SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
(Mark One)                SECURITIES EXCHANGE ACT OF 1934

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

For the fiscal year ended December 31, 1999

                                       OR

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

For the transition period from _____________________ to ________________

Commission file number     0-14289
                           -------

                         GREENE COUNTY BANCSHARES, INC.
                         ------------------------------
             (Exact name of registrant as specified in its charter)

                    Tennessee                                 62-1222567
 -----------------------------------------------        ----------------------
 (State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                          Identification No.)

 100 North Main Street, Greeneville, Tennessee               37743-4992
 ----------------------------------------------         ----------------------
 (Address of principal executive offices)                    (Zip Code)

       Registrant's telephone number, including area code: (423) 639-5111.

        Securities registered pursuant to Section 12(b) of the Act: None.

           Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, par value $10.00 per share
                    ----------------------------------------
                                (Title of Class)

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 by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The  registrant's  voting  stock is not  regularly  and  actively  traded in any
established  market,  and there are no regularly quoted bid and asked prices for
the  registrant's  common  stock.  Based upon recent  negotiated  trading of the
common  stock at a price of $150 per share,  the  registrant  believes  that the
aggregate market value of the voting stock on March 22, 2000 was $204.4 million.
For purposes of this  calculation,  it is assumed that  directors,  officers and
beneficial owners of more than 5% of the registrant's  outstanding  voting stock
are not  affiliates.  On such date,  1,363,043  shares of the common  stock were
issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

The following lists the documents  incorporated by reference and the Part of the
Form 10-K into which the document is incorporated:

     1.   Portions  of the Annual  Report to  Shareholders  for the fiscal  year
          ended December 31, 1999. (Parts I and II)
     2.   Portions of Proxy  Statement for 2000 Annual Meeting of  Shareholders.
          (Part III)
<PAGE>
                                     PART I

Forward-Looking Statements

     This  Annual  Report on Form 10-K,  including  all  documents  incorporated
herein by reference, contains forward-looking statements.  Additional written or
oral forward-looking  statements may be made by the Company from time to time in
filings with the  Securities  and Exchange  Commission or  otherwise.  The words
"believe,"  "expect,"  "seek," and  "intend"  and similar  expressions  identify
forward-looking  statements,  which speak only as of the date the  statement  is
made.  Such  forward-looking  statements  are within the meaning of that term in
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange Act of 1934, as amended.  Such statements may include,  but
are not limited to, projections of income or loss,  expenditures,  acquisitions,
plans for future  operations,  financing  needs or plans relating to services of
the Company, as well as assumptions  relating to the foregoing.  Forward-looking
statements  are  inherently  subject to risks and  uncertainties,  some of which
cannot be predicted or quantified. Future events and actual results could differ
materially  from  those  set  forth  in,   contemplated  by  or  underlying  the
forward-looking statements.

ITEM 1.  BUSINESS

The Company

     Greene County Bancshares,  Inc. (the "Company") is a Tennessee  corporation
that serves as the bank holding  company and sole  stockholder for Greene County
Bank,  a  Tennessee-chartered  commercial  bank (the  "Bank").  The Company also
wholly owns Premier Bank of East  Tennessee,  a now dormant  Tennessee-chartered
commercial  bank  with its  principal  office  in  Niota,  Tennessee,  which was
combined into the Bank  effective  October 16, 1998.  Further,  the Company owns
American  Fidelity Bank, a dormant Tennessee bank whose operations were combined
with the Bank in 1996.

     The  Company's  assets  consist  primarily of its  investment  in the Bank,
liquid  investments  and fixed  assets.  Its primary  activities  are  conducted
through the Bank. At December 31, 1999, the Company's  consolidated total assets
were $656.0 million,  its consolidated net loans,  including loans available for
sale, were $546.9 million,  its total deposits were $522.4 million and its total
stockholders' equity was $60.8 million.

     The  principal  executive  offices of the  Company are located at 100 North
Main Street, Greeneville, Tennessee 37743-4992 and its telephone number is (423)
639-5111.

The Bank

     The Bank is a  Tennessee-chartered  commercial bank established in 1890 and
which  has its  principal  executive  offices  in  Greeneville,  Tennessee.  The
principal business of the Bank consists of attracting  deposits from the general
public and investing those funds,  together with funds generated from operations
and from  principal  and interest  payments on loans,  primarily  in  commercial
loans,  commercial real estate loans, consumer loans and single-family  mortgage
loans. The Bank also provides  collection and other banking services,  including
separate finance, mortgage,  acceptance and title corporations.  At December 31,
1999, the Bank had seven full service  banking offices located in Greene County,
Tennessee;  three full service  banking  offices  located in Washington  County,
Tennessee;  three  full  service  banking  offices  located  in  Blount  County,
Tennessee;   two  full  service  banking  offices  located  in  Hamblen  County,
Tennessee; two full service banking offices located in McMinn County, Tennessee;
and a full service  banking office located in each of Sullivan  County,  Hawkins
County, Cocke County, Knox County and Monroe County, Tennessee. In addition, the
Bank has  opened  additional  full  service  offices  in  Hawkins  and  Sullivan
Counties, Tennessee during the first quarter of 2000, and the Bank plans to open
an additional  full service  office in Blount  County,  Tennessee in the fall of
2000 as well as a full service office in Loudon County,  Tennessee in the spring
of  2000.  Further,  the Bank has  opened  in  January  2000 a trust  and  money
management  function,  doing  business as President's  Trust,  in Wilson County,
Tennessee.

<PAGE>
     The  Bank  also  conducts  separate  business  through  four  wholly  owned
subsidiaries.  Through  Superior  Financial  Services,  Inc.,  the Bank operates
fifteen  consumer  finance company offices located in Greene,  Blount,  Hamblen,
McMinn,  Washington,  Sullivan,  Sevier,  Knox,  Hawkins,  Hamilton  and  Loudon
Counties, Tennessee. Through its subsidiary, Superior Mortgage Company, the Bank
operates a mortgage  banking  operation  through its main office in Knox County,
Tennessee and other offices located in Bradley and Sullivan Counties, Tennessee.
Superior  Mortgage  Company also has  representatives  located in the  Company's
branch system in Greene,  Washington,  Hamblen and McMinn  Counties,  Tennessee.
Through GCB  Acceptance  Corporation,  the Bank  operates a subprime  automobile
lending company with a sole office in Johnson City,  Tennessee.  Through Fairway
Title Co., the Bank operates a title company in Knoxville, Tennessee.

     Deposits of the Bank are insured by the Bank  Insurance Fund ("BIF") of the
Federal Deposit Insurance Corporation ("FDIC") to a maximum of $100,000 for each
insured  depositor.  The Bank is subject to  supervision  and  regulation by the
Tennessee  Department of Financial  Institutions (the "Banking  Department") and
the FDIC. See "Regulation, Supervision and Governmental Policy."

Lending Activities

     General.  The loan  portfolio  of the  Company  is  comprised  of  mortgage
installment loans,  commercial loans, real estate loans and consumer loans. Such
loans are originated  within the Company's market area of East Tennessee and are
generally  secured by  residential  or  commercial  real  estate or  business or
personal  property  located  in the  counties  of Greene,  Washington,  Hamblen,
Sullivan, Hawkins, Blount, Knox, McMinn and Cocke Counties, Tennessee.

     Loan  Composition.  The following  table sets forth the  composition of the
Company's loans for the periods indicated.
<TABLE>
<CAPTION>
                                                     At December 31,
                            -------------------------------------------------------------
                               1999         1998         1997         1996         1995
                               ----         ----         ----         ----         ----
                                                    (In thousands)
<S>                         <C>          <C>          <C>          <C>          <C>
Commercial ..............   $ 143,610    $ 121,294    $ 108,985    $  97,340    $  75,503
Commercial real estate ..     181,873      115,204      125,359      108,936       74,276
Mortgage installment ....     163,586      148,117      138,943      108,878       92,276
Loans available-for-sale.       1,210        5,043        7,284           --           --
Installment consumer ....      69,560       80,147       72,752       71,354       55,876
Other ...................      10,980       17,102        3,154        5,797        2,772
                            ---------    ---------    ---------    ---------    ---------
   Total loans ..........     570,819      486,907      456,477      392,305      300,703
Unearned income .........     (13,590)      (9,993)      (5,933)      (3,703)      (2,215)
Allowance for loan losses     (10,332)     (10,253)      (9,154)      (7,330)      (4,654)
                            ---------    ---------    ---------    ---------    ---------
   Net loans ............   $ 546,897    $ 466,661    $ 441,390    $ 381,272    $ 293,834
                            =========    =========    =========    =========    =========
</TABLE>

     Loan  Maturities.  The  following  table  reflects at December 31, 1999 the
dollar  amount of loans  maturing or subject to rate  adjustment  based on their
contractual  terms to maturity.  Loans with fixed rates are reflected based upon
the contractual  repayment schedule while loans with variable interest rates are
reflected  based upon the contractual  repayment  schedule up to the contractual
rate  adjustment  date.  Demand  loans,  loans  having  no  stated  schedule  of
repayments and loans having no stated  maturity are reported as due within three
months.
<TABLE>
<CAPTION>
                                  Due in One    Due After One Year     Due After
                                 Year or Less   Through Five Years    Five Years     Total
                                 ------------   ------------------    ----------     -----
<S>                                 <C>               <C>              <C>           <C>
Commercial......................    $101,530          $  36,229        $  5,851      $143,610
Commercial real estate..........      38,212            118,780          24,881       181,873
Mortgage installment............      38,011             72,720          52,855       163,586
Loans available-for-sale........       1,210                 --              --         1,210
Installment consumer............      16,675             44,579           8,306        69,560
Other...........................       2,580                 42           8,358        10,980
                                    --------           --------        --------      --------
     Total......................    $198,218           $272,350        $100,251      $570,819
                                    ========           ========        ========      ========
</TABLE>
                                       2
<PAGE>

     The  following  table sets forth the  dollar  amount of the loans  maturing
subsequent to the year ending December 31, 2000 between those with predetermined
interest rates and those with floating interest rates.

                                  Fixed Rate       Variable Rate        Total
                                  ----------       -------------        -----
                                                   (In thousands)
Commercial........................ $  27,022         $  7,873         $  34,895
Commercial real estate............   108,853           35,692           144,545
Mortgage installment..............   100,252           43,602           143,854
Loans available-for-sale..........     1,210               --             1,210
Installment consumer..............    57,813            8,100            65,913
Other.............................         2              405               407
                                    --------          -------          --------
     Total........................  $295,152          $95,672          $390,824
                                    ========          =======          ========

     Commercial Loans. The Company's  principal lending  activities  include the
origination  of  commercial  loans  in  the  Company's   primary  lending  area.
Commercial loans are made for a variety of business purposes,  including working
capital,  inventory and equipment and capital  expansion.  At December 31, 1999,
commercial loans outstanding  totaled $143.6 million,  or 26.3% of the Company's
net loan  portfolio.  The terms for commercial  loans are generally one to seven
years.  Commercial  loan  applications  must be supported  by current  financial
information  on the borrower and,  where  appropriate,  by adequate  collateral.
Commercial  loans are  generally  underwritten  by  addressing  cash flow  (debt
service  coverage),  primary  and  secondary  sources  of  repayment,  financial
strength of any guarantor, liquidity, leverage, management experience, ownership
structure,  economic conditions and industry-specific trends and collateral. The
loan to value  ratio  depends  on the type of  collateral.  Generally  speaking,
accounts receivable are financed at 60% of accounts receivable less than 90 days
past due. If other collateral is taken to support the loan, the loan to value of
accounts receivable may approach 85%. Inventory financing will range between 25%
and 60% depending on the borrower and nature of inventory.  The Company requires
a first  lien  position  for such  loans.  These  types of loans  are  generally
considered  to be a higher  credit  risk  than  other  loans  originated  by the
Company.

     Commercial  Real Estate Loans.  The Company  originates  commercial  loans,
generally to existing business customers,  secured by real estate located in the
Company's  market  area.  At December  31,  1999,  commercial  real estate loans
totaled $181.9 million, or 33.3% of the Company's net loan portfolio.  The terms
of such loans are generally for ten to twenty years and are priced based in part
upon the prime rate,  as reported in The Wall Street  Journal.  Commercial  real
estate loans are generally  underwritten  by addressing  cash flow (debt service
coverage), primary and secondary source of repayment,  financial strength of any
guarantor,  strength  of the tenant (if any),  liquidity,  leverage,  management
experience,  ownership  structure,  economic  conditions  and industry  specific
trends and collateral.  Generally,  the Company will loan up to 85% of the value
of  improved  property,  65% of the  value of raw  land and 75% of the  value of
undeveloped  land.  A first  lien on the  property  and  assignment  of lease is
required if the  collateral  is rental  property,  with  second  lien  positions
considered on a case by case basis.

     Mortgage Installment Loans. The Company also originates one-to-four family,
owner-occupied  residential  mortgage  loans secured by property  located in the
Company's  primary  market  area.  The  majority  of the  Company's  residential
mortgage  loans  consists  of loans  secured  by  owner-occupied,  single-family
residences.  At December 31, 1999, the Company had $164.8 million,  or 30.1%, of
its  net  loan  portfolio  in  mortgage  installment  loans.  The  Company  also
originates,  to a limited extent,  installment real estate loans for other types
of real estate  acquisitions.  Mortgage  installment and installment real estate
loans generally have a loan to value ratio of 85%. These loans are  underwritten
by giving consideration to the ability to pay, stability of employment or source
of income, credit history and loan to value ratio.

     Mortgage loans  originated by the Bank are not  underwritten  in conformity
with  secondary  market  guidelines and therefore are not readily  salable.  The
Company  has not  previously  engaged  in  sales of its  loans in the  secondary
market.  Beginning in April 1997, the Company began selling  one-to-four  family
mortgage  loans in the  secondary  market to  Freddie  Mac  through  the  Bank's
mortgage  banking  subsidiary,  Superior  Mortgage.  Sales of such loans totaled
$61.5 million during 1999, and the related  mortgage  servicing rights were sold
together with the loan.

                                       3
<PAGE>

     Installment Consumer Loans. At December 31, 1999, the Company's installment
consumer loan portfolio  totaled $69.6 million,  or 12.7% of the Company's total
net loan  portfolio.  The  Company's  consumer  loan  portfolio  is comprised of
secured and unsecured loans originated both by the Bank and Superior  Financial.
The  consumer  loans of the Bank  generally  have a higher risk of default  than
other loans  originated  by the Bank.  Further,  consumer  loans  originated  by
Superior  Financial,  a finance  company  rather than a bank,  generally  have a
greater  risk of default  than such loans  originated  by  commercial  banks and
accordingly carry a higher interest rate. The performance of consumer loans will
be affected by the local and  regional  economy as well as the rates of personal
bankruptcies, job loss, divorce and other individual-specific characteristics.

     Past Due,  Special Mention,  Classified and Non-Accrual  Loans. The Company
classifies  its  problem  loans into four  categories:  past due loans,  special
mention  loans,  classified  loans  (which  are  still  accruing  interest)  and
non-accrual loans.

     When management determines that a loan no longer satisfies the criteria for
performing loans and that collection of interest appears  doubtful,  the loan is
placed on non-accrual status. All loans that are 90 days past due are considered
non-accrual,  unless  they  are  adequately  secured  and  there  is  reasonable
assurance of full  collection  of principal  and  interest.  Management  closely
monitors all loans that are  contractually 90 days past due, treated as "special
mention" or otherwise  classified or on non-accrual  status.  Non-accrual  loans
that are 120 days past due  without  assurance  of  repayment  are  charged  off
against the allowance for loan losses.

     The following  table sets forth  information  with respect to the Company's
non-performing  assets at the dates  indicated.  At these dates, the Company did
not have any  restructured  loans  within the meaning of  Statement of Financial
Accounting Standards No. 15.
<TABLE>
<CAPTION>
                                                                          At December 31,
                                              ------------------------------------------------------------------------
                                                  1999          1998           1997           1996           1995
                                                  ----          ----           ----           ----           ----
                                                                          (In thousands)
<S>                                               <C>           <C>            <C>            <C>           <C>
Loans accounted for on a non-accrual
   basis................................          $2,952        $4,159         $2,265         $  616        $   902
Accruing loans which are contractually
   past due 90 days or more as to interest
   or principal payments................             996           872          1,583          1,486          1,044
                                                  ------        ------         ------         ------        -------
Total non-performing loans..............           3,948         5,031          3,848          2,102          1,946
Real estate owned:
   Foreclosures.........................           1,546           920            411             --             --
   Other real estate held and
     repossessed assets.................             826           607             97            223            122
                                                  ------        ------         ------         ------         ------
   Total non-performing assets..........          $6,320        $6,558         $4,356         $2,325         $2,068
                                                  ======        ======         ======         ======         ======
</TABLE>

     Non-accrual  loans decreased $1.2 million,  or 29.0%,  from $4.2 million at
December 31, 1998 to $3.0  million at December 31, 1999.  The decrease is mainly
attributable  to a  general  decline  during  the year in the  level of  various
non-accrual  loans  of  approximately  $1.4  million  attributable  to  enhanced
collection efforts.

     The  Company's   continuing   efforts  to  resolve   non-performing   loans
occasionally  include  foreclosures,  which result in the Company's ownership of
the real estate  underlying the mortgage.  If non-accrual  loans at December 31,
1999 had been current according to their original terms and had been outstanding
throughout 1999, or since  origination if originated  during the year,  interest
income on these loans would have been approximately $213,000.  Interest actually
recognized on these loans during 1999 was not significant.

     The increase in real estate owned during 1999 from  $1,527,000  at December
31, 1998 to  $1,870,000  at December 31, 1999  primarily  reflects  management's
continued  implementation  of  a  more  aggressive  collection  strategy,  which
includes foreclosing on loans past due 120 days without providing borrowers with
a delaying  option to  restructure.  The  $1,546,000 in  foreclosed  real estate
consists of 11 properties,  one of which is a condominium  complex in the amount
of approximately  $517,000.  Management anticipates selling this property in the
second  quarter of 2000 at a loss of  approximately  $100,000.  In  addition,  a
foreclosure of a large commercial loan in the amount of approximately $1 million
is scheduled at the end of the first quarter of 2000.  Management  believes that
this property will be sold timely and that the total contractual balance will be
recovered.

                                       4
<PAGE>

     At December 31, 1999, the Company had  approximately  $2.4 million in loans
that  are  not  currently  classified  as  non-accrual  or 90 days  past  due or
otherwise  restructured  and  where  known  information  about  possible  credit
problems of  borrowers  caused  management  to have  serious  concerns as to the
ability of the borrowers to comply with present loan repayment terms. Such loans
were considered  classified by the Company and comprised various  commercial and
commercial  real estate loans,  including one  commercial  loan for $1.6 million
secured by a blanket  lien on the land,  plant and  equipment of the business as
well as significant additional collateral.  Management believes the value of the
collateral is presently  sufficient  to cover the full amount of the loan,  plus
accrued interest.  This loan was considered  classified based upon cash flows of
the business deemed insufficient to cover debt service. For further information,
see Note 1 of Notes to Consolidated Financial Statements.

     Allowance for Loan Losses. The allowance for loan losses is maintained at a
level which  management  believes is adequate to absorb all potential  losses on
loans  then  present  in the loan  portfolio.  The  amount of the  allowance  is
affected by: (1) loan charge-offs,  which decrease the allowance; (2) recoveries
on loans  previously  charged-off,  which  increase the  allowance;  and (3) the
provision  of  possible  loan  losses  charged to income,  which  increases  the
allowance.  In  determining  the  provision  for  possible  loan  losses,  it is
necessary for management to monitor fluctuations in the allowance resulting from
actual  charge-offs  and  recoveries,  and to  periodically  review the size and
composition of the loan portfolio in light of current and  anticipated  economic
conditions in an effort to evaluate portfolio risks. If actual losses exceed the
amount of the  allowance  for loan  losses,  earnings  of the  Company  could be
adversely  affected.  The  amount  of the  provision  is based  on  management's
judgment of those risks and therefore the allowance  represents general,  rather
than specific,  reserves. During the year ended December 31, 1999, the Company's
provision  for loan losses  decreased by $0.3 million to $3.1 million to reflect
the reduction in actual or potential losses arising from the loan portfolio. For
additional   information,   see  Note  1  of  Notes  to  Consolidated  Financial
Statements.

                                       5
<PAGE>

     The following is a summary of activity in the allowance for loan losses for
the periods indicated:
<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                               --------------------------------------------------------------------------------
                                                   1999             1998            1997            1996            1995
                                                   ----             ----            ----            ----            ----
                                                                               (In thousands)
<S>                                            <C>            <C>               <C>            <C>             <C>
Balance at beginning of year............       $    10,253    $     9,154       $     7,330    $     4,654     $     3,447
                                               -----------    -----------       -----------    -----------     -----------
Charge-offs:
   Commercial...........................              (298)          (440)             (563)(b)       (162)               (a)
   Commercial real estate...............              (302)           (87)             (129)           (32)               (a)
                                               -----------    -----------       -----------    -----------     ------------
          Subtotal......................              (600)          (527)             (692)          (194)            (26)

   Mortgage installment.................                --             --                --              --               (a)
   Installment consumer ................            (3,417)        (2,707)           (4,450)        (1,089)               (a)
                                               -----------    -----------       -----------    -----------     -----------
       Subtotal.........................            (3,417)        (2,707)           (4,450)        (1,089)           (646)

   Other................................                --             --                --           (342)             --
                                               -----------    -----------       -----------    -----------     -----------
     Total charge-offs..................            (4,017)        (3,234)           (5,142)        (1,625)           (672)
                                               -----------    -----------       -----------    -----------     -----------

Recoveries:
   Commercial...........................               295            216                56             62                (a)
   Commercial real estate...............                --             24                 4             --                (a)
                                               -----------    -----------       -----------    -----------     -----------
     Subtotal...........................               295            240                60             62               9
                                               -----------    -----------       -----------    -----------     -----------

   Mortgage installment.................                              --              --                --                (a)
   Installment consumer.................               668            673               951            755                (a)
                                               -----------    -----------       -----------    -----------     -----------
     Subtotal...........................               668            673               951            755             447
   Other................................                --              3                 2             71              --
                                               -----------    -----------       -----------    -----------     -----------
     Total recoveries...................               963            916             1,013            888             456
                                               -----------    -----------       -----------    -----------     -----------
Net charge-offs.........................            (3,054)        (2,318)           (4,129)          (737)           (216)

Provision for loan losses...............             3,133          3,417             5,953(b)       2,973           1,423
Balances acquired in acquisition of
    Premier Bank .......................                --             --                --            440              --
                                               -----------    -----------       -----------    -----------     -----------
Balance at end of year..................       $    10,332    $    10,253       $     9,154    $     7,330     $     4,654
                                               ===========    ===========       ===========    ===========     ===========
Ratio of net charge-offs to average
     loans outstanding, net of
     unearned discount, during
     the period.........................              0.60%          0.52%             0.96%          0.21%           0.08%
                                               ===========    ===========       ===========    ===========     ===========
Ratio of allowance for loan losses to
     non-performing loans...............            261.70%        203.80%           237.89%        348.72%         239.16%
                                               ===========    ===========       ===========    ===========     ===========
Ratio of allowance for loan losses to
     total loans........................              1.81%          2.11%             2.01%          1.87%           1.55%
                                               ===========    ===========       ===========    ===========     ===========
</TABLE>
-------------------------
(a)      Prior to 1996,  the  Company  did not  maintain  records of  individual
         balances in these types of categories  and  therefore  such amounts are
         reflected herein only in the aggregate.
(b)      Includes a $500,000  charge-off  against  the  Company's  $1.1  million
         participation  in a $3.5 million  commercial loan to a nonprofit entity
         for a  hotel  development  project,  secured  by a hotel  building  and
         underlying  commercial real estate in Greenville,  Tennessee.  In 1998,
         the  loan  was paid  off and the  Bank  received  $788,000  in net loan
         proceeds.

                                       6
<PAGE>

     The following  table presents an allocation of the Company's  allowance for
loan losses at the dates  indicated and the  percentage of loans  represented by
each category to total loans:
<TABLE>
<CAPTION>
                                                                            At December 31,
Breakdown of allowance for             ------------------------------------------------------------------------------------------
   loan losses by category:                       1999                            1998                           1997
                                                  ----                            ----                           ----
                                                       Percent of                      Percent of                     Percent of
                                                      loan in each                    loan in each                   loan in each
   Balance at end of period              Amount       category to        Amount        category to       Amount       category to
     applicable to:                   (in thousands)  total loans    (in thousands)    total loans   (in thousands)   total loans
                                      --------------  -------------  --------------   -------------  --------------  ------------
<S>                                    <C>               <C>            <C>               <C>            <C>             <C>
Commercial......................       $  2,168          25.16%         $  1,429          24.91%         $2,186          23.88%
Commercial real estate..........          3,234          31.86%            3,640          23.66%          2,514          27.46%
Mortgage installment............          3,299          28.66%            2,773          30.42%          2,932          30.43%
Loans available-for-sale........             --           0.21%               --           1.04%             --           1.60%
Installment consumer............          1,305          12.19%            2,082          16.46%          1,459          15.94%
Other...........................            326           1.92%              329           3.51%             63           0.69%
                                        -------         -------          -------         -------         ------         -------
                                        $10,332         100.00%          $10,253         100.00%         $9,154         100.00%
                                        =======         =======          =======         =======         ======         =======
</TABLE>

Investment Activities

     General.  The  Company  maintains  a portfolio  of  investments  to provide
liquidity and an additional source of income.

     Securities  by  Category.  The  following  table  sets  forth the amount of
securities by major  categories  held by the Company at December 31, 1999,  1998
and 1997.
<TABLE>
<CAPTION>
                                                                         At December 31,
                                                         ------------------------------------------------
                                                           1999                1998               1997
                                                           ----                ----               ----
                                                                          (In thousands)
<S>                                                         <C>               <C>                <C>
Securities Held to Maturity:
Obligations of state and political subdivisions........     $  3,321          $  3,620           $  7,627
                                                            --------          --------           --------

   Total...............................................     $  3,321          $  3,620           $  7,627
                                                            ========          ========           ========

Securities Available for Sale:
U.S. Treasury securities and obligations of U.S.
   Government corporations and agencies................     $ 19,191          $ 22,420           $ 30,284
Obligations of state and political subdivisions........        1,535             1,113              1,153
                                                            --------          --------           --------
   Total...............................................     $ 20,726          $ 23,533           $ 31,437
                                                            ========          ========           ========
</TABLE>

     For information  regarding the amortized cost of securities at December 31,
1999, 1998 and 1997, see Note 2 of Notes to Consolidated Financial Statements.

                                       7
<PAGE>

     Maturity  Distributions  of Securities.  The following table sets forth the
distributions  of maturities of securities at amortized  cost as of December 31,
1999.
<TABLE>
<CAPTION>
                                                        Due After One
                                           Due in One    Year through        Due After Five             Due
                                          Year or Less    Five Years     Years through Ten Years  After Ten Years   Total
                                          ------------    ----------     -----------------------  --------------    -----
                                                                      (Dollars in thousands)
<S>                                        <C>              <C>               <C>                <C>             <C>
U.S.  treasury  securities  -  available
  for sale................................ $      --        $1,009            $    --            $     --        $  1,009
Federal  agency  obligations - available
  for sale................................       219         5,449              4,193               8,350          18,211
Obligations of state and political
   subdivisions - available for sale......       120           524                 --                 891           1,535
Obligations of state and political
   subdivisions - held to maturity........     1,408         1,416                 --                 497           3,321
Other securities - available for sale.....        --            --                 --                  --              --

    Total................................. $   1,747        $8,398            $ 4,193              $9,738         $24,076

Market value adjustment on available for
   sale securities........................ $      --        $  (86)           $    23            $     34        $    (29)
                                           ---------        ------            -------            --------        --------

    Total................................. $   1,747        $8,312            $ 4,216            $  9,772        $ 24,047
                                           =========        ======            =======            ========        ========

Weighted average yield (a)................     4.60%         5.93%              6.70%               7.05%           6.42%
                                               =====         =====              =====               =====           =====
</TABLE>

(a)  Yields on tax-exempt obligations have not been computed on a tax-equivalent
     basis.

     Expected   maturities  may  differ  from  contractual   maturities  because
borrowers may have the right to call or prepay  obligations with or without call
or prepayment  penalties.  For  information  regarding  the  amortized  cost and
approximate  market value of  securities  at December 31, 1999,  by  contractual
maturity, see Note 2 of Notes to Consolidated Financial Statements.

Deposits

     Deposits  are the primary  source of funds for the Company.  Such  deposits
consist of checking  accounts,  regular savings  deposits,  NOW accounts,  Money
Market Accounts and market rate Certificates of Deposit.  Deposits are attracted
from individuals, partnerships and corporations in the Company's market area. In
addition,  the Company obtains  deposits from state and local entities and, to a
lesser extent, U.S. Government and other depository institutions.  The Company's
policy permits the acceptance of limited amounts of brokered deposits.

     The following  table sets forth the average  balances and average  interest
rates based on daily balances for deposits for the periods indicated.
<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                         -------------------------------------------------------------------------------------
                                                    1999                         1998                        1997
                                         --------------------------     ------------------------    --------------------------
                                            Average       Average        Average       Average       Average        Average
                                            Balance      Rate Paid       Balance      Rate Paid      Balance       Rate Paid
                                            -------      ---------       -------      ---------      -------       ---------
                                                                        (Dollars in thousands)
<S>                                        <C>              <C>         <C>               <C>        <C>               <C>
Types of deposits (all in domestic
offices)
Non-interest bearing demand
   deposits.........................       $  42,278          --%       $  39,822           --%      $ 33,540            --%
Interest bearing demand deposits....         140,009        2.57%         107,647         2.45%       103,288          2.61%
Savings deposits....................          47,049        2.18%          53,128         2.28%        46,801          2.65%
Time deposits.......................         273,392        5.00%         255,872         5.46%       253,840          5.49%
                                            --------                     --------                    --------
     Total deposits.................        $502,728                     $456,469                    $437,469
                                            ========                     ========                    ========
</TABLE>
                                       8
<PAGE>

     The following table  indicates the amount of the Company's  certificates of
deposit of $100,000 or more by time remaining  until maturity as of December 31,
1999.

                                                      Certificates of
                        Maturity Period                   Deposits
    ----------------------------------------------    ---------------
                                                       (In thousands)
    Three months or less..........................          $19,788
    Over three through six months.................           24,881
    Over six through twelve months................           22,126
    Over twelve months............................            8,721
                                                            -------
       Total......................................          $75,516
                                                            =======

Competition

     To  compete   effectively,   the  Company  relies  substantially  on  local
commercial  activity;  personal  contacts  by  its  directors,  officers,  other
employees and  shareholders;  personalized  services;  and its reputation in the
communities it serves.

     According to data as of June 30, 1999 supplied by the FDIC, the Bank ranked
as the largest  independent  commercial bank in its market area,  which includes
Greene, Hamblen, Hawkins, Sullivan,  Washington,  Blount and McMinn Counties and
portions of Cocke, Monroe,  Jefferson and Knox Counties. In Greene County, there
are six commercial banks and one savings bank, operating 23 branches and holding
an aggregate of approximately $719 million in deposits as of June 30, 1999.

     Under the federal Bank Holding  Company Act of 1956 (the  "Holding  Company
Act"), as amended by the Riegle-Neal Interstate Banking and Branching Efficiency
Act of 1994 (the "Riegle-Neal Act"), Tennessee banks and their holding companies
may be acquired by out-of-state banks or their holding companies,  and Tennessee
banks and their holding companies may acquire  out-of-state banks without regard
to whether the  transaction is prohibited by the laws of any state. In addition,
the federal banking agencies may approve interstate merger transactions  without
regard to whether  such  transactions  are  prohibited  by the law of any state,
unless  the home state of one of the banks  opts out of the  Riegle-Neal  Act by
adopting a law that  applies  equally to all  out-of-state  banks and  expressly
prohibits merger  transactions  involving  out-of-state banks. The effect of the
Riegle-Neal  Act may be to increase  competition  within the State of  Tennessee
among  banking  institutions  located in Tennessee  and from  banking  companies
located anywhere in the country.

Employees

     As of December  31,  1999 the Company  employed  363  full-time  equivalent
employees.  None of the Company's employees are presently represented by a union
or covered under a collective  bargaining  agreement.  Management of the Company
considers relations with employees to be good.

Regulation, Supervision and Governmental Policy

     The following is a brief summary of certain statutes, rules and regulations
affecting the Company and the Bank. A number of other  statutes and  regulations
have an impact on their operations. The following summary of applicable statutes
and regulations does not purport to be complete and is qualified in its entirety
by reference to such statutes and regulations.

     Bank  Holding  Company  Regulation.  The  Company is  registered  as a bank
holding  company  under  the  Holding  Company  Act  and,  as such,  subject  to
supervision, regulation and examination by the Board of Governors of the Federal
Reserve Board (the "FRB").

     Acquisitions  and  Mergers.  Under the Holding  Company Act, a bank holding
company must obtain the prior approval of the FRB before (1) acquiring direct or
indirect  ownership or control of any voting  shares of any bank or bank holding
company if, after such  acquisition,  the bank holding company would directly or
indirectly  own

                                       9
<PAGE>

or control more than 5% of such shares;  (2) acquiring all or substantially  all
of the  assets of  another  bank or bank  holding  company;  or (3)  merging  or
consolidating  with another bank holding company.  Also, any company must obtain
approval of the FRB prior to acquiring  control of the Company or the Bank.  For
purposes of the Holding  Company Act,  "control" is defined as ownership of more
than 25% of any class of  voting  securities  of the  Company  or the Bank,  the
ability to control the election of a majority of the directors,  or the exercise
of a  controlling  influence  over  management or policies of the Company or the
Bank.

     The Holding  Company  Act,  as amended by the  Riegle-Neal  Act,  generally
permits  the  FRB to  approve  interstate  bank  acquisitions  by  bank  holding
companies without regard to any prohibitions of state law. See "Competition."

     The  Change in Bank  Control  Act and the  related  regulations  of the FRB
require any person or persons acting in concert  (except for companies  required
to make  application  under the Holding  Company Act), to file a written  notice
with the FRB before such person or persons may acquire control of the Company or
the Bank.  The  Change in Bank  Control  Act  defines  "control"  as the  power,
directly  or  indirectly,  to vote 25% or more of any  voting  securities  or to
direct the management or policies of a bank holding company or an insured bank.

     Bank  holding  companies  like the Company are  currently  prohibited  from
engaging in activities  other than banking and activities so closely  related to
banking or managing or controlling banks as to be a proper incident thereto. The
FRB's regulations contain a list of permissible  nonbanking  activities that are
closely  related to banking or managing or  controlling  banks.  A bank  holding
company must file an  application  or notice with the Federal  Reserve  prior to
acquiring  more  than 5% of the  voting  shares  of a  company  engaged  in such
activities.  Financial  modernization  legislation enacted on November 12, 1999,
however,  will  greatly  broaden the scope of  activities  permissible  for bank
holding  companies.  Effective March 11, 2000, this legislation will permit bank
holding companies, upon classification as financial holding companies, to engage
in a broad  variety  of  activities  "financial"  in  nature.  See  "--Financial
Modernization Legislation."

     Capital  Requirements.  The Company is also subject to FRB guidelines  that
require bank holding  companies to maintain  specified minimum ratios of capital
to  total  assets  and  capital  to  risk-weighted   assets.   See  "--  Capital
Requirements."

     Dividends.  The FRB has the power to  prohibit  dividends  by bank  holding
companies if their actions constitute unsafe or unsound  practices.  The FRB has
issued a policy statement expressing its view that a bank holding company should
pay cash dividends only to the extent that the company's net income for the past
year is  sufficient  to  cover  both the cash  dividends  and a rate of  earning
retention that is consistent  with the company's  capital needs,  asset quality,
and  overall  financial  condition.  The Company  does not  believe  this policy
statement  will limit the  Company's  activity to maintain its dividend  payment
rate.

     Support of Banking Subsidiaries.  Under FRB policy, the Company is expected
to act as a source of financial strength to its banking  subsidiaries and, where
required, to commit resources to support each of such subsidiaries.  Further, if
the Bank's capital levels were to fall below minimum regulatory guidelines,  the
Bank would need to develop a capital plan to increase its capital levels and the
Company  would be required to guarantee the Bank's  compliance  with the capital
plan in order for such plan to be accepted by the federal regulatory authority.

     Under the "cross guarantee" provisions of the Federal Deposit Insurance Act
(the "FDI Act"),  any  FDIC-insured  subsidiary  of the Company such as the Bank
could be liable for any loss incurred by, or reasonably  expected to be incurred
by,  the FDIC in  connection  with (i) the  default  of any  other  FDIC-insured
subsidiary also controlled by the Company or (ii) any assistance provided by the
FDIC to any FDIC-insured subsidiary of the Company in danger of default.

     Transactions  with  Affiliates.  The  Federal  Reserve  Act  imposes  legal
restrictions  on the quality and amount of credit that a bank holding company or
its non bank  subsidiaries  ("affiliates")  may obtain from bank subsidiaries of
the holding company. For instance, these restrictions generally require that any
such  extensions  of credit by a bank to its  affiliates  be on  nonpreferential
terms and be secured by designated amounts of specified  collateral.  Further, a
bank's ability to lend to its affiliates is limited to 10% per affiliate (20% in
the aggregate to all affiliates) of the bank's capital and surplus.

                                       10
<PAGE>

     Bank Regulation. As a Tennessee banking institution, the Bank is subject to
regulation,  supervision and regular examination by the Banking Department.  The
deposits of the Bank are insured by the FDIC to the maximum  extent  provided by
law (a maximum of $100,000 for each insured  depositor).  Tennessee  and federal
banking laws and regulations  control,  among other things,  required  reserves,
investments, loans, mergers and consolidations,  issuance of securities, payment
of  dividends,  and  establishment  of branches and other  aspects of the Bank's
operations.  Supervision, regulation and examination of the Company and the Bank
by the bank  regulatory  agencies are intended  primarily for the  protection of
depositors rather than for holders of the Common Stock of the Company.

     Extensions  of Credit.  Under  joint  regulations  of the  federal  banking
agencies,  including the FDIC,  banks must adopt and maintain  written  policies
that  establish  appropriate  limits and standards for extensions of credit that
are secured by liens or  interests in real estate or are made for the purpose of
financing permanent  improvements to real estate.  These policies must establish
loan  portfolio  diversification  standards,   prudent  underwriting  standards,
including   loan-to-value   limits,   that  are  clear  and   measurable,   loan
administration   procedures   and   documentation,    approval   and   reporting
requirements.  A bank's real estate lending policy must reflect consideration of
the Interagency  Guidelines for Real Estate Lending  Policies (the  "Interagency
Guidelines")  that  have  been  adopted  by the  federal  bank  regulators.  The
Interagency Guidelines, among other things, call upon depository institutions to
establish  internal  loan-to-value  limits for real estate loans that are not in
excess of the  loan-to-value  limits specified in the Guidelines for the various
types of real estate  loans.  The  Interagency  Guidelines  state that it may be
appropriate   in   individual   cases  to  originate  or  purchase   loans  with
loan-to-value  ratios in excess of the  supervisory  loan-to-value  limits.  The
aggregate  amount of loans in excess of the  supervisory  loan-to-value  limits,
however,  should not exceed  100% of total  capital  and the total of such loans
secured  by  commercial,  agricultural,  multifamily  and other  non-one-to-four
family residential properties should not exceed 30% of total capital.

     Federal Deposit  Insurance.  The Bank is subject to FDIC deposit  insurance
assessments.  The FDIC has established a risk-based deposit insurance assessment
system for insured depository institutions, under which insured institutions are
assigned  assessment  risk   classifications   based  upon  capital  levels  and
supervisory  evaluations.  Insurance assessment rates for BIF-insured banks such
as the Bank depend on the capital  category and supervisory  category to which a
bank is  assigned  and  currently  range from $0.00 to $0.27 per $100 of insured
deposits.

     Safety and Soundness Standards.  The Federal Deposit Insurance  Corporation
Improvement Act of 1991 ("FDICIA") required the federal bank regulatory agencies
to prescribe, by regulation,  non-capital safety and soundness standards for all
insured depository  institutions and depository  institution  holding companies.
The  FDIC  and the  other  federal  banking  agencies  have  adopted  guidelines
prescribing  safety and soundness  standards  pursuant to FDICIA. The safety and
soundness  guidelines  establish general standards relating to internal controls
and information  systems,  internal audit systems,  loan  documentation,  credit
underwriting,  interest rate exposure, asset growth, and compensation,  fees and
benefits.   Among  other  things,  the  guidelines  require  banks  to  maintain
appropriate  systems and  practices to identify  and manage risks and  exposures
identified in the guidelines.

     Capital  Requirements.  The FRB has established  guidelines with respect to
the  maintenance  of  appropriate  levels of capital by registered  bank holding
companies,  and the FDIC has established  similar guidelines for state-chartered
banks  that are not  members  of the FRB.  The  regulations  of the FRB and FDIC
impose two sets of capital adequacy requirements:  minimum leverage rules, which
require the maintenance of a specified minimum ratio of capital to total assets,
and risk-based capital rules, which require the maintenance of specified minimum
ratios of capital to  "risk-weighted"  assets. At December 31, 1999, the Company
and the Bank satisfied the minimum required regulatory capital requirements. See
Note 13 of Notes to Consolidated Financial Statements.

     The FDIC has issued final  regulations  that  classify  insured  depository
institutions  by capital  levels and require  the  appropriate  federal  banking
regulator to take prompt action to resolve the problems of any institution  that
fails  to  satisfy   the   capital   standards.   Under  such   regulations,   a
"well-capitalized"  bank is one that is not subject to any  regulatory  order or
directive  to meet any  specific  capital  level  and that  has or  exceeds  the
following  capital  levels:  a total  risk-based  capital ratio of 10%, a Tier 1
risk-based  capital ratio of 6%, and a leverage  ratio of 5%. As of December 31,
1999, the Bank was "well-capitalized" as defined by the regulations. See Note 13
of Notes to Consolidated Financial Statements for further information.

                                       11
<PAGE>

     Financial   Modernization   Legislation.   On  November   12,   1999,   the
Gramm-Leach-Bliley  Act of 1999  (the  "GLBA")  was  signed  into  law.  The Act
includes  a  number  of  provisions   intended  to  modernize  and  to  increase
competition in the American financial services industry, including authority for
bank  holding  companies  to engage in a wider range of  nonbanking  activities,
including securities  underwriting and general insurance  activities.  Under the
GLBA,  a bank  holding  company  that elects to be deemed a  "financial  holding
company" will be permitted to engage in any activity  that the Federal  Reserve,
in consultation with the Secretary of the Treasury,  determines by regulation or
order  is (i)  financial  in  nature,  (ii)  incidental  to any  such  financial
activity,  or (iii)  complementary  to any such financial  activity and does not
pose a substantial risk to the safety or soundness of depository institutions or
the financial system generally.  The GLBA identifies certain activities that are
deemed  to  be  financial  in  nature,  including  those  nonbanking  activities
currently  authorized for bank holding  companies by the Federal Reserve as well
as insurance and securities underwriting,  insurance agency and merchant banking
activities.  In order to take  advantage of this new  authority,  a bank holding
company's  depository  institution  subsidiaries  must be  well-capitalized  and
well-managed  and have at least a  satisfactory  examination  rating  under  the
Community Reinvestment Act.

     In  addition,  the  GLBA  authorizes  national  banks  to  engage,  through
"financial  subsidiaries,"  in any activity that is permissible  for a financial
holding company (as described  above) and any activity that the Secretary of the
Treasury,  in consultation with the Federal Reserve,  determines is financial in
nature or  incidental  to any such  financial  activity,  except  (i)  insurance
underwriting,  (ii) real estate development or real estate investment activities
(unless   otherwise   permitted  by  law),  (iii)  insurance  company  portfolio
investments  and  (iv)  merchant  banking.  In order to  invest  in a  financial
subsidiary,  a national bank must be well-managed  and  well-capitalized  (after
deducting  from  capital  the  bank's   outstanding   investments  in  financial
subsidiaries)  and have at least a "satisfactory"  examination  rating under the
Community Reinvestment Act.

     The GLBA  provides  that  state  banks,  such as the  Bank,  may  invest in
financial  subsidiaries  (assuming they have the requisite  investment authority
under  applicable  state law) that engage as principal in activities  that would
only be  permissible  for a national bank to conduct in a financial  subsidiary.
This  authority  is  generally  subject  to the same  conditions  that  apply to
investments  made  by  a  national  bank  in  financial  subsidiaries.  Since  a
Tennessee-chartered  bank is  authorized  by state law to exercise  any power or
engage in any activity that it could exercise or engage in if it were a national
bank located in Tennessee,  the financial  subsidiary  authority  under the GLBA
could result in the  expansion of  activities  permissible  for  Tennessee  bank
subsidiaries.

     Most of the GLBA's  provisions have delayed effective dates and require the
adoption of federal banking  regulations to implement the statutory  provisions.
The Federal Reserve and the FDIC have yet to issue final  regulations  under the
GLBA,  and the effect of such  regulations,  when adopted,  cannot be predicted.
However, the legislation is expected to present opportunities to the Company and
the Bank for new business activities,  although no such activities are presently
planned, and may also have the effect of increasing  competition for the Company
and the Bank.

Executive Officers of the Registrant

     The following table sets forth information regarding the executive officers
of the Company.

                           Age At
      Name           December 31, 1999                  Title
      ----           -----------------                  -----
R. Stan Puckett             43            President and Chief Executive Officer
Davis Stroud                66            Executive Vice President and Secretary
William F. Richmond         50            Senior Vice President and Chief
                                             Financial Officer

     R. Stan Puckett  currently serves as President and Chief Executive  Officer
of the Company and has held that position since 1990. He has served as President
and Chief Executive Officer of the Bank since February 1989. He is a graduate of
Bristol  University  with a degree  in  business  administration.  He  served as
President  of First  American  National  Bank of Johnson  City,  Tennessee  from
December  1987 to  February  1989 and as its Vice  President  from  June 1986 to
December  1987. He was Assistant  Vice President of First Union National Bank in

                                       12
<PAGE>

Asheville,  North  Carolina  from  September  1983 to June  1986 and  served  as
commercial loan officer of Signet Bank in Bristol,  Virginia from September 1977
to June 1983.

     Davis  Stroud was  Executive  Vice  President  of the  Company and the Bank
through  January  3,  2000.  Mr.  Stroud  joined the Bank in 1952 and became its
Senior Vice  President and Cashier in 1973. He became  Executive  Vice President
and  Secretary  of the  Company  and the Bank in 1988 and has also  served  as a
director of the Company and the Bank since December 1989. Mr. Stroud is a member
of First Christian  Church and Greeneville  Masonic Lodge No. 3 F&AM, and he has
also served as Treasurer of Greene County Foundation.

     William F.  Richmond  joined the  Company in  February  1996 and  currently
serves as Senior Vice President and Chief  Financial  Officer of the Company and
the Bank. Prior to joining the Company,  Mr. Richmond served,  subsequent to the
acquisition of Heritage Federal Bancshares,  Inc. ("Heritage") by First American
Corporation,  as  transition  coordinator  for various  financial  matters  from
November 1995 through January 1996.  Heritage was the parent of Heritage Federal
Bank for  Savings  located in  Kingsport,  Tennessee.  He served as Senior  Vice
President  and Chief  Financial  Officer  for  Heritage  from June 1991  through
October 1995 and as  controller  from April 1985  through May 1991.  He has been
active in community activities in the Tri-Cities,  Tennessee area, having served
on the Board of Directors  of Boys and Girls Club,  Inc. and as President of the
Tri-Cities Estate Planning Council. He has served in various capacities with the
United  Way  of  Greater  Kingsport  and  is a  Paul  Harris  Fellow  in  Rotary
International.  He is licensed as a Certified Public  Accountant in Virginia and
Tennessee and is also a Certified Financial Planner.

ITEM 2.       PROPERTIES

     The  Company's  principal  executive  offices are located at 100 North Main
Street, Greeneville,  Tennessee in facilities owned by the Bank. At December 31,
1999, the Company maintained a main office in Greeneville, Tennessee and 26 bank
branches  (of which  seven are in leased  operating  premises)  and 21  separate
locations operated by the Bank's subsidiaries.

ITEM 3.       LEGAL PROCEEDINGS

     From time to time, the Company and its  subsidiaries are parties to various
legal proceedings incident to its business.  At December 31, 1999, there were no
legal  proceedings  which management  anticipates  would have a material adverse
effect on the Company.

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

     No matters  were  submitted  during the fourth  quarter of the fiscal  year
covered by this  report to a vote of security  holders of the Company  through a
solicitation of proxies or otherwise.

                                     PART II

ITEM 5.       MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
              STOCKHOLDER MATTERS

     The information  contained under the section captioned "Market and Dividend
Information"  in the Company's 1999 Annual Report to  Shareholders  (the "Annual
Report") filed as Exhibit 13 hereto is incorporated herein by reference.

ITEM 6.       SELECTED FINANCIAL DATA

     The  information  contained  in the  table  captioned  "Selected  Financial
Highlights" in the Company's Annual Report is incorporated herein by reference.

                                       13
<PAGE>

ITEM 7.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS

     The information contained in the section captioned "Management's Discussion
and Analysis of Financial  Condition and Results of Operations" in the Company's
Annual Report is incorporated herein by reference.

ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  information  set forth  under  Item 7,  "Management's  Discussion  and
Analysis of  Financial  Condition  and  Results of  Operations  - Interest  Rate
Sensitivity" is incorporated herein by reference.

ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  consolidated  financial  statements  contained in the Company's Annual
Report are incorporated herein by reference.

ITEM 9.       DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     Not applicable.

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     For  information  concerning  the Board of Directors  of the  Company,  the
information contained under the section captioned "Election of Directors" in the
Company's  definitive  proxy  statement for the Company's 2000 Annual Meeting of
Shareholders (the "Proxy Statement") is incorporated herein by reference.

     Information regarding executive officers of the Company is contained in the
section captioned "Executive Officers of the Registrant" under Part I hereof and
is incorporated herein by reference.

     Information  regarding  delinquent  Form 3, 4 or 5 filers  is  incorporated
herein by reference to the section entitled  "Beneficial  Ownership  Reports" in
the Proxy Statement.

ITEM 11.      EXECUTIVE COMPENSATION

     The  information   contained  under  the  section  captioned  "Election  of
Directors -- Executive  Compensation  and Other Benefits" in the Proxy Statement
is incorporated herein by reference.

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                  (a)      Security Ownership of Certain Beneficial Owners

                           Information  required  by this  item is  incorporated
                           herein  by   reference   to  the  section   captioned
                           "Security  Ownership of Certain Beneficial Owners and
                           Management" in the Proxy Statement.

                  (b)      Security Ownership of Management

                           Information  required  by this  item is  incorporated
                           herein  by  reference   to  the  sections   captioned
                           "Security  Ownership of Certain Beneficial Owners and
                           Management"  and "Election of Directors" in the Proxy
                           Statement.

                                       14
<PAGE>

                  (c)      Changes in Control

                           Management of the Company  knows of no  arrangements,
                           including  any pledge by any person of  securities of
                           the  Company,   the  operation  of  which  may  at  a
                           subsequent  date result in a change in control of the
                           registrant.

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  required by this item is incorporated  herein by reference
to the section captioned "Election of Directors" in the Proxy Statement.

                                     PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)(1) The  following  consolidated  financial  statements  of the  Company
included in the Annual Report are  incorporated  herein by reference from Item 8
of this Report.  The  remaining  information  appearing in the Annual  Report to
Shareholders  is not  deemed  to be  filed  as part of this  Report,  except  as
expressly provided herein.

               1.   Report of Independent Accountants.

               2.   Consolidated Balance Sheets - December 31, 1999 and 1998.

               3.   Consolidated  Statements  of  Income  for  the  Years  Ended
                    December 31, 1999, 1998 and 1997.

               4.   Consolidated  Statements of Changes in Shareholders'  Equity
                    for the Years Ended December 31, 1999, 1998 and 1997.

               5.   Consolidated  Statements  of Cash Flows for the Years  Ended
                    December 31, 1999, 1998 and 1997.

               6.   Notes to Consolidated Financial Statements.

     (a)(2)  All  schedules  for  which  provision  is  made  in the  applicable
accounting  regulations  of the  Securities  and  Exchange  Commission  are  not
required under the related  instructions or are  inapplicable and therefore have
been omitted.

     (a)(3) The  following  exhibits  either are filed as part of this Report or
are incorporated herein by reference:

                  Exhibit No. 3.  Articles of Incorporation and Bylaws
                                  ------------------------------------

                           (i)      Amended and Restated Charter, effective June
                                    18, 1998 -- incorporated herein by reference
                                    to the Company's  Annual Report on Form 10-K
                                    for the year ended December 31, 1998.

                           (ii)     Amended and Restated  Bylaws -- incorporated
                                    herein by reference to the Company's  Annual
                                    Report  on  Form 10-K  for  the  year  ended
                                    December 31, 1998

                  Exhibit No. 10.  Employment Agreements
                                   ---------------------

                           (i)      Employment agreement between the Company and
                                    R. Stan  Puckett --  incorporated  herein by
                                    reference to the Company's  Annual Report on
                                    Form 10-K for the year  ended  December  31,
                                    1995.

                                       15
<PAGE>
                           (ii)     Employment agreement between the Company and
                                    Davis  Stroud  --  incorporated   herein  by
                                    reference  to  the  Company's   Registration
                                    Statement on Form S-14 (File No. 2-96273).

                  Exhibit No. 11. Statement re Computation of Per Share Earnings
                                  ----------------------------------------------

                                   (Incorporated  by reference to Note 18 of the
                                   Notes to Consolidated Financial Statements).

                  Exhibit No. 13. Annual Report to Shareholders
                                  -----------------------------

                                  Except  for  those  portions  of   the  Annual
                                  Report to  Shareholders  for  the  year  ended
                                  December  31,  1999,    which   are  expressly
                                  incorporated   herein  by   reference,    such
                                  Annual   Report   is    furnished   for    the
                                  information  of  the  Commission and is not to
                                  be deemed "filed" as part of this Report.

                  Exhibit No. 21. Subsidiaries of the Registrant
                                  ------------------------------

                                  A  list  of  subsidiaries of the Registrant is
                                  included as an exhibit to this Report.

                  Exhibit No. 23. Consent of PricewaterhouseCoopers LLP
                                  -------------------------------------

                  Exhibit No. 27. Financial Data Schedule (SEC Use Only)
                                  --------------------------------------

         (b)      Reports on Form 8-K.  No Reports on Form 8-K were filed by the
                  Company  during the last quarter of the fiscal year covered by
                  this report.

         (c)      Exhibits. The exhibits required by Item 601 of Regulation  S-K
                  are either  filed as part of this Annual Report  on Form  10-K
                  or incorporated herein by reference.

         (d)      Financial   Statements  and  Financial   Statement   Schedules
                  Excluded From Annual Report. There are no financial statements
                  and financial statement schedules which were excluded from the
                  Annual Report pursuant to Rule 14a-3(b)(1)  which are required
                  to be included herein.

                                       16
<PAGE>
                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
behalf by the undersigned, thereunto duly authorized.

                                    GREENE COUNTY BANCSHARES, INC.


Date:   March 24, 2000              By: /s/ R. Stan Puckett
                                        ------------------------------
                                        R. Stan Puckett
                                        Director, President and
                                         Chief Executive Officer
                                         (Duly Authorized Representative)

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated and on the dates indicated.

SIGNATURE AND TITLE:                                      DATE:


/s/ R. Stan Puckett                                       March 24, 2000
------------------------------------------------------
R. Stan Puckett
Director, President and Chief
  Executive Officer
  (Principal Executive Officer)


/s/ William F. Richmond                                   March 24, 2000
------------------------------------------------------
William F. Richmond
Senior Vice President and
  Chief Financial Officer
  (Principal Financial and Accounting Officer)


/s/ Ralph T. Brown                                        March 24, 2000
------------------------------------------------------
Ralph T. Brown
Chairman of the Board


/s/ Phil M. Bachman, Jr.                                  March 24, 2000
------------------------------------------------------
Phil M. Bachman, Jr.
Director


/s/ Charles S. Brooks                                     March 24, 2000
------------------------------------------------------
Charles S. Brooks
Director


/s/ W.T. Daniels                                          March 24, 2000
------------------------------------------------------
W.T. Daniels
Director

                                       17
<PAGE>

/s/ J.W. Douthat                                          March 24, 2000
------------------------------------------------------
J.W. Douthat
Director


/s/ James A. Emory                                        March 24, 2000
------------------------------------------------------
James A. Emory
Director


/s/ Jerald K. Jaynes                                      March 24, 2000
------------------------------------------------------
Jerald K. Jaynes
Director


/s/ Terry Leonard                                         March 24, 2000
------------------------------------------------------
Terry Leonard
Director


/s/ H.J. Moser III                                        March 24, 2000
------------------------------------------------------
H.J. Moser, III
Director


/s/ Davis Stroud                                          March 24, 2000
------------------------------------------------------
Davis Stroud
Director

                                       18