##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

MARK ONE

|    |                                                 
|--- | ------------------------------------------------
|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
|    | OF THE SECURITIES EXCHANGE ACT OF 1934          

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003



|      |                                                  
|----- | -------------------------------------------------
|[   ] | TRANSITION REPORT PURSUANT TO 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

---

(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

---

(Address of Principal Executive Offices and Zip Code)


(931) 473-4402

---

(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.

Common stock outstanding 1,043,718 shares at August 12, 2003

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

YES [   ]   NO [X]

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TABLE OF CONTENTS



|                                         |                                                                                               |                                                   |  |  |  |  |  | 
|---------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------- |  |  |  |  |  | 
|PART 1 - FINANCIAL INFORMATION FORM 10-Q
|                                         | Item 1. Financial Information                                                                
|                                         |                                                                                               | Consolidated Balance Sheets                      
|                                         |                                                                                               | Consolidated Statements of Earnings              
|                                         |                                                                                               | Consolidated Statements of Comprehensive Earnings
|                                         |                                                                                               | Consolidated Statements of Cash Flows            
|                                         |                                                                                               | Notes to Consolidated Financial Statements       
|                                         | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                         | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                         | Item 4. Controls and Procedures                                                              
|PART II. OTHER INFORMATION              
|                                         | 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 SECURITY HOLDERS                                  
|                                         | Item 5. OTHER INFORMATION                                                                    
|                                         | Item 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                              
|EX-31 SECTION 302 CERTIFICATIONS        
|EX-32 SECTION 906 CERTIFICATIONS        



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q

|                                                                                                                                                                                                                                             |                                                                                                                       |                                                                                       |    |                                                                                                                                                         |  |  |  |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  |  |  | 
|PART I


    - FINANCIAL INFORMATION FORM 10-Q                                                                                                                                                                                               |                                                                                                                       |                                                                                      
|Item 1.                                                                                                                                                                                                                                      |                                                                                                                       | Financial Information                                                                 |    |                                                                                                                                                        
|The unaudited consolidated financial statements of the registrant and its
wholly-owned subsidiary, First National Bank of McMinnville (Bank) and the
Banks wholly-owned subsidiary, First Community Title & Escrow Company, are as
follows: |                                                                                                                       |                                                                                      
|                                                                                                                                                                                                                                             | Consolidated Balance Sheets - June 30, 2003 and December 31, 2002.                                                    |                                                                                       | 3 
|                                                                                                                                                                                                                                             | Consolidated Statements of Earnings - For the three months and six months
ended June 30, 2003 and 2002.               |                                                                                       | 4 
|                                                                                                                                                                                                                                             | Consolidated Statements of Comprehensive Earnings - For the three months
and six months ended June 30, 2003 and 2002. |                                                                                       | 5 
|                                                                                                                                                                                                                                             | Consolidated Statements of Cash Flows - For the six months ended June 30,
2003 and 2002.                              |                                                                                       | 6 
|Item 2.                                                                                                                                                                                                                                      |                                                                                                                       | Managements Discussion and Analysis of Financial Condition and
Results of Operations |    | 9                                                                                                                                                      
|Item 3.                                                                                                                                                                                                                                      |                                                                                                                       | Quantitative and Qualitative Disclosures About Market Risk*                           |    | 21                                                                                                                                                     
|                                                                                                                                                                                                                                             |                                                                                                                       |                                                                                       |    | *Disclosures required by Item 3 are incorporated by
reference to managements Discussion and Analysis of Financial
Condition and Results of Operations. |  | 
|Item 4.                                                                                                                                                                                                                                      |                                                                                                                       | Controls and Procedures                                                               |    | 21                                                                                                                                                     
|PART II


     OTHER INFORMATION                                                                                                                                                                                                            |                                                                                                                       |                                                                                      
|Item 1.                                                                                                                                                                                                                                      |                                                                                                                       | Legal Proceedings                                                                     |    | 22                                                                                                                                                     
|Item 2.                                                                                                                                                                                                                                      |                                                                                                                       | Changes in Securities and Use of Proceeds                                             |    | 22                                                                                                                                                     
|Item 3.                                                                                                                                                                                                                                      |                                                                                                                       | Defaults Upon Senior Securities                                                       |    | 22                                                                                                                                                     
|Item 4.                                                                                                                                                                                                                                      |                                                                                                                       | Submission of Matters to a Vote of Security Holders                                   |    | 22                                                                                                                                                     
|Item 5.                                                                                                                                                                                                                                      |                                                                                                                       | Other Information                                                                     |    | 23                                                                                                                                                     
|Item 6.                                                                                                                                                                                                                                      |                                                                                                                       | Exhibits and Reports on Form 8-K                                                      | 23 |                                                                                                                                                        
|Signatures                                                                                                                                                                                                                                   |                                                                                                                       |                                                                                       |    | 24                                                                                                                                                     

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FIRST MCMINNVILLE
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Consolidated Balance Sheets

June 30, 2003 and December 31, 2002

(Unaudited)

|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |        |   |         | 
|------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------------------------ | ------ | -------------- | ------- | ------------ | ------ | - | ------- | 
|                                                             |                                                                                                                                                                                    |   |                                            |        | June 30,       |         | December 31,
|                                                             |                                                                                                                                                                                    |   |                                            |        | 2003           |         | 2002        
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |             
|                                                             |                                                                                                                                                                                    |   |                                            |        | (In Thousands)
|Assets                                                       |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|Loans                                                        |                                                                                                                                                                                    | $ | 147,604                                    |        |                |         | 149,581      |       
|                                                             | Less: Allowance for loan losses                                                                                                                                                    |   |                                            | (1,952 | )              |         |              | (1,908 | )
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             |                                                                                                                                                                                    |   | Net loans                                  |        |                | 145,652 |              |        |   | 147,673 | 
|Securities:                                                  |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             | Held to maturity, at cost (market value $51,344,000 and
$52,968,000, respectively)                                                                                                 |   |                                            | 48,167 |                |         |              | 50,956 |  
|                                                             | Available-for-sale, at market (amortized cost $78,587,000
and $73,215,000, respectively)                                                                                           |   |                                            | 79,828 |                |         |              | 74,442 |  
|Federal funds sold                                           |                                                                                                                                                                                    |   | 24,000                                     |        |                |         | 17,000       |       
|Interest bearing deposits in financial institutions          |                                                                                                                                                                                    |   | 135                                        |        |                |         | 108          |       
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             |                                                                                                                                                                                    |   | Total earning assets                       |        |                | 297,782 |              |        |   | 290,179 | 
|Cash and due from banks                                      |                                                                                                                                                                                    |   | 7,825                                      |        |                |         | 10,285       |       
|Bank premises and equipment, net of accumulated depreciation |                                                                                                                                                                                    |   | 2,184                                      |        |                |         | 1,981        |       
|Accrued interest receivable                                  |                                                                                                                                                                                    |   | 1,741                                      |        |                |         | 1,856        |       
|Other real estate                                            |                                                                                                                                                                                    |   | 80                                         |        |                |         |             |       
|Other assets                                                 |                                                                                                                                                                                    |   | 377                                        |        |                |         | 459          |       
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             |                                                                                                                                                                                    |   | Total Assets                               |        | $              | 309,989 |              |        |   | 304,760 | 
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|Liabilities and Stockholders Equity                         |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|Deposits                                                     |                                                                                                                                                                                    | $ | 232,562                                    |        |                |         | 229,264      |       
|Securities sold under repurchase agreements                  |                                                                                                                                                                                    |   | 27,424                                     |        |                |         | 25,994       |       
|Deferred tax liability, net                                  |                                                                                                                                                                                    |   | 325                                        |        |                |         | 319          |       
|Advances from Federal Home Loan Bank                         |                                                                                                                                                                                    |   | 1,000                                      |        |                |         | 1,000        |       
|Accrued interest and other liabilities                       |                                                                                                                                                                                    |   | 1,155                                      |        |                |         | 2,785        |       
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             |                                                                                                                                                                                    |   | Total liabilities                          |        |                | 262,466 |              |        |   | 259,362 | 
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|Stockholders equity:                                        |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             | Common stock, no par value and $2.50 par value, respectively;
authorized 5,000,000 shares, issued 1,229,442 shares and
613,575 shares, respectively (reflects 2 for 1 stock split) |   |                                            | 3,601  |                |         |              | 1,534  |  
|                                                             | Additional paid-in capital                                                                                                                                                         |   |                                            |       |                |         |              | 2,001  |  
|                                                             | Retained earnings                                                                                                                                                                  |   |                                            | 47,151 |                |         |              | 45,082 |  
|                                                             | Net unrealized gains on available-for-sale securities, net of income
taxes of $475,000 and $470,000, respectively                                                                  |   |                                            | 766    |                |         |              | 757    |  
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             |                                                                                                                                                                                    |   | 51,518                                     |        |                |         | 49,374       |       
|                                                             | Less cost of treasury stock of 186,078 shares and 92,826 shares,
respectively                                                                                                      |   |                                            | (3,995 | )              |         |              | (3,976 | )
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             |                                                                                                                                                                                    |   | Total stockholders equity                 |        |                | 47,523  |              |        |   | 45,398  | 
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       
|                                                             |                                                                                                                                                                                    |   | Total liabilities and stockholders equity |        | $              | 309,989 |              |        |   | 304,760 | 
|                                                             |                                                                                                                                                                                    |   |                                            |        |                |         |              |       

See accompanying notes to consolidated
financial statements (unaudited).

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FIRST MCMINNVILLE
CORPORATION




Consolidated Statements of Earnings

Three Months and Six Months Ended June 30, 2003 and 2002

(Unaudited)

|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |       |       |       | 
|--------------------------------- | --------------------------------------------------------------------------------- | -------------------------------- | --------------------------------------------------- | ----- | ------------------------------------------------ | ----- | ---------------- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | ----- | 
|                                  |                                                                                   |                                  |                                                     |       | Three Months Ended                               |       | Six Months Ended
|                                  |                                                                                   |                                  |                                                     |       | June 30,                                         |       | June 30,        
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                 
|                                  |                                                                                   |                                  |                                                     |       | 2003                                             |       | 2002             |       | 2003  |       | 2002 
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |      
|                                  |                                                                                   |                                  |                                                     |       | (Dollars In Thousands, Except Per Share Amounts)
|Interest income:                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  | Interest and fees on loans                                                        |                                  | $                                                   | 2,619 |                                                  |       |                  | 2,607 |       |       | $     | 5,256 |       |       |       | 5,282 |      
|                                  | Interest and dividends on securities:                                             |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   | Taxable securities               |                                                     |       | 869                                              |       |                  |       | 1,231 |       |       |       | 1,778 |       |       |       | 2,544 |      
|                                  |                                                                                   | Exempt from Federal income taxes |                                                     |       | 417                                              |       |                  |       | 437   |       |       |       | 816   |       |       |       | 890   |      
|                                  | Interest on federal funds sold                                                    |                                  |                                                     | 65    |                                                  |       |                  | 77    |       |       |       | 124   |       |       |       | 87    |      
|                                  | Interest on interest-bearing deposits in other banks and
other interest           |                                  |                                                     | 1     |                                                  |       |                  | 1     |       |       |       | 1     |       |       |       | 1     |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   |                                  | Total interest income                               |       |                                                  | 3,971 |                  |       |       | 4,353 |       |       |       | 7,975 |       |       |       | 8,804 | 
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|Interest expense:                 |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  | Interest on negotiable order of withdrawal accounts                               |                                  |                                                     | 75    |                                                  |       |                  | 124   |       |       |       | 151   |       |       |       | 236   |      
|                                  | Interest on money market demand and savings accounts                              |                                  |                                                     | 128   |                                                  |       |                  | 203   |       |       |       | 254   |       |       |       | 396   |      
|                                  | Interest on certificates of deposit                                               |                                  |                                                     | 940   |                                                  |       |                  | 1,135 |       |       |       | 1,926 |       |       |       | 2,372 |      
|                                  | Interest on securities sold under repurchase agreements
and short term borrowings |                                  |                                                     | 83    |                                                  |       |                  | 108   |       |       |       | 171   |       |       |       | 217   |      
|                                  | Interest on Federal funds purchased                                               |                                  |                                                     |      |                                                  |       |                  |      |       |       |       |      |       |       |       | 10    |      
|                                  | Interest on advances from Federal Home Loan Bank                                  |                                  |                                                     | 14    |                                                  |       |                  | 14    |       |       |       | 28    |       |       |       | 28    |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   |                                  | Total interest expense                              |       |                                                  | 1,240 |                  |       |       | 1,584 |       |       |       | 2,530 |       |       |       | 3,259 | 
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   |                                  | Net interest income                                 |       |                                                  | 2,731 |                  |       |       | 2,769 |       |       |       | 5,445 |       |       |       | 5,545 | 
|Provision for loan losses         |                                                                                   |                                  | 15                                                  |       |                                                  |       | 45               |       |       |       | 59    |       |       |       | 89    |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   |                                  | Net interest income after provision for loan losses |       |                                                  | 2,716 |                  |       |       | 2,724 |       |       |       | 5,386 |       |       |       | 5,456 | 
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|Other income:                     |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  | Service charges on deposit accounts                                               |                                  |                                                     | 121   |                                                  |       |                  | 118   |       |       |       | 231   |       |       |       | 229   |      
|                                  | Other fees and commissions                                                        |                                  |                                                     | 93    |                                                  |       |                  | 99    |       |       |       | 170   |       |       |       | 189   |      
|                                  | Commissions and fees on fiduciary activities                                      |                                  |                                                     | 9     |                                                  |       |                  | 8     |       |       |       | 15    |       |       |       | 21    |      
|                                  | Securities gains                                                                  |                                  |                                                     | 4     |                                                  |       |                  |      |       |       |       | 4     |       |       |       | 3     |      
|                                  | Gain on sale of fixed assets                                                      |                                  |                                                     |      |                                                  |       |                  |      |       |       |       | 30    |       |       |       |      |      
|                                  | Other income                                                                      |                                  |                                                     | 6     |                                                  |       |                  | 13    |       |       |       | 14    |       |       |       | 24    |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   |                                  | 233                                                 |       |                                                  |       | 238              |       |       |       | 464   |       |       |       | 466   |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|Other expenses:                   |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  | Salaries and employee benefits                                                    |                                  |                                                     | 735   |                                                  |       |                  | 688   |       |       |       | 1,457 |       |       |       | 1,369 |      
|                                  | Occupancy expenses, net                                                           |                                  |                                                     | 58    |                                                  |       |                  | 51    |       |       |       | 111   |       |       |       | 102   |      
|                                  | Furniture and equipment expense                                                   |                                  |                                                     | 11    |                                                  |       |                  | 17    |       |       |       | 27    |       |       |       | 30    |      
|                                  | Data processing expense                                                           |                                  |                                                     | 44    |                                                  |       |                  | 71    |       |       |       | 97    |       |       |       | 134   |      
|                                  | FDIC insurance                                                                    |                                  |                                                     | 10    |                                                  |       |                  | 9     |       |       |       | 19    |       |       |       | 19    |      
|                                  | Other operating expenses                                                          |                                  |                                                     | 256   |                                                  |       |                  | 282   |       |       |       | 501   |       |       |       | 516   |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   |                                  | 1,114                                               |       |                                                  |       | 1,118            |       |       |       | 2,212 |       |       |       | 2,170 |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   |                                  | Earnings before income taxes                        |       |                                                  | 1,835 |                  |       |       | 1,844 |       |       |       | 3,638 |       |       |       | 3,752 | 
|Income taxes                      |                                                                                   |                                  | 580                                                 |       |                                                  |       | 593              |       |       |       | 1,153 |       |       |       | 1,121 |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|                                  |                                                                                   |                                  | Net earnings                                        |       | $                                                | 1,255 |                  |       |       | 1,251 |       |       | $     | 2,485 |       |       |       | 2,631 | 
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|Basic earnings per common share   |                                                                                   | $                                | 1.20                                                |       |                                                  |       | 1.21             |       |       | $     | 2.38  |       |       |       | 2.53  |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|Diluted earnings per common share |                                                                                   | $                                | 1.18                                                |       |                                                  |       | 1.19             |       |       | $     | 2.35  |       |       |       | 2.50  |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      
|Dividends per share               |                                                                                   | $                                | .40                                                 |       |                                                  |       | .375             |       |       | $     | .40   |       |       |       | .375  |      
|                                  |                                                                                   |                                  |                                                     |       |                                                  |       |                  |       |       |       |       |       |       |       |       |      

See accompanying notes to consolidated
financial statements (unaudited).

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FIRST MCMINNVILLE
CORPORATION




Consolidated Statements of Comprehensive Earnings

Three Months and Six Months Ended June 30, 2003 and 2002

(Unaudited)

|                                                 |                                                                                                                                                               |                              |       |                    |       |                  |       |                |       |      |       |    |       |  |       |     |       | 
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------- | ----- | ------------------ | ----- | ---------------- | ----- | -------------- | ----- | ---- | ----- | -- | ----- |  | ----- | --- | ----- | 
|                                                 |                                                                                                                                                               |                              |       | Three Months Ended |       | Six Months Ended
|                                                 |                                                                                                                                                               |                              |       | June 30,           |       | June 30,        
|                                                 |                                                                                                                                                               |                              |       |                    |       |                 
|                                                 |                                                                                                                                                               |                              |       | 2003               |       | 2002             |       | 2003           |       | 2002
|                                                 |                                                                                                                                                               |                              |       |                    |       |                  |       |                |       |     
|                                                 |                                                                                                                                                               |                              |       |                    |       |                  |       | (In Thousands) |       |      |       |   
|Net earnings                                     |                                                                                                                                                               | $                            | 1,255 |                    |       |                  | 1,251 |                |       | $    | 2,485 |    |       |  | 2,631 |    
|                                                 |                                                                                                                                                               |                              |       |                    |       |                  |       |                |       |      |       |    |       |  |       |    
|Other comprehensive earnings (loss), net of tax: |                                                                                                                                                               |                              |       |                    |       |                  |       |                |       |      |       |    |       |  |       |    
|                                                 | Unrealized gains (losses) on available-for-sale
securities arising during period, net of income
taxes of $64,000, $635,000, $7,000 and
$234,000, respectively |                              |       | 103                |       |                  |       | 1,038          |       |      |       | 12 |       |  |       | 385 |      
|                                                 | Reclassification adjustment for gains included in
net earnings, net of taxes of $1,000                                                                        |                              |       | (3                 | )     |                  |       |               |       |      |       | (3 | )     |  |       | (2  | )    
|                                                 |                                                                                                                                                               |                              |       |                    |       |                  |       |                |       |      |       |    |       |  |       |    
|                                                 |                                                                                                                                                               | Other comprehensive earnings |       |                    | 100   |                  |       |                | 1,038 |      |       |    | 9     |  |       |     | 383   | 
|                                                 |                                                                                                                                                               |                              |       |                    |       |                  |       |                |       |      |       |    |       |  |       |    
|                                                 |                                                                                                                                                               | Comprehensive earnings       |       | $                  | 1,355 |                  |       |                | 2,289 |      |       | $  | 2,494 |  |       |     | 3,014 | 
|                                                 |                                                                                                                                                               |                              |       |                    |       |                  |       |                |       |      |       |    |       |  |       |    

See accompanying notes to consolidated
financial statements (unaudited).

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FIRST MCMINNVILLE
CORPORATION




Consolidated Statements of Cash Flows

Six Months Ended June 30, 2003 and 2002

Increase (Decrease) in Cash and Cash Equivalents

(Unaudited)

|                                                 |                                                                        |                                                     |        |                |       |      |        |        |        | 
|------------------------------------------------ | ---------------------------------------------------------------------- | --------------------------------------------------- | ------ | -------------- | ----- | ---- | ------ | ------ | ------ | 
|                                                 |                                                                        |                                                     |        | 2003           |       | 2002
|                                                 |                                                                        |                                                     |        |                |       |     
|                                                 |                                                                        |                                                     |        | (In Thousands)
|Cash flows from operating activities:            |                                                                        |                                                     |        |                |       |      |        |       
|                                                 | Interest received                                                      |                                                     | $      | 8,066          |       |      |        | 9,031  |       
|                                                 | Fees and commissions received                                          |                                                     |        | 431            |       |      |        | 463    |       
|                                                 | Interest paid                                                          |                                                     |        | (2,826         | )     |      |        | (3,786 | )     
|                                                 | Cash paid to suppliers and employees                                   |                                                     |        | (1,938         | )     |      |        | (1,987 | )     
|                                                 | Income taxes paid                                                      |                                                     |        | (1,300         | )     |      |        | (1,283 | )     
|                                                 |                                                                        |                                                     |        |                |       |      |        |        |       
|                                                 |                                                                        | Net cash provided by operating activities           |        |                | 2,433 |      |        |        | 2,438  | 
|                                                 |                                                                        |                                                     |        |                |       |      |        |        |       
|Cash flows from investing activities:            |                                                                        |                                                     |        |                |       |      |        |       
|                                                 | Proceeds from maturities of held-to-maturity securities                |                                                     |        | 19,321         |       |      |        | 9,453  |       
|                                                 | Proceeds from sales of available-for-sale securities                   |                                                     |        |               |       |      |        | 757    |       
|                                                 | Proceeds from maturities of available-for-sale securities              |                                                     |        | 64,170         |       |      |        | 15,770 |       
|                                                 | Purchase of held-to-maturity securities                                |                                                     |        | (16,532        | )     |      |        | (760   | )     
|                                                 | Purchase of available-for-sale securities                              |                                                     |        | (69,514        | )     |      |        | (8,456 | )     
|                                                 | Loans to customers, net of repayments                                  |                                                     |        |               |       |      |        | (1,022 | )     
|                                                 | Loan repayments, net of advances to customers                          |                                                     |        | 1,882          |       |      |        |       |       
|                                                 | Increase in interest bearing deposits in financial institutions        |                                                     |        | (27            | )     |      |        | (915   | )     
|                                                 | Proceeds from sale of other real estate                                |                                                     |        |               |       |      |        | 98     |       
|                                                 | Purchase of bank equipment                                             |                                                     |        | (306           | )     |      |        |       |       
|                                                 | Proceeds from sale of bank equipment                                   |                                                     |        | 30             |       |      |        |       |       
|                                                 |                                                                        |                                                     |        |                |       |      |        |        |       
|                                                 |                                                                        | Net cash provided by (used in) investing activities |        |                | (976  | )    |        |        | 14,925 | 
|                                                 |                                                                        |                                                     |        |                |       |      |        |        |       
|Cash flows from financing activities:            |                                                                        |                                                     |        |                |       |      |        |       
|                                                 | Net increase in non-interest bearing, savings and NOW
deposit accounts |                                                     |        | 2,096          |       |      |        | 6,858  |       
|                                                 | Net increase in time deposits                                          |                                                     |        | 1,202          |       |      |        | 8,919  |       
|                                                 | Increase (decrease) in securities sold under repurchase agreements     |                                                     |        | 1,430          |       |      |        | (2,023 | )     
|                                                 | Decrease in Federal funds purchased                                    |                                                     |        |               |       |      |        | (5,000 | )     
|                                                 | Dividends paid                                                         |                                                     |        | (1,693         | )     |      |        | (1,587 | )     
|                                                 | Payments to acquire treasury stock                                     |                                                     |        | (19            | )     |      |        | (176   | )     
|                                                 | Proceeds from sales of common stock                                    |                                                     |        | 67             |       |      |        | 6      |       
|                                                 | Proceeds from issuance of short-term notes payable                     |                                                     |        |               |       |      |        | 30     |       
|                                                 | Repayment of short-term notes payable                                  |                                                     |        |               |       |      |        | (30    | )     
|                                                 |                                                                        |                                                     |        |                |       |      |        |        |       
|                                                 |                                                                        | Net cash provided by financing activities           |        |                | 3,083 |      |        |        | 6,997  | 
|                                                 |                                                                        |                                                     |        |                |       |      |        |        |       
|Net increase in cash and cash equivalents        |                                                                        |                                                     | 4,540  |                |       |      | 24,360 |       
|Cash and cash equivalents at beginning of period |                                                                        |                                                     | 27,285 |                |       |      | 7,046  |       
|                                                 |                                                                        |                                                     |        |                |       |      |        |        |       
|Cash and cash equivalents at end of period       |                                                                        | $                                                   | 31,825 |                |       |      | 31,406 |       
|                                                 |                                                                        |                                                     |        |                |       |      |        |        |       

See accompanying notes to
consolidated financial statements (unaudited).

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FIRST MCMINNVILLE
CORPORATION

Consolidated Statements of Cash Flows, Continued

Six Months Ended June 30, 2003 and 2002

Increase (Decrease) in Cash and Cash Equivalents

(Unaudited)

|                                                                             |                                                                                                                     |                                          |                                           |       |                |       |      |       |      |       |  
|---------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ----------------------------------------- | ----- | -------------- | ----- | ---- | ----- | ---- | ----- | -
|                                                                             |                                                                                                                     |                                          |                                           |       | 2003           |       | 2002
|                                                                             |                                                                                                                     |                                          |                                           |       |                |       |     
|                                                                             |                                                                                                                     |                                          |                                           |       | (In Thousands)
|Reconciliation of net earnings to net cash provided by
operating activities: |                                                                                                                     |                                          |                                           |       |                |       |      |      
|                                                                             | Net earnings                                                                                                        |                                          | $                                         | 2,485 |                |       |      | 2,631 |     
|                                                                             | Adjustments to reconcile net earnings to net cash
provided by operating activities:                                 |                                          |                                           |       |                |       |      |       |     
|                                                                             |                                                                                                                     | Depreciation                             |                                           |       | 103            |       |      |       | 99   |      
|                                                                             |                                                                                                                     | Provision for loan losses                |                                           |       | 59             |       |      |       | 89   |      
|                                                                             |                                                                                                                     | Securities gains                         |                                           |       | (4             | )     |      |       | (3   | )    
|                                                                             |                                                                                                                     | Loss on sale of other real estate        |                                           |       |               |       |      |       | 2    |      
|                                                                             |                                                                                                                     | Gain on sale of equipment                |                                           |       | (30            | )     |      |       |     |      
|                                                                             |                                                                                                                     | FHLB dividend reinvestment               |                                           |       | (24            | )     |      |       | (16  | )    
|                                                                             |                                                                                                                     | Decrease (increase) in other assets, net |                                           |       | 83             |       |      |       | (94  | )    
|                                                                             |                                                                                                                     | Increase (decrease) in other liabilities |                                           |       | (58            | )     |      |       | 14   |      
|                                                                             |                                                                                                                     | Decrease in interest receivable          |                                           |       | 115            |       |      |       | 243  |      
|                                                                             |                                                                                                                     | Decrease in interest payable             |                                           |       | (296           | )     |      |       | (527 | )    
|                                                                             |                                                                                                                     |                                          |                                           |       |                |       |      |       |     
|                                                                             |                                                                                                                     |                                          | Total adjustments                         |       |                | (52   | )    |       |      | (193  | )
|                                                                             |                                                                                                                     |                                          |                                           |       |                |       |      |       |     
|                                                                             |                                                                                                                     |                                          | Net cash provided by operating activities |       | $              | 2,433 |      |       |      | 2,438 |  
|                                                                             |                                                                                                                     |                                          |                                           |       |                |       |      |       |     
|Supplemental schedule of non-cash activities:                                |                                                                                                                     |                                          |                                           |       |                |       |      |      
|                                                                             | Unrealized gain in value of securities available-for-sale,
net of income taxes of $6,000 and $234,000, respectively |                                          | $                                         | 19    |                |       |      | 383   |     
|                                                                             |                                                                                                                     |                                          |                                           |       |                |       |      |       |     
|                                                                             | Non-cash transfers from loans to other real estate                                                                  |                                          | $                                         | 80    |                |       |      |      |     
|                                                                             |                                                                                                                     |                                          |                                           |       |                |       |      |       |     

See accompanying notes to consolidated
financial statements (unaudited).

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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 or Registrant) and its wholly-owned
subsidiary, First National Bank of McMinnville (Bank) and the Banks
wholly-owned subsidiary, First Community Title & Escrow Company.

The accompanying consolidated financial statements have been prepared, without
audit, pursuant to 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 June 30, 2003 and December 31, 2002, and the results of operations for
the three months and six months ended June 30, 2003 and 2002, comprehensive
earnings for the three months and six months ended June 30, 2003 and 2002 and
changes in cash flows for the six months ended June 30, 2003 and 2002. 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, 2002. The results for
interim periods are not necessarily indicative of results to be expected for
the complete fiscal year.

Stock Split and Elimination of Par Value

In December of 2002, the Companys Board of Directors declared a two-for-one
stock split. As a result, shareholders as of the record date received one
additional share for each share that they already owned. Accordingly, the
number of outstanding shares doubled from 520,794 to 1,041,588. In addition,
the Board authorized a charter amendment to eliminate par value, which was
deemed an unnecessary accounting convention. All share and option per share
amounts in this Report have been restated to reflect the stock split.

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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 Company 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, 2002 for a more complete discussion
of factors that may have an 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, 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
condition and results of operations of the Company and not to predict the
future or to guarantee results. The Company is unable to reliably predict all
of 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 stability 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 involve higher
costs than fixed rate instruments such as passbook savings.

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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. (Please refer to Item
3 of this Part I for additional information).

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 June 30, 2003, the Company
would expect net interest income to decrease approximately $404,000 over a
twelve month period if rates increased 2.0%. Net interest income would be
expected to increase approximately $404,000 over a 12 month period should rates
decrease 2.0%. The rate sensitivity as of June 30, 2003 was 1 to 1.39 (0-91
days) and 1 to 1.13 (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 $743,000 mature or reprice within the next twelve
months.

A secondary source of liquidity is the Banks loan portfolio. At June 30,
2003 commercial, consumer and other loans of approximately $11.0 million and
mortgage loans of approximately $37.3 million either will become due or will be
subject to rate adjustments within twelve months. Emphasis is placed on
structuring adjustable rate loans.

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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 $34.1 million will become due during the next twelve months. The
Banks deposit base increased approximately $3.3 million during the six months
ended June 30, 2003. Securities sold under repurchase agreements increased
approximately $1.4 million during the six months ended June 30, 2003. The
deposit base increased approximately $2.1 million during the second quarter of
2003. Securities sold under repurchase agreements increased $266,000 during
the second three months of 2003. Federal funds sold were $24.0 million at June
30, 2003 and $17.0 million at December 31, 2002. Advances from the Federal
Home Loan Bank were $1.0 million at June 30, 2003 and at December 31, 2002.

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 does
not expect that there will be significant withdrawals from these accounts in
the future that are inconsistent with past experience.

The subsidiary Bank is limited by law, regulation and prudence as to the
amount of dividends that it can pay. At June 30, 2003, the Bank can declare
during the remainder of 2003 cash dividends in an aggregate amount not to
exceed approximately $7.8 million, exclusive of any 2003 net earnings, without
prior approval of the Comptroller of the Currency. However, most of these
funds will be retained for use in the Companys operations rather than being
paid out in dividends. It is anticipated that with present maturities, the
expected 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 will result in or that are
reasonably 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 (excluding the unrealized
loss on available-for-sale securities) was 15.1% at June 30, 2003 and 14.6% at
December 31, 2002. Total assets increased approximately $5.2 million during
the six months ended June 30, 2003. The annualized rate of return on average
stockholders equity (excluding the unrealized loss on available-for-sale
securities) for the first six months of 2003 was 11.0% compared to 12.5% for
the comparable period in 2002. 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 of $417,000 and
$389,000 or $.40 and $.375 per share were declared in the six months ended June
30, 2003 and 2002, respectively. Cash dividends will be increased in the
remainder of 2003 over 2002 only in the discretion of the Board of Directors
and as profits permit. Dividends paid during 2002 were $1.60 per share. 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.

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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

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 total risk based 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 total 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 for
the most recent quarter 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 27.49%, a total capital to risk-based ratio of
28.64% and a leverage ratio of 15.12%, and thus falls within the well
capitalized category under the regulations.

The Federal Reserve Board imposes consolidated capital guidelines on bank
holding companies (such as the Company) 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.

Stock Option Plan

In April, 1997, the stockholders of the Company approved the First
McMinnville Corporation 1997 Stock Option Plan (The Stock Option Plan). The
Stock Option Plan provides for the granting of stock options and authorizes the
issuance of common stock upon the exercise of such options for up to 115,000
(57,500 before 2 for 1 split) shares of common stock to directors and employees
of the Company.

Under the Stock Option Plan awards may be granted in the form of incentive
stock options or nonstatutory stock options, and are exercisable for up to ten
years following the date such option awards are granted. Exercise prices of
incentive stock options must be equal to or greater than 100% of the fair
market value of the common stock on the grant date.

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FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED

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

Stock Option Plan, Continued

SFAS No. 123, Accounting for Stock Based Compensation, as amended by
SFAS No. 148, Accounting for Stock-Based Compensation - Transition and
Disclosure, sets forth the method for recognition of cost of plans similar to
those of the Company. As is permitted, management has elected to continue
accounting for the plan under APB Opinion 25 and related Interpretations in
accounting for its plan. Accordingly, no compensation cost has been recognized
for the stock option plan. However, under SFAS No. 123, the Company is
required to make proforma disclosures as if cost had been recognized in
accordance with the pronouncement. Had compensation cost for the Companys
stock option plan been determined based on the fair value at the grant dates
for awards under the plan consistent with the method of SFAS No. 123, the
Companys net earnings and basic earnings per common share and diluted earnings
per common share for the three months and six months ended June 30, 2003 and
2002, respectively, would have been reduced to the proforma amounts indicated
below:

|                                   |             |      |                    |       |                  |      |  |       |  |  |  |       |  |  |  |       | 
|---------------------------------- | ----------- | ---- | ------------------ | ----- | ---------------- | ---- |  | ----- |  |  |  | ----- |  |  |  | ----- | 
|                                   |             |      | Three Months Ended |       | Six Months Ended
|                                   |             |      | June 30,           |       | June 30,        
|                                   |             |      |                    |       |                 
|(In Thousands)                     |             | 2003 |                    | 2002  |                  | 2003 |  | 2002 
|                                   |             |      |                    |       |                  |      |  |      
|Net earnings:                      |             |      |                    |       |                  |      |  |       |  |  |  |       |  |  |  |      
|                                   | As Reported |      | $                  | 1,255 |                  |      |  | 1,251 |  |  |  | 2,485 |  |  |  | 2,631 | 
|                                   | Proforma    |      | $                  | 1,252 |                  |      |  | 1,247 |  |  |  | 2,479 |  |  |  | 2,624 | 
|Basic earnings per common share:   |             |      |                    |       |                  |      |  |       |  |  |  |       |  |  |  |      
|                                   | As Reported |      | $                  | 1.20  |                  |      |  | 1.21  |  |  |  | 2.38  |  |  |  | 2.53  | 
|                                   | Proforma    |      | $                  | 1.22  |                  |      |  | 1.21  |  |  |  | 2.38  |  |  |  | 2.52  | 
|Diluted earnings per common share: |             |      |                    |       |                  |      |  |       |  |  |  |       |  |  |  |      
|                                   | As Reported |      | $                  | 1.18  |                  |      |  | 1.19  |  |  |  | 2.35  |  |  |  | 2.50  | 
|                                   | Proforma    |      | $                  | 1.19  |                  |      |  | 1.18  |  |  |  | 2.35  |  |  |  | 2.49  | 

Accordingly, due to the initial phase-in period, the effects of applying
this statement for proforma disclosures are not likely to be representative of
the effects on reported net earnings for future years.

Results of Operations

Net earnings were $2,485,000 for the six months ended June 30, 2003 as
compared to $2,631,000 for the same period in 2002. Net earnings were
$1,255,000 for the quarter ended June 30, 2003 as compared to $1,251,000 during
the same quarter in 2002.

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.

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 Companys interest income, excluding tax equivalent adjustments,
decreased by $829,000 or 9.4% during the six months ended June 30, 2003 as
compared to a decrease of $973,000 or 10.0% during the six months ended June
30, 2002 as compared to the same period in 2001. Interest income for the
quarter ended June 30, 2003 decreased $382,000 or 8.8% over the quarter ended
June 30, 2002, and decreased $33,000 or .8% from the first quarter of 2003.
The decreases in 2003 and 2002 were primarily attributable to significant
decreases in interest rates. The ratio of average earning assets to total
average assets was 95.1% for the six months ended June 30, 2003 and 95.6% for
the same period in 2002.

Interest expense decreased by $729,000 for the six months ended June 30,
2003 or 22.4% compared to the same period in 2002. Interest expense for the
quarter ended June 30, 2003 decreased $344,000 or 21.7% as compared to the
quarter ended June 30, 2002. Interest expense for the quarter ended June 30,
2003 decreased $50,000 or 3.9% compared to the first quarter of 2003. The
decrease in interest expense for the six months ended June 30, 2003 as compared
to the same period in 2002 can be attributable to the significant decrease in
interest rates as noted above.

The foregoing resulted in net interest income of $5,445,000 for the six
months ended June 30, 2003, a decrease of $100,000 or 1.8% compared to the
prior year period. Net interest income for the quarter ended June 30, 2003
decreased $38,000 or 1.4% over the second quarter of 2002 while there was an
increase of $17,000 or .6% over the first quarter in 2003.

The following schedule details the loans of the Company at June 30, 2003
and December 31, 2002:

|                                       |  |                |         |              |  |  |         | 
|-------------------------------------- |  | -------------- | ------- | ------------ |  |  | ------- | 
|                                       |  | June 30,       |         | December 31,
|                                       |  | 2003           |         | 2002        
|                                       |  |                |         |             
|                                       |  | (In Thousands)
|Commercial, financial and agricultural |  | $              | 47,211  |              |  |  | 44,451  | 
|Real estate  construction             |  |                | 5,673   |              |  |  | 5,674   | 
|Real
estate  mortgage                 |  |                | 91,706  |              |  |  | 96,960  | 
|Consumer                               |  |                | 3,014   |              |  |  | 2,496   | 
|                                       |  |                |         |              |  |  |         | 
|                                       |  | $              | 147,604 |              |  |  | 149,581 | 
|                                       |  |                |         |              |  |  |         | 

The provision for loan losses was $59,000 and $89,000 for the first six
months of 2003 and 2002, respectively. The provision for loan losses is based
on past loan experience and other factors which, in managements subjective
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. This is not an exact science.
Management has in place a system that is designed to identify and monitor
problems on a timely basis, of course no system is either infallible or
perfect.

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

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 $59,573,000 and $3,014,000, respectively at June 30,
2003, 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 evaluated under the provisions of SFAS
Nos. 114 and 118 which are 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 any required payment of 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 managements
subjective evaluation of the borrowers financial condition, collateral,
liquidation value, and other factors that, in the judgment of management,
affect the borrowers ability to pay.

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. There
were no loans on nonaccrual status at June 30, 2003 and 2002 nor at anytime
during the six month periods then ended.

15



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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

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 June 30, 2003, 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 June 30,
2003 and December 31, 2002 were as follows:

|                          |  |               |     |                   |  |   |       | 
|------------------------- |  | ------------- | --- | ----------------- |  | - | ----- | 
|                          |  | June 30, 2003 |     | December 31, 2002
|                          |  |               |     |                  
|                          |  | Recorded      |     | Recorded         
|(In Thousands)            |  | Investment    |     | Investment       
|                          |  |               |     |                  
|Recorded investment       |  | $             | 350 |                   |  | $ | 1,740 | 
|Allowance for loan losses |  | $             |    |                   |  | $ | 533   | 

On June 20, 2003, the Company received a payment of approximately
$1,250,000 from a customer whose loan totaled approximately $1,600,000. This
loan was impaired and had an allowance for loan loss of $500,000. The
remaining balance of $350,000 continues to be impaired. However, management
has determined that adequate collateral secures the loan and no loss on this
loan is anticipated. Other loans that were classified as impaired at December
31, 2002 have had deficiencies corrected and are no longer accounted for as
impaired.

The allowance for loan loss related to impaired loans was measured based
upon the estimated fair value of related collateral.

The average recorded investment in impaired loans for the six months ended
June 30, 2003 and 2002 was $1,525,000 and $1,955,000, respectively. The

related amount of interest income recognized on the accrual method for the
period that such loans were impaired was approximately $64,000 and $82,000 for
2003 and 2002, respectively.

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 schedule details selected information as to non-performing
loans of the Company at June 30, 2003 and December 31, 2002:

|                           |  |               |     |                   |  |         |   |             |  |  |    |  |  |  |   | 
|-------------------------- |  | ------------- | --- | ----------------- |  | ------- | - | ----------- |  |  | -- |  |  |  | - | 
|                           |  | June 30, 2003 |     | December 31, 2002
|                           |  |               |     |                  
|                           |  | Past Due      |     |                   |  |         |   | Past Due    |  |  |    | 
|                           |  | 90 Days       |     | Non-Accrual       |  | 90 Days |   | Non-Accrual
|                           |  |               |     |                   |  |         |   |            
|                           |  | In Thousands  |     | In Thousands     
|                           |  |               |     |                  
|Real estate - mortgage     |  | $             | 343 |                   |  |         |  |             |  |  | 57 |  |  |  |  | 
|Real estate - construction |  |               |    |                   |  |         |  |             |  |  |   |  |  |  |  | 
|Installment loans          |  |               |    |                   |  |         |  |             |  |  | 12 |  |  |  |  | 
|Commercial                 |  |               | 49  |                   |  |         |  |             |  |  |   |  |  |  |  | 
|                           |  |               |     |                   |  |         |   |             |  |  |    |  |  |  |   | 
|                           |  | $             | 392 |                   |  |         |  |             |  |  | 69 |  |  |  |  | 
|                           |  |               |     |                   |  |         |   |             |  |  |    |  |  |  |   | 
|Renegotiated loans         |  | $             | 695 |                   |  |         |  |             |  |  |   |  |  |  |  | 
|                           |  |               |     |                   |  |         |   |             |  |  |    |  |  |  |   | 

Transactions in the allowance for loan losses were as follows:

|                                                |                                  |   |                  |     |      |  |       |     |  
|----------------------------------------------- | -------------------------------- | - | ---------------- | --- | ---- |  | ----- | --- | -
|                                                |                                  |   | Six Months Ended
|                                                |                                  |   | June 30,        
|                                                |                                  |   |                 
|                                                |                                  |   | 2003             |     | 2002
|                                                |                                  |   |                  |     |     
|                                                |                                  |   | (In Thousands)  
|Balance, January 1, 2003 and 2002, respectively |                                  | $ | 1,908            |     |      |  | 1,804 |    
|Add (deduct):                                   |                                  |   |                  |     |      |  |       |    
|                                                | Losses charged to allowance      |   |                  | (27 | )    |  |       | (34 | )
|                                                | Recoveries credited to allowance |   |                  | 12  |      |  |       | 27  |  
|                                                | Provision for loan losses        |   |                  | 59  |      |  |       | 89  |  
|                                                |                                  |   |                  |     |      |  |       |    
|Balance, June 30, 2003 and 2002, respectively   |                                  | $ | 1,952            |     |      |  | 1,886 |    
|                                                |                                  |   |                  |     |      |  |       |    

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.

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 following table presents total internally graded loans as of June 30,
2003 and December 31, 2002:

|                                       |  |                |       |         |  |             |       |          |  |  |       |  |  |  |    | 
|-------------------------------------- |  | -------------- | ----- | ------- |  | ----------- | ----- | -------- |  |  | ----- |  |  |  | -- | 
|                                       |  | June 30, 2003 
|                                       |  |               
|                                       |  | (In Thousands) |       | Special |  |             |       |          |  |  |       | 
|                                       |  | Total          |       | Mention |  | Substandard |       | Doubtful
|                                       |  |                |       |         |  |             |       |         
|Commercial, financial and
agricultural |  | $              | 6,842 |         |  |             | 3,049 |          |  |  | 3,793 |  |  |  |   | 
|Real estate mortgage                   |  |                | 2,877 |         |  |             |      |          |  |  | 2,839 |  |  |  | 38 | 
|Real estate construction               |  |                |      |         |  |             |      |          |  |  |      |  |  |  |   | 
|Consumer                               |  |                | 194   |         |  |             |      |          |  |  | 194   |  |  |  |   | 
|                                       |  |                |       |         |  |             |       |          |  |  |       |  |  |  |    | 
|                                       |  | $              | 9,913 |         |  |             | 3,049 |          |  |  | 6,826 |  |  |  | 38 | 
|                                       |  |                |       |         |  |             |       |          |  |  |       |  |  |  |    | 

|                                       |  |                   |        |         |  |             |       |          |  |  |       |  |  |  |    | 
|-------------------------------------- |  | ----------------- | ------ | ------- |  | ----------- | ----- | -------- |  |  | ----- |  |  |  | -- | 
|                                       |  | December 31, 2002
|                                       |  |                  
|                                       |  | (In Thousands)    |        | Special |  |             |       |          |  |  |       | 
|                                       |  | Total             |        | Mention |  | Substandard |       | Doubtful
|                                       |  |                   |        |         |  |             |       |         
|Commercial, financial and
agricultural |  | $                 | 7,930  |         |  |             | 6,141 |          |  |  | 1,756 |  |  |  | 33 | 
|Real estate mortgage                   |  |                   | 2,063  |         |  |             | 481   |          |  |  | 1,582 |  |  |  |   | 
|Real estate construction               |  |                   |       |         |  |             |      |          |  |  |      |  |  |  |   | 
|Consumer                               |  |                   | 150    |         |  |             | 8     |          |  |  | 142   |  |  |  |   | 
|                                       |  |                   |        |         |  |             |       |          |  |  |       |  |  |  |    | 
|                                       |  | $                 | 10,143 |         |  |             | 6,630 |          |  |  | 3,480 |  |  |  | 33 | 
|                                       |  |                   |        |         |  |             |       |          |  |  |       |  |  |  |    | 

As noted in the discussion regarding impaired loans, the decrease in the
internally graded loans is concentrated in a single customer whose credit was
paid down significantly during the quarter ended June 30, 2003. The remaining
portion of this customers debt is included in the internally graded loans.
Management believes there is adequate collateral on the remaining debt owed by
this customer.

The collateral values, based on estimates received by management, securing
the above internally graded loans total approximately $19,811,000, ($3,260,000
related to real property and $16,551,000 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.

There were no material amounts of other interest-bearing assets
(interest-bearing deposits with other banks, municipal bonds, etc.) at June 30,
2003 which would be required to be disclosed as past due, non-accrual,
restructured or potential problem loans, if such interest-bearing assets were
loans.

18



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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

Residential real estate loans that are graded substandard totaling
$2,839,000 and $1,582,000 at June 30, 2003 and December 31, 2002, respectively,
consist of forty-three and thirty-four 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, either individually or in the aggregate.

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

|                                       |  |               |       |                   |  |            |     |                |  |   |       |            |  |  |     |  
|-------------------------------------- |  | ------------- | ----- | ----------------- |  | ---------- | --- | -------------- |  | - | ----- | ---------- |  |  | --- | -
|                                       |  | June 30, 2003 |       | December 31, 2002
|                                       |  |               |       |                  
|                                       |  |               |       |                   |  | 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 |  | $             | 1,352 |                   |  |            | 32  | %              |  | $ | 1,426 |            |  |  | 30  | %
|Real estate construction               |  |               | 14    |                   |  |            | 4   |                |  |   | 14    |            |  |  | 4   |  
|Real estate mortgage                   |  |               | 525   |                   |  |            | 62  |                |  |   | 419   |            |  |  | 65  |  
|Consumer                               |  |               | 61    |                   |  |            | 2   |                |  |   | 49    |            |  |  | 1   |  
|                                       |  |               |       |                   |  |            |     |                |  |   |       |            |  |  |     |  
|                                       |  | $             | 1,952 |                   |  |            | 100 | %              |  | $ | 1,908 |            |  |  | 100 | %
|                                       |  |               |       |                   |  |            |     |                |  |   |       |            |  |  |     |  

Non-interest income was $464,000 for the six months ended June 30, 2003 as
compared to $466,000 in 2002. Non-interest income decreased $5,000 or 2.1% for
the quarter ended June 30, 2003 as compared to the comparable quarter in 2002.
Non-interest income for the six months ended June 30, 2002 included a gain on
sale of fixed assets of $30,000 which related to the sale of proof machines
which the subsidiary bank had replaced. There were decreases in credit life
insurance premiums ($9,000), appraisal fees ($10,000), document preparation
fees ($9,000) and title research fees ($10,000). Commissions and service
charges are monitored continually to insure maximum return based on costs and
competition.

Securities gains were $4,000 and $3,000 during the six month period ended
June 30, 2003 and 2002, respectively. The gains in 2003 relate to calls and
available-for-sale securities. The securities gains in 2002 resulted from
sales of available-for-sale securities.

Non-interest expense increased $42,000 or 1.9% during the first six months
of 2003 as compared to the same period in 2002. Salaries and employee benefits
increased $88,000 or 6.4%, while data processing expense decreased $37,000 or
27.6%. Data processing expenses in 2002 increased primarily due to increased
software maintenance.

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

19



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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 is a summary of components comprising basic and diluted
earnings per share (EPS) for the three and six months ended June 30, 2003 and
2002:

|                                     |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |           | 
|------------------------------------ | ------------------------------------------------------------------ | ---------------------------------------------------- | --------- | ------------------ | --------- | ---------------- | --------- | --------- | --------- |  | --------- | --------- | --------- |  | --------- | --------- | --------- | 
|                                     |                                                                    |                                                      |           | Three Months Ended |           | Six Months Ended
|                                     |                                                                    |                                                      |           | June 30,           |           | June 30,        
|                                     |                                                                    |                                                      |           |                    |           |                 
|(In Thousands, except share amounts) |                                                                    | 2003                                                 |           | 2002               |           | 2003             |           | 2002     
|                                     |                                                                    |                                                      |           |                    |           |                  |           |          
|Basic EPS Computation:               |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |          
|                                     | Numerator - income available to common
shareholders                |                                                      | $         | 1,255              |           |                  |           | 1,251     |           |  |           | 2,485     |           |  |           | 2,631     |          
|                                     |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |          
|                                     | Denominator - weighted average number
of common shares outstanding |                                                      |           | 1,043,484          |           |                  |           | 1,038,954 |           |  |           | 1,042,598 |           |  |           | 1,040,374 |          
|                                     |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |          
|                                     | Basic earnings per common share                                    |                                                      | $         | 1.20               |           |                  |           | 1.21      |           |  |           | 2.38      |           |  |           | 2.53      |          
|                                     |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |          
|Diluted EPS Computation:             |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |          
|                                     | Numerator                                                          |                                                      | $         | 1,255              |           |                  |           | 1,251     |           |  |           | 2,485     |           |  |           | 2,631     |          
|                                     |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |          
|                                     | Denominator:                                                       |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |          
|                                     |                                                                    | Weighted average number of common
shares outstanding |           |                    | 1,043,484 |                  |           |           | 1,038,954 |  |           |           | 1,042,598 |  |           |           | 1,040,374 | 
|                                     |                                                                    | Dilutive effect of stock options                     |           |                    | 13,295    |                  |           |           | 11,868    |  |           |           | 13,295    |  |           |           | 11,868    | 
|                                     |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |          
|                                     |                                                                    |                                                      | 1,056,779 |                    |           |                  | 1,050,822 |           |           |  | 1,055,893 |           |           |  | 1,052,242 |          
|                                     |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |          
|                                     | Diluted earnings per common share                                  |                                                      | $         | 1.18               |           |                  |           | 1.19      |           |  |           | 2.35      |           |  |           | 2.50      |          
|                                     |                                                                    |                                                      |           |                    |           |                  |           |           |           |  |           |           |           |  |           |           |          

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 had a significant effect on net earnings in recent years. If the
inflation rate stays flat or increases slightly, the effect on profits is not
expected to be significant.

20



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##### Table of Contents



FIRST MCMINNVILLE CORPORATION

FORM 10-Q, CONTINUED




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 affect 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 as discussed in Item 2. Based upon the nature of the Companys
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. These meetings focus
on the spread between the cost of funds and interest yields generated primarily
through loans and investments.

Managing interest rate risk is a very subjective exercise based on a wide
variety of factors. This activity is based significantly on managements
subjective beliefs about future events (such as actions of the Federal Reserve
Board and the conduct of competitors) and is never guaranteed.

There have been no material changes in reported market risks during the
six months ended June 30, 2003. Please refer to Item 2 of Part 1 of this
Report for additional information related to market and other risks.




Item 4. Controls and Procedures

Within 90 days prior to the date of filing of this report, we carried out
an evaluation, under the supervision and with the participation of our Chief
Executive Officer and the Chief Financial Officer, of the design and operation
of our disclosure controls and procedures. Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective for gathering, analyzing and disclosing
the information that we are required to disclose in the reports we file under
the Securities Exchange Act of 1934, within the time periods specified in the
SECs rules and forms. Our Chief Executive Officer and Chief Financial Officer
also concluded that our disclosure controls and procedures are effective in
timely alerting them to material information relating to our Company required
to be included in our periodic SEC filings. In connection with the new rules,
we are in the process of further reviewing and documenting our disclosure
controls and procedures, including our internal controls and procedures for
financial reporting, and may from time to time make changes designed to enhance
their effectiveness and to ensure that our systems evolve with our business.

There have been no significant changes in our internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of this evaluation.

21



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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 issued to Directors and/or
Employees pursuant to the Companys Stock Option Plan as follows:
| |  | --------------------------------------------------------------------------------------------------------------------------------------

|              |  |                                       |   |                 |  |   |       | 
|------------- |  | ------------------------------------- | - | --------------- |  | - | ----- | 
|Date of Sale  |  | Number of Shares of Common Stock Sold |   | Price Per Share
|              |  |                                       |   |                
|April 8, 2003 |  |                                       | 2 |                 |  | $ | 29.08 | 



| |  | The aggregate proceeds of the shares sold were $58.16.                                                                                                                                                                                             
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | There were no underwriters and no underwriting discounts or commissions.
All sales were 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.




Item 3. DEFAULTS UPON SENIOR SECURITIES



| |  | None
| |  | ----




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



|(a) |  | The annual meeting of stockholders was held April 8, 2003.  
|--- |  | ------------------------------------------------------------
|   
|(b) |  | Election of the following members of the board of directors:



| |                                                        
| | -------------------------------------------------------
| | Dean I. Gillespie, C. Levoy Knowles and John W. Perdue.



|(c) |  | (1) Each of the above directors were elected by the following tabulation:
|--- |  | -------------------------------------------------------------------------

|                  |  |           |         |     |  |         |         |          |  |           |   |  |  |  |       |        |  |  |   | 
|----------------- |  | --------- | ------- | --- |  | ------- | ------- | -------- |  | --------- | - |  |  |  | ----- | ------ |  |  | - | 
|                  |  | Number    |         |     |  |         |         |          |  |           |   |  |  |  |       |        |  | 
|                  |  | of Shares |         |     |  |         |         |          |  |           |   |  |  |  |       | Broker
|                  |  | Voting    |         | For |  | Against |         | Withheld |  | Non-Votes
|                  |  |           |         |     |  |         |         |          |  |          
|Dean I. Gillespie |  |           | 513,375 |     |  |         | 509,791 |          |  |           |  |  |  |  | 3,584 |        |  |  |  | 
|C. Levoy Knowles  |  |           | 513,375 |     |  |         | 503,495 |          |  |           |  |  |  |  | 9,880 |        |  |  |  | 
|John W. Perdue    |  |           | 513,375 |     |  |         | 509,791 |          |  |           |  |  |  |  | 3,584 |        |  |  |  | 

22



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##### Table of Contents



PART II. OTHER INFORMATION, CONTINUED

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS, Continued



|(c) |  | (1) Continued                                                                   
|--- |  | --------------------------------------------------------------------------------
|   
|    |  | The terms of office of the following directors were continued after the meeting:



| |  |                                                                                                                                                               
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | J. Gregory Brock, Arthur J. Dyer, Rufus W. Gonder, G.B. Greene,
Charles C. Jacobs, Robert W. Jones, J. Douglas Milner, John J. Savage,
Jr. and Carl M. Stanley



| |     |                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | The ratification of the selection of Maggart & Associates,
P.C. as independent auditors for the Company for the year ending
December 31, 2003 was as follows:

|              |  |     |         |         |  |          |   |           |  |  |     |  |  |        |   | 
|------------- |  | --- | ------- | ------- |  | -------- | - | --------- |  |  | --- |  |  | ------ | - | 
|Number of     |  |     |         |         |  |          |   |           |  |  |     |  |  | Broker
|Shares Voting |  | For |         | Against |  | Withheld |   | Non-Votes
|              |  |     |         |         |  |          |   |          
|513,375       |  |     | 512,615 |         |  |          |  |           |  |  | 760 |  |  |        | 0 | 



|(d) |  | Not Applicable.
|--- |  | ---------------




Item 5. OTHER INFORMATION



| |  | None
| |  | ----




Item 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibit 31 consists of certifications required by Section 302 of the
Sarbanes-Oxley Act of 2002.
|--- |  | ------------------------------------------------------------------------------------------------
|   
|(b) |  | Exhibit 32 consists of certifications required by Section 906 of the
Sarbanes-Oxley Act of 2002.
|   
|(c) |  | No reports on Form 8-K were 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: August 12, 2003 |  | /s/ Charles C. Jacobs

Charles C. Jacobs
Chairman and Chief Executive Officer
|                      |  |                                                                              
|DATE: August 12, 2003 |  | /s/ Kenny D. Neal

Kenny D. Neal
Chief Financial and Accounting Officer      

24