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, 1999 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 of                        (I.R.S. Employer
   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 9, 1999.





<PAGE>

                            CAVALRY BANCORP, INC.

                              Table of Contents

Part I.   Financial Information                                        Page

Item 1.   Financial Statements   (unaudited)

          Consolidated Balance Sheets at September 30, 1999
          and December 31, 1998                                           1


          Consolidated Statements of Income for the Three and
          Nine Month Periods Ended September 30, 1999 and 1998          2-3


          Consolidated Statements of Comprehensive Income for
          the Three and Nine Month Periods Ended September 30,
          1999 and 1998                                                   4


          Consolidated Statements of Changes in Equity for the
          Three and Nine Month Periods Ended September 30,
          1999 and 1998                                                 5-6

          Consolidated Statements of Cash Flows for the Nine Month
          Periods Ended September 30, 1999 and 1998                     7-8


          Notes to Consolidated Financial Statements                   9-12


Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                         12-22

Item 3.   Quantitative and Qualitative Disclosures About Market Risk  22-23

Part II.  Other Information                                              24

Signatures                                                               25


<PAGE>

PART I.   FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS

                             CAVALRY BANCORP, INC.
                          CONSOLIDATED BALANCE SHEETS
                 (Dollars in Thousands, except per share data)
                                 (Unaudited)
                                                September 30,   December 31,
ASSETS                                                 1999           1998
                                                     -------         -------
Cash                                               $  11,421      $  12,110
Interest-bearing deposits with
 other financial institutions                         44,263         41,078
                                                   ---------      ---------
Cash and cash equivalents                             55,684         53,188
Investment securities available-for-sale
 (amortized cost: $40,967 and $46,424 at September 30,
  1999 and December 31, 1998, respectively)           40,923         46,505
Mortgage-backed securities held to maturity - at
  amortized cost (fair value: $704 and $963 at September
  30, 1999 and December 31, 1998, respectively )         714            959
Loans held for sale, at estimated fair value           5,578         10,923
Loans receivable, net                                271,715        237,547
Accrued interest receivable                            2,507          2,376
Office properties and equipment, net                   9,028          8,782
Real Estate Owned and Other Repossessed Assets            49             80
Federal Home Loan Bank of Cincinnati stock - at cost   1,846          1,751
Other assets                                           2,831          2,781
                                                   ---------      ---------
TOTAL ASSETS                                       $ 390,875      $ 364,892
                                                   =========      =========

LIABILITIES AND EQUITY

LIABILITIES:
  Deposits                                          $297,415       $266,032
  Accrued interest payable                               324            285
  Advance payments by borrowers for property
   taxes and insurance                                   796            237
  Other liabilities and accrued expenses               2,216          3,157
                                                   ---------      ---------
     Total Liabilities                               300,751        269,711
                                                  ----------      ---------
STOCKHOLDERS' EQUITY:
  Preferred stock, no par value:
    Authorized - 250,000 shares; none issued or outstanding at
      September 30, 1999 and December 31, 1998             -              -
  Common Stock, no par value:
    Authorized - 49,750,000 shares; issued and outstanding:
     7,104,801 and 7,161,337 at September 30, 1999 and
       December 31, 1998, respectively                64,104         65,705
  Retained earnings                                   37,399         35,037
  Unallocated ESOP Shares                             (5,167)        (5,612)
  Unearned restricted stock                           (6,185)             -
  Accumulated other comprehensive
   income, net of taxes                                  (27)            51
                                                    ---------     ---------
         Total Stockholders' Equity                   90,124         95,181
                                                   ---------      ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $ 390,875      $ 364,892
                                                   =========      =========

See accompanying notes to consolidated financial statements.



                                      1
<PAGE>


                            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,

                                    1999       1998         1999         1998
                                    ----       ----         ----         ----
Interest and dividend income:
 Loans                          $  6,036     $5,493 $     17,468     $ 16,113
 Investment securities               543        670        1,768        1,348
 Deposits with other financial
  institutions                       499        520        1,419        2,221
 Mortgage-backed securities held
  to maturity                          9         15           30           54
                                  ------     ------       ------       ------
  Total interest and dividend
   income                          7,087      6,698       20,685       19,736
                                  ------     ------       ------       ------
  Interest expense on deposits     2,532      2,310        7,231        7,233
                                  ------     ------       ------       ------
  Net interest income              4,555      4,388       13,454       12,503
                                  ------     ------       ------       ------
Provision for loan losses            132        173          644          308
                                  ------     ------       ------       ------
  Net interest income after
  provision for loan losses        4,423      4,215       12,810       12,195
                                  ------     ------       ------       ------
Noninterest income:
 Servicing income                     59       103           198          305
 Gain on sale of loans, net          692       587         1,598        1,625
 Gain on sale of office
  properties  and equipment            -         -             -           42
 Deposit servicing fees and charges  546       377         1,451        1,091
 Trust service fees                  249       171           687          505
 Other operating income               61        55           197          157
                                  ------    ------        ------       ------
   Total non-interest income       1,607     1,293         4,131        3,725
                                  ------    ------        ------       ------






                                      2

<PAGE>

Noninterest expenses:
 Compensation, payroll taxes and
  fringe benefits                  2,381     1,843         6,761        5,159
 Occupancy expense                   186       170           533          452
 Supplies, communications and other
  office expenses                    204       237           654          615
 Federal insurance premiums           37        37           112          112
 Advertising expense                  48        47           229          140
 Equipment and service bureau
   expense                           603       603         1,776        1,706
 Other operating expenses            315       325         1,038          862
                                  ------    ------        ------       ------
   Total non-interest expenses     3,774     3,262        11,103        9,046
                                  ------    ------         ------     -------
Earnings before income tax
   expense                         2,256     2,246         5,838        6,874
                                  ------    ------        ------       ------
Income tax expense                   918       842         2,407        2,579
                                  ------    ------        ------       ------
   Net income                    $ 1,338 $   1,404        $3,431       $4,295
                                  ======    ======        ======       ======
Basic earnings per share           $0.20     $0.20         $0.52        $0.62
                                  ======    ======        ======       ======
Weighted average
shares outstanding (1)         6,580,643   6,960,318    6,656,391   6,947,846
                               =========   =========    =========   =========

 Dividends declared $0.05 per share payable October 15, 1999 for stockholders
 of record date September 30, 1999.


(1) Cavalry Bancorp's initial public offering closed on March 16, 1998.  For
purposes of earnings per share calculations, shares issued on March 16, 1998
have been assumed to be outstanding as of January 1, 1998.

See accompanying notes to consolidated financial statements.



                                      3

<PAGE>




                                CAVALRY BANCORP, INC.
                     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                               (Dollars in Thousands)
                                   (Unaudited)

                                       Three Months Ended  Nine Months Ended
                                         September 30,     September 30,
                                            1999    1998       1999    1998
                                            ----   -----      -----   -------

     Net income                           $1,338    $1,404     $3,431  $4,295
     Other comprehensive income, net of tax
     Unrealized gains(losses) on securities
     Available for sale                       14        95        (78)     82
                                           ------   -------   -------  -------
     Comprehensive income                 $1,352   $ 1,499   $  3,353  $4,377
                                         ========  ========  ======== ========

     See accompanying notes to consolidated financial statements.




                                      4

<PAGE>



                                 CAVALRY BANCORP, INC.
                        CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
                         FOR THE THREE AND NINE MONTH PERIODS ENDED
                               SEPTEMBER 30, 1998 AND 1999
                                (Dollars in Thousands)
                                      (Unaudited)

                                             Unallocated            Total
           Common      Common    Retained    ESOP    MRP   Comp  Shareholders'
           Shares       Stock     Earnings  Shares  Shares Income   Equity
           ------      ------    ---------  ------  -----  ------   ------
Balance
June 30,
1998
          7,538,250    73,850      32,965   (6,031)     -     (18)    100,766
         ==========   =======     =======   =======   ===    ====    ========
Net income        -         -       1,404        -      -       -       1,404
Change in valuation
 allowance for
 investment securities
 available for sale         -           -        -      -      95          95
ESOP shares committed
  for release     -        27           -       54      -       -          81
Dividends         -         -        (377)       -      -       -        (377)
          ---------    ------      ------   ------   ----    ----      ------
Balance
September 30,
1998      7,538,250    73,877      33,992   (5,977)     -      77     101,969
          =========    ======      ======   =======   ====   ====     =======

Balance,
December 31,
1997          -       $     -     $30,452     $  -  $   -     $(5)    $30,447
          =========    ======      ======   ======   ====    ====     =======
Net income    -             -       4,295        -      -       -       4,295
Change in valuation
 allowance for
 investment securities
 available for sale         -           -        -      -     82           82
Issuance of common
stock     7,538,250    73,850           -   (6,031)     -      -       67,819
ESOP shares committed
  for release     -        27           -       54      -      -           81
Dividends         -        -         (755)       -      -      -         (755)
          ---------    ------      ------   ------   ----   ----       ------
Balance
September 30,
1998
Total     7,538,250    73,877      33,992   (5,977)     -     77      101,969
         ==========   ========    =======   =======    ===   ===      =======

                                      5
<PAGE>

Balance
June 30,
1999
Total     7,104,801    63,942      36,403   (5,316) (6,522)  (41)      88,466
          =========    ======      ======   ======  =======  ====      ======
  Net income      -         -       1,338        -       -     -        1,338
Change in valuation
 allowance for
 investment
 securities
 available-for-sale         -           -        -       -     14          14
ESOP shares committed
 for release      -       162           -      149       -      -         311
Restricted shares
 for release      -         -           -        -     337      -         337
Dividends         -         -         (342)      -       -      -        (342)
           ---------    ------      ------   -----   -----    ---      ------
Balance,
September 30,
1999      7,104,801    64,104      37,399   (5,167) (6,185)   (27)      90,124
          =========    ======      ======   =======  ======   ====      ======

Balance,
December 31,
1998      7,161,337   $65,705      35,037   (5,612)     -     51       95,181
  Net income      -         -       3,431        -      -      -        3,431
Change in valuation
 allowance for
 investment securities
 available-for-sale         -           -        -      -    (78)         (78)
 Issuance of
  common
  stock     301,530     6,747           -        -  (6,747)    -            -
ESOP shares committed
 for release      -       517           -      445       -     -          962
Restricted shares
  for release     -         -           -        -     562     -          562
Purchase and
 retirement of common
 stock     (358,066)   (8,865)          -        -       -     -       (8,865)
Dividends         -         -       (1,069)      -       -     -       (1,069)
           ---------    ------      ------   ------   ----   ----       ------
Balance,
September 30,
1999      7,104,801    64,104      37,399   (5,167)(6,185)   (27)      90,124
          =========    ======      ======   ======= ======   ====      ======

                                      6
<PAGE>

                              CAVALRY BANCORP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                              (Dollars in Thousands)
                                  (Unaudited)

                                                             1999        1998
                                                            -----        ----
Operating activities:
     Net cash provided (used) by operating activities       10,303       (120)
                                                          --------   --------
Investing activities:
 Decrease (increase) in loans
  receivable, net                                          (34,857)   (20,748)
 Principal payments on mortgage
  backed securities held to maturity                           237        293
 Proceeds from the sales of office
  properties and equipment                                       -        203
 Purchase of investment securities
  available for sale                                       (35,965)   (47,104)
 Purchase of investment securities
  held to maturity                                               -     (4,940)
 Proceeds from maturities of investment
  securities                                                41,500     15,000
 Purchase of office properties
  and equipment                                             (1,085)    (1,404)
                                                           --------   --------
       Net cash used in investing  activities              (30,170)   (58,700)
                                                           --------   --------
Financing activities:
 Net (decrease) increase in deposits                        31,383     (1,389)
 Issuance of common stock                                        -     69,352
 Expenses of stock offering                                      -     (1,536)
 Stock repurchase and retirement                            (8,865)         -
 Net increase in advance
  payments by borrowers for
  property taxes and insurance                                 559        621
 Cash dividends paid on common stock                          (714)      (377)
                                                           --------  --------
        Net Cash provided (used) by
         financing activities                               22,363     66,671
                                                          --------   --------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                                         2,496     7,851

CASH AND EQUIVALENTS, BEGINNING OF PERIOD                   53,188     37,658
                                                          --------   --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                    55,684     45,509
                                                          ========   ========

                                      7
<PAGE>

SUPPLEMENT DISCLOSURES OF CASH
 FLOW INFORMATION:
Payments during the period for:
 Interest                                                    7,201      7,228
                                                          ========   ========
 Income taxes                                                3,569      2,660
                                                          ========   ========
SUPPLEMENTAL DISCLOSURES OF NONCASH
 INVESTING AND FINANCING ACTIVITIES:

Foreclosures and in substance
Foreclosures of loans during period                             69        23
                                                          ========   ========
Interest credited to deposits                                2,946      2,876
                                                          ========   ========
Net unrealized gains(losses) on investment
  Securities available for sale                               (124)       131
                                                           ========   ========
(Decrease) increase in deferred tax asset related
  to unrealized gain on investments                              46        (49)
                                                           ========  ========

See accompanying notes to consolidated financial statements.



                                      8
<PAGE>


                             CAVALRY BANCORP, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                (Unaudited)

1. Basis of Presentation

   Cavalry Bancorp, Inc. (the "Company"), was organized on November 5,
   1997 under Tennessee law at the direction of Cavalry Banking (the
   "Bank") to acquire all of the capital stock that the Bank would issue
   upon its conversion from the mutual to stock form of ownership.  The
   conversion was completed on March 16, 1998 through the sale and
   issuance of 7,538,250 shares of common stock by the Company at a price
   of $10.00 per share.  Information set forth in this report relating to
   periods prior to the Conversion, including consolidated financial
   statements and related data, relates to Cavalry Banking and its
   subsidiaries.

   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.

   Statements contained in this Form 10-Q which are not historical facts
   are forward-looking statements, as that term is defined in the Private
   Securities Litigation Reform Act of 1995.  Such forward-looking statements
   are subject to risk and uncertainties which could cause actual results
   to differ materially from those projected.  Such risks and uncertainties
   include potential changes in interest rates, competitive factors in the
   financial services industry, general economic conditions, the effects of
   new legislation and other risks detailed in documents filed by the Company
   with the Securities and Exchange Commission from time to time.

   The results of operations for the three and nine months ended September
   30,1999 are not necessarily indicative of the results to be expected for
   the year ending December 31, 1999.  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, 1998.

2. Earnings Per Share

   Statement of Financial Accounting Standards No. 128, Earnings Per
   Share, established new standards for computing and presenting earnings
   per share.  The standard is effective for annual and interim periods
   ending after December 15, 1997.  This standard had no impact on the
   computation of the Company's earnings per share upon adoption.

                                      9
<PAGE>
   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.  For the purpose
   of computing weighted average shares outstanding for the three and nine
   months ended September 30, 1998, shares issued in the Conversion on
   March 16, 1998 were assumed to have been outstanding since January 1,
   1998.  Earnings per share for the three and nine months ended September
   30, 1998 was based upon 6,960,318 and 6,947,846, respectively.  ESOP
   shares are not considered in the weighted average shares outstanding
   until shares are committed to be released or earned.

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 in
    1998 and 50% of the mortgage banking revenues for the nine month period
    ended September 30, 1999 are derived each year from transactions with
    agencies of the U.S. and state government.  In addition, one
    separate and unrelated entity purchased approximately 50% of mortgages
    sold in 1998 with another separate and unrelated entity doing the same
    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 1998 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.

    For the quarter ended                   Mortgage
    September 30, 1999            Banking    Banking     Trust   Consolidated
                                  -------    -------   -------   ------------
    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 sale of assets          -        692         -         692
    Segment profit                  2,033        161        62       2,256
    Segment assets                384,990      5,703       182     390,875

    For the quarter ended                   Mortgage
    September 30, 1998             Banking   Banking     Trust   Consolidated
                                   -------   -------   -------   ------------
    Interest Revenue               $6,698     $    -     $   -      $6,698
    Other income -external customers  432        103       171         706
    Interest expense                2,310          -         -       2,310
    Depreciation and amortization     284         67         9         360

                                     10
<PAGE>
    Other significant items:
        Provision for loan losses     173          -         -         173
        Gain on sales of assets         -        587         -         587
    Segment profit                  1,738        487        21       2,246
    Segment assets                343,599     10,106        38     353,743

    For the nine months ended               Mortgage
    September 30, 1999            Banking    Banking     Trust   Consolidated
                                  -------    -------   -------   ------------
    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 sale of assets          -      1,598         -       1,598
    Segment profits                 5,413        262       163       5,838
    Segment assets                384,990      5,703       182     390,875

    For the nine months ended               Mortgage
    September 30, 1998            Banking    Banking     Trust   Consolidated
                                  -------    -------   -------   ------------
    Interest revenue              $19,736     $   -      $   -     $19,736
    Other income-external customers 1,248        305       505       2,058
    Interest expense                7,233          -         -       7,233
    Depreciation and amortization     671        188        27         886
    Other significant items:
        Provision for loan losses     308          -         -         308
        Gain on sales of assets        42      1,625         -       1,667
    Segment profit                  6,194        588        92       6,874
    Segment assets                343,599     10,106        38     353,743

4.  On March 25, 1999 Cavalry Bancorp, Inc. announced plans to implement a
    program to repurchase in the open market up to 358,066 shares or
    approximately 5 percent of its 7.2 million shares outstanding at that
    time.  The buyback was completed June 10, 1999.  The Company repurchased
    358,066 shares at the average price of $24.76 per share with the last
    purchase being a negotiated single block trade from an unaffiliated
    shareholder.  This block consisted of 212,303 shares purchased at a
    price of $26.125, which represents a 8.29% large block premium, paid
    over recent trading prices.


                                     11
<PAGE>

5.  Stock Compensation Plans

    Restricted stock-On April 22, 1999, 301,530 shares of restricted stock
    were awarded to participants in the Cavalry Bancorp, Inc. Management
    Recognition Plan ("MRP") which was approved at the Company's Annual
    Meeting of the Stockholders on April 22, 1999.  The stock awards vest
    over a five-year period.  The stock was issued from authorized but
    unissued shares on the date of the grant.  The Company recorded the stock
    award at the market value on the date of the grant ($22.375 per share) as
    unearned compensation in stockholders' equity and will amortize it over
    the vesting period.

    Stock option plan-On April 22, 1999 at the Annual Meeting of the
    Stockholders approval was given to implement a Stock Option Plan.
    This plan authorizes the issuance of options on 753,825 shares of
    authorized and unissued shares of Cavalry Bancorp, Inc. stock with
    an exercise price at least equal to the fair market value of a share
    of Common Stock on the grant date.  Currently no options have been
    granted.

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

Comparison of Financial Condition at September 30, 1999 and December 31, 1998

   Total assets were $390.9 million at September 30, 1999 and $364.9 million
   at December 31, 1998, an increase of $26.0 million or 7.1%.  This increase
   was a result of growth in net loans receivable and interest bearing
   deposits with other financial institutions offset by a decline in
   loans available for sale.  Cash and cash equivalents increased $2.5 million
   while total investments decreased $5.6 million.  The decrease was a
   result of increased portfolio lending and the repurchase and retirement of
   Cavalry Bancorp, Inc. stock.  Mortgage-backed securities decreased $245,000
   from $959,000 at December 31, 1998 to $714,000 at September 30, 1999 as a
   result of repayments.  Loans held for sale decreased $5.3 million.  The
   decrease resulted primarily from a decline in the volume of loans originated
   for sale.  This decline was a result of fewer refinances during this period.
   Loans receivable, net increased from $237.5 million at December 31, 1998 to
   $271.7 million at September 30, 1999.  Gross loans outstanding increased
   $39.3 million from $304.6 million at December 31, 1998 to $343.9 at
   September 30, 1999.  The portfolio of one-to-four family mortgage loans
   declined $11.5 million or 15.2% from $75.6 million at December 31, 1998
   to $64.1 million at September 30, 1999.  This decline was primarily a
   result of pay-offs in the adjustable rate mortgage portfolio with very
   limited origination activity in those types of mortgages.  The multifamily
   portfolio also declined $302,000 from $1.1 million at December 31, 1998 to
   $798,000 at September 30, 1999 as a result of repayments.  The commercial
   mortgage portfolio increased from $52.5 million at December 31, 1998 to
   $68.0 million at September 30, 1999, an increase of $15.5 million or 29.5%.
   This increase was primarily a result of active solicitation and competitive
   pricing of all consumer, commercial, construction, land and commercial real
   estate loan products.  Construction and land loans increased $21.4 million
   or 21.3% from $100.3 million at December 31, 1998 to $121.7 million at
   September 30, 1999.  Consumer and commercial loans increased $14.2 million
   or 18.9% from $75.1 million at December 31, 1998 to $89.3 million
   at September 30, 1999.

                                     12
<PAGE>

   Deposit accounts increased $31.4 million from $266.0 million
   at December 31, 1998 to $297.4 million at September 30, 1999.
   Certificates of deposit increased $17.4 million from $125.3
   million at December 31, 1998 to $142.7 million at September 30, 1999.  The
   Bank's savings account balances decreased $100,000 from $13.6 million
   at December 31, 1998 to $13.5 million at September 30, 1999.  NOW account
   balances increased $7.8 million from $35.6 million at December 31, 1998
   to $43.4 million at September 30, 1999.  Money market accounts increased
   $6.7 million from $52.5 million at December 31, 1998 to $59.2 million at
   September 30, 1999.  Non-interest-bearing deposits declined from $39.1
   million at December 31, 1998 to $38.7 million at September 30, 1999.  The
   increases in deposit activity as well as the increase in the
   loan activity can be attributed primarily to the branch network production.
   Most branches are now full service, which would include the ability to
   originate loans.

   Stockholders' equity decreased by $5.1 million from December 31, 1998
   to September 30, 1999.  This decrease was primarily a result of the stock
   repurchases and retirement program.  The company repurchased and retired
   358,066 shares at a cost of $8.9 million.  At the annual meeting of the
   stockholders on April 22, 1999 the stockholders approved two incentive
   plans which included a management recognition plan and a stock option
   plan.  The management recognition plan resulted in the issuance of 301,530
   shares of restricted stock at a market value of $6.7 million with an
   offsetting reduction to capital in the form of unearned restricted
   stock.  This stock will be earned over a five year vesting period.
   During this period capital increased $562,000 as a result of
   restricted stock being earned.  During the period 44,469 ESOP shares
   were committed to be released increasing capital by $962,000.
   Capital also increased as a result of earnings for the nine month
   period of $3.4 million.  These increases were offset by dividends
   of $1.1 million and comprehensive income of ($78,000).  The negative
   comprehensive income was a result of the decline in the market value
   of available for sale investment securities.

   Nonperforming assets increased from $187,000 at December 31, 1998 to
   $428,000 at September 30, 1999.  The recorded investment in impaired loans
   was $1.3 million at December 31, 1998 and September 30, 1999.

Comparison of Operating Results for the Three Months Ended September 30, 1999
and September 30, 1998.

   Net Income.   Net income decreased to $1.3 million for the three months
   ended September 30, 1999 from $1.4 million for the three months ended
   September 30, 1998 primarily as a result of increased operating expenses
   and higher interest expense.  These increased expenses were
   partially offset by higher interest income, a lower allowance for loan
   losses and higher operating incomes.


                                     13
<PAGE>

   Net Interest Income.   Total interest income increased 6.0% to $7.1
   million for the three months ended September 30, 1999 from $6.7 million
   for the same period in 1998. Interest on loans increased from $5.5 million
   for the period ended September 30, 1998 to $6.0 million for the same period
   in 1999.  This was a result of average loans outstanding increasing from
   $234.3 million in 1998 to $274.6 million for the same period in 1999.
   The average yield decreased from 9.4% for the period ended September
   30, 1998 compared to 8.8% for the same period in 1999.  This decrease
   was a result of lower rates and market competition. Income on all
   other investments consisting of mortgage backed securities, investments,
   FHLB stock, bank deposits and federal funds decreased from $1.2 million
   for the period ended September 30, 1998 to $1.1 million for 1999.  Average
   investments decreased from $86.7 million for the three months in 1998
   to $82.1 million for the same period in 1999.  These funds were used
   to repurchase stock and to fund lending activity.  The average yield
   declined from 5.6% for the three months ended September 30, 1998 to 5.1%
   for the same period in 1999.  This decline in yield was a result of
   lower rates for the three month period ended September 30, 1999 compared
   to the same period in 1998.  All interest income is allocated to
   the banking segment.

   Interest Expense.   Interest expense increased from $2.3 million for
   the period ended September 30, 1998 to $2.5 million for the same period in
   1999.  Average costing liabilities increased from $208.3 million for
   the period ended September 30, 1998 to $253.2 million for the same period
   in 1999.  The average cost of funds decreased from 4.4% for the three
   months ended September 30, 1998 to 4.0% for the same period in 1999.
   This decrease was primarily a result of an increase in the average
   balance in NOW accounts, a lower cost deposit, increasing from $30.3
   million for the three month period ended September 30, 1998 to $43.3
   million for the same period in 1999.  This increase was also coupled
   with a decline in the average cost from 1.4% for the three months
   ended September 30, 1998 to 1.2% for the same period in 1999.  This
   decline in cost was a result of the bank lowering the rate offered on NOW
   accounts.  The average balances of money market accounts outstanding
   increased from $42.1 million for the three months ended September 30, 1998
   to $61.6 million for the same period in 1999.  This increase in volume
   was offset by a decline in average cost from 4.2% for the three months
   ended September 30, 1998 to 4.0% for the same period in 1999.  This
   decrease in cost was a result of lower rates.  Average passbook balances
   also increased from $13.3 million for the period ended September 30,
   1998 to $14.3 million for the same period in 1999.  The average cost
   declined from 2.0% to 1.2% between 1998 and 1999.  This decline was a
   result of the bank lowering the rates paid on passbook deposits.  Average
   balances in certificates of deposits increased from $122.6 million for
   the three months ended September 30, 1998 to $134.1 million for the
   same period in 1999.  Lower rates accounted for the decline in
   the average cost from 5.5% for the three month period ended September
   30, 1998 to 5.1% for the same period in 1999. All interest expense is
   allocated to the banking segment.

                                     14
<PAGE>

   Provision for Loan Loses.   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 was $132,000 for the period ending September
   30, 1999 compared to $173,000 for the same period in 1998.  The decrease
   in the provision was primarily a result of slower growth in the construction,
   land, commercial real estate, commercial and consumer loan portfolios.
   The Bank assigns a higher risk to these credits than to one-to-four
   family mortgages.  Internally classified assets were $1.3 million at
   September 30, 1999 compared to $1.3 million at September 30, 1998.
   Management expects classified assets to increase moderately, although no
   assurances can be given that this will in fact occur.  Management deemed
   the allowance for loan losses adequate at September 30, 1999.  The
   provision for loan losses is allocated to the banking segment

   Noninterest Income.   Noninterest income increased to $1.6 million for
   the three months ended September 30, 1999 from $1.3 million for the same
   period in 1998.  The mortgage banking segment saw an increase in net gain
   on sale of loans from $587,000 for the three months ended September 30, 1998
   to $692,000 for the same period in 1999.  This increase was primarily a
   result of a slight increase in volume of loans sold.  Also during this
   quarter the Bank decided to sell all Tennessee Housing Development Authority
   guaranteed loans servicing released.  This allowed for a greater profit on
   the sale of these loans.  Servicing income declined from $103,000 for the
   quarter ended September 30, 1998 to $59,000 for the same quarter in 1999.
   This decline was a result of increased amortization of the originated s
   servicing asset.  In the banking segment service fees and other operating
   incomes increased from $432,000 for the three months ended September 30,
   1998 to $607,000 for the same period in 1999.  This increase was a result of
   volume in transactional accounts and an increased fee structure.  In the
   trust segment trust fees increased from $171,000 for the three months ended
   September 30, 1998 to $249,000 for the same period in 1999.  This increase
   was a result of more trust assets under management.

                                     15
<PAGE>

   Noninterest Expense.   Noninterest expense was $3.8 million for the
   period ending September 30, 1999 compared to $3.3 million for the
   same period in 1998.  Compensation and other employee benefits
   increased from $1.8 million for the three months ended September 30,
   1998 to $2.4 million for the period ended September 30, 1999.
   This increase was a result of the implementation of the management
   recognition plan, increased ESOP expense and increased staffing
   to support the branch network.  The increases in other categories
   of operating expenses generally are attributable to the growth of
   the Company.

   Income taxes.   The provision for income taxes was $918,000 for the
   period ended September 30, 1999 compared to $842,000 for the same
   period in 1998.

Comparison of Operating Results for the Nine Months Ended September
 30, 1999 and September 30, 1998.

   Net Income.  Net income decreased to $3.4 million for the nine months
   ended September 30, 1999 from $4.3 million for the nine months ended
   September 30, 1998 primarily as a result of an increased provision
   for losses on loans and increased noninterest expense.  These
   increased expenses were offset partially by an increase in interest
   income and increased noninterest income.

   Net Interest Income.  Total interest income increased 5.1% to $20.7
   million for the nine months ended September 30, 1999 from $19.7
   million for the same period in 1998. Interest on loans increased
   from $16.1 million for the period ended September 30, 1998 to $17.5
   million for the same period in 1999.  This was a result of average
   loans outstanding increasing from $228.9 million for the nine months
   ended September 30, 1998 to $262.9 for the same period in 1999.
   This increase was partially offset by a decline in
   average yield from 9.4% for the nine months ended September 30, 1998
   to 8.9% for the same period in 1999. Income on all other investments
   consisting of mortgage backed securities, investments, FHLB stock,
   bank deposits and federal funds sold decreased from $3.6 million
   for the nine months ended September 30, 1998 to $3.2 million for
   the same period in 1999.  Average investments decreased from $88.3
   million for the nine months ended September 30, 1998 to $86.4
   million for the same period in 1999.  The average yield declined
   from 5.5% for the nine months ended September 30, 1998 to 5.0%
   for the same period in 1999 as a result of declining rates.  Total
   interest income is allocated to the banking segment.


                                     16
<PAGE>

   Interest Expense.  Interest expense remained constant at $7.2 million
   for the nine month periods ended September 30, 1998 and 1999.  Average
   costing liabilities increased from $226.4 million for the nine months
   ended September 30, 1998 to $242.1 million for the same period in 1999.
   The average cost of funds declined from 4.3% for the nine months ended
   September 30, 1998 to 4.0% for the same period in 1999.  Average
   passbook savings decreased from $25.0 million for the nine months
   ended September 30, 1998 to $14.0 million for the same period in 1999.
   The average cost of passbook deposits declined from 1.9%
   for the nine months ended September 30, 1998 to 1.3% for the same
   period in 1999.  The decline in volume was a result of the returning of
   subscription funds during the nine month period of 1998.  The decline
   in rate was a result of the bank's pricing policy on those deposits.
   Average deposits in money market accounts increased from $45.6 million
   for the nine months ended September 30, 1998 to $58.4 million for
   the same period in 1999.  The average cost of the money market accounts
   declined from 4.2% for the nine month period ended September 30, 1998
   to 4.0% for the same period in 1999 as a result of declining rates.
   Average balances in NOW accounts increased from $32.0 million
   for the nine month period ended September 30, 1998 to $41.0 million
   for the same period in 1999.  This increase was primarily a result
   of active solicitation of these accounts by the use of employee
   incentives.  The average cost of NOW accounts declined from 1.5% for
   the nine months ended September 30, 1998 to 1.2% for the same period in
   1999 as a result of the Bank lowering the rate paid on these deposits.
   The average balances in certificates of deposits increased slightly from
   $123.8 million for the nine month period ended September 30, 1998 to $128.6
   million for the same period in 1999.  The average cost declined from 5.5%
   for the nine months ended September 30, 1998 to 5.1% for the same period in
   1999 as a result of declining rates.  Total interest expense is allocated
   to the banking segment.

   Provision for Loan Losses.  The provision for loan losses was $644,000
   for the nine month period ended September 30, 1999 compared to $308,000
   for the same period in 1998.  The increase was a result of increased loan
   portfolio growth in construction, land development, commercial, consumer
   commercial real estate loans. See "Comparison of Operating Results for the
   Three Months Ended September 30, 1999 and September 30, 1998 - Provision
   for Losses."

   Noninterest Income.  Noninterest income increased to $4.1 million for
   the nine months ended September 30, 1999 compared to $3.7 million for
   the same period in 1998.  In the mortgage banking segment the gain on
   sale of loans was $1.6 million for both nine month periods ended
   September 30, 1999 and 1998.  The mortgage banking segment
   saw a decline in mortgage servicing fees from $305,000 for the nine
   month period ended September 30, 1998 to $198,000 for the same period
   in 1999.  This decline was a result of the amortization of the originated
   servicing asset.  The trust segment saw trust fees increase from $505,000
   for the nine months ended September 30, 1998 to $687,000 for the same
   period in 1999.  In the banking segment deposit servicing fees and
   other operating income increased from $1.2 million for the nine months
   ended September 30, 1998 to $1.6 million for the same period in 1999
   as a result of increased volume in transactional accounts and increased
   fee pricing.

                                     17
<PAGE>

   Noninterest Expense.  Noninterest expense was $11.1 million for the
   nine month period ended September 30, 1999 compared to $9.0 million
   for the same period in 1998.  Compensation, payroll taxes and fringe
   benefits increased from $5.2 million for the nine month period ended
   September 30, 1998 to $6.8 million for the same period in 1999.
   This increase was primarily a result of increased staffing to service
   the increased volumes in deposits and lending, normal annual salary
   increases, increased ESOP expense and the expense of restricted stock
   awards.  The increases in other categories of operating expenses
   generally are attributable to the growth of the Company.

   Income Taxes.  The provision for income taxes was $2.4 million for the
   nine month period ended September 30, 1999 compared to $2.6 million
   for the same period in 1998.  This decrease was a result of lower income
   before taxes for the nine months ended September 30, 1999.


Liquidity and Capital Resources

   The Company's primary sources of funds are customer deposits, proceeds
   from principal and interest payments from and the sale of loans,
   maturing securities and 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 funds 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, 1999, cash and cash
   equivalents totaled $55.7 million or 14.2% of total assets, and
   investments available for sale totaled $40.9 million.  At September 30,
   1999, the Bank also maintained, but did not draw upon, a line of credit
   with the FHLB of Cincinnati in the amount of $20.0 million.

                                     18
<PAGE>

   As of September 30, 1999, the Bank's regulatory capital was in excess of
   all applicable regulatory requirements.  At September 30, 1999, under
   regulations of the OTS, the Bank's tangible, core and risk-based
   capital ratios were 20.45%, 20.45% and 22.29%, respectively, compared to
   requirements of 1.5%, 3.0% and 8.0%, respectively.

   The Bank's capital requirements and actual capital under OTS regulations
   are as follows as of September 30, 1999:
                                                 AMOUNT      % OF ASSETS
                                                -------      -----------
               GAAP Capital                     $77,144          20.44%
                                                =======          ======
               Tangible Capital:
                     Actual                     $77,171          20.45%
                     Required                     5,661           1.50%
                                                -------           -----
                     Excess                     $71,510          18.95%
                                                =======         =======
               Core Capital
                     Actual                     $77,171          20.45%
                     Required                    11,322           3.00%
                                                -------          ------
                     Excess                     $65,849          17.45%
                                                =======         =======
Liquidity and Capital Resources (Continued)

               Risk-based Capital:
                     Actual                     $80,998          22.29%
                     Required                    29,074           8.00%
                                                -------         -------
                     Excess                     $51,924          14.29%
                                                =======          ======


   At September 30, 1999, the Bank had loan commitments (including undisbursed
   portions of construction loans) of approximately $61.9 million.  In
   addition, at September 30, 1999, the unused portion of lines of credit
   extended by the Bank was approximately $8.4 million for consumer lines
   of credit and $26.5 million for commercial lines of credit.  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 are for a term of
   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, 1999, the Bank had $8.0
   million of letters of credit outstanding.

                                     19
<PAGE>

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.

Year 2000

   The approach of the Year 2000 presents significant issues for many
   computer systems.  The problems stem from the inability of some computer
   systems to properly interpret dates after December 31, 1999, because such
   systems allow only two digits to indicate the year in a date.  The Year
   2000 issues are not limited to dates in computer programs but is a complex
   combination of problems that may exist in computer programs, data files,
   computer hardware and other devices essential to the operation of the Bank.
   Further, the Bank must consider the potential impact that Year 2000 may
   have on services provided by third parties and our borrowing customers.

   The Bank began working on the Year 2000 issue in 1996 as part of a
   project to update our information systems to a level that would allow us
   to compete in the 21st century.  The Bank has a formal Year 2000 plan
   which follows the FFIEC's suggested steps of Awareness, Assessment,
   Renovation, Validation and Implementation and has been reviewed by
   senior management, the Audit Committee and the Board of Directors.
   Included in the plan is a listing of all applications and systems
   (whether in-house or provided by third parties) which may be impacted
   by Year 2000 and a categorization of their potential impact on Bank
   operations. The Bank's Year 2000 readiness has been reviewed by
   Federal Regulators.

   As of September 30, 1999, the Awareness and Assessment Phases have been
   completed by the Bank.  All internal computer hardware and software have
   been Renovated, Validated and Implemented and are Year 2000 ready.
   However, management feels that these phases, while complete, are also
   ongoing due to unexpected but necessary hardware and software
   replacements/upgrades between now and the end of the year.  While
   these upgrades/replacements will be limited, all necessary changes
   will be thoroughly tested prior to replacement of the current Year
   2000 compliant hardware or software.

                                     20
<PAGE>

   The BISYS Group, Inc. ("BISYS") provides the Bank with core processing
   systems in the mission critical teller, general ledger, consumer,
   commercial, and mortgage lending areas.  BISYS has developed a Year
   2000 plan and provides the Bank with periodic updates.  BISYS has also
   provided Year 2000 workshops, whose objectives have been to assist the
   Bank in the development of its Year 2000 plan, to provide updates on
   the BISYS Year 2000 plan, and training on the use of the BISYS Year
   2000 test facility. The BISYS test facility allows BISYS clients to
   test their systems' compatibility with the BISYS system. BISYS has
   certified that its systems are Year 2000 compliant. From November
   1998 through January 1999, the Bank and BISYS have successfully
   completed the compatibility testing of the interface between BISYS
   and the Bank and the software's performance when encountering
   potentially troublesome dates such as January 3, 2000, and
   February 29, 2000.  Like the Bank, BISYS' Year 2000 activities
   are reviewed and monitored by Federal Regulators.

   The Bank does not believe that the Year 2000 issue will be material
   to its financial position in any given year.  Year 2000 costs are not
   always easy to separate from expenses related to routine upgrades or
   changes in hardware/software.  This is especially true since the Bank
   started in late 1996 to perform a complete system wide upgrade of all
   computer hardware and software.  These upgrades were necessary from an
   operational perspective but also solved many potential Year 2000
   problems.  Therefore, the Bank believes that most of the following
   costs disclosed as Year 2000 costs could just as easily have been
   excluded as replacement or upgrade costs.  The Bank's estimated upgrade
   and Year 2000 related cost for 1996 was $700,000.  The Bank's estimated
   upgrade and Year 2000 related cost for fiscal year 1997 was $250,000
   and the Company's estimated upgrade and Year 2000 related cost for
   fiscal year 1998 was $150,000.  The Bank currently believes that all
   major year 2000 expenditures have been made and therefore, estimates
   that only an additional $35,000 in Year 2000 cost will be incurred
   over the remaining 3 months.  These costs will relate primarily to
   personnel cost incurred in the validation and implementation phases.

   The Bank's operations are highly dependent on computer systems and
   computer hardware, both internal and those provided through third
   parties.  Due to such a high level of dependency on computers and
   computer systems, the failure of systems due to Year 2000 problems
   could have a material adverse financial impact on the Bank.  The
   following risks are believed by management to present the most likely
   reasonable worst case scenario:

   BISYS could experience unforeseen system(s) failure resulting in
   the inability to access customer accounts and process transactions.

                                     21
<PAGE>

   Loss of utilities could cause major disruptions of business.
   Although the Bank has a backup generator to ensure that our
   critical systems at the main office would be operational, the loss
   of power to the branches would be disruptive.  Should telephone
   service be disrupted, the Bank would lose the ability to communicate
   with BISYS, which would prohibit electronic access to customer accounts.

   Failure in the Federal Reserve payments system could cause a severe
   disruption to the Bank's business causing processing backlogs and could
   affect the Bank's ability to process customer deposits and withdrawals
   as well as fund loans.

   Loss of customer confidence that the Bank or the banking system in
   general will be Year 2000 compliant could cause excessive deposit
   withdrawals impairing the Bank's liquidity.

   Business resumption plans have been developed and were tested during
   the third quarter to deal with these worse case scenarios.  However,
   should any or a combination of any of the above scenarios actually
   materialize, the results could be loss of revenue, increased cost
   and/or impaired liquidity.  It is not possible to estimate the extent
   of loss that may occur nor is it possible to estimate the length of time
   that it would take to remedy any problems encountered.

   The forgoing Year 2000 cost and issues are based on management's
   best estimates which were derived utilizing numerous forward looking
   assumptions.  However, there can be no guarantee and the actual results
   could differ materially.  Specific factors that might cause such material
   differences include, but are not limited to, failure of a key third party
   to meet expectations, availability and cost of key personnel, and the
   public's perception of Year 2000 risk.

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, 1998 to September 30, 1999.  However, the OTS results are not
   yet available for the quarter ended September 30, 1999.  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 fiscal year ended December 31, 1998.


                                     22
<PAGE>

   The following table presents the Company's interest sensitivity gap at
   September 30, 1999.


                                            After   After
                                     Six    One     Three
                          Within    Months   To      To      Over
                           Six      To One  Three   Five     Five
                           Months    Year   Years   Years    Years   Total

  Interest-earning assets:
   Loans receivable, net  $54,849  52,505  46,814  61,866  61,259  277,293
   Mortgage-backed
    securities                 10      11      46      53     594      714
   FHLB stock                 185     185     738     738       -    1,846
   Investment securities   39,934     989       -       -       -   40,923
   Federal funds sold,
     overnights, and other
     interest-bearing
     deposits              44,263       -       -       -       -   44,263
                          -------  ------ ------- ------- -------  -------
  Total rate sensitive
     Assets               139,241  53,690  47,598  62,657  61,853  365,039
                          ======= ======= ======= ======= =======  =======
   Interest-bearing liabilities:
   Deposits:
    NOW accounts            4,341   4,341  17,364  17,364       -   43,410
    Passbook savings
     accounts               1,347   1,347   5,389   5,389       -   13,472
    Money market
     deposit accounts       5,922   5,922  23,687  23,687       -   59,218
    Certificates of
     deposits              63,743  56,588  13,467   8,726     129  142,653
                          ------- ------- ------- ------- -------  -------
   Total rate sensitive
     Liabilities           75,353  68,198  59,907  55,166     129  258,753
                          ======= ======= ======= ======= =======  =======

  Excess (deficiency) of
   interest sensitivity
   assets over interest
   sensitivity
   liabilities             63,888 (14,508)(12,309)  7,491  61,724  106,286
 Cumulative excess
   (deficiency) of
   interest sensitivity
   assets                  63,888  49,380  37,071  44,562 106,286  106,286
 Cumulative ratio
   of interest-earning
   assets to interest-bearing
   liabilities             184.78% 134.40% 118.22%  117.23%  141.08%  141.08%
 Interest sensitivity
   gap to total
   assets                  17.50%  (3.97)% (3.37)%   2.05%    16.91%   29.12%
 Ratio of interest
   -earning assets to
   interest-bearing
   liabilities            184.78%  78.73%   79.45% 113.58% 47,948.06% 141.08%
 Ratio of cumulative
   gap to total
   assets                  17.50%  13.53%   10.16%  12.21%     29.12%   29.12%

                                     23
<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

        Not applicable

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

         Not applicable

 (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, 1998.

                                     24

<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 9, 1999                      By: /s/Ronald F. Knight
                                               -----------------------------
                                               Ronald F. Knight
                                               President and Chief Operating
                                               Officer


Date: November 9, 1999                      By: /s/Hillard C. Gardner
                                               -----------------------------
                                               Hillard C. Gardner
                                               Senior Vice President and
                                               Chief Financial Officer
24