SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

Mark One

[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

     For the quarterly period ended March 31, 2003.


[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                                                 Commission File Number: 0-23551

                        UNITED TENNESSEE BANKSHARES, INC.
        (Exact Name of Small Business Issuer as Specified in its Charter)


            TENNESSEE                                         62-1710108
----------------------------------                     -------------------------
(State or Other Jurisdiction of                            (I.R.S. Employer
Incorporation or Organization)                             Identification No.)


                     344 Broadway, Newport, Tennessee 37821
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

         Issuer's Telephone Number, Including Area Code: (423) 623-6088


Check  whether  the issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past ninety days:
Yes [X]  No [  ]

State the number of shares outstanding of each of the issuer's classes of common
stock as of the latest practicable date: 1,273,124
                                         ---------

Transitional Small Business Disclosure Format (Check one):     Yes [ ]   No [X]


<PAGE>


CONTENTS

PART I. FINANCIAL INFORMATION
        ---------------------

        Item 1. Financial Statements

                Consolidated  Statements  of Financial
                Condition as of March 31, 2003 (Unaudited)
                and December 31, 2002                                         3

                Consolidated  Statements  of  Income  for the
                Three  Month  Month Period Ended March 31,
                2003 and 2002 (Unaudited)                                     4

                Consolidated Statements of Comprehensive Income (Loss)
                for the Three Month Period Ended March 31,
                2003 and 2002 (Unaudited)                                     5

                Consolidated Statement of Changes in Shareholders'
                Equity for the Three Month Period Ended March 31,
                2003 (Unaudited)                                              6

                Consolidated Statements of Cash Flows for the
                Three Month Period Ended March 31, 2003 and
                2002 (Unaudited)                                            7-8

                Notes to Consolidated Financial Statements
                for the Three Month Period Ended March 31,
                2003 and 2002 (Unaudited)                                  9-14

       Item 2.  Management's Discussion and Analysis or Plan
                of Operation                                              14-19

       Item 3.  Controls and Procedures                                      19


PART II.  OTHER INFORMATION
          -----------------

          Item 1.  Legal Proceedings                                         20

          Item 2.  Changes in Securities and Use of Proceeds                 20

          Item 3.  Defaults upon Senior Securities                           20

          Item 4.  Submission of Matters to a Vote of Security Holders       20

          Item 5.  Other Information                                         20

          Item 6.  Exhibits and Reports on Form 8-K                          20

SIGNATURES                                                                   21

CERTIFICATIONS                                                            22-23

                                       2
<PAGE>


PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements

                UNITED TENNESSEE BANKSHARES, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                   AS OF MARCH 31, 2003 AND DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                                  March 31,
                                                                                    2003               December 31,
                                                                                 (Unaudited)               2002
                                                                               ---------------       ----------------
                                                                                          (in thousands)
                                 Assets
<S>                                                                            <C>                   <C>
Cash and amounts due from depository institutions                              $        5,200        $         5,350
Investment securities available for sale, at fair value                                26,515                 25,267
Loans receivable, net                                                                  77,752                 78,362
Premises and equipment, net                                                               950                    969
Foreclosed real estate - held for sale                                                     21                    127
Accrued interest receivable                                                               687                    670
Goodwill, net of amortization                                                             853                    873
Prepaid expenses and other assets                                                          91                    135
                                                                               ---------------       ----------------
 Total assets                                                                  $      112,069        $       111,753
                                                                               ===============       ================

                         Liabilities and Equity
Liabilities:
 Deposits                                                                      $       93,847        $        93,747
 Accrued interest payable                                                                 129                    132
 Accrued income taxes                                                                     272                      0
 Deferred income taxes                                                                    924                  1,008
 Accrued benefit plan liabilities                                                         702                    856
 Other liabilities                                                                         61                     85
                                                                               ---------------       ----------------

 Total liabilities                                                                     95,935                 95,828
                                                                               ---------------       ----------------

Shareholders' equity:
 Common stock - no par value, Authorized 20,000,000 shares;
   issued and outstanding 1,273,124 shares (1,311,124 in 2002)                         12,051                 12,448
 Unearned compensation - ESOP                                                           (401)                  (517)
 Shares in grantor trust - contra account                                               (199)                  (199)
 Shares in MRP plan - contra account                                                     (56)                   (56)
 Shares in stock option plan trusts - contra account                                  (1,315)                (1,491)
 Retained earnings                                                                      4,649                  4,199

 Accumulated other comprehensive income                                                 1,405                  1,541
                                                                               ---------------       ----------------

  Total shareholders' equity                                                           16,134                 15,925
                                                                               ---------------       ----------------
  Total liabilities and equity                                                 $      112,069        $       111,753
                                                                               ===============       ================
</TABLE>




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

                                       3
<PAGE>

                UNITED TENNESSEE BANKSHARES, INC., AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                                            (In Thousands Except
                                                                            per Share Information)
                                                                     -------------------------------------
                                                                              Three Months Ended
                                                                     -------------------------------------
                                                                                  March 31,
                                                                     -------------------------------------
                                                                          2003                  2002
                                                                      (Unaudited)            (Unaudited)
                                                                     ---------------        --------------
<S>                                                               <C>                    <C>

Interest income:

 Loans                                                            $           1,468      $          1,460
 Investment securities                                                          279                   284
 Other interest-earning assets                                                    6                     3
                                                                     ---------------        --------------
  Total interest income                                                       1,753                 1,747
                                                                     ---------------        --------------

Interest expense:
 Deposits                                                                       453                   567
 Advances from Federal Home Loan Bank
  and Note Payable                                                                0                     0
                                                                     ---------------        --------------
  Total interest expense                                                        453                   567
                                                                     ---------------        --------------

Net interest income                                                           1,300                 1,180

Provision for loan losses                                                        36                    24
                                                                     ---------------        --------------

Net interest income after provision for loan losses                           1,264                 1,156
                                                                     ---------------        --------------

Noninterest income:
 Deposit account service charges                                                 62                    54
 Loan service charges and fees                                                   25                    28
 Net gain (loss) on sales of investment
  securities available for sale                                                  13                     7
 Other                                                                           20                    14
                                                                     ---------------        --------------
  Total noninterest income                                                      120                   103
                                                                     ---------------        --------------

Noninterest expense:
 Compensation and benefits                                                      323                   277
 Occupancy and equipment                                                         63                    55
 Federal deposit insurance premiums                                              15                    12
 Data processing fees                                                            67                    63
 Advertising and promotion                                                       18                    20
 Net (gain) loss on foreclosed real estate                                        8                     0
 Amortization                                                                    20                    20
 Other                                                                          137                   151
                                                                     ---------------        --------------
  Total noninterest expense                                                     651                   598
                                                                     ---------------        --------------

Income before income taxes                                                      733                   661

Income taxes                                                                    283                   248
                                                                     ---------------        --------------


Net income                                                        $             450      $            413
                                                                     ---------------        --------------
Earnings per share

 Basic                                                            $            0.34      $           0.31
                                                                     ===============        ==============
 Diluted                                                          $            0.34      $           0.31
                                                                     ===============        ==============
</TABLE>


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


                                       4

<PAGE>



                UNITED TENNESSEE BANKSHARES, INC. AND SUBSIDIARY
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2003 AND 2002







<TABLE>
<CAPTION>


                                                                                       Three Months Ended March 31,
                                                                                    -----------------------------------
                                                                                        2003                  2002
                                                                                    -------------         -------------
                                                                                        (Unaudited - in thousands)
<S>                                                                             <C>                  <C>


Net income                                                                      $           450      $            413
                                                                                    -------------         -------------

Other comprehensive income (loss), net of tax:
 Unrealized gains (losses) on investment securities available for sale                     (207)                 (278)
 Less reclassification adjustment for gains\losses
  included in net income                                                                    (13)                   (8)
 Less income taxes related to unrealized
  gains\losses on investment securities available for sale                                   84                   108
                                                                                    -------------         -------------
   Other comprehensive income (loss), net of tax                                           (136)                 (178)
                                                                                    -------------         -------------


Comprehensive income (loss)                                                     $           314      $            235
                                                                                    =============         =============
</TABLE>




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

                                       5
<PAGE>


<TABLE>
<CAPTION>

                UNITED TENNESSEE BANKSHARES, INC. AND SUBSIDIARY
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                 FOR THE THREE MONTH PERIOD ENDED MARCH 31,2003


                                                     Shares in   Shares in  Shares in             Accumulated
                                          Unearned     Grantor    MRP Plan- Stock Option             Other        Total
                               Common   Compensation Trust-Contra   Contra  Plan-Contra  Retained Comprehensive Shareholders'
                                Stock      ESOP       Account      Account     Account   Earnings    Income       Equity
                              -------   -----------  ----------- ---------- ------------ -------- ------------- -------------
<S>                           <C>       <C>          <C>         <C>        <C>          <C>      <C>           <C>

Balances, beginning of period $12,448   $     (517)  $     (199) $     (56) $    (1,491) $  4,199 $       1,541 $     15,925

Net income                          0            0            0          0            0       450             0          450

Issuance of shares of common
  stock pursuant to MRP plan        0            0            0          0            0         0             0            0

Other comprehensive income (loss)   0            0            0          0            0         0          (136)        (136)

Payment on ESOP loan principal      0          116            0          0            0         0             0          116

Dividends paid                      0            0            0          0            0         0             0            0

Adjustment of cost on directors
  long-term incentive plan          0            0            0          0            0         0             0            0

Proceeds from exercise of
  stock options                     0            0            0          0            9         0             0            9

Costs associated with
stock options surrendered           0            0            0          0         (195)        0             0         (195)

Purchase and retirement of
  2,500 shares of common stock    (35)           0            0          0            0         0             0          (35)

Retirement of 35,500 shares of
  common stock held in the stock
  option plan contra account     (362)           0            0          0          362         0             0            0
                             ---------  -----------  ----------- ---------- ------------ -------- -------------  ------------

Balances                     $ 12,051   $      (401) $      (199)$      (56)$     (1,315)$  4,649 $       1,405  $    16,134
                             ---------  -----------  ----------- ---------- ------------ -------- -------------  ------------
</TABLE>




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




                                       6
<PAGE>



                UNITED TENNESSEE BANKSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2003 AND 2002
<TABLE>
<CAPTION>

                                                                                                          Three Months Ended
                                                                                                                March 31,
                                                                                                   -------------------------------
                                                                                                         2003            2002
                                                                                                     (Unaudited - in thousands)
                                                                                                   -------------------------------
<S>                                                                                                <C>                <C>
Operating Activities:
 Net income                                                                                        $       450        $       413
                                                                                                   ------------       ------------
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   Provision for loan losses                                                                                36                 24
   Depreciation                                                                                             23                 17
   Amortization of goodwill                                                                                 20                 20
   Net (gain) loss on sales of foreclosed real estate                                                        8                  0
   Federal home loan bank stock dividends                                                                   (9)               (10)
   Net (gain) loss on sales of investment securities available for sale                                    (13)                (8)
   (Increase) Decrease in:
    Accrued interest receivable                                                                            (17)               (21)
    Other assets                                                                                            44                  2
   Increase (Decrease) in:
    Accrued interest payable                                                                                (3)               (47)
    Accrued income taxes                                                                                   272                266
    Accrued benefit plan liabilities                                                                      (154)              (271)
    Other liabilities                                                                                      (24)               (17)
                                                                                                   ------------       ------------
     Total adjustments                                                                                     183                (45)
                                                                                                   ------------       ------------
Net cash provided by operating activities                                                                  617                368
                                                                                                   ------------       ------------

Investing Activities:
 Purchases of investment securities available for sale                                                  (4,078)            (3,300)
 Proceeds from maturities of investment securities available for sale                                      517              1,080
 Payments received on investment securities available for sale                                           1,008              2,051
 Proceeds from sales of investment securities available for sale                                         1,107              1,373
 Net (increase) decrease in loans                                                                          553             (3,135)
 Purchases of premises and equipment, net                                                                   (4)               (17)
 Proceeds from sales of foreclosed real estate                                                             119                  0
                                                                                                   ------------       ------------
Net cash provided by (used in) investing activities                                                       (778)            (1,948)
                                                                                                   ------------       ------------

</TABLE>





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






                                       7
<PAGE>



                UNITED TENNESSEE BANKSHARES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                                         Three Months Ended
                                                                                                      2003               2002
                                                                                                  -----------        -----------
                                                                                                   (Unaudited - in thousands)
<S>                                                                                               <C>                <C>
Financing Activities:
 Costs associated with stock options surrendered                                                        (195)                 0
 Net increase (decrease) in deposits                                                                     100              4,693
 Purchase and retirement of common stock                                                                 (35)              (144)
 Proceeds from exercise of stock options                                                                   9                  0
 Issuance of common stock for MRP plan                                                                     0                143
 Payment on ESOP loan and release of shares                                                              116                115
                                                                                                  -----------        -----------

Net cash provided by (used in) financing activities                                                       (5)             4,807
                                                                                                  -----------        -----------

Net increase (decrease) in cash and cash equivalents                                                    (150)             3,227

Cash and cash equivalents, beginning of period                                                         5,350              2,123
                                                                                                  -----------        -----------


Cash and cash equivalents, end of period                                                          $    5,200         $    5,350
                                                                                                  ===========        ===========

Supplementary disclosures of cash flow information:
Cash paid during the period for:
 Interest                                                                                         $      456         $      567
 Income taxes                                                                                     $      250         $       29

Supplementary disclosures of noncash investing activities:
  Acquisition of foreclosed real estate                                                           $       21         $        0
  Change in unrealized gain\loss on investment securities
   available for sale                                                                             $     (220)        $     (286)
  Change in deferred income taxes associated with unrealized
   gain\loss on investment securities available for sale                                          $      (84)        $      108
  Change in net unrealized gain\loss on investment
   securities available for sale                                                                  $     (136)        $     (178)

</TABLE>






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


                                       8
<PAGE>


                UNITED TENNESSEE BANKSHARES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2003 AND 2002
                                   (UNAUDITED)

Note 1 - Basis of Presentation and Principles of  Consolidation  and Significant
Accounting Policies

United Tennessee Bankshares, Inc. ("Company") was incorporated under the laws of
the State of  Tennessee  for the  purpose of  becoming  the  holding  company of
Newport Federal Savings and Loan Association ("Association"), in connection with
the Association's  conversion from a federally chartered mutual savings and loan
association to a federally chartered capital stock savings bank. The Company had
no assets or  operations  prior to the  conversion.  On  January  1,  1998,  the
Association  converted  from a mutual  savings  association  to a capital  stock
savings  bank,  changed  its name to  Newport  Federal  Bank  ("Bank"),  and was
simultaneously  acquired by its holding company,  United  Tennessee  Bankshares,
Inc.

The Bank provides a variety of financial  services to individuals  and corporate
customers  through its three offices in Newport,  Tennessee.  The Bank's primary
deposit  products are  interest-bearing  savings  accounts and  certificates  of
deposit.  The Bank's  primary  lending  products  are  one-to-four  family first
mortgage loans.

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with the instructions for Form 10-QSB and on the same basis as the
Company's  audited  consolidated   financial  statements.   In  the  opinion  of
management, all adjustments,  consisting of normal recurring accruals, necessary
to present fairly the financial position,  results of operations, and cash flows
for the interim periods presented have been included.  The results of operations
for such interim periods are not necessarily  indicative of the results expected
for the full year.

The consolidated  financial  statements  include the accounts of the Company and
the Bank. All intercompany accounts have been eliminated.

The Company has a stock-based  employee  compensation  plan,  which is described
more fully in Note 5. The Company accounts of its plan under the recognition and
measurement  principles  of APB Opinion No. 25,  Accounting  for Stock Issued to
Employees,  and related  interpretations.  No stock-based employee  compensation
cost is reflected in net income, as all options granted under those plans had an
exercise price equal to the market value of the  underlying  common stock on the
date of grant.  The  following  table  illustrates  the effect on net income and
earnings  per  share if the  Company  had  applied  the fair  value  recognition
provisions of FASB Statement No. 123,  Accounting for Stock-Based  Compensation,
to stock-based employee compensation.

                                                        Three Months Ended
                                                 -------------------------------
                                                               March 31,
                                                 -------------------------------
(In thousands, except per share data)                  2003              2002
                                                 --------------    -------------
Net income, as reported                          $          450    $        413

Deduct: Total stock-based employee compensation
  expense determined under fair value based method
  for all awards, net of related tax effects                 (4)            (37)
                                                 --------------    -------------
Pro forma net income                             $          446    $        376
                                                 ==============    =============

Earnings per share:
 Basic - as reported                             $         0.34    $       0.31
                                                 ==============    =============
 Basic - pro forma                               $         0.34    $       0.28
                                                 ==============    =============
 Diluted - as reported                           $         0.34    $       0.31
                                                 ==============    =============
 Diluted - pro forma                             $         0.34    $       0.28
                                                 ==============    =============


                                       9
<PAGE>

Note 2 - Earnings Per Share

Basic earnings per share represent income  available to shareholders  divided by
the weighted  average number of shares  outstanding  during the period.  Diluted
earnings per share reflect additional shares that would have been outstanding if
dilutive  potential shares had been issued,  as well as any adjustment to income
that would result from the assumed issuance. Potential shares that may be issued
by the Company  relate solely to outstanding  stock options,  and are determined
using the treasury stock method.

Earnings per share have been computed based on the following:

                                                        Three Months Ended
                                                  ------------------------------
                                                              March 31,
                                                  ------------------------------
                                                       2003             2002
                                                  --------------   -------------
Average number of shares outstanding                   1,304,580       1,335,779
Effect of dilutive options                                 2,433           1,422
                                                  --------------   -------------
Average number of shares outstanding used
  to calculate earnings per share                      1,307,013       1,337,201
                                                  ==============   =============


                                       10
<PAGE>

Note 3 - Comprehensive Income

The  Financial  Accounting  Standards  Board  (FASB)  has  issued  Statement  of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income."
This statement establishes standards for reporting  comprehensive income and its
components  in the  financial  statements.  The objective of the statement is to
report a measure of all changes in equity of an  enterprise  that  results  from
transactions  and other  economic  events of the period other than  transactions
with owners. Items included in comprehensive income include revenues, gains, and
losses that under generally accepted accounting  principles are directly charged
to equity.  Examples include foreign currency  translations,  pension  liability
adjustments and unrealized gains and losses on investment  securities  available
for sale.  The  Company  has  included  its  comprehensive  income in a separate
financial statement as part of its consolidated financial statements.


Note 4 - Management Recognition Plan

In  January  1999,  the  Company's  board of  directors  approved  a  Management
Recognition Plan (MRP), and in May 1999, the Company's shareholders ratified the
plan. The plan authorizes the board of directors to award up to 58,190 shares of
restricted  common  stock to  members  of the  board  of  directors  and  senior
management.

The Company's  board of directors has awarded 54,518 shares as of March 31, 2003
of  restricted  common stock to certain  members of the board of  directors  and
senior  management.  The shares are  awarded  25% per year.  The Company and its
subsidiary  will  share the cost of the Plan and accrue  the  estimated  cost of
repurchasing shares to be reissued as restricted stock over the period that such
awards are earned.

Activity in the MRP plan is as follows:

                                                       Period Ended March 31,
                                                      ------------------------
                                                         2003          2002
                                                      ----------    ----------
Accrued Liability Balance at Beginning of Period      $   5,538     $ 142,259
Amount Charged to Expense                                 2,809         5,618
Less Cost of Shares Issued                                    0      (142,339)
                                                      ----------    ----------
Accrued Liability at End of Period                    $   8,347     $   5,538
                                                      ==========    ==========

                                       11

<PAGE>

The  Company  held 4,591  shares of its  common  stock in trust at a net cost of
$56,195 as of March 31, 2003 and December 31, 2002. A contra-equity  account has
been established to reflect the cost of such shares held in trust.

Note 5 - Stock Option Plan

In January 1999,  the Company's  board of directors  approved the Company's 1999
stock option plan,  and in May 1999,  the  Company's  shareholders  ratified the
plan.  The plan  reserved  209,299  shares  of the  Company's  common  stock for
issuance  pursuant  to the options to be  granted.  These  shares will be either
newly issued shares or shares purchased on the open market.

The  Company's  board of directors  has  approved the issuance of stock  options
under  the  Plan to  certain  members  of the  board  of  directors  and  senior
management. The options vest at a rate of 25% per year, expire in ten years, and
provide for the  purchase of stock at an exercise  price equal to the fair value
of the Company's stock on the date the option is granted. Holders of the options
can also surrender the options and be paid cash for the  difference  between the
exercise price and the stock's fair value on the date surrendered.  The board of
directors  granted 202,676 options in 1999 and 6,623 options in 2001. During the
three month period ended March 31, 2003,  36,394  options were  surrendered at a
total cost of $195,664.  Stock options awarded and  outstanding  totaled 138,927
and 175,321 as of March 31, 2003 and December 31, 2002, respectively.

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions:
<TABLE>
<CAPTION>

                                                                      Quarters Ended March 31,
                                                              ---------------------------------------
                                                                     2003                   2002
                                                              -------------------  ------------------
<S>                                                               <C>                    <C>

Dividend Yield                                                       3.5%                   3.5%
Expected Life                                                     8.5 years              8.5 years
Expected Volatility                                                  52%                    52%
Risk-Free Interest Rate                                              4.8%                   4.8%

</TABLE>


A summary of the status of the Company's stock option plan is presented below:


<TABLE>
<CAPTION>

                                     Three Months Ended March          Three Months Ended March
                                             31, 2003                          31, 2002
                                   ----------------------------       ---------------------------
                                                     Weighted                         Weighted
                                                     Average                          Average
                                                     Exercise                         Exercise
                                     Shares           Price            Shares          Price
                                   -----------     ------------       --------     --------------

<S>                                   <C>          <C>                 <C>         <C>
Outstanding at
 Beginning of Period                  175,321      $       8.59        209,299     $         8.59
Granted                                     0                                0                  0
Exercised                                   0                                0
Surrendered                           (36,394)             8.60              0
Forfeited                                   0                                0
                                   -----------                        --------
Outstanding at
 End of Year                          138,927      $       8.59        209,299     $         8.59
                                   ===========                        ========
Options Exercisable                   135,616      $       8.59        204,332     $         8.59
 at Period-End
Weighted-Average Fair
 Value of Options Granted
 During the year                          N/A                              N/A

</TABLE>


                                       12

<PAGE>

Information pertaining to options outstanding at March 31, 2003 is as follows:
<TABLE>
<CAPTION>

                                        Options Outstanding                           Options Exercisable
                        ----------------------------------------------------     ------------------------------
                                                  Weighted
                                                  Average         Weighted                            Weighted
                                                 Remaining         Average                             Average
     Range of                 Number            Contractual       Exercise           Number           Exercise
 Exercise Prices           Outstanding              Life            Price          Exercisable          Price
-------------------     -------------------    ---------------    ----------     ----------------     ---------
<S>                          <C>                 <C>              <C>                <C>              <C>
$8.00 - $9.00                138,927             5.8 years        $   8.59           135,616          $  8.59

</TABLE>

The Company has  purchased  138,641 and 188,422  shares as of March 31, 2003 and
December 31, 2002,  respectively,  of its common  stock,  which is being held in
trusts for when the stock options are  exercised.  A  contra-equity  account has
been established to reflect the costs of such shares held in trusts.

The Company applies APB Opinion 25 and related Interpretations in accounting for
its stock option plan. Accordingly, no compensation cost has been recognized.


Note 6 - Improvement Plan for Main Office Facility

During the first quarter of 2001,  the Company's  board of directors  approved a
plan to improve the existing main office  facilities.  The Company has purchased
land on which to construct a new main office facility.


Note 7 - Recent Accounting Pronouncements

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting Standard No. 141, Business  Combinations and SFAS No. 142,
Goodwill and Other  Intangible  Assets.  SFAS No. 141 requires that the purchase
method of accounting be used for all business combinations  initiated after June
30, 2001. SFAS No. 142 requires that goodwill and other  intangible  assets with
indefinite  useful  lives no longer be  amortized,  but  instead  be tested  for
impairment  annually.  SFAS No. 142 is effective  on January 1, 2002.  Since the
Company's  intangible asset associated with its branch purchase is accounted for
in accordance with SFAS No. 72, the Company will not change its  amortization of
its intangible asset.

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial   Accounting   Standard  No.  143,  Accounting  for  Asset  Retirement
Obligations.  SFAS No. 143  applies  to legal  obligations  associated  with the
retirement of long-lived assets that result from the acquisition,  construction,
development  and/or the  normal  operation  of a  long-lived  asset,  except for
certain  obligations  of  lessees.  SFAS  No.  143 is  effective  for  financial
statements  issued for fiscal years  beginning  after June

                                       13
<PAGE>
15,  2002.  Since the Company does not have any legal  obligations  as described
above,  this  statement  is not  expected  to have any  impact on the  Company's
financial position or results of operations.

In August 2001, the Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal
of Long-Lived  Assets (SFAS No. 144).  This  statement  supercedes  SFAS No. 121
Accounting for the Impairment of Long-Lived  Assets and for Long-Lived Assets to
be Disposed of, and the accounting  and reporting  provisions of APB Opinion No.
30, Reporting the Results of  Operations-Reporting  the Effects of Disposal of a
Segment of a Business,  and  Extraordinary,  Unusual and Infrequently  Occurring
Events  and  Transactions,  for the  disposal  of a segment  of a  business  (as
previously  defined in that  Opinion).  SFAS No. 144 is effective  for financial
statements  issued for fiscal years  beginning  after  December  15,  2001,  and
interim  periods  within those fiscal years.  This  statement is not expected to
have a  significant  impact on the  Company's  financial  position or results of
operations.

In October 2002, the Financial  Accounting  Standards Board issued  Statement of
Financial Standard No. 147, Accounting for Certain Financial Institutions.  This
statement removes acquisitions of financial  institutions from the scope of FASB
Statement  No. 72,  Accounting  for  Certain  Acquisitions  of Banking or Thrift
Institutions, and FASB Interpretation No. 9, Applying APB Opinions No. 16 and 17
When a Savings and Loan  Association  or a Similar  Institution Is Acquired in a
Business  Combination  Accounted for by the Purchase Method.  In addition,  this
statement  amends FASB  Statement  No. 144,  Accounting  for the  Impairment  or
Disposal  of  Long-Lived  Assets,  to  include in its scope  long-term  customer
relationship intangible assets of financial institutions such as depositor - and
borrower-relationship intangible assets and credit cardholder intangible assets.
This statement  intends to improve the  comparability of financial  reporting by
requiring  institutions to follow FASB Statement No. 141, Business Combinations.
SFAS No. 147 is effective for  acquisitions for which the date of acquisition is
on or after October 1, 2002. Management does not expect this statement to have a
significant impact on the Company's financial position or results of operations.

In December 2002, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standard No. 148, Accounting for Stock-Based Compensation -
Transition  and  Disclosure  - an  amendment  of FASB  Statement  No. 123.  This
statement provides  alternative  methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
In addition,  this statement amends the disclosure requirements of Statement 123
to require prominent disclosures in both annual and interim financial statements
about the method of accounting for  stock-based  employee  compensation  and the
effect of the method used on reported  results.  Statement  No. 148 is effective
for financial statements for fiscal years ending after December 15, 2002 and for
interim  periods  beginning  after  December 15, 2002.  The Company and the Bank
apply the intrinsic  value based method of accounting  prescribed by APB Opinion
No. 25, Accounting for Stock Issued to Employees,  in accounting for their stock
option  plans and have not  elected a  voluntary  change to the fair value based
method  prescribed  in Statement  No. 123.  The  Company's  consolidated  annual
financial  statements  beginning  in 2002  and  consolidated  interim  financial
statements beginning in 2003 include the additional disclosures required by SFAS
No. 148, but management does not anticipate this statement  having a significant
impact  on  the  Company's   consolidated   financial  position  or  results  of
operations.

                                       14
<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of Operation

General

The principal business of United Tennessee Bankshares, Inc. and our wholly owned
subsidiary  Newport  Federal  Bank  ("we,"  "us," etc.)  consists  of  accepting
deposits from the general  public through our main office and two branch offices
and investing  those funds in loans secured by one- to  four-family  residential
properties  located in our primary  market area. We also maintain a portfolio of
investment  securities and originate a limited amount of commercial  real estate
loans and consumer loans. Our investment  securities  portfolio consists of U.S.
Treasury notes and U.S. government agency securities,  local municipal bonds and
mortgage-backed  securities  that are guaranteed as to principal and interest by
the Federal Home Loan Mortgage  Corporation  (FHLMC),  the  Government  National
Mortgage Association (GNMA) or the Federal

National Mortgage  Association (FNMA). We also maintain an investment in Federal
Home Loan Bank of Cincinnati common stock and FHLMC common stock.

Our net  income  primarily  depends  on our net  interest  income,  which is the
difference between interest income earned on loans and investment securities and
interest paid on  customers'  deposits and other  borrowings.  Our net income is
also  affected by  noninterest  income,  such as service  charges on  customers'
deposit accounts,  loan service charges and other fees, and noninterest expense,
primarily  consisting  of  compensation  expense,  deposit  insurance  and other
expenses incidental to our operations.

Our  operations  and those of the thrift  industry as a whole are  significantly
affected by prevailing  economic  conditions,  competition  and the monetary and
fiscal policies of governmental  agencies. Our lending activities are influenced
by demand for and supply of housing and competition  among lenders and the level
of interest  rates in our market area.  Our deposit flows and costs of funds are
influenced  by  prevailing  market  rates of  interest,  primarily  on competing
investments, account maturities and the levels of personal income and savings in
our market area.

The following is a discussion  of our  financial  condition as of March 31, 2003
and for the three month period ended March 31, 2003.  These  comments  should be
read in conjunction with our consolidated  financial statements and accompanying
footnotes appearing in this report.

This  report  contains   "forward-looking   statements"   relating  to,  without
limitation,  future economic performance,  plans and objective of management for
future  operations,  and  projections of revenues and other financial items that
are based on the  beliefs  of  management,  as well as  assumptions  made by and
information currently available to management. The words "expect," "anticipate,"
and  "believe,"  as  well as  similar  expressions,  are  intended  to  identify
forward-looking  statements.  Our actual results may differ  materially from the
results discussed in the forward-looking statements.



                                       15
<PAGE>

Comparison of Financial Condition at March 31, 2003 and December 31, 2002

Total assets increased from December 31, 2002 to March 31, 2003 by $316,000,  or
0.3%,  from $111.8  million at December 31, 2002 to $112.1  million at March 31,
2003.  The  increase  in assets was  principally  the result of an  increase  in
investment securities. Investment securities increased by $1.2 million due to an
increase in investment purchases during the current period.

Loans  receivable  decreased  from  December  31,  2002  to  March  31,  2003 as
repayments exceeded originations for the period by approximately  $610,000.  The
following  table  sets  forth  information  about  the  composition  of our loan
portfolio by type of loan at the dates indicated. At March 31, 2003 and December
31, 2002, we had no  concentrations  of loans exceeding 10% of gross loans other
than as disclosed below.

<TABLE>
<CAPTION>

                                                             March 31, 2003                 December 31, 2002
                                                         ------------------------        ------------------------
                                                                           (In Thousands)
                                                            Amount      Percent             Amount      Percent
<S>                                                      <C>              <C>            <C>              <C>
Type of Loan:
Real estate loans:

  One- to four-family residential                       $      61,923      77.1%         $     62,772      77.5%

  Commercial                                                    8,747      10.9%                8,617      10.6%

  Construction                                                  3,870       4.8%                3,932       4.9%

Consumer loans:

  Automobile                                                    1,406       1.8%                1,354       1.7%

  Loans to depositors, secured by deposits                      1,167       1.5%                1,264       1.6%

  Home equity and second mortgage                                 961       1.2%                  948       1.2%

  Other                                                         2,200       2.7%                2,055       2.5%
                                                         ------------- ----------       ------------- ----------

                                                               80,274     100.0%               80,942%    100.0%

                                                         ------------- ==========       ------------- ==========

Less:

  Loans in process                                              1,317                           1,406

  Deferred fees and discounts                                     368                             372

  Allowance for loan losses                                       837                             803
                                                         -------------                   -------------
    Total                                                $                               $
                                                               77,752                          78,361
                                                         -------------                   -------------
</TABLE>



We  actively  monitor  our asset  quality  and charge  off loans and  properties
acquired in settlement of loans against the  allowances for losses on such loans
and such properties when  appropriate and provide  specific loss allowances when
necessary.  Although we believe we use the best  information  available  to make
determinations with respect to the allowances for losses, future adjustments may
be  necessary  if economic  conditions  differ  substantially  from the economic
conditions in the assumptions used in making the initial determinations.

                                       16
<PAGE>



The following table sets forth  information  about our allowance for loan losses
for the period indicated.

                                               Three                  Three
                                             Months Ended         Months Ended
                                              March 31,              March 31,
                                                2003                   2002
                                        ------------------     -----------------
                                                   (In Thousands)
Balance at beginning of period          $              803     $             719
                                        ------------------     -----------------
Charge-offs:
  Consumer                                              (3)                    0
  Mortgage                                               0                     0
Recoveries:
  Consumer                                               1                     3
  Mortgage                                               0                     0
                                        ------------------     -----------------
Net Charge-offs                                         (2)                    3
Provision for loan losses                               36                    24
                                        ------------------     -----------------
Balance at end of period                $              837     $             746
                                        ==================     =================

The following table sets forth information about our nonperforming assets at the
dates indicated.

                                               March 31,          December 31,
                                                 2003                 2002
                                        ------------------     -----------------
                                                       (In Thousands)
Nonaccrual Loans                        $               0      $               0
Accruing loans which are contractually
  past due 90 days or more:
Real Estate:
  Residential                                          394                   292
  Non-Residential                                       14                    30
Consumer                                                21                    14
                                        ------------------     -----------------
Total                                   $              429     $             336
                                        ==================     =================

At March 31,  2003,  the Bank had one  additional  commercial  real  estate loan
totaling $460,000,  as to which known information about possible credit problems
of the  borrower  caused us to have doubts as to the ability of the  borrower to
comply with present loan repayment terms. Although the loan is current, the cash
flows  of the  lessee  of the  property  are  below  expectations.  The  loan is
considered  well  secured  and we do not  expect  to incur any loss in excess of
existing reserves on any of our assets. We conduct regular reviews of our assets
and  evaluate  the need to  establish  allowances  on the basis of this  review.
Allowances are  established on a regular basis based on an assessment of risk in
our  assets  taking  into  consideration  the  composition  and  quality  of the
portfolio, delinquency trends, current charge-off and loss experience, the state
of the real  estate  market,  regulatory  reviews  conducted  in the  regulatory
examination  process,  general  economic  conditions  and other  factors  deemed
relevant by us.  Allowances are provided for individual  assets,  or portions of
assets, when ultimate  collection is considered  improbable based on the current
payment status of the assets and the fair value or net  realizable  value of the
collateral.

During  the three  months  ended  March 31,  2003,  the  Company  increased  its
liabilities by $107,000, or 0.1%. Total deposits increased $100,000 or 0.1% from
$93.7 million at December 31, 2002 to $93.8 million at March 31, 2003.

During 2003, the Bank has accepted deposits totaling  approximately $7.0 million
from various governmental and institutional customers, some of which are outside
of its traditional market area. The

                                       17
<PAGE>


average term of these deposits is approximately six months. Management is unable
to determine  whether the Bank will retain these deposits upon maturity.  In the
event the Bank is not able to retain  these  deposits,  management  has  various
sources of liquidity  available  including cash and amounts due from  depository
institutions  and  investment  securities  which  are  available  for  sale.  In
addition,  the Bank has borrowing  authority  from the Federal Home Loan Bank of
approximately $4.0 million.

Our shareholders'  equity increased  $209,000 from $15.9 million at December 31,
2002 to $16.1  million at March 31,  2003.  The  increase  was due  primarily to
$450,000 of net  income,  a decrease  in  unearned  compensation  related to the
Company's ESOP of $116,000  offset by a $136,000  decrease in our net unrealized
gain on investment  securities,  the surrender of 36,394 stock options at a cost
of $195,000  and the purchase and  retirement  of 2,500 shares of the  Company's
common stock at a cost of $35,000.  The Company's board of directors  approved a
plan in July 2002 to purchase and retire up to $500,000 of the Company's  common
stock over the next two years, depending upon the stock price.

Discussion  of Results of  Operations  for the Three Months Ended March 31, 2003
and 2002

Our net  income  for the three  months  ended  March 31,  2003 was  $450,000,  a
$37,000,  or 9.0%  increase  from the $413,000 we earned during the three months
ended March 31, 2002.  Basic and diluted earnings per share for the three months
ended  March 31,  2003 were each $0.34  compared to $0.31 for the same period in
2002. Basic average shares outstanding for three months ended March 31, 2003 was
1,304,580 shares and 1,335,779 shares for the three months ended March 31, 2002.
Average   dilutive   potential   shares   outstanding   were  2,433  and  1,422,
respectively.

Interest  income  increased  $6,000,  or 0.3%, from $1.747 million for the three
months  ended March 31, 2002 to $1.753  million for the three months ended March
31,  2003.  The  increase in interest  income was due to an increase in interest
income from loans and other  interest  income of $11,000 offset by a decrease in
interest  income on investment  securities  of $5,000.  The decrease in interest
income  on  investment  securities  is a  result  of a  decrease  in the  yields
available on investment securities.

Interest  expense on deposits  decreased  $114,000  from  $567,000 for the three
months  ended March 31, 2002 to $453,000  for the three  months  ended March 31,
2003, primarily due to the decrease in deposit account interest rates.

Net  interest  income  increased  $120,000,  or 10.2%,  between the periods as a
result of the  decrease  in interest  expense and a slight  increase in interest
income.  The Company's net interest margin widened to 5.00% for the three months
ended March 31, 2003 compared to 4.85% for the  comparable  period of 2002.  The
widening of the net interest  margin  reflects the current rate  environment and
the fact that our variable  rate loans are not adjusting as quickly as the rates
on our interest-bearing deposits.

Noninterest  income  increased  $17,000 from $103,000 for the three months ended
March 31, 2002 to  $120,000  for the three  months  ended  March 31,  2003.  The
increase in  noninterest  income was primarily the result of a net gain on sales
of  investment  securities  available  for sale of $13,000  and an  increase  in
deposit  account  service charges of $8,000 offset by a decrease in loan service
charges and fees of $3,000.

Noninterest  expenses increased $53,000 from $598,000 for the three months ended
March 31, 2002 to  $651,000  for the three  months  ended  March 31,  2003.  The
increase in noninterest  expense was primarily from an increase in  compensation
and benefits of $46,000,  and an increase in occupancy and equipment  expense of
$8,000.

Our  effective tax rates for the three months ended March 31, 2003 and 2002 were
38.6% and 37.5%, respectively.


                                       18
<PAGE>


Liquidity and Capital Resources

The Company  does not  currently  have any  business  activities  other than the
operation of the Bank and does not have significant on-going funding commitments
other than the payment of dividends to  shareholders.  To date,  the Company has
used the proceeds from its initial  public  offering and dividends from the Bank
to  meet  its  liquidity  needs.  The  Bank is  subject  to  various  regulatory
limitations on the payment of dividends to the Company.

Our most liquid  assets are cash and amounts due from  depository  institutions,
which are short-term highly liquid investments with original  maturities of less
than three months that are readily  convertible  to known  amounts of cash.  The
levels of these assets are dependent on our  operating,  financing and investing
activities  during any given period.  Our primary sources of funds are deposits,
proceeds from principal and interest payments on loans and investment securities
and earnings.  While  scheduled  principal  repayments  on loans and  investment
securities are a relatively  predictable source of funds, deposit flows and loan
and investment securities prepayments are greatly influenced by general interest
rates,  economic  conditions,  competition and other factors.  We do not solicit
deposits  outside  of  our  market  area  through  brokers  or  other  financial
institutions;  however,  we do accept  deposits  from various  governmental  and
institutional investors outside our traditional market area from time to time.

We have also  designated all of our investment  securities as available for sale
in order to meet liquidity demands.  In addition to internal sources of funding,
as a  member  of the  Federal  Home  Loan  Bank  we have  substantial  borrowing
authority  with the Federal Home Loan Bank.  Our use of a  particular  source of
funds is based on need, comparative total costs and availability.

We have historically maintained substantial levels of capital. The assessment of
capital adequacy depends on several factors,  including asset quality,  earnings
trends,  liquidity and economic  conditions.  We seek to maintain high levels of
regulatory  capital to give us maximum  flexibility  in the changing  regulatory
environment and to respond to changes in market and economic  conditions.  These
levels of capital have been achieved through consistent earnings enhanced by low
levels of noninterest expense and have been maintained at those high levels as a
result of our policy of moderate growth  generally  confined to our market area.
At March 31, 2003 and  December 31,  2002,  we exceeded  all current  regulatory
capital requirements and met the definition of a "well-capitalized" institution,
the highest regulatory capital category.


Item 3.  Controls and Procedures

(a)  Evaluation  of Disclosure  Controls and  Procedures.
The Company's  Chief  Executive  Officer and its  Controller  have evaluated the
effectiveness of the design and operation of the Company's  disclosure  controls
and procedures (as defined in Exchange Act Rule13a-14(c)) as of a date within 90
days of the filing date of this quarterly report. Based on that evaluation,  the
Chief  Executive  Officer and the  Controller  have concluded that the Company's
disclosure  controls  and  procedures  are  effective  to ensure  that  material
information relating to the Company and the Company's consolidated  subsidiaries
is made known to such  officers by others  within these  entities,  particularly
during the period this quarterly  report was prepared,  in order to allow timely
decisions regarding required disclosure.

(b) Changes in Internal Controls.
There have not been any significant  changes in the Company's  internal controls
or in other factors that could significantly affect these controls subsequent to
the date of their evaluation.



                                       19
<PAGE>
PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        None.

Item 2. Changes in Securities and Use of Proceeds

        None.

Item 3. Defaults upon Senior Securities

        None.

Item 4. Submission of Matters to a Vote of Security Holders

        None.

Item 5. Other Information

        None.

Item 6. Exhibits and Reports on Form 8-K

        (a) Exhibits:

The following exhibits are filed as a part of this report:

3.1(1)     Charter of United Tennessee Bankshares, Inc.

3.2(1)     Bylaws of United Tennessee Bankshares, Inc.

4(1)       Form of Stock Certificate of United Tennessee Bankshares, Inc.

10.1(2)    United Tennessee Bankshares, Inc. 1999 Stock Option Plan

10.2(2)    United Tennessee Bankshares, Inc. Management Recognition Plan

10.3(a)(1) Employment  Agreements   between  Newport  Federal  Savings  and Loan
           Association and Richard G. Harwood, Nancy L. Bryant and Peggy Holston

10.3(b)(1) Forms  of  Guarantee Agreements  between United Tennessee Bankshares,
           Inc. and Richard G. Harwood, Nancy L. Bryant and Peggy Holston

10.4(1)    Newport Federal Savings and Loan Association Long-Term Incentive Plan

10.5(1)    Newport  Federal  Savings  and Loan Association Deferred Compensation
           Plan

99.1(3)    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley  Act  of 2002, signed by Richard
           G. Harwood, President and Chief Executive Officer of United Tennessee
           Bankshares, Inc on May 14, 2003.

99.2(3)    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
           to Section 906 of the Sarbanes-Oxley  Act of 2002, signed by Chris H.
           Triplett, Controller on May 14, 2003.

---------------
(1)        Incorporated  by  reference  to  United  Tennessee Bankshares, Inc.'s
           Registration Statement on Form SB-2, File No. 333-36465.

(2)        Incorporated  by  reference  to  United  Tennessee Bankshares, Inc.'s
           Registration Statement on Form S-8, File No. 333-82803.

(3)        A  signed  original of this written statement required by Section 906
           has  been provided to the Company and will be retained by the Company
           and  furnished to the Securities and Exchange Commission or its staff
           upon request.

           (b) Reports on Form 8-K:

           United  Tennessee  Bankshares,  Inc. did not file a current report on
           Form 8-K during the quarter covered by this report.

                                       20
<PAGE>


SIGNATURES



     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   UNITED TENNESSEE BANKSHARES, INC.
                                   Registrant



Date:  May 14, 2003                /s/ Richard G. Harwood
                                   ---------------------------------------------
                                   Richard G. Harwood
                                   President and Chief Executive Officer
                                   (Duly Authorized Representative and
                                   Principal Financial and Accounting Officer)





                                       21
<PAGE>


             Certification of President and Chief Executive Officer
                         Pursuant to Section 302 of the
                           Sarbanes-Oxley Act of 2002

I, Richard G. Harwood, certify that:

1.   I have reviewed this  quarterly  report on Form 10-QSB of United  Tennessee
     Bankshares, Inc. ("United Tennessee");

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report; and

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of United  Tennessee  as of, and for,  the periods  presented in this
     quarterly report.

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 14, 2003                              /s/  Richard G. Harwood
                                                --------------------------------
                                                Richard G. Harwood
                                                President and
                                                Chief Executive Officer



                                       22
<PAGE>


                           Certification of Controller
                         Pursuant to Section 302 of the
                           Sarbanes-Oxley Act of 2002

I, Chris H. Triplett, certify that:

1.   I have reviewed this  quarterly  report on Form 10-QSB of United  Tennessee
     Bankshares, Inc. ("United Tennessee");

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report; and

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of United  Tennessee  as of, and for,  the periods  presented in this
     quarterly report.

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: May 14, 2003                                /s/ Chris H. Triplett
                                                  ------------------------------
                                                  Chris H. Triplett
                                                  Controller





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