<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 11, 1999
UNITED TENNESSEE BANKSHARES, INC.
- ----------------------------------------------------------------
(Exact name of registrant as specified in charter)
TENNESSEE 0-23551 62-1710108
- ----------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
344 BROADWAY, NEWPORT, TENNESSEE 37821
- ----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(423) 623-6088
<PAGE>
<PAGE>
ITEM 5. OTHER EVENTS.
------------
On June 11, 1999, United Tennessee Bankshares, Inc. (the
"Registrant") announced that the Internal Revenue Service had
issued a favorable private letter ruling regarding the tax-free
nature of a possible return of capital distribution to the
Registrant's shareholders. At this time, the Registrant is only
considering a return of capital distribution and no firm
decision, including the amount and timing of any such
distribution, has been made.
Additionally, the Registrant announced that it has applied
to the Office of Thrift Supervision (the "OTS") for a waiver of
the regulatory limits on stock repurchases in order to
repurchase an additional 5% of its outstanding stock during the
current year. For further information, see the Press Release
issued by the Registrant on June 11, 1999 filed herewith as
Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
------------------------------------------------------
The following exhibits are being filed as part of this
Current Report on Form 8-K:
Number Description
------ -----------
99.1 Press Release issued June 11, 1999
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
UNITED TENNESSEE BANKSHARES, INC.
By: /s/ Richard G. Harwood
------------------------------------
Richard G. Harwood
President and Chief Executive Officer
Date: June 11, 1999
<PAGE>
For Immediate Release
- ---------------------
For further information, contact:
Richard G. Harwood, President
(423) 623-6088
UNITED TENNESSEE BANKSHARES, INC.
RECEIVES FAVORABLE PRIVATE LETTER RULING REQUEST
FOR POSSIBLE RETURN OF CAPITAL DISTRIBUTION;
ANNOUNCES FILING OF APPLICATION FOR ADDITIONAL 5% REPURCHASE
PROGRAM
United Tennessee Bankshares, Inc. (Nasdaq:UTBI), the
holding company for Newport Federal Bank, Newport, Tennessee,
today announced that the Internal Revenue Service had issued a
favorable private letter ruling regarding the tax-free nature of
a possible return of capital distribution to the Company's
shareholders. The private letter ruling confirmed that a
distribution of cash by the Company to its shareholders on the
terms described would be treated as a tax-free return of capital
rather than as a taxable dividend.
Richard G. Harwood, the Company's President, emphasized
that the Company was only considering this action at this time
and no firm decision, including the amount or timing of any such
distribution, has been made. "Although the Board of Directors
has given consideration to a return of capital distribution in
the range of $2 to $4 per share, we do not expect to pay any
such distribution before the fourth quarter of this year." Mr.
Harwood stated. He further cautioned that the payment of any
distribution would depend on a variety of factors including the
Company's liquidity and capital needs and the relative merits of
competing investment opportunities. Accordingly, no assurance
could be given that any return of capital distribution would be
paid.
The Company also announced that it had applied for a waiver
of the regulatory limits on stock repurchases in order to
repurchase another 5% of its outstanding stock during the
current year. The Company completed a 5% open market repurchase
program in April.
"OTS regulations generally limit stock repurchases to 5% of
shares outstanding during the second and third years following a
mutual to stock conversion." Mr. Harwood explained. "With our
stock currently trading at a significant discount to its book
value, however, we felt that it was in the best interests of
stockholders to seek a waiver of the repurchase limits."
United Tennessee Bankshares, Inc. became the holding
company for Newport Federal Bank upon the completion of the
Bank's conversion to stock form on January 1, 1998. Newport
Federal currently has $94 million in assets and three offices in
Newport, Tennessee.
