<PAGE>
                     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, 2001

                          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:
                                                        $ 9,800,803

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 15,
2002, is $12,916,020 for 645,801 shares, at an estimated $20.00 per share.

                                     827,500
     (Outstanding shares of the issuer's common stock as of March 15, 2002)


<PAGE>

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 six years of operations, on December 31, 2001, the Bank had
grown to total assets of more than $130,194,000.

         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 55,000 as of December 31, 2001.

         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 42 full-time employees (excluding
maintenance employees) as of December 31, 2001.

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 Board of Directors (the
"Loan Committee"), which consists of both management and non-management
directors of the Bank.

<PAGE>

Loan Review

         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 2001
approximately 51% 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, 2001, the Company had approximately 42 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 May of 2001 David LeVeau was hired as Senior Accounting Officer to
assume responsibilities held by Chief Financial Officer, Samantha Bruce, who
left on maternity leave.

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.


<PAGE>

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.

         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, 2001, the Company's
risk-based Tier 1 Capital and risk-based Total Capital ratios were 10.7% and
11.8%, respectively. 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.

         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,
2001 was 8.5% and at December 31, 2000 was 8.1%.

         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, 2001 were
approximately $2,344,632. 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 2001,
the Bank paid a dividend of $237,917 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 2001, the Company paid quarterly dividends equivalent to $.07 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.

<PAGE>

         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.

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.


<PAGE>

         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, 2001, 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.

         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.


<PAGE>

         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 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.

<PAGE>

         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 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.

<PAGE>

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, 2001.


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 2001 and 2000:


<TABLE>
<CAPTION>
2001                               High            Low
                                 -------        -------
<S>                              <C>            <C>
     First Quarter ......        $ 21.00        $ 21.00
     Second Quarter .....        $ 21.00        $ 20.00
     Third Quarter ......        $ 21.00        $ 20.00
     Fourth Quarter .....        $ 20.50        $ 19.00
</TABLE>



<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
</TABLE>


The most recent trade of the Company's common stock known to the Company
occurred on March 15, 2002 at a price of $20.00 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 15, 2002, there were approximately 417 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 2000 and 2001. Total assets have grown $10.9 million or more than 8.4%
from December 2000 to December 2001. The growth in total assets has been funded
by an increase in deposits of $15.5 million from December 1999 to December 2000
and $4.8 million from December 2000 to December 2001. Loans have increased $14.2
million during 2000, and increased $4.8 million in 2001. Investment securities
have increased $3.4 million in 2000 but have decreased $1.8 million in 2001.
This growth in loan production and the anticipated future growth in loans and
investment securities will allow the Bank to satisfy its cash requirements. It
is not anticipated that it will be necessary to raise any additional funds.


<PAGE>

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 $294 thousand which were ninety days past
due as of December 31, 2000 and had loans totaling $606 thousand which were past
due at December 31, 2001. 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 $4.3 million and $6.0
million at December 31, 2000 and 2001, respectively, and federal funds sold of
$2.4 million and $7.6 million at December 31, 2000 and 2001, respectively.
Additionally, investment securities, which are available-for-sale, at December
31, 2001, had a fair value of $22.2 million. Loans maturing in one year or less,
from December 31, 2001, are estimated to be $38.6 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, 2000 was $9.7 million or 8.1% of total
assets and at December 31, 2001 is $10.8 million or 8.3% of total assets, which
represents a strong capital position.

Results of Operations

The Company had net income of $873,955 for the year ended December 31, 2000. For
the year-ended December 31, 2001, the Company had net income of $1,098,783. 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 2002 year.

Interest income increased due to the increase in earning assets while interest
expense decreased slightly with deposits growing at a slower rate from December
31, 2000 to December 31, 2001. The growth in noninterest income reflects the
increase in loans and deposits, resulting primarily from the service charges on
deposit accounts.

The provision for loan losses has increased due to the increase in loans. The
allowance of $996,767 and $1,116,566 at December 31, 2000 and 2001,
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
$606 thousand. In reference to the impaired loans, the Company has related
allowance for credit losses totaling $185 thousand, leaving a balance classified
as substandard of $421 thousand.

Net Interest Earnings

As depicted in the table below, the Bank experienced moderate growth in the 2001
year. Since December 31, 2000, growth was primarily from the volume increase in
business and managing the cost/yield spread. Any increase or decrease due to
rate changes would have been insignificant.

<PAGE>

<TABLE>
<CAPTION>
   Dollar                                                                            Average           Interest
   Average          Increase                                                        Balances            Earned
    Yield           from 2000                                                         2001             or Paid
--------------     ------------                                                   --------------     -------------
<S>                <C>               <C>                                          <C>                <C>
                                     Interest Earning Assets (in 000's):
                                        Loans:
        6.25%           $2,690            Commercial                                  $40,811            $3,111
        0.00%               --            Real Estate Construction                          0                 0
        8.35%             (138)            Commercial Real Estate                          86                 2
        8.18%           (1,584)            Residential Real Estate                     10,087               812
        7.73%            4,167            Installments                                 34,197             2,988
        7.06%             (291)            Consumer Single Pay                          2,577               207
        0.00%                0            Loans Held for Sale                               0                 0
       18.00%              (62)           Other                                           370                20
     -------            -------                                                       -------            ------
        7.07%           $4,615       Totals                                           $88,043            $7,140
     =======            =======                                                       =======            ======
</TABLE>

<TABLE>
<CAPTION>
   Dollar                                                                            Average           Interest
   Average          Increase                                                        Balances            Earned
    Yield           from 1999                                                         2000             or Paid
--------------     ------------                                                   --------------     -------------
<S>                <C>               <C>                                          <C>                <C>
                                     Interest Earning Assets (in 000's):
                                        Loans:
        9.05%           $4,225            Commercial                                 $38,474            $3,492
        0.00%                0            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%         $ 11,886       Totals                                          $79,857            $7,058
     -------          --------                                                       -------            ------
</TABLE>

The Bank has $294 thousand of non-accruing loans from the date of inception
through December 31, 2000. The Bank had $606 thousand of non-accruing loans from
the date of inception through December 31, 2001. In the calculation of changes
of interest these are not included in the interest income computations.


Interest Bearing Liabilities (in 000's):

<TABLE>
<CAPTION>

   Dollar                                                                           Average          Interest
   Average          Increase                                                        Balances          Earned
    Yield           from 2000                                                         2001            or Paid
--------------     ------------                                                   -------------     ------------
<S>                <C>              <C>                                           <C>               <C>
         .96%         $    897      NOW Accounts                                       $ 4,864              102
        2.18%           22,137      Money Market Accounts                               22,513              923
        2.46%            6,367      Savings Accounts                                    23,170              804
        4.22%         (28,310)      Certificates of Deposit                             46,373            2,768
     -------          --------                                                        --------          -------
        2.69%         $  1,091         Totals                                         $ 96,920          $ 4,597
     -------          --------                                                        --------          -------

        4.38%      Net Yield
</TABLE>


<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
</TABLE>

<PAGE>

Investment Portfolio

Held-to-Maturity (in 000's):


<TABLE>
<CAPTION>
   December 31,           Average                                                               December 31,          Average
       2000                Yield         State and Municipal Governments:                           2001               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%
               101            5.00%      After Ten Years                                                   101            5.00%
            ------           -----                                                                      ------           -----
               101            5.00%         Total Held-to-Maturity                                         101            5.00%
            ------           -----                                                                      ------           -----



   December 31,           Average                                                               December 31,          Average
       2000                Yield         U.S. Government & Government Agency:                       2001               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%
            ------           -----                                                                      ------           -----
                 0            0.00%         Total Held-to-Maturity                                           0            0.00%
            ------           -----                                                                      ------           -----
</TABLE>

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


Available-for-Sale (in 000's):

<TABLE>
<CAPTION>
   December 31,           Average                                                               December 31,          Average
       2000                Yield         U.S. Government & Government Agency:                       2001               Yield
-------------------     ------------     ------------------------------------------------     -----------------     ------------
<S>                     <C>              <C>                                                  <C>                   <C>
                 0            0.00%      Maturity within one year                                            0             0.0%
             1,486            6.09%      Maturity within one to five years                                 537            5.16%
             4,578            6.72%      Maturity within five to ten years                               2,012            5.40%
             1,001            7.65%      After ten years                                                 3,412            7.96%

                                         State and Municipal Governments:

                55            4.20%      Maturity within one year                                          217            6.44%
             1,845            4.29%      Maturity within one to five years                               1,956            6.60%
             3,272            4.56%      Maturity within five to ten years                               4,442            6.69%
             3,089            4.94%      After ten years                                                 3,097            7.62%

                                         Corporates                                                          0

               781            8.04%      Maturity within five to ten years                                                0.00%

             7,852            6.94%      Mortgage-Backed Securities                                      6,493            6.50%
           -------          ------                                                                     -------          ------
            23,959            6.12%         Total Available-for-Sale                                    22,164            6.70%
           =======          ======                                                                     =======          ======
</TABLE>

The Bank had no foreign loans at December 31, 2001.

Summary of Loan Loss Experience (in 000's)


<TABLE>
<CAPTION>
    2000                                                                          2001
<S>                                                                           <C>
-------------                                                                 -----------
        $ 864     Balance at Beginning of Period                                    $ 997
-------------                                                                 -----------
          (65)        Charge-Offs
                                                                                     (203)
                     Recoveries
            4                                                                         (13)
-------------                                                                 -----------
          (61)     Net Recoveries
                                                                                     (216)
-------------                                                                 -----------
          194     Additions Charged to Operations
                                                                                      335
-------------                                                                 -----------
        $ 997     Balance at the End of Period                                    $ 1,117
=============                                                                 ===========

                  Ratio of net charge-offs during the period to
        0.17%       average Loans outstanding during the period                      0.14%
</TABLE>

The allowance for loan loss represents 1.26% 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.


<PAGE>

Return on Equity and Assets

<TABLE>
<CAPTION>
                                                            2001                     2000
                                                          --------                 -------
<S>                                                       <C>                      <C>
Return on Assets                                             0.88%                    0.79%
Return on Equity                                            10.75%                    8.70%
</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, 2001 and
December 31, 2000 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.


<PAGE>

                             People's Community Bank
                       Rate Sensitivity Analysis (in 000)
                                December 31, 2001

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                                        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                                                                              $5,791         $5,791
Federal Funds Sold                   7,573                  7,573                 7,573                           7,573
U.S. Treasury Securities                                                                                             --
U.S. Government Agencies                                                                                             --
Available for Sale Securities          545      21,617      3,573     18,590      7,734    14,429                22,162
Held to Maturity Securities                        102                   102        102                             102
Corporate Bonds & Notes
Federal Home Loan Bank Stock           339                    339                   339                             339
Loans & Leases (net unearn disc.)   32,988      57,186     38,960     51,225     87,713     2,471                90,184
Allowance for Loan Losses                                                                            (1,117)     (1,117)
Premises, Furn, Fixt, Equip                                                                           2,910       2,672
Other Assets                                                                                          2,131       2,131
-----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                       $41,455     $78,905    $50,444    $69,916   $103,460   $16,900    $9,478    $129,838
-----------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------
Liabilities & Capital                RSL4      FRL5       RSL4       FRL5      RSL4       FRL5      NPL6       Total
-----------------------------------------------------------------------------------------------------------------------
Demand Deposits                                                                                      16,400      16,400
NOW Accounts                         5,569                  5,569                 5,569                           5,569
Invest. Money Market Accounts       35,487                 35,487                35,487                          35,487
Regular Savings                     26,198                 26,198                26,198                          26,198
Certificates of Deposit             10,018      19,181     26,093      3,107     29,179        20                29,200
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                                                                            14          14
-----------------------------------------------------------------------------------------------------------------------
 TOTAL LIAB. & CAPITAL             $77,273     $19,181    $93,347     $3,107   $96,434   $20       $33,384     $129,838
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>
                          3 mo      12 mo       60 mo                 3 mo      12 mo     60 mo
                      --------------------------------            ------------------------------
             <S>      <C>          <C>        <C>                    <C>       <C>       <C>
               RSA       41,455      50,444    103,460       RSL      77,273    93,347    95,434
               FRA       78,905      69,916     16,900       FRL      19,181     3,107        --
               NEA        9,478       9,478      9,478       NPL      16,400    16,400    16,400
                                                          EQUITY      16,983    16,983    16,983
                      --------------------------------            ------------------------------
              TOTAL    $129,838    $129,838   $129,838              $129,838  $129,838  $129,817
                      ================================            ==============================
</TABLE>


<TABLE>
<CAPTION>
   RATE SENSITIVITY MEASURES:        3 mo      12 mo       60 mo
---------------------------------------------------------------------
<S>                                <C>         <C>         <C>                <C>
             RSA/RSL                 53.65%      54.04%    107.29%            1RSA =RATE SENSITIVE ASSETS
             RSA-RSL                                                          2FRA =FIXED RATE ASSETS
                                   (35,818)    (42,903)     7,027             3NEA =NON EARNING ASSETS
           GAP/Equity              -210.90%    -249.62%     41.37%            4RSL =RATE SENSITIVE LIABILITIES
             GAP/TA                 -27.59%     -33.04%      5.41%            5FRL =FIXED RATE LIABILITIES
                                                                              6NPL =NON PAYING LIABILITIES
</TABLE>



<PAGE>

                             People's Community Bank
                       Rate Sensitivity Analysis (in 000)
                                December 31, 2000


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

                                PCB BANCORP, INC.

                                  CONSOLIDATED
                              FINANCIAL STATEMENTS

                                      WITH

                          INDEPENDENT AUDITORS' REPORT

                 For the Years Ended December 31, 2001 and 2000


<PAGE>

                                PCB BANCORP, INC.
                           December 31, 2001 and 2000

                                      INDEX

<TABLE>
<CAPTION>
                                                                                          Page
                                                                                         Number
                                                                                         ------
<S>                                                                                      <C>
Independent Auditors' Report                                                                1

Consolidated Statements of Financial Condition                                              2

Consolidated Statements of Income                                                         3 - 4

Consolidated Statements of Shareholders' Equity                                             5

Consolidated Statements of Cash Flows                                                     6 - 7

Notes to the Consolidated Financial Statements                                           8 - 26
</TABLE>


<PAGE>

                          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, 2001 and 2000, and the related consolidated statements of income,
shareholders' equity and cash flows for the years then ended. These consolidated
financial statements are the responsibility of PCB Bancorp's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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, 2001 and
2000, and the results of their operations and their cash flows for the years
then ended, in conformity with accounting principles generally accepted in the
United States of America.

                                       BLACKBURN, CHILDERS AND STEAGALL, PLC

February 22, 2002


<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                                 2001                  2000
                                                                                             ------------          -----------
<S>                                                                                          <C>                     <C>
                                     ASSETS

Cash and Due from Banks                                                                      $  6,040,810            4,289,021
Federal Funds Sold                                                                              7,573,000            2,383,000
Securities Held-to-Maturity                                                                       100,412              100,585
Securities Available-for-Sale                                                                  22,163,522           23,959,251
Loans Held for Sale                                                                               732,723              238,478
Loans Receivable, Net of Allowance for Loan Losses
 and Deferred Loan Origination Fees                                                            88,960,311           84,165,356
Interest Receivable                                                                               608,365              740,041
Premises and Equipment, Net of Accumulated Depreciation                                         2,671,769            2,909,997
Restricted Investments - Stock in Federal Home Loan Bank, Cost                                    338,700              311,200
Deferred Tax Asset                                                                                181,853                   --
Other Assets                                                                                      822,794              217,698
                                                                                             ------------          -----------

           Total Assets                                                                      $130,194,259          119,314,627
                                                                                             ============          ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
    Deposits:
       Demand Deposits                                                                       $ 14,682,509           10,955,168
       Savings and NOW Deposits                                                                67,033,953           37,635,988
       Other Time Deposits                                                                     29,420,183           57,726,028
    Interest Payable                                                                              195,124              496,047
    Dividend Payable                                                                               66,200               57,239
    Line of Credit                                                                              6,000,000            2,000,000
    Deferred Tax Liability                                                                             --               81,801
    Accounts Payable and Other Liabilities                                                      2,027,823              679,075
                                                                                             ------------          -----------
           Total Liabilities                                                                  119,425,792          109,631,346
                                                                                             ------------          -----------

SHAREHOLDERS' EQUITY:
    Common Stock - $1 par value; 3,000,000 shares authorized; 827,500 and
       817,700 shares issued and outstanding, at
       2001 and 2000, respectively                                                                827,500              817,700
    Additional Paid-in Capital                                                                  7,474,500            7,367,500
    Retained Earnings                                                                           2,344,632            1,483,766
    Accumulated Other Comprehensive Income                                                        121,835               14,315
                                                                                             ------------          -----------
           Total Shareholders' Equity                                                          10,768,467            9,683,281
                                                                                             ------------          -----------

           Total Liabilities and Shareholders' Equity                                        $130,194,259          119,314,627
                                                                                             ============          ===========
</TABLE>

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


                                       2
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                        CONSOLIDATED STATEMENTS OF INCOME
                 For the Years Ended December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                                 2001                  2000
                                                                                             ------------           -----------
<S>                                                                                          <C>                    <C>
INTEREST INCOME:
    Interest on Loans                                                                        $  7,139,666             7,058,370
    Interest on Investments                                                                     1,440,341             1,367,589
    Interest on Federal Funds Sold                                                                208,733               149,930
                                                                                             ------------           -----------

       Total Interest Income                                                                    8,788,740             8,575,889
                                                                                             ------------           -----------

INTEREST EXPENSE:
    Interest on Interest Bearing Checking Accounts                                                102,000                99,215
    Interest on Money Market Accounts                                                             922,978               444,817
    Interest on Passbook Accounts                                                                 877,027             1,123,169
    Interest on Certificates of Deposit                                                         2,694,454             3,137,088
    Interest on Other Borrowed Funds                                                              311,118               164,734
                                                                                             ------------           -----------

       Total Interest Expense                                                                   4,907,577             4,969,023
                                                                                             ------------           -----------

Net Interest Income                                                                             3,881,163             3,606,866
    Provision for Loan Losses                                                                     335,426               193,791
                                                                                             ------------           -----------

Net Interest Income after Provision for Loan Losses                                             3,545,737             3,413,075
                                                                                             ------------           -----------

NON-INTEREST INCOME:
    Service Charges                                                                               403,438               382,632
    Loan Origination Fees                                                                         569,452               351,743
    Net Gains from Sale of Loans                                                                       --                 2,328
    Net Realized Gains on Sales and Calls of Securities                                            82,867                 4,165
    Net Realized Loss on Sale of Other Real Estate Owned                                          (11,486)                   --
    Net Unrealized Impairment Loss on Other Real Estate Owned                                     (65,962)                   --
    Miscellaneous Income                                                                           33,754                 3,180
                                                                                             ------------           -----------

       Total Non-Interest Income                                                                1,012,063               744,048
                                                                                             ------------           -----------

NON-INTEREST EXPENSES:
    Salaries                                                                                    1,524,271             1,412,658
    Payroll Taxes                                                                                 117,687               107,234
    Employee Benefits                                                                             136,252               146,327
    Occupancy Expense                                                                             108,294               102,416
    Rental Expense                                                                                 31,800                25,200
</TABLE>

                                   (Continued)


                                       3
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                        CONSOLIDATED STATEMENTS OF INCOME
                 For the Years Ended December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                                 2001                   2000
                                                                                             ------------           -----------
<S>                                                                                          <C>                    <C>
NON-INTEREST EXPENSES (CONTINUED):
    Furniture and Equipment Expense                                                                31,614                24,460
    Computer Equipment Expense                                                                     95,682               100,357
    Stationery, Supplies and Printing                                                              86,578                88,015
    Postage, Express and Freight                                                                   89,664                89,000
    Telephone Expense                                                                              50,551                49,811
    Vehicle Expense                                                                                22,244                22,564
    Outside Services                                                                              125,722               101,991
    Teller Over and Short                                                                            (865)                1,300
    Advertising and Promotion                                                                      63,490                77,515
    Loan Collection Expense                                                                        18,371                20,804
    Bank Security and Protection                                                                    4,255                 3,629
    FDIC Assessment                                                                                19,984                19,245
    Insurance                                                                                      43,726                39,864
    Dues and Subscriptions                                                                         19,458                22,316
    Franchise Tax Expense                                                                          26,978                24,747
    Refunds and Reimbursements                                                                      8,557                12,722
    Travel and Meetings                                                                             1,561                 3,669
    Contributions                                                                                   7,015                 6,454
    Depreciation                                                                                  286,844               293,686
    Directors' Fees                                                                                48,750                31,635
    Miscellaneous Expenses                                                                         44,209                71,715
                                                                                             ------------           -----------

       Total Non-Interest Expenses                                                              3,012,692             2,899,334
                                                                                             ------------           -----------

Income Before Taxes                                                                             1,545,108             1,257,789

INCOME TAX PROVISION:
    Income Tax Expense                                                                            446,325               383,834
                                                                                             ------------           -----------

Net Income                                                                                   $  1,098,783               873,955
                                                                                             ============           ===========

Net Income per Share - Basic                                                                 $       1.34                  1.07
                                                                                             ============           ===========

Net Income per Share - Assuming Dilution                                                     $       1.25                   .99
                                                                                             ============           ===========
</TABLE>

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


                                       4
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 For the Years Ended December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                                  Accumulated
                                                                   Additional                        Other
                                                    Common           Paid-in        Retained     Comprehensive
                                                    Stock            Capital        Earnings         Income           Total
                                                   --------        ----------       ---------    -------------      ----------
<S>                                                <C>             <C>              <C>          <C>                <C>
Balances, January 1, 2000                          $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

COMPREHENSIVE INCOME:
Net Income                                               --               --        1,098,783             --        1,098,783
Other Comprehensive Income
    Net of Tax:
      Change in Unrealized
        Gain (Loss) on Securities
        Available-For-Sale, Net
        of Deferred Income Tax
        of $71,681                                                                                   107,520          107,520
                                                                                                   ---------
Total Comprehensive Income                                                                         1,206,303
Stock Option Exercises                                9,800          107,000             --               --          116,800
Cash Dividends                                           --               --        (237,917)             --         (237,917)
                                                   --------        ---------       ---------       ---------       ----------

Balances, December 31, 2001                        $827,500        7,474,500       2,344,632         121,835        10,768,467
                                                   ========        =========       =========       =========       =========
</TABLE>

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


                                       5
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2001 and 2000

<TABLE>
                                                                                                 2001                   2000
                                                                                             ------------           -----------
<S>                                                                                          <C>                        <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Income                                                                               $  1,098,783               873,955
    Adjustments to Reconcile Net Income to Net Cash
      Provided by Operating Activities:
        Depreciation Expense                                                                      286,844               293,686
        Provision for Loan Losses                                                                 335,426               193,791
        Discount Accretion Net of Premium Amortization                                           (108,455)              (73,037)
        Origination of Mortgage Loans Held for Sale                                           (21,976,525)           (4,426,300)
        Proceeds from Mortgage Loans Sold                                                      21,486,003             4,187,822
        Net Realized Gains on Sales and Calls of Securities                                       (82,867)               (4,165)
        Deferred Income Tax                                                                      (263,076)              (49,813)
        (Increase) Decrease in Assets:
           Interest Receivable                                                                    131,676              (120,845)
           Other Assets                                                                          (605,096)             (119,358)
        Increase (Decrease) in Liabilities:
           Interest Payable                                                                      (300,923)              174,144
           Accounts Payable and Other Liabilities                                               1,348,748              (186,336)
                                                                                             ------------           -----------
Net Cash Provided by Operating Activities                                                       1,350,538               743,544
                                                                                             ------------           -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net (Increase) Decrease in Federal Funds Sold                                              (5,190,000)           (1,024,000)
    Purchases of Available-for-Sale Securities                                                (12,377,460)           (5,371,357)
    Proceeds from Maturities and Calls of Held-to-Maturity Securities                                  --               500,000
    Proceeds from Sales Maturities and Calls of Available-For-Sale Securities                  12,207,993             2,330,688
    Principal Payments Received on Mortgage Backed Securities                                   2,260,291               612,796
    Purchases of Restricted Investments                                                           (27,500)              (35,700)
    Purchases of Premises and Equipment                                                           (48,997)              (51,808)
    Loan Participations Bought                                                                 (1,038,163)           (2,916,116)
    Loan Participations Sold                                                                    2,375,189             2,239,462
    Net Increase in Loans                                                                      (6,467,407)          (14,213,097)
                                                                                             ------------           -----------
Net Cash Used for Investing Activities                                                         (8,306,054)          (17,929,132)
                                                                                             ------------           -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Dividends Paid                                                                               (228,956)             (194,118)
    Stock Options Exercised                                                                       116,800               120,000
    Proceeds from Line of Credit                                                                4,000,000                    --
    Net Increase in Deposits                                                                    4,819,461            15,499,111
                                                                                             ------------           -----------
Net Cash Provided by Financing Activities                                                       8,707,305            15,424,993
                                                                                             ------------           -----------

Increase (Decrease) in Cash and Cash Equivalents                                                1,751,789            (1,760,595)
                                                                                             ------------           -----------
</TABLE>

                                   (Continued)


                                       6
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                                 2001                  2000
                                                                                             ------------          -----------
<S>                                                                                          <C>                   <C>
Increase (Decrease) in Cash and Cash Equivalents                                                1,751,789           (1,760,595)
   (Brought Forward)

Cash and Cash Equivalents, Beginning of Year                                                    4,289,021            6,049,616
                                                                                             ------------          -----------

Cash and Cash Equivalents, End of Year                                                       $  6,040,810            4,289,021
                                                                                             ============          ===========

SUPPLEMENTAL DISCLOSURES:
    Cash Paid During the Year for Interest                                                   $  5,208,500            4,794,879
                                                                                             ============          ===========

    Cash Paid During the Year for Income Taxes                                               $    511,022              417,803
                                                                                             ============          ===========

    Loans Transferred to Other Real Estate Owned (Foreclosures)                              $    935,353                    0
                                                                                             ============          ===========
</TABLE>

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


                                       7
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

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 accounting principles
generally accepted in the United States of America 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 judgments 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.


                                       8
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

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
judgment, 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, collateral 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.


                                       9
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     Allowance for Loan Losses (continued):

     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.

     Other Real Estate Owned

     Real estate properties acquired through or in lieu of loan foreclosure are
     initially recorded at the lower of the Bank's carrying amount or fair value
     less estimated selling cost at the date of foreclosure. Any write-downs
     based on the asset's fair value at the date of acquisition are charged to
     the allowance for loan losses. After foreclosure, these assets are carried
     at the lower of their new cost basis or fair value less cost to sell.
     Valuations are periodically performed by management, and any subsequent
     write-downs are recorded as a charge to operations, if necessary, to reduce
     the carrying value of a property to the lower of its cost or fair value
     less cost to sell.

     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.


                                       10
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     Fair Values of Financial Instruments (continued):

        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.

        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.


                                       11
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     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.

     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>
                                                                      2001              2000
                                                                   ---------           -------
        <S>                                                        <C>              <C>
        Unrealized holding gains (losses)
          arising during the year                                  $ 262,067           753,490

        Reclassification adjustment for (gains)/losses
          realized in net income                                     (82,867)           (4,165)
                                                                   ---------           -------

        Net unrealized holding gains (losses) before taxes           179,200           749,325

        Tax effect                                                    71,680           299,730
                                                                   ---------           -------

        Net change                                                 $ 107,520           449,595
                                                                   =========           =======
</TABLE>

NOTE 2.  FINANCIAL STATEMENT PRESENTATION:

Certain amounts in the December 31, 2000 financial statements have been
reclassified to conform to the December 31, 2001 presentation.


                                       12
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 3.  INVESTMENTS:

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

<TABLE>
<CAPTION>
                                               December 31, 2001                                  December 31, 2000
                                 ---------------------------------------------    ----------------------------------------------
                                                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               $5,930,185     31,893       708     5,961,370     7,155,043     21,103    111,213     7,064,933
State and Municipal
  Governments                     9,676,293    118,493    85,964     9,708,822     8,231,226     93,443     63,692     8,260,977
Corporate Securities                     --         --        --            --       766,596     14,610         --       781,206
Mortgage-Backed
  Securities                      6,353,985    145,780     6,435     6,493,330     7,782,529     92,014     22,408     7,852,135
                                 ----------    -------    ------    ----------    ----------    -------    -------    ----------

Total Available-for-Sale         21,960,463    296,166    93,107    22,163,522    23,935,394    221,170    197,313    23,959,251
                                 ----------    -------    ------    ----------    ----------    -------    -------    ----------

Held-to-Maturity
State and Municipal
  Governments                       100,412        474        --       100,886       100,585        782         --       101,367
                                                          ------    ----------    ----------    -------    -------    ----------

Total Held-to-Maturity              100,412        474         0       100,886       100,585        782          0       101,367
                                                                                  ----------    -------    -------    ----------

Total Investment
  Securities                     $22,060,875   296,640    93,107    22,264,408    24,035,979    221,952    197,313    24,060,618
                                 ==========    =======    ======    ==========    ==========    =======    =======    ==========
</TABLE>

The amortized cost and market value of debt securities at December 31, 2001, 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                           $      --              --            215,000        216,526
     After one year through five years                 --              --          3,322,566      3,370,958
     After five years through ten years                --              --          6,537,906      6,541,142
     After ten years                              100,412         100,886          5,531,006      5,541,566
     Mortgage-Backed Securities                        --              --          6,353,985      6,493,330
                                                ---------        --------         ----------     ----------
                                                $ 100,412         100,886         21,960,463     22,163,522
                                                =========        ========         ==========     ==========
</TABLE>

Accrued interest on investments at December 31, 2001 and 2000 was $190,519 and
$263,890, respectively. During 2001 and 2000 the bank received $12,207,993 and
$2,330,688 proceeds from sales and calls of securities available for sale with a
carrying value based on historical cost and adjusted for amortization of
premiums and accretion of discounts of $12,125,126 and $2,326,523 resulting in a
realized gain of $82,867 and $4,165 in 2001 and 2000, respectively.


                                       13
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 4.  LOANS RECEIVABLE:

Loans at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                                                        2001                        2000
                                                                    ------------               -----------
       <S>                                                          <C>                        <C>
       Commercial                                                   $ 42,439,024                39,832,227
       Commercial Real Estate                                                  -                   138,148
       Residential Real Estate                                         9,155,830                10,520,297
       Installment                                                    36,107,446                31,922,118
       Consumer                                                        2,354,874                 2,645,665
       Other                                                             127,013                   189,040
                                                                    ------------               -----------
                                                                      90,184,187                85,247,495
       Allowance for Loan Losses                                      (1,116,566)                 (996,767)
       Net Deferred Loan Origination Fees                               (107,310)                  (85,372)
                                                                    ------------               -----------

                                                                    $ 88,960,311                84,165,356
                                                                    ============               ===========
</TABLE>

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

<TABLE>
<CAPTION>
                                                                         2001                      2000
                                                                    ------------               -----------
       <S>                                                          <C>                        <C>
       Balance at Beginning of Year                                 $    996,767                   863,816
       Provision for Loan Losses                                         335,426                   193,791
       Loans Charged Off                                                (203,061)                  (64,635)
       Recoveries on Loans                                               (12,566)                    3,795
                                                                    ------------               -----------

       Balance at End of Year                                       $  1,116,566                   996,767
                                                                    ============               ===========
</TABLE>

A summary of loans by estimated maturity as of December 31, 2001 is as follows:

<TABLE>
<CAPTION>
                                                                        2001                        2000
                                                                    ------------               -----------
       <S>                                                          <C>                        <C>
       Maturity within one year                                     $ 38,638,067                35,006,778
       One to five years                                              48,457,575                48,234,825
       Over five years                                                 3,088,545                 2,005,892
                                                                    ------------               -----------

                                                                    $ 90,184,187                85,247,495
                                                                    ============                ==========
</TABLE>

Accrued interest receivable on loans at December 31, 2001 and 2000 was $417,846
and $476,151 respectively.

At December 31, 2001 and 2000, the total recorded investment in impaired loans
amounted to $298,959 and $273,361, respectively. The amount of the recorded
investment in impaired loans for which there is a related allowance for credit
losses at December 31, 2001 and 2000, is $185,000 and $185,000, 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 $113,959
and $88,361, 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 $0 was recognized for cash receipts during 2001 and 2000,
respectively.


                                       14
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 4.  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 $10,438,214 and $8,063,025 at December 31,
2001 and 2000 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, 2001 and 2000 were $237,345 and $860,761. During
2001, there were additional loans to such related parties in the amount of $0
and repayments amounted to $623,416.

NOTE 5.  PREMISES AND EQUIPMENT:

Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                                             2001                  2000
                                                                         -----------           ----------
       <S>                                                               <C>                   <C>
       Bank Building                                                     $ 1,308,319            1,308,319
       Land 867,625                                                          867,625
       Land Improvements                                                     263,058              263,058
       Leasehold Improvements                                                 47,210               47,210
       Furniture and Equipment                                               727,320              727,783
       Computer Equipment                                                    591,634              579,473
       Computer Software                                                      74,456               79,634
       Construction in Progress                                               25,800                    -
                                                                         -----------           ----------
            Total                                                          3,905,422            3,873,102
       Accumulated Depreciation                                            1,233,653              963,105
                                                                         -----------           ----------
       Premises and Equipment-Net                                        $ 2,671,769            2,909,997
                                                                         ===========           ==========
</TABLE>

Depreciation expense for the years ended December 31, 2001 and 2000 was $286,844
and $293,686, respectively.

NOTE 6.  OTHER ASSETS:

Other Assets at December 31 consisted of the following:

<TABLE>
<CAPTION>
                                                                            2001                  2000
                                                                        ----------             --------
       <S>                                                              <C>                    <C>
       Other Real Estate Owned                                          $  738,205              129,725
       Prepaid Expense                                                      76,150               86,642
       Other Receivables                                                     8,439                1,331
                                                                        ----------             --------

                                                                        $  822,794              217,698
                                                                        ==========             ========
</TABLE>


                                       15
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 7.  DEPOSITS:

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

<TABLE>
<CAPTION>
                                                              2001                 2000
                                                          -----------         ------------
       <S>                                                <C>                 <C>
       Regular Checking                                   $ 3,005,864            3,170,150
       Club Checking                                           76,101               39,410
       Discount Checking                                      295,705              143,168
       Small Business Accounts                              5,625,638            4,457,803
       Commercial Checking                                  5,679,201            3,144,637
       Primetime Checking                                   1,736,148            1,107,726
       NOW Accounts                                         3,832,857            3,564,331
       Money Market Accounts                               35,487,464           13,350,529
       Saving Accounts                                     25,977,484           19,830,321
       Certificates of Deposit                             29,420,183           57,509,109
                                                         ------------         ------------

       Total                                            $ 111,136,645          106,317,184
                                                        =============         ============
</TABLE>

At December 31, 2001, scheduled maturities of certificates of deposit are as
follows:

<TABLE>
           <S>                                         <C>
          2002                                         $ 26,116,617
          2003                                            2,185,349
          2004                                              764,277
          2005                                               68,817
          2006                                                    -
          2007 and Thereafter                               285,123
                                                       ------------
                                                       $ 29,420,183
</TABLE>

The aggregate amount of short-term jumbo certificates of deposit with a minimum
denomination of $100,000 was $9,259,539 and $20,222,871 at December 31, 2001 and
2000.

The Bank held deposits of approximately $1,240,999 and $1,377,488 for related
parties at December 31, 2001 and 2000 respectively.

NOTE 8.  ACCOUNTS PAYABLE AND OTHER LIABILITIES:

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

<TABLE>
<CAPTION>
                                                              2001                   2000
                                                           -----------            --------
       <S>                                                 <C>                    <C>
       Property Tax Payable                                $    14,605               6,912
       Payroll Taxes Payable                                       (60)                315
       Miscellaneous Payables and Other Liabilities          1,780,987             520,334
       Accrued State Franchise Tax                              26,978              24,747
       Current Income Tax Payable                              205,313             126,767
                                                           -----------            --------
                                                           $ 2,027,823             679,075
                                                           ===========            ========
</TABLE>


                                       16
<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 9.  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
$8,748,269 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
$6,000,000 and $2,000,000 from the FHLB at December 31, 2001 and 2000,
respectively. In addition, the Bank has pledged $2,300,000 and $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, 2001 and 2000,
respectively. Specific mortgage loans were pledged by the Bank with an
approximate value of $8,197,926 and $5,805,000 as of December 31, 2001 and 2000,
respectively.

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

<TABLE>
<CAPTION>
                                                                            2001               2000
                                                                         ---------          ---------
                <S>                                                      <C>                <C>
                Maximum balance at any month-end
                during the year                                          9,000,000          9,000,000

                Average balance for the year                             5,666,667          2,683,333

                Weighted Average Rate for the year                        4.75%               6.24%

                Weighted Average Rate at year-end                         4.75%               6.71%
</TABLE>

NOTE 10.  UNUSED LINES OF CREDIT:

The Bank previously 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 matured on March 31, 2001 and was
not renewed. The Bank had not drawn on these funds at December 31, 2001 and
2000.

The Bank entered into an open-ended unsecured line of credit with Columbus Bank
and Trust for $2,500,000 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 line is renewed annually upon review by Columbus Bank and
Trust. The Bank had not drawn any of these funds at December 31, 2001 and 2000.

On August 23, 2001, the Bank also entered into an open-ended unsecured line of
credit with Compass Bank for $2,100,000 for federal fund purchases. Funds issued
under this agreement are at the effective rate of Compass Bank at the time of
borrowing. The line matures on September 30, 2002. The Bank had not drawn any of
these funds at December 31, 2001.


                                       17
<PAGE>
                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 11.  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
                                        -------------------------------------
                                              2001                  2000
                                        ------------------    --------------

<S>                                        <C>                     <C>
       Lines of Credit                     $ 5,988,543             6,240,939
       Letters of Credit                     1,061,046               405,300
                                             ---------          ------------
          Total                            $ 7,049,589             6,646,239
                                             =========            ==========
</TABLE>

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 12.  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.

NOTE 13.  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.

                                       18


<PAGE>


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


NOTE 14.  FAIR VALUE OF FINANCIAL INSTRUMENTS:

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

<TABLE>
<CAPTION>
                                                                 2001                          2000
                                                    ------------------------------   ---------------------------
                                                      Carrying                        Carrying
                                                       Amount          Fair Value      Amount        Fair Value
                                                    ------------      ------------   -----------     -----------
<S>                                                 <C>                <C>             <C>            <C>
    Financial Assets:
      Cash and Due from Banks and
      Federal Funds Sold                            $ 13,623,210       13,623,210      6,672,021      6,672,021
      Securities Held-to-Maturity                        100,412          100,886        100,585        101,367
      Securities Available-for-Sale                   22,163,522       22,163,522     23,959,251     23,959,251
      Loans Receivable:
      Adjustable Rate Loans under 30 years            25,358,602       25,358,602     20,417,933     20,417,933
      Fixed Rate Loans with original
         maturities of 30 years                          161,050           89,043        163,090         86,891
      Fixed Rate Loans with original
        maturities of 5 to 30 years                   46,339,013       43,666,576     43,421,165     40,589,957
      Fixed Rate Loans with original
         maturities of 1 to 5 years                   15,402,653       15,646,967     18,362,627     17,970,448
      Fixed Rate Loans with original
        maturities of less than one year               2,815,559        2,815,559      2,797,308      2,797,308
      Loans Held for Sale                                732,723          732,723        238,478        238,478
      Interest Receivable                                608,365          608,365        740,041        740,041
    Financial Liabilities:
      Deposit Liabilities                            111,136,645      111,136,645    106,317,184    106,317,184
    Off Balance Sheet Instruments:
      Commitments to Extend Credit                  $         --           12,753             --          3,125
</TABLE>


NOTE 15.  FEDERAL INCOME TAXES:

The provision for income tax for 2001 and 2000 consists of the following:

<TABLE>
<CAPTION>
                                                                     2001                    2000
                                                                --------------          --------------
<S>                                                             <C>                         <C>
    Income Tax Expense:
       Current Tax Expense
          Federal                                               $   584,187                 346,414
          State                                                     125,214                  87,233
       Deferred Tax (Benefit)
          Federal                                                  (223,615)                (42,341)
          State                                                     (39,461)                 (7,472)
                                                                  ---------               ----------
                                                                $   446,325              $  383,834
</TABLE>


                                       19


<PAGE>


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


NOTE 15.  FEDERAL INCOME TAXES (CONTINUED):
-------------------------------------------

A cumulative net deferred tax asset for 2001 is shown on the Statements of
Financial Condition. A cumulative net deferred tax liability for 2000 is shown
on the statements of financial condition. The components of the asset and
liability are as follows:

<TABLE>
<CAPTION>
                                                                     2001                     2000
                                                                -------------            -------------
<S>                                                             <C>                    <C>
    Differences in Depreciation Methods                         $   (85,022)               (125,439)
    Difference in Methods for Provision for Loan Losses             321,714                  53,181
    Difference in Valuation of Other Real Estate Owned               26,385                       -
    Net Unrealized Gain/Loss on
      Available-For-Sale Securities                                 (81,224)                 (9,543)
                                                                 ----------            ------------
                                                                 $  181,853                 (81,801)
                                                                  =========             ===========

    Deferred Tax Assets                                          $  348,099                  53,181
    Deferred Tax Liabilities                                       (166,246)               (134,982)
                                                                  ---------              ----------
    Net Deferred Tax Assets (Liabilities)                        $  181,853                 (81,801)
                                                                  =========             ===========
</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>
                                                                     2001                     2000
                                                                -------------            --------------
<S>                                                             <C>                      <C>
    Federal Income Tax Expense at the
       Statutory Rate (34%)                                      $  428,319                 414,209
    Increases (Decreases) Resulting from:
       Nontaxable Interest Income, Net of Non-
         deductible Interest Expense                               (107,208)               (117,608)
       State Income Taxes, Net of Federal Income
         Tax Benefit                                                125,214                  87,233
                                                                  ---------            ------------
    Provision for Income Taxes                                   $  446,325                 383,834
                                                                  =========             ===========
</TABLE>


NOTE 16. 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 $29,502 and $33,000 were accrued at December 31,
2001 and December 31, 2000, respectively.


                                       20


<PAGE>


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 17.  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 judgments 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, 2001 and 2000 that the Bank meets all capital adequacy requirements
to which it is subject.

As of August 6, 2001, 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, 2001:

    Total Risk-Based Capital
      (To Risk Weighted Assets)    $ 12,006,868   11.8%       > 8,170,880    > 8.0%    10,213,600    > 10.0%
    Tier I Capital                                            -              -                       -
      (To Risk Weighted Assets)      10,890,868   10.7%       > 4,085,440    > 4.0%     6,128,160    > 6.0%
    Tier I Capital                                            -              -                       -
      (To Average Assets)            10,890,868    8.5%       > 5,135,960    > 4.0%     6,419,950    > 5.0%
                                                              -              -                       -
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%
                                                              -              -                       -
</TABLE>


                                       21


<PAGE>


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


NOTE 17. 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, 2001 and 2000 was $ 19,984 and $19,245, respectively.


NOTE 18.  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,
2001 and 2000.

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>
 ASSETS                                                                2001              2000
                                                                   -----------        -----------
<S>                                                                <C>                    <C>
 Cash On Deposit with Subsidiary                                   $   249,622            145,861
 Investment in Subsidiary                                           10,518,845          9,537,066
 Dividends Receivable                                                   66,200             57,239
 Premises and Equipment, Net of Accumulated Depreciation
    of $2,120 and $1,766, respectively                                      --                354
                                                                   -----------        -----------
          Total Assets                                             $10,834,667          9,740,520
                                                                   ===========        ===========

           LIABILITIES AND SHAREHOLDERS' EQUITY
Dividends Payable                                                  $    66,200             57,239
Common Stock                                                           827,500            817,700
Additional Paid-In Capital                                           7,474,500          7,367,500
Retained Earnings (Deficit)                                          2,344,632          1,483,766
Net Unrealized Gain (Loss) on Available-for-Sale Securities
Net of Tax of $81,223 and (9,543) respectively                         121,835             14,315
                                                                   -----------        -----------
          Total Liabilities and Shareholders                       $10,834,667          9,740,520
                                                                   ===========        ===========
</TABLE>


                                       22

<PAGE>


                                PCB BANCORP, INC
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 18.  BANK HOLDING COMPANY (CONTINUED):

              Condensed Statements of Income and Retained Earnings
                                  (Parent Only)


<TABLE>
<CAPTION>
                                                                                    2001             2000
                                                                                -----------    --------------
<S>                                                                          <C>               <C>
       OPERATING INCOME
            Dividend from Subsidiary                                         $    237,917           251,357
                                                                                 --------       -----------
       Total Operating Income                                                     237,917           251,357
                                                                                 --------       -----------

       OPERATING EXPENSES
            Postage and Printing                                                    3,011             5,259
            Education and Development                                                   -             1,195
            Travel                                                                      -               619
            Depreciation Expense                                                      354               424
            Outside Services                                                       10,028            14,215
            Miscellaneous                                                               -                20
                                                                              -----------   ---------------
       Total Operating Expenses                                                    13,393            21,732
                                                                              -----------      ------------

       Income from Operations                                                     224,524           229,625

       OTHER INCOME (EXPENSE)
            Undistributed Net Income from Investment
               in Wholly-Owned Subsidiary                                         874,259           644,330
                                                                               ----------        ----------

       Net Income                                                               1,098,783           873,955
       Beginning Retained Earnings (Deficit)                                    1,483,766           861,168
       Cash Dividends                                                            (237,917)         (251,357)
                                                                               ----------        ----------
       Ending Retained Earnings                                               $ 2,344,632         1,483,766
                                                                                =========         =========
</TABLE>


                                      Condensed Statements of Cash Flows
                                                 (Parent Only)

<TABLE>
       <S>                                                                    <C>               <C>
       Cash Flows from Operating Activities:
            Net Income                                                        $ 1,098,783           873,955
            Undistributed Net (Income) Loss of Wholly-Owned
               Subsidiary                                                        (874,259)         (644,330)
            Depreciation Expense                                                      354               424
            (Increase) in Dividends Receivable                                      (8,961)         (57,239)
                                                                              ------------       ----------

       Net Cash Provided by Operating Activities                                  215,917           172,810
                                                                              -----------         ----------
</TABLE>


                                       23


<PAGE>


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 18.  BANK HOLDING COMPANY (CONTINUED):

<TABLE>
<CAPTION>
                                                                                    2001               2000
                                                                                ------------        ----------
<S>                                                                             <C>                 <C>
       Cash Flows from Financing Activities:
            Stock Options Exercised                                               116,800           120,000
            Dividends Paid                                                       (228,956)         (194,118)
                                                                                 --------         ---------

       Net Cash Used for Financing Activities                                    (112,156)          (74,118)
                                                                                 --------        ----------

       Increase in Cash and Cash Equivalents                                      103,761            98,692
       Beginning Cash and Cash Equivalents                                        145,861            47,169
                                                                                 --------       -----------

       Ending Cash and Cash Equivalents                                         $ 249,622           145,861
                                                                                 ========         =========
</TABLE>


NOTE 19.  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 2001 and
2000 would have been $ 1,073,821 and $ 845,168, respectively. The pro forma
earnings per share would have been $1.22 and $.96 in 2001 and 2000,
respectively. The Company calculates a weighted-average fair value for each
option. The weighted-average fair value for the options granted in 2001 and 2000
was $0 and $16.20, 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                                             2.7%
</TABLE>


                                       24


<PAGE>


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000

NOTE 19.  STOCK OPTIONS (CONTINUED):

A summary of option transactions during the years ended December 31, 2001 and
2000 is shown below:


<TABLE>
<CAPTION>
                                                                   Number           Weighted-Average
                                                                  of Shares           Exercise Price
                                                                  -----------      ------------------
<S>                                                               <C>              <C>
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 at December 31, 2000                                        11,500                 10.43
                                                                   ---------

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

Vested and Exercisable at December 31, 2000                           86,000                 13.29
                                                                   =========

Outstanding at January 1, 2001                                       111,300
       Granted:  Directors                                                 0                 13.29
                                                                   ---------
                                                                     111,300                 13.29
Exercised during 2001                                                  9,800                 13.26
                                                                   ---------

Outstanding at December 31, 2001                                     101,500                 13.26
                                                                    ========

Vested and Exercisable at December 31, 2001                           91,500                 13.26
                                                                   =========
</TABLE>

A summary of options outstanding as of December 31, 2001 is shown below:

<TABLE>
<CAPTION>
                                                                                 Weighted-Average
                  Exercise                  Number of Options                  Remaining Contractual
                   Price                      Outstanding                        Life Outstanding
                -----------             -------------------------           ---------------------------

              <S>                       <C>                                 <C>
              $   10.00                         78,900                             4.5 years
                  16.00                              0                             5.5 years
                  20.00                          3,800                             6.5 years
                  25.00                          4,200                             7.5 years
                  25.00                         10,000                               8 years
                  23.00                          4,600                               9 years
                                             ---------
                                               101,500
</TABLE>



                                       25

<PAGE>


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000



NOTE 20.  EARNINGS PER SHARE:

<TABLE>
<CAPTION>
                                                                               FOR THE YEAR ENDED
                                          ---------------------------------------------------------------------------------------
                                                            2001                                       2000
                                         ------------------------------------------    ------------------------------------------
                                                        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                               $ 1,098,783                --          --        873,955               --           --

Basic EPS
  Income Available to
  Common Stockholders                      1,098,783           818,657        1.34        873,955           811,266         1.07

Effect of Dilutive Options

Stock Options
  (using the Treasury Stock
  Method)                                          -            62,731           -             --            68,607           --
                                         -----------    ----------------  ---------    -----------  ----------------   ----------

Diluted EPS

Income Available to
  Common Stockholders plus
  Assumed Exercise of Options            $ 1,098,783           881,388       1.25         873,955          879,873           .99
                                         ===========    ================  =========    ===========  ================   ==========
</TABLE>


                                       26
<PAGE>
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 (54)                        Director and                           Banker
6 Fox Run Lane                                  Chief Executive Officer
Johnson City, TN 37604

Michael T. Christian (59)                       Director and                           Banker
110 Belmeade Circle                             President
Johnson City, TN  37601

Thomas J. Garland (67)                          Director                               College Professor/Consultant
1208 Christy Court
Greeneville, TN 37743

Timothy P. Jones (59)                           Director                               Newspapers
824 E. Myrtle Avenue
Johnson City, TN 37601

C.C. Marshall (68)                              Director                               Real Estate Developer
1805 Sherwood Dr.
Johnson City, TN 37601

James D. Swartz (66)                            Director                               Newspapers
112 Barberry, Unit 30
Johnson City, TN 37604

James W. Gibson, M.D. (68)                      Director                               Radiologist
810 Cloudland Drive
Johnson City, TN 37601

Scott M. Niswonger (54)                         Director                               Trucking & Air
1508 Crestwood Dr.
Greeneville, TN 37745
</TABLE>

Biographies of Directors and Officers

Phillip R. Carriger, age 54, 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 29 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 Secretary, United Way
and Girl's Inc. Board of Directors and Tennessee bankers Association Board of
Directors.


                                       27
<PAGE>

Michael T. Christian, age 59, 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 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 68, 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 59, 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 67, 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 66, 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 68, 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.

Scott M. Niswonger, age 54, co-founded Landair Transport, a trucking company
specializing in time-definite service, in 1981 and currently serves as the
Chairman and Chief Executive Officer of Landair Transport and her sister company
Forward Air Corporation with corporate offices located in Greenville, Tennessee.
Both are public companies and trade on the NASDAQ exchange. Mr. Niswonger
established the Niswonger Foundation in 2001 that supports and promotes
philanthropic educational projects. He also serves on the Executive Committee of
the Board of Trustees for Tusculum College; is a Board member of the ETSU
Foundation and Honorary ETSU alumnus; former Director of First Tennessee Bank,
NA; former Vice-Chair of the Tennessee Board for Economic Growth; former
Chairman of the Greene County Partnership; and an ordained elder at Greeneville
Cumberland Presbyterian Church. He is a graduate of Purdue University's School
of Aviation Technology and received a BSBA from Tusculum College.

ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table

         The following table summarizes the compensation paid or accrued for the
years ended December 31,2001, 2000, 1999, 1998, and 1997 to the Chief Executive
Officer and President for the year ended December 31, 2001. There are no other
officers of the


                                       28
<PAGE>

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 and the President of the Bank.

<TABLE>
<CAPTION>
                                                                                 Annual
                                                                              Compensation
                                                       Fiscal                                             Salary
Name and Current Position                               Year             Salary ($)     Bonus ($)      Compensation
-------------------------------------------        ----------------   ------------------------------ ------------------
<S>                                                <C>                <C>               <C>          <C>
Phillip R. Carriger                                           2001            $127,760                      $2,615 (1)
Chairman and Chief Executive Officer,                         2000            $120,500                      $2,215 (1)
Director                                                      1999            $114,150                      $1,901 (1)
                                                              1998            $108,750                      $1,304 (1)
                                                              1997            $102,000                      $3,800 (1)

Michael T. Christian                                          2001            $103,020                      $4,053 (1)
President, Director
</TABLE>

(1)      Represents automobile reimbursement.

Option Grants in Preceeding 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 2001, 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, 2001 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."


                                       29
<PAGE>

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.

         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-


                                       30
<PAGE>

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

         The following table sets forth as of December 31, 2001 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 12/31/01 (%)
-------------------------------------------                                            -----------------------------------
<S>                                                                                         <C>              <C>
Phillip R. Carriger (1)                                                                     63,250           (7.64%)
6 Fox Run Lane
Johnson City, TN 37604

Thomas J. Garland (2)                                                                       17,400           (2.10%)
1208 Christy Court
Greeneville, TN 37743

Timothy P. Jones (2)                                                                        17,400           (2.10%)
824 E. Myrtle Avenue
Johnson City, TN 37601

C.C. Marshall (2)                                                                           33,431           (4.04%)
1805 Sherwood Dr.
Johnson City, TN 37601

James D. Swartz  (4)                                                                        15,368           (1.86%)
112 Barberry, Unit 30
Johnson City, TN 37604

James W. Gibson, M.D. (3)                                                                   12,400           (1.50%)
810 Cloudland Drive
Johnson City, TN 37601

Scott M. Niswonger                                                                          81,500           (9.85%)
1508 Crestwood Dr.
Greeneville, TN 37745

Michael Christian                                                                            8,000            (.97%)
110 Belmeade Circle
Johnson City,TN 37601

All Directors and Executive Officers as a group (eight persons) (8)                        248,749           30.06%
</TABLE>


                                       31
<PAGE>

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

(2) Includes 7,400 shares which each of these
directors currently has a right to acquire under Company stock options.

(3)
Includes 2,400 chares which Dr. Gibson currently has a right to acquire under
Company stock options.

(4) Includes 91,500 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.

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, 2001, the total amount of loans to directors and
executive officers was $247 thousand, or approximately 2.3% 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.
</TABLE>

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

         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)


                                       32
<PAGE>



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

               Date: March 28, 2002
               ----------------------------------------------------------------



               By:/s/ David LeVeau
               ----------------------------------------------------------------
               David LeVeau, Senior Accountant
               (Senior Accounting Officer)

               Date: March 28, 2002
               ----------------------------------------------------------------

         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 28, 2002
               ----------------------------------------------------------------



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

               Date: March 28, 2002
               ----------------------------------------------------------------



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

               Date: March 28, 2002
               ----------------------------------------------------------------



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

               Date: March 28, 2002
               ----------------------------------------------------------------



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

               Date: March 28, 2002
               ----------------------------------------------------------------


                                       33
<PAGE>



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

               Date: March 28, 2002
               ----------------------------------------------------------------



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

               Date: March 28, 2002
               ----------------------------------------------------------------



               By:/s/ Scott M. Niswonger
               ----------------------------------------------------------------
               Scott M. Niswonger, Director

               Date: March 28, 2002
               ----------------------------------------------------------------


                                       34