GCBS Greene County Bancshares (MM)

Greene County Bancshares, Inc. (NASDAQ: GCBS), the third largest bank holding company headquartered in the State of Tennessee, today announced continued growth in the second quarter and first six months of 2006, highlighted by year-over-year increases in earnings per diluted share for the periods of 15% and 24%, respectively. The Company's record quarterly and first-half results primarily reflected ongoing growth in net interest income and a disciplined approach to expense control, coupled with continued strong asset quality measures. Rapid growth in core non-interest income also contributed to the Company's higher results in 2006. For the second quarter of 2006, net income increased 48% to $5,483,000 or $0.55 per diluted share compared with $3,714,000 or $0.48 per diluted share in the year-earlier period. The disproportionate increase in per share earnings reflects the issuance of approximately 2.2 million shares of new common stock in the fourth quarter of 2005 to support the Company's expansion initiatives. On a linked-quarter basis, second quarter 2006 net income and diluted earnings per share rose 8% and 6%, respectively, from the first quarter of 2006. Return on Average Assets (ROAA) improved notably compared with the year-earlier period as well as the linked quarter. The Company's ROAA improved to 1.34% in the second quarter of 2006 from 1.27% in the first quarter of 2006 and 1.11% in the year-earlier quarter. Return on Average Equity, reflecting the issuance of new stock in the fourth quarter of 2005, was 12.43% in the second quarter of 2006, up from 11.86% in the first quarter of 2006, but below 13.11% in the second quarter of 2005. Similarly, Return on Average Tangible Equity improved to 15.99% in the second quarter of 2006 from 15.41% in the first quarter of 2006, but was slightly below 16.53% in the year-earlier quarter. Net interest income for the second quarter increased 26% to $17,773,000 from $14,072,000 in the year-earlier period, driven by a 25% increase in average loans outstanding. The quarter's provision for loan losses increased 17% to $1,244,000 from $1,060,000 in the second quarter of last year, commensurate with the Company's continued loan growth. Commenting on the second quarter results, Stan Puckett, Chairman and Chief Executive Officer, said, "We are encouraged with the results of the second quarter. Credit quality remained strong with net charge-offs at 0.17% of average total loans versus 0.21% in the first quarter of 2006 and 0.27% in the year-earlier period. Quarterly loan growth was solid at 10% on an annualized basis, reflecting the economic vitality of our key markets. Expense control remains a priority as evidenced by the continued improvement in our efficiency ratio to 55.61% from 57.55% in the first quarter of 2006 and 59.44% in the same period of 2005. Non-interest income was 45% higher than in the second quarter last year and it now comprises 22% of total revenue versus 20% in the second quarter of the previous year. "Lastly, net interest margin remained constant in the second quarter at 4.80% versus the first quarter of 2006, despite the challenging interest rate environment, as we continued to optimize our funding mix," Puckett continued. "Compared with the same period a year ago net interest margin widened by 23 basis points. Nevertheless, margin compression remains a concern due to the keenly competitive loan and deposit environments, and we anticipate some pressure on the margin for the second half of the year." For the six months ended June 30, 2006, net income increased 59% to $10,579,000 or $1.07 per diluted share from $6,649,000 or $0.86 per diluted share in the first half of 2005. Net interest income increased 28% to $34,959,000 for the first half of 2006 compared with $27,399,000 in the same period last year. At June 30, 2006, the Company's total assets increased 3% to $1,665,630,000 from $1,619,989,000 at December 31, 2005, and were 21% ahead of the $1,374,194,000 in total assets reported as of June 30, 2005. Net loans increased 4% to $1,437,935,000 at June 30, 2006, from $1,378,642,000 at December 31, 2005, and were 24% higher than net loans of $1,158,644,000 at June 30, 2005. Deposits declined slightly to $1,283,606,000 at June 30, 2006, from $1,295,879,000 at December 31, 2005, but were 12% ahead of deposits of $1,148,434,000 as of June 30, 2005. Total shareholders' equity increased 5% to $176,889,000 at June 30, 2006, versus $168,021,000 at December 31, 2005, and was 56% higher than total shareholders' equity of $113,486,000 at June 30, 2005. Concluding, Puckett added, "We are pleased with the Company's performance in the first half and believe it represents a positive step toward achieving our goal of being a high-performance, high-growth banking company." Greeneville, Tennessee-based Greene County Bancshares, Inc., with total assets of approximately $1.7 billion, is the holding company for Greene County Bank. Greene County Bank, founded in 1890, now has 48 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 Six Months Ended --------------------------- ----------------- June 30, March 31, June 30, June 30, June 30, 2006 2006 2005 2006 2005 ------- ------- ------- ------- ------- Interest income $28,489 $26,767 $20,703 $55,256 $39,438 Interest expense 10,716 9,581 6,631 20,297 12,039 ------- ------- ------- ------- ------- Net interest income 17,773 17,186 14,072 34,959 27,399 Provision for loan losses 1,244 1,064 1,060 2,308 2,682 ------- ------- ------- ------- ------- Net interest income after provision for loan losses 16,529 16,122 13,012 32,651 24,717 Non-interest income 5,028 4,755 3,463 9,783 6,639 Non-interest expense 12,679 12,706 10,422 25,385 20,697 ------- ------- ------- ------- ------- Income before income taxes 8,878 8,171 6,053 17,049 10,659 Income taxes 3,395 3,075 2,339 6,470 4,010 ------- ------- ------- ------- ------- Net income $ 5,483 $ 5,096 $ 3,714 $10,579 $ 6,649 ======= ======= ======= ======= ======= Comprehensive income $ 5,498 $ 5,089 $ 3,732 $10,587 $ 6,554 ======= ======= ======= ======= ======= Earnings per share: Basic $ 0.56 $ 0.52 $ 0.49 $ 1.08 $ 0.87 ======= ======= ======= ======= ======= Diluted $ 0.55 $ 0.52 $ 0.48 $ 1.07 $ 0.86 ======= ======= ======= ======= ======= Weighted average shares: Basic 9,786 9,771 7,651 9,778 7,650 ======= ======= ======= ======= ======= Diluted 9,898 9,871 7,746 9,892 7,745 ======= ======= ======= ======= ======= Dividends declared per share $ 0.12 $ 0.12 $ 0.12 $ 0.24 $ 0.24 ======= ======= ======= ======= ======= June 30, Dec. 31, June 30, 2006 2005 2005 ---------- ---------- ---------- Total assets $1,665,630 $1,619,989 $1,374,194 Cash and cash equivalents 63,974 74,523 81,936 Investment securities 54,076 58,736 61,035 Loans, net of unearned interest 1,437,935 1,378,642 1,158,644 Allowance for loan losses 20,834 19,739 16,880 Deposits 1,283,606 1,295,879 1,148,434 Shareholders' equity 176,889 168,021 113,486 Tangible shareholders' equity 1 137,808 128,399 90,167 Book value per share 18.07 17.20 14.83 Tangible book value per share 1 14.08 13.15 11.78 1 Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Balance Sheets June 30, 2006, December 31, 2005 and June 30, 2005 (Dollars in thousands except share and per share data) (Unaudited) December (Unaudited) June 30, 31, June 30, 2006 2005(a) 2005 ------------ ----------- ----------- ASSETS --------------------------------- Cash and due from banks $ 44,358 $ 46,136 $ 35,420 Federal funds sold & other 19,616 28,387 46,516 Securities available-for-sale ("AFS") 44,457 48,868 51,216 Securities held-to-maturity (with a market value of $2,696, $3,335 and $3,503 on June 30, 2006, December 31, 2005 and June 30, 2005) 2,740 3,379 3,480 FHLB, Bankers Bank and other stock, at cost 6,879 6,489 6,339 Loans held for sale 2,054 2,686 1,057 Loans, net of unearned interest 1,437,935 1,378,642 1,158,644 Allowance for loan losses (20,834) (19,739) (16,880) Bank premises and equipment, net of accumulated depreciation 52,735 49,985 35,373 Goodwill and other intangible assets 39,081 39,622 23,319 Other assets 36,609 35,534 29,710 ------------ ----------- ----------- Total Assets $ 1,665,630 $ 1,619,989 $ 1,374,194 ============ =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY --------------------------------- Deposits $ 1,283,606 $ 1,295,879 $ 1,148,434 Federal funds purchased 26,000 - - Repurchase agreements 25,133 17,498 16,426 FHLB advances and notes payable 123,281 105,146 70,509 Subordinated debentures 13,403 13,403 13,403 Accrued interest payable and other liabilities 17,318 20,042 11,936 ------------ ----------- ----------- Total Liabilities 1,488,741 1,451,968 1,260,708 ------------ ----------- ----------- SHAREHOLDERS' EQUITY --------------------------------- Common Stock: $2 par value, 15,000,000 shares authorized; 9,788,145, 9,766,336 and 7,651,016 shares outstanding 19,577 19,533 15,303 Paid in Capital 71,285 70,700 24,204 Retained Earnings 86,389 78,158 74,101 Accumulated Other Comprehensive Income (Loss) (362) (370) (122) ------------ ----------- ----------- Total Shareholders' Equity 176,889 168,021 113,486 ------------ ----------- ----------- Total Liabilities & Shareholders' Equity $ 1,665,630 $ 1,619,989 $ 1,374,194 ============ =========== =========== (a) Derived from Audited Consolidated Financial Statements. GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Statements of Income and Comprehensive Income Three Months Ended June 30, 2006, March 31, 2006 and June 30, 2006 and Six Months Ended June 30, 2006 and 2005 (Unaudited) (Dollars in thousands except share and per share data) Three Months Ended Six Months Ended -------------------------------- --------------------- June 30, March 31, June 30, June 30, June 30, 2006 2006 2005 2006 2005 ---------- ---------- ---------- ---------- ---------- Interest Income: ----------------- Interest and Fees on Loans $ 27,781 $ 26,100 $ 19,851 $ 53,881 $ 37,930 Interest on Investment Securities 649 631 592 1,280 1,065 Interest on Federal Funds Sold and Interest- earning Deposits 59 36 260 95 443 ---------- ---------- ---------- ---------- ---------- Total Interest Income 28,489 26,767 20,703 55,256 39,438 ---------- ---------- ---------- ---------- ---------- Interest Expense: ----------------- Interest on Deposits 8,647 8,042 5,501 16,689 9,763 Interest on Borrowings 2,069 1,539 1,130 3,608 2,276 ---------- ---------- ---------- ---------- ---------- Total Interest Expense 10,716 9,581 6,631 20,297 12,039 ---------- ---------- ---------- ---------- ---------- Net Interest Income 17,773 17,186 14,072 34,959 27,399 Provision for Loan Losses 1,244 1,064 1,060 2,308 2,682 ---------- ---------- ---------- ---------- ---------- Net Interest Income after Provision for Loan Losses 16,529 16,122 13,012 32,651 24,717 ---------- ---------- ---------- ---------- ---------- Noninterest Income: ----------------- Service Charges, Commissions and Fees 4,001 3,231 2,836 7,232 4,978 Other Income 1,027 1,524 627 2,551 1,661 ---------- ---------- ---------- ---------- ---------- Total Noninterest Income 5,028 4,755 3,463 9,783 6,639 ---------- ---------- ---------- ---------- ---------- Noninterest Expense: ----------------- Salaries and Benefits 6,266 6,391 5,099 12,657 10,344 Occupancy and Furniture and Equipment Expense 2,050 2,059 1,774 4,109 3,513 Other Expenses 4,363 4,256 3,549 8,619 6,840 ---------- ---------- ---------- ---------- ---------- Total Noninterest Expense 12,679 12,706 10,422 25,385 20,697 ---------- ---------- ---------- ---------- ---------- Income Before Income Taxes 8,878 8,171 6,053 17,049 10,659 Income Taxes 3,395 3,075 2,339 6,470 4,010 ---------- ---------- ---------- ---------- ---------- Net Income $ 5,483 $ 5,096 $ 3,714 $ 10,579 $ 6,649 ========== ========== ========== ========== ========== Comprehensive Income $ 5,498 $ 5,089 $ 3,732 $ 10,587 $ 6,554 ========== ========== ========== ========== ========== Per Share of Common Stock: ----------------- Basic Earnings $0.56 $0.52 $0.49 $1.08 $0.87 ========== ========== ========== ========== ========== Diluted Earnings $0.55 $0.52 $0.48 $1.07 $0.86 ========== ========== ========== ========== ========== Dividends $0.12 $0.12 $0.12 $0.24 $0.24 ========== ========== ========== ========== ========== Weighted Average Shares Outstanding: ----------------- Basic 9,785,936 9,770,555 7,650,884 9,778,288 7,649,982 ========== ========== ========== ========== ========== Diluted 9,897,987 9,870,691 7,745,985 9,891,817 7,745,130 ========== ========== ========== ========== ========== GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights (UNAUDITED) (Dollars in thousands except share and per share data) June 30, December 31, % 2006 2005 Change ---------- ---------- ------- Financial Condition Data: --------------------------------- Assets $1,665,630 $1,619,989 2.82% Loans, net of unearned interest 1,437,935 1,378,642 4.30% Cash and investments 98,434 104,872 -6.14% Federal funds sold 19,616 28,387 -30.90% Deposits 1,283,606 1,295,879 -0.95% Federal funds purchased 26,000 - - FHLB advances and notes payable 123,281 105,146 17.25% Subordinated debentures 13,403 13,403 0.00% Federal funds purchased and repurchase agreements 25,133 17,498 43.63% Shareholders' equity 176,889 168,021 5.28% Tangible shareholders' equity (1) 137,808 128,399 7.33% Ratios: --------------------------------- Book value per share $18.07 $17.20 5.06% Tangible book value per share (1) $14.08 $13.15 7.07% Average equity to average assets 10.78% 9.20% 17.17% Dividend payout ratio 22.19% 37.38%(2)-40.64% (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. (2) Includes special dividend of $.14 per share paid in December 2005. ---------------------------------------------------------------------- Three Months Ended Six Months Ended June 30, June 30, --------------- -------------- 2006 2005 % Change 2006 2005 % Change --------------------------------------------------- Operating Data: ----------------- Total Interest Income $28,489 $20,703 37.61% $55,256 $39,438 40.11% Total Interest Expense 10,716 6,631 61.60% 20,297 12,039 68.59% ------ -------- ------- --------- ------- ------- Net Interest Income 17,773 14,072 26.30% 34,959 27,399 27.59% Provision for Loan Losses 1,244 1,060 17.36% 2,308 2,682 -13.94% ------ -------- ------- --------- ------- ------- Net Interest Income After Provision for Loan Losses 16,529 13,012 27.03% 32,651 24,717 32.10% Non-Interest Income 5,028 3,463 45.19% 9,783 6,639 47.36% Non-Interest Expense 12,679 10,422 21.66% 25,385 20,697 22.65% ------ -------- -------- --------- ------- ------- Income Before Income Taxes 8,878 6,053 46.67% 17,049 10,659 59.95% ------ -------- ------- ---------- ------- ------- Income Tax Expense 3,395 2,339 45.15% 6,470 4,010 61.35% ------ -------- ------- ---------- ------- ------- Net Income $5,483 $3,714 47.63% $10,579 $6,649 59.11% ====== ======== ======= ========== ======= ======= Comprehensive Income $5,498 $3,732 47.32% $10,587 $6,554 61.53% ====== ======== ======= ========== ======= ======= Per Share of Common Stock: ----------------- Basic Earnings $0.56 $0.49 14.29% $1.08 $0.87 24.14% ====== ======== ======= ========== ======== ======= Diluted Earnings $0.55 $0.48 14.58% $1.07 $0.86 24.42% ====== ======== ======= ========== ======= ======= Dividends $0.12 $0.12 0.00% $0.24 $0.24 0.00% ====== ======== ======= ========== ======= ======= Weighted Average Shares Outstanding: ---------------------------- Basic 9,785,936 7,650,884 9,778,288 7,649,982 ========== ========== ========== ========== Diluted 9,897,987 7,745,985 9,891,817 7,745,130 ========== ========== ========== ========== ---------------------------------------------------------------------- Three Months Ended Six Months Ended --------------------------- June 30, June 30, March June 30, 31, ------------------ 2006 2006 2005 2006 2005 --------------------------------------------- Key Financial Ratios: ------------------------- Return on Average Assets 1.34% 1.27% 1.11% 1.31% 1.02% Return on Average Shareholders' Equity 12.43% 11.86% 13.11% 12.15% 11.86% Return on Average Tangible Shareholders' Equity (1) 15.99% 15.41% 16.53% 15.70% 15.01% Interest Rate Spread 4.35% 4.42% 4.30% 4.38% 4.34% Net Interest Margin 4.80% 4.80% 4.57% 4.80% 4.61% Efficiency Ratio 55.61% 57.55% 59.44% 56.74% 60.81% (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. ---------------------------------------------------------------------- ---------------------------------------------------------------------- June 30, March 31, June 30, 2006 2006 2005 ----------------------------------- Asset Quality Ratios: --------------------------------- Nonperforming Loans as a Percentage of Total Loans, net of Unearned Income 0.34% 0.35% 0.62% Nonperforming Assets as a Percentage of Total Assets 0.47% 0.49% 0.69% Allowance for Loan Losses as a Percentage of Total Loans, net of Unearned Income 1.45% 1.43% 1.46% Allowance for Loan Losses as a Percentage of Nonperforming Assets 263.55% 252.55% 177.74% Net Charge-Offs to Average Total Loans, Net of Unearned Income 0.17% 0.21% 0.27% GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights June 30, 2006 (UNAUDITED) -------------------------------------------------------------- Nonperforming Assets and Net Charge-offs ------------------------------------------ As of and for the three months Bank Other Total ended June 30, 2006 ------------------------------------------ -------- ---------- Loans past due 90 days and still accruing $ 65 $ - $ 65 Nonaccrual loans 4,392 424 4,816 Other real estate owned and repossessed assets 2,743 281 3,024 -------- -------- ---------- Total nonperforming assets $ 7,200 $ 705 $ 7,905 ======== ======== ========== Annualized net charge-offs $ 1,638 $ 790 $ 2,426 ======== ======== ========== As of and for the three months Bank Other Total ended June 30, 2005 ------------------------------------------ -------- ---------- Loans past due 90 days and still accruing $ 376 $ 8 $ 384 Nonaccrual loans 6,365 405 6,770 Other real estate owned and repossessed assets 2,091 252 2,343 -------- -------- ---------- Total nonperforming assets $ 8,832 $ 665 $ 9,497 ======== ======== ========== Annualized net charge-offs $ 1,716 $ 1,330 $ 3,046 ======== ======== ========== As of and for the year ended Bank Other Total December 31, 2005 ------------------------------------------ -------- ---------- 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 ======== ======== ========== ---------------------------------------------------------------------- Asset Quality Ratios ------------------------------------------ As of and for the three months ended Bank Other Consolidated June 30, 2006 ---------------------------------------------------------------------- Nonperforming loans as a percentage of total loans, net of unearned income 0.31% 1.32% 0.34% Nonperforming assets as a percentage of total assets 0.43% 1.95% 0.47% Allowance for loan losses as a percentage of total loans, net of unearned income 1.28% 7.90% 1.45% Allowance for loan losses as a percentage of nonperforming assets 254.22% 358.87% 263.55% Annualized net charge-offs to average total loans, net of unearned income 0.12% 2.52% 0.17% As of and for the three months ended Bank Other Consolidated June 30, 2005 ---------------------------------------------------------------------- Nonperforming loans as a percentage of total loans, net of unearned income 0.59% 1.29% 0.62% Nonperforming assets as a percentage of total assets 0.64% 1.97% 0.69% Allowance for loan losses as a percentage of total loans, net of unearned income 1.25% 7.71% 1.46% Allowance for loan losses as a percentage of nonperforming assets 163.27% 369.92% 177.74% Annualized net charge-offs to average total loans, net of unearned income 0.16% 4.19% 0.27% As of and for the year ended Bank Other Consolidated December 31, 2005 ---------------------------------------------------------------------- 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% GREENE COUNTY BANCSHARES, INC. Condensed Average Balances, Interest Rates and Yields June 30, 2006 Three Months Ended June 30, ---------------------------------------------------- 2006 2005 ---------------------------------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ---------------------------------------------------- Interest-earning assets: ------------------ Loans 1,426,984 27,781 7.81% 1,140,537 19,851 6.98% Investment securities 54,571 649 4.77% 60,691 592 3.91% Other short-term investments 4,476 59 5.29% 33,265 260 3.13% ---------------------------------------------------- Total interest- earning assets 1,486,031 28,489 7.69% 1,234,493 20,703 6.73% ---------------------------------------------------- Non-interest earning assets 146,520 104,107 ---------- ---------- Total assets 1,632,551 1,338,600 ========== ========== Interest-bearing liabilities: ------------------ Deposits: ------------------ Now accounts, money market and savings 505,383 2,680 2.13% 401,441 1,161 1.16% Time deposits 625,457 5,967 3.83% 598,470 4,340 2.91% ---------------------------------------------------- Total interest bearing- deposits 1,130,840 8,647 3.07% 999,911 5,501 2.21% ---------------------------------------------------- Securities sold under repurchase and short-term borrowings 34,783 397 4.58% 15,014 95 2.54% Notes payable 123,199 1,672 5.44% 81,000 1,035 5.13% ---------------------------------------------------- Total interest- bearing liabilities 1,288,822 10,716 3.34% 1,095,925 6,631 2.43% ---------------------------------------------------- Non-Interest Bearing Liabilities: ------------------ Demand Deposits 148,937 116,436 Other Liabilities 18,396 12,942 ---------- ---------- Total Non-Interest Bearing Liabilities 167,333 129,378 ---------- ---------- Total liabilities 1,456,155 1,225,303 ---------- ---------- Shareholders' equity 176,396 113,297 Total liabilities & shareholders' equity 1,632,551 1,338,600 ========== ========== Net interest income 17,773 14,072 ========= ======== Interest rate spread 4.35% 4.30% ======= ======== Net yield on interest-earning assets (net interest margin) 4.80% 4.57% ======= ======== Six Months Ended June 30, ---------------------------------------------------- 2006 2005 ---------------------------------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ---------------------------------------------------- Interest-earning assets: ------------------ Loans 1,409,788 53,881 7.71% 1,110,231 37,930 6.89% Investment securities 55,503 1,280 4.65% 55,874 1,065 3.84% Other short-term investments 3,928 95 4.88% 33,694 443 2.65% ---------------------------------------------------- Total interest- earning assets 1,469,219 55,256 7.58% 1,199,799 39,438 6.63% ---------------------------------------------------- Non-interest earning assets 146,829 103,339 ---------- ---------- Total assets 1,616,048 1,303,138 ========== ========== Interest-bearing liabilities: ------------------ Deposits: ------------------ Now accounts, money market and savings 513,060 5,256 2.07% 395,246 2,027 1.03% Time deposits 625,750 11,433 3.68% 561,428 7,736 2.78% ---------------------------------------------------- Total interest bearing- deposits 1,138,810 16,689 2.96% 956,674 9,763 2.06% ---------------------------------------------------- Securities sold under repurchase and short-term borrowings 28,267 604 4.31% 16,712 184 2.22% Notes payable 112,474 3,004 5.39% 86,740 2,092 4.86% ---------------------------------------------------- Total interest- bearing liabilities 1,279,551 20,297 3.20% 1,060,126 12,039 2.29% ---------------------------------------------------- Non-Interest Bearing Liabilities: ------------------ Demand Deposits 144,515 116,644 Other Liabilities 17,856 14,235 ---------- ---------- Total Non-Interest Bearing Liabilities 162,371 130,879 ---------- ---------- Total liabilities 1,441,922 1,191,005 ---------- ---------- Shareholders' equity 174,126 112,133 Total liabilities & shareholders' equity 1,616,048 1,303,138 ========== ========== Net interest income 34,959 27,399 ========= ======== Interest rate spread 4.38% 4.34% ======= ======== Net yield on interest-earning assets (net interest margin) 4.80% 4.61% ======= ======== GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights June 30, 2006 (UNAUDITED) --------------------------------------------------------------------- June 30, 2006 December 31, 2005 -------------------- ----------------- Loans Balance % Balance % % Change --------------------- -------------------- -------------------------- Commercial $ 266,416 18.39% $ 245,285 17.67% 8.61% Commercial real estate 794,090 54.81% 729,254 52.52% 8.89% Residential real estate 300,298 20.73% 319,797 23.03% -6.10% Consumer 85,526 5.90% 90,682 6.53% -5.69% Other 2,458 0.17% 3,476 0.25% -29.29% -------------------- -------------------------- 1,448,788 100.00% 1,388,494 100.00% 4.34% ======== ================ Less: Unearned interest income (10,853) (9,852) ------------ ---------- Total $ 1,437,935 $1,378,642 ============ ========== Loan Balances by Banking Units and Operating Subsidiaries ------------------------------------------- June 30, 2006 December 31, 2005 -------------------- ----------------- Loan % to Loan % to Balance Total Balance Total % Change Loans Loans ----------------------------------------------- Greene County Bank $ 115,427 8.03% $ 113,213 8.21% 1.96% American Fidelity Bank 474,443 32.99% 447,261 32.46% 6.08% Bank of Athens 46,516 3.23% 46,744 3.39% -0.49% Bank of Bulls Gap 4,969 0.35% 5,273 0.38% -5.77% Bank of Niota 8,784 0.61% 10,478 0.76% -16.17% Clarksville Community Bank 103,718 7.21% 107,660 7.81% -3.66% Cocke County Bank 6,377 0.44% 6,021 0.44% 5.91% Community Bank of Loudon County 20,355 1.42% 23,362 1.69% -12.87% Community Trust Bank 8,698 0.60% 9,937 0.72% -12.47% First Bristol Bank 60,700 4.22% 57,661 4.18% 5.27% First Independent Bank 63,238 4.40% 65,391 4.74% -3.29% Hamblen County Bank 48,058 3.34% 48,944 3.55% -1.81% Hawkins County Bank 33,479 2.33% 31,887 2.31% 4.99% Bank of Lawrence County 22,458 1.56% 24,222 1.76% -7.28% Middle Tennessee Bank and Trust 110,968 7.72% 87,351 6.34% 27.04% Rutherford Bank and Trust 92,154 6.41% 83,590 6.06% 10.25% Sullivan County Bank 13,885 0.97% 16,865 1.22% -17.67% Washington County Bank 171,694 11.94% 161,643 11.72% 6.22% GCB Acceptance Corporation 12,235 0.85% 12,140 0.88% 0.78% Superior Financial Services, Inc. 19,779 1.38% 18,999 1.38% 4.11% -------------------- -------------------------- Totals $ 1,437,935 100.00% $1,378,642 100.00% 4.30% ==================== ========================== --------------------------------------------------------------------- --------------------------------------------------------------------- June 30, 2006 December 31, 2005 -------------------- ----------------- Deposits Balance % Balance % % Change --------------------- -------------------- -------------------------- Non-interest bearing demand $ 156,951 12.23% $ 144,216 11.13% 8.83% Interest bearing demand 273,369 21.30% 268,714 20.74% 1.73% Money market and savings 217,810 16.97% 245,740 18.96% -11.37% Retail time 419,279 32.66% 425,506 32.83% -1.46% Jumbo time 216,197 16.84% 211,703 16.34% 2.12% -------------------- -------------------------- Total $ 1,283,606 100.00% $1,295,879 100.00% -0.95% ==================== ========================== Deposit Balances by Banking Units and Operating Subsidiaries ----------------------------------------------------- June 30, 2006 December 31, 2005 -------------------- ----------------- Balance % Balance %% Change -------------------- -------------------------- Greene County Bank $ 329,491 25.65% $ 322,396 24.90% 2.20% American Fidelity Bank 181,707 14.16% 184,874 14.27% -1.71% Bank of Athens 31,818 2.48% 26,280 2.03% 21.07% Bank of Bulls Gap 16,368 1.28% 16,181 1.25% 1.16% Bank of Niota 17,405 1.36% 16,237 1.25% 7.19% Clarksville Community Bank 164,223 12.79% 169,032 13.04% -2.85% Cocke County Bank 29,477 2.30% 28,314 2.18% 4.11% Community Bank of Loudon County 24,090 1.88% 24,507 1.89% -1.70% Community Trust Bank 4,566 0.36% 6,539 0.50% -30.17% First Bristol Bank 31,396 2.45% 47,351 3.65% -33.70% First Independent Bank 93,370 7.27% 101,071 7.80% -7.62% Hamblen County Bank 57,153 4.45% 52,998 4.09% 7.84% Hawkins County Bank 47,502 3.70% 47,484 3.66% 0.04% Bank of Lawrence County 71,774 5.59% 70,519 5.44% 1.78% Middle Tennessee Bank and Trust 42,270 3.29% 38,919 3.00% 8.61% Rutherford Bank and Trust 51,207 3.99% 51,903 4.01% -1.34% Sullivan County Bank 11,631 0.91% 13,671 1.05% -14.92% Washington County Bank 78,158 6.09% 77,603 5.99% 0.72% GCB Acceptance Corporation - 0.00% - 0.00% - Superior Financial Services, Inc. - 0.00% - 0.00% - -------------------- -------------------------- $ 1,283,606 100.00% $1,295,879 100.00% -0.95% ==================== ========================== *T