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 June 30, 2001 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  August  10,  2001.

<PAGE>


                              CAVALRY BANCORP, INC.

                                Table of Contents

Part I   Financial Information                                             Page

Item 1.  Financial Statements

         Consolidated Balance Sheets at June 30, 2001 (unaudited)
         and  December  31,  2000                                             1


         Consolidated Statements of Income (unaudited) for the Three
         and Six Months Ended June 30, 2001 and 2000                          2


         Consolidated Statements of Comprehensive Income (unaudited)
         for the Three and Six Months Ended June 30, 2001 and 2000            3


         Consolidated Statements of Cash Flows (unaudited) for the
         Six Months Ended June 30, 2001 and 2000                              4


         Notes to Consolidated Financial Statements (unaudited)             5-6


Item 2.  Management's  Discussion  and  Analysis  of  Financial
         Condition  and  Results  of  Operations                           7-11

Item 3.  Quantitative and Qualitative Disclosures About Market Risk       11-12

Part II  Other  Information                                                  13

Signatures                                                                   14

<PAGE>

Part  I.     Financial  Information

ITEM  1.                 FINANCIAL  STATEMENTS

<TABLE>

<CAPTION>


                                       CAVALRY BANCORP, INC.
                                    CONSOLIDATED BALANCE SHEETS
                          JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000
                                       (DOLLARS IN THOUSANDS)


                                                                            June 30     December 31
                  ASSETS                                                      2001         2000
                  ------                                                     --------   -----------
                                                                            (Unaudited)
<S>                                                                            <C>        <C>
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 20,728   $ 18,025
Interest-bearing deposits with other financial institutions . . . . . . . . .    23,426     27,000
                                                                               ---------  ---------
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .    44,154     45,025
Investment securities available-for-sale at fair value (amortized cost: . . .    49,828     32,247
 $49,497 and $32,096 at June 30, 2001 and December 31, 2000, respectively)
Mortgage-backed securities held to maturity - at amortized cost (fair value:.       571        594
  $569 and $589 at June 30, 2001 and December 31, 2000, respectively)
Loans held for sale, at estimated fair value. . . . . . . . . . . . . . . . .     7,160      4,183
Loans receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .   274,926    279,478
Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . .     2,366      2,559
Office properties and equipment, net. . . . . . . . . . . . . . . . . . . . .    15,760     15,255
Federal Home Loan Bank of Cincinnati stock - at cost. . . . . . . . . . . . .     2,093      2,020
Real estate and other assets acquired in settlement of loans. . . . . . . . .        96         86
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     2,449      2,838
                                                                               ---------  ---------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $399,403   $384,285
                                                                               =========  =========

                                  LIABILITIES AND EQUITY
                                  -----------------------
Liabilities:
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $349,904   $336,534
Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1,025      1,578
Accounts payable and other liabilities. . . . . . . . . . . . . . . . . . . .     2,091      2,202
                                                                               ---------  ---------
               Total liabilities. . . . . . . . . . . . . . . . . . . . . . .   353,020    340,314
                                                                               ---------  ---------
Equity:
Preferred stock, no par value
  Authorized- 250,000 shares; none issued or outstanding at
     June 30, 2001 and December 31, 2000. . . . . . . . . . . . . . . . . . .         -          -
Common stock, no par value
  Authorized- 49,750,000 shares; issued and outstanding
     7,104,801 at June 30, 2001 and December 31, 2000 . . . . . . . . . . . .    11,701     11,489
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    41,282     39,991
Unearned restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . .    (2,741)    (3,224)
Unallocated ESOP Shares . . . . . . . . . . . . . . . . . . . . . . . . . . .    (4,065)    (4,380)
Accumulated other comprehensive income, net of tax. . . . . . . . . . . . . .       206         95
                                                                               ---------  ---------

Total equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    46,383     43,971
                                                                               ---------  ---------
Total liabilities and equity. . . . . . . . . . . . . . . . . . . . . . . . .  $399,403   $384,285
                                                                               =========  =========
</TABLE>

Note:  The  balance sheet at December 31, 2000 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     Six  Months  Ended
                                                      June  30,                June  30,
                                                    2001       2000        2001       2000
                                                    ----       ----        ----       ----
<S>                                           <C>         <C>         <C>         <C>
Interest and dividend income:
 Loans . . . . . . . . . . . . . . . . . . .  $    6,186  $    6,420  $   12,678   $  12,548
 Investment securities . . . . . . . . . . .         658         404       1,232         696
 Deposits with other financial institutions.         331         365         755         914
 Mortgage-backed securities held to maturity          11          11          21          21
                                              ----------  ----------  ----------  ----------
       Total interest and dividend income. .       7,186       7,200      14,686      14,179
                                              ----------  ----------  ----------  ----------
Interest expense - deposits. . . . . . . . .       3,467       3,085       7,095       6,063
Interest expense - borrowings. . . . . . . .           5          15          19         145
                                              ----------  ----------  ----------  ----------
      Total interest expense . . . . . . . .       3,472       3,100       7,114       6,208
                                              ----------  ----------  ----------  ----------
 Net interest income . . . . . . . . . . . .       3,714       4,100       7,572       7,971
 Provision for loan losses . . . . . . . . .          63          67         166         141
                                              ----------  ----------  ----------  ----------
  Net interest income after provision
     for loan losses . . . . . . . . . . . .       3,651       4,033       7,406       7,830
                                              ----------  ----------  ----------  ----------
Non-interest income:
  Servicing income . . . . . . . . . . . . .          62          67         137         131
  Gain on sale of loans, net . . . . . . . .         609         442       1,012         756
  Deposit servicing fees and charges . . . .       1,004         618       1,826       1,179
  Trust service fees . . . . . . . . . . . .         292         267         585         534
  Other operating income . . . . . . . . . .         158          59         327         197
                                              ----------  ----------  ----------  ----------
    Total non-interest income. . . . . . . .       2,125       1,453       3,887       2,797
                                              ----------  ----------  ----------  ----------
 Non-interest expenses:
   Compensation, payroll taxes and
     fringe benefits . . . . . . . . . . . .       2,486       2,268       4,831       4,606
   Occupancy expense . . . . . . . . . . . .         247         193         486         349
   Supplies, communications and other
     office expenses . . . . . . . . . . . .         231         189         460         400
   Federal insurance premiums. . . . . . . .          15          16          31          31
   Advertising expense . . . . . . . . . . .         109          62         205         152
   Equipment and service bureau expense. . .         621         526       1,173       1,024
   Other operating expenses. . . . . . . . .         397         350         776         728
                                              ----------  ----------  ----------  ----------
      Total non-interest expenses. . . . . .       4,106       3,604       7,962       7,290
                                              ----------  ----------  ----------  ----------
  Earnings before income tax expense . . . .       1,670       1,882       3,331       3,337
  Income tax expense . . . . . . . . . . . .         717         771       1,421       1,398
                                              ----------  ----------  ----------  ----------
     Net income. . . . . . . . . . . . . . .  $      953  $    1,111  $    1,910  $    1,939
                                              ==========  ==========  ==========  ==========

Basic and diluted earnings per share . . . .  $     0.15  $     0.18  $     0.30  $     0.31
                                              ==========  ==========  ==========  ==========

Weighted average shares outstanding-Basic. .   6,469,086   6,320,328   6,456,937   6,330,656
                                              ==========  ==========  ==========  ==========

Weighted average shares outstanding-Diluted.   6,478,762   6,320,328   6,468,975   6,330,656
                                              ==========  ==========  ==========  ==========
</TABLE>

Dividends  declared  $0.05  per  share payable July 13, 2001 for shareholders of
record  date  June  30,  2001.

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  Six Months Ended
                                        June  30,          June  30,
                                        2001     2000     2001    2000
                                        ----     ----     ----    ----
<S>                                      <C>   <C>      <C>     <C>
Net income. . . . . . . . . . . . . . .  $953  $1,111   $1,910  $1,939
Other comprehensive income, net of tax
Unrealized gains (losses) on securities
 available for sale . . . . . . . . . .    14      (2)     111     (28)
                                         ----  -------  ------  -------

Comprehensive income. . . . . . . . . .  $967  $1,109   $2,021  $1,911
                                         ====  =======  ======  =======
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>


                              CAVALRY BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)


                                                            2001       2000
                                                            ----       ----
<S>                                                      <C>        <C>
Operating activities:
          Net cash provided by operating activities . .  $    562   $  1,619
                                                         ---------  ---------
Investing activities:
   Decrease (increase) in loans receivable, net . . . .     4,497     (4,793)
   Principal payments on mortgage
        backed securities held to maturity. . . . . . .        22         26
Proceeds from sales of office properties and equipment.         -         18
  Purchase of investment securities
     available for sale . . . . . . . . . . . . . . . .   (41,991)   (23,854)
  Proceeds from maturities of investment securities . .    24,630      7,000
   Purchase of office properties and equipment. . . . .    (1,087)    (4,571)
                                                         ---------  ---------
          Net cash used in investing activities . . . .   (13,929)   (26,174)
                                                         ---------  ---------

Financing activities:
  Net increase in deposits. . . . . . . . . . . . . . .    13,370     13,753
  Dividends paid. . . . . . . . . . . . . . . . . . . .      (620)      (710)
  Net decrease in borrowings. . . . . . . . . . . . . .      (553)   (43,395)
Payments by borrowers for
  property taxes and insurance. . . . . . . . . . . . .       299        396
                                                         ---------  ---------
         Net cash provided by (used in)
          financing activities. . . . . . . . . . . . .    12,496    (29,956)
                                                         ---------  ---------
Decrease in cash and cash equivalents . . . . . . . . .      (871)   (54,511)
Cash and equivalents, beginning of period . . . . . . .    45,025     94,422
                                                         ---------  ---------

 Cash and cash equivalents, end of period . . . . . . .  $ 44,154   $ 39,911
                                                         =========  =========

SUPPLEMENT DISCLOSURES OF CASH
   FLOW INFORMATION:
Payments during the period for:
Interest. . . . . . . . . . . . . . . . . . . . . . . .  $  6,992   $  6,230
                                                         =========  =========
Income taxes. . . . . . . . . . . . . . . . . . . . . .  $  1,529   $  1,791
                                                         =========  =========

SUPPLEMENTAL DISCLOSURES OF NONCASH
  INVESTING AND FINANCING ACTIVITIES:

 Interest credited to deposits. . . . . . . . . . . . .  $  2,512   $  2,174
                                                         =========  =========
 Increase in deferred tax asset related
   to unrealized loss on investments. . . . . . . . . .  $     69   $     10
                                                         =========  =========
Net unrealized gain (losses) on investment
    securities available for sale . . . . . . . . . . .  $    180   $    (38)
                                                         =========  =========
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 six months ended June 30, 2001, are
not  necessarily  indicative  of  the results to be expected for the year ending
December  31,  2001.  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,  2000.

2.     Earnings  Per  Share

The  following  schedule reconciles the numerators and denominators of the basic
and diluted earnings per share ("EPS") computations for the three and six months
ended  June 30, 2001 and 2000.  Diluted common shares arise from the potentially
dilutive  effect  of  the  Company's  stock  options  outstanding.
<TABLE>
<CAPTION>


                                       Three Months Ended       Six  Months  Ended
                                           June  30,                 June  30,
                                         2001       2000         2001        2000
                                         ----       ----         ----        ----
<S>                                  <C>         <C>         <C>         <C>
Basic EPS:
Net income. . . . . . . . . . . . .  $  953,000  $1,111,000  $1,910,000  $1,939,000
Average common shares outstanding .   6,469,086   6,320,328   6,456,937   6,330,656
                                     ----------  ----------  ----------  ----------

Earnings per share. . . . . . . . .  $     0.15  $     0.18  $     0.30  $     0.31
                                     ==========  ==========  ==========  ==========

Diluted EPS:
Net income. . . . . . . . . . . . .  $  953,000  $1,111,000  $1,910,000  $1,939,000
                                     ----------  ----------  ----------  ----------

Average common shares outstanding .   6,469,086   6,320,328   6,456,937   6,330,656

Dilutive effect of stock options. .       9,676           -      12,038           -
                                     ----------  ----------  ----------  ----------

Average dilutive shares outstanding   6,478,762   6,320,328   6,468,975   6,330,656
                                     ----------  ----------  ----------  ----------

Earnings per share. . . . . . . . .  $     0.15  $     0.18  $     0.30  $     0.31
                                     ==========  ==========  ==========  ==========
</TABLE>

3.     Business  Segments

The  Company and its subsidiaries provide community oriented banking services to
individuals  and  businesses primarily within Rutherford and Bedford 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.
The  majority  of  loans  originated for sale are sold with the servicing rights
attached.  One  unrelated  entity  purchased approximately 50% of mortgage loans
sold  in  2000  and  2001.

                                        5
<PAGE>
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  2000  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.

<TABLE>
<CAPTION>

<S>                                 <C>        <C>       <C>     <C>
                                               Mortgage
For the quarter ended. . . . . . .    Banking   Banking   Trust   Consolidated
June 30, 2001
Interest revenue . . . . . . . . .  $   7,186  $      -  $    -  $       7,186
Other income-external customers. .      1,162        62     292          1,516
Interest expense . . . . . . . . .      3,472         -       -          3,472
Depreciation and amortization. . .        236        42       9            287
Other significant items:
    Provision for loan losses. . .         63         -       -             63
    Gain (loss) on sales of assets          -       609       -            609
Segment profit . . . . . . . . . .      1,592         1      77          1,670
Segment assets . . . . . . . . . .    391,813     7,268     322        399,403
</TABLE>

<TABLE>
<CAPTION>

<S>                              <C>        <C>       <C>     <C>
                                            Mortgage
For the quarter ended . . . . .    Banking   Banking   Trust   Consolidated
June 30, 2000
Interest revenue. . . . . . . .  $   7,200  $      -  $    -  $       7,200
Other income-external customers        674        67     267          1,008
Interest expense. . . . . . . .      3,100         -       -          3,100
Depreciation and amortization .        159        29       8            196
Other significant items:
   Provision for loan losses. .         67         -       -             67
   Gain on sales of assets. . .          3       442       -            445
Segment profit. . . . . . . . .      1,813         -      69          1,882
Segment assets. . . . . . . . .    362,129     4,521     403        367,053
</TABLE>

<TABLE>
<CAPTION>

<S>                                  <C>        <C>        <C>     <C>
                                                Mortgage
For the six months ended. . . . . .    Banking   Banking    Trust   Consolidated
June 30, 2001
Interest revenue. . . . . . . . . .  $  14,686  $      -   $    -  $      14,686
Other income-external customers . .      2,153       137      585          2,875
Interest expense. . . . . . . . . .      7,114         -        -          7,114
Depreciation and amortization . . .        460        83       17            560
Other significant items:
    Provision for loan losses . . .        166         -        -            166
    Gain (loss) on sales of assets.          -     1,012        -          1,012
Segment profit and (losses) . . . .      3,185        (5)     151          3,331
Segment assets. . . . . . . . . . .    391,813     7,268      322        399,403
</TABLE>

<TABLE>
<CAPTION>

<S>                               <C>        <C>        <C>     <C>
                                             Mortgage
For the six months ended . . . .    Banking   Banking    Trust   Consolidated
June 30, 2000
Interest revenue . . . . . . . .  $  14,179  $      -   $    -  $      14,179
Other income-external customers.      1,358       131      534          2,023
Interest expense . . . . . . . .      6,208         -        -          6,208
Depreciation and amortization. .        331        62       17            410
Other significant items:
   Provision for loan losses . .        141         -        -            141
   Gain on sales of assets . . .         18       756        -            774
Segment profit and (losses). . .      3,253       (52)     136          3,337
Segment assets . . . . . . . . .    362,129     4,521      403        367,053
</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  June  30,  2001  and December 31, 2000

Total assets were $399.4 million at June 30, 2001, compared to $384.3 million at
December  31,  2000,  an increase of $15.1 million or 3.93%.  Increased deposits
and  equity funded this increase in assets.  Cash and cash equivalents decreased
from  $45.0  million  at  December  31, 2000, to $44.2 million at June 30, 2001.
Investments  available  for  sale  increased  from $32.2 million at December 31,
2000,  to  $49.8  million  at  June  30,  2001  as  a result of investing excess
liquidity.  Loans  receivable  net decreased $4.6 million from $279.5 million at
December  31,  2000,  to  $274.9 million at June 30, 2001. Office properties and
equipment  increased from $15.3 million at December 31, 2000 to $15.8 million at
June  30,  2001.

Deposit  accounts  increased  $13.4  million from $336.5 million at December 31,
2000,  to  $349.9  million  at June 30, 2001.  Certificates of deposit decreased
$700,000 from $162.5 million at December 31, 2000, to $161.8 million at June 30,
2001.  Savings  deposits  increased  $200,000 from $13.2 million at December 31,
2000,  to  $13.4 million at June 30, 2001.  Money market accounts increased $9.9
million  from  $69.8  million at December 31, 2000, to $79.7 million at June 30,
2001.  NOW  accounts  declined from $52.3 million at December 31, 2000, to $49.2
million  at June 30, 2001.  Non interest-bearing accounts increased $7.2 million
from  $38.6  million  at  December  31, 2000, to $45.8 million at June 30, 2001.
These  increases  were  primarily  a  result  of  an ongoing effort to raise the
deposit  base  for  the  Bank.

Equity  increased  by  $2.4  million from $44.0 million at December 31, 2000, to
$46.4  million  at  June 30, 2001, as a result of net income of $1.9 million for
the  six  months  ended  June  30,  2001, release of ESOP shares of $527,000 and
release  of  Management  Recognition  Plan  (MRP)  shares  of  $483,000  and  an
unrealized  gain  on  available  for  sale  securities of $111,000 net of taxes.
These  increases  were  offset  by  dividends  declared  of  $620,000.

Non-performing  assets  were $209,000 at December 31, 2000, and $744,000 at June
30,  2001.

Comparison  of  Operating  Results  for the Three Months Ended June 30, 2001 and
June  30,  2000.

Net  Income.  Net  income was $953,000 for the three months ended June 30, 2001,
compared  to  $1.1  million  for  the  three  months  ended June 30, 2000.  This
decrease  was  primarily  a  result  of  higher  interest  expense  and  higher
non-interest  expenses.  These  factors  were  partially  offset  by  higher
non-interest  income.  The  Company expects to see downward pressure on earnings
as  a result of interest rate cuts by the Federal Reserve Board.  As a result of
these  Fed  rate  cuts,  banks have cut the prime rate in a similar manner.  The
majority  of  the  Bank's construction loan portfolio is tied to this prime rate
and  adjusts  immediately with changes in the prime rate.  These declines have a
short-term  negative  impact  on  interest  income.

                                        7
<PAGE>
Net  Interest  Income.  Net  interest  income declined from $4.1 million for the
three  months  ended  June  30, 2000, to $3.7 million for the three months ended
June  30,  2001.  The  ratio  of  average  interest-earning  assets  to  average
interest-bearing  liabilities  decreased from 117.18% for the three months ended
June  30,  2000,  to  116.59% for the three months ended June 30, 2001.This is a
result  of  higher  percentage  increases  in  costing  liabilities  compared to
percentage  increases  in  earning  assets.

Interest  income  remained  constant  at $7.2 million for the three months ended
June  30,  2001 and 2000.  Interest on loans decreased from $6.4 million for the
three  months  ended June 30, 2000, to $6.2 million for the same period in 2001.
Average  loans  outstanding  increased  from $280.4 million for the three months
ended June 30, 2000, to $282.7 million for the same period in 2001.  The average
yield  decreased  from  9.16% for the three months ended June 30, 2000, to 8.78%
for  the same period in 2001 as a result of declining interest rates.  Income on
all  other  investments  consisting  of mortgage backed securities, investments,
FHLB  stock,  bank  deposits  and  federal funds increased from $780,000 for the
three  months  ended June 30, 2000, to $1.0 million for the same period in 2001.
Average investments increased from $49.0 million for the three months ended June
30,  2000,  to  $77.0  million  for  the same period in 2001.  The average yield
decreased  from 6.40% for the three months ended June 30, 2000, to 5.21% for the
same  period  in  2001.

Interest expense increased from $3.1 million for the three months ended June 30,
2000,  to  $3.5 million for the same period in 2001.  Average deposits increased
from  $279.5 million for the three months ended June 30, 2000, to $307.5 million
for  the  same period in 2001.  This increase was a result of continuing efforts
to  increase  market  share of deposits.  The average cost of deposits increased
from  4.43%  for  the  three  months  ended June 30, 2000, to 4.52% for the same
period  in  2001.  This  increase was primarily a result of increases in average
certificates  of deposit from $151.9 million for the three months ended June 30,
2000,  to  $164.0 million for the three months ended June 30, 2001.  The average
cost of certificates of deposits increased from 5.72% for the three months ended
June  30,  2000,  to  6.08%  for the three months ended June 30, 2001.   Average
borrowings decreased from $1.6 million at an average cost of 3.74% for the three
months  ended June 30, 2000, to $1.0 million at an average cost of 1.95% for the
three  months ended June 30, 2001.  The total cost of funds increased from 4.42%
for  the  three  months ended June 30, 2000, to 4.51% for the three months ended
June  30,  2001.  Average  interest-bearing  liabilities  increased  from $281.1
million for the three months ended June 30, 2000, to $308.6 million for the same
period  in 2001.  Interest rate spread decreased from 4.32% for the three months
ended  June 30, 2000, to 3.48% for the same period in 2001.  Net interest margin
decreased  from 4.98% for the three months ended June 30, 2000, to 4.14% for the
same  period  in  2001.

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.

The  provision for loan losses decreased from $67,000 for the three months ended
June  30, 2000, to $63,000 for the three months ended June 30, 2001.  Management
deemed  the  allowance  for  loan  losses  adequate  at  June  30,  2001.

Non-interest  Income.  Non-interest  income  increased from $1.5 million for the
three  months  ended June 30, 2000, to $2.1 million for the same period in 2001.
In  the  mortgage  banking  segment,  net  gain  on sale of loans increased from
$442,000  for  the  three  months  ended June 30, 2000, to $609,000 for the same
period  in  2001.  The  higher  gain in 2001 was a result of increased volume of
loan  sales.  Loan  servicing fees decreased slightly from $67,000 for the three
months  ended  June  30,  2000,  to $62,000 for the same period in 2001.  In the
banking  segment,  deposit  fees  and  other  operating  incomes  increased from
$677,000  for the three months ended June 30, 2000, to $1.2 million for the same
period  in  2001.  This  increase  was  a  result  of  growth  in  the number of
transaction  accounts  and  increased  charges.  The  Bank  also  implemented an
overdraft  privilege  program  coupled with a new free checking account program.
These  factors also helped to increase deposit and overdraft fees.  In the trust
segment,  trust fees increased from $267,000 for the three months ended June 30,
2000,  to  $292,000  for  the same period in 2001 as a result of increased trust
assets  under  management.

                                        8
<PAGE>
Non-interest  Expense.  Non-interest expense increased from $3.6 million for the
three  months  ended June 30, 2000, to $4.1 million for the same period in 2001.
Compensation  and  other  employee  benefits increased from $2.3 million for the
three  months  ended  June  30, 2000, to $2.5 million for the three months ended
June  30,  2001.  This  increase  was a result of increased commission expenses,
increased  overtime  compensation,  and  other  incentives.  Other  increases in
compensation  were a result of increased staffing and normal annual increases in
compensation.  The  increase  in occupancy expense was primarily a result of the
opening  of  the new operations building and increases in the cost of utilities.
The increases in other expenses were primarily due to increased loan and deposit
activity.

Income  taxes.  The provision for income taxes was $717,000 for the three months
ended  June  30,  2001,  compared to $771,000 for the same period in 2000.  This
decrease  was  primarily  a  result  of  lower  income  before  taxes.

Comparison  of Operating Results for the Six Months Ended June 30, 2001 and June
30,  2000.

Net Income.  Net income was $1.9 million for the six months ended June 30, 2001,
compared  to  $1.9  million for the six months ended June 30, 2000.  There was a
decrease  which  was  primarily  a  result of higher interest expense and higher
non-interest  expenses.  These  factors  were  partially  offset  by  higher
non-interest  income.  The  Company expects to see downward pressure on earnings
as  a result of interest rate cuts by the Federal Reserve Board.  As a result of
these  Fed  rate  cuts,  banks have cut the prime rate in a similar manner.  The
majority  of  the  Bank's construction loan portfolio is tied to this prime rate
and  adjusts  immediately with changes in the prime rate.  These declines have a
short-term  negative  impact  on  interest  income.

Net Interest Income.  Net interest income declined from $8.0 million for the six
months  ended  June  30, 2000, to $7.6 million for the six months ended June 30,
2001.  The  ratio of average interest-earning assets to average interest-bearing
liabilities  decreased  from  116.79% for the six months ended June 30, 2000, to
116.37%  for  the  six  months  ended June 30, 2001.  This is a result of higher
percentage  increases in costing liabilities compared to percentage increases in
earning  assets.

Interest  income  increased from $14.2 million for the six months ended June 30,
2000,  to  $14.7  million  for  the six months ended June 30, 2001.  Interest on
loans  increased  from  $12.5 million for the six months ended June 30, 2000, to
$12.7  million for the same period in 2001.  Average loans outstanding increased
from  $277.6  million  for the six months ended June 30, 2000, to $283.1 million
for the same period in 2001.  The average yield decreased from 9.04% for the six
months  ended June 30, 2000, to 9.03% for the same period in 2001 as a result of
declining  interest  rates.  Income  on  all  other  investments  consisting  of
mortgage  backed  securities, investments, FHLB stock, bank deposits and federal
funds  increased  from  $1.6  million for the six months ended June 30, 2000, to
$2.0  million  for  the same period in 2001.  Average investments increased from
$52.7million  for  the  six months ended June 30, 2000, to $72.4 million for the
same  period in 2001.  The average yield decreased from 6.20% for the six months
ended  June  30,  2000,  to  5.59%  for  the  same  period  in  2001.

Interest  expense  increased from $6.2 million for the six months ended June 30,
2000,  to  $7.1 million for the same period in 2001.  Average deposits increased
from  $277.6  million  for the six months ended June 30, 2000, to $304.2 million
for  the  same period in 2001.  This increase was a result of continuing efforts
to  increase  market  share of deposits.  The average cost of deposits increased
from  4.39% for the six months ended June 30, 2000, to 4.70% for the same period
in  2001.  This increase in cost of funds was primarily a result of increases in
average  certificates  of  deposit  from $152.4 million for the six months ended
June  30,  2000  to  $164.9 million for the six months ended June 30, 2001.  The
average cost of certificates of deposits increased from 5.64% for the six months
ended  June  30, 2000, to 6.21% for the six months ended June 30, 2001.  Average
borrowings  decreased  from $5.2 million at an average cost of 5.57% for the six
months  ended June 30, 2000, to $1.3 million at an average cost of 2.99% for the
six  months  ended  June 30, 2001.  The total cost of funds increased from 4.41%
for  the  six months ended June 30, 2000, to 4.67% for the six months ended June
30,  2001.  Average  interest-bearing  liabilities increased from $282.8 million
for the six months ended June 30, 2000, to $305.5 million for the same period in
2001.  Interest  rate  spread decreased from 4.17% for the six months ended June
30,  2000,  to 3.66% for the same period in 2001.  Net interest margin decreased
from  4.83% for the six months ended June 30, 2000, to 4.26% for the same period
in  2001.

                                        9
<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  non-performing assets because classified assets include not only
non-performing  assets  but  also  performing  assets that otherwise exhibit, in
management's  judgment,  potential  credit  weaknesses.

The  provision  for loan losses increased from $141,000 for the six months ended
June  30,  2000, to $166,000 for the six months ended June 30, 2001.  Management
deemed  the  allowance  for  loan  losses  adequate  at  June  30,  2001.

Non-interest  Income.  Non-interest  income  increased from $2.8 million for the
six months ended June 30, 2000, to $3.9 million for the same period in 2001.  In
the  mortgage banking segment, net gain on sale of loans increased from $756,000
for  the  six months ended June 30, 2000, to $1.0 million for the same period in
2001.  The  higher  gain in 2001 was a result of increased volume of loan sales.
Loan  servicing  fees  increased slightly from $131,000 for the six months ended
June 30, 2000, to $137,000 for the same period in 2001.  In the banking segment,
deposit fees and other operating incomes increased from $1.2 million for the six
months  ended  June 30, 2000, to $1.8 million for the same period in 2001.  This
increase  was  a  result  of  growth  in  the number of transaction accounts and
increased  charges.  The  Bank  also  implemented an overdraft privilege program
coupled  with a new free checking account program.  These factors also helped to
increase deposit and overdraft fees.  In the trust segment, trust fees increased
from  $534,000  for the six months ended June 30, 2000, to $585,000 for the same
period  in  2001  as  a  result  of  increased  trust  assets  under management.

Non-interest  Expense.  Non-interest expense increased from $7.3 million for the
six  months  ended  June  30, 2000, to $8.0 million for the same period in 2001.
Compensation and other employee benefits increased from $4.6 million for the six
months  ended  June  30,  2000 to $4.8 million for the six months ended June 30,
2001.  This increase was a result of increased commissions, incentives, overtime
compensation and normal salary increases.  The increase in occupancy expense was
primarily  a  result of the opening of the new operations building and increases
in the cost of utilities.  The increases in other expenses were primarily due to
increased  loan  and  deposit  activity.

Income  taxes.  The  provision  for  income  taxes  was $1.4 million for the six
months  ended  June  30,  2001,  compared to $1.4 million for the same period in
2000.


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 June 30,
2001, cash and cash equivalents totaled $44.2 million or 11.07% of total assets,
and investments available-for-sale totaled $49.9 million.  At June 30, 2001, 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.

As  of  June  30,  2001,  the  Bank's  regulatory  capital  was in excess of all
applicable  regulatory requirements.  At June 30, 2001, under regulations of the
OTS, the Bank's actual tangible, core and risk-based capital ratios were 10.82%,
10.82%  and  13.69%,  respectively,  compared  to requirements of 1.5%, 3.0% and
8.0%,  respectively.

                                       10
<PAGE>

At  June 30, 2001, the Bank had loan commitments of approximately $36.0 million.
In addition, at June 30, 2001, the unused portion of lines of credit extended by
the Bank was approximately $9.3 million for consumer loans and $29.2 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 June 30,
2001,  the  Bank  had  $6.8  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.  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,  2000.  The  Company is more susceptible to declining
rates.

The  following  table  presents  the Company's maturity gap at June 30, 2001 (In
thousands).

                                       11
<PAGE>
<TABLE>
<CAPTION>


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

   Loans receivable, net. . .  $ 59,487   $53,362   $86,222   $  44,048   $  38,967   $282,086
   Mortgage-backed
    securities. . . . . . . .        42        39       133         103         254        571
   FHLB Stock . . . . . . . .     2,093         -         -           -           -      2,093
   Investment securities. . .    33,557    13,100     3,171           -           -     49,828
   Federal funds sold
    overnight and other
    interest-bearing deposits    23,426         -         -           -           -     23,426
                               ---------  --------  --------  ----------  ----------  ---------

     Total rate
       sensitive assets . . .  $118,605   $66,501   $89,526   $  44,151   $  39,221   $358,004
                               =========  ========  ========  ==========  ==========  =========

Interest-bearing liabilities:

Deposits:
   NOW accounts . . . . . . .  $  4,925   $ 4,925   $19,698   $  19,698   $       -   $ 49,246
   Passbook savings
    accounts. . . . . . . . .     1,339     1,339     5,354       5,354           -     13,386
   Money market
    deposit accounts. . . . .     7,965     7,965    31,860      31,860           -     79,650
   Certificates of
    deposit . . . . . . . . .   106,821    34,519    17,425       3,059           4    161,828
Borrowings. . . . . . . . . .        27        27       109         109         753      1,025
                               ---------  --------  --------  ----------  ----------  ---------
     Total rate
      sensitive liabilities .  $121,077   $48,775   $74,446   $  60,080   $     757   $305,135
                               =========  ========  ========  ==========  ==========  =========

Excess (deficiency) of
   interest sensitive
   assets over interest
   sensitive liabilities. . .   ($2,472)  $17,726   $15,080    ($15,929)  $  38,464   $ 52,869
Cumulative excess
   (deficiency) of
   interest sensitive
   assets . . . . . . . . . .   ($2,472)  $15,254   $30,334   $  14,405   $  52,869   $ 52,869
Cumulative ratio of
   interest-earning assets
   to interest-bearing
   liabilities. . . . . . . .     97.96%   108.98%   112.42%     104.73%     117.33%    117.33%
Interest sensitivity
   gap to total rate
   sensitive assets . . . . .    (0.69)%     4.95%     4.21%     (4.45)%      10.74%     14.77%
Ratio of interest-
   earning assets to
   interest -bearing
   liabilities. . . . . . . .     97.96%   136.34%   120.26%      73.49%   5,181.11%    117.33%
Ratio of cumulative gap
   to total rate
   sensitive assets . . . . .    (0.69)%     4.26%     8.47%       4.02%      14.77%     14.77%
</TABLE>



                                       12
<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

           On April 26, 2001 at the annual meeting of shareholders of Cavalry
Bancorp, Inc.  the  following  Directors  were  elected for three-year  terms:

     Name                              For                           Against
Ed  C.  Loughry,  Jr.               5,208,021                        31,303
William  Kent  Coleman              5,224,321                        15,003
James  C.  Cope                     5,223,770                        15,554

The shareholders approved the appointment of Rayburn, Betts & Bates, P.C. as the
Company's independent auditors for the fiscal year ending December 31, 2001 with
votes  as  follows:

                        For               Against               Abstain
                     5,228,491             6,337                 4,496

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,  Jr.**
          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****

*     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, 2000, as filed with the
      Securities and Exchange  Commission  on  March  26,  2001.

     (b)  Reports  on  Form  8-K

     No  Reports  on Form 8-K were filed during the quarter ended June 30, 2001.

                                       13
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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: August 9, 2001                     by: /s/ Ed C. Loughry, Jr.
                                             ----------------------
                                             Ed  C.  Loughry,  Jr.
                                             Chairman  of the Board of Directors
                                             Chief  Executive  Officer


Date:  August  9,  2001                  by: /s/ Hillard C. Gardner
                                             --------------
                                             Hillard  C.  Gardner
                                             Senior  Vice  President  and  Chief
                                             Financial  Officer
                                             (Principal  Financial  and
                                             Accounting  Officer)
                                       14
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