<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 2)<F1>
Mitchell Bancorp, Inc.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
606503100
(CUSIP Number)
Jerome H. Davis
c/o David M. Perlmutter, Esq.
200 Park Ave., Suite 4515, New York, NY 10166
(212) 986-4900
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 5, 1997
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1 (b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all
exhibits, should be filed with the Commission. See Rule 13d-1(a)
for other parties to whom copies are to be sent.
(Continued on following pages)
_________________________
<F1>
1 The remainder of this cover page shall be filled out for
a reporting person's initial filing of this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 or otherwise subject to
the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).
Page 1 of 13 Pages
<PAGE>
CUSIP No. 606503100
_________________________________________________________________
1. Name of Reporting Person Jerome H. Davis
_________________________________________________________________
S.S. or I.R.S. Identification ###-##-####
No. of Above Person
_________________________________________________________________
2. Check the Appropriate Box (a)______
if a Member of a Group (b)___X__
(See Instructions)
_________________________________________________________________
3. SEC Use Only
_________________________________________________________________
4. Source of Funds (See Instructions)
PF
_________________________________________________________________
5. Check Box if Disclosure of Legal
Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
_________________________________________________________________
6. Citizenship or Place of
Organization United States
_________________________________________________________________
Number of 7. Sole Voting Power 12,190
Shares 8. Shared Voting
Beneficially Power 80,810*<F2>
Owned by 9. Sole Dispositive
Each Report- Power 12,190
ing Person 10. Shared Dispositive
with Power 80,810*<F2>
_________________________________________________________________
11. Aggregate Amount Beneficially
Owned by Each Reporting Person 93,000*<F2>
_________________________________________________________________
12. Check Box if the Aggregate Amount
in Row (11) Excludes Certain / /
Shares (See Instructions)
_________________________________________________________________
13. Percent of Class Represented
by amount in Row (11) 9.99%
_________________________________________________________________
14. Type of Reporting Person IN
(See Instructions)
_________________________________________________________________
<F2>
* See Items 5(a) and 5(b) of this Statement.
Page 2 of 13 Pages
<PAGE>
CUSIP No. 606503100
_________________________________________________________________
1. Name of Reporting Person Susan B. Davis
_________________________________________________________________
S.S. or I.R.S. Identification ###-##-####
No. of Above Person
_________________________________________________________________
2. Check the Appropriate Box (a)______
if a Member of a Group (b)___X__
(See Instructions)
_________________________________________________________________
3. SEC Use Only
_________________________________________________________________
4. Source of Funds (See Instructions)
PF
_________________________________________________________________
5. Check Box if Disclosure of Legal
Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
_________________________________________________________________
6. Citizenship or Place of
Organization United States
_________________________________________________________________
Number of 7. Sole Voting Power -0-
Shares 8. Shared Voting
Beneficially Power 93,000*<F3>
Owned by 9. Sole Dispositive
Each Report- Power -0-
ing Person 10. Shared Dispositive
with Power 93,000*<F3>
________________________________________________________________
11. Aggregate Amount Beneficially
Owned by Each Reporting Person 93,000*<F3>
_________________________________________________________________
12. Check Box if the Aggregate Amount
in Row (11) Excludes Certain / /
Shares (See Instructions)
_________________________________________________________________
13. Percent of Class Represented
by amount in Row (11) 9.99%
_________________________________________________________________
14. Type of Reporting Person IN
(See Instructions)
_________________________________________________________________
<F3>
* See Items 5(a) and 5(b) of this Statement. For purposes of
this Statement, Susan B. Davis may be deemed, pursuant to Rules
13d-3(a)(1) and 13d-3(a)(2) under the Securities Exchange Act of
1934, as amended, to be the beneficial owner of 12,190 shares of
the Company's Common Stock, par value $.01 per share, held in the
name of her husband, Jerome H. Davis.
Page 3 of 13 Pages
<PAGE>
This is Amendment No. 2 to the Statement on Schedule
13D (this "Statement") of Jerome H. Davis with respect to the
Common Stock, par value $.01 per share ("Common Stock") of
Mitchell Bancorp, Inc., a North Carolina Corporation
("Mitchell"). This Amendment No. 2 sets forth, in its entirety,
the information contained in Mr. Davis' Statement with regard to
the Common Stock of Mitchell, as required pursuant to the
provisions of Rule 13d-2(c) under the Securities Exchange Act of
1934, as amended and for purposes hereof "Rule 13d-2(c)".
Prior to this Amendment No. 2 to the Statement, Mr. and
Mrs. Davis filed an Amendment No. 1 to the Statement on November
20, 1996 ("Amendment No. 1"). Mr. and Mrs. Davis' original
Statement was filed with the Securities and Exchange Commission
("SEC") on July 22, 1996. Information contained in Amendment No.
1 and the original Statement which comprises a part of this
Statement is identified below where applicable.
Item 1. SECURITY AND ISSUER.
The information set forth below was disclosed in Item 1
of Mr. Davis' original Statement, and is restated herein as
required pursuant to Rule 13d-2(c).
"The class of equity securities to which this
Statement on Schedule 13D (this "Statement") relates is the
Common Stock, par value $.01 per share ("Common Stock") of
Mitchell Bancorp, Inc., a North Carolina, ("Mitchell") with
its principal executive offices located at 210 Oak Avenue,
Spruce Pine, North Carolina 28777."
Item 2. IDENTITY AND BACKGROUND.
The information set forth below was disclosed in Item 2
of Mr. Davis' original Statement, and is restated herein as
required pursuant to Rule 13d-2(c).
"(a) This Statement is jointly filed by Susan B. Davis
and Jerome H. Davis, wife and husband.
(b) Residence: 11 Baldwin Farms North, Greenwich,
Connecticut 06831.
(c) Mrs. Davis is an investor in antiques operating
out of her home. Mr. Davis is a self-employed investment
analyst and works out of his home.
(d) During the last five years, neither Mr. Davis nor
Mrs. Davis have been convicted in a criminal proceeding
(excluding traffic or similar misdemeanors).
Page 4 of 13 Pages
<PAGE>
(e) During the last five years, neither Mr. Davis nor
Mrs. Davis has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction
and as a result of such proceedings was or is subject to a
judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to,
Federal or state securities laws or finding any violation
with respect to such laws.
(f) Mr. Davis and Mrs. Davis are each citizens of the
United States."
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in the following paragraph
was disclosed in Item 3 of Mr. Davis' original Statement, and is
restated herein pursuant to Rule 13d-2(c).
"Pursuant to a stock subscription for Common Stock of
Mitchell, Mr. Davis paid $121,900.00 for an aggregate of
12,190 shares of Common Stock owned by him. Additionally,
Mr. and Mrs. Davis paid an aggregate of $898,050.00 for an
aggregate of 85,690 shares of Common Stock owned by them.
Except for the Common Stock obtained through a subscription,
all shares were purchased in over-the-counter transactions
through standard brokerage accounts maintained by Mr. and
Mrs. Davis. All shares were purchased with personal funds
of Mr. and Mrs. Davis."
Item 4. PURPOSE OF TRANSACTION.
A. The information set forth in the following
paragraphs was disclosed in Item 4 pursuant Mr. Davis' original
Statement, and is restated herein pursuant to Rule 13d-2(c).
"Mr. and Mrs. Davis have acquired the shares of Common
Stock for investment and not with the purpose of changing or
influencing the control of Mitchell. Mr. and Mrs. Davis do
not have any plan or proposal which relates to or would
result in any of the actions enumerated in Item 4 of
Schedule 13D, except that Mr. and Mrs. Davis may dispose of
some or all of the Common Stock or may acquire additional
shares of Common Stock, from time to time, depending upon
price and market conditions, evaluation of alternative
investments, and other factors."
B. The information set forth in the following
paragraphs was added to the disclosure in Item 4 pursuant to
Amendment No. 1, and is restated herein pursuant to Rule 13d-
2(c).
Page 5 of 13 Pages
<PAGE>
"Mr. and Mrs. Davis originally acquired the shares of
Common Stock for investment and without any purpose of
changing or influencing the control of Mitchell. However,
based on Mr. Davis' review of Mitchell's financial results
for the quarter ending September, 1996, Mr. and Mrs. Davis
now believe that Mitchell must consider several options
which will enhance shareholder value, including a merger
transaction. This view along with Mr. Davis' several
concerns regarding Mitchell's poor financial performance are
discussed in his November 18, 1996 letter to Mitchell's
Board of Directors, a copy of which is attached hereto as
Exhibit No. 2.
In his letter, Mr. Davis sets forth the following
specific concerns and suggestions regarding Mitchell's poor
financial results:
1) INFERIOR RATE OF EARNINGS. Excluding the SAIF
charge, Mitchell's earnings for the September quarter
reflect an earnings rate of only $.13 per share, and an
annualized rate of only $.52 per share. Such earnings do
not support Mitchell's current stock price of $12.25 per
share, which is very rich at 23.6 times earnings. The value
of the Common Stock must be enhanced in other ways.
2) FULL VALUATION OF COMMON STOCK. The Common Stock
trades at 82% of its book value of $14.93 per share. Other
steps must be taken to improve the price of the Common
Stock, since it already reflects its "full" value.
3) SUBSTANDARD RETURN ON EQUITY. Mitchell's current
book value per share of $14.93 along with its expected
earnings of $.52 produce a ROE of just 3.5%. This amount
similarly does not support an increase in the price of the
Common Stock. Mr. Davis cautions that when a ROE does not
exceed an institution's passbook rate, shareholders will
suffer.
4) EXCESSIVE CAPITAL RATIO. Mitchell maintains an
enormous capital ratio of 39.8%. Such a ratio supports an
immediate increase in Mitchell's regular yearly dividend
rate of $.40 per share (which reflects a current yield of
only 3.27%). More significantly, it justifies a special
dividend of $7.00 to $10.00 per share. Numerous thrifts
have already issued special dividends between $3.00 and
$10.00. For example, Hillsborough Savings in North Carolina
recently announced a special dividend of $7.00 per share,
based on its capital ratio of 28.2% - just 70% of Mitchell's
capital ratio. Mr. Davis questions whether Mitchell has
entered into an agreement with regulators to not issue a
special dividend for at least a year.
Page 6 of 13 Pages
<PAGE>
5) LACK OF SHARE REPURCHASE. The price (discount to
book) of the Common Stock and Mitchell's capital ratio
warrant a substantial share repurchase. Mr. Davis notes
that Mitchell will have been public for 6 months in January,
1997 and requests that its Board of Directors state its
position on a share repurchase.
6) EXCESSIVE NPA. Although Mitchell's NPAs are down
86 basis points from March, 1996, they are still extremely
elevated at 2.54%. Mr. Davis asks Mitchell's Board of
Directors to identify the steps it is taking to reduce this
figure below 1.00%.
Mr. Davis concludes his letter by strongly advising
Mitchell to explore opportunities to merge with a larger
financial institution upon its one year anniversary, if it
can not triple its substandard 3.5% return on equity. Mr.
Davis states that such a transaction would produce a
substantial premium over the current price of the Common
Stock of $12.25 per share. However, Mitchell's first step
should be to substantially reduce its capital, such as
through a special dividend of $9.25 per share, which still
leaves a capital ratio of 15.1%.
Other than as described above, Mr. and Mrs. Davis do
not have any plan or proposal which relates to or would
result in any of the actions enumerated in Item 4 of
Schedule 13D, except that Mr. and Mrs. Davis may dispose of
some or all of the Common Stock or may acquire additional
shares of Common Stock, from time to time, depending upon
price and market conditions, evaluation of alternative
investments, and other factors."
C. Item 4 of the Statement is hereby further
supplemented by the addition of the following information:
"On May 5, 1997, Mr. Davis wrote to Mitchell's Board of
Directors with several comments regarding its recent
quarterly results. A copy of Mr. Davis' letter to
Mitchell's Board of Directors is attached hereto as Exhibit
3.
In his letter, Mr. Davis notes that Mitchell's
performance for the recent March quarter showed improvement
in the following respects:
i) The ratio of net interest income to G&A is now up
to 2.29 (best in the last 4 quarters);
ii) The ratio of G &A to assets, and efficiency ratio
have improved;
Page 7 of 13 Pages
<PAGE>
iii) ROA has increased to 1.70% (annualized);
iv) Capital ratio is reduced (slightly) to 40%; and
v) NPA's are declining (although they remain to high
at 2.06%).
While Mitchell has shown recent improvements in its
performance, Mr. Davis maintains that its ROE remains
extremely low, at only 4.2% when annualized for the March
quarter. Mr. Davis also believes that Mitchell must reduce
its excess capital. This capital should be shared with
Mitchell's shareholder by increasing the amount of its
regular dividend and declaring a substantial special dividend.
Mr. Davis concludes his comments by pointing out that
the Common Stock currently trades at 106% of book, and at a
very full PE ratio of 25 times earnings (based on $.16 for
the recent quarter). Based on these figures, Mr. Davis
believes that the market fully expects Mitchell to implement
capital management enhancements.
Mr. Davis plans to engage in further oral and written
communications with Mitchell's officers and directors to
discuss his views on its performance. Such communications
may include suggestions regarding ways to enhance Mitchell's
performance and increase shareholder value.
Other than as described above, Mr. and Mrs. Davis do
not have any plan or proposal which relates to or would
result in any of the actions enumerated in Item 4 of
Schedule 13D, except that Mr. and Mrs. Davis may dispose of
some or all of the Common Stock or may acquire additional
shares of Common Stock, from time to time, depending upon
price and market conditions, evaluation of alternative
investments, and other factors. The disposition of Common
Stock, as set forth on Schedule A hereto, reflects
investment decisions consistent with the purpose for which
such shares of Common Stock were required."
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
A. Paragraphs (a) through (e) of Item 5 of the
Statement are amended and restated in their entirety to read as
follows:
"(a) The aggregate number of shares of Common Stock
deemed to be beneficially owned by Mr. and Mrs. Davis for
the purposes of this Statement is 93,000 shares,
representing 9.99 percent of the outstanding shares of
Common Stock based on 930,902 shares of Common Stock
Page 8 of 13 Pages
<PAGE>
disclosed by the Mitchell as outstanding on May 6, 1997. Of
such shares, 12,190 (1.31%) are held in the name of Mr.
Davis, and 80,810 (8.68%) are held in the name of Mr. and
Mrs. Davis.
(b) (i) Subject to the matters referred to in
paragraph (a) hereof, Mr. Davis has sole power to vote or
direct the vote and sole power to dispose or direct the
disposition of the 12,190 shares of Common Stock owned by
him, and shared power to vote or direct the vote and shared
power to dispose or direct the disposition of the 80,810
shares of Common Stock jointly owned by him and Mrs. Davis.
(ii) Subject to the matter referred to in
paragraphs (a) and (b)(i) hereof, Mrs. Davis has shared
power to vote or to direct the vote and shared power to
dispose or direct the disposition of the 80,810 shares of
Common Stock jointly owned by her and Mr. Davis, and may be
deemed to have shared power to vote or direct the vote and
shared power to dispose or direct the disposition of the
12,190 shares of Common Stock owned by Mr. Davis.
(c) A description of all transactions in the shares of
Common Stock which have been effected jointly and/or
separately by Mr. and Mrs. Davis is set forth in Schedule A
attached hereto and is incorporated herein by reference.
(d) and (e) - Not applicable."
Item 6. CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
The information set forth below was disclosed in Item 6
pursuant to Mr. Davis' original Statement, and is restated herein
pursuant to Rule 13d-2(c).
"There are no relevant contracts, arrangements,
undertakings or relationships between Mr. and/or Mrs. Davis
(except that Mr. Davis and Mrs. Davis are husband and wife
and Mr. Davis generally directs Mrs. Davis' investment
decisions with respect to any of the securities) and/or with
any other person with respect to any securities of
Mitchell."
Page 9 of 13 Pages
<PAGE>
Item 7. MATERIALS TO BE FILED AS EXHIBITS.
A. The information set forth below regarding Exhibit
1 to the Statement was disclosed in Mr. Davis' original
Statement, and is restated herein pursuant to Rule 13d-2(c).
"1. Joint Filing Agreement between Jerome H. Davis and
Susan B. Davis."
B. The information set forth below regarding Exhibit
2 to the Statement was disclosure in Amendment No. 1, and is
restated herein as required pursuant to Rule 13d-2(c).
"2. Letter dated November 18, 1996 from Jerome H.
Davis to the Board of Directors of Mitchell Bancorp, Inc."
C. Item 7 of the Statement is hereby further
supplemented by the addition of the following information:
"3. Letter dated May 5, 1997 from Jerome H. Davis to
the Board of Directors of Mitchell Bancorp, Inc."
Page 10 of 13 Pages
<PAGE>
Signature.
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned certify that the
information set forth in this amendment is true, complete and
correct.
5/7/97 Jerome H. Davis
Date (Signature)
5/7/97 Susan B. Davis
Date (Signature)
Page 11 of 13 Pages
<PAGE>
<TABLE>
Schedule A
Information with Respect to Transactions in the
Common Stock of Mitchell Bancorp, Inc. by
Jerome H. Davis and Susan B. Davis
<CAPTION>
Date of No. of Shrs Price Per Shr Where How
Transa- Purchased (excl. commis- Trans- Trans-
tion (Sold) sions) acted acted
<S> <C> <C> <C> <C>
Jerome H. Davis:
1. 6/10/96 12,190 $10.00 Mit- Stock
chell Subsc-
ription
Mr. and Mrs. Davis:
2. 7/15/96 12,190 10.625 OTC *<F4>
3. 7/15/96 12,000 10.50 OTC *<F4>
4. 7/15/96 13,000 10.50 OTC *<F4>
5. 7/15/96 3,000 10.50 OTC *<F4>
6. 7/16/96 11,000 10.4375 OTC *<F4>
7. 7/16/96 12,000 10.375 OTC *<F4>
8. 7/16/96 6,500 10.4375 OTC *<F4>
9. 7/17/96 10,000 10.4375 OTC *<F4>
10. 7/18/96 6,000 10.50 OTC *<F4>
11. 5/7/97 (4,880) 16.25 OTC *<F4>
__________________________________
<FN>
<F4>
* Transaction effected in the over-the-counter market ("OTC")
through a standard brokerage account maintained by Mr. and/or
Mrs. Davis.
</FN>
</TABLE>
The transaction listed in No. 11 has not been previously
reported on Schedule A.
Page 12 of 13 Pages
Exhibit No. 3
May 5, 1997
The Board of Directors
Mitchell Bancorp, Inc.
210 Oak Avenue
Spruce Pine, NC 28777
Gentlemen:
I have reviewed your two page news release re: March quarter
results. I see some errors.
In the box "Consolidated Balance Sheet" the right side
column should be dated March 31, 1997. Also, paragraph 3 of the
text states "declared and paid a $.02 per share dividend...."
This should read $.20.
I have some questions and comments concerning your quarterly
results. This quarter was better than those previous. Ratio of
net interest income to G&A is now up to 2.29, best of last 4
quarters. Ratio of G&A to assets, and efficiency ratio,
similarly improved. ROA now up to 1.70% (annualized) and capital
ratio reduced (slightly) to 40%. While NPA's are declining,
slowly, they remain too high at 2.06%.
The ROE remains paltry, at only 4.2% (annualized for the
March quarter). You simply must dump capital. I urge that you
pay a larger regular dividend and declare a substantial special
dividend. The completed stock repurchase, while appropriate, has
reduced your capital ratio to only 38.4% presently. You have
tons of remaining capital to share with shareholders.
Our stock price continues to levitate - now at 106% of book.
It trades at a very full PE ratio of 25 times earnings (based
upon recent quarterly rate of $.16). The market certainly
anticipates, and fully expects, your capital management
enhancements. I hope you won't disappoint.
You must know what month you will hold your special meeting.
Is it July or August (anticipated)?
At 3/31/97, how much of your $20.3 million in deposits were
in C.D.'s?
I look forward to your reply.
Very truly yours,
Jerome H. Davis
(signature)
Page 13 of 13 Pages
