U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)

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

                  For the quarterly period ended June 30, 2001

[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the transition period from             to
                              ------------    -------------

Commission file number  33-94050

                             VOLUNTEER BANCORP, INC.
        (Exact name of small business issuer as specified in its charter)

                Tennessee                             62-1271025
      (State of other jurisdiction of               (IRS Employer
       incorporation or organization)             Identification No.)

               210 East Main Street, Rogersville, Tennessee 37879
                    (Address of principal executive offices)

                                 (423) 272-2200
                           (Issuer's telephone number)


(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section  12, 13 or 15(d) of the  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. Yes X No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date: 539,027 as of June 30, 2001.

Transitional Small Business Disclosure Format (check one); Yes _____ No __X__


<PAGE>

                         PART I -- FINANCIAL INFORMATION


Item 1. Financial Statements

                       INDEPENDENT AUDITOR'S REVIEW REPORT


To the Board of Directors
Volunteer Bancorp, Inc.
Rogersville, Tennessee

We have  reviewed the  accompanying  condensed  consolidated  balance  sheets of
Volunteer  Bancorp,  Inc. and  subsidiary as of June 30, 2001 and 2000,  and the
related condensed  consolidated  statements of earnings and comprehensive income
for  the  three  and six  months  then  ended  and  the  condensed  consolidated
statements  of cash flows for the six months  then  ended,  in  accordance  with
Statements  on  Standards  for  Accounting  and  Review  Services  issued by the
American Institute of Certified Public Accountants.  All information included in
these condensed  consolidated  financial statements is the representation of the
management of Volunteer Bancorp, Inc.

A review of interim  financial  statements  consists  primarily  of inquiries of
company  personnel and analytical  procedures  applied to financial  data. It is
substantially  less in scope than an audit in accordance with generally accepted
accounting  standards,  the  objective of which is the  expression of an opinion
regarding  the condensed  consolidated  financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the accompanying condensed consolidated financial statements in order
for them to be in conformity with generally accepted accounting principles.






July 20, 2001
Nashville, Tennessee





                                       2
<PAGE>
<TABLE>
<CAPTION>

                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

                      Condensed Consolidated Balance Sheets

                             June 30, 2001 and 2000

                   (Unaudited- See Accountants' Review Report)
--------------------------------------------------------------------------------

                                   ASSETS                                                 2001              2000
                                   ------                                       -------------------   -------------------
<S>                                                                            <C>                   <C>
Cash and due from banks                                                         $         3,322,975   $         3,434,870
Federal fund sold                                                                         5,425,000               975,000
                                                                                -------------------   -------------------
   Total cash and cash equivalents                                                        8,747,975             4,409,870
Investment securities available for sale (amortized cost of
  $27,298,020 and $26,238,251, respectively)                                             27,312,892            24,701,248
Investment securities held to maturity (estimated market
 $1,755,914 value of and $994,634)                                                        1,749,338             1,071,313
Loans, less allowances for loan losses of $993,915 and
  $964,601, respectively                                                                 75,792,641            71,476,509
Accrued interest receivable                                                               1,160,623             1,085,257
Premises and equipment, net                                                               3,960,623             4,151,205
Deferred income taxes                                                                       144,605               686,735
Other real estate                                                                           902,168               492,298
Goodwill                                                                                    140,201               158,084
Other assets                                                                                176,160               113,884
                                                                                -------------------   -------------------
Total assets                                                                    $       120,087,226   $       108,346,403
                                                                                ===================   ===================
                         LIABILITIES AND STOCKHOLDERS' EQUITY
                         ------------------------------------
Deposits:
   Non-interest bearing                                                         $        11,498,556   $        11,382,147
   Interest bearing                                                                      98,601,943            88,180,347
                                                                                -------------------   -------------------
          Total deposits                                                                110,100,499            99,562,494

Interest payable                                                                          1,077,294               941,680
Securities sold under repurchase agreements                                                 862,296             1,050,288
Note payable                                                                              2,170,000             2,495,000
Other accrued taxes, expenses and liabilities                                                59,329                53,988
                                                                                -------------------   -------------------
Total liabilities                                                                       114,269,418           104,103,450
                                                                                -------------------   -------------------
Stockholders' equity:
    Common stock, $0.01 par value, 1,000,000 shares authorized,
      539,027 shares issued and outstanding                                                   5,390                 5,390
 Additional paid-in capital                                                               1,916,500             1,916,500
 Retained earnings                                                                        3,905,140             3,296,325
 Accumulated other comprehensive income                                                     (9,222)             (975,262)
                                                                                -------------------   -------------------
Total stockholders' equity                                                                5,817,808             4,242,953
                                                                                -------------------   -------------------
Total liabilities and stockholders' equity                                      $       120,087,226   $       108,346,403
                                                                                ===================   ===================
</TABLE>


The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
                                       3
<PAGE>
<TABLE>
<CAPTION>

                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

     Condensed Consolidated Statements of Earnings and Comprehensive Income

            For The Three and Six Months Ended June 30, 2001 and 2000


                  (Unaudited - See Accountants' Review Report)
--------------------------------------------------------------------------------

                                                                  Three months ended                   Six months ended
                                                                       June 30,                            June 30,
                                                                      ----------                          ----------
                                                                  2001              2000              2001               2000
                                                                  ----              ----              ----               ----
Interest Income:
<S>                                                        <C>                <C>              <C>                <C>
    Interest and fees on loans                             $        1,833,188 $      1,760,987 $        3,688,749 $        3,412,495
    Interest on federal funds                                          56,586           37,490            157,399             62,590
    Interest on investment securities:
          Taxable                                                     435,800          363,688            842,759            736,093
          Exempt from Federal income taxes                             28,250           44,999             58,608             93,879
                                                           ------------------ ---------------- ------------------ ------------------
               Total interest income                                2,353,824        2,207,164          4,747,515          4,305,057
                                                           ------------------ ---------------- ------------------ ------------------
Interest Expense:
    Interest on deposits                                            1,243,615        1,149,082          2,556,588          2,208,207
    Other borrowed funds                                               50,300           67,672            109,042            148,375
                                                           ------------------ ---------------- ------------------ ------------------
               Total interest expense                               1,293,915        1,216,754          2,665,630          2,356,582
                                                           ------------------ ---------------- ------------------ ------------------
Net interest income                                                 1,059,909          990,410          2,081,885          1,948,475
Provision for possible loan losses                                     85,000           60,000            160,000            120,000
                                                           ------------------ ---------------- ------------------ ------------------
Net interest income after provision for possible
   loan losses                                                        974,909          930,410          1,921,885          1,828,475
                                                           ------------------ ---------------- ------------------ ------------------
Non-interest income:
    Service charges on deposits                                        41,997           60,298             93,933            115,452
    Other service charges and fees                                     38,801           38,910             53,094             57,179
    Securities gains                                                    1,677                -              9,604                  -
    Other non-interest income                                             487            1,741             18,470             14,606
                                                           ------------------ ---------------- ------------------ ------------------
               Total non-interest income                               82,962          100,949            175,101            187,237
                                                           ------------------ ---------------- ------------------ ------------------
Non-interest expense:
    Salaries and employee benefits                                    428,248          395,216            875,521            814,349
    Occupancy expense                                                  78,593           65,381            148,795            122,176
    Furniture and equipment expense                                    84,999           78,276            166,584            158,273
    Other non-interest expense                                        224,038          197,657            427,662            391,712
                                                           ------------------ ---------------- ------------------ ------------------
                Total non-interest expense                            815,878          736,530          1,618,562          1,486,510
                                                           ------------------ ---------------- ------------------ ------------------
Earnings before income taxes                                          241,993          294,829            478,424            529,202
Income tax expense                                                     86,909          100,056            171,143            176,123
                                                           ------------------ ---------------- ------------------ ------------------
                Net income                                 $          155,084  $       194,773 $          307,281  $         353,079
                                                           ================== ================ ================== ==================

Other comprehensive income :
  Unrealized gain (loss) on securities available
     for sale, before tax                                  $         (76,014) $        (5,476) $          438,409 $        (218,358)
  Reclassification for gains included in net income                   (1,677)                -            (9,604)                  -
  Income taxes related to other comprehensive
       income                                                          29,522            2,081          (162,947)             82,976
                                                           ------------------ ---------------- ------------------ ------------------
                                                                     (48,169)          (3,395)            265,858          (135,382)
                                                           ------------------ ---------------- ------------------ ------------------

Total comprehensive income                                 $          106,915 $        191,378 $          573,139 $          217,697
                                                           ================== ================ ================== ==================

Net income per  common share                               $             0.29   $         0.36       $       0.57  $            0.66
                                                           ================== ================ ================== ==================

Common shares outstanding                                             539,027          539,027            539,027            539,027
                                                           ================== ================ ================== ==================
</TABLE>


The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
                                       4
<PAGE>
<TABLE>
<CAPTION>

                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

                 Condensed Consolidated Statements of Cash Flows

                 For The Six Months Ended June 30, 2001 and 2000

                  (Unaudited - See Accountants' Review Report)
--------------------------------------------------------------------------------

                                                                                               2001                 2000
                                                                                        ----------------      ----------
<S>                                                                                 <C>                   <C>
Cash Flows from Operating Activities:
   Net income                                                                       $            307,281  $           353,079
Adjustments to reconcile net income to net cash
  provided by operating activities:
      Deferred income taxes                                                                       13,806                4,101
      Provision for possible loan losses                                                         160,000              120,000
      Provision for depreciation and amortization                                                121,021              123,625
      FHLB stock dividends                                                                       (12,000)             (11,000)
      (Gain) on securities                                                                        (9,604)                   -
      Decrease (increase) in interest receivable                                                  52,696              (56,897)
      (Increase)  in other assets                                                               (315,804)            (141,488)
      (Decrease) increase in other liabilities                                                  (127,436)              51,012
                                                                                    --------------------  -------------------
   Net cash provided (used) by operating activities                                              189,960              442,432
                                                                                    --------------------  -------------------

Cash Flows from Investing Activities:
   Purchase of investment securities held to maturity                                           (705,141)                   -
   Proceeds from calls and maturity of held to maturity securities                                22,351               26,316
   Purchase of investment securities available for sale                                      (14,251,973)                   -
   Proceeds from calls and maturity of securities available for sale                           4,606,695              782,535
   Proceeds from sale of securities available for sale                                         8,205,464                    -
   Net (increase) in loans                                                                    (2,913,721)          (4,864,081)
   Capital expenditures                                                                          (20,659)            (191,639)
                                                                                    --------------------  -------------------
   Net cash (used) in investing activities                                                    (5,056,984)          (4,246,869)
                                                                                    --------------------  -------------------

Cash Flows from Financing Activities:
   Net increase in demand deposits, NOW accounts, IRA
      and savings accounts                                                                     2,908,166            3,661,419
   Net increase in certificates of deposit                                                     1,184,647            1,077,028
   Net (decrease) in securities sold under
      repurchase agreements                                                                     (190,217)            (270,802)
   Repayment of long-term borrowing                                                             (325,000)            (295,000)
   Repayment of FHLB advances                                                                          -           (4,500,000)
   Payment of dividends                                                                          (75,464)             (64,683)
                                                                                    --------------------  -------------------
   Net cash (used) provided by financing activities                                            3,502,132             (392,038)
                                                                                    --------------------  -------------------
   (Decrease) in cash and cash equivalents                                                    (1,364,892)          (4,196,475)
Cash and cash equivalents beginning of period                                                 10,112,867            8,606,345
                                                                                    --------------------  -------------------
Cash and cash equivalents end of period                                             $          8,747,975      $     4,409,870
                                                                                    ====================  ===================

Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for:
      Interest                                                                      $          2,782,369  $         2,266,296
                                                                                    ====================  ===================
      Income taxes                                                                  $            293,754  $           227,053
                                                                                    ====================  ===================
</TABLE>


The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
                                       5
<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

         Notes to Unaudited Condensed Consolidated Financial Statements

                     Six Months Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------

1.   Management Opinion
     ------------------

     In  the  opinion  of  management,   the  accompanying  unaudited  condensed
     consolidated  financial  statements of Volunteer Bancorp,  Inc. contain all
     adjustments, consisting of only normal, recurring adjustments, necessary to
     fairly present the financial results for the interim periods presented. The
     results of operations for any interim period is not necessarily  indicative
     of the results to be expected for an entire year.  These interim  financial
     statements  should  be  read  in  conjunction  with  the  annual  financial
     statements and notes thereto.

2.   Adoption of Recently Issued  Statements of Financial  Accounting  Standards
     (SFAS)
     ---------------------------------------------------------------------------

     SFAS  No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
     Activities",  as amended by SFAS No. 137, is effective for fiscal  quarters
     beginning  after June 15,  2000  unless  adopted  earlier.  This  Statement
     establishes accounting and reporting standards for derivative  instruments,
     including  certain  derivative  instruments  embedded  in other  contracts,
     (collectively  referred to as derivatives) and for hedging  activities.  It
     requires  that an entity  recognize  all  derivatives  as either  assets or
     liabilities  in the  statement  of  financial  position  and measure  those
     instruments at fair value. If certain  conditions are met, a derivative may
     be specifically designated as (a) a hedge of the exposure to changes in the
     fair value of a  recognized  asset or  liability  or an  unrecognized  firm
     commitment,  (b) a hedge  of the  exposure  to  variable  cash  flows  of a
     forecasted transaction,  or (c) a hedge of the foreign currency exposure of
     a net investment in a foreign  operation,  an unrecognized firm commitment,
     an   available-for-sale   security,   or   a   foreign-currency-denominated
     forecasted  transaction.  Adoption by the Company did not have any material
     impact upon financial position or results of operations.


     SFAS No. 140,  "Accounting for Transfers and Servicing of Financial  Assets
     and  Extinguishment  of  Liabilities",   is  effective  for  transfers  and
     servicing of financial assets and  extinguishment of liabilities  occurring
     after March 31,  2001.  This  Statement is effective  for  recognition  and
     reclassification   of   collateral   and  for   disclosures   relating   to
     securitization  transactions  and  collateral for fiscal years ending after
     December 15, 2000.  This statement  replaces SFAS No. 125,  "Accounting for
     Transfers  and  Servicing  of  Financial  Assets  and   Extinguisments   of
     Liabilities".  It revises the standards for accounting for  securitizations
     and other transfers of financial assets and collateral and requires certain
     disclosures,  but it carries over most of SFAS No. 125's provisions without
     reconsideration. This Statement provides accounting and reporting standards
     for  transfers  and  servicing of financial  assets and  extinguishment  of
     liabilities.  Those  standards  are based on  consistent  application  of a
     financial-components  approach that focuses on control. Under the approach,
     after a transfer of financial  assets,  an entity  recognizes the financial
     and  servicing  assets it controls  and the  liabilities  it has  incurred,
     derecognizes  financial  assets  when  control  has been  surrendered,  and
     derecognizes   liabilities  when  extinguished.   This  Statement  provides
     consistent standards for distinguishing  transfers of financial assets that
     are sales from transfers that are secured  borrowings.  The adoption of the
     provisions  of this  Statement  did not have any  material  impact upon the
     financial position or results of operation of the Company.

                                       6
<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

         Notes to Unaudited Condensed Consolidated Financial Statements

                     Six Months Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------

3.   Long-term debt

     The  Company's  long-term  debt  consists of a single  note  payable in the
     amount  of   $2,170,000   and   $2,495,000  at  June  30,  2001  and  2000,
     respectively,  due an unaffiliated  national bank. The interest rate on the
     note adjusts  quarterly and is equal to the  three-months  London Interbank
     Offered  Rate (Three  Month LIBOR) plus 1.95% per annum or at the option of
     the Company,  the rate on the note is equal to the  lender's  index rate as
     such rate changes from time to time.  The Company may change  interest rate
     options at any time with prior  notice to the  lender.  Interest is payable
     quarterly.  At June 30,  2001 the rate on the  note was  5.78%  per  annum.
     Principal is payable annually on January 31, as follows:


               January 31,                     Principal Due
               -----------                     -------------
                  2002                            360,000
                  2003                            395,000
                  2004                            435,000
                  2005                            470,000
          2006 (Final Maturity)                   510,000
                                           ----------------------
                                           $      2,170,000
                                           ======================

     The loan is secured by all of the stock of Citizens Bank of East  Tennessee
     owned by the Company.

4.   Contingencies

     During the course of business,  the Company makes various  commitments  and
     incurs  certain  contingent  liabilities  that  are  not  presented  in the
     accompanying balance sheet. The commitments and contingent  liabilities may
     include various guarantees,  commitments to extend credit,  standby letters
     of credit,  and  litigation.  In the  opinion of  management,  no  material
     adverse effect on the financial position, liquidity or operating results of
     the Company and its subsidiary is anticipated as a result of these items.



                                       7
<PAGE>

<TABLE>
<CAPTION>

                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY
                              FINANCIAL HIGHLIGHTS
                  As of And For The Three And Six Months Ended
                             June 30, 2001 and 2000
                                   (Unaudited)


                                                                       Three Months Ended              Six Months Ended
                                                                            June 30,                       June 30,

                                                                       2001            2000            2001            2000
                                                                       ----            ----            ----            ----
<S>                                                         <C>             <C>              <C>             <C>
Net income                                                  $       155,084 $       194,773  $      307,281  $       353,079
Per common share data:
  Net income per weighted average
    common share                                                      $0.29           $0.37           $0.57            $0.66
  Book value                                                         $10.79           $7.87          $10.79            $7.87
Ratios:
  Return on average assets                                            0.52%           0.72%           0.52%            0.66%
  Return on average common equity                                    10.76%          18.79%          11.04%           16.95%
  Net interest margin (taxable equivalent basis)                      3.87%           4.00%           3.81%            4.03%
  Expense ratio                                                       2.73%           2.71%           2.74%            2.77%
  Allowance for loan losses / loans                                   1.29%           1.33%           1.29%            1.33%
  Non-performing loans / loans                                        2.11%           1.30%           2.11%            1.30%
  Non-performing assets / loans and
    foreclosed properties                                             3.25%           1.96%           3.25%            1.96%
  Shareholder's equity / total assets                                 4.84%           3.92%           4.84%            3.92%
  Leverage ratio (tangible capital /
    tangible average assets)                                          4.34%           4.70%           4.38%            4.64%
</TABLE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations


As Of and for the Three and Six Months Ended June 30, 2001 and 2000

The  following  provides a narrative  discussion  and  analysis  of  significant
changes in Volunteer  Bancorp's' results of operations and financial  condition.
This discussion  should be read in conjunction with the  consolidated  financial
statements and related financial analysis set forth in Volunteer Bancorp's' 2000
Annual Report, the interim unaudited consolidated financial statements and notes
for the three and six months ended June 30, 2001, included elsewhere herein, and
the supplemental financial data included herein.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING INFORMATION

This discussion contains certain  forward-looking  statements (as defined in the
Private Securities  Litigation Reform Act of 1995). Such statements are based on
management's   expectations  as  well  as  certain   assumptions  made  by,  and
information  available to, management.  Specifically,  this discussion  contains
forward-looking statements with respect to the following items:

     -    effects of projected changes in interest rates,

     -    effects of changes in the securities markets,

     -    effects of changes in general economic conditions,

     -    the  adequacy  of the  allowance  for losses on loans and the level of
          future provisions for losses on loans, and

     -    business  plans for the year 2001 and  beyond  including  underwriting
          criteria.

When used in this  discussion,  the  words  "anticipate,"  "project,"  "expect,"
"believe,"   "should"   and  similar   expressions   are  intended  to  identify
forward-looking statements.

These  forward-looking  statements  involve  significant risks and uncertainties
including changes in general economic and financial market  conditions,  changes
in banking laws and regulations, and Volunteer Bancorp's' ability to execute its
business  plans.  Although  Volunteer  Bancorp  believes  that the  expectations
reflected in the forward-looking statements are reasonable, actual results could
differ materially.



                                       8

<PAGE>



SUMMARY

The Company reported net income for the second quarter of $155,084, or $0.29 per
common  share,  compared to income of  $194,733,  or $0.37 for the same period a
year ago. Our returns on average assets and average common equity were 0.52% and
10.76%, respectively,  for the quarter compared to 0.72% and 18.79% for the same
period last year.

FINANCIAL CONDITION

Earning  Assets.  Average  earning assets for the six months ended June 30, 2001
totaled  $110,776,000  which represents 92.92% of average total assets.  Earning
assets totaled $111,274,000 at June 30, 2001. Average earning assets for the six
months  ended June 30, 2000 totaled  $99,029,000,  which  represented  92.21% of
average total assets. Earning assets totaled $99,189,000 at June 30, 2000.

Loan  Portfolio.  The Company's  average loans for the six months ended June 30,
2001  were  $74,835,000  and  for  the six  months  ended  June  30,  2000  were
$70,097,000.  The  Company's  average  loans for the quarter ended June 30, 2001
were  $75,571,000 and were  $71,028,000 for the quarter ended June 30, 2000. The
balance in total loans at June 30, 2001 was $76,787,000 and at June 30, 2000 was
$72,441,000.

Investment  portfolio.  The Company's  investment  securities portfolio averaged
$29,521,000  for the six months ended June 30, 2001 and  $26,798,000 for the six
months  ended June 30,  2000.  The  Company's  investment  securities  portfolio
averaged   $30,104,000  for  the  quarter  ended  June  30,  2001  and  averaged
$27,727,000  for  the  quarter  ended  June  30,  2000.  The  portfolio  totaled
$29,062,000 at June 30, 2001 and $25,773,000 at June 30, 2000.

The Company maintains an investment  strategy of seeking portfolio yields within
acceptable risk levels,  as well as providing  liquidity.  The Company maintains
two classifications of investment securities:  "Available for Sale" and "Held to
Maturity."  The Available for Sale  securities are carried at fair market value,
whereas the Held to Maturity  securities are carried at amortized  cost. At June
30, 2001 there was an unrealized  loss in the  Available for Sale  securities of
$15,000 and there was an unrealized loss of $1,573,000 at June 30, 2000.

Deposits.  The Company's  average deposits were  $109,219,000 for the six months
ended June 30, 2001.  This included  average  non-interest  bearing  deposits of
$11,202,000,  average  certificates of deposit of  $68,076,000,  average savings
deposits of $5,186,000  and average  interest  bearing  transaction  accounts of
$24,755,000.

The  Company's  average  deposits  for the six months  ended June 30,  2000 were
$97,893,000. This included average non-interest bearing deposits of $11,009,000,
average  certificates  of deposit of $63,222,000,  average  savings  deposits of
$4,841,000 and average interest bearing transaction accounts of $18,821,000.

Deposits at June 30, 2001 totaled  $110,100,499 and totaled  $99,562,494 at June
30, 2000.

Securities sold under repurchase  agreements.  The Company's  average balance of
securities  sold under  repurchase  agreements for the six months ended June 30,
2001 was $976,000 and the average was  $1,416,000  for the six months ended June
30, 2000.  The total  outstanding  under these  agreements  at June 30, 2001 was
$862,000 and the total outstanding at June 30, 2000 was $1,050,000.

Note Payable.  The Company's long-term debt consists of a single note payable in
the amount of $2,170,000 due an unaffiliated national bank. The interest rate on
the note adjusts  quarterly and is equal to the  three-months  London  Interbank
Offered  Rate (Three  Month  LIBOR) plus 1.95% per annum or at the option of the
Company the

                                       9

<PAGE>



rate on the note is equal to the  lender's  index rate as such rate changes from
time to time.  The Company  may change  interest  rate  options at any time with
prior notice to the lender.  Interest is payable quarterly. At June 30, 2001 the
rate on the note was 5.78% per annum.  Principal is payable annually  commencing
January 31, 1996 and each January 31  thereafter.  Interest  expense for the six
months  ended June 30, 2001 totaled  $85,000.  The loan is secured by all of the
stock of Citizens Bank of East Tennessee owned by the Company.

Capital Resources. Shareholder's equity totaled $$5,818,000 as of June 30, 2001.
This included $5,000 of common stock,  $1,917,000 of additional paid-in capital,
$3,905,000  of retained  earnings and  accumulated  other  comprehensive  income
consisting  of a  unrealized  loss on  Securities  Available  for  Sale,  net of
deferred taxes, of ($9,000.)

BALANCE SHEET MANAGEMENT

Liquidity  Management.  Liquidity is the ability of a company to convert  assets
into cash without significant loss and to raise funds by increasing liabilities.
Liquidity  management  involves  having the ability to meet day-to-day cash flow
requirements of its customers,  whether they are depositors  wishing to withdraw
funds or borrowers requiring funds to meet their credit needs.

The  primary  function  of  asset/liability  management  is not  only to  assure
adequate  liquidity  in order for the Company to meet the needs of its  customer
base, but to maintain an appropriate balance between  interest-sensitive  assets
and interest-sensitive liabilities so that the Company can profitably deploy its
assets.  Both assets and liabilities are considered sources of liquidity funding
and both are, therefore, monitored on a daily basis.

The asset  portion of the balance sheet  provides  liquidity  primarily  through
investments  in  federal  funds  and  maturities  of  investment  of  investment
securities.  Additional  sources of liquidity are loan  repayments  and possible
prepayments from the mortgage backed securities in the investment portfolio.  At
June 30,  2001 and  2000,  the  Company  had  investments  in  federal  funds of
$5,425,000 and $975,000, respectively.

The liability  portion of the balance sheet provides  liquidity  through various
interest bearing and non-interest  bearing deposit accounts.  Additional sources
of liquidity are Federal Home Loan Bank Advances,  federal funds purchased,  and
securities sold under repurchase  agreements.  The Company has an agreement with
the Federal  Home Loan Bank  whereby  the Company may  borrower up to an amount,
$6,000,000  at June 30, 2001,  established  by the Federal  Home Loan Bank.  The
Company  is  required  to  maintain  eligible  collateral,  consisting  of first
mortgages on one-to-four residential properties, representing 150 percent of the
current outstanding balance of all advances.  There were no advances outstanding
at June 30, 2001 and 2000.  At June 30,  2001,  the Company  had  $2,500,000  of
federal funds purchase lines available at three correspondent  banks. There were
no federal funds purchased at June 30, 2001 and 2000. The Company has agreements
with  customers,  who must meet  certain  criteria  established  by the Company,
whereby the Company sells the customer investment securities under agreements to
repurchase  the  securities.   The  securities  underlying  the  agreements  are
maintained  under the Company's  control.  The  outstanding  balance under these
agreements was $862,000 and $1,050,000 at June 30, 2001 and 2000, respectively.

Because of the level of  capital  obtained  from stock  sales and from the funds
derived from the note payable, no additional capital funds or long-term debt are
anticipated to be deemed necessary during the next twelve months.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000

Net  Interest  Income.  Net  interest  income is the  principal  component  of a
financial institution's income stream and represents the spread between interest
and fee income generated from earning assets and the interest expense

                                       10

<PAGE>



incurred on interest  bearing  deposits and other borrowed funds.  The following
discussion is based on a fully taxable equivalent basis.

Net  interest  income on a fully tax  equivalent  basis for the six months ended
June 30,  2001  totaled  $2,112,000.  This was a result  of  interest  income of
$4,778,000 and interest expense of $2,666,000.  Interest and fee income on loans
totaled  $3,689,000,   interest  income  on  the  investment  portfolio  totaled
$932,000,  and interest income on federal funds sold totaled $157,000.  Interest
expense  included  $2,042,000 on certificates  of deposit,  $443,000 on interest
bearing transaction accounts, $72,000 on savings accounts, $29,000 on securities
sold under repurchase agreements, and $80,000 on the note payable.

Net  interest  income on a fully tax  equivalent  basis for the six months ended
June 30,  2000  totaled  $1,997,000.  This was a result  of  interest  income of
$4,353,000 and interest expense of $2,356,000.  Interest and fee income on loans
totaled  $3,412,000,   interest  income  on  the  investment  portfolio  totaled
$878,000,  and interest income on federal funds sold totaled  $63,000.  Interest
expense  included  $1,755,000 on certificates  of deposit,  $381,000 on interest
bearing transaction accounts, $72,000 on savings accounts, $46,000 on securities
sold under repurchase agreements, and $102,000 on the note payable.

Net interest  income on a fully tax equivalent  basis for the three months ended
June 30,  2001  totaled  $1,075,000.  This was a result  of  interest  income of
$2,369,000 and interest expense of $1,294,000.  Interest and fee income on loans
totaled  $1,833,000,   interest  income  on  the  investment  portfolio  totaled
$479,000,  and interest income on federal funds sold totaled  $57,000.  Interest
expense  included  $1,000,000 on certificates  of deposit,  $208,000 on interest
bearing transaction accounts, $36,000 on savings accounts, $13,000 on securities
sold under repurchase agreements, and $37,000 on the note payable.

Net interest  income on a fully tax equivalent  basis for the three months ended
June 30,  2000  totaled  $1,013,000.  This was a result  of  interest  income of
$2,230,000 and interest expense of $1,217,000.  Interest and fee income on loans
totaled  $1,761,000,   interest  income  on  the  investment  portfolio  totaled
$432,000,  and interest income on federal funds sold totaled  $37,000.  Interest
expense  included  $902,000 on  certificates  of  deposit,  $211,000 on interest
bearing transaction accounts, $36,000 on savings accounts, $18,000 on securities
sold under repurchase agreements, and $50,000 on the note payable.

The trend in net interest income is commonly evaluated in terms of average rates
using the net  interest  margin and the interest  rate spread.  The net interest
margin,  or the net yield on earning  assets,  is  computed  by  dividing  fully
taxable  equivalent net interest income by average  earning  assets.  This ratio
represents  the difference  between the average yield on overage  earning assets
and the  average  rate  incurred  for all funds  used to support  those  earning
assets.

The net interest  margin for the six months  ended June 30, 2001 was 3.81%.  The
net cost of funds, defined as interest expense divided by average earning assets
was 4.82% and the yield on earning  assets  was 8.63% for the six  months  ended
June 30, 2001.  The net  interest  margin for the six months ended June 30, 2000
was  4.03%.  The net cost of funds for the six months  ended  June 30,  2000 was
4.76% and the yield on earning assets was 8.79%.  The decrease in interest rates
during the first six months of 2001 had a negative  impact on the  Company's net
interest  margin.  It is  anticipated  that the impact will lessen in the second
half of 2001 as rate sensitive liabilities re-price at lower rates.

The net interest margin for the three months ended June 30, 2001 was 3.87%.  The
net cost of funds, defined as interest expense divided by average earning assets
was 4.66% and the yield on earning  assets was 8.53% for the three  months ended
June 30, 2001. The net interest  margin for the three months ended June 30, 2000
was 4.00%.

                                       11

<PAGE>



The net cost of funds for the three months ended June 30, 2000 was 4.81% and the
yield on earning assets was 8.81%.

The interest rate spread  measures the  difference  between the average yield on
earning  assets and the average  rate  incurred on interest  bearing  sources of
funds.  The interest rate spread  eliminates the impact of non-interest  bearing
funds and gives a direct  perspective  on the  effect  of market  interest  rate
movements.  During recent years, the net interest rate margins and interest rate
spreads have been under intense pressure to maintain  historical  levels, due in
part to tax laws that discourage investment in tax-exempt securities and intense
competition for funds with non-bank  institutions.  The interest rate spread for
the six months ended June 30, 2001 was 3.41% and it was 3.69% for the six months
ended June 30, 2000.  The  interest  rate spread for the three months ended June
30, 2001 was 3.44% and it was 3.51% for the three months ended June 30, 2000.

Allowance for Possible Loan Losses.  Lending  officers are  responsible  for the
ongoing  review  and   administration  of  each  loan.  They  make  the  initial
identification  of loans that present some  difficulty  in  collection  or where
there is an indication that the probability of loss exists. Lending officers are
responsibility for the collection effort on a delinquent loan. Senior management
is informed of the status of delinquent and problem loans on a weekly basis.

Senior management makes recommendations  monthly to the board of directors as to
charge-offs. Senior management reviews the allowance for possible loan losses on
a monthly basis.  The Company's  policy is to discontinue  interest accrual when
payment of principal and interest is 90 days or more in arrears, unless there is
sufficient collateral to justify continued accrual.

The  allowance for possible  losses  represents  management's  assessment of the
risks  associated with extending credit and its evaluation of the quality of the
loan portfolio. Management analyzes the loan portfolio to determine the adequacy
of the  allowance  for  possible  loan  losses  and the  appropriate  provisions
required to maintain a level  considered  adequate  to absorb  anticipated  loan
losses.  The provision for possible loan losses was $85,000 for the three months
ended June 30, 2001 and it was $60,000 for the three months ended June 30, 2000.
In assessing the adequacy of the allowance, management reviews the size, quality
and risk of loans in the  portfolio.  Management  also considers such factors as
loan loss experience,  the amount of past due and non-performing loans, specific
known  risk,  the  status  and  amount  of  non-performing  assets,   underlying
collateral values securing loans,  current and anticipated  economic  conditions
and other factors which affect the allowance for possible loan losses.

While it is the Company's  policy to charge off in the current  period the loans
in which a loss is considered  probable,  there are  additional  risks of future
losses that cannot be quantified  precisely or attributed to particular loans or
classes  of  loans.  Because  these  risks  include  the  state of the  economy,
management's  judgement  as to the  adequacy  of the  allowance  is  necessarily
approximate and imprecise.

The  allowance  for loan  losses  at June  30,  2001  was  1.29%  of  loans  and
approximately  39%  of  non-performing  assets.  Management  believes  that  the
$995,000 at June 30, 2001 in the  allowance for possible loan losses is adequate
to absorb known risks in the portfolio. No assurance can be given, however, that
adverse economic  circumstances  will not result in increased losses in the loan
portfolio,  and  require  greater  provisions  for  possible  loan losses in the
future.

Non-Performing  Assets.  Non-performing assets include  non-performing loans and
foreclosed  real  estate  held for  sale.  Non-performing  loans  include  loans
classified  as  non-accrual  and  loans  past  due more  than 90 days and  still
accruing interest.  Non-performing  assets at June 30, 2001 were $2,526,000,  or
3.25% of loans and foreclosed properties. Non-performing assets at June 30, 2001
consisted of  non-accrual  loans of  $470,000,  loans past due 90 days and still
accruing  interest  of  $1,154,000  and  foreclosed  real  estate  of  $902,000.
Non-performing assets at

                                       12

<PAGE>



June  30,  2000  were  $1,432,000,  or 1.98% of  loans  and  foreclosed  assets.
Non-performing  assets  at June  30,  2000  consisted  of  non-accrual  loans of
$499,000  loans past due 90 days and still  accruing  interest of  $441,000  and
foreclosed  real estate of $492,000.  The increase in  non-performing  assets is
primarily  attributable to commercial  real estate and real estate  construction
loans in which management does not anticipate incurring material losses.  Senior
management  has  strengthened   the   underwriting   criteria  for  real  estate
construction  and  commercial  real estate lending in order to decrease the risk
associated with these types of loans.

Non-Interest  Income.  Non-interest income consists of revenues generated from a
broad range of financial  services and activities  including  fee-based services
and securities gains and losses.  Total non-interest income was $175,000 for the
six months ended June 30, 2001.  This included  $94,000 from service  charges on
deposit  accounts,  $53,000  from other  service  charges  and fees,  $10,000 of
securities gains, and $18,000 of other non- interest income.

Total  non-interest  income for the six months ended June 30, 2000 was $187,000.
This included  $115,000 from service charges on deposit  accounts,  $57,000 from
other service charges and fees, and $15,000 of other non- interest income.

Total non-interest  income was $83,000 for the three months ended June 30, 2001.
This included  $42,000 from service  charges on deposit  accounts,  $39,000 from
other service charges and fees,  $1,000 of securities gains, and $1,000 of other
non-interest income.

Total non-interest income for the three months ended June 30, 2000 was $101,000.
This included  $60,000 from service  charges on deposit  accounts,  $39,000 from
other service charges and fees, and $2,000 of other non-interest income.

The decrease in total non-interest  income is mainly  attributable to a decrease
in service charges on deposit accounts.

Non-Interest  Expense.  Non-interest  expense for the six months  ended June 30,
2001 was  $1,619,000.  This  consisted  of  $876,000 of  salaries  and  employee
benefits,  $149,000 of occupancy  expenses,  $167,000 of furniture and equipment
expense,  and  $427,000  of  other  non-interest  expenses.  Other  non-interest
expenses include  advertising,  supplies and printing,  telephone,  postage, and
legal and accounting fees.

Non-interest expense for the six months ended June 30, 2000 was $1,486,000. This
consisted of $814,000 of salaries and employee  benefits,  $122,000 of occupancy
expenses,  $158,000 of furniture  and equipment  expense,  and $392,000 of other
non-interest expenses.

Non-interest expense for the three months ended June 30, 2001 was $816,000. This
consisted of $428,000 of salaries and  employee  benefits,  $79,000 of occupancy
expenses,  $85,000 of furniture  and  equipment  expense,  and $224,000 of other
non-interest expenses.

Non-interest expense for the three months ended June 30, 2000 was $736,000. This
consisted of $395,000 of salaries and  employee  benefits,  $65,000 of occupancy
expenses,  $78,000 of furniture  and  equipment  expense,  and $198,000 of other
non-interest expenses.

The  increase in total  non-interest  expense is primarily  associated  with the
overall growth of the Company.


                                       13

<PAGE>



Income  Taxes.  For the six months  ended June 30,  2001,  the Company  incurred
income tax expense of  $171,000.  For the six months  ended June 30,  2000,  the
Company incurred income tax expense of $176,000. Approximately $59,000 of income
earned for the six months  ended June 30,  2001 is exempt  from  Federal  income
taxes.  Approximately  $94,000 of the income  earned during the six months ended
June 30, 2000 is exempt from Federal income taxes.

For the three  months  ended June 30,  2001,  the  Company  incurred  income tax
expense of  $87,000.  For the three  months  ended June 30,  2000,  the  Company
incurred income tax expense of $100,000.  Approximately $28,000 of income earned
for the three months ended June 30, 2001 is exempt from  Federal  income  taxes.
Approximately  $45,000 of the income  earned  during the three months ended June
30, 2000 is exempt from Federal income taxes.

RETURN ON ASSETS AND EQUITY

Return on assets (annualized net income divided by average total assets) for the
six months  ended June 30,  2001 was 0.52%.  Return on assets for the six months
ended June 30, 2000 was 0.66%.  Return on assets for the three months ended June
30, 2001 was 0.52% and it was 0.72% for the three months ended June 30, 2000.

Return on equity  (annualized  net income divided by average equity) for the six
months ended June 30, 2001 was 11.04% and it was 16.95% for the six months ended
June 30,  2000.  Return on equity for the three  months  ended June 30, 2001 was
10.76% and it was 18.79% for the three months ended June 30,2000.

Equity to assets  (average equity divided by average total assets) was 4.72% for
the six  months  ended June 30,  2001 and it was 3.88% for the six months  ended
June 30,  2000.  Equity to assets for the three  months  ended June 30, 2001 was
4.82% and it was 3.81% for the three months ended June 30, 2000.


The dividend payout ratio (dividends declared divided by net income) for the six
months  ended June 30, 2001 was 24.55%.  The  dividend  payout ratio for the six
months ended June 30, 2000 was 18.31%.  No dividends  were  declared  during the
three months ended June 30, 2001 and 2000 and,  accordingly,  no dividend payout
ratio is presented for those quarters.

EFFECTS OF INFLATION AND CHANGING PRICES

Inflation  generally  increases the cost of funds and operating  overhead and to
the  extent  loans and other  assets  bear  variable  rates,  the yields on such
assets.  Unlike  most  industrial  companies,   virtually  all  the  assets  and
liabilities  of a financial  institution  are  monetary in nature.  As a result,
interest rates generally have a more significant  impact on the performance of a
financial institution than the effects of general levels of inflation.  Although
interest  rates do not  necessarily  move in the same  direction  or to the same
extent as the prices of goods and  services,  increases in  inflation  generally
have  resulted in  increased  interest  rates.  In addition,  inflation  affects
financial  institutions'  cost of  goods  and  services  purchased,  the cost of
salaries and  benefits,  occupancy  expenses and similar  items.  Inflation  and
related  increases  in interest  rates  generally  decrease  the market value of
investments  and loans held and may  adversely  affect  liquidity,  earnings and
stockholders'  equity.  Mortgage  originations  and refinancing  tend to slow as
interest  rates  increase  and can  reduce  the  Company's  earnings  from  such
activities  and the income from the sale of  residential  mortgage  loans on the
secondary market.


                                       14

<PAGE>



                          PART II -- OTHER INFORMATION



Item 1.  Legal Proceedings

         None.

Item 2.           Changes in Securities

         None

Item 3.           Defaults upon Senior Securities

         None

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

At the Annual Meeting on May 23, 2001, the  shareholders  voted on the following
proposals with the results as indicated:

1.   Elected five of its current  directors to continue in office until the 2004
     meeting of shareholders. Current directors elected to three-year terms were
     as follows:

                                            FOR               WITHHOLD AUTHORITY

         Reed D. Matney                   382,719                  66
         Shirley Price                    382,785                   0
         Carlin Green                     382,785                   0
         Eddie Freeman                    382,785                   0
         Leon Gladson                     382,785                   0

         Directors continuing to serve include:

         William E. Phillips            H. Lyons Price             Douglas Price
         Gary Varnell                    George Brooks               Neil Miller
         Lawrence Gray                   Scott Collins

2.   Ratified  the  appointment  of Welch &  Associates,  Ltd. as the  Company's
     independent accounts and auditors for 2001 as follows:

         FOR               AGAINST          ABSTAIN           BROKER NON-VOTES
         ---               -------          -------           ----------------

         379,974              0              2,811                   0

Item 5.           Other Information

         None

Item 6.           Exhibits and reports on Form 8-K

         (a)      Exhibits

                  Exhibit 23.1      Consent of Welch & Associates


         (b) There  have been no Current  Reports  on Form 8-K filed  during the
quarter ended June 30, 2001.




                                       15

<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.


                                                   VOLUNTEER BANCORP, INC.
                                                   (Registrant)


Date: August 14, 2001                              /s/ Reed D. Matney
                                                   ---------------------------
                                                   Reed D. Matney, President
                                                   (principal executive officer)


Date: August 14, 2001                              /s/ H. Lyons Price
                                                   -----------------------------
                                                   H. Lyons Price (principal
                                                   financial and accounting
                                                   officer)


                                       16

<PAGE>


                                                                    EXHIBIT 23.1


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


     As  independent  public  accountants,  we hereby  consent to the use of our
report,  dated July 20, 2001,  included in this Quarterly  Report on Form 10-QSB
for the Quarter Ended June 30, 2001.






                            Welch & Associates, Ltd.



Nashville, Tennessee
July 20, 2001


                                       17