<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 4)<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)
October 31, 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 9 Pages
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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 9 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 9 Pages
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The Statement on Schedule 13D (the "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") is hereby amended as set forth below.
Item 4. PURPOSE OF TRANSACTION.
Item 4 of the Statement is hereby supplemented by the
addition of the following information:
"Following his review of Mitchell's September, 1997
quarterly results, Mr. Davis wrote to its Board of Directors
to express his continuing disappointment regarding its poor
financial results and lack of progress in enhancing shareholder
value. Mitchell's inability to achieve meaningful financial
results is reflected in the recent closing price of the Common
Stock at $17.00 per share as compared to a closing price of $16.75
on May 9, 1997. A copy of Mr. Davis' October 31, 1997 letter to
Mitchell's Board of Directors is attached hereto as Exhibit No. 5.
In his letter, Mr. Davis sets forth the following
comments regarding Mitchell's poor financial results for the recent
quarter:
1) ASSETS AND DEPOSITS. As compared to September 30,
1996, each of these important measures has declined. Mr. Davis'
questions how the price of the Common Stock can improve with such
negative growth.
2) BOOK VALUE PER SHARE. Mitchell's recent press
release shows book value per share of $15.36. This is lower than
its book value of $15.71 at June 30, 1997, and shows no meaningful
increase over its amount on March 31, 1997 of $15.17 per share.
3) EARNINGS AND RETURN ON EQUITY. Mitchell's earnings
for the September, 1997 quarter are approximately $.134 per share
based on 930,902 shares outstanding. This reflects a current price
in the Common Stock which is 31 times earnings. Mr. Davis
inquires who would purchase such a "rich" stock. Moreover,
at this quarterly rate of earnings, Mitchell's return on equity,
when annualized, is a only 3.5%.
4) OPERATING EXPENSES AND EFFICIENCY RATIO. Mr. Davis
states that a key measure of management's performance is the
company's operating expense to assets ratio. Mitchell's current
operating expense to assets ratio of 2.63% (annualized) is the
highest it has been since the March 31, 1996 financial results
disclosed in its prospectus information. It has never been worse.
Similarly, Mitchell's efficiency ratio is now above 50% for the
first time in the last five quarters.
Page 4 of 9 Pages
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5) CAPITAL RATIO. Mitchell maintains an enormous
capital ratio of 41.3%. According to Mr. Davis, this figure
highlights the ineffective decisions made by Mitchell's management.
Despite its tremendous excess capital, Mitchell has not paid a
special dividend, taxable or otherwise, since going public in July,
1996. Its capital ratio has even increased from its level at March
31, 1997 of 40%. Mr. Davis considers Mitchell's retention of such
an astonishing amount of excess capital to be unconscionable and
evidences its inability to further the growth of the company and
improve its financial state. Such excess capital will also cause
the price of the Common Stock to languish even further. Mr. Davis
believes that Mitchell's decision to withhold this cash from its
shareholders conflicts with management's fiduciary
responsibilities. He also notes that an acquiror will not pay for
such excess cash.
In view of Mitchell's consistently poor financial
results, Mr. Davis believes that it has no reason to remain
independent. Based on management's record, Mr. Davis advises
Mitchell to declare a large special dividend of approximately $7.00
and change the control of the company by turning it over to others
who are more capable of managing a public company.
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."
Page 5 of 9 Pages
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Item 7. MATERIALS TO BE FILED AS EXHIBITS.
Item 7 of the Statement is hereby supplemented by the
addition of the following information:
"5. Letter dated October 31, 1997 from Jerome H. Davis
to the Board of Directors of Mitchell Bancorp, Inc."
Page 6 of 9 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.
11/4/97 Jerome H. Davis
Date (Signature)
11/4/97 Susan B. Davis
Date (Signature)
Page 7 of 9 Pages
Exhibit No. 5
October 31, 1997
The Board of Directors
Mitchell Bancorp, Inc.
210 Oak Avenue
Spruce Pine, NC 28777
Attn: Edward Ballew, Jr.
Gentlemen:
Thank you for your fax today of your September quarterly
financial results. I continue to be disappointed by the lack of
progress in the enhancement of shareholder value. Because of the
lack of meaningful financial results, the price of our stock has
languished considerably for quite a long time. The price of
Mitchell stock yesterday closed at $17.00 per share versus a
closing price of $16.75 a share on May 9, 1997. During this six
month period prices of thrift stocks have soared. Shareholders in
Mitchell have not participated and have been left only as
spectators. I cannot understand why you do not implement the
generally accepted measures which enhance shareholder value.
Let's look at this quarters results compared to previous
quarters.
I. Assets and Deposits.
The amounts shown in today's press release indicate declines
rather than growth in these important measures, when compared to
September 30, 1996. How can our stock price improve with negative
growth?
II. Book Value Per Share.
Your release shows book value per share of $15.36. This is
down from $15.71 at June 30, 1997 and shows no meaningful increase
over where it stood March 31, 1997, $15.17 per share.
III. Earnings and Return on Equity.
Earnings remain locked at approximately $.134 per share
quarterly (based on full 930,902 outstanding). The current stock
price equates to a whopping 31 times earnings. Would you buy such
a "rich" stock? Your return on equity (annualized) at the present
quarterly rate of earnings remains woefully inadequate at a paltry
3.5%.
Page 8 of 9 Pages
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Mitchell Bancorp, Inc.
October 31, 1997
Page 2
4. Operating Expenses and Efficiency Ratio.
A key measure of management performance is its operating
expense to assets ratio. Your's has never been worse (for the
September 30, 1997 quarter). It stands at 2.63% (annualized), the
highest of all the quarters since March 31, 1996 (prospectus
information). Similarly, your efficiency ratio, which had been
below 50% in each of the last five quarters, has risen to 50%.
5. Capital Ratio.
One of the most egregious examples of ineffective management
decision is your present 41.3% capital ratio. You have paid no
special dividend, taxable or otherwise since you went public in
July of 1996. Your decision to retain this excessive capital is
unconscionable. Furthermore, the present capital ratio is the
highest of the past three quarters, having risen from exactly 40%
at March 31, 1997. Your continued retention of such an astonishing
amount of excess capital reflects your inability to further the
growth of our company and improve its financial state. This can
only cause the price of our stock to languish even further. You
must know that an acquiror will not pay up for this excess cash.
Your decision to withhold this cash from the owners of the company
is in direct conflict with your fiduciary responsibility.
Considering the constant and pitiful state of the financial
results you have generated, our company has no reason to remain
independent. The time for declaration of a large special dividend
(approximately $7 per share) and a change in control, is long
overdue. The record warrants that management turn over the reins
of our company to others, more capable of running a public company.
I, and I am sure all your non-management shareholders, hope to
hear from you very soon about these serious concerns.
Very truly yours,
Jerome H. Davis
cc: Calvin F. Hall
Emma Lee M. Wilson
Baxter D. Johnson
Lloyd Hise, Jr.
