SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                         ------------------------------

                                   FORM 10-QSB


[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

     FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

     FOR THE TRANSITION PERIOD FROM ____________ TO ____________

                        COMMISSION FILE NUMBER 333-72371

                            KENTUCKY NATIONAL BANCORP, INC.
--------------------------------------------------------------------------------
        (Exact name of Small Business Issuer as specified in its Charter)


               Indiana                                      61-1345603
----------------------------------------------  --------------------------------
(State or other  jurisdiction of organization) (IRS Employer Identification No.)

1000 North Dixie Avenue, Elizabethtown, Kentucky      42701
------------------------------------------------    ---------
(Address of principal executive offices)             (Zip code)

Issuer's telephone number, including area code: (270)737-6000
                                                  -------------


         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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.

           X   Yes                        No
         -----                      -----


         As  of  September   30,  2000,   there  were  246,440   shares  of  the
Registrant's common stock, par value $.01 per share, outstanding.


         Transitional Small Business Issuer Disclosure Format (check one):

               Yes                     X   No
         -----                      ------




<PAGE>

                         KENTUCKY NATIONAL BANCORP, INC.

                             ELIZABETHTOWN, KENTUCKY


                                      INDEX


                                                                            PAGE
                                                                            ----
PART I.
-------

FINANCIAL INFORMATION

Item 1.

Consolidated Statement of Condition as of September 30, 2000
   and December 31, 1999 (Unaudited)                                          3

Consolidated  Statement  of Income -  (Unaudited)  for the three months
   and nine months ended September 30, 2000 and 1999                          4

Consolidated Statement of Cash Flows - (Unaudited)
   for the nine months ended September 30, 2000 and 1999                      5

Notes to Consolidated Financial Statements (Unaudited)                        6


Item 2.

Management's Discussion and Analysis of Financial
     Condition and Results of Operations                                      9


PART II.
--------

OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K                                  14

Signatures                                                                    15




                                       2
<PAGE>

                         KENTUCKY NATIONAL BANCORP, INC.

                       CONSOLIDATED STATEMENT OF CONDITION
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                         SEPTEMBER 30,            DECEMBER 31,
                                                                              2000                     1999
                                                                         -------------             -----------
<S>                                                                      <C>                       <C>
                               ASSETS

Cash and due from banks                                                  $ 1,358,625               $ 1,594,188
Federal funds sold                                                         1,631,000                 1,331,000
Investment securities:
  Securities available-for-sale                                            3,260,620                 2,152,985
  Securities held-to-maturity, at fair value                                 152,300                   180,000
Loans, net                                                                55,977,588                48,330,667
Premises and equipment                                                     1,938,781                 1,980,301
Accrued interest receivable and other assets                                 933,487                   501,106
                                                                         -----------               -----------

     Total assets                                                        $65,252,401               $56,070,247
                                                                         ===========               ===========

                LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
  Deposits                                                               $57,615,415               $49,206,413
  Obligations under capital leases                                         1,271,576                 1,305,929
  Accrued interest payable and other
    liabilities                                                              562,445                   477,767
                                                                         -----------               -----------

     Total liabilities                                                    59,449,436                50,990,109
                                                                         -----------               -----------

Stockholders' equity:
  Preferred stock, $.01 par value;
    authorized 1,000,000 shares                                                   --                        --
  Common stock, $.01 par value;
    authorized 5,000,000 shares; issued and
    outstanding, 246,440 and 240,000 shares
    at September 30, 2000 and December 31,
    1999, respectively                                                         2,464                     2,400
  Surplus                                                                  5,432,861                 5,212,125
  Retained earnings (deficit)                                                380,540                  (125,467)
  Accumulated other comprehensive income                                     (12,900)                   (8,920)
                                                                         -----------               -----------

     Total stockholders' equity                                            5,802,965                 5,080,138
                                                                         -----------               -----------

Commitments and contingent liabilities                                            --                        --
                                                                         -----------              ------------

     Total liabilities and stockholders'
       equity                                                            $65,252,401               $56,070,247
                                                                         ===========               ===========
</TABLE>
                 See notes to consolidated financial statements.


                                       3
<PAGE>
                         KENTUCKY NATIONAL BANCORP, INC.

                        CONSOLIDATED STATEMENT OF INCOME

     FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                         THREE MONTHS ENDED                NINE MONTHS ENDED
                                                           SEPTEMBER 30,                     SEPTEMBER 30,
                                                     -----------------------------      ---------------------------
                                                         2000              1999            2000            1999
                                                     -----------       -----------      ------------    -----------
<S>                                                  <C>               <C>              <C>             <C>
Interest income:
     Loans, including fees                           $ 1,320,736       $ 1,033,647      $3,731,264      $2,813,823
     Securities                                           57,065             2,615         166,379          11,067
     Federal funds sold                                   26,729             6,125          63,057          12,203
                                                     -----------       -----------      ----------      ----------

         Total interest income                         1,404,530         1,042,387       3,960,700       2,837,093
                                                     -----------       -----------      ----------      ----------

Interest expense:
     Deposit accounts                                    525,589           316,408       1,416,985         881,125
     Certificates of deposit over $100,000               232,102           133,751         641,006         385,895
     Interest expense - federal funds                         --            18,127           1,187          33,965
     Interest expense - capital lease                     33,251            33,630         100,134         101,500
                                                     -----------       -----------      ----------      ----------

         Total interest expense                          790,942           501,916       2,159,312       1,402,485
                                                     -----------       -----------      ----------      ----------

         Net interest income                             613,588           540,471       1,801,388       1,434,608

Provision for loan losses                                 55,200            67,638         162,372         326,442
                                                     -----------       -----------      ----------      ----------

         Net interest income after provision
           for loan losses                               558,388           472,833       1,639,016       1,108,166
                                                     -----------       -----------      ----------      ----------

Other income:
     Service charges and fees                            100,737            71,390         266,003         194,081
     Credit life and accident insurance                    7,647             5,085          42,894          22,430
                                                     -----------       -----------      ----------      ----------

                                                         108,384            76,475         308,897         216,511
                                                     -----------       -----------      ----------      ----------

Other expenses:
     Salaries and employee benefits                      272,167           192,849         763,897         593,298
     Net occupancy expense                                33,271            28,370         103,442          88,972
     Advertising                                          28,454            29,339          88,612          91,155
     Data processing                                      67,910            49,517         158,566         123,274
     Postage, telephone and supplies                      26,517            27,587          84,162          76,364
     Bank franchise tax                                   17,664             9,292          50,812          37,828
     Directors fees                                       15,088            19,320          36,108          57,330
     Professional services                                49,124            47,499         170,799         144,012
     Other operating expenses                             87,073            68,540         209,308         160,639
                                                     -----------       -----------      ----------      ----------

                                                         597,268           472,313       1,665,706       1,372,872
                                                     -----------       -----------      ----------      ----------

Income (loss) before income taxes and
 cumulative effect of accounting change                   69,504            76,995         282,207         (48,195)

Income tax expense (benefit)                              20,561                --        (223,800)             --
                                                     -----------       -----------      ----------      ----------

Net income (loss) before cumulative effect
 of accounting change                                     48,943            76,995         506,007         (48,195)

Cumulative effect of accounting change                        --                --              --        (156,769)
                                                     -----------       -----------      ----------      ----------

Net income (loss)                                    $    48,943       $    76,995      $  506,007      $ (204,964)
                                                     ===========       ===========      ==========      ==========

Earnings (loss) per share                            $       .20       $       .32      $     2.08      $     (.85)
                                                     ===========       ===========      ==========      ==========
</TABLE>


                 See notes to consolidated financial statements.


                                       4
<PAGE>

                         KENTUCKY NATIONAL BANCORP, INC.

                      CONSOLIDATED STATEMENT OF CASH FLOWS

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                    NINE MONTHS ENDED
                                                                       SEPTEMBER 30,
                                                              ------------------------------
                                                                 2000                1999
                                                              -----------        -----------

<S>                                                        <C>                <C>
Operating activities:
     Net income (loss)                                     $    506,007       $   (204,964)
     Adjustments to reconcile net income (loss) to
              net cash provided by operating activities:
         FHLB stock dividend                                    (12,400)                --
         Provision for loan losses                              162,372            326,442
         Provision for depreciation, amortization
           and accretion, net                                    78,782             67,131
         Incentive stock option plans                            59,800             13,637
         Deferred tax                                          (223,800)                --
         Cumulative effect of accounting change                      --            156,769
         Changes in assets and liabilities:
              Increase in accrued interest receivable
               and other assets                                (206,532)          (156,718)
              Increase in accrued interest payable
               and other liabilities                            245,678             64,519
                                                           ------------       ------------

                  Net cash provided by
                    operating activities                        609,907            266,816
                                                           ------------       ------------

Investing activities:
     Purchases of available-for-sale securities              (1,101,019)           (65,500)
     Proceeds from maturity of held-to-maturity
       securities                                                27,700                 --
     Net increase in loans                                   (7,809,293)       (10,894,647)
     Purchases of premises and equipment                        (37,507)          (137,458)
                                                           ------------       ------------

                  Net cash used in investing
                    activities                               (8,920,119)       (11,097,605)
                                                           ------------       ------------

Financing activities:
     Net increase in deposits                                 8,409,002         11,702,916
     Payments on capital lease obligations                      (34,353)           (32,297)
     Net decrease in federal funds purchased                         --           (447,000)
     Federal Home Loan Bank advances                                 --          1,000,000
                                                           ------------       ------------

                  Net cash provided by financing
                    activities                                8,374,649         12,223,619
                                                           ------------       ------------

Net increase in cash and cash equivalents                        64,437          1,392,830

Cash and cash equivalents, beginning of period                2,925,188            924,798
                                                           ------------       ------------

Cash and cash equivalents, end of period                   $  2,989,625       $  2,317,628
                                                           ============       ============

SUPPLEMENTAL DISCLOSURES:

Cash paid for interest                                     $  2,040,589       $  1,368,867
                                                           ============       ============
</TABLE>


NONCASH TRANSACTIONS:

During the nine month period ended  September 30, 2000, the Company issued 6,440
shares of common stock in lieu of cash payment for accrued  directors' fees from
inception through December 31, 1999 in the amount of $161,000 in accordance with
a deferred compensation plan approved by the stockholders on April 25, 2000.

                 See notes to consolidated financial statements.


                                       5
<PAGE>
                         KENTUCKY NATIONAL BANCORP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.   BASIS OF PRESENTATION

     Kentucky National  Bancorp,  Inc., (the Company) became the holding company
     for  Kentucky  National  Bank (the Bank) on May 18,  1999,  by issuing  and
     exchanging its stock on a share for share basis for the  outstanding  stock
     of the Bank.  The  transfer of stock  between  the  entities  under  common
     control  was  accounted  for at  historical  cost in a manner  similar to a
     pooling  of  interests.  Accordingly,  the 1999  financial  statements  are
     presented as if the holding company formation occurred on January 1, 1999.

     The unaudited  consolidated  financial  statements  include the accounts of
     Kentucky National Bancorp, Inc., and its subsidiary Kentucky National Bank.
     All material intercompany balances and transactions have been eliminated in
     consolidation.

     The accompanying  unaudited consolidated financial statements were prepared
     in  accordance  with  instructions  for Form 10-QSB and  therefore,  do not
     include  all  disclosures  necessary  for a  complete  presentation  of the
     statement of financial condition, statement of income and statement of cash
     flows in conformity with generally accepted accounting principles. However,
     all adjustments (all of which are of a normal recurring  nature) which are,
     in the opinion of management,  necessary for the fair  presentation  of the
     interim  financial  statements have been included.  The statement of income
     for periods  presented is not  necessarily  indicative of the results which
     may be expected for the entire year.

2.   COMPREHENSIVE INCOME

     During the year ended December 31, 1999,  Kentucky National  Bancorp,  Inc.
     adopted  FASB  Statement  No. 130,  "Reporting  Comprehensive  Income." The
     statement requires the reporting of comprehensive income in addition to net
     income from operations.  Comprehensive income is a more inclusive financial
     reporting  methodology  that  includes  disclosures  of  certain  financial
     information that historically has not been recognized in the calculation of
     net income.

     At  September  30, 2000 and December  31,  1999,  the Bank held  securities
     classified  as  available-for-sale,  which  have net  unrealized  losses of
     approximately $19,500 and $13,500,  respectively.  The before and after tax
     amount and tax expense (benefit) of this component of comprehensive  income
     at September 30, 2000 and December 31, 1999 is summarized below:
<TABLE>
<CAPTION>

                                                                                   TAX
                                                              BEFORE            (BENEFIT)              AFTER
                                                                TAX              EXPENSE                TAX
                                                              -------           ---------              ------
<S>                                                         <C>                 <C>                  <C>
     SEPTEMBER 30, 2000
       Unrealized holding losses                            $ (19,545)          $  (6,645)           $ (12,900)
       Reclassification adjustment
         for gains included in net
         income                                                    --                  --                   --
                                                            ---------          ----------           ----------

                                                            $ (19,545)          $  (6,645)           $ (12,900)
                                                            =========           =========            =========

     DECEMBER 31, 1999
       Unrealized holding losses                            $ (13,515)          $  (4,595)           $  (8,920)
       Reclassification adjustment
         for gains included in net
         income                                                    --                  --                   --
                                                            ---------          ----------           ----------

                                                            $ (13,515)          $  (4,595)           $  (8,920)
                                                            =========           =========            =========
</TABLE>


                                       6
<PAGE>

                         KENTUCKY NATIONAL BANCORP, INC.

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                                   (UNAUDITED)


3.   EARNINGS (LOSS) PER SHARE

     Earnings (loss) per share has been determined in accordance with Statements
     of Financial Accounting Standards No. 128, "Earnings per Share."

     Earnings  (loss) per share for the nine month periods  ended  September 30,
     2000 and 1999 have been computed  based on the weighted  average  number of
     shares   outstanding   throughout  the  periods  of  243,578  and  240,000,
     respectively.  Earnings  (loss) per share for the three month periods ended
     September  30,  2000 and 1999  have  been  computed  based on the  weighted
     average number of shares outstanding  throughout the periods of 246,440 and
     240,000,  respectively.  Diluted  earnings  (loss)  per  share has not been
     presented  as the effect of options  granted  under stock  option plans are
     antidilutive.

4.   ORGANIZATION COSTS

     In April 1998, Accounting Standards Executive Committee issued Statement of
     Position 98-5, "Reporting on the Costs of Start-up  Activities,"  effective
     for financial  statements  for fiscal years  beginning  after  December 15,
     1998. In  accordance  with this  standard,  the Bank expensed on January 1,
     1999,  unamortized start-up costs in the amount of $156,769 as a cumulative
     effect of a change in accounting principle.

5.   RECLASSIFICATIONS

     Certain  1999  amounts  have been  reclassified  to  conform  with the 2000
     presentation.

6.   INCOME TAXES

     The Company and the Bank file a consolidated income tax return. The Bank is
     charged or credited the amount equal to the income tax that would have been
     applicable on a separate return basis.

     The components of consolidated  income tax expense (benefit)  applicable to
     continuing operations for the nine months ended September 30, 2000 and 1999
     were as follows:
<TABLE>
<CAPTION>
                                     SEPTEMBER 30,      SEPTEMBER 30,
                                          2000              1999
                                     -------------      -------------

             <S>                     <C>                  <C>
             Current                 $        --          $     --
             Deferred                   (223,800)               --
                                     -----------          --------

                                     $  (223,800)         $     --
                                     ===========          ========
</TABLE>

                                       7
<PAGE>

                         KENTUCKY NATIONAL BANCORP, INC.

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                                   (UNAUDITED)


6.   INCOME TAXES, CONTINUED

     At  September  30,  2000 and  December  31,  1999  deferred  tax assets and
     liabilities are composed of the following:
<TABLE>
<CAPTION>
                                                                        SEPTEMBER 30,            DECEMBER 31,
                                                                            2000                     1999
                                                                       -------------             ------------
             <S>                                                      <C>                       <C>
             Deferred tax assets:
               Allowance for loan losses                               $   136,100               $   143,200
               Net operating losses                                         36,100                   109,000
               Startup costs                                                40,200                    54,100
               Organization costs                                           28,600                    39,200
               Stock options                                                35,900                    15,600
               Available-for-sale securities                                 6,600                     4,600
                                                                       -----------               -----------

                                                                           283,500                   365,700
                                                                       -----------               -----------
             Deferred tax liabilities:
               Federal Home Loan Bank stock                                 (8,000)                   (3,800)
               Depreciation                                                (45,100)                  (34,100)
                                                                       -----------               -----------

                                                                           (53,100)                  (37,900)
                                                                       -----------               -----------

                                                                           230,400                   327,800
             Less valuation allowance                                           --                  (323,200)
                                                                       -----------               -----------

             Net deferred tax asset                                    $   230,400               $     4,600
                                                                       ===========               ===========
</TABLE>

       At  September  30,  2000,  the  Company  has tax  loss  carryforwards  of
       approximately  $106,200 that may be offset against future taxable income.
       The carryforwards expire from 2012 to 2015.

7.   LEASE COMMITMENT

     A related party is currently constructing a building addition onto the main
     branch which the Bank will lease under a capital lease arrangement upon its
     completion which is expected to be August 2001. As a result of the addition
     of building and equipment  under capital leases in the aggregate  amount of
     approximately $900,000, the Bank will incur monthly amortization expense of
     approximately  $1,900,  and monthly operating lease expense for land rental
     of approximately  $700. The monthly cash flow  requirement  under the lease
     obligations,  including interest expense, will be approximately $10,500 per
     month.



                                       8
<PAGE>

ITEM 2.


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

GENERAL

The following discussion and analysis is intended to assist in understanding the
consolidated financial condition and results of operations of the Company.

FORWARD-LOOKING STATEMENTS

When used in this  discussion  and  elsewhere in this  Quarterly  Report on Form
10-QSB,  the words or phrases  "will likely  result,"  "are  expected  to," will
continue," "is anticipated,"  "estimate,"  "project," or similar expressions are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private  Securities  Litigation Reform Act of 1995. The Company cautions readers
not to place undue reliance on any such forward-looking statements,  which speak
only as of the date made, and advises  readers that various  factors,  including
regional  and  national  economic  conditions,  substantial  changes in level of
market  interest  rates,  credit  and  other  risks of  lending  and  investment
activities and  competitive  and  regulatory  factors could affect the Company's
financial  performance  and could cause the Company's  actual results for future
periods to differ materially from those anticipated or projected.

The Company does not undertake  and  specifically  disclaims  any  obligation to
update any  forward-looking  statements to reflect  occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.

COMPARISON  OF THE RESULTS OF  OPERATIONS  FOR THE THREE AND NINE MONTH  PERIODS
ENDED SEPTEMBER 30, 2000 AND 1999

NET INCOME  (LOSS).  Net income for the  quarter  ended  September  30, 2000 was
$48,900  or $.20 per share  compared  to net income of $77,000 or $.32 per share
for the same period last year, a decrease of $28,100 or $.12 per share. The year
to date net  income  at  September  30,  2000 was  $506,000  or $2.08  per share
compared to a net loss of  $(205,000) or $(.85) per share for the same period in
1999.  The decrease in net income for the three months ended  September 30, 2000
over the same period last year was due primarily to increases in deferred income
tax expense,  salaries  expense,  and other  operating  expenses  related to the
Bank's  continued  growth.  The increase in the year to date income at September
30,  2000 of  $711,000  or $2.93 per share is due  largely to the lifting of the
valuation  allowance  relating to net deferred tax assets.  In  accordance  with
Statement of Financial  Accounting Standards No. 109, the Company has determined
that it is more likely than not that net  deferred  tax assets will be realized,
and  thus  concluded  that no  valuation  allowance  is  needed  for  deductible
temporary  differences.  The lifting of the valuation  allowance relating to net
deferred tax assets  resulted in a current  income tax benefit of $223,800.  The
increase  is also  due to the  increase  in net  interest  income  of  $366,800,
increase  in other  income of  $92,400,  reduced  provision  for loan  losses of
$164,000,  relative to an increase in expense of $292,800. In addition, the nine
months  ended  September  30, 1999  included a  nonrecurring  accounting  change
implementation  which  required  the  Bank  to  expense  previously  capitalized
start-up  costs of $156,800 and also included a specific  charge off of $120,000
which increased the provision for loan losses for that period.



                                       9
<PAGE>

NET INTEREST INCOME.  Net interest income increased $73,100 or 13.5% to $613,600
for the three months ended September 30, 2000 compared to $540,500 for the three
months  ended  September  30, 1999.  Year to date net  interest  income was $1.8
million and $1.4 million for the nine months ended  September 30, 2000 and 1999,
respectively,  an increase of $400,000 or 28.6%. Total average  interest-earning
assets  increased  by  approximately  $15.6  million with an increase in average
yield of 12 basis points while average interest bearing liabilities increased by
approximately  $14.3 million with an increase in average costs of  approximately
49 basis  points.  The increase in the average cost of funds is due primarily to
higher yields paid on interest  bearing  deposits  driven by market rates.  As a
result,  the Bank's interest rate spread  decreased to 3.42% for the nine months
ended  September 30, 2000 compared to 3.79% for the nine months ended  September
30, 1999. Net interest  margin was to 4.21% for the nine months ended  September
30, 2000 compared to 4.62% for the nine months ended September 30, 1999.

PROVISION FOR LOAN LOSSES. The provision for loan losses was $55,200 and $67,600
for the quarters ended  September 30, 2000 and 1999,  respectively.  The year to
date  provision  for loan losses was  $162,400  and $326,400 for the nine months
ended  September 30, 2000 and 1999,  respectively.  The year to date decrease of
$164,000 was  primarily  due to a specific  charge off in the amount of $120,000
during the first quarter of 1999. At September  30, 2000,  the Bank's  allowance
for loan losses was $562,400 or 1.0% of the gross loan portfolio.

OTHER  INCOME.  Other income was  $108,400  and $76,500 for the  quarters  ended
September  30,  2000 and  1999,  respectively.  Year to date  other  income  was
$308,900 and $216,500  for the nine months  ended  September  30, 2000 and 1999,
respectively.  The increase for the quarter of $31,900 or 41.7%, and the year to
date increase of $92,400 or 42.7%, is reflective of loan and deposit growth from
which  other  income of service  charges,  fees,  and credit  life and  accident
insurance commissions are generated.

OTHER  EXPENSE.  Other expense was $597,300 and $472,300 for the quarters  ended
September 30, 2000 and 1999,  respectively.  Year to date other expense was $1.7
million and $1.4 million for the nine months ended  September 30, 2000 and 1999,
respectively.  The increase for the quarter of $125,000 or 26.5% and the year to
date  increase  of  $300,000  or 21.4% was due  primarily  to the  increases  in
salaries and employee  benefits of $79,300 or 41.1% for the quarter and $170,600
or 28.8% year to date.  The growth in salaries  and  employee  benefits  are the
results of bank growth,  the addition of the branch  location in December  1998,
the addition of internet banking  personnel in 1999, the accrual of compensation
under a stock  option  plan  effective  April 25,  2000,  and the  addition of a
mortgage banking division during this quarter.

INCOME TAX  BENEFIT  (EXPENSE).  Income tax  expense  (benefit)  was $20,600 and
$(223,800) for the three and nine months ended  September 30, 2000,  compared to
no tax expense  (benefit) during 1999. The tax expense (benefit) during the 2000
periods  related to the  reversal  of  valuation  allowances  related to its net
deferred tax assets.  The Company provides for both the current and deferred tax
effects of the transactions reported in its financial statements and established
deferred tax assets and  liabilities for the temporary  differences  between the
financial  reporting and tax bases of its assets and  liabilities.  The Company,
however, establishes valuation allowances for its net deferred tax assets unless
it is more likely than not that these net  deferred tax assets will be realized.
Based on its current earnings and other factors,  the Company determined that it
is more likely than not that it will  realize  certain of its net  deferred  tax
assets and reversed the corresponding valuation allowance.



                                       10
<PAGE>

COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2000 AND DECEMBER 31, 1999

The Bank continued to experience  asset growth during the third quarter of 2000.
Total assets increased $9.2 million,  or 16.4% to $65.3 million at September 30,
2000  compared to $56.1  million at December  31,  1999.  The  increase in total
assets was  primarily  attributable  to a $7.6 million or 15.7%  increase in the
loan portfolio.  Also  contributing to the increase in assets was a $1.1 million
increase in investment securities,  $300,000 increase in federal funds sold, and
a $432,400  increase in other  assets due  primarily to the  recordation  of the
deferred  tax asset of  $223,800.  Funding  for the  Bank's  asset  growth  came
primarily from increased deposits. At September 30, 2000, deposits totaled $57.6
million, an $8.4 million, or 17.1%, increase over deposits at December 31, 1999.

Stockholders' equity increased by $722,800 to $5.8 million at September 30, 2000
from $5.1 million at December 31, 1999. Net income for the year of $506,000, the
recordation of stock and contributed  capital for payment of deferred directors'
fees  through  December  31, 1999 of $161,000  and  surplus  from stock  options
accrued  of  $59,800,  less a  $4,000  change  in  unrealized  gain  or  loss on
available-for-sale securities is the source of the increase. Management believes
that a strong capital position is vital to future  profitability  and to promote
depositor and investor  confidence.  The Bank continues to be in compliance with
all applicable regulatory capital requirements.

As a  condition  of its  approval  of the  Bank's  deposit  insurance,  the FDIC
required  the Bank to  maintain  a ratio of Tier I capital  to assets of no less
than 8% during its first three years of  operations.  The Bank was in compliance
with this  requirement as of September 30, 2000,  with a Tier 1 capital ratio of
9.01%.  The Company  has made  arrangements  to borrow  funds from a third party
lender for  capital  infusion to enhance  continued  growth.  Although  the Bank
believes  that  it will be  permitted  to  maintain  Tier 1  capital  at a lower
percentage of assets after October 15, 2000,  there can be no assurance that the
Bank will be permitted to resume its historic rate of growth without an increase
in capital.

As a result of the addition of building and equipment  under  capital  leases in
the aggregate amount of approximately  $900,000,  the Company will incur monthly
amortization  expense of  approximately  $1,900,  and  monthly  operating  lease
expense for land rental of  approximately  $700 upon  completion of construction
which is currently expected to be August 2001. The monthly cash flow requirement
under the lease obligations,  including interest expense,  will be approximately
$10,500 per month.  Management  projects  that future cash flow from  operations
will be sufficient to meet the cash flow requirement of the leases.

ASSET QUALITY

The following table sets forth information  regarding the Bank's  non-performing
assets at the dates indicated.
<TABLE>
<CAPTION>

                                                                       SEPTEMBER 30,    DECEMBER 31,
                                                                           2000             1999
                                                                       ------------     ------------

         <S>                                                           <C>               <C>
         Restructured loans                                            $        --       $       --
         Non-accrual loans                                                 305,200          155,000
         Accruing loans past due 90 days or more                                --               --
                                                                       -----------       ----------

                Total                                                  $   305,200       $  155,000
                                                                       ===========       ==========
</TABLE>

At September 30, 2000, there were $1,069,000 in loans  outstanding not reflected
in the above table as to which known  information about possible credit problems
of borrowers caused  management to have serious doubts as to the ability of such
borrowers  to  comply  with  present  loan  repayment   terms.   The  growth  in
non-performing and potentially problematic loans is due to the maturation of the
loan portfolio and is contained in relatively few borrowers.



                                       11
<PAGE>

An analysis of the changes in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>

                                                                         Nine Months ended September 30,
                                                                       --------------------------------------
                                                                          2000                        1999
                                                                       -----------                 ----------

         <S>                                                           <C>                         <C>
         Balance, beginning of period                                  $  561,944                  $  347,000
         Loans charged off                                               (169,308)                   (167,185)
         Loan recoveries                                                    7,369                       1,061
                                                                       ----------                  -----------

         Net charge-offs                                                 (161,939)                   (166,124)
         Provision for loan losses                                        162,372                     326,442
                                                                       ----------                  -----------

         Balance, end of period                                        $  562,377                  $  507,318
                                                                       ==========                  ===========
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES.

The Company currently has no operating business other than the Bank and does not
have material  funding needs.  In the future,  the Company may require funds for
dividends  and tax  payments  for  which it will  rely on  dividends  and  other
distributions  from  the  Bank.  The  Bank  is  subject  to  various  regulatory
restrictions on the payment of dividends.

The Bank's  sources of funds for lending  activities and operations are deposits
from its primary  market  area,  funds  raised in its initial  public  offering,
principal and interest payments on loans, interest received on other investments
and federal funds  purchased.  The Bank is also eligible to borrow from the FHLB
of Cincinnati.  Its principal  funding  commitments  are for the  origination of
loans, the payment of maturing deposits and obligations under capital leases for
buildings  and  equipment.  Deposits are  considered  a primary  source of funds
supporting the Bank's lending and investment activities.

At September 30, 2000,  the Bank's ratio of loans to deposits was 97.2% compared
to 98.2% at December 31, 1999. The loan-to-deposit ratio is used as an indicator
of a bank's ability to originate  additional  loans and general  liquidity.  The
Bank's comparatively high loan-to-deposit  ratio reflects  management's emphasis
on building the loan portfolio and has been possible because the Bank has funded
a  significant  portion of its loan  growth with  capital  raised in its initial
public offering. Because the Bank's continued loan growth will depend on deposit
growth,  management  expects to place more emphasis on building liquidity on the
balance  sheet and that the  loan-to-deposit  ratio  will  decline.  The  Bank's
strategies in this regard  include the sale of  participations  in loans and the
creation of an investment  securities  portfolio that can be used as a source of
liquidity and earnings.

Due to the growth of the Bank and increase in  personnel,  the Bank is currently
reaching full premises capacity at the main branch location. A related party has
begun an  expansion of bank  premises  which the Bank will lease under a capital
lease arrangement upon its completion which is expected to be August 2001.

The Bank's most liquid assets are cash and cash  equivalents,  which are cash on
hand,  amounts due from  financial  institutions,  federal  funds sold and money
market  mutual  funds.  The levels of such  assets are  dependent  on the Bank's
operating financing and investment  activities at any given time. The variations
in levels of cash and cash  equivalents  are  influenced  by  deposit  flows and
anticipated future deposit flows.

Cash and cash  equivalents  (cash due from banks,  interest-bearing  deposits in
other financial institutions, and federal funds sold), as of September 30, 2000,
totaled $3.0 million  compared to $2.3 million at September 30, 1999. The Bank's
cash flows were provided mainly by financing activities,  including $8.4 million
from net deposit increases.  Operating  activities provided $609,900 in cash for
the nine months ended  September  30, 2000  compared to $266,800 in cash for the
first nine months of 1999. The Bank used cash flows for its investing activities
primarily  to fund an increase in gross  loans of $7.8  million and  purchase of
securities of $1.1 million.


                                       12
<PAGE>


As a national bank, the Bank is subject to regulatory  capital  requirements  of
the  Office of the  Comptroller  of the  Currency  ("OCC").  In order to be well
capitalized  under OCC  regulations,  the Bank must maintain a leverage ratio of
Tier I Capital to  average  assets of at least 5% and ratios of Tier I and total
capital  to  risk-weighted  assets  of at  least  6% and  10%  respectively.  In
addition,  as a condition to the approval of the insurance of its deposits,  the
FDIC  required  the Bank to  maintain  a ratio of Tier I capital to assets of at
least 8% for the first three years of  operations.  At September  30, 2000,  the
Bank  satisfied  the  capital   requirements  for   classification  as  well  as
capitalized  under OCC  regulations  and was in  compliance  with the  condition
imposed by the FDIC in connection with the insurance of its deposits.


                                       13
<PAGE>
Part II


                                OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------

     (a)  The following  exhibits are being filed with this quarterly  report on
          Form 10-QSB:

            Number                         Description
            ------            ------------------------------------

              27              Financial Data Schedule (EDGAR only)

     (b)  During the quarter ended  September 30, 2000, the Company did not file
          any current reports on Form 8-K.



                                       14
<PAGE>



                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                                           KENTUCKY NATIONAL BANCORP, INC.


Date: November 14, 2000                    By: /s/ Ronald J. Pence
      -----------------------                  --------------------------------
                                               Ronald J. Pence, President
                                               (Duly Authorized Represen-
                                               tative and Principal
                                               Financial Officer)




                                       15