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, 2002

           [ ] 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.YesX  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 August 13, 2002.

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


<PAGE>



                             VOLUNTEER BANCORP, INC.

                                      INDEX


Item 1.   FINANCIAL STATEMENTS

          Condensed Consolidated Balance Sheets June
          30, 2002 and 2001 (Unaudited)                                        3

          Condensed Consolidated Statements of Earnings and Comprehensive Income
          For The Three and Six Months Ended June 30, 2002 and 2001
          (Unaudited)                                                          4

          Condensed  Consolidated  Statements  of Cash  Flows For The Six Months
          Ended June 30, 2002 and 2001 (Unaudited)                             5

          Notes to Unaudited Condensed Consolidated Financial Statements
          Six Months Ended June 30, 2002 and 2001                              6

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                            19

Signatures                                                                    20




                                        1
<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, 2002 and 2001,  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.



/s/ Welch & Associates, Ltd.

August 8, 2002
Nashville, Tennessee





                                        2
<PAGE>



                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

                      Condensed Consolidated Balance Sheets

                             June 30, 2002 and 2001

                   (Unaudited- See Accountants' Review Report)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                   ASSETS                                                 2002                   2001
                                   ------                                     --------------------- ---------------------
<S>                                                                           <C>                   <C>
Cash and due from banks                                                       $           3,484,813 $           3,322,975
Federal fund sold                                                                         2,725,000             5,425,000
                                                                              --------------------- ---------------------
   Total cash and cash equivalents                                                        6,209,813             8,747,975
Investment securities available for sale (amortized cost of
  $29,746,913 and $27,298,020, respectively)                                             30,116,490            27,312,892
Investment securities held to maturity (estimated market
 $622,312 value of and $1,755,914)                                                          619,547             1,749,338
Loans, less allowances for loan losses of $1,275,854 and
  $993,915, respectively                                                                 68,643,098            75,792,641
Accrued interest receivable                                                                 983,239             1,160,623
Premises and equipment, net                                                               3,827,571             3,960,623
Deferred income taxes                                                                       116,671               144,605
Other real estate                                                                           906,061               902,168
Goodwill                                                                                    131,259               140,201
Other assets                                                                                281,033               176,160
                                                                              --------------------- ---------------------


Total assets                                                                  $         111,834,782 $         120,087,226
                                                                              ===================== =====================

                         LIABILITIES AND STOCKHOLDERS' EQUITY


Deposits:
   Non-interest bearing                                                       $          13,447,334 $          11,498,556
   Interest bearing                                                                      88,191,979            98,601,943
                                                                              --------------------- ---------------------
          Total deposits                                                                101,639,313           110,100,499

Interest payable                                                                            540,371             1,077,294
Securities sold under repurchase agreements                                               1,409,878               862,296
Note payable                                                                              1,810,000             2,170,000
Other accrued taxes, expenses and liabilities                                                70,775                59,329
                                                                              --------------------- ---------------------

Total liabilities                                                                       105,470,337           114,269,418
                                                                              --------------------- ---------------------

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                                                                        4,213,417             3,905,140
 Accumulated other comprehensive income                                                     229,138                (9,222)
                                                                              --------------------- ---------------------

Total stockholders' equity                                                                6,364,445             5,817,808
                                                                              --------------------- ---------------------

Total liabilities and stockholders' equity                                    $         111,834,782 $         120,087,226
                                                                              ===================== =====================

</TABLE>

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

                                        3
<PAGE>



                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

     Condensed Consolidated Statements of Earnings and Comprehensive Income

            For The Three and Six Months Ended June 30, 2002 and 2001

                  (Unaudited - See Accountants' Review Report)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                  Three months ended                   Six months ended
                                                                       June 30,                            June 30,
                                                                      ----------                          ----------

                                                                       2002              2001               2002               2001
                                                                       ----              ----               ----               ----
<S>                                                        <C>                <C>              <C>                <C>

Interest Income:
    Interest and fees on loans                             $        1,491,304 $      1,833,188 $        2,976,866 $       3,688,749
    Interest on federal funds                                          16,236           56,586             38,338           157,399
    Interest on investment securities:
          Taxable                                                     309,845          435,800            588,156           842,759
          Exempt from Federal income taxes                             57,479           28,250            101,016            58,608
                                                           ------------------ ---------------- ------------------ ------------------
               Total interest income                                1,874,864        2,353,824          3,704,376         4,747,515
                                                           ------------------ ---------------- ------------------ ------------------
Interest Expense:
    Interest on deposits                                              596,226        1,243,615          1,286,250         2,556,588
    Other borrowed funds                                               28,913           50,300             60,507           109,042
                                                           ------------------ ---------------- ------------------ ------------------
               Total interest expense                                 625,139        1,293,915          1,346,757         2,665,630
                                                           ------------------ ---------------- ------------------ ------------------
Net interest income                                                 1,249,725        1,059,909          2,357,619         2,081,885
Provision for possible loan losses                                    455,000           85,000            545,000           160,000
                                                           ------------------ ---------------- ------------------ ------------------
Net interest income after provision for possible
   loan losses                                                        794,725          974,909          1,812,619         1,921,885
                                                           ------------------ ---------------- ------------------ ------------------
Non-interest income:
    Service charges on deposits                                        54,623           41,997             93,608            93,933
    Other service charges and fees                                     47,645           38,801             55,121            53,094
    Securities gains                                                    4,980            1,677             39,222             9,604
    Other non-interest income                                          (7,471)             487             17,304            18,470
                                                           ------------------ ---------------- ------------------ ------------------
               Total non-interest income                               99,777           82,962            205,255           175,101
                                                           ------------------ ---------------- ------------------ ------------------
Non-interest expense:
    Salaries and employee benefits                                    470,386          428,248            909,473           875,521
    Occupancy expense                                                  79,209           78,593            149,172           148,795
    Furniture and equipment expense                                    93,193           84,999            195,047           166,584
    Other non-interest expense                                        447,304          224,038            730,575           427,662
                                                           ------------------ ---------------- ------------------ ------------------
                Total non-interest expense                          1,090,092          815,878          1,984,267         1,618,562
                                                           ------------------ ---------------- ------------------ ------------------
(Loss) earnings before income taxes                                  (195,590)         241,993             33,607           478,424
Income tax (benefit) expense                                          (85,535)          86,909             (9,195)          171,143
                                                           ------------------ ---------------- ------------------ ------------------
                Net (loss) income                          $         (110,055)$        155,084 $           42,802  $        307,281
                                                           ================== ================ ================== ==================

Other comprehensive income :
  Unrealized gain (loss) on securities available
     for sale, before tax                                  $          744,330 $       (76,014) $          432,573  $        438,409
  Reclassification for gains included in net income                    (4,980)         (1,677)            (39,222)           (9,604)
  Income taxes related to other comprehensive
       income                                                        (323,413)         29,522            (149,473)         (162,947)
                                                           ------------------ ---------------- ------------------ ------------------
                                                                      415,937         (48,169)            243,878           265,858
                                                           ------------------ ---------------- ------------------ ------------------

Total comprehensive income                                 $          305,882 $       106,915  $          286,680  $        573,139
                                                           ================== ================ ================== ==================

Net income (loss)per common share                          $           (0.20) $          0.29  $             0.08  $           0.57
                                                           ================== ================ ================== ==================

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>



                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

                 Condensed Consolidated Statements of Cash Flows

                 For The Six Months Ended June 30, 2002 and 2001

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


<TABLE>
<CAPTION>

                                                                                                   2002                  2001
                                                                                    -------------------   -------------------
<S>                                                                                 <C>                   <C>
Cash Flows from Operating Activities:
   Net income                                                                       $             42,802  $           307,281
Adjustments to reconcile net income to net cash
  provided by operating activities:
      Deferred income taxes                                                                     (151,209)              13,806
      Provision for possible loan losses                                                         545,000              160,000
      Provision for depreciation and amortization                                                107,291              121,021
      FHLB stock dividends                                                                        (8,100)             (12,000)
      (Gain) on securities                                                                       (39,222)              (9,604)
      Decrease in interest receivable                                                             83,240               52,696
      Decrease (increase)  in other assets                                                       226,498             (315,804)
      (Decrease) increase in other liabilities                                                  (315,667)            (127,436)
                                                                                    --------------------  -------------------
   Net cash provided by operating activities                                                     490,633              189,960
                                                                                    --------------------  -------------------

Cash Flows from Investing Activities:
   Purchase of investment securities held to maturity                                                  -             (705,141)
   Proceeds from calls and maturity of held to maturity securities                                 7,312               22,351
   Purchase of investment securities available for sale                                      (11,491,585)         (14,251,973)
   Proceeds from calls and maturity of securities available for sale                           2,000,000            4,606,695
   Proceeds from sale of securities available for sale                                         5,782,690            8,205,464
   Net decrease (increase) in loans                                                            2,970,058           (2,913,721)
   Capital expenditures                                                                          (68,504)             (20,659)
                                                                                    --------------------  -------------------
   Net cash (used) in investing activities                                                      (800,029)          (5,056,984)
                                                                                    --------------------  -------------------

Cash Flows from Financing Activities:
   Net increase in demand deposits, NOW accounts, IRA
      and savings accounts                                                                     4,866,661            2,908,166
   Net (decrease) increase in certificates of deposit                                         (7,137,003)           1,184,647
   Net increase (decrease) in securities sold under
      repurchase agreements                                                                      300,275             (190,217)
   Repayment of long-term borrowing                                                             (360,000)            (325,000)
   Payment of dividends                                                                          (53,903)             (75,464)
                                                                                    --------------------  -------------------
   Net cash (used) provided by financing activities                                           (2,383,970)           3,502,132
                                                                                    --------------------  -------------------
   (Decrease) in cash and cash equivalents                                                    (2,693,366)          (1,364,892)
Cash and cash equivalents beginning of period                                                  8,903,179           10,112,867
                                                                                    --------------------  -------------------
Cash and cash equivalents end of period                                             $          6,209,813  $         8,747,975
                                                                                    ====================  ===================

Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for:
      Interest                                                                      $          1,700,733  $         2,782,369
                                                                                    ====================  ===================
      Income taxes                                                                  $             98,026  $           293,754
                                                                                    ====================  ===================
</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, 2002 and 2001

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



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

          In the opinion of management,  the  accompanying  unaudited  condensed
          consolidated  financial  statements  of Volunteer  Bancorp,  Inc. (the
          "Company")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)
          ------------------------------------------------------------------
          On  January  1, 2002,  the  Company  adopted  Statement  of  Financial
          Accounting  Standard  No.  144,  "Accounting  for  the  Impairment  or
          Disposal of Long-Lived  Assets".  SFAS No. 144 supersedes SFAS No. 121
          and provides a single  accounting  model for  long-lived  assets to be
          disposed of. Although  retaining many of the  fundamental  recognition
          and   measurement   provisions   of  SFAS  No.  121,   the  new  rules
          significantly  change  the  criteria  that  would  have  to be  met to
          classify an asset as  held-for-sale.  SFAS No. 144 also supersedes the
          provisions of Accounting Principles Board (APB) Opinion 30 with regard
          to reporting  the effects of a disposal of a segment of a business and
          requires expected future operating losses from discontinued operations
          to be displayed in  discontinued  operations in the period(s) in which
          the losses are  incurred  (rather than as of the  measurement  date as
          presently required by APB Opinion 30). In addition,  more dispositions
          will  qualify  for  discontinued  operations  treatment  in the income
          statement. The adoption of SFAS No. 144 did not have a material impact
          on the Company's financial conditions 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, 2002 and 2001

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


          upon their acquisition. This Statement also addresses how goodwill and
          other  intangible  assets should be accounted for after they have been
          initially   recognized  in  the  financial   statements.   Under  this
          Statement,  goodwill and intangible assets that have indefinite useful
          lives  will  not be  amortized  but  rather  will be  tested  at least
          annually for  impairment.  Intangible  assets that have finite  useful
          lives will  continue to be  amortized  over their  useful  lives,  but
          without  the  constraint  of  an  arbitrary  ceiling.  This  Statement
          provides  specific  guidance for testing goodwill for impairment.  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.

          The Company adopted the provisions of Statement 142 effective  January
          1, 2002.  As of the date of  adoption,  the  Company  had  unamortized
          goodwill in the amount of  $131,259  and no  unamortized  identifiable
          intangible  assets.  As part of its  adoption of  Statement  142,  the
          Company has performed a transitional  impairment  test on its goodwill
          assets,  which indicated that no impairment  charge was required.  The
          Company does not currently have any other indefinite-lived  intangible
          assets  recorded in its  statement  of financial  condition.  The full
          impact of adopting  Statement 142 is expected to result in an increase
          in net  income of  approximately  $17,883 or  approximately  $0.03 per
          share in 2002 as a result of the Company no longer  having to amortize
          goodwill against earnings.  Assuming retroactive adoption of Statement
          142,  net  income  for the year ended  December  31,  2001 and the six
          months  ended June 30,  2001 would have been  $644,542  and  $316,223,
          respectively,  and  earnings per share would have been $1.19 and $0.59
          for the same periods, respectively.


          The  following  table sets forth the  reconcilement  of net income and
          earnings per share excluding goodwill  amortization for the year ended
          December 31, 2001 and six months ended June 30, 2001:

<TABLE>
<CAPTION>

                                                              For the Year Ended                For the Six Months Ended
                                                               December 31, 2001                     June 30, 2001
                                                      -------------------------------------------------------------------
                                                             Net             Earnings            Net         Earnings
                                                           Income            Per Share          Income       Per Share
                                                      ----------------- ----------------- ---------------  --------------
<S>                                                   <C>               <C>               <C>              <C>
Earnings per common share computation:
  Net income/EPS as reported                          $         626,659 $          1.16   $    307,281     $    0.57
  Add back: Goodwill amortization                                17,883            0.03          8,942          0.02
                                                      ----------------- ----------------- ---------------  --------------
    Adjusted net income /EPS                          $         644,542 $          1.19   $    316,223     $    0.59
                                                      ================= ================= ===============  ==============


</TABLE>

                                        7

<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

         Notes to Unaudited Condensed Consolidated Financial Statements

                     Six Months Ended June 30, 2002 and 2001





3.   Long-term debt
     --------------

     The  Company's  long-term  debt  consists of a single  note  payable in the
     amount  of   $1,810,000   and   $2,170,000  at  June  30,  2002  and  2001,
     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,  2002 the rate on the  note was  3.87%  per  annum.
     Principal is payable annually on January 31, as follows:

               January 31,                     Principal Due
               -----------                     -------------
                  2003                            395,000
                  2004                            435,000
                  2005                            470,000
          2006 (Final Maturity)                   510,000
                                           ----------------------
                                           $      1,810,000
                                           ======================
     The loan is secured by all of the stock of Citizens Bank of East  Tennessee
     owned by the Company.

     The Company is in violation of certain loan  covenants with respect to this
     loan in that annualized earnings to tangible assets are less than the 0.75%
     required and the ratio of nonperforming  assets is greater than 2.5%. These
     violations have not been waived by the lender.

     Because of these  violations,  the lender may, at its option,  by notice to
     the Company declare the note in default. In such an event the Company would
     have ten days to remedy compliance with all loan covenants.  If the Company
     did not or could not comply  with all loan  covenants  within  such ten day
     period the note would be in default.  In such a case the lender may declare
     the note  immediately  due and payable and among  other  things  proceed to
     foreclose upon 100% of the stock of Citizens Bank of East  Tennessee  which
     is pledged as security for the note.

     The lender has been  notified  by the  Company of its  non-compliance  with
     certain  covenants of the note that could lead to the lender  declaring the
     note in default.  However,  the lender has not notified the Company that it
     is in default under the terms of the loan agreement.

     The Company is in discussions with the lender and anticipates the lender to
     first pursue  remedies  other than  foreclosure.  Accordingly,  the Company
     expects  that the note  will be  restructured  resulting  in,  among  other
     things, increasing the interest rate on the note and substantially reducing
     the  final  maturity  date on the  note.  In such a case,  there  can be no
     assurance  that the Company  could  satisfy the  restructured  debt without
     obtaining new financing from other lenders or funds from a stock  offering.
     Further,  there can be no  assurance  that a stock  offering by the Company
     would be successful or that new lenders would provide funds to the Company.



                                        8
<PAGE>


                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY

         Notes to Unaudited Condensed Consolidated Financial Statements

                     Six Months Ended June 30, 2002 and 2001
--------------------------------------------------------------------------------
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.

5.   Certain Regulatory Matters
     --------------------------

     As a result of certain  findings in the  Tennessee  Department of Financial
     Institution's  Report  of  Examination  dated  June 4,  2001,  the Board of
     Directors  of the Bank  entered into a  Memorandum  of  Understanding  (the
     "Memorandum"),  dated  August  16,  2001,  with  the  Commissioner  of  the
     Tennessee  Department of Financial  Institutions  and the Memphis  Regional
     Director of the Federal  Deposit  Insurance  Corporation.  A Memorandum  of
     Understanding is an informal administrative tool for institutions that have
     some weaknesses that if not properly  addressed and corrected could lead to
     supervisory  concern  requiring  formal  administrative  action.  The areas
     addressed in the Memorandum cover capital  adequacy,  laws and regulations,
     data processing audit and review,  investment  policy maturity  strategies,
     adequate  documentation  of  each of the  foregoing  but  primarily  credit
     administration.  As a result, the Board has reviewed a number of the Bank's
     policies  and  procedures  including  its loan policy and has  incorporated
     recommendations designed to strengthen credit quality and the Bank's review
     procedures regarding loan loss reserve adequacy.  Management of the Company
     and the Bank believe that the Bank is in  substantial  compliance  with the
     provisions of the Memorandum.


                                        9
<PAGE>



                     VOLUNTEER BANCORP, INC. AND SUBSIDIARY
                              FINANCIAL HIGHLIGHTS
                  As of And For The Three And Six Months Ended
                             June 30, 2002 and 2001
                                   (Unaudited)

<TABLE>
<CAPTION>

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

                                                                       2002            2001            2002            2001
                                                                       ----            ----            ----            ----
<S>                                                              <C>             <C>             <C>             <C>

Net (loss) income                                                $ (110,055)     $ 155,084       $   42,802      $   307,281
Per common share data:
  Net (loss) income per weighted average
    common share                                                     ($0.20)     $    0.29       $     0.08      $      0.57
  Book value                                                         $11.81      $   10.79       $    11.81      $     10.79
Ratios:
  Return on average assets                                           (0.39)%          0.52%            0.08%            0.52%
  Return on average common equity                                    (7.08)%         10.76%            1.37%           11.04%
  Net interest margin (taxable equivalent basis)                      4.61 %          3.44%            4.30%            3.41%
  Expense ratio                                                       3.87 %          2.73%            3.50%            2.74%
  Allowance for loan losses / loans                                   1.82 %          1.29%            1.82%            1.29%
  Non-performing loans / loans                                        3.81 %          2.11%            3.81%            2.11%
  Non-performing assets / loans and
    foreclosed properties                                             5.04 %          3.25%            5.04%            3.25%
  Shareholders' equity / total assets                                 5.68 %          4.84%            5.68%            4.84%
  Leverage ratio (tangible capital /
    tangible average assets)                                          4.70 %          4.34%            4.64%            4.38%

</TABLE>



















                                       10

<PAGE>



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, 2002 and 2001

The  following  provides a narrative  discussion  and  analysis  of  significant
changes in the  results of  operations  and  financial  condition  of  Volunteer
Bancorp,  Inc. (the  "Company").  This discussion  should be read in conjunction
with the consolidated  financial  statements and related financial  analysis set
forth in the Company's 2001 Annual Report,  the interim  unaudited  consolidated
financial  statements  and notes for the three  months and six months ended June
30,  2002,  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 2002 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 the  Company's  ability  to execute  its
business plans. Although the Company believes that the expectations reflected in
the  forward-looking  statements  are  reasonable,  actual  results could differ
materially.

SUMMARY

The Company reported a net loss in the second quarter of ($110,055),  or ($0.20)
per common  share,  compared  to net income of  $155,084,  or $0.29 for the same
period a year ago. Our returns on average  assets and average common equity were
(0.39%) and (7.08%),  respectively, for the quarter compared to 0.52% and 10.76%
for the same period last year.

FINANCIAL CONDITION

Earning  Assets.  Average  earning assets for the six months ended June 30, 2002
totaled  $104,835,000  which represents 92.38% of average total assets.  Earning
assets totaled $102,104,000 at June 30, 2002. Average earning assets for the six
months

                                       11
<PAGE>

ended June 30, 2001 totaled  $110,776,000,  which represented  92.92% of average
total assets. Earning assets totaled $111,274,000 at June 30, 2001.

Loan  Portfolio.  The Company's  average loans for the six months ended June 30,
2002  were  $70,889,000  and  for  the six  months  ended  June  30,  2001  were
$74,835,000.  The  Company's  average  loans for the quarter ended June 30, 2002
were  $70,142,000 and were  $75,571,000 for the quarter ended June 30, 2001. The
balance in total loans at June 30, 2002 was $69,919,000 and at June 30, 2001 was
$76,787,000.

Investment  portfolio.  The Company's  investment  securities portfolio averaged
$29,030,000  for the six months ended June 30, 2002 and  $29,521,000 for the six
months  ended June 30,  2001.  The  Company's  investment  securities  portfolio
averaged   $30,213,000  for  the  quarter  ended  June  30,  2002  and  averaged
$30,104,000  for  the  quarter  ended  June  30,  2001.  The  portfolio  totaled
$30,736,000 at June 30, 2002 and $29,062,000 at June 30, 2001.

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, 2002 there was an unrealized  gain in the  Available for Sale  securities of
$370,000 and there was an unrealized loss of $15,000 at June 30, 2001.

Deposits.  The Company's  average deposits were  $104,474,000 for the six months
ended June 30, 2002.  This included  average  non-interest  bearing  deposits of
$12,192,000,  average  certificates of deposit of  $65,359,000,  average savings
deposits of $7,016,000  and average  interest  bearing  transaction  accounts of
$19,907,000.

The  Company's  average  deposits  for the six months  ended June 30,  2001 were
$109,219,000.   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
$18,821,000.

Deposits at June 30, 2002 totaled $101,639,313 and totaled $110,100,499 at June
30, 2001.

Securities sold under repurchase  agreements.  The Company's  average balance of
securities  sold under  repurchase  agreements for the six months ended June 30,
2002 was  $1,229,000  and the average was $976,000 for the six months ended June
30, 2001.  The total  outstanding  under these  agreements  at June 30, 2002 was
$1,410,000 and the total outstanding at June 30, 2001 was $862,000.

Note Payable.  The Company's long-term debt consists of a single note payable in
the amount of $1,810,000 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 June 30,
2002 the rate on the note was 3.87% per annum.  Principal  is  payable  annually
commencing January 31, 1996 and each January 31 thereafter. Interest expense for
the six months ended June 30, 2002 totaled  $24,000.  The loan is secured by all
of the  stock of  Citizens  Bank of East  Tennessee  owned by the  Company.  The
Company is in violation of certain loan  covenants  with respect to this loan in
that annualized earnings to tangible assets are less than required and the ratio
of  nonperforming  assets is greater than 2.5%.  These  violations have not been
waived by the lender.

Because of these  violations,  the lender may,  at its option,  by notice to the
Company declare the note in default. In such an event the Company would have ten
days to remedy  compliance  with all loan  covenants.  If the Company did not or
could not comply  with all loan  covenants  within  such ten day period the note
would be in default.  In such a case the lender may declare the note immediately
due and payable and among other  things  proceed to  foreclose  upon 100% of the
stock of Citizens  Bank of East  Tennessee  which is pledged as security for the
note.

The lender has been notified by the Company of its  non-compliance  with certain
covenants  of the note  that  could  lead to the  lender  declaring  the note in
default.  However, the lender has not notified the Company that it is in default
under the terms of the loan agreement.

                                       12
<PAGE>



The  Company is in  discussions  with the lender and  anticipates  the lender to
first pursue remedies other than foreclosure.  Accordingly,  the Company expects
that the note will be restructured resulting in, among other things,  increasing
the interest rate on the note and substantially reducing the final maturity date
on the note.  In such a case,  there can be no assurance  that the Company could
satisfy the restructured debt without obtaining new financing from other lenders
or funds from a stock offering.  Further, there can be no assurance that a stock
offering by the Company  would be  successful  or that new lenders would provide
funds to the Company.

Capital Resources.  Shareholder's equity totaled $6,364,000 as of June 30, 2002.
This included $5,000 of common stock,  $1,917,000 of additional paid-in capital,
$4,213,000  of retained  earnings and  accumulated  other  comprehensive  income
consisting  of an  unrealized  gain on  Securities  Available  for Sale,  net of
deferred taxes, of $229,000.

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 securities. Additional
sources of  liquidity  are loan  repayments  and possible  prepayments  from the
mortgage  backed  securities in the investment  portfolio.  At June 30, 2002 and
2001, the Company had investments in federal funds of $2,725,000 and $5,425,000,
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, 2002,  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, 2002 and 2001.  At June 30,  2002,  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, 2002 and 2001. 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 $1,410,000 and $862,000 at June 30, 2002 and 2001, respectively.

Additional  capital  funds or  long-term  debt are  anticipated  to be necessary
during the next twelve to eighteen months. There is no assurance that additional
capital  funds or other  long-term  debt can be obtained  under  current  market
condition.  The additional funds required  approximate  $1,810,000 or the amount
necessary to replace the Company's current note payable.  If the Company is able
to obtain new debt funding the Company  anticipates that the terms would be less
favorable than exist under the Company's current note payable.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001

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.

                                       13
<PAGE>



Net interest  income for the six months ended June 30, 2002 totaled  $2,358,000.
This was a result of  interest  income of  $3,704,000  and  interest  expense of
$1,346,000. Interest and fee income on loans totaled $2,977,000, interest income
on the investment  portfolio  totaled  $689,000,  and interest income on federal
funds sold totaled $38,000. Interest expense included $1,095,000 on certificates
of deposit,  $132,000  on  interest  bearing  transaction  accounts,  $58,000 on
savings accounts,  $24,000 on securities sold under repurchase  agreements,  and
$37,000 on the note payable.

Net interest  income for the six months ended June 30, 2001 totaled  $2,082,000.
This was a result of  interest  income of  $4,748,000  and  interest  expense of
$2,666,000. Interest and fee income on loans totaled $3,689,000, interest income
on the investment  portfolio  totaled  $902,000,  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 for the three months ended June 30, 2002 totaled $1,250,000.
This was a result of  interest  income of  $1,875,000  and  interest  expense of
$625,000.  Interest and fee income on loans totaled $1,491,000,  interest income
on the investment  portfolio  totaled  $367,000,  and interest income on federal
funds sold totaled $17,000.  Interest expense included  $497,000 on certificates
of deposit, $68,000 on interest bearing transaction accounts, $29,000 on savings
accounts, $12,000 on securities sold under repurchase agreements, and $19,000 on
the note payable.

Net interest income for the three months ended June 30, 2001 totaled $1,060,000.
This was a result of  interest  income of  $2,354,000  and  interest  expense of
$1,294,000. Interest and fee income on loans totaled $1,833,000, interest income
on the investment  portfolio  totaled  $464,000,  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.

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, 2002 was 4.60%.  The
net cost of funds, defined as interest expense divided by average earning assets
was 2.57% and the yield on earning  assets  was 7.17% for the six  months  ended
June 30, 2002.  The net  interest  margin for the six months ended June 30, 2001
was  3.81%.  The net cost of funds for the six months  ended  June 30,  2001 was
4.82% and the yield on earning assets was 8.63%.  The decrease in interest rates
during the first six months of 2002 had a positive  impact on the  Company's net
interest margin.

The net interest margin for the three months ended June 30, 2002 was 4.90%.  The
net cost of funds, defined as interest expense divided by average earning assets
was 2.40% and the yield on earning  assets was 7.30% for the three  months ended
June 30, 2002. The net interest  margin for the three months ended June 30, 2001
was 3.87%.  The net cost of funds for the three  months  ended June 30, 2001 was
4.66% and the yield on earning assets was 8.53%.

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, 2002 was 4.30% and it was 3.41% for the six months
ended June 30, 2001.  The  interest  rate spread for the three months ended June
30, 2002 was 4.61% and it was 3.44% for the three months ended June 30, 2001.

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

                                       14

<PAGE>



difficulty in collection or where there is an indication that the probability of
loss exists.  Lending  officers are responsible  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 $455,000 for the three months
ended June 30, 2002 and it was $85,000 for the three months ended June 30, 2001.
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,  2002  was  1.82%  of  loans  and
approximately  36%  of  non-performing  assets.  Management  believes  that  the
$1,276,000  at June 30,  2002 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, 2002 were $3,573,000,  or
5.04% of loans and foreclosed properties. Non-performing assets at June 30, 2002
consisted of non-accrual  loans of $1,141,000,  loans past due 90 days and still
accruing  interest of $1,526,000  and foreclosed  real estate of $906,000.  Non-
performing  assets  at June 30,  2001  were  $2,526,000,  or 3.25% of loans  and
foreclosed  assets.   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.   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 $205,000 for the
six months ended June 30, 2002.  This included  $94,000 from service  charges on
deposit  accounts,  $55,000  from other  service  charges  and fees,  $39,000 of
securities gains, and $17,000 of other non-interest income.

Total  non-interest  income for the six months ended June 30, 2001 was $175,000.
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 was $100,000 for the three months ended June 30, 2002.
This included  $55,000 from service  charges on deposit  accounts,  $48,000 from
other  service  charges and fees,  $5,000 of securities  gains,  and ($8,000) of
other non-interest income.

                                       15
<PAGE>


Total non-interest  income for the three months ended June 30, 2001 was $83,000.
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.

The increase in total non-interest  income is mainly attributable to an increase
in service charges on deposit accounts and other service charges and fees.

Non-Interest  Expense.  Non-interest  expense for the six months  ended June 30,
2002 was  $1,984,000.  This  consisted  of  $909,000 of  salaries  and  employee
benefits,  $149,000 of occupancy  expenses,  $195,000 of furniture and equipment
expense,  and  $731,000  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, 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.

Non-interest  expense for the three months  ended June 30, 2002 was  $1,090,000.
This  consisted  of $470,000  of  salaries  and  employee  benefits,  $79,000 of
occupancy expenses,  $93,000 of furniture and equipment expense, and $448,000 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.

The  increase in total  non-interest  expense is primarily  associated  with the
overall  growth of the Company and a write down in the  carrying  value of other
real estate owned of $222,000.

Income Taxes.  For the six months ended June 30, 2002,  the Company  incurred an
income tax benefit of  ($9,000.)  For the six months  ended June 30,  2001,  the
Company  incurred  income tax  expense of  $171,000.  Approximately  $101,000 of
income  earned for the six months  ended June 30,  2002 is exempt  from  Federal
income taxes.  Approximately  $59,000 of the income earned during the six months
ended June 30, 2001 is exempt from Federal income taxes.

For the three  months ended June 30,  2002,  the Company  incurred an income tax
benefit of  ($86,000.)  For the three months  ended June 30,  2001,  the Company
incurred income tax expense of $87,000.  Approximately  $57,000 of income earned
for the three months ended June 30, 2002 is exempt from  Federal  income  taxes.
Approximately  $28,000 of the income  earned  during the three months ended June
30, 2001 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,  2002 was 0.08%.  Return on assets for the six months
ended June 30, 2001 was 0.52%.  Return on assets for the three months ended June
30, 2002 was (0.39%) and it was 0.52% for the three months ended June 30, 2001.

Return on equity  (annualized  net income divided by average equity) for the six
months  ended June 30, 2002 was 1.37% and it was 11.04% for the six months ended
June 30,  2001.  Return on equity for the three  months  ended June 30, 2002 was
(7.08%) and it was 10.76% for the three months ended June 30,2001.

Equity to assets  (average equity divided by average total assets) was 5.51% for
the six  months  ended June 30,  2002 and it was 4.72% for the six months  ended
June 30,  2001.  Equity to assets for the three  months  ended June 30, 2002 was
5.52% and it was 4.82% for the three months ended June 30, 2001.

The dividend payout ratio (dividends declared divided by net income) for the six
months  ended June 30, 2002 was 125.93%.  The dividend  payout ratio for the six
months ended June 30, 2001 was 24.55%.  No dividends  were  declared  during the
three months ended June 30, 2002 and 2001 and,  accordingly,  no dividend payout
ratio is presented for those quarters.

                                       16
<PAGE>



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

At the Annual Meeting on May 16, 2002, the shareholders voted on the following
proposals with the results as indicated:

1.  Elected  four of its current  directors to continue in office until the 2005
meeting of shareholders.  Current  directors elected to three-year terms were as
follows:

                                 FOR                          WITHHOLD AUTHORITY
                                -----                         ------------------
William E. Phillips           377,716                                 0
Neil D. Miller                377,716                                 0
Scott F. Collins              377,716                                 0
Lawrence E. Gray              377,716                                 0

Directors  continuing to serve include:  Reed D. Matney,  Shirley Price,  Carlin
Green,  Douglas  Price,  Gary  Varnell,  George  Brooks,  Jim  Friddell and Leon
Gladson.

2.  Ratified  the  appointment  of Welch &  Associates,  Ltd.  as the  Company's
independent accounts and auditors for 2002 as follows:

FOR             AGAINST               ABSTAIN                   BROKER NON-VOTES
----            -------               -------                   ----------------
375,435           115                  2,166                           0


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

               Exhibit 99.1  Certification Pursuant to 18 U.S.C. Section 1350,as
                             Adopted   Pursuant   to   Section   906   of    the
                             Sarbanes-Oxley  Act  of 2002,  signed  by  Reed  D.
                             Matney,  the  President  of Volunteer Bancorp, Inc.
                             on August 14, 2002.

               Exhibit 99.2  Certification  Pursuant to 18 U.S.C. Section 1350,
                             Adopted   Pursuant   to   Section   906   of   the
                             Sarbanes-Oxley Act of 2002,  signed by G.  Douglas
                             Price,  the   principal  accounting  and  financial
                             officer  of  Volunteer   Bancorp,  Inc.  on  August
                             14,  2002.

        (b)    There  have been no Current Reports on Form 8-K filed  during the
               quarter ended June 30, 2002.



                                       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: August 14, 2002                              /s/ Reed D. Matney
                                                   -----------------------------
                                                   Reed D. Matney, President
                                                   (principal executive officer)


Date: August 14, 2002                              /s/ G. Douglas Price
                                                   -----------------------------

                                                   G. Douglas 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 August 8, 2002,  included in this Quarterly Report on Form 10-QSB
for the Quarter Ended June 30, 2002.




                                                     s/ Welch & Associates, Ltd.
                                                     ---------------------------
                                                     Welch & Associates, Ltd.



Nashville, Tennessee
August 13, 2002

                                       21

<PAGE>
                                                                    Exhibit 99.1
                                  CERTIFICATION

                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002


     Pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to Section 906 of
the  Sarbanes-Oxley  Act of 2002, and in connection with the quarterly report on
Form 10-QSB of Volunteer  Bancorp,  Inc. (the  "Company")  for the quarter ended
June 30, 2002, as filed with the Securities and Exchange  Commission on the date
hereof (the "Report"),  the  undersigned,  Reed D. Matney,  the President of the
Company,   hereby  certifies  that  (1)  the  Report  fully  complies  with  the
requirements  of Section 13(a) or 15(d) of the Securities  Exchange Act of 1934,
and (2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

      This Certification is signed on August 14, 2002.





                                      /s/ Reed D. Matney
                                      ------------------------------------------
                                      Reed D. Matney
                                      President



<PAGE>



                                                                    Exhibit 99.2
                                  CERTIFICATION
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002


     Pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to Section 906 of
the  Sarbanes-Oxley  Act of 2002, and in connection with the quarterly report on
Form 10-QSB of Volunteer  Bancorp,  Inc. (the  "Company")  for the quarter ended
June 30, 2002, as filed with the Securities and Exchange  Commission on the date
hereof  (the  "Report"),  the  undersigned,  G.  Douglas  Price,  the  principal
accounting and financial  officer of the Company,  hereby certifies that (1) the
Report fully  complies  with the  requirements  of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, and (2) the information contained in the Report
fairly presents,  in all material respects,  the financial condition and results
of operations of the Company.

     This Certification is signed on August 14, 2002.




                                     /s/ G. Douglas Price
                                     -----------------------------------------
                                     G. Douglas Price
                                     principal accounting and financial officer)