
dividends for the most recent year end and  not more than two of the immediately
preceding fiscal year ends.

                                       5
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

Note 1.  Nature of Business (Continued)

On August 18, 1999, the Board of Directors of Coddle Creek Financial Corp.
declared a special return of capital dividend of $17.18 per share for
stockholders of record as of August 30, 1999 and payable on September 8, 1999.
The ESOP has purchased an additional 21,240 shares of stock in the open market
with its portion of the special dividend.

2.    Basis of Presentation

The accompanying unaudited financial statements (except for the statement of
financial condition at December 31, 1998, which is from audited financial
statements at that date) have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Regulation S-X.  Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements.  In the opinion of management, all
adjustments (none of which were other than normal recurring accruals, except for
the implementation of the Management Recognition Plan discussed in Note 5)
necessary for a fair presentation of the financial position and results of
operations for the periods presented have been included.  The results of
operations for the three and nine month periods ended September 30, 1999 are not
necessarily indicative of the results of operations that may be expected for the
year ended December 31, 1999.  The accounting policies followed are as set forth
in Note 1 of the Notes to Consolidated Financial Statements in the 1998 annual
report of the Company.

3.    Earnings Per Share

Earnings per share has been calculated in accordance with Financial Accounting
Standards Board Statement No. 128, Earnings Per Share, and Statement of Position
93-6, Employers' Accounting for Employee Stock Ownership Plans.  For purposes of
this computation, the number of shares of common stock purchased by the Bank's
ESOP which have not been allocated to participant accounts are not assumed to be
outstanding.

The following are reconciliations of the amounts used in the per share
calculations for 1999 and 1998:


<TABLE>
<CAPTION>
                                                     For the Nine Months Ended
                                                    September 30, 1999 and 1998
                                             ----------------------------------------
                                                  Income         Shares     Per Share
                                                (Numerator)   (Denominator)   Amount
                                             ----------------------------------------
<S>                                          <C>               <C>         <C>
Basic EPS and diluted EPS for 1999           $  979,000        634,267     $   1.54
Basic EPS and diluted EPS for 1998            1,453,000        621,509         2.34
</TABLE>

<TABLE>
<CAPTION>
                                                  For the Three Months Ended
                                                  September 30, 1999 and 1998
                                           ---------------------------------------
                                                Income        Shares     Per Share
                                             (Numerator)   (Denominator)   Amount
                                           ---------------------------------------
<S>                                           <C>            <C>          <C>
Basic EPS and diluted EPS for 1999            $337,000       635,642      $   0.53
Basic EPS and diluted EPS for 1998             493,000       622,008          0.79
</TABLE>

                                       6
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

4.    Dividends Declared

On September 14, 1999, the Board of Directors of Coddle Creek Financial Corp.
declared a dividend of $.63 per share for stockholders of record as of September
30, 1999 and payable on October 13, 1999.  The dividends declared were accrued
and reported as other liabilities in the September 30, 1999 condensed
consolidated statement of financial condition.

5.    Stock Option and Management Recognition Plans

The Company's stockholders approved the Company's Stock Option Plan and the
Bank's Management Recognition Plan (the "MRP") on January 26, 1999.  The Stock
Option Plan reserves for issuance up to 67,447 stock options to officers,
directors, and employees at the time of the adoption either in the form of
incentive stock options or non-incentive stock options.  The exercise price of
the stock options may not be less than the fair value of the Company's common
stock at date of grant, as adjusted for the stock splits and dividends affecting
market value.  As permitted under generally accepted accounting principles,
grants under the plan will be accounted for following the provisions of APB
Opinion No. 25 and its related interpretations.  No options have yet been
granted.

The MRP reserved for issuance 26,979 shares of common stock to officers,
directors, and employees at the time of the adoption.  The Bank issued 24,281
shares from authorized but unissued common stock to fund the MRP on January 26,
1999.  The restricted common stock under the MRP vests 25% at the date of grant
and 25% annually beginning on the one year anniversary of the date of grant.
The Company recorded compensation expense in the amount of $295,000 during the
third quarter of 1999 for the special return of capital dividend that was paid
to unvested MRP shares.

6.    Note Payable

In September of 1999, the Company borrowed $12,000,000 from another bank to fund
the special return of capital dividend.  The note requires interest only monthly
payments at the prime rate less 1.25% with the principal balance due on February
28, 2001.  The note is collateralized by all of the Bank's stock, which is owned
by the Company.

                                       7
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

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

Comparison of Financial Condition at September 30, 1999 and December 31, 1998:

At September 30, 1999 and December 31, 1998 total assets amounted to $142.4
million and $135.8 million, respectively.  Loans receivable, net, increased from
$110.6 million at December 31, 1998 to $121.6 million at September 30, 1999, an
$11.0 million increase.  Savings deposits increased $5.0 million from $87.6
million at December 31, 1998 to $92.5 million at September 30, 1999.  Investment
securities decreased $6.7 million from $12.7 million at December 31, 1998 to
$6.0 million at September 30, 1999 due to the maturity of securities during the
first nine months of 1999.  The Company borrowed $12.0 million from another bank
during September of 1999 to fund the special return of capital dividend.
Stockholders' equity decreased by $11.0 million for the nine months ended
September 30, 1999.  This decrease is due to $12.0 million that was paid out as
a special return of capital dividend and $913,000 in regular dividends declared,
offset by $1.0 million that was recorded to additional paid-in capital that is
associated with the implementation and amortization of the MRP and net income of
$979,000.

The Bank's level of nonperforming loans, defined as loans past due 90 days or
more, has historically been and continues to be low as a percentage of total
loans outstanding.  The Bank had $925,000 of loans outstanding which were
delinquent more than 90 days at September 30, 1999, compared to $1.4 million at
December 31, 1998.  Based on management's analysis of the adequacy of the
allowance for loan losses, the composition of the loan portfolio, the credit
risk inherent in the portfolio and historical loan loss experience, the
allowance for loan losses was increased by $4,000, due to a recovery of a
previously charged-off loan, to $899,000 at September 30, 1999 from $895,000 at
December 31, 1998.  Management believes the allowance to be adequate to absorb
any future losses in the portfolio.

At September 30, 1999, the Company's capital amounted to $34.1 million, which as
a percentage of total consolidated assets was 23.9%, and was considerably in
excess of the regulatory capital requirements at such date.

Comparison of Operating Results for the Three and Nine Months Ended September
30, 1999 and 1998:

General.  Net income for the three and nine months ended September 30, 1999 was
$337,000 and $979,000 respectively or $156,000 and $474,000 less than the
$493,000 and $1.5 million earned during the same periods in 1998.  The decrease
in earnings was primarily attributable to the implementation of the MRP which
resulted in additional expense of $1.0 million during the first nine months of
1999.

Interest income.  Interest income remained stable at $2.6 million for the three
months ended September 30, 1998 and 1999.  Interest income decreased by $223,000
from $7.8 million for the nine months ended September 30, 1998 to $7.6 million
for the nine months ended September 30, 1999.  The decrease is primarily due to
a decrease in the average balance of investment securities and interest-earning
deposits, offset by a higher average balance of loans receivable, during the
first nine months of 1999 as compared to 1998.  Approximately 97% of the Bank's
assets were interest-earning at September 30, 1999, and approximately 88% of
such interest-earning assets were held in the form of loans receivable.

                                       8
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

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

Interest Expense.   Interest expense remained stable at $1.0 million for the
three months ended September 30, 1999 and 1998.  Interest expense decreased by
$129,000 from $3.1 million during the nine months ended September 30, 1998 to
$3.0 million for the nine months ended September 30, 1999.  The decrease is due
to a lower average yield on interest-bearing liabilities outstanding during the
first nine months of 1999 in comparison to the same period a year earlier.

Net interest income.  Net interest income remained stable at $1.6 million for
the three months ended September 30, 1999 and 1998.  Net interest income
decreased by $94,000 from $4.7 million for the nine months ended September 30,
1998 to $4.6 million for the nine months ended September 30, 1999.  The decrease
in the nine months ended September 30, 1999 is due to the maturity of $2.0
million of investment securities during the first quarter of 1999.

Provision for loan losses.  The Bank added $-0- and $120,000 in loan loss
provisions during the nine months ended September 30, 1999 and 1998,
respectively.  Provisions, which are charged to operations, and the resulting
loan loss allowances, are amounts the Bank's management believes will be
adequate to absorb losses on existing loans that may become uncollectible. Loans
are charged off against the allowance when management believes that
collectibility is unlikely.  The evaluation to increase or decrease the
provision and resulting allowances is based both on prior loan loss experience
and other factors, such as changes in the nature and volume of the loan
portfolio, overall portfolio quality, and current economic conditions.

The Bank's level of nonperforming loans has remained consistently low in
relation to prior periods and total loans outstanding.  At September 30, 1999,
the Bank's level of general valuation allowances for loan losses amounted to
$899,000, which management believes is adequate to absorb potential losses in
its loan portfolio.

Noninterest expense.  Noninterest expense increased from $868,000 to $1.2
million for the three months ended September 30, 1998 and 1999, respectively.
Noninterest expense increased from $2.3 million to $3.3 million for the nine
months ended September 30, 1998 and 1999, respectively.  Compensation expense
included $1.0 million of MRP expense for the nine months ended September 30,
1999.  The restricted common stock under the MRP vests 25% immediately at the
date of grant and 25% annually beginning on the one year anniversary of the date
of grant.  All other categories of noninterest expense fluctuated by
insignificant amounts between the periods.

                                       9
<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

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

Capital Resources and Liquidity:

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

Mooresville Savings Bank must maintain liquidity in the form of cash, cash
equivalents and investment securities, including mortgage-backed securities,
equal to at least 10% of total assets.  The Bank's liquidity has decreased from
December 31, 1998 as investment securities that matured were used to fund loan
growth.  However, the Bank's liquidity ratio at September 30, 1999 was
considerably in excess of such requirements.  Given its excess liquidity and its
ability to borrow from the Federal Home Loan Bank, the Bank believes that it
will have sufficient funds available to meet anticipated future loan
commitments, unexpected deposit withdrawals, and other cash requirements.

Impact of the Inflation and Changing Prices:

The financial statements and accompanying footnotes have been prepared in
accordance with generally accepted accounting principles, which require the
measurement of financial position and operating results in terms of historical
dollars without consideration for changes in the relative purchasing power of
money over time due to inflation.  The assets and liabili ties of the Bank are
primarily monetary in nature and changes in market interest rates have a greater
impact on the Bank's performance than do the effects of inflation.

Impact of the Year 2000:

A lot of attention has been given to the impact that the year 2000 date change
will have on businesses, utilities and other organizations that rely on
computerized systems to help run their operations.  The year 2000 date change
can affect any system that uses computer software or computer chips including
automated equipment and machinery. For example, many computer programs and
computer chips store the calendar year portion of the date as two digits rather
than four digits.  These software programs and chips record the year 1999 as
"99". This approach works until the year 2000 when the "00" may be interpreted
as the year 1900 instead of the year 2000.  Banks use computer systems to
perform financial calculations, transfer funds, record deposits and loan
payments, run security systems and vaults and a myriad of other functions.
Because banks rely heavily on their computer systems, the Federal Financial
Institutions Examination Council ("FFIEC") has placed significant emphasis on
the problems surrounding the year 2000 issues and has required financial
institutions to document the assessment, testing and corrections made to ready
their computer systems and programs for the year 2000 date change.  The FFIEC
has strict regulations, guidelines, and milestones in place that each FDIC
insured financial institution must follow in order to remain operational.  The
Company's board of directors has remained informed of the Company's position and
progress in its year 2000 project.

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<PAGE>

CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY

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

The Company's year 2000 project remains on schedule according to the guidelines
set forth by the FFIEC. The Company's most critical external exposure to year
2000 system problems is with its data processing provider, Fiserv.  Fiserv
renovated its systems in June of 1998 and the testing and remediation efforts
are now complete.  In addition, the Company has contacted its major customers
and vendors to inquire about their progress in addressing the year 2000 problem
and does not believe that the problems of such customers and vendors will have a
material adverse effect on the Company or its operations.  The Company will
continue to monitor the progress of these parties in addressing the year 2000
problem as the new millennium approaches.  Management does not believe that any
remaining year 2000 costs will be significant.

The year 2000 problems can affect the Company's operation in a number of ways
but the mission critical issue is maintaining customers' account information
including tracking deposits, interest accruals and loan payments.  The Company's
ability to maintain this information is dependent upon electricity, telephone
lines, computer hardware and Fiserv's data processing capability.

The Company is not aware of any major year 2000 problems that exist with its
electric utility and phone company.  The Company is encouraged that both
companies will have all material year 2000 problems addressed well before
December 31, 1999.  However, the Company believes that a temporary
unavailability of electrical power will not hinder safe and secure operations.
The Company will rely on manual operations and all of the necessary supplies are
stored on hand at each location.  To prevent difficulties in the event there is
an unforeseen interruption in either telephone or electrical service when the
year changes, the Company will print hard copies of all account information.  In
addition, the Company will download all account information into programs on the
Company's hardware that will allow bank personnel to extract customer
information without regard to outside sources.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

The Company has not experienced any substantive changes in its portfolio risk
during the nine months ended September 30, 1999.

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<PAGE>

Part II.  OTHER INFORMATION

          Item 1.  Legal Proceedings

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

          Item 2.  Changes in Securities and Use of Proceeds
                   Not applicable

          Item 3.  Defaults Upon Senior Securities
                   Not applicable

          Item 4.  Submission of Matters to a Vote of Security Holders
                   Not applicable

          Item 5.  Other Information
                   Not applicable

          Item 6.  Exhibits and Reports on Form 8-K
                   (a)  27 - Financial Data Schedule
                   (b)  Not applicable

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<PAGE>

                                  SIGNATURES

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

                                                   Coddle Creek Financial Corp.

Dated      November 1, 1999                      By:  /s/ George W. Brawley,Jr.
      -------------------------------------           --------------------------
                                                 George W. Brawley
                                                 President and CEO

Dated      November 1, 1999                      By:  /s/ Billy R. Williams
      -------------------------------------           --------------------------
                                                 Billy R. Williams
                                                 Secretary/Controller

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