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

                                   FORM 10-KSB

                                  Amendment #1

        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

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.)

610 Industrial Park Boulevard, Evans, GA                            30809
----------------------------------------                            -----
(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:  $6,210,663.

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 June 8, 1998.

The number of shares  outstanding  of  issuer's  common  equity as of October 5,
1998, is 2,520,835.


The Index of Exhibits is on page 33.

<PAGE>
                                                                          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 Holders...............   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 in and Disagreements With Accountants on Accounting and
          Financial Disclosure..............................................  26

                                    PART III

ITEM  9   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act.................  27

ITEM 10   Executive Compensation............................................  28

ITEM 11   Security Ownership of Certain Beneficial Owners and Management....  28

ITEM 12   Certain Relationships and Related Transactions....................  30

ITEM 13   Exhibits List and Reports on Form 8-K.............................  31

          Signatures........................................................  33

          Index of Exhibits.................................................  34

<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 610 Industrial Park
Boulevard, Evans, Georgia, 30809. The telephone number is (706) 855-1099.

     The principal business of Crowell and its subsidiary,  Keystone Homes, Inc.
(together,  the "Company"),  is home-building and the development of residential
properties  for  resale.  Crowell  primarily  develops  residential  properties.
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").
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 sold  Petersburg  Racquet Club, its pool and tennis facility to Craig S.
Jones on December 31, 1997. (See Dispositions of Assets on page 4.)

     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 1997.
Columbia County had a population of approximately 88,000 in 1997. 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.

     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  84% of the total  revenues of the Company for
the fiscal year ended December 31, 1997.

     Keystone  purchases  developed lots for home  construction from Home Sites,
Ltd. ("Home  Sites").  For the year ended December 31, 1996, such purchases were
$79,500.  Crowell also provides  management services to Home Sites. For the year
ended December 31, 1996, management fees earned by the Company were $5,430.

     Currently,  Keystone's  home prices  (which  include lot costs)  range from
approximately  $90,000 to  $200,000.  Square  footage in these homes ranges from
1,200 to 3,200  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, vinyl siding, or stucco.

<PAGE>
                                                                          Page 4

     Keystone's  backlog at  December  31,  1997,  was  approximately  $813,000.
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 80.1% complete on these contracts at December 31,
1997.  Management  believes all backlog at December 31, 1997,  will be completed
during 1998.

     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 1997.  Total revenue for UDS for the years ended  December 31, 1997 and 1996
was $421,199 and $562,713, respectively.

     On December 31, 1997,  Crowell sold the real estate and business  operation
known as Petersburg  Racquet Club ("PRC") to Craig S. Jones,  an individual.  No
material relationship existed between Mr. Jones and Crowell before the sale. The
purchase price of PRC was  approximately  $818,000.  This amount was received in
the form of approximately $100,000 in cash, the assumption of a mortgage loan on
PRC in the amount of approximately  $576,000, the execution of a note secured by
a second  mortgage  on PRC in favor of Crowell  in the  amount of  approximately
$129,000,  the  execution  of a note  in  favor  of  Crowell  in the  amount  of
approximately  $7,000 and the obligation to pay Crowell the accounts  receivable
of PRC at December 31, 1997, which

<PAGE>
                                                                          Page 5

are approximately $6,000, as they are received. The net book value of PRC at the
time of the sale was approximately $652,000.

COMPETITION

     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,  1997,  the Company and its  subsidiaries  had eight (8)
full time employees. The Company has one (1) commercial real estate agent.

                        ITEM 2. DESCRIPTION OF PROPERTIES

     At December 31, 1997, the principal  properties held by the Company, all of
which are located in Columbia County, Georgia, unless otherwise noted, included:

<TABLE>
<CAPTION>
         Mortgage                    Project/                                                           Mortgage
       Description               Subdivision Name      Location       Existing Use    Planned Use        Balance
----------------------------------------------------------------------------------------------------------------

<S>                                <C>              <C>                <C>             <C>               <C>
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              *

<PAGE>
                                                                                                          Page 6

27 developed lots                  Chaparral        The Pass Rd                        Residential    $      100

18 developed lots                  Bakers Ferry     The Pass Rd                        Residential       100,200

20.23 acres land under             Cedar Rock       The Pass  Rd       None            Residential       739,500
development

Homes under construction           Bakers Ferry     The Pass Rd        Sales                           1,016,502
                                                                       inventory

Homes under construction           The Boulders     The Pass Rd        Sales                             494,761
                                                                       inventory

Completed homes                    Bridlewood       Fury's Ferry Rd    Sales                              99,000
                                                                       inventory

Completed homes                    Asbury Hill      Richmond County    Sales                              66,400
                                                                       inventory

Homes under construction           Chaparral        The Pass           Sales                             340,167
                                                                       inventory

Rental Homes                       None             Various            Sales                              60,434
                                                                       inventory                      ----------
         Total mortgage debt                                                                          $2,967,064
                                                                                                      ==========
</TABLE>

--------------
* Aggregate mortgage debt was $50,000 at December 31, 1997.

     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, 1997, on the mortgage
debt was approximately  $220,000 (including  capitalized  interest and excluding
interest on the mortgage debt of Petersburg Racquet Club). A similar payment for
1998 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.  (For  additional  information  on the Company's
mortgage  debt,  see Item 6.  Management's  Discussion  and  Analysis or Plan of
Operation.)

     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

<PAGE>
                                                                          Page 7

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  Item  2.  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 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.  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

<PAGE>
                                                                          Page 8

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, 1997.

<PAGE>
                                                                          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, 1997, there were  approximately  750 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 1997 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.

     On February 13, 1998,  the Company filed a Preliminary  Proxy  Statement on
Schedule  14A with the  Securities  and Exchange  Commission  for the purpose of
eliminating the periodic reporting  requirements  under the Securities  Exchange
Act of 1934 by a reverse common stock split.  The reverse common stock split, if
consummated,   will  eliminate  all  common  shareholders  except  the  majority
stockholder.

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  $1,093,103  or 17.5%,  and  commercial  brokerage
commissions  decreased by $23,477 or 11.4% for the year ended December 31, 1997,
as compared to the year ended December 31, 1996. The decrease in home sales

<PAGE>
                                                                         Page 10

primarily  resulted from selling fewer homes in 1997 than in 1996.  The decrease
in commercial brokerage commissions resulted from the decrease in dollar amounts
of property brokered in 1997.

     Gross profit  percent on home sales  decreased to 5.4% in 1997 from 8.5% in
1996. The decrease in gross profit  percentage on home sales resulted  primarily
from building homes on rougher lots in 1997 as compared to 1996.

     Gross profit  percent on commercial  brokerage  commissions  increased from
31.0% in 1996 to 34.4% in 1997.

     Gross profit on lot sales increased from 49.2% in 1996 to 52.1% in 1997.

     Salaries  decreased  in 1997 as  compared  to 1996 by  $110,837  or  21.0%,
because of employee  attrition.  Management believes salary expense will be less
in 1998 than in 1997 because of the loss of several  employees  during 1997. The
Company does not plan to replace employees lost through attrition.

     Depreciation  expense decreased by $814 or 4.3% in 1997 as compared to 1996
because several assets have been fully depreciated.

     Taxes and  licenses  decreased  by $1,815 or 6.1%,  in 1997 as  compared to
1996.

     Building  occupancy  increased  by $11,161 or 19.3% in 1997 as  compared to
1996 because of an increase in maintenance costs.

     Office expense decreased in 1997 by $3,170 or 3.5% as compared to 1996. The
decrease in office expenses in 1997 as compared to 1996 resulted  primarily from
the  decrease in the number of  employees  and the decrease in number of Company
operations.

     Advertising and promotion increased by $2,049 or 12.7%, in 1997 as compared
to 1996.

     Legal and  accounting  expenses  increased  by  $1,681 or 6.5%,  in 1997 as
compared to 1996.

     Communications expenses increased by $1,276 or 7.6%, in 1997 as compared to
1996.

     Overall  operating  expenses  decreased  by  $87,473  or 11.1%  for 1997 as
compared to 1996.  The overall  decreases  in 1997 as compared to 1996  resulted
primarily from decreases in salaries.

     Interest income  increased by $7,264 in 1997 as compared to 1996 because of
collections on a note receivable.

     Interest expense from continuing operations decreased by $69,616 in 1997 as
compared to 1996 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 December 31, 1997, available cash and proceeds from
land,  lot, and home sales were  expected to be sufficient to meet the Company's
requirements  until spring of 1998 when home sales typically improve and provide
cash for operations.

<PAGE>
                                                                         Page 11

     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 1997) 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, 1998 and 1999, 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,  1997.  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.

     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
$2,967,064 as of December 31, 1997) 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 1998 total  $2,227,564.  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, 1997, has deteriorated as
compared to that of December 31, 1996.  Stockholders'  equity as of December 31,
1997, was $684,689 as compared to $741,869 at December 31, 1997.

     Properties  held for resale  decreased from $3,493,117 at December 31, 1996
to  $3,415,398  at December  31,  1997,  a decrease of $77,719,  or 2.2%,  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.

     Cash increased by $130,170 or 208%, at December 31, 1997, from December 31,
1996 because of $100,000  collected  on December  31, 1997,  from payment on the
sale  of  Petersburg   Racquet  Club.  (See  Item  7.  Financial   Statements  -
Consolidated Statements of Cash Flows.)

     Receivables  decreased  from  $161,907 at December 31, 1996,  to $94,108 at
December 31, 1997, a decrease of $67,799 or 41.9%,  because of  collections on a
note receivable in connection with the sale of UDS.

<PAGE>
                                                                         Page 12

     Other assets  increased  from  $43,332 at December 31, 1996,  to $60,750 at
December 31, 1997, an increase of $17,418 or 40.2%.

     Notes payable decreased from $3,566,459 at December 31, 1996, to $2,967,064
at December 31,  1997,  a decrease of $599,395 or 16.8%,  because of the sale of
Petersburg  Racquet  Club.  Notes  payable will  increase and decrease in direct
proportion to the level of housing inventory maintained by the Company.

     Accounts payable and accrued liabilities increased from $71,544 at December
31, 1996, to $181,238 at December 31, 1997, an increase of $109,694 or 153.3%.

     The Company has net operating loss carryforwards available of approximately
$1,945,000 to offset against future federal taxable income. The maximum value of
these  carryforwards  computed at maximum  federal and state income tax rates is
approximately   $760,000.   This  amount  is  not  reflected  in  the  financial
statements.

IMPACT OF INFLATION

     Although inflationary pressures were moderate in 1997 and 1996, 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:

          Consolidated Balance Sheets - December 31, 1997 and 1996
          Consolidated  Statements of Operations - Years ended December 31, 1997
               and 1996
          Consolidated  Statements  of Changes in  Stockholders'  Equity - Years
               ended December 31, 1997 and 1996
          Consolidated  Statements of Cash Flows - Years ended December 31, 1997
               and 1996
          Notes to Consolidated  Financial Statements - Years ended December 31,
               1997 and 1996

<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, 1997 and 1996, 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, 1997 and 1996, 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
August 21, 1998

<PAGE>
                                                                         Page 14

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

                                     ASSETS

<TABLE>
<CAPTION>
                                                                 December 31,
                                                                 ------------
                                                              1997           1996
                                                          -----------    -----------
PROPERTIES HELD FOR RESALE
<S>                                                       <C>            <C>        
   Homes under construction and for sale                  $ 2,173,005    $ 2,276,944
   Developed residential land                               1,176,494      1,016,939
   Land held for future development                            65,899        199,234
                                                          -----------    -----------
                                                            3,415,398      3,493,117
                                                          -----------    -----------
CASH AND CASH EQUIVALENTS, including escrow funds
   of  $2,634 and $6,434 in 1997 and 1996, respectively       192,664         62,494
                                                          -----------    -----------
RECEIVABLES
   Notes                                                       93,522        126,316
   Accounts and other                                             586         35,591
                                                          -----------    -----------
                                                               94,108        161,907
                                                          -----------    -----------
PROPERTY AND EQUIPMENT
   Rental homes                                                90,000         90,000
   Petersburg Racquet Club                                          0      1,059,993
   Furniture, fixtures and equipment                           97,763        146,903
                                                          -----------    -----------
                                                              187,763      1,296,896
   Less accumulated depreciation                              (87,692)      (677,874)
                                                          -----------    -----------
                                                              100,071        619,022
                                                          -----------    -----------

OTHER ASSETS                                                   60,750         43,332
                                                          -----------    -----------
ASSETS OF BUSINESS TRANSFERRED UNDER
   CONTRACTUAL ARRANGEMENT                                    606,000             --
                                                          -----------    -----------
                                                          $ 4,468,991    $ 4,379,872
                                                          ===========    ===========
</TABLE>

See notes to consolidated financial statements.

<PAGE>
                                                                         Page 15

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                            December 31,
                                                                            ------------
                                                                        1997           1996
                                                                    -----------    -----------
<S>                                                                 <C>            <C>        
NOTES PAYABLE TO BANKS                                              $ 2,967,064    $ 3,566,459
                                                                    -----------    -----------
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable                                                        132,918         21,155
Accrued expenses                                                         39,904         42,905
Customer deposits                                                         8,416          7,484
                                                                    -----------    -----------
                                                                        181,238         71,544
                                                                    -----------    -----------
OTHER LIABILITIES
Liabilities and deferred credit of business transferred
   under contractual arrangement                                        606,000             --
Deferred gain on disposal of Petersburg Racquet Club                     30,000             --
                                                                    -----------    -----------
   TOTAL LIABILITIES                                                $ 3,784,302    $ 3,638,003
                                                                    -----------    -----------
COMMITMENTS AND CONTINGENCIES

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 $147,000 ($0.28 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 $155,808 ($0.32 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,
         1997 and 1996                                                  696,774        696,774
   Additional paid-in capital  Preferred stock - Series A                33,648         33,648
   Accumulated deficit                                               (1,057,632)    (1,000,452)
                                                                    -----------    -----------

       TOTAL STOCKHOLDERS' EQUITY                                       684,689        741,869
                                                                    -----------    -----------

                                                                    $ 4,468,991    $ 4,379,872
                                                                    ===========    ===========
</TABLE>

<PAGE>
                                                                         Page 16

                      CROWELL & CO., INC., AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                       Year ended December 31,
                                                       -----------------------
                                                         1997           1996
                                                     -----------    -----------
REVENUES
   Home sales                                        $ 5,160,165    $ 6,253,268
   Brokerage commissions                                 182,778        206,255
   Other income                                          138,420         89,798
   Lot sales                                             388,300        254,900
   Land sales                                            341,000             00
                                                     -----------    -----------
                                                       6,210,663      6,804,221
                                                     -----------    -----------
COST OF REVENUES
   Homes                                               4,881,475      5,721,184
   Agent commissions                                     119,921        142,395
   Other                                                  30,117             00
   Lots                                                  185,923        129,408
   Land                                                  133,335             00
                                                     -----------    -----------
                                                       5,350,771      5,992,987
                                                     -----------    -----------
OPERATING EXPENSES
   Salaries                                              417,260        528,097
   Depreciation                                           17,958         18,772
   Taxes and license                                      28,103         29,918
   Building occupancy                                     68,987         57,826
   Advertising and promotion                              18,155         16,106
   Office expense                                         88,168         91,338
   Legal and accounting                                   27,673         25,992
   Communications                                         18,001         16,725
   Completed home expenses                                12,996             00
                                                     -----------    -----------
                                                         697,301        784,774
                                                     -----------    -----------

     OPERATING INCOME                                    162,591         26,460
                                                     -----------    -----------

FINANCIAL INCOME (EXPENSE)
   Interest income                                         8,205            941
   Interest expense                                     (147,276)      (216,892)
                                                     -----------    -----------
                                                        (139,071)      (215,951)
                                                     -----------    -----------

   INCOME (LOSS) FROM CONTINUING OPERATIONS               23,520       (189,491)
                                                     -----------    -----------

DISCONTINUED OPERATIONS
   Income from residential brokerage division                 00         69,686
   Income from computer division                              00          3,306
   Gain on disposal of computer division                      00        159,927
   Loss from Petersburg Racquet Club                     (80,700)       (56,581)
                                                     -----------    -----------
                                                         (80,700)       176,338
                                                     -----------    -----------

   NET LOSS                                          $   (57,180)   $   (13,153)
                                                     ===========    ===========


(CONTINUED ON NEXT PAGE)

<PAGE>
                                                                         Page 17

EARNINGS PER COMMON SHARE:

   Weighted average number of common
     shares outstanding                                2,520,835      2,520,835
   Basic earnings per share
     Loss from continuing operations                 $      (.02)   $     ( .11)
     Income (loss) from discontinued operations             (.03)           .07
                                                     -----------    -----------

   NET LOSS PER COMMON SHARE                         $      (.05)   $      (.04)
                                                     ===========    =========== 

See notes to consolidated financial statements.

<PAGE>
                                                                         Page 18

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

                     YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
                                      Capital Stock Issued                     Additional Paid-In Capital
                                      --------------------                     --------------------------
                                                                                                         Total
                              Preferred     Preferred                    Preferred    Accumulated   Stockholders'
                               Series A      Series B       Common        Series A      Deficit         Equity
----------------------------------------------------------------------------------------------------------------

<S>                          <C>           <C>           <C>            <C>           <C>            <C>        
BALANCE, DECEMBER 31, 1995   $   525,000   $   486,899   $   696,776    $    33,648   $  (987,299)   $   755,024

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

BALANCE, DECEMBER 31, 1996   $   525,000   $   486,899   $   696,774    $    33,648   $(1,000,452)   $   741,869

Net loss                              --            --            --             --       (57,180)       (57,180)
                             -----------   -----------   -----------    -----------   -----------    -----------

BALANCE, DECEMBER 31, 1997   $   525,000   $   486,899   $   696,774    $    33,648   $(1,057,632)   $   684,689
                             ===========   ===========   ===========    ===========   ===========    ===========
</TABLE>

See notes to consolidated financial statements.

<PAGE>
                                                                         Page 19

                      CROWELL & CO., INC., AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 Years ended December 31,
                                                                 ------------------------
                                                                    1997           1996
                                                                -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                             <C>            <C>         
   Net loss                                                     $   (57,180)   $   (13,153)
   Adjustments to reconcile net loss to net cash
   provided by operating activities:
      Depreciation and amortization                                  76,766         54,388
      Gain on disposal of assets                                    (15,139)      (159,927)
      Changes in assets and liabilities:
         (Increase) decrease in:
         Properties held for resale                                  77,719        436,080
         Accounts and other receivables                              35,005         60,719
         Home sale notes receivable                                   6,316         24,450
         Other assets                                               (17,418)        10,184
         Increase (decrease) in:
         Accounts payable                                           111,763        (56,928)
         Accrued expenses                                            (3,001)       (46,969)
         Customer deposits                                              932        (22,886)
         Deferred gain on disposal of Petersburg Racquet Club        30,000             --
                                                                -----------    -----------
           NET CASH PROVIDED BY OPERATING ACTIVITIES                245,763        285,958
                                                                -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from sale of assets                                     100,000         80,000
   Purchase of property and equipment                              (156,944)      (329,579)
   Collections on notes receivable                                   26,478              0
                                                                -----------    -----------
             NET CASH USED IN INVESTING ACTIVITIES                  (30,466)      (249,579)
                                                                -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from bank loans                                       4,190,611      4,679,657
   Payments of bank loans and other debt                         (4,275,738)    (4,922,106)
                                                                -----------    -----------
       NET CASH USED IN FINANCING ACTIVITIES                        (85,127)      (242,449)
                                                                -----------    -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                130,170       (206,070)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                       62,494        268,564
                                                                -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF YEAR                        $   192,664    $    62,494
                                                                ===========    ===========

SUPPLEMENTARY DISCLOSURES
   Interest paid (net of amount capitalized)                    $   146,932    $   262,853
   Note receivable from disposal of assets                               --        120,000
</TABLE>

See notes to consolidated financial statements.

<PAGE>
                                                                         Page 20

                      CROWELL & CO., INC., AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           DECEMBER 31, 1997 AND 1996

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.
Crowell also provides commercial real estate brokerage services.

     Keystone Homes,  Inc.  ("Keystone"),  a wholly owned subsidiary of Crowell,
builds  single-family and multi-family  homes on a presold and speculative basis
in the Augusta, Georgia, metropolitan statistical area.

     The Company incurred a loss from continuing operations of $189,491 in 1996.
The Company sold two of its divisions  during 1997 and 1996,  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.

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, 1997 and 1996.
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 of $80,952 is subtracted from the income or loss for
continuing  operations  and net loss for the purposes of computing  the loss per
common share

<PAGE>
                                                                         Page 21

regardless  of whether  the  preferred  dividend  is paid.  At the option of the
holder,  the preferred  stock is convertible  into common stock at one share for
every four shares owed for a total potential of 252,975 shares.

CASH AND CASH EQUIVALENTS

     For  the  purpose  of the  Statements  of Cash  Flows,  all  highly  liquid
instruments  with an original  maturity of three  months or less are  considered
cash equivalents.

RECEIVABLES

     The Company uses the allowance method for recording bad debt.

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.

     Contract  costs  include all direct  materials  and labor costs,  allocated
common cost of land and development and those indirect costs related to contract
performance,

<PAGE>
                                                                         Page 22

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 1996 amounts have been  reclassified  to conform with the financial
statement  presentation used in 1997. These  reclassifications  had no effect on
net income.

CONCENTRATION OF RISK

     The Company operates in the Augusta,  Georgia, MSA. Therefore,  the Company
can be  adversely  affected  by  local  economic  conditions.  The  Company  had
approximately  $21,000 in excess of federally  insured amounts on deposit in one
bank.

NOTE 3 - NOTES RECEIVABLE

                                                               December 31,
                                                               ------------
                                                            1997         1996
                                                         ---------    ---------
Note receivable from an individual due in
  quarterly installments with interest at 8.8%,
  secured by all assets of UDS.  (See Note 9)            $  93,522    $ 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
Note receivable from an individual due on
  December 31, 2002, interest receivable monthly,
  beginning January 31, 1999, at 8.3%, secured by PRC      136,000            0
                                                         ---------    ---------
Less allowance for doubtful accounts                      (136,000)           0
                                                         ---------    ---------
                                                         $  93,522    $ 126,315
                                                         =========    =========

     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 leased 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 Company is
no longer  obligated  on one lease  because the  majority  stockholder  sold the
building  covered  under the  lease.  The total  minimum  rental  commitment  at
December 31, 1997, under these leases is $1,098,000, which is due as follows:

        Year ending December 31,
        ------------------------
                 1998                                  $   81,600
                 1999                                      85,200
                 2000                                      85,200
                 2001                                      87,600

<PAGE>
                                                                         Page 23

                 2002                                      90,000
              Thereafter                                  668,400
                                                       ----------
                                                       $1,098,000
                                                       ==========

     The total  rental  expense for these  leases  included in the  consolidated
statements  of income  for the  years  ended  December  31,  1997 and 1996,  was
$127,200 and  $122,400,  respectively.  The Company  received  rental  income of
approximately  $80,000  for two of the  operating  leases for both 1997 and 1996
which offset the rental expense.

     The Company sold Petersburg  Racquet Club ("PRC") on December 31, 1997. The
buyer of PRC assumed a note  payable to the bank in the amount of  approximately
$576,000.  The  Company  remains  as a  secondary  debtor on the  assumed  note.
Therefore,  the Company  has a  contingent  liability  in the amount of the note
payable  balance in the event that the buyer of PRC fails to make payment  under
the note payable agreement.

NOTE 5 - NOTES PAYABLE

<TABLE>
<CAPTION>
                                                                               December 31,
                                                                               ------------
                                                                            1997         1996
                                                                         ----------   ----------
<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, 1997 and 1996)           $2,906,630   $2,955,170
  Secured by Petersburg Racquet Club property, maturing 2009, at an
    interest rate of 7.5% at December 31, 1996 (see Note 4)                      --      541,461
  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%        60,434       69,828
                                                                         ----------   ----------
                                                                         $2,967,064   $3,566,459
                                                                         ==========   ==========
</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,
1997,  the  Company  has  unused  commitments  for  financing  of  approximately
$1,170,000.  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,  1997.  The  majority   stockholder  has  personally
guaranteed all bank loans.  The president of Keystone has personally  guaranteed
all  of  Keystone's  bank  loans  which  amounts  to  additional  guarantees  of
$2,077,264.

     Maturities of debt are as follows:

       Year ending December 31,
       ------------------------
                 1998                             $ 2,227,564
                 1999                                 739,500
                                                  -----------
                                                  $ 2,967,064
                                                  ===========

<PAGE>
                                                                         Page 24

     Capitalized interest (see NOTE 2) was approximately $76,000 and $78,000 for
the years ended  December 31, 1997 and 1996,  respectively.  All other  interest
incurred was recognized as financial  expense in the consolidated  statements of
income.

NOTE 6 - INCOME TAX MATTERS

     For the years ended December 31, 1997 and 1996,  Crowell filed consolidated
income tax returns with its subsidiary Keystone.

     For the years ended December 31, 1997 and 1996, no income tax provision was
made  because of the net losses  the  Company  incurred.  The  Company  reported
$136,000 in income on its income tax return that was not  recorded in income for
financial  reporting  purposes.  This  income  relates  to the  note  receivable
received by the Company on the sale of PRC. (See NOTE 3 and NOTE 9.) The Company
used its net operating loss  carryforward  to eliminate the income tax liability
on this income.

     Deferred tax assets and liabilities at December 31, 1997 and 1996,  consist
of the following:

                                                        Years ended December 31,
                                                        ------------------------
                                                            1997         1996
                                                         ---------    ---------
Deferred tax assets
   Federal and state net operating loss carryforwards    $ 760,000    $ 800,000
   Less valuation allowance                               (760,000)    (800,000)
                                                         ---------    ---------
Net deferred tax asset                                   $      --    $      --
                                                         =========    =========
                                                       
     Remaining net operating loss  carryforwards of $1,945,020 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:

       Year ending December 31
       -----------------------

                 2002                               $   207,118
                 2003                                   597,531
                 2004                                   154,945
                 2005                                   294,482
                 2010                                   683,502
                 2011                                     7,442
                                                    -----------
                                                    $ 1,945,020
                                                    ===========

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.

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

<PAGE>
                                                                         Page 25

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

                                                       Year ended December 31,
                                                       -----------------------
                                                        1997            1996
                                                    -----------     -----------
Net sales
   Real estate development                          $ 6,019,082     $ 6,597,966
   Real estate brokerage                                191,581         206,255
                                                    -----------     -----------
      Net sales                                     $ 6,210,663     $ 6,804,221
                                                    ===========     ===========
Operating income
   Real estate development                          $   122,767     $    (9,843)
   Real estate brokerage                                 39,824          36,303
                                                    -----------     -----------
      Operating income                              $   162,591     $    26,460
                                                    ===========     ===========
Capital expenditures
   Real estate development                          $   156,944     $   324,215
   Real estate brokerage                                     --              --
                                                    -----------     -----------
      Net capital expenditures                      $   156,944     $   324,215
                                                    ===========     ===========
Depreciation and amortization
   Real estate development                          $    17,958     $    18,772
   Real estate brokerage                                     --              --
                                                    -----------     -----------
      Net depreciation and amortization             $    17,958     $    18,772
                                                    ===========     ===========
Assets employed
   Real estate development                          $ 4,468,991     $ 4,379,872
   Real estate brokerage                                     --              --
                                                    -----------     -----------
                                                    $ 4,468,991     $ 4,379,872
                                                    ===========     ===========

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 year ended
December 31, 1996 such purchases were $79,500.  Crowell also provides management
services to Home Sites.  For the year ended  December 31, 1996  management  fees
earned by the Company were $5,430.

     The Company received $120,275 in real estate commissions from property sold
to Home Sites by an unrelated  party for the year ended  December 31, 1997.  For
the year ended  December  31, 1997,  an officer of the Company  purchased a home
from  the  Company.  The  sales  price  was  $172,069.  The cost of the home was
$161,918.

NOTE 9 - DISCONTINUED OPERATIONS

     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 1997. Total revenue for UDS for the years ended December
31, 1996 was $562,713.

<PAGE>
                                                                         Page 26

     On December 31, 1997,  Crowell sold the real estate and business  operation
known as Petersburg  Racquet Club ("PRC") to Craig S. Jones,  an individual.  No
material  relationship  existed between Mr. Jones and Crowell at the time of the
sale.  The purchase  price of PRC was  approximately  $818,000.  This amount was
received in the form of  approximately  $100,000 in cash,  the  assumption  of a
mortgage loan on PRC in the amount of approximately $576,000, the execution of a
note  secured by a second  mortgage  on PRC in favor of Crowell in the amount of
approximately  $129,000,  the  execution  of a note in favor of  Crowell  in the
amount of  approximately  $7,000 and the  obligation to pay Crowell the accounts
receivable of PRC at December 31, 1997, which were approximately $6,000, as they
were  received.  As a result of the  Company  remaining  liable  on the  assumed
mortgage note, the Company has accounted for the PRC  transaction  following the
treatment set forth in the Securities  Exchange  Commission's  Staff  Accounting
Bulletins - Topic 5E (SAB Topic 5E)  "Accounting for divestiture of a subsidiary
or other business  operation".  Accordingly,  the assets of PRC at the sale date
have been  recorded  under the  caption  Assets of  business  transferred  under
contractual  arrangement with a corresponding  amount recorded under Liabilities
and deferred  credit of business  transferred.  The $166,000 gain on sale of PRC
has been  separately  deferred as a deferred  gain of $30,000 and a reduction in
the notes receivable from Mr. Jones in the amount of $136,000.  The Company will
continue to follow this accounting treatment until the amount of the outstanding
debt which Mr. Jones has assumed  declines to a level which  permits the Company
to record  the  transaction  as a sale.  Revenues  from PRC for the years  ended
December 31, 1997 and 1996, were $298,563 and $185,190, respectively.

NOTE 10 - OTHER MATTERS

     On February 13, 1998,  the Company filed a Preliminary  Proxy  Statement on
Schedule  14A with the  Securities  and Exchange  Commission  for the purpose of
eliminating the periodic reporting  requirements  under the Securities  Exchange
Act of 1934 by a reverse common stock split.  The reverse common stock split, if
consummated,   will  eliminate  all  common  shareholders  except  the  majority
stockholder.

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

     Within the two year period  ended  December  31,  1997,  there have been no
changes in  independent  certified  public  accountants  or  disagreements  with
accountants on matters of accounting or financial disclosure.

     The Company has not had an audit  performed for the year ended December 31,
1997. The Company filed a proxy  statement  which  requested a vote at a Special
Meeting  of  the  stockholders  that  would  eliminate  the  periodic  reporting
requirements  of the Securities  Acts. This vote was delayed by the SEC when the
proxy statement and Schedule 13E-3 were under review. During this interim period
the 10-KSB became due. The Company has contacted its  accountants  and is in the
process of having an audit performed.

<PAGE>
                                                                         Page 27

                                    PART III

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

     Set forth below is certain  information  as of June 8, 1997,  about each of
the directors and executive officers of Crowell.

Name                       Age     Office
----                       ---     ------

Otis L. Crowell            63      Director, President and Chairman of the Board

O. Lamar Crowell, Jr.      32      Director and Vice President

Mark L. Gilliam            36      Director, Vice President, Secretary and Chief
                                   Financial Officer

     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.

     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 December 31, 1997,  Crowell's
executive  officers,  directors  and owners of more than 10% of its Common Stock
complied with all filing requirements.

<PAGE>
                                                                         Page 28

                         ITEM 10. EXECUTIVE COMPENSATION

COMPENSATION SUMMARY

     The  following  table  summarizes  by category,  for the fiscal years ended
December 31, 1997,  1996,  and 1995,  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,  1997,  in an
amount in excess of $100,000:

       Name and                        Year Ended
  Principal Position                   December 31,                 Salary
--------------------------------------------------------------------------------
Otis L. Crowell                            1997                   $ 120,000
   President and                           1996                     120,000
   Chief Executive Officer                 1995                     120,000

     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 June 8, 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.

<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                     -                   68.2%

<PAGE>
                                                                                                              Page 29

   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                     -                     -                    5.9%
   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                     -                     -                   68.2%
   and directors as a group               (73.4%)
   (2 persons)
</TABLE>

+    Less than 1.0%
*    Executive officer or director

(1)  Based on 2,520,835 shares of Common Stock outstanding on February 29, 1997.

(2)  Based on 525,000 shares of Series A Preferred Stock  outstanding on June 8,
     1998. 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  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 June 8,
     1998.  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.

<PAGE>
                                                                         Page 30

(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 Company is no longer  obligated on one lease because the
majority  stockholder  sold the  building  covered  under the  lease.  The total
minimum  rental   commitment  at  December  31,  1997,  under  these  leases  is
$1,098,000, which is due as follows:

                      1998                            $   81,600
                      1999                                85,200
                      2000                                85,200
                      2001                                87,600
                      2002                                90,000
                      2003-2009                          668,400
                                                      ----------
                                                      $1,098,000
                                                      ==========

     The total  rental  expense for these  leases  included in the  consolidated
statements  of income  for each  year  ended  December  31,  1997 and 1996,  was
$127,200 and  $122,400,  respectively.  The Company  received  rental  income of
approximately  $80,000  for two of the  operating  leases for both 1997 and 1996
which offset the rental expense.

     The Company sold  Petersburg  Racquet Club ("PRC) on December 31, 1997. The
buyer of PRC assumed a note  payable to the bank in the amount of  approximately
$576,000.  The  Company  remains  as a  secondary  debtor on the  assumed  note.
Therefore,  the Company  has a  contingent  liability  in the amount of the note
payable  balance in the event that the buyer of PRC fails to make payment  under
the note payable agreement.

     Keystone  purchases  developed lots for home  construction from Home Sites.
For the year ended December 31, 1996, such purchases were $79,500.  Crowell also
provides  management  services to Home Sites.  For the year ended  December  31,
1996, management fees earned by the Company were $5,430.

<PAGE>
                                                                         Page 31

     The Company received $120,275 in real estate commissions from property sold
to Home Sites by an unrelated  party for the year ended  December 31, 1997.  The
President  of  Crowell  received  a real  estate  commission  of $72,165 on this
transaction.

     For the year ended December 31, 1997, an officer of the Company purchased a
home from the Company.  The sales price was  $172,069.  The cost of the home was
$161,918.

                    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 32

     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

     10.11 Agreement to purchase  business dated December 16, 1997,  between the
           Company and Craig S. Jones (filed herewith)

     11    Computation of earnings per share

     13    Annual Report to Stockholders

     21    Subsidiaries

     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, 1997.

               Date of Report                            Item Reported
               --------------                            -------------
             December 31, 1997                  Sale of Petersburg Racquet Club


<PAGE>
                                                                         Page 33

                                   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  Oct 5, 1998                          /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      Oct 5, 1998                      /s/ Otis L. Crowell
          -----------                          ---------------
                                               Otis L. Crowell, President
                                               and Chairman of the Board

DATE      Oct 5, 1998                      /s/ Mark L. Gilliam
          -----------                          ---------------
                                               Mark L. Gilliam, Director, Vice
                                               President, Secretary and Chief
                                               Financial Officer

DATE      Oct 5, 1998                      /s/ O. Lamar Crowell, Jr.
          -----------                          ---------------------
                                               O. Lamar Crowell, Jr., Director

<PAGE>
                                                                         Page 34

                                INDEX OF EXHIBITS

11     Computation of earnings per share

13     Annual Report to Shareholders

21     Subsidiaries

27     Financial Data Schedule