GCBS Greene County Bancshares (MM)

Greene County Bancshares, Inc. (NASDAQ/NM: GCBS), the second largest bank holding company headquartered in the state of Tennessee, today announced strong operating and financial results for the fourth quarter and year ended December 31, 2005. These record results capped a year in which the Company saw significant growth in loans outstanding, total assets and deposits - all contributing to the highest level of annual net income in the Company's history. Expansion to new markets and continued market penetration were key drivers in this record performance. Fourth quarter net income increased 44% to $3,838,000 from $2,668,000 in the same 2004 period. Earnings on a diluted per share basis for the fourth quarter increased 15% to $0.39 versus $0.34 for the year ago quarter, reflecting the issuance of 2.1 million new shares in a public common stock offering, which primarily affected fourth quarter 2005 earnings per share. Weighted average shares outstanding during the fourth quarter of 2005 approximated 9.8 million versus 7.7 million weighted average shares outstanding in the year-earlier period. Net interest income for the fourth quarter increased 32% to $16,839,000 from $12,743,000 in the prior-year period, driven principally by an increase in earning assets. This improvement was partially offset by the impact of increased competition for deposits in a rising-rate environment, which narrowed net interest margin to 4.67% in the current quarter from 4.81% during the same period a year ago. On a linked-quarter basis, however, net interest margin improved 13 basis points from 4.54% reported for the third quarter of 2005. The Company's provision for loan losses declined 5% to $1,979,000 from $2,089,000 in the same period last year. This decline primarily reflected continued improvements in asset quality, which have more than offset volume-driven additions to the provision. Net interest income after provision for loan losses rose 39% to $14,860,000 in the fourth quarter of 2005 versus $10,654,000 in the same period last year. Commenting on the announcement, Stan Puckett, Chairman and Chief Executive Officer, said, "We are pleased to report the Company's solid performance in the fourth quarter and throughout 2005. It was an exciting year for us as we continued to build momentum in our operations. One of the highlights of 2005 was our October acquisition of five branches in Clarksville, which added a total of approximately $114 million to our loan portfolio and $173 million in deposits. This acquisition not only signaled our entry into that vibrant market and greatly expanded the footprint of our branch system, it also complemented the strategies underlying our late-2004 purchase of three branches in Lawrenceburg, Tennessee. Moreover, it ties with our continued organic growth in the metropolitan Nashville area, where we opened two new branches during the year as a follow-up to our first Nashville branch opened in November 2004. Together, these initiatives have contributed significantly to our presence in an emerging Middle Tennessee market. "In addition to these steps, we have continued to witness sound market share growth in other areas of our system, like Knox and Blount Counties, Tennessee, and particularly in Knoxville, which is a relatively new market for us," Puckett continued. "This growth has made the Knoxville region our largest market, and we are excited about the opportunities we see for continued growth in these areas." In concert with the Clarksville acquisition and to support the associated growth in other areas of the bank, Greene County Bancshares completed a public offering of 2.1 million common shares this past fall at a price of $25.75 per share. The offering raised approximately $51 million in new capital for the Company. For the year ended December 31, 2005, net income increased 18% to $14,163,000 from $12,008,000 in 2004. Net income per diluted share for 2005 increased 10% to $1.71 on 8.3 million weighted average shares outstanding, reflecting the initial impact of the new stock offering, from $1.55 on 7.7 million weighted average shares outstanding in 2004. Net interest income increased 20% to $58,786,000 for 2005 compared with $49,018,000 last year, driven principally by an increase in earning assets. This improvement was partially offset by rapidly rising market interest rates during the past year, as evidenced by the Federal Open Market Committee's actions to increase rates eight times during 2005, which ratcheted up market rates by 200 basis points and created significant pressure on borrowing costs and competition for deposits. The Company's provision for loan losses in 2005 increased 9% to $6,365,000 from $5,836,000 in 2004. Non-interest income totaling $14,756,000 increased 13% in 2005, driven principally by the growth in transaction account income. Non-interest expenses increased almost 20% over 2004 levels, reflecting the normal operating costs associated with branch expansion initiatives completed in both 2004 and 2005. The Company's efficiency ratio was 60.3% in 2005 compared with 59.6% in 2004. "We are pleased that in most aspects of our business, we witnessed ongoing improvements during 2005," Puckett added. "Reflecting our push into Middle Tennessee and recent expansions in and around Knoxville, together with solid growth in the Bristol and Washington County areas, our loan portfolio increased at an annualized rate of 16% in the fourth quarter of 2005 (without the Clarksville acquisition) versus the third quarter, and was up 32% for the year - with 21% attributable to organic growth. Concurrent with this growth, we continued to see improving credit quality trends, with net charge-offs for the year of $3,814,000 or 0.32% of average total loans and bank-only net charge-offs of $2,490,000 or 0.21% of bank-only average total loans. Our High Performance Checking program, which we initiated last February, resulted in the opening of 14,175 new accounts in 2005. This organic growth in our deposit base, combined with our reach to new markets, continues to help support our expanding loan portfolio. We are pleased with these accomplishments in 2005. Our resolve is firm to continue this positive momentum into 2006." At December 31, 2005, the Company's total assets increased 31% to $1,619,989,000 from $1,233,403,000 at December 31, 2004. The increase of almost $387,000,000 in assets resulted from organic market growth of $214,000,000, coupled with the acquisition of the Clarksville market branches that added approximately $173,000,000 to total assets. Loans, net of unearned interest, increased $331,775,000 or 32% to $1,378,642,000 at December 31, 2005. Approximately $114,000,000 of this improvement related to the Clarksville acquisition. Deposits totaled $1,295,879,000 at December 31, 2005, up $297,857,000 or 30% from the same period a year ago. Approximately $173,000,000 of this increase related to the Clarksville market expansion. Total shareholders' equity increased 55% to $168,021,000 at December 31, 2005, versus $108,718,000 at December 31, 2004, reflecting both earnings growth as well as the net proceeds from the Company's public common stock offering during the year. Annualized return on average shareholders' equity for the fourth quarter and year ended December 31, 2005, was 9.10% and 11.09%, respectively, versus 9.68% and 11.23%, respectively, for the comparable periods last year. The annualized returns on average tangible shareholder' equity were 11.65% for the fourth quarter of 2005 and 14.04% for the full year compared with 11.99% and 13.95%, respectively, for the same periods a year ago. Returns on average total assets for the fourth quarter and year ended December 31, 2005, were 0.98% and 1.02%, respectively, compared with 0.93% and 1.06%, respectively, for the same periods in 2004. Greeneville, Tennessee-based Greene County Bancshares, Inc., with total assets of approximately $1.6 billion, is the holding company for Greene County Bank. Greene County Bank, founded in 1890, now has 47 branches throughout East and Middle Tennessee, one branch in Bristol, Virginia, one branch in western North Carolina, and a trust services office in Lebanon, Tennessee. Greene County Bank does business in Washington County, Tennessee, as Washington County Bank; in Blount County and Knox County, Tennessee, as American Fidelity Bank; in Montgomery County, Tennessee, as Clarksville Community Bank; in Sumner County, Tennessee, as First Independent Bank; in Rutherford County, Tennessee, as Rutherford Bank and Trust; in Sullivan County, Tennessee, as Sullivan County Bank and First Bristol Bank; in Hamblen County, Tennessee, as Hamblen County Bank; in McMinn County, Tennessee, as Bank of Athens and Bank of Niota; in Hawkins County, Tennessee, as Hawkins County Bank and Bank of Bulls Gap; in Lawrence County, Tennessee, as Bank of Lawrence County; in Cocke County, Tennessee, as Cocke County Bank; in Loudon County, Tennessee, as Community Bank of Loudon County; in Monroe County, Tennessee, as Community Trust Bank; in the City of Bristol, Virginia, as First Bristol Bank; in Davidson County and Williamson County, Tennessee, as Middle Tennessee Bank & Trust; and in Wilson County, Tennessee, as President's Trust. In addition, Greene County Bank also conducts separate businesses through three wholly owned subsidiaries: Superior Financial Services, Inc., a consumer finance company; GCB Acceptance Corporation, a consumer finance company specializing in subprime automobile lending; and Fairway Title Co., a title insurance company. This news release may contain forward-looking statements regarding Greene County Bancshares, Inc., as defined in Section 21E of the Securities Exchange Act of 1934. All forward-looking statements involve risk and uncertainty and actual results could differ materially from the anticipated results or other expectations expressed in the forward-looking statements. A discussion of factors that could cause actual results to differ materially from those expressed in the forward-looking statements is included in the Greene County Bancshares, Inc. filings with the Securities and Exchange Commission. -0- *T GREENE COUNTY BANCSHARES, INC. Unaudited Financial Highlights (In thousands, except per share amounts) Three Months Ended Year Ended -------------------------- ---------------- Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, 2005 2005 2004 2005 2004 -------- ------- ------- ------- ------- Interest income $25,638 $22,115 $17,135 $87,191 $65,076 Interest expense 8,799 7,567 4,392 28,405 16,058 ------- ------- ------- ------- ------- Net interest income 16,839 14,548 12,743 58,786 49,018 Provision for loan losses 1,979 1,704 2,089 6,365 5,836 ------- ------- ------- ------- ------- Net interest income after provision for loan losses 14,860 12,844 10,654 52,421 43,182 Non-interest income 4,321 3,796 3,844 14,756 13,028 Non-interest expense 12,952 10,691 10,247 44,340 36,983 ------- ------- ------- ------- ------- Income before income taxes 6,229 5,949 4,251 22,837 19,227 Income taxes 2,391 2,273 1,583 8,674 7,219 ------- ------- ------- ------- ------- Net income $ 3,838 $ 3,676 $ 2,668 $14,163 $12,008 ======= ======= ======= ======= ======= Comprehensive income $ 3,627 $ 3,639 $ 2,569 $13,820 $11,795 ======= ======= ======= ======= ======= Earnings per share: Basic $ 0.40 $ 0.48 $ 0.35 $ 1.73 $ 1.57 ======= ======= ======= ======== ======= Diluted $ 0.39 $ 0.47 $ 0.34 $ 1.71 $ 1.55 ======= ====== ======= ======== ======= Weighted average shares: Basic 9,710 7,711 7,657 8,184 7,652 ======= ======= ======= ======= ======= Diluted 9,800 7,805 7,736 8,276 7,734 ======= ======= ======= ======= ======= Dividends declared per share $ 0.26 $ 0.12 $ 0.25 $ 0.62 $ 0.61 ======= ======= ======= ======= ======= Dec. 31, Sept. 30, Dec. 31, 2005 2005 2004 --------- --------- --------- Total assets $1,619,989 $1,405,580 $1,233,403 Cash and cash equivalents 74,523 46,321 70,648 Investment securities 58,736 63,565 45,910 Loans, net of unearned interest 1,378,642 1,215,072 1,046,867 Allowance for loan losses 19,739 17,640 15,721 Deposits 1,295,879 1,134,864 998,022 Shareholders' equity 168,021 160,307 108,718 Tangible shareholders' equity(1) 128,399 137,176 85,023 Book value per share 17.20 16.90 14.22 Tangible book value per share(1) 13.15 14.46 11.12 (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Balance Sheets December 31, 2005 and December 31, 2004 (Dollars in thousands except share and per share data) (Unaudited) December 31, December 31, 2005 2004(1) ---------------- ------------ ASSETS -------- Cash and due from banks $ 46,136 $ 30,727 Federal funds sold 28,387 39,921 Securities available-for-sale ("AFS") 48,868 35,318 Securities held-to-maturity (with a market value of $3,335 and $4,506 on December 31, 2005 and 2004) 3,379 4,381 FHLB, Bankers Bank and other stock, at cost 6,489 6,211 Loans held for sale 2,686 1,151 Loans, net of unearned interest 1,378,642 1,046,867 Allowance for loan losses (19,739) (15,721) Bank premises and equipment, net of accumulated depreciation 49,985 35,591 Goodwill and other intangible assets 39,622 23,695 Other assets 35,534 25,262 ---------------- ------------ Total Assets $ 1,619,989 $ 1,233,403 ================ ============ LIABILITIES AND SHAREHOLDERS' EQUITY -------------------------------------- Deposits $ 1,295,879 $ 998,022 Repurchase agreements 17,498 13,868 FHLB advances and notes payable 105,146 85,222 Subordinated debentures 13,403 10,310 Accrued interest payable and other liabilities 20,042 17,263 ---------------- ------------ Total Liabilities 1,451,968 1,124,685 ---------------- ------------ SHAREHOLDERS' EQUITY -------------------------------------- Common Stock: $2 par value, 15,000,000 shares authorized; 9,766,336 and 7,647,740 shares outstanding 19,533 15,296 Paid in Capital 70,700 24,160 Retained Earnings 78,158 69,289 Accumulated Other Comprehensive Income (Loss) (370) (27) ---------------- ------------ Total Shareholders' Equity 168,021 108,718 ---------------- ------------ Total Liabilities & Shareholders' Equity $ 1,619,989 $ 1,233,403 ================ ============ (1) Derived from Audited Consolidated Financial Statements. GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Statements of Income and Comprehensive Income Three and Twelve Months Ended December 31, 2005 and 2004 (Unaudited) (Dollars in thousands except share and per share data) Three Months Ended Twelve Months Ended December 31, December 31, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Interest Income: ---------------- Interest and Fees on Loans $ 24,809 $ 16,737 $ 84,074 $ 63,580 Interest on Investment Securities 649 365 2,340 1,434 Interest on Federal Funds Sold and Interest-earning Deposits 180 33 777 62 ---------- ---------- ---------- ---------- Total Interest Income 25,638 17,135 87,191 65,076 ---------- ---------- ---------- ---------- Interest Expense: ----------------- Interest on Deposits 7,433 3,342 23,481 12,199 Interest on Borrowings 1,366 1,050 4,924 3,859 ---------- ---------- ---------- ---------- Total Interest Expense 8,799 4,392 28,405 16,058 ---------- ---------- ---------- ---------- Net Interest Income 16,839 12,743 58,786 49,018 Provision for Loan Losses 1,979 2,089 6,365 5,836 ---------- ---------- ---------- ---------- Net Interest Income after Provision for Loan Losses 14,860 10,654 52,421 43,182 ---------- ---------- ---------- ---------- Noninterest Income: -------------------- Service Charges, Commissions and Fees 3,546 2,429 11,683 9,778 Other Income 775 1,415 3,073 3,250 ---------- ---------- ---------- ---------- Total Noninterest Income 4,321 3,844 14,756 13,028 ---------- ---------- ---------- ---------- Noninterest Expense: -------------------- Salaries and Benefits 6,475 5,218 22,185 19,189 Occupancy and Furniture and Equipment Expense 1,939 1,578 7,273 6,023 Other Expenses 4,538 3,451 14,882 11,771 ---------- ---------- ---------- ---------- Total Noninterest Expense 12,952 10,247 44,340 36,983 ---------- ---------- ---------- ---------- Income Before Income Taxes 6,229 4,251 22,837 19,227 Income Taxes 2,391 1,583 8,674 7,219 ---------- ---------- ---------- ---------- Net Income $ 3,838 $ 2,668 $ 14,163 $ 12,008 ========== ========== ========== ========== Comprehensive Income $ 3,627 $ 2,569 $ 13,820 $ 11,795 ========== ========== ========== ========== Per Share of Common Stock: ---------------------- Basic Earnings $ 0.40 $ 0.35 $ 1.73 $ 1.57 ========== ========== ========== ========== Diluted Earnings $ 0.39 $ 0.34 $ 1.71 $ 1.55 ========== ========== ========== ========== Dividends $ 0.26 $ 0.25 $ 0.62 $ 0.61 ========== ========== ========== ========== Weighted Average Shares Outstanding: -------------------- Basic 9,709,731 7,656,509 8,184,499 7,652,099 ========== ========== ========== ========== Diluted 9,799,609 7,735,834 8,276,133 7,734,335 ========== ========== ========== ========== GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights (UNAUDITED) (Dollars in thousands except share and per share data) December 31, December 31, % 2005 2004 Change ---------- ---------- ------- Financial Condition Data: ------------------------- Assets $1,619,989 $1,233,403 31.34% Loans, net of unearned interest 1,378,642 1,046,867 31.69% Cash and investments 104,872 76,637 36.84% Federal funds sold 28,387 39,921 -28.89% Deposits 1,295,879 998,022 29.84% FHLB advances and notes payable 105,146 85,222 23.38% Subordinated debentures 13,403 10,310 30.00% Federal funds purchased and repurchase agreements 17,498 13,868 26.18% Shareholders' equity 168,021 108,718 54.55% Tangible shareholders' equity(1) 128,399 85,023 51.02% Ratios: --------- Book value per share $17.20 $14.22 20.96% Tangible book value per share(1) $13.15 $11.12 18.26% Average equity to average assets 9.20% 9.46% -2.75% Dividend payout ratio 37.38%(2) 38.86%(2) -3.81% (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. (2) Includes special dividend of $.14 and $.13 per share paid in December 2005 and 2004, respectively. Three Months Ended December 31, ---------------------- 2005 2004 % Change ---------- ---------- --------- Operating Data: --------------- Total Interest Income $ 25,638 $ 17,135 49.62% Total Interest Expense 8,799 4,392 100.34% ---------- ---------- --------- Net Interest Income 16,839 12,743 32.14% Provision for Loan Losses 1,979 2,089 -5.27% ---------- ---------- --------- Net Interest Income After Provision for Loan Losses 14,860 10,654 39.48% Non-Interest Income 4,321 3,844 12.41% Non-Interest Expense 12,952 10,247 26.40% ---------- ---------- --------- Income Before Income Taxes 6,229 4,251 46.53% ---------- ---------- --------- Income Tax Expense 2,391 1,583 51.04% ---------- ---------- --------- Net Income $ 3,838 $ 2,668 43.85% ========== ========== ========= Comprehensive Income $ 3,627 $ 2,569 41.18% ========== ========== ========= Per Share of Common Stock: -------------------------- Basic Earnings $0.40 $0.35 14.29% ========== ========== ========= Diluted Earnings $0.39 $0.34 14.71% ========== ========== ========= Dividends $0.26 $0.25 4.00% ========== ========== ========= Weighted Average Shares Outstanding: ------------------------------------ Basic 9,709,731 7,656,509 ========== ========== Diluted 9,799,609 7,735,834 ========== ========== Twelve Months Ended December 31, ---------------------- 2005 2004 % Change ---------- ---------- --------- Operating Data: --------------- Total Interest Income $ 87,191 $ 65,076 33.98% Total Interest Expense 28,405 16,058 76.89% ---------- ---------- --------- Net Interest Income 58,786 49,018 19.93% Provision for Loan Losses 6,365 5,836 9.06% ---------- ---------- --------- Net Interest Income After Provision for Loan Losses 52,421 43,182 21.40% Non-Interest Income 14,756 13,028 13.26% Non-Interest Expense 44,340 36,983 19.89% ---------- ---------- --------- Income Before Income Taxes 22,837 19,227 18.78% ---------- ---------- --------- Income Tax Expense 8,674 7,219 20.16% ---------- ---------- --------- Net Income $ 14,163 $ 12,008 17.95% ========== ========== ========= Comprehensive Income $ 13,820 $ 11,795 17.17% ========== ========== ========= Per Share of Common Stock: -------------------------- Basic Earnings $1.73 $1.57 10.19% ========== ========== ========= Diluted Earnings $1.71 $1.55 10.32% ========== ========== ========= Dividends $0.62 $0.61 1.64% ========== ========== ========= Weighted Average Shares Outstanding: ------------------------------------ Basic 8,184,499 7,652,099 ========== ========== Diluted 8,276,133 7,734,335 ========== ========== Three Months Twelve Months Ended Ended December 31, December 31, ------------- ------------- 2005 2004 2005 2004 ------ ------ ------ ------ Key Financial Ratios: --------------------- Return on Average Assets 0.98% 0.93% 1.02% 1.06% Return on Average Shareholders' Equity 9.10% 9.68% 11.09% 11.23% Return on Average Tangible Shareholders' Equity (1) 11.65% 11.99% 14.04% 13.95% Interest Rate Spread 4.29% 4.56% 4.30% 4.53% Net Interest Margin 4.67% 4.81% 4.61% 4.75% Efficiency Ratio 61.21% 61.78% 60.29% 59.61% (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. As of Dec. 31, ---------------- 2005 2004 ------- ------- Asset Quality Ratios: --------------------- Nonperforming Loans as a Percentage of Total Loans, net of Unearned Income 0.49% 0.66% Nonperforming Assets as a Percentage of Total Assets 0.65% 0.69% Allowance for Loan Losses as a Percentage of Total Loans, net of Unearned Income 1.43% 1.50% Allowance for Loan Losses as a Percentage of Nonperforming Assets 188.58% 185.56% Net Charge-Offs to Average Total Loans, Net of Unearned Income 0.32% 0.51% GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights December 31, 2005 (UNAUDITED) Nonperforming Assets and Net Charge-offs ---------------------------------------- As of and for the year ended December 31, 2005 Bank Other Total ------------------------------------------------ ------ ------ ------- Loans past due 90 days and still accruing $ 809 $ - $ 809 Nonaccrual loans 5,393 522 5,915 Other real estate owned and repossessed assets 3,396 347 3,743 ------ ------ ------- Total nonperforming assets $9,598 $ 869 $10,467 ====== ====== ======= Net charge-offs $2,490 $1,324 $ 3,814 ====== ====== ======= As of and for the year ended December 31, 2004 Bank Other Total ------------------------------------------------ ------ ------ ------- Loans past due 90 days and still accruing $ 664 $ - $ 664 Nonaccrual loans 5,536 706 6,242 Other real estate owned and repossessed assets 1,306 260 1,566 ------ ------ ------- Total nonperforming assets $7,506 $ 966 $ 8,472 ====== ====== ======= Net charge-offs $3,418 $1,624 $ 5,042 ====== ====== ======= Asset Quality Ratios -------------------- As of and for the year ended Dec. 31, 2005 Bank Other Consolidated ------------------------------------------ ------ ------- ------------ Nonperforming loans as a percentage of total loans, net of unearned income 0.45% 1.68% 0.49% Nonperforming assets as a percentage of total assets 0.59% 2.37% 0.65% Allowance for loan losses as a percentage of total loans, net of unearned income 1.26% 7.89% 1.43% Allowance for loan losses as a percentage of nonperforming assets 180.06% 282.74% 188.58% Net charge-offs to average total loans, net of unearned income 0.21% 4.22% 0.32% As of and for the year ended Dec. 31, 2004 Bank Other Consolidated ------------------------------------------ ------ ------- ------------ Nonperforming loans as a percentage of total loans, net of unearned income 0.60% 2.22% 0.66% Nonperforming assets as a percentage of total assets 0.61% 2.90% 0.69% Allowance for loan losses as a percentage of total loans, net of unearned income 1.27% 7.77% 1.50% Allowance for loan losses as a percentage of nonperforming assets 176.54% 255.69% 185.56% Net charge-offs to average total loans, net of unearned income 0.35% 5.04% 0.51% GREENE COUNTY BANCSHARES, INC. Condensed Average Balances, Interest Rates and Yields December 31, 2005 Three Months Ended December 31, ------------------- 2005 ------ Average Average Balance Interest Rate ------------ -------- ------- Interest-earning assets: ------------------------ Loans 1,350,357 24,809 7.29% Investment securities 60,301 649 4.27% Other short-term investments 18,597 180 3.84% ------------ -------- ------- Total interest-earning assets 1,429,255 25,638 7.12% ------------ -------- ------- Non-interest earning assets 140,186 ------------ Total assets 1,569,441 ============ Interest-bearing liabilities: ----------------------------- Deposits: --------- Now accounts, money market and savings 496,629 2,178 1.74% Time deposits 630,787 5,255 3.31% ------------ -------- ------- Total interest bearing-deposits 1,127,416 7,433 2.62% ------------ -------- ------- Securities sold under repurchase and short-term borrowings 15,840 132 3.31% Notes payable 92,657 1,234 5.28% ------------ -------- ------- Total interest-bearing liabilities 1,235,913 8,799 2.83% ------------ -------- ------- Non-Interest Bearing Liabilities: ----------------------------------- Demand Deposits 146,261 Other Liabilities 18,647 ------------ Total Non-Interest Bearing Liabilities 164,908 ------------ Total liabilities 1,400,821 ------------ Shareholders' equity 168,620 Total liabilities & shareholders' equity 1,569,441 ============ Net interest income 16,839 ======== Interest rate spread 4.29% ======= Net yield on interest-earning assets (net interest margin) 4.67% ======= 2004 ------ Average Average Balance Interest Rate ---------- -------- ------- Interest-earning assets: ------------------------ Loans 1,007,236 16,737 6.61% Investment securities 39,744 365 3.65% Other short-term investments 6,895 33 1.90% ---------- -------- ------- Total interest-earning assets 1,053,875 17,135 6.47% ---------- -------- ------- Non-interest earning assets 98,030 ---------- Total assets 1,151,905 ========== Interest-bearing liabilities: ----------------------------- Deposits: --------- Now accounts, money market and savings 341,157 562 0.66% Time deposits 474,379 2,780 2.33% ---------- -------- ------- Total interest bearing-deposits 815,536 3,342 1.63% ---------- -------- ------- Securities sold under repurchase and short-term borrowings 12,928 51 1.57% Notes payable 86,868 999 4.58% ---------- -------- ------- Total interest-bearing liabilities 915,332 4,392 1.91% ---------- -------- ------- Non-Interest Bearing Liabilities: ----------------------------------- Demand Deposits 112,134 Other Liabilities 14,155 ---------- Total Non-Interest Bearing Liabilities 126,289 ---------- Total liabilities 1,041,621 ---------- Shareholders' equity 110,284 Total liabilities & shareholders' equity 1,151,905 ========== Net interest income 12,743 ======== Interest rate spread 4.56% ======= Net yield on interest-earning assets (net interest margin) 4.81% ======= Twelve Months Ended December 31, -------------------- 2005 ------ Average Average Balance Interest Rate ---------- -------- ------- Interest-earning assets: ------------------------ Loans 1,191,077 84,074 7.06% Investment securities 58,750 2,340 3.98% Other short-term investments 25,964 777 2.99% ---------- -------- ------- Total interest-earning assets 1,275,791 87,191 6.84% ---------- -------- ------- Non-interest earning assets 112,805 ---------- Total assets 1,388,596 ========== Interest-bearing liabilities: ----------------------------- Deposits: --------- Now accounts, money market and savings 423,619 5,654 1.33% Time deposits 591,608 17,827 3.01% ---------- -------- ------- Total interest bearing-deposits 1,015,227 23,481 2.31% ---------- -------- ------- Securities sold under repurchase and short-term borrowings 15,695 414 2.64% Notes payable 89,429 4,510 5.04% ---------- -------- ------- Total interest-bearing liabilities 1,120,351 28,405 2.54% ---------- -------- ------- Non-Interest Bearing Liabilities: ----------------------------------- Demand Deposits 125,071 Other Liabilities 15,460 ---------- Total Non-Interest Bearing Liabilities 140,531 ---------- Total liabilities 1,260,882 ---------- Shareholders' equity 127,714 Total liabilities & shareholders' equity 1,388,596 ========== Net interest income 58,786 ======== Interest rate spread 4.30% ======= Net yield on interest-earning assets (net interest margin) 4.61% ======= 2004 ------ Average Average Balance Interest Rate ---------- -------- ------- Interest-earning assets: ------------------------ Loans 986,806 63,580 6.44% Investment securities 40,024 1,434 3.58% Other short-term investments 4,810 62 1.29% ---------- -------- ------- Total interest-earning assets 1,031,640 65,076 6.31% ---------- -------- ------- Non-interest earning assets 98,381 ---------- Total assets 1,130,021 ========== Interest-bearing liabilities: ----------------------------- Deposits: ----------- Now accounts, money market and savings 336,114 1,762 0.52% Time deposits 466,392 10,437 2.24% ---------- -------- ------- Total interest bearing-deposits 802,506 12,199 1.52% ---------- -------- ------- Securities sold under repurchase and short-term borrowings 15,903 163 1.02% Notes payable 85,621 3,696 4.32% ---------- -------- ------- Total interest-bearing liabilities 904,030 16,058 1.78% ---------- -------- ------- Non-Interest Bearing Liabilities: ----------------------------------- Demand Deposits 105,763 Other Liabilities 13,271 ---------- Total Non-Interest Bearing Liabilities 119,034 ---------- Total liabilities 1,023,064 ---------- Shareholders' equity 106,957 Total liabilities & shareholders' equity 1,130,021 ========== Net interest income 49,018 ======== Interest rate spread 4.53% ======= Net yield on interest-earning assets (net interest margin) 4.75% ======= GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights December 31, 2005 (UNAUDITED) December 31, 2005 December 31, 2004 ------------------ ------------------ Loans Balance % Balance % % Change ----- ---------- ------- ---------- ------- --------- Commercial $ 245,285 17.67% $ 165,975 15.70% 47.78% Commercial real estate 729,254 52.52% 484,088 45.79% 50.64% Residential real estate 319,797 23.03% 319,713 30.24% 0.03% Consumer 90,682 6.53% 82,532 7.81% 9.87% Other 3,476 0.25% 4,990 0.47% -30.34% ---------- ------- ---------- ------- --------- 1,388,494 100.00% 1,057,298 100.00% 31.32% ======= ======= ========= Less: Unearned interest income (9,852) (10,431) ---------- ---------- Total $1,378,642 $1,046,867 ========== ========== Loan Balances by Banking Units and Operating Subsidiaries ------------------------------ December 31, 2005 December 31, 2004 ------------------ ------------------ Loan % to Loan % to Balance Total Balance Total Loans Loans % Change ---------- ------- ---------- ------- --------- Greene County Bank $ 113,213 8.21% $ 119,437 11.40% -5.21% American Fidelity Bank 447,261 32.46% 311,300 29.74% 43.68% Bank of Athens 46,744 3.39% 44,131 4.22% 5.92% Bank of Bulls Gap 5,273 0.38% 5,523 0.53% -4.53% Bank of Niota 10,478 0.76% 14,415 1.38% -27.31% Clarksville Community Bank 107,660 7.81% - 0.00% 100.00% Cocke County Bank 6,021 0.44% 6,341 0.61% -5.05% Community Bank of Loudon County 23,362 1.69% 24,718 2.36% -5.49% Community Trust Bank 9,937 0.72% 15,020 1.43% -33.84% First Bristol Bank 57,661 4.18% 40,322 3.85% 43.00% First Independent Bank 65,391 4.74% 59,786 5.71% 9.38% Hamblen County Bank 48,944 3.55% 56,505 5.40% -13.38% Hawkins County Bank 31,887 2.31% 31,012 2.96% 2.82% Bank of Lawrence County 24,222 1.76% 28,367 2.71% -14.61% Middle Tennessee Bank and Trust 87,351 6.34% 22,708 2.17% 284.67% Rutherford Bank and Trust 83,590 6.06% 77,401 7.39% 8.00% Sullivan County Bank 16,865 1.22% 20,759 1.98% -18.76% Washington County Bank 161,643 11.72% 137,319 13.12% 17.71% GCB Acceptance Corporation 12,140 0.88% 12,548 1.20% -3.25% Superior Financial Services, Inc. 18,999 1.38% 19,255 1.84% -1.33% ---------- ------- ---------- ------- --------- Totals $1,378,642 100.00% $1,046,867 100.00% 31.69% ========== ======= ========== ======= ========= December 31, 2005 December 31, 2004 ------------------ ---------------- Deposits Balance % Balance % % Change ---------------------- ---------- ------- -------- ------- --------- Non-interest bearing demand $ 144,216 11.13% $109,956 11.03% 31.16% Interest bearing demand 268,714 20.74% 203,442 20.38% 32.08% Money market and savings 245,740 18.96% 169,081 16.94% 45.34% Retail time 425,506 32.83% 369,318 37.00% 15.21% Jumbo time 211,703 16.34% 146,225 14.65% 44.78% ---------- ------- -------- ------- --------- Total $1,295,879 100.00% $998,022 100.00% 29.84% ========== ======= ======== ======= ========= Deposit Balances by Banking Units and Operating Subsidiaries --------------------------------- December 31, 2005 December 31, 2004 ------------------ ---------------- Balance % Balance % % Change ---------- ------- -------- ------- --------- Greene County Bank $ 322,396 24.90% $281,738 28.24% 14.43% American Fidelity Bank 184,874 14.27% 159,860 16.02% 15.65% Bank of Athens 26,280 2.03% 21,737 2.18% 20.90% Bank of Bulls Gap 16,181 1.25% 16,104 1.61% 0.48% Bank of Niota 16,237 1.25% 16,484 1.65% -1.50% Clarksville Community Bank 169,032 13.04% - 0.00% 100.00% Cocke County Bank 28,314 2.18% 19,753 1.98% 43.34% Community Bank of Loudon County 24,507 1.89% 26,309 2.64% -6.85% Community Trust Bank 6,539 0.50% 6,732 0.67% -2.87% First Bristol Bank 47,351 3.65% 24,173 2.42% 95.88% First Independent Bank 101,071 7.80% 120,422 12.07% -16.07% Hamblen County Bank 52,998 4.09% 38,509 3.86% 37.62% Hawkins County Bank 47,484 3.66% 46,088 4.62% 3.03% Bank of Lawrence County 70,519 5.44% 68,713 6.88% 2.63% Middle Tennessee Bank and Trust 38,919 3.00% 7,882 0.79% 393.77% Rutherford Bank and Trust 51,903 4.01% 60,028 6.01% -13.54% Sullivan County Bank 13,671 1.05% 14,196 1.42% -3.70% Washington County Bank 77,603 5.99% 69,294 6.94% 11.99% GCB Acceptance Corporation - 0.00% - 0.00% - Superior Financial Services, Inc. - 0.00% - 0.00% - ---------- ------- -------- ------- --------- $1,295,879 100.00% $998,022 100.00% 29.84% ========== ======= ======== ======= ========= *T