FORM 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


For Quarter ended September 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.


<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 - September 30, 2000 and December 31,
     1999.

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

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

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

     Notes to Condensed Consolidated Financial Statements.

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

    <S>                                                                               <C>                  <C>
    Cash and Due from Banks                                                           $     22,348         $    44,555
    Federal Funds Sold                                                                      24,560                   0
    Securities available-for-sale                                                           45,200              20,726
    Securities held-to-maturity (with a market value of $2,516
      on September 30, 2000 and $3,326 on December 31, 1999)                                 2,515               3,321
    Federal Home Loan Bank stock                                                             4,034               3,477
    Bankers Bank Stock                                                                         144                 144
    Loans                                                                                  632,763             557,229
      Less: Allowance for Loan Losses                                                       10,356              10,332
                                                                                       ------------         -----------
      NET LOANS                                                                            622,407             546,897
                                                                                       ------------         -----------
    Bank Premises and Equipment, Net of
        Accumulated Depreciation                                                            22,381              18,106
    Other Assets                                                                            19,001              18,786
                                                                                       ------------         -----------
         TOTAL ASSETS                                                                 $    762,590         $   656,012
                                                                                       ============         ===========

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

    Deposits                                                                          $    620,582         $   522,382
    Federal Funds Purchased                                                                      0              11,620
    Securities Sold under Repurchase Agreements                                              4,737               2,961
    Other Borrowings                                                                        62,031              46,309
    Other Liabilities                                                                       10,497              11,968
                                                                                       ------------         -----------
        TOTAL LIABILITIES                                                                  697,847             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
        September 30, 2000 and December 31, 1999, respectively                              13,637              13,596
    Paid in Capital                                                                          4,843               4,479
    Retained Earnings                                                                       46,240              42,715
    Accumulated Other Comprehensive Income (Loss)                                               23                 (18)
                                                                                       ------------         -----------
        TOTAL SHAREHOLDERS' EQUITY                                                          64,743              60,772
                                                                                       ------------         -----------
        TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                                      $    762,590         $   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 NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
                (DOLLARS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED           NINE MONTHS ENDED
                                                                     SEPTEMBER 30,               SEPTEMBER 30,
                                                                ----------------------     -----------------------
                                                                  2000         1999          2000          1999
                                                                --------     ---------     ---------     ---------

    INTEREST INCOME:
    <S>                                                         <C>          <C>           <C>           <C>
      Interest and Fees on Loans                                $ 15,982     $  13,089     $  45,965     $  38,908
      Interest on Investment Securities                              916           431         2,655         1,189
      Interest on Federal Funds Sold and Other
        Interest-earning Deposits                                    333           172           760           833
                                                                 --------      --------     ---------     ---------
                                          TOTAL INTEREST INCOME   17,231        13,692        49,380        40,930
                                                                 --------      --------     ---------     ---------

    INTEREST EXPENSE:
      Interest on Deposits                                         6,728         4,529        17,940        13,822
      Interest on Borrowings                                         911           255         2,716           644
                                                                 --------      --------     ---------     ---------
                                         TOTAL INTEREST EXPENSE    7,639         4,784        20,656        14,466
                                                                 --------      --------     ---------     ---------

                                            NET INTEREST INCOME    9,592         8,908        28,724        26,464

    Provision for Loan Losses                                      1,122           811         3,916         2,374
                                                                 --------      --------     ---------     ---------

         NET INTEREST INCOME AFTER
           PROVISION FOR LOAN LOSSES                               8,470         8,097        24,808        24,090
                                                                 --------      --------     ---------     ---------

    NONINTEREST INCOME:
      Service Charges, Commissions and Fees                        1,450         1,565         3,741         3,982
      Other Income                                                   285           203           978           781
                                                                 --------      --------     ---------     ---------
                                       TOTAL NONINTEREST INCOME    1,735         1,768         4,719         4,763
                                                                 --------      --------     ---------     ---------
    NONINTEREST EXPENSE:
      Salaries and Benefits                                        4,277         3,639        12,319        10,140
      Occupancy and Furniture and Equipment Expense                  892           856         2,628         2,564
      Other Expenses                                               1,848         1,390         5,266         4,568
                                                                 --------      --------     ---------     ---------
                                      TOTAL NONINTEREST EXPENSE    7,017         5,885        20,213        17,272
                                                                 --------      --------     ---------     ---------

         INCOME BEFORE INCOME TAXES                                3,188         3,980         9,314        11,581

    Income Taxes                                                   1,262         1,567         3,337         4,225
                                                                 --------      -------      --------      --------

         NET INCOME                                             $  1,926     $   2,413     $   5,977     $   7,356
                                                                 ========     ========      ========      ========

    EARNINGS PER SHARE:
      Basic                                                        $1.41         $1.78         $4.39         $5.42
                                                                   ======        ======        ======        =====
      Diluted                                                      $1.40         $1.76         $4.35         $5.37
                                                                   ======        ======        ======        =====
    DIVIDENDS PER SHARE OF COMMON STOCK                            $0.60         $0.56         $1.80         $1.68
                                                                   ======        ======        ======        =====
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements(Unaudited)

                                       4
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 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                                                 -            -         5,977             -          5,977

      Other comprehensive income (loss), net of tax:             -            -             -            41             41
                                                                                                               -----------
         Comprehensive income                                                                                        6,018
      Tax benefit from exercise of nonincentive
         stock options                                                       23                                         23
      Dividends paid                                             -            -        (2,452)            -         (2,452)
      Exercise of stock options                                 41          341             -             -            382
                                                          --------      --------   -----------      --------   -----------
    SEPTEMBER 30, 2000                                   $  13,637     $  4,843   $    46,240      $     23    $    64,743
                                                          ========      ========   ===========      ========   ===========

</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements(Unaudited)

                                       5
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                                SEPTEMBER 30,      SEPTEMBER 30,
                                                                                   2000                 1999
                                                                               -------------       -------------
    NET CASH PROVIDED BY OPERATING ACTIVITIES:
    <S>                                                                      <C>                 <C>
      Net Income                                                             $        5,977      $        7,356
      Adjustments to reconcile net income to
        net cash provided by operating activities:
          Provision for loan losses                                                   3,916               2,374
          Depreciation and amortization                                               1,147                 798
          Amortization of premiums on securities, net of accretion                      145                 228
          Loans originated for sale                                                 (24,945)            (44,806)
          Proceeds from loans originated for sale                                    24,561              45,581
          Net realized (gain) on sale of loans originated for sale                     (141)               (491)
          (Gain)Loss on sale of fixed assets                                             (8)                199
          Loss on other real estate owned                                               281                   0
          Decrease (increase) in other assets, net of intangibles                       314              (4,064)
          Decrease in accrued interest payable and other liabilities                 (2,924)             (1,426)
                                                                               -------------       -------------
                                   NET CASH PROVIDED BY OPERATING ACTIVITIES          8,323               5,749
                                                                               -------------       -------------

    CASH FLOWS FROM INVESTING ACTIVITIES:
      Net (increase) decrease in securities and other interest-earning              (24,311)              2,081
      Net originations of loans held-to-maturity                                    (80,681)            (47,438)
      Improvements in other real estate owned and proceeds from
        sales of other real estate owned, net                                         2,269              (1,008)
      Proceeds from sale of fixed assets                                                 35                 401
      Fixed asset additions                                                          (5,287)             (3,562)
                                                                               -------------       -------------
                                       NET CASH USED BY INVESTING ACTIVITIES       (107,975)            (49,526)
                                                                               -------------       -------------

    CASH FLOWS FROM FINANCING ACTIVITIES:
      Net increase in deposits                                                       98,198              29,378
      Decrease in federal funds purchased                                           (11,620)             (4,800)
      Increase in securities sold under repurchase agreements                         1,776               3,267
      Increase (decrease) in other borrowings, net                                   15,722              (5,241)
      Proceeds from issuance of common stock                                            381                 104
      Cash dividends paid                                                            (2,452)             (2,282)
                                                                               -------------       -------------
                                   NET CASH PROVIDED BY FINANCING ACTIVITIES        102,005              20,426
                                                                               -------------       -------------
    NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                              2,353             (23,351)
                                                                               -------------       -------------
    CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                 44,555              43,892
                                                                               -------------       -------------
    CASH AND CASH EQUIVALENTS AT END OF PERIOD                               $       46,908      $       20,541
                                                                               =============       =============
</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  nine  months  ended
September 30, 2000 were as follows:

                                          September 30,         December 31,
                                             2000                  1999
                                       ------------------    -----------------

Balance at beginning of year      $         10,332        $       10,253

Add (Deduct):
  Charge-offs                               (4,842)               (4,017)
  Recoveries                                    950                   963
  Provisions                                 3,916                 3,133
                                       ------------------    -----------------

Ending Balance                    $         10,356        $       10,332
                                       ==================    =================

                                       7
<PAGE>

3-EARNINGS PER SHARE OF COMMON STOCK
------------------------------------

Basic  earnings  per share (EPS) of common  stock is  computed  by dividing  net
income by the weighted  average number of common shares  outstanding  during the
period.  Diluted  earnings 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 nine months
ended September 30, 2000 and 1999:
<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED SEPTEMBER 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              $1,926        1,363,652                $2,413        1,358,588

EFFECT OF DILUTIVE SECURITIES
Stock options outstanding               -           11,127                     -           10,114
                                ------------------------------------------------------------------------
DILUTED EPS
Income available to common
  shareholders plus assumed
  conversions                      $1,926        1,374,779                $2,413        1,368,702
                                ========================================================================
</TABLE>
<TABLE>
<CAPTION>
                                                NINE MONTHS ENDED SEPTEMBER 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              $5,977        1,362,529                $7,356        1,358,189

EFFECT OF DILUTIVE SECURITIES
Stock options outstanding               -           11,610                     -           10,490
                                   ---------------------------------------------------------------------

DILUTED EPS
Income available to common
  shareholders plus assumed
  conversions                      $5,977        1,374,139                $7,356        1,368,679
                                   =====================================================================
</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 operating
segments: a consumer finance business, a mortgage banking operation,  a subprime
automobile lending operation and a title insurance business. These segments have
been disclosed below in the "other" column, as they do not meet the quantitative
threshold for disclosure on an individual  basis.  Collectively,  these segments
have sufficient revenue to be reported separately.

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.

<TABLE>
<CAPTION>
SEGMENT INFORMATION:

THREE MONTHS ENDED SEPTEMBER 30, 2000          BANK              OTHER          ELIMINATIONS          TOTAL
-------------------------------------      --------------    --------------    --------------    --------------
<S>                                      <C>               <C>               <C>               <C>
Interest income                          $        15,762   $         2,453   $          (984)  $        17,231
Interest expense                                   7,603             1,020              (984)            7,639
                                           --------------    --------------    --------------    --------------
NET INTEREST INCOME                      $         8,159   $         1,433   $             0   $         9,592
                                           ==============    ==============    ==============    ==============

Provision for loan losses                $           300   $           822   $             0   $         1,122
Noninterest income                                 1,204               595               (64)            1,735
Noninterest expense                                5,614             1,467               (64)            7,017
Income tax expense                                 1,345               (83)                0             1,262
                                           --------------    --------------    --------------    --------------
SEGMENT NET INCOME (LOSS)                $         2,104   $          (178)  $             0   $         1,926
                                           ==============    ==============    ==============    ==============
SEGMENT ASSETS                           $       760,132   $        41,764   $       (39,306)  $       762,590
                                           ==============    ==============    ==============    ==============



THREE MONTHS ENDED SEPTEMBER 30, 1999          BANK              OTHER          ELIMINATIONS          TOTAL
-------------------------------------      --------------    --------------    --------------    --------------

Interest income                          $        12,246   $         2,408   $          (962)  $        13,692
Interest expense                                   4,736             1,010              (962)            4,784
                                           --------------    --------------    --------------    --------------
NET INTEREST INCOME                      $         7,510   $         1,398   $             0   $         8,908
                                           ==============    ==============    ==============    ==============

Provision for loan losses                $           351   $           460   $             0   $           811
Noninterest income                                   984               851               (67)            1,768
Noninterest expense                                4,423             1,529               (67)            5,885
Income tax expense                                 1,464               103                 0             1,567
                                           --------------    --------------    --------------    --------------
SEGMENT NET INCOME                       $         2,256   $           157   $             0   $         2,413
                                           ==============    ==============    ==============    ==============
SEGMENT ASSETS DECEMBER 31, 1999         $       652,752   $        44,592   $       (41,332)  $       656,012
                                           ==============    ==============    ==============    ==============

                                       9
<PAGE>

NINE MONTHS ENDED SEPTEMBER 30, 2000           BANK              OTHER         ELIMINATIONS          TOTAL
------------------------------------       --------------    --------------    --------------    --------------

Interest income                          $        44,789   $         7,518   $        (2,927)  $        49,380
Interest expense                                  20,547             3,036            (2,927)           20,656
                                           --------------    --------------    --------------    --------------
NET INTEREST INCOME                      $        24,242   $         4,482   $             0   $        28,724
                                           ==============    ==============    ==============    ==============

Provision for loan losses                $           900   $         3,016   $             0   $         3,916
Noninterest income                                 3,204             1,702              (187)            4,719
Noninterest expense                               15,830             4,570              (187)           20,213
Income tax expense                                 3,896              (559)                0             3,337
                                           --------------    --------------    --------------    --------------
SEGMENT NET INCOME (LOSS)                $         6,820   $          (843)  $             0   $         5,977
                                           ==============    ==============    ==============    ==============
SEGMENT ASSETS                           $       760,132   $        41,764   $       (39,306)  $       762,590
                                           ==============    ==============    ==============    ==============



NINE MONTHS ENDED SEPTEMBER 30, 1999           BANK              OTHER         ELIMINATIONS          TOTAL
------------------------------------       --------------    --------------    --------------    --------------

Interest income                          $        35,476   $         8,127   $        (2,673)  $        40,930
Interest expense                                  14,369             2,770            (2,673)           14,466
                                           --------------    --------------    --------------    --------------
NET INTEREST INCOME                      $        21,107   $         5,357   $             0   $        26,464
                                           ==============    ==============    ==============    ==============

Provision for loan losses                $           964   $         1,410   $             0   $         2,374
Noninterest income                                 2,885             2,064              (186)            4,763
Noninterest expense                               12,777             4,681              (186)           17,272
Income tax expense                                 3,758               467                 0             4,225
                                           --------------    --------------    --------------    --------------
SEGMENT NET INCOME                       $         6,493   $           863   $             0   $         7,356
                                           ==============    ==============    ==============    ==============
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  combined the  operations of Superior
Mortgage into the Bank in order to maximize efficiency and reduce overhead.  The
operations  of  Superior  Mortgage  are  continuing  as a division  of the Bank.
Management has not, at this time, determined whether the Superior Mortgage shell
will be dissolved.

     On September  20, 2000 the Bank entered into two separate  agreements  with
Wachovia Bank, N. A. ("Wachovia"). Under the first agreement, the Bank agreed to
purchase a Virginia  branch  location and a North Carolina  branch location from
Wachovia.  Under the second  agreement,  the Bank  agreed to sell its  Farragut,
Tennessee  branch  to  Wachovia.  The  transactions   contemplated  in  the  two
agreements  are  subject to a number of  conditions.  For  instance,  Wachovia's
purchase of the Farragut,  Tennessee  branch of the Bank is conditioned upon the
ability  of the Bank to  acquire  the  specified  Virginia  and  North  Carolina
branches of  Wachovia;  however,  the Bank's  purchase of the Virginia and North
Carolina  branches  is  not  conditioned  on the  purchase  by  Wachovia  of the
Farragut,

                                       11
<PAGE>

Tennessee  branch  of the  Bank.  The  transactions  are  expected  to  close in
approximately mid-February, 2001.

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 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 $34 million was
available at September 30, 2000. The Company also maintains  federal funds lines
of credit totaling $57.5 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
14.20% of the total  liquidity  base at September 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 nine months ended September 30, 2000,  operating  activities of the
Company provided  $8,323,000 of cash flows.  Net income of $5,977,000,  adjusted
for non-cash operating  activities,  including  $3,916,000 in provision for loan
losses,  a $384,000  increase in loans originated for sale, net of proceeds from
the  sale of such  loans,  and  amortization  and  depreciation  of  $1,292,000,
provided the majority of the cash generated from operations.

     Investing activities, including lending, used $107,975,000 of the Company's
cash flow  during the nine  months  ended  September  30,  2000.  The  Company's
increase in  investment  securities  and other  interest-earning  deposits  used
$24,311,000  in cash flows,  while the net increase in loans  originated  net of
principal collected used $80,681,000 in cash inflows.

     Financing  activities  provided  $102,005,000  of the  Company's  cash flow
during the nine months  ended  September  30, 2000.  Net deposit  growth and the
increase  in other  borrowings  provided  $98,198,000  and  $15,722,000  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 $2,452,000 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

                                       12
<PAGE>

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 September 30, 2000 was $64,743,000,  an increase of
$3,971,000  or 6.53%,  from  $60,772,000  on December 31, 1999.  The increase in
shareholders'  equity  primarily  reflects  net income for the nine months ended
September  30,  2000 of  $5,977,000  ($4.35 per share,  assuming  dilution)  and
proceeds  from the  exercise  of stock  options  during  the nine  months  ended
September  30, 2000  totaling  $382,000.  This  increase was offset by quarterly
dividend  payments  during the nine months  ended  September  30, 2000  totaling
$2,452,000 ($1.80 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 September 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 September 30, 2000
--------------------------------------------------------------------------------
                                    Required
                                    Minimum         Company           Bank
                                     Ratio
-------------------------------- ----------- ----------------- -----------------
  Tier 1 risk-based capital           4.00%            10.63%         10.77%
-------------------------------- ----------- ----------------- -----------------
   Total risk-based capital           8.00%            11.89%         12.02%
-------------------------------- ----------- ----------------- -----------------
        Leverage Ratio                4.00%             8.51%          8.60%
================================ =========== ================= =================

CHANGES IN RESULTS OF OPERATIONS

     NET INCOME.  Net income for the three and nine months ended  September  30,
2000 was $1,926,000 and $5,977,000,  respectively,  an decrease of $487,000,  or
20.2% and  $1,379,000,  or 18.7%,  as compared to net income of  $2,413,000  and
$7,356,000,  respectively,  for the same  periods in 1999.  The decrease for the
three months ended  September  30, 2000 resulted  primarily  from an increase in
non-interest expense of

                                       13
<PAGE>

$1,132,000,  or 19.2%,  to $7,017,000  for the three months ended  September 30,
2000 from $5,885,000 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.  Management  expects to continue  expansion into new
markets if  consistent  with  corporate  initiatives.  In  addition,  management
anticipates to realize benefits of this growth in the near-to-intermediate term.

     Further, this increase in non-interest expense includes a $458,000 increase
in other expenses,  or 32.9%, to $1,848,000 for the three months ended September
30, 2000 from  $1,390,000 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  September 30, 2000 reflects an increase in provision for
loan losses of $311,000, or 38.3%, to $1,122,000 for the three months ended June
30, 2000 from  $811,000 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
a more  aggressive  charge-off  policy.  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 $335,000,  or 213.4%,  to ($178,000) for the three months ended September 30,
2000 compared to $157,000 for the same period in the prior year. Management does
not  anticipate  a  significant  decline in the level of  charge-offs  from this
subsidiary in the near term. These expense increases were offset, in part, by an
increase in net interest  income of $684,000,  or 7.7%,  to  $9,592,000  for the
three months ended  September  30, 2000 from  $8,908,000  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  September 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  nine  months  ended  September  30,  2000  resulted
principally from an increase in non-interest expense of $2,941,000, or 17.0%, to
$20,213,000  for the nine months ended  September 30, 2000 from  $17,272,000 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  September  30,  2000.  In  addition,  the  increase in
provision for loan losses of  $1,542,000,  or 65.0%,  to $3,916,000 for the nine
months  ended  September  30, 2000 from  $2,374,000  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 September 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  $1,706,000,  or 197.7%,  to
($843,000) for the nine months ended September 30, 2000 compared to $863,000 for
the same period in the prior year. These expense increases were offset, in part,
by an increase in net interest income of $2,260,000, or 8.5%, to $28,724,000 for
the nine months ended September 30, 2000 from $26,464,000 for the same period in

                                       14
<PAGE>

1999.  The reasons for this  increase are  primarily the same as set forth above
with respect to the quarter ended September 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 nine months ended
September  30,  2000,  net  interest  income  was  $9,592,000  and  $28,724,000,
respectively,  as compared to $8,908,000 and $26,464,000 for the same periods in
1999, representing increases of 7.7% and 8.5%, respectively. With respect to the
three and nine months ended  September 30, 2000, this increase was due primarily
to an  increase  in volume of  average  interest-earning  assets,  including  an
increase in loan originations,  primarily in the Bank. This increase was offset,
in part,  by the  $75,000,  or 5.4%,  and  $985,000,  or 18.4%,  declines in net
interest  income  for the  three  and nine  months  ended  September  30,  2000,
respectively,  set forth in the "other" category, as further described in Note 4
of the Notes to Condensed  Consolidated  Financial Statements.  This decline for
the three months ended September 30, 2000 resulted primarily from a reduction in
the volume of loans originated by Superior Mortgage and the decline for the nine
months ended September 30, 2000 resulted from a reduction in loan volume in both
Superior Mortgage and Superior Financial. A rising interest rate environment was
the primary cause for the reduction in loan volume in both companies.

     PROVISION  FOR LOAN LOSSES.  During the three and nine month  periods ended
September  30, 2000,  loan  charge-offs  were  $1,584,000  and  $4,842,000,  and
recoveries of charged-off  loans were $422,000 and $950,000,  respectively.  The
Company's  provision for loan losses  increased to $1,122,000 and $3,916,000 for
the three and nine months ended September 30, 2000, respectively,  from $811,000
and $2,374,000 for the same period in 1999. The increase is primarily the result
of Superior  Financial's  implementation of a more aggressive  charge-off policy
discussed above under "Net Income". 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 $24,000 to  $10,356,000  at September 30, 2000 from  $10,332,000 at
December 31, 1999.  The ratio of the allowance for loan losses to  nonperforming
assets was 149.98% and 163.48% at  September  30, 2000 and  December  31,  1999,
respectively, and the ratio of nonperforming assets to total assets was .91% and
 .96% at September 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 nine months ended September 30,
2000 was $1,735,000 and $4,719,000,  respectively, as compared to $1,768,000 and
$4,763,000 for the same periods in 1999. The largest  component of  non-interest
income,  i.e., service charges,  commissions and fees totaled $1,450,000 for the
three months ended  September  30,

                                       15
<PAGE>

2000 as compared to  $1,565,000  for the same period in 1999.  This  decrease of
$115,000,  or 7.3%,  primarily  reflects a reduction in commissions  and fees at
Superior Mortgage. Service charges,  commissions and fees totaled $3,741,000 for
the nine months ended  September 30, 2000 as compared to $3,982,000 for the same
period in 1999.  The  decrease of $241,000,  or 6.1%,  for the nine month period
ended September 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 $7,017,000 and $20,213,000 for
the three and nine months ended  September 30, 2000  compared to $5,885,000  and
$17,272,000 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 the ratio  increased from 57.00% at September 30, 1999 to 60.44% at September
30,  2000.  The  efficiency  ratio  illustrates  how much it cost the Company to
generate revenue;  for example,  it cost the Company 60.44 cents to generate one
dollar of revenue for the nine months ended September 30, 2000.

     Personnel  costs are the  primary  element  of the  Company's  non-interest
expenses.  For the three and nine months ended September 30, 2000,  salaries and
benefits represented $4,277,000,  or 61.0%, and $12,319,000,  or 60.9%, of total
noninterest expense,  respectively.  This was an increase of $638,000, or 17.5%,
and $2,179,000,  or 21.5%, over the $3,639,000 and $10,140,000 for the three and
nine months ended  September 30, 1999,  respectively.  For the nine months ended
September 30, 1999, salaries and benefits represented 58.7% 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 September  30, 2000 was 374 versus
346 at September 30, 1999, an increase of 8.1%.

     Occupancy  and  furniture and  equipment  expense  increased  only slightly
during the nine months ended  September  30, 2000 compared to the same period in
1999, even though the Company increased its size to 44 branches at September 30,
2000 from 40 branches at September 30, 1999. The increase in this expense in the
nine months ended  September  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  $458,000,  or 32.9%, and $698,000,  or 15.3%, for
the  three  and  nine  months  ended  September  30,  2000,  respectively,  from
$1,390,000  and  $4,568,000  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

                                       16
<PAGE>

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  September  30, 2000 were $762.6  million,  an increase of
$106.6 million,  or 16.3%,  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 September 30, 2000, loans, net of unearned income and allowance for loan
losses,  were $622.4 million compared to $546.9 million at December 31, 1999, an
increase of $75.5  million,  or 13.8% from  December 31,  1999.  The increase in
loans  during the first nine 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 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 $1,509,000 during
the nine month period ended  September 30, 2000 to  $4,461,000.  The increase is
primarily attributed to four relationships  totaling $1.3 million and to various
secured consumer loans that are in the process of collection  through litigation
and  foreclosure  actions.  At September  30, 2000,  the ratio of the  Company's
allowance for loan losses to  non-performing  assets (which include  non-accrual
loans) was 149.98%.

     The Company  maintains an  investment  portfolio to provide  liquidity  and
earnings.  Investments  at September  30, 2000 with an  amortized  cost of $47.7
million had a market value of $47.7 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  nine  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 $98.2 million, or 18.8%, to $620.6
million at September 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.

                                       17
<PAGE>

EFFECT OF NEW ACCOUNTING STANDARDS

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments  and Hedging  Activities."  SFAS No. 133, as amended by SFAS No. 137
and No. 138, is effective for fiscal years  beginning  after June 15, 2000.  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.

     Management has  determined  that  implementation  of this standard will not
have a material impact on the Company's financial statements.


                                       18
<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.

                                       19
<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

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: 11/13/00            Greene County Bancshares, Inc.
     ----------           ------------------------------
                                   Registrant



Date: 11/13/00             /s/     R. Stan Puckett
     ----------           ----------------------------------------------------
                                   R. Stan Puckett
                                   President and CEO
                                   (Duly authorized officer)


Date: 11/13/00             /s/     William F. Richmond
     ---------            -----------------------------------------------------
                                   William F. Richmond
                                   Sr. Vice President and Chief Financial
                                   Officer (Principal financial and accounting
                                    officer)

                                       21