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 September 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 September 30,
2001.

     Transitional  Small  Business  Disclosure  Format (check one);
Yes      No  X
   -----   -----

<PAGE>



                             VOLUNTEER BANCORP, INC.

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                 Page No.
Item 1.           FINANCIAL STATEMENTS
<S>                                                                                                   <C>
                  Condensed Consolidated Balance Sheets September
                  30, 2001 and 2000 (Unaudited)                                                          4

                  Condensed Consolidated Statements of Earnings For The Three
                  and Nine Months Ended September 30, 2001 and 2000 (Unaudited)                          5

                  Condensed Consolidated Statements of Cash Flows
                  For The Nine Months Ended September 30, 2001 and 2000 (Unaudited)                      6

                  Condensed Consolidated Statements of Comprehensive Income For The
                  Three and Nine Months Ended September 30, 2001 and 2000 (Unaudited)                    7

                  Notes to Unaudited Condensed Consolidated Financial Statements
                  Nine Months Ended September 30, 2001 and 2000                                          8

Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                                         11

PART II.          OTHER INFORMATION

                  Item 1.     Legal Proceedings                                                         18

                  Item 2.     Changes in Securities                                                     18

                  Item 3.     Defaults upon Senior Securities                                           18

                  Item 4.     Submission of Matters to a Vote of Securities Holders                     18

                  Item 5.     Other Information                                                         18

                  Item 6.     Exhibits and Reports on Form 8-K                                          18

Signatures                                                                                              19
</TABLE>




                                        2

<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 September 30, 2001 and 2000, and
the  related  condensed  consolidated   statements  of  earnings  and  condensed
consolidated  statements of  comprehensive  income for the three and nine months
then ended and the condensed consolidated  statements of cash flows for the nine
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.








Nashville, Tennessee
October 19, 2001


                                       3
<PAGE>

                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

                      Condensed Consolidated Balance Sheets

                           September 30, 2001 and 2000

                   (Unaudited- See Accountants' Review Report)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                   ASSETS                                                2001                   2000
                                   ------                                         -----------------       ---------------
<S>                                                                           <C>                   <C>
Cash and due from banks                                                       $           3,287,812 $           2,937,507
Federal fund sold                                                                         4,600,000             1,875,000
                                                                              --------------------- ---------------------
    Total cash and cash equivalents                                                       7,887,812             4,812,507
Investment securities available for sale (amortized cost of
   $24,270,707 and $26,196,204, respectively)                                            24,468,860            24,984,386
Investment securities held to maturity (estimated market
   value of $ 1,752,583 and $1,007,495, respectively)                                     1,745,291             1,068,584
Loans, less allowances for loan losses of $937,688 and
   $971,210, respectively                                                                74,061,454            72,810,569
Accrued interest receivable                                                               1,110,588             1,160,161
Premises and equipment, net                                                               3,907,293             4,118,150
Other real estate                                                                         1,041,890               552,332
Deferred income taxes                                                                        62,764               549,485
Goodwill                                                                                    135,730               153,613
Other assets                                                                                232,073               120,385
                                                                              --------------------- ---------------------
Total assets                                                                  $         114,653,755           110,330,172
                                                                              ===================== =====================
                         LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
    Non-interest bearing                                                      $          11,561,204 $          11,102,681
    Interest bearing                                                                     92,585,555            90,017,791
                                                                              --------------------- ---------------------
          Total deposits                                                                104,146,759           101,120,472
Interest payable                                                                          1,037,561             1,062,098
Note payable                                                                              2,170,000             2,495,000
Securities sold under repurchase agreements                                               1,023,350               925,434
Other accrued taxes, expenses and liabilities                                               111,431                66,641
                                                                              --------------------- ---------------------
    Total liabilities                                                                   108,489,101           105,669,645
                                                                              --------------------- ---------------------
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                                                                        4,119,909             3,489,964
 Accumulated other comprehensive income                                                     122,855             (751,327)
                                                                              --------------------- ---------------------
    Total stockholders' equity                                                            6,164,654             4,660,527
                                                                              --------------------- ---------------------
Total liabilities and stockholders' equity                                    $         114,653,755           110,330,172
                                                                              ===================== =====================
</TABLE>

     The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       4
<PAGE>

                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

                  Condensed Consolidated Statements of Earnings

         For The Three and Nine Months Ended September 30, 2001 and 2000

                  (Unaudited - See Accountants' Review Report)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                    Three months ended                   Nine months ended
                                                                       September 30,                       September 30,
                                                                      ---------------                     ---------------
                                                                   2001               2000              2001              2000
                                                                   ----               ----              ----              ----
Interest Income:
<S>                                                         <C>                 <C>                       <C>               <C>
     Interest and fees on loans                             $         1,782,589 $       1,849,017         5,471,338        5,261,512
     Interest on federal funds                                           44,504            27,665           201,903           90,255
     Interest on investment securities:
          Taxable                                                       361,754           359,299         1,204,513        1,095,392
          Exempt from Federal income taxes                               29,741            46,983            88,349          140,862
                                                            ------------------- ----------------- ----------------- ----------------
               Total interest income                                  2,218,588         2,282,964         6,966,103        6,588,021
                                                            ------------------- ----------------- ----------------- ----------------
Interest Expense:
     Interest on deposits                                             1,110,923         1,225,709         3,667,511        3,433,916
     Other borrowed funds                                                54,056            60,648           163,098          209,023
                                                            ------------------- ----------------- ----------------- ----------------
               Total interest expense                                 1,164,979         1,286,357         3,830,609        3,642,939
                                                            ------------------- ----------------- ----------------- ----------------
Net interest income                                                   1,053,609           996,607         3,135,494        2,945,082
Provision for possible loan losses                                            -            60,000           160,000          180,000
                                                            ------------------- ----------------- ----------------- ----------------
Net interest income after provision for
   possible loan losses                                               1,053,609           936,607         2,975,494        2,765,082
                                                            ------------------- ----------------- ----------------- ----------------
Non-interest income:
     Service charges on deposits                                         36,152            61,115           130,085          176,567
     Other service charges and fees                                      26,330            24,638            79,424           81,817
     Securities (losses) gain                                             2,158                 -            11,762                -
     Other non-interest income                                           22,496             4,156            40,966           18,762
                                                            ------------------- ----------------- ----------------- ----------------
               Total non-interest income                                 87,136            89,909           262,237          277,146
                                                            ------------------- ----------------- ----------------- ----------------
Non-interest expense:
     Salaries and employee benefits                                     435,637           400,653         1,311,158        1,215,002
     Occupancy expense                                                   64,798            51,285           213,593          173,461
     Furniture and equipment expense                                    104,490            93,009           271,074          251,282
     Other non-interest expense                                         198,296           186,891           625,958          578,603
                                                            ------------------- ----------------- ----------------- ----------------
                Total non-interest expense                              803,221           731,838         2,421,783        2,218,348
                                                            ------------------- ----------------- ----------------- ----------------
                Earnings before income taxes                            337,524           294,678           815,948          823,880

Income tax expense                                                      122,755           101,039           293,898          277,162
                                                            ------------------- ----------------- ----------------- ----------------
                Net income                                  $           214,769           193,639           522,050          546,718
                                                            =================== ================= ================= ================
Income per common share                                     $              0.40              0.36              0.97             1.01
                                                            =================== ================= ================= ================
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.


                                       5
<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

                 Condensed Consolidated Statements of Cash Flows

              For The Nine Months Ended September 30, 2001 and 2000

                  (Unaudited - See Accountants' Review Report)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                               2001                 2000
                                                                                        ----------------      ----------
Cash Flows from Operating Activities:
<S>                                                                                             <C>       <C>
   Net income                                                                        $           522,050  $           546,718
Adjustments to reconcile net income
   to net cash provided by operating activities:
      Deferred income taxes                                                                       14,698                4,101
      Provision for possible loan losses                                                         160,000              180,000
      Provision for depreciation and amortization                                                181,156              182,809
      (Gain) on securities                                                                       (11,762)                   -
      Federal Home Loan Bank stock dividends                                                     (18,000)             (17,000)
      Decrease (increase) in interest receivable                                                 102,731             (131,801)
      (Increase) in other assets                                                                (511,439)            (208,023)
      (Decrease) increase in other liabilities                                                  (115,067)             184,083
                                                                                    --------------------  -------------------
   Net cash provided by operating activities                                                     324,367              740,887
                                                                                    --------------------  -------------------
Cash Flows from Investing Activities:
   Proceeds from calls and maturity of held to maturity securities                                26,398               29,045
   Purchase of investment securities held to maturity                                           (705,141)                   -
                                                                                    ====================  ===================
   Proceeds from calls and maturity of investments available for
    sale                                                                                      15,701,695              866,582
   Proceeds from sale of investments available for sale                                        9,820,786                    -
   Purchase of investment securities available for sale                                      (23,897,079)                   -
   Net (increase) in loans                                                                    (1,182,534)          (6,258,141)
   Capital expenditures                                                                          (22,993)            (213,297)
                                                                                    --------------------  -------------------
   Net cash (used) in investing activities                                                      (258,868)          (5,575,811)
                                                                                    --------------------  -------------------
Cash Flows from Financing Activities:
   Net (decrease) increase in demand deposits, NOW accounts,
      savings accounts, and IRA's                                                             (2,473,313)           3,938,261
   Net increase  in certificates of deposit                                                      612,386            2,358,164
   Repayment of long-term debt                                                                  (325,000)            (295,000)
   Repayment of Federal Home Loan Bank Advances                                                        -           (4,500,000)
   Net change in securities sold under repurchase agreements                                     (29,163)            (395,656)
   Dividends paid                                                                                (75,464)             (64,683)
                                                                                    --------------------  -------------------
   Net cash provided by financing activities                                                  (2,290,554)           1,041,086
                                                                                    --------------------  -------------------
   (Decrease) in cash and cash equivalents                                                    (2,225,055)          (3,793,838)
Cash and cash equivalents beginning of period                                                 10,112,867            8,606,345
                                                                                    --------------------  -------------------
Cash and cash equivalents end of period                                             $          7,887,812            4,812,507
                                                                                    ====================  ===================
Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for:
      Interest                                                                      $          3,933,081  $         3,402,235
                                                                                    ====================  ===================
      Income taxes                                                                  $            402,254  $           320,303
                                                                                    ====================  ===================
</TABLE>

     The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       6
<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

            Condensed Consolidated Statements of Comprehensive Income

         For The Three and Nine Months Ended September 30, 2001 and 2000

                  (Unaudited - See Accountants' Review Report)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                   Three months ended                    Nine months ended
                                                                        September 30,                         September 30,
                                                                        -------------                         -------------
                                                                  2001                2000               2001               2000
                                                                  ----                ----               ----               ----
<S>                                                       <C>             <C>                       <C>                <C>
Net income                                                $    214,769      $       193,639           522,050            546,718
                                                          ----------------------------------------------------------------------
Other comprehensive income, before tax:
  Unrealized (losses) gains on securities
      available for sale:
    Unrealized holding gains (losses) arising
      during the period                                        215,184               361,385          653,593            142,827
    Less: reclassification adjustment for
        (gains) losses included in net income                   (2,158)                    -          (11,762)                 -
                                                          ----------------------------------------------------------------------
  Other comprehensive income                                   213,026               361,385          641,831            142,827
Income taxes related to other
  comprehensive income                                         (80,949)             (137,450)        (243,896)           (54,274)
                                                          ----------------------------------------------------------------------
  Other comprehensive income,
    net of income taxes                                        132,077               223,935          397,935             88,553
                                                          ----------------------------------------------------------------------
  Total comprehensive income (loss)                       $    346,846               417,574          919,985            635,271
                                                          ======================================================================
</TABLE>














     The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       7
<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

         Notes to Unaudited Condensed Consolidated Financial Statements

                  Nine Months Ended September 30, 2001 and 2000
--------------------------------------------------------------------------------

1.   Management Opinion

     In  the  opinion  of  management,   the  accompanying  unaudited  condensed
     consolidated financial statements of Volunteer Bancorp, Inc. and subsidiary
     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 condensed consolidated 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   Extinguishments  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.






                                       8
<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

         Notes to Unaudited Condensed Consolidated Financial Statements

                  Nine Months Ended September 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 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 September 30 , 2001 the rate on the note was 5.61%
     per annum.  Principal is payable annually  commencing  January 31, 1996 and
     each January 1 thereafter 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.

                                       9
<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY
                              FINANCIAL HIGHLIGHTS
                  As of And For The Three And Nine Months Ended
                           September 30, 2001 and 2000
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                             Three Months Ended               Nine Months Ended
                                                               September 30,                    September 30,
                                                       ------------------------------  -------------------------------
                                                                2001             2000             2001            2000
                                                                ----             ----             ----            ----
<S>                                                    <C>             <C>              <C>              <C>
Net income                                             $       241,769 $        193,639 $        522,050 $       546,718
Per common share data:
  Net income per weighted
    average common share                                        $ 0.40           $ 0.36           $ 0.97          $ 1.01
  Book value                                                   $ 11.44           $ 8.65          $ 11.44          $ 8.65
Ratios:
  Return on average assets                                       0.74%            0.71%            0.59%           0.67%
  Return on average common equity                               14.34%           17.40%           12.12%          16.66%
  Net interest margin (taxable equivalent
    basis)                                                       3.97%            4.13%            3.86%           4.02%
  Expense ratio                                                  2.76%            2.68%            2.73%           2.73%
  Allowance for losses on loans / loans                          1.25%            1.32%            1.25%           1.32%
  Non-performing loans / loans                                   2.20%            0.64%            2.20%           0.64%
  Non-performing assets / loans and
    foreclosed properties                                        3.54%            1.38%            3.54%           1.38%
  Shareholders' equity / total assets                            5.38%            4.22%            5.38%           4.22%
  Leverage ratio (tangible capital /
    tangible average assets)                                     5.08%            4.88%            4.99%           5.09%
</TABLE>
                                       10
<PAGE>

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

As Of and for the Three and Nine Months Ended September 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 nine months  ended  September  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.

SUMMARY

The Company reported net income for the third quarter of $214,769 , or $0.40 per
common  share,  compared to income of  $193,639,  or $0.36 for the same period a
year ago. Our returns on average  assets and average  common equity were 0..74 %
and 14.34%,  respectively,  for the quarter compared to 0.71% and 17.40% for the
same period last year.



                                       11

<PAGE>



FINANCIAL CONDITION

Earning  Assets.  Average earning assets for the nine months ended September 30,
2001 totaled  $109,838,000  which  represents  92.73% of average  total  assets.
Earning  assets  totaled  $104,876,000  at September 30, 2001.  Average  earning
assets for the nine months ended September 30, 2000 totaled $100,108,000,  which
represented 92.52% of average total assets.  Earning assets totaled $100,738,000
at September 30, 2000.

Loan Portfolio.  The Company's average loans for the nine months ended September
30, 2001 were  $75,263,000 and for the nine months ended September 30, 2000 were
$71,161,000.  The Company's  average  loans for the quarter ended  September 30,
2001 were  $76,100,000 and were  $72,776,000 for the quarter ended September 30,
2000.  The balance in total loans at September 30, 2001 was  $74,999,000  and at
September 30, 2000 was $73,782,000.

Investment  portfolio.  The Company's  investment  securities portfolio averaged
$28,548,000 for the nine months ended September 30, 2001 and $26,956,000 for the
nine months  ended  September  30, 2000.  The  Company's  investment  securities
portfolio  averaged  $26,271,000  for the quarter  ended  September 30, 2001 and
averaged  $27,269,000  for the quarter ended  September 30, 2000.  The portfolio
totaled $26,214,000 at September 30, 2001 and $26,053,000 at September 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
September  30, 2001 there was a net  unrealized  gain in the  Available for Sale
securities  of $198,000 and there was a net  unrealized  loss of  $1,212,000  at
September 30, 2000.

Deposits.  The Company's  average deposits were $107,981,000 for the nine months
ended September 30, 2001. This included average non-interest bearing deposits of
$11,244,000,  average  certificates of deposit of  $68,877,000,  average savings
deposits of $5,136,000  and average  interest  bearing  transaction  accounts of
$22,724,000.

The Company's average deposits for the nine months ended September 30, 2000 were
$98,681,000. This included average non-interest bearing deposits of $10,981,000,
average  certificates  of deposit of $63,570,000,  average  savings  deposits of
$4,814,000 and average interest bearing transaction accounts of $19,316,000.

Deposits at September 30, 2001 totaled  $104,147,000 and totaled $101,120,000 at
September 30, 2000.

Securities sold under repurchase  agreements.  The Company's  average balance of
securities sold under repurchase  agreements for the nine months ended September
30, 2001 was $982,000 and the average was  $1,261,000  for the nine months ended
September 30, 2000. The total  outstanding  under these  agreements at September
30, 2001 was  $1,023,000  and the total  outstanding  at September  30, 2000 was
$925,000.

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 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
September  30,  2001 the rate on the note was  5.61%  per  annum.  Principal  is
payable  annually  commencing  January 31, 1996 and each January 31  thereafter.
Interest expense for the nine months ended September 30, 2001 totaled  $116,000.
The loan is secured by all of the stock of Citizens Bank of East Tennessee owned
by the Company.


                                       12

<PAGE>



Capital Resources.  Shareholder's equity totaled $$6,165,000 as of September 30,
2001.  This included  $5,000 of common stock,  $1,917,000 of additional  paid-in
capital,  $4,120,000 of retained  earnings and accumulated  other  comprehensive
income consisting of an unrealized gain on Securities Available for Sale, net of
deferred taxes, of $123,000.

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
September  30, 2001 and 2000,  the Company had  investments  in federal funds of
$4,600,000 and $1,875,000, 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 September 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  September  30,  2001 and 2000.  At  September  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 September 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  $1,023,000  and  $925,000 at
September 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 NINE MONTHS ENDED SEPTEMBER 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 incurred
on interest bearing deposits and other borrowed funds. The following  discussion
is based on a fully taxable equivalent basis.

Net  interest  income for the nine  months  ended  September  30,  2001  totaled
$3,135,000.  This was a result of interest  income of  $6,966,000  and  interest
expense of  $3,831,000.  Interest  and fee income on loans  totaled  $5,471,000,
interest income on the investment  portfolio  totaled  $1,293,000,  and interest
income on  federal  funds  sold  totaled  $202,000.  Interest  expense  included
$2,994,000 on certificates of

                                       13

<PAGE>



deposit, $568,000 on interest bearing transaction accounts,  $106,000 on savings
accounts,  $41,000 on securities  sold under  repurchase  agreements,  $6,000 on
Federal Home Loan Bank advances, and $116,000 on the note payable.

Net  interest  income for the nine  months  ended  September  30,  2000  totaled
$2,945,000.  This was a result of interest  income of  $6,588,000  and  interest
expense of  $3,643,000.  Interest  and fee income on loans  totaled  $5,262,000,
interest income on the investment  portfolio  totaled  $1,236,000,  and interest
income  on  federal  funds  sold  totaled  $90,000.  Interest  expense  included
$2,722,000 on certificates of deposit,  $604,000 on interest bearing transaction
accounts,  $108,000  on  savings  accounts,  $53,000  on  securities  sold under
repurchase  agreements,  $9,000 on Federal Home Loan Bank advances, and $147,000
on the note payable.

Net  interest  income for the three  months  ended  September  30, 2001  totaled
$1,054,000.  This was a result of interest  income of  $2,219,000  and  interest
expense of  $1,165,000.  Interest  and fee income on loans  totaled  $1,783,000,
interest  income on the  investment  portfolio  totaled  $391,000,  and interest
income on federal funds sold totaled $45,000. Interest expense included $952,000
on certificates of deposit,  $125,000 on interest bearing transaction  accounts,
$34,000  on  savings  accounts,  $12,000 on  securities  sold  under  repurchase
agreements,  $6,000 on Federal Home Loan Bank advances,  and $36,000 on the note
payable.

Net  interest  income for the three  months  ended  September  30, 2000  totaled
$997,000.  This was a result of  interest  income  of  $2,283,000  and  interest
expense of  $1,286,000.  Interest  and fee income on loans  totaled  $1,849,000,
interest  income on the  investment  portfolio  totaled  $406,000,  and interest
income on federal funds sold totaled $28,000. Interest expense included $966,000
on certificates of deposit,  $223,000 on interest bearing transaction  accounts,
$36,000  on  savings  accounts,  $7,000  on  securities  sold  under  repurchase
agreements,  $9,000 on Federal Home Loan Bank advances,  and $45,000 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 nine months ended September 30, 2001 was 3.86%.
The net cost of funds,  defined as interest  expense  divided by average earning
assets was 4.65% and the yield on earning  assets was 8.51% for the nine  months
ended  September  30, 2001.  The net  interest  margin for the nine months ended
September  30, 2000 was 4.02%.  The net cost of funds for the nine months  ended
September  30,  2000 was 4.85% and the yield on earning  assets  was 8.87%.  The
decrease in interest  rates  during the first nine months of 2001 had a negative
impact on the Company's net interest  margin.  It is anticipated that the impact
will lessen as rate sensitive liabilities re-price at lower rates.

The net interest margin for the three months ended September 30, 2001 was 3.97%.
The net cost of funds,  defined as interest  expense  divided by average earning
assets was 4.32% and the yield on earning  assets was 8.30% for the three months
ended  September  30, 2001.  The net interest  margin for the three months ended
September  30, 2000 was 4.13%.  The net cost of funds for the three months ended
September 30, 2000 was 5.05% and the yield on earning assets was 9.19%.

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 nine months ended September 30, 2001 was 3.41% and it was 3.63% for the nine
months

                                       14

<PAGE>



ended  September  30, 2000.  The interest rate spread for the three months ended
September  30,  2001 was  3.61% and it was  3.65%  for the  three  months  ended
September 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 $60,000 for the three months
ended September 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  September  30,  2001 was 1.25% of loans and
approximately  35%  of  non-performing  assets.  Management  believes  that  the
$938,000 at September  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 September 30, 2001 were $2,689,000,
or 3.54% of loans and foreclosed properties.  Non-performing assets at September
30, 2001 consisted of non-accrual loans of $476,000,  loans past due 90 days and
still accruing  interest of $1,171,000 and foreclosed real estate of $1,042,000.
Non-performing  assets at September 30, 2000 were $1,576,000,  or 1.38% of loans
and foreclosed assets.  Non-performing assets at September 30, 2000 consisted of
non-accrual loans of $470,000 loans past due 90 days and still accruing interest
of  $554,000  and   foreclosed   real  estate  of  $552,000.   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 $262,000 for the
nine months  ended  September  30, 2001.  This  included  $130,000  from service
charges on  deposit  accounts,  $79,000  from other  service  charges  and fees,
$12,000 of securities gains, and $41,000 of other non-interest income.

                                       15

<PAGE>



Total  non-interest  income for the nine  months  ended  September  30, 2000 was
$277,000.  This  included  $177,000  from service  charges on deposit  accounts,
$82,000 from other service  charges and fees, and $18,000 of other  non-interest
income.

Total  non-interest  income was $87,000 for the three months ended September 30,
2001. This included  $36,000 from service charges on deposit  accounts,  $26,000
from other service charges and fees,  $2,000 of securities gains, and $23,000 of
other non-interest income.

Total  non-interest  income for the three  months ended  September  30, 2000 was
$90,000. This included $61,000 from service charges on deposit accounts, $25,000
from other service charges and fees, and $4,000 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 nine months ended September
30, 2001 was  $2,422,000.  This consisted of $1,311,000 of salaries and employee
benefits,  $214,000 of occupancy  expenses,  $271,000 of furniture and equipment
expense,  and  $626,000  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  nine  months  ended  September  30,  2000  was
$2,218,000.  This  consisted of  $1,215,000  of salaries and employee  benefits,
$173,000 of occupancy expenses, $251,000 of furniture and equipment expense, and
$579,000 of other non-interest expenses.

Non-interest expense for the three months ended September 30, 2001 was $803,000.
This  consisted  of $436,000  of  salaries  and  employee  benefits,  $65,000 of
occupancy expenses, $104,000 of furniture and equipment expense, and $198,000 of
other non-interest expenses.

Non-interest expense for the three months ended September 30, 2000 was $732,000.
This  consisted  of $401,000  of  salaries  and  employee  benefits,  $51,000 of
occupancy expenses,  $93,000 of furniture and equipment expense, and $187,000 of
other non-interest expenses.

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

Income Taxes. For the nine months ended September 30, 2001, the Company incurred
income tax expense of $294,000.  For the nine months ended  September  30, 2000,
the Company  incurred income tax expense of $277,000.  Approximately  $88,000 of
income  earned for the nine  months  ended  September  30,  2001 is exempt  from
Federal  income  taxes.  Approximately  $141,000 of the income earned during the
nine months ended September 30, 2000 is exempt from Federal income taxes.

For the three months ended  September 30, 2001, the Company  incurred income tax
expense of $123,000.  For the three months ended September 30, 2000, the Company
incurred income tax expense of $101,000.  Approximately $30,000 of income earned
for the three months  ended  September  30, 2001 is exempt from  Federal  income
taxes.  Approximately $47,000 of the income earned during the three months ended
September 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
nine months ended  September  30, 2001 was 0.59%.  Return on assets for the nine
months ended September 30, 2000 was 0.67%. Return on assets for the three months
ended  September  30, 2001 was 0.74% and it was 0.71% for the three months ended
September 30, 2000.


                                       16

<PAGE>



Return on equity  (annualized net income divided by average equity) for the nine
months ended September 30, 2001 was 12.12% and it was 16.66% for the nine months
ended September 30, 2000.  Return on equity for the three months ended September
30,  2001 was  14.34% and it was 17.40%  for the three  months  ended  September
30,2000.

Equity to assets  (average equity divided by average total assets) was 5.38% for
the nine months  ended  September  30, 2001 and it was 4.22% for the nine months
ended September 30, 2000.  Equity to assets for the three months ended September
30, 2001 was 5.38% and it was 4.22% for the three  months  ended  September  30,
2000.

The dividend  payout ratio  (dividends  declared  divided by net income) for the
nine months ended  September 30, 2001 was 14.45%.  The dividend payout ratio for
the nine months ended September 30, 2000 was 11.83%.  No dividends were declared
during the three months ended September 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.


                                       17
<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

         None

Item 5. Other Information

         None


                                       18

<PAGE>



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 September 30, 2001.



                                       19

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


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


                                       20

<PAGE>


                                                                   EXHIBIT 23.1


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


     As  independent  public  accountants,  we hereby  consent to the use of our
report, dated October 19, 2001, included in this Quarterly Report on Form 10-QSB
for the Quarter Ended September 30, 2001.






                                                     Welch & Associates, Ltd.



Nashville, Tennessee
November 14, 2001


                                       21