FORM 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


For Quarter ended March 31, 2002             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: 6,818,890.

                                       1
<PAGE>
                         PART 1 - FINANCIAL INFORMATION


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

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

     Condensed  Consolidated  Balance  Sheets - March 31, 2002 and  December 31,
     2001.

     Condensed Consolidated  Statements of Income and Comprehensive Income - For
     the three months ended March 31, 2002 and 2001.

     Condensed  Consolidated  Statement of Stockholders'  Equity - For the three
     months ended March 31, 2002.

     Condensed  Consolidated  Statements  of Cash  Flows - For the three  months
     ended March 31, 2002 and 2001.

     Notes to Condensed Consolidated Financial Statements.


                                       2


<PAGE>

                          GREENE COUNTY BANCSHARES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2002 AND DECEMBER 31, 2001
             (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
                                                             (UNAUDITED)
                                                               MARCH 31,   DECEMBER 31,
                                                                2002          2001*
                                                              ----------   ------------
                                          ASSETS
                                          ------
<S>                                                           <C>          <C>
Cash and due from banks                                       $  18,802    $  22,432

Federal funds sold                                               46,087       25,621

Interest bearing deposits in other banks                              0        1,100

Securities available-for-sale ("AFS")                            46,157       28,567
Securities held-to-maturity (with a market value of $698
  on March 31, 2002 and $840 on December 31, 2001)                  693          833

FHLB and Bankers Bank stock, at cost                              4,587        4,538

Loans held for sale                                               2,536        7,945

Loans                                                           686,321      682,547

  Less: allowance for loan losses                               (11,412)     (11,221)
                                                              ---------    ---------

  NET LOANS                                                     674,909      671,326
                                                              ---------    ---------
Bank premises and equipment, net of
    accumulated depreciation                                     25,640       25,611

Other assets                                                     23,686       23,639
                                                              ---------    ---------

     TOTAL ASSETS                                             $ 843,097    $ 811,612
                                                              =========    =========

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

Deposits                                                      $ 680,478    $ 653,913
Repurchase agreements                                            12,685       10,375
Notes payable                                                    67,890       67,978
Accrued interest payable and other liabilities                   11,740       10,719
                                                              ---------    ---------

    TOTAL LIABILITIES                                           772,793      742,985
                                                              ---------    ---------

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

Common Stock, authorized 15,000,000 shares;
    issued and outstanding 6,818,890 shares at
    March 31, 2002 and December 31, 2001                         13,638       13,638
Paid in Capital                                                   4,854        4,854
Retained Earnings                                                51,822       50,071
Accumulated Other Comprehensive Income (Loss)                       (10)          64
                                                              ---------    ---------

    TOTAL SHAREHOLDERS' EQUITY                                   70,304       68,627
                                                              ---------    ---------

    TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                  $ 843,097    $ 811,612
                                                              =========    =========
</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 AND COMPREHENSIVE INCOME
                   THREE MONTHS ENDED MARCH 31, 2002 AND 2001
                                   (UNAUDITED)

             (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

                                                          THREE MONTHS ENDED
                                                                MARCH 31,
                                                          ------------------
                                                            2002      2001
                                                          -------    -------

INTEREST INCOME:
----------------
  Interest and Fees on Loans                               $14,290   $17,484
  Interest on Investment Securities                            383       469
  Interest on Federal Funds Sold and Interest-earning
    Deposits                                                   249       229
                                                           -------   -------
                                   TOTAL INTEREST INCOME    14,922    18,182
                                                           -------   -------

INTEREST EXPENSE:
-----------------
  Interest on Deposits                                       4,211     7,081
  Interest on Borrowings                                       897       841
                                                           -------   -------
                                  TOTAL INTEREST EXPENSE     5,108     7,922
                                                           -------   -------

                                     NET INTEREST INCOME     9,814    10,260

Provision for Loan Losses                                    1,307     1,439
                                                           -------   -------

     NET INTEREST INCOME AFTER
       PROVISION FOR LOAN LOSSES                             8,507     8,821
                                                           -------   -------

NONINTEREST INCOME:
-------------------
  Service Charges, Commissions and Fees                      1,918     1,730
  Other Income                                                 669       586
                                                           -------   -------
                                TOTAL NONINTEREST INCOME     2,587     2,316
                                                           -------   -------
NONINTEREST EXPENSE:
--------------------
  Salaries and Benefits                                      4,228     4,124
  Occupancy and Furniture and Equipment Expense              1,032       954
  Other Expenses                                             1,775     1,457
                                                           -------   -------
                               TOTAL NONINTEREST EXPENSE     7,035     6,535
                                                           -------   -------

     INCOME BEFORE INCOME TAXES                              4,059     4,602

Income Taxes                                                 1,490     1,694
                                                           -------   -------

    NET INCOME                                             $ 2,569   $ 2,908
                                                           =======   =======

    COMPREHENSIVE INCOME                                   $ 2,495   $ 2,974
                                                           =======   =======

PER SHARE OF COMMON STOCK:
  Basic Earnings                                           $  0.38   $  0.43
                                                           =======   =======
  Diluted Earnings                                         $  0.38   $  0.42
                                                           =======   =======
  Dividends                                                $  0.12   $  0.12
                                                           =======   =======

See accompanying notes to Condensed Consolidated Financial Statements(Unaudited)

                                        4

<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                    FOR THE THREE MONTHS ENDED MARCH 31, 2002
                                   (UNAUDITED)
             (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                               ACCUMULATED
                                                                                  OTHER
                                                                              COMPREHENSIVE
                                         COMMON       PAID IN     RETAINED        INCOME
                                          STOCK       CAPITAL     EARNINGS        (LOSS)         TOTAL
                                       ------------ ----------   ----------    ------------   -----------
<S>                                   <C>           <C>         <C>            <C>            <C>
JANUARY 1, 2002                       $     13,638  $    4,854  $    50,071    $        64    $    68,627

  Net income                                     -           -        2,569              -          2,569

  Change in unrealized gain on AFS
     securities, net of tax:                     -           -            -            (74)           (74)
                                                                                               ----------
     Comprehensive income                                                                           2,495

  Dividends paid                                 -           -         (818)             -           (818)

                                       ------------  ----------  -----------    ----------     ----------
MARCH 31, 2002                        $     13,638  $    4,854  $    51,822    $       (10)   $    70,304
                                       ============  ==========  ===========    ==========     ==========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements(Unaudited)

                                        5

<PAGE>
                         GREENE COUNTY BANCSHARES, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
                                   (UNAUDITED)
             (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                                 MARCH 31,   MARCH 31,
                                                                                   2002        2001
                                                                                 ---------   ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES:
<S>                                                                              <C>         <C>
  Net Income                                                                     $  2,569    $  2,908
  Adjustments to reconcile net income to
    net cash provided by operating activities:
      Provision for loan losses                                                     1,307       1,439
      Depreciation and amortization                                                   484         372
      Amortization of premiums on securities, net of accretion                        (62)         38
      FHLB stock dividends                                                            (49)        (73)
      Loans originated for sale                                                   (12,569)    (14,655)
      Proceeds from loans originated for sale                                      18,073      12,730
      Net realized (gain) on sale of loans originated for sale                        (95)        (74)
      Loss on other real estate owned                                                  23          56
      Net Changes:
       Accrued interest receivable and other assets, net of intangibles              (547)      2,383
       Accrued interest payable and other liabilities                               1,023      (1,251)
                                                                                 --------    --------
                                       NET CASH PROVIDED BY OPERATING ACTIVITIES   10,157       3,873
                                                                                 --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Decrease in interest-bearing deposits with banks                                  1,100           0
  Net (increase) decrease in securities and other interest-earning investments    (17,507)     28,485
  Net originations of loans held-to-maturity                                       (6,002)    (19,011)
  Improvements in other real estate owned and proceeds from
    sales of other real estate owned, net                                           1,481       1,125
  Fixed asset additions and proceeds from sales of fixed assets, net                 (361)     (1,424)
                                                                                 --------    --------
                                NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES  (21,289)      9,175
                                                                                 --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase (decrease) in deposits                                              26,564     (17,311)
  Increase (decrease) in securities sold under repurchase agreements                2,310         (80)
  (Decrease) increase in notes payable, net                                           (88)      8,917
  Cash dividends paid                                                                (818)       (818)
                                                                                 --------    --------
                                NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES   27,968      (9,292)
                                                                                 --------    --------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                          16,836       3,756
                                                                                 --------    --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                   48,053      32,168
                                                                                 --------    --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                       $ 64,889    $ 35,924
                                                                                 ========    ========
</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  accounting
principles  generally  accepted  in the  United  States of America  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
accounting  principles  generally  accepted in the United  States of America 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, 2002. 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, 2001.  Certain  amounts from prior period
financial  statements  have been  reclassified  to conform to the current year's
presentation.

                                       7

<PAGE>

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

Transactions  in the  Allowance for Loan Losses for the three months ended March
31, 2002 and twelve months ended December 31, 2001 were as follows:

                                                 MARCH 31,     DECEMBER 31,
                                                   2002           2001
                                                ----------     -----------
                                                      (IN THOUSANDS)

Balance at beginning of year                    $ 11,221        $ 11,728
Add (Deduct):
  Charge-offs                                     (1,780)         (7,830)
  Recoveries                                         664           1,364
  Provisions                                       1,307           5,959
                                                --------        --------
ENDING BALANCE                                  $ 11,412        $ 11,221
                                                ========        ========


                                                 MARCH 31,     DECEMBER 31,
                                                   2002           2001
                                                ----------     -----------
                                                      (IN THOUSANDS)

Loans past due 90 days still on accrual         $    145        $    871
Nonaccrual Loans                                   3,703           5,857
                                                --------        --------
TOTAL                                           $  3,848        $  6,728
                                                ========        ========

                                       8

<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  potential  common
shares  outstanding  during the period.  Stock options are regarded as potential
common  shares.  Potential  common shares are computed  using the treasury stock
method.  113,870  options are  excluded  from the effect of dilutive  securities
because they are anti-dilutive.

The following is a reconciliation of the numerators and denominators used in the
basic and diluted  earnings  per share  computations  for the three months ended
March 31, 2002 and 2001:
<TABLE>
<CAPTION>
                               (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
                                              THREE MONTHS ENDED MARCH 31,
                               -------------------------------------------------------
                                         2002                         2001
                               --------------------------- ---------------------------

                                  INCOME        SHARES         INCOME        SHARES
                                (NUMERATOR)  (DENOMINATOR)   (NUMERATOR)  (DENOMINATOR)
<S>                               <C>         <C>              <C>         <C>
BASIC EPS
Income available to
  common shareholders             $2,569      6,818,890        $2,908      6,818,890

EFFECT OF DILUTIVE SECURITIES
Stock options outstanding              -         22,868             -         60,275
                               -------------------------------------------------------

DILUTED EPS
Income available to common
  shareholders plus assumed
  conversions                     $2,569      6,841,758        $2,908      6,879,165
                               =======================================================
</TABLE>
                                       9
<PAGE>

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

The Company's  operating  segments include banking,  mortgage banking,  consumer
finance,  subprime  automobile  lending  and  title  insurance.  The  reportable
segments are  determined  by the products  and  services  offered,  and internal
reporting. Loans, investments,  and deposits provide the revenues in the banking
operation,  loans and fees  provide the revenues in consumer  finance,  mortgage
banking, and subprime lending and insurance commissions provide revenues for the
title insurance company. Mortgage banking, consumer finance, subprime automobile
lending  and  title  insurance  do not meet  the  quantitative  threshold  on an
individual  basis, and are therefore shown below in "other".  All operations are
domestic.

Segment  performance  is  evaluated  using net interest  income and  noninterest
income.  Income  taxes are  allocated  based on income  before  income taxes and
indirect expenses  (includes  management fees) are allocated based on time spent
for  each  segment.   Transactions  among  segments  are  made  at  fair  value.
Information reported internally for performance assessment follows.


             (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
SEGMENT INFORMATION:
--------------------

THREE MONTHS ENDED MARCH 31, 2002     BANK         OTHER        TOTAL
---------------------------------   ---------    ---------    ---------

Net interest income                 $   8,124    $   1,690    $   9,814
Provision for loan losses                 418          889        1,307
Noninterest income                      2,205          382        2,587
Noninterest expense                     5,949        1,086        7,035
Income tax expense                      1,515          (25)       1,490
                                    ---------    ---------    ---------
SEGMENT PROFIT                      $   2,447    $     122    $   2,569
                                    =========    =========    =========

SEGMENT ASSETS AT MARCH 31, 2002    $ 805,106    $  37,991    $ 843,097
                                    =========    =========    =========



THREE MONTHS ENDED MARCH 31, 2001     BANK         OTHER        TOTAL
---------------------------------   ---------    ---------    ---------

Net interest income                 $   8,658    $   1,602    $  10,260
Provision for loan losses                 (87)       1,526        1,439
Noninterest income                      1,645          671        2,316
Noninterest expense                     5,350        1,185        6,535
Income tax expense                      1,945         (251)       1,694
                                    ---------    ---------    ---------
SEGMENT PROFIT                      $   3,095    $    (187)   $   2,908
                                    =========    =========    =========

SEGMENT ASSETS AT MARCH 31, 2001    $ 740,079    $  41,468    $ 781,547
                                    =========    =========    =========

                                       10
<PAGE>

5-INTANGIBLE ASSETS
-------------------

Intangible assets are as follows:

                                          GROSS              ACCUMULATED
                                          AMOUNT             AMORTIZATION
                                       -----------------    ------------------

Goodwill with finite life             $               0    $                0
Goodwill with indefinite life                       954                   530
Core deposit                                      3,363                   958
                                       -----------------    ------------------
    TOTALS                            $           4,317    $            1,488
                                       =================    ==================

Amortization  expense  for the  first  quarter  2002 was $84.  Annual  estimated
amortization expense for the next five years is:

2002                           $            325
2003                                        322
2004                                        322
2005                                        322
2006                                        212
                                ----------------
    TOTAL                      $          1,503
                                ================

There were no impairment  losses recognized during the first quarter 2002, since
the fair value of the entity acquired was greater than the book value.


Information  about the impact of goodwill with an indefinite  life on net income
is as follows:


                                                    MARCH 31,      MARCH 31,
                                                      2002           2001
                                                --------------   -------------

Reported net income                             $        2,569   $      2,908
Add back:  goodwill amortization                             0             27
                                                 --------------   ------------
    ADJUSTED NET INCOME                         $        2,569   $      2,935
                                                 ==============   ============

Reported basic earnings per share               $         0.38   $       0.43
Add back: goodwill amortization per share                 0.00           0.00
                                                 --------------   ------------
    ADJUSTED BASIC EARNINGS PER SHARE           $         0.38   $       0.43
                                                 ==============   ============

Reported diluted earnings per share             $         0.38   $       0.42
Add back: goodwill amortization per share                 0.00           0.00
                                                 --------------   ------------
    ADJUSTED DILUTED EARNINGS PER SHARE         $         0.38   $       0.42
                                                 ==============   ============

                                       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.

     ALL DOLLAR  AMOUNTS  SET FORTH  BELOW,  OTHER THAN  PER-SHARE  AMOUNTS  AND
PERCENTAGES,  ARE IN THOUSANDS  UNLESS  OTHERWISE  NOTED.  DURING MAY 2001,  THE
COMPANY AFFECTED A FIVE-FOR-ONE STOCK SPLIT IN THE FORM OF A DIVIDEND.  EARNINGS
AND DIVIDENDS PER SHARE ARE RESTATED FOR ALL STOCK SPLITS AND DIVIDENDS.

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 three
wholly-owned   subsidiaries:   Superior  Financial  Services,   Inc.  ("Superior
Financial"),  a consumer  finance  company;  GCB  Acceptance  Corporation  ("GCB
Acceptance"),  a subprime  automobile lending company;  and Fairway Title Co., a
title  company  formed  in 1998.  The Bank  also  operates  a  mortgage  banking
operation  through its main  office in Knox  County,  Tennessee  and it also has
representatives located through out the Company's branch system.

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 liquid assets include investment securities,  federal
funds sold and other  interest-earning  deposits,  and cash and due from

                                       12
<PAGE>

banks. Including securities pledged to collateralize  municipal deposits,  these
assets  represented  15.3% of the total  liquidity  base at March 31,  2002,  as
compared to 11.3% at December 31, 2001. The liquidity base is generally  defined
to include deposits,  securities sold under repurchase agreements and short-term
borrowed funds and other borrowings. In addition, the Company maintains lines of
credit  totaling  $20  million  with the  Federal  Home Loan Bank of  Cincinnati
("FHLB"), of which $20 million was available at March 31, 2002. The Company also
maintains  federal  funds  lines  of  credit  totaling  $70.9  million  at seven
correspondent banks. The Company believes it has sufficient liquidity to satisfy
its current operating needs.

     For the three  months  ended March 31, 2002,  operating  activities  of the
Company  provided  $10,157  of cash  flows.  Net income of $2,569  adjusted  for
non-cash  operating  activities,  including  $5,504 in net  proceeds  from loans
originated  for sale,  $1,307 in  provision  for loan losses,  depreciation  and
amortization  of $422 and the $476 in cash flows provided from the net change in
interest  receivable and other assets,  net of intangibles and accrued  interest
payable and other liabilities  comprised the majority of the cash generated from
operations.

     The Company's increase in investment securities and other  interest-earning
investments   used   $17,507  in  cash   flows,   while  the  net   increase  in
held-to-maturity  loans originated,  net of principal collected,  used $6,002 in
cash flows.

     The  net  increase  in  deposits  and  securities  sold  under   repurchase
agreements  provided  $26,564  and  $2,310 in cash  flows,  respectively.  These
increases in cash flows were offset, in part, by quarterly dividends paid in the
amount of $818 and by the $88 decrease in notes payable, net.

     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 March 31, 2002 was $70,304, an increase of $1,677,
or 2.44%,  from  $68,627 on December 31,  2001.  The  increase in  shareholders'
equity  primarily  reflects net income for the three months ended March 31, 2002
of $2,569  ($0.38 per share,  assuming  dilution).  This  increase was offset by
quarterly  dividend  payments  during  the three  months  ended  March 31,  2002
totaling $818 ($0.12 per share).

     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

                                       13
<PAGE>

regulatory capital requirements and to retain its characterization under federal
regulations as a "well-capitalized" institution.

     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 March 31,  2002,  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. The capital ratios of the
Bank contained within the table below do not differ materially from those of the
Company.


==========================================================================
                          Capital Ratios at March 31, 2002
--------------------------------------------------------------------------
                                            Required
                                             Minimum               Bank
                                              Ratio
--------------------------------------------------------------------------
   Tier 1 risk-based capital                  4.00%                10.20%
--------------------------------------------------------------------------
    Total risk-based capital                  8.00%                11.45%
--------------------------------------------------------------------------
         Leverage Ratio                       4.00%                 8.11%
==========================================================================

CHANGES IN RESULTS OF OPERATIONS

     NET  INCOME.  Net  income for the three  months  ended  March 31,  2002 was
$2,569,  a decrease  of $339,  or 11.7%,  as  compared  to net income of $2,908,
respectively,  for the same period in 2001.  The  decrease  for the three months
ended March 31, 2002 resulted principally from a decrease in net interest income
of $446,  or 4.3%,  to $9,814 for the three  months  ended  March 31,  2002 from
$10,260 for the same period in 2001. This reduction  primarily reflects the full
effect of the significant  decline in interest rates during the entire course of
2001. In addition,  non-interest  expense increased $500, or 7.6%, to $7,035 for
the three  months  ended March 31, 2002 from $6,535 for the same period in 2001,
with the majority of this  increase  occurring in other  expenses and  resulting
primarily from non-recurring reductions in certain expenses in the first quarter
of 2001,  increased ATM expenses,  additional legal fees and other  professional
services,  increases in loss on sale of other repossessed  assets and additional
amortization  expense  related  to  intangibles  recorded  as a result of recent
branch  acquisitions.  Offsetting  these  expense  increases,  in  part,  was an
increase  in  non-interest  income of $271,  or 11.7%,  to $2,587  for the three
months  ended  March 31,  2002 from  $2,316  for the same  period in 2001.  This
increase was primarily the result of an increase in service charges, commissions
and fees of $188, or 10.8%,  to $1,918 for the three months ended

                                       14
<PAGE>

March 31, 2002 from $1,730 for the same period in 2001. This increase  primarily
reflects  growth in  service  charges  associated  with the  Company's  checking
account  programs,  principally  as a result of increases in volume,  as well as
additional fees generated by the Company's mortgage banking division.

     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 months ended March
31, 2002,  net interest  income was $9,814,  as compared to $10,260 for the same
period in 2001, representing a decrease of $446, or 4.3%. While increases in the
average balances of interest-earning  assets provided a positive contribution to
net interest  income,  a  significant  decline in the yield on  interest-earning
assets more than offset the decline in the cost of interest-bearing liabilities,
resulting in an overall negative contribution to net interest income from change
in rates in the three months ended March 31, 2002 as compared to the same period
in 2001.  This negative  contribution  from change in rates more than offset the
positive  contribution  provided  from the  increase in the average  balances of
interest-earning  assets.  Further,  the Company,  which has an asset  sensitive
interest rate risk posture,  continued its sequential  quarterly  decline in net
interest  margin due to the decrease in interest rates  beginning in early 2001.
This decline in net interest  margin began in early 2001.  If interest  rates do
not decline further, the Company believes its net interest margin has stabilized
and will increase if interest  rates begin to rise,  based on the current mix of
interest-earning assets and interest-bearing liabilities.

     PROVISION  FOR LOAN  LOSSES.  During the three month period ended March 31,
2002,  loan  charge-offs  were $1,780 and recoveries of  charged-off  loans were
$664.  The Company's  provision  for loan losses  decreased by $132, or 9.2%, to
$1,307 for the three months ended March 31, 2002 from $1,439 for the same period
in 2001. Despite these lower provisions, the Company's allowance for loan losses
increased  by $191 to $11,412 at March 31,  2002 from  $11,221 at  December  31,
2001,  with the ratio of the allowance for loan losses to total loans  remaining
essentially constant from period to period. As of March 31, 2002,  indicators of
credit quality,  as discussed below,  appear favorable  compared to December 31,
2001. The ratio of allowance for loan losses to nonperforming assets was 171.17%
and 112.89% at March 31, 2002 and December 31, 2001, respectively, and the ratio
of nonperforming assets to total assets was .79% and 1.22% at March 31, 2002 and
December 31, 2001, respectively. The ratio of nonperforming loans to total loans
was .55% and .97% at March 31, 2002 and December 31, 2001, respectively.

     The Company's  annualized net  charge-offs for the three months ended March
31, 2002 were $4,464  compared to actual net  charge-offs of $6,466 for the year
ended December 31, 2001.  Annualized net  charge-offs in Superior  Financial for
the three  months  ended  March 31,  2002 were  $1,864  compared  to actual  net
charge-offs  of $2,818 for the year ended  December  31,  2001.  Annualized  net
charge-offs  in the Bank for the three  months  ended March 31, 2002 were $1,160
compared to actual net charge-offs of $2,610 for the year ended

                                       15
<PAGE>

December 31, 2001. At this point,  management is unable to predict whether these
favorable  trends will continue  during the remainder of 2002. If such trends do
not  continue,  net  charge-offs  in the Bank,  Superior  Financial  and/or  GCB
Acceptance could increase.

     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  months  ended March 31, 2002 was
$2,587, as compared to $2,316 for the same period in 2001. The largest component
of non-interest  income,  i.e.,  service  charges,  commissions and fees totaled
$1,918 for the three months ended March 31, 2002,  as compared to $1,730 for the
same period in 2001. This increase of $188, or 10.8%,  primarily reflects growth
in service  charges  associated  with the Company's  checking  account  programs
principally  as a result of  increases  in volume,  as well as  additional  fees
generated  by the  Company's  mortgage  banking  operation.  Other  income  also
increased  by $83, or 14.2%,  to $669 for the three  months ended March 31, 2002
from  $586 for the same  period in 2001.  Most of this  increase  resulted  from
commissions  generated  from  annuity  products  and a gain on the sale of fixed
assets, offset, in part, by lower revenue from insurance activities.

     NON-INTEREST EXPENSE.  Control of non-interest expense also is an important
aspect in enhancing 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 $7,035 for the three months ended March 31,
2002  compared  to $6,535  for the same  period in 2001.  The  majority  of this
increase  occurred in other expenses and resulted  primarily from  non-recurring
reductions  in certain  expenses  in the first  quarter of 2001,  increased  ATM
expenses,  additional legal fees and other professional  services,  increases in
loss on sale of other  repossessed  assets and additional  amortization  expense
related to intangibles recorded as a result of recent branch acquisitions.

     Personnel  costs are the  primary  element  of the  Company's  non-interest
expenses.  For the three  months  ended  March 31, 2002 and 2001,  salaries  and
benefits represented $4,228, or 60.10%, and $4,124, or 63.11%, respectively,  of
total non-interest expense. This was an increase of $104, or 2.5%, for the three
months ended March 31, 2002 as compared to the same period in the prior year. As
the Company decreased its size to 42 branches at March 31, 2002 from 44 branches
at March 31, 2001, the number of full-time  equivalent  employees  declined 4.3%
from 394 at March 31, 2001 to 377 at March 31, 2002.  This decrease in employees
was primarily the result of  consolidating  certain Superior  Financial  offices
into other, more centrally-located branches for the purpose of achieving greater
operating efficiencies as well as certain position eliminations in the Bank.

     Occupancy and furniture and equipment expense increased by $78, or 8.2%, to
$1,032 for the three months  ended March 31,  2002,  as compared to $954 for the
same period in 2001.  Although the actual number of Company  branches  declined,
increased depreciation

                                       16
<PAGE>

expense  associated with technology  expenditures and branches placed in service
during  early  and mid 2001,  as well as  higher  operating  costs,  put  upward
pressure on these expenses.

     Primarily as a result of this overall increase in non-interest expense, the
Company's efficiency ratio was negatively affected,  as the ratio increased from
51.96% at March 31,  2001 to 56.73% at March  31,  2002.  The  efficiency  ratio
illustrates how much it cost the Company to generate  revenue;  for example,  it
cost the Company  56.73  cents to  generate  one dollar of revenue for the three
months ended March 31, 2002.

CHANGES IN FINANCIAL CONDITION

     Total assets at March 31, 2002 were  $843,097,  an increase of $31,485,  or
3.9%, from total assets of $811,612 at December 31, 2001. The increase in assets
was primarily  reflective of the $20,466  increase in federal funds sold and the
$17,450 net increase in  securities,  offset,  in part, by the $5,409 decline in
loans held for sale as set forth on the Condensed Consolidated Balance Sheet.

     At March 31, 2002,  loans,  net of unearned  income and  allowance for loan
losses,  were $674,909 compared to $671,326 at December 31, 2001, an increase of
$3,583,  or .5%, from December 31, 2001.  The increase in loans during the first
three  months  of  2002  primarily   reflects  an  increase  in  commercial  and
residential  real estate loans.  The somewhat  small 2% annualized  rate of loan
increase  reflects overall weaker loan demand in the Company's major markets and
is  attributable to the slower economy as compared to the first quarter of 2001.
Non-performing  loans include  non-accrual  loans and loans 90 or more days past
due. All loans that are 90 days past due are considered  non-accrual unless they
are adequately  secured and there is reasonable  assurance of full collection of
principal  and  interest.  Non-accrual  loans  that  120 days  past due  without
assurance of repayment  are charged off against the  allowance  for loan losses.
The Company has aggressive  collection  practices in which senior  management is
heavily involved. Nonaccrual loans and loans past due 90 days and still accruing
decreased  by $2,880  during the three  months  ended  March 31, 2002 to $3,848.
Management  attributes this reduction in  nonperforming  assets to the payoff of
two  non-accrual  commercial  relationships  during the quarter  ended March 31,
2002.  Management  does not  anticipate  that this positive trend in non-accrual
loan  reductions will continue at the same pace during the remainder of 2002. At
March  31,  2002,  the  ratio of the  Company's  allowance  for loan  losses  to
non-performing assets (which include non-accrual loans) was 171.17%.

     The Company  maintains an  investment  portfolio to provide  liquidity  and
earnings.  Investments at March 31, 2002 with an amortized cost of $46,866 had a
market value of $46,855. At year-end 2001, investments with an amortized cost of
$29,297 had a market  value of $29,407.  This  increase  consists  primarily  of
short-term agency  securities  purchased with funds obtained via the increase in
deposits referenced below.

     Deposits  increased  $26,565,  or 4.1%,  to $680,478 at March 31, 2002 from
$653,913 at December  31,  2001.  Most of the  increase in deposits was in lower
costing,  interest-bearing  transaction  accounts  as opposed to higher  costing
certificates of deposits.

                                       17
<PAGE>

EFFECT OF NEW ACCOUNTING STANDARDS

     A new accounting  standard dealing with asset  retirement  obligations will
apply for 2003.  The Company does not believe this standard will have a material
affect on its financial position or results of operations.

     Effective January 1, 2002, the Company adopted a new standard on impairment
and disposal of long-lived  assets. The effect of this on the financial position
and results of operations of the Company is not material.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     A comprehensive qualitative and quantitative analysis regarding market risk
was disclosed in the Company's  December 31, 2001 Form 10-K. No material changes
in the assumptions  used or results  obtained from the model have occurred since
December 31, 2001.

     Actual  results  for the year  ending  December  31,  2002 will differ from
simulated  results due to timing,  magnitude,  and  frequency  of interest  rate
changes, as well as changes in market conditions and management strategies.

                                       18

<PAGE>

PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

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


Item 2.   Changes in Securities 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

              None

          (b)Reports on Form 8-K
              None

                                       19

<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: 05/09/02              Greene County Bancshares, Inc.
     -------------          ------------------------------
                                      Registrant



Date: 05/09/02              By:  /s/ R. Stan Puckett
     -------------               -------------------------------------
                                     R. Stan Puckett
                                     President and Chief Executive Officer
                                     (Duly authorized representative)


Date: 05/09/02                   /s/ William F. Richmond
     -------------               -------------------------------------
                                     William F. Richmond
                                     Sr. Vice President and Chief Financial
                                     Officer (Principal financial and accounting
                                     officer)

                                       20