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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                     THE SECURITIES AND EXCHANGE ACT OF 1934

                   For the Fiscal Year ended December 31, 2000

                          Commission File No. 333-4984

                                PCB BANCORP, INC.
             (Exact Name of Registrant as Specified in its Charter)

              Tennessee                                       62-1641671
      (State or other jurisdiction                         (I.R.S. Employer
          of incorporation)                              Identification Number)

300 Sunset Dr : Johnson City, Tennessee                         37604
(Address of Principal Executive Office)                       (Zip Code)

                                 (423) 915-2222
                 (Issuer's Telephone Number Including Area Code)

      Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
                                      None

Indicate by the check mark whether the Issuer: (1) has filed all reports
required by Section 13 or 15 (d)of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                               Yes [X]  No [ ]

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB

                               Yes [X]  No [ ]

         State issuer's revenues for its most recent fiscal year:

                                   $ 9,319,937

The aggregate market value of the issuer's voting stock held by non-affiliates,
computed by reference the price at which the stock was sold as of March 2, 2001,
is $14,005,131 for 666,911 shares, at an estimated $21.00 per share.

                                     817,700

      (Outstanding shares of the issuer's common stock as of March 2, 2001)
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PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

         PCB Bancorp, Inc. (the "Company" or "PCB") is a registered bank holding
company which was incorporated under Tennessee law in May 1996. The Company's
activities are conducted through its wholly-owned subsidiary, People's Community
Bank (the "Bank"), a Tennessee state bank which began business in December 1995.
The Bank was acquired by the Company in a tax-free share exchange in October of
1996, and after five years of operations, on December 31, 2000, the Bank had
grown to total assets of more than $119,314,000.

         The Bank's primary trade area is Johnson City, Tennessee, which had a
population of 55,000 according to the 2000 Census. Current population is
estimated to be 54,000.

         At the present time, the Bank operates a full service banking business
through it main office and branch locations in Johnson City. The Bank provides
such customary banking services as checking and savings accounts, various other
types of time deposits, safe deposit facilities and money transfers. It also
finances commercial transactions, makes secured and unsecured loans, and
provides other financial services to its customers. The Bank is not authorized
to provide trust services.

         The Bank considers its primary market for loans and deposits to be
individuals, small-to-medium size businesses and professionals in Johnson City,
Tennessee. The Bank is actively soliciting business in this target market and
considers the potential growth opportunities to be favorable. No material
portion of the Bank's deposits have been obtained from any single person or
group of persons.

         The Bank is subject to the regulatory authority of the Department of
Financial Institutions of the State of Tennessee and the Federal Deposit
Insurance Corporation ("FDIC").

         The Bank has approximately 41 full-time employees (excluding
maintenance employees) as of December 31, 2000.

Competition

         Competition for consumer demand and savings deposits is quite intense
in Washington County. Such competition is heightened by the fact that Tennessee
law now permits any bank or savings institution located in Tennessee to branch
in any county in Tennessee. The Bank currently competes in the Washington County
area with ten commercial banks and two savings institutions. The Bank also
competes generally with insurance companies, credit unions, and other financial
institutions, and institutions which have expanded into the quasi-financial
market, including some institutions that are much larger than the Bank. Many of
the institutions with which the Bank competes have been located in Washington
County for many years and have much greater resources and deposit strength, as
well as offering services such as securities investing and trust services which
the Bank does not provide to its customers.

Loans

         Various types of secured and unsecured commercial, consumer and real
estate loans are offered by the Bank. The Bank's current policy is to make loans
primarily to borrowers who maintain depository relationships with the Bank or
reside or work in the Bank's market areas. Real estate loans usually are made
only when such loans are secured by real property located in Washington County.
In addition, the Bank purchases finance contracts for motor vehicles.

         The Bank provides each lending officer with written loan guidelines.
Lending authority is delegated by the Board of Directors to loan officers, each
of who has limited authority to extend secured and unsecured credit. Any credit
in excess of $650,000 must have the approval of the Loan Committee of the Board
of Directors (the "Loan Committee"), which consists of both management and
non-management directors of the Bank.

Loan Review


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         The Bank continually reviews its loan portfolio to determine
deficiencies and the corrective actions to be taken. The Bank grades its loans
with respect to quality and risk and requires each loan officer to assign a
grade when a loan is booked and to review loan grades annually. During 2000 The
Bank changed from an external review of loans to adding an experienced loan
review officer who is responsible for loan review. The Bank's loan review
officer does not have loan origination responsibilities and conducts reviews of
all borrowers with aggregate indebtedness in excess of $100,000. During 2000
approximately 26% of the dollar amount of the Bank's loan portfolio was reviewed
by loan review. All the new loans are reviewed within three months of origin.
The Bank's loan review officer advises as to the quality, structure and
renewability of the loans and assigns each loan grade. An internal loan officer
committee reviews past due loans and technical exceptions at least weekly, and
the Loan Committee reviews a summary report of such loans monthly.

Investment Policy

         The Bank's general investment portfolio policy is to provide maximum
safety of funds invested to insure solvency and to balance risk taken in other
areas of funds management, to provide sufficient liquidity, to provide maximum
return on funds invested, to meet basic pledging requirements and to comply with
all laws and regulations. Both the Bank's Asset/Liability Committee and the
Board of Directors review this policy from time to time. Individual
transactions, portfolio composition and performance are reviewed and approved
monthly by the Board of Directors or a committee thereof. The CEO of the Bank
implements the policy and reports to the full Board of Directors on a monthly
basis information as to maturities, sales, purchases, resultant gains or losses,
average maturity, federal taxable equivalent yields and appreciation or
depreciation by investment category.

Monetary Policies

         The result of operations of the Bank and the Company are affected by
credit policies of monetary authorities, particularly the Federal Reserve Board.
The instruments of monetary policy employed by the Federal Reserve Board include
open market operations in U.S. government securities, changes in the discount
rate on bank borrowings and changes in reserve requirements against bank
deposits. In view of changing conditions in the national economy and in the
money markets, as well as the effects of actions by monetary and fiscal
authorities, including the Federal Reserve Board, no prediction can be made as
to possible future changes in interest rates, deposit levels, loan demand or the
effect of such matters on the business and earnings of the Company.

Personnel

         At December 31, 2000, the Company had approximately 41 full-time
equivalent employees. The Company is not a party to any collective bargaining
agreement and believes that its employee relations generally are good.

         In August of 2000 Eddie W. Ward was hired as Vice President with
responsibilities for compliance, loan review, and audit.

         In September of 2000 Samantha Bruce was promoted from Accounting
Manager to Assistant Vice President and Chief Financial Office.

Supervision and Regulation

         The Company and the Bank are subject to extensive regulation under
state and federal statutes and regulations. The discussion in this section,
which briefly summarizes certain of such statutes, does not purport to be
complete, and is qualified in its entirety by reference to such statutes. Other
state and federal legislation and regulations directly and indirectly affecting
banks and other financial institutions likely are to be enacted or implemented
in the future; however, such legislation and regulations and their effect on the
business of the Company and the Bank cannot be predicted.

PCB Bancorp, Inc.

         The Company is a bank holding company subject to the supervision of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board")
under the Bank Holding Company Act of 1956, as amended. As a bank holding
company, the Company is required to file annual reports with, and is subject to
examination by the Federal Reserve Board.

People's Community Bank.


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         The Bank is incorporated under the banking laws of the State of
Tennessee, and as such, is subject to the provisions of the Tennessee Banking
Act and the supervision of and the regular examination by the Tennessee
Department of Financial Institutions (the "Department"). The Bank is a member of
the FDIC and, therefore, also is subject to the provisions of the Federal
Deposit Insurance Act and to supervision and examination by the FDIC.

         Capital. The Federal Reserve Board and the FDIC have adopted final
risk-based capital guidelines for bank holding companies. The minimum guidelines
for the ratio of total capital ("Total Capital") to risk weighted assets
(including certain off-balance sheet activities, such as standby letters of
credit) is 8.00%. At least half of the Total Capital must be composed of "Tier 1
or core capital," which consists of common stockholders' equity, minority
interests in the equity accounts of consolidated subsidiaries non-cumulative
perpetual preferred stock, less goodwill ("Tier 1 Capital"). The remainder, Tier
2 Capital, may consist of subordinated debt, other preferred stock, and a
limited amount of loan loss reserves. At December 31, 2000, the Company's
risk-based Tier 1 Capital and risk-based Total Capital ratios were 10.5% and
11.6%, respectively. At December 31, 1999, the Company's risk-based Tier 1
Capital and risk-based Total Capital ratios were 10.3% and 11.3%, respectively.

         In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for bank holding companies. These guidelines provide for a
minimum leverage ratio (Tier 1 Capital to total assets, less goodwill) of 4% to
5% for most bank holding companies. The Company's leverage ratio at December 31,
2000 was 8.1% and at December 31, 1999 was 8.7%.

         Failure to meet FDIC capital requirements can subject an FDIC-insured
state bank to a variety of enforcement remedies, including issuance of a capital
directive, termination of deposit insurance and a prohibition on the taking of
brokered deposits. Substantial additional restrictions can be imposed under the
"prompt corrective action" regulations, as described below.

         Payment of Dividends. The Company is a legal entity separate and
distinct from the Bank. The principal source of the Company's revenues, however,
is from dividends declared by the Bank. Under Tennessee law, the Bank can only
pay dividends out of its undivided profits, which at December 31, 2000 were
approximately $1,483,766. This amount will be increased by the Bank's net
earnings and decreased by any losses. The Bank's ability to pay dividends also
may depend on its ability to meet minimum capital levels established from time
to time by FDIC. Under such regulations, FDIC-insured state banks are prohibited
from paying dividends, making other distributions or paying any management fee
to a parent if, after such payment, the Bank would fail to have a risk-based
Total Capital ratio of 8% and a Tier 1 leverage capital ratio of 4%. In 2000,
the Bank paid a dividend of $251,357 to the Company to pay stockholder
dividends.

         Under Tennessee law, the Company may pay common stock dividends if,
after giving effect to the dividends, the Company can pay its debts as they
become due in the ordinary course of business and the Company's total assets
exceed its total liabilities. The payment of dividends by the Company also may
be affected or limited by certain factors, such as the requirements to maintain
adequate capital above regulatory guidelines. In addition, if, in the opinion of
the applicable regulatory authority, a bank holding company or a bank under its
jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the bank, could include
the payment of dividends), such authority may take supervisory actions to
prevent such action, including a cease and desist order prohibiting such
practice. In 2000, the Company paid quarterly dividends equivalent to $.06 per
outstanding share.

         The Company's Support of the Bank. Under the Federal Reserve Board
policy, the Company is expected to act as a source of financial strength and to
commit resources to the Bank. Such support may be required at times when, absent
such Federal Reserve Board policy, the Company may not be inclined to provide
it.

         Under the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 ("FIRREA"), a depository institution insured by the FDIC can be held
liable for any loss incurred by, or reasonably expected to be incurred by, the
FDIC in connection with (I) the default of a commonly controlled FDIC-insured
depository institution or (II) any assistance provided by the FDIC to any
commonly controlled FDIC-insured depository institution "in danger of default."
"Default" is defined generally as the appointment of a conservator or receiver
and "in danger of default" is defined generally as the existence of certain
conditions indicating that a default is likely to occur in the absence of
regulatory assistance.

         Any capital loans by a bank holding company to any of its subsidiary
banks are subordinate in right or payment to deposits and to certain other
indebtedness of such subsidiary banks. In the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank must be assumed
by the bankruptcy trustee and entitled to a priority of payment over certain
other creditors.


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Prompt Corrective Action

         The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") requires the Federal banking regulators to assign to each insured
institution one of five capital categories ("well-capitalized", "adequately
capitalized" or one of three under-capitalized categories) and to take
progressively more restrictive regulatory actions depending upon the assigned
category. Under the "prompt corrective action" regulations adopted pursuant to
FDICIA, in order to be considered "adequately capitalized", national banks must
have a risk-based Tier 1 Capital ratio of at least 4%, a risk-based Total
Capital ratio of 8% and a Tier 1 leveraged capital ratio of at least 4%.
Well-capitalized institutions are those which have a risk-based Tier 1 Capital
ratio above 6%, a risk-based Total Capital ratio above 10% and a Tier 1
leveraged capital ratio above 5%, and which are not subject to a written
agreement, order or capital directive to maintain capital at a specific level.
The Bank is considered a "well-capitalized" institution under these definitions.

All institutions, regardless of their capital levels, are restricted from making
any capital distribution or paying any management fees that would cause the
institution to fail to satisfy the minimum levels to be considered adequately
capitalized. An institution that fails to meet the minimum level for any
relevant capital measure (an "undercapitalized institution") is: (I) subject to
increased monitoring by the appropriate federal banking regulator, (II) required
to submit an acceptable capital restoration plan within 45 days, (III) subject
to asset growth limits, and (IV) required to obtain prior regulatory approval
for acquisitions, branching, and new lines of business. The capital restoration
plan must include a guarantee by the institution's holding company that the
institution will comply with the plan until it has been adequately capitalized
on average for four consecutive quarters. Pursuant to the guarantee, the
institution's holding company would be liable up to the lesser of 5% of the
institutions total assets or the amount necessary to bring the institution into
capital compliance as of the date it failed to comply with its capital
restoration plan. If the controlling bank holding company fails to fulfill its
obligations under the Federal Bankruptcy Code, the appropriate federal banking
regulator could have a claim as a general creditor of the bank holding company,
and, if the guarantee were deemed to be a commitment to maintain capital under
the Federal Bankruptcy Code, the claim would be entitled to priority in such
bankruptcy proceeding over third-party creditors and shareholders of the bank
holding company.

         The bank regulatory agencies have discretionary authority to reclassify
well-capitalized institutions as adequately capitalized or to impose on
adequately capitalized institutions requirements or actions specified for
undercapitalized institutions if the agency determines after notice and an
opportunity for hearing that the institution is in an unsafe or unsound
condition or is engaging in an unsafe or unsound practice, which can consist of
the receipt of an unsatisfactory examination rating if the deficiencies cited
are not corrected. A significantly undercapitalized institution, as well as any
restoration plan, may be subject to regulatory demands for recapitalization,
broader applications of restrictions on transactions with affiliates,
limitations on interest rates paid on deposits, asset growth and other
activities, possible placement of directors and officers, and restrictions on
capital distributions by any bank holding company controlling the institution.
Any company controlling the institution could also be required to divest the
institution or the institution could be required to divest subsidiaries. The
senior executive officers of a significantly undercapitalized institution may
not receive bonuses or increases in compensation without prior approval and the
institution is prohibited from making payments of principal or interest on its
subordinated debt. If an institution's ratio of tangible capital to total assets
falls below a level established by the appropriate federal banking regulator
(the "Critical capital level"), which may not be less than 2% nor more than 65%
of the minimum tangible capital level otherwise required, the institution will
be subject to conservatorship or receivership within 90 days unless periodic
determinations are made that forbearance from such action would better protect
the deposit insurance fund. Unless appropriate findings and certifications are
made by the appropriate federal bank regulatory agencies, a critically
undercapitalized institution must be placed in receivership if it remains
critically undercapitalized on average during the calendar quarter beginning 270
days after the date it became critically undercapitalized.

         Acquisition and Expansion. The Bank Holding Company Act requires any
bank holding company to obtain the prior approval of the Federal Reserve Board
before it may acquire substantially all the assets of any bank, or ownership or
control of any voting shares of any bank, if, after acquiring such shares, it
would own or control directly or indirectly, more than 5% of the voting shares
of such bank. Effective September 29, 1995, the Tennessee Bank Structure Act of
1974 was amended to, among other things, prohibit (subject to certain
exceptions) a bank holding company from acquiring a bank for which the home
state is Tennessee if, upon consummation, the company would directly or
indirectly control 30% or more of the total deposits in insured depository
institutions in Tennessee. As of December 31, 2000, the Company estimates it
held less than 1% of such deposits. Subject to certain exceptions, the Tennessee
Bank Structure Act prohibits a bank holding company from acquiring a bank in
Tennessee, which has been in operation for less than five years. Tennessee banks
may open additional branches in any county in the state.


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         The Reigle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "IBBEA") authorizes interstate acquisitions of banks and bank holding
companies without geographic limitation beginning one year after enactment. In
addition, beginning June 1, 1997, a bank may merge with a bank in another state
as long as neither of the states has opted out of interstate branching between
the date of enactment of the IBBEA and May 31, 1997. The IBBEA further provides
that states may enact laws permitting interstate merger transactions prior to
June 1, 1997. A bank may establish and operate a de novo branch in a state in
which the bank does not maintain a branch if that state expressly permits de
novo branching. Once a bank has established branches in a state through an
interstate merger transaction, the bank may establish and acquire additional
branches at any location in the state where any bank involved in the interstate
merger transaction could have established or acquired branches under applicable
federal or state law. A bank that has established a branch in a state through de
novo branching may establish and acquire additional branches in such state in
the same manner and to the same extent as a bank having a branch in such state
as a result of an interstate merger. If a state opts out of interstate branching
within the specified time period, no bank in any other state may establish a
branch in the opting out of state, whether through an acquisition or de novo.
Tennessee law allows banks and bank holding companies in any state to acquire
banks and bank holding companies in Tennessee provided that the state in which
such acquirer is headquartered also permits Tennessee banks and bank holding
companies to acquire banks and bank holding companies in that state.
Acquisitions of banks or bank holding companies in Tennessee require the
approval of the Commissioner of Financial Institutions.

         The Bank Holding Company Act also prohibits a bank holding company,
with certain exceptions, from acquiring more than 5% of the voting shares of any
company that is not a bank and from engaging in any business other than banking
or managing or controlling banks. The Federal Reserve Board is authorized to
approve ownership of shares by a bank holding company in any company, the
activities of which the Federal Reserve Board has determined to be so closely
related to banking or to managing or controlling banks as to be a proper
incident thereto. Certain activities have been found to be closely related to
banking by Federal Reserve Board regulations, including operating a trust
company, a mortgage company, finance company or factoring company, performing
data processing operations, providing investment advice, and engaging in certain
kinds of credit-related insurance activities.

         FDIC Insurance Assessments; DIFA. The FDIC reduced the insurance
premiums it charges on bank deposits insured by the Bank Insurance Fund ("BIF")
to the statutory minimum of $2,000.00 for "well-capitalized" banks, effective
January 1, 1996. Premiums related to deposits assessed by the Savings
Association Insurance Fund ("SAIF"), including savings association deposits
acquired by banks, continued to be assessed at a rate of between 23 cents and 31
cents per $100.00 of deposits. On September 30, 1996, the Deposit Insurance
Funds Act of 1996 ("DIFA") was enacted and signed into law. DIFA provided for a
special assessment to recapitalize the SAIF to bring the SAIF up to statutory
required levels. The assessment imposed a one-time fee to banks that own
previously acquired thrift deposits of $.526 per $100 of thrift deposits they
held at March 31, 1995. This assessment did not apply to the Company. DIFA
further provides for assessments to be imposed on insured depository
institutions with respect to deposits insured by the BIF (in addition to
assessments currently imposed on depository institutions with respect to
SAIF-insured deposits) to pay for the cost of Financing Corporation ("FICO")
bonds. All banks will be assessed to pay the interest due on FICO bonds starting
on January 1, 1997. The Company expects the cost to the Company to be
immaterial.

         Under the FDICIA, insurance of deposits may be terminated by the FDIC
upon finding that the institution has engaged in unsafe and unsound practices,
is in unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by a federal bank
regulatory agency.

         The Bank Holding Company Act also prohibits a bank holding company,
with certain exceptions, from acquiring more than 5% of the voting shares of any
company that is not a bank and from engaging in any business other than banking
or managing or controlling banks. The Federal Reserve Board is authorized to
approve ownership of shares by a bank holding company in any company, the
activities of which the Federal Reserve Board has determined to be so closely
related to banking or to managing or controlling banks as to be a proper
incident thereto. Certain activities have been found to be closely related to
banking by Federal Reserve Board regulations, including operating a trust
company, mortgage company, finance company or factoring company; performing data
processing operations; providing investment advice; and engaging in certain
kinds of credit-related insurance activities.

         Certain Transactions by the Company with its Affiliates. There also are
various legal restrictions on the extent to which the Company and any nonbank
subsidiary can borrow or otherwise obtain credit from its bank subsidiaries. An
insured bank and its subsidiaries are limited in engaging in "covered
transactions" with its nonbank or nonsavings bank affiliates to the following
amounts: (I) in the case of any such affiliate, the aggregate amount of covered
transactions of the insured bank and its subsidiaries will not exceed 10% of the
capital stock and surplus of the insured bank; and (II) in the case of all
affiliates, the aggregate amount of the


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covered transactions of the insured bank and its subsidiaries will not exceed
20% of the capital stock and surplus of the Bank. "Covered Transactions" are
defined by statute to include a loan or extension of credit, as well as purchase
of securities issued by an affiliate, a purchase of assets (unless otherwise
exempted by the Federal Reserve Board), the acceptance of securities issued by
the affiliate as a collateral for a loan and the issuance of a guarantee,
acceptance, or letter of credit on behalf of an affiliate. Further, a bank
holding company and its subsidiaries are prohibited from engaging in certain
tie-in arrangements in connection with any extension of credit, lease or sale of
property or furnishing of services.

         Recent Banking Legislation.

         The most significant new legislation was the passage of the
Gramm-Leach-Bliley (GLB) Act of 1999. The Act sweeps away large parts of the
regulatory structure established in the 1930's and creates new opportunities for
banks, other depository institutions, insurance companies, and securities firms
to enter into combinations that permit a single financial services organization
to offer customers a complete array of financial services. The 1999 financial
services reforms dramatically increase the ability of eligible banking
organizations to affiliate with insurance, securities, and other financial firms
and insured depository institutions.

         Under the GLB Act, two types of banking organizations may engage in
expanded securities activities. The act authorizes a new type of bank holding
company called a financial holding company (FHC) to have a subsidiary company
that engages in securities underwriting and dealing without limitation as to the
types of securities involved. The GLB Act enlarges the activities in which a
bank holding company may engage and authorizes affiliations with a broader range
of nonblank enterprises than the prior provisions of the Bank Holding Company
Act permitted. New regulatory standards must be satisfied for an FHC or a
financial subsidiary to qualify for the new types of securities activities.
Banking institutions will face a new host of challenges, as well as,
opportunities as a result of the GLB Act.

         In addition to the matters discussed above, FDICIA made other extensive
changes to the federal banking laws.

         Standards for Safety and Soundness. FDICIA requires the federal bank
regulatory agencies to prescribe, by regulation, standards for all insured
depository institutions and depository institution holding companies relating
to: (I) internal controls, information systems and audit systems; (II) loan
documentation; (III) credit underwriting; (IV) interest rate risk exposure; (V)
asset growth; and (VI) compensation, fees and benefits. The compensation
standards must prohibit employment contracts, compensation or benefit
arrangements, stock option plans, fee arrangements or other compensatory
arrangements that would provide excessive compensation, fees or benefits that
could lead to material financial loss, but (subject to certain exceptions) may
not prescribe specific compensation levels or ranges for directors, officers or
employees. In addition, the federal banking regulatory agencies would be
required to prescribe by regulation standards specifying: (I) maximum classified
assets to capital ratios; (II) minimum earnings sufficient to absorb losses
without impairing capital; and (III) to the extent feasible, a minimum ratio of
market value to book value for publicly-traded shares of depository institutions
and depository institution holding companies.

         Brokered Deposits. FDICIA amends the Federal Deposit Insurance Act to
prohibit insured depository institutions that are not well-capitalized from
accepting brokered deposits unless a waiver has been obtained from the FDIC.
Deposit brokers will be required to register with the FDIC.

         Consumer Protection Provisions. FDICIA seeks to encourage enforcement
of existing consumer protection laws and enacts new consumer -oriented
provisions including a requirement of notice to regulators and customers for any
proposed branch closing and provisions intended to encourage the offering of
"lifeline" banking accounts and lending in distressed communities. FDICIA also
requires depository institutions to make additional disclosures to depositors
with respect to the rate of interest and the terms of their deposit accounts.

         Miscellaneous. FDICIA extends the deadline for the mandatory use of
state-certified and state-licensed appraisers and authorizes acquisitions of
banks by savings associations on the same terms as savings associations may be
acquired by banks. With certain exceptions, state-chartered banks are limited to
the activities of national banks. Within nine months of the date of enactment of
FDICIA, the federal bank regulatory agencies are required to biannually review
risk-based capital standards to ensure that they adequately address interest
rate risk, concentration of credit risk and risks from non-traditional
activities.

         FDICIA also made extensive changes in the applicable rules regarding
audit, examinations and accounting. FDICIA generally requires annual on-site
full-scope examinations by each bank's primary federal regulator. FDICIA also
imposes new


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responsibilities on management, the independent audit committee and outside
accountants to develop, approve or attest to reports regarding the effectiveness
of internal controls, legal compliance and off-balance-sheet liabilities and
assets.

         Interest Rate Limitations. The maximum permissible rates of interest on
most commercial and consumer loans made by the Bank are governed by Tennessee's
general usury. Certain other usury laws affect limited classes of loans, but the
law referenced above is by far the most significant. Tennessee's general usury
law authorizes a floating rate of base prime rate plus 4% per annum and also
allows certain loan charges, generally on a more liberal basis that does the
general usury law.

         Effect of Government Policies. The earnings and business of the Company
are and will be affected by the policies of various regulatory authorities of
the United States, especially by the Federal Reserve Board. The Federal Reserve
Board, among other functions, regulates the supply of credit and deals with
general economic conditions within the United States. The instruments of
monetary policy employed by the Federal Reserve Board for these purposes
influence in various ways the overall level of investments, loans, other
extensions of credit and deposits, and the interest rates paid on liabilities
and received on assets.

ITEM 2.  DESCRIPTION OF PROPERTY

         The Company's main office is currently located at 300 Sunset Drive in
Johnson City, Tennessee in a two-story brick building owned by the Company. The
Company also operates two branch locations. One branch is located on 202 East
Main Street in Johnson City in a two-story brick building leased by the Company.
A second branch location is located at 2681 Boones Creek Road in Johnson City,
Tennessee in a custom-built, commercial-grade mobile unit.

ITEM 3.  LEGAL PROCEEDINGS

         From time to time the bank is named as a defendant in suits arising
from the ordinary conduct of its affairs. In the opinion of management, the
ultimate outcome of any litigation to which the Bank is a party as of the date
of this Form 10-KSB will not materially affect its financial condition.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

         No matter was submitted to a vote of security holders during the fourth
quarter of the Company's fiscal ending December 31, 2000.

PART  II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         The Company's common stock is not traded on an exchange nor is there a
known active trading market. Based solely on information made available to the
Company from a limited number of buyers and seller's, management of the Company
believes that the following table sets forth the high and low sales prices for
the Company's common stock during 2000 and 1999:

<TABLE>
<CAPTION>
    2000                                      High           Low
                                             ------         ------
           <S>                               <C>            <C>
           First Quarter ...........         $23.00         $20.00
           Second Quarter ..........         $23.00         $22.00
           Third Quarter ...........         $23.00         $20.00
           Fourth Quarter ..........         $23.00         $20.00
<CAPTION>
    2000                                      High           Low
                                             ------         ------
           <S>                               <C>            <C>
           First Quarter ...........         $25.00         $25.00
           Second Quarter ..........         $25.00         $25.00
           Third Quarter ...........         $25.00         $25.00
           Fourth Quarter ..........         $25.00         $20.00
</TABLE>


                                       8
<PAGE>   9

The most recent trade of the Company's common stock known to the Company
occurred on March 2, 2001 at a price of $21.00 per share (no stock has traded
since that date). These sales are isolated transactions and, given the small
volume of trading in the Company's stock, may not be indicative of its present
value. As of March 2, 2001, there were approximately 415 holders of record of
the Company's common stock.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

General

The Bank represents virtually all of the assets of the Company. The Company's
consolidated results of operations are dependent primarily on net interest
income, which is the difference between the interest income earned on
interest-earning assets, such as loans and investments, and the interest expense
incurred on interest-bearing liabilities, such as deposits and other borrowings.

Financial Condition

The Bank, which was opened in December 1995, has experienced substantial growth
during 1999 and 2000. Total assets have grown $16.8 million or more than 16.4%
from December 1999 to December 2000. The growth in total assets has been funded
by an increase in deposits of $9.0 million from December 1998 to December 1999
and $15.5 million from December 1999 to December 2000. Loans have increased $4.3
million during 1999, but increased $14.2 million in 2000 and investment
securities have increased $8 million in 1999 and have increased $3.4 million in
2000. This growth and the anticipated future growth will allow the Bank to
satisfy its cash requirements. It is not anticipated that it will be necessary
to raise any additional funds.

Nonperforming Assets and Risk Elements

The Bank discontinues the accrual of interest on loans which become ninety days
past due. The Bank had loans totaling $299 thousand which were ninety days past
due as of December 31, 1999 and had loans totaling $294 thousand which were past
due at December 31, 2000. The Bank also had no concentrations of ten percent or
more of total loans in any single industry nor any geographical area outside the
immediate market area of the Bank.

Liquidity and Capital

Liquidity is adequate with cash and due form banks of $6.1 million and $4.3
million at December 31, 1999 and 2000, respectively, and federal funds sold of
$1.4 million and $2.4 million at December 31, 1999 and 2000, respectively.
Additionally, investment securities, which are available-for-sale, at December
31, 2000, had a fair value of $24 million. Loans maturing in one year or less,
from December 31, 2000, are estimated to be $35 million. There are no known
trends, demands, commitments, events or uncertainties that will result in or
that are reasonably likely to result in the registrant's liquidity decreasing in
a material way.

Total equity capital at December 31, 1999 was $8.5 million or 8.3% of total
assets and at December 31, 2000 is $9.7 million or 8.1% of total assets, which
represents a strong capital position.

Results of Operations

The Company had net income of $671,022 for the year ended December 31, 1999. For
the year-ended December 31, 2000, the Company had net income of $873,955. The
improvement resulted largely from growth in earning assets generated by an
increased customer base. The Company anticipates, with the continued growth it
is experiencing, an increased net profit for the 2001 year.

Interest income and interest expense both increased dramatically because of the
increase in earning assets and deposits from December 31, 1999 to December 31,
2000. The growth in noninterest income reflects the increase in loans and
deposits, resulting primarily from the service charges on deposit accounts.


                                       9
<PAGE>   10

The provision for loan losses has increased due to the increase in loans. The
allowance of $863,816 and $996,767 at December 31, 1999 and 2000, respectively,
is considered by management to be adequate to cover losses inherent in the loan
portfolio. Management evaluates the adequacy of the allowance for loan losses
monthly and makes provisions for loan losses based on this evaluation. At the
present time, the Company has impaired loans totaling $294 thousand. In
reference to the impaired loans, the Company has related allowance for credit
losses totaling $189 thousand, leaving a balance classified as substandard of
$105 thousand.

Net Interest Earnings

As depicted in the table below there was a substantial growth in the 2000 year.
Since December 31, 1999, growth was primarily from the volume increase in
business. Any increases due to rate changes would have been insignificant.

<TABLE>
<CAPTION>
  Dollar                                                              Average         Interest
 Average         Increase                                            Balances          Earned
  Yield          from 1999                                             2000           or Paid
 -------         ---------                                           --------         --------
 <S>             <C>           <C>                                   <C>              <C>
                               Interest Earning Assets:
                                 Loans:
  9.05%          $  4,225           Commercial                        $38,474          $3,492
  0.00%                --           Real Estate Construction                0               0
  8.25%                (8)          Commercial Real Estate                143              14
  8.28%            (1,654)          Residential Real Estate            11,000             888
  9.03%             9,106           Installments                       27,796           2,441
  9.59%                96           Consumer Single Pay                 2,187             199
  0.00%               (23)          Loans Held for Sale                     0               0
 15.24%               124           Other                                 257              24
 -----           --------                                             -------          ------
  8.97%          $ 11,866      Totals                                 $79,857          $7,058
 =====           ========                                             =======          ======

<CAPTION>
  Dollar                                                              Average         Interest
 Average         Increase                                            Balances          Earned
  Yield          from 1998                                             2000           or Paid
 -------         ---------                                           --------         --------
 <S>             <C>           <C>                                   <C>              <C>
                               Interest Earning Assets:
                                 Loans:
  8.65%          $  7,705           Commercial                        $34,249          $2,956
  0.00%                 0           Real Estate Construction                0               0
  8.25%               105           Commercial Real Estate                151              13
  7.78%              (696)          Residential Real Estate            12,654             994
  8.60%             5,193           Installments                       18,690           1,640
  8.92%               408           Consumer Single Pay                 2,091             172
  0.00%              (135)          Loans Held for Sale                    23               0
 14.16%                (8)          Other                                 133              15
------           --------                                             -------          ------
  8.51%          $  5,243      Totals                                 $67,991          $5,790
======           --------                                             -------          ------
</TABLE>

The Bank has $299 thousand of non-accruing loans from the date of inception
through December 31, 1999. The Bank had $294 thousand of non-accruing loans from
the date of inception through December 31, 2000. In the calculation of changes
of interest these are not included in the interest income computations.


                                       10
<PAGE>   11

Interest Bearing Liabilities:
<TABLE>
<CAPTION>
      Dollar                                                                         Average        Interest
     Average         Increase                                                        Balances        Earned
      Yield         from 1999                                                         2000           or Paid
    ---------       ----------                                                      ----------     ----------
    <S>             <C>             <C>                                             <C>            <C>
        2.03%        $   1,086      NOW Accounts                                    $   3,972              99
        4.12%            3,483      Money Market Accounts                               8,827             445
        4.67%         (11,918)      Savings Accounts                                   24,011           1,123
        6.60%           17,007      Certificates of Deposit                            50,728           3,137
   ---------         ---------                                                      ---------       ---------
        5.19%        $   9,658         Totals                                       $  87,538       $   4,804
   ---------         ---------                                                      ---------       ---------

        3.79%      Net Yield

<CAPTION>
    Dollar                                                                           Average          Interest
    Average          Increase                                                        Balances          Earned
     Yield           from 1998                                                         1999            or Paid
   ---------        -----------                                                     ----------       ----------
   <S>              <C>             <C>                                             <C>              <C>
        2.03%           $  893      NOW Accounts                                      $  2,886        $      59
        4.12%            1,068      Money Market Accounts                                5,344              221
        4.67%           18,331      Savings Accounts                                    35,929            1,800
        5.49%          (6,270)      Certificates of Deposit                             33,721            1,740
  ----------         ---------                                                       ---------        ---------
        4.39%        $  14,022         Totals                                         $ 77,880        $   3,820
  ----------         ---------                                                        --------        ---------

        4.12%      Net Yield
</TABLE>

Investment Portfolio

Held-to-Maturity:

<TABLE>
<CAPTION>
   December 31,         Average                                                               December 31,       Average
       1999              Yield       State and Municipal Governments:                             2000            Yield
   ------------        --------      ----------------------------------------                 ------------      ---------
   <S>                 <C>           <C>                                                      <C>               <C>
          0               0.00%      Maturity within one year                                        0             0.00%
          0               0.00%      Maturity within one to five years                               0             0.00%
          0               0.00%      Maturity within five to ten years                               0             0.00%
         97               5.00%      After Ten Years                                               101             5.00%
    -------           --------                                                                 -------           ------
         97               5.00%         Total Held-to-Maturity                                     101             5.00%
    -------           --------                                                                 -------           ------

<CAPTION>
   December 31,       Average                                                                  December 31,       Average
       1999            Yield         U.S. Government & Government Agency:                          2000            Yield
   ------------      ---------       ----------------------------------------                  ------------      ---------
   <S>               <C>             <C>                                                       <C>               <C>
          0              0.00%       Maturity within one year                                        0              0.00%
          0              0.00%       Maturity within one to five years                               0              0.00%
        500              7.42%       Maturity within five to ten years                               0              0.00%
   --------          --------                                                                   -------           -------
   $    500              7.42%        Total Held-to-Maturity                                         0              0.00%
   --------          --------                                                                   -------           -------
</TABLE>

Yields on State and Municipal Government securities do not reflect savings due
to tax-exemption status.


                                       11
<PAGE>   12

Available-for-Sale:

<TABLE>
<CAPTION>
   December 31,       Average                                                       December 31,          Average
       1999            Yield       U.S. Government & Government Agency:                 2000               Yield
   ------------      ---------     ---------------------------------------          -------------        ---------
   <S>               <C>           <C>                                              <C>                  <C>
           0            0.00%      Maturity within one year                                    0            0.00%
       2,938            6.36%      Maturity within one to five years                       1,486            6.09%
       3,582            6.69%      Maturity within five to ten years                       4,578            6.72%
           0            0.00%      After ten years                                         1,001            7.65%

                                   State and Municipal Governments:
                                   ---------------------------------------
          50            4.15%      Maturity within one year                                   55            4.20%
       1,393            4.20%      Maturity within one to five years                       1,845            4.29%
       2,785            4.39%      Maturity within five to ten years                       3,272            4.56%
       2,881            4.91%      After ten years                                         3,089            4.94%

                                   Corporates
                                   ---------------------------------------
           0            0.00%      Maturity within five to ten years                         781            8.04%

       5,498            6.82%      Mortgage-Backed Securities                              7,852            6.94%
                                   ---------------------------------------
 -----------         --------                                                        -----------        --------
      20,042            5.96%         Total Available-for-Sale                            23,959            6.12%
 ===========         ========                                                        ===========        ========
</TABLE>

The Bank had no foreign loans at December 31, 2000.

Summary of Loan Loss Experience

<TABLE>
<CAPTION>
    1999                                                                     2000
  --------                                                                 --------
  <S>           <C>                                                        <C>
  $    826      Balance at Beginning of Period                             $    864
  --------                                                                 --------
       (42)         Charge-Offs                                                 (65)
         6          Recoveries                                                    4
  --------                                                                 --------
       (36)     Net Recoveries                                                  (61)
  --------                                                                 --------
        74      Additions Charged to Operations                                 194
  --------                                                                 --------
  $    864      Balance at the End of Period                               $    997
  ========                                                                 ========

                Ratio of net charge-offs during the period to
      0.06%      average Loans outstanding during the period                   0.17%
</TABLE>

The allowance for loan loss represents 1.17% of the outstanding loan balance at
year-end. Management believes this amount will be sufficient to cover all loan
losses inherent in the loan portfolio.


                                       12
<PAGE>   13

Return on Equity and Assets

<TABLE>
<CAPTION>
                                                          2000         1999
                                                         ------       ------
<S>                                                      <C>          <C>
Return on Assets                                          0.79%        0.69%
Return on Equity                                          8.70%        8.00%
</TABLE>

The Bank had no foreign banking offices.

Interest Sensitivity

The Company monitors and manages the pricing and maturity of its assets and
liabilities in order to diminish the potential adverse impact that changes in
interest rates could have on its net interest income. The principal monitoring
technique employed by the Company is the measurement of the Company's interest
sensitivity "gap", which is the positive or negative dollar difference between
assets and liabilities that are subject to interest rate repricing within a
given period of time. Interest rate sensitivity can be managed by repricing
assets or liabilities, selling available-for-sale securities, replacing an asset
or liability at maturity, or adjusting the interest rate during the life of an
asset or liability. Managing the amount of assets and liabilities repricing in
this same time interval helps to hedge the risk and minimize the impact on net
interest income of rising or falling interest rates.

The Company evaluates interest sensitivity risk and then formulates guidelines
regarding asset generation and repricing, funding sources and pricing, and
off-balance sheet commitments in order to decrease interest sensitivity risk.

Asset/Liability Management

It is the objective of the Bank to manage assets and liabilities to provide a
satisfactory, consistent level of profitability within the framework of
established cash, loan, investment, borrowing and capital policies. Certain
officers of the Bank and the Bank's Asset/Liability Committee are charged with
the responsibility for developing and monitoring policies and procedures that
are designed to seek an acceptable composition of the asset/liability mix. It is
the overall philosophy of management to support asset growth primarily through
growth of core deposits, which include deposits of all categories made by
individuals, partnerships, and corporations. Management of the Bank seeks to
invest the largest portion of the Bank's assets in consumer/installment,
commercial, real estate and construction loans.

The Bank's asset/liability mix is monitored with a report reflecting the
interest-sensitive assets and interest-sensitive liabilities being prepared and
presented to the Bank's Investment Committee on a monthly basis. The objective
of this policy is to match interest-sensitive assets and liabilities so as to
minimize the impact of substantial movements in interest rates on the Bank's
earnings.

Gap analysis measures how the Bank is positioned for interest rate changes. An
analysis of rate sensitivity assets and liabilities as of December 31, 2000 and
December 31, 1999 are presented on the following pages.

As indicated in this table, the negative gap between rate sensitivity assets and
rate sensitive liabilities during the 0-3 month period would allow the Company
to reprice its liabilities faster than its assets. In a rising interest rate
environment, this could cause the Company to either narrow it's spread between
yields on assets and liabilities, or to use alternative sources of funding such
as lines of credit to fund asset growth. However, the Company's gap analysis is
not a precise indicator of its timing of maturities and repricing opportunities,
without taking into consideration that changes in interest rates do not affect
all assets and liabilities equally. Net interest income may be impacted by other
significant factors in a given interest rate environment, including changes in
the volume and mix of earning assets and interest-bearing liabilities.


                                       13
<PAGE>   14


<TABLE>
<CAPTION>
                                                      People's Community Bank
                                                 Rate Sensitivity Analysis (in 000)
                                                         December 31, 2000
----------------------------------------------------------------------------------------------------------------------------
                                        3 Months                12 Months              60 Months
Assets                               RSA1       FRA2           RSA1     FRA2        RSA1       FRA2       NEA3        Total
----------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>        <C>         <C>         <C>       <C>         <C>       <C>          <C>
Cash and Due From Banks                                                                                $  4,143     $  4,143
Federal Funds Sold                     2,383                  2,383                 2,383                              2,383
U.S. Treasury Securities                                                                                                   -
U.S. Government Agencies                                                                                                   -
Available for Sale Securities         14,962                 14,962                14,962                             14,962
Municipal Securities                   8,231        101       8,231        101      8,231       101                    8,332
Corporate Bonds & Notes                  767                    767                   767                                767
Federal Home Loan Bank Stock             311                    311                   311                                311
Loans & Leases (net unearn disc.)     24,962     60,524      35,135     50,351     83,434     2,052                   85,486
Allowance for Loan Losses                                                                                  (997)        (997)
Premises, Furn, Fixt, Equip                                                                               2,910        2,910
Other Assets                                                                                                872          872
----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                        $ 51,615   $ 60,625    $ 61,788    $50,452   $110,088    $2,152    $  6,928     $119,169
----------------------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------------------
Liabilities & Capital                   RSL4       FRL5        RSL4       FRL5       RSL4      FRL5        NPL6        Total
----------------------------------------------------------------------------------------------------------------------------
Demand Deposits                                                                                          11,428       11,428
NOW Accounts                           4,672                  4,672                 4,672                              4,672
Invest. Money Market Accounts         13,351                 13,351                13,351                             13,351
Regular Savings                       19,830                 19,830                19,830                             19,830
Certificates of Deposit               13,917     43,592      54,806      2,703     57,509                             57,509
Fed Funds Purch & Securities
Repos                                                                                                                      -
Other Liabilities                                                                                         2,790        2,790
Common Stock & Surplus                                                                                    8,000        8,000
Undivided Profits                                                                                         1,575        1,575
Unrealized Holding G/L on
  AFS Sec.                                                                                                   14           14
----------------------------------------------------------------------------------------------------------------------------
TOTAL LIAB. & CAPITAL               $ 51,770   $ 43,592    $ 92,659     $2,703    $95,362    $    -    $ 23,807     $119,169
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                               3 mo      12 mo       60 mo                  3 mo     12 mo       60 mo
                           -------------------------------              ------------------------------
            <S>            <C>        <C>         <C>         <C>       <C>       <C>         <C>
            RSA              51,615     61,788     110,088        RSL     51,770    92,659      95,362
            FRA              60,625     50,452       2,152        FRL     43,592     2,703           -
            NEA               6,928      6,928       6,928        NPL     11,428    11,428      11,428
                                                               EQUITY     12,379    12,379      12,379
                           -------------------------------              ------------------------------
                   TOTAL   $119,169   $119,169    $119,169              $119,169  $119,169    $119,169
                           ===============================              ==============================
</TABLE>


<TABLE>
<S>                                <C>       <C>           <C>                                 <C>

                                                                                               1RSA =RATE SENSITIVE ASSETS
   RATE SENSITIVITY MEASURES:      3 mo       12 mo        60 mo                               2FRA =FIXED RATE ASSETS
------------------------------------------------------------------                             3NEA =NON EARNING ASSETS
             RSA/RSL                99.70%     66.68%      115.44%                             4RSL =RATE SENSITIVE LIABILITIES
             RSA-RSL                 (155)   (30,871)       14,726                             5FRL =FIXED RATE LIABILITIES
           GAP/Equity               -1.25%   -249.38%      118.96%                             6NPL =NON PAYING LIABILITIES
             GAP/TA                 -0.13%    -25.91%       12.36%
</TABLE>


                                       14
<PAGE>   15


<TABLE>
<CAPTION>
                                                         People's Community Bank
                                                   Rate Sensitivity Analysis (in 000)
                                                            December 31, 1999
--------------------------------------------------------------------------------------------------------------------------------
                                                 3 Months             12 Months            60 Months
Assets                                      RSA(1)      FRA(2)    RSA(1)    FRA(2)    RSA(1)     FRA(2)      NEA(3)      Total
--------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>        <C>      <C>        <C>         <C>       <C>         <C>
Cash and Due From Banks                                                                                     $  6,002    $  6,002
Federal Funds Sold                            1,359                1,359               1,359                               1,359
U.S. Treasury Securities                                                                                                       -
U.S. Government Agencies                                   500                 500                  500                      500
Available for Sale Securities                12,648               12,648              12,648                              12,648
Municipal Securities                          7,396        101     7,396       101     7,396        101                    7,497
Federal Home Loan Bank Stock                    276                  276                 276                                 276
Loans & Leases (net unearn disc.)            21,975     49,077    29,294    41,758    69,964      1,088                   71,052
Allowance for Loan Losses                                                                                       (864)       (864)
Premises, Furn, Fixt, Equip                                                                                    3,151       3,151
Other Assets                                                                                                     675         675
--------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                               $ 43,654   $ 49,678  $ 50,973   $42,359  $ 91,643   $  1,689     $  8,964    $102,296
--------------------------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------
Liabilities & Capital                        RSL(4)     FRL(5)    RSL(4)     FRL(5)   RSL(4)     FRL(5)       NPL(6)      Total
--------------------------------------------------------------------------------------------------------------------------------
Demand Deposits                                                                                                9,966       9,966
NOW Accounts                                  3,520                3,520               3,520                               3,520
Invest. Money Market Accounts                 4,974                4,974               4,974                               4,974
Regular Savings                              32,220               32,220              32,220                              32,220
Certificates of Deposit                       9,628     31,218    35,089     5,757    40,846                              40,846
Fed Funds Purch & Securities Repos                       2,000                                                             2,000
Other Liabilities                                                                                                327         327
Common Stock & Surplus                                                                                         8,000       8,000
Undivided Profits                                                                                                878         878
Unrealized Holding G/L on AFS Sec.                                                                              (435)       (435)
--------------------------------------------------------------------------------------------------------------------------------
TOTAL LIAB. & CAPITAL                      $ 50,342   $ 33,218  $ 75,803    $5,757  $ 81,560   $      -     $ 19,171    $102,296
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                               3 mo      12 mo     60 mo                3 mo      12 mo        60 mo
                           -----------------------------            --------------------------------
            <S>            <C>         <C>       <C>        <C>     <C>        <C>          <C>
            RSA              43,654     50,973    91,643       RSL    50,342     75,803       81,560
            FRA              49,678     42,359     1,689       FRL    33,218      5,757            -
            NEA               8,964      8,964     8,964       NPL    10,293     10,293       10,293
                                                            EQUITY     8,443      8,443        8,443
                           -----------------------------            --------------------------------
                   TOTAL   $102,296    102,296   102,296            $102,296   $100,296     $100,296
                           =============================            ================================
</TABLE>

<TABLE>
<S>                                        <C>       <C>        <C>                              <C>
                                                                                                 1RSA =RATE SENSITIVE ASSETS
       RATE SENSITIVITY MEASURES:          3 mo       12 mo     60 mo                            2FRA =FIXED RATE ASSETS
-------------------------------------------------------------------------                        3NEA =NON EARNING ASSETS
                RSA/RSL                      86.71%     67.24%   112.36%                         4RSL =RATE SENSITIVE LIABILITIES
                RSA-RSL                     (6,688)   (24,830)   10,083                          5FRL =FIXED RATE LIABILITIES
               GAP/Equity                   -79.21%   -294.09%   119.42%                         6NPL =NON PAYING LIABILITIES
                 GAP/TA                      -6.54%    -24.27%     9.86%
</TABLE>


                                       15
<PAGE>   16



                                PCB BANCORP, INC.



                              FINANCIAL STATEMENTS

                                      WITH

                          INDEPENDENT AUDITORS' REPORT




                 For the Years Ended December 31, 2000 and 1999


                                       16
<PAGE>   17


                                PCB BANCORP, INC.
                           December 31, 2000 and 1999


                                      INDEX



<TABLE>
<CAPTION>
                                                                      Page
                                                                     Number
                                                                     ------


<S>                                                                  <C>
     Independent Auditors' Report                                       18



     Consolidated Statements of Financial Condition                     19


     Consolidated Statements of Income                               20-21


     Consolidated Statements of Shareholders' Equity                    22


     Consolidated Statements of Cash Flows                           23-24



     Notes to the Financial Statements                               25-43
</TABLE>


                                       17
<PAGE>   18




                          INDEPENDENT AUDITORS' REPORT




To the Board of Directors and Audit Committee
PCB Bancorp, Inc.
Johnson City, Tennessee  37602

We have audited the accompanying consolidated statements of financial condition
of PCB Bancorp, Inc. and wholly-owned subsidiary People's Community Bank as of
December 31, 2000 and 1999, and the related consolidated statements of income,
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of Bancorp's management. Our responsibility is
to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of PCB Bancorp, Inc.
and wholly-owned subsidiary People's Community Bank at December 31, 2000 and
1999, and the results of its operations and its cash flows for the years then
ended, in conformity with generally accepted accounting principles.




                               BLACKBURN, CHILDERS AND STEAGALL, PLC

January 31, 2001


                                       18
<PAGE>   19



                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2000 and 1999

<TABLE>
<CAPTION>

                                                                          2000                1999
                                                                          ----                ----
                                     ASSETS
                                     ------

<S>                                                                   <C>                  <C>
Cash and Due from Banks                                               $  4,289,021           6,049,616
Federal Funds Sold                                                       2,383,000           1,359,000
Securities Held-to-Maturity                                                100,585             600,749
Securities Available-for-Sale                                           23,959,251          20,043,328
Loans Held for Sale                                                        238,478                  --
Loans Receivable, Net of Allowance for Loan Losses of $996,767
 and $863,816, respectively                                             84,165,356          70,146,050
Accrued Interest Receivable                                                740,041             619,196
Premises and Equipment, Net of Accumulated Depreciation of
  $963,105 and $681,627, respectively                                    2,909,997           3,152,084
Restricted Investments - Stock in Federal Home Loan Bank, Cost             311,200             275,500
Deferred Tax Asset                                                              --             152,612
Other Assets                                                               217,698              98,340
                                                                      ------------         -----------

           Total Assets                                               $119,314,627         102,496,475
                                                                      ============         ===========


                       LIABILITIES AND SHAREHOLDERS' EQUITY
                       ------------------------------------
LIABILITIES:
-----------
  Deposits:
    Demand Deposits                                                   $ 10,955,168           9,841,868
    Savings and NOW Deposits                                            37,852,907          40,130,428
    Other Time Deposits                                                 57,509,109          40,845,777
  Accrued Interest Payable                                                 496,047             321,903
  Dividend Payable                                                          57,239                  --
  Accounts Payable and Other Liabilities                                 2,760,876           2,865,411
                                                                      ------------        ------------
        Total Liabilities                                              109,631,346          94,005,387
                                                                      ------------        ------------

SHAREHOLDERS' EQUITY:
--------------------
  Common Stock - $1 par value; 3,000,000 shares authorized;
   817,700 and 806,200 shares issued and outstanding, at
   2000 and 1999, respectively                                             817,700             806,200
  Additional Paid-in Capital                                             7,367,500           7,259,000
  Retained Earnings                                                      1,483,766             861,168
  Accumulated Other Comprehensive Income                                    14,315            (435,280)
                                                                      ------------        ------------
        Total Shareholders' Equity                                       9,683,281           8,491,088
                                                                      ------------        ------------

        Total Liabilities and Shareholders' Equity                    $119,314,627         102,496,475
                                                                      ============        ============
</TABLE>


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


                                       19
<PAGE>   20


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                        CONSOLIDATED STATEMENTS OF INCOME
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                       2000             1999
                                                                   ----------        ---------

<S>                                                                <C>               <C>
INTEREST INCOME:
  Interest on Loans                                                $7,058,370        5,790,389
  Interest on Investments                                           1,367,589          971,948
  Interest on Federal Funds Sold                                      149,930          258,871
                                                                   ----------        ---------

    Total Interest Income                                           8,575,889        7,021,208
                                                                   ----------        ---------

INTEREST EXPENSE:
  Interest on Interest Bearing Checking Accounts                       99,215           68,456
  Interest on Money Market Accounts                                   444,817          221,183
  Interest on Passbook Accounts                                     1,123,169        1,697,987
  Interest on Certificates of Deposit                               3,137,088        1,832,145
  Interest on Other Borrowed Funds                                    164,734            1,044
                                                                   ----------        ---------

    Total Interest Expense                                          4,969,023        3,820,815
                                                                   ----------        ---------

Net Interest Income                                                 3,606,866        3,200,393
  Provision for Loan Losses                                           193,791           79,677
                                                                   ----------        ---------

Net Interest Income after Provision for Loan Losses                 3,413,075        3,120,716
                                                                   ----------        ---------

NON-INTEREST INCOME:
  Service Charges                                                     382,632          327,230
  Loan Origination Fees                                               351,743          263,423
  Net Gains from Sale of Loans                                          2,328           16,612
  Net Realized Gain (Loss) on Sales and Calls of Securities             4,165           10,782
  Miscellaneous                                                         3,180            3,424
                                                                   ----------        ---------
    Total Non-Interest Income                                         744,048          621,471
                                                                   ----------        ---------

NON-INTEREST EXPENSES:
  Salaries                                                          1,412,658        1,287,783
  Payroll Taxes                                                       107,234          107,105
  Employee Benefits                                                   146,327          109,488
  Occupancy Expense                                                   102,416           90,427
  Rental Expense                                                       25,200           28,800
</TABLE>

                                  (Continued)

                                       20
<PAGE>   21


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                        CONSOLIDATED STATEMENTS OF INCOME
                 For the Years Ended December 31, 2000 and 1999



<TABLE>
<CAPTION>
                                                   2000              1999
                                                ----------        ---------
<S>                                             <C>               <C>
    NON-INTEREST EXPENSES (CONTINUED):
    Furniture and Equipment Expense                 24,460           18,259
    Computer Equipment Expense                     100,357          143,235
    Stationery, Supplies and Printing               88,015           77,350
    Postage, Express and Freight                    89,000           69,791
    Telephone Expense                               49,811           57,150
    Vehicle Expense                                 22,564           15,392
    Outside Services                               101,991           85,790
    Teller Over and Short                            1,300              344
    Advertising and Promotion                       77,515           94,280
    Loan Collection Expense                         20,804           11,236
    Bank Security and Protection                     3,629            3,255
    FDIC Assessment                                 19,245           10,240
    Insurance                                       39,864           37,089
    Dues and Subscriptions                          22,316           20,968
    Franchise Tax Expense                           24,747           24,000
    Refunds and Reimbursements                      12,722           13,865
    Travel and Meetings                              3,669            7,917
    Contributions                                    6,454            5,825
    Depreciation and Amortization                  293,686          328,294
    Directors' Fees                                 31,635           32,612
    Miscellaneous Expenses                          71,715           71,414
                                                ----------        ---------
       Total Non-Interest Expenses               2,899,334        2,751,909
                                                ----------        ---------
Income Before Taxes                              1,257,789          990,278

INCOME TAX PROVISION:
    Income Tax Expense                             383,834          319,256
                                                ----------        ---------

Net Income                                      $  873,955          671,022
                                                ==========        =========

Net Income per Share - Basic                    $     1.08              .84
                                                ==========        =========

Net Income per Share - Assuming Dilution        $      .99              .76
                                                ==========        =========
</TABLE>

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


                                       21

<PAGE>   22
                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                                                    Accumulated
                                                                       Additional                     Other
                                                         Common          Paid-in        Retained   Comprehensive
                                                         Stock           Capital        Earnings      Income           Total
                                                       ---------       ----------      ----------  -------------     ---------
<S>               <C>                                  <C>             <C>               <C>            <C>          <C>
Balances, January 1, 1999                              $ 800,000       7,200,000         310,456        68,578       8,379,034

COMPREHENSIVE INCOME:
Net Income                                                    --              --         671,022            --         671,022
Other Comprehensive Income
    Net of Tax:
      Change In Unrealized
        Gain (Loss) on Securities
        Available-For-Sale, Net
        of Deferred Income Tax
        of $(335,906)                                                                                 (503,858)       (503,858)
                                                                                                                    ----------
Total Comprehensive Income                                                                                             167,164
Stock Option Exercises                                     6,200          59,000              --            --          65,200
Cash Dividends                                                --              --        (120,310)           --        (120,310)
                                                       ---------       ----------      ----------    ---------      ----------

Balances, December 31, 1999                            $ 806,200       7,259,000         861,168      (435,280)      8,491,088

COMPREHENSIVE INCOME:
Net Income                                                    --              --         873,955            --         873,955
Other Comprehensive Income
    Net of Tax:
      Change in Unrealized
        Gain (Loss) on Securities
        Available-For-Sale, Net
        of Deferred Income Tax
        of $299,730                                                                                    449,595         449,595
                                                                                                                    ----------
Total Comprehensive Income                                                                                           1,323,550
Stock Option Exercises                                    11,500         108,500              --            --         120,000
Cash Dividends                                                --              --        (251,357)           --        (251,357)
                                                       ---------       ----------      ----------    ---------      ----------

Balances, December 31, 2000                            $ 817,700       7,367,500       1,483,766        14,315       9,683,281
                                                       =========      ==========      ==========      ========      ==========
</TABLE>

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


                                       22
<PAGE>   23

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                                          2000                    1999
                                                                                     --------------           ------------
<S>                                                                                  <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Income                                                                       $      873,955                671,022
    Adjustments to Reconcile Net Income to Net Cash
      Provided by Operating Activities:
        Depreciation Expense                                                                293,686                276,026
        Amortization Expense                                                                     --                 52,268
        Provision for Loan Losses                                                           193,791                 79,677
        Discount Accretion Net of Premium Amortization                                      (73,037)               (53,946)
        Origination of Mortgage Loans Held for Sale                                      (4,426,300)              (496,300)
        Proceeds from Mortgage Loans Sold                                                 4,187,822                876,550
        Net Realized (Gains) Losses on Sales and Calls of Securities                         (4,165)               (10,782)
        Deferred Income Tax                                                                 (49,813)                 8,363
        (Increase) Decrease in Interest Receivable                                         (120,845)              (117,416)
        (Increase) Decrease in Other Assets                                                (119,358)               (67,405)
        Increase (Decrease) in Accrued Interest Payable                                     174,144                (83,018)
        Increase (Decrease) in Other Liabilities                                           (104,535)             2,058,840
                                                                                     --------------           ------------
Net Cash Provided by Operating Activities                                                   825,345              3,193,879
                                                                                     --------------           ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net (Increase) Decrease in Federal Funds Sold                                        (1,024,000)             5,215,000
    Purchases of Held-to-Maturity Securities                                                     --               (100,814)
    Purchases of Available-for-Sale Securities                                           (5,453,158)           (14,360,228)
    Proceeds from Maturities and Calls of Held-to-Maturity Securities                       500,000                     --
    Proceeds from Maturities and Calls of Available-For-Sale Securities                   2,943,484              5,739,450
    Purchases of Restricted Investments                                                     (35,700)                (9,800)
    Purchases of Premises and Equipment                                                     (51,808)              (210,872)
    Loan Participations Bought                                                           (2,916,116)              (880,673)
    Loan Participations Sold                                                              2,239,462              4,227,511
    Net Increase in Loans                                                               (14,213,097)            (7,726,408)
                                                                                     --------------           ------------
Net Cash Used for Investing Activities                                                  (18,010,933)            (8,106,834)
                                                                                     --------------           ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Dividends Paid                                                                         (194,118)              (160,310)
    Stock Options Exercised                                                                 120,000                 65,200
    Net Increase in Deposits                                                             15,499,111              9,009,331
                                                                                     --------------           ------------
Net Cash Provided by Financing Activities                                                15,424,993              8,914,221
                                                                                     --------------           ------------

Increase (Decrease) in Cash and Cash Equivalents                                         (1,760,595)             4,001,266
                                                                                     --------------           ------------
</TABLE>

                                   (Continued)

                                       23
<PAGE>   24

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                                          2000                   1999
                                                                                     -------------           ------------
<S>                                                                                  <C>                     <C>
Increase (Decrease) in Cash and Cash Equivalents                                        (1,760,595)             4,001,266
   (Brought Forward)

Cash and Cash Equivalents, Beginning of Year                                             6,049,616              2,048,350
                                                                                     -------------           ------------

Cash and Cash Equivalents, End of Year                                               $   4,289,021              6,049,616
                                                                                     =============           ============

SUPPLEMENTAL DISCLOSURES:
    Cash Paid During the Year for Interest                                           $   4,794,879              3,903,008
                                                                                     =============           ============

    Cash Paid During the Year for Income Taxes                                       $     417,803                256,526
                                                                                     =============           ============
</TABLE>

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


                                       24
<PAGE>   25

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES:

Basis of Consolidation

The consolidated financial statements include the accounts of PCB Bancorp, Inc.
(Company), a one-bank holding company, formed on October 1, 1996 and its
wholly-owned subsidiary People's Community Bank. All material intercompany
balances and transactions have been eliminated in consolidation.

Nature of Operations

People's Community Bank is a state-chartered bank formed on December 15, 1995.
On October 1, 1996 the Bank became a wholly- owned subsidiary of PCB Bancorp,
Inc., a one bank holding company. People's Community Bank provides a variety of
banking services to individuals and businesses in Upper East Tennessee through
its main office on Sunset Drive and branch locations in Boones Creek and on Main
Street in Johnson City. Its primary deposit products are demand deposits,
savings deposits and certificates of deposit; and its primary lending products
are commercial business, real estate mortgage and installment loans. As a state
bank, the Bank is subject to regulation by the Tennessee State Banking
Department and the Federal Deposit Insurance Corporation.

Financial Reporting

The Company reports on the accrual basis of accounting for financial purposes.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers cash and cash
equivalents as those amounts included in the statement of financial condition as
captioned "cash and due from banks". Federal funds sold are not included as cash
or cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for losses on loans. While
management uses available information to recognize losses on loans, future
additions to the allowance may be necessary based on changes in local economic
conditions. In addition, regulatory agencies, as an integral part of their
examination process, periodically review the Bank's allowances for losses on
loans. Such agencies may require the Bank to recognize additions to the
allowances based on their judgements about information available to them at the
time of their examination. Because of these factors, it is reasonably possible
that the allowances for losses on loans may change materially in the near term.
However, the amount of the change that is reasonably possible cannot be
estimated.


                                       25
<PAGE>   26

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

         Investment Securities

         Securities Held-to-Maturity: Debt securities that management has the
         positive intent and ability to hold to maturity are reported at cost,
         adjusted for amortization of premiums and accretion of discounts that
         are recognized in interest income using methods approximating the
         interest method over the period to maturity.

         Securities Available-for-Sale: Debt securities not classified as
         held-to-maturity are classified as available-for-sale. Securities
         available-for-sale are carried at fair value with unrealized gains and
         losses reported separately net of tax, through a separate component of
         shareholders' equity. Gains and losses on sales of securities are
         determined using the specific-identification method. The amortization
         of premiums and the accretion of discounts are recognized in interest
         income using methods approximating the interest method.

         Loans Held for Sale

         Mortgage loans originated and intended for sale in the secondary market
         are carried at the lower of cost or estimated market value in the
         aggregate. Net unrealized losses are recognized through a valuation
         allowance of charges to income.

         Loans

         Loans are stated at unpaid principal, less the allowance for loan
         losses and net deferred loan fees and unearned discounts.

         Unearned discounts on installment loans are recognized as income over
         the term of the loans using a method that approximates the interest
         method.

         Loan origination and commitment fees, as well as certain direct
         origination costs, are deferred and amortized as a yield adjustment
         over the lives of the related loans using a method that approximates
         the interest method. Amortization of the deferred loan fees is
         discontinued when a loan is placed on nonaccrual status.

         Interest income generally is not recognized on specific impaired loans
         unless the likelihood of further loss is remote. Cash payments received
         on such loans are applied as a reduction of the loan principal balance.
         Interest income on other impaired loans is recognized only to the
         extent of interest payments received.

         Allowance for Loan Losses

         The allowance for loan losses is maintained at a level which, in
         management's judgement, is adequate to absorb credit losses inherent in
         the loan portfolio. The amount of the allowance is based on
         management's evaluation of the collectibility of the loan portfolio,
         including the nature of the portfolio, credit concentrations, trends in
         historical loss experience, specific impaired loans, economic
         conditions, and other risks inherent in the portfolio. Allowances for
         impaired loans are generally determined based on collateral values or
         the present value of estimated cash flows. Although management uses
         available information to recognize losses on loans, because of the
         uncertainties associated with local economic conditions.


                                       26
<PAGE>   27

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

         Allowance for Loan Losses (continued):

         values, and future cash flows on impaired loans, it is reasonably
         possible that a material change could occur in the allowance for loan
         losses in the near term. However, the amount of the change that is
         reasonably possible cannot be estimated. The allowance is increased by
         a provision for loan losses, which is charged to expense and reduced by
         charge-offs, net of recoveries. Changes in the allowance relating to
         impaired loans are charged or credited to the provision for loan
         losses.

         Premises and Equipment

         Premises and equipment are stated at cost less any accumulated
         depreciation. Depreciation is provided for using the straight-line
         method over the useful lives of the assets. Maintenance and repairs are
         expensed as incurred while major additions and improvements are
         capitalized. Gains and losses on dispositions are included in current
         operations.

         Income Taxes

         Income taxes are provided for the tax effects of the transactions
         reported in the financial statements and consist of taxes currently due
         plus deferred taxes related primarily to differences between the
         depreciation and loan loss reserves for financial and income tax
         reporting. The deferred tax assets and liabilities represent the future
         tax consequences of those differences, which will either be taxable or
         deductible when the assets and liabilities are recovered or settled.
         Deferred tax assets and liabilities are reflected at income tax rates
         applicable to the period in which the deferred tax assets or
         liabilities are expected to be realized or settled. As changes in tax
         laws or rates are enacted, deferred tax assets and liabilities are
         adjusted through the provision for income tax.

         Fair Values of Financial Instruments

         Statement of Financial Accounting Standards (SFAS) No. 107, Disclosures
         about Fair Value of Financial Instruments, requires disclosure of fair
         value information about financial instruments, whether or not
         recognized in the statement of financial condition. In cases where
         quoted market prices are not available, fair values are based on
         estimates using present value or other valuation techniques. Those
         techniques are significantly affected by the assumptions used,
         including the discount rate and estimates of future cash flows. In that
         regard, the derived fair value estimates cannot be substantiated by
         comparison to independent markets and, in many cases, could not be
         realized in immediate settlement of the instruments. SFAS No. 107
         excludes certain financial instruments and all non-financial
         instruments from its disclosure requirements. Accordingly, the
         aggregate fair value amounts presented do not represent the underlying
         value of the Bank.

         The following methods and assumptions were used by the Bank in
         estimating its fair value disclosures for financial instruments:

                  Cash and Cash Equivalents: The carrying amounts reported in
                  the statement of financial condition for cash and cash
                  equivalents approximate their fair value.


                                       27
<PAGE>   28

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

                  Fair Values of Financial Instruments (continued):

                  Investment securities: Fair values for investment securities
                  are based on quoted market prices, where available. If quoted
                  market prices are not available, fair values are based on
                  quoted market prices of comparable instruments.

                  Loans: For variable-rate loans that re-price frequently and
                  with no significant change in credit risk, fair values are
                  based on carrying amounts. The fair values for other loans
                  (for example, fixed rate commercial real estate and rental
                  property mortgage loans and commercial and industrial loans)
                  are estimated using discounted cash flow analysis, based on
                  interest rates currently being offered for loans with similar
                  terms to borrowers of similar credit quality. Loan fair value
                  estimates include judgments regarding future expected loss
                  experience and risk characteristics. The carrying amount of
                  accrued interest receivable approximates its fair value.

                  Deposits: The fair values disclosed for demand deposits (for
                  example, interest-bearing checking accounts and passbook
                  accounts) are, by definition, equal to the amount payable on
                  demand at the reporting date (that is, their carrying
                  amounts). The carrying amounts of variable-rate, fixed-term
                  money market accounts and certificates of deposit approximate
                  their fair values. The fair values for fixed rate certificates
                  of deposit are estimated using a discounted cash flow
                  calculation that applies interest rates currently being
                  offered on certificates to a schedule of aggregated
                  contractual maturities on such time deposits.

                  Accrued Interest: The carrying amount of accrued interest
                  approximates the fair values.

                  Off-Balance-Sheet Instruments: Fair values for
                  off-balance-sheet lending commitments are based on fees
                  currently charged to enter into similar agreements, taking
                  into account the remaining terms of the agreements and the
                  counterparties' credit standings.

         Advertising

         The Bank expenses advertising costs as they are incurred.

         Net Income Per Share

         Net income per share of common stock has been computed on the basis of
         the weighted-average number of shares of common stock outstanding.

         Comprehensive Income

         Comprehensive income is defined as the change in equity from
         transactions and other events from non-owner sources. It includes all
         changes in equity except those resulting from investments by
         shareholders and distributions to shareholders. Comprehensive income
         includes net income and certain elements of "other comprehensive
         income" such as foreign currency translations, accounting for futures
         contracts; employers accounting for pensions; and accounting for
         certain investments in debt and equity securities.


                                       28
<PAGE>   29

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

         Comprehensive Income (continued):

         The Bank has elected to report its comprehensive income in the
         Statement of Shareholders' Equity. The only element of "other
         comprehensive income" that the Bank has is the unrealized gains or
         losses on available- for-sale securities.

         The components of the change in net unrealized gains (losses) on
         securities were as follows:

<TABLE>
<CAPTION>
                                                                                        2000                 1999
                                                                                     ----------           ---------
<S>                                                                                  <C>                  <C>
Unrealized holding gains (losses)
  arising during the year                                                            $  753,490            (828,982)

Reclassification adjustment for (gains)/losses
  realized in net income                                                                 (4,165)            (10,782)
                                                                                     ----------           ---------

Net unrealized holding gains (losses) before taxes                                      749,325            (839,764)

Tax effect                                                                              299,730             335,906
                                                                                     ----------           ---------

Net change                                                                           $  449,595            (503,858)
                                                                                     ==========           =========
</TABLE>


                                       29
<PAGE>   30

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 2.  INVESTMENTS:

The amortized costs of securities and their approximate fair values are as
follows:

<TABLE>
<CAPTION>
                                                December 31, 2000                            December 31, 1999
                                -----------------------------------------------  ----------------------------------------------
                                               Gross       Gross                               Gross      Gross
                                 Amortized   Unrealized  Unrealized              Amortized   Unrealized  Unrealized
                                    Cost       Gains       Losses    Fair Value    Cost        Gains      Losses     Fair Value
                                -----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------
<S>                             <C>          <C>         <C>         <C>         <C>         <C>         <C>         <C>
Available-for-Sale
U.S. Government
  Federal Agencies              $ 7,155,043      21,103     111,213   7,064,933   7,720,191          --     288,194   7,431,997
State and Municipal
  Governments                     8,231,226      93,443      63,692   8,260,977   7,395,994         204     283,339   7,112,859
Corporate Securities                766,596      14,610          --     781,206          --          --          --          --
Mortgage-Backed
  Securities                      7,782,529      92,014      22,408   7,852,135   5,652,610       2,895     157,033   5,498,472
                                -----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------

Total Available-for-Sale         23,935,394     221,170     197,313  23,959,251  20,768,795       3,099     728,566  20,043,328
                                -----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------

Held-to-Maturity
US Government Agencies                   --          --          --          --     500,000          --       4,548     495,452
State and Municipal
  Governments                       100,585         782          --     101,367     100,749          --       4,442      96,307
                                -----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------

Total Held-to-Maturity              100,585         782           0     101,367     600,749          --       8,990     591,759
                                -----------  ----------  ----------  ----------  ----------  ----------  ----------  ----------

Total Investment
  Securities                    $24,035,979     221,952     197,313  24,060,618  21,369,544       3,099     737,556  20,635,087
                                ===========  ==========  ==========  ==========  ==========  ==========  ==========  ==========
</TABLE>

The amortized cost and market value of debt securities at December 31, 2000, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                                                        Held-to-Maturity            Available-for-Sale
                                                     ------------------------    ------------------------
                                                     Amortized       Fair        Amortized       Fair
                                                       Cost          Value         Cost          Value
                                                     ----------    ----------    ----------    ----------
<S>                                                  <C>           <C>           <C>           <C>
Amounts maturing in:
     One year or less                                $       --            --        55,000        54,898
     After one year through five years                       --            --     2,809,051     2,789,882
     After five years through ten years                      --            --     8,550,009     8,527,111
     After ten years                                    100,585       101,367     4,738,805     4,735,225
     Mortgage-Backed Securities                              --            --     7,782,529     7,852,135
                                                     ----------    ----------    ----------    ----------
                                                     $  100,585       101,367    23,935,394    23,959,251
                                                     ==========    ==========    ==========    ==========
</TABLE>

Accrued interest on investments at December 31, 2000 and 1999 was $263,890 and
$241,885, respectively. During 2000 and 1999 the bank received $2,623,324 and
$4,711,563 proceeds from sales and calls of securities with a carrying value
based on historical cost and adjusted for amortization of premiums and accretion
of discounts of $2,619,159 and $4,700,781 resulting in a realized gain of $4,165
and $10,782 in 2000 and 1999, respectively.


                                       30
<PAGE>   31

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 3.  LOANS RECEIVABLE:

Loans at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                                   2000             1999
                                               ------------     ------------
         <S>                                   <C>              <C>
         Commercial                            $ 39,832,227       35,563,247
         Commercial Real Estate                     138,148          147,015
         Residential Real Estate                 10,520,297       11,726,358
         Installment                             31,922,118       21,768,076
         Consumer                                 2,645,665        1,666,176
         Other                                      189,040          181,453
                                               ------------     ------------
                                                 85,247,495       71,052,325
         Allowance for Loan Losses                 (996,767)        (863,816)
         Net Deferred Loan Origination Fees         (85,372)         (42,459)
                                               ------------     ------------

                                               $ 84,165,356       70,146,050
                                               ============     ============
</TABLE>

         An analysis of the change in the allowance for loan losses follows:

<TABLE>
<CAPTION>
                                                   2000             1999
                                               ------------     ------------
         <S>                                   <C>              <C>
         Balance at Beginning of Year          $    863,816          825,649
         Provision for Loan Losses                  193,791           79,677
         Loans Charged Off                          (64,635)         (47,821)
         Recoveries on Loans                          3,795            6,311
                                               ------------     ------------

         Balance at End of Year                $    996,767          863,816
                                               ============     ============
</TABLE>

A summary of loans by estimated maturity as of December 31, 2000 is as follows:

<TABLE>
         <S>                                   <C>               <C>
         Maturity within one year              $ 35,006,778      29,296,509
         One to five years                       48,234,825      40,670,129
         Over five years                          2,005,893       1,085,919
                                               ------------    ------------

                                               $ 85,247,496      71,052,557
                                               ============    ============
</TABLE>

Accrued interest receivable on loans at December 31, 2000 and 1999 was $377,311
and $357,143, respectively.

At December 31, 2000 and 1999, the total recorded investment in impaired loans
amounted to $273,361 and $292,818, respectively. The amount of the recorded
investment in impaired loans for which there is a related allowance for credit
losses at December 31, 2000 and 1999, is $185,000 and $158,411, respectively.
The amount of the recorded investment in impaired loans for which there is no
related allowance for credit loss and is classified as substandard is $88,361
and $134,407, respectively. The amount of accrued interest is recognized prior
to principal for any cash receipts on impaired loans. Interest income in the
amount of $0 and $17,812 was recognized for cash receipts during 2000 and 1999,
respectively.


                                       31
<PAGE>   32
                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 3.  LOANS RECEIVABLE (CONTINUED):

The Bank has no commitments to loan additional funds to borrowers whose loans
have been modified.

The Bank services loans for others of $8,603,025 and $8,601,891 at December 31,
2000 and 1999 under loan participation agreements. The Bank receives no fees for
servicing these loans and no fees have been received in connection with the
origination of the loan participation agreements.

In the ordinary course of business, the Bank has and expects to continue to have
transactions, including borrowings, with certain of its officers, executive
directors, significant stockholders and their affiliates. In the opinion of
management, such transactions were on substantially the same terms, including
interest rates and collateral, as those prevailing at the time of comparable
transactions with other persons and did not involve more than a normal risk of
collectibility or present any other unfavorable features to the Bank. Loans to
such borrowers at December 31, 2000 and 1999 were $860,761 and $742,529. During
2000, there were additional loans to such related parties in the amount of
$753,204 and repayments amounted to $634,972.

NOTE 4.  PREMISES AND EQUIPMENT:

Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                                       2000              1999
                                                                    ----------        ---------
         <S>                                                        <C>               <C>
         Bank Building                                              $1,308,319        1,307,338
         Land 867,625                                                  867,625
         Land Improvements                                             263,058          263,058
         Leasehold Improvements                                         47,210           47,210
         Furniture and Equipment                                       727,783          721,411
         Computer Equipment                                            579,473          568,359
         Computer Software                                              79,634           58,710
                                                                    ----------        ---------
              Total                                                  3,873,102        3,833,711
                                                                                      ---------
         Accumulated Depreciation                                      963,105          681,627
                                                                    ----------        ---------
         Premises and Equipment-Net                                 $2,909,997        3,152,084
                                                                    ==========        =========
</TABLE>

Depreciation expense for the years ended December 31, 2000 and 1999 was $293,686
and $276,026, respectively.

NOTE 5.  OTHER ASSETS:

Other Assets at December 31 consisted of the following:

<TABLE>
<CAPTION>
                                                                      2000             1999
                                                                    --------          ------
         <S>                                                        <C>               <C>
         Other Real Estate Owned                                    $129,725          48,128
         Prepaid Expense                                              86,642          48,034
         Other Receivables                                             1,331           2,178
                                                                    --------          ------

                                                                    $217,698          98,340
                                                                    ========          ======
</TABLE>


                                       32
<PAGE>   33

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 6.  DEPOSITS:

A summary of deposit account balances at December 31 is as follows:

<TABLE>
<CAPTION>
                                                                        2000             1999
                                                                    ------------      ----------
         <S>                                                        <C>               <C>
         Regular Checking                                           $  3,170,150       2,536,443
         Club Checking                                                    39,410          17,900
         Discount Checking                                               143,168          81,325
         Small Business Accounts                                       4,457,803       3,452,867
         Commercial Checking                                           3,144,637       3,169,821
         Primetime Checking                                            1,107,726         583,512
         NOW Accounts                                                  3,564,331       2,936,344
         Money Market Accounts                                        13,350,529       4,973,571
         Saving Accounts                                              19,830,321      32,220,513
         Certificates of Deposit                                      57,509,109      40,845,777
                                                                    ------------      ----------

         Total                                                      $106,317,184      90,818,073
                                                                    ============      ==========
</TABLE>

At December 31, 2000, scheduled maturities of certificates of deposit are as
follows:

<TABLE>
<CAPTION>
         <S>                                                         <C>
         2001                                                        $54,889,277
         2002                                                          2,411,526
         2003                                                            136,281
         2004                                                                 --
         2005 and Thereafter                                              72,025
                                                                     -----------
                                                                     $57,509,109
</TABLE>

The aggregate amount of short-term jumbo certificates of deposit with a minimum
denomination of $100,000 was $20,222,871 and $16,599,069 at December 31, 2000
and 1999.

The Bank held deposits of approximately $1,377,488 and $1,703,422 for related
parties at December 31, 2000 and 1999, respectively.

NOTE 7.  ACCOUNTS PAYABLE AND OTHER LIABILITIES:

Accounts Payable and Other Liabilities at December 31 consisted of the
following:

<TABLE>
<CAPTION>
                                                                       2000             1999
                                                                    ----------        ---------
         <S>                                                        <C>               <C>
         Line of Credit                                             $2,000,000        2,000,000
         Property Tax Payable                                            6,912            5,970
         Payroll Taxes Payable                                             315            2,293
         Miscellaneous Payables and Other Liabilities                  520,334          722,998
         Accrued State Franchise Tax                                    24,747           23,227
         Net Deferred Income Tax Liability                              81,801               --
         Current Income Tax                                            126,767          110,923
                                                                    ----------        ---------
                                                                    $2,760,876        2,865,411
                                                                    ==========        =========
</TABLE>


                                       33
<PAGE>   34

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 8.  ADVANCES FROM FEDERAL HOME LOAN BANK:

Effective June 13, 1997, People's Community Bank became members of the Federal
Home Loan Bank (FHLB) of Ohio. The Bank has been authorized to borrow up to
$4,300,000 on a line of credit from the FHLB. The Bank's total borrowing
capacity is a component of both capital stock and the member's most recent
Qualified Thrift Lender rating and access to borrowing is dependent upon
submission of advance application. The Bank has outstanding advances of
$2,000,000 and $2,000,000 from the FHLB at December 31, 2000 and 1999,
respectively. In addition, the Bank has pledged $2,300,000 of their line of
credit with the FHLB to the State of Tennessee Collateral Pool to secure public
funds on deposit with the Bank at December 31, 2000.

The table below presents selected information related to short term borrowings.

<TABLE>
<CAPTION>
                                                                       2000             1999
                                                                    ---------         ---------
         <S>                                                        <C>               <C>
         Maximum balance at any month-end
          during the year                                           9,000,000         2,000,000

         Average balance for the year                               2,683,333         2,000,000

         Weighted Average Rate for the year                              6.24%             5.25%

         Weighted Average Rate at year-end                               6.71%             5.25%
</TABLE>

NOTE 9.  UNUSED LINES OF CREDIT:

The Bank entered into an open-ended unsecured line of credit with AmSouth Bank
for $2,500,000 for federal fund purchases and daylight overdrafts. Funds issued
under this agreement are at the AmSouth federal funds rate effective at the time
of borrowing. The line matures at March 31, 2001. The Bank had not drawn on
these funds at December 31, 2000 and 1999.

On September 25, 2000 the Bank also entered into an open-ended unsecured line of
credit with Columbus Bank and Trust for $2,100,000 for federal fund purchases.
Funds issued under this agreement are at the Columbus Bank and Trust federal
funds rate effective at the time of borrowing. The Bank had not drawn any of
these funds at December 31, 2000 and 1999.

NOTE 10.  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK:

At December 31, the Bank had outstanding commitments for unused lines and
letters of credit that are not reflected in the accompanying financial
statements as follows:

<TABLE>
<CAPTION>
                                                                           Variable Rate
                                                                    ---------------------------
                                                                       2000              1999
                                                                    ----------        ---------
         <S>                                                        <C>               <C>
         Lines of Credit                                            $6,240,939        8,822,305
         Letters of Credit                                             405,300          672,800
                                                                    ----------        ---------
            Total                                                   $6,646,239        9,495,105
                                                                    ==========        =========
</TABLE>


                                       34
<PAGE>   35

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 10.  FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (CONTINUED):

Commitments to extend credit are financial instruments with off-balance sheet
risk entered into by the Bank in the normal course of business to meet the
financing needs of its customers. These commitments involve, to varying degrees,
elements of credit and interest rate risk in excess of the amount recognized in
the statement of financial condition. The Bank is at risk from the possible
inability of borrowers to meet the terms of their contracts and from movements
in interest rates. The Bank's exposure to credit loss in the event of
nonperformance by the borrower is represented by the contractual amount of the
financial instruments described above.

Standby letters of credit written are conditional commitments issued by the Bank
to guarantee the performance of a customer to a third party. Those guarantees
are issued to support public and private borrowing arrangements, bond financing,
and similar transactions. The credit risk involved in issuing a letter of credit
is essentially the same as that involved in extending loan facilities to
customers.

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses. Since many
of the commitments may never be drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Bank uses the same credit
policies in making commitments as it does for on-balance sheet instruments. The
Bank evaluates each customer's creditworthiness on a case by case basis.

NOTE 11.  COMMITMENTS AND CONTINGENT LIABILITIES:

The Bank is subject to claims and lawsuits, which arise, primarily in the
ordinary course of business. It is the opinion of management that the
disposition or ultimate resolution of such claims and lawsuits will not have a
material adverse effect on the financial position of the Bank. As of the
completion of the audit, management is not aware of any such outstanding claims
or lawsuits.

NOTE 12. SIGNIFICANT GROUP CONCENTRATIONS CREDIT RISK:

Most of the Bank's business activity is with customers within the Upper East
Tennessee area.

The Bank evaluates each customer's creditworthiness on a case by case basis. The
amount of collateral obtained if deemed necessary by the Bank upon extension of
credit is based on management's credit evaluation of the customer. Collateral
held varies but generally includes real estate, vehicles, equipment and income
producing commercial properties.


                                       35
<PAGE>   36

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 13.  FAIR VALUE OF FINANCIAL INSTRUMENTS:

The estimated fair values of the Bank's financial instruments at December 31
were as follows:

<TABLE>
<CAPTION>
                                                                        2000                                 1999
                                                          -------------------------------        ----------------------------
                                                            Carrying                              Carrying
                                                             Amount           Fair Value           Amount          Fair Value
                                                          ------------        -----------        ----------        ----------
<S>                                                       <C>                 <C>                <C>               <C>
Financial Assets:
  Cash and Due from Banks and
  Federal Funds Sold                                      $  6,672,021          6,672,021         7,408,616         7,408,616
  Securities Held-to-Maturity                                  100,585            101,367           600,749           591,759
  Securities Available-for-Sale                             23,959,251         23,959,251        20,043,328        20,043,328
  Loans Receivable:
  Adjustable Rate Loans under 30 years                      20,417,933         20,417,933        17,246,876        17,246,876
  Fixed Rate Loans with original
     maturities of 30 years                                    163,090             86,891           163,803            88,243
  Fixed Rate Loans with original
    maturities of 5 to 30 years                             43,421,165         40,589,957        35,911,687        27,515,573
  Fixed Rate Loans with original
     maturities of 1 to 5 years                             18,362,627         17,970,448        14,723,306        14,500,371
  Fixed Rate Loans with original
    maturities of less than one year                         2,797,308          2,797,308         3,006,885         3,006,885
  Loans Held for Sale                                          238,478            238,478                --                --
  Accrued Interest Receivable                                  740,041            740,041           619,196           619,196
Financial Liabilities:
  Deposit Liabilities                                      106,317,184        106,317,184        90,818,073        90,818,073
    Off Balance Sheet Instruments:
Commitments to Extend Credit                                        --                 --                --                --
</TABLE>

NOTE 14.  FEDERAL INCOME TAXES:

The provision for income tax for 2000 and 1999 consists of the following:

<TABLE>
<CAPTION>
                                                             2000                1999
                                                          ---------            -------
<S>                                                       <C>                  <C>
Income Tax Expense:
   Current Tax Expense
      Federal                                             $ 346,414            249,608
      State                                                  87,233             61,285
   Deferred Tax (Benefit)
      Federal                                               (42,341)             8,363
      State                                                  (7,472)                --
                                                          ---------            -------
                                                          $ 383,834            319,256
                                                          =========            =======
</TABLE>

                                       36
<PAGE>   37

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 14.  FEDERAL INCOME TAXES (CONTINUED):

A cumulative net deferred tax liability for 2000 is included in Other
Liabilities. A cumulative net deferred tax asset for 1999 is shown on the
statements of financial condition. The components of the asset and liability are
as follows:

<TABLE>
<CAPTION>
                                                                       2000                1999
                                                                    ---------            --------
<S>                                                                 <C>                  <C>
Differences in Depreciation Methods                                 $(125,439)           (134,634)
Difference in Methods for Provision for Loan Losses                    53,181                  --
Net Unrealized Gain/Loss on
  Available-For-Sale Securities                                        (9,543)            287,246
                                                                    ---------            --------
                                                                    $ (81,801)            152,612
                                                                    =========            ========

Deferred Tax Assets                                                 $  53,181             287,246
Deferred Tax Liabilities                                             (134,982)           (134,634)
                                                                    ---------            --------
Net Deferred Tax Assets (Liabilities)                               $ (81,801)            152,612
                                                                    =========            ========
</TABLE>

The following is a reconciliation of the statutory federal income tax rate
applied to pre-tax accounting income, with the income tax provisions in the
statements of income.

<TABLE>
<CAPTION>
                                                                      2000                 1999
                                                                    --------             -------
<S>                                                                 <C>                  <C>
Federal Income Tax Expense at the
   Statutory Rate (34%)                                             $414,209             347,281
Increases (Decreases) Resulting from:
   Nontaxable Interest Income, Net of Non-
     deductible Interest Expense                                    (117,608)            (89,310)
   State Income Taxes, Net of Federal Income
     Tax Benefit                                                      87,233              61,285
                                                                    --------             -------
Provision for Income Taxes                                          $383,834             319,256
                                                                    ========             =======
</TABLE>

NOTE 15. EMPLOYEE BENEFIT PLANS:

Effective May 1, 1998 the Bank adopted a simple IRA plan covering all employees.
Employees may contribute up to $6,000 per year to the plan. The Bank may
contribute up to 3% of the employees annual compensation. Employer contributions
in the amount of $33,000 and $12,000 were accrued at December 31, 2000 and
December 31, 1999, respectively.


                                       37
<PAGE>   38

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 16.  REGULATORY MATTERS:

The Bank is subject to various regulatory capital requirements administered by
its primary federal regulator, the Federal Deposit Insurance Corporation (FDIC).
Failure to meet minimum capital requirements can initiate certain mandatory, and
possibly additional discretionary actions by regulators that, if undertaken,
could have a direct material effect on the Bank's financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve quantitative
measures of the Bank's assets, liabilities and certain off-balance-sheet items
as calculated under regulatory accounting practices. The Bank's capital amounts
and classification are also subject to qualitative judgements by the regulator
about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios of total and Tier I
capital to risk-weighted assets (as defined). Management believes, as of
December 31, 2000 and 1999 that the Bank meets all capital adequacy requirements
to which it is subject.

As of March 31, 1998 the most recent notification from the FDIC, the Bank was
categorized as well capitalized under the regulatory framework for prompt
corrective action. To remain categorized as well capitalized, the Bank will have
to maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage
ratios as disclosed in the table below. There are no conditions or events since
the most recent notification that management believes have changed the Bank's
prompt corrective action category.

The Bank's actual capital and ratio amounts are presented in the following
table:

<TABLE>
<CAPTION>
                                                                                                            To Be Well Capitalized
                                                                                                               Under the Prompt
                                                                                   For Capital                    Corrective
                                                         Actual                  Adequacy Purposes             Action Provisions
                                                 ---------------------       ------------------------       ----------------------
<S>                                              <C>              <C>        <C>               <C>          <C>            <C>
As of December 31, 2000:

    Total Risk-Based Capital
      (To Risk Weighted Assets)                  $10,509,976      11.6%      => 7,249,280      => 8.0%      9,061,600      => 10.0%
    Tier I Capital
      (To Risk Weighted Assets)                    9,513,208      10.5%      => 3,624,640      => 4.0%      5,436,960       => 6.0%
    Tier I Capital
      (To Average Assets)                          9,513,208       8.1%      => 4,684,720      => 4.0%      5,855,900       => 5.0%

As of December 31, 1999:

    Total Risk-Based Capital
      (To Risk Weighted Assets)                  $ 9,742,237      11.3%      => 6,865,600      => 8.0%      8,582,000      => 10.0%
    Tier I Capital
      (To Risk Weighted Assets)                    8,878,421      10.3%      => 3,432,800      => 4.0%      5,149,200       => 6.0%
    Tier I Capital
      (To Average Assets)                          8,878,421       8.7%      => 4,089,640      => 4.0%      5,112,050       => 5.0%
</TABLE>


                                       38
<PAGE>   39

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 16. REGULATORY MATTERS (CONTINUED):

The Bank received notice from the FDIC that the Bank's deposits are insured up
to $100,000 for each depositor, the FDIC assessment for the years ended December
31, 2000 and 1999 was $19,245 and $10,239, respectively.

NOTE 17.  BANK HOLDING COMPANY:

People's Community Bank is a wholly-owned subsidiary of PCB Bancorp, Inc. The
retained earnings of PCB Bancorp, Inc. reflect the accumulated earnings of
People's Community Bank and the consolidated statements of income reflect the
income and expenses of People's Community Bank for the years ended December 31,
2000 and 1999.

The Parent Company's sole source of funds is the receipt of dividends from the
Bank.

                  Condensed Statements of Financial Condition
                                 (Parent Only)
<TABLE>
<CAPTION>
                                                                                   2000              1999
                                                                                ----------        ----------
<S>                                                                             <C>               <C>
     ASSETS
Cash On Deposit with Subsidiary                                                 $  145,861            47,169
Investment in Subsidiary                                                         9,537,066         8,443,141
Dividends Receivable                                                                57,239                --
Premises and Equipment, Net of Accumulated Depreciation
   of $1,766 and $1,342, respectively                                                  354               778
                                                                                ----------        ----------
      Total Assets                                                              $9,740,520         8,491,088
                                                                                ==========        ==========

     LIABILITIES AND SHAREHOLDERS' EQUITY
Dividends Payable                                                               $   57,239                --
Common Stock                                                                       817,700           806,200
Additional Paid-In Capital                                                       7,367,500         7,259,000
Retained Earnings (Deficit)                                                      1,483,766           861,168
Net Unrealized Gain (Loss) on Available-for-Sale Securities
   Net of Tax of $(9,543) and 287,246 respectively                                  14,315          (435,280)
                                                                                ----------        ----------
      Total Liabilities and Shareholders' Equity                                $9,740,520         8,491,088
                                                                                ==========        ==========
</TABLE>


                                       39
<PAGE>   40

                                PCB BANCORP, INC
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 17.  BANK HOLDING COMPANY (CONTINUED):

              Condensed Statements of Income and Retained Earnings
                                  (Parent Only)

<TABLE>
<CAPTION>
                                                                                   2000             1999
                                                                                -----------       --------
<S>                                                                             <C>               <C>
OPERATING INCOME
     Dividend from Subsidiary                                                   $  251,357         120,310
                                                                                ----------        --------
Total Operating Income                                                             251,357         120,310
                                                                                ----------        --------

OPERATING EXPENSES
     Amortization of Organization Costs                                                 --          10,625
     Postage and Printing                                                            5,259           3,702
     Education and Development                                                       1,195           1,195
     Travel                                                                            619           1,457
     Interest Expense                                                                   --             824
     Depreciation Expense                                                              424             388
     Outside Services                                                               14,215          12,926
     Miscellaneous                                                                      20              20
                                                                                ----------        --------
Total Operating Expenses                                                            21,732          31,137
                                                                                ----------        --------

Income from Operations                                                             229,625          89,173

OTHER INCOME (EXPENSE)
     Undistributed Net Income from Investment
        in Wholly-Owned Subsidiary                                                 644,330         581,849
                                                                                ----------        --------

Net Income                                                                         873,955         671,022
Beginning Retained Earnings (Deficit)                                              861,168         310,456
Cash Dividends                                                                    (251,357)       (120,310)
                                                                                ----------        --------
Ending Retained Earnings                                                        $1,483,766         861,168
                                                                                ==========        ========
</TABLE>

                       Condensed Statements of Cash Flows
                                  (Parent Only)
<TABLE>
<S>                                                                             <C>               <C>
Cash Flows from Operating Activities:
     Net Income (Loss)                                                          $  873,955         671,022
     Undistributed Net (Income) Loss of Wholly-Owned
        Subsidiary                                                                (644,330)       (581,849)
     Depreciation Expense                                                              424             388
     Amortization of Organization Costs                                                 --          10,625
     (Increase) in Dividends Receivable                                            (57,239)             --
                                                                                ----------        --------

Net Cash Provided by (Used for) Operating Activities                               172,810         100,186
                                                                                ==========        ========
</TABLE>


                                       40
<PAGE>   41
                               PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 17.  BANK HOLDING COMPANY (CONTINUED):

<TABLE>
<CAPTION>
                                                         2000           1999
                                                      ---------       --------
<S>                                                   <C>             <C>
Cash Flows from Financing Activities:
     Stock Options Exercised                            120,000         65,200
     Dividends Paid                                    (194,118)      (120,310)
                                                      ---------       --------

Net Cash Used for Financing Activities                  (74,118)       (55,110)
                                                      ---------       --------

Increase (Decrease) in Cash and Cash Equivalents         98,692         45,076
Beginning Cash and Cash Equivalents                      47,169          2,093
                                                      ---------       --------

Ending Cash and Cash Equivalents                      $ 145,861         47,169
                                                      =========       ========
</TABLE>

NOTE 18.  STOCK OPTIONS:

During 1996, PCB Bancorp, Inc. adopted a stock option plan for key employees.
The plan is established to provide "Incentive Stock Options" within the meaning
of Section 422 of the Internal Revenue Code of 1986, or "non-statutory" stock
options. The Board of Directors administers the plan.

In addition to the plan for the key employees, PCB Bancorp, Inc. adopted a plan
for non-employee directors. All eligible directors can participate and receive
non-qualified stock options. Directors were granted an initial option to acquire
5,000 shares at an option price of $10, which was the fair value at the date of
the grant. This option was fully vested immediately. Directors are granted an
additional 1,000 shares each year through the year 2000. The shares are granted
at the fair value on the date of grant. Options vest ratably at twenty percent
per year over five years.

Under both plans, no incentive stock option shall be exercisable after the
expiration of 10 years from the date it is granted and the total number of
shares of the Company's common stock that may be transferred pursuant to the
exercise of stock options under the Plan shall not exceed in the aggregate
100,000 shares for the employee stock option plan and 60,000 shares for the
directors stock option plan.

The Company has elected to account for the stock option plan under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", and
related interpretations. Accordingly, no compensation expense has been
recognized for the stock option.

Had compensation expense for the stock option plan been determined based on the
fair value of the options at the grant date consistent with the methodology
prescribed under Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation", the Company's net income in 2000 and
1999 would have been $843,170 and $638,785, respectively. The pro forma earnings
per share would have been $1.04 and $0.80 in 2000 and 1999, respectively. The
Company calculates a weighted-average fair value for each option. The
weighted-average fair value for the options granted in 2000 and 1999 was $ 16.20
and $17.61, using the following assumptions for both years:

<TABLE>
       <S>                                      <C>
       Risk-free interest rate                   5.5%
       Expected life (years)                      10
       Expected volatility                         8%
       Expected dividends                        None
</TABLE>


                                       41
<PAGE>   42

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 18.  STOCK OPTIONS (CONTINUED):

A summary of option transactions during the years ended December 31, 2000 and
1999 is shown below:

<TABLE>
<CAPTION>
                                                       Number      Weighted-Average
                                                     of Shares      Exercise Price
                                                     ---------     ----------------
<S>                                                  <C>           <C>
Outstanding at January 1, 1999                        115,000            10.50
       Granted:  Directors                             10,000            25.00
                 Employees                              5,000            25.00
                                                      -------
                                                      130,000            12.54

Exercised at December 31, 1999                          6,200            10.71
                                                      -------

Outstanding at December 31, 1999                      123,800            12.63
                                                      =======

Exercisable at December 31, 1999                       73,000            12.63
                                                      =======

Outstanding at January 1, 2000                        123,800
       Granted:  Directors                              5,000            23.00
                                                      -------
                                                      128,800            13.08
Expired during 2000                                     6,000            13.08
Exercised during 2000                                  11,500            10.43
                                                      -------

Outstanding at December 31, 2000                      111,300            13.29
                                                      =======

Exercisable at December 31, 2000                       86,000            13.29
                                                      =======
</TABLE>

A summary of options outstanding as of December 31, 2000 is shown below:

<TABLE>
<CAPTION>
                                                    Weighted-Average
                 Exercise   Number of Options     Remaining Contractual
                  Price        Outstanding           Life Outstanding
                ---------   ----------------      ---------------------
                <S>         <C>                   <C>
                $  10.00         81,900                 5.5 years
                   16.00          4,600                 6.5 years
                   20.00          4,800                 7.5 years
                   25.00          5,000                 8.5 years
                   25.00         10,000                   9 years
                   23.00          5,000                  10 years
                   -----        -------
                                111,300
                                =======
</TABLE>


                                       42
<PAGE>   43

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

NOTE 19.  EARNINGS PER SHARE:

<TABLE>
<CAPTION>
                                                                            FOR THE YEAR ENDED
                                           -------------------------------------------------------------------------------------
                                                              2000                                        1999
                                           ----------------------------------------    -----------------------------------------
                                                         Weighted-Average                           Weighted-Average
                                             Income           Shares      Per-Share       Income          Shares       Per-Share
                                           (Numerator)    (Denominator)     Amount     (Numerator)    (Denominator)      Amount
                                           -----------  ----------------  ---------    -----------  ----------------   ---------
<S>                                        <C>          <C>               <C>          <C>          <C>                <C>
Net Income                                   $873,955            --           --          671,022             --          --

Basic EPS
Income Available to
Common Stockholders                           873,955       811,266         1.08          671,022        802,633         .84

Effect of Dilutive Options

Stock Options
  (using the Treasury Stock
  Method)                                          --        68,607           --               --         76,563          --
                                             --------       -------         ----          -------        -------         ---

Diluted EPS

Income Available to
  Common Stockholders plus
  Assumed Exercise of Options                $873,955       879,873          .99          671,022        879,196         .76
                                             ========       =======         ====          =======        =======        ====
</TABLE>


                                       43
<PAGE>   44

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         The names of the Company's directors and executives officers, together
with certain information regarding them, are as follows:

<TABLE>
<CAPTION>
       Name, Age, and Address                   Company Position                       Principal Occupation
------------------------------------            ------------------------               ----------------------------
<S>                                             <C>                                    <C>
Phillip R. Carriger (53)                        Director and                           Banker
6 Fox Run Lane                                  Chief Executive Officer
Johnson City, TN 37604

Michael T. Christian (58)                       Director and                           Banker
110 Belmeade Circle                             President
Johnson City, TN  37601

Thomas J. Garland (66)                          Director                               College Professor/Consultant
1208 Christy Court
Greeneville, TN 37743

Timothy P. Jones (58)                           Director                               Newspapers
824 E. Myrtle Avenue
Johnson City, TN 37601

C.C. Marshall (67)                              Director                               Real Estate Developer
1805 Sherwood Dr.
Johnson City, TN 37601

James D. Swartz (65)                            Director                               Newspapers
112 Barberry, Unit 30
Johnson City, TN 37604

James W. Gibson, M.D. (67)                      Director                               Radiologist
810 Cloudland Drive
Johnson City, TN 37601
</TABLE>

Biographies of Directors and Officers

Phillip R. Carriger, age 53, has been the Chief Executive Officer of People's
Community in Johnson City since 1995. Prior to that time, he was the Senior Vice
President of Hamilton Bank's Corporate Division. Mr. Carriger has over 26 years
of experience in the banking industry, having worked for the Comptroller of the
Currency as an Assistant National Bank Examiner, C&C Bank of Anderson County as
a Senior Vice President and First American National Bank (in the Knoxville and
Johnson City offices) as a Senior Vice President. Mr. Carriger graduated from
the University of Tennessee with a B.S. Degree in Economics in 1971. Mr.
Carriger is a member of the Kiwanis Club, East Tennessee State University
Foundation Board of Trustees, Economic Development Board, Johnson City
Development Authority Board, United Way and Girl's Inc. Board of Directors and
President of the Johnson City Country Club Board of Directors.

Michael T. Christian, age 58, spent 28 years with NationsBank and its
predecessors. He last served as Executive Vice President in charge of retail
banking for Tennessee and Kentucky. Prior to that, he was Executive Vice
President over all of Tennessee and Kentucky community banks. Mr. Christian
graduated from the University of Tennessee in 1966. He has served on numerous
civic


                                       44
<PAGE>   45

and professional boards of directors including the Tennessee Bankers
Association, the Federal Reserve Bank of Nashville, the Tennessee Manufacturer's
Association and Tusculum College. He is a former Captain, U.S. Army, Armor.

C.C. Marshall, age 67, has been President of Mountcastle Corporation, a real
estate development and construction firm, since 1967. Mr. Marshall was a
director of Hamilton Bank for 17 years. He is a graduate of East Tennessee State
University and a native of Johnson City.

Timothy P. Jones, age 58, is a Vice President, director and stockholder of Press
Holding Corporation, the publisher of the Johnson City Press newspaper and seven
other newspapers. Mr. Jones received his A.B. Degree in Economics from Wofford
College, has a Masters degree in Mass Communications from Texas Tech University
and is a former directors of the Tennessee Press Association. He is also a
former director of Hamilton Bank and a past Chairman of the Board of Directors
of the Johnson City/Jonesborough/Washington County Chamber of Commerce. Mr.
Jones is Past President of the Johnson City Evening Rotary Club, Past President
of the Johnson City Country Club Board of Directors, a member of the East
Tennessee State University Foundation Board of Trustees, Economic Development
Board and Johnson City Development Authority Board.

Thomas J. Garland, age 66, served for 21 years in the Tennessee State Senate (17
years as Senate Minority Leader). He is a former Chancellor of the Tennessee
Board of Regents, former Chairman of the Board of Commerce Union Bank (now
NationsBank) in Greeneville, Tennessee, and also served as Executive Vice
President and a director of First American Bank, Tri-Cities. Mr. Garland, a
graduate of East Tennessee State University, currently serves as Chairman of the
Tusculum Institute for Public Leadership and Policy at Tusculum College. He is a
member of the Board of Directors of Atmos Energy Corporation, Dallas Texas, and
a former director of Tri-State Container, now Inland Container, in Elizabethton,
Tennessee. Mr. Garland is a member of the boards of the Johnson City Medical
Center, the Sequoyah Council Boy Scouts of America, ETSU National Alumni
Association, the Greater Tri-Cities Business Alliance and the East Tennessee
State University Foundation Board of Trustees.

James D. Swartz, age 65, has been a co-owner of Swartz-Morris Media (which owns
two newspapers) and Swart Media Consultants, a company that advises newspapers
in operation systems, since 1988. Prior to that time, Mr. Swartz was President
or Worrell Enterprises, a media company with 33 newspapers and three television
stations. Mr. Swartz was born in Johnson City, Tennessee, and currently serves
on the East Tennessee State University Foundation Board of Trustees and ETSU
College of Business Board of Advisors.

James W. Gibson, M.D., age 67, is currently associated with Mountain Empire
Radiology , P.C. and has practiced his specialty of radiology in Johnson City
since 1965. Dr. Gibson received his undergraduate education from Vanderbilt
University, his Medical Degree from the University of Tennessee Medical School
in Memphis and served his residency in radiology at Duke University Medical
Center, Durham, North Carolina. He presently serves on the National Alumni
Council for the University of Tennessee Medical School and is a member of the
ETSU Foundation. He has served on the Johnson City Medical School Board of
Directors and the Watauga Mental Health Center Board of Directors.

ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table

         The following table summarizes the compensation paid or accrued for the
years ended December 31, 2000, 1999, 1998, and 1997 to the Chief Executive
Officer. There are no other officers of the Company or Bank whose total annual
salary exceeds $100,000; accordingly, disclosure regarding executive
compensation is provided in the below tables only with respect to the Chief
Executive Officer.


                                       45
<PAGE>   46

<TABLE>
<CAPTION>
                                                                                 Annual
                                                                              Compensation
                                                       Fiscal                                               Salary
Name and Current Position                               Year               Salary ($)     Bonus ($)      Compensation
------------------------------                        --------           ---------------------------     ------------
<S>                                                   <C>                <C>                             <C>
Phillip R. Carriger                                     2000                      $120,500                 $2,215 (1)
                                                        1999                      $114,150                 $1,901 (1)
                                                        1998                      $108,750                 $1,304 (1)
   President and Chief Executive                        1997                      $102,000                 $3,800 (1)
   Officer, Director
</TABLE>

(1)      Represents automobile reimbursement.


Option Grants in Preceding Fiscal Years

         The following table sets forth information concerning stock option
grants to the Company's Chief Executive Officer during 1996. There were no
grants prior to that time or after that time.

<TABLE>
<CAPTION>
                                                      # OF SECURITIES                  % OF TOTAL
                                                    UNDERLYING OPTIONS              OPTIONS GRANTED TO
Name                                                      GRANTED                   EMPLOYEES IN 1996
----------------------                              -------------------             ------------------
<S>                                                 <C>                             <C>
Phillip R. Carriger                                        40,000                          51.61%
</TABLE>

Value of Unexercised Options

         This table presents information regarding the value of unexercised
options held at December 31, 1999. No stock options were exercised, and there
were no SARs outstanding during 2000, 1999, 1998, 1997, or 1996.

<TABLE>
<CAPTION>
                                                                                           VALUE OF UNEXERCISABLE
                                                       NUMBER OF UNEXERCISED                IN-THE-MONEY OPTIONS
                                                       OPTIONS AT FY-END (#)                    AT FY-END (1)
Name                                                 EXERCISABLE/UNEXERCISABLE            EXERCISABLE/UNEXERCISABLE
-----------------------------                       --------------------------           ---------------------------
<S>                                                 <C>                                  <C>
Phillip R. Carriger                                        24,000/16,000                       $264,000/$176,000
</TABLE>

(1)      Dollar values were calculated by determining the difference between the
         price of common stock on December 31, 2000 of $21.00 per share and the
         exercise price of such options

Director Compensation

         The outside directors of the Company are entitled to receive options
under the PCB Bancorp, Inc. Outside Directors' Stock Option Plan. See "Stock
Incentive Plans."

Stock Incentive Plans

         The Company's Board of Directors and its shareholders have adopted and
approved the 1996 Stock Option Plan (the "Employee Plan") and the Outside
Directors' Stock Option Plan (the "Directors' Plan"). The Plans are intended to
promote the interests of the Company and its shareholders, to improve the
long-term financial performance of the Company, and to attract and retain the
Company's management team by providing competitive financial incentives.

         1996 Stock Option Plan. The persons to whom options may be granted
under the Employee Plan will be determined from time to time by the Company's
Compensation Committee (the "Committee"). Officers and key employees of the
Company of the Company and its subsidiary, as determined by the Board or the
Committee, are eligible for grants of options.


                                       46
<PAGE>   47

         The Employee Plan provides for the granting of incentive stock options
and non-statutory stock options. Incentive stock options offer employees the
possibility of deferring taxes until the underlying shares of stock acquired
upon exercise of the option are sold. For some of the Company's employees, the
benefits of incentive stock options are outweighed by the disadvantages of
certain restrictions imposed by the Internal Revenue Code. In addition, with
non-statutory stock options, the Company receives a tax deduction at the time
the employee recognizes ordinary income in an amount of such income to the
employee. With incentive stock options, the Company does not receive a tax
deduction at any time (assuming that the employee meets the holding period
requirements for capital gain treatment).

         The Employee Plan is administered by the Committee. No person while a
member of the Committee is eligible to be granted an option under the Employee
Plan. Members of the Committee are appointed, and vacancies thereon filled, by
the Board of Directors of the Company, and the Board has the power to remove
members of the Committee.

         An aggregate of 100,000 shares of the Company's common stock, no par
value, may be issued pursuant to the exercise of stock options by such officers
and key employees of the Company and its subsidiary as the Committee determine.
As of December 31, 1996, options covering a total of 77,500 shares had been
granted under the Employee Plan. There are no limitations on the number of
shares of common stock which may be optioned to any one person, except that the
aggregate fair market value (determined as of the time the option is granted) of
Company Common Stock with respect to which incentive stock options are
exercisable for the first time by an employee during any calendar under the
Employee Plan (and any other incentive stock option plan of the Company or any
subsidiary) may not exceed $100,000.

         Outside Directors' Stock Option Plan. The Directors' Plan provides that
each person (except Dr. Gibson) who was a non-employee director of the Company
in April 1996, will receive an option to purchase 5,000 shares of the Company's
common stock, no par value. This option was exercisable immediately. In
addition, on the first business day following the annual meeting of shareholders
of each of the years 1996 through and including 2000, each outside director
immediately following such annual meeting will be granted an option to purchase
1,000 shares of stock. These options will vest at a rate of 20% per year on the
anniversary date of the annual meeting of shareholders. The exercise price of
all options shall equal the fair market of the Company's common stock on the
date of the grant.

         An aggregate of 60,000 shares are reserved for grants of options
pursuant to the Directors' Plan. Shares subject to options which terminate or
expire unexercised will be available for future option grants. The total number
of shares subject to the Director's Plan and the number covered under each
individual option is subject to automatic adjustment in the event of stock
dividends, recapitalizations, mergers, consolidations, split-ups, combinations
or exchanges of shares and the like, as determined by the Board of Directors.

         If any non-employee director ceases to be a director as a result of
death or total disability while holding an option that has not expired and has
not been fully exercised, such person or such person's executors,
administrators, heirs, personal representative, conservator, or distributees
may, at any time within six months after the date of such death or total
disability, exercise the option in its entirety with respect to all remaining
shares covered by that option.

         The options under the Directors' Plan are nonstatutory options intended
not to qualify as incentive stock options under Section 422 of the Internal
Revenue Code. The grant of options will not result in taxable income to the
non-employee director or a tax deduction to the Company. The exercise of an
option by a non-employee director will result in taxable ordinary income to the
non-employee director and a corresponding deduction for the Company, in each
case equal to the difference between the option price and the fair market value
of the shares on the date the option is exercised.

         The Director's Plan is administered by the Board of Directors who is
authorized to interpret the Plan but has no authority with respect to the
selection of directors to receive options or the option price for shares subject
to the Directors' Plan. The Board has no authority to materially increase the
benefits under the plan. The Board may amend the Directors' Plan as it shall
deem advisable but may not, without further shareholder approval, increase the
maximum number of shares under the plan or options granted there under, reduce
the minimum option price, extend the period during which options may be granted
or exercised, or change the class of persons eligible to receive options.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


                                       47
<PAGE>   48

         The following table sets forth as of December 31, 2000 certain
information with respect to the shares of the common stock of the Company
beneficially owned by the shareholders known to the Company to own beneficially
more than 5% of the shares and the shares of common stock beneficially owned by
the Company's directors and executive officers and by all of its executive
officers and directors as a group. The shares listed below and the percentage of
ownership for each person named below have been calculated assuming that all
presently exercisable options and options that will become exercisable within
120 days from the date of this table, that have been issued pursuant to any of
the Company's stock option plans, have been exercised.

<TABLE>
<CAPTION>
       Name and Address                                                                 Number of Shares Beneficially
     of Beneficial Owners                                                                    Owned on 12/31/00 (%)
-----------------------------                                                           -----------------------------
<S>                                                                                     <C>                   <C>
Phillip R. Carriger (1)                                                                      63,250           (7.74%)
6 Fox Run Lane
Johnson City, TN 37604

Thomas J. Garland (2)                                                                        15,150           (1.85%)
1208 Christy Court
Greeneville, TN 37743

Timothy P. Jones (2)                                                                         16,400           (2.01%)
824 E. Myrtle Avenue
Johnson City, TN 37601

C.C. Marshall (2)                                                                            54,189           (6.63%)
1805 Sherwood Dr.
Johnson City, TN 37601

James D. Swartz  (4)                                                                         51,200           (6.26%)
112 Barberry, Unit 30
Johnson City, TN 37604

James W. Gibson, M.D. (3)                                                                    11,400           (1.39%)
810 Cloudland Drive
Johnson City, TN 37601

All Directors and Executive Officers as a group (five persons) (5)                          211,589          (25.88%)
</TABLE>

(1)      Includes 40,000 shares which Mr. Carriger currently has a right to
         acquire under Company stock options.

(2)      Includes 6,400 shares which each of these directors currently has a
         right to acquire under Company stock options.

(3)      Includes 1,400 shares which Dr. Gibson currently has a right to acquire
         under Company stock options.

(4)      Includes 200 shares which Mr. Swartz currently has a right to acquire
         under Company stock options.

(5)      Includes 60,800 shares which all officers and directors as a group
         currently have a right to purchase under Company stock options.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company's directors and officers, as well as business organizations
and individuals associated with them, are customers of the Bank. All loan
transactions to such individuals and entities are made in the ordinary course of
business and on the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with unrelated
borrowers and do not involve more than the normal risk of collectibility or
present other unfavorable features.


                                       48
<PAGE>   49
There are no cases in which aggregate extensions of credit outstanding to any
one director or officer and his associates exceeds 10% of the equity capital of
the Bank. At December 31, 2000, the total amount of loans to directors and
executive officers was $861 thousand, or approximately 8.9% of shareholder's
equity.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      List of Exhibits Filed

<TABLE>
<CAPTION>
         Exhibit
         Number                    Description
         -------  --------------------------------------------------------------
         <S>      <C>
         3.1      Charter of Registrant (previously filed as Exhibit 3(a) as
                  part of the Registration Statement on Form S-4 No. 333-4984,
                  filed June 6, 1996, which incorporated herein by reference).

         3.2      Bylaws of Registrant (previously filed as Exhibit 3 (b) as
                  part of the Registration Statement No. 333-4984, which exhibit
                  is incorporated herein by reference).

         10.1     PCB Bancorp, Inc. 1996 Stock Option Plan (previously filed as
                  Appendix C to Registration Statement No. 333-4984, which
                  appendix is incorporated herein by reference).

         10.2     PCB Bancorp, Inc. Outside Directors' Stock Option Plan
                  (previously filed as Appendix D to Registration Statement No.
                  33-4984, which appendix is incorporated herein by reference).

         21       Subsidiaries of the Registrant - The Registrant's sole
                  subsidiary is "People's Community Bank", a Tennessee state
                  chartered banking institution.

         (b)      Reports on Form 8-K. No reports on Form 8-K filed during the
                  fourth quarter of the Registrant's last fiscal year.
</TABLE>

         In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                    PCB BANCORP, INC.
                    (Registrant)


                    By: /s/ Phillip R. Carriger
                       ---------------------------------------------------------
                       Phillip R. Carriger, Chairman and Chief Executive Officer
                       (Principal Executive Officer)

                    Date: March 27, 2001
                          ------------------------------------------------------


                    By: /s/ Larry Parks
                       ---------------------------------------------------------
                       Larry Parks, Vice President
                       (Principal Accounting Officer)

                    Date: March 27, 2001
                          ------------------------------------------------------


                                       49
<PAGE>   50

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.

                 By: /s/ Phillip R. Carriger
                    ------------------------------------------------------------
                    Phillip R. Carriger, Chairman and Chief Executive Officer
                   (Principal Executive Officer)

                 Date: March 27, 2001
                       ---------------------------------------------------------


                 By: /s/ Michael T. Christian
                    ------------------------------------------------------------
                    Michael T. Christian, President and Director

                 Date: March 27, 2001
                       ---------------------------------------------------------


                 By: /s/ Thomas J. Garland
                    ------------------------------------------------------------
                    Thomas J. Garland, Director

                 Date: March 27, 2001
                       ---------------------------------------------------------


                 By: /s/ Timothy P. Jones
                    ------------------------------------------------------------
                    Timothy J. Jones, Director

                 Date: March 27, 2001
                       ---------------------------------------------------------


                 By: /s/ C.C. Marshall
                    ------------------------------------------------------------
                    C.C. Marshall, Director

                 Date: March 27, 2001
                       ---------------------------------------------------------


                 By: /s/ J.D. Swartz
                    ------------------------------------------------------------
                    J.D. Swartz, Director

                 Date: March 27, 2001
                       ---------------------------------------------------------


                 By: /s/ James W. Gibson
                    ------------------------------------------------------------
                    James W. Gibson, Director

                 Date: March 27, 2001
                       ---------------------------------------------------------


                                       50