UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark  One)

{  X  }   Quarterly  Report Under Section 13 or 15(d) of the Securities Exchange
          Act  of  1934 For the Quarterly Period Ended September 30, 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:  0-23605


                              CAVALRY BANCORP, INC.
                              ---------------------
             (exact name of registrant as specified in its charter)

           Tennessee                                            62-1721072
--------------------------                                --------------------
(State or other jurisdiction                                (I.R.S. Employer
 of incorporation or  organization)                          I.D. Number)

114 West College Street, Murfreesboro, Tennessee                   37130
--------------------------------------------------------         ---------
 (Address  of  principal executive offices)                      (Zip Code)

                                 (615) 893-1234
                                 --------------
               Registrant's telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required to file such reports), and has been subject to such filing requirements
for  the  past  90  days.

                  Yes  X                    No
                      ---                      ---
Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common  stock,  as  of  the  latest  practicable  date.

Common  Stock  Issued  and  Outstanding:  7,104,801  as  of  November  6,  2000.

<PAGE>


                              CAVALRY BANCORP, INC.

                                Table of Contents

Part I   Financial  Information                                            Page

Item 1.  Financial  Statements

         Consolidated Balance Sheets at September 30, 2000 (unaudited)
         and  December  31,  1999                                              1

         Consolidated Statements of Income (unaudited) for the
         Three Month and Nine Month Periods Ended September 30, 2000 and 1999  2

         Consolidated  Statements of Comprehensive Income (unaudited) for the
         Three and Nine Month Periods Ended September 30, 2000 and 1999        3

         Consolidated Statements of Cash Flows (unaudited) for the
         Nine Month Periods Ended September 30, 2000 and 1999                  4

         Notes to Consolidated Financial Statements (unaudited)              5-6

Item  2. Management's  Discussion  and  Analysis  of  Financial
         Condition  and  Results  of  Operations                            7-12

Item 3.  Quantitative and Qualitative Disclosures About Market Risk        12-13

Part II  Other Information                                                    14

Signatures                                                                    15


<PAGE>

PART I.   Financial Information

ITEM  1.                 FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>
                              CAVALRY BANCORP, INC.
                           CONSOLIDATED BALANCE SHEETS
              SEPTEMBER 30, 2000 (UNAUDITED) AND DECEMBER 31, 1999
                             (DOLLARS IN THOUSANDS)

                                                        September 30, December 31,
ASSETS                                                       2000       1999
--------------------------------------------------------  ---------- ----------
                                                          (Unaudited)
<S>                                                        <C>        <C>
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 16,262   $ 20,043
Interest-bearing deposits with
  other financial institutions. . . . . . . . . . . . . .    22,673     74,379
                                                           ---------  ---------
Cash and cash equivalents . . . . . . . . . . . . . . . .    38,935     94,422
Investment securities available-for-sale
 at fair value (amortized cost: . . . . . . . . . . . . .    27,108      6,964
 $27,090 and $6,968 at September 30, 2000
 and December 31, 1999, respectively)
Mortgage-backed securities held
 to maturity - at
 amortized cost (fair value:. . . . . . . . . . . . . . .       613        651
  $604 and $645 at September 30, 2000
 and December 31, 1999, respectively)
Loans held for sale, at estimated fair value. . . . . . .     7,129      4,485
Loans receivable, net . . . . . . . . . . . . . . . . . .   278,794    272,211
Accrued interest receivable . . . . . . . . . . . . . . .     2,348      1,784
Office properties and equipment, net. . . . . . . . . . .    15,188      9,892
Federal Home Loan Bank of Cincinnati
 stock - at cost. . . . . . . . . . . . . . . . . . . . .     1,982      1,878
Real estate and other assets acquired
 in settlement of loans . . . . . . . . . . . . . . . . .         4        166
Other assets. . . . . . . . . . . . . . . . . . . . . . .     2,834      2,966
                                                           ---------  ---------
Total assets. . . . . . . . . . . . . . . . . . . . . . .  $374,935   $395,419
                                                           =========  =========

LIABILITIES AND EQUITY
---------------------------------------------------------
Liabilities:
Deposits. . . . . . . . . . . . . . . . . . . . . . . . .  $328,418   $308,929
Borrowings. . . . . . . . . . . . . . . . . . . . . . . .     1,592     45,000
Accounts payable and other liabilities. . . . . . . . . .     2,274      2,725
                                                           ---------  ---------
               Total liabilities. . . . . . . . . . . . .   332,284    356,654
                                                           ---------  ---------
Shareholders' equity:
Preferred stock, no par value
  Authorized- 250,000 shares; none
     issued or outstanding at
     September 30, 2000 and December 31, 1999 . . . . . .         -          -
Common stock, no par value
  Authorized- 49,750,000 shares; issued
     and outstanding  7,104,801 at
      September 30, 2000 and December 31, 1999. . . . . .    11,402     10,972
Retained earnings . . . . . . . . . . . . . . . . . . . .    39,235     37,194
Unearned restricted stock . . . . . . . . . . . . . . . .    (3,466)    (4,380)
Unallocated ESOP Shares . . . . . . . . . . . . . . . . .    (4,531)    (5,019)
Accumulated other comprehensive gain (loss), net of tax .        11         (2)
                                                           ---------  ---------

Total equity. . . . . . . . . . . . . . . . . . . . . . .    42,651     38,765
                                                           ---------  ---------
Total liabilities and equity. . . . . . . . . . . . . . .  $374,935   $395,419
                                                           =========  =========
</TABLE>

Note:  The  balance sheet at December 31, 1999 has been derived from the audited
financial  statements  at  that date but does not include all of the information
and  footnotes required by generally accepted accounting principles for complete
financial  statements.

See  accompanying  notes  to  consolidated  financial  statements.

                                        1
<PAGE>
<TABLE>
<CAPTION>


                                CAVALRY BANCORP, INC.
                          CONSOLIDATED STATEMENTS OF INCOME
                    (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                     (UNAUDITED)

                                        Three  Months  Ended     Nine  Months  Ended
                                            September  30,          September  30,
                                          2000         1999        2000        1999
                                          ----         ----        ----        ----
<S>                                  <C>          <C>         <C>         <C>
Interest and dividend income:
 Loans. . . . . . . . . . . . . . .  $    6,651   $    6,036  $   19,199  $   17,468
 Investment securities. . . . . . .         446          543       1,142       1,768
 Deposits with other
   financial institutions . . . . .         431          499       1,345       1,419
 Mortgage-backed securities
   held to maturity . . . . . . . .          10            9          31          30
                                     -----------  ----------  ----------  ----------
       Total interest and
           dividend income. . . . .       7,538        7,087      21,717      20,685
                                     -----------  ----------  ----------  ----------
Interest expense - deposits . . . .       3,248        2,532       9,311       7,231
Interest expense - borrowings . . .          15            -         160           -
                                     -----------  ----------  ----------  ----------
      Total interest expense. . . .       3,263        2,532       9,471       7,231
                                     -----------  ----------  ----------  ----------
 Net interest income. . . . . . . .       4,275        4,555      12,246      13,454
 Provision for loan losses. . . . .           -          132         141         644
                                     -----------  ----------  ----------  ----------
  Net interest income after
     provision for loan losses. . .       4,275        4,423      12,105      12,810
                                     -----------  ----------  ----------  ----------
Non-interest income:
  Servicing income. . . . . . . . .          60           59         191         198
  Gain on sale of loans, net. . . .         419          692       1,175       1,598
  Gain (loss) on sale of office
    properties and equipment. . . .         (16)           -           2           -
  Deposit servicing fees
    and charges . . . . . . . . . .         665          546       1,844       1,451
  Trust service fees. . . . . . . .         267          249         801         687
  Other operating income. . . . . .          67           61         246         197
                                     -----------  ----------  ----------  ----------
    Total non-interest income . . .       1,462        1,607       4,259       4,131
                                     -----------  ----------  ----------  ----------
 Non-interest expenses:
   Compensation, payroll taxes
     and fringe benefits. . . . . .       2,457        2,381       7,063       6,761
   Occupancy expense. . . . . . . .         174          186         523         533
   Supplies, communications
    and other office expenses . . .         192          204         592         654
   Federal insurance premiums . . .          16           37          47         112
   Advertising expense. . . . . . .          52           48         204         229
   Equipment and service
         bureau expense . . . . . .         512          603       1,536       1,776
   Other operating expenses . . . .         350          315       1,078       1,038
                                     -----------  ----------  ----------  ----------
     Total non-interest expenses. .       3,753        3,774      11,043      11,103
                                     -----------  ----------  ----------  ----------
  Earnings before income
      tax expense . . . . . . . . .       1,984        2,256       5,321       5,838
  Income tax expense. . . . . . . .         815          918       2,213       2,407
                                     -----------  ----------  ----------  ----------
     Net income . . . . . . . . . .  $    1,169   $    1,338  $    3,108  $    3,431
                                     ===========  ==========  ==========  ==========

Basic earnings per share. . . . . .  $     0.18   $     0.20  $     0.49  $     0.52
                                     ===========  ==========  ==========  ==========

Weighted average shares outstanding   6,397,364    6,580,643   6,353,054   6,656,391
                                     ===========  ==========  ==========  ==========
</TABLE>


Dividends  declared $0.05 per share payable October 13, 2000 for shareholders of
record  date  September  30,  2000.

See  accompanying  notes  to  consolidated  financial  statements.

                                        2
<PAGE>
<TABLE>
<CAPTION>

                              CAVALRY BANCORP, INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)


                                      Three Months Ended    Nine Months Ended
                                         September  30,       September  30,
                                           2000    1999        2000    1999
                                           ----    ----        ----    ----
<S>                                      <C>     <C>         <C>     <C>
Net income. . . . . . . . . . . . . . .  $1,169  $1,338      $3,108  $3,431
Other comprehensive income, net of tax
Unrealized gains (losses) on securities
 available for sale . . . . . . . . . .      41      14          13     (78)
                                         ------  ------      ------   ------

Comprehensive income. . . . . . . . . .  $1,210  $1,352      $3,121  $3,353
                                         ======  ======      ======  =======
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>

                              CAVALRY BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

                                                               2000      1999
                                                               ----      ----
<S>                                                        <C>        <C>
Operating activities:
          Net cash provided by operating activities . . .  $  1,224   $ 10,303
                                                           ---------  ---------
Investing activities:
   Increase in loans receivable, net. . . . . . . . . . .    (6,468)   (34,857)
   Principal payments on mortgage
        backed securities held to maturity. . . . . . . .        36        237
  Proceeds from sales of office properties and equipment.       272          -
  Purchase of investment securities
     available for sale . . . . . . . . . . . . . . . . .   (28,901)   (35,965)
  Proceeds from maturities of investment securities . . .     9,000     41,500
   Purchase of office properties and equipment. . . . . .    (6,215)    (1,085)
                                                           ---------  ---------
          Net cash used in investing activities . . . . .   (32,276)   (30,170)
                                                           ---------  ---------

Financing activities:
  Net increase in deposits. . . . . . . . . . . . . . . .    19,489     31,383
  Dividends paid. . . . . . . . . . . . . . . . . . . . .    (1,065)      (714)
  Net increase (decrease) in borrowings . . . . . . . . .   (43,408)         -
  Stock repurchase and retirement . . . . . . . . . . . .         -     (8,865)
Payments by borrowers for
  property taxes and insurance. . . . . . . . . . . . . .       549        559
                                                           ---------  ---------
         Net cash provided by (used in)
          financing activities. . . . . . . . . . . . . .   (24,435)    22,363
                                                           ---------  ---------
Increase (decrease) in cash and cash equivalents. . . . .   (55,487)     2,496
Cash and equivalents, beginning of period . . . . . . . .    94,422     53,188
                                                           ---------  ---------

 Cash and cash equivalents, end of period . . . . . . . .  $ 38,935   $ 55,684
                                                           =========  =========

SUPPLEMENT DISCLOSURES OF CASH
   FLOW INFORMATION:
Payments during the period for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . .  $  9,193   $  7,201
                                                           =========  =========
Income taxes. . . . . . . . . . . . . . . . . . . . . . .  $  2,831   $  3,569
                                                           =========  =========

SUPPLEMENTAL DISCLOSURES OF NONCASH
  INVESTING AND FINANCING ACTIVITIES:

 Interest credited to deposits. . . . . . . . . . . . . .  $  3,381   $  2,946
                                                           =========  =========
 Increase (decrease) in deferred tax asset related
   to unrealized loss on investments. . . . . . . . . . .  $     (7)  $     46
                                                           =========  =========
Net unrealized gain (losses) on investment
    securities available for sale . . . . . . . . . . . .  $     20   $   (124)
                                                           =========  =========
Dividends declared and payable. . . . . . . . . . . . . .  $    355   $    355
                                                           =========  =========
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                        4
<PAGE>
                              CAVALRY BANCORP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Basis  of  Presentation

Cavalry  Bancorp,  Inc. (the "Company"), a Tennessee corporation, is the holding
company  for  Cavalry  Banking (the "Bank") which is a federally chartered stock
savings  bank.

The  accompanying  consolidated  financial  statements  of the Company have been
prepared in accordance with Instructions to Form 10-Q.  Accordingly, they do not
include  all  of  the  information  and footnotes required by generally accepted
accounting  principles  for  complete  financial  statements.  However,  such
information  reflects  all  adjustments  (consisting  solely of normal recurring
adjustments)  which  are,  in  the  opinion  of management, necessary for a fair
statement  of  results  for  the  interim  periods.

The  results  of  operations  for  the three and nine months ended September 30,
2000,  are not necessarily indicative of the results to be expected for the year
ending  December  31,  2000.  The  consolidated  financial  statements and notes
thereto  should be read in conjunction with the audited financial statements and
notes  thereto  for  the  year  ended  December  31,  1999.

2.     Earnings  Per  Share

Earnings  per  share  has  been  computed  for  the  three and nine months ended
September  30,  2000,  based  upon weighted average common shares outstanding of
6,397,364  and 6,353,054 respectively.  Earnings per share has been computed for
the  three and nine months ended September 30, 1999, based upon weighted average
common  shares outstanding of 6,580,643 and 6,656,391 respectively.  The Company
had  no dilutive securities, therefore diluted earnings per share is the same as
basic  earnings  per  share.

3.     Business  Segments

The  Company  and  its subsidiary provide community oriented banking services to
individuals  and businesses primarily within Rutherford, Bedford, and Williamson
counties  in  Middle  Tennessee.

The  Company's  segments  are  identified  by the products and services offered,
principally  distinguished  as  banking,  trust and mortgage banking operations.
Approximately  30%  of  mortgage  banking  revenues  are  derived each year from
transactions  with  agencies of the U.S. government.  In addition, one unrelated
entity  purchased  approximately  50%  of  mortgages  sold  in  1999.

Segment  information  is  derived from the internal reporting system utilized by
management  with  accounting  policies  and  procedures  consistent  with  those
described  in  Note  1  of  the  1999  Annual  Report  to Shareholders.  Segment
performance  is  evaluated  by the Company based on profit or loss before income
taxes.  Revenue,  expense,  and  asset  levels  reflect  those  which  can  be
specifically  identified  and  those  assigned  based  on  internally  developed
allocation  methods.  These  methods  have  been  consistently  applied.

                                        5
<PAGE>
<TABLE>
<CAPTION>

<S>                              <C>         <C>       <C>     <C>
                                             Mortgage
For the quarter ended . . . . .  Banking      Banking   Trust   Consolidated
September 30, 2000
Interest revenue. . . . . . . .  $   7,538   $      -  $    -      $   7,538
Other income-external customers        732         60     267          1,059
Interest expense. . . . . . . .      3,263          -       -          3,263
Depreciation and amortization .        161         31       8            200
Other significant items:
     Provision for loan losses.          -          -       -              -
     Gain (loss) on
         sales of assets. . . .        (16)       419       -            403
Segment profit. . . . . . . . .      1,920          -      64          1,984
Segment assets. . . . . . . . .    369,050      5,703     182        374,935
</TABLE>


<TABLE>
<CAPTION>

<S>                              <C>        <C>       <C>     <C>
                                            Mortgage
For the quarter ended . . . . .  Banking     Banking   Trust   Consolidated
September 30, 1999
Interest revenue. . . . . . . .  $   7,087  $      -  $    -      $   7,087
Other income-external customers        607        59     249            915
Interest expense. . . . . . . .      2,532         -       -          2,532
Depreciation and amortization .        200        48      22            270
Other significant items:
    Provision for loan losses .        132         -       -            132
    Gain on sales of assets . .          -       692       -            692
Segment profit. . . . . . . . .      2,033       161      62          2,256
Segment assets. . . . . . . . .    384,990     5,703     182        390,875
</TABLE>


<TABLE>
<CAPTION>

<S>                              <C>        <C>        <C>     <C>
                                            Mortgage
For the nine months ended . . .  Banking     Banking    Trust   Consolidated
September 30, 2000
Interest revenue. . . . . . . .  $  21,717  $      -   $    -     $   21,717
Other income-external customers      2,090       191      801          3,082
Interest expense. . . . . . . .      9,471         -        -          9,471
Depreciation and amortization .        493        93       24            610
Other significant items:
    Provision for loan losses .        141         -        -            141
    Gain on sales of assets . .          2     1,175        -          1,177
Segment profit (loss) . . . . .      5,126        (5)     200          5,321
Segment assets. . . . . . . . .    367,330     7,162      443        374,935
</TABLE>


<TABLE>
<CAPTION>

<S>                              <C>        <C>       <C>     <C>
                                            Mortgage
For the nine months ended . . .  Banking     Banking   Trust   Consolidated
September 30, 1999
Interest revenue. . . . . . . .  $  20,685  $      -  $    -     $   20,685
Other income-external customers      1,648       198     687          2,533
Interest expense. . . . . . . .      7,231         -       -          7,231
Depreciation and amortization .        622       150      43            815
Other significant items:
    Provision for loan losses .        644         -       -            644
   Gain on sales of assets. . .          -     1,598       -          1,598
Segment profit. . . . . . . . .      5,413       262     163          5,838
Segment assets. . . . . . . . .    384,990     5,703     182        390,875
</TABLE>


                                        6
<PAGE>

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
        of  Operations

Private Securities Litigation Reform Act Safe Harbor Statement

This  Quarterly  Report  contains  forward-looking  statements  within  the
meaning  of  the  federal  securities laws.  These statements are not historical
facts,  rather  statements based on the Company's current expectations regarding
its  business  strategies and their intended results and its future performance.
Forward-looking  statements are preceded by terms such as "expects," "believes,"
"anticipates,"  "intends,"  and  similar  expressions.

Forward-looking  statements  are  not  guarantees  of  future  performance.
Numerous  risks  and  uncertainties  could  cause  the Company's actual results,
performance, and achievements to be materially different from those expressed or
implied by the forward-looking statements.  Factors that may cause or contribute
to  these  differences include, without limitation, general economic conditions,
including  changes  in  market interest rates and changes in monetary and fiscal
policies  of  the  federal  government;  legislative and regulatory changes; and
other  factors  disclosed  periodically  in  the  Company's  filings  with  the
Securities  and  Exchange  Commission.

Because  of  the  risks  and  uncertainties  inherent  in  forward-looking
statements,  readers  are cautioned not to place undue reliance on them, whether
included in this report or made elsewhere from time to time by the Company or on
its  behalf.  The  Company  assumes  no obligation to update any forward-looking
statements.

Comparison of Financial Condition at September 30, 2000 and December 31, 1999

Total  assets  were  $374.9  million  at  September 30, 2000, compared to $395.4
million  at  December  31,  1999,  a  decrease  of $20.5 million or 5.18%.  This
decrease was a result of cash being used to reduce borrowings from $45.0 million
to  $1.6  million.  This  decrease  was  partially  offset  by  an  increase  in
investments  from  increased deposits.  Cash and cash equivalents decreased from
$94.4  million  at  December  31,  1999, to $38.9 million at September 30, 2000.
This  decrease  was  primarily  a result of cash used to retire $45.0 million in
borrowings.  Investments  available  for  sale  increased  from  $7.0 million at
December  31,  1999,  to  $27.1  million  at  September 30, 2000, as a result of
increased  deposits.  Loans  receivable  net  increased $6.6 million from $272.2
million  at  December  31, 1999, to $278.8 million at September 30, 2000. Office
properties  and  equipment  increased  from $9.9 million at December 31, 1999 to
$15.2  million  at  September 30, 2000.  This increase was primarily a result of
the  construction  of  a  new  operations  building  that  was completed in late
September.  The  construction  of  this building will allow additional growth in
the  downtown  main office and the consolidation of support operations. The Bank
continues  to try to serve the needs of the community by increasing deposits and
using  those  funds  to  make  loans  in  the  surrounding  community.


                                        7
<PAGE>
Deposit  accounts  increased  $19.5  million from $308.9 million at December 31,
1999,  to  $328.4  million  at  September  30,  2000.  Certificates  of  deposit
increased  $5.4  million  from  $151.0  million  at  December 31, 1999 to $156.4
million  at  September 30, 2000.  Savings deposits increased $425,000 from $13.0
million  at  December  31,  1999  to $13.4 million at September 30, 2000.  Money
market  accounts  increased $4.2 million from $63.8 million at December 31, 1999
to  $68.0  million  at  September 30, 2000.  Transaction accounts increased $7.5
million  from  $34.7  million at December 31, 1999 to $42.2 million at September
30, 2000.  These increases were primarily a result of an ongoing effort to raise
the  deposit  base  for  the  Bank.

Stockholders'  equity  increased  by $3.9 million from $38.8 million at December
31,  1999,  to $42.7 million at September 30, 2000, as a result of net income of
$3.1  million  for  the  nine  months  ended September 30, 2000, release of ESOP
shares  of  $918,000  and release of Management Recognition Plan (MRP) shares of
$914,000  and an unrealized gain on available for sale securities of $13,000 net
of  taxes.  These  increases  were offset by dividends declared of $1.1 million.

Nonperforming assets  were  $499,000  at  December  31,  1999  and  $589,000 at
September 30, 2000.

Comparison of Operating Results for the Three Months Ended September 30, 2000
  and September 30, 1999.

Net  Income.  Net  income  was $1.2 million for the three months ended September
30, 2000 compared to $1.3 million for the three months ended September 30, 1999.
This  decline  was  primarily  a result of higher interest expense and lower non
interest  income.  These  factors  were  offset  by  lower non interest expense,
higher  interest  income  and a lower provision for loan losses.  The decline in
net  interest income was primarily a result of the impact of the decline in cash
equivalents  used  to fund the special cash distribution of $53.3 million, which
was  paid  in  December  1999.

Net  Interest  Income.  Net interest income decreased $300,000 from $4.6 million
for  the  three  months  ended September 30, 1999, to $4.3 million for the three
months  ended  September  30, 2000.  This decline was a result of earning assets
being  utilized  to  fund  the  special cash distribution paid in December 1999.
This distribution resulted in a decline in the ratio of average interest-earning
assets to average interest-bearing liabilities from 140.85% for the three months
ended  September  30,  1999, to 117.37% for the three months ended September 30,
2000.

Interest  income  increased  5.63%  to  $7.5  million for the three months ended
September  30, 2000, from $7.1 million for the same period in 1999.  Interest on
loans increased from $6.0 million for the three months ended September 30, 1999,
to $6.7 million for the same period in 2000.  This was a result of average loans
outstanding  increasing from $274.6 million for the three months ended September
30,  1999,  to  $281.1  million  for the same period in 2000.  The average yield
increased from 8.79% for the three months ended September 30, 1999, to 9.47% for
the  same  period  in  2000.  This  increase  in yield was a result of increased
lending  rates.  Income  on  all other investments consisting of mortgage backed
securities,  investments,  FHLB  stock, bank deposits and federal funds declined
from $1.1 million for the three months ended September 30, 1999, to $887,000 for
the  same  period in 2000.  Average investments decreased from $82.1 million for
the  three months ended September 30, 1999, to $52.3 million for the same period
in  2000.  The  average  yield  increased  from 5.01% for the three months ended
September 30, 1999, to 6.73% for the same period in 2000.  This increase in rate
was  a  result of rising rates while the decline in volume was a result of funds
used  to  pay  the  special  cash  distribution  in  December  1999.


                                        8
<PAGE>

Interest  expense  increased  from  $2.5  million  for  the  three  months ended
September  30,  1999,  to  $3.3  million  for  the same period in 2000.  Average
deposits  increased from $253.2 million for the three months ended September 30,
1999, to $282.4 million for the same period in 2000.  This increase was a result
of continuing efforts to increase market share of deposits.  The average cost of
deposits  increased from 3.97% for the three months ended September 30, 1999, to
4.56%  for  the same period in 2000.  Average borrowings were $1.6 million at an
average cost of 3.73% for the three months ended September 30, 2000.  There were
no borrowings outstanding during the three months ended September 30, 1999.  The
total  cost  of  funds increased from 3.97% for the three months ended September
30, 1999, to 4.56% for the three months ended September 30, 2000.  This increase
in cost was a result of higher interest rates during the quarter ended September
30,  2000.  Average  interest-bearing  liabilities increased from $253.2 million
for  the  three  months ended September 30, 1999, to $284.0 million for the same
period  in 2000.  Interest rate spread increased from 3.98% for the three months
ended September 30 1999, to 4.48% for the same period in 2000.  This increase in
spread  was a result of yields on earning assets increasing faster than the cost
of  funds.  Net interest margin increased from 5.11 % for the three months ended
September  30,  1999,  to  5.13%  for  the  same  period  in  2000.

Provision for Loan Losses.  Provision for loan losses are charges to earnings to
bring the total allowance for loan losses to a level considered by management as
adequate  to  provide for estimated loan losses 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.  Management also considers the level of
problem  assets, giving greater weight to the level of classified assets than to
the  level  of  nonperforming  assets because classified assets include not only
nonperforming  assets  but  also  performing  assets  that otherwise exhibit, in
management's  judgement,  potential  credit  weaknesses.

There  was no provision for loan losses for the three months ended September 30,
2000,  compared  to  $132,000  for the same period in 1999.  The decrease in the
provision  was a result of a smaller increase in total loans outstanding between
the  two  periods.  Management  deemed the allowance for loan losses adequate at
September  30,  2000.

Noninterest  Income.  Noninterest  income  decreased  from  $1.6 million for the
three  months  ended  September 30, 1999, to $1.5 million for the same period in
2000.  In the mortgage banking segment, net gain on sale of loans decreased from
$692,000 for the three months ended September 30, 1999, to $419,000 for the same
period  in  2000.  The  higher gain in 1999 was a result of a non recurring bulk
sale  of  a  portion  of  the  servicing  portfolio  in  the amount of $199,000.
Discounting  the  one  time  transaction,  the  gain  for the three months ended
September  30,  1999, would have been $493,000.  The decline in net gain on sale
of  loans  was  a result of narrower margins due to market competition and lower
volumes.  Loan  servicing  fees  increased  slightly  from $59,000 for the three
months ended September 30, 1999, to $60,000 for the same period in 2000.  In the
banking  segment,  deposit  fees  and  other  operating  incomes  increased from
$607,000 for the three months ended September 30, 1999, to $732,000 for the same
period  in  2000.  This  increase  was  a  result  of  growth  in  the number of
transaction  accounts  and  increased charges.  In the trust segment, trust fees
increased  from  $249,000  for  the  three  months  ended September 30, 1999, to
$267,000  for  the  same  period  in 2000 as a result of increased fees and more
trust  assets  under  management.

Noninterest  Expense.  Noninterest expense was $3.8 million for the three months
ended  September  30,  2000, and 1999.  Compensation and other employee benefits
increased  from  $2.4  million for the three months ended September 30, 1999, to
$2.5 million for the three months ended September 30, 2000.  This increase was a
result  of  vesting  of a deceased director's MRP shares.  The increase in other
operating  expense  was  primarily a result of increased professional fees.  The
decreases  in  other  expenses  were  primarily  due to a general slowing of the
economy and an effort to reduce overhead.  The company expects occupancy expense
to increase beginning in the fourth quarter of 2000 as a result of occupying the
new  operations  building.

Income  taxes.  The provision for income taxes was $815,000 for the three months
ended  September  30,  2000,  compared  to $918,000 for the same period in 1999.
This  decrease  was  primarily  a  result  of  lower  income  before  taxes.


                                        9
<PAGE>

Comparison of Operating Results for the Nine Months Ended September 30, 2000 and
September  30,  1999.

Net  Income.  Net  income  decreased  to  $3.1 million for the nine months ended
September  30,  2000,  from $3.4 million for the nine months ended September 30,
1999,  primarily  as  a  result  of a higher interest expense.  This increase in
interest  expenses  was  partially  offset  by  an  increase in interest and non
interest  income  and  a  lower  provision  for  loan  losses.

Net  Interest  Income.  Net interest income decreased from $13.5 million for the
nine months ended September 30, 1999, to $12.2 million for the nine months ended
September  30, 2000.  This decline was a result of earning assets being utilized
to  fund the special cash distribution paid in December 1999.  This distribution
resulted in a decline in the ratio of average interest-earning assets to average
interest-bearing  liabilities  from  144.31% for the nine months ended September
30,  1999,  to  116.37%  for  the  nine  months  ended  September  30,  2000.

Interest  income  increased  4.83%  to  $21.7  million for the nine months ended
September 30, 2000, from $20.7 million for the same period in 1999.  Interest on
loans increased from $17.5 million for the nine months ended September 30, 1999,
to  $19.2  million  for  the  same period in 2000.  This was a result of average
loans  outstanding  increasing  from  $262.9  million  for the nine months ended
September  30, 1999, to $278.7 million for the same period in 2000.  The average
yield  increased  from  8.88%  for  the nine months ended September 30, 1999, to
9.20%  for  the  same  period  in  2000.  This increase in yield was a result of
increased lending rates.  Income on all other investments consisting of mortgage
backed  securities,  investments,  FHLB  stock,  bank deposits and federal funds
declined from $3.2 million for the nine months ended September 30, 1999, to $2.5
million  for  the same period in 2000.  Average investments decreased from $86.4
million  for  the nine months ended September 30, 1999, to $50.9 million for the
same period in 2000.  The average yield increased from 4.97% for the nine months
ended  September  30, 1999, to 6.61% for the same period in 2000.  This increase
in rate was a result of rising rates while the decline in volume was a result of
funds  used  to  pay  the  special  cash  distribution  in  December  1999.

Interest expense increased from $7.2 million for the nine months ended September
30,  1999,  to  $9.5  million  for  the  same  period in 2000.  Average deposits
increased  from  $242.1 million for the nine months ended September 30, 1999, to
$279.2  million  for  the  same  period  in 2000.  This increase was a result of
continuing  efforts  to  increase market share of deposits.  The average cost of
deposits  increased  from 3.99% for the nine months ended September 30, 1999, to
4.45%  for  the same period in 2000.  Average borrowings were $4.0 million at an
average  cost of 5.31% for the nine months ended September 30, 2000.  There were
no  borrowings outstanding during the nine months ended September 30, 1999.  The
total cost of funds increased from 3.99% for the nine months ended September 30,
1999,  to  4.47% for the nine months ended September 30, 2000.  This increase in
cost  was  a  result  of  higher  interest  rates  during  the nine months ended
September  30, 2000.  Average interest-bearing liabilities increased from $242.1
million  for the nine months ended September 30, 1999, to $283.2 million for the
same  period  in  2000.  Interest  rate spread increased from 3.93% for the nine
months  ended  September  30,  1999, to 4.33% for the same period in 2000.  This
increase  in  spread  was a result of yields on earning assets increasing faster
than  the  cost of funds.  Net interest margin decreased from 5.15% for the nine
months  ended  September  30,  1999, to 4.96% for the same period in 2000.  This
decrease  was  a  result of average earning assets declining and average costing
liabilities  increasing.


                                       10
<PAGE>
Provision for Loan Losses.  Provision for loan losses are charges to earnings to
bring the total allowance for loan losses to a level considered by management as
adequate  to  provide for estimated loan losses 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.  Management also considers the level of
problem  assets  giving greater weight to the level of classified assets than to
the  level  of  nonperforming  assets because classified assets include not only
nonperforming  assets  but  also  performing  assets  that otherwise exhibit, in
management's  judgment,  potential  credit  weaknesses.

The provision for loan losses was $141,000 for the nine months ended September
30, 2000, compared to $644,000 for the same period in 1999.  The decrease in the
provision  was a result of a smaller increase in total loans outstanding between
the  two  periods.  Management  deemed the allowance for loan losses adequate at
September  30,  2000.

Noninterest Income.  Noninterest income increased from $4.1 million for the nine
months  ended  September  30, 1999, to $4.3 million for the same period in 2000.
In  the  mortgage  banking segment net gain on sale of loans decreased from $1.6
million  for  the  nine months ended September 30, 1999, to $1.2 million for the
same  period  in  2000.  This  decrease  was  a result of lower sales volume and
declining  margins due to market competition.  Loan servicing fees also declined
slightly from $198,000 for the nine months ended September 30, 1999, to $191,000
for  the  same  period  in 2000.  In the banking segment, deposit fees and other
operating  incomes  increased  from  $1.6  million  for  the  nine  months ended
September  30, 1999, to $2.1 million for the same period in 2000.  This increase
was  primarily a result of growth in the number of transaction accounts.  In the
trust  segment,  trust  fees  increased  from $687,000 for the nine months ended
September  30,  1999,  to  $801,000  for  the same period in 2000 as a result of
increased  fees  and  more  trust  assets  under  management.

Noninterest  Expense.  Noninterest expense was $11.0 million for the nine months
ended September 30, 2000, compared to $11.1 million for the same period in 1999.
Compensation  and  other  employee  benefits increased from $6.8 million for the
nine  months  ended  September  30,  1999 to $7.1 million for the same period in
2000.  This  increase  was  primarily  a result of the MRP stock incentive plan,
which  was  approved  at  the annual meeting in April 1999.  Most other expenses
declined  for the nine months ended September 30, 2000, compared the same period
in  1999 as a result of slower lending activity and efforts to control expenses.

Income  taxes.  The  provision  for  income  taxes was $2.2 million for the nine
months  ended September 30, 2000 compared to $2.4 million for the same period in
1999.  This  decrease  was  primarily  a  result  of  lower income before taxes.

Liquidity  and  Capital  Resources
The Company's primary sources of funds are customer deposits, proceeds from loan
principal  and interest payments, sale of loans, maturing securities and Federal
Home  Loan  Bank  (FHLB) of Cincinnati advances.  While maturities and scheduled
amortization  of  loans  are  a  predictable  source of funds, deposit flows and
mortgage  prepayments  are  influenced  greatly by general interest rates, other
economic  conditions,  and  competition.  Regulations  of  the  Office of Thrift
Supervision  ("OTS"), the Bank's primary regulator, require the Bank to maintain
an  adequate  level  of  liquidity  to  ensure  the  availability  of sufficient
liquidity  to  fund  loan originations, deposit withdrawals and to satisfy other
financial  commitments.  Currently, the OTS regulatory liquidity for the Bank is
the  maintenance of an average daily balance of liquid assets (cash and eligible
investments)  equal  to  at  least  4%  of  the  daily balance of net withdrawal
deposits  and  short-term  borrowings.  This liquidity requirement is subject to
periodic  change.  The  Company  and the Bank generally maintain sufficient cash
and short-term investments to meet short-term liquidity needs.  At September 30,
2000, cash and cash equivalents totaled $38.9 million or 10.38% of total assets,
and  investments  available-for-sale  totaling  $27.1 million.  At September 30,
2000, the Bank also maintained, but did not draw upon, a line of credit with the
FHLB  of  Cincinnati  in  the  amount  of  $10.0  million.


                                       11
<PAGE>

As  of  September  30,  2000, The Bank's regulatory capital was in excess of all
applicable regulatory requirements.  At September 30, 2000, under regulations of
the  OTS,  the  Bank's  actual tangible, core and risk-based capital ratios were
11.09%,  11.09% and 12.30%, respectively, compared to requirements of 1.5%, 3.0%
and  8.0%,  respectively.

At  September  30,  2000,  the  Bank had loan commitments of approximately $32.5
million.  In  addition,  at  September  30, 2000, the unused portion of lines of
credit  extended  by  the Bank was approximately $9.2 million for consumer loans
and $26.8 million for commercial loans.  Standby letters of credit and financial
guarantees  are  conditional  commitments  issued  by  the Bank to guarantee the
performance  of  a  customer  to  a third party.  Those guarantees are primarily
issued  to  support  public  and  private  borrowing  arrangements,  including
commercial  paper,  bond  financing,  and similar transactions.  Most guarantees
extend  from  one  to two years.  The credit risk involved in issuing letters of
credit  is essentially the same as that involved in extending loan facilities to
customers.  At  September  30,  2000,  the  Bank  had $8.4 million of letters of
credit  outstanding.

Impact  of  Inflation  and  Changing  Prices

The  consolidated  financial  statements  of  the  Company  and  notes  thereto,
presented  elsewhere  herein,  have been prepared in accordance with GAAP, which
require the measurement of financial condition and operating results in terms of
historical  dollars  without considering the change in relative purchasing power
of  money  over  time due to inflation.  The impact of inflation is reflected in
the  increased  cost  of  the  Company's  operations.  Unlike  most  industrial
companies,  nearly  all the assets and liabilities of the Company are financial.
As  a  result, interest rates have a greater impact on the Company's performance
than  do  the  effects  of  general  levels of inflation.  Interest rates do not
necessarily  move  in  the same direction or to the same extent as the prices of
goods  and  services.

Item  3.  Quantitative  and  Qualitative  Disclosures  About  Market  Risk

The  Company's  interest  rate  sensitivity  is  monitored by management through
selected  interest rate risk measures produced internally and by the OTS.  Based
on  internal reviews, management does not believe that there has been a material
change  in  the  Company's  interest rate sensitivity from December 31, 1999, to
September  30,  2000.  However,  the  OTS  results are not yet available for the
quarter  ended  September  30,  2000.  All methods used to measure interest rate
sensitivity  involve  the  use  of  assumptions.  Management cannot predict what
assumptions  are  made by the OTS, which can vary from management's assumptions.
Therefore,  the  results  of  the  OTS calculations can differ from management's
internal  calculations.  The  Company's  interest  rate  sensitivity  should  be
reviewed  in  conjunction  with  the  financial  statements  and  notes  thereto
contained  in the Company's Annual Report for the  year ended December 31, 1999.

The  following  table  presents the Company's maturity gap at September 30, 2000
(In  thousands).


                                       12
<PAGE>
<TABLE>
<CAPTION>

                                         Six        After      After
                              Within    Months     One to      Three      Over
                               Six      To One      Three     to Five      Ten
                              Months     Year       Years      Years      Years       Total
                            --------  ---------  ---------  ---------  ----------  ---------
<S>                          <C>       <C>        <C>        <C>        <C>         <C>
Interest-earning
 assets:

   Loans receivable, net. .  $52,610   $ 50,968   $ 60,352   $ 57,217   $  64,776   $285,923
   Mortgage-backed
        securities. . . . .        9          9         41         47         507        613
   FHLB Stock . . . . . . .    1,982          -          -          -           -      1,982
   Investment securities. .   11,951      5,088     10,069          -           -     27,108
   Federal funds sold
   overnight and other
    interest-bearing
    deposits. . . . . . . .   22,673          -          -          -           -     22,673
                            --------  ---------  ---------  ---------  ----------  ---------

     Total rate
          sensitive assets.  $89,225   $ 56,065   $ 70,462   $ 57,264   $  65,283   $338,299
                             =======   ========   ========   ========   =========   ========

Interest-bearing
 liabilities:

Deposits:
   NOW accounts . . . . . .  $ 4,837   $  4,837   $ 19,349   $ 19,349   $       -   $ 48,372
   Passbook savings
      accounts. . . . . . .    1,344      1,344      5,377      5,377           -     13,442
   Money market
      deposit accounts. . .    6,799      6,799     27,197     27,197           -     67,992
   Certificates of
      deposit . . . . . . .   66,783     57,186     28,340      4,029          49    156,387
Borrowings. . . . . . . . .      543         18         71         71         889      1,592
                             --------  ---------  ---------  ---------  ----------  --------
      Total rate
      sensitive liabilities  $80,306   $ 70,184   $ 80,334   $ 56,023   $     938   $287,785
                             ========  =========  =========  =========  ==========  ========

Excess (deficiency) of
   interest sensitive
   assets over interest
  sensitive liabilities . .  $ 8,919   $(14,119)  $ (9,872)  $  1,241   $  64,345   $ 50,514
Cumulative excess
 (deficiency) of
 interest sensitive
 assets . . . . . . . . . .  $ 8,919   $ (5,200)  $(15,072)  $(13,831)  $  50,514   $ 50,514
Cumulative ratio of
 interest-earning
 assets to interest-
 bearing liabilities. . . .  111.11%     96.54%     93.47%     95.18%     117.55%    117.55%
Interest sensitivity
 gap to total rate
 sensitive assets . . . . .    2.64%    (4.17)%    (2.92)%      0.37%      19.02%     14.93%
Ratio of interest-
 earning assets to
 interest-bearing
 liabilities. . . . . . . .  111.11%     79.88%     87.71%    102.22%   6,959.81%    117.55%
Ratio of cumulative
 gap to total rate
 sensitive assets . . . . .    2.64%    (1.54)%    (4.46)%    (4.09)%      14.93%     14.93%
</TABLE>





                                       13
<PAGE>

Part  II.  Other  Information

Item  1.  Legal  Proceedings

     Not  applicable

Item  2.  Changes  in  Securities  and  use  of  Proceeds

     Not  applicable

Item  3.  Defaults  Upon  Senior  Securities

     Not  applicable

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

     Not  applicable

Item  5.  Other  Information

     None

Item  6.  Exhibits,  Financial  Statement  Schedules,  and  Reports  on Form 8-K

     (a)  Exhibits

      3.1      Charter  of  the  Registrant*
      3.2      Bylaws  of  the  Registrant*
     10.1      Employment  Agreement  with  Ed  C.  Loughry,  Jr.**
     10.2      Employment  Agreement  with  Ronald  F.  Knight  **
     10.3      Severance  Agreement  with  Hillard  C.  Gardner**
     10.4      Severance  Agreement  with  Ira  B.  Lewis  **
     10.5      Severance  Agreement  with  R.  Dale  Floyd  **
     10.6      Severance  Agreement  with  M.  Glenn  Layne  **
     10.7      Severance  Agreement  with  Joy  B.  Jobe**
     10.8      Severance  Agreement  with  William  S.  Jones**
     10.9      Severance  Agreement  with  David  W.  Hopper**
     10.10     Cavalry  Banking  Key  Personnel  Severance  Compensation  Plan**
     10.11     Cavalry  Banking  Employee  Stock  Ownership  Plan**
     10.12     Management  Recognition  Plan  with William H. Huddleston III ***
     10.13     Management  Recognition  Plan  with  Gary  Brown  ***
     10.14     Management  Recognition  Plan  with  Ed  Elam  ***
     10.15     Management  Recognition  Plan  with  Frank  E.  Crosslin, Jr. ***
     10.16     Management  Recognition  Plan  with  Tim  J.  Durham  ***
     10.17     Management  Recognition  Plan  with  James  C.  Cope  ***
     10.18     Management  Recognition  Plan  with  Terry  G.  Haynes  ***
     10.19     Management  Recognition  Plan  with  Ed  C.  Loughry,  Jr.  ***
     10.20     Management  Recognition  Plan  with  Ronald  F.  Knight  ***
     10.21     Management  Recognition  Plan  with  William  S.  Jones  ***
     10.22     Management  Recognition  Plan  with  Hillard  C.  Gardner  ***
     10.23     Management  Recognition  Plan  with  R.  Dale  Floyd  ***
     10.24     Management  Recognition  Plan  with  David  W.  Hopper  ***
     10.25     Management  Recognition  Plan  with  Joe  W.  Townsend  ***
     10.26     Management  Recognition  Plan  with  M.  Glenn  Layne  ***
     10.27     Management  Recognition  Plan  with  Joy  B.  Jobe  ***
     10.28     Management  Recognition  Plan  with  Ira  B.  Lewis,  Jr.  ***
     10.29     Management  Recognition  Plan  with  Elizabeth  L.  Green  ***
     10.30     Management  Recognition  Plan  with  James  O.  Sweeney,  III ***
     13        Annual  Report  to  Stockholders****
     21        Subsidiaries  of  the  Registrant****
     27        Financial  Data  Schedule

*     Incorporated  herein  by  reference  to  the  Registrant's  Registration
      Statement  on  Form  S-1,  as  amended  (333-40057).
**    Incorporated  herein  by  reference  to the Registrant's Annual Report on
      Form 10-K for the year ended December 31, 1997, as filed with the
      Securities and Exchange  Commission  on  March  30,  1998.
***   Incorporated  herein  by  reference  to  the Registrant's Annual Meeting
      Proxy Statement dated March 15, 1999, as filed with the Securities and
      Exchange Commission  on  March  15,  1999.
****  Incorporated  herein  by reference to the Registrant's Annual Report on
      Form 10-K for the year ended December 31, 1999, as filed with the
      Securities and Exchange  Commission  on  March  27,  2000.

     (b)  Reports  on  Form  8-K

          No Reports on Form 8-K were filed during the quarter ended
          September 30, 2000.

                                       14
<PAGE>

Pursuant  to  the  requirements  of section 13 or 15(d) of the Securities Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the  undersigned,  thereunto  duly  authorized.


                                        CAVALRY  BANCORP,  INC.

Date:  November  6,  2000               by:  /s/  Ed  C. Loughry,  Jr.
                                             -------------------------
                                             Ed C. Loughry, Jr.
                                             Chairman of the Board
                                             of Directors
                                             Chief Executive Officer


Date:  November  6, 2000                 by: /s/ Hillard C. Gardner
                                             ------------------------
                                             Hillard C. Gardner
                                             Senior Vice President and
                                             Chief Financial Officer
                                             (Principal Financial and
                                             Accounting Officer)

                                       15
<PAGE>