<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K

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

                   For the Fiscal Year ended December 31, 2002

                         Commission File Number 0-27393

                        CUMBERLAND BANCORP, INCORPORATED
             (Exact name of registrant as specified in its charter)

          Tennessee                                            62 - 1297760
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

              4 Corporate Centre
        810 Crescent Centre Dr, Ste 320
              Franklin, Tennessee                                   37067
    (Address of principal executive offices)                     (Zip Code)

                                 (615) 383-6619
                           (Issuer's telephone number)

              Securities registered under Section 12(b) of the Act:
                                      None
              Securities registered under Section 12(g) of the Act:
                          Common Stock, $.50 par value
                                (Title of Class)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

                              YES [X]       NO [ ]

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

         Indicate by check mark whether the registrant is an accelerated filer
(as described in Exchange Act Rule 12b-2). YES [ ] NO [X]

         The aggregate market value of the Registrant's voting stock held by
non-affiliates of the Registrant on June 28, 2002 was $36,841,339. The market
value calculation was determined using the closing price of $4.13 for the
Registrant's common stock on June 28, 2002, as reported on the NASDAQ
over-the-counter bulletin board.

         As of February 28, 2003, 15,384,626 shares of the issuer's Common
Stock were outstanding.


<PAGE>
                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Registrant's definitive proxy statement for its Annual
Meeting of Shareholders to be held on May 15, 2003 are incorporated by
reference into Part III of this Annual Report on Form 10-K.


<PAGE>
                             CROSS REFERENCE INDEX
                                       TO
                                   FORM 10-K

<TABLE>
<CAPTION>

                                      PART I
                                                                             PAGE
<S>                                                                          <C>
ITEM 1.   DESCRIPTION OF BUSINESS                                              2
ITEM 2.   DESCRIPTION OF PROPERTY                                             10
ITEM 3.   LEGAL PROCEEDINGS                                                   10
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 10

                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED
          SHAREHOLDER MATTERS                                                 11
ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA                                11
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS                                 13
ITEM 7A.  QUANTITATIVE AND QUALITATIVE
          DISCLOSURE ABOUT MARKET RISK                                        26
ITEM 8.   FINANCIAL STATEMENTS                                                28
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH
          ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE                                                60

                                     PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS                                    60
ITEM 11.  EXECUTIVE COMPENSATION                                              60
ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
          OWNERS AND MANAGEMENT                                               60
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                      60
ITEM 14.  CONTROLS AND PROCEDURES                                             62
ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K     63
</TABLE>


                                ---------------


<PAGE>
                         Cautionary Statement Concerning
                           Forward-Looking Information

         This Annual Report on Form 10-K of Cumberland Bancorp, Incorporated, a
Tennessee corporation (the "Company") contains or incorporates by reference
certain "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are
intended to be covered by the "safe harbors" created thereby. Those statements
include, but may not be limited to, the discussions of the Company's
expectations concerning its future profitability, operating performance, growth
strategy, and its assumptions regarding other matters. Also, when any of the
words "believes", "expects", "anticipates", "intends", "estimates", "plans", or
similar terms or expressions, are used in this Annual Report on Form 10-K,
forward-looking statements are being made.

         You should be aware that, while the Company believes the expectations
reflected in those forward-looking statements are reasonable, they are
inherently subject to risks and uncertainties which could cause the Company's
future results and shareholder values to differ materially from the Company's
expectations. These factors are disclosed in Management's Discussion and
Analysis of Financial Condition and Results of Operations set forth herein and
include, among others, (i) increased competition with other financial
institutions, (ii) lack of sustained growth in the economy in the Company's
market area, (iii) rapid fluctuations in interest rates, (iv) significant
downturns in the businesses of one or more large customers, (v) risks inherent
in originating loans, including prepayment risks, (vi) the fluctuations in
collateral values, the rate of loan charge-offs and the level for the provision
for losses on loans, and (vii) changes in the legislature and regulatory
environment. Because of these factors, there can be no assurance that the
forward-looking statements included or incorporated by reference herein will
prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included or incorporated by reference herein, you
should not regard the inclusion of such information as a representation by the
Company or any other person that the objectives and plans of the Company will
be achieved. In addition, the Company does not intend to, and is not obligated
to, update these forward-looking statements after the date of this Annual
Report on Form 10-K, even if new information, future events or other
circumstances have made them incorrect or misleading as of any future date.

                                     PART I

ITEM 1.  Description of Business

General

         Cumberland Bancorp is a multi-bank holding company headquartered in
Franklin, Tennessee, with $719.7 million in total assets at December 31, 2002.
We conduct our banking business through five (5) bank subsidiaries in twelve
markets throughout Middle and West Tennessee:

         -        Cumberland Bank, a Tennessee state chartered bank with nine
                  (9) offices in Macon, Robertson, Smith, Sumner and Warren
                  Counties, Tennessee;

         -        BankTennessee, a Tennessee state chartered bank with five (5)
                  offices in Shelby and Lauderdale Counties, Tennessee;


                                                                             1.
<PAGE>
         -        The Community Bank, a Tennessee state chartered bank, with
                  three (3) offices in Davidson and Williamson Counties,
                  Tennessee;

         -        Bank of Dyer, a Tennessee state chartered bank with four (4)
                  offices in Gibson and Madison County, Tennessee; and

         -        Bank of Mason, a Tennessee state chartered bank with one (1)
                  office in Tipton County, Tennessee.

         We own a fifty percent (50%) interest in The Murray Bank, a federal
savings bank in Murray, Kentucky that opened for business on June 15, 1999 and
has grown to total assets of more than $96.4 million at December 31, 2002. We
also own a fifty percent (50%) interest in the Insurors Bank of Tennessee, a
state chartered, Federal Reserve member bank that opened for business on
November 20, 2000. The Insurors Bank has grown to total assets of $41.7 million
at December 31, 2002.

         Our principal operations involve commercial and residential real
estate lending, commercial business lending, consumer lending, construction
lending and other financial services, including depository, credit card and
brokerage services. We equally serve both metropolitan and rural areas.
Management believes that the markets in which our banks operate offer an
environment for continued growth with respect to our target market, which
includes local consumers, professionals and small businesses.

         We have seven (7) bank branch offices that are less than four years
old as of December 31, 2002. We also have broadened our mix of products and
expanded our customer base through a combination of internal growth and
acquisitions. Our growth has been directed by a senior management team composed
of individuals with an average of more than twenty-three (23) years of banking
experience, with the vast majority of that experience in Tennessee.

         Our banks are subject to the regulatory authority of the Department of
Financial Institutions of the State of Tennessee, the Federal Reserve Board and
the Federal Deposit Insurance Corporation (the "FDIC"), which currently insures
the depositors of each member bank to a maximum of $100,000 per depositor. For
this protection, each bank is subject to a quarterly statutory assessment and
the rules and regulations of the FDIC.


Employees

         The Company and its subsidiaries had approximately 276 full-time
equivalent employees as of December 31, 2002. These employees are not
represented by a collective bargaining group. We consider relations with our
employees to be excellent. Benefit programs are provided to our employees
including a 401(k) plan, group life and health insurance, an annual merit
program, paid vacations, and sick leave.

Competition

         Our banks have substantial competition in attracting and retaining
deposits and in lending funds. The primary factors in competing for deposits
are the range and quality of financial services offered, the ability to offer
attractive rates and the availability of convenient office locations. Such
competition is heightened by the fact that Tennessee law permits any bank or
savings association located in Tennessee to branch in any county in Tennessee.
Additional significant competition for savings deposits comes from other
investment alternatives, such as money market funds and


                                                                             2.
<PAGE>
corporate and government securities. Primary factors in competing for loans are
the range and quality of lending services offered, interest rates and loan
origination fees. Competition for the origination of loans normally comes from
other savings and financial institutions, commercial banks, credit unions,
insurance companies and other financial service companies. Many of these
competitors are not subject to the same regulatory restrictions as are bank
holding companies and banks. As a result, they may have a competitive advantage.

         We believe our strategy of relationship banking and local autonomy in
the communities we serve allows flexibility in rates and products offered in
response to local needs in a way that can enhance profitability for our banks,
particularly as consolidation of the banking industry occurs and larger
institutions exit markets that are only marginally profitable for them. We
believe our emphasis on community banking, customer service and relationships
is the most effective method we have of competing with these larger regional
bank holding companies as well as smaller community banks.

Lending Procedures and Loan Approval Process

         Lending Procedures. Lending procedures of our banks reflect our
philosophy of granting local control to decision making. Although the overall
lending policy of the banks is set by our board of directors and is subject to
the oversight and control of our board of directors, we depend, to a great
degree, upon the judgment of our loan officers and senior management at each
bank to assess and control lending risks. Each of our banks utilize a loan
committee to review loan requests exceeding the discretionary limit of the loan
officer or branch manager, or for which the loan officer or branch manager
chooses not to exercise his or her discretionary authority.

         We have created a Corporate Credit Committee, which brings together
our strongest and most experienced lending officers and utilizes them to work
with our local loan committees in analyzing, underwriting, and structuring
large loan requests. This group is responsible for the implementation of our
loan policy and lending procedures.

         The position of Director of Corporate Risk Management has been added
at the holding company to provide independent oversight of our banks' loan
review, compliance, and internal audit functions. The banks' have adopted an
8-point internal loan grading system as well as a uniform analysis of the loan
loss reserve adequacy methodology. Past due loans are reviewed by an internal
loan officer committee, and a summary report of such loans is reviewed monthly
by the board of directors of the Company. A report of loan review findings is
presented to our Audit Committee and board of directors.

Asset/Liability Management

         Each of our banks has a committee comprised of its senior officers and
outside directors charged with managing assets and liabilities pursuant to our
asset-liability management policy. Each committee's task is to maximize and
stabilize the net interest margin, and to provide reasonable growth of assets,
earnings and return on equity capital while maintaining credit quality,
reasonable interest rate risk, adequate capital and liquidity. To meet these
objectives, each committee monitors its bank's progress and assists in
directing overall acquisition and allocation of funds. Each committee meets
monthly to review liquidity and funds position, and to review the general
economic condition and other factors affecting the availability and use of
funds of its bank. Each committee reports monthly to our and the individual
banks' boards of directors explaining variances between budget and actual
results, providing the likely reasons for such variances and


                                                                             3.
<PAGE>
reporting management's course of action in light of any budget variances. Our
asset liability management policy is reviewed annually by each bank's board of
directors.

Investment Activities

         Our banks maintain separate investment portfolios consisting primarily
of investment grade securities, including federal agency obligations, corporate
bonds and asset-backed securities. Federal regulations limit the types and
quality of instruments in which the banks may invest.

         A key objective of each of our banks' investment portfolios is to
provide a balance with the bank's loans consistent with each bank's liability
structure, and to assist in management of interest rate risk. The investment
portfolio generally receives more weight than loans in the risk-based capital
formula, and provides the necessary liquidity to meet fluctuations in credit
demands and fluctuations in deposit levels of the local communities served. The
portfolios also provide collateral for pledging against public deposits and
income for our banks.

         An Investment Portfolio Manager has been added to the holding company
to manage each of the banks' investment portfolios. Investment advice provided
by board-approved, reputable, independent brokerage firms is utilized.

Joint Ventures

         The Company owns a 50% interest in The Murray Bank in Murray, Kentucky
and Insurors Bank of Tennessee, headquartered in Nashville, Tennessee. Both of
these investments are structured so that the Company does not have controlling
representation on the Board of Directors. Therefore, only the Company's initial
investment, adjusted for its pro rata share of operating results of each
entity, is included in the consolidated financial statements. The Murray Bank,
which opened in 1999, has approximately $96.4 million in total assets at
December 31, 2002. Insurors Bank opened in November 2000 and has approximately
$41.7 million in assets at December 31, 2002. Certain services are provided by
the Company to both of these institutions for a fee, which is not significant
to the Company's financial statements. More information regarding these two
entities can be found in note 7 to the consolidated financial statements.

Monetary Policies

         The result of operations of our banks and the Company are affected by
credit policies of monetary authorities, particularly the Federal Reserve
Board. The instruments of monetary policy employed by the Federal Reserve Board
include open market operations in U.S. government securities, changes in the
discount rate on bank borrowings, and changes in reserve requirements against
bank deposits. In view of changing conditions in the national economy and in
the money markets, as well as the effects of actions by monetary and fiscal
authorities, including the Federal Reserve Board, no prediction can be made as
to possible future changes in interest rates, deposit levels, loan demand or
the effect of such matters on the business and earnings of the Company.

Supervision and Regulation

         We, along with our banks, are subject to state and federal banking
laws and regulations which impose specific requirements or restrictions and
provide for general regulatory oversight with respect to virtually all aspects
of our and our banks' operations. These laws and regulations are generally
intended to protect depositors, not shareholders. The following summaries of
statutes


                                                                             4.
<PAGE>
and regulations affecting banks and bank holding companies do not purport to be
complete. These summaries are qualified in their entirety by reference to the
statutes and regulations described.

         General. As a bank holding company, we are regulated under the Bank
Holding Company Act of 1956, as amended (the "BHCA"), and are inspected,
examined, and supervised by the Board of Governors of the Federal Reserve
System. Under the BHCA, bank holding companies generally may not acquire the
ownership or control of more than 5% of the voting shares, or substantially all
the assets, of any company, including a bank, without the Federal Reserve's
prior approval. In addition, bank holding companies generally may engage,
directly or indirectly, only in banking and such other activities as are
determined by the Federal Reserve to be closely related to banking. Under the
Gramm-Leach-Bliley Act of 1999, bank holding companies may elect to become
financial holding companies, which are permitted to engage in activities that
are financial in nature or incidental to a financial activity. We have not
elected to become a financial holding company.

         Various governmental requirements, including Sections 23A and 23B of
the Federal Reserve Act, as amended, limit borrowings by us and our nonbank
subsidiaries from our affiliate banks. These requirements also limit various
other transactions between us and our nonbank subsidiaries, on the one hand,
and our banks, on the other. For example, Section 23A limits to no more than
10% of its total capital the aggregate outstanding amount of any bank's loans
and other "covered transactions" with any particular nonbank affiliate, and
limits to no more than 20% of its total capital the aggregate outstanding
amount of any bank's "covered transactions" with all of its nonbank affiliates.
Section 23A also generally requires that a bank's loans to its nonbank
affiliates be secured, and Section 23B generally requires that a bank's
transactions with its nonbank affiliates be on arm's length terms.

         All of our banks are incorporated under the banking laws of the State
of Tennessee and, as such, are governed by the applicable provisions of those
laws. Consequently, the Tennessee Department of Financial Institutions ("TDFI")
supervises and regularly examines our banks. Our banks' deposits are insured by
the FDIC through the Bank Insurance Fund, and therefore are governed by the
provisions of the Federal Deposit Insurance Act. However, most of our banks are
members of the Federal Reserve Bank System. Therefore, our primary federal
banking regulator is the Federal Reserve. The TDFI and the FDIC regulate or
monitor virtually all areas of our banks' operations. The Murray Bank is a
federal savings bank organized under the laws of the United States of America.
The Murray Bank is primarily regulated and examined by the Office of Thrift
Supervision. The FDIC also regulates various operations of The Murray Bank.

         Branching. Tennessee law imposes limitations on the ability of a state
bank to establish branches in Tennessee. Under current Tennessee law, any
Tennessee bank domiciled in Tennessee may establish branch offices at any
location in any county in the state. Furthermore, Tennessee and federal law
permits out-of-state acquisitions by bank holding companies, interstate merging
by banks, and de novo branching of interstate banks, subject to certain
conditions. These powers may result in an increase in the number of competitors
in our banks' markets. We believe our banks can compete effectively in their
markets despite any impact of these branching powers, but there can be no
assurance that future developments will not affect our banks' ability to
compete effectively.

         Community Reinvestment Act. The Community Reinvestment Act requires
that, in connection with examinations of financial institutions within their
respective jurisdictions, the federal bank regulatory agencies responsible for
evaluating us and our banks evaluate the record of the depository institutions
in meeting the credit needs of their local communities, including low and
moderate income neighborhoods, consistent with the safe and sound operation of
those institutions.


                                                                             5.
<PAGE>
These factors are also considered in evaluating mergers, acquisitions and
applications to open a branch or facility.

         Capital Requirements Generally. The federal regulatory agencies that
evaluate us and our banks use capital adequacy guidelines in their examination
and regulation of banks. If the capital falls below the minimum levels
established by these guidelines, the banks may be denied approval to acquire or
establish additional banks or non-bank businesses, or to open facilities, or
the banks may be regulated by additional regulatory restrictions or actions.

         Risk-Based Capital Requirements. All of the federal regulatory
agencies have adopted risk-based capital guidelines for banks and bank holding
companies. These risk-based capital guidelines are designed to make regulatory
capital requirements more sensitive to differences in risk profile among banks
to account for off-balance sheet exposure and to minimize disincentives for
holding liquid assets. Assets and off-balance sheet items are assigned to broad
risk categories, each with appropriate weights. The resulting capital ratios
represent capital as a percentage of total risk-weighted assets and off-balance
sheet items. The ratios are minimums. The guidelines require all
federally-regulated banks to maintain a minimum risk-based total capital ratio
of 8%, of which at least 4% must be Tier I capital, as described below.

         A banking organization's qualifying total capital consists of two
components: Tier I, or "core" capital, and Tier 2, or "supplementary" capital.
Tier I capital is an amount equal to the sum of: (1) common shareholders'
equity, including adjustments for any surplus or deficit; (2) non-cumulative
perpetual preferred stock; and (3) the company's minority interests in the
equity accounts of consolidated subsidiaries. With limited exceptions for
goodwill arising from certain supervisory acquisitions, intangible assets
generally must be deducted from Tier I capital. Other intangible assets may be
included in an amount up to 25% of Tier I capital, so long as the asset is
capable of being separated and sold apart from the banking organization or the
bulk of its assets. Additionally, the market value of the asset must be
established on an annual basis through an identifiable stream of cash flows,
and there must be a high degree of certainty that the asset will hold this
market value notwithstanding the future prospects of the banking organization.
Finally, the banking organization must demonstrate that a liquid market exists
for the asset. Intangible assets in excess of 25% of Tier I capital generally
are deducted from a banking organization's regulatory capital. At least 50% of
the banking organization's total regulatory capital must consist of Tier I
capital.

         Tier 2 capital is generally considered to be an amount equal to the
sum of the following:

                  -        the allowance for possible credit losses in an
                           amount up to 1.25 % of risk-weighted assets;

                  -        cumulative perpetual preferred stock with an
                           original maturity of 20 years or more and related
                           surplus;

                  -        hybrid capital instruments defined as instruments
                           with characteristics of both debt and equity,
                           perpetual debt and mandatory convertible debt
                           securities; and

                  -        in an amount up to 50% of Tier I capital, eligible
                           term subordinated debt and intermediate-term
                           preferred stock with an original maturity of five
                           years or more, including related surplus.


                                                                             6.
<PAGE>
         Investments in unconsolidated banking and finance subsidiaries,
investments in securities subsidiaries and reciprocal holdings of capital
instruments must be deducted from capital. The federal regulatory agencies may
require other deductions on a case-by-case basis.

         Under the risk-weighted capital guidelines, balance sheet assets and
certain off-balance sheet items like standby letters of credit are assigned to
one of four risk-weight categories according to the nature of the asset and its
collateral or the identity of any obligor or guarantor. These four categories
are 0%, 20%, 50% or 100%. For example, cash is assigned to the 0% risk
category, while loans secured by one-to-four family residences are assigned to
the 50% risk category. The aggregate amount of assets and off-balance sheet
items in each risk category is adjusted by the risk-weight assigned to that
category to determine weighted values, which are added together to determine
the total risk-weighted assets for the banking organization. Accordingly, an
asset, like a commercial loan, which is assigned to a 100% risk category is
included in risk-weighted assets at its nominal face value, whereas a loan
secured by a single-family home mortgage is included at only 50% of its nominal
face value. The application ratios are equal to capital, as determined, divided
by risk-weighted assets, as determined.

         Leverage Capital Requirements. The federal regulatory agencies have
issued a final regulation requiring certain banking organizations to maintain
additional capital of 1% to 2% above a 3% minimum Tier I leverage capital ratio
equal to Tier I capital, less intangible assets, to total assets. In order for
an institution to operate at or near the minimum Tier I leverage capital ratio
of 3%, the banking regulators expect that the institution would have
well-diversified risk, no undue rate risk exposure, excellent asset quality,
high liquidity and good earnings. In general, the bank would have to be
considered a strong banking organization, rated in the highest category under
the bank rating system and have no significant plans for expansion. Higher Tier
I leverage capital ratios of up to 5% will generally be required if all of the
above characteristics are not exhibited, or if the institution is undertaking
expansion, seeking to engage in new activities, or otherwise faces unusual or
abnormal risks.

         Institutions not in compliance with these regulations are expected to
be operating in compliance with a capital plan or agreement with that
institution's regulator. If they do not do so, they are deemed to be engaging
in an unsafe and unsound practice and may be subject to enforcement action.
Failure to maintain a Tier I leverage capital ratio of at least 2% of assets
constitutes an unsafe and unsound practice and may result in enforcement action
against an institution justifying termination of that institution's FDIC
insurance.

         At December 31, 2002, the Company's Tier 1 risk-based Capital and
Total risk-based Capital ratios were 10.92% and 12.18%, respectively.

         Capital Commitments. The Company and its subsidiaries, Cumberland Bank,
BankTennessee and Bank of Dyer, have informally agreed with or committed to bank
regulatory officials to take various actions, including to reduce the level of
criticized or non-performing loans, to improve loan underwriting, problem loan
resolution and collection, and strategic and capital planning, to obtain prior
regulatory approval before incurring additional holding company indebtedness,
repurchasing shares, or paying dividends from certain subsidiary banks to the
holding company or from the holding company to shareholders, and to maintain
certain capital levels at subsidiary banks in excess of those required for well
capitalized status. The most restrictive of these provisions would require the
Company to maintain a Tier I leverage ratio of at least 7.0% at BankTennessee,
Bank of Dyer and Cumberland Bank at December 31, 2002. The Company and its
subsidiaries believe they were in compliance in all material respects with these
informal understandings at December 31, 2002. The Company and its subsidiaries
intend to continue to comply with these informal understandings, and the
Company received approval to pay dividends in the first quarter of 2003. The
Company believes that the proceeds of its private placement, earnings from
operations and available funds will be sufficient to allow the Company to meet
all these commitments and the requirements for well capitalized status through
the end of 2003. However, the Company's regulators have considerable discretion
in determining whether to grant required approvals, and no assurance can be
given that such approvals will be forthcoming.

         Liability for Bank Subsidiaries. Under the Federal Reserve policy, we,
as a bank holding company, are expected to act as a source of financial and
managerial strength to each of our banks and to maintain resources adequate to
support each of our banks. This support may be required at times when we may
not have the resources to provide it. Any depository institution insured by the
FDIC can be held liable for any loss incurred, or reasonably expected to be
incurred, by the FDIC in connection with the default of a commonly-controlled,
FDIC-insured depository institution like a bank subsidiary. Additionally,
depository institutions insured by the FDIC may be held liable to the FDIC for
any loss incurred or reasonably expected to be incurred in connection with any
assistance provided by the FDIC to a commonly-controlled, FDIC-insured
depository institution in danger of default. "Default" is defined generally as
the appointment of a conservator or receiver and "in danger of default" is
defined generally as the existence of certain conditions indicating that a
"default" is likely to occur in the absence of regulatory assistance. All of
our banks are FDIC-


                                                                             7.
<PAGE>
insured depository institutions. Also, in the event that such a default
occurred with respect to one of our banks, any capital loans from us to that
bank would be subordinate in right of payment to payment of the bank's
depositors and other of the bank's obligations.

         Dividend Restrictions. Federal and Tennessee law limits the payment of
dividends by banks. Under Tennessee law, the directors of a state bank, after
making proper deduction for all expenditures, expenses, taxes, losses, bad
debts, and any write-offs or other deductions required by the TDFI, may credit
net profits to the bank's undivided profits account. Thereafter, the bank may
quarterly, semi-annually, or annually declare a dividend from that account in
an amount judged expedient by the bank's board of directors. Before declaring
the dividend, the board of directors must deduct any net loss from the
undivided profits account and transfer to the bank's surplus account (1) the
amount, if any, required to raise the surplus to 50% of the capital stock and
(2) the amount required, if any, but not less than 10% of net profits, to make
the paid-in-surplus account equal the capital stock account. Thereafter, the
bank may declare a dividend if the bank is adequately reserved against deposits
and those reserves will not be impaired by the declaration of the dividend.

         A state bank, with the approval of the TDFI, may transfer funds from
its surplus account to the undivided profits or retained earnings account or
any part of its paid-in-capital account. The payment of dividends by any bank
is dependent upon its earnings and financial condition and also may be limited
by federal and state regulatory agency protections against unsafe or unsound
banking practices. The payment of dividends could, depending upon the financial
condition of a bank, constitute an unsafe or unsound banking practice. When a
bank's surplus account is less than its capital stock account, Tennessee law
imposes other restrictions on dividends. Finally, the FDIC prohibits a state
bank, the deposits of which are insured by the FDIC, from paying dividends if
it is in default in the payment of any assessments due the FDIC.

         The Federal Reserve also imposes dividend restrictions on our banks as
state member banks of the Federal Reserve. Our banks may not declare or pay a
dividend if that dividend would exceed the bank's undivided profits, unless the
bank has received the prior approval of the Board of Governors of the Federal
Reserve. Additionally, our banks may not permit any portion of their "permanent
capital" to be withdrawn unless the withdrawal has been approved by the Board
of Governors of the Federal Reserve. "Permanent capital" is defined as the
total of a bank's perpetual preferred stock and related surplus, common stock
and surplus, and minority interest in consolidated subsidiaries. Finally, if
one of our banks has a capital surplus in excess of that required by law, that
excess may be transferred to the bank's undivided profits account and be
available for the payment of dividends so long as (1) the amount came from the
earnings of prior periods, excluding earnings transferred as a result of stock
dividends, and (2) the bank's board and the Board of Governors of the Federal
Reserve approved the transfer.

         Deposit Insurance Assessments. The deposits of each of our banks are
insured up to regulatory limits by the FDIC and we are required under the
FDIC's deposit insurance assessments to maintain the Bank Insurance Fund (BIF)
and Savings Association Insurance Fund (SAIF). The FDIC has adopted regulations
establishing a permanent risk-related deposit insurance assessment system. Each
financial institution is assigned to one of three capital groups; well
capitalized, adequately capitalized or undercapitalized; and further assigned
to one of three subgroups within a capital group. A bank's assignment is based
on supervisory evaluations by the institution's primary federal regulator and,
if applicable, other information relevant to the institution's financial
condition and the risk posed to the applicable insurance fund. The assessment
rate applicable to our banks in the future will depend in part upon the risk
assessment classification assigned to each bank by the FDIC and in part on the
BIF assessment schedule adopted by the FDIC. Institutions are prohibited


                                                                             8.
<PAGE>
from disclosing the risk classification to which they have been assigned. The
Deposit Insurance Funds Act of 1996 provides for assessments to be imposed on
insured depository institutions with respect to deposits insured by the BIF and
the SAIF. Currently, the annual insurance premiums on bank deposits insured by
the BIF and SAIF vary between $0.00 to $0.27 per $100 of deposits.

         Effects of Governmental Policies. The difference between interest
earned by our banks on their loans and investments and the interest paid by
them on their deposits or other borrowings affects our banks' earnings. The
yields on their assets and the rates paid on their liabilities are sensitive to
changes in prevailing market rates of interest. Thus, the general economic
conditions, fiscal policies of the federal government, and the policies of
regulatory agencies, particularly the Federal Reserve, which establishes
national monetary policy, will influence our banks' earnings and growth. The
nature and impact of any future changes in fiscal or monetary policies cannot
be predicted.

         Commercial banks are affected by the credit policy of various
regulatory authorities, including the Federal Reserve. An important function of
the Federal Reserve is to regulate the national supply of bank credit. Among
the instruments of monetary policy used by the Federal Reserve to implement
these objectives are open market operations in U.S. Government securities,
changes in reserve requirements on bank deposits, changes in the discount rate
on bank borrowings, and limitations on interest rates that banks may pay on
time and savings deposits. The Federal Reserve uses these means in varying
combinations to influence overall growth of bank loans, investments and
deposits, and also to affect interest rates charged on loans, received on
investments or paid for deposits.

         The monetary and fiscal policies of regulatory authorities, including
the Federal Reserve, also affect the banking industry. Through changes in the
reserve requirements against bank deposits, open market operations in U.S.
Government securities and changes in the discount rate on bank borrowings, the
Federal Reserve influences the cost and availability of funds obtained for
lending and investing. No prediction can be made with respect to possible
future changes in interest rates, deposit levels or loan demand or with respect
to the impact of these changes on the business and earnings of our banks.

         From time to time, various federal and state laws, rules and
regulations, and amendments to existing laws, rules and regulations, are enacted
that affect banks and bank holding companies. Future legislation and regulation
could significantly change the competitive environment for banks and bank
holding companies. We cannot predict the likelihood or effect of any such
legislation or regulation.

AVAILABLE INFORMATION

         The Company's Internet website is http://www.cumberlandbancorp.com.
Please note that our website address is provided as an inactive textual
reference only. The Company makes available free of charge on its website the
Company's annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and amendments to those reports as soon as reasonably
practicable after it electronically files or furnishes such materials to the
Securities and Exchange Commission (the "SEC"). The information provided on our
website is not part of this report, and is therefore not incorporated by
reference herein unless such information is otherwise specifically referenced
elsewhere in this report.

ITEM 2.  Description of Property

         Cumberland Bancorp's corporate headquarters are located at 4 Corporate
Centre, 810 Crescent Centre Drive, Suite 320, Franklin, Tennessee 37067 in a
leased facility with approximately 5,000 square feet of office space. This
facility located in the Cool Springs area of Franklin houses our centralized
operational units. The Community Bank operates three branch offices in Davidson
and Williamson Counties, Tennessee. BankTennessee currently conducts business in
five (5) offices located in Shelby and Lauderdale Counties, Tennessee. Bank of
Dyer has four offices located in Madison and Gibson Counties. Bank of Mason has
one office in Tipton County. Cumberland Bank currently conducts business at nine
(9) offices located in Macon, Smith, Sumner, Robertson and Warren Counties,
Tennessee. Cumberland Finance conducts business at two offices, one located in
Sumner County and one in Rutherford County, Tennessee. InsureTennessee conducts
business at one office in Shelby County that it shares with BankTennessee.


                                                                             9.
<PAGE>
         We own all of our branch office locations except for seven leased
operations which include Cumberland Bank's offices in Gallatin and McMinnville,
The Community Bank's offices in Green Hills, BankTennessee's Collierville
Square office, and Cumberland Finance's Murfreesboro office.

         Cumberland Bank also operates off-site ATMs at leased locations in
Smith and Sumner Counties.

ITEM 3.  Legal Proceedings

         As of the date hereof, there are no material pending legal proceedings
to which the Company or any of its subsidiaries is a party or of which any of
its properties are subject; nor are there material proceedings known to the
Company or its subsidiaries to be contemplated by any governmental authority;
nor are there material proceedings known to the Company or its subsidiaries,
pending or contemplated, in which any director, officer or affiliate or any
principal security holder of the Company or any of its subsidiaries or any
associate of any of the foregoing, is a party or has an interest adverse to the
Company or any of its subsidiaries.

ITEM 4.  Submission of Matters to a Vote of Shareholders

         No matters were submitted to a vote of shareholders during the fourth
quarter of the Company's fiscal year ending December 31, 2002.

                                     PART II

ITEM 5.  Market for Registrant's Common Equity and Related Shareholder Matters

         The Company's common stock is currently traded over-the-counter on the
OTC Bulletin Board. Prior to being traded on the OTC Bulletin Board, there was
no established public trading market for our shares. Accordingly, there was no
comprehensive record of trades or the prices of any trades prior to the shares
being listed on the OTC Bulletin Board. The following table reflects stock
prices for our shares to the extent any information is available for trades
prior to the fourth quarter of 2001, the date that the shares were first listed
on the OTC Bulletin Board and for trades after such date as reported on the OTC
Bulletin Board.

                 Cumberland Bancorp Incorporated Common Stock(1)

<TABLE>
<CAPTION>
                                              HIGH     LOW
                                              -----   -----
<S>                                           <C>     <C>
        2001:
              First Quarter ............      $4.75   $4.50
              Second Quarter ...........      $4.90   $4.00
              Third Quarter ............      $4.60   $3.96
              Fourth Quarter ...........      $4.13   $3.25

        2002:
              First Quarter ............      $3.95   $3.40
              Second Quarter ...........      $4.50   $3.75
              Third Quarter ............      $4.30   $4.00
              Fourth Quarter ...........      $6.00   $4.07
</TABLE>

------------


                                                                            10.
<PAGE>


(1)      The amounts per share have been adjusted for stock splits and stock
         dividends prior to December 31, 2002.

         As of February 28, 2003, we had approximately 1,092 record
shareholders. At that date, 15,384,626 shares were outstanding.

         In 2002, cash dividends totaling $0.06 per share were declared. In
2001, cash dividends totaling $0.06 per share were declared. In the first
quarter of 2003, a cash dividend was declared in the amount of $0.015 per share
payable on April 14, 2003 to shareholders of record on March 1, 2003.

         We review our dividend policy at least annually. The amount of the
dividend, while in our sole discretion, depends in part upon the performance of
our banks. Our ability to pay dividends is restricted by federal laws and
regulations applicable to bank holding companies and by Tennessee laws relating
to the payment of dividends by Tennessee corporations. Because substantially
all of our operations are conducted through our subsidiaries, our ability to
pay dividends also depends on the ability of our banks to pay a dividend to us.
The ability of the banks to pay cash dividends is restricted by applicable
regulations of the TDFI, the Federal Reserve, the OTS and the FDIC. As a
result, we may not be able to declare a dividend to holders of the shares even
if the present dividend policy were to change. See "Supervision and Regulation
- Dividend Restrictions" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity."

        On December 2, 2002, the Company concluded a private placement of its
common stock to certain accredited investors pursuant to Regulation D and
Section 4(2) of the Securities Act of 1933, as amended. In the private
placement, the Company received approximately $5.4 million from the
subscription of 1,340,710 shares at $4 per share for its common stock. The
proceeds of this private placement will be utilized to maintain capital at the
Company's subsidiary banks and for general working capital purposes.

ITEM 6.  Selected Consolidated Financial Data

         The table below provides selected consolidated financial data for the
Company as of and for each of the five years ended December 31, 1998, 1999,
2000, 2001 and 2002. You should read the following selected consolidated
financial information in conjunction with our financial statements and the
notes to those statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" located elsewhere in this
document.

<TABLE>
<CAPTION>
                                                                  For years ending December 31,
                                         ------------------------------------------------------------------------------
                                                              (In thousands, except per share amount)
                                            2002            2001              2000             1999             1998
                                         ----------       ----------       ----------       ----------       ----------
<S>                                      <C>              <C>              <C>              <C>              <C>
Summary of Operations
Interest income                          $   42,848           52,865           51,651           39,193           33,290
Interest expense                             18,643           28,901           27,057           19,127           17,381

Net interest income                          24,205           23,964           24,594           20,066           15,909
Provision for loan losses                    (6,800)          (6,377)          (2,636)          (1,623)          (1,188)
Noninterest income                            8,448            7,048            5,771            4,290            4,237
Noninterest expense                         (25,104)         (24,408)         (21,132)         (17,109)         (13,613)

Income before income taxes                      749              227            6,597            5,624            5,345
Income tax expense                              228               18            2,436            2,113            2,003

Net earnings                                    521              209            4,161            3,511            3,342
Basic earnings per share                       0.04             0.02             0.30             0.28             0.28
Diluted earnings per share                     0.04             0.01             0.30             0.27             0.28
Dividends per common share                     0.06             0.06             0.05               --               --
Book value per common share                    2.96             2.85             2.86             2.57             2.01
</TABLE>


                                                                            11.
<PAGE>

<TABLE>
<CAPTION>
                                                                   For years ending December 31,
                                             -----------------------------------------------------------------------
                                                              (In thousands, except per share amount)
                                              2002            2001            2000            1999            1998
                                             -------         -------         -------         -------         -------
<S>                                          <C>             <C>             <C>             <C>             <C>
Selected Period-End Balances
Total assets                                 719,713         667,511         643,457         525,559         408,706
Loans net of unearned income                 526,215         522,245         507,217         440,316         321,547
Allowance for loan losses                      9,062           9,023           6,137           5,146           4,012
Total deposits                               592,998         549,424         524,142         435,252         357,404
Other borrowings                              63,688          60,186          64,535          49,284          25,206
Shareholders' equity                          45,473          39,313          39,476          35,275          22,059


Selected Average Balances
Total assets                                 690,610         671,690         576,622         453,378         372,967
Securities                                    62,135          32,344          23,468          25,886          26,612
Loans net of unearned income                 520,825         512,918         476,339         374,714         293,665
Allowance for loan losses                      9,078           7,027           5,635           4,196           3,504
Total deposits                               572,809         550,569         485,708         387,941         319,796
Other borrowings                              60,090          63,975          47,437          34,477          27,776
Shareholders' equity                          39,967          40,056          37,366          27,200          20,607

Selected Operating Ratios
Annual % change in average loans                1.54%           7.68%          27.12%          27.60%          58.92%
Annual % change in average assets               2.82%          16.49%          27.18%          21.56%          64.87%
Return on average equity                        1.30%           0.52%          11.14%          12.91%          16.22%
Return on average assets                        0.08%           0.03%           0.72%           0.77%           0.90%
</TABLE>


Per share amounts adjusted to reflect the effect of stock splits and stock
dividends.

ITEM 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

         You should read the following discussion in conjunction with our
financial statements and the notes to those statements appearing elsewhere in
this document.

Critical Accounting Policies

         The accounting principles followed by the Corporation and the methods
of applying these principles conform with United States generally accepted
accounting principles and with general practices within the banking industry.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Critical accounting policies relate to investments, loans, allowance for
loan losses, intangibles, revenues, expenses, stock options and income taxes. A
description of these policies, which significantly affect the determination of
the financial position, results of operations and cash flows, are summarized in
Note 1, Summary of Significant Accounting Policies in the Notes to Consolidated
Financial Statements and discussed elsewhere in this section.


                                                                            12.
<PAGE>
Overview

         The Company made strategic decisions during 2002 which it anticipates
will affect its future financial condition and results of operations. During the
fourth quarter, Richard E. Herrington was named President and Chief Executive
Officer of Cumberland Bancorp. New capital in the amount of $5.4 million was
raised in a private placement consumated in early December 2002. Centralization
of certain backroom operations is expected for 2003 which the Company believes
will result in common policies and procedures being implemented throughout the
organization. A new organization structure at the holding company has been
approved to include several key positions. While these decisions may cause added
personnel costs in the short-term, they are expected to provide better
management and financial controls and centralization appropriate for future
growth.

         Earnings for 2002 remained poor as performance continued to be hindered
by asset quality issues resulting from the weakening economy and prior
underwriting practices. Until the Company can achieve significant reductions in
problem assets, which are discussed in more detail below, it is likely that
loan charge-offs will continue to be incurred, resulting in additional
provisions for loan losses which will negatively impact future earnings. Growth
of total assets during 2002 was modest as compared to prior years as
management's focus on asset quality related issues detracted from business
development efforts. Earnings were adversely impacted by provision for loan
losses and a reduction in net interest margins, both of which are discussed in
more detail below. As further explained in this document, economic conditions,
including the abrupt decline in interest rates in 2001, and the recessionary
economic environment, were primary factors contributing to the above.

         Assets grew from $667.5 million at December 31, 2001, to $719.7
million at year-end 2002, a $52.2 million increase or 7.8%. The primary changes
in assets were the $35.0 million increase in securities and the $13.0 million
increase in federal funds sold and interest-bearing deposits. We funded these
increases primarily by an increase in deposits of $43.5 million. Our total
liabilities grew from $628.2 million at December 31, 2001 to $674.2 million at
year end 2002, a $46.0 million increase or 7.3%. In addition to the deposit
growth, federal funds purchased increased $5.7 million.

         Shareholders' equity increased $6.2 million to $45.5 million at
December 31, 2002. This increase was primarily the result of the completion of
our private placement in December 2002, which resulted in proceeds to the
Company of approximately $5.4 million. Our leverage capital ratio increased to
7.95% at December 31, 2002 from 7.47% at December 31, 2001. See note 14 to our
consolidated financial statements for more information relating to capital.

Results of Operations Year ended December 31, 2002 Compared to the Year ended
December 31, 2001:

         Net earnings increased $312,000 or 149.3% to $521,000 in 2002 compared
to $209,000 in 2001. Although total revenues decreased by 14.4%, this decrease
was offset by a decrease in total expenses of 17.9% for 2002 as compared to the
prior year. Provision expense increased 6.3% during that same time period.

         Net interest income increased $241,000 or 1.0%, to $24.2 million in
2002 from $24.0 million in 2001. In 2002, the Federal Reserve continued to
reduce the Federal Funds rate from 1.75% at the end of 2001 to 1.25% at the end
of 2002. This reduction followed the 475 basis point reduction in the Federal
Funds rate in 2001. As we continued to operate in this low rate environment,
increased prepayments on both loans and investment securities adversely affected
net interest income.


                                                                            13.
<PAGE>
         Interest income decreased 18.9% in 2002 to $42.8 million. The decrease
was primarily attributable to the decline in the yield on average earning
assets, which fell to 6.79% in 2002 from 8.61% in 2001 and reduced interest
income $11.7 million. The decline in yield is a result of the decline in market
interest rates. A lower yield on loans was the primary factor driving the
decrease in the earning assets yield. The yield on loans was 7.48% in 2002,
compared to 9.39% in 2001. The increased level of non-performing loans also
heavily contributed to this decline in interest income as lost interest
totaling $1.2 million due to loans in a non-accrual status was not realized, an
increase of $297,000 over the 2001 total of approximately $855,000. Non-accrual
loans increased $5.8 million over the prior year.

         The reduction in interest income due to declining market interest
rates was offset by the decline in interest expense. This expense reduction
resulted from the repayment of higher-cost deposits and borrowings. Interest
expense decreased $10.3 million or 35.5% in 2002 compared to 2001. The average
rate paid for interest-bearing liabilities decreased from 4.63% in 2001 to
2.89% in 2002. This accounted for a $9.7 million decrease in interest expense
and was due primarily to the falling interest rate environment previously
discussed.

         The Company's net interest spread and net yield on earning assets were
3.90% and 3.84% respectively, in 2002 as compared to 3.98% and 3.90% in 2001.
Net interest spread represents the difference in the yield on earning assets
and the rate paid on interest bearing liabilities. Net yield on earning assets
is net interest income divided by average earning assets. Margin contraction
resulted from the asset sensitive bias of the balance sheet given the
significant reduction in market interest rates coupled with asset quality
deterioration. More detail on changes in interest income and interest expense
due to changes in rates is shown on page 23.

         The provision for loan losses was $6.8 million for 2002 compared to
$6.4 million in 2001, a 6.3% increase. The increase in the provision was
attributable to the increase in classified loans and net charge-offs. Net loan
charge-offs were $6.8 million in 2002 compared to $3.5 million in 2001.
Charge-offs increased due to increased losses in commercial, real estate and
consumer loans. Loan classifications increased due to the economic downturn and
management's aggressive identification actions on loans to borrowers which
otherwise are able to make principal and interest payments, but, upon review,
appear to have financial weaknesses.

         Noninterest income increased $1.4 million, or 19.9%, to $8.4 million
in 2002 from $7.0 million in 2001. Service charges on deposit accounts continue
to be our largest source of noninterest income. These are fees received for
services related to our retail and commercial deposit products. These charges
increased $266,000 or 7.5% in 2002 to $3.8 million. This compares to $3.6
million for 2001. The increase resulted from an increase in the number of
accounts subject to service charges, repricing of certain customer services and
a stronger emphasis on the collection of fees. Mortgage banking income
increased $317,000 or 23.9% from 2001 levels, primarily due to growth in
mortgage activity related to the favorably low interest rates. Mortgage banking
income is comprised of mortgage origination fees, mortgage servicing rights,
and gains or losses on sale of mortgage loans. The company also realized
$461,000 in the sale of some of its investment securities in 2002.

         Noninterest expense increased $696,000, or 2.8%, to $25.1 million in
2002 from $24.4 million in 2001. Salaries and employee benefits represent the
largest category of noninterest expense and totaled $12.5 million in 2002, an
increase from $12.1 million in 2001 or 2.7%. Also, included in noninterest
expense is $150,000 in net losses of unconsolidated affiliates. Other operating
expenses include $1.4 million in legal fees and expenses related to other real
estate and $1.2 million in data processing expenses.


                                                                            14.
<PAGE>
Results of Operations Year ended December 31, 2001 Compared to the Year ended
December 31, 2000:

         Net earnings were $209,000 in 2001 compared to $4.2 million in 2000.
Total revenues increased 4.3% while total expenses increased 10.6% during 2001
as compared to the prior year.

         Net interest income decreased $630,000 or 2.6%, to $24.0 million in
2001 from $24.6 million in 2000. Net interest income was adversely affected by
the Federal Reserve's effort to stimulate economic growth by decreasing the
Federal funds rate a total of 475 basic points to 1.75% during 2001. Likewise,
banks followed by reducing the rate charged to their prime loan customers 475
basis points to 4.75%. This significant decline in interest rates accelerated
prepayments on both loans and securities. Additionally, variable rate loans
were reset to the lower market interest rates. This exposed the asset
sensitive bias of the banks' balance sheet. Interest-bearing liabilities were
unable to reprice downward at the same speed, degree or volume as earning
assets. Unlike the earning assets, interest-bearing liabilities did not have
the ability to realize 100% of the continued decreases in market interest rates
in this already low rate environment. Once interest rates stabilized allowing
interest-bearing liabilities to cycle forward, net interest income improved.

         The increase in the level of non-performing assets also heavily
contributed to this decline in net interest income. Lost interest totaling
$855,000 due to loans in a non-accrual status negatively impacted performance.
Non-accruals and foreclosed property levels increased $7 million and $4
million, respectively, over the prior year.

         The Company also recorded a full year's interest expense on the $8
million Trust Preferred securities issued in December 2000 and five months of
expense for the additional $4 million issued in July of 2001.

         These factors combined to cause a reduction in net interest income.

         The Company's net interest spread and net yield on earning assets were
3.98% and 3.90% respectively, in 2001 as compared to 4.69% and 4.65% in 2000.
Net interest spread represents the difference in the yield on earning assets
and the rate paid on interest bearing liabilities. Net yield on earning assets
is net interest income divided by average earning assets. As previously
mentioned, margin contraction resulted from the asset sensitive bias of the
balance sheet given the significant reduction in market interest rates coupled
with asset quality deterioration. The decline in the average yield on earning
assets, which fell from 9.76% in 2000 to 8.61% in 2001, reduced interest income
significantly. The yield on loans was 9.39% in 2001, compared to 10.17% in
2000. The lower yield on loans was the primary factor driving the decrease in
net interest margin. More detail on changes in interest income and interest
expense due to changes in rates is shown on page 24.

         The provision for loan losses was $6.4 million at December 31, 2001
compared to $2.6 million at December 31, 2000, a 141.9% increase. The increase
in the provision was attributable to the increase in classified loans and net
charge-offs. Net loan charge-offs were $3.5 million in 2001 compared to $1.7
million in 2000. Charge-offs increased due to increased losses in commercial,
real estate and consumer loans. Loan classifications increased due to the
economic downturn and management's aggressive identification actions on loans
to borrowers which otherwise are able to make principal and interest payments,
but, upon review, appear to have financial weaknesses. During the second half
of 2001, additional emphasis was placed on reviewing and identifying weak and
problem credits. Through extensive internal and outside loan review,
significant problem loans were identified. Additional provisions for loan
losses were necessary to provide an adequate allowance related to these loans.


                                                                            15.
<PAGE>
         Noninterest income increased $1.3 million or 22.1%, to $7.0 million
in 2001 from $5.7 million in 2000. Service charges on deposit accounts continue
to be our largest source of noninterest income. These charges increased
$880,000 or 32.9% in 2001 to $3.6 million. This compares to $2.7 million for
2000. The increase resulted from an increase in the number of accounts subject
to service charges, repricing of certain customer services and a stronger
emphasis on the collection of fees. Mortgage banking income increased $517,000
or 63.7% from 2000 levels, primarily due to growth in mortgage activity related
to falling interest rates.

         Noninterest expense increased $3.3 million, or 15.5%, to $24.4 million
in 2001 from $21.1 million in 2000. Included in noninterest expense are
increases in data processing expenses of $212,000 and occupancy expense of
$642,000. Salaries and benefits increased from $11.2 million in 2000 to $12.1
million in 2001, or an increase of $968,000 or 8.7%. Also, included in
noninterest expense is $505,000 in net losses of unconsolidated affiliates.
Other increases in miscellaneous operating expenses totaled $1.1 million
related to increases in loan fees expense, legal fees, and expenses related to
other real estate.

Loans

         The following table presents various categories of loans contained in
our banks' loan portfolio for the periods indicated and the total amount of all
loans for such period:

<TABLE>
<CAPTION>
                                                                                     December 31,
                                                      2002              2001             2000             1999             1998
                                                   ----------          -------          -------          -------          -------
                                                                                    (In thousands)
<S>                                                <C>                 <C>              <C>              <C>              <C>
Type of Loan
Real estate-construction and development           $   71,907           73,713           73,706           80,789           55,220
Real estate-1 to 4 family residential                 169,220          181,675          181,723          157,820          140,138
Real estate other                                      93,894           68,089           63,450           49,708           12,555
Commercial, financial and agricultural                145,409          142,122          131,548          102,385           71,070
Consumer                                               44,978           57,517           58,156           50,643           45,431
Other                                                   1,103            1,115            1,396            1,744              746
                                                   ----------          -------          -------          -------          -------

Total loans                                           526,511          524,231          509,979          443,089          325,160
Unearned income and deferred fees                        (296)          (1,986)          (2,762)          (2,773)          (3,613)
                                                   ----------          -------          -------          -------          -------

     Net loans                                     $  526,215          522,245          507,217          440,316          321,547
                                                   ==========          =======          =======          =======          =======
</TABLE>

         Total loans at December 31, 2002 were $526.2 million, compared to
$522.2 at year-end 2001. Loan growth was $4.0 million, or 0.8%, during 2002,
and $15.0 million, or 3.0%, during 2001. Loan growth was less in 2002 primarily
as a result of declining economic conditions. Furthermore, managements' focus
on managing asset quality issues detracted from business development efforts.


                                                                            16.
<PAGE>
Loans are the largest category of our earning asset base and account for 82.6%
of average earning assets in 2002.

         At December 31, 2002, 1-4 family residential real estate loans
constituted 32.1% of total loans and construction and development loans
constituted 13.7% of total loans. Construction and development loans typically
involve 1-4 family residential properties or loans to develop subdivisions of
such properties. More than half of our construction and development loans are
made to finance speculative construction by builders. The remaining builder
loans are for custom-built homes with sales contracts in place. Most of our
real estate loans are secured by properties located in the primary service
areas of our banks.

         The following is a presentation of an analysis of maturities of loans
as of December 31, 2002:

<TABLE>
<CAPTION>
                                                    Due in 1 year    Due in 1 to 5      Due After 5
             Type of Loan                              or less            Years            Years               Total
                                                    -------------    -------------      -----------          --------
                                                                           (In thousands)
<S>                                                  <C>             <C>                <C>                  <C>
Real estate-construction & development               $   63,066             7,483             1,358            71,907
Real estate-1-4 family residential                       28,280            81,440            59,500           169,220
Real estate-other                                        33,797            52,252             7,845            93,894
Commercial, financial and agricultural                   51,005            58,009            36,395           145,409
Consumer                                                 17,897            26,722               359            44,978
Other                                                       466               251               386             1,103
                                                     ----------           -------           -------           -------
     Total                                           $  194,511           226,157           105,843           526,511
                                                     ==========           =======           =======           =======
</TABLE>

         At December 31, 2002, $220 million in loans due after one year had
predetermined interest rates and $112 million in loans due after one year had
floating interest rates.

         It is our philosophy to pursue real estate lending as our core type of
lending relationship. Of our combined loan portfolio, 63.6% is secured by
residential and other real estate.

Provision for Loan Losses and Asset Quality

         The provision for loan losses represents charges made to earnings to
maintain an adequate allowance for loan losses. The allowance is maintained at
an amount believed by management to be sufficient to absorb inherent losses in
the loan portfolio. Factors considered in establishing an appropriate allowance
include an assessment of the financial condition of the borrower, a
determination of the value and adequacy of underlying collateral, the condition
of the local economy and the condition of the specific industry of the
borrower, an analysis of the levels and trends of loan categories, and a review
of delinquent and classified loans. We apply a systematic process for
determining the adequacy of the allowance for loan losses, including an
internal loan review function and a monthly analysis of the adequacy of the
allowance. Our monthly analysis includes determination of specific potential
loss factors on individual classified loans, historical potential loss factors
derived from actual net charge-off experience and trends in nonperforming
loans, and potential loss factors for other loan portfolio risks such as loan
concentrations, local economy, and the nature and volume of loans.


                                                                            17.
<PAGE>
         An analysis of our loss experience, is furnished in the following
table for the periods indicated:

<TABLE>
<CAPTION>
                                                                            Years Ended December 31,
                                                       2002            2001            2000            1999            1998
                                                     --------        --------        --------        --------        --------
                                                                             (Dollars in thousands)

<S>                                                  <C>             <C>             <C>             <C>             <C>
Balance at beginning of year                         $  9,023           6,137           5,146           4,012           3,214
Increase due to acquisitions                               --              --              58             152              --
                                                     --------        --------        --------        --------        --------
                                                        9,023           6,137           5,204           4,164           3,214

Loans charged-off:
     Real estate-construction & development              (679)           (258)            (73)             --             (65)
     Real estate-1 to 4 single family                    (598)           (295)           (414)           (117)            (45)
     Real estate-other                                   (496)           (608)            (62)             --              --
     Commercial, financial & agricultural              (3,670)         (1,553)           (614)           (123)            (54)
     Consumer                                          (1,806)         (1,052)           (704)           (518)           (324)
     Other                                               (150)           (137)             --              --             (24)
                                                     --------        --------        --------        --------        --------

         Total charge-offs                           $ (7,399)         (3,903)         (1,867)           (758)           (512)
                                                     --------        --------        --------        --------        --------

Charge-offs recovered:
     Real estate - construction & development             137              19              --              --              21
     Real estate - 1-4 single family                       53              34               5               9               2
     Real estate - other                                   47              29              32              --              --
     Commercial                                           180             112              10              19               5
     Consumer                                             214             156             117              89              76
     Other                                                  7              62              --              --              18
                                                     --------        --------        --------        --------        --------

         Total recoveries                            $    638             412             164             117             122
                                                     --------        --------        --------        --------        --------

Net loans charged-off                                  (6,761)         (3,491)         (1,703)           (641)           (390)
Current year provision                                  6,800           6,377           2,636           1,623           1,188
                                                     --------        --------        --------        --------        --------
Balance at end of year                               $  9,062           9,023           6,137           5,146           4,012
                                                     ========        ========        ========        ========        ========

Loans at year end                                    $526,215        $522,245         507,217         440,316         321,547
Ratio of allowance to loans at year end                  1.72%           1.72%           1.21%           1.17%           1.25%
Average loans                                        $520,825        $512,918         476,339         374,716         293,665
Ratio of net loans charged off to average loans          1.30%           0.68%           0.36%           0.17%           0.13%
</TABLE>

         The recorded values of loans actually removed from the consolidated
balance sheets are referred to as charge-offs and, after netting out recoveries
on previously charged-off assets, become net charge-offs. Our policy is to
charge off loans, when, in management's opinion, the loan is deemed
uncollectible, although concerted efforts are made to maximize recovery. Net
charge-offs increased $3.3 million in 2002 to $6.8 million, which compares to
$3.5 million in 2001. Our level of net charge-offs to average loans was 1.30% in
2002 and 0.68% in 2001. Charge-offs were higher due to real estate foreclosures
and consumer bankruptcies in 2002. Recessionary economic conditions, on a local
and a national level, have adversely affected borrowers, particularly those that
were marginally capitalized. During 2002, the provision for loan losses of $6.8
million was $0.4 million more than the preceding year. Factors which gave rise
to the increased provision in 2002 were primarily a substantial increase in loan
losses and non-performing loans.

         The level of non-performing loans is an important element in assessing
asset quality and the relevant risk in the credit portfolio. Non-performing
loans include non-accrual loans, restructured loans and loans delinquent 90
days or more. Loans are classified as non-accrual when management believes that
collection of interest is doubtful. When loans are placed on nonaccrual status,
all unpaid accrued interest is reversed. Another element associated with asset
quality is foreclosed


                                                                            18.
<PAGE>
properties, (carried as other real estate on the balance sheet), which
represent real estate or personal property acquired through loan defaults by
customers.

The following table presents information regarding nonaccrual, past due and
restructured loans, and foreclosed properties at the dates indicated:

<TABLE>
<CAPTION>
                                                                        December 31,
                                                   2002         2001        2000      1999       1998
                                                 ---------    --------    -------    -------    -------
                                                                (Dollars in Thousands)
<S>                                              <C>          <C>         <C>        <C>        <C>
Loans accounted for on a non-accrual basis       $18,435       12,625      5,608      2,446      1,745

Accruing loans which are contractually
past due 90 days or more as to principal
and interest payments                                 --        1,168        345        241        467

Restructured loans (1)                               223          252         --        693        652
                                                 -------     --------    -------    -------    -------
Total nonperforming loans                         18,658       14,045      5,953      3,380      2,864
Foreclosed properties                              6,308        7,330      3,142      2,400        610
</TABLE>


---------
(1)      As of December 31, 2002, all restructured loans were in compliance
with their modified terms.

         Non-performing loans consist of non-accrual loans, loans past due
greater than 90 days, and restructured loans. Total non-performing loans were
$18.7 million at December 31, 2002, an increase of 32.8% over the $14.0 million
at December 31, 2001. Non-performing loans were 3.5% and 2.7% of loans at
December 31, 2002 and 2001, respectively. To total assets, non-performing loans
were 2.6% and 2.1% for the same time periods. The ratio of allowance to
non-performing loans at December 31, 2002 and December 31, 2001 was 49% and 64%,
respectively. The dollar increase in non-performing loans during 2002 is due to
the weakening economy and higher levels of bankruptcies and consumer debt
problems. Additional interest income of approximately $1.2 million in 2002,
$855,000 in 2001, and $499,000 in 2000 would have been recorded if all loans
accounted for on a non-accrual basis had been current in accordance with their
original terms.

         Management has internally classified approximately $16.1 million in
loans as substandard based upon other possible credit problems. These loans are
not included in the above amounts. These loans are performing loans but are
classified as substandard due to payment history, decline in the borrowers'
financial position or decline in collateral value. Loans classified as
substandard are inadequately protected by the current sound worth and paying
capacity of the obligor or the collateral pledged, if any. Loans so classified
must have a well-defined weakness or weakness that jeopardize the liquidation
of the debt. Loans classified as doubtful have all the weaknesses inherent in
one classified substandard, with the added characteristic that the weaknesses
make collection or liquidation in full, on the basis of currently existing
facts, conditions and values, highly questionable and improbable. Loans
classified as loss are considered uncollectible and of such little value that
their continuance as bankable assets is not warranted.

         As of December 31, 2002, there are no loans classified by our
regulators or management as loss, doubtful or substandard that have not been
disclosed above or which represent or result from trends or uncertainties which
management reasonably expects will materially impact future operating results,
liquidity, or capital resources, or represent material credits about which
management is aware of any information which causes management to have serious
doubts as to the ability of such borrowers to comply with the loan repayment
terms.


                                                                            19.
<PAGE>
         Although non-performing loans, net charge-offs and foreclosed
properties increased substantially during 2002 and 2001, management believes
the allowance for loan losses and the carrying value of foreclosed properties
is properly stated at December 31, 2002. Substantial resources have been
devoted to identifying, grading and valuing problem assets during the past two
years. Although it is likely that the Company will continue to have asset
quality problems in 2003, management believes that identifiable problem assets
have been appropriately provided for in the accompanying financial statements.

         The allocation of the allowance for loan losses by loan category at
December 31, for the years indicated is presented below:

<TABLE>
<CAPTION>
                                                                          As of December 31,
                                                 2002                     2001                      2000
                                                    Percent of                Percent of                  Percent of
                                                Loans in Category          Loans in Category           Loans in Category
                                         Amount   to Total Loans  Amount    to Total Loans    Amount    to Total Loans
                                         ------   ---------------  ------   ---------------   ------    ---------------
<S>                                      <C>      <C>               <C>      <C>              <C>       <C>
Real estate - construction
& development                            $1,541          14%        1,444            14%        1,227          15%
Real estate - 1-4 single
   family                                   725          32%          541            35%          430          36%
Real estate - other                         634          18%          722            13%          368          12%
Commercial, financial
  and agricultural                         3,262         28%        3,519            27%        1,289          26%
Consumer                                   2,628          8%        2,166            11%        1,964          11%
Other                                        181          0%          180             0%          123           0%
Unallocated                                   91         NA          451             NA           736          NA
                                          ------       ----         -----          ----         -----        ----
       Total                              $9,062        100%        9,023           100%        6,137         100%
                                          ======       ====         =====          ====         =====        ====
</TABLE>

         As of December 31, 2002, real estate mortgage loans constituted 63.7%
of outstanding loans. Approximately $125.5 million, or 37.5%, of this category
represents first mortgage residential real estate mortgages where the amount of
the original loan generally does not exceed 80% of the appraised value of the
collateral. We have $71.9 million in construction and development loans, which
are primarily related to the home building industry in Shelby, Williamson,
Davidson and Sumner Counties, Tennessee. The remaining portion of this category
consists primarily of commercial real estate loans. Risk of loss for these loans
is generally higher than residential loans. Therefore, management has allocated
a significant portion of the allowance for loan losses to this category.

Securities

         Our banks' securities portfolios are primarily used as a source of
liquidity. Total securities were $90.5 million at year-end 2002 compared to
$55.5 million at December 31, 2001, an increase of $35.0 million from year-end
2001. Average investment securities were $62.1 million and $32.3 million,
respectively for the years ended December 31, 2002 and 2001. The securities
portfolio comprised 12.6% of total assets at year-end 2002. Our banks' policy
guidelines are designed to minimize credit, market and liquidity risk.
Securities generally must be investment grade or higher to be purchased. Over
the last year, a majority of newly-purchased securities have been designated as
available for sale to increase flexibility for asset liability management. At
December 31, 2002, the investment portfolio had a net unrealized gain of
$669,000 compared to $172,000 at December 31, 2001. Approximately 25.1% of
securities held at year-end 2002 were pledged to secure public deposits and for
other purposes as required or permitted by law. Other than commitments to
originate or sell mortgage loans, our banks do not invest in off-balance sheet
or derivative financial instruments.


                                                                            20.
<PAGE>
         We invest primarily in obligations of the United States or obligations
guaranteed as to principal and interest by the United States, other taxable
securities and in certain obligations of states, counties and municipalities
("SCM"). The majority of the mortgage-backed securities are instruments of U.S.
Government agencies. In addition, we enter into federal funds transactions with
our principal correspondent banks, and act as a net seller of such funds. We do
not hold securities of any single issuer that exceeded ten percent of
shareholders' equity.

         The following tables present, for the periods indicated, the carrying
amount of our securities portfolio, including mortgage-backed securities,
segregated into available for sale and those held to maturity categories.

<TABLE>
<CAPTION>
                                                      At December 31,
                                            2002           2001          2000
                                          ---------      --------      --------
                                                  (Dollars in thousands)
<S>                                       <C>            <C>           <C>
Available for sale:
   U.S. Government and agencies           $   6,923        25,222         9,888
   Obligations of SCM                           723         3,933         2,866
   Mortgage-backed                           69,524        10,467         1,246
   Other debt securities                        773         1,863           233
   Marketable equity securities               1,108         1,329         1,333
                                          ---------        ------        ------
      Total available for sale               79,051        42,814        15,566
                                          ---------        ------        ------
Held to maturity:
   U.S. Government and agencies               3,398         6,297         4,600
   Obligations of SCM                         2,823           918           654
   Mortgage-backed                            2,651         2,912         3,171
   Other debt securities                      2,616         2,608            --
                                          ---------        ------        ------
        Total held to maturity               11,488        12,735         8,425
                                          ---------        ------        ------
        Total securities                  $  90,539        55,549        23,991
                                          ---------        ------        ------
</TABLE>


         The following table indicates, for the year ended December 31, 2002,
the amount of investments due in (1) one year or less, (2) one to five years,
(3) five to ten years, and (4) over ten years:

<TABLE>
<CAPTION>
                            1 yr or                                                              Over
                             less                1 to 5 yrs            5 to 10 yrs               10 yrs                  Total
                            Balance      Yield    Balance      Yield     Balance        Yield    Balance       Yield     Balance
                            -------      -----   ----------    -----   -----------      -----    -------       -----     -------
                                                                   (Dollars in Thousands)
<S>                         <C>          <C>     <C>           <C>     <C>              <C>      <C>           <C>       <C>
Available for sale:
 U.S. Government           $  --           --   $ 6,709         4.40%    $   --           --    $   214         5.76%    $ 6,923
   and agencies
Obligations of SCM            --           --        --           --        522         4.58%       201         4.81%        723
Mortgage-backed               --           --     1,411         3.87%     4,653         3.60%    63,460         3.90%     69,524
Marketable equity             --           --        --           --         --           --      1,108        (7.71)%     1,108
securities(2)
Other                         --           --       273         6.19%        --           --        500         9.55%        773
Held to maturity:
U.S. Government               --           --       910         4.98%     2,472         5.60%        16         2.90%      3,398
and agencies
Obligations of SCM           101         4.75%      409         4.80%     1,096         4.23%     1,217         4.17%      2,823
Mortgage-backed               --           --        78         5.16%       187         5.80%     2,386         4.78%      2,651
Other                         --           --     1,016         4.30%        --           --      1,600         9.55%      2,616
                           -----         ----   -------         ----     ------         ----    -------         ----     -------
     Totals                $ 101                $10,806                  $8,930                 $70,702                  $90,539
                           =====         ====   =======         ====     ======         ====    =======         ====     =======
</TABLE>


                                                                            21.
<PAGE>
(1)      Yields are presented based on adjusted cost basis of securities
available for sale. Yields based on carrying value would be higher since fair
value is less than adjusted cost.

(2)      Marketable equity securities are included in the over 10 year category
as there is no maturity.


Deposits and Borrowings

         Deposits are our primary source of funding loans. Deposits were $593.0
million at December 31, 2002 and averaged $572.8 million for the year 2002.
This compares to year-end deposits of $549.4 and average deposits of $550.6 in
2001. We believe we have the ability to generate deposit growth within our
local markets as loan demand dictates. From time to time, we may use FHLB
borrowings to complement our funding needs. Our long-term strategy has been to
be competitive on popular deposit products such as money market demand accounts
and certificates of deposit. FHLB advances, while typically more costly than
deposit funding, are typically the lowest cost borrowed funds available to
institutions such as our banks. As of December 31, 2002, the balance of FHLB
borrowings totaled $50.9 million, none of which mature before December 31,
2003.

         Total deposits grew at a rate of 7.93% during 2002, resulting from the
maturing of our newer branch locations and more attractive pricing for
deposits. Management's strategy to alter the deposit mix by reducing time
deposits greater than $100,000 with no other relationships proved successful as
these balances declined by $24.7 million while money market and checking
account deposits increased $18.7 million. Deposit growth was greater than loan
growth in 2002, resulting in a decrease in loan to deposit ratio from 95.0% at
year end 2001 to 88.7% at year end 2002. The increase in deposit growth over
loan growth resulted in an increase of securities of $35.0 million at the end
of 2002.

         We operate retail bank branches in twelve (12) different Tennessee
counties, have fifty percent (50%) ownership of a stand-alone federal savings
bank in one Kentucky county through a joint venture, and have fifty percent
(50%) ownership of a de novo bank in Nashville, Tennessee through a joint
venture. Each local market has its own unique deposit customer base. Deposit
growth has been strong in the communities where new additional branches have
been established. In general, large certificate of deposit customers tend to be
more sensitive to interest rate levels, making these deposits less reliable
sources of funding from liquidity planning purposes than core deposits. We have
normally had to pay a small premium for these types of deposits above current
rates. However, we believe that we have long-term customers who maintain
substantial deposits with our banks based upon personal relationships with each
bank's officers and employees.

         Average amount of and average rate paid for our deposits for year-end
2000, 2001 and 2002 are represented by deposit category on the table on pages
23 through 24 of this section of the documents.

         The following table indicates amounts outstanding of time certificates
of deposit of $100,000 or more and respective maturities for the year ended
December 31, 2002:

<TABLE>
<CAPTION>
                                                            Time Certificates of Deposit
                                                                   (In thousands)
<S>                                                         <C>
                     3 months or less                                 $ 32,766
                     3-12 months                                        58,760
                     Over 12 months                                     29,270
                                                                      --------
                     Total                                            $120,796
                                                                      ========
</TABLE>


                                                                            22.
<PAGE>
                   CUMBERLAND BANCORP, INC. AND SUBSIDIARIES
         CONSOLIDATED AVERAGE BALANCE SHEETS, NET INTEREST REVENUE AND
                CHANGES IN INTEREST INCOME AND INTEREST EXPENSE


The following table shows the consolidated average monthly balances of each
principal category of assets, liabilities, and shareholders' equity of the
Company, and an analysis of net interest revenue, and the change in interest
income and interest expense segregated into amounts attributable to changes in
volume and changes in rates.

<TABLE>
<CAPTION>
                                                            (Dollars in Thousands)
                                                    2002                           2001                       2002/2001 CHANGE
                                        ------------------------------   -----------------------------   --------------------------
                                        AVERAGE    INTEREST   REVENUE/   AVERAGE  INTEREST     REVENUE/  DUE TO    DUE TO
                                        BALANCE      RATE     EXPENSE    BALANCE    RATE       EXPENSE   VOLUME   RATE (1)   TOTAL
                                        --------   --------   --------   -------  --------     -------   ------   --------   ------

<S>                                     <C>        <C>        <C>        <C>      <C>          <C>       <C>      <C>        <C>
Net loans (2 and 3)                     $520,825    7.48%     $ 38,977   512,918    9.39%       48,155     742     (9,920)   (9,178)
Securities                                62,135    4.63%        2,877    32,344    6.05%        1,958   1,802       (883)      919
Federal funds sold                        38,060    1.62%          616    37,222    3.30%        1,227      28       (639)     (611)
FHLB and FRB stock                         4,871    4.78%          233     4,513    8.27%          373      30       (170)     (140)
Interest-bearing deposits in banks         4,860    2.98%          145    26,739    4.31%        1,152    (943)       (64)   (1,007)
                                        --------   -----      --------   -------    ----       -------   -----    -------    ------

   Total earning assets                  630,751    6.79%     $ 42,848   613,736    8.61%       52,865   1,659    (11,676)  (10,017)
                                                   =====      ========              ====       =======   =====    =======    ======

Cash and due from banks                   22,576                          20,295
Allowance for loan losses                 (9,078)                         (7,027)
Other assets                              46,361                          44,686
                                        --------                         -------

   Total assets                         $690,610                         671,690
                                        ========                         =======

Deposits:
   NOW investments                      $ 64,558    1.20%          774    40,467    2.29%          925     552       (703)     (151)
   Money market investments              116,840    2.30%        2,692   106,954    3.42%        3,656     338     (1,302)     (964)
   Savings                                23,488    1.99%          467    15,819    2.86%          453     219       (205)       14
   Time deposits $100,000 and over       116,945    3.70%        4,326   126,854    5.40%        6,851    (535)    (1,990)   (2,525)
   Other time deposits                   197,873    3.37%        6,661   211,014    6.04%       12,745    (794)    (5,290)   (6,084)
                                        --------   -----      --------   -------    ----       -------   -----    -------    ------

   Total interest-bearing deposits       519,704    2.87%       14,920   501,108    4.92%       24,630    (220)    (9,490)   (9,710)

Non interest-bearing
  demand deposits                         53,105                    --    49,461                    --
                                        --------   -----      --------   -------    ----       -------   -----    -------    ------

   Total deposits                        572,809    2.60%       14,920   550,569    4.47%       24,630    (220)    (9,490)   (9,710)

Fed Funds purchased                        2,989    1.81%           54     6,305    4.23%          267    (140)       (73)     (213)
Notes payable                              6,211    7.55%          469     7,934    8.00%          635    (138)       (28)     (166)
FHLB advances and other borrowings        50,890    4.99%        2,538    49,736    5.29%        2,629       1        (92)      (91)
Trust preferred securities                12,000    5.52%          662     9,600    7.71%          740       2        (80)      (78)
                                        --------              --------   -------               -------    ----    -------    ------

   Total deposits and borrowed funds     644,899    2.89%       18,643   624,144    4.63%       28,901    (495)    (9,763)  (10,258)
                                                    ----      --------              ----       -------

Other liabilities                          5,744                           7,490
Shareholders' equity                      39,967                          40,056
                                        --------                         -------

   Total liabilities and
      shareholders' equity              $690,610                         671,690
                                        ========                         =======

Net interest income                                           $ 24,205                         $23,964   2,154     (1,913)      241
                                                              ========                         =======   =====    =======   =======

Net yield on earning assets                         3.84%                           3.90%
                                                    ====                            ====
</TABLE>


1        Changes in interest income and expense not due solely to balance or
rate changes are included in the rate category.

2        Interest income includes fees on loans of $2,057 in 2002 and $2,283 in
2001.

3        Nonaccrual loans are included in average loan balances and the
associated income (recognized on a cash basis) is included in interest.

4        No taxable equivalent adjustments have been made since the effect of
tax exempt income is insignificant.


                                                                            23.
<PAGE>

                   CUMBERLAND BANCORP, INC. AND SUBSIDIARIES
         CONSOLIDATED AVERAGE BALANCE SHEETS, NET INTEREST REVENUE AND
                CHANGES IN INTEREST INCOME AND INTEREST EXPENSE

The following table shows the consolidated average monthly balances of each
principal category of assets, liabilities, and shareholders' equity of the
Company, and an analysis of net interest revenue, and the change in interest
income and interest expense segregated into amounts attributable to changes in
volume and changes in rates.

<TABLE>
<CAPTION>
                                                            (Dollars in Thousands)
                                                    2001                           2000                       2001/2000 CHANGE
                                        ------------------------------   -----------------------------   --------------------------
                                        AVERAGE    INTEREST   REVENUE/   AVERAGE  INTEREST     REVENUE/  DUE TO    DUE TO
                                        BALANCE      RATE     EXPENSE    BALANCE    RATE       EXPENSE   VOLUME   RATE (1)   TOTAL
                                        --------   --------   --------   -------  --------     -------   ------   --------   ------

<S>                                     <C>        <C>        <C>        <C>      <C>          <C>       <C>      <C>        <C>
Net loans (2 and 3)                     $ 512,918    9.39%    $48,155    476,339   10.17%        48,465    3,722  (4,032)     (310)
Securities                                 32,344    6.05%      1,958     23,468    6.55%         1,537      581    (160)      421
Federal funds sold                         37,222    2.91%      1,082     18,419    6.00%         1,106    1,129  (1,153)      (24)
FHLB and FRB stock                          4,513    8.27%        373      3,711    6.63%           246       53      74       127
Interest-bearing deposits in banks         26,739    4.85%      1,297      7,442    3.99%           297      770     230     1,000
                                        ---------    ----     -------    -------    ----        -------    -----  ------    ------

   Total earning assets                   613,736    8.61%    $52,865    529,379    9.76%        51,651    6,255  (5,041)    1,214
                                                     ====     =======               ====        =======    =====  ======    ======

Cash and due from banks                    20,295                         17,330
Allowance for loan losses                  (7,027)                        (5,635)
Other assets                               44,686                         35,548
                                        ---------                        -------

   Total assets                         $ 671,690                        576,622
                                        =========                        =======

Deposits:
   NOW investments                       $ 40,467    2.29%        925     41,568    2.31%           960      (25)    (10)      (35)
   Money market investments               106,954    3.42%      3,656     93,008    4.97%         4,623      693  (1,660)     (967)
   Savings                                 15,819    2.86%        453     16,288    2.79%           454      (13)     12        (1)
   Time deposits $100,000 and over        126,854    5.40%      6,851     97,140    6.15%         5,975    1,828    (952)      876
   Other time deposits                    211,014    6.04%     12,745    196,611    6.10%        12,002      879    (136)      743
                                        ---------    ----     -------    -------    ----        -------    -----  ------    ------

   Total interest-bearing deposits        501,108    4.92%     24,630    444,615    5.40%        24,014    3,362  (2,746)      616

Non interest-bearing demand deposits       49,461                  --     41,093                     --
                                        ---------    ----     -------    -------    ----        -------    -----  ------    ------

   Total deposits                         550,569    4.47%     24,630    485,708    4.94%        24,014    3,362  (2,746)      616

Fed Funds purchased                         6,305    4.23%        267      5,345    5.82%           311       56    (100)      (44)
Notes payable                               7,934    8.00%        635      7,950    7.50%           596       (1)     40        39
FHLB advances and other borrowings         49,736    5.29%      2,629     34,142    6.26%         2,136       10     483       493
FHLB advances and other borrowings          9,600    7.71%        740         --      --             --      740      --       740
                                        ---------    ----     -------    -------    ----        -------    -----  ------    ------

   Total deposits and borrowed funds    $ 624,144    4.63%     28,901    533,145    5.07%        27,057    4,167  (2,323)    1,844
                                                     ----     -------               ----        -------    -----  ------    ------

Other liabilities                           7,490                          6,111
Shareholders' equity                       40,056                         37,366
                                        ---------                        -------


   Total liabilities and
     shareholders' equity               $ 671,690                        576,622
                                        =========                        =======

Net interest income                                           $23,964                           $24,594    2,088  (2,718)     (630)
                                                              =======                           =======    =====  ======    ======

Net yield on earning assets                          3.90%                           4.65%
                                                     ====                            ====
</TABLE>

1        Changes in interest income and expense not due solely to balance or
rate changes are included in the rate category.

2        Interest income includes fees on loans of $2,283 in 2001 and $3,164 in
2000.

3        Nonaccrual loans are included in average loan balances and the
associated income (recognized on a cash basis) is included in interest.

4        No taxable equivilent adjustments have been made since the effect of
tax exempt income is insignificant.


                                                                            24.
<PAGE>
Equity and Capital Resources

         Shareholders' equity totaled $45.5 million at year-end 2002. The
increase in equity is attributable to the issuance of common stock in connection
with a private sale of approximately $5.4 million of our common stock, net
earnings of $521,000, a net increase in the unrealized gain/loss on available
for sale securities of $470,000, shares issued from stock options exercised
totaling $631,000, less dividends paid of $833,000.

         The Company's principal regulators have established minimum risk-based
capital requirements and leverage capital requirements. These guidelines
classify capital into two categories of Tier I and total risk-based capital.
Total risk-based capital consists of Tier I (or core) capital (essentially
common equity less intangible assets) and Tier II capital (essentially
qualifying long-term debt, of which the Company and subsidiary banks have none,
and a part of the allowance for loan losses). In determining risk-based capital
requirements, assets are assigned risk-weights of 0% to 100%, depending on
regulatory assigned levels of credit risk associated with such assets. Trust
preferred securities are allowed to be counted in Tier I capital, subject to
certain limitations. At December 31, 2002, the Company's total risk-based
capital ratio was 12.18% and its Tier I risk-based capital ratio was
approximately 10.92% compared to ratios of 11.28% and 10.04%, respectively at
December 31, 2001. At December 31, 2002, the Company had a leverage ratio of
7.95%, compared to 7.47% at December 31, 2001.

         The Company and its subsidiaries, Cumberland Bank, BankTennessee and
Bank of Dyer, have informally agreed with or committed to bank regulatory
officials to take various actions, including to reduce the level of criticized
or non-performing loans, to improve loan underwriting, problem loan resolution
and collection, and strategic and capital planning, to obtain prior regulatory
approval before incurring additional holding company indebtedness, repurchasing
shares, or paying dividends from certain subsidiary banks to the holding company
or from the holding company to shareholders, and to maintain certain capital
levels at subsidiary banks in excess of those required for well capitalized
status. The most restrictive of these provisions would require the Company to
maintain a Tier I leverage ratio of at least 7.0% at BankTennessee, Bank of Dyer
and Cumberland Bank at December 31, 2002. The Company and its subsidiaries
believe they were in compliance in all material respects with these informal
understandings at December 31, 2002. The Company and its subsidiaries intend to
continue to comply with these informal understandings, and the Company received
approval to pay dividends in the first quarter of 2003. The Company believes
that the proceeds of its private placement, earnings from operations and
available funds will be sufficient to allow the Company to meet all these
commitments and the requirements for well-capitalized status through the end of
2003. However, the Company's regulators have considerable discretion in
determining whether to grant required approvals, and no assurance can be given
that such approvals will be forthcoming.

         The Company issued $8 million of capital trust securities in December
2000, and another $4 million during July 2001. As disclosed in note 14 to the
consolidated financial statements, these securities are included in Tier I
Capital, with certain limitations. Their holders are also entitled to receive
distributions based on a variable interest rate applied to the original
investment.

         Items that represent common stock equivalents include 773,540 common
stock options outstanding at December 31, 2002. We plan to continue granting
stock options to selected officers, directors, and other key employees.

Return on Equity and Assets

         Returns on average consolidated assets and average consolidated equity
for the periods indicated are as follows:


<TABLE>
<CAPTION>
                                                               Years Ended
                                                               December 31,
                                                  --------------------------------------
                                                  2002             2001             2000
                                                  ----             ----             ----

<S>                                               <C>              <C>              <C>
Return on average assets                          0.08%            0.03%            0.72%
Return on average equity                          1.30%            0.52%           11.13%
Average equity to average assets ratio            5.79%            5.96%            6.48%
Dividend payout ratio                              160%             397%              17%
</TABLE>

Liquidity

         It is a primary concern to depositors, creditors, and regulators that
banks demonstrate the ability to have readily available funds sufficient to
repay fully-maturing liabilities. Our liquidity, represented by cash and cash
due from banks, is a result of our operating, investing and financing
activities. In order to insure funds are available at all times, we devote
resources to projecting on a monthly basis the amount of funds that will be
required and maintain relationships with a diversified customer base so funds
are accessible. Liquidity requirements can also be met through short-term
borrowings or the disposition of short-term assets, which are generally matched
to correspond to the maturity of liabilities.

         Our banks have liquidity policies and, in the opinion of management,
the overall liquidity level is considered adequate. Neither we, nor our banks,
are subject to any specific liquidity requirements imposed by regulatory
authorities. Dividends totaling $2.2 million were upstreamed from the banks to
the holding company during 2002. Regulatory approval must be obtained prior to
upstreaming future dividends. Our banks are subject to general Federal Reserve
guidelines, which do not require a minimum level of liquidity. The ratio for
average loans to average deposits for 2001 was 93.2% and for 2002 was 90.9%. We
do not know of any trends or demands that are reasonably likely to result in
liquidity increasing or decreasing.

         The Company's bank borrowings and trust preferred securities have
certain interest payment requirements and the Company has certain operating
expenses, which require dividends or management fees from the Company's bank
subsidiaries in order to be funded. As discussed above, the Company's recent
asset quality problems have resulted in regulatory restrictions (approval) on
its subsidiaries ability to make dividends to the Company. The Company
anticipates that it will be able to meet required payments on its outstanding
debt and trust preferred securities for the next four quarters through available
cash resources and the additional capital raised in the private placement of its
common stock described elsewhere in this document. However, the Company's
regulators have considerable discretion in determining whether to grant required
approvals, and no assurance can be given that such approvals will be
forthcoming.


         At December 31, 2002, the Company had unfunded loan commitments
outstanding of $58.8 million and unfunded lines of credit and letters of credit
of $26.2 million. Because these commitments generally have fixed expiration
dates and many will expire without being drawn upon, the total commitment level
does not necessarily represent future cash requirements. If needed to fund these
outstanding commitments, the Company's bank subsidiaries have the ability to
liquidate Federal funds sold or securities available-for-sale or on a short-term
basis to borrow and purchase Federal funds from other financial institutions.
Additionally, the Company's bank subsidiaries could sell participations in these
or other loans to correspondent banks.


                                                                            25.
<PAGE>
Interest Rate Sensitivity

         A key element in the financial performance of financial institutions
is the level and type of interest rate risk assumed. The single most
significant measure of interest rate risk is the relationship of the repricing
periods of earning assets and interest-bearing liabilities. The more closely
the repricing periods are correlated, the less interest rate risk we assume. In
general, community bank customer preferences tend to push the average repricing
period for costing liabilities to a shorter time frame than the average
repricing period of earning assets, resulting in a net liability sensitive
position in time frames less than one year. A summary of the repricing schedule
of our interest earning assets and interest-bearing liabilities (GAP) at
year-end 2002 follows:

<TABLE>
<CAPTION>
                                                                                                        Over 5
                                              1-90 Days          91-365 Days         1-5 years           Years              Total
                                              ---------          -----------         ---------          ------             -------

<S>                                           <C>                <C>                 <C>                <C>                <C>
Interest earning assets:
   Loans, net                                  199,412             102,155            204,707            19,941            526,215
Securities available for sale                    4,220              13,040             50,328            11,463             79,051
Securities held to maturity                        228                 384              3,860             7,016             11,488
Federal funds sold                              27,561                  --                 --                --             27,561
Interest-earning deposits                        8,045                 474                852                95              9,466
                                              --------            --------            -------           -------            -------

     Total interest earning assets             239,466             116,053            259,747            38,515            653,781
                                              --------            --------            -------           -------            -------

Interest bearing liabilities:
  Interest bearing demand
    deposits                                    71,550                  --                 --                --             71,550
  Savings deposits                             150,045                  --                 --                --            150,045
  Time deposits                                 88,559             152,453             73,752                --            314,764
  FHLB borrowings                                   --                  --              1,852            49,000             50,852
  Notes payable                                     50                 750              3,200             1,500              5,500
  Federal funds purchased                        7,336                  --                 --                --              7,336
  Trust preferred securities                    12,000                  --                 --                --             12,000
                                              --------            --------            -------           -------            -------

  Total interest bearing liabilities           329,540             153,203             78,804            50,500            612,047
                                              --------            --------            -------           -------            -------

Rate sensitive gap                             (90,074)            (37,150)           180,943           (11,985)            41,734
                                              --------            --------            -------           -------            -------

Rate sensitive cumulative gap                  (90,074)           (127,224)            53,719            41,734
                                              --------            --------            -------           -------

Cumulative gap as a percentage
  of earnings assets                            (13.78)%             (19.4)%             8.22%             6.38%
                                              --------            --------            -------           -------
</TABLE>

         Cumberland Bancorp's primary business is banking and the resulting
earnings, primarily net interest income, are susceptible to changes in market
interest rates. Net interest income represented 74.1% of net revenues (net
interest income and noninterest income) for 2002. Likewise, it is management's
goal to maximize net interest income within acceptable levels of interest rate
and liquidity risks. Repricing gap (the difference between assets and
liabilities that reprice within a specific time period) and simulation modeling
(projecting net interest income under various interest rate scenarios and
balance sheet assumptions) are the primary methods the bank uses in analyzing
and managing interest rate risk.


                                                                            26.
<PAGE>
         Gap analysis attempts to capture the amounts and timing of balances
exposed to changes in interest rates at a given point in time. Although our gap
table shows a liability sensitive bias, our position is a bias towards asset
sensitivity. The amount of change our deposit base realizes in relation to the
total change in market interest rates is significantly less than that of the
asset base. When this is taken into account, repricing assets are substantially
shorter in the three and six month time horizons with a more evenly matched one
year gap.

         Simulation modeling projects net interest income under various interest
rate scenarios based on the optionality inherent in the balance sheet. At
December 31, 2003, with rates unchanged, net interest income is projected to
increase 8.5% over 2002, resulting from the continued repricing of funding
sources. The 100 basis points immediate rise in interest rates produces a 14%
increase in net interest income. This assumes management's ability to control
interest expense.

         Both methods are inherently uncertain and cannot precisely estimate
net interest income nor predict the impact of changes in market interest rates
on net interest income. As such, investors are cautioned not to place undue
reliance on such estimates and models.

         As shown in the table, we have a cumulative GAP of approximately
13.78% and 19.46% at the end of 90 days and one year, respectively. Management
believes that this level of GAP is appropriate since many of the liabilities
that are immediately repriceable can be effectively repriced more slowly than
the assets which are contractually immediately repriceable in a rising rate
environment. Conversely, those liabilities can often be repriced downward more
rapidly than contractually required assets repricing in a downward rate
environment. The degree to which management can control the rate of change in
deposit liabilities, which are immediately repriceable, is affected to a large
extent by the speed and amount of interest rate movements.

ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk

         Our primary component of market risk is interest rate volatility.
Fluctuations in interest rates will ultimately impact both the level of income
and expense recorded on a large portion of our assets and liabilities, and the
market value of all interest-earning assets and interest-bearing liabilities,
other than those which possess a short term to maturity. Based upon the nature
of our operations, we do not maintain any foreign currency exchange or
commodity price risk.

         The following table provides information about our financial
instruments that are sensitive to changes in interest rates as of December 31,
2002. These market risk sensitive instruments have been entered into by us for
purposes other than trading. We do not hold market risk sensitive instruments
for trading purposes. Amounts described below do not take into account possible
loan, security, or interest bearing deposit renewals or repricing for such
renewals. The information provided by this table should be read in connection
with our audited consolidated financial statements and Management's Discussion
and Analysis of Financial Condition and Results of Operation.


                                                                            27.
<PAGE>
<TABLE>
<CAPTION>
                                                                 EXPECTED MATURITY DATE -
                                                                 YEAR ENDING DECEMBER 31,
                                   -------------------------------------------------------------------------------------------
                                                     2004 to         2006 to           2008                             FAIR
(Dollars in Thousands)              2003               2005            2007          THEREAFTER          TOTAL          VALUE
                                  -------            -------         -------         ----------          ------        -------

<S>                              <C>                 <C>             <C>             <C>                <C>            <C>
INTEREST EARNING ASSETS:
Loans, net of unearned
interest:(1)
Variable rate                    $176,146             5,088            3,655               40           184,929        184,929
   Average interest rate             5.02%             6.91%            6.55%            9.50%             5.10%
Fixed rate                       $124,689           101,957           94,261           20,379           341,286        346,515
   Average interest rate             7.03%             7.89%            7.23%            4.94%             7.22%
Securities(2)                    $ 17,872            40,426           13,761           18,480            90,539         90,667
   Average interest rate             3.33%             3.80%            4.56%            5.28%             4.12%
Federal funds sold               $ 27,561                --               --               --            27,561         27,561
   Average interest rate             1.15%               --               --               --              1.15%
Interest-earning
deposits in financial
institutions                     $  8,519               753               99               95             9,466          9,466
    Average interest rate            0.84%             4.45%            3.40%            5.00%             1.19%
INTEREST BEARING LIABILITIES:
Interest-bearing
deposits                         $471,886            52,503           12,084               --           536,473        540,636
   Average interest rate             2.11%             4.08%            4.31%              --              2.35%
Federal funds purchased          $  7,336                --               --               --             7,336          7,336
    Average interest rate            1.65%               --               --               --              1.65%

Other borrowings                 $ 12,800             2,452            2,600           50,500            68,352         73,408
   Average interest rate             5.87%             6.57%            6.34%            4.92%             5.23%
</TABLE>

------------------

(1)      Loan amounts and weighted average interest rates for loans net out any
undisbursed loan proceeds, make no assumptions about loan prepayments, and do
not include the allowance for loan losses.

(2)      Securities include our investment in obligations of certain political
subdivisions within the State of Tennessee. Average interest rates have not
been adjusted for any federal, state, or municipal tax liability that we may
incur.


                                                                            28.
<PAGE>
ITEM 8.  Financial Statements and Supplementary Data


                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors
Cumberland Bancorp, Incorporated
Franklin, Tennessee

We have audited the consolidated balance sheet of Cumberland Bancorp,
Incorporated as of December 31, 2002, and the related consolidated statements of
income, changes in shareholders' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit. The financial statements as of and for the years ended December
31, 2001 and 2000, were audited by Heathcott and Mullaly, P.C. who merged with
Crowe, Chizek and Company LLP as of April 1, 2002 and whose report dated January
31, 2002 expressed an unqualified opinion on those statements.

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

In our opinion, the 2002 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Cumberland
Bancorp, Incorporated as of December 31, 2002, and the results of its operations
and its cash flows for the year ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America.


                                              /s/ Crowe, Chizek and Company LLP

Brentwood, Tennessee
February 13, 2003


                                                                            29.
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS


To the Shareholders and Board of Directors
Cumberland Bancorp, Incorporated

We have audited the consolidated balance sheet of Cumberland Bancorp,
Incorporated as of December 31, 2001, and the related consolidated statements of
income, changes in shareholders' equity, and cash flows for the years ended
December 31, 2001 and 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cumberland Bancorp,
Incorporated as of December 31, 2001, and the results of its operations and its
cash flows for the years ended December 31, 2001 and 2000 in conformity with
accounting principles generally accepted in the United States of America.

                                             /s/ Heathcott & Mullaly, P.C.


Brentwood, Tennessee
March 1, 2002




                                                                             30.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


<TABLE>
<CAPTION>
                                                                                         2002             2001
                                                                                      ---------         ---------

<S>                                                                                   <C>               <C>
ASSETS:
Cash and due from banks                                                               $  21,681         $  20,868
Federal funds sold                                                                       27,561            19,531
                                                                                      ---------         ---------
     Total cash and cash equivalents                                                     49,242            40,399

Interest-bearing deposits in financial institutions                                       9,466             4,563
Securities available for sale                                                            79,051            42,814
Securities held to maturity (fair
  value $11,616 and $12,814)                                                             11,488            12,735
Loans, net of unearned income                                                           526,215           522,245
Allowance for loan losses                                                                (9,062)           (9,023)
                                                                                      ---------         ---------
     Loans, net                                                                         517,153           513,222

Premises and equipment, net                                                              23,366            23,871
Restricted equity securities                                                              5,040             4,719
Loan servicing rights                                                                       213               327
Other real estate                                                                         6,338             7,330
Investment in unconsolidated affiliates                                                   6,163             5,195
Goodwill                                                                                  1,597             1,597
Accrued interest receivable                                                               3,922             4,693
Other assets                                                                              6,674             6,046
                                                                                      ---------         ---------
         Total assets                                                                 $ 719,713         $ 667,511
                                                                                      =========         =========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Deposits
     Non-interest bearing                                                             $  56,639         $  52,395
     Interest bearing                                                                   536,359           497,029
                                                                                      ---------         ---------
         Total deposits                                                                 592,998           549,424
Notes payable                                                                             5,500             7,659
Federal funds purchased                                                                   7,336             1,675
Advances from Federal Home Loan Bank                                                     50,852            50,852
Accrued interest payable                                                                  3,129             3,994
Other liabilities                                                                         2,425             2,594
Trust preferred securities                                                               12,000            12,000
                                                                                      ---------         ---------
         Total liabilities                                                              674,240           628,198
                                                                                      ---------         ---------

Shareholders' equity:
Common stock, $0.50 par value; authorized 40,000,000 shares, shares issued and
   outstanding 15,382,626 at December 31, 2002
   and 13,808,236 at December 31, 2001                                                    7,691             6,904
Additional paid-in capital                                                               27,504            22,289
Retained earnings                                                                         9,749            10,061
Accumulated other comprehensive income                                                      529                59
                                                                                      ---------         ---------
              Total shareholders' equity                                                 45,473            39,313
                                                                                      ---------         ---------
              Total liabilities and shareholders' equity                              $ 719,713         $ 667,511
                                                                                      =========         =========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                                                            31.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                       CONSOLIDATED STATEMENTS OF INCOME
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

           (Dollars in thousands, except share and per share amounts)


<TABLE>
<CAPTION>
                                                              2002               2001                2000
                                                           -----------        -----------        -----------

<S>                                                        <C>                <C>                <C>
Interest income:
    Loans, including fees                                  $    38,977        $    48,155        $    48,465
    Securities                                                   2,877              1,958              1,537
    Deposits in financial institutions                             145              1,152                297
    Federal funds sold                                             616              1,227              1,106
    Federal Home Loan Bank dividends                               233                373                246
                                                           -----------        -----------        -----------
       Total interest income                                    42,848             52,865             51,651

Interest expense:
    Deposits                                                    14,920             24,630             24,014
    Federal funds purchased                                         54                267                311
    Other borrowings                                             3,669              4,004              2,732
                                                           -----------        -----------        -----------
       Total interest expense                                   18,643             28,901             27,057

NET INTEREST INCOME                                             24,205             23,964             24,594

Provision for loan losses                                        6,800              6,377              2,636
                                                           -----------        -----------        -----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES             17,405             17,587             21,958

Noninterest income:
    Service charges on deposit accounts                          3,817              3,551              2,671
    Other service charges, commissions and fees                  2,488              1,887              1,787
    Mortgage banking activities                                  1,645              1,328                811
    Net gain on securities transactions                            461                 --                 --
    Net gain on sale of loans                                       37                282                502
                                                           -----------        -----------        -----------
       Total other income                                        8,448              7,048              5,771

Noninterest expense:
    Salaries and employee benefits                              12,461             12,137             11,169
    Occupancy and equipment                                      3,374              3,367              2,725
    Deposit insurance premiums                                     130                152                211
    Other                                                        9,139              8,752              7,027
                                                           -----------        -----------        -----------
       Total other expenses                                     25,104             24,408             21,132
                                                           -----------        -----------        -----------

INCOME BEFORE INCOME TAXES                                         749                227              6,597

Income tax expense                                                 228                 18              2,436
                                                           -----------        -----------        -----------

NET EARNINGS                                               $       521        $       209        $     4,161
                                                           ===========        ===========        ===========

Net earnings per share - basic                             $      0.04               0.02               0.30
Net earnings per share - diluted                                  0.04               0.01               0.30

Weighted average shares outstanding - basic                 14,018,715         13,813,774         13,767,312
Weighted average shares outstanding - diluted               14,142,996         14,019,794         14,021,926
</TABLE>


          See accompanying notes to consolidated financial statements.

                                                                            32.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

           (Dollars in thousands, except share and per share amounts)


<TABLE>
<CAPTION>
                                                                                                         Accumulated
                                                    Common Stock             Additional                     Other          Total
                                               -------------------------       Paid-In        Retained   Comprehensive Shareholders'
                                                  Shares         Amount        Capital        Earnings      Income        Equity
                                               -----------       -------     ----------     -----------  ------------- ------------

<S>                                            <C>               <C>         <C>            <C>          <C>           <C>
Balance at January 1, 2000                       6,857,620       $ 3,429       $ 25,110       $  7,194       $(458)      $ 35,275

Additional shares issued for Bank of Dyer               --            --             --             15          --             15
Proceeds from sale of common stock                  34,678            17            410             --          --            427
Exercise of stock options                            1,330             1              6             --          --              7
Dividends ($0.05 per share)                             --            --             --           (688)         --           (688)
Comprehensive income:
   Net earnings                                         --            --             --          4,161          --          4,161
Other comprehensive income:
   Change in unrealized loss on
     securities available for sale,
     net of $171 in income taxes                        --            --             --             --         279            279
                                                                                                                         --------
Total comprehensive income                                                                                                  4,440
                                               -----------       -------       --------       --------       -----       --------

Balance at December 31, 2000                     6,893,628       $ 3,447       $ 25,526       $ 10,682       $(179)      $ 39,476

Purchase and retirement of common stock            (47,000)          (24)          (259)            --          --           (283)
Issuance of common stock in connection
   with the acquisition of minority
   interest of Bank of Mason                        53,250            27            453             --          --            480
Two for one stock split                          6,899,878         3,450         (3,450)            --          --             --
Exercise of stock options                            8,480             4             19             --          --             23
Dividends ($0.06 per share)                             --            --             --           (830)         --           (830)
Comprehensive income:
   Net earnings                                         --            --             --            209          --            209
Other comprehensive income:
   Change in unrealized loss on
     securities available for sale, net
     of $146 in income taxes                            --            --             --             --         238            238
                                                                                                                         --------
Total comprehensive income                                                                                                    447
                                               -----------       -------       --------       --------       -----       --------

Balance at December 31, 2001                    13,808,236       $ 6,904       $ 22,289       $ 10,061       $  59       $ 39,313

Issuance of common stock                         1,342,710           671          4,700             --          --          5,371
Exercise of stock options                          231,680           116            515             --          --            631
Dividends ($0.06 per share)                             --            --             --           (833)         --           (833)
Comprehensive income:
   Net earnings                                         --            --             --            521          --            521
Other comprehensive income:
   Change in unrealized loss on
     securities available for sale,
     net of $307 in income taxes                        --            --             --             --         754            754
   Less: adjustment for gains included
     in net income, net of $177 in
     income taxes                                       --            --             --             --        (284)          (284)
                                                                                                                         --------
Total comprehensive income                                                                                                    991
                                               -----------       -------       --------       --------       -----       --------

Balance at December 31, 2002                    15,382,626       $ 7,691       $ 27,504       $  9,749       $ 529       $ 45,473
                                               ===========       =======       ========       ========       =====       ========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                                                            33.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

           (Dollars in thousands, except share and per share amounts)


<TABLE>
<CAPTION>
                                                                                2002               2001               2000
                                                                              --------           --------           ---------

<S>                                                                           <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                 $    521           $    209           $   4,161
   Adjustments to reconcile net income to net cash from
    operating activities:
     Provision for loan losses                                                   6,800              6,377               2,636
     Depreciation and amortization                                               1,698              1,876               1,543
     Operations of unconsolidated affiliates                                       150                505                 308
     Origination of mortgage loans held for sale                               (61,824)           (47,277)            (65,311)
     Proceeds from sale of mortgage loans held for sale                         60,464             42,396              66,196
     Federal Home Loan Bank stock dividend                                        (321)              (493)               (562)
     Net gain on securities transactions                                          (461)                --                  --
     Net (gain) loss on sale of other real estate                                 (199)                 3                  (3)
   Net change in:
       Deferred income tax benefits                                                323             (1,375)                150
       Accrued interest receivable                                                 771                951              (1,571)
       Accrued interest payable and other liabilities                           (1,038)              (716)              1,556
       Other, net                                                               (9,296)              (141)             (3,059)
                                                                              --------           --------           ---------
     Total adjustments                                                          (2,933)             2,106               1,884
                                                                              --------           --------           ---------
       Net cash from operating activities                                       (2,412)             2,315               6,045
                                                                              --------           --------           ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Net change in interest-bearing deposits in financial institutions            (4,903)            10,425              (9,592)
   Purchases of securities available for sale                                  (83,088)           (38,118)               (639)
   Proceeds from maturities, paydowns, and calls of securities
     available for sale                                                         23,918             11,108               1,171
   Proceeds from sales of securities available for sale                         23,865                 --                  --
   Purchases of securities held to maturity                                     (7,097)           (11,632)             (3,902)
   Proceeds from maturities, paydowns, and calls of securities
     held to maturity                                                            8,344              7,322               2,147
   Net change in loans                                                          (9,431)           (21,768)            (69,431)
   Investments in unconsolidated affiliates                                     (1,118)              (212)             (2,904)
   Purchases of premises and equipment, net                                     (1,193)            (2,166)            (10,329)
   Proceeds from sale of other real estate                                       9,710              3,942               1,175
                                                                              --------           --------           ---------
       Net cash from investing activities                                      (40,993)           (41,099)            (92,304)
                                                                              --------           --------           ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net change in deposits                                                       43,574             25,282              88,890
   Federal funds purchased                                                       5,661             (7,900)              7,300
   Repayments of Federal Home  Loan Bank advances                                1,300             24,652             107,200
   Proceeds from Federal Home Loan Bank advances                                (1,300)           (20,011)           (100,543)
   Proceeds from notes payable                                                      --                 --               4,325
   Repayments of notes payable                                                  (2,159)            (1,090)             (3,031)
   Proceeds from issuance of trust preferred securities                             --              4,000               8,000
   Dividends paid                                                                 (830)              (795)               (516)
   Repurchase and retirement of common stock                                        --               (283)                 --
   Proceeds from issuance of common stock                                        6,002                 23                 434
                                                                              --------           --------           ---------
       Net cash from financing activities                                       52,248             23,878             112,059
                                                                              --------           --------           ---------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                          8,843            (14,906)             25,800
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                  40,399             55,305              29,505
                                                                              --------           --------           ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                      $ 49,242           $ 40,399           $  55,305
                                                                              ========           ========           =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Interest paid                                                              $ 19,508           $ 29,601           $  25,435
   Income taxes paid                                                             1,253              1,627               3,097

NON-CASH ACTIVITIES:
   Issuance of common stock - due to acquisitions                                   --                480                  15
   Assets acquired through foreclosure                                           9,388              8,130               1,888
</TABLE>

          See accompanying notes to consolidated financial statements.


                                                                            34.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of Cumberland Bancorp, Incorporated and Subsidiaries
conform to accounting principles generally accepted in the United States of
America and to general practices within the banking and financial services
industry. The significant policies are summarized as follows:

Basis of Presentation: The accompanying consolidated financial statements
include the accounts of Cumberland Bancorp, Incorporated (the Company) and its
subsidiaries. Material intercompany accounts and transactions have been
eliminated in consolidation.

Nature of Operations: Substantially all of the assets, liabilities, and
operations presented in the consolidated financial statements are attributable
to the five subsidiary banks: Cumberland Bank, BankTennessee, The Community
Bank, Bank of Dyer, and Bank of Mason (collectively, the "Banks"). The Banks
provide a variety of banking services to individuals and businesses through
their eighteen branches located across ten counties in Middle and West
Tennessee. Their primary deposit products are demand deposits, savings deposits,
and certificates of deposit, and their primary lending products are commercial
business, real estate mortgage, and installment loans. Other financial services
such as credit insurance, investment products, consumer loan services, and
property and casualty insurance are also provided by subsidiaries or divisions
of the Banks.

Use of Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. The allowance for loan losses and fair value of financial
instruments are particularly subject to change.

Cash Flows: Cash and cash equivalents includes cash, deposits with other
financial institutions under 90 days, and federal funds sold. Net cash flows are
reported for loans and deposit transactions.

Cash and Due From Banks: Deposits in excess of $100 are not insured by the
Federal Deposit Insurance Corporation. Although the Company has several deposit
accounts in excess of this limit as of December 31, 2002, credit risk is
considered nominal.

Included in cash and due from banks are legal reserve requirements, which must
be maintained on an average basis in the form of cash and balances due from the
Federal Reserve and other banks. Cash on hand or on deposit with the Federal
Reserve Bank of $2,381 was required to meet regulatory reserve and clearing
requirements at year-end 2002. These balances do not earn interest.


                                                                            35.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Securities: Securities are classified as held to maturity and carried at
amortized cost when the Company has the positive intent and ability to hold them
to maturity. Securities are classified as available for sale when they might be
sold before maturity. Securities available for sale are carried at fair value,
with unrealized holding gains and losses reported in other comprehensive income.

Interest income includes amortization of purchase premium or discount. Gains and
losses on sales are based on the amortized cost of the security sold. Securities
are written down to fair value when a decline in fair value is not temporary.

Loans: Loans that the Company has the intent and ability to hold for the
foreseeable future or until maturity or payoff are reported at the principal
balance outstanding, net of unearned interest, deferred loan fees and costs, and
an allowance for loan losses.

Interest income is reported on the interest method and includes amortization of
net deferred loan fees and costs over the loan term. Interest income on mortgage
and commercial loans is discontinued at the time the loan is 90 days delinquent
unless the credit is well-secured and in process of collection. In all cases,
loans are placed on nonaccrual or charged off at an earlier date if collection
of principal or interest is considered doubtful.

All interest accrued, but not received, for loans placed on nonaccrual is
reversed against interest income. Interest received on such loans is accounted
for on the cash-basis or cost-recovery method, until qualifying for return to
accrual. Loans are returned to accrual status when all the principal and
interest amounts contractually due are brought current and future payments are
reasonably assured.

Allowance for Loan Losses: The allowance for loan losses is a valuation
allowance for probable incurred credit losses, increased by the provision for
loan losses and decreased by charge-offs less recoveries. The Company estimates
the allowance balance required using past loan loss experience, the nature and
volume of the portfolio, information about specific borrower situations and
estimated collateral values, economic conditions, and other factors. Allocations
of the allowance may be made for specific loans, but the entire allowance is
available for any loan that, in management's judgment, should be charged off.
Loan losses are charged against the allowance when management believes the
uncollectibility of a loan balance is confirmed.

A loan is impaired when full payment under the loan terms is not expected.
Commercial and commercial real estate loans are individually evaluated for
impairment. If a loan is impaired, a portion of the allowance is allocated so
that the loan is reported, net, at the present value of estimated future cash
flows using the loan's existing rate or at the fair value of collateral if
repayment is expected solely from the collateral. Large groups of smaller
balance homogeneous loans, such as consumer and residential real estate loans,
are collectively evaluated for impairment, and accordingly, they are not
separately identified for impairment disclosures.


                                                                            36.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Mortgage Banking Activities: The Banks originate mortgage loans for sale and
these loans are generally sold at origination. Loans held for sale are carried
at the lower of cost or fair value, on an aggregate basis. Origination fees are
recorded as income when the loans are sold to third party investors.

Premises and Equipment: Land is carried at cost. Premises and equipment are
stated at cost less accumulated depreciation. Depreciation has been computed on
straight-line method, based on the estimated useful lives of the respective
asset which range from 3 to 10 years for furniture, fixtures, and equipment and
5 to 40 years for buildings and improvements.

Restricted Equity Securities: These amounts are stated at cost, and consist
primarily of Federal Home Loan Bank and Federal Reserve Bank Stock.

Loan Servicing Rights: Loan servicing rights represent the allocated value of
retained servicing rights on loans sold. Servicing assets are expensed in
proportion to, and over the period of, estimated net servicing revenues.
Impairment is evaluated based on the fair value of the assets, using groupings
of the underlying loans as to interest rates and then, secondarily, as to
geographic and prepayment characteristics. Fair value is determined using prices
for similar assets with similar characteristics, when available, or based upon
discounted cash flows using market-based assumptions. Any impairment of a
grouping is reported as a valuation allowance.

Foreclosed Assets: Assets acquired through or instead of loan foreclosure are
initially recorded at fair value when acquired, establishing a new cost basis.
If fair value declines, a valuation allowance is recorded through expense. Costs
after acquisition are expensed.

Goodwill: Goodwill results from prior business acquisitions and represents the
excess of the purchase price over the fair value of acquired tangible assets and
liabilities and identifiable intangible assets. Upon adopting new accounting
guidance on January 1, 2002, the company ceased amortizing goodwill. Goodwill is
assessed at least annually for impairment and any such impairment will be
recognized in the period identified. The effect on net income of ceasing
goodwill amortization in 2002 was $70, net of income tax.

Long-term Assets: Premises and equipment, goodwill, other intangible assets, and
other long-term assets are reviewed for impairment when events indicate their
carrying amount may not be recoverable from future undiscounted cash flows. If
impaired, the assets are recorded at fair value.

Stock Compensation: Employee compensation expense under stock options is
reported using the intrinsic value method. No stock-based compensation cost is
reflected in net income, as all options granted had an exercise plan equal to or
greater than the market price of the underlying common stock at date of grant.
The following table illustrates the effect on net income and earnings per share
if expense was measured using the fair value recognition provisions of FASB
Statement No. 123, Accounting for Stock-Based Compensation.


                                                                            37.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

<TABLE>
<CAPTION>
                                                     2002            2001            2000
                                                    -----           -----           -------

<S>                                                 <C>             <C>             <C>
Net income as reported                              $ 521           $ 209           $ 4,161
Deduct:  Stock-based compensation expense
  determined under fair value based method           (130)           (202)             (201)
                                                    -----           -----           -------
Pro forma net income                                $ 391           $   7           $ 3,960
                                                    =====           =====           =======

Basic earnings per share as reported                 0.04            0.02              0.30
Pro forma basic earnings per share                   0.01            0.00              0.29

Diluted earnings per share as reported               0.04            0.01              0.30
Pro forma diluted earnings per share                 0.01            0.01              0.28
</TABLE>

The pro forma effects are computed using option pricing models, using the
following weighted-average assumptions as of grant date.

<TABLE>
<CAPTION>
                                          2002            2001            2000
                                         -----           -----           -----

<S>                                      <C>             <C>             <C>
Risk-free interest rate                   4.71%           4.31%           6.00%
Expected option life                     7 yrs.          7 yrs.          5 yrs.
Expected stock price volatility             18%             18%             40%
Dividend yield                            1.50%           1.46%           0.80%
</TABLE>

Income Taxes: Income tax expense is the total of the current year income tax due
or refundable and the change in deferred tax assets and liabilities. Deferred
tax assets and liabilities are the expected future tax amounts for the temporary
differences between carrying amounts and tax bases of assets and liabilities,
computed using enacted tax rates. A valuation allowance, if needed, reduces
deferred tax assets to the amount expected to be realized.

Fair Value of Financial Instruments: Fair values of financial instruments are
estimated using relevant market information and other assumptions, as more fully
disclosed in a separate note. Fair value estimates involve uncertainties and
matters of significant judgment regarding interest rates, credit risk,
prepayments, and other factors, especially in the absence of broad markets for
particular items. Changes in assumptions or in market conditions could
significantly affect the estimates.

Earnings Per Common Share: Basic earnings per common share is net income divided
by the weighted-average number of common shares outstanding during the period.
Diluted earnings per common share includes the dilutive effect of additional
potential common shares issuable under stock options. Earnings and dividends per
share are restated for all stock splits and dividends through the date of issue
of the financial statements.

Comprehensive Income: Comprehensive income consists of net income and other
comprehensive income. Other comprehensive income includes unrealized gains and
losses on securities available for sale, which are also recognized as separate
components of equity.


                                                                            38.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Operating Segments: While the chief decision-makers monitor the revenue streams
of the various products and services, the identifiable segments are not material
and operations are managed and financial performance is evaluated on a
Company-wide basis. Accordingly, all of the financial service operations are
considered by management to be aggregated in one reportable operating segment.

Newly Issued But Not Yet Effective Accounting Standards: New accounting
standards on asset retirement obligations, restructuring activities and exit
costs, operating leases, and early extinguishment of debt were issued in 2002.
The Company determined that when the new accounting standards are adopted in
2003 they will not have a material impact on the Company's financial condition
or results of operations.

Loss Contingencies: Loss contingencies, including claims and legal actions
arising in the ordinary course of business, are recorded as liabilities when the
likelihood of loss is probable and an amount or range of loss can be reasonably
estimated. Management does not believe there now are such matters than will have
a material effect on the financial statements.

Reclassifications: Certain reclassifications have been made to prior year
amounts to conform to the current year presentation.

NOTE 2 - INTEREST BEARING DEPOSITS

At December 31, 2002, the Company had demand deposits totaling $6,415 at the
Federal Home Loan Bank (FHLB). Additionally, the Company held $2,031 in
certificates of deposit with non-affiliated banks and $1,020 with its
affiliates.

At December 31, 2001, the Company had demand deposits totaling $2,491 at the
FHLB. In addition, the Company held $1,927 in demand deposits at non-affiliated
banks. The Company also held demand deposits of $145 with non-financial
institutions.

NOTE 3 - BUSINESS COMBINATIONS AND ACQUISITIONS

During 2000, the Company purchased additional shares of stock in the Bank of
Mason for $365 giving the Company 53% of the outstanding stock at December 31,
2000. The excess cash paid over the fair value of net assets acquired is
recorded as goodwill in the consolidated financial statements. The Bank of Mason
has been included in the consolidated financial statements of the Company for
the period in which Cumberland Bancorp, Incorporated had controlling interest.
Bank of Mason has approximately $10 million in total assets. On January 31,
2001, the Company issued 53,250 shares for the remaining interest in Bank of
Mason.


                                                                            39.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 4 - SECURITIES

The fair value of securities available for sale and the related gross unrealized
gains and losses recognized in accumulated other comprehensive income were as
follows:

<TABLE>
<CAPTION>
                                                               Gross          Gross
                                                Fair        Unrecognized   Unrecognized
                                                Value          Gains          Losses
                                               -------      ------------   -----------

<S>                                            <C>          <C>            <C>
December 31, 2002
   U.S. Treasury and U.S. government
    agencies                                   $ 6,923          $ 97          $  --
   Obligations of state and political
    subdivisions                                   723            27             --
   Mortgage-backed                              69,524           562            (79)
   Marketable equity securities                  1,108            --            (85)
   Other debt securities                           773            19             --
                                               -------          ----          -----

       Total                                   $79,051          $705          $(164)
                                               =======          ====          =====

December 31, 2001

   U.S. Treasury and U.S. government
    agencies                                   $25,222          $190          $ (12)
   Obligations of state and political
    subdivisions                                 3,933            49            (27)
   Mortgage-backed                              10,467            49            (10)
   Marketable equity securities                  1,329            --           (166)
   Other debt securities                         1,863            21             (1)
                                               -------          ----          -----

       Total                                   $42,814          $309          $(216)
                                               =======          ====          =====
</TABLE>

The carrying amount, unrecognized gains and losses, and fair value of securities
held to maturity were as follows:

<TABLE>
<CAPTION>
                                                               Gross          Gross
                                               Carrying     Unrecognized   Unrecognized       Fair
                                                Amount         Gains          Losses          Value
                                               --------     ------------   ------------      -------

<S>                                            <C>          <C>            <C>               <C>
December 31, 2002
   U.S. Treasury and U.S. government
    agencies                                   $ 3,398          $ 39          $(18)          $ 3,419
   Obligations of state and political
    subdivisions                                 2,823            77            --             2,900
   Mortgage-backed                               2,651            38            (8)            2,681
   Other debt securities                         2,616            --            --             2,616
                                               -------          ----          ----           -------
       Total                                   $11,488          $154          $(26)          $11,616
                                               =======          ====          ====           =======
</TABLE>


                                                                            40.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 4 - SECURITIES (Continued)

<TABLE>
<CAPTION>
                                                               Gross          Gross
                                               Carrying     Unrecognized   Unrecognized       Fair
                                                Amount         Gains          Losses          Value
                                               --------     ------------   ------------      -------

<S>                                            <C>          <C>            <C>               <C>
December 31, 2001
   U.S. Treasury and U.S. government
    agencies                                   $ 6,297          $12          $ --           $ 6,309
   Obligations of state and political
    subdivisions                                   918           19            (1)              936
   Mortgage-backed                               2,912           33           (12)            2,933
   Other debt securities                         2,608           28            --             2,636
                                               -------          ---          ----           -------

       Total                                   $12,735          $92          $(13)          $12,814
                                               =======          ===          ====           =======
</TABLE>

Sales of available for sale securities were as follows:

<TABLE>
<CAPTION>
                       2002            2001          2000
                      -------          ----          ----

<S>                   <C>              <C>           <C>
Proceeds              $23,090          $ --          $ --
Gross gains               469            --            --
Gross losses               41            --            --
</TABLE>

Proceeds from redemptions of held to maturity securities were $1,832 in 2002,
resulting in net realized gains of $33 during 2002. These securities were
considered as maturities for purposes of the classification of securities under
FAS 115.

Contractual maturities of securities at year-end 2002 are shown below.
Securities not due at a single maturity date, primarily mortgage-backed
securities, are shown separately.

<TABLE>
<CAPTION>
                                             Held to maturity
                                        --------------------------           Available
                                        Carrying            Fair             for sale
                                         Amount             Value           Fair Value
                                        --------           -------          ---------

<S>                                     <C>                <C>              <C>
Due in one year or less                 $   101            $   103            $    --
Due from one to five years                1,318              1,360              6,709
Due from five to ten years                3,588              3,622                521
Due after ten years                       1,215              1,233                416
Mortgage-backed                           2,650              2,682             69,524
Marketable equity securities                 --                 --              1,108
Other debt securities                     2,616              2,616                773
                                        -------            -------            -------

    Total                               $11,488            $11,616            $79,051
                                        =======            =======            =======
</TABLE>

Securities with carrying amounts of approximately $22,770 at December 31, 2002
and $17,822 at December 31, 2001 were pledged to secure deposits and for other
purposes as required or permitted by law.


                                                                            41.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 4 - SECURITIES (Continued)

At December 31, 2002, the Company did not hold securities of any single issuer,
other than obligations of the U. S. Treasury and other U. S. Government
agencies, whose aggregate book value exceeded ten percent of shareholders'
equity.

NOTE 5 - LOANS

A summary of loans outstanding by category follows:

<TABLE>
<CAPTION>
                                                            2002                  2001
                                                          ---------             ---------

<S>                                                       <C>                   <C>
Real estate:
     Construction and development                         $  71,907             $  73,713
     One-to-four family residential properties              169,220               181,675
     Commercial                                              93,894                68,089
Commercial                                                  145,409               142,122
Consumer                                                     44,978                57,517
Other                                                         1,103                 1,115
                                                          ---------             ---------
     Total loans                                            526,511               524,231
Net deferred loan fees and discounts                            (42)                 (548)
Unearned income                                                (254)               (1,438)
                                                          ---------             ---------
     Subtotal                                               526,215               522,245
Allowance for loan losses                                    (9,062)               (9,023)
                                                          ---------             ---------

     Loans, net                                           $ 517,153             $ 513,222
                                                          =========             =========
</TABLE>

In addition to the loans shown above, loans serviced for others totaled $74,139
and $69,758 at December 31, 2002 and 2001.

Certain parties (principally, directors and officers of the Company or the
Banks, including their affiliates, families, and companies in which they hold
ten percent or more ownership) were customers of, and had loans and other
transactions with the Banks in the ordinary course of business. The outstanding
balances of such loans totaled $3,922 and $5,207 at December 31, 2002 and
December 31, 2001. These loan transactions were made on substantially the same
terms as those prevailing at the time for comparable loans to other persons.
They did not involve more than the normal risk of collectibility or present
other unfavorable features. During 2002 and 2001, the Company advanced $1,157
and $2,370 and received payments of $2,442 and $3,323 on such loans.


                                                                            42.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 5 - LOANS (Continued)

Activity in the allowance for loan losses was as follows:

<TABLE>
<CAPTION>
                                                          2002                2001               2000
                                                        -------             -------             -------

<S>                                                     <C>                 <C>                 <C>
Balance at beginning of year                            $ 9,023             $ 6,137             $ 5,146
Allowance for loan losses due to acquisition                 --                  --                  57
Provision charged to operating expenses                   6,800               6,377               2,636
Loans charged off                                        (7,399)             (3,903)             (1,861)
Recoveries on previously charged off loans                  638                 412                 159
                                                        -------             -------             -------

Balance at end of year                                  $ 9,062             $ 9,023             $ 6,137
                                                        =======             =======             =======
</TABLE>

Impaired loans were as follows:

<TABLE>
<CAPTION>
                                                               2002               2001
                                                             -------            -------

<S>                                                          <C>                <C>
Year-end loans with no allocated allowance
  for loan losses                                            $    --            $    --
Year-end loans with allocated allowance
  for loan losses                                             18,435             12,625
                                                             -------            -------

  Total                                                      $18,435            $12,625
                                                             =======            =======

Amount of the allowance for loan losses allocated            $ 2,765            $ 1,894
</TABLE>

<TABLE>
<CAPTION>
                                                      2002                2001             2000
                                                     -------            -------            ------

<S>                                                  <C>                <C>                <C>
Average of impaired loans during the year            $15,701            $10,649            $5,085
Lost interest income during impairment                 1,152                855               499
</TABLE>

Cash-basis interest income recognized on impaired loans for 2002, 2001 and 2000
was immaterial to the operations.

Nonperforming loans were as follows:

<TABLE>
<CAPTION>
                                                        2002                2001
                                                        -----              -------

<S>                                                     <C>                <C>
Loans past due over 90 days still on accrual            $    --            $ 1,168
Nonaccrual loans                                         18,435             12,625
</TABLE>

Nonperforming loans and impaired loans are defined differently. Some loans may
be included in both categories, whereas other loans may only be included in one
category.


                                                                            43.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 6 - BANK PREMISES AND EQUIPMENT

The following is a summary of premises and equipment as of December 31, 2002 and
2001.

<TABLE>
<CAPTION>
                                              2002               2001
                                             -------            -------

<S>                                          <C>                <C>
Land                                         $ 5,666            $ 5,489
Buildings and improvements                    15,993             15,593
Leasehold improvements                           816                900
Furniture, fixtures and equipment              8,291              8,360
Automobile                                       270                228
Construction in process                          511                643
                                             -------            -------
                                              31,547             31,213
Less:  Accumulated depreciation                8,181              7,342
                                             -------            -------

    Net premises and equipment               $23,366            $23,871
                                             =======            =======
</TABLE>

Depreciation expense related to premises and equipment amounted to $1,698 in
2002, $1,762 in 2001 and $1,444 in 2000.

The Company has entered into various noncancellable operating lease arrangements
in connection with its operating locations. Based upon these agreements at
December 31, 2002, future minimum lease commitments are as follows:

<TABLE>
<CAPTION>
<S>              <C>
   2003          $  308
   2004             214
   2005             135
   2006             128
   2007             122
Thereafter          154
                 ------
                 $1,061
                 ======
</TABLE>

Rent expense relating to these agreements which are included in occupancy
expense amounted to $264 in 2002, $235 in 2001 and $265 in 2000.

During 2002, the subsidiaries of the Company leased certain premises from
related parties. The related expense from the leases totaled approximately $34.


                                                                            44.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 7 - INVESTMENT IN UNCONSOLIDATED AFFILIATES

Investments in unconsolidated affiliates consist of the following at December
31, 2002 and 2001:

<TABLE>
<CAPTION>
                                                                     2002              2001
                                                                    ------            ------

<S>                                                                 <C>               <C>
Investment in Murray Bank (50% ownership)                           $3,493            $2,833
Investment in Insurors Bank of Tennessee (50% ownership)             2,332             2,095
Other investments in other unconsolidated affiliates                   338               267
                                                                    ------            ------

                                                                    $6,163            $5,195
                                                                    ======            ======
</TABLE>

The Company uses the equity method of accounting in recording investments in the
unconsolidated affiliates shown above. The initial investment is recorded at
cost and the carrying amount of the investment is increased or decreased by the
proportionate share of earnings or losses. Any dividends received are recorded
as a reduction in the investment.

Condensed financial information for The Murray Bank (TMB) and Insurors Bank of
Tennessee (IBOT) are as follows as of December 31, 2002 and 2001:

CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                 TMB                                   IBOT
                                                      --------------------------            --------------------------
                                                        2002              2001               2002               2001
                                                      -------            -------            -------            -------

<S>                                                   <C>                <C>                <C>                <C>
ASSETS:
Cash and due from banks                               $ 4,152            $ 3,114            $   757            $   591
Federal funds sold                                      8,488              5,051                325                900
Securities available for sale                          25,837              9,380              6,191              3,475
Securities held to maturity                                --                450                 --                 --
Loans, net                                             54,631             48,631             33,120             15,413
Premises and equipment, net                             2,303              1,965                515                441
Accrued interest receivable                               583                531                151                 86
Restricted equity securities                              324                180                433                328
Other assets                                              123                257                199                 68
                                                      -------            -------            -------            -------

     Total assets                                     $96,441            $69,559            $41,691            $21,302
                                                      =======            =======            =======            =======

LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Total deposits                                        $87,541            $62,104            $30,971            $13,978
Borrowings                                              1,141              1,203              5,791              2,997
Accrued interest payable                                  333                392                206                 43
Other liabilities                                         441                188                 59                 95
                                                      -------            -------            -------            -------
Total liabilities                                      89,456             63,887             37,027             17,113
Shareholders' equity                                    6,985              5,672              4,664              4,189
                                                      -------            -------            -------            -------

Total liabilities and shareholders' equity            $96,441            $69,559            $41,691            $21,302
                                                      =======            =======            =======            =======
</TABLE>


                                                                            45.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 7 - INVESTMENT IN UNCONSOLIDATED AFFILIATES (Continued)

CONDENSED INCOME STATEMENT

<TABLE>
<CAPTION>
                                                    TMB                                               IBOT
                                   --------------------------------------          -----------------------------------------
                                    2002            2001            2000            2002              2001              2000
                                   ------          ------          ------          -------           -------           -----

<S>                                <C>             <C>             <C>             <C>               <C>               <C>
Net interest income                $2,482          $1,835          $1,030          $ 1,077           $   419           $  39
Provision for loan losses             128             373             129              256                --              --
Noninterest income                    662             492             254               77                16               8
Noninterest expense                 2,249           1,778           1,259            1,554             1,622             531
Income tax expense                    261              51              24               --                --              --
                                   ------          ------          ------          -------           -------           -----
Net income (loss)                  $  506          $  125          $ (128)         $  (656)          $(1,187)          $(484)
                                   ======          ======          ======          =======           =======           =====
</TABLE>

NOTE 8 - GOODWILL

The change in the carrying amount of goodwill for the year is as follows:

<TABLE>
<S>                                            <C>
Beginning of year                              $1,597
Goodwill from acquisition during year              --
                                               ------

End of year                                    $1,597
                                               ======
</TABLE>

Goodwill is no longer amortized starting in 2002. The effect of not amortizing
goodwill is summarized as follows:

<TABLE>
<CAPTION>
                                                               2002            2001             2000
                                                             -------          -------          -------

<S>                                                          <C>              <C>              <C>
Reported net income                                          $   521          $   209          $ 4,161
Add back:  goodwill amortization, net of income tax               --               70               66
                                                             -------          -------          -------

     Adjusted net income                                     $   521          $   279          $ 4,227
                                                             =======          =======          =======

Basic earnings per share:
     Reported net income                                     $  0.04          $  0.02          $  0.30
     Goodwill amortization                                        --             0.01               --
                                                             -------          -------          -------

     Adjusted net income                                     $  0.04          $  0.03          $  0.30
                                                             =======          =======          =======

Diluted earnings per share:
     Reported net income                                     $  0.04          $  0.01          $  0.30
     Goodwill amortization                                        --               --               --
                                                             -------          -------          -------

     Adjusted net income                                     $  0.04          $  0.01          $  0.30
                                                             =======          =======          =======
</TABLE>


                                                                            46.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 9 - DEPOSITS

A summary of deposits at December 31, 2002 and 2001 is as follows:

<TABLE>
<CAPTION>
                                                       2002              2001
                                                     --------          --------

<S>                                                  <C>               <C>
Noninterest-bearing demand                           $ 56,639          $ 52,395
   Interest-bearing demand                            193,033           174,328
Savings                                                28,562            18,572
Certificates of deposit of $100,000 or more           120,796           145,485
Other time                                            193,968           158,644
                                                     --------          --------

     Total deposits                                  $592,998          $549,424
                                                     ========          ========
</TABLE>

Schedule maturities of time deposits for the next five years were as follows:

<TABLE>
<S>                <C>
2003               $241,012
2004                 44,712
2005                 16,649
2006                  4,524
2007                  7,867
</TABLE>

Deposits from principal officers, directors, and their affiliates at year-end
2002 were $2,349.

NOTE 10 - ADVANCES FROM FEDERAL HOME LOAN BANK

The Federal Home Loan Bank (FHLB) of Cincinnati advances funds to the Company
with the requirement that the advances are secured by qualifying loans,
essentially home mortgages (1-4 family residential). To participate in this
program, the Company is required to be a member of the Federal Home Loan Bank
and own stock in the FHLB. The Company has $4,216 of such stock at December 31,
2002 to satisfy this requirement.

At both December 31, 2002 and 2001, advances from the FHLB totaled $50,852. The
interest rates on these advances ranged from 3.83% to 5.45%. Qualifying loans
totaling $94,117 and $76,278 were pledged as security under a blanket pledge
agreement with the FHLB at December 31, 2002 and 2001. Securities totaling
$21,670 and $7,772 were also pledged for these borrowings at December 31, 2002
and 2001.


                                                                            47.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 10 - ADVANCES FROM FEDERAL HOME LOAN BANK (Continued)

Maturities of the advances from FHLB at December 31, 2002 are as follows:

<TABLE>
<S>                  <C>
2003                 $    --
2004                     852
2005                   1,000
2006                   1,000
2007                      --
Later years           48,000
                     -------

                     $50,852
                     =======
</TABLE>

NOTE 11 - NOTES PAYABLE

Notes payable consist of the following:

<TABLE>
<CAPTION>
                                                                                                2002            2001
                                                                                               ------          ------

<S>                                                                                            <C>             <C>
Note payable to a lending institution which bears interest at a rate of 8.25%
until June 14, 2003, at which time the rate will be at prime. Interest is
payable quarterly and principal is payable quarterly or on an annual basis of at
least 10% of the outstanding balance commencing on June 15, 1998. The note is
secured by 100% of the common stock of Cumberland Bank. This note was repaid
March 20, 2002                                                                                 $   --          $  859

$5,000,000 line of credit from a lending institution with an optional variable
or fixed interest rate to be selected for each advance. Variable rate equal to
90 day LIBOR Rate plus 225 basis points. Advances can be made on the line from
inception to June 30, 2003. Interest is payable quarterly. Principal is payable
in forty equal quarterly payments commencing September 30, 2002 of 2.50% of the
respective advances. Advances made on or after July 1, 2002 through June 30,
2003 shall convert to thirty-six quarterly interest plus principal payments
beginning September 30, 2003. Quarterly principal payments shall be 2.78% of the
respective balance for each advance. The note is secured by all of the
outstanding shares of the capital stock of Cumberland Bank, BankTennessee, The
Community Bank, The Bank of Dyer and any shares of capital stock the Company
owns in any other banks                                                                         1,900           2,000

$6,000,000 line of credit from a lending institution which bears interest at a
rate of 7.50%. Advances can no longer be made on this line. Interest is payable
quarterly and principal is payable in ten annual installments of $600,000
commencing April 1, 2000. The note is secured by 100% of the common stock of
Cumberland Bank, BankTennessee, and The Community Bank                                          3,600           4,800
                                                                                               ------          ------
                                                                                               $5,500          $7,659
                                                                                               ======          ======
</TABLE>


                                                                            48.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 11 - NOTES PAYABLE (Continued)

Minimum annual principal payments for future years are as follows:

<TABLE>
<S>               <C>
2003              $  800
2004                 800
2005                 800
2006                 800
2007                 800
Later years        1,500
                  ------

                  $5,500
                  ======
</TABLE>

The Company has agreed to certain covenants in connection with the notes payable
to the lending institution. These covenants include, among other things, minimum
financial ratios for the subsidiary Banks. The Banks were not in compliance with
all of the provisions of the loan covenants as of December 31, 2002. The Company
has obtained a waiver of these covenants from the lending institution.

One of the more significant covenants states if the Company is current on
principal and interest payments, it will be permitted to pay dividends to
shareholders not exceeding twenty-five percent of net earnings.

NOTE 12 - TRUST PREFERRED SECURITIES

On December 29, 2000, Cumberland Bancorp, Incorporated, through Cumberland
Capital Trust I and with the assistance of its Placement Agent, sold to
institutional investors $8,000,000 of capital securities. Cumberland Capital
Trust I, a Delaware business trust wholly owned by Cumberland Bancorp,
Incorporated, issued $8,000,000 of Floating Rate Capital Securities. Holders of
the Capital Securities are entitled to receive preferential cumulative cash
distributions from the Trust, at a rate per annum reset quarterly equal to the
sum of three month LIBOR plus 350 basis points applied to the liquidation amount
of $1,000 per Capital Security, accruing from the date of original issuance and
payable quarterly in arrears on January 1, April 1, July 1 and October 1 each
year commencing April 1, 2001. The rate was 5.15% at December 31, 2002. The
Company can defer payment of the cash distributions on the securities at any
time or from time to time for a period not to exceed twenty consecutive
quarters.

Cumberland Bancorp, Incorporated has, through various contractual arrangements,
fully and unconditionally guaranteed all of Cumberland Capital Trust I's
obligations with respect to the capital securities. These Capital Securities
qualify as a Tier I Capital, subject to certain limitations, and are presented
in the Consolidated Balance Sheets as Trust Preferred Securities. The sole asset
of Cumberland Capital Trust I is $8,000,000 of junior subordinated debentures
issued by Cumberland Bancorp, Incorporated. These junior subordinated debentures
also carry the same floating rate as the Capital Securities and both mature on
December 25, 2025; however, the maturity of both may be shortened to a date not
earlier than December 25, 2005.


                                                                            49.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 12 - TRUST PREFERRED SECURITIES (Continued)

On July 31, 2001, Cumberland Bancorp, Incorporated, through Cumberland Capital
Trust II and with the assistance of its Placement Agent, sold to institutional
investors $4,000,000 of capital securities. Cumberland Capital Trust II, a
Connecticut business trust wholly-owned by Cumberland Bancorp, Incorporated,
issued $4,000,000 of Floating Rate Capital Securities. Holders of the Capital
Securities are entitled to receive preferential cumulative cash distributions
from the Trust, at a rate per annum reset quarterly equal to the sum of three
month LIBOR plus 358 basis points applied to the liquidation amount of $1,000
per Capital Security, accruing from the date of original issuance and payable
quarterly in arrears on January 31, April 30, July 31 and October 31 each year
commencing October 31, 2001. The rate was 5.34% at December 31, 2002. The
Company can defer payment on the securities at any time or from time to time for
a period not to exceed twenty consecutive quarters.

Cumberland Bancorp, Incorporated has, through various contractual arrangements,
fully and unconditionally guaranteed all of Cumberland Capital Trust II's
obligations with respect to the capital securities. These Capital Securities
qualify as a Tier I Capital, subject to certain limitations, and are presented
in the Consolidated Balance Sheets as Trust Preferred Securities. The sole asset
of Cumberland Capital Trust II is $4,000,000 of junior subordinated debentures
issued by Cumberland Bancorp, Incorporated. These junior subordinated debentures
also carry the same floating rate as the Capital Securities and both mature on
July 31, 2031; however, the maturity of both may be shortened to a date not
earlier than July 31, 2006.

NOTE 13 - INCOME TAXES

Income tax expense (benefit) consist of the following:

<TABLE>
<CAPTION>
                                                       2002           2001               2000
                                                       ----          -------           -------

<S>                                                    <C>           <C>               <C>
Current federal                                        $ 17          $ 1,279           $ 2,398
Current state                                             9              255               456
                                                       ----          -------           -------
     Total current tax                                   26            1,534             2,854
                                                       ----          -------           -------

Deferred federal                                        166           (1,283)             (357)
Deferred state                                           39             (238)              (66)
                                                       ----          -------           -------
     Total deferred tax benefits                        205           (1,521)             (423)
                                                       ----          -------           -------
Tax benefits credited to shareholders' equity
  related to exercise of stock options                   --                5                 5
                                                       ----          -------           -------

     Total income tax expense                          $231          $    18           $ 2,436
                                                       ====          =======           =======
</TABLE>


                                                                            50.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 13 - INCOME TAXES (Continued)

Significant temporary differences between tax and financial reporting that
result in deferred tax assets (liabilities) included in other assets on the
consolidated balance sheet are as follows at December 31, 2002 and 2001:

<TABLE>
<CAPTION>
                                                   2002             2001
                                                 -------           -------

<S>                                              <C>               <C>
Allowance for loan losses                        $ 3,535           $ 3,323
Deferred loan fees                                    89               135
Other                                                370               529
                                                 -------           -------
         Total deferred tax assets                 3,994             3,987
                                                 -------           -------

FHLB stock dividends                             $  (734)          $  (659)
Premises and equipment                              (495)             (491)
Unrealized gain on securities                       (205)              (87)
Loan servicing rights                                (84)             (107)
Other                                               (244)              (88)
                                                 -------           -------
         Total deferred tax liabilities           (1,762)           (1,432)
                                                 -------           -------

         Net deferred tax asset                  $ 2,232           $ 2,555
                                                 =======           =======
</TABLE>

A reconciliation of the provision for income taxes with the amount of income
taxes computed by applying the federal statutory rate (34%) to earnings before
income taxes follows:

<TABLE>
<CAPTION>
                                                              2002           2001            2000
                                                             -----           ----           -------

<S>                                                          <C>             <C>            <C>
Computed expected provision for income taxes                 $ 256           $ 77           $ 2,243
Increase (decrease) in taxes resulting from:
     State income taxes, net of federal tax benefit             32             11               261
     Tax exempt interest                                       (77)           (75)              (69)
     Other, net                                                 20              5                 1
                                                             -----           ----           -------

         Total provision for income taxes                    $ 231           $ 18           $ 2,436
                                                             =====           ====           =======
</TABLE>

During 1996, the subsidiary Banks began computing their tax bad debt reserves
under the rules which apply to commercial banks. In years prior to 1996, the
Banks obtained tax bad debt deductions of approximately $1.8 million in excess
of their financial statement allowance for loan losses for which no provision
for federal income tax was made. These amounts are subject to federal income tax
in future years if used for purposes other than to absorb bad debt losses. This
excess reserve is subject to recapture only if a bank ceases to qualify as a
bank as defined in the Internal Revenue Code.


                                                                            51.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 14 - REGULATORY CAPITAL STANDARDS

Banks and bank holding companies are subject to regulatory capital requirements
administered by federal banking agencies. Capital adequacy guidelines and,
additionally for banks, prompt corrective action regulations involve
quantitative measures of assets, liabilities, and certain off-balance-sheet
items calculated under regulatory accounting practices. Capital amounts and
classifications are also subject to qualitative judgments by regulators.
Failure to meet capital requirements can initiate regulatory action.

Prompt corrective action regulations provide five classifications: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized, although these terms are not
used to represent overall financial condition. If adequately capitalized,
regulatory approval is required to accept brokered deposits. If
undercapitalized, capital distributions are limited, as is asset growth and
expansion, and capital restoration plans are required.

As of December 31, 2002, the most recent notification from the Federal Reserve
Bank categorized the Company and all Bank subsidiaries as well capitalized
under the regulatory framework for prompt corrective action. To be categorized
as well capitalized, the Company and the Banks must maintain total risk-based,
Tier I risk-based and Tier I leverage ratios as set forth in the table. There
are no conditions or events since that notification that management believes
have changed the category.


                                                                            52.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 14 - MINIMUM CAPITAL STANDARDS (Continued)


The Company and the Banks' actual capital amounts and ratios at December 31,
2002 and 2001 are as follows:

<TABLE>
<CAPTION>
                                                                                To be well
                                                                            capitalized under
                                                     Required                prompt corrective
                                                     Minimum                 action provisions                  Actual
                                              --------------------         ---------------------         --------------------
December 31, 2002
                                              Amount        Ratios         Amount         Ratios         Amount        Ratios
                                              ------        ------         ------         ------         ------        ------

<S>                                           <C>           <C>            <C>            <C>            <C>           <C>
Tier I to average assets -leverage
    Cumberland Bancorp, Inc.                  27,947         4.00%         34,933          5.00%         55,544          7.95%
    Cumberland Bank                           11,024         4.00%         13,780          5.00%         20,255          7.35%
    BankTennessee                              7,439         4.00%          9,299          5.00%         13,901          7.47%
    The Community Bank                         6,691         4.00%          8,363          5.00%         14,417          8.62%
    Bank of Dyer                               2,024         4.00%          2,530          5.00%          3,777          7.46%
    Bank of Mason                                426         4.00%            532          5.00%          1,088         10.22%

Tier I to risk-weighted assets
    Cumberland Bancorp, Inc.                  27,947         4.00%         34,933          6.00%         55,544         10.92%
    Cumberland Bank                           11,024         4.00%         13,780          6.00%         20,255          9.57%
    BankTennessee                              7,439         4.00%          9,299          6.00%         13,901         10.49%
    The Community Bank                         6,691         4.00%          8,363          6.00%         14,417         11.91%
    Bank of Dyer                               2,024         4.00%          2,530          6.00%          3,777         11.40%
    Bank of Mason                                426         4.00%            532          6.00%          1,088         20.60%

Total capital to risk-weighted assets
    Cumberland Bancorp, Inc.                  27,947         8.00%         34,933         10.00%         61,935         12.18%
    Cumberland Bank                           11,024         8.00%         13,780         10.00%         22,911         10.82%
    BankTennessee                              7,439         8.00%          9,299         10.00%         15,578         11.76%
    The Community Bank                         6,691         8.00%          8,363         10.00%         15,930         13.16%
    Bank of Dyer                               2,024         8.00%          2,530         10.00%          4,198         12.67%
    Bank of Mason                                426         8.00%            532         10.00%          1,154         21.85%
</TABLE>


                                                                            53.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 14 - MINIMUM CAPITAL STANDARDS (Continued)

<TABLE>
<CAPTION>
                                                                                To be well
                                                                            capitalized under
                                                     Required                prompt corrective
                                                     Minimum                 action provisions                  Actual
                                              --------------------         ---------------------         --------------------
December 31, 2001
                                              Amount        Ratios         Amount         Ratios         Amount        Ratios
                                              ------        ------         ------         ------         ------        ------

<S>                                           <C>           <C>            <C>            <C>            <C>           <C>
Tier I to average assets -leverage
    Cumberland Bancorp, Inc.                  $27,089         4.00%         33,861          5.00%         50,612          7.47%
    Cumberland Bank                            10,682         4.00%         13,352          5.00%         19,006          7.12%
    BankTennessee                               7,974         4.00%          9,968          5.00%         15,518          7.78%
    The Community Bank                          5,969         4.00%          7,461          5.00%          9,844          6.60%
    Bank of Dyer                                2,037         4.00%          2,547          5.00%          3,588          7.04%
    Bank of Mason                                 426         4.00%            533          5.00%          1,001          9.40%

Tier I to risk-weighted assets
    Cumberland Bancorp, Inc.                   20,162         4.00%         30,243          6.00%         50,612         10.04%
    Cumberland Bank                             8,051         4.00%         12,076          6.00%         19,006          9.44%
    BankTennessee                               6,114         4.00%          9,171          6.00%         15,518         10.15%
    The Community Bank                          4,198         4.00%          6,296          6.00%          9,844          9.38%
    Bank of Dyer                                1,348         4.00%          2,022          6.00%          3,588         10.65%
    Bank of Mason                                 217         4.00%            326          6.00%          1,001         18.43%

Total capital to risk-weighted assets
    Cumberland Bancorp, Inc.                   40,323         8.00%         50,404         10.00%         56,877         11.28%
    Cumberland Bank                            16,102         8.00%         20,127         10.00%         21,526         10.69%
    BankTennessee                              12,228         8.00%         15,285         10.00%         17,450         11.42%
    The Community Bank                          8,395         8.00%         10,494         10.00%         11,157         10.63%
    Bank of Dyer                                2,696         8.00%          3,370         10.00%          4,013         11.91%
    Bank of Mason                                 435         8.00%            543         10.00%          1,076         19.81%
</TABLE>

The Company and its subsidiaries, Cumberland Bank, BankTennessee and Bank of
Dyer, have informally agreed with or committed to bank regulatory officials to
take various actions, including to reduce the level of criticized or
non-performing loans, to improve loan underwriting, problem loan resolution and
collection, and strategic and capital planning, to obtain prior regulatory
approval before incurring additional holding company indebtedness, repurchasing
shares, or paying dividends from certain subsidiary banks to the holding company
or from the holding company to shareholders, and to maintain certain capital
levels at subsidiary banks in excess of those required for well capitalized
status. The most restrictive of these provisions would require the Company to
maintain a Tier I leverage ratio of at least 7.0% at BankTennessee, Bank of Dyer
and Cumberland Bank at December 31, 2002. The Company and its subsidiaries
believe they were in compliance in all material respects with these informal
understandings at December 31, 2002.

                                                                            54.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 15 - EMPLOYEE BENEFITS

The Company maintains a 401(k) savings plan for all employees who have completed
six months of service and are 21 or more years of age. Employer contributions to
the plan are determined annually by the board of directors. The Company's
expenses related to the plan were $233 in 2002, $398 in 2001, and $414 in 2000.


NOTE 16 - OFF-BALANCE-SHEET ACTIVITIES

Some financial instruments, such as loan commitments, credit lines, letters of
credit, and overdraft protection, are issued to meet customer financing needs.
These are agreements to provide credit or to support the credit of others, as
long as conditions established in the contract are met, and usually have
expiration dates. Commitments may expire without being used. Off-balance-sheet
risk to credit loss exists up to the face amount of these instruments, although
material losses are not anticipated. The same credit policies are used to make
such commitments as are used for loans, including obtaining collateral at
exercise of the commitment.

The contractual amount of financial instruments with off-balance-sheet risk was
as follows at year end:

<TABLE>
<CAPTION>
                                                      2002             2001
                                                     -------         -------

<S>                                                  <C>             <C>
Commitments to make loans                            $58,789         $49,685
Unused lines of credit and letters of credit          26,156          23,333
</TABLE>

Commitments to make loans are generally made for periods of 60 days or less.


                                                                            55.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 17 - FAIR VALUES OF FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments are as follows
at December 31, 2002 and 2001:

<TABLE>
<CAPTION>
                                                              2002                               2001
                                                  --------------------------          --------------------------
                                                  Carrying           Fair             Carrying           Fair
                                                   Amount            Value             Amount            Value
                                                  --------          --------          --------          --------

Financial assets:
<S>                                               <C>               <C>               <C>               <C>
   Cash and due from banks                        $ 21,681          $ 21,681          $ 20,868          $ 20,868
   Federal funds sold                               27,561            27,561            19,531            19,531
   Interest-bearing deposits in
     financial institutions                          9,466             9,466             4,563             4,563
   Securities available for sale                    79,051            79,051            42,814            42,814
   Securities held to maturity                      11,488            11,616            12,735            12,814
   Loans, net of allowance                         517,183           522,382           513,222           518,788
   Accrued interest receivable                       3,922             3,922             4,693             4,693
   Restricted equity securities                      5,040             5,040             4,719             4,719
   Investment in unconsolidated
     affiliates                                      6,163             6,163             5,195             5,195
   Loan servicing rights                               213               213               327               327

Financial liabilities:
   Deposits                                        592,998           597,690           549,424           553,587
   Notes payable                                     5,500             5,766             7,659             8,088
   Federal funds purchased                           7,336             7,336             1,675             1,675
   Advances from FHLB                               50,852            55,642            50,852            52,913
   Accrued interest payable                          3,129             3,129             3,994             3,994
   Trust preferred securities                       12,000            12,000            12,000            12,000

Off-balance-sheet financial instruments:
   Commitments to extend credit                   $     --          $     --          $     --          $     --
   Standby letters of credit                            --                --                --                --
</TABLE>

The methods of assumptions used to estimate fair value are described as
follows:

Carrying amount is the estimated fair value for cash and cash equivalents,
short-term borrowings, Federal Home Loan Bank stock, accrued interest
receivable and payable, demand deposits, short-term debt, and variable rate
loans or deposits that reprice frequently and fully. Security fair values are
based on market prices or dealer quotes, and if no such information is
available, on the rate and term of the security and information about the
issuer. For fixed rate loans or deposits and for variable rate loans or
deposits with infrequent repricing or repricing limits, fair value is based on
discounted cash flows using current market rates applied to the estimated life
and credit risk. Fair values for impaired loans are estimated using discounted
cash flow analysis or underlying collateral values. Fair value of loans held
for sale is based on market quotes. Fair value of debt is based on current
rates for similar financing. The fair value of off-balance-sheet items is based
on the current fees or cost that would be charged to enter into or terminate
such arrangements.


                                                                            56.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 18 - STOCK OPTIONS

Options to buy stock are granted to directors, officers and employees under the
Employee Stock Option Plan, which provides for issue of up to 1,100,000 options.
Exercise price is the market price at date of grant, so there is no compensation
expense recognized in the income statement. The maximum option term is ten
years, and options vest over five years.

A summary of the activity in the plan is as follows.

<TABLE>
<CAPTION>
                                         2002                             2001                              2000
                              --------------------------        -------------------------         -------------------------
                                               Weighted                         Weighted                          Weighted
                                                Average                          Average                           Average
                                                Exercise                         Exercise                          Exercise
                               Shares            Price           Shares           Price            Shares            Price
                              --------         ---------        --------        ---------         --------        ---------

<S>                           <C>              <C>              <C>             <C>               <C>             <C>
Outstanding at
  beginning
  of year                      913,390           $3.22           924,470           $3.39           851,270           $3.08
Granted                        121,000            4.12            39,100            4.12            89,500            6.25
Exercised                     (231,680)           2.73            (8,480)           2.73            (2,660)           2.73
Forfeited or expired           (29,170)           2.97           (41,700)           2.73           (13,640)           2.73
                              --------           -----          --------           -----          --------           -----
Outstanding at
  end of year                  773,540           $3.49           913,390           $3.22           924,470           $3.39
                              ========           =====          ========           =====          ========           =====


Options exercisable
   at year-end                 615,980                           655,296                           331,888
                              ========                          ========                          ========

Weighted-average
   fair value of
   options granted
   during year                $   1.04                          $   1.03                          $   2.60
                              ========                          ========                          ========
</TABLE>

OPTIONS OUTSTANDING AT YEAR-END 2002 WERE AS FOLLOWS:

<TABLE>
<CAPTION>
                                             Outstanding                    Exerciseable
                               --------------------------------------   ------------------
                                              Weighted
                                               Average       Weighted             Weighted
                                              Remaining      Average               Average
Exercise                                     Contractual     Exercise             Exercise
Prices                         Number           Life          Price     Number      Price
--------                       -------       -----------     --------   -------   --------

<S>                            <C>           <C>             <C>        <C>         <C>
$2.73                          463,440       5.00 years       $2.73     463,440     $2.73
$4.00                           90,500       9.00 years        4.00      22,625      4.00
$4.12                           54,100       8.28 years        4.12      21,640      4.12
$4.50                           15,500       9.00 years        4.50       3,875      4.50
$6.25                          150,000       6.51 years        6.25     104,400      6.25
                              --------                                  -------

Outstanding at year end        773,540                                  615,980
                              ========                                  =======
</TABLE>


                                                                            57.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 19 - EARNINGS PER SHARE

The factors used in the earnings per share computation follow.

<TABLE>
<CAPTION>
                                                      2002                 2001                 2000
                                                   -----------          -----------          -----------

<S>                                                <C>                  <C>                  <C>
Basic
  Net income                                       $       521          $       209          $     4,161
                                                   ===========          ===========          ===========

    Weighted average common shares
      outstanding                                   14,018,715           13,813,774           13,767,312

  Basic earnings per common share                  $      0.04          $      0.02          $      0.30
                                                   ===========          ===========          ===========

Diluted
  Net income                                       $       521          $       209          $     4,161
                                                   ===========          ===========          ===========
    Weighted average common shares
      outstanding for basic earnings per
      common share                                  14,018,715           13,813,774           13,767,312
    Add:  Dilutive effects of assumed
      exercises of stock options                       124,281              206,020              254,614
                                                   -----------          -----------          -----------

    Average shares and dilutive potential
      common shares                                 14,142,996           14,019,794           14,021,926
                                                   ===========          ===========          ===========

  Diluted earnings per common share                $      0.04          $      0.01          $      0.30
                                                   ===========          ===========          ===========
</TABLE>

Stock options for 150,000 shares of common stock were not considered in
computing diluted earnings per common share for 2002 because they were
antidilutive.


                                                                            58.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 20 - QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                 Earnings per share
                                          Net         Provision                               -----------------------
                        Interest       Interest        For Loan          Net                                   Fully
                         Income         Income          Losses          Income                Basic           Diluted
                        -------        --------       ---------         ------                ----            -------

<S>                     <C>              <C>              <C>             <C>                 <C>               <C>
2002
First quarter           $11,156          6,168            892             507                 0.04              0.04
Second quarter           10,810          6,114          3,727          (1,338)               (0.10)            (0.10)
Third quarter            10,573          5,918            494           1,033                 0.07              0.07
Fourth quarter           10,309          6,005          1,687             319                 0.02              0.02

2001
First quarter            14,300          6,168            262             956                 0.07              0.07
Second quarter           13,542          5,915            790             543                 0.04              0.04
Third quarter            13,211          5,961          3,333          (1,162)               (0.08)            (0.08)
Fourth quarter           11,812          5,920          1,992            (128)               (0.01)            (0.01)
</TABLE>


NOTE 21 - PARENT COMPANY ONLY FINANCIAL INFORMATION

CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                       December 31,
                                                   2002             2001
                                                 -------          -------

<S>                                              <C>              <C>
ASSETS:

Cash                                             $ 1,644          $ 2,693
Investment in subsidiaries                        55,173           50,405
Investment in unconsolidated affiliates            5,825            4,928
Premises and equipment                               608              239
Other assets                                       3,913            2,877
                                                 -------          -------

                                                 $67,163          $61,142
                                                 =======          =======

LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
   Notes payable                                 $ 5,500          $ 7,659
   Accrued interest                                  902              804
   Other liabilities                               2,916              994
   Subordinate debt securities                    12,372           12,372
                                                 -------          -------
     Total liabilities                            21,690           21,829
Total shareholders' equity                        45,473           39,313
                                                 -------          -------

                                                 $67,163          $61,142
                                                 =======          =======
</TABLE>


                                                                            59.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 21 - PARENT COMPANY ONLY FINANCIAL INFORMATION (Continued)

CONDENSED STATEMENTS OF INCOME

Years Ended December 31,

<TABLE>
<CAPTION>
                                                        2002              2001              2000
                                                      -------           -------           -------

<S>                                                   <C>               <C>               <C>
Income:
   Dividends from subsidiaries                        $ 2,200           $    --           $    --
   Other dividends                                         --                --                --
   Other income                                           768                33                41
                                                      -------           -------           -------
                                                      $ 2,968           $    33           $    41
                                                      =======           =======           =======

Expenses:
   Interest expense                                   $ 1,132           $ 1,375           $   603
   Other expense                                        2,033             1,122             1,323
                                                      -------           -------           -------
                                                      $ 3,165           $ 2,497           $ 1,926
                                                      =======           =======           =======

Loss before income taxes and effect of
  undistributed earnings of subsidiaries                 (197)           (2,464)           (1,885)
Income tax benefit                                        902             1,112               732
                                                      -------           -------           -------

Income (loss) before effect of undistributed
  earnings of subsidiaries                                705            (1,352)           (1,153)
Undistributed earnings of subsidiaries                   (184)            1,561             5,314
                                                      -------           -------           -------

Net income                                            $   521           $   209           $ 4,161
                                                      =======           =======           =======
</TABLE>


                                                                            60.
<PAGE>
                        CUMBERLAND BANCORP, INCORPORATED
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

           (Dollars in thousands, except share and per share amounts)


NOTE 21 - PARENT COMPANY ONLY FINANCIAL INFORMATION (Continued)

CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years Ended December 31,                                                             2002               2001              2000
                                                                                    -------           -------           -------

<S>                                                                                 <C>               <C>               <C>
Cash flows from operating activities:
         Net income                                                                 $   521           $   209           $ 4,161

Adjustments to reconcile net income to net cash from operating activities:
     Undistributed earnings of subsidiaries                                             184            (1,561)           (5,314)
     Operations of unconsolidated affiliates                                             98               505               308
     Depreciation and amortization                                                       47                34                32
     Net change in accrued interest payable                                              98                91               456
     Other, net                                                                       1,353              (671)             (384)
                                                                                    -------           -------           -------
         Net cash from operating activities                                           2,301            (1,393)             (741)
                                                                                    -------           -------           -------

Cash flows from investing activities:
     Investment in commercial bank subsidiaries                                      (4,952)           (3,749)           (5,366)
     Investment in unconsolidated affiliates                                           (995)             (212)           (2,904)
     Purchase of premises and equipment, net                                           (416)             (219)              (29)
                                                                                    -------           -------           -------
         Net cash from investing activities                                          (6,363)           (4,180)           (8,299)
                                                                                    -------           -------           -------

Cash flows from financing activities:
     Proceeds from notes payable                                                         --                --             4,325
     Repayment of notes payable                                                      (2,159)           (1,090)           (3,031)
     Proceeds from trust preferred securities                                            --             4,000             8,000
     Proceeds from issuance of common stock                                           6,002                23               434
     Repurchase of common stock                                                          --              (283)               --
     Dividends paid on common stock                                                    (830)             (795)             (516)
                                                                                    -------           -------           -------
         Net cash from financing activities                                           3,013             1,855             9,212
                                                                                    -------           -------           -------

Net change in cash and cash equivalents                                              (1,049)           (3,718)              172

Cash and cash equivalents at beginning of year                                        2,693             6,411             6,239
                                                                                    -------           -------           -------

Cash and cash equivalents at end of year                                            $ 1,644           $ 2,693           $ 6,411
                                                                                    =======           =======           =======
</TABLE>


                                                                            61.
<PAGE>

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

         There have been no disagreements with the Company's independent
auditors on any matters of accounting principles or practices or financial
statement disclosure during the fiscal year ended December 31, 2002.

ITEM 10. Directors and Executive Officers of the Registrant

         The information required by this item with respect to the directors and
named executive officers is incorporated herein by reference to the section
entitled "Election of Directors" in the Company's definitive proxy materials
relating to the Annual Meeting of Shareholders to be held May 15, 2003. The
information required by this item for other executive officers is set forth
below:

         Andy LoCascio (37) has been our Chief Financial Officer since
November 2000 and is responsible for overseeing all financial and regulatory
matters. Previously, Mr. LoCascio served as Chief Financial Officer of
BankTennessee in Collierville, Tennessee from January 2000 through October
2000. Mr. LoCascio served as Senior Financial Officer of Lincoln Federal
Savings Bank in Plainfield, Indiana from October 1997 through December 1999.
Previously, Mr. LoCascio served as a bank examiner for the Indiana Department
of Financial Institutions.

         The information required by this section with respect to compliance
with Section 16(a) of the Exchange Act is incorporated herein by reference to
the section entitled "Compliance with Section 16(a) of the Exchange Act" in the
Company's definitive proxy materials relating to the Annual Meeting of
Shareholders to be held May 15, 2003.

ITEM 11. Executive Compensation

         The information required by this item with respect to executive
compensation is incorporated herein by reference to the section entitled
"Executive Compensation" in the Company's definitive proxy materials relating to
the Annual Meeting of Shareholders to be held May 15, 2003.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

         Information with respect to the security ownership of certain
beneficial owners and management is incorporated herein by reference to the
section titled "Stock Ownership" in the Company's definitive proxy materials
relating to the Annual Meeting of Shareholders to be held May 15, 2003.

         Information with respect to the Company's equity compensation plans
is incorporated herein by reference to the section entitled "Proposal 2 --
Approval of Amendment to Cumberland Bancorp, Incorporated 1998 Stock Option
Plan" in the Company's definitive proxy materials relating to the Annual Meeting
of Shareholders to be held May 15, 2003.

ITEM 13. Certain Relationships and Related Transactions

         Information with respect to certain relationships and related
transactions is incorporated herein by reference to the section titled "Certain
Relationships and Related Transactions" in the Company's definitive proxy
materials relating to the Annual Meeting of Shareholders to be held May 15,
2003.

ITEM 14. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         The Company maintains disclosure controls and procedures, as defined
in Rule 13a-14 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed by it in the reports that it files or submits under the Exchange Act
is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. Within the 90 days prior to the date of this
report, the Company carried out an evaluation, under the supervision and with
the participation of its management, including its Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of
its disclosure controls and procedures. Based on the evaluation of these
disclosure controls and procedures, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures were effective.

CHANGES IN INTERNAL CONTROLS

         There were no significant changes in the Company's internal controls
or in other factors that could significantly affect the internal controls
subsequent to the date that it completed its evaluation.



                                                                            62.
<PAGE>
ITEM 15. Exhibits and Reports on Form 8-K

         (a)(1) Financial Statements.  See Item 8.
         (a)(2) Financial Statements Schedules.  Inapplicable.
         (a)(3) Exhibits.  See Index to Exhibits.

         Registrant is a party to certain notes which are more fully described
in the notes to Registrant's financial statements pursuant to which Registrant
has borrowed money from other financial institutions in principal amounts which
combined do not exceed ten percent (10%) of Registrants total consolidated
assets. Copies of these notes will be filed with the Commission upon request.
Registrant is also a party to certain agreements entered into in connection with
the Company's offering of $12,000,000 in subordinated debentures in connection
with the offering of trust preferred securities to institutional investors by
Cumberland Capital Trust I and Cumberland Capital Trust II. Copies of the
various transaction documents associated with the trust preferred offerings will
be filed with the Commission upon request.

         (b)      Reports on Form 8-K

                  None.


                                                                            63.
<PAGE>
                                  SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    CUMBERLAND BANCORP, INCORPORATED


                                    By: /s/ Richard Herrington
                                       ----------------------------------------
                                       Richard Herrington
                                       President (Principal Executive Officer)

                                    Date: March 31, 2003


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
        Signature                                      Title                                 Date
        ---------                                      -----                                 ----

<S>                                 <C>                                                   <C>
/s/ Richard Herrington              President (Principal Executive Officer) and           March 31, 2003
------------------------------      Director
Richard Herrington

/s/ Andy LoCascio                   Chief Financial Officer (Principal                    March 31, 2003
------------------------------      Financial and Accounting Officer)
Andy LoCascio

/s/ John Wilder                     Chairman                                              March 31, 2003
------------------------------
John Wilder

/s/ Danny Herron                    Director                                              March 31, 2003
------------------------------
Danny Herron

/s/ Tom E. Paschal                  Director                                              March 31, 2003
------------------------------
Tom E. Paschal

/s/ Tom Brooks                      Director                                              March 31, 2003
------------------------------
Tom Brooks

/s/ Ronald Gibson                   Director                                              March 31, 2003
------------------------------
Ronald Gibson
</TABLE>


                                                                            64.
<PAGE>
<TABLE>
<CAPTION>
        Signature                                      Title                                 Date
        ---------                                      -----                                 ----

<S>                                 <C>                                                   <C>
/s/ Frank Inman, Jr.                Director                                              March 31, 2003
------------------------------
Frank Inman, Jr.

/s/ Alex Richmond                   Director                                              March 31, 2003
------------------------------
Alex Richmond

/s/ John S. Shepherd                Director                                              March 31, 2003
------------------------------
John S. Shepherd

/s/ James Rout                      Director                                              March 31, 2003
------------------------------
James Rout

/s/ Joel Porter                     Director                                              March 31, 2003
------------------------------
Joel Porter

/s/ Paul Pratt, Sr.                 Director                                              March 31, 2003
------------------------------
Paul Pratt, Sr.

/s/ R. Todd Vanderpool              Director                                              March 31, 2003
------------------------------
R. Todd Vanderpool

/s/ C.M. Gatton                     Director                                              March 31, 2003
------------------------------
C.M. Gatton

/s/ William Wallace                 Director                                              March 31, 2003
------------------------------
William Wallace
</TABLE>


                                                                            65.
<PAGE>
                                 CERTIFICATIONS

I, Richard Herrington, certify that:

1.       I have reviewed this annual report on Form 10-K of Cumberland Bancorp,
         Incorporated;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this annual report;

3.       Based on my knowledge, the financial statements and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
         and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation
                  Date"); and

         c)       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in
         this annual report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date: March 31, 2003

                                             By: /s/ Richard Herrington
                                                -------------------------------
                                             Name: Richard Herrington
                                             Chief Executive Officer


                                                                            66.
<PAGE>
I, Andy LoCascio, certify that:

1.       I have reviewed this annual report on Form 10-K of Cumberland Bancorp,
         Incorporated;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this annual report;

3.       Based on my knowledge, the financial statements and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
         and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation
                  Date"); and

         c)       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in
         this annual report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date: March 31, 2003

                                             By: /s/ Andy LoCascio
                                                -------------------------------
                                             Name: Andy LoCascio
                                             Chief Financial Officer


                                                                            67.
<PAGE>
                               INDEX TO EXHIBITS


3.1      Restated Charter of the Company (Restated for SEC Electronic filing
         purposes only).

3.2      Amended and Restated Bylaws of the Company (Restated for SEC
         Electronic filing purposes only).

10.1     Cumberland Bancorp, Incorporated 1998 Stock Option Plan (incorporated
         herein by reference to the Company's definitive Proxy Statement for
         the Annual Meeting of Shareholders held April 27, 2000).

21.1     Subsidiaries of the Company.

23.1     Consent of Crowe, Chizek and Company LLP.

23.2     Consent of Heathcott and Mullaly P.C.

99.1     Certification Pursuant to 18 U.S.C. 1350 As Adopted Pursuant to Section
         906 of the Sabanes-Oxley Act of 2002.

99.2     Certification Pursuant to 18 U.S.C. 1350 As Adopted Pursuant to Section
         906 of the Sabanes-Oxley Act of 2002.


                                                                            68.