FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

For Quarter ended June 30, 2000                     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                    (IRS Employer Identification
incorporated or organization)                      Number)


Main & Depot Street
Greeneville, Tennessee                                       37743
---------------------------------                    ---------------------
(Address of principal                                      (Zip Code)
executive offices)

Registrant's telephone number, including area code 423-639-5111
                                                   ------------

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 or shares  outstanding  of each of the  Issuers  classes of
common stock as of the latest practicable date: 1,363,652.

                                       1
<PAGE>
                         PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
-----------------------------

The unaudited condensed  consolidated financial statements of the Registrant and
its wholly owned subsidiaries are as follows:

     Condensed  Consolidated  Balance  Sheets - June 30, 2000 and  December  31,
     1999.

     Condensed Consolidated  Statements of Income - For the three and six months
     ended June 30, 2000 and 1999.

     Condensed  Consolidated  Statement  of  Stockholders'  Equity - For the six
     months ended June 30, 2000.

     Condensed Consolidated  Statements of Cash Flows - For the six months ended
     June 30, 2000 and 1999.

     Notes to Condensed Consolidated Financial Statements.

                                       2
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
                                                                        (UNAUDITED)
                                                                          JUNE 30,               DECEMBER 31,
                                                                            2000                     1999*
                                                                      ---------------           -------------
                                                                                    (IN THOUSANDS)
                                                                      ---------------------------------------
                                     ASSETS
                                     ------

     <S>                                                              <C>                       <C>
     Cash and Due from Banks                                          $      24,906             $      44,555

     Federal Funds Sold                                                      10,460                         0

     Securities available-for-sale                                           44,032                    20,726
     Securities held-to-maturity (with a market value of $2,621
       on June 30, 2000 and $3,326 on December 31, 1999)                      2,625                     3,321

     Federal Home Loan Bank stock                                             3,959                     3,477

     Bankers Bank Stock                                                         144                       144

     Loans                                                                  605,102                   557,229

       Less: Allowance for Loan Losses                                       10,396                    10,332
                                                                       -------------             -------------

       NET LOANS                                                            594,706                   546,897
                                                                       -------------             -------------

     Bank Premises and Equipment, Net of

         Accumulated Depreciation                                            21,761                    18,106

     Other Assets                                                            19,020                    18,786
                                                                       -------------             -------------

          TOTAL ASSETS                                                $     721,613             $     656,012
                                                                       =============             =============

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

     Deposits                                                         $     581,517             $     522,382
     Federal Funds Purchased                                                      0                    11,620
     Securities Sold under Repurchase Agreements                              4,392                     2,961
     Other Borrowings                                                        62,111                    46,309
     Other Liabilities                                                        9,962                    11,968
                                                                       -------------             -------------
         TOTAL LIABILITIES                                                  657,982                   595,240
                                                                       -------------             -------------

                              SHAREHOLDERS' EQUITY
                              --------------------

     Common Stock, par value $10, authorized 5,000,000 shares;
       issued and outstanding 1,363,652 and 1,359,647 shares at
       June 30, 2000 and December 31, 1999, respectively                     13,637                    13,596
     Paid in Capital                                                          4,843                     4,479
     Retained Earnings                                                       45,132                    42,715
     Accumulated Other Comprehensive Income (Loss)                               19                       (18)
                                                                       -------------             -------------
         TOTAL SHAREHOLDERS' EQUITY                                          63,631                    60,772
                                                                       -------------             -------------
         TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                     $     721,613             $     656,012
                                                                       =============             =============
</TABLE>
* Condensed from Audited Financial Statements.
See accompanying notes to Condensed Consolidated Financial Statements(Unaudited)

                                       3
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  THREE AND MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (UNAUDITED)
                (DOLLARS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                                       JUNE 30,                           JUNE 30,
                                                           -------------------------------     ------------------------------
                                                                2000              1999             2000             1999
                                                           -------------      ------------     ------------     -------------
<S>                                                        <C>                <C>              <C>              <C>
INTEREST INCOME:
----------------
  Interest and Fees on Loans                               $     15,384       $    12,799      $    30,066      $     25,819
  Interest on Investment Securities                                 880               349            1,739               758
  Interest on Federal Funds Sold and Other
    Interest-earning Deposits                                       383               462              427               661
                                                            ------------       -----------      -----------      ------------
         TOTAL INTEREST INCOME                                   16,647            13,610           32,232            27,238
                                                            ------------       -----------      -----------      ------------
INTEREST EXPENSE:
-----------------
  Interest on Deposits                                            5,933             4,788           11,162             9,293
  Interest on Borrowings                                            999               220            1,831               389
                                                            ------------       -----------      -----------      ------------
         TOTAL INTEREST EXPENSE                                   6,932             5,008           12,993             9,682
                                                            ------------       -----------      -----------      ------------

         NET INTEREST INCOME                                      9,715             8,602           19,239            17,556

Provision for Loan Losses                                         1,077               762            2,794             1,563
                                                            ------------       -----------      -----------      ------------

     NET INTEREST INCOME AFTER
       PROVISION FOR LOAN LOSSES                                  8,638             7,840           16,445            15,993
                                                            ------------       -----------      -----------      ------------

NONINTEREST INCOME:
-------------------
  Service Charges, Commissions and Fees                           1,236             1,143            2,347             2,515
  Other Income                                                      181               180              537               509
                                                            ------------       -----------      -----------      ------------
       TOTAL NONINTEREST INCOME                                   1,417             1,323            2,884             3,024
                                                            ------------       -----------      -----------      ------------
NONINTEREST EXPENSE:
--------------------
  Salaries and Benefits                                           4,172             3,357            8,043             6,502
  Occupancy and Furniture and Equipment Expense                     905               975            1,733             1,708
  Other Expenses                                                  1,859             1,492            3,426             3,207
                                                            ------------       -----------      -----------      ------------
         TOTAL NONINTEREST EXPENSE                                6,936             5,824           13,202            11,417
                                                            ------------       -----------      -----------      ------------

     INCOME BEFORE INCOME TAXES                                   3,119             3,339            6,127             7,600

Income Taxes                                                      1,225             1,051            2,076             2,657
                                                            ------------       -----------      -----------      ------------

     NET INCOME                                            $      1,894       $     2,288      $     4,051      $      4,943
                                                            ============       ===========      ===========      ============

PER SHARE OF COMMON STOCK:
-------------------------
  Net Income, Basic                                               $1.39             $1.68            $2.98             $3.64
                                                                  =====             =====            =====             =====
  Net Income, Assuming Dilution                                   $1.38             $1.67            $2.95             $3.61
                                                                  =====             =====            =====             =====
  Dividends                                                       $0.60             $0.56            $1.20             $1.12
                                                                  =====             =====            =====             =====
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements(Unaudited)

                                       4
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                     FOR THE SIX MONTHS ENDED JUNE 30, 2000
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                   ACCUMULATED
                                                                                      OTHER
                                                                                   COMPREHENSIVE
                                                    COMMON     PAID IN   RETAINED     INCOME
                                                    STOCK      CAPITAL   EARNINGS     (LOSS)     TOTAL
                                                    -----      -------   --------     ------     -----
<S>                                                <C>        <C>        <C>         <C>         <C>
JANUARY 1, 2000                                    $ 13,596   $  4,479   $ 42,715    $    (18)   $ 60,772

  Net income                                             --         --      4,051          --       4,051

  Other comprehensive income (loss), net of tax:         --         --         --          37          37
                                                                                                 --------
     Comprehensive income                                                                           4,088
  Tax benefit from exercise of nonincentive
     stock options                                                  23                                 23

  Dividends paid                                         --         --     (1,634)         --      (1,634)

  Exercise of stock options                              41        341         --          --         382
                                                   --------   --------   --------    --------    --------
JUNE 30, 2000                                      $ 13,637   $  4,843   $ 45,132    $     19    $ 63,631
                                                   ========   ========   ========    ========    ========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements(Unaudited)

                                       5
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (UNAUDITED)
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                     JUNE 30,     JUNE 30,
                                                                       2000         1999
                                                                       ----         ----
<S>                                                                  <C>         <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES:
  Net Income                                                         $  4,051    $  4,943
  Adjustments to reconcile net income to
    net cash provided by operating activities:
      Provision for loan losses                                         2,794       1,563
      Depreciation and amortization                                       754         653
      Amortization of premiums on securities, net of accretion            111         173
      Loans originated for sale                                       (18,653)    (36,673)
      Proceeds from loans originated for sale                          17,363      37,070
      Net realized (gain) on sale of loans originated for sale            (93)       (365)
      (Gain)Loss on sale of fixed assets                                   (9)        199
      Loss on other real estate owned                                     227           0
      Decrease (increase) in other assets, net of intangibles              30      (2,408)
      Decrease in accrued interest payable and other liabilities       (3,165)     (1,033)
                                                                     --------    --------
           NET CASH PROVIDED BY OPERATING ACTIVITIES                    3,410       4,122
                                                                     --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net (increase) decrease in securities and other interest-earning    (23,144)      1,389
  Net originations of loans held-to-maturity                          (50,158)    (21,276)
  Improvements in other real estate owned and proceeds from
    sales of other real estate owned, net                               1,500        (537)
  Proceeds from sale of fixed assets                                       35         401
  Fixed asset additions                                                (4,327)     (1,656)
                                                                     --------    --------
           NET CASH USED BY INVESTING ACTIVITIES                      (76,094)    (21,679)
                                                                     --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in deposits                                             59,135      46,882
  Decrease in federal funds purchased                                 (11,620)     (4,800)
  Increase in securities sold under repurchase agreements               1,431       2,892
  Increase (decrease) in other borrowings, net                         15,802     (20,165)
  Proceeds from issuance of common stock                                  381         104
  Cash dividends paid                                                  (1,634)     (1,521)
                                                                     --------    --------
           NET CASH PROVIDED BY FINANCING ACTIVITIES                   63,495      23,392
                                                                     --------    --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                   (9,189)      5,835
                                                                     --------    --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                       44,555      43,892
                                                                     --------    --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $ 35,366    $ 49,727
                                                                     ========    ========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements(Unaudited)

                                       6
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1-PRINCIPLES OF CONSOLIDATION
-----------------------------

The accompanying unaudited condensed consolidated financial statements of Greene
County Bancshares, Inc. (the "Company") and its wholly owned subsidiary,  Greene
County Bank (the  "Bank"),  have been  prepared  in  accordance  with  generally
accepted  accounting  principles for interim  information and in accordance with
the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by
the Securities and Exchange Commission. Accordingly, they do not include all the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been  included.  All interim  amounts are subject to year-end
audit and the  results  of  operations  for the  interim  period  herein are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2000. For further information,  refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended  December  31, 1999.  Certain  amounts from prior period
financial  statements  have been  reclassified  to conform to the current year's
presentation.

2-ALLOWANCE FOR LOAN LOSSES
---------------------------

Transactions  in the Allowance for Loan Losses for the six months ended June 30,
2000 were as follows:

                                                               In
                                                            Thousands
                                                        ------------------

Balance, January 1, 2000                           $         10,332

Add (Deduct):
  Charge-offs                                                (3,258)
  Recoveries                                                    528
  Provisions                                                  2,794
                                                        ------------------

Balance, June 30, 2000                             $         10,396
                                                        ==================

                                       7
<PAGE>
3-NET INCOME PER SHARE OF COMMON STOCK
--------------------------------------

Net income per share of common  stock is computed by dividing  net income by the
weighted average number of common shares outstanding during the period.  Diluted
net income per share of common  stock is computed by dividing  net income by the
weighted   average  number  of  common  shares  and  common  stock   equivalents
outstanding  during the  period.  Stock  options are  regarded  as common  stock
equivalents.  Common stock  equivalents  are computed  using the treasury  stock
method.

The following is a reconciliation of the numerators and denominators used in the
basic and diluted  earnings per share  computations for the three and six months
ended June 30, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED JUNE 30,
                                         -------------------------------------------------------------------------
                                                         2000                                   1999
                                         ------------------------------------     --------------------------------
                                                               (DOLLAR AMOUNTS IN THOUSANDS)

                                                INCOME         SHARES                  INCOME          SHARES
                                              (NUMERATOR)   (DENOMINATOR)            (NUMERATOR)   (DENOMINATOR)
    <S>                                         <C>           <C>                      <C>           <C>
    BASIC EPS
    Income available to
      common shareholders                       $1,894        1,363,491                $2,288        1,358,110

    EFFECT OF DILUTIVE SECURITIES
    Stock options outstanding                        -           10,094                     -           10,229
                                         -------------------------------------------------------------------------
    DILUTED EPS
    Income available to common
      shareholders plus assumed
      conversions                               $1,894        1,373,585                $2,288        1,368,339
                                         =========================================================================


                                                                     SIX MONTHS ENDED JUNE 30,
                                         -------------------------------------------------------------------------
                                                         2000                                   1999
                                         ------------------------------------     --------------------------------
                                                               (DOLLAR AMOUNTS IN THOUSANDS)

                                                INCOME         SHARES                  INCOME          SHARES
                                              (NUMERATOR)   (DENOMINATOR)            (NUMERATOR)   (DENOMINATOR)

    BASIC EPS
    Income available to
      common shareholders                       $4,051        1,361,961                $4,943        1,357,986

    EFFECT OF DILUTIVE SECURITIES
    Stock options outstanding                        -           10,650                     -           10,323
                                         -------------------------------------------------------------------------

    DILUTED EPS
    Income available to common
      shareholders plus assumed
      conversions                               $4,051        1,372,611                $4,943        1,368,309
                                         =========================================================================
</TABLE>
                                       8
<PAGE>

4-SEGMENT INFORMATION
---------------------

The  Company's  principal  business  consists of  operating  through the Bank to
attract  deposits from the general public and invest 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.  In  addition,  the  Bank  has  four
wholly-owned  subsidiaries:  a consumer  finance  business,  a mortgage  banking
operation,  a  subprime  automobile  lending  operation  and a  title  insurance
business. Collectively, these subsidiaries have sufficient revenue to constitute
a separate segment of the business of the Company.  These subsidiaries have been
disclosed  below in the  "other"  column,  as they do not meet the  quantitative
threshold for disclosure on an individual basis.

Intersegment  revenues and expenses are  accounted  for as if they were received
from or incurred to third parties at current market prices.

The  reportable  segments  are  strategic  business  units that offer  different
products  and  services.  They are  managed  separately  because  each  requires
different marketing strategies.

                                       9
<PAGE>
<TABLE>
<CAPTION>
SEGMENT INFORMATION:
--------------------
THREE MONTHS ENDED JUNE 30, 2000               BANK              OTHER         ELIMINATIONS          TOTAL
--------------------------------          --------------    --------------    --------------    --------------
<S>                                      <C>               <C>               <C>               <C>
Interest income                          $        15,075   $         2,588   $        (1,016)  $        16,647
Interest expense                                   6,883             1,065            (1,016)            6,932
                                           --------------    --------------    --------------    --------------
NET INTEREST INCOME                      $         8,192   $         1,523   $             0   $         9,715
                                           ==============    ==============    ==============    ==============

Provision for loan losses                $           300   $           777   $             0   $         1,077
Noninterest income                                 1,084               377               (44)            1,417
Noninterest expense                                5,400             1,580               (44)            6,936
Income tax expense                                 1,395              (170)                0             1,225
                                           --------------    --------------    --------------    --------------
SEGMENT NET INCOME (LOSS)                $         2,181   $          (287)  $             0   $         1,894
                                           ==============    ==============    ==============    ==============
SEGMENT ASSETS                           $       718,007   $        45,657   $       (42,051)  $       721,613
                                           ==============    ==============    ==============    ==============

THREE MONTHS ENDED JUNE 30, 1999               BANK              OTHER         ELIMINATIONS          TOTAL
--------------------------------          --------------    --------------    --------------    --------------
Interest income                          $        11,751   $         2,754   $          (895)  $        13,610
Interest expense                                   4,959               944              (895)            5,008
                                           --------------    --------------    --------------    --------------
NET INTEREST INCOME                      $         6,792   $         1,810   $             0   $         8,602
                                           ==============    ==============    ==============    ==============

Provision for loan losses                $           306   $           456   $             0   $           762
Noninterest income                                 1,001               395               (73)            1,323
Noninterest expense                                4,355             1,542               (73)            5,824
Income tax expense                                   966                85                 0             1,051
                                           --------------    --------------    --------------    --------------
SEGMENT NET INCOME                       $         2,166   $           122   $             0   $         2,288
                                           ==============    ==============    ==============    ==============
SEGMENT ASSETS DECEMBER 31, 1999         $       652,752   $        44,592   $       (41,332)  $       656,012
                                           ==============    ==============    ==============    ==============

SIX MONTHS ENDED JUNE 30, 2000                 BANK              OTHER         ELIMINATIONS          TOTAL
------------------------------            --------------    --------------    --------------    --------------
Interest income                          $        28,945   $         5,230   $        (1,943)  $        32,232
Interest expense                                  12,944             1,992            (1,943)           12,993
                                           --------------    --------------    --------------    --------------
NET INTEREST INCOME                      $        16,001   $         3,238   $             0   $        19,239
                                           ==============    ==============    ==============    ==============

Provision for loan losses                $           600   $         2,194   $             0   $         2,794
Noninterest income                                 2,082               925              (123)            2,884
Noninterest expense                               10,216             3,109              (123)           13,202
Income tax expense                                 2,551              (475)                0             2,076
                                           --------------    --------------    --------------    --------------
SEGMENT NET INCOME (LOSS)                $         4,716   $          (665)  $             0   $         4,051
                                           ==============    ==============    ==============    ==============
SEGMENT ASSETS                           $       718,007   $        45,657   $       (42,051)  $       721,613
                                           ==============    ==============    ==============    ==============

SIX MONTHS ENDED JUNE 30, 1999                 BANK              OTHER         ELIMINATIONS          TOTAL
------------------------------            --------------    --------------    --------------    --------------
Interest income                          $        23,230   $         5,719   $        (1,711)  $        27,238
Interest expense                                   9,633             1,760            (1,711)            9,682
                                           --------------    --------------    --------------    --------------
NET INTEREST INCOME                      $        13,597   $         3,959   $             0   $        17,556
                                           ==============    ==============    ==============    ==============

Provision for loan losses                $           613   $           950   $             0   $         1,563
Noninterest income                                 1,901             1,242              (119)            3,024
Noninterest expense                                8,354             3,182              (119)           11,417
Income tax expense                                 2,294               363                 0             2,657
                                           --------------    --------------    --------------    --------------
SEGMENT NET INCOME                       $         4,237   $           706   $             0   $         4,943
                                           ==============    ==============    ==============    ==============
SEGMENT ASSETS DECEMBER 31, 1999         $       652,752   $        44,592   $       (41,332)  $       656,012
                                           ==============    ==============    ==============    ==============
</TABLE>
                                       10
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         ---------------------------------------------

FORWARD-LOOKING STATEMENTS

     THIS QUARTERLY  REPORT ON FORM 10-Q,  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.

GENERAL

     Greene County Bancshares,  Inc. (the "Company") is the bank holding company
for Greene County Bank ("the Bank"), a Tennessee-chartered  commercial bank that
conducts the principal  business of the Company.  In addition to its  commercial
banking  operations,  the Bank  conducts  separate  businesses  through its four
wholly-owned   subsidiaries:   Superior  Financial  Services,   Inc.  ("Superior
Financial"),  a consumer finance company;  Superior Mortgage Company  ("Superior
Mortgage"),  a  mortgage  banking  company;  GCB  Acceptance  Corporation  ("GCB
Acceptance"),  a subprime  automobile lending company;  and Fairway Title Co., a
title company formed in 1998.

     Effective July 1, 2000,  the Company  shifted the bulk of the operations of
Superior  Mortgage  to the Bank in  order  to  maximize  efficiency  and  reduce
overhead.  Most of the assets and liabilities of Superior  Mortgage,  as well as
the  employees,  were  transferred  to the Bank and the  operations  of Superior
Mortgage will continue as a division of the Bank. The separate corporation which
houses Superior  Mortgage will continue in existence for an undetermined  period
of time during  which  certain  operational  and  administrative  issues will be
finalized.  Management has not, at this time,  determined  whether this separate
corporation will be dissolved.

LIQUIDITY AND CAPITAL RESOURCES

     LIQUIDITY.  Liquidity refers to the ability or the financial flexibility to
manage future cash flows to meet the needs of depositors  and borrowers and fund
operations.  Maintaining  appropriate  levels of liquidity allows the Company to
have sufficient  funds available for

                                       11
<PAGE>

reserve requirements,  customer demand for loans, withdrawal of deposit balances
and maturities of deposits and other  liabilities.  The Company's primary source
of liquidity is dividends paid by the Bank.  Applicable  Tennessee  statutes and
regulations impose  restrictions on the amount of dividends that may be declared
by the Bank.  Further,  any  dividend  payments  are  subject to the  continuing
ability of the Bank to maintain its compliance with minimum  federal  regulatory
capital   requirements  and  to  retain  its   characterization   under  federal
regulations  as a  "well-capitalized"  institution.  In  addition,  the  Company
maintains  lines of credit  totaling $45 million with the Federal Home Loan Bank
of Cincinnati,  of which $39 million was available at June 30, 2000. The Company
also  maintains  federal  funds  lines of credit  totaling  $45  million  at six
correspondent banks.

     The Company's liquid assets include  investment  securities,  federal funds
sold and other interest-earning deposits, and cash and due from banks. Including
securities pledged to collateralize municipal deposits, these assets represented
13.3% of the total  liquidity  base at June 30,  2000,  as  compared to 12.4% at
December 31, 1999. The liquidity base is generally  defined to include deposits,
securities sold under  repurchase  agreements and short-term  borrowed funds and
other borrowings.

     For the six months ended June 30, 2000, operating activities of the Company
provided  $3,410,000  of cash  flows.  Net income of  $4,051,000,  adjusted  for
non-cash  operating  activities,  including  $2,794,000  in  provision  for loan
losses, a $1,290,000 increase in loans originated for sale, net of proceeds from
the sale of such loans, and amortization and depreciation of $754,000,  provided
the majority of the cash generated from operations.

     Investing activities,  including lending, used $76,094,000 of the Company's
cash flow during the six months ended June 30, 2000.  The Company's  increase in
investment  securities and other  interest-earning  deposits used $23,144,000 in
cash  flows,  while  the net  increase  in  loans  originated  net of  principal
collected used $50,158,000 in cash inflows.

     Financing activities provided $63,495,000 of the Company's cash flow during
the six months ended June 30, 2000. Net deposit growth and the increase in other
borrowings provided  $59,135,000 and $15,802,000 in cash inflows,  respectively.
These inflows were offset, in part, by the $11,620,000 decrease in federal funds
purchased.  Further, cash dividends paid to shareholders used $1,634,000 in cash
flows.

     CAPITAL  RESOURCES.  The  Company's  capital  position is  reflected in its
shareholders'  equity,  subject to certain adjustments for regulatory  purposes.
Shareholders'  equity,  or  capital,  is a measure of the  Company's  net worth,
soundness  and  viability.  The Company  continues  to exhibit a strong  capital
position while consistently paying dividends to its stockholders.  Further,  the
capital  base  of  the  Company   allows  it  to  take   advantage  of  business
opportunities  while  maintaining the level of resources  deemed  appropriate by
management of the Company to address  business  risks  inherent in the Company's
daily operations.

     Shareholders'  equity on June 30,  2000 was  $63,631,000,  an  increase  of
$2,859,000  or 4.70%,  from  $60,772,000  on December 31, 1999.  The increase in
shareholders' equity

                                       12
<PAGE>

primarily  reflects  net  income  for the six  months  ended  June  30,  2000 of
$4,051,000 ($2.95 per share,  assuming  dilution) and proceeds from the exercise
of stock options  during the six months ended June 30, 2000  totaling  $382,000.
This increase was offset by quarterly  dividend  payments  during the six months
ended June 30, 2000 totaling $1,634,000 ($1.20 per share).

     Risk-based  capital  regulations  adopted by the Board of  Governors of the
Federal Reserve Board (the "FRB") and the Federal Deposit Insurance  Corporation
require bank holding companies and banks, respectively,  to achieve and maintain
specified  ratios of capital to  risk-weighted  assets.  The risk-based  capital
rules are  designed to measure  Tier 1 Capital and Total  Capital in relation to
the credit risk of both on- and off-balance  sheet items.  Under the guidelines,
one of four risk  weights is applied to the  different  on-balance  sheet items.
Off-balance  sheet  items,  such  as  loan  commitments,  are  also  subject  to
risk-weighting  after conversion to balance sheet equivalent  amounts.  All bank
holding  companies  and banks  must  maintain a minimum  total  capital to total
risk-weighted  assets ratio of 8.00%, at least half of which must be in the form
of core, or Tier 1, capital (consisting of stockholders' equity, less goodwill).
At June 30,  2000,  the Company  and the Bank each  satisfied  their  respective
minimum regulatory  capital  requirements,  and the Bank was  "well-capitalized"
within the meaning of federal regulatory requirements.

=========================================================================
                         Capital Ratios at June 30, 2000
-------------------------------------------------------------------------
                                     Required
                                      Minimum     Company       Bank
                                       Ratio
--------------------------------- ------------ ------------ ------------
   Tier 1 risk-based capital            4.00%       10.99%       11.12%
--------------------------------- ------------ ------------ ------------
    Total risk-based capital            8.00%       12.24%       12.38%
--------------------------------- ------------ ------------ ------------
         Leverage Ratio                 4.00%        8.64%        8.72%
========================================================================

CHANGES IN RESULTS OF OPERATIONS

     NET INCOME. Net income for the three and six months ended June 30, 2000 was
$1,894,000 and $4,051,000,  respectively,  an decrease of $394,000, or 17.2% and
$892,000,  or 18.0%,  as compared to net income of  $2,288,000  and  $4,943,000,
respectively,  for the same  periods in 1999.  The decrease for the three months
ended June 30, 2000 resulted primarily from an increase in non-interest  expense
of $1,112,000,  or 19.1%, to $6,936,000 for the three months ended June 30, 2000
from  $5,824,000  for the same period in 1999.  This  increase is  reflective of
increasing  compensation and benefit expenses  associated with the growth of the
Company's  branch  network.  Further,  this  increase  in  non-interest  expense
includes a $367,000 increase in other expenses,  or 24.6%, to $1,859,000 for the
three  months ended June 30, 2000 from  $1,492,000  for the same period in 1999.
This increase  primarily  reflects increased losses on sale of real estate owned
and other  repossessed  assets,  as well as additional  advertising  and related
expenses  incurred  with the  growth  of the  Company's  branch  network  and in
association with the Company's aggressive solicitation of deposits. In addition,
the decrease in net income for the three months ended June 30, 2000  reflects an

                                       13
<PAGE>

increase in provision for loan losses of $315,000,  or 41.3%,  to $1,077,000 for
the three months ended June 30, 2000 from  $762,000 for the same period in 1999.
The  increase  in  provisions  principally  reflects  additional  provisions  at
Superior  Financial  resulting  from increased  loan  charge-offs  stemming from
Superior  Financial's  implementation  of new  credit  regulations  applying  to
bank-owned  consumer  finance  subsidiaries.  This  increase  in  provisions  at
Superior Financial is the primary reason for the decrease in "other" segment net
income,  set forth in Note 4 of the Notes to  Condensed  Consolidated  Financial
Statements,  of $409,000,  or 335.2%,  to ($287,000)  for the three months ended
June 30,  2000  compared  to  $122,000  for the same  period in the prior  year.
Finally,  income tax expense increased $174,000, or 16.5%, to $1,225,000 for the
three  months ended June 30, 2000 from  $1,051,000  for the same period in 1999,
reflecting  an updating of the  Company's  estimated tax liability in the second
quarter of 1999. These expense increases were offset, in part, by an increase in
net interest income of $1,113,000,  or 12.9%, to $9,715,000 for the three months
ended June 30, 2000 from $8,602,000 for the same period in 1999. The increase in
net interest income  primarily  reflects the Company's  continued growth in loan
production  for the three months  ended June 30,  2000,  as compared to the same
period  in  1999,  through  its  expanding  branch  network,  primarily  through
increases in commercial and commercial real estate loans.

The decrease for the six months ended June 30, 2000 resulted principally from an
increase in non-interest expense of $1,785,000, or 15.6%, to $13,202,000 for the
six months ended June 30, 2000 from $11,417,000 for the same period in 1999. The
causal  trends  associated  with  this  increase  in  non-interest  expense  are
essentially  the same as described  above with respect to the three months ended
June 30,  2000.  In  addition,  the  increase  in  provision  for loan losses of
$1,231,000,  or 78.7%, to $2,794,000 for the six months ended June 30, 2000 from
$1,563,000  for the same period in 1999 further  contributed  to the decrease in
net income.  This  increase in  provisions  reflects the same trends at Superior
Financial described above in the discussion regarding the quarter ended June 30,
2000 and is the primary  reason for the decrease in "other"  segment net income,
set forth in Note 4 of the Notes to Condensed Consolidated Financial Statements,
of $1,371,000,  or 194.1%,  to ($665,000) for the six months ended June 30, 2000
compared  to  $706,000  for the same  period in the prior  year.  These  expense
increases  were  offset,  in part,  by an  increase  in net  interest  income of
$1,683,000,  or 9.6%, to $19,239,000 for the six months ended June 30, 2000 from
$17,556,000  for the same  period in 1999.  The reasons  for this  increase  are
primarily the same as set forth above with respect to the quarter ended June 30,
2000.

     NET INTEREST INCOME.  The largest source of earnings for the Company is net
interest   income,   which  is  the  difference   between   interest  income  on
interest-earning assets and interest paid on deposits and other interest-bearing
liabilities. The primary factors which affect net interest income are changes in
volume and yields of interest-earning  assets and interest-bearing  liabilities,
which are  affected  in part by  management's  responses  to changes in interest
rates through asset/liability management.  During the three and six months ended
June 30, 2000, net interest income was $9,715,000 and $19,239,000, respectively,
as  compared  to  $8,602,000  and  $17,556,000  for the  same  periods  in 1999,
representing  increases  of 12.9% and 9.6%,  respectively.  With  respect to the
three and six months ended June 30, 2000,  this increase was due primarily to an
increase in volume of average  interest-

                                       14
<PAGE>

earning  assets,  including an increase in loan  originations,  primarily in the
Bank.  This  increase  was  offset,  in part,  by the  $287,000,  or 15.8%,  and
$721,000, or 18.2%, declines in net interest income for the three and six months
ended June 30, 2000, respectively, set forth in the "other" category, as further
described in Note 4 of the Notes to Condensed Consolidated Financial Statements.
These  declines  resulted  primarily  from a  reduction  in the  volume of loans
originated by Superior Mortgage and Superior Financial and were caused primarily
by a rising interest rate environment.

     PROVISION  FOR LOAN LOSSES.  During the three and six month  periods  ended
June 30, 2000, loan charge-offs  were $1,573,000 and $3,258,000,  and recoveries
of  charged-off  loans were $277,000 and $528,000,  respectively.  The Company's
provision for loan losses  increased to $1,077,000  and $2,794,000 for the three
and six months ended June 30, 2000,  respectively,  from $762,000 and $1,563,000
for the same period in 1999.  The increase is  primarily  the result of Superior
Financial's  implementation  of  new  credit  regulations  governing  bank-owned
consumer finance subsidiaries. In addition, the increase reflects increased loan
volume in the Bank and GCB Acceptance,  the Bank's subprime  automobile  lending
subsidiary.  As a result,  the Company's  allowance for loan losses increased by
$64,000 to $10,396,000  at June 30, 2000 from  $10,332,000 at December 31, 1999.
The ratio of the allowance for loan losses to  nonperforming  assets was 200.62%
and 163.48% at June 30, 2000 and December 31, 1999, respectively,  and the ratio
of  nonperforming  assets to total assets was .72% and .96% at June 30, 2000 and
December 31, 1999, respectively.

     NON-INTEREST INCOME. Income that is not related to interest-earning assets,
consisting  primarily of service  charges,  commissions  and fees, has become an
important  supplement  to the  traditional  method  of  earning  income  through
interest rate spreads.

     Total non-interest  income for the three and six months ended June 30, 2000
was  $1,417,000  and  $2,884,000,  respectively,  as compared to $1,323,000  and
$3,024,000  for the same periods in 1999.  The increase of $94,000,  or 7.1% for
the three  months  ending  June 30,  2000  compared  to the same period in 1999,
principally  reflects  an  increase in the  largest  component  of  non-interest
income,  i.e.,  service charges,  commissions and fees, which totaled $1,236,000
for the three months ended June 30, 2000 as compared to $1,143,000  for the same
period in 1999. This increase of $93,000, or 8.1%, is reflective  principally of
management's   continued   focus  on  the   generation  of  fee  income  through
implementation of additional fees and increasing  existing fees. The decrease of
$140,000, or 4.6%, for the six month period ending June 30, 2000 compared to the
same period in 1999 primarily  reflects a reduction in  commissions  and fees at
Superior  Mortgage and Superior  Financial as a result of a rising interest rate
environment and a resulting reduction in loan originations.

     NON-INTEREST EXPENSE.  Control of non-interest expense also is an important
aspect  in  managing  net  income.   Non-interest  expense  includes  personnel,
occupancy,  and other expenses such as data  processing,  printing and supplies,
legal and professional  fees,  postage,  Federal Deposit  Insurance  Corporation
assessment,  etc. Total non-interest  expense was $6,936,000 and $13,202,000 for
the  three and six  months  ended  June 30,  2000  compared  to  $5,824,000  and
$11,417,000 for the same periods in 1999. Primarily as a result of this increase
in non-interest  expense, the Company's efficiency ratio was adversely affected,
as

                                       15
<PAGE>

the ratio increased from 55.54% at June 30, 1999 to 59.68% at June 30, 2000. The
efficiency ratio  illustrates how much it cost the Company to generate  revenue;
for example,  it cost the Company  59.68 cents to generate one dollar of revenue
for the six months ended June 30, 2000.

     Personnel  costs are the  primary  element  of the  Company's  non-interest
expenses.  For the  three and six  months  ended  June 30,  2000,  salaries  and
benefits represented  $4,172,000,  or 60.1%, and $8,043,000,  or 60.9%, of total
noninterest expense,  respectively.  This was an increase of $815,000, or 24.3%,
and $1,541,000,  or 23.7%,  over the $3,357,000 and $6,502,000 for the three and
six months ended June 30, 1999, respectively.  For the six months ended June 30,
1999,  salaries and benefits  represented  57.0% of total  noninterest  expense.
These  increases  were due to opening new  branches  and  strengthening  certain
operational  areas,  which required  increased  staff at varying  experience and
compensation levels and increased employee benefit costs. Overall, the number of
full-time  equivalent  employees at June 30, 2000 was 384 versus 341 at June 30,
1999, an increase of 12.6%.

     Occupancy  and  furniture and  equipment  expense  increased  only slightly
during the six months  ended June 30, 2000  compared to the same period in 1999,
even though the Company  increased its size to 45 branches at June 30, 2000 from
38 branches at June 30, 1999. The increase in this expense in both the three and
six months  ended June 30, 2000,  as compared to the same  periods in 1999,  was
mitigated by the absence of an  approximate  $200,000  loss on the sale of fixed
assets which occurred in the second quarter of 1999.

     Other expenses increased $367,000, or 24.6%, and $219,000, or 6.8%, for the
three and six months  ended June 30, 2000,  respectively,  from  $1,492,000  and
$3,207,000 for the same respective  periods in 1999.  These increases  primarily
reflect increased losses on sale of real estate and other repossessed assets, as
well as additional  advertising and related expenses incurred with the growth of
the Company's  branch network and in association  with the Company's  aggressive
solicitation of deposits.

CHANGES IN FINANCIAL CONDITION

     Total  assets at June 30,  2000 were $721.6  million,  an increase of $65.6
million,  or 10.0%,  over 1999's  year-end total assets of $656.0  million.  The
increase in assets was  reflective  of the  increase in loans and federal  funds
sold, funded by both an increase in deposits and other borrowings.

     At June 30, 2000,  loans,  net of unearned  income and  allowance  for loan
losses,  were $594.7 million compared to $546.9 million at December 31, 1999, an
increase of $47.8 million, or 8.7% from December 31, 1999. The increase in loans
during  the  first  six  months  of  2000 is  primarily  due to an  increase  in
commercial and commercial  real estate loans  generated  primarily by additional
branches and lenders,  first-hand  knowledge  of the local  lending  markets and
competitive loan rates.

     Non-performing  loans include non-accrual and classified loans. The Company
has a policy of  placing  loans 90 days  delinquent  in  non-accrual  status and
charging  them off at 120

                                       16
<PAGE>

days past due.  Other loans past due that are well secured and in the process of
collection  continue to be carried on the Company's  balance sheet.  The Company
has  aggressive  collection  practices  in which  senior  management  is heavily
involved.  Nonaccrual  loans  increased  by $86,000  during the six month period
ended June 30, 2000 to $3,038,000.

     The Company  maintains an  investment  portfolio to provide  liquidity  and
earnings.  Investments  at June 30, 2000 with an amortized cost of $46.7 million
had a market  value of $46.7  million.  At year-end  1999,  investments  with an
amortized  cost of $24.0  million  had a market  value  of $24.1  million.  This
increase,  funded by  borrowings  from the Federal Home Loan Bank of  Cincinnati
("FHLB"),  was the result of management's  decision to restructure its method of
collateralizing  public  deposits  which allowed for an increase in net interest
income with minimal interest rate risk.

     In planning for the funding of the additional  loan demand which  developed
during the first six months of 2000, the Company became aggressive in soliciting
deposits. As a result, deposits, which are the primary funding mechanism for the
Company's assets,  increased $59.1 million,  or 11.3%, to $581.5 million at June
30, 2000 compared to $522.4 million at December 31, 1999.  Most of this increase
occurred in  higher-costing  certificate of deposits.  This increase in deposits
was used principally to fund loan demand and to increase overall liquidity.

EFFECT OF NEW ACCOUNTING STANDARDS

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging  Activities." The statement  establishes  accounting and
reporting  standards  requiring  that  every  derivative  instrument  (including
certain derivative  instruments  embedded in other contracts) be recorded in the
balance  sheet as either an asset or liability  measured at its fair value.  The
statement  requires  that changes in the  derivative's  fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivative's  gains and losses to
offset related results on the hedged item in the income statement,  and requires
that a company must formally document, designate and assess the effectiveness of
transactions that receive hedge accounting.

     SFAS No.  133, as amended by SFAS No. 137 and No.  138,  is  effective  for
fiscal years  beginning  after June 15, 2000. A company may also  implement  the
statement as of the  beginning of any fiscal  quarter after  issuance  (that is,
fiscal quarters beginning June 16, 1998 and thereafter).  SFAS No. 133 cannot be
applied  retroactively.   SFAS  No.  133  must  be  applied  to  (a)  derivative
instruments  and (b)  certain  derivative  instruments  embedded  in the  hybrid
contracts that were issued,  acquired or  substantively  modified after December
31, 1997 (and, at the Company's election, before January 1, 1998).

     The Company has not yet  quantified the impacts of adopting SFAS No. 133 on
its  financial  statements  and has not  determined  the timing or method of its
adoption of SFAS No. 133.  However,  the statement could increase  volatility in
earnings and other  comprehensive  income.

                                       17
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information  called for by this item is incorporated  herein by reference to
the "Interest Rate Sensitivity" and "Asset/Liability  Management" Subsections of
the Management's Discussion and Analysis section contained in the Company's 1999
Annual Report to shareholders.

Management  believes there has been no material  change in either  interest rate
risk or market risk since December 31, 1999.

                                       18
<PAGE>

PART II - OTHER INFORMATION

Item 1.           Legal Proceedings

                  The  Company  and its  subsidiaries  are  involved  in various
                  claims and legal  actions  arising in the  ordinary  course of
                  business.  Management  currently  is not aware of any material
                  legal   proceedings  to  which  the  Company  or  any  of  its
                  subsidiaries  is a party or to which any of their  property is
                  subject.

Item 2.           Changes in Securities

                  None.


Item 3.           Defaults upon Senior Securities

                  None.


Item 4.           Submission of Matters to a Vote of Security Holders

                  (a)  The 1999  Annual  Meeting  of Shareholders of the Company
                       was held on April 24, 2000.

                  (b)  Not applicable

                  (c)  The following  proposal was considered by shareholders at
                       the Annual Meeting:

                  Proposal 1 - Election of Directors
                  ----------------------------------
                  The following directors were elected or re-elected:

                                                            Votes
                                            -----------------------------------
                                               For         Against      Abstain
                                               ---         -------      -------

                  W.T. Daniels              830,039           0           1,610
                  R. Stan Puckett           831,189           0             460
                  Davis Stroud              831,189           0             460
                  Charles S. Brooks         831,189           0             460
                  H.J. Moser, III           829,179           0           2,470

                                       19
<PAGE>
Item 5.           Other Information

                  None.


Item 6.           Exhibits and Reports on Form 8-K

                  (a)Exhibits

                  Exhibit 27 Financial Data Schedule (for SEC use only)

                  (b)Reports on Form 8-K

                        None

                                       20
<PAGE>
                                   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.

Date: 8/11/00              Greene County Bancshares, Inc.
     ---------             ------------------------------
                                    Registrant



Date: 8/11/00               /s/     R. Stan Puckett
     ---------             ------------------------
                                    R. Stan Puckett
                                    President and CEO
                                    (Duly authorized officer)



Date: 8/11/00               /s/     William F. Richmond
     --------              ----------------------------
                                    William F. Richmond
                                    Sr. Vice President and Chief Financial
                                    Officer (Principal financial and accounting
                                    officer)

                                       21