`SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

(Mark One)

/X/      Quarterly Report Pursuant to Section 13 or 15(d) of the
         Securities Exchange Act of 1934

For the quarterly period ended September 30, 2001
                               --------------

                                       OR

/ /      Transition Report Pursuant to Section 13 or 15(d) of the
         Securities Exchange Act of 1934

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

Commission File Number   333-96209
                       -----------

                               PREMIERWEST BANCORP
             (Exact name of registrant as specified in its charter)

              OREGON                             93-1282171
     (State of Incorporation)                 (I.R.S. Employer
                                            Identification Number)

                              503 Airport Road
                                            P.O. Box 40
                             Medford, Oregon 97504
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (541) 618-6003
              (Registrant's telephone number, including area code)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes  /X/    No / /


     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of latest practicable date: 10,854,732 shares as of November
7, 2001.



                 Disclosure Regarding Forward-Looking Statements

This  report  includes  forward-looking  statements  within  the  meaning of the
"safe-harbor"  provisions  of the Private  Securities  Litigation  Reform Act of
1995. Such forward-looking  statements are based on the beliefs of the Company's
management and on assumptions  made by and  information  currently  available to
management.  All statements other than statements of historical fact,  regarding
the Company's financial position,  business strategy and plans and objectives of
management for future operations of the Company are forward-looking  statements.
When used herein, the words "anticipate,"  "believe,"  "estimate," "expect," and
"intend" and words or phrases of similar meaning,  as they relate to the Company
or management, are intended to identify forward-looking statements.  Examples of
forward-looking  statements  include,  but are not limited to (i) projections of
revenues,  income  or  expenses,   earnings  per  share,  capital  expenditures,
dividends,  capital  structure and other financial items, (ii) statements of the
plans and  objectives of the Company or its  management,  or Board of Directors,
including the  introduction  of new products or services,  plans for  expansion,
acquisitions  or future  growth,  or  estimates  or  predictions  of  actions by
customers,  vendors, competitors or regulatory authorities,  (iii) statements of
future economic performance, and (iv) statements of assumptions underlying other
statements  about the Company and its  business.  Although the Company  believes
that  the  expectations   reflected  in  such  forward-looking   statements  are
reasonable,  it can give no assurance that such  expectations will prove to have
been  correct.  Forward-looking  statements  are  subject to  certain  risks and
uncertainties,  which could cause actual results to differ materially from those
indicated  by the  forward-looking  statements.  These  risks and  uncertainties
include  the  Company's  ability to  maintain  or expand its market  share,  net
interest  margins,  or implement its marketing and growth  strategies.  Further,
actual results may be affected by the Company's  ability to compete on price and
other  factors with other  financial  institutions;  customer  acceptance of new
products and services; general trends in the banking industry and the regulatory
environment,  as they  relate  to the  Company's  cost of funds and  returns  on
assets.  In addition,  there are risks inherent in the banking industry relating
to  collectibility of loans and changes in interest rates. The reader is advised
that this list of risks is not  exhaustive  and should not be  construed  as any
prediction by the Company as to which risks would cause actual results to differ
materially from those indicated by the forward-looking statements.



                                    Form 10-Q
                                Table of Contents


Part I ......   FINANCIAL INFORMATION

Item 1  .....   Condensed Consolidated Financial Statements.......................................................................4

Item 2  .....   Management's Discussion and Analysis of Financial Condition and Results of Operations............................13



Part II .....   OTHER INFORMATION

Item 1  .....   Legal Proceedings................................................................................................17

Item 4  .....   Submission of Matters to a Vote of Securities Holders............................................................17

Item 6  .....   Exhibits and Reports on Form 8-K.................................................................................17

Signatures      .................................................................................................................17



PART I. FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                      PREMIERWEST BANCORP AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                               (Dollars in 000's)
                                   (UNAUDITED)


                                                         September 30,     December 31,
                                                             2001             2000
                                                      -----------------   -----------
                                 ASSETS
                                 ------

CASH AND DUE FROM BANKS                               $           17,429  $           14,306
FEDERAL FUNDS SOLD AND INTEREST-BEARING DEPOSITS                  40,869               3,730
                                                      ------------------  ------------------
         Total cash and cash equivalents                          58,298              18,036
INVESTMENT SECURITIES AVAILABLE-FOR-SALE                          59,890              73,634
LOANS, NET OF ALLOWANCE FOR LOAN LOSSES                          332,164             232,910
FEDERAL HOME LOAN BANK STOCK                                       1,567               1,490
PREMISES AND EQUIPMENT, NET                                       17,544              11,172
ACCRUED INTEREST AND OTHER ASSETS                                 13,342               7,004
                                                      ------------------  ------------------

         TOTAL ASSETS                                 $          482,805  $          344,246
                                                      ==================  ==================


                  LIABILITIES AND SHAREHOLDERS' EQUITY
                  ------------------------------------

LIABILITIES:
DEPOSITS:
     Non-interest-bearing checking                   $           77,901  $           51,062
     Savings and interest-bearing demand                        181,825             125,398
     Time                                                       163,255             119,780
                                                     ------------------  ------------------
         Total deposits                                         422,981             296,240
   FEDERAL HOME LOAN BANK BORROWINGS                              5,725               6,672
   REPURCHASE AGREEMENTS                                          7,618               6,162
   EMPLOYEE STOCK OWNERSHIP PLAN NOTES PAYABLE                      217                 383
                                                     ------------------  ------------------
         Total borrowings                                        13,560              13,217
   OTHER LIABILITIES                                              2,434               2,347
                                                     ------------------  ------------------
         Total liabilities                                      438,975             311,804

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
   Preferred stock - no par value; 1,000,000
        shares authorized; none issued                                -                   -
   Common stock - no par value; 20,000,000
        shares authorized; and 10,854,732 and
        9,028,862 shares issued and outstanding
        in 2001 and 2000, respectively                           29,462              18,679
   Retained earnings                                             13,820              14,514
   Unearned Employee Stock Ownership Plan compensation             (217)               (383)
   Accumulated other comprehensive income (loss)                    765                (368)
                                                        ------------------  ----------------
         Total shareholders' equity                              43,830              32,442
                                                        ------------------  ----------------

         TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $       482,805      $      344,246
                                                        ==================  ==================

                            See accompanying notes.



                      PREMIERWEST BANCORP AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
             (Dollars in 000's, Except for Earnings per Share Data)
                                   (UNAUDITED)

                                          FOR THE THREE MONTHS ENDED              FOR THE NINE MONTHS ENDED
                                     -------------------------------------  ---------------------------------
                                       September 30,        September 30,       September 30,      September 30,
                                           2001                 2000                2001               2000
                                     -----------------  ------------------  ------------------  ------------------

Interest income:
   Interest and fees on loans        $           7,326  $            5,527  $           19,777  $           15,133
   Interest-earning deposits                       274                 108                 755                 233
   Investment securities                           929               1,322               2,950               3,939
                                     -----------------  ------------------  ------------------  ------------------
         Total interest income                   8,529               6,957              23,482              19,305
Interest expense:
   Deposits                                      3,528               2,537               9,981               6,494
   Other borrowings                                151                 478                 460               1,651
                                     -----------------  ------------------  ------------------  ------------------
         Total interest expense                  3,679               3,015              10,441               8,145
                                     -----------------  ------------------  ------------------  ------------------
Net interest income                              4,850               3,942              13,041              11,160
Loan loss provision                                258                 215                 613                 594
                                     -----------------  ------------------  ------------------  ------------------
         Net interest income after
           loan loss provision                   4,592               3,727              12,428              10,566
Non-interest income                              1,076                 529               2,733               1,537
Non-interest expense:
   Salaries and employee benefits                2,738               1,600               7,178               4,932
   Professional fees                                30                  28                 280                 256
   Occupancy & equipment, net                      747                 379               2,081               1,399
   Advertising                                      75                  69                 225                 301
   Merger and data conversion costs                  -                  65                   -                 948
   Goodwill                                         92                   -                 188                   -
   Other                                         1,064                 929               2,408               2,160
                                     -----------------  ------------------  ------------------  ------------------
         Total non-interest expense              4,746               3,070              12,360               9,996
                                     -----------------  ------------------  ------------------  ------------------
Income before income taxes                         922               1,186               2,801               2,107
Provision for income taxes                         320                 380                 949                 915
                                     -----------------  ------------------  ------------------  ------------------

         Net income                  $             602  $              806  $            1,852  $            1,192
                                     =================  ==================  ==================  ==================

Earnings per common share:
   Basic                             $            0.06  $             0.09  $             0.18  $             0.14
                                     =================  ==================  ==================  ==================
   Diluted                           $            0.06  $             0.09  $             0.18  $             0.13
                                     =================  ==================  ==================  ==================

                             See accompanying notes



                      PREMIERWEST BANCORP AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                               (Dollars in 000's)
                                   (UNAUDITED)

                                                                                  Accumulated
                                                                     Unearned      other                           Total
                                 Comprehensive      Retained           ESOP       comprehensive      Common      shareholders'
                                     income         earnings      compensation    income (loss)      stock         equity
                                   ----------     -------------  ---------------- ---------------- ---------     -----------

BALANCE - JANUARY 1, 2000                         $      12,710  $        (604)  $      (1,800)    $  17,918     $     28,224

   Comprehensive income:
     Net income                    $       1,192          1,192              -               -             -            1,192
     Net change in unrealized loss
       on investment securities
       available-for-sale,
       net of taxes                          445              -              -             445             -              445
                                   -------------

         Comprehensive income      $       1,637
                                   =============

   ESOP compensation expense                                  -            166               -             -              166

   Stock options exercised                                    -              -               -           625              625
   Tax benefit of stock options
     exercised                                                -              -               -            32               32
                                                  -------------  -------------   -------------  -------------  --------------

BALANCE - September 30, 2000                      $      13,902  $        (438)  $      (1,355) $     18,575   $       30,684
                                                  =============  =============   =============  =============  ==============

BALANCE - JANUARY 1, 2001                         $      14,514  $        (383)  $        (368) $     18,679   $       32,442

   Comprehensive income:
     Net income                    $       1,852          1,852              -               -             -            1,852
     Net change in unrealized gains
       on investment securities
       available-for-sale
       (net of taxes),
       net of reclassification
       adjustment for gains included
       in the income statement
       of approximately $45(net of
       $23 in taxes)                       1,133              -              -           1,133             -            1,133
                                   -------------

         Comprehensive income      $       2,985
                                   =============

   Common stock issued to
     shareholders of Timberline
     Bancshares, Inc.                                         -              -               -         7,995            7,995
   Stock dividend paid (5%)                              (2,546)             -               -         2,546                -
   ESOP compensation expense                                  -            166               -            44              210
   Tax benefit of stock
     options exercised                                        -              -               -            71               71
   Stock options exercised                                    -              -               -           127              127
                                                  -------------  -------------   -------------  -------------  --------------

BALANCE - SEPTEMBER 30, 2001                      $      13,820  $        (217)  $         765  $     29,462   $       43,830
                                                  =============  =============   =============  =============  ==============

                             See accompanying notes



                      PREMIERWEST BANCORP AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (Dollars in 000's)
                                   (UNAUDITED)

                                                                               FOR THE NINE MONTHS ENDED
                                                                       ---------------------------------
                                                                       September 30,          September 30,
                                                                              2001                2000
                                                                       ------------------  -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                          $            1,852  $            1,192
   Adjustments to reconcile net income to net cash provided
     by operating activities:
       Depreciation and amortization                                                1,074                 783
       Goodwill amortization                                                          188                   -
       Amortization of premiums (accretion of discounts)
        on investment securities, net                                                  42                  17
       Dividends on Federal Home Loan Bank stock                                      (77)               (186)
       Net securities gains                                                           (68)                  -
       Loan loss provision                                                            613                 594
       Loss on sale of other real estate                                              101                   -
       Recognition of deferred compensation relating to ESOP                          210                 166
       Increase in accrued interest and other assets                                 (282)               (304)
       (Decrease) increase in accrued interest and other liabilities                 (696)                282
                                                                       ------------------- ------------------
              Net cash provided by operating activities                             2,957               2,544

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of Federal Home Loan Bank
     and Federal Reserve Bank stock                                                     -               4,538
   Purchases of investment securities available-for-sale                          (22,342)                  -
   Proceeds from maturities and calls of investment
     securities available-for-sale                                                 47,404               4,403
   Loan originations, net                                                         (42,021)            (47,643)
   Proceeds from sale of property and equipment                                     1,332                   -
   Purchase of premises and equipment, net                                         (4,731)             (1,006)
   Acquired net assets of Timberline, net of cash and cash
     equivalents acquired of $19,714                                               17,835                   -
                                                                       ------------------  ------------------
              Net cash used by investing activities                                (2,523)            (39,708)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net increase in deposits                                                        39,287              46,138
   Net borrowings (repayments)                                                        343             (14,023)
   Proceeds from exercise of stock options                                            127                 657
                                                                       ------------------  ------------------
              Net cash provided by financing activities                            39,828              32,772
                                                                       ------------------  ------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   40,262              (4,392)

CASH AND CASH EQUIVALENTS - Beginning of the period                                18,036              20,868
                                                                       ------------------  ------------------

CASH AND CASH EQUIVALENTS - End of the period                          $           58,298  $           16,476
                                                                       ==================  ==================

                             See accompanying notes



                      PREMIERWEST BANCORP AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                               September 30, 2001

1.   SUMMARY OF  ORGANIZATION,  BUSINESS  AND  SIGNIFICANT  ACCOUNTING  POLICIES
     ---------------------------------------------------------------------------

     ORGANIZATION AND MERGER:  PremierWest Bancorp was incorporated in the state
     of  Oregon  on  November  26,  2000.   Effective  on  May  8,  2000,  in  a
     reorganization   and  merger  accounted  for  as  a   pooling-of-interests,
     PremierWest  Bancorp  became  the  holding  company  for  PremierWest  Bank
     (formerly,  Bank of Southern  Oregon);  United Bancorp (United) merged with
     and into PremierWest Bancorp and United's wholly owned subsidiary,  Douglas
     National  Bank,  merged  with and into  PremierWest  Bank  (the  Bank).  In
     connection with the merger,  PremierWest Bancorp issued 3,910,016 shares of
     its common stock to United  shareholders and 5,100,417 shares of its common
     stock to PremierWest Bank shareholders.

     On April  16,  2001,  PremierWest  Bancorp  completed  the  acquisition  of
     Timberline  Bancshares,  Inc. and its wholly owned  subsidiary,  Timberline
     Community Bank  (Timberline).  The  acquisition was accounted for using the
     purchase method of accounting.  Accordingly,  the assets and liabilities of
     Timberline  have been recorded by PremierWest  Bancorp at their  respective
     fair values at the time of the  completion of the merger and the results of
     Timberline  have been included with those of PremierWest  Bancorp since the
     date of the  acquisition.  The  financial  statement  data for the  periods
     presented are not  comparable as a result of the  acquisition of Timberline
     using the purchase method of accounting (see Note 8).

     PremierWest Bank,  including its subsidiaries,  serves Jackson,  Josephine,
     Douglas,  and  Klamath  counties of Southern  Oregon and  Siskiyou  County,
     California.

     BASIS OF  PRESENTATION:  The condensed  consolidated  financial  statements
     include  the  accounts  of   PremierWest   Bancorp  and  its  wholly  owned
     subsidiaries, PremierWest Bank, PremierWest Investment Services and Premier
     Finance Company,  hereafter  referred to as "the Company".  All significant
     intercompany   accounts   and   transactions   have  been   eliminated   in
     consolidation.

     The interim condensed  consolidated  financial  statements are not audited,
     but include all adjustments that management  considers necessary for a fair
     presentation  of the results of  operations  for such interim  periods.  In
     preparing the condensed  consolidated  financial statements,  management is
     required to make estimates and assumptions that affect the reported amounts
     of assets and  liabilities  as of the date of the balance sheets and income
     and  expenses  for the  periods.  Actual  results  could  differ from those
     estimates.

     The accompanying  condensed consolidated financial statements are presented
     as though the merger with United had been  consummated  as of the  earliest
     date  reported.  The balance sheet data as of December 31, 2000 was derived
     from  audited  financial  statements  and does not include all  disclosures
     contained in the 2000 Annual Report to Shareholders.  The interim condensed
     consolidated  financial  statements  should be read in conjunction with the
     Company's  2000  consolidated  financial  statements,  including  the notes
     thereto,  included in the 2000 Annual  Report to  Shareholders.  The reader
     should keep in mind that the results of operations for the interim  periods
     shown in the accompanying  condensed  consolidated financial statements are
     not necessarily indicative of results for any future interim periods or the
     entire fiscal year.

     METHOD OF  ACCOUNTING:  The Company  prepares its  financial  statements in
     conformity  with  accounting  principles  generally  accepted in the United
     States.  The Company  utilizes  the  accrual  method of  accounting,  which
     recognizes  income when earned and expenses when incurred.  The preparation
     of financial statements in conformity with accounting  principles generally
     accepted in the United States  requires  management  to make  estimates and
     assumptions that affect the reported amounts of assets and liabilities, the
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements,  and the  reported  amounts of income  and  expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     STOCK DIVIDEND: On April 19, 2001, the Company declared a 5% stock dividend
     payable to its  shareholders  of record  June 1,  2001.  All shares and per
     share data in the accompanying  condensed  consolidated financial statement
     have been retroactively restated to reflect the stock dividend.

     RECLASSIFICATION: Certain amounts in 2000 have been reclassified to conform
     with the 2001 presentation.



2.   INVESTMENT SECURITIES AVAILABLE-FOR-SALE
     ----------------------------------------

     Investment securities available-for-sale at September 30, 2001 and December
     31, 2000 consisted of the following:

                                                                                             2001
                                                                 ------------------------------------------------------------
                                                                                     Gross          Gross          Estimated
                                                                  Amortized        unrealized      unrealized        fair
(Dollars in 000's)                                                  cost            gains          losses           value
                                                                 -------------   -------------  -------------  --------------
U.S. agency securities                                           $      26,356   $         606  $           -  $       26,962
Collateralized mortgage obligations
           and mortgage-backed securities                               12,724             270             (4)         12,990
Obligations of states and
           political subdivisions                                       15,720             326             (1)         16,045
Corporate securities                                                     3,003              41              -           3,044
Equity securities                                                          849               -              -             849
                                                                 -------------   -------------  -------------  --------------
           Total                                                 $      58,652   $       1,243  $          (5) $       59,890
                                                                 =============   =============  =============  ==============

                                                                                             2000
                                                                 ------------------------------------------------------------
                                                                                     Gross          Gross          Estimated
                                                                  Amortized        unrealized      unrealized        fair
(Dollars in 000's)                                                  cost            gains          losses           value
                                                                 -------------   -------------  -------------  --------------
U.S. agency securities                                           $      41,531   $          27  $        (404)    $    41,154
Collateralized mortgage obligations
           and mortgage-backed securities                               17,198              52           (167)         17,083
Obligations of states and
           political subdivisions                                       15,176              84           (189)         15,071
Equity securities                                                          326               -              -             326
                                                                 -------------   -------------  -------------     -----------
           Total                                                 $      74,231   $         163  $        (760)    $    73,634
                                                                 =============   =============  =============     ===========

     At September 30, 2001,  approximately $37 million in investment  securities
     available-for-sale  were pledged to secure  public  deposits and  nonpublic
     deposits and borrowings.

3.   LOANS AND ALLOWANCE FOR LOAN LOSSES
     -----------------------------------

     The  composition  of the loan  portfolio at September 30, 2001 and December
     31, 2000 was as follows:

       (Dollars in 000's)                               2001                2000
                                                  ----------           ---------
       Commercial                                   $ 73,588             $37,878
       Real estate - construction                     57,096              48,039
       Real estate - other                           170,652              11,902
       Consumer installment                           33,279              30,575
       Other                                           2,776               5,478
                                                  ----------          ----------
                                                     337,491             236,972
       Allowance for loan losses                      (4,617)             (3,476)
       Deferred loan fees                               (710)               (586)
                                                  ----------          ----------
          Loans - net                               $332,164           $ 232,910
                                                  ==========          ==========

     Impaired  loans,  on which the accrual of interest  had been  discontinued,
     were  approximately  $4.0 million at September 30, 2001 and $4.8 million at
     December 31, 2000.

     A summary of changes in the  allowance  for loan losses for the nine months
     ended September 30, 2001 and 2000 were as follows:

       (Dollars in 000's)                                    2001           2000
                                                         ----------      -------
       Balance - Beginning of the period                 $  3,476        $  3,075
       Loans charged-off                                     (199)           (404)
       Loan recoveries                                         51              89
       Loan loss provision                                    613             594
       Allowance for loan losses acquired from Timberline     676               -
                                                         --------        --------
       Balance - End of the period                      $   4,617        $  3,354
                                                       ==========        ========



4.   LINE OF CREDIT AND OTHER BORROWINGS
     -----------------------------------

     The Company has a line of credit  available  with Federal Home Loan Bank of
     Seattle  (FHLB) for up to  approximately  $50 million as of  September  30,
     2001.  This line of credit is secured by restricted FHLB stock owned by the
     Company and is limited to 15% of the Bank's  total assets and by the amount
     of FHLB stock held by the Bank.  Interest  and  principal  payments are due
     monthly  on any  outstanding  borrowings.  As of  September  30,  2001  and
     December 31, 2000,  the Company had no draws on  short-term  advances  from
     FHLB under the line of credit.  The  Company  has also  borrowed  long-term
     funds from the FHLB against this line of credit,  aggregating approximately
     $5.7  million and $6.7  million as of  September  30, 2001 and December 31,
     2000,  respectively.  As of September 30, 2001,  $4.9 million is due August
     28,  2008,  and the  remaining  $800,000  is due at various  times  through
     February  2014.  The  Company  is  making  monthly  principal  payments  of
     approximately $60,000 plus interest at rates of 5.82% to 7.75%.

     Borrowings of approximately  $7.6 million and $6.2 million at September 30,
     2001 and  December  31,  2000,  relate to  repurchase  agreements  used for
     customer overnight sweep accounts. The cost of these funds at September 30,
     2001 is an average annual rate of interest of approximately  2.71%. Certain
     investment  securities,  as required,  have been pledged as  collateral  to
     fully secure the long-term debt and the repurchase agreements.

     Additionally,  as of September 30, 2001 the Company has  approximately  $25
     million  in  available  borrowings  through  lines of credit  with  certain
     correspondent banks and through the Federal Reserve Bank's discount window.

5.   COMMITMENTS AND CONTINGENCIES
     -----------------------------

     The Company is a party to financial instruments with off-balance-sheet risk
     in the  normal  course  of  business  to meet  the  financing  needs of its
     customers. These financial instruments include commitments to extend credit
     and standby letters of credit. These instruments involve various levels and
     elements  of  credit  and  interest  rate  risk  in  excess  of the  amount
     recognized in the accompanying condensed consolidated financial statements.
     The contract or notional amounts of those instruments reflect the extent of
     involvement the Company has in particular classes of financial instruments.
     As of September  30, 2001,  the Company has $39 million of  commitments  to
     extend credit to customers and $2 million of standby letters of credit.

6.   EARNINGS PER SHARE
     ------------------

     The Company's  basic earnings per common share are computed by dividing net
     income by the weighted average number of common shares  outstanding  during
     the period.  The Company's diluted earnings per common share is computed by
     dividing  net  income  by the  weighted-average  number  of  common  shares
     outstanding plus dilutive common shares related to stock options.

         Three-months ended September 30, 2001 and 2000:       2001         2000
                                                               ----         ----
       Weighted average number of common shares:
       Basic earnings per share                             10,855,000    8,820,000
       Diluted earnings per share                           10,934,000    9,104,000

         Nine-months ended September 30, 2001 and 2000:

       Weighted average number of common shares:
       Basic earnings per share                             10,131,000    8,820,000
       Diluted earnings per share                           10,210,000    9,098,000

7.   ADOPTION OF NEW ACCOUNTING STANDARDS
     ------------------------------------

     In September 2000, the Financial Standards Board (FASB) issued Statement of
     Financial  Accounting  Standards (SFAS) No. 140,  "Accounting for Transfers
     and Servicing of Financial Assets and Extinguishments of Liabilities," as a
     replacement  for SFAS No.  125.  SFAS No. 140  revises  the  standards  for
     accounting for  securitizations and other transfers of financial assets and
     collateral,  but it  carries  over most of the  provisions  of SFAS No. 125
     without change.

     SFAS No. 140 is effective for  transfers and servicing of financial  assets
     and  extinguishments  of  liabilities  occurring  after March 31, 2001. The
     statement is effective for recognition and  reclassification  of collateral
     for fiscal years ending after  December 15, 2000.  The adoption of SFAS No.
     140 did not have a material effect on the Company's  financial  position or
     results of operation.



7.   ADOPTION OF NEW ACCOUNTING STANDARDS (continued)
     ------------------------------------------------

     In July 2001, FASB issued SFAS No. 141, "Business  Combinations",  and SFAS
     No. 142,  "Goodwill and Other  Intangible  Assets." These  statements  make
     significant  changes  to  the  accounting  for  business  combinations  and
     goodwill.  SFAS No.  141  eliminates  the  pooling-of-interests  method  of
     accounting and requires that the purchase  method of accounting be used for
     business  combinations   initiated  after  June  30,  2001.  SFAS  No.  142
     discontinues the practice of amortizing goodwill and requires that goodwill
     be  continually   evaluated  for  impairment  and  be   written-down   when
     appropriate.  Other intangible assets with a determinable  useful life will
     continue to be amortized over future periods.  Goodwill previously recorded
     by the Company will be affected upon adoption of SFAS No. 142 on January 1,
     2002. Application of the non-amortization  provisions of the statement will
     eliminate  the  Company's  future  amortization  of goodwill.  In addition,
     during 2002, the Company will perform the first of the required  impairment
     tests of goodwill.  However,  management  has not yet  determined  what the
     effect of these  impairment  tests  will be on the  Company's  consolidated
     results of operations and financial position.

8.   ACQUISITION OF TIMBERLINE BANSCHARES, INC.
     ------------------------------------------

     On April 16, 2001,  the Company  completed  the  acquisition  of Timberline
     Bancshares, Inc. and its wholly owned subsidiary, Timberline Community Bank
     (Timberline).  The  Company  issued  1,757,775  shares of its common  stock
     valued at $7,995,000 and $5,595,000 in cash to  shareholders  in connection
     with the acquisition. The acquisition was accounted for, using the purchase
     method of accounting. Accordingly, the assets and liabilities of Timberline
     have been recorded by the Company at their respective estimated fair values
     at the  time  of the  completion  of the  transaction  and the  results  of
     Timberline  have been  included with those of the Company since the date of
     the  acquisition.  The  excess of the  Company's  purchase  price  over the
     estimated net fair value of the assets  acquired and  liabilities  assumed,
     including  identifiable  intangible  assets, is reported as goodwill and is
     being amortized on a straight-line basis over 20 years.

     The estimated fair values of net assets  acquired at the  acquisition  date
     are summarized as follows:

       (Dollars in 000's)
       Cash and due from banks                                         $     4,614
       Federal funds sold                                                   19,700
       Investment securities                                                10,159
       Loans, net of allowance for loan losses                              56,270
       Property and equipment                                                2,847
       Other assets                                                          8,838
                                                                       -----------
       Total Assets                                                        102,428
                                                                       -----------
       Deposits                                                             87,454
       Other liabilities                                                       783
                                                                       -----------
                                                                            88,237
                                                                       -----------
       Purchase price:
                       PremierWest Common Stock        $     7,995
                       Cash payments                         5,595
                       Costs of acquisition                    601     $    14,191
                                                       -----------     ===========

     The following  pro forma  information  presents the Company's  consolidated
     results of operations as if the  acquisition  of Timberline had occurred at
     the  beginning  of each  of the  periods  presented  below.  The pro  forma
     information  does not  purport to be  indicative  of the actual  results of
     operations that would have occurred had the transactions taken place at the
     beginning of the periods presented or of future result of operations.



8.   ACQUISITION OF TIMBERLINE BANSCHARES, INC. (continued)
     ------------------------------------------------------

(Dollars in 000's, except earnings per share)      Nine-months ended September 30,
                                              ------------------------------------
                                                     2001                  2000
                                              -------------------    ------------
Total interest and non-interest income            $   28,312           $   26,394
Net income                                        $    1,980           $    1,817

Basic earnings per common share                   $     0.20           $     0.17
Diluted earnings per common share                 $     0.19           $     0.17

          Note: Earnings per share data has been retroactively adjusted for a 5%
          stock dividend declared April 19, 2001.



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

HIGHLIGHTS
----------

As discussed in the notes  accompanying  the  condensed  consolidated  financial
statements included in this report,  effective May 8, 2000,  PremierWest Bancorp
and its subsidiaries (hereafter also referred to as "the Company") consummated a
merger as a  pooling-of-interests.  The  merger  was  between  Bank of  Southern
Oregon,  which changed its name to PremierWest  Bank, and United Bancorp and its
wholly owned  subsidiary,  Douglas National Bank.  Accordingly,  information and
data included in the accompanying  condensed  consolidated  financial statements
and related  notes,  and  Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations  have been combined as though the merger had
been consummated as of the earliest period financial information is presented.

On  April  16,  2001,  the  Company  completed  the  acquisition  of  Timberline
Bancshares,  Inc. and its wholly owned  subsidiary,  Timberline  Community  Bank
(Timberline).  The Company issued 1,757,775 shares of its common stock valued at
$7,995,000 and $5,595,000 in cash to Timberline  shareholders in connection with
the acquisition.  The acquisition was accounted for using the purchase method of
accounting.  Accordingly,  the assets and  liabilities  of Timberline  have been
recorded by the Company at their respective estimated fair values at the time of
the  completion  of the  acquisition  and the  results of  Timberline  have been
included  with  those of the  Company  since  the date of the  acquisition.  The
unidentified  intangible assets related to the excess of the Company's  purchase
price over the estimated net fair value of the assets  acquired and  liabilities
assumed is reported as goodwill and is being  amortized over a useful life of 20
years. The financial statement data for the periods presented are not comparable
as a result  of the  acquisition  of  Timberline  using the  purchase  method of
accounting.

Forward-looking  statements are based on the beliefs of the Company's management
and on assumptions  made by and information  currently  available to management.
Although  the  Company  believes  that  the   expectations   reflected  in  such
forward-looking  statements are  reasonable,  it can give no assurance that such
expectations  will prove to have been correct.  Forward-looking  statements  are
subject to certain risks and uncertainties,  which could cause actual results to
differ materially from those indicated by the forward-looking statements.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
------------------------------------------------------

The Company had net income of $602,000 for the three months ended  September 30,
2001,  which was a decrease of $204,000 (or 25%)  compared to the same period in
2000. This decrease is due mainly to a $908,000  increase in net interest income
and $547,000 increase in non-interest income offset by an increase of $1,676,000
in non-interest expense over the comparative  three-month period ended September
30,2000.

The following table presents  information  regarding yields on  interest-earning
assets, expense on interest-bearing liabilities, net interest spread, net yields
on  average  interest-earning  assets,  return on  average  assets and return on
average equity for the periods indicated (dollars in thousands):


Analysis for the three-month period ended                                               Increase
September 30, 2001 and 2000                                2001           2000         (Decrease)       %Change
---------------------------                           -------------   -------------  -------------  -----------
Average interest-earning assets                       $     421,392   $     304,534  $     116,858        38.4%
Average interest-bearing liabilities                        428,265         253,060        175,206        69.2%
Average total assets                                        472,093         328,144        144,301        44.0%
Average equity                                               43,232          29,978         13,254        44.2%

Average yield earned                                          8.03%           9.09%          -1.1%       -11.6%
Average rate paid                                             3.41%           4.74%          -1.3%       -28.1%
                                                      -------------   -------------  -------------
Net interest spread                                           4.62%           4.35%           0.3%         6.9%
                                                      =============   =============  =============
Net interest income to average
     interest-earning assets                                  4.57%           5.15%          -0.6%       -11.7%
Return on average assets, before non-operating costs          0.58%           1.06%          -0.5%       -47.2%
Return on average equity, before non-operating costs          6.37%          11.56%          -5.2%       -44.9%
Efficiency ratio, before non-operating costs                 78.54%          67.21%          11.3%        16.8%

Note:  Non-operating costs include goodwill and merger charges.



NET  INTEREST  INCOME.  Net  interest  income  before  the loan  loss  provision
increased  $908,000 for the three-month period ended September 30, 2001 over the
same  period  in 2000.  Of this  increase,  $500,000  was  contributed  from the
Timberline  operations since its acquisition.  The remaining increase was mainly
due to an  increase  in the  volume of loans  offset by a  decrease  in  overall
yields. The Company's volume of interest-earning  assets increased approximately
$122 million during the three months ended September 30, 2001 as compared to the
corresponding  period in 2000.  Average earning assets of $63 million relates to
the acquired Timberline operations. Though the Company's cost of funds decreased
to 3.41%, the volume of its interest-bearing  liabilities increased $122 million
($77 million relating to the acquired  Timberline  operations)  during the three
months ended September 30, 2001 as compared to the corresponding period in 2000.
As a result,  the Company's  interest  rate margin  decreased by 58 basis points
resulting in a 12% decrease in net interest margin.

LOAN LOSS  PROVISION.  The loan loss provision  during the  three-month  periods
ended  September 30, 2001 was $258,000  compared to $215,000 for the three-month
period ended  September 30, 2000.  The Company had net  charge-offs  of $107,000
during  the  three-month  period  ended  September  30,  2001,  compared  to net
charge-offs of $112,000 for the corresponding  period in 2000.  Additions to the
loan loss  provision  have  maintained  the  allowance  for loan  losses at $4.6
million as of September  30, 2001,  compared to $3.1 million as of September 30,
2000.  Of the increase in the  allowance  for loan losses,  $676,000  relates to
loans of $57  million  acquired in the  Timberline  transaction.  The  remaining
increase in the allowance  for loan losses is primarily  related to specific and
inherent losses in the loan portfolio. The Company's ratio of allowance for loan
losses to total  loans was 1.37% at  September  30,  2001,  compared to 1.52% at
September  30,  2000.  Non-performing  assets  (defined as loans on  non-accrual
status,  90  days or  more  past  due,  and  other  real  estate  owned)  either
specifically  reserved or adequately  collateralized  were $6.1 million and $4.3
million at September 30, 2001 and 2000, respectively.

NON-INTEREST  INCOME.  Non-interest  income increased 103% to $1,076,000 for the
three months  ended  September  30,  2001,  as compared to $529,000 for the same
period in 2000. Of this increase,  $130,000  relates to the acquired  Timberline
operations,  $560,000  relates to an increase in mortgage  brokerage  fees,  and
$148,000 relates to investment services.

NON-INTEREST  EXPENSE.  Non-interest  expense increased $1,676,000 for the three
months ended September 30, 2001 as compared to the corresponding period in 2000.
Salaries and employee  benefits  increased  $1,138,000  ($512,000 relates to the
Timberline  operations) as a result of higher costs  associated  with recruiting
and hiring and profit sharing  expenses  during the three months ended September
30,  2001 as  compared  to the  corresponding  period  in  2000.  Occupancy  and
equipment  expenses  increased  a total of  $368,000  ($142,000  relates  to the
Timberline  operations)  for the three  months  ended  September  30,  2001,  as
compared to the same period in 2000.  This  increase  was  attributed  to higher
costs  associated  with building  maintenance  and repairs.  Other  non-interest
expense increased by $168,000 due to the Company's increase in operations offset
by cost savings  associated with the acquisition of two community banks.  During
the three months ended  September  30, 2001,  the Company  amortized  $92,000 in
goodwill,  such charges of which were not incurred during the three-month period
ended  September  30,  2000.  However,  during the second  quarter of 2000,  the
Company charged to expense $65,000 in costs related to the Douglas National Bank
merger completed in May 2000.

FOR THE NINE MONTHS ENDED September 30, 2001 AND 2000
-----------------------------------------------------

Net income was  $1,852,000 for the nine months ended  September 30, 2001,  which
was  greater  by  $660,000  as  compared  to the same  period in 2000.  Goodwill
amortization  of  $188,000  was charged to  earnings  for the nine months  ended
September 30, 2001 compared to no  amortization  charges  during the nine months
ended September 30, 2000.  During the second quarter of 2000, net income for the
nine-month  period ended  September 30, 2000 includes  one-time  merger and data
conversion costs of $948,000.

The following table presents  information  regarding yields on  interest-earning
assets, expense on interest-bearing liabilities, net interest spread, net yields
on  average  interest-earning  assets,  return on  average  assets and return on
average equity for the periods indicated (dollars in thousands):

Analysis for the nine-month periods ended                                                          Increase
September 30, 2001 and 2000                                           2001           2000         (Decrease)       %Change
---------------------------                                      -------------   -------------  -------------  -----------

Average interest-earning assets                                  $     377,755   $     293,690  $      84,065        28.6%
Average interest-bearing liabilities                                   382,396         243,827        138,569        56.8%
Average total assets                                                   421,634         319,615        102,019        31.9%
Average equity                                                          38,411          29,459          8,952        30.4%

Average yield earned                                                     8.31%           8.78%          -0.5%        -5.3%
Average rate paid                                                        3.65%           4.46%          -0.8%       -18.2%
                                                                 -------------   -------------  -------------
Net interest spread                                                      4.66%           4.32%           0.3%         7.9%
                                                                 =============   =============  =============



Analysis for the nine-month periods ended                                                          Increase
September 30, 2001 and 2000                                           2001           2000         (Decrease)       %Change
---------------------------                                      -------------   -------------  -------------  -----------
Net interest income to average
     interest-earning assets                                             4.62%           5.08%          -0.5%        -9.1%
Return on average assets, before non-operating costs                     0.65%           0.89%          -0.2%       -27.7%
Return on average equity, before non-operating costs                     7.10%           9.70%          -2.6%       -26.8%
Efficiency ratio, before non-operating costs                            77.16%          71.26%           5.9%         8.3%

Note:  Non-operating costs include goodwill and merger charges.

NET INTEREST  INCOME.  During the nine months  ended  September  30,  2001,  net
interest income increased by $1,881,000, ($993,000 contributed by the Timberline
operations), as compared to the same period in 2000.

Other than the increase contributed by the Timberline operations,  this increase
was  primarily  due to an  increase  in the  volume  of loans  offset  by a 5.3%
decrease  in  related  yields.  There  was also an  increase  in the  volume  of
interest-bearing  deposits.  During the  nine-month  period ended  September 30,
2001, the volume of average loans increased by approximately $81 million,  while
overall  yields  decreased  approximately  50 basis  points as  compared  to the
corresponding  period  in the prior  year.  There  was also an  increase  of $95
million in the volume of  interest-bearing  liabilities,  including  Timberline,
while at the same  time a 81 basis  point  decrease  in rates  paid,  negatively
impacting the Company's net interest margin by 46 basis points.

LOAN LOSS PROVISION.  The loan loss provision during the nine-month period ended
September 30, 2001,  was $613,000 as compared to $594,000 for the same period in
2000. The Company had net charge-offs of $148,000  during the nine-month  period
ended September 30, 2001,  compared to net charge-offs of $315,000 for 2000. The
provision  for loan losses was  increased  by $19,000  during this period due to
specific and inherent losses in the loan portfolio.

NON-INTEREST  INCOME.  Non-interest  income  increased by  $1,196,000  ($239,000
relates to the Timberline  operations) to $2.7 million for the nine months ended
September  30,  2001,  as compared to $1.5  million for the same period in 2000.
Most of the remaining increase relates to mortgage loan brokerage fees that were
earned during the nine months ended September 30, 2001.

NON-INTEREST EXPENSE.  Non-interest expense increased to 12 million, including a
$188,000  charge for goodwill  amortization  for the nine months ended September
30, 2001, as compared to $10 million,  including $948,000 of one-time merger and
data conversion costs discussed above, for the same period in 2000. Salaries and
employee benefits  increased $2.2 million  ($698,000  relating to the Timberline
operations)  with the increase in full-time  employees  supporting  the level of
customer  service and the greater  volume of Company  operations.  Occupancy and
equipment  expenses  increased  $682,000  ($188,000  relates  to the  Timberline
operations)  for the nine months ended  September  30, 2001,  as compared to the
same period in 2000.  This increase was attributed to costs  associated with the
new administration and loan production facility that opened in December 2000 and
additional  computer  and  phone  equipment.  While  the  size of the  Company's
operations  expanded,  costs in other  non-interest  expense have also increased
though to a lesser degree.  Management of the Company  continually reviews areas
to reduce  duplication  of  operational  processes  in an effort to reduce other
non-interest expenses.

INCOME TAXES. In accordance with provisions of the IRC and as discussed above, a
significant  portion  of merger  costs  incurred  during the nine  months  ended
September 30, 2000 were not deductible for income tax purposes. As a result, the
Company's  taxable  income  resulted in an estimated  $915,000 (an effective tax
rate of 43%) in federal and state income taxes for the  nine-month  period ended
September  30,  2000.  This  compares  to an  effective  tax rate of 34% for the
nine-month period ended September 30, 2001.

FINANCIAL  CONDITION.  Total  assets at September  30,  2001,  increased to $483
million  since  December 31, 2000,  $97 million  added with the  acquisition  of
Timberline and $42 million due to growth in mainly the loan area.  Growth of $87
million in  deposits  with the  Timberline  acquisition  and $40  million in new
customer  growth added $127 million in total deposits to $423 million.  With the
liquidation of $30 million of callable U.S. agency  securities  during the first
nine months of 2001, federal funds sold increased by $37 million helping to make
available  funds for future loans.  With the  acquisition of Timberline in April
2001,  the Company added  approximately  $8 million to capital  maintaining  the
Company's capital to assets ratio at 9.08%.

LIQUIDITY. Liquidity enables the Company to meet withdrawals of its deposits and
borrowing  needs of its loan  customers.  The Company  maintains  its  liquidity
position  through  maintenance  of cash  resources and the stability of its core
deposit base. Liquidity significantly increased during this quarter. Excess cash
was invested on a short-term basis into federal funds sold and  interest-earning
deposits with the FHLB. As of September 30, 2001, the Company had $41 million in
federal funds sold.



A further  source of  liquidity  is the  Company's  ability  to borrow  funds by
maintaining a secured line-of-credit with the FHLB up to 15% of the Bank's total
assets.  As of September  30, 2001,  $5.7 million had been advanced in long-term
borrowings from the FHLB against the Company's  credit line. Other borrowings of
approximately  $7.6  million  relate  to  repurchase   agreements  for  customer
overnight sweep accounts.  The cost of these funds is  approximately  2.71%. The
Company also has established  secured credit lines of approximately  $25 million
through  certain  correspondent  banks and the discount  window with the Federal
Reserve Bank of San Francisco.

At September 30, 2001, the Company had  approximately $39 million in outstanding
commitments to extend credit for newly  approved  loans and available  funds for
construction  projects.  Under  the  terms of such  commitments,  completion  of
specified  project  benchmarks  must be certified  before funds may be drawn. In
addition,  it is anticipated that a portion of other  commitments will expire or
terminate  without  funding.  Management  believes that the Company's  available
resources  will be sufficient to fund these  commitments in the normal course of
business.

CAPITAL  RESOURCES.  Federal  regulators  require the  calculation of risk-based
capital.  This is an analysis that weights balance sheet and  off-balance  sheet
items for their  inherent  risk. It requires  minimum  standards for  risk-based
capital-by-capital  tier. As a minimum  requirement,  total  risk-based  capital
ratio should be at least 8.00%,  Tier 1 capital  ratio should be at least 4.00%,
and a leverage  capital  ratio should be at least 4.00%.  At September 30, 2001,
the  Company's  estimated  regulatory  capital  ratios  were as  follows:  total
risk-based  capital  ratio of  10.37%,  Tier 1  capital  ratio of  9.22%,  and a
leverage  capital ratio of 7.87%. If the Company were fully  leveraged,  further
growth  could be  restricted  to the level  attainable  through  generation  and
retention  of net income or the  Company  could  seek  additional  capital  from
outside sources.

MARKET  RISK.  Market  risk is the risk of loss from  adverse  changes in market
prices and rates.  The Company's  market risk arises  principally  from interest
rate risk in its lending, deposit and borrowing activities.  Management actively
monitors  and manages its  interest  rate risk  exposure.  Although  the Company
manages  other risks,  as in credit  quality and  liquidity  risk, in the normal
course of business,  management considers interest rate risk to be a significant
market  risk,  which could have the  largest  material  effect on the  Company's
financial condition and results of operations. Other types of market risks, such
as foreign currency exchange rate risk and commodity price risk, do not arise in
the normal course of the Company's business activities.  The Company experienced
a change in market risk at September  30, 2001 as compared to December 31, 2000.
Prime rate adjusted by 450 basis points during the first  three-quarters of 2001
that caused a 46 basis point  tightening of the Company's  interest rate margin.
The Company is  adjusting  its cost of deposits  to correct  its  interest  rate
margin.  Additional downward  adjustments in the Prime interest rate will result
in a further tightening of the Company's margins.



PART II. OTHER INFORMATION

ITEM 1. LEGAL  PROCEEDINGS.  The Company may  occasionally  have pending routine
litigation  resulting from the collection of secured and unsecured  indebtedness
as part of its business of providing  financial  services.  In some cases,  such
litigation will involve counterclaims or other claims against the Company. Other
than  litigation  in the normal  course of  business  and in the  collection  of
Company  loans and  other  such  assets,  the  Company  is not  involved  in any
significant cases, which in management's opinion would have a material impact on
the Company's financial condition.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      None

(b)      Reports on Form 8-K
         October 24, 2001 - Earnings Release dated October 17, 2001

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

DATED: November 12, 2001

PREMIERWEST BANCORP


/s/ Bruce R. McKee
---------------------------------------
Bruce R. McKee, Chief Financial Officer



/s/ John L. Anhorn
---------------------------------------
John L. Anhorn, Chief Executive Officer`