UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB

              [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2000
                                       OR
            [ ] 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: 33-58832

                         FIRST CENTRAL BANCSHARES, INC.
        (Exact name of small business issue as specified in its charter)

                                    Tennessee
         (State or other jurisdiction of incorporation or organization)

                  725 Highway 321 North, Lenoir City, Tennessee
                     (Address of principal executive office)

                                   62-1482501
                      (I.R.S. Employer Identification No.)

                                   37771-0230
                                   (Zip Code)

Registrant's telephone number, including area code:  (865) 986-1300

Securities registered pursuant to Section 12(b) of the Act:  None

Securities  registered  pursuant to Section 12(g) of the Act:  Common Stock (par
     value $5.00 per share)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [ ] No

Check if there is no disclosure of delinquent filers in response to items 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB [ ]

The issuer's revenues for its most recent fiscal year were $10,880,068.

At March 21,  2001,  the  aggregate  market  value of the  voting  stock held by
non-affiliates of the Company was approximately  $12,067,356.  The last recorded
trade of shares between  individuals was on March 19, 2001 at a price of $28 per
share.

As of March 21,  2001,  issuer had 564,361  shares of its $5.00 par value common
stock outstanding.


<PAGE>


                                     PART I

Item 1. Description of Business

(a)      Business Development

First Central Bancshares, Inc. (the "Company") is a one bank holding company for
First Central Bank (the "Bank").  The formation was approved by the stockholders
of the Bank on March 18,  1993.  On April 6, 1993 the Bank became a wholly owned
subsidiary  of the Company  with the  exchange of one share of Bank common stock
for one share of common stock of the Company.  The Company currently has 564,361
shares of its $5.00 par value common stock outstanding.

(b)      Business of Issuer

The Bank operates out of the main office located in Lenoir City,  Loudon County,
Tennessee and six branch offices, one located in Loudon, one in Tellico Village,
Loudon County,  Tennessee, one located in Farragut, Knox County,  Tennessee, one
located in Kingston,  Roane County,  Tennessee, and two located in Alcoa, Blount
County,  Tennessee.  All  offices  are full  service  branches  serving  an area
approximately 50 miles in radius which encompasses parts of Knox County,  Blount
County,  Monroe County,  Roane County,  and Anderson County. All offices provide
typical  commercial  bank  products  such  as  checking  and  savings  accounts,
certificates of deposit and individual retirement accounts, and a complete range
of  loans  including  commercial,   personal,  real  estate,  home  improvement,
automobile and other installment  loans,  student education loans and single pay
loans.  Each office also offers Visa and  MasterCard,  ATM cards,  safe  deposit
boxes, travelers checks, money orders,  cashiers checks,  collection items, wire
transfers and other  customary bank services.  All offices have drive-up  window
facilities  and ATM machines.  The ATM cards may be used at all Honor and Cirrus
network machines.

The last office  opened was in Alcoa,  Blount  County,  which opened  August 28,
2000. The competition includes four other commercial banks in Loudon County with
only one of them being locally  headquartered.  The adjoining  counties  include
twelve commercial banks and seven savings banks/savings and loan associations. A
new  commercial  bank opened in Anderson  County in 1995 and is the  smallest in
terms of asset  size.  First  Central is the second  smallest  in asset size and
remains the fastest growing institution in Loudon County and the above-described
market area. The branch in Monroe County,  Tennessee was sold in June,  2000. An
agreement was signed  effective  October 31, 1999 to sell this branch to another
bank holding company group.

The Company is subject to regulation  by the Federal  Reserve Bank (FRB) and the
Securities and Exchange  Commission  (SEC). The Bank is subject to regulation by
the Department of Financial  Institutions  of the State of Tennessee  (TDFI) and
Federal Deposit Insurance  Corporation  (FDIC).  As a Bank Holding Company,  the
Company  is subject  to  regulation  by the Board of  Governors  of the  Federal
Reserve System (Federal  Reserve  Board).  The Bank Holding Company Act requires
the prior approval of the Federal Reserve Board in any case where a bank holding
company proposes to acquire direct or indirect ownership or control of more than
5% of the voting  shares of any bank  (unless it owns a majority  of such bank's
voting shares) or to merge or consolidate  with any other bank holding  company.
The  Federal  Reserve  Board  may  not  approve  such  acquisition,   merger  or
consolidation  that would have  anticompetitive  effects or that would  permit a
bank  holding  company  to  acquire  a bank  outside  of the  holding  company's
principal state of operations  unless the statutes of the second state expressly
permit the acquisition.

The Bank Holding Company Act also prohibits a bank holding company, with certain
exceptions, from acquiring or retaining more than 5% of the voting shares of any
company that is not a bank and from engaging in any business  other than banking
or managing or controlling banks and other  subsidiaries  authorized by the Bank
Holding Company Act or providing  services to them. The Federal Reserve Board is
authorized to approve the  ownership of shares by a bank holding  company of any
company whose activities have been determined by the Federal Reserve Board to be
so closely  related to banking or to  managing or  controlling  banks as to be a
proper incident thereto.

The Federal Reserve Board may issue cease and desist orders against bank holding
companies  and  non-bank  subsidiaries  to stop  actions  believed  to present a
serious threat to a subsidiary bank. It also regulates changes in the control of
bank holding  companies and the ability to proscribe the payment of dividends by
banks and bank holding  companies.  The Federal  Reserve Board has expressed its
view that a bank holding company  experiencing  earnings weakness should not pay
cash  dividends  exceeding  its net income or which could only be funded in ways
that weaken the bank holding company's financial health, such as by borrowing.

The Financial  Institutions  Reform,  Recovery,  and Enforcement Act ("FIRREA"),
signed into law in 1989,  amended  provisions of the Bank Holding Company Act to
specifically  authorize a bank  holding  company,  upon  receipt of  appropriate
approvals  from the  Federal  Reserve  Board and the  Director  of the Office of
Thrift  Supervision  ("OTS"),  to acquire control of any savings  association or
holding company thereof wherever located. A savings and loan holding company may
not  acquire  control of a bank.  Pursuant  to rules  promulgated  by FIRREA,  a
savings  association  acquired by a bank holding  company (i) may, so long as it
continues to meet the qualified  thrift  lender test,  continue to branch to the
same extent as permitted to their nonaffiliated  savings associations  similarly
chartered in the state, and (ii) may not continue any nonbanking  activities not
authorized for bank holding companies.  Savings associations  acquired by a bank
holding  company may, if located in a state where the holding company is legally
authorized  to acquire a bank, be  converted,  to the extent  permitted by state
law,  to the status of a bank but deposit  insurance  assessments  and  payments
continue to be paid by the association to the Savings Association Insurance Fund
of the FDIC. A savings association so converted to a bank becomes subject to the
branching  restrictions  applicable  to banks.  Under certain  circumstances,  a
savings  association  acquired by a bank  holding  company may be merged with an
existing bank subsidiary of a holding company.

The Company is also a bank holding company under the Bank Structure Act of 1974.
A bank holding  company whose principal place of business is within the State of
Tennessee  is  allowed  to  enter  any and all  counties  in the  State  through
acquisitions of existing banks.  However, a bank holding company may not acquire
any of the shares of a bank in Tennessee  unless such bank has been in operation
for at least five (5) years,  except in certain  circumstances.  A bank  holding
company is  prohibited  from  acquiring  any bank in  Tennessee as long as banks
which the holding company  controls retain sixteen and one-half  (16.5)% percent
or more of the total  individual,  partnership  or corporate  demand and savings
deposits in all banks in Tennessee as reported  annually by the FDIC.  Tennessee
law provides that any out-of-state  holding company may acquire a Tennessee bank
holding company or a Tennessee Bank with the approval of the Commissioner of the
Department   of  Financial   Institutions   of  the  State  of  Tennessee   (the
"Commissioner")  if the laws of the state in which the out-of-state bank holding
company has its principal  office permit such bank holding company to acquire or
be acquired by Tennessee  bank holding  companies.  The Tennessee  banks or bank
holding  companies to be acquired must have been in existence for more than five
years.

The  Riegle-Neal  Interstate  Banking and Branching  Efficiency  Act of 1994(the
"IBBEA") authorizes interstate  acquisitions of banks and bank holding companies
without geographic  limitation beginning one year after enactment.  In addition,
since  June 1, 1997,  a bank may merge  with a bank in another  state as long as
neither of the states has opted out of interstate  branching between the date of
enactment of the IBBEA and May 31, 1997. Tennessee did not opt out of interstate
branching.  The IBBEA  further  provides  that states may enact laws  permitting
interstate merger  transactions  prior to June 1, 1997.  Tennessee did not enact
such a law.  A bank may  establish  and  operate a de novo  branch in a state in
which the bank does not  maintain a branch if that state  explicitly  permits de
novo  branching.  Once a bank has  established  branches  in a state  through an
interstate  merger  transaction,  the bank may establish and acquire  additional
branches at any location in the state where any bank involved in the  interstate
merger  transaction could have established or acquired branches under applicable
federal or state law. A bank that has established a branch in a state through de
novo  branching may establish and acquire  additional  branches in such state in
the same  manner and to the same  extent as a bank having a branch in such state
as a result of an interstate merger. If a state opts out of interstate branching
within the  specified  time period,  no bank in any other state may  establish a
branch in the opting out of state, whether through an acquisition or de novo.

Compliance  with  environmental  laws has not  directly  impacted the Company or
Bank.  However,  compliance  has impacted  the lending  functions of the Bank to
commercial  business  customers.  All commercial  loans require an environmental
assessment at varying levels of expertise.

As of December  31,  2000,  the Bank  employed 56 salaried  persons and 7 hourly
persons.

(b)(1) Distribution of Assets,  Liabilities and Stockholders'  Equity;  Interest
     Rates and Interest Differential

See  Schedule I (Attached)

(b)(2) Investment and Loan Portfolio  Maturities and Sensitivities to Changes in
     Interest Rates

See Schedule III (Attached)

(b)(3) Risk Elements

See  Item 6 -  Management's  Discussion  and Analysis or Plan of  Operation  and
     Schedule V - Nonperforming Assets.

(b)(4) Summary of Loan Loss Experience

See  Schedule VI - Analysis of Loan Loss  Reserve and  Schedule VII - Allocation
     of the Loan Loss Reserve (Attached).

(b)(5) Deposits

See  Item 7 - Financial Statements and Schedule I (Attached)

(b)(6)   Return on Equity and Assets

See  Item 6 -  Management's  Discussion  and Analysis or Plan of  Operation  and
     Schedule VIII - Return on Assets and Equity.

(b)(7)   Short-Term Borrowings

None.

Item 2. Description of Property.

(a) Location of Property

As detailed in Item 1, the Bank operates offices in Lenoir City, Loudon, Tellico
Village, Loudon County, Tennessee;  Farragut, Knox County, Tennessee;  Kingston,
Roane County, Tennessee; and Alcoa, Blount County, Tennessee. The main office in
Lenoir City is a modern facility containing approximately 10,000 square feet and
was occupied upon  completion  of  construction  in January of 1993.  The Loudon
office is a modern  facility  which was remodeled and expanded  during 1996. The
extensive  remodeling  in the first half of 1996  better  supports  the level of
business  maintained at that  location.  The Tellico  Village office is a modern
facility  containing  approximately  3,000  square  feet of space  and is a full
service  office with a drive-up  ATM. The Farragut  office,  which opened in May
1995, is a modern full service facility of approximately  6,000 square feet. The
Kingston office,  which opened  December,  1997, is similar to the Loudon branch
with approximately  2,500 square feet. The first Alcoa office,  which was opened
in December,  1998, is located in a temporary facility.  The second Alcoa office
was opened in August,  2000 and  contains  approximately  4,000  square  feet of
space.

(b) Investment Policies

     (1)  The Bank and  Company  do not  invest in real  estate  other  than for
          property from which to conduct its operations.

     (2)  The Bank makes mortgage loans for single family dwellings,  commercial
          properties,   unimproved  land,  and  developmental  property.   These
          mortgage  loans may be first or second  mortgages and are serviced and
          held by the  Bank.  The  Bank  may  also  from  time to time  purchase
          government  agency  bonds  secured  by  mortgages  and  backed  and/or
          guaranteed by  governmental  agencies.  These agency bonds may include
          Federal  National  Mortgage  Association,  Federal Home Loan  Mortgage
          Corporation and Government National Mortgage Association.

          (3)  No  investment  is made in  securities  of or interest in persons
               engaged in real estate activities.

(c)  Description of Real Estate and Operating Data

          (1)  The  Company  has  its  principal  offices  in  its  headquarters
               building at 725 Highway 321 North, Lenoir City,  Tennessee 37771,
               which is owned by the Bank. The Bank also owns  properties  which
               house  the  branches  at  Loudon  and  Tellico  Village,  Loudon,
               Tennessee,  Farragut,  Tennessee,  Kingston, Tennessee and Alcoa,
               Tennessee.  None of the properties amount to ten (10%) percent of
               total assets and none are encumbered.


Item 3. Legal Proceedings

The Company is not aware of any material pending legal  proceedings to which the
Company or the Bank is a party.


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

No matter was submitted to a vote of security  holders during the fourth quarter
of the Company's fiscal year ending December 31, 2000.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

(a)      Market Information

The stock of the Company is not publicly  traded on any exchange or market.  The
stock is traded between individual  stockholders only. The stock was issued in a
one for one share exchange with the Bank  stockholders  when the Bank was merged
with the Company on April 6, 1993. The price for the traded stock is set between
the individuals.  However,  Company  officials believe that the stock has traded
from a low of $25 per share to a high of $28 per share between  January 2000 and
the date of this  report,  as per  individuals  who have sold  and/or  purchased
stock.

(b)      Holders

The Company has 649 shareholders of common stock.

(c)      Dividends

In February  2000, the Company  distributed a ten (10%) percent  dividend to its
stockholders by issuing an additional 51,080 shares of common stock. The Company
used a fair market value of $26.00 per share and credited common stock $5.00 per
share or $255,400,  additional  paid in capital  $21.00 per share or $1,072,680,
and  charged  retained  earnings  a  total  of  $1,328,080.  No  dividends  were
distributed in 1999.




<PAGE>


Item 6. Management's Discussion and Analysis

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

First Central Bancshares,  Inc. is a one bank holding company which owns 100% of
the  outstanding  stock of First Central Bank.  The  investment in First Central
Bank represents virtually all of the assets of First Central Bancshares, Inc.

The  Company's  subsidiary,  First  Central  Bank formed a new  subsidiary,  FCB
Financial  Services,  Inc. in 2000.  This  subsidiary  is a  financial  services
company  authorized by the State of Tennessee to sell insurance and investments.
As of December 31, 2000, FCB Financial Services, Inc. had no activity.

The following  represents a narrative  analysis of the  financial  condition and
operational  results of the Company and its subsidiary Bank for 2000. For a more
complete  understanding  of this  narrative,  please  refer to the  Consolidated
Financial  Statements  and notes  thereto  presented  elsewhere  in this  Annual
Report.


FINANCIAL CONDITION

The accompanying  financial  statements are consolidated  statements of the Bank
and the Company as detailed  above.  In 2000,  total assets  increased 10.3% and
federal funds sold increased 135.1%. The increase in federal funds sold resulted
from large increases in deposits as customers were looking for more conservative
methods of investing due to a sluggish stock market.  This allowed our liquidity
ratio to reach 35.1% which was an increase of 3.1% over last year.

The Bank continues to have consistent loan growth with net loans increasing 6.9%
in 2000.  This increase  included a 27.7%  increase in commercial and industrial
loans,  and a  42.4%  increase  in  consumer  loans.  Increases  in  commercial,
industrial  and  consumer  loans  can  be  attributed  to  changing  our  market
concentrations  with a greater  focus by  management  to attract  these types of
loans.  Residential  real  estate  loans  remained  about the same  even  though
interest rates increased during the year.

Management  has  continued to evaluate  the loan loss reserve  through a monthly
analysis of loans  outstanding.  The  adequacy of the loan loss  reserve is also
evaluated  quarterly  by the Board of  Directors.  The  reserve  for loan losses
increased  19.5%.  Nonperforming  assets  decreased  approximately  $21,000 from
$123,000 in 1999 to $102,000 in 2000. This resulted in nonperforming loan ratios
of 0.13% at December 31, 2000, and 0.17% of net loans at December 31, 1999.

Nonperforming  loans  were 13.8% and 19.9% of loan loss  reserves  for the years
ending December 31, 2000 and 1999 respectively.  Total  nonperforming  assets to
total assets were 0.08% at December 31, 2000 and 0.11% at December 31, 1999.

The improvement in nonperforming asset ratios was due to management's  continued
efforts to make quality loans and monitor their progress.

Past due loans of 30 days or more but less than 90 days total 1.20% of total net
loans.  We continue to monitor loans very closely and anticipate  that past dues
and losses will be effectively managed to keep both low.

Net  investment  securities  increased  19.1%.  The  total  net  securities  are
accounted for under Financial  Accounting Standards (FAS) No. 115, (see notes to
consolidated  financial  statements).  Most securities are in U.S. Government or
U.S. Government Agency issues, municipal securities and stock in Banker's Bank.

Net  investment  in premises  and  equipment  decreased  6.7% in 2000.  This was
primarily due to the sale of our Sweetwater office,  and normal  depreciation on
premises and equipment  offset by the completion of our Hunters Crossing office.
Other assets decreased 64.2%.  This decrease was due to management  selling real
estate previously acquired through  foreclosure,  and a significant  decrease in
the  deferred  income tax benefit  related to  unrealized  losses on  investment
securities as the bond market took a large upturn in the last quarter of 2000.

Total deposits  increased  12.0% in 2000 as the Bank continued to concentrate on
increasing  loans.  Deposit  growth is not expected to increase as quickly since
2001 presents a falling interest rate environment and strong  liquidity.  Demand
deposits increased 2.2% and time deposits increased 20.1%.  Noninterest  bearing
demand deposits increased 11.7% while interest bearing demand deposits decreased
14.4%, as customers shifted to certificates of deposit to obtain higher interest
rates.  Term deposits  under $100,000  increased  17.8% while term deposits over
$100,000 increased 27.1%.  Other liabilities  increased 12.8% due to an increase
in accrued  profit  sharing of  approximately  $18,000 from  $116,000 in 1999 to
$134,000 in 2000.

As  mentioned  previously,  the  Company's  ability  to  mobilize  cash  to meet
operating needs (liquidity)  remains strong. The Bank is a member of the Federal
Home Loan Bank of Cincinnati  and is eligible to obtain both short and long-term
credit advances. Also, the Bank may enter into repurchase agreements or purchase
federal funds should the need for additional  liquidity arise. Cash and due from
accounts decreased 13.0% in 2000 as the Bank used cash to purchase  investments.
The net  unrealized  loss on  investments  at  December  31,  2000 was  $292,000
compared to an  unrealized  loss of $1.46  million as of December 31, 1999.  The
fair value of securities fluctuates with movement of interest rates.  Generally,
fair values improve in a  strengthening  bond market and decrease in a weakening
bond market.


RESULTS OF OPERATIONS

The Company as a whole had a 9.7% increase in net income for 2000. This increase
was the result of a number of factors  including a 7.5% increase in net interest
income and a 7.9% increase in noninterest  income.  The return on average assets
(ROAA)  was 1.10% for the year  versus  1.06% for 1999.  The  return on  average
equity (ROAE) was 12.8% in 2000, and 13.4% in 1999.

Interest  income  increased  12.0% in 2000.  Contributing  to the increase was a
13.4%  increase  in  interest  on  loans,  and a 21.0%  increase  in  investment
securities income, as a number of favorable investment options were available to
the Bank due to the rising interest rate environment in 2000.

Interest  expense   increased  16.9%  as  a  result  of  strong  growth  in  our
certificates of deposit. This was due to the attraction of new customers and the
shift of our current  customers to higher  earning  deposit  accounts.  Interest
expense on NOW and money market accounts increased 5.8%, and interest expense on
savings  accounts  increased  6.9%. The net result was a net interest  margin of
4.28% and 4.24% for 2000 and 1999, respectively.

Noninterest  income increased 7.9%, which includes a nonrecurring  $435,000 gain
on sale of the  Sweetwater  branch.  The Bank  recognized a $300,000 gain on the
sale of the  Sweetwater  branch  in  1999,  which  represented  a  nonrefundable
deposit. Service charge income on deposit accounts increased 11.3% due primarily
to the successful  implementation of our free checking and overdraft  protection
service.

Noninterest  expense  increased 3.7%.  Salaries and benefits and data processing
fees  account  for  the  largest  components  on  noninterest  expense  as  both
increased. Salaries and benefits increased 8.7% due to the addition of employees
for the Hunters Crossing office. Employees were also added throughout our system
to handle normal Bank growth. Data processing expense increased 13.8%, primarily
due to the  opening of the new  branch.  Other  noninterest  expenses as a whole
decreased  5.1%.  Noninterest  costs  should  level  off as no new  offices  are
expected to be opened in 2001.


CAPITAL ADEQUACY

The Company and Bank had  consolidated  total equity of $4.6 million on December
31, 1993. The company then issued stock dividends in 1994,  1996, 1998 and 2000,
the most recent of which was a dividend of 51,080 shares in February 2000. Other
previous  dividends  were as follows:  38,560  shares in 1994,  42,376 shares in
1996, and 46,526 shares in 1998.

Total capital was $11.5  million at December 31, 2000.  Total Tier 1 capital was
$10.7  million.  Total capital at December 31, 1999 was $10.2 million and Tier 1
capital was $9.5 million.

Risk based capital guidelines as defined by banking regulators required the Bank
to maintain minimum total capital ratios of 8% to risk-weighted  assets,  Tier I
capital of 4% and Tier I capital to average assets of 5%.

Tier I capital to risk-weighted  assets was 12.5% at December 31, 2000 and 11.6%
at December 31, 1999.  Tier I capital to average assets was 8.8% at December 31,
2000 and 8.5% at December 31, 1999.

The Bank exceeded all minimum capital ratio  requirements in the years discussed
and  management  believes  that the capital  position is adequate to support the
operations of the Company and subsidiary Bank.


YEAR 2000 RECAP

The Bank  successfully  completed  the century  date change with no  significant
problems and no interruption of operations.


REGULATORY MATTERS AND RECENT LEGISLATION

The Bank is state chartered and federally  insured,  and is subject to the rules
and regulations of the Tennessee Department of Financial Institutions (TDFI) and
the Federal Deposit Insurance  Corporation  (FDIC).  The holding company is also
subject to the rules and  regulations of the Federal  Reserve Bank (FRB) and the
Securities and Exchange Commission (SEC).

In June 1998, the Financial Accounting Standards Board (FASB),  issued Statement
of Financial  Accounting  Standards  (SFAS) No. 133,  Accounting  for Derivative
Instruments and Hedging Activities.  This statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments  embedded in other contracts,  and for hedging  activities.  In June
1999,  FAS No. 137 delayed the effective  date of this  pronouncement  to fiscal
quarters  beginning  after June 15, 2000. In June 2000, SFAS No. 138 was issued,
which addresses a limited number of issues causing  implementation  difficulties
for  numerous  entities  that apply  SFAS 133.  It amended  the  accounting  and
reporting  standards of SFAS 133 for certain derivative  instruments and certain
hedging  activities.  These  statements  will not have a material  effect on the
Company's financial statements.

In October,  1998, the FASB issued SFAS No. 134,  Accounting for Mortgage-Backed
Securities  after  Securitization  of  Mortgage  Loans Held for Sale by Mortgage
Banking  Enterprises.  SFAS No. 134 amends SFAS No. 65,  Accounting  for Certain
Mortgage

Banking  Activities  which  established  accounting and reporting  standards for
certain  activities of mortgage banking  enterprises and other  enterprises that
conduct operations that are substantially similar to the primary operations of a
mortgage  banking  enterprise.  The  Bank is not  currently  entering  into  any
transactions  related to the securitization of mortgage loans, nor does the Bank
anticipate  entering  into  any  transactions  of  this  nature  in the  future.
Therefore,  SFAS No. 134 does not have any effect on our financial  condition or
results of operations.

In September  2000,  the FASB issued SFAS No. 140,  Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities.  This Statement
replaces  SFAS No. 125,  Accounting  for  Transfers  and  Servicing of Financial
Assets  and  Extinguishment  of  Liabilities.   It  revises  the  standards  for
accounting  for  securitization  and other  transfers  of  financial  assets and
collateral and requires  certain  disclosures,  but it carries over most of SFAS
No. 125's provisions.  The statement provides accounting and reporting standards
for  transfers  and  servicing  of  financial  assets  and   extinguishment   of
liabilities  occurring  after March 31, 2001.  This  statement is effective  for
recognition  and  reclassification  of collateral and for disclosure  related to
securitization  transactions  and  collateral  for  fiscal  years  ending  after
December 15,  2000.  Since the Company  (including  the Bank) does not engage in
securitization  and other  transfers of financial  assets and  collateral,  this
statement  is not  expected  to affect  the  financial  condition  or results of
operations at the present time.

NOTE:  NUMERICAL  ENTRIES APPEARING IN THIS REPORT HAVE BEEN ROUNDED FOR EASE IN
READABILITY.  ACTUAL  BALANCES  APPEAR  IN THE  AUDITED  CONSOLIDATED  FINANCIAL
STATEMENTS, WHICH IS CONTAINED WITHIN THE FOLLOWING PAGES OF THIS DOCUMENT.


<PAGE>


Item 7. Consolidated Financial Statements and Financial Data Schedules














                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                             Lenoir City, Tennessee

                        CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2000, 1999 and 1998



<PAGE>



                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                                TABLE OF CONTENTS






                                                                            PAGE
INDEPENDENT AUDITOR'S REPORT

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





<PAGE>













                          INDEPENDENT AUDITOR'S REPORT



Board of Directors
First Central Bancshares, Inc.
Lenoir City, Tennessee


We have audited the  accompanying  consolidated  balance sheets of First Central
Bancshares,  Inc.  and  subsidiary  as of December  31,  2000 and 1999,  and the
related  consolidated  statements of income,  comprehensive  income,  changes in
shareholders'  equity,  and cash flows for the years ended  December  31,  2000,
1999, and 1998. These consolidated  financial  statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of First  Central
Bancshares, Inc. and subsidiary as of December 31, 2000 and 1999 and the results
of their  operations and their cash flows for the years ended December 31, 2000,
1999 and 1998, in conformity with generally accepted accounting principles.





                                                    Pugh & Company, P.C.
                                                    Certified Public Accountants
                                                    Knoxville, Tennessee
                                                    March 1, 2001



<PAGE>
<TABLE>
<CAPTION>


                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                                As of December 31,             2000                     1999
                                                                       ---------------------    ---------------------
                                                       ASSETS
<S>                                                                            <C>                      <C>
 Cash and Due From Banks                                                       $  5,409,424             $  6,221,108
 Federal Funds Sold                                                               5,360,000                2,280,000
                                                                       ---------------------    ---------------------
   Total Cash and Cash Equivalents                                               10,769,424                8,501,108

 Investment Securities, At Fair Value                                            33,613,495               28,229,212
 Loans, Net                                                                      76,069,878               71,151,700
 Premises and Equipment, Net                                                      4,768,958                5,109,301
 Accrued Interest Receivable                                                      1,038,141                  779,330
 Prepaid Expenses and Other                                                         131,735                  368,152
 Prepaid Income Taxes                                                                29,913                        0
 Deferred Income Tax Benefit                                                        158,401                  593,463
                                                                       ---------------------    ---------------------
TOTAL ASSETS                                                                    126,579,945              114,732,266
                                                                       =====================    =====================

                                               LIABILITIES AND EQUITY
LIABILITIES
 Deposits:
  Demand                                                                         47,682,623               46,644,780
  Term                                                                           67,376,817               56,092,665
                                                                       ---------------------    ---------------------
   Total Deposits                                                               115,059,440              102,737,445

 Accrued Interest Payable                                                           528,746                  391,187
 Securities Sold Under Agreement
  To Repurchase                                                                     257,759                2,671,453
 Accrued Income Taxes                                                                     0                  108,302
 Other                                                                              185,448                  164,335
                                                                       ---------------------    ---------------------
   Total Liabilities                                                            116,031,393              106,072,722
                                                                       =====================    =====================

SHAREHOLDERS' EQUITY
 Common Stock - Par Value $5.00, Authorized
  2,000,000 Shares;  Issued and Outstanding
  564,361 Shares (513,281 in 1999)                                                2,821,805                2,566,405
 Capital In Excess of Par Value                                                   5,430,199                4,357,519
 Treasury Stock                                                                    (130,000)                       0
 Retained Earnings                                                                2,607,818                2,638,826
                                                                       ---------------------    ---------------------
 Shareholders' Equity Before Accumulated
  Other Comprehensive Loss                                                       10,729,822                9,562,750
 Accumulated Other Comprehensive Loss                                              (181,270)                (903,206)
                                                                       ---------------------    ---------------------
   Total Shareholders' Equity                                                    10,548,552                8,659,544
                                                                       ---------------------    ---------------------

TOTAL LIABILITIES AND EQUITY                                                   $126,579,945             $114,732,266
                                                                       =====================    =====================
</TABLE>

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


<PAGE>

<TABLE>
<CAPTION>

                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME

                   For the Years Ended December 31,           2000                  1999                   1998
                                                       ------------------    -------------------    ------------------
INTEREST INCOME
<S>                                                           <C>                    <C>                   <C>
 Loans                                                        $ 6,908,948            $ 6,091,993           $ 5,715,852
 Investment Securities                                          2,168,750              1,792,025             1,255,076
 Federal Funds Sold                                                95,119                305,820               685,277
                                                       ------------------    -------------------    ------------------
  Total Interest Income                                         9,172,817              8,189,838             7,656,205

INTEREST EXPENSE                                                4,595,659              3,930,390             3,869,026
                                                       ------------------    -------------------    ------------------

NET INTEREST INCOME                                             4,577,158              4,259,448             3,787,179

PROVISION FOR LOAN LOSSES                                         209,038                160,000               235,000
                                                       ------------------    -------------------    ------------------

NET INTEREST INCOME AFTER
 PROVISION FOR LOAN LOSSES                                      4,368,120              4,099,448             3,552,179
                                                       ------------------    -------------------    ------------------

NONINTEREST INCOME
 Service Charges On Demand
  Deposits                                                        713,546                640,953               502,978
 Loan Fees and Other Service
  Charges                                                         408,492                461,590               337,504
 Gain on Sales of Investment
  Securities                                                        6,365                 23,578                     0
 Income from Non-Refundable
  Deposit on Sale of Branch                                             0                300,000                     0
 Gain on Sale of Branch                                           434,797                      0                     0
 Gain on Sales of Loans                                            68,687                120,271                     0
 Other                                                             75,364                 36,480                22,692
                                                       ------------------    -------------------    ------------------
  Total Noninterest Income                                      1,707,251              1,582,872               863,174
                                                       ------------------    -------------------    ------------------

NONINTEREST EXPENSE
 Salaries and Employee Benefits                                 2,140,117              1,969,530             1,461,468
 Occupancy Costs                                                  385,040                352,250               293,918
 Data Processing Fees                                             401,499                352,721               265,006
 Furniture and Equipment,
  Depreciation and Maintenance                                    359,942                402,540               323,516
 Federal Insurance Premiums                                        44,089                 37,073                22,711
 Advertising and Promotion                                        131,904                128,991                96,908
 Office Supplies and Postage                                      225,327                231,119               170,084
 Other                                                            307,987                379,956               311,681
                                                       ------------------    -------------------    ------------------
  Total Noninterest Expense                                     3,995,905              3,854,180             2,945,292
                                                       ------------------    -------------------    ------------------

INCOME BEFORE INCOME TAXES                                      2,079,466              1,828,140             1,470,061

INCOME TAXES                                                      782,394                645,724               569,583
                                                       ------------------    -------------------    ------------------

NET INCOME                                                    $ 1,297,072            $ 1,182,416           $   900,478
                                                       ==================    ===================    ==================

EARNINGS PER SHARE AMOUNTS                                    $      2.33            $      2.30           $      1.77
                                                       ==================    ===================    ==================
</TABLE>


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


<PAGE>
<TABLE>
<CAPTION>


                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME




                    For the Years Ended December 31,            2000                    1999                  1998
                                                         -------------------    --------------------    ----------------
<S>                                                              <C>                    <C>                    <C>
NET INCOME                                                       $1,297,072             $ 1,182,416            $900,478

OTHER COMPREHENSIVE INCOME
 (LOSS), NET OF TAX:
 Unrealized Gains (Losses) on
  Investment Securities Available
  for Sale                                                        1,158,048              (1,553,486)             71,066
 Reclassification Adjustment for
  Gains/Losses on Sales of
  Investment Securities Available
  for Sale                                                            6,365                  23,578                   0
 Change in Deferred Income Tax
  Associated With Unrealized
  Gains/Losses on Investment
  Securities Available for Sale                                    (442,477)                581,365             (27,005)
                                                         -------------------    --------------------    ----------------
   Other Comprehensive Income
    (Loss), Net of Tax                                              721,936                (948,543)             44,061
                                                         -------------------    --------------------    ----------------

COMPREHENSIVE INCOME                                             $2,019,008             $   233,873            $944,539
                                                         ===================    ====================    ================
</TABLE>


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


<PAGE>
<TABLE>
<CAPTION>


                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

              For the Years Ended December 31, 2000, 1999, and 1998






                                                                              Capital in
                                                         Common               Excess of                  Retained
                                                          Stock               Par Value                  Earnings
                                                         -------             -----------                ----------
<S>                                                    <C>                     <C>                     <C>
BALANCES, JANUARY 1, 1998                             $2,333,775              $3,426,999              $ 1,719,082

Other Comprehensive Income                                     0                       0                        0

Stock Dividend of 46,526
 Shares of Common Stock                                  232,630                 930,520               (1,163,150)

Net Income                                                     0                       0                  900,478
                                                              --                      --                 ---------
BALANCES, DECEMBER 31, 1998                            2,566,405               4,357,519                1,456,410

Other Comprehensive Income                                     0                       0                        0

Net Income                                                     0                       0                1,182,416
                                                              --                      --               -----------
BALANCES, DECEMBER 31, 1999                            2,566,405               4,357,519                2,638,826

Other Comprehensive Loss                                       0                       0                        0

Stock Dividend of 51,080
 Shares of Common Stock                                  255,400               1,072,680               (1,328,080)

Treasury Stock                                                 0                       0                        0

Net Income                                                     0                       0                1,297,072
                                                              --                      --               -----------
BALANCES, DECEMBER 31, 2000                           $2,821,805              $5,430,199              $ 2,607,818
                                                      ==========              ==========              ============

</TABLE>



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

<PAGE>

<TABLE>
<CAPTION>


                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Continued)

              For the Years Ended December 31, 2000, 1999, and 1998




                                                    Accumulated
                                                          Other
                                                   Comprehensive                                            Total
                                                         Income                Treasury              Shareholders'
                                                         (Loss)                   Stock                    Equity
                                                        --------                 -------                  --------
<S>                                                      <C>                         <C>               <C>
BALANCES, JANUARY 1, 1998                               $ 1,276                     $ 0               $ 7,481,132

Other Comprehensive Income                               44,061                       0                    44,061

Stock Dividend of 46,526
 Shares of Common Stock                                       0                       0                         0

Net Income                                                    0                       0                   900,478
                                                             ---                     ---                 ---------
BALANCES, DECEMBER 31, 1998                              45,337                       0                 8,425,671

Other Comprehensive Income                             (948,543)                      0                  (945,543)

Net Income                                                    0                       0                 1,182,416
                                                             ---                     ---               -----------
BALANCES, DECEMBER 31, 1999                            (903,206)                      0                 8,659,544

Other Comprehensive Loss                                721,936                       0                   721,936

Stock Dividend of 51,080
 Shares of Common Stock                                       0                       0                         0

Treasury Stock                                                0                (130,000)                 (130,000)

Net Income                                                    0                       0                 1,297,072
                                                             ---                     ---               -----------
BALANCES, DECEMBER 31, 2000                          $ (181,270)             $ (130,000)              $10,548,552
                                                     ===========             ===========              ============
</TABLE>



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


<PAGE>
<TABLE>
<CAPTION>


                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS



             For the Years Ended
                December 31,                              2000                     1999                     1998
                                                 ----------------------    ---------------------    --------------------
CASH FLOWS FROM OPERATING
 ACTIVITIES
<S>                                                       <C>                      <C>                      <C>
  Net Income                                              $  1,297,072             $  1,182,416             $   900,478
                                                 ----------------------    ---------------------    --------------------
  Adjustments to Reconcile
   Net Income to Net Cash
   Provided by Operating
   Activities:
    Provision For Loan
     Losses                                                    209,038                  160,000                 235,000
    Depreciation                                               303,740                  326,718                 277,338
    Amortization                                                     0                        0                   1,119
    (Gain) on Sales of
    Investment Securities                                       (6,365)                 (23,578)                      0
    (Gain) on Sale of Branch                                  (434,797)                       0                       0
    (Gain) on Sales of Loans                                   (68,687)                (120,271)                      0
    Deferred Income Tax
     (Benefit)                                                  (7,415)                  14,083                  (9,968)
    Increase (Decrease) in
     Unearned Interest                                        (458,148)                (177,024)               (417,886)
    (Increase) Decrease in
     Unearned Loan Fees                                            700                  (19,802)                (15,715)
    Amortization of Premiums
     and Discounts on
     Investment Securities,
     Net                                                       (19,301)                  13,278                   7,995
    Federal Home Loan Bank
     Stock Dividends                                           (26,200)                 (22,500)                (18,600)
    (Increase) In Accrued
     Interest Receivable                                      (260,688)                (105,440)               (179,297)
    Decrease in Prepaid
     Expenses and Other                                         32,217                   23,766                   4,062
    (Increase) Decrease in
     Prepaid Income Taxes                                      (29,913)                  10,050                 (10,050)
    Increase (Decrease) In
     Accrued Interest
     Payable                                                   140,283                  (52,523)                108,468
    (Increase) Decrease In
     Income Taxes Payable                                     (108,302)                 108,302                  (9,499)
    Increase (Decrease) In
     Other Liabilities                                          21,113                   63,140                (245,451)
                                                 ----------------------    ---------------------    --------------------
      Total Adjustments                                       (712,725)                 198,199                (272,484)
                                                 ----------------------    ---------------------    --------------------
       Net Cash Provided By
        Operating Activities                                   584,347                1,380,615                 627,994
                                                 ----------------------    ---------------------    --------------------
</TABLE>


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


<PAGE>

<TABLE>
<CAPTION>
                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

             For the Years Ended
                 December 31,                             2000                     1999                    1998
                                                  ---------------------    ---------------------    -------------------
CASH FLOWS FROM INVESTING
 ACTIVITIES
<S>                                                         <C>                       <C>                       <C>
  Net Proceeds from Sale
   of Branch                                                   676,148                        0                      0
  Purchases of Investment
   Securities Available
   for Sale                                                 (5,668,860)             (11,782,649)           (30,740,050)
  Principal Repayments on
   Mortgage-Backed Securities
   Available for Sale                                          892,074                1,457,869                897,250
  Maturities of Investment
   Securities Available
   for Sale                                                    111,907                6,250,000             14,000,000
  Increase in Loans                                        (11,923,316)             (18,483,255)            (2,709,342)
  Sales of Investment
   Securities Available
   for Sale                                                    496,875                1,487,641                      0
  Proceeds  From Sales
   of Loans                                                  6,695,387                8,221,961                      0
  Net Purchases of Premises
   and Equipment                                              (744,059)              (1,131,632)              (448,643)
  Proceeds From Sales of
   Foreclosed Real Estate                                      200,000                        0                      0
                                                  ---------------------    ---------------------    -------------------
  Net Cash Used In
   Investing Activities                                     (9,263,844)             (13,980,065)           (19,000,785)
                                                  ---------------------    ---------------------    -------------------

CASH FLOWS FROM FINANCING
 ACTIVITIES
  Increase in Deposits                                      13,491,507                  984,701             27,212,684
  Repayment of Federal Home
   Loan Bank Advances                                                0                        0                (43,121)
  Net Increase (Decrease)
   in Securities Sold
   Under Agreements to
   Repurchase                                               (2,413,694)               2,637,020                      0
  Purchase of Treasury Stock                                  (130,000)                       0                      0
                                                  ---------------------    ---------------------    -------------------
   Net Cash Provided By
    Financing Activities                                    10,947,813                3,621,721             27,169,563
                                                  ---------------------    ---------------------    -------------------

NET INCREASE (DECREASE) IN
 CASH AND CASH EQUIVALENTS                                   2,268,316               (8,977,729)             8,796,772

CASH AND CASH EQUIVALENTS,
 BEGINNING OF YEAR                                           8,501,108               17,478,837              8,682,065
                                                  ---------------------    ---------------------    -------------------

CASH AND CASH EQUIVALENTS,
 END OF YEAR                                              $ 10,769,424             $  8,501,108            $17,478,837
                                                          =============            =============           ===========
</TABLE>


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


<PAGE>
<TABLE>
<CAPTION>


                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


             For the Years Ended
                 December 31,                             2000                     1999                     1998
                                                  ---------------------    ---------------------    --------------------
<S>                                                     <C>                        <C>                    <C>
Supplementary Disclosures
 of Cash Flow Information:
  Cash Paid During the
   Year for:
    Interest                                              $  4,458,100             $  3,982,913             $ 3,760,558
    Income taxes                                          $    932,785             $    513,289             $   599,100

Supplementary Disclosures of
 Noncash Investing
  Activities:
   Change in Unrealized Gain
    (Loss) on Investment
    Securities                                            $  1,164,413             $ (1,529,908)            $    71,066
   Change in Deferred Income
    Tax Associated With
    Unrealized Gain (Loss)
    on Investment Securities                              $    442,477             $   (581,365)            $    27,005
   Change in Net Unrealized
    Gain (Loss) on
    Investment Securities                                 $    721,936             $   (948,543)            $    44,061
   Issuance of Common Stock
    Dividend:
     Par                                                  $    255,400             $          0             $   232,630
     Capital in Excess of
      Par Value                                           $  1,072,680             $          0             $   930,520
     Reduction in Retained
      Earnings Due to
      Issuance of Common
      Stock Dividend                                      $  1,328,080             $          0             $ 1,163,150
     Acquisition of
      Foreclosed Real Estate                              $          0             $    210,292             $         0
      Sale of Branch:
       Assets Removed:
        Loans                                             $    626,848             $          0             $         0
        Premises and
         Equipment                                        $    780,662             $          0             $         0
        Accrued Interest
         Receivable                                       $      1,877             $          0             $         0
        Other Assets                                      $      4,200             $          0             $         0

       Liabilities Removed:
        Deposits                                          $ (1,169,512)            $          0             $         0
        Accrued Interest
         Payable                                          $     (2,724)            $          0             $         0

</TABLE>


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


<PAGE>


                         FIRST CENTRAL BANCSHARES, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2000, 1999 and 1998

NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations - The Company's subsidiary,  First Central Bank (the Bank),
provides a variety of banking services to individuals and businesses through its
main office in Lenoir City and six branches located in Loudon,  Tellico Village,
Farragut,  Kingston,  and two in Blount County,  Tennessee.  Its primary deposit
products  are demand  deposits  and  certificates  of  deposit,  and its primary
lending products are commercial business,  real estate mortgage, and installment
loans.  In 2000, the Company formed a new  subsidiary,  FCB Financial  Services,
Inc. for the purpose of selling  insurance  and  investment  products.  This new
subsidiary had no activity during the year 2000.

Principles of Consolidation - The consolidated  financial statements include the
accounts of First  Central  Bancshares,  Inc., a bank holding  company,  and its
wholly owned  subsidiary,  First  Central  Bank.  All  significant  intercompany
balances and transactions have been eliminated.

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

Estimates - The preparation of consolidated  financial  statements in accordance
with  generally  accepted  accounting  principles  requires  management  to make
estimates and  assumptions.  Those  estimates  and  assumptions  affect  certain
reported  amounts and disclosures.  Accordingly,  actual results could vary from
those estimates.

Cash and Due From  Banks - Cash and due from  banks  includes  balances  in four
correspondent  commercial  banks  located  in the  southeastern  United  States,
approximately  $249,400  ($387,000 in 1999) on deposit with the Nashville branch
of Federal Reserve Bank of Atlanta, and approximately  $16,000 ($15,000 in 1999)
on  deposit  with  the  Federal  Home  Loan  Bank  of  Cincinnati.  Balances  in
correspondent bank accounts in excess of FDIC insurance limits are approximately
$3,200 as of December 31, 2000 ($399,500 in 1999).

Federal  Funds Sold - Federal  funds  sold  consist  of  unsecured  loans to two
correspondent  commercial banks located in the southeastern United States. These
loans are repaid on the next business day.

Investment  Securities - The Bank  applies the  Financial  Accounting  Standards
Board  Statement of  Financial  Accounting  Standards  No. 115,  Accounting  for
Certain Investments in Debt Equity Securities (SFAS No. 115). In accordance with
SFAS No. 115, the Bank has classified  all of its  investment  securities in the
available for sale category. These securities are carried at fair value based on
quoted  market  prices.   Any  unrealized  gain  or  loss  is  reported  in  the
consolidated statements of comprehensive income, net of any deferred tax effect.

Realized gains and losses on the sales of investment securities are based on the
net proceeds  and  amortized  cost of the  securities  sold,  using the specific
identification method.

See Note 2 for additional information on investment securities.

Recognition  of Interest on Loans - Unearned  interest on  installment  loans is
recognized  as  income  over the terms of the loans  using a  declining  balance
method.  Interest on other loans is calculated  using the simple interest method
on the principal outstanding. Accrual of interest is discontinued on a loan when
management  believes,  after  considering  economic and business  conditions and
collection  efforts,  that  the  borrower's  financial  condition  is such  that
collection of interest is doubtful.

Allowance  for Loan Losses - The  allowance  for loan losses is  maintained at a
level which,  in  management's  judgment,  is adequate to absorb  credit  losses
inherent  in the  loan  portfolio.  The  amount  of the  allowance  is  based on
management's  evaluation of the collectibility of the loan portfolio,  including
the nature of the portfolio,  credit  concentrations,  trends in historical loss
experience,  specific  impaired loans, and economic  conditions.  Allowances for
impaired  loans  are  generally  determined  based on  collateral  values or the
present value of estimated cash flows. Because of uncertainties  associated with
regional  economic  conditions,  collateral  values,  and  future  cash flows on
impaired loans, it is reasonably  possible that management's  estimate of credit
losses  inherent  in the loan  portfolio  and the related  allowance  may change
materially in the near term.  The allowance is increased by a provision for loan
losses,  which  is  charged  to  expense  and  reduced  by  charge-offs,  net of
recoveries.  Changes in the allowance  relating to impaired loans are charged or
credited to the provision for loan losses.

Loan Fees - Loan fees,  net of initial  direct costs related to  initiating  and
closing loans,  have been deferred and are being  amortized into interest income
over the  remaining  lives of the  loans as an  adjustment  of yield  using  the
interest method.

Premises  and  Equipment  - Premises  and  equipment  are  stated at cost,  less
accumulated   depreciation.   Depreciation,   computed   principally  using  the
straight-line method, is based on the following estimated useful lives:

         Buildings and Land Improvements                          15 to 40 years
         Leasehold Improvements                                    7 to 31 years
         Furniture, Fixtures and Equipment                         5 to  7 years

Earnings Per Share - Earnings per share is based on the weighted  average number
of shares outstanding of 555,427 in 2000 (513,281 and 507,465 in 1999 and 1998).

Income Taxes - Income  taxes are  provided  for the tax effects of  transactions
reported in the consolidated financial statements and consist of taxes currently
due plus deferred taxes related  primarily to  differences  between the basis of
the allowance for loan losses, accumulated depreciation, and the conversion from
the accrual basis of accounting  for  financial  reporting  purposes to the cash
basis of accounting for tax reporting.  The deferred tax assets and  liabilities
represent the future tax return  consequences  of those  differences  which will
either be taxable or deductible when the assets and liabilities are recovered or
settled.

Advertising  and  Promotion - Advertising  and  promotion  costs are expensed as
incurred.

NOTE 2 - INVESTMENT SECURITIES

The Bank applies SFAS No. 115 for its accounting for investment securities.  The
amortized cost and estimated fair value of investment  securities as of December
31, 2000 and 1999:
<TABLE>
<CAPTION>

                                                         Investment Securities Available for Sale
                                                                Gross                 Gross             Estimated
                                        Amortized             Unrealized           Unrealized             Market
                                           Cost                 Gains                Losses               Value
                                     -----------------     -----------------    ------------------   -----------------
<S>                                     <C>                     <C>                   <C>               <C>
As of December 31,
 2000:
 Debt Securities:
  U.S. Treasury
   Securities and
   Obligations of
   U.S. Government
   Corporations and
   Agencies                       $        26,595,011   $            76,081  $          (353,708)          26,317,384
  Obligations of
   States and
   Political
   Subdivisions                             2,436,039                13,294              (22,952)           2,426,381
  Corporate Debt
   Securities                                 488,897                 3,758                    0              492,655
  Mortgage-Backed
                                     -----------------     -----------------    ------------------   -----------------
   Securities                               3,935,044                12,876              (21,720)           3,926,200
                                     -----------------     -----------------    ------------------   -----------------
                                           33,454,991               106,009             (398,380)          33,162,620
 Equity Securities:
  Stock in Federal
   Home Loan Bank
   of Cincinnati,
   at Cost                                    376,300                     0                    0              376,300
  Stock in Banker's
                                     -----------------     -----------------    ------------------   -----------------
   Bank, at Cost                               74,575                     0                    0               74,575
                                     -----------------     -----------------    ------------------   -----------------
                                  $        33,905,866   $           106,009  $          (398,380)          33,613,495
                                     =================     =================    ==================   =================
</TABLE>



<PAGE>

<TABLE>
<CAPTION>


                                                         Investment Securities Available for Sale
                                    -----------------------------------------------------------------------------------
                                                               Gross                 Gross               Estimated
                                       Amortized            Unrealized             Unrealized              Market
                                          Cost                 Gains                 Losses                Value
                                    -----------------    ------------------    -------------------    -----------------
<S>                                     <C>                     <C>                     <C>                     <C>
As of December 31,
 1999:
 Debt Securities:
  U.S. Treasury
   Securities and
   Obligations of
   U.S. Government
   Corporations
   and Agencies                  $        22,395,485  $                 0   $         (1,258,541)  $        21,136,944
  Obligations of
   States and
   Political
   Subdivisions                            2,163,640                  397                (91,694)            2,072,343
  Mortgage-Backed
                                    -----------------    ------------------    -------------------    -----------------
   Securities                              4,702,195                3,148               (110,093)            4,595,250
                                    -----------------    ------------------    -------------------    -----------------
                                          29,261,320                3,545             (1,460,328)           27,804,537
 Equity
  Securities:
   Stock in
    Federal Home
    Loan Bank
    of Cincinnati,
    at Cost                                  350,100                    0                      0               350,100
   Stock in
    Banker's Bank,
    at Cost                                   74,575                    0                      0                74,575
                                    -----------------    ------------------    -------------------    -----------------
                                 $        29,685,995  $             3,545   $         (1,460,328)  $        28,229,212
                                    =================    ==================    ===================    =================
</TABLE>


The amortized cost and estimated  market value of debt securities as of December
31, 2000 by contractual  maturity are shown below.  Actual maturities may differ
from  contractual  maturities  because  borrowers  may have the right to call or
prepay obligations with or without call or prepayment penalties.

                                                 Available for Sale
                                          ----------------- --- ----------------
                                                          Estimated
                                              Amortized               Market
                                                 Cost                 Value
                                          -----------------     ----------------
Due in One Year or Less                 $           194,277   $          194,377
Due After One Year Through Five Years             8,613,304            8,562,244
Due After Five Years Through Ten Years           20,950,171           20,769,849
Due After Ten Years                               3,697,239            3,636,150
                                          -----------------     ----------------
 Total Debt Securities                  $        33,454,991   $       33,162,620
                                          =================     ================



<PAGE>


For purposes of the maturity table,  mortgage-backed  securities,  which are not
due at a single maturity date, have been allocated over maturity groupings based
on their  contractual  maturities.  The  mortgage-backed  securities  may mature
earlier than their contractual maturities because of principal prepayments.

Gross  gains  of  $6,365  and  $23,578  were  realized  on the  sale of  certain
investment  securities  classified  as available for sale during the years ended
December  31,  2000 and  1999.  There  were no sales  of  investment  securities
classified  as  available  for sale  during the year ended  December  31,  1998.
Accordingly,  no gross gains or gross  losses were  realized  for the year ended
December 31, 1998.

Investments with carrying values of approximately $6,704,000 and $5,144,000 were
pledged to secure  deposits of public  funds as of  December  31, 2000 and 1999,
respectively.

NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES

The  Bank  provides  mortgage,  commercial  and  consumer  lending  services  to
businesses and  individuals  primarily in the East Tennessee  area. A summary of
loans is as follows:

                                              2000                   1999
                                      -------------------   -------------------
Loans secured by real estate:
 Non farm-non-residential            $          9,023,810  $         13,232,573
 Construction and land development              9,632,736             9,814,058
 Residential and other properties              22,081,735            22,519,366
                                      -------------------   -------------------
  Total loans secured by real estate           40,738,281            45,565,997
Commercial and industrial loans                16,135,289            12,631,423
Consumer loans                                 19,244,834            13,511,471
Other loans                                     1,049,883               878,177
                                      -------------------   -------------------
                                               77,168,287            72,587,068

Less:  Allowance for Loan Losses                 (738,523)             (618,034)
           Unearned Interest                     (342,277)             (800,425)
           Unearned Loan Fees                     (17,609)              (16,909)
                                      -------------------   -------------------
                                     $         76,069,878  $         71,151,700
                                      ===================   ===================

In the ordinary course of business,  the Bank has entered into off-balance-sheet
financial  instruments  consisting of commitments  to extend credit,  commercial
letters of credit and standby letters of credit. These financial instruments are
recorded  in the  financial  statements  when they become  payable.  Outstanding
letters of credit were  approximately  $1,006,000  and $2,296,000 as of December
31, 2000 and 1999,  respectively.  Unadvanced lines of credit and commitments to
extend credit were approximately  $16,670,000 and $13,701,000 as of December 31,
2000 and 1999,  respectively.  Of the total  outstanding  letters  of credit and
unadvanced lines and commitments as of December 31, 2000 and 1999, approximately
$7,898,000 and $8,008,000, respectively, were secured, primarily by real estate.


<PAGE>



From time to time, the Bank provides credit to its executive officers, directors
and their  affiliates.  Such  transactions  are made on the same  terms as those
prevailing for comparable transactions with other borrowers and do not represent
more than a normal risk of collection.

Loans to executive officers, directors and their affiliates are as follows:

                                                     December 31,
                                        ----------------------------------------
                                               2000                  1999
                                        ------------------    -----------------
Loans at beginning of year             $         1,212,989   $        1,805,956
 Disbursements                                   1,142,518              928,647
 Repayments and Reclassifications                 (485,390)          (1,521,614)
                                         ------------------   -----------------
Loans at end of year                   $         1,870,117   $        1,212,989
                                         ==================   =================

The transactions in the allowance for loan losses are as follows:
<TABLE>
<CAPTION>

                                                              2000                  1999                  1998
                                                        ------------------    ------------------    -----------------
<S>                                                  <C>                   <C>                   <C>
Balance, Beginning of Year                           $           618,034   $           594,059   $          586,860
Provision - Charged to Expense                                   209,038               160,000              235,000
Recoveries of Loans Previously
 Charged Off                                                      57,318                59,653               56,762
Loans Charged Off                                               (145,867)             (195,678)            (284,563)
                                                        ------------------    ------------------    -----------------
Balance, End of Year                                 $           738,523   $           618,034   $          594,059
                                                        ==================    ==================    =================
</TABLE>

Loans  past  due  ninety  days or more  and  still  accruing  interest  totalled
approximately  $91,369 as of  December  31, 2000  ($89,000 in 1999).  There were
loans totalling  approximately $10,950 on which the accrual of interest had been
discontinued as of December 31, 2000 ($34,000 in 1999).

As of December 31, 2000 and 1999, the Bank had loans amounting to  approximately
$944,335  and  $658,000,  respectively,  that were  specifically  classified  as
impaired.  The average  individual loan balance of these impaired loans amounted
to approximately $27,000 and $25,000, respectively, for the years ended December
31, 2000 and 1999.  As of  December  31,  2000 and 1999 the  allowance  for loan
losses for impaired loans amounted to approximately  $85,700 and $73,000.  Also,
interest  income of $75,800 and $138,000  relating to these  impaired  loans was
recognized for the years ended December 31, 2000 and 1999.

NOTE 4 - PREMISES AND EQUIPMENT

A summary of premises and equipment is as follows:
                                                 2000                  1999
                                        ------------------    -----------------
Land                                  $          1,463,470  $         1,689,970
Buildings                                        3,160,257            3,059,913
Furniture, Fixtures and Equipment                1,904,406            1,856,409
                                        ------------------    -----------------
                                                 6,528,133            6,606,292
Less Accumulated Depreciation                    1,759,175            1,496,991
                                        ------------------    -----------------
                                      $          4,768,958  $         5,109,301
                                        ==================    =================



<PAGE>


NOTE 5 - ACCRUED INTEREST RECEIVABLE

A summary of accrued interest receivable is as follows:
                                                2000                  1999
                                        ------------------    -----------------
Investment securities                 $            555,068  $           424,806
Loans                                              483,073              354,524
                                        ------------------    -----------------
                                      $          1,038,141  $           779,330
                                        ==================    =================
NOTE 6 - DEPOSITS

A summary of deposits is as follows:
                                               2000                   1999
                                     -------------------    -------------------
Demand Deposits:
 Noninterest-bearing accounts      $          18,541,376  $          13,920,661
 NOW and MMDA accounts                        23,767,510             27,648,830
 Savings accounts                              5,373,737              5,075,289
                                     -------------------    -------------------
  Total Demand Deposits                       47,682,623             46,644,780
                                     -------------------    -------------------
Term Deposits:
 Less than $100,000                           49,809,443             42,271,834
 $100,000 or more                             17,567,374             13,820,831
                                     -------------------    -------------------
  Total Term Deposits                         67,376,817             56,092,665
                                     -------------------    -------------------
                                   $         115,059,440  $         102,737,445
                                     ===================    ===================

As of December 31, 2000, the scheduled  maturities of term deposits above are as
follows:

           2001                                             $        44,998,132
           2002                                                       6,007,717
           2003`                                                     15,051,916
           2004                                                         591,145
           2005                                                         727,907
                                                              -----------------
                                                            $        67,376,817
                                                              =================

NOTE 7 - INTEREST EXPENSE
<TABLE>
<CAPTION>

A summary of interest expense is as follows:

                                                              2000                  1999                  1998
                                                        ------------------    ------------------    -----------------
<S>                                                     <C>                     <C>                  <C>
Deposits:
 NOW and MMDA Accounts                               $            911,896  $            862,001  $        $1,035,393
 Savings Accounts                                                 116,407               108,868               81,078
 Term Deposits                                                  3,531,340             2,959,521            2,748,943
                                                        ------------------    ------------------    -----------------
  Total Interest Expense
   on Deposits                                                  4,559,643             3,930,390            3,865,414
                                                        ------------------    ------------------    -----------------

Borrowings:
 Federal Funds Purchased                                           36,016                     0                    0
 FHLB Advances                                                          0                     0                3,612
                                                        ------------------    ------------------    -----------------
  Total Interest Expense
   on Borrowings                                                   36,016                     0                3,612
                                                        ------------------    ------------------    -----------------
   Total Interest Expense                            $          4,595,659  $          3,930,390  $        $3,869,026
                                                        ==================    ==================    =================
</TABLE>



<PAGE>


NOTE 8 - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

The Bank has sold certain  investment  securities  with agreements to repurchase
primarily on an overnight  basis to selected  depositors  totaling  $257,759 and
$2,617,453 as of December 31, 2000 and 1999, respectively.

Securities sold under agreements to repurchase averaged  approximately  $738,000
and $971,000 during 2000 and 1999, respectively. The maximum amounts outstanding
at any  month-end  during  2000  and  1999  were  approximately  $4,375,000  and
$2,671,453, respectively.

NOTE 9 - INCOME TAXES

Income taxes as shown in the  consolidated  statements of income differ from the
amount computed using the statutory federal income tax rate as follows:
<TABLE>
<CAPTION>

                                  2000                           1999                            1998
                      ------------------------------ ------------------------------ -------------------------------
                                         Percent                        Percent                        Percent
                                            of                             of                             of
                                          Pretax                         Pretax                         Pretax
                          Amount          Income         Amount          Income         Amount          Income
                      ---------------- ------------- ---------------- ------------- ---------------- -------------
<S>                         <C>             <C>           <C>               <C>           <C>              <C>
Federal
 income
 tax at
 statutory
 rate                       $707,018         34.0 %        $621,567         34.0 %        $499,821         34.0 %
Tax
 exempt
 income                      (22,681)        (1.2)          (22,442)        (1.2)          (15,283)        (1.0)
State
 income,
 net                          82,347          4.0            68,470          3.7            54,216          3.7
Other,
                      ---------------- ------------- ---------------- ------------- ---------------- -------------
 net                          15,710           .8           (21,871)        (1.2)           30,829          2.0
                      ---------------- ------------- ---------------- ------------- ---------------- -------------

                            $782,394         37.6 %        $645,724         35.3 %        $569,583         38.7 %
                      ================ ============= ================ ============= ================ =============

Income
 taxes
 consist
 of:
  Current                   $789,809                       $631,641                       $579,551
  Deferred
                      ----------------               ----------------               ----------------
  (Benefit)                   (7,415)                        14,083                         (9,968)
                      ----------------               ----------------               ----------------
                            $782,394                      $654,724                        $569,583
                      ================               ================               ================
</TABLE>



<PAGE>


The net  deferred  tax  asset in the  December  31,  2000 and 1999  consolidated
balance sheets includes the following components:

                                                  2000                 1999
                                          -----------------    -----------------
Deferred Tax Assets:
 Provision for Loan Losses             $           211,687  $           169,244
 Deferred Loan Fees                                  6,684                6,419
 Unrealized Holding Loss on
                                         -----------------    -----------------
  Investment Securities                            111,101              553,578
                                         -----------------    -----------------
   Total Deferred Tax Assets                       329,472              729,241
                                         -----------------    -----------------

Deferred Tax Liabilities:
 Depreciation                                       83,573               72,615
 FHLB Stock Dividends                               46,501               36,556
 Change in Accounting Method                             0                1,574
 Prepaid Items                                      26,805               20,021
 Other                                              14,192                5,012
                                         -----------------    -----------------
   Total Deferred Tax Liabilities                  171,071              135,778
                                         -----------------    -----------------
    Net Deferred Tax Assets            $           158,401  $           593,463
                                         =================    =================

NOTE 10 - RETIREMENT PLAN

The Bank has a profit  sharing  retirement  plan which allows for  discretionary
contributions by the Bank as determined annually by its board of directors.  The
plan also allows for voluntary  (401k)  contributions by employees up to fifteen
percent  of their  compensation.  The Bank's  contributions  to the plan for the
years ended December 31, 2000, 1999, and 1998:

                                      401k
                        Matching           Profit Sharing           Total
                    ----------------     -----------------    -----------------
2000              $           10,084   $            86,282  $            96,366
1999                           7,452                70,484               77,936
1998                           7,201                66,644               73,845

NOTE 11 - REGULATORY MATTERS

The Bank is subject to various regulatory capital  requirements  administered by
the  federal  and  state  banking  agencies.  Failure  to meet  minimum  capital
requirements   can  initiate   certain   mandatory,   and  possibly   additional
discretionary,  actions by regulators  that, if undertaken,  could have a direct
material  effect on the Bank's  financial  statements.  Under  capital  adequacy
guidelines and the regulatory  framework for prompt corrective  action, the Bank
must meet specific capital guidelines that involve quantitative  measures of the
Bank's assets,  liabilities,  and certain  off-balance-sheet items as calculated
under  regulatory   accounting   practices.   The  Bank's  capital  amounts  and
classification are also subject to qualitative judgments by the regulators about
components, risk weightings, and other factors.


<PAGE>


Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below)  of  Total  and  Tier  I  capital  (as  defined  in the  regulations)  to
Risk-Weighted Assets (as defined), and of Tier I capital (as defined) to Average
Assets (as defined). Management believes, as of December 31, 2000, that the Bank
meets all capital adequacy requirements to which it is subject.

As of December 31, 2000, the Bank is categorized as well  capitalized  under the
regulatory  framework for prompt  corrective  action.  To be categorized as well
capitalized,  the Bank must maintain minimum total risk-based, Tier I risk-based
and Tier I leverage ratios as set forth in the table. There are no conditions or
events since that date that management  believes have changed the  institution's
category.

The Bank's actual  capital  amounts and ratios are also  presented in the table.
All amounts are in thousands of dollars.
<TABLE>
<CAPTION>

                                                                                                   To be Well
                                                                   To Comply With               Capitalized Under
                                                                   Minimum Capital              Prompt Corrective
                                           Actual                   Requirements                Action Provisions
                                   ------------------------    ------------------------     --------------------------
                                     Amount        Ratio         Amount        Ratio          Amount         Ratio
                                   -----------    ---------    -----------    ---------     -----------    -----------
<S>                             <C>                <C>          <C>             <C>             <C>             <C>
As of December 31,
 2000:
Total Capital (to
 Risk-Weighted
 Assets)                        $      11,450        13.3%  $       6,875        >8.0%   $       8,594         >10.0%
Tier I Capital
 (to Risk-
 Weighted Assets)               $      10,712        12.5%  $       3,438        >4.0%   $       5,157          >6.0%
Tier I Capital
 to Average
 Assets)                        $      10,712         8.8%  $       6,093        >5.0%   $       6,093          >5.0%

As of December 31,
 1999:
Total Capital (to
 Risk-Weighted
 Assets)                        $      10,166        12.4%  $       6,582        >8.0%   $       8,228         >10.0%
Tier I Capital
 to Risk-
 Weighted Assets)               $       9,548        11.6%  $       3,291        >4.0%   $       4,937          >6.0%
Tier I Capital
 to Average
 Assets)                        $       9,548         8.5%  $       5,628        >5.0%   $       5,628          >5.0%
</TABLE>




<PAGE>


NOTE 12 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standards  No.  107,  Disclosures  About  Fair  Value  of  Financial
Instruments  (SFAS No.  107),  which  requires  the Company to disclose the fair
value of financial  instruments,  both assets and liabilities recognized and not
recognized in the consolidated  statements of financial condition,  for which it
is practicable to estimate fair value.

According to SFAS No. 107, a financial  instrument is defined as cash,  evidence
of an ownership  interest in an entity,  or a contract that both: (1) imposes on
one  entity a  contractual  obligation  to  deliver  cash or  another  financial
instrument to a second  entity,  or to exchange other  financial  instruments on
potentially  unfavorable  terms with the second entity,  and (2) conveys to that
second  entity  a  contractual  right  to  receive  cash  or  another  financial
instrument from the first entity, or to exchange other financial  instruments on
potentially favorable terms with the first entity.

SFAS No. 107 also states that the fair value of a  financial  instrument  is the
amount at which  the  instrument  could be  exchanged  in a current  transaction
between  willing  parties,  other than in a forced or liquidation  sale.  Quoted
market prices in an active  market,  if available,  are the best evidence of the
fair value of financial instruments. For financial instruments that do not trade
regularly,  management's  best  estimate  of fair  value is based on either  the
quoted market price of a financial instrument with similar characteristics or on
valuation  techniques  such as the present value of estimated  future cash flows
using a discount rate commensurate with the risks involved.

For the Bank, as for most financial institutions, the majority of its assets and
liabilities are considered  financial  instruments as defined above.  However, a
large  majority of those assets and  liabilities  do not have an active  trading
market nor are their characteristics  similar to other financial instruments for
which an active trading market exists.  In addition,  it is the Bank's  practice
and intent to hold the majority of its financial instruments to maturity and not
to engage in trading or sales activities.  Therefore, much of the information as
well as the amounts  disclosed  below are highly  subjective  and  judgmental in
nature.   The  subjective   factors  include  estimates  of  cash  flows,  risks
characteristics, credit quality, and interest rates, all of which are subject to
change.  Because the fair value is  estimated  as of December 31, 2000 and 1999,
the amounts which will actually be realized or paid upon  settlement or maturity
of the various financial instruments could be significantly different.

The estimates of fair value are based on existing financial  instruments without
attempting to estimate the value of anticipated  future business or activity nor
the  value  of  assets  and  liabilities  that  are  not  considered   financial
instruments.  For example,  the value of mortgage loan servicing  rights and the
value of the Bank's long-term  relationships with depositors,  commonly known as
core deposit  intangibles,  have not been  considered  in the  estimates of fair
values  presented  below.  In  addition,  the tax  implications  related  to the
realization of unrealized gains and losses can have a significant effect on fair
value estimates and have not been included in the estimated fair values below.


<PAGE>


The following  methods and  assumptions  were used to estimate the fair value of
the following classes of financial instruments:

Cash and Cash Equivalents - Cash and cash equivalents  include cash and due from
banks,   and   interest-bearing   deposits  with  banks.  For  these  short-term
instruments, the recorded book value is a reasonable estimate of fair value.

Investment Securities - Quoted market prices are used to determine the estimated
fair value of investment securities.

Net Loans - The estimated fair value of fixed rate mortgage loans and commercial
loans is calculated  by  discounting  future cash flows to their present  value.
Future cash flows,  consisting  of both  principal  and interest  payments,  are
discounted using current Bank rates for similar loans with similar maturities.

The estimated fair value of variable rate loans is considered  equal to recorded
book value.

Fixed rate installment  loans have an average maturity of less than three years,
a  relatively  stable  average  interest  rate,  and a variety  of credit  risks
associated  with them. The fair value of these loans is estimated by discounting
future  estimated cash flows to their present value using current Bank rates for
similar loans with similar maturities.

The  estimated  fair value of the  allowance for loan losses is considered to be
recorded book value.  Additionally,  the credit  exposure  known to exist in the
loan portfolio is embodied in the allowance for loan losses.

Deposits - The  estimated  fair value of demand,  savings,  NOW and money market
deposits is the amount  payable on demand at the reporting  date. The fair value
of fixed-maturity certificates of deposit is estimated using the rates currently
offered for deposits of similar maturities.

Advances  From  Federal  Home Loan Bank - The  advances are fixed rate and fixed
maturity  liabilities.  Their  fair value is  estimated  using  rates  currently
available to the Bank for debt with similar terms and remaining maturities.

Off-Balance-Sheet Loan Commitments - The fair value of loan commitments is based
on fees currently charged to enter into similar agreements,  taking into account
the remaining  terms of the agreements and the present  creditworthiness  of the
counterparties.  For fixed rate loan commitments,  fair value also considers the
difference between current levels of interest rates and the committed rates. The
fair value of letters of credit is based on fees  currently  charged for similar
agreements or on the estimated  cost to terminate  them or otherwise  settle the
obligations  with the  counterparties  at the reporting  date. The fair value of
these items is not material to the Company as of December 31, 2000 and 1999.


<PAGE>



The recorded  book value and  estimated  fair value of the  Company's  financial
instruments as of December 31 are as follows:
<TABLE>
<CAPTION>

                                                     2000                                       1999
                                    ----------------- -- ------------------    ------------------ -- ------------------
                                        Recorded             Estimated             Recorded              Estimated
                                          Book                 Fair                  Book                  Fair
FINANCIAL ASSETS:                        Value                 Value                 Value                 Value
                                    -----------------    ------------------    ------------------    ------------------
<S>                                     <C>                     <C>                     <C>                     <C>
Cash and
 Cash Equivalents               $         10,769,424  $         10,769,424  $          8,501,108  $          8,501,108
 Investment
  Securities                    $         33,613,495  $         33,613,495  $         28,229,212  $         28,229,212
 Net Loans                      $         76,069,878  $         76,072,629  $         71,151,700  $         70,897,350

FINANCIAL
 LIABILITIES:
  Deposits                      $        115,059,440  $        115,108,958  $        102,737,445  $        105,324,926
</TABLE>


NOTE 13 - SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK

The Bank's  primary  business  activity is with  customers  located  within East
Tennessee. Note 2 discusses the types of securities that the Company invests in.
Note 3 discusses  the types of lending that the Company  engages in. The Company
does not have any significant concentrations to any one industry or customer.

NOTE 14 - CONDENSED PARENT COMPANY FINANCIAL INFORMATION

Condensed  financial  information  of First  Central  Bancshares,  Inc.  (parent
company only) is as follows:

                             CONDENSED BALANCE SHEET
                                December 31, 2000

Assets:
 Demand Balance With Subsidiary                           $               6,892
 Accounts Receivable - Subsidiary                                             0
 Prepaid Income Taxes                                                    10,722
 Investment in Subsidiary                                            10,712,223
                                                            -------------------
  Total Assets                                            $          10,729,837
                                                            ===================
Liabilities:
 Accrued Expenses                                         $                  15
                                                            -------------------
  Total Liabilities                                                          15
                                                            -------------------

Shareholders' Equity:
 Common Stock - Par Value $5.00,
  Authorized 2,000,000 Shares; 564,361 Shares (513,281
  in 1999) Issued and Outstanding                                     2,821,805
 Treasury Stock                                                        (130,000)
 Capital in Excess of Par Value                                       5,430,199
 Retained Earnings                                                    2,607,818
                                                            -------------------
  Total Shareholders' Equity                                         10,729,822
                                                            -------------------
Total Liabilities and Shareholders' Equity                 $         10,729,837
                                                            ===================



<PAGE>


                          CONDENSED STATEMENT OF INCOME
                          Year Ended December 31, 2000

Expenses                                                   $             17,538
                                                            -------------------
Loss Before Equity in Undistributed
 Earnings of Subsidiary                                                  17,538
Undistributed Earnings of Subsidiary                                  1,314,610
                                                            -------------------
  Net Income                                               $          1,297,072
                                                            ===================

                        CONDENSED STATEMENT OF CASH FLOWS
                          Year Ended December 31, 2000

Operating Activities:
 Net Income                                                 $         1,297,072
                                                             ------------------
 Adjustments to Reconcile Net Income to
  Net Cash Used in Operating Activities:                                      0
   Undistributed Earnings of Subsidiary                              (1,314,610)
   Increase in Accounts Receivable - Subsidiary                             (10)
   Increase in Prepaid Income Taxes                                     (10,722)
   Decrease in Accrued Expenses                                              15
                                                             ------------------
    Total Adjustments                                                (1,325,327)
                                                             ------------------
     Net Cash Used in Operating Activities                              (28,255)
                                                             ------------------
Financing Activities:
   Dividends Received                                                   150,000
   Purchase of Treasury Stock                                          (130,000)
                                                             ------------------
      Net Cash Provided by Financing Activities                          20,000
                                                             ------------------
      Net Decrease in Demand Balance With Subsidiary                     (8,255)
Demand Balance With Subsidiary, Beginning of Year                        15,147
                                                             ------------------

Demand Balance With Subsidiary, End of Year                 $             6,892
                                                             ==================

NOTE 15 - STOCK DIVIDENDS

During 2000, the Holding Company's board of directors approved the issuance of a
ten percent stock dividend to shareholders of record as of February 14, 2000. An
additional  51,080  shares of common  stock were  issued at $26 per  share,  and
retained  earnings  were reduced by  $1,328,080 in 2000 as a result of the stock
dividend.  The Holding Company did not declare a stock dividend in 1999.  During
1998, the Holding  Company's  board of directors  approved the issuance of a ten
percent  stock  dividend  to  shareholders  of record as of January 1, 1998.  An
additional  46,526  shares of common  stock were  issued at $25 per  share,  and
retained  earnings  were reduced by  $1,163,150 in 1998 as a result of the stock
dividend.

NOTE 16 - TREASURY STOCK

During 2000, the Holding  Company's board of directors  approved the purchase of
5,000  shares of its common  stock at $26 per share,  which was funded by a cash
dividend from the subsidiary.


<PAGE>



NOTE 17 - STOCK OPTION PLAN

At the April 20, 2000 annual shareholders'  meeting,  shareholders  approved the
designation of 25,000 common stock shares of First Central  Bancshares for stock
options  for  employees,  to be  awarded  at  the  discretion  of the  board  of
directors. No options have been granted to date.

NOTE 18 - BRANCH SALE

The Bank and Holding  Company  entered  into an agreement  effective  October of
1999, to sell the Sweetwater  branch.  The total  consideration of approximately
$1,500,000  was for the  opportunity  to  acquire  the branch and for the branch
itself and was payable in two components.  The buyer paid $300,000  (received in
1999)  upon  the   execution  of  the   agreement.   The  $300,000   amount  was
nonrefundable,  and as such, was recorded in the 1999 consolidated  statement of
income as Income from  Non-Refundable  Deposit on Sale of Branch.  The remaining
approximate  $1,200,000 was paid at closing of the  transaction in June of 2000.
In addition,  the buyer paid $167,188 for the operating  loss of the branch from
the date of the agreement to closing. Of this amount, $40,262, which was for the
1999 loss from the  agreement  date to  December  31,  1999,  is included in the
$434,797  gain on  sale  of  branch.  The  remainder,  which  was  $126,926  and
represented  the loss of the branch from  January 2000 to the closing in June of
2000, eliminated the loss of the branch for the year 2000.

NOTE 19 - EMPLOYMENT AGREEMENTS

The Bank has entered into  employment  agreements  with the  president and three
other officers of the Bank. The agreements contain various provisions related to
salary, benefits, and non-compete clauses.


<PAGE>

<TABLE>
<CAPTION>

                            FINANCIAL DATA SCHEDULES

                                   SCHEDULE I
                  AVERAGE BALANCES, INTEREST AND AVERAGE RATES
                                 (IN THOUSANDS)

                                                                   2000                                      1999
                                                                  ------                                    ------
                                       Average                    Average        Average                    Average
                                       Balance      Interest       Yield         Balance       Interest      Yield
                                      ---------     --------      -------       --------       --------     -------
ASSETS
<S>                                    <C>              <C>         <C>         <C>               <C>         <C>
Federal Funds Sold                     $ 1,465          $ 95        6.48%       $ 6,281           $ 306       4.87%
Investment Securities:
Available for Sale:
 Taxable                                30,029         2,083        6.94%        26,089           1,710       6.55%
 Tax - Exempt                            2,417            86        3.56%         2,234              82       3.67%
Gross Loans,
 Including Fees                         75,093         7,000        9.32%        68,619           6,212       9.05%
                                       --------       ------        -----       --------         ------       -----
Total Interest
 Earning Assets                        109,004        $9,264        8.50%       103,223          $8,310       8.05%
                                                      ======        =====                        ======       =====

Cash and Due From Banks                  4,072                                    3,793
All Other Assets                         6,047                                    6,587
Less:
 Reserve for Loan Losses                  (669)                                    (622)
 Unearned Fees and
  Interest                                (611)                                  (1,510)
                                         ------                                 --------
Total Assets                          $117,843                                 $111,471
                                      =========                                =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Interest Bearing Deposits:
 Time Deposits                        $ 60,071        $3,531        5.88%      $ 55,292          $2,960       5.35%
 Other Deposits                         31,240         1,029        3.29%        31,620             970       3.07%
Federal Funds Purchased                    493            36        7.30%             0               0       0.00%
                                          -----          ---       ------            ---             --       -----
Total Interest
 Bearing Liabilities                     91,804       $4,596        5.01%        86,912          $3,930       4.52%
                                                      ======        =====                        ======       =====
Non-Interest Bearing
 Deposits                                16,651                                  15,734
Total Cost of Funds                                                 4.24%                                     3.83%
                                                                    =====                                     ====-
All Other Liabilities                       145                                     361
Shareholders' Equity                     10,124                                   8,856
Unrealized Gain (Loss)
 on Securities Available
 for Sale                                 (881)                                    (392)
                                         ------                                   ------
Total Liabilities and
 Shareholders' Equity                 $117,843                                 $111,471
                                      =========                                =========

Net Interest Yield                                                  3.49%                                     3.53%
                                                                    =====                                     =====

Net Interest Margin                                                 4.28%                                     4.24%
                                                                    =====                                     =====
</TABLE>



<PAGE>

<TABLE>
<CAPTION>

                                   SCHEDULE II
                              RATE/VOLUME ANALYSIS
                                 (IN THOUSANDS)




                                                             2000/1999                                  1999/1998
                                                            -----------                                -----------
                                                Increase (Decrease) due                    Increase (Decrease) due
                                                          to change in                               to change in
                                                         --------------                             --------------
                                        Average     Average                     Average      Average
                                        Balance       Rate       Total          Balance        Rate         Total
                                        -------      ------     -------         -------       ------       -------
INTEREST REVENUE
<S>                                      <C>          <C>        <C>            <C>            <C>         <C>
Federal Funds Sold                       $(312)       $101       $(211)         $ (330)        $(49)       $ (379)
Securities Available
 for Sale Taxable                          273         100         373             491           20           511
Securities Available
 for Sale, Tax Exempt                        7          (3)          4              33           (7)           26
Loans, Including Fees                     (603)        185         788             824         (329)          495
                                         ------       -----       -----           -----        -----         -----
Total Interest Revenue                     571         383         954           1,018         (365)          653

INTEREST EXPENSE

Interest Bearing
 Deposits                                  220         410         630             410         (348)           62
Other Short-Term
 Borrowings                                  0           0           0               0           (1)           (1)
Federal Funds Purchased                     36           0          36               0            0             0
                                           ----         ---        ----             ---          ---           ---
Total Interest Expense                   $ 256         410         666           $ 410         (349)           61
                                         ======       =====       =====          ======        =====          ====

Net Change in Net
 Interest Revenue                        $ 315        $(27)      $ 288           $ 608         $(16)        $ 592
                                         ======       =====      ======          ======        =====        ======
</TABLE>





<PAGE>

<TABLE>
<CAPTION>

                                  SCHEDULE III
                            INTEREST RATE SENSITIVITY
                                 (IN THOUSANDS)

                                                                                                December 31, 2000
                                                0-3             4 MO           1 YR
                                             MONTHS          TO 1 YR        TO 5 YR        > 5 YR           TOTAL
                                            --------         --------      ---------      --------        --------
                                     ASSETS
<S>                                        <C>               <C>            <C>           <C>             <C>
Federal Funds Sold                         $  5,360          $     0        $     0       $    0          $ 5,360
Investments                                     284              998          9,513        22,818          33,613
Loans                                        25,203           10,609         41,027           329          77,168
                                           ---------        ---------      ---------      --------       ---------

Total Earning Assets                       $ 30,847         $ 11,607       $ 50,540       $23,147        $116,141
                                           =========        =========      =========      ========       =========

LIABILITIES AND SHAREHOLDERS EQUITY
Interest-Bearing
 Deposits                                  $ 39,507         $ 25,933       $ 31,078           $ 0        $ 96,518
Non-Interest
 Bearing Deposits                            18,541                0              0             0          18,541
Securities Sold Under
 Agreements to Repurchase                       258                0              0             0         115,317
                                               -----              ---            ---           ---       ---------

Total Interest and
 Non-Interest
 Bearing Deposits                          $ 58,306         $ 25,933       $ 31,078         $   0        $115,317
                                           =========        =========      =========        ======       =========

Interest Rate
 Sensitivity Gap                           $(27,459)        $(14,326)      $ 19,462       $23,147           $ 824
                                           =========        =========      =========      ========          ======

Cumulative Interest
 Rate Sensitivity Gap                      $(27,459)        $(41,785)      $(22,323)        $ 824
                                           =========        =========      =========        ======

Net Repricing Gap as a
 Percentage of Total
 Earning Assets                             (23.64)%         (12.34)%        16.76%         19.93%          0.71 %
                                           =========        =========       ========       =======         =======

Cumulative Gap as a
 Percentage of Total
 Earning Assets                             (23.64)%         (35.98)%       (19.22)%         0.71%
                                           =========        =========      =========        ======
</TABLE>



<PAGE>

<TABLE>
<CAPTION>

                                   SCHEDULE IV
                                 LOAN REPRICING
                                 (IN THOUSANDS)

                                                                                          December 31, 2000
                                                                          ----------------------------------
                                               0-3           4 MO           1 YR
                                            MONTHS        TO 1 YR        TO 5 YR        > 5 YR        TOTAL
                                           --------       --------      ---------      --------     --------
LOAN CATEGORY
<S>                                         <C>            <C>             <C>           <C>         <C>
 Real Estate -
  Commercial                                $ 3,367         $1,417         $5,527           $ 0      $10,311
 Real Estate -
  Construction and
  Land Development                            3,145          1,324          5,164             0        9,633
 Real Estate -
  Residential                                 6,792          2,859         11,143             0       20,794
 Commercial and
  Industrial                                  5,270          2,218          8,647             0       16,135
 Installment Loans -
  Consumer and Other                          6,629          2,791         10,546           329       20,295
                                            -------         ------        -------          ----      -------

Total                                       $25,203        $10,609        $41,027         $ 329      $77,168
                                            =======        =======        =======         =====      =======
</TABLE>


<PAGE>


                                   SCHEDULE V
                              NONPERFORMING ASSETS
                                 (IN THOUSANDS)



                                                              December 31,
                                                        2000                1999
                                                       -----                ----
Non-Accrual Loans                                       $ 11                $ 34
Loans Past Due > 90 Days                                  91                  89
Restructured Loans                                         0                   0
                                                        ----                  --
Total Non-Performing Assets                             $102                $123
                                                        ====                ====







<PAGE>


                                   SCHEDULE VI
                          ANALYSIS OF LOAN LOSS RESERVE
                                 (IN THOUSANDS)



                                                            December 31,
                                                            ------------
                                                      2000                 1999
                                                      ----                 ----
Balance at Beginning of Period                        $618                 $594
                                                      ----                 ----
Charge-Offs:
Commercial, Financial & Agricultural                    37                    0
Real Estate - Construction                               0                    0
Real Estate - Mortgages                                  0                    0
Installment - Consumer                                 108                  196
Other                                                    0                    0
                                                        --                   --
Total Charge-Offs                                      145                  196
                                                      ----                 ----
Recoveries:
Commercial, Financial and Agricultural                  13                    0
Real Estate - Construction                               0                    0
Real Estate - Mortgages                                  0                    0
Installment - Consumer                                  44                   60
Other                                                    0                    0
                                                        --                   --
Total Recoveries                                        57                   60
                                                       ---                  ---
Net Charge-Offs                                         88                  136

Provision for Loan Losses                              209                  160
                                                     -----                -----
Balance at the End of the Period                      $739                 $618
                                                     =====                =====
Ratio of Net Charge-Offs to
 Average Loans Outstanding                            0.12%                0.20%
                                                     =====                =====





<PAGE>

<TABLE>
<CAPTION>

                                  SCHEDULE VII
                         ALLOCATION OF LOAN LOSS RESERVE
                                 (IN THOUSANDS)



                                                                                             December 31,
                                                                                 -------------------------
                                                        2000        % of Total      1999        % of Total
<S>                                                     <C>               <C>       <C>             <C>
Commercial, Financial and
 Agricultural                                           $152              20%       $127              21%
Real Estate - Construction                               123              17%        108              17%
Real Estate - Mortgages                                  205              28%        113              18%
Installment - Consumer                                   255              34%        162              27%
Other                                                      4               1%        108              17%
Unallocated                                                0               0%          0               0%
                                                          --              ---         --              ---
                                                        $739             100%       $618             100%
                                                        ====             ====       ====             ====
</TABLE>



<PAGE>


                                  SCHEDULE VIII
                           RETURN ON ASSETS AND EQUITY
                                 (IN THOUSANDS)



                                                         2000              1999
                                                        ------            ------
Return on Average Assets                                 1.10%             1.06%

Return on Average Equity                                12.81%            13.35%
Dividend Payout Ratio                                    0.00%             0.00%

Average Equity to Average Assets                         8.59%             7.94%






<PAGE>



Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
     Financial Disclosure

There have been no disagreements with the Company's  independent  accountants on
any matter of accounting or financial statement disclosure.

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
     with Section 16(a) of the Exchange Act

The information  appearing under the caption  "Election of Directors" on pages 3
and 4 of  the  Proxy  Statement  relating  to the  2001  Annual  Meeting  of the
Stockholders is incorporated herein by reference.

Item 10. Executive Compensation

The information  appearing under the caption "Compensation of Executive Officers
and  Directors"  on page 5 of the  Proxy  Statement  is  incorporated  herein by
reference.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The  information  appearing  under the caption  "Information  Regarding  Certain
Beneficial  Owners" on page 2 of the Proxy Statement is  incorporated  herein by
reference.

Item 12. Certain Relationships and Related Transactions

The information  appearing under the caption "Certain  Relationships and Related
Transactions" on pages 5 and 6 of the Proxy Statement is incorporated  herein by
reference.

Item 13. Exhibits and Reports on Form 8-K

     (a)  The following exhibits either are filed or otherwise furnished as part
          of this report or are incorporated herein by reference:

         No.                    Description
         ---                    -----------
         21                     Subsidiaries of the Registrant

     (b)  Reports on Form 8-K. The registrant  did not file any Current  Reports
          on Form 8-K during the last fiscal year ending December 31, 2000.



<PAGE>


FORM 1O-KSB

SIGNATURES


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





FIRST CENTRAL BANCSHARES, INC.

Date:  3/30/01        By:  /s/ Ed F. Bell
                           --------------
                       Ed F. Bell Chairman, President and
                      Chief Executive Officer


Date:  3/30/01        By:  /s/ Willard D. Price
                           --------------------
                        Willard D. Price, Executive Vice
                      President and Chief Operating Officer




<PAGE>


In accordance with Section 13 or 15(d) of the Exchange Act, this report has been
signed below by the  following  persons on behalf of the  registrant  and in the
capacities and on the dates indicated:


/s/ Ed F. Bell                              /s/ Willard D. Price
---------------------------------           ------------------------------------
Ed F. Bell, Chairman, President             Willard D. Price, Executive Vice
 and Chief Executive Officer                  President and Chief Operating
 Director                                     Officer, Director
Date:           3/30/01                     Date:           3/30/01
     ----------------------------                 ------------------------------


/s/ Jack Hammontree                         /s/ Barry H. Gordon
---------------------------------           ------------------------------------
Jack Hammontree, Director                   Barry H. Gordon, Director
Date:           3/30/01                     Date:           3/30/01
     ----------------------------                 ------------------------------


/s/ Robert D. Grimes                        /s/ Gary Kimsey
---------------------------------           ------------------------------------
Robert D. Grimes, Director                  Gary Kimsey, Director
Date:           3/30/01                     Date:           3/30/01
     ----------------------------                 ------------------------------


/s/ G. Bruce Martin                         /s/ Peter G. Stimpson
---------------------------------           ------------------------------------
G. Bruce Martin, Director                   Peter G. Stimpson, Director
Date:           3/30/01                     Date:           3/30/01
     ----------------------------                 ------------------------------


/s/ Benny L. Shubert                        /s/ Ted L. Wampler, Jr.
---------------------------------           ------------------------------------
Benny L. Shubert, Director                  Ted L. Wampler, Jr., Director
Date:           3/30/01                     Date:           3/30/01
     ----------------------------                 ------------------------------


/s/ Guilford F. Tyler, Jr.                  /s/ James W. Wilburn, III
---------------------------------           ------------------------------------
Guilford F. Tyler, Jr., Director            James W. Wilburn, III, Director
Date:           3/30/01                     Date:           3/30/01
     ----------------------------                 ------------------------------


<PAGE>
                                   EXHIBIT 21

                         Subsidiaries of the Registrant:


First Central Bank, a Tennessee banking corporation

FCB Financial Services, Inc., a Tennessee corporation