<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

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

                                   FORM 10-K

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

For the Fiscal Year ended December 31, 1999
Commission File Number 0-27393

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

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

         4205 Hillsboro Road,
         Nashville, Tennessee                                         37215
         -----------------------------------------    ------------------------------------
         (Address of principal executive offices)                    (Zip Code)
</TABLE>

Registrant's telephone number, including area code:
(615) 377-9395

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

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

                     Common Stock, $.50 par value per share
      --------------------------------------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during
the preceeding 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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of the 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.   [ ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant on February 29, 2000, was approximately $38,188,044. The market value
calculation was determined using $12.50 per share.

Shares of common stock, $0.50 par value per share, outstanding on February 29,
2000 were 6,863,724

                      DOCUMENTS INCORPORATED BY REFERENCE

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<CAPTION>

Part of Form 10-K          Documents from which portions are incorporated by reference
-----------------          ------------------------------------------------------------
<S>                        <C>
Part III                   Portions of the Registrant's definitive proxy statement,
                           relating to the Registrant's Annual Meeting of Shareholders
                           to be held on April 27, 2000 are incorporated by
                           reference into Items 10, 11, 12 and 13.
</TABLE>


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PART I

ITEM 1.  DESCRIPTION OF BUSINESS


                                    BUSINESS
GENERAL

         We are the largest Tennessee bank holding company headquartered in
Nashville, Tennessee. We conduct our banking business through four (4) bank
subsidiaries:

         - Bank of Dyer, a Tennessee state chartered bank (which merged with us
                in 1999) with two (2)offices in Gibson County, Tennessee,
         - Cumberland Bank, a Tennessee state chartered bank with eight (8)
                offices in Macon, Smith, Sumner and Warren Counties, Tennessee,
         - BankTennessee, a Tennessee state chartered bank with five (5) offices
                in Shelby and Lauderdale Counties, Tennessee and
         - The Community Bank, a Tennessee state chartered bank which merged
                with us, along with BankTennessee in 1997, with three (3)
                offices in Davidson and Williamson Counties, Tennessee.

         Our Tennessee banks are collectively referred to as our bank
subsidiaries or our banks. We also own a fifty percent (50%) interest in The
Murray Bank, a federal savings bank, which opened for business June 15, 1999.
Our operations principally involve commercial and residential real estate
lending, commercial business lending, consumer lending, construction lending
and other financial services, including credit card services and brokerage
services. The Murray Bank has grown to total assets of more than $16 million at
year end. The Company has grown to more than $525 million in total assets as of
December 31, 1999.


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         The following table represents our bank's growth in branch offices and
total assets from the years ended December 31, 1993 and December 31, 1996 to
December 31, 1999. Data for BankTennessee and The Community Bank for 1993 and
1996 are for their respective predecessor entities.

<TABLE>
<CAPTION>
                                            12/31/93           12/31/96           12/31/99
                                            --------           --------           --------
                                                        (Dollars in Thousands)
<S>                                         <C>                <C>                <C>
BankTennessee
         Branch Offices...............             2                  3                  5
         Total Assets.................      $ 72,200           $ 97,400           $188,000

Cumberland Bank
         Branch Offices...............             2                  4                  8
         Total Assets.................      $ 63,500           $102,700           $194,700

The Community Bank
         Branch Offices...............             1                  1                  3
         Total Assets.................      $ 11,500           $ 35,300           $ 98,031

Bank of Dyer
         Branch Offices...........                 1                  2                  2
         Total Assets.............          $ 18,000           $ 28,086           $ 42,498

Total
         Bank Branch Offices..........             6                 10                 18
         Bank Subsidiaries
         Total Assets.................      $165,200           $263,486           $523,229
</TABLE>

         We have six (6) bank branch offices that are less than three years old
as of December 31, 1999. 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 (20) years of banking
experience in Tennessee.

         Cumberland Bank has been in business in Smith County for more than
twenty (20) years. It was originally organized as a state savings and loan
association in 1975 in Carthage and converted to a Tennessee state bank in
1991. Its first office was in Carthage with later expansion to Gallatin.
Cumberland Bank also has a well established base in Sumner County with offices
in Gallatin, White House, and Portland, Tennessee. Another office operates in
Gordonsville in Smith County. Cumberland Bank opened a new office in Lafayette,
Macon County, Tennessee during the fourth quarter. It acquired two branch
offices in the third quarter of 1999, both of which are located in Warren
County, Tennessee. Cumberland Bank provides lending and other financial
services through its subsidiary, Cumberland Finance Company, which has offices
in Gallatin and Murfreesboro, Tennessee. Cumberland Bank offers investment
services and other financial services through its subsidiary CBC Financial
Services, Inc., which has offices in Carthage and Gallatin, Tennessee.
Cumberland Bank also manages and owns a fifty percent (50%) interest in a full
service, independent insurance agency, InsureTennessee, Inc. InsureTennessee
represents more than twenty (20) different companies offering automobile, home
life, health, disability and other types of insurance. InsureTennessee shares
an office location in Carthage with CBC Financial Services and a office in
Collierville, Tennessee in BankTennessee's building on New Byhalia Road.


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         BankTennessee was originally organized as a federal savings
association, First Federal Savings and Loan Association in 1934 and later
changed its name to First Federal Bank of Memphis. It converted to a Tennessee
state bank in 1997. BankTennessee's senior management team has over
seventy-five (75) years of banking experience, with three former bank
presidents on staff. BankTennessee is Tennessee's largest Small Business
Administration lender according to "SBA Lenders." Also, residential
construction loans account for a substantial percentage of BankTennessee's loan
portfolio compared to other Tennessee banks. BankTennessee's growth is
evidenced by current construction of a new $3.0 million main office in
Collierville and a recently completed branch office in Ripley, Tennessee.

         The Community Bank was originally organized as a federal savings
association, First Southern Federal Savings Bank, and later First Federal Bank
of Nashville, in 1976. It converted to a Tennessee state bank in 1997. It has
three (3) offices, one in Nashville, Tennessee, opened in 1976, one in
Brentwood, Williamson County, opened in 1996, and one in Franklin, Williamson
County, opened in 1999.

         Except for Macon, Smith, Lauderdale, Warren and northern Sumner
Counties which are predominantly rural, our banks are located in growing
metropolitan areas including Collierville and eastern Shelby County in
Metropolitan Memphis, and Green Hills, Brentwood, Franklin and Gallatin in
Metropolitan Nashville. 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. Our
banks do not have a concentration of deposits obtained from a single person or
entity, or a small group of persons or entities, the loss of which would have a
material adverse effect on our business or the business of our banks.
Construction and development loans of approximately $80.8 million made up 18%
of our loan portfolio as of December 31, 1999.

         We have entered into a joint venture agreement with BancKentucky,
Inc., a Kentucky unitary thrift holding company, under which we have acquired a
fifty percent (50%) interest in The Murray Bank, a de novo federal savings bank
located in Murray, Calloway County, Kentucky. BancKentucky owns the remaining
interest in the bank. The venture became effective as of June 15, 1999 with the
opening of The Murray Bank for business on that date.

         Our Banks provide a range of customary services which include
checking, NOW accounts, money market and savings accounts, certificates of
deposit, individual retirement accounts, money transfers, and safe deposit
facilities. Lending services include construction lending, commercial,
consumer, commercial and residential real estate, home equity and home
improvements. In addition, the Banks offers various uninsured, non-deposit
products including annuities and mutual funds, brokerage services, and
secondary market mortgage processing services. The Banks are not authorized to
provide trust services.

         Our Banks are subject to the regulatory authority of the Department of
Financial Institutions of the State of Tennessee and the Federal Reserve Board
of Governors 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 pays a quarterly statutory
assessment and is subject to the rules and regulations of the FDIC.

         MARKET AREAS

         We operate principally in six (6) market areas in Tennessee: Macon
County, Shelby County, Smith County, Sumner County, Warren County and Southern
Davidson/Williamson County. We also have a bank branch in Lauderdale County and
a finance company office in Rutherford County.

Employees

         The Company had approximately 250 full-time equivalent employees as of
December 31, 1999. The Company has four (4) full-time employees who are not
employed by the Banks. All four of these persons are on the payroll of a bank
subsidiary for administrative purposes, but the bank is reimbursed monthly by
us for their salaries and benfits.


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None of our employee's or banks' employees are represented by a collective
bargining group. We consider relations with our employees to be excellent. The
Company and the banks' provide several employee benefit programs, 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 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.

         Except in our Smith County market, our banks have small market shares
in their respective markets. Competitors of each of our banks generally possess
substantially greater financial resources than those available to our banks. In
addition, these institutions generally have higher lending limits than our
banks and may provide various services for their customers which our banks do
not offer.

         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,
particular 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.

         Individual loan officers have discretionary authority to approve
certain loans at each of our banks without prior approval. The discretionary
limit at BankTennessee varies by loan officer based upon seniority. For
example, the bank's president has discretionary approval authority up to
$750,000 for certain secured loans, while executive vice presidents have
discretionary approval authority up to $250,000 for certain secured loans. At
Cumberland Bank, certain individual loan officers have discretionary approval
authority up to $100,000 on certain secured loans while the bank's president
has discretionary approval authority up to $500,000 on secured loans. At The
Community Bank, certain individual loan officers have discretionary approval
authority of up to $250,000 on certain secured loans. At Bank of Dyer, certain
loan offices have discretionary approved authority up to $100,000 on certain
secured loans.

         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. Each of the banks has its own officer loan committee,
reflecting our emphasis on local control and decision making.


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         Loans are reviewed periodically by both our banks' senior lending
officers and our independent external auditors. We utilize this process to
grade each of our banks' loans and determine the adequacy of our banks' loan
loss reserve. 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. A report of loan review findings is presented quarterly to the
Bank's 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 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 banks' loans consistent with each bank's liability
structures, 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.

         Each of the banks manages its own investment portfolios. They utilize
investment advice provided primarily by the Bond Division of First Tennessee
National Bank and by Vining-Sparks IBG, a fixed-income brokerage firm.

NON-DEPOSITORY BUSINESS

         Cumberland Finance Company. Cumberland Finance, a wholly-owned
subsidiary of Cumberland Bank, was formed in 1994 for the purpose of offering
high risk, higher yield credit to people located in Smith County, Tennessee. In
1995, Cumberland Finance expanded its operations to Murfreesboro in Rutherford
County, Tennessee. Cumberland Finance was profitable in its first year of
operations but has struggled financially since then due to problems associated
with growth and underwriting functions. We believe that recent changes in local
management should result in a trend toward profitability.

         CBC Financial Services, Inc. CBC Financial Services, a wholly-owned
subsidiary of Cumberland Bank, opened its first office in Carthage, Tennessee
in 1993 and thereafter expanded its operations to Gallatin, Tennessee in 1997.
It provides both full-service brokerage services and financial estate planning
services to customers within Smith and Sumner Counties, Tennessee. CBC
Financial Services has experienced operating losses in recent years as a result
of costs attributable to its growth, but expects to be profitable in the year
2000, based upon current trends of increased gross revenue and decreased
monthly


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losses. Under its current management, CBC Financial Services has grown to a
business with over $26 million in assets under administration as of December
31, 1999.

         InsureTennessee, Inc. InsureTennessee is a fully-licensed insurance
agency, owned fifty percent (50%) by Cumberland Bank and fifty percent (50%) by
a long-time West Tennessee insurance agent. It provides insurance products to
customers in Shelby, Sumner and Smith Counties, Tennessee through its offices
in Carthage, Gallatin and most recently Memphis, Tennessee. InsureTennessee
experienced operating losses the past year as a result of costs attributable to
its growth, but expects to be profitable in the year 2000, based upon current
trends of increased gross revenue and decreased monthly losses. Over the last
twelve months, InsureTennessee has more than doubled its personnel.

THE MURRAY BANK

         On October 1, 1998, we entered into a joint venture with BancKentucky
for the purposes of forming and operating a federal savings bank pursuant to
Section 5(c) of the Home Owners Loan Act, as amended. By virtue of the joint
venture, we own a fifty percent (50%) interest in the voting common stock of
The Murray Bank a federal savings bank located at 1000 Whitnell Street, Murray,
Kentucky. BancKentucky owns the additional fifty percent (50%) of The Murray
Bank. The Murray Bank opened for business to the public on June 15, 1999.

         Of the 20,000 shares of common stock, $10.00 par value issued by the
Murray Bank, we acquired 10,000 of these shares at $215 per share for a total
consideration of $2.15 million. The board of directors of The Murray Bank
consists of thirteen (13) directors, of which four (4) have been designated by
us. Under the terms of our agreement with BancKentucky, we also provide
investment, accounting, auditing, human resource management, and loan review
services to The Murray Bank on a fee for services basis, and will continue to
do so as long as we have beneficial ownership of at least fifty percent (50%)
of the voting stock of The Murray Bank.

Monetary Policies

         The result of operations of the Bank 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 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, 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


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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.

         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
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 and examined by the FDIC. 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 and the Federal Reserve
also regulate 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 financial 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. These factors are also considered in evaluating mergers,
acquisitions and applications to open a branch or facility.

CAPITAL REQUIREMENTS

         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


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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.

         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


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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, 1999, the Company's subsidiary bank's risk-based Tier
1 Capital and risk-based Total Capital ratios were 6.84% and 9.45%,
respectively.

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-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


                                       9
<PAGE>   11

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 and at least two-thirds of the shareholders of each class of stock
outstanding. 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 and at least two-thirds of the
shareholders of each class of stock outstanding. 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.

         In 1999, the Company declared a 10% stock dividend to its
shareholders. This stock dividend was effective as of March 26, 1999. In the
first quarter of 2000, a cash dividend was declared in the amount of $.025
cents per share payable on April 14, 2000 to shareholders of record on March 1,
2000.

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 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,


                                      10
<PAGE>   12

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.

ITEM 2.  DESCRIPTION OF PROPERTY

         Our principal and executive offices are located at 4205 Hillsboro
Road, Suite 212, Nashville, Tennessee 37215 in a leased facility with over
5,000 square feet of office space used by The Community Bank as its Green Hills
branch. The Community Bank also operates two other branch offices located in
Brentwood and Franklin, Williamson County, Tennessee. BankTennessee currently
conducts business in five offices located in Shelby and Lauderdale Counties,
Tennessee. Cumberland Bank currently conducts business at eight offices located
in Macon, Smith, Sumner, and Warren Counties, Tennessee. CBC Financial Services
conducts business at two offices, one in Smith County and one in Sumner County.
Cumberland Finance conducts business at two offices, one located in Sumner
County and one in Rutherford County, Tennessee. InsureTennessee conducts
business at two offices, one in Smith County and one in Shelby County that it
shares with BankTennessee.

         We own all of our branch office locations expcept for seven leased
operations which include Cumberland Bank's office in Gallatin, and McMinnville,
The Community Bank's offices in Green Hills and Franklin, BankTennessee's
Toddle House office, Cumberland Finance's Murfreesboro office and CBC Financial
Services' office in Carthage.

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

ITEM 3.  LEGAL PROCEEDINGS

         The nature of the banking business generates a certain amount of
litigation against us and our banks involving matters in the ordinary course of
business. None of the legal proceedings currently pending or threatened to
which we or our subsidiaries are a party or to which any of our properties are
subject will have, or have, in the opinion of management, a material effect on
our business or financial condition.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

         No matter was submitted to a vote of security holders during the
fourth quarter of the Company's fiscal year ending December 31, 1999.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         We have no established public trading market for our shares.
Accordingly, there is no comprehensive record of trades or the prices of any
trades. The following table reflects stock prices for our shares to the extent
any information is available. We have not declared any cash dividends in the
past two


                                      11
<PAGE>   13

fiscal years nor have we declared any cash dividends during this fiscal year,
other than the small amount incorporated due to the pooling with Bancshares of
Dyer, Inc.


                CUMBERLAND BANCORP INCORPORATED COMMON STOCK(1)

<TABLE>
<CAPTION>
                                                                     HIGH              LOW
                                                                     ----              ---
<S>                                                                 <C>              <C>
1998:
      First Quarter..................................               $ 5.45           $ 4.55
      Second Quarter.................................               $13.64           $ 5.45
      Third Quarter..................................               $14.55           $11.82
      Fourth Quarter.................................               $12.73           $10.91

1999:
      First Quarter..................................               $12.27           $ 9.09
      Second Quarter.................................               $13.50           $12.00
      Third Quarter .................................               $12.50           $12.50
      Fourth Quarter.................................               $12.50           $12.50
</TABLE>

----------------
 (1) The amounts per share have been adjusted for a 3-for-1 stock split
effective June 30, 1997; a 2-for-1 stock split effective March 1, 1998 and a
10% stock dividend effective March 26, 1999.

         As of February 29, 2000 we had approximately 1,146 record
shareholders. At that date, 6,863,724 shares were outstanding.

         We did not declare any dividends for the fiscal years ended December
31, 1999 or 1998. In the first quarter of 2000, a cash dividend was declared in
the amount of $.025 cents per share payable on April 14, 2000 to shareholders
of record on March 1, 2000.

         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 dividends to us. The
ability of the banks to pay cash dividends is restricted by applicable
regulations of the TDFI and the Federal Reserve. 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."




                                      12
<PAGE>   14

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA (UNAUDITED)

         The table below provides selected consolidated financial data for our
company as of and for the five years ended December 31, 1999, 1998, 1997, 1996
and 1995. This information does not include financial data of BankTennessee or
The Community Bank before the July 1997 merger of First Federal Bancshares,
Inc. into us. The merger was accounted using the purchase method of accounting.
In accordance with purchase accounting, the results of operations for
BankTennessee and The Community Bank are included in the selected consolidated
financial data since the date of the merger. 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,
                                                                   -----------------------------

                                               1999            1998            1997           1996           1995
                                               ----            ----            ----           ----           ----
<S>                                          <C>              <C>            <C>            <C>            <C>
SUMMARY OF OPERATIONS
Interest income                              $  39,193         33,290         20,479         11,475          9,429
Interest expense                                19,127         17,381         10,429          5,514          4,522

Net interest income                             20,066         15,909         10,050          5,961          4,907
Provision for loan losses                       (1,623)        (1,188)        (1,390)          (430)          (370)
Noninterest income                               4,379          4,260          3,390          1,697          1,355
Noninterest expense                            (17,198)       (16,636)        (8,696)        (5,497)        (4,102)

Income before income taxes                       5,624          5,345          3,354          1,731          1,790
Income tax expense                               2,113          2,003          1,220            611            657

Net earnings                                     3,511          3,342          2,134          1,120          1,133
Basic earnings per share                          0.56           0.56           0.49           0.39           0.39
Diluted earnings per share                        0.55           0.55           0.48           0.37           0.37
Dividends per common share                           0              0              0              0           0.05
Book value per common share                       5.14           4.02           3.41           2.82           2.48

SELECTED PERIOD-END BALANCES
Total assets                                   525,559        408,706        330,335        130,774        113,271
Loans - net of unearned income                 440,316        321,547        269,378        105,141         83,559
Allowance for loan losses                        5,146          4,012          3,214          1,386          1,255
Total deposits                                 435,252        357,404        285,049        116,078         99,651
Other borrowings                                49,284         25,206         23,189          5,426          5,233
Stockholders' equity                            35,275         22,059         18,650          8,352          7,219

SELECTED AVERAGE BALANCES
Total assets                                   453,378        372,967        226,220        125,380        103,578
Securities                                      25,886         26,612         14,631          9,524         12,450
Loans - net of unearned income                 374,716        293,665        184,792         98,036         77,526
Allowance for loan losses                        4,196          3,504          2,603          1,183          1,108
Total deposits                                 356,075        296,553        226,220        111,107         84,921
Other borrowings                                34,477         27,776         12,942          5,101          5,413
Stockholders' equity                            27,200         20,607         13,543          7,905          6,717

SELECTED OPERATING RATIOS
Annual % change in average loans                 36.94%         58.92%         88.00%         26.46%         23.87%
Annual % change in average assets                28.59%         64.87%         80.43%         21.05%         19.97%
Return on average equity                         12.91%         16.22%         15.76%         14.07%         16.87%
</TABLE>



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

                        CAUTIONARY STATEMENT CONCERNING
                          FORWARD-LOOKING INFORMATION

         This section along with other sections in this document, 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 document, 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 stockholder values to differ materially from the Company's
expectations. These factors are disclosed in this section. 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 hereof, even if new information, future events or
other circumstances have made them incorrect or misleading as of any future
date.

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

                                      13
<PAGE>   15

         Cumberland Bancorp, Incorporated had several significant events that
occurred during 1999 which affected its financial condition and results of
operations. An initial public offering was completed in the last half of the
year which raised approximately $8.5 million in net additional capital.
Bancshares of Dyer, Inc. (a $40 million one bank holding company) was acquired
in late December, 1999. This transaction was accounted for as a pooling of
interest and prior period amounts have been restated to include the accounts
and results of operations of Dyer. Two branches totaling $20 million were
acquired from another financial institution and investments in unconsolidated
subsidiaries were made of approximately $2 million.

         Financial Condition. Our total assets grew from $408.7 million at
year-end 1998 to $525.5 million at December 31, 1999, a $116.8 million increase
or 29%. The primary changes in assets was related to the $117 million increase
in net loans. In addition, cash and due from banks increased $9.2 million to
allow for possible cash needs related to uncertainties related to the Year 2000
issues. We funded these increases primarily by an increase in deposits of $78
million and by decreasing our interest-bearing deposits held in other
institutions by $16.6 million.

         Our total liabilities grew from $387 million at year end 1998 to $490
million at December 31, 1999, a $104 million increase or 27%. In addition to
the deposit growth mentioned above, federal funds purchased increased $2.2
million and advances from the Federal Home Loan Bank increased $21.6 million.

         Stockholders' equity increased $13.2 million to $35.3 million at
December31, 1999. The increase is related to the previously mentioned IPO, and
privately placed common stock of approximately $2 million. Retained earnings
provide the balance of the increase in equity. Our leverage capital ratio
increased from 5.45% at December 31, 1998 to 6.84% at December 31, 1999. See
note 14 to our consolidated financial statements for more information relating
to capital.

RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR ENDED
DECEMBER 31, 1998

         Net earnings were $3.5 million in 1999 compared to $3.3 million in
1998. Total revenues increased 16% while total expenses increased 18% during
1999 as compared to the prior year. As discussed in more detail later, our
portion of the operating loss of the investment in the denovo, The Murray Bank,
merger and acquisition expenses relating to Bancshares of Dyer, Inc. and start
up costs associated with other market expansions negatively affected earnings
in 1999.

         Net interest income increased $4.2 million, or 26%, to $20.1 million
in 1999 from $17.4 million in 1998. The increase is a result of growth in
average earning assets of our Cumberland Bank subsidiary throughout the year,
and our BankTennessee and Community Bank subsidiaries for the last six months.

         The Company's net interest spread and net yield on earning assets were
4.66% and 4.71% respectively, in 1999 as compared to 4.41% and 4.50% in 1998.
The increase in net interest spread and net yield on earning assets was the
result of yields on earning assets increasing faster than rates paid on
interest bearing liabilities. 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.

         The provision for loan losses was $1.6 million in 1999 compared to
$1.2 million in 1998, a 37% increase. The increase in the provision was
primarily attributable to the 36.3% increase in loans.

         Noninterest income increased $120,000, or 3%, to $4.4 million in 1999
from $4.3 million in 1998. Mortgage banking income declined $443,000 or 32%
from 1998 levels, primarily due to reduction in activity related to rising
interest rates.


                                      14
<PAGE>   16
         Noninterest expense increased $3.6 million, or 26%, to $17.2 million in
1999 from $13.6 million in 1998. Included in noninterest expense is
approximately $116,000 in 1999 related to losses of unconsolidated subsidiaries,
compared to $92,000 in the prior year. Also included in 1999 are expenses
related to the organization of new entities and to expenses associated with our
mergers and acquisitions of approximately $102,000 (See Note 17 to our Notes to
Consolidated Financial Statements for more information regarding these
activities). Other increases in other expenses are primarily a result of overall
growth. Salaries and benefits increased from $7.1 million in 1998 to $9.2
million in 1999 or an increase of 29%.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO THE YEAR ENDED DECEMBER 31, 1997

         The comparison of 1998 to 1997 operating results is substantially
affected by our merger with First Federal, which occurred on July 1, 1997.
Total assets and operating results for The Community Bank and BankTennessee in
1997 are only included in the second six months of the Results of Operations.

         Net interest income increased $5.9 million, or 58%, to $15.9 million
in 1998 from $10.1 million in 1997. Of this increase, $2.8 million, or 47%, is
attributable to the addition of First Federal's assets and liabilities in
mid-year 1997. The remaining $3.1 million, or 53%, increase is a result of
growth in average earning assets of our Cumberland Bank subsidiary throughout
the year, and our BankTennessee and Community Bank subsidiaries for the last
six months.

         The Company's net interest spread and net yield on earning assets were
4.41% and 4.50% respectively, in 1998 as compared to 4.57% and 4.69% in 1997.
The decrease in net interest spread and net yield on earning assets was the
result of yields on earning assets declining faster than rates paid on interest
bearing liabilities. 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.

         The provision for loan losses was $1.2 million in 1998 compared to
$1.4 million in 1997. The decrease in the provision was primarily attributable
to lower charge-offs in 1998, partially offset by an increase in loan volume
due to growth and our merger with First Federal.

         Noninterest income increased $870,000, or 26%, to $4.3 million in 1998
from $3.4 million in 1997. Noninterest income of First Federal for the first
sixth months of 1997 (prior to the merger) was $413,000. After adjusting for
the $550,000 gain on the sale of a branch that was recognized during the last
half of 1997, noninterest income increased $1.5 million, or 44%. In addition to
the effect of a full year of noninterest income from BankTennessee and The
Community Bank, noninterest income also increased because of improved mortgage
banking operations due to market conditions and gains on sales of SBA loans.

         Noninterest expense increased $4.9 million, or 57%, to $13.6 million
in 1998 from $8.7 million in 1997. Of the increase, $2.6 million, or 53%, is
related to the effect of BankTennessee's and The Community Bank's operations in
1998. The remaining $2.3 million increase, or 47%, is a result of our overall
growth. Salaries and benefits increased from $4.4 million in 1997 to $7.1
million in 1998 or an increase of 63%. The increase is due to the large
increase in total employees who work for BankTennessee and The Community Bank.
Our efficiency ratio in 1998 was 67.5%, compared to 64.1% in 1997.

         Net income increased $1.2 million or 57%, to $3.3 million in 1998. Of
this increase, $400,000 is due to the effects of the merger with First Federal.
Return on average assets during 1998 and 1997 was 0.89% and 0.95% respectively,
and return on average equity was 16.63% in 1998 compared to 16.57% for 1997.


                                      15
<PAGE>   17
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,

                                      1999           1998           1997           1996          1995
                                      ----           ----           ----           ----          ----
                                                              (In thousands)
<S>                               <C>              <C>            <C>            <C>            <C>
TYPE OF LOAN
------------
Real estate-construction and
     development                  $  80,789         55,220         42,819          7,573         4,852
Real estate-1 to 4 family
     residential                    157,820        140,138        121,928         43,143        29,709
Real estate other                    49,708         12,555         26,956          5,923        11,441
Commercial, financial and
agricultural                        102,385         71,070         38,977         18,762        12,292
Consumer                             50,643         45,431         41,941         32,083        27,517
Other                                 1,744            746            208            193           397
                                  ---------        -------        -------        -------        ------
Total loans                         443,089        325,160        272,829        107,677        86,208
Unearned income and
deferred
fees                                 (2,773)        (3,613)        (3,451)        (2,536)       (2,649)
                                  ---------        -------        -------        -------        ------
     Net loans                    $ 440,316        321,547        269,378        105,141        83,559
                                  =========        =======        =======        =======        ======
</TABLE>

     Loan growth was $118 million, or 36.3%, during 1999, and $52.3 million, or
19.2%, during 1998. Of this increase, $13.5 million, or 11.4% was through
acquisition of the McMinnville branches. We believe that the remaining loan
growth reported in 1999 approximates the normal trend for our four operating
bank subsidiaries. Loans continued to grow during 1999 as a result of strong
economic conditions in our banks' primary markets, with commercial loans
experiencing the largest growth. We believe that commercial loans and loans to
the residential real estate industry will continue to be our two primary loan
categories.

     At December 31, 1999, 1-4 family residential real estate loans constituted
36% of total loans and construction and development loans constituted 18% 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 or where there are already contracts for sale. 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, 1999:

<TABLE>
<CAPTION>

                                           DUE IN 1    DUE IN 1 TO  DUE AFTER 5
                 TYPE OF LOAN            YEAR OR LESS    5 YEARS      YEARS       TOTAL
                                                            (In thousands)
<S>                                      <C>           <C>          <C>          <C>
Real estate-construction & development       79,173        1,561          55       80,789
Real estate-1-4 family residential           91,536       55,237      11,047      157,820
Real estate-other                            29,825       19,300         583       49,708
Commercial, financial and agricultural       47,431       52,815       2,139      102,385
Consumer                                     27,854       20,103       2,686       50,643
Other                                         1,424          320           0        1,744
     Total                                  277,243      149,336      16,510      443,089
</TABLE>

     At December 31, 1999, $155.6 million in loans due after one year had
predetermined interest rates and $10.2 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, 53.9% is secured by
residential real estate. Management believes this type of


                                      16
<PAGE>   18


lending has allowed us to maintain low levels of charge-offs and non-performing
loans. However, the real estate lending market has traditionally been sensitive
to interest rates, and the volume of such loans may decline if interest rates
continue to increase.

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 to be sufficient to absorb losses in the loan portfolio.
Factors considered in establishing an appropriate allowance include a careful
assessment of the financial condition of the borrower; a realistic 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; a
comprehensive 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.

     An analysis of our loss experience, as well as a breakdown of the allowance
for possible loan losses, is furnished in the following table for the periods
indicated:

<TABLE>
<CAPTION>

                                                                            YEARS ENDED DECEMBER 31,
                                                               1999          1998          1997          1996          1995
                                                               ----          ----          ----          ----          ----
                                                                             (Dollars in thousands)
<S>                                                        <C>             <C>           <C>           <C>           <C>
Balance at beginning of year                               $   4,012         3,214         1,386         1,255          947
Allowance increases due to acquisitions                          152            --         1,229            --           --
                                                           ---------      --------      --------      --------      -------
Loans charged-off:
     Real estate-construction & development                      (65)           --            --            --
     Real estate-1 to 4 single family                           (117)          (45)          (23)           (5)
     Real estate-other                                           (90)           --            --
     Commercial, financial & agricultural                       (123)          (54)          (35)           (1)          --
     Consumer                                                   (518)         (324)         (721)         (336)        (107)
     Other                                                       (24)           --            --            --
                                                           ---------      --------      --------      --------      -------
         Total charge-offs                                      (758)         (512)         (869)         (342)        (107)
                                                           ---------      --------      --------      --------      -------

Charge-offs recovered:
     Real estate - construction & development                     --            21            --            --           --
     Real estate - 1-4 single family                               9             2            11            --           --
     Real estate - other                                          --             0            --            --           --
     Commercial                                                   19             5             1             4           --
     Consumer                                                     89            76            66            39           45
     Other                                                        --            18            --            --           --
                                                           ---------      --------      --------      --------      -------
         Total recoveries                                        117           122            78            43           45
                                                           ---------      --------      --------      --------      -------

Net loans charged-off                                           (641)         (390)         (791)         (299)         (62)
Current year provision                                         1,623         1,188         1,390           430          370
                                                           ---------      --------      --------      --------      -------
Balance at end of year                                     $   5,146         4,012         3,214         1,386        1,255
                                                           =========      ========      ========      ========      =======

Loans at year end                                            440,316       321,547       269,378       105,141       83,559
Ratio of allowance to loans at year end                         1.17%         1.25%         1.19%         1.32%        1.50%
Average loans                                                374,716       293,665       184,792        98,036       77,526
Ratio of net loans charged off to average loans                 0.17%         0.13%         0.43%         0.31%        0.08%
</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


                                      17
<PAGE>   19


concerted efforts are made to maximize recovery. Our level of net charge-offs to
average loans was 0.17% in 1999 and 0% in 1998. Charge-offs were higher due to
consumer loan losses for Cumberland Bank and Cumberland Finance, its finance
company subsidiary, in 1999. During 1999, the provision for loan losses of $1.6
million was almost $400,000 more than the preceding year. Factors which gave
rise to the increased provision in 1999 were the $117 million loan growth our
institutions sustained and the $194,000 increase in consumer loan losses in
Cumberland Bank's portfolio and similar loan losses in Cumberland Finance.

     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 properties, 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,

                                      1999     1998      1997   1996    1995
                                      ----     ----      ----   ----    ----
                                               (Dollars in Thousands)
<S>                                  <C>       <C>      <C>      <C>    <C>
Loans accounted for on a non-
accrual basis                        $2,446    1,745    1,561    565      489

Accruing loans which are
contractually past due 90 days or
more as to principal and interest
payments                                241      467       86    428      554

Restructured loans                      693      652      443     --       --
                                     ------    -----    -----    ---    -----
Total nonperforming loans (1)         3,380    2,864    2,090    993    1,043

Foreclosed properties                $2,400      610      630    502      630
</TABLE>

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

 (1) As of December 31, 1999, all restructured loans were in compliance with
their modified terms.

     Non-performing loans were 0.8% and 0.9% of loans at December 31, 1999 and
1998, respectively. The dollar increase in non-performing loans during 1999 is
due to a growing and maturing portfolio, and less attributable to conditions in
the marketplace. Additional interest income of approximately $125,000 in 1999,
$121,000 in 1998, $79,000 in 1997, $33,000 in 1996, and $26,000 in 1995 would
have been recorded if all loans accounted for on a non-accrual basis had been
current in accordance with their original terms. No interest income has been
recognized during the five year period ended December 31, 1999 on loans that
have been accounted for on a non-accrual basis.

         Management has internally classified approximately $4.3 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


                                       18
<PAGE>   20


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, 1999, 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.

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

<TABLE>
<CAPTION>

                                                                 AS OF DECEMBER 31,
                    ---------------------------------------------------------------------------------------------------
                                 1999                               1998                          1997
                                 ----                               ----                          ----
                                            PERCENT OF                       PERCENT OF                      PERCENT OF
                                            LOANS IN                         LOANS IN                        LOANS IN
                                              EACH                             EACH                           EACH
                               PERCENT OF   CATEGORY             PERCENT OF  CATEGORY            PERCENT OF  CATEGORY
                               ALLOWANCE    TO TOTAL             ALLOWANCE   TO TOTAL            ALLOWANCE   TO TOTAL
                               TO TOTAL        -----             TO TOTAL       -----            TO TOTAL      -----
                     AMOUNT    ALLOWANCE     LOANS     AMOUNT    ALLOWANCE    LOANS     AMOUNT   ALLOWANCE    LOAN
                     ------    ---------     -----     ------    ---------    -----     ------   ---------    ----
<S>                  <C>       <C>          <C>        <C>       <C>         <C>       <C>         <C>         <C>
Real estate -
construction &
 development.....    $1,029       20%         18%        802        20%        18%       643        20%         16%
Real estate-1-4
single family....       257        5%         36%        201         5%        42%       161         5%         44%
Real estate - other     309        6%         11%        160         4%         4%       129         4%         11%
Commercial,
   financial and
   agriculture...     1,132       22%         23%        883        22%        23%       482        15%         14%
Consumer.........     1,647       32%         11%      1,204        30%        12%       804        25%         14%
Other............       103        2%          1%         80         2%         1%        64         2%          1%
Unallocated......       669       13%                    682         17%                 931         29%
                     ------      ---         ---       -----       ---        ---      -----       ---         ---
       Total         $5,146      100%        100%      4,012       100%       100%     3,214       100%        100%
                     ======      ===         ===       =====       ===        ===      =====       ===         ===
</TABLE>


     As of December 31, 1999, real estate mortgage loans constituted 65% of
outstanding loans. Approximately $126 million, or 44%, 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 $80.8 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 $22.9 million at year-end 1999, which is down
$3.8 million from year-end 1998. The securities portfolios comprised 4.4% of
total assets at year-end 1999. 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. Approximately 42% of
securities held at year-end 1999


                                       19
<PAGE>   21


were pledged for public deposits. Other than commitments to originate or sell
mortgage loans, our banks do not invest in off-balance sheet derivative
financial instruments.

     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 and municipalities. 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 did 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,

                                       1999        1998         1997
                                          (Dollars in thousands)
<S>                                  <C>          <C>          <C>
Available for sale:
   U.S. Government and agencies      $10,378      10,471       1,602
   Obligations of SCM                  2,727       1,844       1,397
   Mortgage-backed                     1,464       3,384       1,409
   Other debt securities                 262          --         676
   Marketable equity securities        1,382       1,571       1,445
                                     -------      ------      ------

      Total available for sale        16,213      17,270       6,529
                                     -------      ------      ------

Held to maturity:
   U.S. Government and agencies        2,790       4,624       5,660
   Obligations of SCM                  3,844       4,782         356
   Mortgage-backed                        43          --       6,161
   Other debt securities                  --          --         204
                                     -------      ------      ------
        Total held to maturity         6,677       9,406      12,381
                                     -------      ------      ------
        Total securities             $22,890      26,676      18,910
                                     =======      ======      ======
</TABLE>

     The following table indicates, for the year ended December 31, 1999, 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 10
                              LESS            1 TO 5 YRS          5 TO 10 YRS             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
   and agencies           $  989       5.12%    $7,522      5.74%   $1,558      5.93%   $  309       7.5%  $10,378
Obligations of SCM                                 100      5.02       966      4.35     1,661       4.96    2,727
Mortgage-backed                                    498      5.50        85       9.0     1,130       6.6     1,713
Marketable equity
securities(2)                                                                            1,395       6.4     1,395
Held to maturity:
U.S. Government
and agencies                                     2,560      5.78                                             2,560
Obligations of SCM            75       8.10                            155      5.25                           230
Mortgage-backed                                     44      5.54     3,800      7.65        43       5.3     3,887
                           -----                ------               -----               -----              ------

     Totals                1,064                10,724               6,564               4,538              22,890
                           =====                ======               =====               =====              ======
</TABLE>

(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


                                       20
<PAGE>   22

DEPOSITS AND BORROWINGS

     Deposits are our primary source of funding loans. Depending upon current
market rates, we may from time to time use FHLB borrowings to complement our
funding needs. See "--Liquidity" and "--Interest Rate Sensitivity." We believe
we have the ability to generate deposit growth within our local markets as loan
demand dictates. Our long-term strategy has been to match the competition on
popular deposit products such as money market demand accounts and certificates
of deposit. FHLB advances, while more costly than deposit funding, are typically
the lowest cost borrowed funds available to institutions such as our banks. Our
banks utilize short term borrowing from the FHLB to sustain the available for
sale loans until they are sold. The marketable time table has increased
slightly, therefore, short term borrowing have increased. Of a total $39.6
million in FHLB borrowings at year-end 1999, $27.8 million matures before
December 31, 2000.

     Total deposits grew at a rate of 21.8% during 1999, resulting from the
opening of new branch locations, acquiring a new branch location and more
attractive pricing for deposits. Loan growth was greater than deposit growth in
1999, resulting in an increase in loan to deposit ratio from 90% at year end
1998 to 101% at year end 1999. To offset the loan growth, the banks purchased
federal funds of $2.3 million at year end 1999 and short term FHLB funds.

     We operate retail bank branches in nine different Tennessee counties and
have fifty percent (50%) ownership of a stand-alone federal savings bank in one
Kentucky county through a joint venture. Each local market has it own unique
deposit customer base. Deposit growth has been strong in the new communities
where 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 1997,
1998, and 1999 are represented by deposit category on the table on pages 23
through 25 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, 1999:



<TABLE>
<CAPTION>

                                  TIME
                              CERTIFICATES
                               OF DEPOSIT

                             (In thousands)

<S>                              <C>
3 months or less                 20,714

3-6 months                       24,409

6-12 months                      16,272

over 12 months                   21,694
                                 ------
Total                            83,089
                                 ======
</TABLE>


                                       21
<PAGE>   23


                   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 stockholders' 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. The table is presented on a
     taxable equivalent basis.

<TABLE>
<CAPTION>

                                                    (Dollars in Thousands)

                                                 1998                            1997                   1998/1997 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)                 $293,665    10.22%    29,999     184,792    10.17%    18,791   11,071     137     11,208
                                    --------    -----     ------     -------    -----     ------   ------    ----     ------

Investment Securities:
   Available for Sale                 26,612     6.04%     1,607      14,631     6.40%       937      767     (97)       670
                                                                                                   ------    ----     ------

         Total investment securities  26,612     6.04%     1,607      14,631     6.40%       937      767     (97)       670
                                    --------    -----     ------     -------    -----     ------   ------    ----     ------

Federal funds sold                    16,344     5.14%       840      10,444     4.88%       510      288      42        330
FHLB and FRB stock                     2,541     7.20%       183       1,451     6.82%        99       74      10         84
Interest-bearing deposits in banks    14,575     4.54%       661       2,896     4.90%       142      573     (54)       519
                                    --------    -----     ------     -------    -----     ------   ------    ----     ------

         Total earning assets        353,737     9.41%    33,290     214,214     9.56%    20,479   12,773      38     12,811
                                                =====     ======                =====     ======   ======    ====     ======

Cash and due from banks                7,262                           4,521
Allowance for loan losses             (3,504)                         (2,603)
Other assets                          15,472                          10,088
                                    --------                         -------

         Total assets               $372,967                         226,220
                                    ========                         =======

Deposits:
   NOW investments                  $ 24,919     2.75%       686      17,975     2.69%       483      187      16        203
   Money market investments           59,580     4.90%     2,919      26,719     4.91%     1,313    1,615      (9)     1,606
   Savings                            13,023     3.34%       435       9,399     3.21%       302      116      17        133
   Time deposits $100,000 and over    58,765     5.74%     3,373      34,665     6.15%     2,132    1,482    (241)     1,241
   Other time deposits               140,266     5.88%     8,249      94,442     5.70%     5,387    2,614     248      2,862
                                    --------    -----     ------     -------    -----     ------   ------    ----     ------

         Total interest-bearing
             deposits                296,553     5.28%    15,662     183,200     5.25%     9,617    6,014      31      6,045

Non interest-bearing demand deposits  23,243       --         --      13,019       --         --       --      --         --
                                    --------    -----     ------     -------    -----     ------   ------    ----     ------

         Total deposits              319,796     4.90%    15,662     196,219     4.90%     9,617    6,014      31      6,045

Fed Funds purchased                      164                   5         533     7.50%        40      (28)     (7)       (35)
Note payable                           6,590     8.00%       527       2,994     8.42%       252      303     (28)       275
FHLB advances                         21,022     5.65%     1,187       9,395     5.53%       520        6     661        667
                                    --------              ------     -------               -----   ------    ----     ------
         Total deposits and borrowed

             funds                   347,572     5.00%    17,381     209,141     4.99%    10,429    6,295     657      6,952
                                                -----                           -----                                 ------

Other liabilities                      4,788                           3,536
Stockholders' equity                  20,607                          13,543
                                    --------                         -------

         Total liabilities and
           stockholders' equity     $372,967                         226,220
                                    ========                         =======

Net interest income                                      $15,909                         $10,050    6,478    (619)     5,859
                                                         =======                         =======   ======    ====     ======

Net yield on earning assets                      4.50%                           4.69%
                                                =====                          ======
</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 $1,748 in 1998 and $1,025 in
     1997.

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


                                       22
<PAGE>   24




                   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
                stockholders' 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. The table is presented
                on a taxable equivalent basis.

<TABLE>
<CAPTION>
                                                                             (Dollars in Thousands)
                                                          1999                      1998                      1999/1998 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)                            $374,716    9.75%  36,528  293,665   10.22%   29,999    8,280   (1,751)   6,529
                                               --------    ----   ------  -------   -----    ------    -----   ------    -----

Investment securities:
    Available for sale                           25,886    5.80%   1,502   26,612    6.04%    1,607      (44)     (61)    (105)
                                               --------    ----   ------  -------   -----    ------    -----   ------    -----

    Total investment securities                  25,886    5.80%   1,502   26,612    6.04%    1,607      (44)     (61)    (105)
                                               --------    ----   ------  -------   -----    ------    -----   ------    -----

Federal funds sold                               15,046    4.72%     710   16,344    5.14%      840      (67)     (63)    (130)
FHLB and FRB stock                                2,921    6.85%     200    2,541    7.20%      183       27      (10)      17
Interest-bearing deposits in bank                 7,824    3.23%     253   14,575    4.54%      661     (306)    (102)    (408)
                                               --------    ----   ------  -------   -----    ------    -----   ------    -----

        Total earning assets                    426,393    9.19%  39,193  353,737    9.41%   33,290    7,890   (1,987)   5,903
                                                           ====   ======             ====    ======    =====   ======    =====

Cash and due from banks                           8,903                     7,262
Allowance for loan losses                        (4,196)                   (3,504)
Other assets                                     22,278                    15,472
                                               --------                  --------

                Total assets                    453,378                   372,967
                                               ========                  ========

Deposits:
  NOW investments                                35,889    2.38%     854   24,919    2.75%      686      302     (134)     168
Money market investments                         90,045    4.53%   4,082   59,580    4.90%    2,919    1,493     (330)   1,163

     Savings                                     15,090    3.06%     462   13,023    3.34%      435       69      (42)      27
Time deposits $100,000 and                       65,587    5.20%   3,411   58,765    5.74%    3,373      392     (354)      38
                    over
     Other time deposits                        149,464    5.51%   8,241  140,266    5.88%    8,249      541     (549)      (8)
                                               --------    ----   ------  -------   -----    ------    -----   ------    -----

        Total interest-bearing
                    deposits                    356,075    4.79%  17,050  296,553    5.28%   15,662    2,797   (1,409)   1,388

Non interest-bearing demand                      31,866      --       --   23,243      --        --       --       --       --
   deposits
                                               --------    ----   ------  -------   -----    ------    -----   ------    -----

              Total deposits                    387,941    4.39%  17,050  319,796    4.90%   15,662    2,797   (1,409)   1,388

Fed Funds purchased                               2,334    5.06%     118      164    3.05%        5       66       47      113
Note payable                                      7,293    7.93%     578    6,590    8.00%      527       56       (5)      51
FHLB advances                                    24,850    5.56%   1,381   21,022    5.65%    1,187        2      192      194
                                               --------           ------  -------            ------    -----   ------    -----

                    Total deposits and
                    borrowed  funds             422,418    4.53%  19,127  347,572    5.00%   17,381    2,921   (1,175)   1,746
                                                           ----                      ----

Other liabilities                                 3,760                0    4,788
Stockholders' equity                             27,200                0   20,607
                                                 ------                    ------
       Total liabilities and
        stockholders' equity                    453,378       0           372,967
                                                =======                   =======

Net interest income                                              $20,066                   $ 15,909    4,969     (812)   4,157
                                                                 =======                   ========    =====     ====    =====

Net yield on earning assets                                4.71%                     4.50%
                                                           ====                      ====
</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 $2,551 in 1999 and $1,748 in
     1998.


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



                                       23


<PAGE>   25


EQUITY AND CAPITAL RESOURCES

         We were "well capitalized" for leverage and Tier One capital
calculations; we were "adequately capitalized" for total capital to
risk-weighted assets purposes at December 31, 1999. Our leverage capital ratio
was 6.84% in 1999 and 5.45% in 1998, with stockholders' equity of $35.3 million
at year-end 1999. For a discussion of capital requirements see "Supervision and
Regulation - Capital Requirements." We declared a 10% stock dividend in March
1999. Also in March 1999, we sold 100,000 shares of stock for $1,000,000 to a
group of Franklin, Tennessee investors to support the new Franklin branch
opened there by The Community Bank.

         In September 1999, we completed an Initial Public Offering (IPO) of
700,000 shares of stock at a price of $12.50 per share for $8,500,000. In
connection with the purchase of the two branches from a financial institution,
we issued 47,000 shares valued at $588,000. To purchase the minority interest
shares of Bank of Dyer we issued 7,704 shares of stock valued at approximately
$99,000.

         In March 2000, we have declared a .025 cent cash dividend for
shareholders of record as of March 1, 2000 to be paid April 14, 2000.

         Items that represent common stock equivalents include 425,635 shares
of common stock options outstanding at December 31, 1999. At December 31, 1999,
there were 113,540 additional common shares available for grant under the stock
option plan. 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,
                                                                          1999          1998          1997

<S>                                                                      <C>           <C>           <C>
Return on average assets                                                  0.77%         0.89%         0.94%
Return on average equity                                                 12.91%        16.22%        15.76%
Average equity to average assets ratio                                    6.00%         5.53%         5.99%
Dividend payout ratio                                                       --            --            --
</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. 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 1998 was 99% and for 1999

                                      24


<PAGE>   26


was 96.6%. We do not know of any trends or demands that are reasonably likely
to result in liquidity increasing or decreasing

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 1999 follows:

<TABLE>
<CAPTION>
                                                                          91-365                            OVER 5
                                                     1-90 DAYS             DAYS           1-5 YEARS          YEARS          TOTAL
<S>                                                  <C>                  <C>             <C>               <C>            <C>
Interest earning assets:
   Loans, net                                        $ 173,047            104,196           146,563          16,510        440,316
Securities available for sale                              798              1,625             8,025           5,765         16,213
Securities held to maturity                                793              2,663             2,781             440          6,677
   Federal funds sold                                   11,250                 --                --              --         11,250
   Interest-earning deposits                             4,896                500                --              --          5,396
----------------------------------------------------------------------------------------------------------------------------------
     Total interest earning assets                   $ 190,784            108,984           157,369          22,715        479,852
==================================================================================================================================
Interest bearing liabilities:
   Interest bearing demand dep                       $ 132,917                 --                --              --        132,917
   Savings deposits                                     13,582                 --                --              --         13,582
   Time deposits                                        55,898            136,278            61,618             199        253,993
   FHLB borrowings                                      10,539             16,852             2,154          10,009         39,554
   Notes payable                                            78                975             4,290           2,112          7,455
   Fed Funds purchased                                   2,275                 --                --              --          2,275
----------------------------------------------------------------------------------------------------------------------------------
   Total interest bearing liabilities                $ 215,289            154,105            68,062          12,320        449,776
==================================================================================================================================
Rate sensitive gap                                   $ (24,505)           (45,121)           89,307          10,395         30,076
----------------------------------------------------------------------------------------------------------------------------------
Rate sensitive cumulative gap                          (24,505)           (69,626)           19,681          30,076         30,076
Cumulative gap as a percentage
  of earnings assets                                     (5.11)%           (14.51)%            4.10%           6.27%
==================================================================================================================================
</TABLE>

As shown in the table, we have a cumulative negative GAP of approximately 5.1%
and 14.5% at the end of 90 days and one year, respectively. Management believes
that this level of negative GAP is appropriate since many of the liabilities
which 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.


                                      25
<PAGE>   27


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,
1998. 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.


<TABLE>
<CAPTION>
                                                   EXPECTED MATURITY DATE -
                                                   YEAR ENDING DECEMBER 31,

                                                           2001 to       2003 to           2005                             FAIR
(Dollars in Thousands)                        2000          2002          2004          THEREAFTER           TOTAL          VALUE
<S>                                          <C>           <C>           <C>            <C>                  <C>            <C>
EARNING ASSETS:
Loans, net of unearned
interest:(1)
                  Variable rate             $152,639       $11,168       $ 2,703           $    85          $166,595       $166,595
      Average interest rate (%)                 9.51          8.70          8.20              9.33              9.43
                  Fixed rate                 114,020        57,202        86,465            16,034           273,721        272,768
      Average interest rate (%)                 8.97          9.34          9.06              8.36              9.04
Securities(2)                                  1,064         7,440         3,284            11,102            22,890         22,807
                  Average interest (%)          5.12          5.73          5.96              6.45              5.80
Federal funds sold                            11,250                                                          11,250         11,250
                  Average interest (%)          5.60                                                            5.60
Interest-earning deposits                      5,396                                                           5,396         5,396
in financial institutions                       5.50%                                                           5.50%
Interest-bearing deposits                    339,336        47,555        14,063               199           401,153        400,866
                  Average interest (%)          4.96          5.70          5.93              4.75              5.08
Other borrowings                              30,719         3,618         2,826            12,121            49,284         48,009
                  Average interest (%)          5.91          7.17          7.19              5.84
</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.


                                      26
<PAGE>   28


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEPENDENT AUDITORS' REPORT


The Board of Directors
Cumberland Bancorp, Incorporated


We have audited the consolidated balance sheets of Cumberland Bancorp,
Incorporated and Subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of earnings, changes in stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1999. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Cumberland
Bancorp, Incorporated and Subsidiaries as of December 31, 1999 and 1998, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1999, in conformity with
generally accepted accounting principles.

                                                   /s/ Heathcott & Mullaly, P.C.

February 24, 2000
Brentwood, Tennessee


                                      27
<PAGE>   29


               Cumberland Bancorp, Incorporated and Subsidiaries
                          Consolidated Balance Sheets
                           December 31, 1999 and 1998

<TABLE>
<CAPTION>
(Dollars in thousands except share amounts)                                          1999                  1998
-------------------------------------------------------------------------------------------------------------------
ASSETS:
<S>                                                                             <C>                        <C>
Cash and due from banks                                                         $     18,255                  8,972
Interest-bearing deposits in financial institutions                                    5,396                 21,996
Federal funds sold                                                                    11,250                 14,250
Securities available for sale, at fair value                                          16,213                 17,270
Securities held to maturity, fair value $6,594 in 1999
     and $9,440 in 1998                                                                6,677                  9,406
Loans                                                                                440,316                321,547
Allowance for loan losses                                                             (5,146)                (4,012)
-------------------------------------------------------------------------------------------------------------------
                                  LOANS, NET                                         435,170                317,535
-------------------------------------------------------------------------------------------------------------------
Premises and equipment                                                                14,578                 10,561

Accrued interest receivable                                                            4,073                  3,026

Federal Home Loan Bank and Federal Reserve Bank stock - restricted                     3,415                  2,648

Investment in unconsolidated subsidiaries                                              2,441                    373

Other real estate                                                                      2,400                    610

Loan servicing rights                                                                  1,021                  1,087

Other intangible assets                                                                1,523                      0

Other assets                                                                           3,147                    972
-------------------------------------------------------------------------------------------------------------------
                               TOTAL  ASSETS                                    $    525,559                408,706
-------------------------------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY:
Deposits
    Noninterest-bearing                                                         $     34,099                 26,804
    Interest-bearing                                                                 401,153                330,600
-------------------------------------------------------------------------------------------------------------------
                              TOTAL DEPOSITS                                         435,252                357,404
-------------------------------------------------------------------------------------------------------------------
Notes  Payable                                                                         7,455                  7,233
Federal Funds Purchased                                                                2,275                      0
Advances From Federal Home Loan Bank                                                  39,554                 17,973
Accrued Interest Payable                                                               3,072                  2,571
Other Liabilities                                                                      2,676                  1,466
-------------------------------------------------------------------------------------------------------------------
                           TOTAL LIABILITIES                                         490,284                386,647
-------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:

Common Stock, $0.50 Par Value, Authorized 20,000,000 Shares;

    Shares Issued - 6,857,620  in 1999 and 5,486,035 in 1998                           3,429                  2,743

Additional Paid-in Capital                                                            25,110                  9,380

Retained Earnings                                                                      7,194                 10,026

Accumulated Other Comprehensive Income (Loss)                                           (458)                   (90)
-------------------------------------------------------------------------------------------------------------------
                           TOTAL STOCKHOLDERS' EQUITY                                 35,275                 22,059
-------------------------------------------------------------------------------------------------------------------
                           TOTAL  LIABILITIES  AND  STOCKHOLDERS'
                           EQUITY                                               $    525,559                408,706
-------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.


                                       28
<PAGE>   30


                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


<TABLE>
<CAPTION>

(Dollars in thousands except per share data)                       1999               1998               1997
                                                                ----------          ---------          ---------
<S>                                                             <C>                 <C>                <C>
INTEREST INCOME:
  Loans, including fees                                         $   36,528             29,999             18,791
  Securities                                                         1,502              1,607                937
  Deposits in financial institutions                                   253                661                142
  Federal funds sold                                                   710                840                510
  Federal Home Loan Bank dividends                                     200                183                 99
                                                                ----------          ---------          ---------
                 TOTAL INTEREST INCOME                              39,193             33,290             20,479
                                                                ----------          ---------          ---------
INTEREST EXPENSE:
Time deposits of $100,000 or more                                    3,411              3,373              2,132
Other time deposits                                                 13,639             12,288              7,484
Federal funds purchased                                                118                  5                 40
Notes payable and advances from Federal Home Loan Bank               1,959              1,715                773
                                                                ----------          ---------          ---------
                 TOTAL INTEREST EXPENSE                             19,127             17,381             10,429
                                                                ----------          ---------          ---------
                 NET INTEREST INCOME                                20,066             15,909             10,050
PROVISION FOR LOAN LOSSES                                            1,623              1,188              1,390
                                                                ----------          ---------          ---------
                 NET INTEREST INCOME AFTER PROVISION                    --
                   FOR LOAN LOSSES                                  18,443             14,721              8,660
                                                                ----------          ---------          ---------
OTHER INCOME:
Service charges on deposit accounts                                  1,683              1,305              1,016
Other service charges, commissions and fees                          1,295              1,039                747
Mortgage banking activites                                             937              1,380                689
Gain on sale of SBA loans                                              464                515                222
Gain on sale of branch                                                   0                  0                550
Real estate sales                                                        0                 21                166
                                                                ----------          ---------          ---------
                 TOTAL OTHER INCOME                                  4,379              4,260              3,390
                                                                ----------          ---------          ---------
OTHER EXPENSES:
                                                                                                       ---------
Salaries and employee benefits                                       9,206              7,109              4,354
                                                                                                       ---------
Occupancy                                                            1,073              1,051                645
Cost of real estate sales                                                0                 23                171
Deposit insurance premiums                                             209                205                132
Other operating                                                      6,710              5,248              3,394
                                                                ----------          ---------          ---------
                 TOTAL OTHER EXPENSES                               17,198             13,636              8,696
                                                                ----------          ---------          ---------
                 INCOME BEFORE INCOME TAXES                          5,624              5,345              3,354
                                                                                                       ---------
INCOME TAX EXPENSE                                                   2,113              2,003              1,220
                                                                ----------          ---------          ---------
                 NET EARNINGS                                   $    3,511              3,342              2,134
                                                                ----------          ---------          ---------
NET EARNINGS PER SHARE - BASIC                                  $     0.56               0.56               0.49
NET EARNINGS PER SHARE - DILUTED                                      0.55               0.55               0.48
                                                                ----------          ---------          ---------
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC                      6,248,130          5,971,306          4,354,263
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED                    6,387,636          6,098,173          4,483,267
                                                                ----------          ---------          ---------
</TABLE>


See accompanying notes to consolidated financial statements.


                                       29
<PAGE>   31


                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997


<TABLE>
<CAPTION>

                                                                                                        ACCUMULATED
                                                                              ADDITIONAL                   OTHER         TOTAL
                                                           COMMON STOCK        PAID-IN      RETAINED   COMPREHENSIVE  STOCKHOLDERS'
                                                      --------------------
(DOLLARS IN THOUSANDS)                                 SHARES       AMOUNT     CAPITAL      EARNINGS   INCOME (LOSS)    EQUITY
                                                      ---------     ------    ----------    --------   -------------  -------------
<S>                                                   <C>           <C>       <C>           <C>        <C>            <C>

BALANCE, DECEMBER 31, 1996                              370,901     $1,113       1,637        3,854         (38)          6,566

     ADJUSTMENTS FOR POOLING OF SHARES                  511,783        256         852          726         (18)          1,816
                                                      ---------     ------     -------      -------        ----         -------

BALANCE, DECEMBER 31, 1996, RESTATED                    882,684      1,369       2,489        4,580         (56)          8,382
CONVERSION OF STOCK OPTIONS TO  39,231 SHARES
   OF COMMON STOCK                                       39,231        118        (118)           0           0               0
INCOME TAX BENEFIT FROM EXERCISE OF
   STOCK OPTIONS                                              0          0          77            0           0              77
THREE-FOR-ONE STOCK SPLIT                               820,263          0           0            0           0               0
ISSUANCE OF 1,135,749 SHARES OF COMMON STOCK
   IN CONNECTION WITH THE ACQUISTION OF  FIRST
   FEDERAL BANCSHARES, INC                            1,135,749      1,136       5,886            0           0           7,022
PROCEEDS FROM SALE OF  111,250 SHARES OF
    COMMON STOCK                                        111,250        111         939            0           0           1,050
CASH DIVIDENDS - DYER                                         0          0           0          (15)          0             (15)
COMPREHENSIVE INCOME:
     NET EARNINGS,  AS PREVIOUSLY REPORTED                    0          0           0        2,134
    OTHER COMPREHENSIVE INCOME:
       CHANGE IN UNREALIZED LOSS ON
       SECURITIES AVAILABLE FOR SALE ,NET OF
       $4 IN INCOME TAXES                                     0          0           0            0           6
TOTAL COMPREHENSIVE INCOME                                2,140
SUBSEQUENT TWO-FOR-ONE STOCK SPLIT                    2,477,394          0           0            0           0
                                                      ---------     ------     -------      -------        ----         -------

BALANCE, DECEMBER 31, 1997                            5,466,571      2,734       9,273        6,699         (50)         18,656
SALE OF 19,464 SHARES OF COMMON STOCK
   TO EMPLOYEES                                          19,464          9         107            0          --             116
CASH DIVIDENDS - DYER                                         0          0           0          (15)          0             (15)
COMPREHENSIVE INCOME:
     NET EARNINGS                                            --          0           0        3,342
    OTHER COMPREHENSIVE INCOME
       CHANGE IN UNREALIZED LOSS ON
       SECURITIES AVAILABLE FOR SALE NET OF
       $24 IN INCOME TAX BENEFITS                             0          0           0            0         (40)
TOTAL COMPREHENSIVE INCOME                                3,302
                                                      ---------     ------     -------      -------        ----         -------

BALANCE, DECEMBER 31, 1998                            5,486,035      2,743       9,380       10,026         (90)         22,059
PROCEEDS FROM SALE OF 100,000 SHARES OF
     COMMON STOCK (PRIVATE PLACEMENT)                   100,000         50         950            0           0           1,000
10% STOCK DIVIDEND                                      507,305        254       6,087       (6,341)          0               0
CASH DIVIDEND ON FRACTIONAL SHARES                            0          0           0           (2)          0              (2)
PROCEEDS FROM SALE OF  666,711 SHARES OF
     COMMON STOCK, NET OF OFFERING COSTS                666,711        333       7,800            0           0           8,133
COMMON STOCK ISSUED IN CONNECTION WITH
   OPENING OF THE MURRAY BANK                            41,665         20         230            0           0             250
EXERCISE OF STOCK OPTIONS                                 1,200          1           6            0           0               7
ISSUANCE OF  47,000 SHARES OF COMMON STOCK
    IN CONNECTION WITH THE ACQUISITION OF
   MCMINNVILLE BRANCH                                    47,000         24         564            0           0             588
ISSUANCE OF  7,704 SHARES OF COMMON STOCK
    IN CONNECTION WITH THE ACQUISITION OF  MINORITY
   INTEREST SHARES OF BANK OF DYER                        7,704          4          93            0          97
COMPREHENSIVE INCOME:
     NET EARNINGS                                             0          0           0        3,511          --
    OTHER COMPREHENSIVE INCOME
       CHANGE IN UNREALIZED LOSS ON
       SECURITIES AVAILABLE FOR SALE NET OF
       $ 281 IN INCOME TAX BENEFITS                           0          0           0            0        (368)
TOTAL COMPREHENSIVE INCOME                                3,143
                                                      ---------     ------     -------      -------        ----         -------
BALANCE, DECEMBER 31, 1999                            6,857,620     $3,429      25,110        7,194        (458)         35,275
                                                      ---------     ------     -------      -------        ----         -------


</TABLE>


See accompanying notes to consolidated financial statements.


                                       30
<PAGE>   32


                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>

(Dollars in thousands)                                                                  1999               1998             1997
                                                                                     ---------          ---------        ---------
<S>                                                                                  <C>                <C>              <C>
NET EARNINGS                                                                         $   3,511              3,342            2,134
ADJUSTMENTS TO RECONCILE NET EARNINGS
  TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
    Provision for loan losses                                                            1,623              1,188            1,390
    Depreciation and amortization                                                        1,367              1,079              529
    Gain on sale of branch                                                                   0                  0             (550)
    Operations of unconsolidated subsidiaries                                              104                 86                0
    Mortgage loans originated for sale                                                 (51,740)           (74,813)         (20,374)
    Proceeds from sale of mortgage loans                                                52,494             76,155           20,425
    Deferred income tax benefits                                                          (467)               (87)            (130)
    Increase in accrued interest receivable                                               (877)              (276)            (479)
    Increase in accrued interest payable and other liabilities                           1,635                526              360
    Other, net                                                                          (3,169)              (148)              (7)
                                                                                     ---------          ---------        ---------
                                                             TOTAL ADJUSTMENTS             970              3,710            1,164
                                                                                     ---------          ---------        ---------
                                     NET CASH PROVIDED BY OPERATING ACTIVITIES           4,481              7,052            3,298
                                                                                     ---------          ---------        ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net cash received - acquistion of First Federal Bancshares, Inc.                           0                  0           14,965
  Net (increase) decrease in interest-bearing deposits in financial institutions        16,600            (12,568)          (4,427)
  (Increase) decrease in federal funds sold                                              3,000             (4,175)          (3,000)
  Purchases of securities available for sale                                            (3,635)           (23,863)          (2,238)
  Proceeds from maturities and redemptions of securities available for sale              4,560             14,483            2,449
  Purchases of securities held to maturity                                              (1,350)            (4,489)          (5,000)
  Proceeds from maturities and redemptions of securities held to maturity                4,079              6,449            2,534
  Net  increase in loans                                                              (109,825)           (53,886)         (44,701)
  Purchase of and improvements to other real estate                                          0                (28)            (384)
  Cash used in sale of branch                                                                0                  0             (916)
  Cash received in purchase of branch                                                    3,746                  0                0
  Investment in unconsolidated subsidiaries                                             (1,935)              (613)
  Purchases of premises and equipment                                                   (3,627)            (2,766)          (2,490)
  Proceeds from sale of other real estate                                                1,346                 46               65
                                                                                     ---------          ---------        ---------
                                         NET CASH USED BY INVESTING ACTIVITIES         (87,041)           (81,410)         (43,143)
                                                                                     ---------          ---------        ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net  increase in deposits                                                             58,375             72,368           38,801
  Increase (decrease) in federal funds purchased                                         2,275             (1,200)             800
  Increase in advances from Federal Home Loan Bank                                      21,581                516            2,991
  Proceeds from notes payable                                                              675              3,000                0
  Repayments of notes payable                                                             (453)              (298)               0
  Dividends paid                                                                             0                (15)             (15)
  Proceeds from issuance of common stock, net                                            9,390                117            1,050
                                                                                     ---------          ---------        ---------
                                     NET CASH PROVIDED BY FINANCING ACTIVITIES          91,843             74,488           43,627
                                                                                     ---------          ---------        ---------
                                                          NET INCREASE IN CASH           9,283                130            3,782
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                           8,972              8,842            5,060
                                                                                     ---------          ---------        ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR                                             $  18,255              8,972            8,842
                                                                                     ---------          ---------        ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                                                                                     ---------          ---------        ---------
    Interest  paid                                                                   $  18,626             16,880           10,365
    Income taxes paid                                                                    2,660              1,988            1,333
                                                                                     ---------          ---------        ---------
NON-CASH ACTIVITIES:
    Issuance of common stock - acquisition of McMinnville branch                     $     588                  0                0
    Issuance of common stock - acquisition of minority interest of Bank of Dyer             97                  0                0

10% stock dividend                                                                       6,341                  0                0
Assets acquired through foreclosure                                                      3,052
Issuance of common stock - acquisition of First Federal
    Bancshares, Inc.                                                                         0                  0            7,022
Issuance of common stock - conversion of stock options                                       0                  0              118
                                                                                     ---------          ---------        ---------
</TABLE>

See accompanying notes to consolidated financial statements.



                                       31
<PAGE>   33


                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

1        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

         PRINCIPLES OF CONSOLIDATION

         The accompanying consolidated financial statements include the accounts
         of Cumberland Bancorp, Incorporated (the Company) and its wholly-owned
         subsidiaries, Cumberland Bank, BankTennesse, The Community Bank and
         Bank of Dyer. Also included in the consolidated financial statements
         are Cumberland Bank's wholly-owned subsidiaries Cumberland Finance,
         Inc., Cumberland Mortgage Company, Inc., Cumberland Life Insurance
         Company, Inc., CBC Financial Services, Inc., and CBC Financial
         Services, Inc.'s fifty percent owned subsidiary, InsureTennessee.
         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 Cumberland
         Bank, BankTennesse, The Community Bank and Bank of Dyer. The Banks
         provide a variety of banking services to individuals and businesses
         through their eighteen branches located across nine 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.

         Cumberland Bank's subsidiaries, Cumberland Mortgage Company, Inc.,
         Cumberland Life Insurance Company, Inc., CBC Financial Services, Inc.,
         and Insure Tennessee, Inc. are headquartered in Carthage, Tennessee and
         have offices in Gallatin and Murfreesboro, Tennessee. Cumberland
         Finance, Inc. provides consumer loan services. Cumberland Mortgage
         Company, Inc. develops real estate. Cumberland Life Insurance Company,
         Inc. is a reinsurance company for credit insurance products. CBC
         Financial Services, Inc. provides brokerage services. InsureTennessee
         sells property and casualty insurance.

         USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
         accepted accounting principles 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.

         CASH AND DUE FROM BANKS

         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.

         INVESTMENT SECURITIES

         In accordance with Statement of Financial Accounting Standards No. 115,
         "Accounting for Certain Debt and Equity Securities" (SFAS 115)
         securities are classified into three categories: held to maturity
         (HTM), available for sale (AFS), and trading.


                                       32
<PAGE>   34

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

1        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

         Securities classified as held to maturity, which are those the Company
         has the positive intent and ability to hold to maturity, are reported
         at amortized cost. Securities classified as available for sale may be
         sold in response to changes in interest rates, liquidity needs, and for
         other purposes. Available for sale securities are reported at fair
         value and include securities not classified as held to maturity or
         trading. Trading securities are those held principally for the purpose
         of selling in the near future and are carried at fair value. The
         Company currently has no trading securities.

         Unrealized holding gains and losses for available for sale securities
         are excluded from earnings and reported, net of any income tax effect,
         as other comprehensive income in stockholders' equity. Realized gains
         and losses are reported in earnings based on the adjusted cost of the
         specific security sold.

         LOANS

         Loans which the Company has the positive intent and ability to hold to
         maturity are stated at the principal amount outstanding. Unearned
         discounts, deferred loan fees and the allowance for loan losses are
         shown as reductions of loans. Loan origination fees are deferred, to
         the extent they exceed direct origination costs, and recognized over
         the life of the related loans as yield adjustments. Interest income on
         loans is computed based on the outstanding loan balance.

         Loans are generally placed on nonaccrual when a loan is specifically
         determined to be impaired or when the collection of interest is less
         than probable or collection of any amount of the principal is doubtful,
         after considering economic and business conditions and collection
         efforts. Any unpaid interest previously accrued on those loans is
         reversed from income. Interest income generally is not recognized on
         specific impaired loans unless the likelihood of further loss is
         remote. Interest payments received on such loans are applied as a
         reduction of the loan principal balance. Interest income on other
         nonaccrual loans is recognized only to the extent of interest payments
         received.

         ALLOWANCE FOR LOAN LOSSES

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

         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. Origination fees are recorded as income
         when the loans are sold to third party investors.


                                       33
<PAGE>   35

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

1        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

         TRANSFER AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF
         LIABILITIES

         Effective January 1, 1997, the Company adopted SFAS No. 125,
         "Accounting for Transfers and Servicing of Financial Assets and
         Extinguishments of Liabilities". The statement, which supercedes SFAS
         No. 122, provides accounting and reporting standards for transfers and
         servicing of financial assets and extinguishments of liabilities based
         on application of a financial-components approach that focuses on
         control. It distinguishes transfers of financial assets that are sales
         from transfers of assets that are secured borrowings. The adoption of
         SFAS 125 did not have a material effect on the Company's financial
         position or results of operations.

         PREMISES AND EQUIPMENT

         Premises and equipment are stated at cost, less accumulated
         depreciation and amortization. Depreciation has been computed on
         straight-line and accelerated methods, based on the estimated useful
         lives of the respective asset.

         OTHER INTANGIBLE ASSETS

         Other intangible assets consist of goodwill and a core deposit
         intangible. Goodwilll represents the excess of cost over the fair value
         of the assets acquired from Bancshares of Dyer, Inc. and is being
         amortized over 15 years. The core deposit intangible represents the
         value assigned to a deposit base acquired in the acquisition of another
         financial institution's branch banking operations in Warren County,
         Tennessee and is being amortized on the straight line basis over 15
         years.

         INCOME TAXES

         The Company and its subsidiaries file a consolidated federal income tax
         return. The subsidiaries provide for income taxes on a separate-return
         basis and remit to or receive from the Company amounts currently
         payable or receivable. Income taxes have been provided using the
         liability method in accordance with SFAS No. 109, "Accounting for
         Income Taxes".

         A valuation allowance is required by SFAS 109 if, based on the weight
         of available evidence, it is more likely than not that some portion or
         all of the deferred tax assets will not be realized. This allowance is
         evaluated periodically by management and adjusted based on current
         circumstances.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         SFAS No. 107, "Disclosures about Fair Value of Financial Instruments",
         requires entities to disclose the estimated fair value of its financial
         instrument assets and liabilities. Management is concerned that the
         required disclosures under SFAS No. 107 may lack reasonable
         comparability between financial institutions due to the wide range of
         permitted valuation techniques and numerous estimates which must be
         made given the absence of active secondary markets for many of the
         financial instruments. This lack of uniform valuation methodologies
         also introduces a greater degree of subjectivity to these estimated
         fair values.

         The following methods and assumptions were used to estimate the fair
         value of each class of financial instruments for which it is
         practicable to estimate that value. These fair values are provided for
         disclosure purposes only and do not impact carrying values of financial
         statement amounts.


                                       34
<PAGE>   36

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

1        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

         Cash, interest bearing deposits in financial institutions and federal
         funds sold -- The carrying amounts reported in the balance sheet for
         cash, interest bearing deposits in financial institutions and federal
         funds sold approximate those assets' fair values.

         Securities (including mortgage-backed securities) -- Fair values for
         securities are based on quoted market prices, where available. If
         quoted market prices are not available, fair values are based on quoted
         market prices of comparable instruments.

         Loans receivable -- For variable-rate loans that reprice frequently and
         have no significant change in credit risk, fair values are based on
         carrying values. The fair values for other loans are estimated using
         discounted cash flow analyses, using interest rates currently offered
         for loans with similar terms to borrowers of similar credit quality.

         Federal Home Loan Bank and Federal Reserve Bank stock -- The carrying
         amounts reported in the balance sheet for Federal Home Loan Bank and
         Federal Reserve Bank stock approximates its fair value.

         Loan servicing rights --The carrying amounts reported in the balance
         sheet for servicing rights approximates their fair value.

         Deposits with defined maturities -- The fair value for deposits with
         defined maturities is calculated by discounting future cash flows to
         their present value. Future cash flows, consisting of both principal
         and interest payments, are discounted with the Bank's current rates for
         similar instruments applicable to the remaining maturity. For purposes
         of this disclosure, deposits with defined maturities include all
         certificates of deposits and other time deposits.

         Deposits with undefined maturities -- The fair value of deposits with
         undefined maturities is equal to the carrying value. For purposes of
         this disclosure, deposits with undefined maturities include
         noninterest-bearing demand, interest-bearing demand and savings
         accounts.

         Federal funds purchased --The carrying amounts reported in the balance
         sheet for federal funds purchased approximates their fair value.

         Notes payable, and Federal Home Loan Bank advances -- The fair values
         of notes payable and advances from the Federal Home Loan Bank are
         estimated using discounted cash flow analyses, based on the Company's
         current incremental borrowing rates for similar types of borrowing
         arrangements.

         Accrued Interest -- The carrying amounts of accrued interest
         approximate their fair values.

         Off-Balance Sheet Financial Instruments - Fair values for off-balance
         sheet lending commitments are based on fees currently charged to enter
         into similar agreements taking into account the remaining terms of the
         agreements and the counter parties' creditworthiness.

         CASH AND CASH EQUIVALENTS

         Cash and cash equivalents includes amounts in the balance sheet
         caption, cash and due from banks.


                                       35
<PAGE>   37

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

1        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

         EARNINGS PER SHARE

         Earnings per share (EPS) is calculated in accordance with Statement of
         Financial Accounting Standards (SFAS) No. 128, issued in February 1997.
         The statement requires the dual presentation of basic and diluted EPS
         on the income statement. Basic EPS excludes dilution, and is computed
         by dividing income available to common stockholders by the
         weighted-average number of common shares outstanding for the period.
         Diluted EPS reflects the potential dilution that could occur if options
         to issue common stock were exercised or converted into common stock
         that then shared in the earnings of the entity. EPS has been adjusted
         for the 1999 10% stock dividend, 1997 three-for-one stock split, and
         the 1998 two-for-one stock split as if the stock splits and dividend
         occurred as of the earliest period presented. In addition, average
         shares outstanding was increased by 511,783 shares to reflect the
         pooling of interests with Bancshares of Dyer, Inc. in all periods
         presented.

         EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS

         In July 1997, the FASB issued SFAS No. 130, "Comprehensive Income". The
         statement establishes standards for reporting and presentation of
         comprehensive income and its components (revenues, expenses, gains, and
         losses) in a full set of general-purpose financial statements. It
         requires that all items that are required to be recognized under
         accounting standards as components of comprehensive income be reported
         in a financial statement that is presented with the same prominence as
         other financial statements. This statement requires that companies (i)
         classify items of other comprehensive income by their nature in a
         financial statement and (ii) display the accumulated balance of other
         comprehensive income separately from retained earnings and additional
         paid-in capital in the equity section of the statement of financial
         condition.

         This statement is effective for fiscal years beginning after December
         15, 1997. Reclassification of financial statements for earlier periods
         provided for comprehensive purposes is required.

         In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments
         of an Enterprise and Related Information". The statement establishes
         standards for disclosure about operating segments in annual financial
         statements and selected information in interim financial reports. It
         also establishes standards for related disclosures about products and
         services, geographic areas, and major customers. This statement
         supersedes SFAS No. 14, "Financial Reporting for Segments of a Business
         Enterprise". This statement becomes effective for the Company's fiscal
         year ending December 31, 1998, and requires that comparative
         information from earlier years be restated to conform to its
         requirements. The adoption of the provisions of this statement did not
         have a material impact on the Company.

         In October 1998, the Financial Accounting Standards Board (FASB) issued
         SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained after
         Securitization of Mortgage Loans Held for Sale by a Mortgage Banking
         Enterprise." This Statement amends SFAS No. 65, which required that
         retained securities be classified as trading securities. SFAS No. 134
         allows these securities to be classified as trading, held to maturity
         or available for sale based on the intent and ability of the
         enterprise. This Statement is effective January 1, 1999, did not
         materially impact the Company's financial position or results of
         operations.

         In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
         Instruments and Hedging Activities." The new Statement requires that an
         entity recognize all derivatives as either assets or liabilities in the
         statement of condition and measure those instruments at fair value. The
         accounting for changes in the fair value of a derivative depends on the
         intended use of the derivative and the resulting designation. This
         Statement is effective for all quarters of fiscal years beginning after
         June 15, 1999; which for the Company will mean the first quarter of
         2000. This Statement did not materially impact the Company's financial
         position or results of operations.


                                       36
<PAGE>   38

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

1        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

         In April 1998, the American Institute of Certified Public Accountants
         issued SOP 98-5, "Reporting on the Costs of Start-up Activities." This
         Statement requires that the costs of start-up activities, including
         organization costs, be expensed as incurred. When adopted, previously
         capitalized start-up and organization costs should be written off and
         reported as the cumulative effect of a change in accounting principle.
         The Statement is effective for fiscal years beginning after December
         15, 1998 and did not materially impact the Company's financial position
         or results of operations.

2        INTEREST BEARING DEPOSITS

         At December 31, 1998, the Company had certificates of deposit with the
         Federal Home Loan Bank totaling $17,500,000. The certificates bear
         interest ranging from 4.75% to 5.83% and have maturities ranging from
         seven days to two years, with penalties for early withdrawal. Any
         penalties for early withdrawal would not have a material effect on the
         financial statements.

         The majority of the certificates are short-term with maturities ranging
         from 7 to 87 days and bear interest ranging from 4.75% to 5.10%. One
         $500,000 certificate has a 185 day maturity with interest at 4.80%, and
         one other $500,000 certificate has a 730 day maturity and bears
         interest of 5.825%.

         At December 31, 1999, the Company had demand deposits with the Federal
         Home Loan Bank totaling $4,696,000 and certificates of deposit with a
         related party institution totaling $700,000.

3        SECURITIES

         The following table reflects the amortized cost and estimated fair
         values of securities, as well as gross unrealized gains and gross
         unrealized losses as of December 31, 1999 and 1998.

<TABLE>
<CAPTION>

                                                        GROSS            GROSS
                                     AMORTIZED        UNREALIZED      UNREALIZED           FAIR
(Dollars in thousands)                  COST            GAINS           LOSSES            VALUE
                                     ---------        ----------      ----------         -------
<S>                                   <C>             <C>             <C>                <C>
Available for sale
U.S. Treasury and U.S.
  government agencies                 $10,696               --            (318)           10,378
Obligations of state and
  political subdivisions                2,869               --            (142)            2,727
Mortgage-backed securities              1,490                3             (29)            1,464
Marketable equity securities            1,489               --            (107)            1,382
Other debt securities                     261                1              --               262
                                      -------          -------         -------           -------
  December 31, 1999                   $16,805                4            (596)           16,213
                                      -------          -------         -------           -------

Held to maturity
U.S. Treasury and U.S.
  government agencies                 $ 2,560               --             (54)            2,506
Obligations of state and
  political subdivisions                  230                6              --               236
Mortgage-backed securities              3,844               20             (55)            3,809
Other debt securities                      43               --              --                43
                                      -------          -------         -------           -------
  December 31, 1999                   $ 6,677               26            (109)            6,594
                                      -------          -------         -------           -------
</TABLE>


                                       37
<PAGE>   39


                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


<TABLE>
<CAPTION>

                                                                  GROSS          GROSS
                                              AMORTIZED        UNREALIZED     UNREALIZED           FAIR
         (Dollars in thousands)                 COST              GAINS         LOSSES             VALUE
                                              ---------        ----------     ----------          -------

         <S>                                  <C>              <C>            <C>                 <C>
         Available for sale
         U.S. Treasury and U.S.
           government agencies                 $10,440               38              (7)           10,471
         Obligations of state and
           political subdivisions                1,800               44              --             1,844
         Mortgage-backed securities              3,392               11             (19)            3,384
         Marketable equity securities            1,735               --            (164)            1,571
                                               -------          -------         -------           -------

           DECEMBER 31, 1998                   $17,367               93            (190)           17,270
                                               -------          -------         -------           -------

         Held to maturity
         U.S. Treasury and U.S.
           government agencies                 $ 4,269               21              --             4,290
         Obligations of state and
           political subdivisions                  355               16              --               371
         Mortgage-backed securities              4,782               40             (43)            4,779
                                               -------          -------         -------           -------
           DECEMBER 31, 1998                   $ 9,406               77             (43)            9,440
                                               -------          -------         -------           -------
</TABLE>

         The carrying amounts and estimated fair value of securities at December
         31, 1999 by contractual maturity are shown below. Expected maturities
         will differ from contractual maturities because borrowers may have the
         right to call or prepay obligations with or without call or prepayment
         penalties.


<TABLE>
<CAPTION>

                                                     AVAILABLE FOR SALE              HELD TO MATURITY
                                                  ------------------------        ----------------------
                                                  AMORTIZED          FAIR         AMORTIZED        FAIR
         (Dollars in thousands)                      COST            VALUE           COST          VALUE
                                                  ---------         ------        ---------        -----
         <S>                                      <C>               <C>           <C>              <C>
         Due in one year or less                   $ 1,000             988             75             75
         Due after one through five years            7,799           7,623          2,560          2,505
         Due after five through ten years            2,645           2,524            155            161
         Due after ten years                         2,121           1,970             --             --
         Marketable equity securities                1,502           1,395             --             --
         Mortgage-backed securities                  1,490           1,464          3,844          3,810
         SBA loan pool participation                   248             249             43             43
                                                   -------          ------          -----          -----
                                                   $16,805          16,213          6,677          6,594
                                                   -------          ------          -----          -----
</TABLE>

         Securities carried at approximately $9,572,000 at December 31, 1999
         were pledged to secure deposits and for other purposes as required or
         permitted by law. The fair value of the securities portfolio is
         established by an independent pricing service as of the approximate
         dates indicated.

         At December 31, 1999, 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
         stockholders' equity.


                                       38
<PAGE>   40


                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

4        LOANS

         A summary of loans outstanding by category follows:

<TABLE>
<CAPTION>

         (Dollars in thousands)                                         1999                1998
                                                                     ---------           ---------
         <S>                                                         <C>                 <C>
         Real estate - construction and development                  $  80,789              55,220
         Real estate - 1 to 4 family residential properties            157,820             140,138
         Real estate - other                                            49,708              12,555
         Commercial, financial and agricultural                        102,385              71,070
         Consumer                                                       50,643              45,431
         Other                                                           1,744                 746
                                                                     ---------           ---------
                                                                       443,089             325,160
         Net deferred loan fees and discounts                             (639)               (588)
         Unearned income                                                (2,134)             (3,025)
                                                                     ---------           ---------
                                                                     $ 440,316             321,547
                                                                     ---------           ---------
</TABLE>

         In addition to the loans shown above, loans serviced for others totaled
         $92,208,000 and $104,321,000 at December 31, 1999 and 1998,
         respectively.

         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 $3,931,000 and
         $4,126,000 as of December 31, 1999 and 1998, respectively. 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 1999, the Company advanced
         $1,823,000 and received payments of $2,018,000 on such loans.

5        FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

         The Banks are parties to financial instruments with off-balance sheet
         risk in the normal course of business to meet the financing needs of
         their customers. These financial instruments include commitments to
         extend credit and standby letters of credit. Those instruments involve,
         to varying degrees, elements of credit risk in excess of the amount
         recognized in the balance sheet. The contract or notional amounts of
         those instruments reflect the extent of involvement the Banks have in
         those particular financial instruments.

         The Banks' exposure to credit loss in the event of nonperformance by
         the other party to the financial instrument for commitments to extend
         credit and letters of credit is represented by the contractual or
         notional amount of those instruments. The Banks use the same credit
         policies in making commitments and conditional obligations as it does
         for on-balance sheet instruments.

<TABLE>
<CAPTION>
         FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK              (Dollars in Thousands)
                                                                        ----------------------
         <S>                                                            <C>
         Contractual commitments to extend credit                               $ 76,436
         Standby letters of credit                                              $  3,467
                                                                                --------
</TABLE>


                                       39
<PAGE>   41


                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

5        FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK, CONTINUED

         Commitments to extend credit are agreements to lend to a customer as
         long as there is no violation of any condition established in the
         contract. Commitments generally have fixed expiration dates or other
         termination clauses and may require payment of a fee. Since many of the
         commitments are to expire without being drawn upon, the total
         commitment amounts do not necessarily represent future cash
         requirements. The Banks evaluate each customer's creditworthiness on a
         case-by-case basis. The amount of collateral obtained if deemed
         necessary by the Banks upon extension of credit is based on
         management's credit evaluation. Collateral held varies but may include
         accounts receivable, inventory, property, plant and equipment, and
         income-producing commercial properties.

         Letters of credit are conditional commitments issued by the Banks to
         guarantee the performance of a customer to a third party. Those
         guarantees are primarily issued to support public and private borrowing
         arrangements, including commercial paper, bond financing, and similar
         transactions. The credit risk involved in issuing letters of credit is
         essentially the same as that involved in extending loan facilities to
         customers.

         The Banks have a recourse obligation for 90 days from the purchase date
         for loans sold to investors. At December 31, 1999, loans sold to the
         investors with existing recourse approximated $13,156,712 (for The
         Community Bank and BankTennessee only). The obligation on these loans
         relates to performance by the borrower.

6        CONCENTRATIONS OF CREDIT

         The Banks grant agribusiness, commercial, construction, and individual
         loans to customers located primarily within the middle and western
         portion of Tennessee. Concentration by type of loans are presented in
         note 3.

7        ALLOWANCE FOR LOAN LOSSES

         Transactions in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>

         (Dollars in thousands)                                            1999              1998             1997
                                                                         -------           -------          -------
         <S>                                                             <C>               <C>              <C>
         Balance at beginning of year                                    $ 4,012             3,214            1,386
         Allowance for loan losses of First Federal Bancshares,
            Inc. at acquisition date                                          --                --            1,229
         Increase in reserve due to acquisition of branch                    152                --               --
         Provisions charged to operating expense                           1,623             1,188            1,390
         Loans charged-off                                                  (758)             (512)            (869)
         Recoveries on previously charged-off loans                          117               122               78
                                                                         -------           -------          -------
         Balance at end of year                                          $ 5,146             4,012            3,214
                                                                         -------           -------          -------
</TABLE>

         The Company had approximately $2,687,000 and $1,839,000 at December 31,
         1999 and 1998, respectively, in loans which were considered impaired
         under SFAS 114. Accrual of interest had been discontinued on these
         loans as of those dates. The allowance for loan losses related to these
         loans was approximately $537,000 and $368,000 at December 31, 1999 and
         1998, respectively. If such loans had been on an accrual basis,
         interest income would have been approximately $125,000, $121,000 and
         $79,000 higher in 1999, 1998 and 1997, respectively.


                                       40
<PAGE>   42

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


8        PREMISES AND EQUIPMENT

         Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>

         (Dollars in thousands)                       1999             1998
                                                    -------          -------
         <S>                                        <C>              <C>
         Land                                       $ 3,816            3,262
         Buildings and improvements                   6,938            4,424
         Leasehold improvements                       1,354            1,110
         Furniture, fixtures and equipment            5,475            4,144
         Automobiles                                    155              121
         Construction-in-progress                       956              481
                                                    -------          -------
                                                     18,694           13,542
         Less accumulated depreciation                4,116            2,981
                                                    -------          -------
              Net premises and equipment            $14,578           10,561
                                                    -------          -------
</TABLE>

         Depreciation expense related to premises and equipment amounted to
         $1,114,000 in 1999, $928,000 in 1998 and $503,000 in 1997.

9        OTHER INTANGIBLE ASSETS

         A summary of other intangible assets at December 31, 1999 and 1998
follows:

<TABLE>
<CAPTION>

         (Dollars in thousands)             1999            1998
                                           ------          ------
         <S>                               <C>             <C>
         Deposit premium                   $1,475              --
         Goodwill                              73              --
                                           ------          ------
         Accumulated amortization              25              --
                                           ------          ------
         Net intangible assets             $1,523              --
                                           ------          ------
</TABLE>

         Amortization expense related to intangible assets amounted to $25,000
         in 1999.

10       DEPOSITS

         A summary of deposits at December 31, 1999 and 1998 follows:

<TABLE>
<CAPTION>

         (Dollars in thousands)                                  1999             1998
                                                              --------          -------
         <S>                                                  <C>               <C>
         Noninterest-bearing demand                           $ 34,099           26,804
         Interest-bearing demand                               130,777          111,660
         Savings                                                16,383           13,284
         Certificates of deposit of $100,000 or more            83,089           64,093
         Other time                                            170,904          141,563
                                                              --------          -------
              TOTAL DEPOSITS                                  $435,252          357,404
                                                              --------          -------
</TABLE>


                                       41
<PAGE>   43

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


10       DEPOSITS, CONTINUED

         At December 31, 1999 scheduled maturities of time deposits are as
         follows:

<TABLE>
<CAPTION>

         (Dollars in thousands)
                                                         --------
         <S>                                             <C>
         One year or less                                $196,399
         Due after one year through three years            48,867
         Due after three years                              8,727
                                                         --------
                                                         $253,993
                                                         --------
</TABLE>

11       ADVANCES FROM FEDERAL HOME LOAN BANK

         The Company is currently participating in a program with the Federal
         Home Loan Bank (FHLB) of Cincinnati to provide funds to the public for
         affordable housing. The FHLB 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 $2,981,000 of
         such stock at December 31, 1999 to satisfy this requirement.

         At December 31, 1999 and 1998, advances from the FHLB totaled
         $39,554,000 and $17,973,000, respectively. The interest rates on these
         advances ranged from 5.35% to 9.125%. Qualifying loans totaling
         $64,601,000 were pledged as security under a blanket pledge agreement
         with the FHLB at December 31, 1999.

         Maturities of the advances from FHLB at December 31, 1999 are as
         follows:

          (Dollars in thousands)
<TABLE>
                                          <S>                              <C>
                                             2000                          $27,794
                                             2001                            1,031
                                             2002                               --
                                             2003                              720
                                          Later years                       10,009
                                                                           -------
                                                                           $39,554
                                                                           -------
</TABLE>


12       NOTES PAYABLE

         Notes payable consist of the following:

<TABLE>
<CAPTION>

         (Dollars in thousands)                                                                     1999            1998
                                                                                                   ------          ------
         <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 in ten annual installments of $143,125
         commencing on June 15, 1998. The note is
         secured by 100% of the common stock of Cumberland Bank                                    $1,145           1,288
</TABLE>


                                       42
<PAGE>   44


                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999


12       NOTES PAYABLE, CONTINUED

<TABLE>
<CAPTION>

         (Dollars in thousands)                                                                     1999            1998
                                                                                                   ------          ------
         <S>                                                                                       <C>             <C>
         As a result of the acquisition of First Federal Bancshares, Inc., the Company
         assumed a note payable to a lending institution which bears interest at a rate
         of 8.25%. Interest is payable quarterly and principal is payable in fifteen
         quarterly installments of $77,500 commencing on June 30, 1998, and one final
         payment of $37,500 due on March 31, 2002. The note is secured by 100% of the
         common stock of BankTennessee and The Community Bank                                         735           1,045

         As a result of the acquisition of First Federal Bancshares, Inc., the Company
         assumed a note payable to a lending institution which bears interest at prime
         rate. Interest is payable quarterly and principal is payable in one installment
         of $40,000 on March 31, 2002, and 24 quarterly installments commencing on June
         30, 2002 of $77,500. The note is secured by 100% of the common stock of
         BankTennessee and The Community Bank                                                       1,900           1,900

         $6,000,000 line of credit from a lending institution which bears
         interest at a rate of 7.50%. Advances can be made on the line from inception to
         March 31, 2000. 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                                                                             3,675           3,000
                                                                                                   ------          ------
                                                                                                   $7,455           7,233
                                                                                                   ------          ------
</TABLE>

         Minimum annual principal payments for future years are as follows:

          (Dollars in thousands)
<TABLE>
                                         <S>                                                                    <C>
                                            2000                                                                $ 1,053
                                            2001                                                                  1,053
                                            2002                                                                  1,131
                                            2003                                                                  1,053
                                            2004                                                                  1,053
                                         Later years                                                              2,112
                                                                                                                -------
                                                                                                                $ 7,455
                                                                                                                -------
</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 in compliance with all of the provisions of the loan
         covenants as of December 31, 1999.

         The Company entered into a new loan agreement for a $6,000,000 line of
         credit during 1998. In the loan agreement, the lending institution
         placed a covenant restricting capital. The covenant states if the
         Company is current on principal and interest payments, it will be
         permitted to pay dividends to the stockholders not exceeding
         twenty-five percent of net earnings.


                                       43
<PAGE>   45

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

13       INCOME TAXES

         The provision for income taxes (benefits) consist of the following:

<TABLE>
<CAPTION>

         (Dollars in thousands)                                           1999              1998             1997
                                                                        -------           -------          -------
         <S>                                                            <C>               <C>              <C>
         Current:
            Federal                                                     $ 2,165             1,755            1,037
            State                                                           412               335              195
                                                                        -------           -------          -------
              Total current tax                                           2,577             2,090            1,232
                                                                        -------           -------          -------
         Deferred:
            Federal                                                        (393)              (77)            (109)
            State                                                           (74)              (10)             (21)
                                                                        -------           -------          -------
              Total deferred (benefit)                                     (467)              (87)            (130)
                                                                        -------           -------          -------
         Tax benefits credited to stockholders' equity related
         to exercise of stock options                                         3                --              118
                                                                        -------           -------          -------
              Total provision for income taxes                          $ 2,113             2,003            1,220
                                                                        -------           -------          -------
</TABLE>

         Significant temporary differences between tax and financial reporting
         that give rise to deferred tax assets (liabilities) included in other
         assets on the consolidated balance sheet are as follows at December 31,
         1999 and 1998:

<TABLE>
<CAPTION>

         (Dollars in thousands)                                                             1999             1998
                                                                                          -------          -------
         <S>                                                                              <C>              <C>
         Allowance for loan losses                                                        $ 1,752            1,295
         Unrealized loss on securities                                                        252               46
         Deferred loan fees                                                                   139              142
         Other                                                                                192              187
                                                                                          -------          -------
              Total deferred tax assets                                                     2,335            1,670
                                                                                          -------          -------
         FHLB stock                                                                          (475)            (410)
         Premises and equipment                                                              (442)            (490)
         Loan servicing rights                                                               (388)            (413)
                                                                                          -------          -------
             Total deferred tax liabilities                                                (1,305)          (1,313)
                                                                                          -------          -------
         Net deferred tax asset                                                           $ 1,030              357
                                                                                          -------          -------
</TABLE>


                                       44
<PAGE>   46

                CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

13       INCOME TAXES, CONTINUED

         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>

         (Dollars in thousands)                                       1999              1998             1997
                                                                    -------           -------          -------
         <S>                                                        <C>               <C>              <C>
         Computed expected provision for income taxes               $ 1,912             1,817            1,140
         Increase (decrease) in taxes resulting from:
            State income taxes, net of federal tax benefit              223               215              114
            Tax exempt interest                                         (48)               --               --
            Other, net                                                   26               (29)             (34)
                                                                    -------           -------          -------
               Total income tax expense                             $ 2,113             2,003            1,220
                                                                    -------           -------          -------
</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 were then 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.

14       MINIMUM CAPITAL STANDARDS

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

         Quantitative measures established by regulation to ensure capital
         adequacy require the maintenance of minimum amounts and ratios (set
         forth in the table below) of total and Tier I capital (as defined in
         the regulations) to risk- weighted assets (as defined), and of Tier I
         capital (as defined) to average assets (as defined). Management
         believes, as of December 31, 1999 and 1998, that all capital adequacy
         requirements to which they are subject are met.

         As of December 31, 1999, the most recent notification from the Federal
         Reserve Bank categorized the Company as adequately capitalized under
         the regulatory framework for prompt corrective action. To be
         categorized as adequately capitalized the Company and the Banks must
         maintain minimum total risk-based, Tier I risk-based and Tier I
         leverage ratios as set forth in the table. There are no conditions or
         events since that notification that management believes have changed
         the category.


                                       45

<PAGE>   47
               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 31, 1999


14       MINIMUM CAPITAL STANDARDS, CONTINUED

         The Company and the Banks' actual capital amounts and ratios at
         December 31, 1999 and 1998, are as follows:

<TABLE>
<CAPTION>
                                                                                  To be well
                                                                               capitalized under
                                                              Required         prompt corrective
         (Dollars in thousands)                                Minimum         action provisions          Actual
         ----------------------                                -------         -----------------          ------
         <S>                                                <C>                <C>                       <C>
          December 31, 1999

          Cumberland Bancorp, Inc.
          Amount:
             Tier I to average assets - leverage            $   20,011               25,014              34,210
             Tier I to risk-weighted assets                     16,656               24,983              34,210
             Total capital to risk-weighted assets              33,311               41,639              39,367
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.84%
             Tier I to risk-weighted assets                       4.00%                6.00%               8.22%
             Total capital to risk-weighted assets                8.00%               10.00%               9.45%

          Cumberland Bank
          Amount:
             Tier I to average assets - leverage            $    7,572                9,465              12,539
             Tier I to risk-weighted assets                      6,017                9,026              12,539
             Total capital to risk-weighted assets              12,034               15,043              14,427
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.62%
             Tier I to risk-weighted assets                       4.00%                6.00%               8.34%
             Total capital to risk-weighted assets                8.00%               10.00%               9.59%

          BankTennessee
          Amount:
             Tier I to average assets - leverage            $    3,131                3,914              11,138
             Tier I to risk-weighted assets                      5,862                8,793              11,138
             Total capital to risk-weighted assets              11,724               14,656              12,970
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.25%
             Tier I to risk-weighted assets                       4.00%                6.00%               7.60%
             Total capital to risk-weighted assets                8.00%               10.00%               8.85%

          The Community Bank
          Amount:
             Tier I to average assets - leverage            $    3,751                4,689               6,417
             Tier I to risk-weighted assets                      3,275                4,912               6,417
             Total capital to risk-weighted assets               6,549                8,187               7,267
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.84%
             Tier I to risk-weighted assets                       4.00%                6.00%               7.84%
             Total capital to risk-weighted assets                8.00%               10.00%               8.88%
</TABLE>


                                      46
<PAGE>   48

               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 31, 1999


14       MINIMUM CAPITAL STANDARDS, CONTINUED

<TABLE>
<CAPTION>
                                                                                   To be well
                                                                                capitalized under
                                                             Required           prompt corrective
         (Dollars in thousands)                              Minimum            action provisions      Actual
         ----------------------                              -------            -----------------      ------
         <S>                                                <C>                 <C>                    <C>
          December 31, 1999

          Bank of Dyer
          Amount:
             Tier I to average assets - leverage            $    1,614                2,018               2,598
             Tier I to risk-weighted assets                      1,086                1,629               2,598
             Total capital to risk-weighted assets               2,173                2,716               2,896
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.44%
             Tier I to risk-weighted assets                       4.00%                6.00%               9.57%
             Total capital to risk-weighted assets                8.00%               10.00%              10.66%
                                                            ----------           ----------            --------
          December 31, 1998

          Cumberland Bancorp, Inc.
          Amount:
             Tier I to average assets - leverage            $   16,182               20,227              22,149
             Tier I to risk-weighted assets                     11,938               17,906              22,149
             Total capital to risk-weighted assets              23,875               29,844              25,781
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               5.45%
             Tier I to risk-weighted assets                       4.00%                6.00%               7.38%
             Total capital to risk-weighted assets                8.00%               10.00%               8.64%

          Cumberland Bank
          Amount:
             Tier I to average assets - leverage            $    6,052                7,565              10,073
             Tier I to risk-weighted assets                      4,312                6,467              10,073
             Total capital to risk-weighted assets               8,623               10,779              11,426
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.66%
             Tier I to risk-weighted assets                       4.00%                6.00%               9.35%
             Total capital to risk-weighted assets                8.00%               10.00%              10.60%
</TABLE>


                                      47
<PAGE>   49

               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 31, 1999


14       MINIMUM CAPITAL STANDARDS, CONTINUED

<TABLE>
<CAPTION>
                                                                                 To be well
                                                                              capitalized under
                                                             Required         prompt corrective
         (Dollars in thousands)                               Minimum          action provisions        Actual
         ----------------------                               -------          -----------------        ------
         <S>                                                <C>                  <C>                    <C>
          December 31, 1998

          BankTennessee
          Amount:
             Tier I to average assets - leverage            $    5,644                7,054               9,664
             Tier I to risk-weighted assets                      4,250                6,375               9,664
             Total capital to risk-weighted assets               8,500               10,625              10,992
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.85%
             Tier I to risk-weighted assets                       4.00%                6.00%               9.10%
             Total capital to risk-weighted assets                8.00%               10.00%              10.35%

          The Community Bank
          Amount:
             Tier I to average assets - leverage            $    3,103                3,878               4,876
             Tier I to risk-weighted assets                      2,137                3,205               4,876
             Total capital to risk-weighted assets               4,274                5,342               5,415
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.29%
             Tier I to risk-weighted assets                       4.00%                6.00%               9.13%
             Total capital to risk-weighted assets                8.00%               10.00%              10.14%

          Bank of Dyer
          Amount:
             Tier I to average assets - leverage            $    1,387                1,734               2,393
             Tier I to risk-weighted assets                        870                1,305               2,393
             Total capital to risk-weighted assets               1,740                2,175               2,615
          Ratios:
             Tier I to average assets - leverage                  4.00%                5.00%               6.90%
             Tier I to risk-weighted assets                       4.00%                6.00%              11.00%
             Total capital to risk-weighted assets                8.00%               10.00%              12.00%
</TABLE>


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
         $273,848 in 1999, $303,612 in 1998 and $138,839 in 1997, respectively.


                                      48
<PAGE>   50

               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 31, 1999


16       FAIR VALUES OF FINANCIAL INSTRUMENTS

         The estimated fair values of the Company's financial instruments are
         as follows at December 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                                       1999                            1998
                                                             ------------------------        -----------------------
                                                              CARRYING          FAIR         Carrying         Fair
         (Dollars in thousands)                                 VALUE           VALUE          Value          Value
                                                             ----------        ------        ---------       -------
         <S>                                                 <C>               <C>           <C>             <C>
          Financial assets:
             Cash and due from banks                           $ 18,255         18,255          8,972          8,972
             Interest-bearing deposits in
          financial                                               5,396          5,396         21,996         21,996
                institutions                                     11,250         11,250         14,250         14,250
             Federal funds sold                                  16,213         16,213         17,270         17,270
             Securities available for sale                        6,677          6,594          9,406          9,440
             Securities held to maturity                        435,170        434,215        317,535        319,009
             Loans, net of allowance                              4,073          4,073          3,026          3,026
             Accrued interest receivable                          3,415          3,415          2,648          2,648
             FHLB and FRB stock                                   1,021          1,021          1,087          1,087
             Servicing rights
          Financial liabilities:
             Deposits with defined maturities                  $253,993        253,706        205,656        207,082
             Deposits with undefined maturities                 181,259        181,259        151,748        151,748
             Notes payable                                        7,455          7,250          7,233          7,233
             Federal funds purchased                              2,275          2,275             --             --
             Advances from FHLB                                  39,554         38,484         17,973         17,913
             Accrued interest payable                             3,072          3,072          2,571          2,571
</TABLE>


<TABLE>
<CAPTION>
                                                               Notional          Fair        Notional           Fair
                                                               Amounts           Value        Amount           Value
                                                               -------           -----        ------           -----
          <S>                                                  <C>               <C>         <C>               <C>
          Off-balance sheet financial instruments:
           Commitments to extend credit                        $ 76,436             --         59,956             --
           Standby letters of credit                              3,467             --          2,152             --
           Mortgage loans sold subject to
             repurchase provisions                               13,157             --         16,231             --
</TABLE>

         The carrying values in the preceding table are included in the
         consolidated balance sheets under the applicable captions.

17       BUSINESS COMBINATIONS AND ACQUISITIONS

         On December 31, 1999, Cumberland Bancorp, Incorporated (CBI) acquired
         for approximately 511,783 shares of its common stock, all of the
         outstanding capital stock of Bancshares of Dyer, Inc. (BDI), a bank
         holding company in Dyer, Tennessee, which owned approximately 98% of
         Bank of Dyer. The merger has been accounted for as a pooling of
         interests and accordingly, financial information for periods prior to
         the merger reflect retroactive restatement of the companies combined
         financial position and operating results. No adjustments were
         necessary to conform the accounting practices of the companies.


                                      49
<PAGE>   51

               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 31, 1999


17       BUSINESS COMBINATIONS AND ACQUISITIONS, CONTINUED

         The following presents certain financial data pertaining to the
         combination of CBI with BDI for the years ended 1998 and 1997.

<TABLE>
<CAPTION>
         (Dollars in thousands, except per share data)           1998              1997
         ---------------------------------------------        ----------         --------
         <S>                                                  <C>                <C>
         Total revenue:*
         CBI, as originally reported                          $   18,606           11,966
         BDI                                                       1,563            1,474
                                                              ----------         --------
         CBI                                                  $   20,169           13,440
                                                              ==========         ========
         Net income:
         CBI, as originally reported                          $    3,018            1,843
         BDI                                                         324              291
                                                              ----------         --------
         CBI                                                  $    3,342            2,134
                                                              ==========         ========
         Net income per share - basic
         CBI, as originally reported                          $      .55              .48
         BDI                                                        1.65             1.48
         CBI                                                         .56              .49

         Net income per share - diluted
         CBI, as originally reported                          $      .54              .46
         BDI                                                        1.65             1.48
         CBI                                                         .55              .48
</TABLE>

         *Total revenue is net interest income and noninterest income

         The minority interest in Bank of Dyer was acquired in a purchase
         transaction for cash of approximately $10,000 and 7,704 shares of CBI
         common stock valued at $12.50 per share.

         Effective September 24, 1999, the Company's Cumberland Bank subsidiary
         purchased certain assets and assumed certain liabilities of American
         City Bank's McMinnville, Tennessee branch. As part of the transaction,
         the Company issued 47,000 shares of its common stock. The liabilities
         assumed exceeded the assets received in the transaction (deposit
         premium) by $1,475,000. Assets purchased and liabilities assumed at
         the acquisition date are summarized as follows:

<TABLE>
<CAPTION>
         Assets (Dollars in thousands)
         <S>                                                       <C>
         Cash received in transaction                              $  3,746
         Loans, net                                                  13,276
         Premises and equipment                                       1,456
         Other assets                                                   222
         Deposit premium                                              1,475
                                                                   --------
                                                                   $ 20,175
                                                                   --------

         Liabilities

         Deposits assumed                                          $ 19,473
         Other liabilities                                              114
         Common shares issued to complete transaction                   588
                                                                   --------
                                                                   $ 20,175
                                                                   ========
</TABLE>


                                      50
<PAGE>   52

               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 31, 1999


17       BUSINESS COMBINATIONS AND ACQUISITIONS, CONTINUED

         On July 1, 1997, the Company acquired 100% of the outstanding common
         stock of First Federal Bancshares, Inc. (FFBI) for consideration
         totaling $7,022,460. The consideration was in the form of the
         Company's common stock. The shareholders of FFBI received 1.2489
         shares of the Company's stock for each share of FFBI common stock
         surrendered. FFBI owned 100% of the common stock of First Federal
         Bank, F.S.B. of Memphis (First Federal-Memphis) which owned 100% of
         the common stock of First Federal Bank, F.S.B. of Nashville (First
         Federal-Nashville). The acquisition has been accounted for in
         accordance with the purchase method of accounting. The purchase price
         exceeded the historical book value of FFBI at acquisition date by
         $1,429,332. Such amount has been allocated to the assets purchased to
         the extent of their fair market value in accordance with purchase
         accounting. Simultaneous with the acquisition, First Federal-Memphis
         and First Federal-Nashville amended their charters and renamed the
         banks. First Federal-Memphis changed its name to BankTennessee and
         First Federal-Nashville changed its name to The Community Bank.
         Results of operations of BankTennessee and The Community Bank from
         July 1, 1997 through December 31, 1997 are included in the 1997
         consolidated financial statements. Consideration in connection with
         the transaction consisted of 1,135,749 shares of Cumberland Bancorp,
         Incorporated common stock.

         Summarized historical financial information of First Federal
         Bancshares, Inc. as of June 30, 1997 is as follows:

<TABLE>
<CAPTION>
         Dollars in thousands except per share data

         <S>                                                        <C>
         Securities                                                 $  10,509
         Loans, net                                                   119,239
         Other assets                                                  23,878
                                                                    ---------
            Total assets                                            $ 153,626
                                                                    =========

         Deposits                                                   $ 131,848
         Other liabilities                                             16,185
         Stockholders' equity                                           5,593
                                                                    ---------
            Total liabilities and stockholders' equity              $ 153,626
                                                                    =========
</TABLE>


         Pro forma net earnings and per share information for year ending
         December 31, 1997 as if the acquisition occurred January 1, 1997 are
         as follows:

<TABLE>
         <S>                                                        <C>
         Net earnings - as reported                                 $   2,134
         Net earnings - pro forma                                       2,522
         Net earnings per share - basic - as reported                    0.49
         Net earnings per share - basic - pro forma                      0.51
         Net earnings per share - diluted - as reported                  0.48
         Net earnings per share - diluted - pro forma                    0.50
</TABLE>

         Pro forma amounts are not necessarily indicative of the actual results
         that would have been realized if the acquisition had occurred January
         1, 1997.


                                      51
<PAGE>   53

               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 31, 1999


18       COMMITMENTS AND CONTINGENCIES

         The Company has entered into various noncancellable operating lease
         arrangements in connection with its operating locations. Based upon
         these agreements at December 31, 1999, future minimum lease
         commitments are as follows:

         (Dollars in thousands)

<TABLE>
                          <S>                      <C>
                             2000                  $  239
                             2001                     173
                             2002                     164
                             2003                     167
                             2004                      86
                          Thereafter                   24
                                                   ------
                                                   $  853
                                                   ======
</TABLE>

         Rentals relating to these agreements which are included in occupancy
         expense amounted to $196,000 in 1999, $212,000 in 1998 and $134,000 in
         1997.

         During 1999, the subsidiaries of the Company leased certain premises
         from related parties. The related expense from the leases totaled
         $29,000 in 1999.

         During 1997, the Company entered into an agreement with a group of
         investors to open a BankTennesse branch in Ripley, Tennessee. In
         return, these investors purchased 222,500 shares (as adjusted for the
         March 1998 stock split) of the Company's common stock for $4.49 per
         share (as adjusted for the March 1998 stock split). The agreement with
         the Ripley group addresses a spin-off of the Ripley branch into a
         separate entity after the branch reaches $30 million in assets and
         becomes profitable. It is anticipated that the Ripley group will own
         50% of the new entity and Cumberland Bancorp, Incorporated will own
         50% of the new entity. However, there are several provisions in the
         agreement that could alter the anticipated structure.

         During 1999 and 1998, the Company invested approximately $2,300,000
         representing a 50% interest in a de novo bank in Murray, Kentucky. The
         Company's pro rata portion of the organization and start-up costs of
         approximately $92,500 in 1998 and $60,000 in 1999, in the respective
         periods have been expensed.

         The Murray Bank opened in June, 1999 and it incurred an operating loss
         of approximately $275,000 in 1999. This investment is being accounted
         for by the equity method of accounting, whereby CBI's pro rata share
         of its operations are shown as an adjustment of the original
         investment and included in other operating expenses on the
         consolidated statements of earnings.

         The investors that bought the remaining 50% of the Murray Bank were
         given the ability to buy $250,000 worth of stock based upon a price of
         1.5 multiplied by the Company's book value that became exercisable
         when the charter was granted to the Murray Bank by the OTS. An
         additional $250,000 in stock options become exercisable at 1.5
         multiplied by the Company's book value if the Murray Bank attains
         certain financial objectives.

         During 1999, CBI has been involved in organizing a denovo bank called
         Insurors Bank of Tennessee. The Bank is anticipated being opened in
         the first half of 2000, subject to regulatory approval. CBI will own
         50% and the remaining 50% has been marketed to the Independent
         Insurance Agents in the State of Tennessee. Approximately $24,000 has
         been expensed in 1999 related to these start-up efforts. The total
         commitment is expected to be approximately $2.4 million, most of which
         will be funded in 2000 if the new charter is approved.

         In the normal course of business there are commitments outstanding and
         contingent liabilities such as legal proceedings pending against the
         Bank. In the opinion of management, no material adverse effect on the
         financial position is anticipated as a result of these items.


                                      52
<PAGE>   54

               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                               December 31, 1999


19       SALE OF ASSETS

         On August 4, 1997, BankTennessee sold its Oakland branch operation and
         its assets and liabilities to Concord EFS, Inc. The branch had assets
         with a book value of $208,218 which consisted primarily of loans and
         office property and equipment. The branches liabilities totaled
         $1,673,876 which consisted primarily of deposits. The Bank had a net
         gain of $550,000 on the sale of this asset.

20       STOCK OPTIONS

         The Company issues non-qualified stock options under various plans to
         employees, non-employee directors, and bank advisory board members.
         The plans provide for the issuance of the Company's common stock at a
         price determined by the plans' committee, which is the Board of
         Directors of the Company. As a matter of policy, the Board of
         Directors has issued options at an exercise price equal to the fair
         market value of the Company's common stock at the date of grant. Share
         and per share amounts in the accompanying text and tables have been
         adjusted for stock splits and stock dividends.

         In 1995, SFAS No. 123 "Accounting for Stock Based Compensation"
         changed the method for recognition of cost of plans similar to those
         of the Company. As is permitted, management has elected to continue
         accounting for the plan under APB Opinion 25 and related
         Interpretations. Accordingly, no compensation cost has been recognized
         for the stock option plan. However, under SFAS No. 123, the Company is
         required to make proforma disclosures as if cost had been recognized
         in accordance with the pronouncement. Had compensation cost for the
         Company's stock option plan been determined based on the fair value at
         the grant dates for awards under the plan consistent with the method
         of SFAS No. 123, the Company's net earnings and net earnings per
         common share would have been as follows:

<TABLE>
<CAPTION>
                                          1999                         1998                         1997
                                   As                            As                            As
                                Reported       Proforma       Reported       Proforma       Reported       Proforma
                                ---------      ---------      ---------      ---------      ---------      ---------
          <S>                   <C>            <C>            <C>            <C>            <C>            <C>
          Net income            $   3,511      $   3,344      $   3,342      $   3,206      $   2,134      $   2,129

          Basic earnings
           per share            $    0.56      $    0.54      $    0.56      $    0.54      $    0.49      $    0.49
          Diluted earnings
           per share                 0.55           0.52           0.55           0.53           0.48           0.48
</TABLE>

         The fair value of the options granted is estimated as of the date
         granted using the Black-Scholes option pricing model with the
         following weighted-average assumptions used for grants: dividend yield
         of 6.0 percent in 1999, risk-free interest rate of 6.0 percent,
         expected lives of five years, and expected volatility of 47 percent in
         1999 and 53 percent in 1998.

         The weighted-average fair value of options, calculated using the
         Black-Scholes option pricing model, granted during 1999, 1998 and 1997
         was $6.09, $3.16, and $0.38, respectively.

         On May 8, 1997, the Board of Directors of the Company, amended all
         existing stock option plans. All previously issued options were deemed
         exercisable. For the options exercised the shareholder would receive
         the net value of the option (fair value less exercise price) in the
         Company's common stock. All options not exercised by July 1, 1997
         would be forfeited. As a result, all outstanding options were
         exercised on June 30, 1997 which resulted in the Company issuing
         39,231 shares of common stock (235,386 shares after giving effect to
         the stock splits).


                                      53
<PAGE>   55
               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1999


20       STOCK OPTIONS, CONTINUED

         Effective March 1, 1998, 357,918 shares (adjusted to 393,710 to
         reflect the March, 1999 stock dividend) were granted under a stock
         option plan adopted in 1998. These options generally become
         exercisable at a rate of 20% per year until all become fully vested on
         March 1, 2003. The options expire February 29, 2004.

         A summary of the stock option activity for 1999, 1998 and 1997 is as
         follows (after giving effect to the stock dividend and stock split):

<TABLE>
<CAPTION>
                                                          Shares                                               Weighted
                                                         Available           Shares           Option           Average
                                                            for              Under             Shares          Exercise
(Dollars in thousands except per share data)              Option             Option          Exercisable         Price
                                                         ---------          --------         -----------       --------

<S>                                                       <C>               <C>                                    <C>
Outstanding at beginning of year - 1996                         --           536,151           363,660         $   1.54
BOD action                                                      --                --           172,491             1.54
Granted                                                         --            21,998            21,998             1.54
Exercised                                                                   (558,149)         (558,149)            1.54
                                                          --------          --------          --------         --------
Outstanding at December 31, 1997                                --                --                --               --
New plan - 1998                                            550,000
Granted                                                   (393,710)          393,710                --         $   5.45
                                                          --------          --------          --------         --------
Outstanding at December 31, 1998                           156,290           393,710                --         $   5.45

Granted                                                    (42,750)           42,750                --         $  12.50
Exercisable                                                     --                --            83,642             5.45
Forfeited                                                       --            (9,625)               --             5.45
Exercised                                                       --            (1,200)               --             5.45
                                                          --------          --------          --------         --------
Outstanding at December 31, 1999                           113,540           425,635            83,642         $   6.16
                        === ====                          ========          ========          ========         ========
</TABLE>

         The following table sets forth the computation of basic net earnings
         per share and diluted net earnings per share.

<TABLE>
<CAPTION>

                                                                           1999                  1998                  1997
                                                                        ----------            ----------            ----------

<S>                                                                     <C>                        <C>                   <C>
For basic net earnings per share and diluted net earnings
   per share, net earnings                                              $    3,511                 3,342                 2,134
                                                                        ----------            ----------            ----------
Weighted average shares outstanding - basic                              6,248,130             5,971,306             4,354,263
Effect of dilutive securities - stock options                              139,506               126,867               129,004
                                                                        ----------            ----------            ----------
Weighted average shares outstanding - diluted                            6,387,636             6,098,173             4,483,267
                                                                        ==========             =========             =========
Net earnings per share - basic                                          $      .56                   .56                   .49
Net earnings per share - diluted                                               .55                   .55                   .48
</TABLE>


                                      54
<PAGE>   56


               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1999


21       OTHER OPERATING EXPENSES

         Other operating expenses consists of the following:

<TABLE>
<CAPTION>
                                                                                      Years ended December 31,
                                                                           1999                  1998                  1997
                                                                        ----------            ----------            ----------

<S>                                                                     <C>                   <C>                   <C>
Data processing                                                         $      907                   783                   349
Advertising                                                                    441                   375                   183
Stationery, printing and supplies                                              494                   371                   165
Postage, freight and courier                                                   221                   162                   149
Directors' fees                                                                418                   357                   198
Other                                                                        4,229                 3,200                 2,350
                                                                        ----------            ----------            ----------
                                                                        $    6,710                 5,248                 3,394
                                                                        ==========            ==========            ==========
</TABLE>


                                      55
<PAGE>   57


               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1999


22     PARENT COMPANY ONLY FINANCIAL INFORMATION

       CONDENSED BALANCE SHEETS (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                       December 31,
                                                              ------------------------
       Assets                                                   1999             1998
                                                              -------           ------

       <S>                                                    <C>                <C>
       Cash                                                   $  6,239           1,391
       Investment in subsidiaries                               33,946          27,032
       Investment in unconsolidated subsidiaries                 2,441             609
       Premises and equipment                                       45              40
       Goodwill                                                     73               0
       Other assets                                                713             445
                                                              --------          ------
                                                              $ 43,457          29,517
                                                              ========          ======

       Liabilities and Stockholders' Equity

       Liabilities:
         Notes payable                                        $  7,455           7,233
         Accrued interest                                          257             108
         Other liabilities                                         470             117
                                                              --------          ------
             Total  liabilities                                  8,182           7,458
                                                              ========          ======
       Total  stockholders'  equity                             35,275          22,059
                                                              ========          ======
                                                              $ 43,457          29,517
                                                              ========          ======
</TABLE>

       CONDENSED STATEMENTS OF EARNINGS

<TABLE>
<CAPTION>
       Years Ended December 31,                                        1999          1998        1997
                                                                     --------       -----       -----

       <S>                                                           <C>              <C>         <C>
       Income:
        Dividends from subsidiaries                                  $    800         620         359
        Dividends from securities                                           4           2          18
        Other income                                                     (46)          13           3
                                                                     --------       -----       -----
                                                                          758         635         380
                                                                     --------       -----       -----
       Expenses:
        Interest expense                                                  578         527         252
        Other expense                                                     870         428         385
                                                                     --------       -----       -----
                                                                        1,448         955         637
                                                                     --------       -----       -----
       Loss before income taxes and equity in undistributed
           earnings of subsidiaries                                     (690)       (320)       (257)
             Income tax benefit                                           558         359         285
                                                                     --------       -----       -----

       Income (loss) before equity in undistributed earnings
           of subsidiaries                                              (132)          39          28
           Equity in undistributed earnings of subsidiaries             3,643       3,303       2,106
                                                                     --------       -----       -----
       NET EARNINGS                                                  $  3,511       3,342       2,134
                                                                     ========       =====       =====
</TABLE>


                                      56
<PAGE>   58


               CUMBERLAND BANCORP, INCORPORATED AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1999


22     PARENT COMPANY ONLY FINANCIAL INFORMATION, CONTINUED

       CONDENSED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
       Years Ended December 31,                                                   1999       1998      1997
                                                                                -------     ------    ------

        <S>                                                                     <C>         <C>       <C>

        Cash flows from operating activities:
        Net earnings                                                            $ 3,511      3,342     2,134
        Adjustments to reconcile net earnings to net
            cash provided (used) by operating activities:
              Equity in undistributed earnings of subsidiaries                   (3,643)    (3,303)   (2,106)
              Operations of unconsolidated subsidiaries                             104         86         0
              Depreciation and amortization                                          15          4       204
              Increase in accrued interest payable                                  149        103         3
              Other, net                                                             55         44       110
                                                                                -------     ------    ------
                Net cash provided by operating activities                           191        276       345
                                                                                =======     ======    ======
        Cash flows from investing activities:
            Investment in commercial bank subsidiaries                           (3,000)    (1,725)   (1,450)
            Investment in unconsolidated subsidiaries                            (1,935)      (613)        0
            Purchases of premises and equipment                                     (20)       (24)       (3)
                                                                                -------     ------    ------
                Net cash used by investing activities                            (4,955)    (2,362)   (1,453)
                                                                                =======     ======    ======

        Cash flows from financing activities:
            Proceeds from notes payable                                             675      3,000        --
            Repayment of notes payable                                             (453)      (298)       --
            Proceeds from issuance of common stock                                9,390        117     1,050
            Dividends paid on common stock of previously acquired
               subsidiary                                                            --        (15)      (15)
                                                                                -------     ------    ------
                Net cash provided by
                  financing  activities                                           9,612      2,804     1,035
                                                                                =======     ======    ======
        Net increase (decrease) in cash                                           4,848        718       (73)
        Cash at beginning of year                                                 1,391        673       746
                                                                                =======     ======    ======
        Cash at end of year                                                     $ 6,239      1,391       673
                                                                                =======     ======    ======

        Non-Cash Activities:

            Issuance of common stock - acquisition of Bancshares of Dyer,
               Inc                                                              $ 2,512         --        --
            Issuance of common stock - 10% stock dividend                         6,341         --        --
            Issuance of common stock - acquisition of McMinnville branch            588         --        --
            Issuance of common stock - acquisition of First Federal
                Bancshares, Inc.                                                     --         --     7,022
            Issuance of common stock - conversion of stock options                  257         --       118

    </TABLE>


                                      57
<PAGE>   59


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.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Information with respect to the directors and executive officers is
incorporated herein by reference to the Proxy Statement relating to the Annual
Meeting of Shareholders to be held April 27, 2000.

ITEM 11.  EXECUTIVE COMPENSATION

         Information with respect to executive compensation is incorporated
herein by reference to the Proxy Statement relating to the Annual Meeting of
Shareholders to be held April 27, 2000.

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
Proxy Statement relating to the Annual Meeting of Shareholders to be held April
27, 2000.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information with respect to certain relationships and related
transactions is incorporated herein by reference to the Proxy Statement
relating to the Annual Meeting of Shareholders to be held April 27, 2000.

ITEM 14.  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.

         (b)      Reports on Form 8-K

                  None.


                                      58
<PAGE>   60


                                   SIGNATURES

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

                                CUMBERLAND BANCORP, INCORPORATED
                                (REGISTRANT)



                                BY: /s/ Joel Porter
                                   ----------------------------------
                                   Joel Porter, President
                                   (Principal Executive Officer)

                                DATE:    March 28, 2000
                                      -------------------------------


         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/ Joel Porter                        President (Principal Executive           March 28, 2000
------------------------------         Officer) and Director
Joel Porter

/s/ Mark McDowell                      Chief Administrative Officer             March 28, 2000
------------------------------         (Principal Financial and
Mark McDowell                          Accounting Officer)

/s/ John Wilder                        Chairman                                 March 28, 2000
------------------------------
John Wilder

/s/ John S. Everett                    Director                                 March 28, 2000
------------------------------
John S. Everett

/s/ Danny Herron                       Director                                 March 28, 2000
------------------------------
Danny Herron

/s/ Tom E. Paschal                     Director                                 March 28, 2000
------------------------------
Tom E. Paschal

/s/ Tom Brooks                         Director                                 March 28, 2000
------------------------------
Tom Brooks
</TABLE>




                                       59
<PAGE>   61

<TABLE>
<S>                                    <C>                                      <C>

/s/ Jerry Cole                         Director                                 March 28, 2000
------------------------------
Jerry Cole

/s/ Ronald Gibson                      Director                                 March 28, 2000
------------------------------
Ronald Gibson

/s/ Frank Inman, Jr.                   Director                                 March 28, 2000
------------------------------
Frank Inman, Jr.

/s/ Alex Richmond                      Director                                 March 28, 2000
------------------------------
Alex Richmond

/s/ Wayne Rodgers                      Director                                 March 28, 2000
------------------------------
Wayne Rodgers

/s/ John S. Shepherd                   Director                                 March 28, 2000
------------------------------
John S. Shepherd

/s/ William D. Smallwood               Director                                 March 28, 2000
------------------------------
William D. Smallwood


</TABLE>





                                       60
<PAGE>   62



                                INDEX TO EXHIBITS

3.1      Amended and Restated Charter of the Company (previously filed as
         Exhibit 3.1 to the Company's Registration Statement on Form S-1 dated
         September 8, 1999 (Registration No. 333-84173) and incorporated herein
         by reference).

3.2      Amended and Restated Bylaws of the Company (previously filed as Exhibit
         3.2 to the Company's Registration Statement on Form S-1 dated September
         8, 1999 (Registration No. 333-84173) and incorporated herein by
         reference).

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).

10.2     Joint Venture Agreement dated as of October 1, 1998 by and between
         Cumberland Bancorp, Inc. and BancKentucky and Addendum to Joint Venture
         Agreement dated as of October 31, 1998 (previously filed as Exhibit
         10.2 to the Company's Registration Statement on Form S-1 dated
         September 8, 1999 (Registration No. 333-84173) and incorporated herein
         by reference).

10.3     Joint Venture Agreement dated as of August 26, 1999 by and between
         Cumberland Bancorp, Inc. and InsCorp, Inc. (previously filed as Exhibit
         10.3 to the Company's Registration Statement on Form S-1 dated
         September 8, 1999 (Registration No. 333-84173) and incorporated herein
         by reference).

21       Subsidiaries of the Company.

23       Consent of Independent Auditors.

27       Financial Data Schedule for the fiscal year ended December 31, 1999
         (for SEC use only).



                                       61