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

                                   FORM 10-KSB

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

                   For the Fiscal Year ended December 31, 2002

                          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 Identification
     of incorporation)                                        Number)

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

                                 (423) 915-2200
                 (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:
                                   $ 9,564,684

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 26,
2003, is $13,171,972 for 598,726 shares, at an estimated $22.00 per share.

                                     830,100
     (Outstanding shares of the issuer's common stock as of March 26, 2003)

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PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

         PCB Bancorp, Inc. (the "Company" or "PCB") is a registered bank holding
company which was incorporated under Tennessee law in May 1996. The Company's
activities are conducted through its wholly-owned subsidiary, People's Community
Bank (the "Bank"), a Tennessee state bank which began business in December 1995.
The Bank was acquired by the Company in a tax-free share exchange in October of
1996, and after seven years of operations, on December 31, 2002, the Bank had
grown to total assets of more than $152,299,000.

         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 57,000 as of December 31, 2002. The Bank has also expanded its
business into Kingsport, Tennessee and Fall Branch, Tennessee.

         At the present time, the Bank operates a full service banking business
through it main office and branch locations in Johnson City, a branch location
in Fall Branch, and a Loan Production Office in Kingsport. 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 the Johnson
City-Kingsport metropolitan areas in 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 47 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 primarily 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
mainly 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

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credit in excess of $1,000,000 must have the approval of the Board of Directors
(the "Loan Committee"), which consists of both management and non-management
directors of the Bank.

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 2002
approximately 62% 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, 2002, the Company had approximately 47 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 order to accommodate growth during the course of 2002, the Bank
increased in its number of officers. Alvin Church was hired as Vice President in
charge of the Loan Production Office in Kingsport, Tennessee. In September of
2002 Ken Murphy was promoted as Branch Manager of the Downtown Branch replacing
Dan Murphy. In November, Jim McClellan was hired as Branch Manager of the Fall
Branch, Tennessee Branch which opened on January 2, 2003. In December, Jan
Taylor became the Loan Collection Officer for the Bank while Frankie Steffey
assumed the responsibilities of Branch Manager at the Main Office Branch and
Nancy Johnson was promoted to Branch Manager in the Boones Creek Branch in
Johnson City, Tennessee.

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

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implemented in the future; however, such legislation and regulations and their
effect on the business of the Company and the Bank cannot be predicted.

PCB Bancorp, Inc.

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

People's Community Bank.

         The Bank is incorporated under the banking laws of the State of
Tennessee, and as such, it 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, 2002, the Company's
risk-based Tier 1 Capital and risk-based Total Capital ratios were 9.6% and
10.8%, respectively. 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.

         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,
2002 was 7.8% and at December 31, 2001 was 8.5%.

         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, 2002 were
approximately $3,625,075. 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 2002,
the Bank paid a dividend of $281,606 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 2002, the Company paid quarterly dividends equivalent to $.08 per
outstanding share.

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

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

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

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

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holding company controlling the institution. Any company controlling the
institution could also be required to divest the institution or the institution
could be required to divest subsidiaries. The senior executive officers of a
significantly undercapitalized institution may not receive bonuses or increases
in compensation without prior approval and the institution is prohibited from
making payments of principal or interest on its subordinated debt. If an
institution's ratio of tangible capital to total assets falls below a level
established by the appropriate federal banking regulator (the "Critical capital
level"), which may not be less than 2% nor more than 65% of the minimum tangible
capital level otherwise required, the institution will be subject to
conservatorship or receivership within 90 days unless periodic determinations
are made that forbearance from such action would better protect the deposit
insurance fund. Unless appropriate findings and certifications are made by the
appropriate federal bank regulatory agencies, a critically undercapitalized
institution must be placed in receivership if it remains critically
undercapitalized on average during the calendar quarter beginning 270 days after
the date it became critically undercapitalized.

         Acquisition and Expansion. The Bank Holding Company Act requires any
bank holding company to obtain the prior approval of the Federal Reserve Board
before it may acquire substantially all the assets of any bank, or ownership or
control of any voting shares of any bank, if, after acquiring such shares, it
would own or control directly or indirectly, more than 5% of the voting shares
of such bank. Effective September 29, 1995, the Tennessee Bank Structure Act of
1974 was amended to, among other things, prohibit (subject to certain
exceptions) a bank holding company from acquiring a bank for which the home
state is Tennessee if, upon consummation, the company would directly or
indirectly control 30% or more of the total deposits in insured depository
institutions in Tennessee. As of December 31, 2002, 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

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

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

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

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

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

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

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

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

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

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

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         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 three branch locations and one Loan Production Office. 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. A Loan Production Office location opened in April of 2002 located
at 111 Jack White Drive in Kingsport, Tennessee in office space leased by the
Company. A third branch opened January 2, 2003 and is located at 1706 Highway 93
in Fall Branch, Tennessee.

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, 2002.

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 2002 and 2001:

<TABLE>
<CAPTION>
                                                             High           Low
                                                          ----------     ---------
<S>                                                       <C>            <C>
2002
    First Quarter...................................      $    20.50     $   20.00
    Second Quarter..................................      $    21.00     $   19.00
    Third Quarter...................................      $    22.00     $   22.00
    Fourth Quarter..................................      $    23.00     $   20.00
</TABLE>

<TABLE>
<CAPTION>
                                                             High           Low
                                                          ----------     ---------
<S>                                                       <C>            <C>
2001
    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>

The most recent trade of the Company's common stock known to the Company
occurred on March 26, 2003 at a price of $22.00 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 26, 2003, there were approximately 415 holders of record of
the Company's common stock.

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

General

<PAGE>

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 2001 and 2002. Total assets have grown $22.1 million or more than 17.0%
from December 2001 to December 2002. The growth in total assets has been funded
by an increase in deposits of $4.8 million from December 2000 to December 2001
and $19.8 million from December 2001 to December 2002. Loans have increased $4.8
million during 2001, and increased $20.3 million in 2002. Investment securities
had decreased $1.8 million in 2001 but have increased $6.5 million in 2002. 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.

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 $606 thousand which were ninety days past
due as of December 31, 2001 and had loans totaling $928 thousand which were past
due at December 31, 2002. The Bank also had no concentrations of ten percent or
more of total loans in any single industry or any geographical area outside the
immediate market area of the Bank. As of December 31, 2002, the Bank has no
impaired loans and has $102,000 in other real estate owned

Liquidity and Capital

Liquidity is adequate with cash and due form banks of $6.0 million and $7.8
million at December 31, 2001 and 2002, respectively, and federal funds sold of
$7.6 million and $.2 million at December 31, 2001 and 2002, respectively.
Additionally, investment securities, which are available-for-sale, at December
31, 2002, had a fair value of $27.7 million. Loans maturing in one year or less,
from December 31, 2002, are estimated to be $56.1 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, 2001 was $10.8 million or 8.3% of total
assets and at December 31, 2002 is $12.5 million or 8.2% of total assets, which
represents a strong capital position.

Results of Operations

The Company had net income of $1,098,783 for the year ended December 31, 2001.
For the year-ended December 31, 2002, the Company had net income of $1,562,049.
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 2003 year.

Interest income decreased slightly due to the lowering in interest rates while
interest expense substantially decreased with deposits growing at a slower rate
from December 31, 2001 to December 31, 2002. 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 $1,116,566 and $1,424,928 at December 31, 2001 and 2002,
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. As of December 31, 2002, the Company has impaired loans
totaling $0.

Net Interest Earnings

<PAGE>

As depicted in the table below, the Bank experienced moderate growth in the 2002
year. Since December 31, 2001, 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.

<TABLE>
<CAPTION>
  Dollar          Increase                                                       Average           Interest
 Average         (Decrease)                                                      Balances           Earned
  Yield           from 2001                                                        2002            or Paid
---------        ----------                                                     ----------         ---------
<S>              <C>              <C>                                           <C>                <C>
                                  Interest Earning Assets (in 000's):
                                    Loans:
     5.62%       $   (7,707)         Commercial                                 $   33,104         $   2,060
     0.00%                0          Real Estate Construction                            0                 0
     6.06%           28,583          Commercial Real Estate                         28,670             1,733
     7.04%            5,084          Residential Real Estate                        15,171             1,259
     7.61%          (11,416)         Installments                                   22,781             1,743
     7.28%           (1,094)         Consumer Single Pay                             1,483                76
     0.00%                0          Loans Held for Sale                                 0                 0
    17.18%             (190)         Other                                             180                21
---------        ----------                                                     ----------         ---------
     6.31%       $   13,260       Totals                                        $  101,389         $   6,892
=========        ==========                                                     ==========         =========
</TABLE>

<TABLE>
<CAPTION>
  Dollar          Increase                                                       Average           Interest
 Average         (Decrease)                                                      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                                        $   88,128         $   7,140
---------        ----------                                                     ----------         ---------
</TABLE>

The Bank has $928 thousand of non-accruing loans from the date of inception
through December 31, 2002. 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
(000's):

<TABLE>
<CAPTION>
  Dollar                                                                         Average           Interest
 Average          Increase                                                       Balances           Earned
  Yield           from 2001                                                        2002            or Paid
---------        ----------                                                     ----------         ---------
<S>              <C>              <C>                                           <C>                <C>
   .97%          $    1,134       NOW Accounts                                  $    5,998                93
  1.83%              28,612       Money Market Accounts                             51,125             1,343
</TABLE>

<PAGE>

<TABLE>
<S>              <C>              <C>                                           <C>                <C>
     1.97%            6,537       Savings Accounts                                  29,707               708
     2.89%          (24,544)      Certificates of Deposit                           21,829               744
---------        ----------                                                     ----------         ---------
     2.69%       $   11,739        Totals                                       $  108,659         $   2,888
---------        ----------                                                     ----------         ---------

     1.91%       Net Yield
</TABLE>

<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>

Investment Portfolio

Held-to-Maturity:

<TABLE>
<CAPTION>
 December 31,         Average                                                               December 31,          Average
    2001               Yield          State and Municipal Governments:                          2002               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                               1,000            5.04%
            101            5.00%      After Ten Years                                                     0            0.00%
---------------      ----------                                                          ------------------      ----------
            101            5.00%       Total Held-to-Maturity                                             0            5.00%
---------------      ----------                                                          ------------------      ----------
</TABLE>

<TABLE>
<CAPTION>
 December 31,         Average                                                               December 31,          Average
    2001               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:

<TABLE>
<CAPTION>
 December 31,         Average                                                               December 31,          Average
    2001               Yield          U.S. Government & Government Agency:                      2002               Yield
---------------      ----------       ------------------------------------               ------------------      ----------
<S>                  <C>              <C>                                                <C>                     <C>
              0             0.0%      Maturity within one year                                            0            0.00%
</TABLE>

<PAGE>

<TABLE>
<S>                  <C>              <C>                                                <C>                     <C>
            537            5.16%      Maturity within one to five years                                 504            5.10%
          2,012            5.40%      Maturity within five to ten years                               3,051            5.74%
          3,412            7.96%      After ten years                                                 6,335            4.99%

                                      State and Municipal Governments:
            217            6.44%      Maturity within one year                                          496            4.16%
          1,956            6.60%      Maturity within one to five years                               2,472            4.29%
          4,442            6.69%      Maturity within five to ten years                               5,281            4.26%
          3,097            7.62%      After ten years                                                 4,036            4.86%

                                      Corporates
              0            0.00%      Maturity within one to five years                                 544            5.35%

          6,493            6.50%      Mortgage-Backed Securities                                      5,937            6.22%
---------------      ----------                                                          ------------------      ----------
         22,164            6.70%       Total Available-for-Sale                                      27,653            6.12%
===============      ==========                                                          ==================      ==========
</TABLE>

The Bank had no foreign loans at December 31, 2002.

Summary of Loan Loss Experience

<TABLE>
<CAPTION>
  2001                                                          2002
--------                                                     -----------
<S>           <C>                                            <C>
$    997      Balance at Beginning of Period                 $     1,117
--------                                                     -----------
    (203)      Charge-Offs                                          (219)
     (13)      Recoveries                                             15
--------                                                     -----------
    (216)     Net Recoveries                                        (204)
--------                                                     -----------
     335      Additions Charged to Operations                        512
--------                                                     -----------
$  1,117      Balance at the End of Period                   $     1,425
========                                                     ===========

              Ratio of net charge-offs during the period to
    0.14%     average Loans outstanding during the period           0.28%
</TABLE>

The allowance for loan loss represents 1.31% 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.

Return on Equity and Assets

<TABLE>
<CAPTION>
                                    2002             2001
                                 ----------       ----------
<S>                              <C>              <C>
Return on Assets                    1.03%            0.88%
Return on Equity                   12.47%           10.75%
</TABLE>

The Bank had no foreign banking offices.

<PAGE>

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, 2002 and
December 31, 2001 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, and the 4-12 month
period would allow the Company to reprice its liabilities faster than its
assets. In a low interest rate environment, the Company can either maintain or
increase it's spread between yields on assets and liabilities by managing the
interest rate it charges to it's deposit customers, and may 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.

                             People's Community Bank
                       Rate Sensitivity Analysis (in 000)
                                December 31, 2002

<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                                                                           $  7,578    $   7,578
Federal Funds Sold                     209                   209                   209                              209
U.S. Treasury Securities                                                                                              -
U.S. Government Agencies                                                                                              -
</TABLE>

<PAGE>

<TABLE>
<S>                                <C>        <C>       <C>        <C>       <C>        <C>       <C>         <C>
Available for Sale Securities            0     16,371      1,131     15,240      4,925   11,446                  16,371
Municipal Securities                   286     11,997        496     11,788      5,777    6,507                  12,284
Corporate Bonds & Notes
Federal Home Loan Bank Stock           354                   354                   354                              354
Loans & Leases (net unearn disc.)   50,086     60,406     56,119     54,373    108,470    2,022                 110,492
Allowance for Loan Losses                                                                            (1,425)     (1,425)
Premises, Furn, Fixt, Equip                                                                           2,864       2,864
Other Assets                                                                                          3,185       3,185
-----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                       $54,157    $85,630   $ 60,708   $ 79,079  $ 123,904  $15,883   $  12,201   $ 151,988
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Liabilities & Capital                RSL4      FRL5       RSL4        FRL5       RSL4      FRL5       NPL6        Total
-----------------------------------------------------------------------------------------------------------------------
<S>                                <C>        <C>       <C>        <C>       <C>        <C>       <C>         <C>
Demand Deposits                                                                                      18,305      18,305
NOW Accounts                         6,215                 6,215                 6,215                            6,215
Invest. Money Market Accounts       56,724                56,724                56,724                           56,724
Regular Savings                     30,412                30,412                30,412                           30,412
Certificates of Deposit              4,573     16,167     14,018      2,722     20,184      556                  20,740
Fed Funds Purch & Securities
  Repos                                875                                                                          875
Other Liabilities                                                                                     6,455       6,455
Common Stock & Surplus                                                                                8,000       8,000
Undivided Profits                                                                                     3,686       3,686
Unrealized Holding G/L on AFS Sec.                                                                      577         577

-----------------------------------------------------------------------------------------------------------------------
                                   $98,799    $16,167   $107,369   $  6,722  $ 113,535  $   556   $  37,022   $ 151,988
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
           3 mo      12 mo       60 mo                 3 mo        12 mo       60 mo
        --------------------------------   -------------------------------------------
<S>     <C>         <C>        <C>         <C>       <C>         <C>         <C>
  RSA      54,157     60,708     123,904      RSL       98,799     107,369     113,535
  FRA      85,630     79,079      15,883      FRL       16,167       2,722           -
  NEA      12,201     12,201      12,201      NPL       18,305      18,305      18,305
                                           EQUITY       18,717      18,717      18,717
        --------------------------------             ---------------------------------
TOTAL   $ 151,988   $151,988   $ 151,988             $ 151,988   $ 151,113   $ 150,557
        ================================             =================================
</TABLE>

<TABLE>
<CAPTION>
RATE SENSITIVITY MEASURES:     3 mo       12 mo     60 mo
----------------------------------------------------------
<S>                           <C>        <C>        <C>
          RSA/RSL               54.82%     56.54%   109.13%
          RSA-RSL             (44,642)   (46,661)   10,369
        GAP/Equity            -238.51%   -249.30%    55.40%
          GAP/TA               -29.37%    -30.70%     6.82%
</TABLE>

(1RSA) = RATE SENSITIVE ASSETS
(2FRA) = FIXED RATE ASSETS
(3NEA) = NON EARNING ASSETS
(4RSL) = RATE SENSITIVE LIABILITIES
(5FRL) = FIXED RATE LIABILITIES
(6NPL) = NON PAYING LIABILITIES

                             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                                                                                              -
</TABLE>

<PAGE>

<TABLE>
<S>                                <C>        <C>       <C>        <C>       <C>        <C>       <C>         <C>
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
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Liabilities & Capital                RSL4       FRL5       RSL4        FRL5     RSL4     FRL5      NPL6           Total
-----------------------------------------------------------------------------------------------------------------------
<S>                                <C>        <C>       <C>        <C>       <C>        <C>       <C>         <C>
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
  Sec.                                                                                                   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>         <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>
          RSA/RSL               53.65%     54.04%   107.29%
          RSA-RSL             (35,818)   (42,903)    7,027
        GAP/Equity            -210.90%   -249.62%    41.37%
          GAP/TA               -27.59%    -33.04%     5.41%
</TABLE>

(1RSA) = RATE SENSITIVE ASSETS
(2FRA) = FIXED RATE ASSETS
(3NEA) = NON EARNING ASSETS
(4RSL) = RATE SENSITIVE LIABILITIES
(5FRL) = FIXED RATE LIABILITIES
(6NPL) = NON PAYING LIABILITIES

<PAGE>

                                PCB BANCORP, INC.

                                  CONSOLIDATED
                              FINANCIAL STATEMENTS

                                      WITH

                          INDEPENDENT AUDITORS' REPORT

                 For the Years Ended December 31, 2002 and 2001

<PAGE>

                                PCB BANCORP, INC.
                           December 31, 2002 and 2001

                                      INDEX

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

Consolidated Statements of Financial Condition                        2

Consolidated Statements of Income                                     3

Consolidated Statements of Shareholders' Equity                       5

Consolidated Statements of Cash Flows                                 6

Notes to the Consolidated Financial Statements                        8
</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, 2002 and 2001, and the related consolidated statements of income,
changes in 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 audit 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 consolidated
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, 2002 and
2001, 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 21, 2003

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2002 and 2001

<TABLE>
<CAPTION>
                                                                                 2002            2001
                                                                           ---------------    -----------
<S>                                                                        <C>                <C>
                                     ASSETS

Cash and Due from Banks                                                    $     7,836,372      6,040,810
Federal Funds Sold                                                                 209,000      7,573,000
Securities Held-to-Maturity                                                      1,000,000        100,412
Securities Available-for-Sale                                                   27,728,986     22,163,522
Loans Held for Sale                                                              2,431,423        732,723
Loans Receivable, Net of Allowance for Loan Losses
 and Deferred Loan Origination Fees                                            108,818,305     88,960,311
Interest Receivable                                                                681,609        608,365
Premises and Equipment, Net of Accumulated Depreciation                          2,863,775      2,671,769
Restricted Investments                                                             484,400        338,700
Deferred Tax Asset                                                                  39,905        181,853
Other Assets                                                                       205,323        822,794
                                                                           ---------------    -----------

           Total Assets                                                    $   152,299,098    130,194,259
                                                                           ===============    ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
  Deposits:
    Demand Deposits                                                        $    16,810,677     14,682,509
    Savings and NOW Deposits                                                    92,583,818     67,033,953
    Other Time Deposits                                                         21,507,028     29,420,183
  Federal Funds Purchased                                                          875,000              -
  Interest Payable                                                                 110,587        195,124
  Dividend Payable                                                                  82,910         66,200
  Line of Credit                                                                 6,000,000      6,000,000
  Accounts Payable and Other Liabilities                                         1,807,153      2,027,823
                                                                           ---------------    -----------
           Total Liabilities                                                   139,777,173    119,425,792
                                                                           ---------------    -----------

SHAREHOLDERS' EQUITY:
  Common Stock - $1 par value; 3,000,000 shares authorized;
   829,100 and 827,500 shares issued and outstanding, at
   2002 and 2001, respectively                                                     829,100        827,500
  Additional Paid-in Capital                                                     7,492,300      7,474,500
  Retained Earnings                                                              3,625,075      2,344,632
  Accumulated Other Comprehensive Income                                           575,450        121,835
                                                                           ---------------    -----------
          Total Shareholders' Equity                                            12,521,925     10,768,467
                                                                           ---------------    -----------

          Total Liabilities and Shareholders' Equity                       $   152,299,098    130,194,259
                                                                           ===============    ===========
</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, 2002 and 2001

<TABLE>
<CAPTION>
                                                                      2002           2001
                                                                  ------------    ---------
<S>                                                               <C>             <C>
INTEREST INCOME:
    Interest on Loans                                             $  6,892,256    7,139,666
    Interest on Investments                                          1,355,500    1,440,341
    Interest on Federal Funds Sold                                      92,432      208,733
                                                                  ------------    ---------

       Total Interest Income                                         8,340,188    8,788,740
                                                                  ------------    ---------
INTEREST EXPENSE:
    Interest on Interest Bearing Checking Accounts                      93,423      102,000
    Interest on Money Market Accounts                                1,342,692      922,978
    Interest on Passbook Accounts                                      707,536      877,027
    Interest on Certificates of Deposit                                743,633    2,694,454
    Interest on Other Borrowed Funds                                   302,393      311,118
                                                                  ------------    ---------

       Total Interest Expense                                        3,189,677    4,907,577
                                                                  ------------    ---------

Net Interest Income                                                  5,150,511    3,881,163
    Provision for Loan Losses                                          511,634      335,426
                                                                  ------------    ---------

Net Interest Income after Provision for Loan Losses                  4,638,877    3,545,737
                                                                  ------------    ---------

NON-INTEREST INCOME:
    Service Charges                                                    400,916      403,438
    Loan Origination Fees                                              799,457      569,452
    Net Gains from Sale of Loans                                             -            -
    Net Realized Gains on Sales and Calls of Securities                 22,783       82,867
    Miscellaneous Income                                                 1,340       33,754
                                                                  ------------    ---------

       Total Non-Interest Income                                     1,224,496    1,089,511
                                                                  ------------    ---------

NON-INTEREST EXPENSES:
    Salaries                                                         1,737,417    1,524,271
    Payroll Taxes                                                      130,837      117,687
    Employee Benefits                                                  169,910      136,252
    Net Realized Loss on Sale of Other Real Estate Owned                11,584       11,486
    Net Unrealized Impairment Loss on Other Real Estate Owned           30,000       65,962
    Occupancy Expense                                                  116,411      108,294
    Rental Expense                                                      52,734       31,800
</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, 2002 and 2001

<TABLE>
<CAPTION>
                                                                      2002           2001
                                                                  ------------    ----------
<S>                                                               <C>             <C>
NON-INTEREST EXPENSES (CONTINUED):
    Furniture and Equipment Expense                                    18,043        31,614
    Computer Equipment Expense                                        108,922        95,682
    Stationery, Supplies and Printing                                  92,203        86,578
    Postage, Express and Freight                                       98,728        89,664
    Telephone Expense                                                  86,538        50,551
    Vehicle Expense                                                    22,945        22,244
    Outside Services                                                  162,521       125,722
    Teller Over and Short                                              (4,513)         (865)
    Advertising and Promotion                                         101,895        63,490
    Loan Collection Expense                                           135,889        18,371
    Bank Security and Protection                                        9,528         4,255
    FDIC Assessment                                                    19,723        19,984
    Insurance                                                          48,583        43,726
    Dues and Subscriptions                                             25,937        19,458
    Franchise Tax Expense                                              65,705        26,978
    Refunds and Reimbursements                                         10,515         8,557
    Travel and Meetings                                                 4,081         1,561
    Contributions                                                       9,604         7,015
    Depreciation                                                      288,835       286,844
    Directors' Fees                                                    63,050        48,750
    Miscellaneous Expenses                                            134,389        44,209
                                                                  -----------     ---------

       Total Non-Interest Expenses                                  3,752,014     3,090,140
                                                                  -----------     ---------

Income Before Taxes                                                 2,111,359     1,545,108

INCOME TAX PROVISION:
    Income Tax Expense                                                549,310       446,325
                                                                  -----------     ---------

Net Income                                                        $ 1,562,049     1,098,783
                                                                  ===========     =========

Net Income per Share - Basic                                      $      1.88          1.34
                                                                  ===========     =========

Net Income per Share - Assuming Dilution                          $      1.78          1.25
                                                                  ===========     =========
</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, 2002 and 2001

<TABLE>
<CAPTION>
                                                                               Accumulated
                                                   Additional                     Other
                                      Common        Paid-in       Retained    Comprehensive
                                       Stock        Capital       Earnings        Income         Total
                                    -----------   -----------    ----------   -------------   -----------
<S>                                 <C>           <C>            <C>          <C>             <C>
Balances, January 1, 2001           $   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 $71,680                                                                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

COMPREHENSIVE INCOME:
Net Income                                    -             -    1,562,049              -       1,562,049
Other Comprehensive Income
    Net of Tax:
      Change in Unrealized
        Gain (Loss) on Securities
        Available-For-Sale, Net
        of Deferred Income Tax
        of $302,410                                                               453,615         453,615
                                                                                               ----------
Total Comprehensive Income                                                                      2,015,664
Stock Option Exercises                    1,600        17,800            -              -          19,400
Cash Dividends                                -             -     (281,606)             -        (281,606)
                                    -----------     ---------    ---------        -------      ----------

Balances, December 31, 2002         $   829,100     7,492,300    3,625,075        575,450      12,521,925
                                    ===========     =========    =========        =======      ==========
</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, 2002 and 2001

<TABLE>
<CAPTION>
                                                                                      2002              2001
                                                                                  -------------     -------------
<S>                                                                               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                                                     $  1,562,049         1,098,783
   Adjustments to Reconcile Net Income to Net Cash
     Provided by (Used for) Operating Activities:
       Depreciation Expense                                                            288,835           286,844
       Realized (Gain) Loss on Sale of Other Real Estate Owned                          11,584                 -
       Unrealized Impairment Loss on Other Real Estate Owned                            30,000                 -
       Provision for Loan Losses                                                       511,634           335,426
       Discount Accretion Net of Premium Amortization                                  (33,087)         (108,455)
       Origination of Mortgage Loans Held for Sale                                 (27,622,457)      (21,976,525)
       Proceeds from Mortgage Loans Sold                                            25,923,757        21,486,003
       Net Realized (Gains) Losses on Sales and Calls of Securities                    (22,783)          (82,867)
       Deferred Income Tax                                                            (241,684)         (263,076)
   (Increase) Decrease in Assets:
       Interest Receivable                                                             (73,244)          131,676
       Other Assets                                                                    617,471          (605,096)
   Increase (Decrease) in Liabilities:
       Interest Payable                                                                (84,537)         (300,923)
       Accounts Payable and Other Liabilities                                         (220,670)        1,348,748
                                                                                  ------------       -----------

Net Cash Provided by Operating Activities                                              646,868         1,350,538
                                                                                  ------------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Net (Increase) Decrease in Federal Funds Sold                                    7,364,000        (5,190,000)
    Purchases of Available-for-Sale Securities                                     (14,646,578)      (12,377,460)
    Proceeds from Sales, Maturities and Calls of Available-For-Sale Securities       6,138,347        12,207,993
    Principal Payments Received on Mortgage Backed Securities                        2,106,372         2,260,291
    Purchases of Restricted Investments                                               (145,700)          (27,500)
    Purchases of Premises and Equipment                                               (478,501)          (48,997)
    Loan Participations Bought                                                      (4,899,210)       (1,038,163)
    Loan Participations Sold                                                         8,460,000         2,375,189
    Proceeds from Sale of Foreclosed Property                                          786,000                 -
    Net Increase in Loans                                                          (23,930,418)       (6,467,407)
                                                                                  ------------       -----------

Net Cash Used for Investing Activities                                             (19,245,688)       (8,306,054)
                                                                                  ------------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Dividends Paid                                                                    (264,896)         (228,956)
    Stock Options Exercised                                                             19,400           116,800
    Proceeds from Line of Credit                                                             -         4,000,000
    Net Increase in Federal Funds Purchased                                            875,000                 -
    Net Increase in Deposits                                                        19,764,878         4,819,461
                                                                                  ------------       -----------
Net Cash Provided by Financing Activities                                           20,394,382         8,707,305
                                                                                  ------------       -----------
</TABLE>

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

                                       6

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2002 and 2001

<TABLE>
<CAPTION>
                                                                               2002         2001
                                                                           ------------   ---------
<S>                                                                        <C>            <C>
Increase (Decrease) in Cash and Cash Equivalents                              1,795,562   1,751,789
                                                                           ------------   ---------

Cash and Cash Equivalents, Beginning of Year                                  6,040,810   4,289,021
                                                                           ------------   ---------

Cash and Cash Equivalents, End of Year                                     $  7,836,372   6,040,810
                                                                           ============   =========

SUPPLEMENTAL DISCLOSURES:
    Cash Paid During the Year for Interest                                 $  3,274,214   5,208,500
                                                                           ============   =========

    Cash Paid During the Year for Income Taxes                             $    665,079     511,022
                                                                           ============   =========

    Loans Transferred to Other Real Estate Owned (Foreclosures)            $    598,704     935,353
                                                                           ============   =========
</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, 2002 and 2001

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, branch locations in Fall Branch, Boones Creek
and on Main Street in Johnson City, and a loan production office in Kingsport.
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.

Cash Reserve

Included in Cash and Due from Banks are average daily reserve balances the Bank
is required to maintain. The amount of these required reserves are calculated
based on a percentage of certain deposit balances and was $735,595 at December
31, 2002.

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.

                                       8

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

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.

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.

Loans are determined to be past due or delinquent based on the contractual terms
of the loan agreement. The bank evaluates significantly delinquent loans on an
individual basis to determine if charge off or reclassification to impaired
status is appropriate.

                                       9

<PAGE>

The accrual of interest income is discontinued on any asset for which payment in
full of interest or principal is not expected, or on any asset upon which
principal or interest has been in default for a period of 90 days or more,
unless it is both well secured and in the process of collection. Loans are
placed on non-accrual status upon notification of bankruptcy by the borrower.

                                       10

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

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. 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.

                                       11

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     Fair Values of Financial Instruments

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

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

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

         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.

                                       12

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     Fair Values of Financial Instruments (continued):

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

     Advertising

     The Bank expenses advertising costs as they are incurred.

     Net Income Per Share

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

     Comprehensive Income

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

     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>
                                                         2002         2001
                                                      ----------    --------
<S>                                                   <C>           <C>
Unrealized holding gains (losses)
  arising during the year                             $ 778,808     262,067

Reclassification adjustment for (gains)/losses
  realized in net income                                (22,783)    (82,867)
                                                      ---------     -------

Net unrealized holding gains (losses) before taxes      756,025     179,200

Tax effect                                              302,410      71,680
                                                      ---------     -------

Net change                                            $ 453,615     107,520
                                                      =========     =======
</TABLE>

                                       13

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 2:  FINANCIAL STATEMENT PRESENTATION:

Certain amounts in the December 31, 2001 financial statements have been
reclassified to conform to the December 31, 2002 presentation.

NOTE 3.  INVESTMENTS:

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

<TABLE>
<CAPTION>
                                          December 31, 2002                                    December 31, 2001
                          --------------------------------------------------   -------------------------------------------------
                                          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        $ 8,731,687    158,518        1,400      8,888,805    5,930,185      31,893         708      5,961,370
State and Municipal
  Governments              11,775,675    510,017        1,886     12,283,806    9,676,293     118,493      85,964      9,708,822
Corporate Securities          518,372     25,678            -        544,050            -           -           -              -
Mortgage-Backed
  Securities                5,744,170    268,155            -      6,012,325    6,353,985     145,780       6,435      6,493,330
                          -----------    -------        -----     ----------   ----------     -------      ------     ----------

Total Available-for-Sale   26,769,904    962,368        3,286     27,728,986   21,960,463     296,166      93,107     22,163,522
                          -----------    -------        -----     ----------   ----------     -------      ------     ----------

Held-to-Maturity
State and Municipal
  Governments               1,000,000      2,314            -      1,002,314      100,412         474           -        100,886
                          -----------    -------        -----     ----------   ----------     -------      ------     ----------

Total Held-to-Maturity      1,000,000      2,314            0      1,002,314      100,412         474           0        100,886
                          -----------    -------        -----     ----------   ----------     -------      ------     ----------

Total Investment
  Securities              $27,769,904    964,682        3,286     28,731,300   22,060,875     296,640      93,107     22,264,408
                          ===========    =======        =====     ==========   ==========     =======      ======     ==========
</TABLE>

The amortized cost and market value of debt securities at December 31, 2002, 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                                $        -            -    1,455,547    1,469,913
     After one year through five years                        -            -    5,973,561    6,156,485
     After five years through ten years                       -            -    7,304,082    7,610,171
     After ten years                                  1,000,000    1,002,314    6,292,544    6,480,092
     Mortgage-Backed Securities                               -            -    5,744,170    6,012,325
                                                     ----------   ----------   ----------   ----------
                                                     $1,000,000    1,002,314   26,769,904   27,728,986
                                                     ==========   ==========   ==========   ==========
</TABLE>

                                       14

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 3.  INVESTMENTS (CONTINUED):

Accrued interest on investments at December 31, 2002 and 2001 was $250,994 and
$190,519, respectively. During 2002 and 2001 the bank received $6,138,347 and
$12,207,993 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 $6,115,564 and $12,125,126 resulting in a
realized gain of $22,783 and $82,867 in 2002 and 2001, respectively.

NOTE 4.  LOANS RECEIVABLE:

Loans at December 31 are summarized as follows:

<TABLE>
<CAPTION>
                                             2002            2001
                                        --------------    -----------
<S>                                     <C>               <C>
Commercial                              $  27,903,470     42,439,024
Residential Real Estate                    20,388,409      9,155,830
Non Residential Real Estate                46,824,648              -
Installment                                14,660,968     36,107,446
Consumer                                      515,787      2,354,874
Other                                         198,703        127,013
                                        -------------     ----------
                                          110,491,985     90,184,187
Allowance for Loan Losses                  (1,424,928)    (1,116,566)
Net Deferred Loan Origination Fees           (248,752)      (107,310)
                                        -------------     ----------

                                        $ 108,818,305     88,960,311
                                        =============     ==========
</TABLE>

Certain loans reported as Commercial and Installment at December 31, 2001 have
been reclassified as Non-Residential Real Estate at December 31, 2002. Due to
complexities involved, the classifications at December 31, 2001 have not been
restated.

Overdrafts of demand deposit accounts in the amount of $37,098 and $8,309 at
December 31, 2002 and 2001 respectively, are included in the Other
classification of loans receivable.

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

<TABLE>
<CAPTION>
                                             2002            2001
                                        -------------     ----------
<S>                                     <C>               <C>
Balance at Beginning of Year            $  1,116,566        996,767
Provision for Loan Losses                    511,634        335,426
Loans Charged Off                           (218,596)      (203,061)
Recoveries on Loans                           15,324        (12,566)
                                        ------------      ---------

Balance at End of Year                  $  1,424,928      1,116,566
                                        ============      =========
</TABLE>

                                       15

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 5.  LOANS RECEIVABLE (CONTINUED):

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

<TABLE>
<CAPTION>
                                 2002           2001
                            -------------    ----------
<S>                         <C>              <C>
Maturity within one year    $  56,121,068    38,638,067
One to five years              52,353,312    48,457,575
Over five years                 2,017,605     3,088,545
                            -------------    ----------

                            $ 110,491,985    90,184,187
                            =============    ==========
</TABLE>

Accrued interest receivable on loans at December 31, 2002 and 2001 was $430,615
and $417,846 respectively.

At December 31, 2002 and 2001, the total recorded investment in loans on
nonaccrual amounted to $928,129 and $617,833, respectively, and the total
recorded investment in loans past due ninety days or more and still accruing
interest amounted to approximately $94,190 and $164,459, respectively. At
December 31, 2002 and 2001, the total recorded investment in impaired loans
amounted to $0 and $298,959, respectively. The amount of the recorded investment
in impaired loans for which there is a related allowance for credit losses at
December 31, 2002 and 2001, is $0 and $185,000, respectively. The amount of the
recorded investment in impaired loans for which there is no related allowance
for credit loss is classified as substandard and is $0 and $113,959,
respectively. The amount of any cash receipts is applied to principal on
impaired loans. Interest income in the amount of $0 and $0 was recognized for
cash receipts during 2002 and 2001, respectively. The entire amount of the
impaired loan was written off as a bad debt during 2002.

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

The Bank services loans for others of $12,503,772 and $10,438,214 at December
31, 2002 and 2001 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, 2002 and 2001 were $0 and $237,345. During 2002,
there were additional loans to such related parties in the amount of $0 and
repayments amounted to $237,345.

                                       16

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 6.  PREMISES AND EQUIPMENT (CONTINUED):

Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                        2002            2001
                                    ------------    -----------
<S>                                 <C>             <C>
Bank Building                       $ 1,589,585      1,308,319
Land                                    907,625        867,625
Land Improvements                       263,058        263,058
Leasehold Improvements                   49,847         47,210
Vehicles                                 13,603              -
Furniture and Equipment                 790,929        727,320
Computer Equipment                      669,016        591,634
Computer Software                        76,798         74,456
Construction in Progress                 25,800         25,800
                                    -----------     ----------
     Total                            4,386,261      3,905,422
Accumulated Depreciation             (1,522,486)    (1,233,653)
                                    -----------     ----------
Premises and Equipment-Net          $ 2,863,775      2,671,769
                                    ===========     ==========
</TABLE>

Depreciation expense for the years ended December 31, 2002 and 2001 was $288,835
and $286,844, respectively.

NOTE 7.  OTHER ASSETS:

Other Assets at December 31 consisted of the following:

<TABLE>
<CAPTION>
                                       2002        2001
                                    ---------    -------
<S>                                 <C>          <C>
Other Real Estate Owned             $ 101,802    738,205
Prepaid Expense                        91,797     76,150
Other Receivables                      11,724      8,439
                                    ---------    -------

                                    $ 205,323    822,794
                                    =========    =======
</TABLE>

                                       17

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 8.  DEPOSITS:

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

<TABLE>
<CAPTION>
                                        2002             2001
                                    -------------    -----------
<S>                                 <C>              <C>
Regular Checking                    $   2,926,409      3,005,864
Club Checking                              52,290         76,101
Discount Checking                         305,516        295,705
Small Business Accounts                 7,230,376      5,625,638
Commercial Checking                     6,296,086      5,679,201
Primetime Checking                      1,792,043      1,736,148
NOW Accounts                            4,422,982      3,832,857
Money Market Accounts                  56,723,677     35,487,464
Saving Accounts                        29,645,116     25,977,484
Individual Retirement Accounts          2,814,992      2,747,769
Certificates of Deposit                18,692,036     26,672,414
                                    -------------    -----------

Total                               $ 130,901,523    111,136,645
                                    =============    ===========
</TABLE>

At December 31, 2002, scheduled maturities of certificates of deposit are as
follows:

<TABLE>
<S>             <C>
2003            $ 12,922,580
2004               2,396,388
2005               2,423,068
2006                       -
2007                 950,000
                ------------
                $ 18,692,036
                ============
</TABLE>

The aggregate amount of short-term jumbo certificates of deposit with a minimum
denomination of $100,000 was $5,161,954 and $9,259,539 at December 31, 2002 and
2001.

The Bank held deposits of approximately $2,400,995 and $1,240,999 for related
parties at December 31, 2002 and 2001 respectively.

NOTE 9.  ACCOUNTS PAYABLE AND OTHER LIABILITIES:

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

<TABLE>
<CAPTION>
                                                     2002          2001
                                                 -----------    ---------
<S>                                              <C>            <C>
Property Tax Payable                             $    31,412       14,605
Miscellaneous Payables and Other Liabilities       1,595,373    1,780,927
Accrued State Franchise Tax                           31,305       26,978
Current Income Tax Payable                           149,063      205,313
                                                 -----------    ---------
                                                 $ 1,807,153    2,027,823
                                                 ===========    =========
</TABLE>

                                       18

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 10. 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 $6,000,000 from the FHLB at December 31, 2002 and 2001,
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, 2002 and 2001,
respectively. Specific mortgage loans were pledged by the Bank with an
approximate value of $10,774,252 and $8,197,926 as of December 31, 2002 and
2001, respectively.

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

<TABLE>
<CAPTION>
                                                    2002           2001
                                                 ----------     ----------
<S>                                              <C>            <C>
Maximum balance (outstanding and pledged)
 at any month-end during the year                8,300,000      9,000,000

Average balance for the year                     8,300,000      5,666,667

Weighted Average Rate for the year                    4.75%          4.75%

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

NOTE 11. UNUSED LINES OF CREDIT:

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, 2002 and 2001.

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. This line is renewed annually upon review by Compass Bank. The Bank
had drawn $875,000 and $0 December 31, 2002 and 2001, respectively.

                                       19

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 12. 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
                                    --------------------------
                                        2002           2001
                                    ------------    ----------
<S>                                 <C>             <C>
Lines of Credit                     $  6,281,019     5,988,543
Letters of Credit                      2,014,000     1,061,046
Loans Approved, Not Closed             1,844,346     3,898,400
                                    ------------    ----------
   Total                            $ 10,139,365    10,947,989
                                    ============    ==========
</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 13. 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.

                                       20

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 14. 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.

NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS:

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

<TABLE>
<CAPTION>
                                                            2002                          2001
                                                ---------------------------    --------------------------
                                                  Carrying                      Carrying
                                                   Amount       Fair Value       Amount       Fair Value
                                                ------------    -----------    -----------    ----------
<S>                                             <C>             <C>            <C>            <C>
Financial Assets:
  Cash and Due from Banks and
  Federal Funds Sold                            $  8,045,372      8,045,372     13,613,810     13,613,810
  Securities Held-to-Maturity                      1,000,000      1,002,314        100,412        100,886
  Securities Available-for-Sale                   27,728,986     27,728,986     22,163,522     22,163,522
  Loans Receivable:
  Adjustable Rate Loans under 30 years            42,203,578     42,203,578     25,358,602     25,358,602
  Fixed Rate Loans with original
     maturities of 30 years                           95,245         56,760        161,050         89,043
  Fixed Rate Loans with original
     maturities of 5 to 30 years                  48,155,584     44,881,001     46,339,013     43,666,576
  Fixed Rate Loans with original
     maturities of 1 to 5 years                   16,961,459     17,002,414     15,402,653     15,646,967
  Fixed Rate Loans with original
     maturities of less than one year              2,827,367      2,827,367      2,815,559      2,815,559
  Loans Held for Sale                              2,431,423      2,431,423        732,723        732,723
  Interest Receivable                                681,609        681,069        608,365        608,365
Financial Liabilities:
  Deposit Liabilities                            130,901,523    130,901,523    111,136,645    111,136,645
Off Balance Sheet Instruments:
  Commitments to Extend Credit                  $          -         10,350              -         12,753
</TABLE>

                                       21

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 16. FEDERAL INCOME TAXES:

The provision for income tax for 2002 and 2001 consists of the following:

<TABLE>
<CAPTION>
                                           2002          2001
                                        ----------    ----------
<S>                                     <C>           <C>
Income Tax Expense:
   Current Tax Expense
      Federal                           $ 638,851       584,187
      State                               152,143       125,214
   Deferred Tax (Benefit)
      Federal                            (205,431)     (223,615)
      State                               (36,253)      (39,461)
                                        ---------      --------
                                        $ 549,310       446,325
                                        =========      ========
</TABLE>

A cumulative net deferred tax asset for 2002 and 2001 is shown on the Statements
of Financial Condition. The components of the asset and liability are as
follows:

<TABLE>
<CAPTION>
                                                                2002          2001
                                                            ------------    ---------
<S>                                                         <C>             <C>
Differences in Depreciation Methods                         $   (45,535)     (85,022)
Difference in Methods for Provision for Loan Losses             457,072      321,714
Difference in Valuation of Other Real Estate Owned               12,000       26,385
Net Unrealized Gain/Loss on
  Available-For-Sale Securities                                (383,632)     (81,224)
                                                            -----------     --------
                                                            $    39,905      181,853
                                                            ===========     ========

Deferred Tax Assets                                         $   469,072      348,099
Deferred Tax Liabilities                                       (429,167)    (166,246)
                                                            -----------     --------
Net Deferred Tax Assets (Liabilities)                       $    39,905      181,853
                                                            ===========     ========
</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>
                                                                2002          2001
                                                            -----------    ---------
<S>                                                         <C>            <C>
Federal Income Tax Expense at the
  Statutory Rate (34%)                                      $  552,337      428,319
Increases (Decreases) Resulting from:
    Nontaxable Interest Income, Net of Non-
      deductible Interest Expense                             (155,170)    (107,208)
    State Income Taxes, Net of Federal Income
      Tax Benefit                                              152,143      125,214
                                                            ----------     --------
Provision for Income Taxes                                  $  549,310      446,325
                                                            ==========     ========
</TABLE>

                                       22

<PAGE>


                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 17. 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 $35,279 and $29,502 were accrued at December 31,
2002 and December 31, 2001, respectively.

NOTE 18. 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, 2002 and 2001 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, 2002:

 Total Risk-Based Capital
   (To Risk Weighted Assets)  $ 13,117,606   10.8%  > than = to 9,731,040   > than = to 8.0%   12,163,800   > than = to  10.0%
 Tier I Capital
   (To Risk Weighted Assets)    11,692,678    9.6%  > than = to 4,865,520   > than = to 4.0%    7,298,280   > than = to   6.0%
 Tier I Capital
   (To Average Assets)          11,692,678    7.8%  > than = to 6,050,440   > than = to 4.0%    7,563,050   > than = to   5.0%
</TABLE>

                                       23

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 18. REGULATORY MATTERS (CONTINUED):

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

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, 2002 and 2001 was $19,723 and $19,984, respectively.

NOTE 19.  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,
2002 and 2001.

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>
                                                                                2002                2001
                                                                           --------------      -------------
<S>                                                                        <C>                 <C>
         ASSETS
Cash On Deposit with Subsidiary                                            $      258,799            249,622
Investment in Subsidiary                                                       12,268,126         10,518,845
Dividends Receivable                                                               82,910             66,200
                                                                           --------------      -------------
    Total Assets                                                           $   12,609,835         10,834,667
                                                                           ==============      =============
</TABLE>

                                       24

<PAGE>

                                PCB BANCORP, INC
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 19. BANK HOLDING COMPANY (CONTINUED):

<TABLE>
<CAPTION>
                                                                         2002               2001
                                                                    --------------      ------------
<S>                                                                 <C>                 <C>
     LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts Payable                                                    $        5,000                -
Dividends Payable                                                           82,910           66,200
Common Stock                                                               829,100          827,500
Additional Paid-In Capital                                               7,492,300        7,474,500
Retained Earnings (Deficit)                                              3,625,075        2,344,632
Net Unrealized Gain (Loss) on Available-for-Sale Securities
   Net of Tax of $383,633 and 81,223 respectively                          575,450          121,835
                                                                    --------------       ----------
Total Liabilities and Shareholders' Equity                          $   12,609,835       10,834,667
                                                                    ==============       ==========

              Condensed Statements of Income and Retained Earnings
                                  (Parent Only)

OPERATING INCOME
     Dividend from Subsidiary                                       $      281,606          237,917
                                                                    --------------        ---------
Total Operating Income                                                     281,606          237,917
                                                                    --------------        ---------

OPERATING EXPENSES
     Postage and Printing                                                        -            3,011
     Depreciation Expense                                                        -              354
     Outside Services                                                       15,223           10,028
                                                                    --------------        ---------
Total Operating Expenses                                                    15,223           13,393
                                                                    --------------        ---------

Income from Operations                                                     266,383          224,524

OTHER INCOME (EXPENSE)
     Undistributed Net Income from Investment
        in Wholly-Owned Subsidiary                                       1,295,666          874,259
                                                                    --------------        ---------

Net Income                                                               1,562,049        1,098,783
Beginning Retained Earnings (Deficit)                                    2,344,632        1,483,766
Cash Dividends                                                            (281,606)        (237,917)
                                                                    --------------        ---------
Ending Retained Earnings                                            $    3,625,075        2,344,632
                                                                    ==============        =========
</TABLE>

                                       25

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 19. BANK HOLDING COMPANY (CONTINUED):

                       Condensed Statements of Cash Flows
                                  (Parent Only)

<TABLE>
<CAPTION>
                                                                  2002              2001
                                                             --------------      -----------
<S>                                                          <C>                 <C>
Cash Flows from Operating Activities:
     Net Income                                              $    1,562,049        1,098,783
     Undistributed Net (Income) Loss of Wholly-Owned
        Subsidiary                                               (1,295,666)        (874,259)
     Depreciation Expense                                              -                 354
     (Increase) in Dividends Receivable                             (16,710)          (8,961)
     Increase in Accounts Payable                                     5,000                -
                                                             --------------      -----------

Net Cash Provided by Operating Activities                           254,673          215,917
                                                             --------------      -----------

Cash Flows from Financing Activities:
     Stock Options Exercised                                         19,400          116,800
     Dividends Paid                                                (264,896)        (228,956)
                                                             --------------      -----------

Net Cash Used for Financing Activities                             (245,496)        (112,156)
                                                             --------------      -----------

Increase in Cash and Cash Equivalents                                 9,177          103,761
Beginning Cash and Cash Equivalents                                 249,622          145,861
                                                             --------------      -----------

Ending Cash and Cash Equivalents                             $      258,799          249,622
                                                             ==============      ===========
</TABLE>

NOTE 20.  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.

                                       26

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 20. STOCK OPTIONS (CONTINUED):

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 2002 and
2001 would have been $1,535,341 and $1,073,821, respectively. The pro forma
earnings per share would have been $1.75 and $1.22 in 2002 and 2001,
respectively. The Company calculates a weighted-average fair value for each
option. There were no options granted in 2002 or 2001.

A summary of option transactions during the years ended December 31, 2002 and
2001 is shown below:

<TABLE>
<CAPTION>
                                                                    Number       Weighted-Average
                                                                   of Shares      Exercise Price
                                                                   ---------     ----------------
<S>                                                                <C>           <C>
Outstanding at January 1, 2001                                      111,300

Exercised at December 31, 2001                                        9,800            11.92
                                                                    -------

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

Vested and Exercisable at December 31, 2001                          91,500            13.26
                                                                    =======

Outstanding at January 1, 2002                                      101,500

Exercised during 2002                                                 1,600            12.13
                                                                    -------

Outstanding at December 31, 2002                                     99,900            14.05
                                                                    =======

Vested and Exercisable at December 31, 2002                          93,900            14.05
                                                                    =======
</TABLE>

A summary of options outstanding as of December 31, 2002 is shown below:

<TABLE>
<CAPTION>
                                        Weighted-Average
Exercise       Number of Options      Remaining Contractual
 Price            Outstanding            Life Outstanding
---------      -----------------      ---------------------
<S>            <C>                    <C>
$   10.00           77,700                  3.5 years
    16.00                0                  4.5 years
    20.00            3,600                  5.5 years
    25.00            4,000                  6.5 years
    25.00           10,000                    7 years
    23.00            4,600                    8 years
                    ------
                    99,900
                    ======
</TABLE>

                                       27

<PAGE>

                                PCB BANCORP, INC.
                           AND WHOLLY-OWNED SUBSIDIARY
                             PEOPLE'S COMMUNITY BANK
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001

NOTE 21. EARNINGS PER SHARE:

<TABLE>
<CAPTION>
                                                                 FOR THE YEAR ENDED
                                ---------------------------------------------------------------------------------------
                                                   2002                                         2001
                                -----------------------------------------   -------------------------------------------
                                             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                      $ 1,562,049             -            -       1,098,783             -               -

Basic EPS
     Income Available to
     Common Stockholders          1,562,049       828,108         1.88       1,098,783        818,657           1.34

Effect of Dilutive Options

Stock Options
  (using the Treasury Stock
  Method)                                 -        50,522             -              -         62,731              -
                                -----------        ------          ----      ---------        -------            ---

Diluted EPS

Income Available to
  Common Stockholders plus
  Assumed Exercise of Options   $ 1,562,049       878,630         1.78       1,098,783        881,388           1.25
                                ===========       =======         ====      ==========        =======           ====
</TABLE>

                                       28

<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 executive 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 (55)       Director and                Banker
6 Fox Run Lane                 Chief Executive Officer
Johnson City, TN 37604

Michael T. Christian (60)      Director and                Banker
110 Belmeade Circle            President
Johnson City, TN 37601

Thomas J. Garland (68)         Director                    College Professor/Consultant
1208 Christy Court
Greeneville, TN 37743

Timothy P. Jones (60)          Director                    Newspapers
824 E. Myrtle Avenue
Johnson City, TN 37601

C.C. Marshall (69)             Director                    Real Estate Developer
1805 Sherwood Dr.
Johnson City, TN 37601

James D. Swartz (67)           Director                    Newspapers
112 Barberry, Unit 30
Johnson City, TN 37604

James W. Gibson, M.D. (69)     Director                    Radiologist
810 Cloudland Drive
Johnson City, TN 37601

Scott M. Niswonger (55)        Director                    Trucking & Air
1508 Crestwood Dr.
Greeneville, TN 37745

Richard H. Roberts (48)        Director                    Trucking & Air
2107 Old Tusculum Rd.
Greenville, TN 37745
</TABLE>

Biographies of Directors and Officers

Phillip R. Carriger, age 55, 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 30 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.

                                       29

<PAGE>

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.

Michael T. Christian, age 60, 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 69, 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 60, 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 director 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 68, 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 67, 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 69, 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 55, 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.

Richard H. Roberts, age 48, is Senior Vice President, Secretary, General Counsel
and a Director of Landiar Corporation of Greeneville, Tennessee. He also serves
as a Director of Miller Industries, Inc. and Senior Vice President, General
Counsel, Secretary and a Director of Forward Air Corporation of Greenville,
Tennessee. Prior to joining Forward Air, Mr. Roberts was a partner with Baker,
Worthington, Crossley, and Stansberry law firm.

                                       30

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table

         The following table summarizes the compensation paid or accrued for the
years ended December 31,2002, 2001, 2000, 1999, 1998, and 1997 to the Chief
Executive Officer and President for the year ended December 31, 2002. There are
no other officers of the Company or Bank whose total annual salary exceeds
$100,000; accordingly, disclosure regarding executive compensation is provided
in the below tables only with respect to the Chief Executive Officer and the
President of the Bank.

<TABLE>
<CAPTION>
                                                              Annual
                                                           Compensation
                                           Fiscal                                  Salary
Name and Current Position                   Year      Salary ($)   Bonus ($)    Compensation
-------------------------------------      ------     ----------------------    ------------
<S>                                        <C>        <C>                       <C>
Phillip R. Carriger                         2002            $  132,955          $  2,238 (1)
Chairman and Chief Executive Officer,       2001            $  127,760          $  2,615 (1)
Director                                    2000            $  120,500          $  2,215 (1)
                                            1999            $  114,150          $  1,901 (1)
                                            1998            $  108,750          $  1,304 (1)
                                            1997            $  102,000          $  3,800 (1)

Michael T. Christian                        2002            $  108,728          $  1,845 (1)
President, Director                         2001            $  103,020          $  4,053 (1)
</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, 2002. No stock options were exercised, and there
were no SARs outstanding during 2002, 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                 40,000/ 0                     $ 480,000/$0
</TABLE>

                                       31

<PAGE>

(1)      Dollar values were calculated by determining the difference between the
         price of common stock on December 31, 2002 of $22.00 per share and the
         exercise price of such options

Director Compensation

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

Stock Incentive Plans

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

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

         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.

                                       32

<PAGE>

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

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

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth as of December 31, 2002 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 12/31/02 (%)
-------------------------                                                       -----------------------------
<S>                                                                             <C>               <C>
Phillip R. Carriger (1)                                                          63,250           (7.63%)
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 (5)                                                                10,000           (1.21%)
1805 Sherwood Dr.
Johnson City, TN 37601

James D. Swartz  (4)                                                                200           (0.02%)
112 Barberry, Unit 30
Johnson City, TN 37604

James W. Gibson, M.D. (3)                                                        12,400           (1.50%)
810 Cloudland Drive
</TABLE>

                                       33

<PAGE>

<TABLE>
<S>                                                                             <C>              <C>
Johnson City, TN 37601

Scott M. Niswonger                                                              142,724          (17.21%)
1508 Crestwood Dr.
Greeneville, TN 37745

Michael T. Christain (6)                                                         19,000           (2.29%)
108 Belmeade Circle
Johnson City, TN 37601

Richard H. Roberts                                                               16,000           (1.93%)
2107 Tusculum Rd.
Greeneville, TN 37745

All Directors and Executive Officers as a group (nine persons, 9) (4)           298,374          (34.77%)
</TABLE>

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

(2) Includes 8,800 shares which each of these directors currently has a right to
    acquire under Company stock options.

(3) Includes 3,800 shares which Dr. Gibson currently has a right to acquire
    under Company stock options.

(4) Includes 93,900 shares which all officers and directors as a group currently
    have a right to purchase under Company stock options.

(5) Includes 800 shares which C.C. Marshall currently has a right to acquire
    under Company stock options.

(6) Includes 10,000 shares which Mr. Christian currently has a right to acquire
    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, 2002, the total amount of loans to directors and
executive officers was $0, or approximately 0.0% of shareholder's equity.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      List of Exhibits Filed

         Exhibit
         Number   Description

         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).

                                       34

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         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).

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

         99.1     Certifications pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

         (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)

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

                       Date: March 28, 2003

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

                       Date: March 28, 2003

         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, 2003

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

                       Date: March 28, 2003

                                       35

<PAGE>

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

                       Date: March 28, 2003

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

                       Date: March 28, 2003

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

                       Date: March 28, 2003

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

                       Date: March 28, 2003

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

                       Date: March 28, 2003

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

                       Date: March 28, 2003

                       By:/s/ Richard H. Roberts
                       ---------------------------------------------------------
                       Richard H. Roberts, Director

                       Date: March 28, 2003

                                       36