##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

|         |  |                                                                                         |  | 
|-------- |  | --------------------------------------------------------------------------------------- |  | 
|MARK ONE |  |                                                                                         |  | 
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|[X]      |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |  | 
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|         |  | FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001                                       |  | 
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|[   ]    |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934      |  | 

FOR THE TRANSITION PERIOD
FROM _______________ TO _______________

Commission File Number 2-90200

FIRST MCMINNVILLE CORPORATION

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(Exact Name of Registrant As
Specified in its Charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Tennessee                                                      |  | 62-1198119                          
|                                                               |  |                                     
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (IRS Employer Identification
Number)

200 East Main Street, McMinnville, TN 37110

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(Address of Principal Executive
Offices and Zip Code)


(931) 473-4402

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(Registrants Telephone
Number, Including Area Code)


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed 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 [ ]

Indicate the number of shares outstanding of each of the issuers classes of
common stock as of the latest practicable date: November 13, 2001 
520,697 .

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TABLE OF CONTENTS



|                                                                                              |  |                                                   |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- |  | ------------------------------------------------- |  |  |  |  |  | 
|                                                                                              |  | Consolidated Balance Sheets                      
|                                                                                              |  | Consolidated Statements of Earnings              
|                                                                                              |  | Consolidated Statements of Comprehensive Earnings
|                                                                                              |  | Consolidated Statements of Cash Flows            
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|Item 1. LEGAL PROCEEDINGS                                                                    
|Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                            
|Item 3. DEFAULTS UPON SENIOR SECURITIES                                                      
|Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS                                
|Item 5. OTHER INFORMATION                                                                    
|Item 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     



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##### Table of Contents



PART I  FINANCIAL INFORMATION

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|--------------------------- | -------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|Item 1.                     | Financial Statements                                                                  
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|                            |                                                                                        | The unaudited consolidated financial statements of the registrant and its wholly-owned subsidiary, First National
Bank of McMinnville (the Bank) are as follows:
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|                            |                                                                                        | Consolidated Balance Sheets  September 30, 2001 and December 31, 2000.                                                                                           
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|                            |                                                                                        | Consolidated Statements of Earnings  For the three months and nine months ended September 30, 2001 and 2000.                                                     
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|                            |                                                                                        | Consolidated Statements of Comprehensive Earnings  For the three months and nine months ended September 30, 2001
and 2000.                                       
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|                            |                                                                                        | Consolidated Statements of Cash Flows  For the nine months ended September 30, 2001 and 2000.                                                                    
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|Item 2.                     | Managements Discussion and Analysis of Financial Condition and Results
of Operations.
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|Item 3.                     | Quantitative and Qualitative Disclosures about Market Risk.                           
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|                            |                                                                                        | Disclosures required by Item 3 are incorporated by reference to
Managements Discussion and Analysis of Financial Condition and
Results of Operations.            
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|PART II  OTHER INFORMATION
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|Item 1.                     | Legal Proceedings                                                                     
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|Item 2.                     | Changes in Securities and Use of Proceeds                                             
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|Item 3.                     | Defaults Upon Senior Securities                                                       
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|Item 4.                     | Submission of Matters to a Vote of Security Holders                                   
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|Item 5.                     | Other Information                                                                     
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|Item 6.                     | Exhibits and Reports on Form 8-K                                                      

2



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION




Consolidated Balance Sheets

September 30, 2001 and December 31, 2000

(Unaudited)

|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |        |         |  | 
|---------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------ | -------------- |  | ------------ | ------ | ------- |  | 
|                                                                             |                                                                                                                            |                                            |         |        | September 30,  |  | December 31,
|                                                                             |                                                                                                                            |                                            |         |        | 2001           |  | 2000        
|                                                                             |                                                                                                                            |                                            |         |        |                |  |             
|                                                                             |                                                                                                                            |                                            |         |        | (In Thousands)
|                                                                             |                                                                                                                            |                                            | Assets 
|                                                                             |                                                                                                                            |                                            |         |        |                |  |             
|Loans                                                                        |                                                                                                                            | $                                          | 137,337 |        |                |  | 136,046      |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Less: Allowance for loan losses                                                                                            |                                            |         | (1,853 | )              |  |              | (1,711 | )      
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                            | Net loans                                  |         |        | 135,484        |  |              |        | 134,335 | 
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Securities:                                                                  |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Held to maturity, at cost (market value $66,130,000 and $39,475,000,
respectively)                                         |                                            |         | 64,415 |                |  |              | 39,410 |        
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Available-for-sale, at market (amortized cost $54,214,000 and $85,666,000,
respectively)                                   |                                            |         | 54,826 |                |  |              | 83,710 |        
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Federal funds sold                                                           |                                                                                                                            |                                            | 9,600   |        |                |  |             |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Interest-bearing deposits in other banks                                     |                                                                                                                            |                                            | 46      |        |                |  | 63           |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Other earning assets                                                         |                                                                                                                            |                                            | 1,137   |        |                |  | 1,082        |       
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                             |                                                                                                                            | Total earning assets                       |         |        | 265,508        |  |              |        | 258,600 | 
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Cash and due from banks                                                      |                                                                                                                            |                                            | 6,838   |        |                |  | 4,364        |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Bank premises and equipment, net of accumulated depreciation                 |                                                                                                                            |                                            | 2,103   |        |                |  | 2,228        |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Accrued interest receivable                                                  |                                                                                                                            |                                            | 2,259   |        |                |  | 2,480        |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Deferred tax asset                                                           |                                                                                                                            |                                            |        |        |                |  | 932          |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Other real estate                                                            |                                                                                                                            |                                            | 98      |        |                |  | 70           |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Other assets                                                                 |                                                                                                                            |                                            | 439     |        |                |  | 486          |       
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                             |                                                                                                                            | Total assets                               |         | $      | 277,245        |  |              |        | 269,160 | 
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                             |                                                                                                                            | Liabilities
and Stockholders Equity      
|                                                                             |                                                                                                                            |                                            |         |        |                | 
|Deposits                                                                     |                                                                                                                            | $                                          | 213,251 |        |                |  | 210,852      |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Securities sold under repurchase agreements                                  |                                                                                                                            |                                            | 18,492  |        |                |  | 13,981       |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Short-term borrowings                                                        |                                                                                                                            |                                            | 125     |        |                |  |             |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Federal funds purchased                                                      |                                                                                                                            |                                            |        |        |                |  | 2,000        |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Advances from Federal Home Loan Bank                                         |                                                                                                                            |                                            | 1,000   |        |                |  | 1,000        |       
|                                                                            
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|                                                                            
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|Accrued interest and other liabilities                                       |                                                                                                                            |                                            | 2,544   |        |                |  | 3,620        |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Deferred tax liability                                                       |                                                                                                                            |                                            | 43      |        |                |  |             |       
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                             |                                                                                                                            | Total liabilities                          |         |        | 235,455        |  |              |        | 231,453 | 
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       
|Stockholders equity:                                                        |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Common stock, $2.50 par value; authorized 5,000,000 shares, issued 610,155
shares and 609,225 shares, respectively         |                                            |         | 1,525  |                |  |              | 1,523  |        
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Additional paid-in capital                                                                                                 |                                            |         | 1,810  |                |  |              | 1,760  |        
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Retained earnings                                                                                                          |                                            |         | 41,724 |                |  |              | 39,121 |        
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Net unrealized gains (losses) on available-for-sale securities, net of income
taxes of $232,000 and $743,000, respectively |                                            |         | 380    |                |  |              | (1,213 | )      
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                             |                                                                                                                            |                                            | 45,439  |        |                |  | 41,191       |       
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Less cost of treasury stock of 88,869 shares and 86,767 shares, respectively |                                                                                                                            |                                            | (3,649  | )      |                |  | (3,484       | )     
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                            | Total stockholders equity                 |         |        | 41,790         |  |              |        | 37,707  | 
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       
|                                                                             |                                                                                                                            | Total liabilities and stockholders equity |         | $      | 277,245        |  |              |        | 269,160 | 
|                                                                             |                                                                                                                            |                                            |         |        |                |  |              |       

See accompanying notes to consolidated financial
statements (unaudited).

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##### Table of Contents



FIRST MCMINNVILLE CORPORATION




Consolidated Statements of Earnings

Three Months Ended September 30, 2001 and 2000
and Nine Months Ended September 30, 2001 and 2000
(Unaudited)

|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |       |       |        | 
|--------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------ | --------------------------------------------------- | ----- | ----------------------------------------------- | ----- | ----------------- | ----- | ----- | ----- | ----- | ----- | ----- | ------ | ----- | ----- | ----- | ------ | 
|                                  |                                                                                   |                                      |                                                     |       | Three Months Ended                              |       | Nine Months Ended
|                                  |                                                                                   |                                      |                                                     |       | September 30,                                   |       | September 30,    
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                  
|                                  |                                                                                   |                                      |                                                     |       | 2001                                            |       | 2000              |       | 2001  |       | 2000 
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |      
|                                  |                                                                                   |                                      |                                                     |       | (Dollars In Thousands, Except Per Share Amount)
|Interest income:                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
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|                                  | Interest and fees on loans                                                        |                                      | $                                                   | 2,805 |                                                 |       |                   | 2,828 |       |       |       | 8,458 |       |        |       | 8,364 |      
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|                                  | Interest and dividends on securities:                                             |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |       |      
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|                                  |                                                                                   | Taxable securities                   |                                                     |       | 1,505                                           |       |                   |       | 1,626 |       |       |       | 4,816 |        |       |       | 4,874 |       
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|                                  |                                                                                   | Tax exempt from Federal income taxes |                                                     |       | 415                                             |       |                   |       | 345   |       |       |       | 1,178 |        |       |       | 1,049 |       
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|                                  | Interest on federal funds sold                                                    |                                      |                                                     | 49    |                                                 |       |                   |      |       |       |       | 98    |       |        |       |      |      
|                                 
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|                                  | Interest on interest-bearing deposits in other banks and
other interest           |                                      |                                                     |      |                                                 |       |                   | 1     |       |       |       | 1     |       |        |       | 2     |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                  |                                                                                   |                                      | Total interest income                               |       |                                                 | 4,774 |                   |       |       | 4,800 |       |       |       | 14,551 |       |       |       | 14,289 | 
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|Interest expense:                 |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                 
|                                 
|                                 
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|                                  | Interest on negotiable order of withdrawal accounts                               |                                      |                                                     | 166   |                                                 |       |                   | 194   |       |       |       | 531   |       |        |       | 570   |      
|                                 
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|                                  | Interest on money market demand and savings accounts                              |                                      |                                                     | 246   |                                                 |       |                   | 261   |       |       |       | 780   |       |        |       | 813   |      
|                                 
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|                                  | Interest on certificates of deposit                                               |                                      |                                                     | 1,840 |                                                 |       |                   | 1,921 |       |       |       | 5,912 |       |        |       | 5,291 |      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest on securities sold under repurchase agreements
and short term borrowings |                                      |                                                     | 153   |                                                 |       |                   | 149   |       |       |       | 476   |       |        |       | 419   |      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest on Federal funds purchased                                               |                                      |                                                     |      |                                                 |       |                   | 77    |       |       |       | 43    |       |        |       | 314   |      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest on advances from Federal Home Loan Bank                                  |                                      |                                                     | 13    |                                                 |       |                   | 31    |       |       |       | 41    |       |        |       | 137   |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                  |                                                                                   |                                      | Total interest expense                              |       |                                                 | 2,418 |                   |       |       | 2,633 |       |       |       | 7,783  |       |       |       | 7,544  | 
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                  |                                                                                   |                                      | Net interest income                                 |       |                                                 | 2,356 |                   |       |       | 2,167 |       |       |       | 6,768  |       |       |       | 6,745  | 
|                                 
|                                 
|                                 
|                                 
|Provision for loan losses         |                                                                                   |                                      | 45                                                  |       |                                                 |       | 45                |       |       |       | 135   |       |       |        | 135   |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                  |                                                                                   |                                      | Net interest Income after provision for
loan losses |       |                                                 | 2,311 |                   |       |       | 2,122 |       |       |       | 6,633  |       |       |       | 6,610  | 
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|Other income:                     |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                 
|                                 
|                                 
|                                 
|                                  | Service charges on deposit accounts                                               |                                      |                                                     | 118   |                                                 |       |                   | 129   |       |       |       | 365   |       |        |       | 369   |      
|                                 
|                                 
|                                 
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|                                  | Other fees and commissions                                                        |                                      |                                                     | 78    |                                                 |       |                   | 117   |       |       |       | 207   |       |        |       | 250   |      
|                                 
|                                 
|                                 
|                                 
|                                  | Commissions and fees on fiduciary activities                                      |                                      |                                                     | 16    |                                                 |       |                   | 16    |       |       |       | 40    |       |        |       | 64    |      
|                                 
|                                 
|                                 
|                                 
|                                  | Security gains related to available-for-sale securities                           |                                      |                                                     | 3     |                                                 |       |                   |      |       |       |       | 3     |       |        |       |      |      
|                                 
|                                 
|                                 
|                                 
|                                  | Other income                                                                      |                                      |                                                     | 6     |                                                 |       |                   | 7     |       |       |       | 20    |       |        |       | 21    |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                  |                                                                                   |                                      | Total other income                                  |       |                                                 | 221   |                   |       |       | 269   |       |       |       | 635    |       |       |       | 704    | 
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|Other expenses:                   |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                 
|                                 
|                                 
|                                 
|                                  | Salaries and employee benefits                                                    |                                      |                                                     | 682   |                                                 |       |                   | 681   |       |       |       | 1,983 |       |        |       | 1,969 |      
|                                 
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|                                 
|                                  | Occupancy expenses, net                                                           |                                      |                                                     | 53    |                                                 |       |                   | 56    |       |       |       | 151   |       |        |       | 156   |      
|                                 
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|                                  | Furniture and equipment expense                                                   |                                      |                                                     | 14    |                                                 |       |                   | 17    |       |       |       | 47    |       |        |       | 53    |      
|                                 
|                                 
|                                 
|                                 
|                                  | Data processing expense                                                           |                                      |                                                     | 46    |                                                 |       |                   | 30    |       |       |       | 146   |       |        |       | 95    |      
|                                 
|                                 
|                                 
|                                 
|                                  | FDIC insurance                                                                    |                                      |                                                     | 10    |                                                 |       |                   | 11    |       |       |       | 30    |       |        |       | 31    |      
|                                 
|                                 
|                                 
|                                 
|                                  | Other operating expenses                                                          |                                      |                                                     | 201   |                                                 |       |                   | 203   |       |       |       | 675   |       |        |       | 666   |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                  |                                                                                   |                                      | Total other expenses                                |       |                                                 | 1,006 |                   |       |       | 998   |       |       |       | 3,032  |       |       |       | 2,970  | 
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                  |                                                                                   |                                      | Earnings before income taxes                        |       |                                                 | 1,526 |                   |       |       | 1,393 |       |       |       | 4,236  |       |       |       | 4,344  | 
|                                 
|                                 
|                                 
|                                 
|Income taxes                      |                                                                                   |                                      | 460                                                 |       |                                                 |       | 411               |       |       |       | 1,267 |       |       |        | 1,347 |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|                                  |                                                                                   |                                      | Net earnings                                        |       | $                                               | 1,066 |                   |       |       | 982   |       |       |       | 2,969  |       |       |       | 2,997  | 
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|Basic earnings per common share   |                                                                                   | $                                    | 2.04                                                |       |                                                 |       | 1.88              |       |       |       | 5.68  |       |       |        | 5.71  |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|Diluted earnings per common share |                                                                                   | $                                    | 2.02                                                |       |                                                 |       | 1.86              |       |       |       | 5.62  |       |       |        | 5.67  |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      
|Dividends per share               |                                                                                   | $                                    |                                                    |       |                                                 |       |                  |       |       |       | .70   |       |       |        | .65   |      
|                                  |                                                                                   |                                      |                                                     |       |                                                 |       |                   |       |       |       |       |       |       |        |       |      

See accompanying notes to consolidated financial
statements (unaudited).

4



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION




Consolidated Statements of Comprehensive Earnings

Three Months and Nine Months Ended September 30, 2001 and 2000

(Unaudited)

|                                          |                                                                                                                                                                  |                              |       |                    |       |                   |     |                |       |      |       |       |       |  |       |     |       | 
|----------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ----- | ------------------ | ----- | ----------------- | --- | -------------- | ----- | ---- | ----- | ----- | ----- |  | ----- | --- | ----- | 
|                                          |                                                                                                                                                                  |                              |       | Three Months Ended |       | Nine Months Ended
|                                          |                                                                                                                                                                  |                              |       | September 30,      |       | September 30,    
|                                          |                                                                                                                                                                  |                              |       |                    |       |                  
|                                          |                                                                                                                                                                  |                              |       |                    |       |                   |     | (In Thousands) |       |      |       |      
|                                          |                                                                                                                                                                  |                              |       | 2001               |       | 2000              |     | 2001           |       | 2000
|                                          |                                                                                                                                                                  |                              |       |                    |       |                   |     |                |       |     
|Net earnings                              |                                                                                                                                                                  | $                            | 1,066 |                    |       |                   | 982 |                |       |      | 2,969 |       |       |  | 2,997 |    
|                                          |                                                                                                                                                                  |                              |       |                    |       |                   |     |                |       |      |       |       |       |  |       |    
|Other comprehensive earnings, net of tax: |                                                                                                                                                                  |                              |       |                    |       |                   |     |                |       |      |       |       |       |  |       |    
|                                         
|                                         
|                                         
|                                         
|                                          | Unrealized gains (losses) on available-for-sale
securities arising during period, net of income
taxes of $278,000, $432,000, $975,000 and
$340,000, respectively |                              |       | 457                |       |                   |     | 707            |       |      |       | 1,595 |       |  |       | 555 |      
|                                         
|                                         
|                                         
|                                         
|                                          | Less: reclassification adjustment for gains included
in net earnings, net of tax of $1,000                                                                       |                              |       | (2                 | )     |                   |     |               |       |      |       | (2    | )     |  |       |    |      
|                                          |                                                                                                                                                                  |                              |       |                    |       |                   |     |                |       |      |       |       |       |  |       |    
|                                          |                                                                                                                                                                  | Other comprehensive earnings |       |                    | 455   |                   |     |                | 707   |      |       |       | 1,593 |  |       |     | 555   | 
|                                          |                                                                                                                                                                  |                              |       |                    |       |                   |     |                |       |      |       |       |       |  |       |    
|                                          |                                                                                                                                                                  | Comprehensive earnings       |       | $                  | 1,521 |                   |     |                | 1,689 |      |       |       | 4,562 |  |       |     | 3,552 | 
|                                          |                                                                                                                                                                  |                              |       |                    |       |                   |     |                |       |      |       |       |       |  |       |    

See accompanying notes to consolidated financial
statements (unaudited).

5



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION




Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2001 and 2000

Increase (Decrease) in Cash and Cash Equivalents

|                                                     |                                                                                   |                                                     |        |                |       |      |       |        |        |  
|---------------------------------------------------- | --------------------------------------------------------------------------------- | --------------------------------------------------- | ------ | -------------- | ----- | ---- | ----- | ------ | ------ | -
|                                                     |                                                                                   |                                                     |        | 2001           |       | 2000
|                                                     |                                                                                   |                                                     |        |                |       |     
|                                                     |                                                                                   |                                                     |        | (In Thousands)
|Cash flows from operating activities:                |                                                                                   |                                                     |        |                |       |      |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Interest received                                                                 |                                                     | $      | 14,717         |       |      |       | 14,157 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Fees and commissions received                                                     |                                                     |        | 632            |       |      |       | 704    |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Interest paid                                                                     |                                                     |        | (7,943         | )     |      |       | (7,095 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Cash paid to suppliers and employees                                              |                                                     |        | (2,640         | )     |      |       | (2,669 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Income taxes paid                                                                 |                                                     |        | (1,200         | )     |      |       | (1,452 | )     
|                                                     |                                                                                   |                                                     |        |                |       |      |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     |                                                                                   | Net cash provided by operating activities           |        |                | 3,566 |      |       |        | 3,645  |  
|                                                     |                                                                                   |                                                     |        |                |       |      |       |       
|Cash flows from investing activities:                |                                                                                   |                                                     |        |                |       |      |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from maturities of held-to-maturity securities                           |                                                     |        | 32,388         |       |      |       | 2,437  |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from maturities of available-for-sale securities                         |                                                     |        | 70,773         |       |      |       | 212    |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchase of available-for-sale securities                                         |                                                     |        | (39,318        | )     |      |       | (682   | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchase of held-to-maturity securities                                           |                                                     |        | (57,393        | )     |      |       | (1,092 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Loans made to customers, net of repayments                                        |                                                     |        | (1,312         | )     |      |       | (1,201 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchase of premises and equipment                                                |                                                     |        | (27            | )     |      |       | (337   | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Decrease in interest bearing deposits in financial institutions                   |                                                     |        | 17             |       |      |       |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from sale of other real estate                                           |                                                     |        |               |       |      |       | 74     |       
|                                                     |                                                                                   |                                                     |        |                |       |      |       |       
|                                                     |                                                                                   | Net cash provided by (used in) investing activities |        |                | 5,128 |      |       |        | (589   | )
|                                                     |                                                                                   |                                                     |        |                |       |      |       |       
|Cash flows from financing activities:                |                                                                                   |                                                     |        |                |       |      |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net increase (decrease) in non-interest bearing, savings
and NOW deposit accounts |                                                     |        | 1,434          |       |      |       | (5,048 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Net increase in time deposits                                                     |                                                     |        | 965            |       |      |       | 15,449 |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Increase (decrease) in securities sold under repurchase agreement                 |                                                     |        | 4,511          |       |      |       | (555   | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Decrease in Federal funds purchased                                               |                                                     |        | (2,000         | )     |      |       | (5,800 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Dividends paid                                                                    |                                                     |        | (1,542         | )     |      |       | (1,512 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Payments to acquire treasury stock                                                |                                                     |        | (181           | )     |      |       | (664   | )     
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from sales of common stock                                               |                                                     |        | 52             |       |      |       | 1      |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from sale of treasury stock                                              |                                                     |        | 16             |       |      |       |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from short-term borrowings                                               |                                                     |        | 125            |       |      |       |       |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Repayment of advances from Federal Home Loan Bank                                 |                                                     |        |               |       |      |       | (5,200 | )     
|                                                     |                                                                                   |                                                     |        |                |       |      |       |       
|                                                     |                                                                                   | Net cash provided by financing activities           |        |                | 3,380 |      |       |        | (3,329 | )
|                                                     |                                                                                   |                                                     |        |                |       |      |       |       
|Net increase (decrease) in cash and cash equivalents |                                                                                   |                                                     | 12,074 |                |       |      | (273  | )     
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and cash equivalents at beginning of period     |                                                                                   |                                                     | 4,364  |                |       |      | 4,665 |       
|                                                     |                                                                                   |                                                     |        |                |       |      |       |       
|Cash and cash equivalents at end of period           |                                                                                   | $                                                   | 16,438 |                |       |      | 4,392 |       
|                                                     |                                                                                   |                                                     |        |                |       |      |       |       

See accompanying notes to consolidated financial
statements (unaudited).

6



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

Consolidated Statements of Cash Flows, Continued

Nine Months Ended September 30, 2001 and 2000

Increase (Decrease) in Cash and Cash Equivalents

(Unaudited)

|                                                                             |                                                                                                                       |                                              |                                           |       |                |       |      |       |      |       | 
|---------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ----------------------------------------- | ----- | -------------- | ----- | ---- | ----- | ---- | ----- | 
|                                                                             |                                                                                                                       |                                              |                                           |       | 2001           |       | 2000
|                                                                             |                                                                                                                       |                                              |                                           |       |                |       |     
|                                                                             |                                                                                                                       |                                              |                                           |       | (In Thousands)
|Reconciliation of net earnings to net cash provided by
operating activities: |                                                                                                                       |                                              |                                           |       |                |       |      |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Net earnings                                                                                                          |                                              | $                                         | 2,969 |                |       |      | 2,997 |     
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Adjustments to reconcile net earnings to net cash
provided by operating activities:                                   |                                              |                                           |       |                |       |      |       |     
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Depreciation                                 |                                           |       | 149            |       |      |       | 85   |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Provision for loan losses                    |                                           |       | 135            |       |      |       | 135  |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Security gains related to available-for-sale |                                           |       | (3             | )     |      |       |     |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Loss on disposal of premises and equipment   |                                           |       | 3              |       |      |       |     |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | FHLB dividend reinvestment                   |                                           |       | (55            | )     |      |       | (47  | )    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Decrease in refundable income taxes          |                                           |       | 67             |       |      |       | 58   |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Decrease (increase) in interest receivable   |                                           |       | 221            |       |      |       | (85  | )    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Decrease in taxes payable                    |                                           |       |               |       |      |       | (163 | )    
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Increase (decrease) in interest payable      |                                           |       | (160           | )     |      |       | 449  |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Decrease (increase) in other assets          |                                           |       | (28            | )     |      |       | 25   |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             |                                                                                                                       | Increase in other liabilities                |                                           |       | 268            |       |      |       | 191  |      
|                                                                             |                                                                                                                       |                                              |                                           |       |                |       |      |      
|                                                                             |                                                                                                                       |                                              | Total adjustments                         |       |                | 597   |      |       |      | 648   | 
|                                                                             |                                                                                                                       |                                              |                                           |       |                |       |      |      
|                                                                             |                                                                                                                       |                                              | Net cash provided by operating activities |       | $              | 3,566 |      |       |      | 3,645 | 
|                                                                             |                                                                                                                       |                                              |                                           |       |                |       |      |      
|Supplemental schedule of non-cash activities:                                |                                                                                                                       |                                              |                                           |       |                |       |      |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Unrealized gain in value of securities available-for-sale, net
of income taxes of $975,000 and $340,000, respectively |                                              | $                                         | 1,593 |                |       |      | 555   |     
|                                                                             |                                                                                                                       |                                              |                                           |       |                |       |      |      
|                                                                             | Transfer of loans to other real estate                                                                                |                                              | $                                         | 98    |                |       |      | 30    |     
|                                                                             |                                                                                                                       |                                              |                                           |       |                |       |      |      
|                                                                             | Transfer of other real estate to loans                                                                                |                                              | $                                         | 70    |                |       |      |      |     

See accompanying notes to consolidated financial
statements (unaudited).

7



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

Basis of Presentation

The unaudited consolidated financial statements include the accounts of First
McMinnville Corporation (Company) and its wholly-owned subsidiary, The First
National Bank of McMinnville (Bank).

The accompanying consolidated financial statements have been prepared, without
audit, in accordance with the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations.

In the opinion of management, the statements contain all adjustments and
disclosures necessary to summarize fairly the financial position of the Company
as of September 30, 2001 and December 31, 2000, the results of operations for
the nine months and three months ended September 30, 2001 and 2000,
comprehensive earnings for the nine months and three months ended September 30,
2001 and 2000 and changes in cash flows for the nine months ended September 30,
2001 and 2000. All significant intercompany transactions have been eliminated.
The interim consolidated financial statements should be read in conjunction
with the notes to the consolidated financial statements presented in the
Companys Annual Report on Form 10-K for the year ended December 31, 2000. The
results for interim periods are not necessarily indicative of results to be
expected for the complete fiscal year.

8



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED




Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations

The purpose of this discussion is to provide insight into the financial
condition and results of operations of the Registrant and its subsidiary. This
discussion should be read in conjunction with the consolidated financial
statements. Reference should also be made to the Companys Annual Report on
Form 10-K for the year ended December 31, 2000 for a more complete discussion
of factors that impact liquidity, capital and the results of operations.

Forward  Looking Statements

Managements discussion of the Company, and managements analysis of the
Companys operations and prospects, and other matters, may include
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and other provisions of federal and state
securities laws. Although the Company believes that the assumptions underlying
such forward-looking statements contained in this Report are reasonable, any of
the assumptions could be inaccurate and, accordingly, there can be no assurance
that the forward-looking statements included herein will prove to be accurate.
The use of such words as expect, anticipate, forecast, and comparable terms
should be understood by the reader to indicate that the statement is
forward-looking and thus subject to change in a manner that can be
unpredictable. Factors that could cause actual results to differ from the
results anticipated, but not guaranteed, in this Report, include (without
limitation) economic and social conditions, competition for loans, mortgages,
and other financial services and products, changes in interest rates,
unforeseen changes in liquidity, results of operations, and financial
conditions affecting the Companys customers, material unforeseen complications
related to addressing Year 2000 issues (both as to the Company and as to its
customers, vendors, consultants and governmental agencies), as well as other
risks that cannot be accurately quantified or completely identified. Many
factors affecting the Companys financial condition and profitability,
including changes in economic conditions, the volatility of interest rates,
political events and competition from other providers of financial services
simply cannot be predicted. Because these factors are unpredictable and beyond
the Companys control, earnings may fluctuate from period to period. The
purpose of this type of information (such as in Item 2, as well as other
portions of this Report) is to provide Form 10-Q readers with information
relevant to understanding and assessing the financial conditions and results of
operations of the Company, and not to predict the future or to guarantee
results. The Company is unable to predict the types of circumstances,
conditions, and factors that can cause anticipated results to change. The
Company undertakes no obligation to publish revised forward-looking statements
to reflect the occurrence of changes or of unanticipated events, circumstances,
or results.

Liquidity and Interest Rate Sensitivity Management

The concept of liquidity involves the ability of the Company and its
subsidiary to meet future cash flow requirements, particularly those of
customers who are either withdrawing funds from their accounts or borrowing to
meet their credit needs.

Proper asset/liability management is designed to maintain stability in the
balance of interest-sensitive assets to interest-sensitive liabilities in order
to provide a stable growth in net interest margins. Earnings on
interest-sensitive assets such as loans tied to the prime rate of interest and
federal funds sold, may vary considerably from fixed rate assets such as
long-term investment securities and fixed rate loans. Interest-sensitive
liabilities such as large certificates of deposit and money market
certificates, generally require higher costs than fixed rate instruments such
as passbook savings.

9



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

The Company maintains a formal asset and liability management process to
quantify, monitor and control interest rate risk and to assist management in
maintaining stability in the net interest margin under varying interest rate
environments. The Company accomplishes this process through the development
and implementation of lending, funding and pricing strategies designed to
maximize net interest income under varying interest rate environments subject
to specific liquidity and interest rate risk guidelines.

Analysis of rate sensitivity and rate gap analysis are the primary tools
used to assess the direction and magnitude of changes in net interest income
resulting from changes in interest rates. Included in the analysis are cash
flows and maturities of financial instruments held for purposes other than
trading, changes in market conditions, loan volumns and pricing and deposit
volumn and mix. These assumptions are inherently uncertain, and, as a result,
interest income can not be precisely estimated nor can the impact of higher or
lower interest rates on net interest income be precisely predicted. Actual
results will differ due to timing, magnitude and frequency of interest rate
changes and changes in market conditions, and managements strategies, among
other factors.

Based on the results of the analysis as of September 30, 2001, the Company
would expect net interest income to decrease approximately $470,000 over a
twelve month period if rates increased 2%. Net interest income would be
expected to increase approximately $470,000 over a 12 month period should rates
decrease 2%. The rate sensitivity as of September 30, 2001 was
0.89 to 1.00
(0-91 days) and 0.79 to 1.00 (0-365 days). This asset/liability mismatch in
pricing is referred to as gap and is measured as rate sensitive assets
divided by rate sensitive liabilities for a defined time period. A gap of 1.0
means that assets and liabilities are perfectly matched as to pricing within a
specific time period and interest rate movements will not affect net interest
margin, assuming all other factors hold constant.

Banks, in general, must maintain large cash balances to meet day-to-day
cash flow requirements as well as maintaining required reserves for regulatory
agencies. The cash balances maintained are the primary source of liquidity.
Federal funds sold, which are basically overnight or short-term loans to other
banks that increase the other banks required reserves, are also a major source
of liquidity.

The Companys investment portfolio consists of earning assets that provide
interest income. For those securities classified as held-to-maturity the
Company has the ability and intention to hold these securities until maturity.
Securities classified as available for sale include securities intended to be
used as part of the Companys asset/liability strategy and/or securities that
may be sold in response to changes in interest rate, prepayment risk, the need
or desire to increase capital and similar economic factors. Securities
totaling approximately $4.8 million mature or reprice within the next twelve
months.

A secondary source of liquidity is the Banks loan portfolio. At
September 30, 2001 commercial, consumer and other loans of approximately $25.6
million and mortgage loans of approximately $6.1 million either will become due
or will be subject to rate adjustments within twelve months. Emphasis
continues to be placed on structuring adjustable rate loans.

10



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

As for liabilities, certificates of deposit of $100,000 or greater of
approximately $47.5 million will become due during the next twelve months. The
Banks deposit base increased approximately $2.4 million during the nine months
ended September 30, 2001. Securities sold under repurchase agreements
increased approximately $4.5 million during the nine months ended September 30,
2001. The increase in securities sold under agreements to resell was
approximately $2.9 million during the quarter ended September 30, 2001. The
deposit base increased approximately $10.4 million during the nine months ended
September 30, 2000. Federal funds sold were $9.6 million at September 30, 2001
and $4.0 million at June 30, 2001. Federal funds purchased were $2.0 million
at December 31, 2000. Advances from the Federal Home Loan Bank were $1.0
million at September 30, 2001, June 30, 2001 and December 31, 2000. These
advances are scheduled to mature during the next twelve months.

Historically, there has been no significant reduction in immediately
withdrawable accounts such as negotiable order of withdrawal accounts, money
market demand accounts, demand deposit and regular savings. Management
anticipates that there will be no significant withdrawals from these accounts
except as discussed in the preceding paragraph.

The Subsidiary Bank is limited by law, regulation and prudence as to the
amount of dividends that it can pay. At September 30, 2001, the Bank can
declare during the remainder of 2001 cash dividends in an aggregate amount not
to exceed approximately $7.0 million, exclusive of any 2001 net earnings,
without prior approval of the Comptroller of the Currency. However, most of
these funds will be retained for use in the Banks operations rather than being
paid out in dividends. It is anticipated that with present maturities, the
anticipated growth in deposit base, and the efforts of management in its
asset/liability management program, liquidity will not pose a problem in the
foreseeable future. At the present time there are no known trends or any known
commitments, demands, events or uncertainties that management believes will
result in or that are reasonable likely to result in the Companys liquidity
changing in any material way.

Capital Resources

A primary source of capital is internal growth through retained earnings.
The ratio of stockholders equity to total assets was 15.1% at September 30,
2001 and 14.0% at December 31, 2000. The increase in the ratio resulted
primarily from an increase in the net unrealized gain on securities available
for sale of approximately $1,593,000 and net earnings of $2,969,000 during the
nine months ended September 30, 2001. Total assets increased 3.0% during the
nine months ended September 30, 2001. The annualized rate of return on
stockholders equity for the first nine months of 2001 was 10.5% compared to
11.5% for the comparable period in 2000. This ratio decreased in part due to
the increase in stockholders equity related to the net gain on securities
available for sale during the nine months ended September 30, 2001 of
approximately $1.6 million. Principally because of the relatively high
percentage of equity capital, the return on equity is lower than the reported
average for many banks in the Banks peer group. Dividends paid
during 2000 were $2.90 per share. Dividends of $366,000 and
$341,000 or $.70 and $.65 per share were declared in the nine months ended
September 30, 2001 and 2000, respectively. Cash dividends will be increased in
the remainder of 2001 over 2000 only in the discretion of the Board of
Directors and as profits permit. No material changes in the mix or cost of capital is anticipated in the
foreseeable future. At the present time, there are no material commitments for
capital expenditures.

11



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Capital Resources, Continued

Actions taken by the
Board of Governors of the Federal Reserve System have resulted in
multiple decreases in interest rates during the past twelve months
and lower interest rates on new issue debt securities. The
Companys securities portfolio consists primarily of debt securities with an
average yield greater than the current market rate. These factors have
contributed to an unrealized gain on securities available-for-sale of $380,000
(net of income taxes of $232,000) at September 30, 2001.

Regulations of the Comptroller of the Currency establish required minimum
capital levels for the Bank. Under these regulations, national banks must
maintain certain capital levels as a percentage of average total assets
(leverage capital ratio) and as a percentage of total risk-based assets
(risk-based capital ratio). Under the risk-based requirements, various
categories of assets and commitments are assigned a percentage related to
credit risk ranging from 0% for assets backed by the full faith and credit of
the United States to 100% for loans other than residential real estate loans
and certain off-balance sheet commitments. Total capital is characterized as
either Tier 1 capital which includes common shareholders equity, noncumulative
perpetual preferred stock and a limited amount of cumulative perpetual
preferred  or Tier 2 capital which includes the allowance for loan losses up
to 1.25% of risk weighted assets, perpetual preferred stock, subordinated debt
and various other hybrid capital instruments, subject to various limits.
Goodwill is not includable in Tier 1 or Tier 2 capital. National banks must
maintain a Tier 1 capital to risk-based assets of at least 4.0%, a total
capital to risk-based assets ratio of at least 8.0% and a leverage capital
ratio defined as Tier 1 capital to average total assets of at least 4.0%. The
same ratios are also required in order for a national bank to be considered
adequately capitalized under the OCCs prompt corrective action
regulations, which impose certain operating restrictions on institutions which
are not adequately capitalized. The Bank has a Tier 1 risk-based ratio of
26.9%, a total capital to risk-based ratio of 28.1% and a Tier 1 leverage ratio
of 15.1%, and was thus in the well capitalized category under the
regulations.

The Federal Reserve Board imposes consolidated capital guidelines on bank
holding companies which have more than $150 million in consolidated assets.
These guidelines require bank holding companies to maintain consolidated
capital ratios which are essentially the same as the minimum capital levels
required for national banks. The Companys consolidated capital ratios were
substantially the same as those set forth above for the Bank, and exceeded the
minimums required under these Federal Reserve Board guidelines at September 30,
2001.

On April 8, 1997, the Companys stockholders approved the First
McMinnville Corporation 1997 Stock Option Plan. The Company has granted the
right to purchase 46,000 shares of stock to its directors, officers and
employees at exercise prices ranging from $58.15 to $74.30 per share. At
September 30, 2001, 5,355 shares had been exercised and 22,385 shares were
exercisable. The shares granted to Directors totaling 21,000 vest over a
period of three years and 19,500 shares are fully vested at September 30, 2001.
Shares granted to officers and employees are exercisable over a period of 10
years or the number of years until the optionee reaches age 65, whichever is
less.

12



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Results of Operations

Net earnings were $2,969,000 for the nine months ended September 30, 2001
as compared to $2,997,000 for the same period in 2000. Net earnings were
$1,066,000 for the quarter ended September 30, 2001 as compared to $982,000
during the same quarter in 2000.

As in most financial institutions, a major element in analyzing the
statement of earnings is net interest income which is the excess of interest
earned over interest paid. The net interest margin could be materially
affected during periods of volatility in interest rates.

The Companys interest income, excluding tax equivalent adjustments,
increased by $262,000 or 1.8% during the nine months ended September 30, 2001
as compared to the comparable period in 2000. Interest income for the quarter
ended September 30, 2001 decreased $26,000 or .5% when compared to the quarter
ended September 30, 2000 and $101,000 or 2.1% as compared to the second quarter
of 2001. The decrease for the third quarter of 2001 compared to the same
period in 2000 and compared to the quarter ended June 30, 2001 were primarily
attributable to a decrease in interest rates during the fourth quarter of 2000
and during 2001. The ratio of average earning assets to total average assets
was 96.8% for the nine months ended September 30, 2001 as compared to 96.0% for
the same period in 2000.

Interest expense increased by $239,000 for the nine months ended September
30, 2001 or 3.2% as compared to the same period in 2000. Interest expense for
the quarter ended September 30, 2001 decreased $215,000 or 8.2% as compared to
the quarter ended September 30, 2000. Interest expense for the quarter ended
September 30, 2001 decreased $203,000 or 7.7% over the quarter ended June 30,
2001. The decreases in interest expense can be attributable primarily to
decreases in interest rates over the past twelve months.

The foregoing resulted in net interest income of $6,768,000 for the nine
months ended September 30, 2001, an increase of $23,000 or .3% compared to the
prior year period. Net interest income for the quarter ended September 30,
2001 increased $189,000 or 8.7% as compared to the third quarter of 2000 and
$102,000 or 4.5% over the quarter ended June 30, 2001.

The following schedule details the loans of the Company at September 30,
2001 and December 31, 2000:

|                                       |  |                |         |              |  |  |         | 
|-------------------------------------- |  | -------------- | ------- | ------------ |  |  | ------- | 
|                                       |  | September 30,  |         | December 31,
|                                       |  | 2001           |         | 2000        
|                                       |  |                |         |             
|                                       |  | (In Thousands)
|Commercial, financial and agricultural |  | $              | 35,266  |              |  |  | 37,814  | 
|                                      
|                                      
|                                      
|                                      
|Real estate  construction             |  |                | 4,893   |              |  |  | 3,134   | 
|                                      
|                                      
|                                      
|                                      
|Real estate  mortgage                 |  |                | 94,642  |              |  |  | 92,172  | 
|                                      
|                                      
|                                      
|                                      
|Consumer                               |  |                | 2,536   |              |  |  | 2,926   | 
|                                       |  |                |         |              |  |  |         | 
|                                       |  | $              | 137,337 |              |  |  | 136,046 | 
|                                       |  |                |         |              |  |  |         | 

13



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Results of Operations, Continued

The provision for loan losses was $135,000 for the first nine months of
2001 and 2000. The provision was $45,000 for each of the quarters ended
September 30, 2001 and 2000. The provision for loan losses is based on past
loan experience and other factors which, in managements judgment, deserve
current recognition in estimating possible loan losses. Such factors include
past loan loss experience, growth and composition of the loan portfolio, review
of specific loan problems, the relationship of the allowance for loan losses to
outstanding loans, and current economic conditions that may affect the
borrowers ability to repay. Management has in place a system that is designed
to identify and to monitor loan problems on a timely basis.

The Company accounts for impaired loans under the provisions of Statement
of Financial Accounting Standards (SFAS) No. 114, Accounting by Creditors
for Impairment of a Loan and SFAS No. 118, Accounting by Creditors for
Impairment of a Loan  Income Recognition and Disclosures. These
pronouncements apply to impaired loans except for large groups of
smaller-balance homogeneous loans that are collectively evaluated for
impairment including credit card, residential mortgage, and consumer
installment loans.

A loan is deemed to be impaired when it is probable that the Company will
be unable to collect the scheduled payments of principal and interest due under
the contractual terms of the loan agreement. Impaired loans are measured at
the present value of expected future cash flows discounted at the loans
effective interest rate, at the loans observable market price, or the fair
value of the collateral if the loan is collateral dependent. If the measure of
the impaired loan is less than the recorded investment in the loan, the Company
shall recognize an impairment by creating a valuation allowance with a
corresponding charge to the provision for loan losses or by adjusting an
existing valuation allowance for the impaired loan with a corresponding charge
or credit to the provision for loan losses.

The Companys first mortgage single family residential and consumer loans
which total approximately $62,718,000 and $2,536,000, respectively at September
30, 2001, are divided into various groups of smaller-balance homogeneous loans
that are collectively evaluated for impairment and thus are not subject to the
provisions of SFAS Nos. 114 and 118. Substantially all other loans of the
Company are evaluated for impairment under the provisions of SFAS Nos. 114 and
118.

The Company considers all loans on nonaccrual status to be impaired.
Loans are placed on nonaccrual status when doubt as to timely collection of
principal or interest exists, or when principal or interest is past due 90 days
or more unless such loans are well-secured and in the process of collection.
Delays or shortfalls in loan payments are evaluated with various other factors
to determine if a loan should be considered to be impaired. Generally,
delinquencies under 90 days are considered insignificant unless certain other
factors are present which indicate impairment is probable. The decision to
place a loan on nonaccrual status is also based on an evaluation of the
borrowers financial condition, collateral, liquidation value, and other
factors that affect the borrowers ability to pay.

14



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Results of Operations, Continued

Generally, at the time a loan is placed on nonaccrual status, all interest
accrued on the loan in the current fiscal year is reversed from income, and all
interest accrued and uncollected from the prior year is charged off against the
allowance for loan losses. Thereafter, interest on nonaccrual loans is
recognized as interest income only to the extent that cash is received and
future collection of principal is not in doubt. If the collectibility of
outstanding principal is doubtful, such interest received is applied as a
reduction of principal. A nonaccrual loan may be restored to accruing status
when principal and interest are no longer past due and unpaid and future
collection of principal and interest on a timely basis is not in doubt. At
September 30, 2001 and 2000, the Company had no loans on nonaccrual status and
there were no nonaccrual loans outstanding at any time during the two nine
month periods then ended.

Loans not on nonaccrual status are classified as impaired in certain cases
where there is inadequate protection by the current net worth and financial
capacity of the borrower or of the collateral pledged, if any. In those cases,
such loans have a well-defined weakness or weaknesses that jeopardize the
liquidation of the debt, and if such deficiencies are not corrected, there is a
probability that the Company will sustain some loss. In such cases, interest
income continues to accrue as long as the loan does not meet the Companys
criteria for nonaccrual status.

Generally, the Company also classifies as impaired any loans the terms of
which have been modified in a troubled debt restructuring after January 1,
1995. Interest is accrued on such loans that continue to meet the modified
terms of their loan agreements. At September 30, 2001, the Company had no
loans that have had the terms modified in a troubled debt restructuring.

The Companys charge-off policy for impaired loans is similar to its
charge-off policy for all loans in that loans are charged-off in the month when
they are considered uncollectible.

Impaired loans and related allowance for loan loss amounts at September
30, 2001 and December 31, 2000 were as follows:

|                          |  |               |       |              |  |   |       | 
|------------------------- |  | ------------- | ----- | ------------ |  | - | ----- | 
|                          |  | September 30, |       | December 31,
|                          |  | 2001          |       | 2000        
|                          |  |               |       |             
|                          |  | Recorded      |       | Recorded    
|(In Thousands)            |  | Investment    |       | Investment  
|                          |  |               |       |             
|Recorded investment       |  | $             | 1,873 |              |  | $ | 1,785 | 
|                         
|                         
|                         
|                         
|Allowance for loan losses |  | $             | 538   |              |  | $ | 535   | 

The allowance for loan loss related to impaired loans was measured based
upon the estimated fair value of related collateral. The estimation of
collateral fair value is not an exact science and involves subjective
judgments which are not guaranteed.

15



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Results of Operations, Continued

The average recorded investment in impaired loans for the nine months
ended September 30, 2001 and 2000 was $2,026,000 and $2,822,000, respectively.
The related amount of interest income recognized on the accrual method for the
period that such loans were impaired was approximately $127,000 and $195,000
for 2001 and 2000, respectively.

The following schedule details selected information as to non-performing
loans of the Company at September 30, 2001:

|                   |  |                    |     |             |  |  |   | 
|------------------ |  | ------------------ | --- | ----------- |  |  | - | 
|                   |  | September 30, 2001
|                   |  |                   
|                   |  | Past Due           |     |             |  | 
|                   |  | 90 Days            |     | Non-Accrual
|                   |  |                    |     |            
|Real estate loans  |  | $                  | 119 |             |  |  |  | 
|                  
|                  
|                  
|                  
|Installment loans  |  |                    | 8   |             |  |  |  | 
|                  
|                  
|                  
|                  
|Commercial         |  |                    | 19  |             |  |  |  | 
|                   |  |                    |     |             |  |  |   | 
|                   |  | $                  | 146 |             |  |  |  | 
|                   |  |                    |     |             |  |  |   | 
|Renegotiated loans |  | $                  |    |             |  |  |  | 
|                   |  |                    |     |             |  |  |   | 

Transactions in the allowance for loan losses were as follows:

|                                                   |                                  |   |                   |     |      |  |       |     |  
|-------------------------------------------------- | -------------------------------- | - | ----------------- | --- | ---- |  | ----- | --- | -
|                                                   |                                  |   | Nine Months Ended
|                                                   |                                  |   | September 30,    
|                                                   |                                  |   |                  
|                                                   |                                  |   | 2001              |     | 2000
|                                                   |                                  |   |                   |     |     
|Balance, January 1, 2001 and 2000,
respectively    |                                  | $ | 1,711             |     |      |  | 1,502 |    
|                                                  
|                                                  
|                                                  
|                                                  
|Add (deduct):                                      |                                  |   |                   |     |      |  |       |    
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Losses charged to allowance      |   |                   | (50 | )    |  |       | (42 | )
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Recoveries credited to allowance |   |                   | 57  |      |  |       | 100 |  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Provision for loan losses        |   |                   | 135 |      |  |       | 135 |  
|                                                   |                                  |   |                   |     |      |  |       |    
|Balance, September 30, 2001 and 2000,
respectively |                                  | $ | 1,853             |     |      |  | 1,695 |    
|                                                   |                                  |   |                   |     |      |  |       |    

16



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Results of Operations, Continued

The following table presents total internally graded loans as of September
30, 2001 and December 31, 2000:

|                                       |  |                |       |         |  |             |       |          |  |  |       |  |  |  |    |  |  |  |  | 
|-------------------------------------- |  | -------------- | ----- | ------- |  | ----------- | ----- | -------- |  |  | ----- |  |  |  | -- |  |  |  |  | 
|                                       |  | September 30,  |       |         |  |             |       |          |  |  |       |  |  |  |    |  |  | 
|                                       |  | 2001           |       |         |  |             |       |          |  |  |       |  |  |  |    |  |  | 
|                                       |  |                |       |         |  |             |       |          |  |  |       |  |  |  |    |  |  | 
|                                       |  | (In Thousands) |       | Special |  |             |       |          |  |  |       |  |  |  |    | 
|                                       |  | Total          |       | Mention |  | Substandard |       | Doubtful |  |  |       | 
|                                       |  |                |       |         |  |             |       |          |  |  |       | 
|Commercial, financial and
agricultural |  | $              | 6,262 |         |  |             | 3,300 |          |  |  | 2,926 |  |  |  | 36 |  |  |  |  | 
|                                      
|                                      
|                                      
|                                      
|Real estate mortgage                   |  |                | 1,881 |         |  |             | 86    |          |  |  | 1,795 |  |  |  |   |  |  |  |  | 
|                                      
|                                      
|                                      
|                                      
|Real estate construction               |  |                |      |         |  |             |      |          |  |  |      |  |  |  |   |  |  |  |  | 
|                                      
|                                      
|                                      
|                                      
|Consumer                               |  |                | 92    |         |  |             |      |          |  |  | 92    |  |  |  |   |  |  |  |  | 
|                                       |  |                |       |         |  |             |       |          |  |  |       |  |  |  |    |  |  |  |  | 
|                                       |  | $              | 8,235 |         |  |             | 3,386 |          |  |  | 4,813 |  |  |  | 36 |  |  |  |  | 
|                                       |  |                |       |         |  |             |       |          |  |  |       |  |  |  |    |  |  |  |  | 

|                                       |  |                |       |         |  |             |     |          |  |  |       |  |  |  |    |  |  |  |  | 
|-------------------------------------- |  | -------------- | ----- | ------- |  | ----------- | --- | -------- |  |  | ----- |  |  |  | -- |  |  |  |  | 
|                                       |  | December 31,   |       |         |  |             |     |          |  |  |       |  |  |  |    |  |  | 
|                                       |  | 2000           |       |         |  |             |     |          |  |  |       |  |  |  |    |  |  | 
|                                       |  |                |       |         |  |             |     |          |  |  |       |  |  |  |    |  |  | 
|                                       |  | (In Thousands) |       | Special |  |             |     |          |  |  |       |  |  |  |    | 
|                                       |  | Total          |       | Mention |  | Substandard |     | Doubtful |  |  |       | 
|                                       |  |                |       |         |  |             |     |          |  |  |       | 
|Commercial, financial and
agricultural |  | $              | 2,284 |         |  |             | 358 |          |  |  | 1,889 |  |  |  | 37 |  |  |  |  | 
|                                      
|                                      
|                                      
|                                      
|Real estate mortgage                   |  |                | 1,538 |         |  |             |    |          |  |  | 1,538 |  |  |  |   |  |  |  |  | 
|                                      
|                                      
|                                      
|                                      
|Real estate construction               |  |                |      |         |  |             |    |          |  |  |      |  |  |  |   | 
|                                      
|                                      
|                                      
|                                      
|Consumer                               |  |                | 108   |         |  |             |    |          |  |  | 108   |  |  |  |   |  |  |  |  | 
|                                       |  |                |       |         |  |             |     |          |  |  |       |  |  |  |    |  |  |  |  | 
|                                       |  | $              | 3,930 |         |  |             | 358 |          |  |  | 3,535 |  |  |  | 37 |  |  |  |  | 
|                                       |  |                |       |         |  |             |     |          |  |  |       |  |  |  |    |  |  |  |  | 

The increase in the internally graded loans is concentrated in three loans
that were downgraded during the nine months ended September 30, 2001. All of
the loans are performing and management believes there is adequate collateral
on each loan. The loans were downgraded due to anticipated decreases in these
customers projected cash flows primarily due to a slowing down economy. Two
of the loans are secured by commercial and residential rental property and one
loan is secured by property on which a restaurant is located.

Residential real estate loans that are graded substandard totaling
$1,881,000 and $1,538,000 at September 30, 2001 and December 31, 2000,
respectively, consist of thirty four and thirty three individual loans,
respectively, that have been graded accordingly due to bankruptcies, inadequate
cash flows and delinquencies. No material losses on these loans is anticipated
by management.

The collateral values, based on estimates received by management, securing
the above internally graded loans total approximately $12,133,000 ($2,774,000
related to real property and $9,359,000 related to commercial and other loans).
Such loans are listed as classified when information obtained about possible
credit problems of the borrower has prompted management to question the ability
of the borrower to comply with the agreed repayment terms. The loan
classifications do not represent or result from trends or uncertainties which
management expects will materially and adversely affect future operating
results, liquidity or capital resources.

17



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Results of Operations, Continued

The Company maintains an allowance for loan losses which management
believes is adequate to absorb loses inherent in the loan portfolio. A formal
review is prepared bi-monthly by the Loan Review Committee to assess the risk
in the portfolio and to determine the adequacy of the allowance for loan
losses. The review includes analysis of historical performance, the level of
non-performing and adversely rated loans, specific analysis of certain problem
loans, loan activity since the previous assessment, reports prepared by the
Loan Review Committee, consideration of current economic conditions, and other
pertinent information. The level of the allowance to net loans outstanding
will vary depending on the overall results of this bi-monthly assessment. The
review is presented to and subsequently approved by the Board of Directors.

The following detail provides a breakdown of the allocation of the
allowance for possible loans losses:

|                                       |  |                    |       |                   |  |            |     |                |  |   |       |            |  |  |     |  
|-------------------------------------- |  | ------------------ | ----- | ----------------- |  | ---------- | --- | -------------- |  | - | ----- | ---------- |  |  | --- | -
|                                       |  | September 30, 2001 |       | December 31, 2000
|                                       |  |                    |       |                  
|                                       |  |                    |       |                   |  | Percent of |     |                |  |   |       | Percent of
|                                       |  |                    |       |                   |  | Loans In   |     |                |  |   |       | Loans In  
|                                       |  | In                 |       | Each Category     |  | In         |     | Each Category 
|                                       |  | Thousands          |       | To Total Loans    |  | Thousands  |     | To Total Loans
|                                       |  |                    |       |                   |  |            |     |               
|Commercial, financial and
agricultural |  | $                  | 1,333 |                   |  |            | 26  | %              |  | $ | 1,280 |            |  |  | 28  | %
|                                      
|                                      
|                                      
|                                      
|Real estate construction               |  |                    | 14    |                   |  |            | 3   |                |  |   | 8     |            |  |  | 2   |  
|                                      
|                                      
|                                      
|                                      
|Real estate mortgage                   |  |                    | 473   |                   |  |            | 69  |                |  |   | 381   |            |  |  | 68  |  
|                                      
|                                      
|                                      
|                                      
|Consumer                               |  |                    | 33    |                   |  |            | 2   |                |  |   | 42    |            |  |  | 2   |  
|                                       |  |                    |       |                   |  |            |     |                |  |   |       |            |  |  |     |  
|                                       |  | $                  | 1,853 |                   |  |            | 100 | %              |  | $ | 1,711 |            |  |  | 100 | %
|                                       |  |                    |       |                   |  |            |     |                |  |   |       |            |  |  |     |  

There were no material amounts of other interest-bearing assets
(interest-bearing deposits with other banks, municipal bonds, etc.) at
September 30, 2001 which would be required to be disclosed as past due,
non-accrual, restructured or potential problem loans, if such interest-bearing
assets were loans.

Non-interest income excluding securities transactions decreased $72,000 or
10.2% during the nine months ended September 30, 2001 as compared to the same
period in 2000. There was a decrease during the quarter ended September 30,
2001 of $51,000 or 19.0% as compared to the comparable quarter in 2000.
Commissions and fees on fiduciary activities decreased $24,000 primarily due to
the closing of one large trust account during the latter part of 2000.
Appraisal fees decreased $12,000, preparation fees decreased $7,000,
commissions on investment banking and advisory services decreased $16,000 and
other decreases totaled $13,000. Commissions and service charges are monitored
continually to seek maximum return based on costs and competition.

18



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Results of Operations, Continued

Securities gains during the nine months ended September 30, 2001 amounted
to $3,000. The gains during 2001 related to transactions in the
available-for-sale category. There were no securities gains during 2000.
These gains were incurred primarily in conjunction with managements strategies
to restructure the investment portfolio to improve the quality of the
portfolio, to improve maturity distribution and to maintain a flexible position
to react to market conditions.

Non-interest expense was $3,032,000 and $2,970,000 for the nine months
ended September 30, 2001 and 2000, respectively. Non-interest expense was
$1,006,000 and $998,000 for each quarter ended September 30, 2001 and 2000,
respectively. This increase was due primarily to depreciation related to the
installation of new computer equipment and software during the third quarter of
2000.

Management is not aware of any current recommendations by the regulatory
authorities which, if implemented, would have a material adverse effect on the
Companys liquidity, capital resources or operations.

The following is a summary of components comprising basic and diluted
earnings per share (EPS) for the three and nine months ended September 30, 2001
and 2000:

|                                     |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |         |         | 
|------------------------------------ | ------------------------------------------------------------------ | ---------------------------------------------------- | ------- | ------------------ | ------- | ----------------- | ------- | ------- | ------- |  | ------- | ------- | ------- |  | ------- | ------- | ------- | 
|                                     |                                                                    |                                                      |         | Three Months Ended |         | Nine Months Ended
|                                     |                                                                    |                                                      |         | September 30,      |         | September 30,    
|                                     |                                                                    |                                                      |         |                    |         |                  
|(In Thousands, except share amounts) |                                                                    | 2001                                                 |         | 2000               |         | 2001              |         | 2000   
|                                     |                                                                    |                                                      |         |                    |         |                   |         |        
|Basic EPS Computation:               |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Numerator  income available to common
shareholders                |                                                      | $       | 1,066              |         |                   |         | 982     |         |  |         | 2,969   |         |  |         | 2,997   |        
|                                     |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        
|                                     | Denominator  weighted average number
of common shares outstanding |                                                      |         | 522,791            |         |                   |         | 523,020 |         |  |         | 522,791 |         |  |         | 525,244 |        
|                                     |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        
|                                     | Basic earnings per common share                                    |                                                      | $       | 2.04               |         |                   |         | 1.88    |         |  |         | 5.68    |         |  |         | 5.71    |        
|                                     |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        
|Diluted EPS Computation:             |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | Numerator                                                          |                                                      | $       | 1,066              |         |                   |         | 982     |         |  |         | 2,969   |         |  |         | 2,997   |        
|                                     |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        
|                                     | Denominator:                                                       |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |         |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                    | Weighted average number of common
shares outstanding |         |                    | 522,791 |                   |         |         | 523,020 |  |         |         | 522,791 |  |         |         | 525,244 | 
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                    | Dilutive effect of stock options                     |         |                    | 5,099   |                   |         |         | 3,747   |  |         |         | 5,099   |  |         |         | 3,747   | 
|                                     |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        
|                                     |                                                                    |                                                      | 527,890 |                    |         |                   | 526,767 |         |         |  | 527,890 |         |         |  | 528,991 |        
|                                     |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        
|                                     | Diluted earnings per common share                                  |                                                      | $       | 2.02               |         |                   |         | 1.86    |         |  |         | 5.62    |         |  |         | 5.67    |        
|                                     |                                                                    |                                                      |         |                    |         |                   |         |         |         |  |         |         |         |  |         |        

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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations,
Continued

Impact of Inflation

The primary impact which inflation has on the results of the Companys
operations is evidenced by its effects on interest rates. Interest rates tend
to reflect, in part, the financial markets expectations of the level of
inflation and, therefore, will generally rise or fall as the level of expected
inflation fluctuates. To the extent interest rates paid on deposits and other
sources of funds rise or fall at a faster rate than the interest income earned
on funds, loans or invested, net interest income will vary. Inflation also
affects non-interest expenses as goods and services are purchased, although
this has not appeared to have a significant effect on net earnings. If the
inflation rate stays flat or increases slightly, the effect on profits is not
expected to be significant.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Companys primary component of market risk is interest rate
volatility. Fluctuations in interest rates will ultimately impact both the
level of income and expense recorded on a large portion of the Companys assets
and liabilities, and the market value of all interest-earning assets and
interest-bearing liabilities, other than those which possess a short term to
maturity such as Federal funds sold or purchased and loans, securities and
deposits. Based upon the nature of the Companys current operations, the
Company is not subject to foreign currency exchange or commodity price risk.

Interest rate risk (sensitivity) management focuses on the earnings risk
associated with changing interest rates. Management seeks to maintain
profitability in both immediate and long term earnings through funds
management/interest rate risk management. The Companys rate sensitivity
position has an important impact on earnings. Senior management of the Company
meets monthly to analyze the rate sensitivity position. Such meetings are
intended to focus on the spread between the cost of funds and interest yields
generated primarily through loans and investments.

There are no material changes in reported market risks during the nine
months ended September 30, 2001 known to management. Please refer to Item 2 of
Part I of this report for additional information related to market and other
risks.

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##### Table of Contents



PART II. OTHER INFORMATION




Item 1. LEGAL PROCEEDINGS

None




Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Shares of the Companys common stock were sold out of Treasury to
a newly elected Director and executive employee.

|                   |  |                      |     |                 |  |   |       | 
|------------------ |  | -------------------- | --- | --------------- |  | - | ----- | 
|                   |  | Number of Shares     |     |                 |  |  
|Date of Sale       |  | of Common Stock Sold |     | Price Per Share
|                   |  |                      |     |                
|September 27, 2001 |  |                      | 200 |                 |  | $ | 79.25 | 

The aggregate proceeds of the shares sold were $15,850.

There were no underwriters and no underwriting discounts or
commissions. The sale was for cash.

The Company believes that an exemption from registration of these
 shares was available to the Company in that the issuance thereof did
not constitute a public offering of securities within the meaning of
the Securities Act of 1933, as amended.

The securities sold are not convertible.

The proceeds of the sales are being used by the Company for general
corporate purposes.

(a)  Not Applicable

(b)  Not Applicable

(c)  None

(d)  The only restrictions on working capital and/or dividends are those
reported in Part I.




Item 3. DEFAULTS UPON SENIOR SECURITIES

(a)  None.

(b)  Not Applicable




Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

(a)  None

(b)  Not Applicable

(c)  Not Applicable

(d)  Not Applicable

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##### Table of Contents



PART II. OTHER INFORMATION, CONTINUED




Item 5. OTHER INFORMATION

None.




Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  None.

(b)  No reports on Form 8-K have been filed during the quarter for
which this Report is filed.

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##### Table of Contents



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                        |  |                                                                             
|----------------------- |  | ----------------------------------------------------------------------------
|                        |  | FIRST MCMINNVILLE CORPORATION
(Registrant)                                  
|                       
|DATE: November 13, 2001 |  | /s/ Charles C. JacobsCharles C. Jacobs
President and Chief Executive Officer
|                       
|DATE: November 13, 2001 |  | /s/ Kenny D. NealKenny D. Neal
Chief Financial and Accounting Officer       

23