FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

For Quarter ended September 30, 1999                    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: 1,358,588.

                                       1
<PAGE>
                         PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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

     Condensed Consolidated Balance Sheets - September 30, 1999 and December 31,
     1998.

     Condensed  Consolidated  Statements  of  Earnings  - For the three and nine
     months ended September 30, 1999 and 1998.

     Condensed  Consolidated  Statements of Comprehensive Income - For the three
     and nine months ended September 30, 1999 and 1998.

     Condensed  Consolidated  Statement  of  Shareholders  Equity - For the nine
     months ended September 30, 1999.

     Condensed Consolidated Statements of Cash Flows - For the nine months ended
     September 30, 1999 and 1998.

     Notes to Condensed Consolidated Financial Statements.

                                       2
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1999 AND DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                                                              (UNAUDITED)
                                                                              SEPTEMBER 30,           DECEMBER 31,
                                                                                   1999                   1998*
                                                                          --------------------   ---------------------
                                                                                          (IN THOUSANDS)
                                                                          --------------------------------------------
                                     ASSETS
                                     ------
<S>                                                                   <C>                         <C>
Cash and Due from Banks                                               $       16,401              $      19,592
Federal Funds Sold                                                             4,140                     24,300
Securities available-for-sale                                                 24,987                     26,727
Securities held-to-maturity (with a market value of $3,279
  on September 30, 1999 and $3,620 on December 31, 1998).                      3,279                      3,620
Loans                                                                        524,327                    476,914
  Less: Allowance for Loan Losses                                             10,534                     10,253
                                                                       --------------              -------------
  NET LOANS                                                                  513,793                    466,661
                                                                       --------------              -------------
Bank Premises and Equipment, Net of
    Accumulated Depreciation                                                  14,802                     11,715
Other Assets                                                                  19,428                     15,565
                                                                       --------------              -------------
     TOTAL ASSETS                                                     $      596,830              $     568,180
                                                                       ==============              =============

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

Deposits                                                              $      488,562              $     459,184
Federal Funds Purchased                                                            0                      4,800
Securities Sold under Repurchase Agreements                                    5,683                      2,416
Other Borrowings                                                              31,386                     36,627
Other Liabilities                                                             10,712                      9,767
                                                                       --------------              -------------
    TOTAL LIABILITIES                                                        536,343                    512,794
                                                                       --------------              -------------
                              SHAREHOLDERS' EQUITY
                              --------------------

Common Stock,  par value  $10,  authorized  5,000,000  shares;
    issued  and outstanding 1,358,588 and 1,357,198 shares at
    September 30, 1999 and December 31, 1998, respectively                    13,586                     13,572
Paid in Capital                                                                4,396                      4,298
Retained Earnings                                                             42,495                     37,421
Accumulated Other Comprehensive Income                                            10                         95
                                                                       --------------              -------------
    TOTAL SHAREHOLDERS' EQUITY                                                60,487                     55,386
                                                                       --------------              -------------
    TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                          $      596,830              $     568,180
                                                                       ==============              =============
</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, 1999 AND 1998
                                   (UNAUDITED)
                (DOLLARS IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED                       NINE MONTHS ENDED
                                          SEPTEMBER 30,                           SEPTEMBER 30,
                              ----------------------------------      -------------------------------------
                                   1999               1998                 1999                  1998
                              ---------------     --------------      ---------------       ---------------
INTEREST INCOME:
---------------
<S>                           <C>                  <C>               <C>                   <C>
Interest and Fees on Loans    $        13,162      $      11,933     $         38,981      $         35,644
Interest on Investment
  Securities                              431                527                1,189                 1,705
Interest on Federal Funds
  Sold and Other Interest-
  earning Deposits                        172                337                  833                   747
                              ---------------     --------------      ---------------       ---------------
    TOTAL INTEREST INCOME              13,765             12,797               41,003                38,096
                              ---------------     --------------      ---------------       ---------------
INTEREST EXPENSE:
----------------
Interest on Deposits                   4,529               4,417               13,822                13,640
Interest on Borrowings                   256                 100                  645                   380
                              ---------------     --------------      ---------------       ---------------
   TOTAL INTEREST EXPENSE              4,785               4,517               14,467                14,020
                              ---------------     --------------      ---------------       ---------------
   NET INTEREST INCOME                 8,980               8,280               26,536                24,076

Provision for Loan Losses                297                 496                1,847                 1,470
                              ---------------     --------------      ---------------       ---------------
   NET INTEREST INCOME AFTER
    PROVISION FOR LOAN LOSSES          8,683               7,784               24,689                22,606
                              ---------------     --------------      ---------------       ---------------

NONINTEREST INCOME:
------------------
Service Charges,
  Commissions and Fees                 1,521                 955                4,036                 2,581
Other Income                             145                 140                  654                   461
                              ---------------     --------------      ---------------       ---------------
  TOTAL NONINTEREST INCOME             1,666               1,095                4,690                 3,042
                              ---------------     --------------      ---------------       ---------------

NONINTEREST EXPENSE:
-------------------
Salaries and Benefits                  3,638               2,714               10,140                 7,952
Occupancy and Furniture
  and Equipment Expense                  858                 645                2,566                 1,944
Other Expenses                         1,872               1,570                5,092                 4,041
                              ---------------     --------------      ---------------       ---------------
  TOTAL NONINTEREST EXPENSE            6,368               4,929               17,798                13,937
                              ---------------     --------------      ---------------       ---------------

INCOME BEFORE INCOME TAXES             3,981               3,950               11,581                11,711

Income Taxes                           1,568               1,524                4,225                 4,499
                              ---------------     --------------      ---------------       ---------------
  NET INCOME                  $        2,413      $        2,426      $         7,356       $         7,212
                              ===============     ==============      ===============       ===============

PER SHARE OF COMMON STOCK:
-------------------------
Net Income, Basic                      $1.78               $1.79                $5.42                 $5.32
                                      ======              ======               ======                 =====
Net Income, Assuming Dilution          $1.76               $1.78                $5.37                 $5.29
                                      ======              ======               ======                 =====
Dividends                              $0.56               $0.50                $1.68                 $1.50
                                      ======              ======               ======                 =====
</TABLE>
See  accompanying   notes  to  Condensed   Consolidated   Financial   Statements
(Unaudited)
                                       4
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
             THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED              NINE MONTHS ENDED
                                                            SEPTEMBER 30,                  SEPTEMBER 30,
                                                     ---------------------------      --------------------------
                                                        1999            1998             1999            1998
                                                     ----------     ------------      ----------      ----------


<S>                                               <C>               <C>               <C>             <C>
Net Income                                        $      2,413      $      2,426      $    7,356      $    7,212

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
  Unrealized Gains (Losses) on Securities                  (33)                8             (85)             (9)
                                                  ------------      ------------      ----------      ----------
OTHER COMPREHENSIVE INCOME (LOSS)                          (33)                8             (85)             (9)
                                                  ------------      ------------      ----------      ----------
COMPREHENSIVE INCOME                              $      2,380      $      2,434      $    7,271      $    7,203
                                                  ============      ============      ==========      ==========
</TABLE>

See  accompanying   notes  to  Condensed   Consolidated   Financial   Statements
(Unaudited)

                                       5
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
                                   (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                            ACCUMULATED
                                                                                               OTHER
                                                      COMMON        PAID IN     RETAINED   COMPREHENSIVE
                                                      STOCK         CAPITAL     EARNINGS       INCOME      TOTAL
                                                      -----         -------     --------       ------      -----


<S>                                                <C>            <C>          <C>          <C>         <C>
JANUARY 1, 1999                                    $    13,572    $    4,298   $   37,421   $     95    $   55,386
  Net income                                                 -             -        7,356          -         7,356
  Other comprehensive income (loss), net of tax:
     Unrealized gains (losses) on securities                 -             -            -        (85)          (85)
  Tax benefit from exercise of nonincentive
       stock options                                         -             8            -          -             8
  Dividends paid                                             -             -       (2,282)         -        (2,282)
  Exercise of stock options                                 14            90            -          -           104
                                                    ----------     ---------    ---------    -------     ---------
SEPTEMBER 30, 1999                                 $    13,586    $    4,396   $   42,495   $     10    $   60,487
                                                    ==========     =========    =========    =======     =========

</TABLE>

See  accompanying   notes  to  Condensed   Consolidated   Financial   Statements
(Unaudited)

                                       6
<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (UNAUDITED)
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                         SEPTEMBER 30,      SEPTEMBER 30,
                                                                             1999               1998
                                                                       ----------------    --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES:
<S>                                                                    <C>                 <C>
  Net Income                                                           $       7,356       $      7,212
  Adjustments to reconcile net income to
    net cash provided by operating activities:
      Provision for loan losses                                                1,847              1,470
      Provision for depreciation and amortization                                798                657
      Amortization of security premiums, net of accretion                        228                234
      Loss on sale of fixed assets, net of gains                                 199                  0
      Decrease in interest receivable                                            123                395
      (Increase) decrease in other assets, net of intangibles                 (4,187)               158
      (Decrease) in accrued interest payable and other liabilities            (1,426)            (1,688)
                                                                        ------------        -----------
             NET CASH PROVIDED BY OPERATING ACTIVITIES                         4,938              8,438
                                                                        ------------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net decrease in securities and other interest-earning deposits               2,081              9,183
  Net (increase) decrease in loans                                           (47,413)            11,904
  Improvements in other real estate owned and other, net                      (1,008)              (681)
  Recoveries of loan losses                                                      786              1,261
  Proceeds from sale of fixed assets                                             401                  0
  Fixed asset additions                                                       (3,562)            (1,965)
                                                                        ------------        -----------
            NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES                 (48,715)            19,702
                                                                        ------------        -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase (decrease) in deposits                                         29,378            (15,018)
  Cash dividends paid                                                         (2,282)            (2,033)
  Exercise of stock options                                                      104                 91
  Decrease in federal funds purchased                                         (4,800)                 0
  Increase in securities sold under repurchase agreements                      3,267              1,186
  Decrease in other borrowings, net                                           (5,241)            (8,263)
                                                                        ------------        -----------
            NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                  20,426            (24,037)
                                                                        ------------        -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                         (23,351)             4,103
                                                                        ------------        -----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                43,892             26,187
                                                                        ------------        -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                             $      20,541       $     30,290
                                                                        ============        ===========
</TABLE>

See  accompanying   notes  to  Condensed   Consolidated   Financial   Statements
(Unaudited)

                                       7
<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  periods  herein are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 1999. 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, 1998.

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

Transactions  in the  Allowance  for  Loan  Losses  for the  nine  months  ended
September 30, 1999 were as follows:

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

Balance, January 1, 1999                   $    10,253

Add (Deduct):
    Charge-offs                                 (2,351)
    Recoveries                                     785
    Provisions                                   1,847
                                            ----------
Balance, September 30, 1999                $    10,534
                                            ==========

                                       8
<PAGE>

3-NET INCOME PER SHARE OF COMMON STOCK
--------------------------------------

Basic 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 nine months
ended September 30, 1999 and 1998:
<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED SEPTEMBER 30,
                                     -------------------------------------------------------------------------
                                                    1999                                    1998
                                     -----------------------------------     ---------------------------------
                                                          (DOLLAR AMOUNTS IN THOUSANDS)

                                        INCOME            SHARES                   INCOME           SHARES
                                      (NUMERATOR)      (DENOMINATOR)            (NUMERATOR)     (DENOMINATOR)
<S>                                     <C>              <C>                       <C>            <C>
BASIC EPS
Income available to
  common shareholders                   $2,413           1,358,588                 $2,426         1,355,626

EFFECT OF DILUTIVE SECURITIES
Stock options outstanding                    -              10,114                      -             8,035
                                     -------------------------------------------------------------------------
DILUTED EPS
Income available to common
  shareholders plus assumed
  conversions                           $2,413           1,368,702                 $2,426         1,363,661
                                     =========================================================================
</TABLE>
<TABLE>
<CAPTION>
                                                            NINE MONTHS ENDED SEPTEMBER 30,
                                     -------------------------------------------------------------------------
                                                    1999                                   1998
                                     -----------------------------------     ---------------------------------
                                                          (DOLLAR AMOUNTS IN THOUSANDS)

                                        INCOME            SHARES                   INCOME           SHARES
                                      (NUMERATOR)      (DENOMINATOR)            (NUMERATOR)     (DENOMINATOR)
<S>                                     <C>              <C>                       <C>            <C>
BASIC EPS
Income available to
  common shareholders                   $7,356           1,358,189                 $7,212         1,355,084

EFFECT OF DILUTIVE SECURITIES
Stock options outstanding                    -              10,490                      -             7,884
                                     -------------------------------------------------------------------------
DILUTED EPS
Income available to common
  shareholders plus assumed
  conversions                           $7,356           1,368,679                 $7,212         1,362,968
                                     =========================================================================
</TABLE>
                                       9

<PAGE>

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

The Bank's principal  business consists of attracting  deposits from the general
public and investing those funds,  together with funds generated from operations
and from  principal  and interest  payments on loans,  primarily  in  commercial
loans,  commercial real estate loans, consumer loans and single-family  mortgage
loans. The Bank 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 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.

<TABLE>
<CAPTION>
   SEGMENT INFORMATION:

   THREE MONTHS ENDED SEPTEMBER 30, 1999     BANK            OTHER        ELIMINATIONS        TOTAL
   ------------------------------------- -------------    -------------   --------------   -------------
   <S>                                 <C>              <C>              <C>             <C>
   Interest income                     $       12,246   $        2,480   $        (961)  $       13,765
   Interest expense                             4,736            1,010            (961)           4,785
                                         -------------    -------------   --------------   -------------
   NET INTEREST INCOME                 $        7,510   $        1,470   $           0   $        8,980
                                         =============    =============   ==============   =============

   Provision for loan losses           $          300   $           (3)  $           0   $          297
   Noninterest income                           1,362              756            (452)           1,666
   Noninterest expense                          4,562            1,966            (160)           6,368
   Income tax expense                           1,464              104               0            1,568
                                         -------------    -------------   --------------   -------------
   SEGMENT NET INCOME                  $        2,546   $          159   $        (292)  $        2,413
                                         =============    =============   ==============   =============
   SEGMENT ASSETS                      $      595,354   $      111,126   $    (109,650)  $      596,830
                                         =============    =============   ==============   =============


   THREE MONTHS ENDED SEPTEMBER 30, 1998     BANK            OTHER        ELIMINATIONS        TOTAL
   ------------------------------------- -------------    -------------   --------------   -------------

   Interest income                     $       11,306   $        2,148   $       (657)   $       12,797
   Interest expense                             4,467              707           (657)            4,517
                                         -------------    -------------   --------------   -------------
   NET INTEREST INCOME                 $        6,839   $        1,441   $          0    $        8,280
                                         =============    =============   ==============   =============

   Provision for loan losses           $          200   $          296   $          0    $          496
   Noninterest income                           1,193              272           (370)            1,095
   Noninterest expense                          3,893            1,087            (51)            4,929
   Income tax expense                           1,400              124              0             1,524
                                         -------------    -------------   --------------   -------------
   SEGMENT NET INCOME                  $        2,539   $          206   $       (319)   $        2,426
                                         =============    =============   ==============   =============
   SEGMENT ASSETS                      $      516,780   $       90,965   $    (90,486)   $      517,259
                                         =============    =============   ==============   =============

                                       10
<PAGE>

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

   Interest income                     $       35,476   $        8,199   $     (2,672)   $       41,003
   Interest expense                            14,369            2,770         (2,672)           14,467
                                         -------------    -------------   --------------   -------------
   NET INTEREST INCOME                 $       21,107   $        5,429   $          0    $       26,536
                                         =============    =============   ==============   =============

   Provision for loan losses           $          900   $          947   $          0    $        1,847
   Noninterest income                           4,018            1,998         (1,326)            4,690
   Noninterest expense                         12,931            5,147           (280)           17,798
   Income tax expense                           3,758              467              0             4,225
                                         -------------    -------------   --------------   -------------
   SEGMENT NET INCOME                  $        7,536   $          866   $     (1,046)   $        7,356
                                         =============    =============   ==============   =============
   SEGMENT ASSETS                      $      595,354   $      111,126   $   (109,650)   $      596,830
                                         =============    =============   ==============   =============


   NINE MONTHS ENDED SEPTEMBER 30, 1998      BANK            OTHER        ELIMINATIONS        TOTAL
   ------------------------------------ -------------    -------------   --------------   -------------

   Interest income                     $       34,108   $        5,881   $     (1,893)   $       38,096
   Interest expense                            13,921            1,992         (1,893)           14,020
                                         -------------    -------------   --------------   -------------
   NET INTEREST INCOME                 $       20,187   $        3,889   $          0    $       24,076
                                         =============    =============   ==============   =============

   Provision for loan losses           $          368   $        1,102   $          0    $        1,470
   Noninterest income                           2,945              864           (767)            3,042
   Noninterest expense                         10,957            3,223           (243)           13,937
   Income tax expense                           4,354              145              0             4,499
                                         -------------    -------------   --------------   -------------
   SEGMENT NET INCOME                  $        7,453   $          283   $       (524)   $        7,212
                                         =============    =============   ==============   =============
   SEGMENT ASSETS                      $      516,780   $       90,965   $    (90,486)   $      517,259
                                         =============    =============   ==============   =============
</TABLE>

                                       11
<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.

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 subsidiary  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 has  availability in the amount of $35.2
million  with the Federal  Home Loan Bank of  Cincinnati  and six federal  funds
lines of credit totaling $45.0 million at six correspondent banks.

                                       12
<PAGE>
         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  9.3% of the total liquidity base at September 30, 1999, as compared
to 14.7% at December  31,  1998.  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, 1999,  operating  activities of
the  Company  provided  $4,938,000  of cash  flows.  Net  income of  $7,356,000,
adjusted for non-cash operating  activities,  including  $1,847,000 in provision
for loan losses and  amortization  and  depreciation  of $798,000,  provided the
majority of the cash generated from  operations.  The principal  offset to these
cash inflows was the increase in other assets, net of intangibles, in the amount
of $4,187,000.

         Investing  activities,  including  lending,  used  $48,715,000  of  the
Company's  cash flows  during the nine months  ended  September  30,  1999.  The
Company's  net  decrease in  investment  securities  and other  interest-earning
deposits  provided  $2,081,000  in cash flows,  while the net  increase in loans
originated, net of principal collected, used $47,413,000 in cash flows. Further,
fixed asset additions used $3,562,000 in cash flows.

         Financing  activities provided  $20,426,000 of the Company's cash flows
during the nine months ended  September 30, 1999.  Net deposit  growth  provided
$29,378,000  in cash inflows,  while the net decrease in other  borrowings  used
$5,241,000 in cash flows. Cash dividends paid to shareholders used an additional
$2,282,000 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 September 30, 1999 was $60,487,000, an increase
of $5,101,000 or 9.21%,  from  $55,386,000 on December 31, 1998. The increase in
shareholders' equity reflects net income for the nine months ended September 30,
1999 of $7,356,000 ($5.37 per share,  assuming dilution),  and proceeds from the
exercise  of stock  options  during the nine  months  ended  September  30, 1999
totaling  $104,000.  This  increase  was offset by quarterly  dividend  payments
during the nine months ended September 30, 1999 totaling  $2,282,000  ($1.68 per
share) and the reduction in equity  associated with the decrease in the value of
securities available for sale of $85,000.

         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

                                       13
<PAGE>

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.  At
September 30, 1999,  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, 1999
----------------------------------------------------------------------------
                                     Required
                                     Minimum        Company         Bank
                                      Ratio
------------------------------ ------------ ----------------- --------------
  Tier 1 risk-based capital          4.00%            12.25%         12.50%
------------------------------ ------------ ----------------- --------------
   Total risk-based capital          8.00%            13.51%         13.76%
------------------------------ ------------ ----------------- --------------
        Leverage Ratio               4.00%             9.84%         10.03%
============================================================================

CHANGES IN RESULTS OF OPERATIONS

         NET INCOME.  Net income for the three months ended  September  30, 1999
was $2,413,000, a decrease of $13,000,  or .5%,  as  compared  to net  income of
$2,426,000  for the three months ended  September  30, 1998.  Net income for the
nine months ended September 30, 1999 was $7,356,000, an increase of $144,000, or
2.0%, as compared to net income of $7,212,000, for the same period in 1998.

         The decrease for the three months  ended  September  30, 1999  resulted
primarily from an increase in non-interest  expense of $1,439,000,  or 29.2%, to
$6,368,000 for the three months ended September 30, 1999 from $4,929,000 for the
same  period in 1998.  The  increase  in  non-interest  expense is  attributable
primarily to increasing  compensation  and occupancy and furniture and equipment
expenses  associated  with the  growth  of the  Company's  branch  network.  The
increase  in  non-interest  expense  was offset in part by the  $700,000 or 8.5%
increase  in net  interest  income  to  $8,980,000  for the three  months  ended
September 30, 1999 from  $8,280,000 for the same period in 1998. The increase in
net interest  income  reflects the  Company's  continued  growth in average loan
balances for the three months ended  September 30, 1999, as compared to the same
period  in  1998,  through  its  expanding  branch  network,  primarily  through
increases in commercial and commercial  real estate loans.  Also the increase in
non-interest   expense  was  offset  by  the  $571,000  or  52.1%   increase  in
non-interest  income to $1,666,000 for the three months ended September 30, 1999
from $1,095,000 for the same period in 1998. The increase in non-interest income
is reflective of  management's  continued  focus on the generation of fee income
through   implementation  of  additional  fees  and  increasing  existing  fees,
especially  additional  loan and other fees resulting from increased loan volume
at the Company's  finance and mortgage banking  subsidiaries and also additional
earnings on the cash  surrender  value of certain  Company-owned  life insurance
policies.

         The  increase  for the nine months ended  September  30, 1999  resulted
primarily from an increase in net interest  income of $2,460,000,  or 10.2%,  to
$26,536,000  for the nine months ended  September 30, 1999 from  $24,076,000 for
the same period in 1998.  Non-interest income also

                                       14
<PAGE>

increased  by  $1,648,000  or 54.2%,  to  $4,690,000  for the nine months  ended
September 30, 1999 from $3,042,000 for the same period in 1998.  These increases
reflect  the same  basic  trends in  existence  during  the three  months  ended
September 30, 1999.  These increases were offset in part by the  $3,861,000,  or
27.7%, increase in non-interest expense to $17,798,000 for the nine months ended
September 30, 1999 from $13,937,000 for the same period in 1998, again primarily
attributable to increasing  compensation,  occupancy and furniture and equipment
expense and other expenses  associated  with the growth of the Company's  branch
network.

         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 that affect net interest income are changes in
volume and yields of 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,
1999,  net interest  income was  $8,980,000 and  $26,536,000,  respectively,  as
compared  to  $8,280,000  and   $24,076,000   for  the  same  periods  in  1998,
representing  increases  of 8.5% and 10.2%,  respectively.  With  respect to the
three months and nine months ended  September  30, 1999,  this  increase was due
primarily  to an  increase  in volume of  average  interest-earning  assets  and
further enhanced by decreasing rates paid on interest-bearing liabilities.

         PROVISION  FOR LOAN  LOSSES.  During the three and nine  month  periods
ended September 30, 1999,  loan  charge-offs  were $476,000 and $2,351,000,  and
recoveries of charged-off  loans were $298,000 and $785,000,  respectively.  The
Company's  provision for loan losses  decreased to $297,000 for the three months
ended  September  30, 1999, as compared to $496,000 for the same period in 1998.
The Company's  provision for losses  increased to $1,847,000 for the nine months
ended September 30, 1999, as compared to $1,470,000 for the same period in 1998.
This increase is primarily the result of increased  loan volume in both the Bank
and its subsidiaries,  together with  management's  assessment of the relatively
higher risk associated with loans at Superior Financial and GCB Acceptance,  the
Bank's  consumer   finance  and  subprime   automobile   lending   subsidiaries,
respectively.  As a result, the Company's allowance for loan losses increased by
$281,000 to $10,534,000  at September 30, 1999 from  $10,253,000 at December 31,
1998.  The ratio of the  allowance for loan losses to  nonperforming  assets was
172.18% and 156.34% at September  30, 1999 and December 31, 1998,  respectively,
and the ratio of  nonperforming  assets to total  assets  was 1.03% and 1.15% at
September 30, 1999 and December 31, 1998, 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-month  periods ended
September 30, 1999 was $1,666,000 and $4,690,000,  respectively,  as compared to
$1,095,000 and $3,042,000 for the same periods in 1998. The largest component of
non-interest  income is service  charges,  commissions  and fees,  which totaled
$1,521,000 and  $4,036,000,  respectively,  for the three and nine month periods
ended September 30, 1999, as compared to $955,000 and $2,581,000,  respectively,
for the same periods in 1998.  The  $566,000,  or 59.3%,  increase for the three
months  ended

                                       15
<PAGE>

September 30, 1999 compared to the same period in 1998 is reflective principally
of  management's  continued  focus  on  the  generation  of fee  income  through
implementation  of additional  fees and  increasing  existing  fees,  especially
additional  loan and other fees  resulting  from  increased  loan  volume at the
Company's   finance  and  mortgage   banking   subsidiaries.   Service  charges,
commissions  and fees for the nine months  ended  September  30, 1999  increased
$1,455,000,  or  56.4%,  from the same  period in 1998,  primarily  for the same
reasons discussed above relative to the three months ended September 30, 1999.

         Other income for the three and nine month periods  ended  September 30,
1999 was  $145,000  and  $654,000,  respectively,  as compared  to $140,000  and
$461,000 for the same periods in 1998. These increases  totaled $5,000, or 3.6%,
and $193,000,  or 41.9%,  for three and nine month  periods ended  September 30,
1999,  respectively.  The  increases  for the three months  period are primarily
attributable  to  additional  earnings  on the cash  surrender  value of certain
Company-owned life insurance  policies.  The increase for the nine months period
is also  primarily  attributable  to additional  earnings on the cash  surrender
value of certain  Company-owned life insurance  policies,  as well as additional
earnings  recorded  on  the  Company's  minority   investment  in  an  insurance
partnership.

         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 increased to $6,368,000
and $17,798,000  for the three and nine-month  periods ended September 30, 1999,
respectively,  as compared to $4,929,000 and $13,937,000 for the same periods in
1998. These increases totaled  $1,439,000,  or 29.2%, and $3,861,000,  or 27.7%,
for the three and nine month  periods ended  September  30, 1999,  respectively.
Primarily as a result of this increase in  non-interest  expense,  the Company's
efficiency ratio was adversely  affected,  as the ratio increased from 51.39% at
September  30,  1998 to 57.00% at  September  30,  1999.  The  efficiency  ratio
illustrates how much it costs the Company to generate revenue;  for example,  it
cost the  Company  57.00  cents to  generate  one dollar of revenue for the nine
months ended September 30, 1999.

         Personnel costs are the primary  element of the Company's  non-interest
expenses.  For the  three and nine  month  periods  ended  September  30,  1999,
salaries and benefits  represented  $3,638,000,  or 57.1%, and  $10,140,000,  or
57.0%, of total  non-interest  expenses,  respectively.  This was an increase of
$924,000, or 34.0%, and $2,188,000, or 27.5%, over the $2,714,000 and $7,952,000
for the respective  three and nine-month  periods ended  September 30, 1998. For
the nine months  ended  September  30, 1998,  salaries and benefits  represented
57.1% of total  non-interest  expenses.  These increases were due to opening new
branches and expanding 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,
1999 was 346 versus 296 at September 30, 1998, an increase of 16.9%.

         Occupancy and furniture and equipment expense also increased during the
three and six month  periods ended June 30, 1999 compared to the same periods in
1998 as the Company  increased  its size to 40 branches at  September  30, 1999,
from 30 branches at September 30, 1998.

                                       16
<PAGE>
         Other expenses for the three and nine-month periods ended September 30,
1999 were  $1,872,000  and  $5,092,000,  increases  of $302,000,  or 19.2%,  and
$1,051,000,  or  26.0%,  respectively,  from the  same  periods  in 1998.  These
increases are reflective of the Company's new branches which required additional
advertising,  postage,  telephone  and  other  expenses,  as well  as  increased
expenses related to new programs for customer product delivery.

CHANGES IN FINANCIAL CONDITION

         Total assets at September 30, 1999 were $596.8 million,  an increase of
$28.6 million, or 5.0%, from 1998's year-end total assets of $568.2 million. The
increase in assets was primarily  reflective of the increase in loans, offset by
the reduction in federal funds sold.

         At September 30, 1999,  loans, net of unearned income and allowance for
loan  losses,  were $513.8  million  compared to $466.7  million at December 31,
1998,  an increase of $47.1  million,  or 10.1%,  from  December 31,  1998.  The
increase in loans during the nine months of 1999 is primarily due to an increase
in  commercial  and  commercial  real estate  loans  generated  primarily by the
Company's  increased  emphasis on loan growth through  implementation  of a more
competitive commercial loan rate structure and the hiring of a senior commercial
lender from a regional bank.  This lender brought new and  significant  seasoned
lending  relationships  to the  Company,  as well as an  experienced  commercial
lending staff.

         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  decreased by $783,000,  or
18.8%,  during the nine months ended September 30, 1999, as compared to December
31, 1998.

         The Company  maintains a securities  portfolio to provide liquidity and
earnings.  Securities  at  September  30,  1999 had an  amortized  cost of $28.2
million and a market value of $28.3 million. At year-end 1998,  investments with
an amortized  cost of $30.2  million had a market value of $30.3  million.  This
decrease,  resulting from normal maturing of securities, was principally used to
fund part of the increase in loans.  The Company  also invests in federal  funds
sold in order to enhance liquidity and earnings.  Federal funds sold declined by
$20.2 million, or 83.1%, from $24.3 million at December 31, 1998 to $4.1 million
at September 30, 1999. The Company also,  from time to time,  purchases  federal
funds as a means of broadening  its funding  sources.  Federal  funds  purchased
declined by $4.8 million, or 100%, to $0 at September 30, 1999 from $4.8 million
at December 31, 1998. The reduction in federal funds sold in the amount of $20.2
million,  offset by the  reduction in federal  funds  purchased in the amount of
$4.8 million,  provided  $15.4  million in funds which was  channeled  into loan
originations.

         In  planning  for the  funding of the  additional  loan  demand,  which
developed during late 1998 and the first nine months of 1999, the Company became
aggressive in soliciting deposits. As a

                                       17
<PAGE>
result,  deposits,  which are the primary  funding  mechanism  for the Company's
assets,  increased  $29.4  million,  or 6.4%, to $488.6 million at September 30,
1999  compared to $459.2  million at December  31,  1998.  Most of the  increase
occurred in  higher-costing  certificate of deposits and money market  accounts.
This increase in deposits was used principally to fund loan demand.

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
the  transactions  that receive hedge accounting.

         SFAS No. 133, as amended by SFAS No. 137, 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.

         The FASB has  issued  SFAS No.  134,  "Accounting  for  Mortgage-Backed
Securities  Retained after the Securitization of Mortgage Loans Held for Sale by
a Mortgage Banking Enterprise." The statement requires that an entity engaged in
mortgage banking activities classify any resulting mortgage-backed securities or
other retained  interests  based on its ability and intent to sell or hold these
investments.  The  statement  is effective  for 1999 for the  Company;  however,
management does not expect this  pronouncement  to have a significant  impact on
the Company's financial position.

YEAR 2000

         The Year 2000 issue is the result of computer  programs  being  written
using two digits rather than four to define the  applicable  year. The Company's
computer  equipment and software and devices with imbedded  technology  that are
time-sensitive  may recognize a date using "00" as the year 1900 rather than the
year  2000  and   thereafter.   This  could  result  in  a  system   failure  or
miscalculations  causing  disruptions  of  operations,  including,  among  other
things, temporary inability to process transactions and/or invoices or engage in
similar normal business activities.

                                       18
<PAGE>
         The Company has been actively  involved in Year 2000 ("Y2K") issues and
has assessed its state of readiness by  evaluating  its  information  technology
("IT")  and  non-IT  systems.  IT  systems  commonly  include  data  processing,
accounting,  telephone/PBX  systems,  etc.  Examples of non-IT systems are alarm
systems, fax machines and other miscellaneous systems.

         With respect to its mission critical IT systems,  the Company estimates
that its Y2K  identification,  assessment,  remediation  and testing efforts are
substantially  complete.  Test  results  have  been  reviewed  by the  Company's
internal   auditing   coordinator   in  conjunction   with  financial   industry
consultants. The Company has assessed its Y2K status in regard to non-IT systems
and has determined that no material risk exists.

         The Company has also verbally communicated with its significant vendors
in order to  determine  the extent to which  interfaces  with such  entities are
vulnerable  to Y2K issues and whether the products and services  purchased  from
such  entities  are Y2K  compliant.  The Company has received  either  verbal or
written  assurance  from these  vendors  that they  expect to address  all their
significant  Y2K issues on a timely  basis.  Further,  the Company has conducted
telephonic Y2K evaluations with significant  depositors and/or borrowers and has
evaluated  the  responses  as part  of its  Y2K  assessments.  With  respect  to
significant depositors, the Company does not anticipate any material Y2K issues.
The Company has assessed  the results of its  evaluation  regarding  significant
borrowers  and results are  reflected in its  allowance  for loan losses for the
quarter  ended  September  30,  1999.  The  Company  also  began  in  June  1998
incorporating  the Y2K  issue  in its  underwriting  process  as it  relates  to
significant  borrowers,  and is  communicating  the Y2K  issue  to its  checking
account base via statement  fliers.  Further,  the Company began  conducting Y2K
awareness seminars with its customer base in January 1999.

         The  Company  believes  that  the  cost  of  its  Y2K   identification,
assessment, remediation and testing efforts will not exceed $250,000 in terms of
incremental  cash  outflows.  The  Company  spent  approximately  $200,000 as of
September 30, 1999 and expects to spend an  additional  $50,000 on such efforts.
The source of these funds will be provided  from cash flows from  operations  of
the Company.

         The Company  anticipates  that the most likely worst case scenario will
be a  combination  of several  borrowers  experiencing  short term Y2K cash flow
problems and a pre-Y2K increased cash demand from its overall customer base. The
Company does not  consider a computer  system  failure as likely  because of the
extensive  pre-Y2K  preparation  by the Company.  The other  commonly  discussed
failure is a collapse of the power grid, which the Company considers unlikely in
view of the reports made by the various power  companies in the newspapers  with
respect to their Y2K readiness.

         During the  remainder of 1999,  the Company will  continue to focus its
Y2K  efforts on  contingency  planning  and  customer/community  awareness.  The
Company has  developed a Y2K  contingency  plan,  which has been approved by the
Board of Directors and reviewed by federal banking  regulators.  The contingency
plan  represents  the process  anticipated to ensure  continued  delivery of the
Company's core business  processes in the event of a Y2K-related system failure.

                                       19
<PAGE>
The plan is in the  process  of being  tested by the  Company  and  reviewed  by
independent sources to ensure that it is thorough and appropriate.

         The  Company  will  continue  its  efforts  to  inform  its  employees,
customers and communities  about Y2K issues.  The Company will utilize statement
stuffers,  lobby brochures and posters,  radio and print  advertising,  training
videos,  seminars and other  appropriate  media to communicate its Y2K readiness
and to minimize unfounded public concern.

         If  the  Company  has borrowers that experience Y2K cash flow problems,
they will be dealt with in the same routine manner  in which  normal  cash  flow
interruptions by borrowers are handled; however, the Company does not anticipate
any  material  Y2K  failure  of  borrowers  due to the Company's  ongoing review
process.  Any  Y2K  increases  in  cash  demand  will be funded by the Company's
normal currency ordering process.

         The Company's Y2K coordinator will continue to review the status of the
Company's Y2K readiness and report his findings to the Board of Directors.

                                       20
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------------------------------------------------------------------

Not applicable.

                                       21
<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 and Use of Proceeds

           None.

Item 3.    Defaults upon Senior Securities

           None.

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

           None.

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

                                       22

<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: 11/09/99                Greene County Bancshares, Inc.
      ----------              ------------------------------
                                       Registrant

Date: 11/09/99                /s/ R. Stan Puckett
      ---------               -------------------------------------------------
                              R. Stan Puckett
                              President and CEO
                              (Duly authorized officer)

Date: 11/09/99                /s/ William F. Richmond
      ---------               -------------------------------------------------
                              William F. Richmond
                              Sr. Vice President and Chief Financial Officer
                              (Principal financial and accounting officer)

                                       23