GCBS Greene County Bancshares (MM)

Greene County Bancshares, Inc. (NASDAQ: GCBS) today announced higher earnings and solid operating results for the first quarter ended March�31,�2007. Net income increased to $5,616,000 or $0.57 per diluted share, up 10% from $5,096,000 or $0.52 per diluted share in the first quarter of 2006. Balance sheet highlights included strong organic growth in the Company's loan portfolio, continued improvement in credit quality, and higher deposits. Return on Average Assets (ROA) was 1.26% in the first quarter of 2007 compared with 1.20% in the fourth quarter of 2006 and 1.27% in the year-earlier quarter. Return on Average Equity (ROE) increased to 11.93% in the first quarter of 2007, up from 11.16% in the fourth quarter of 2006 and 11.86% in the year-earlier period. Return on Average Tangible Equity (ROTE) (average shareholders' equity less goodwill and intangible assets) was 14.99% in the first quarter of 2007 versus 14.10% in the fourth quarter of 2006 and 15.41% last year. Commenting on the Company's announcement, Stan Puckett, Chairman and Chief Executive Officer, said, "We are very pleased to report a solid start in 2007, maintaining the momentum we achieved last year. Key drivers for our financial success in the first quarter included continued improvement in our credit quality, outstanding loan growth, and higher non-interest income. Strategically, we announced and implemented the rebranding of all of our banking operations under the GreenBank name � a change that has been well accepted by our customers, and we are enthusiastic about the value this action will bring to our company in the months and years ahead. On the other hand, we had hoped to achieve greater efficiencies in our operations during the quarter and make better headway in improving our efficiency ratio, which remains a priority for us. Recently, we took further steps to reduce non-interest expense going forward, and we hope to see tangible results from these efforts later in the year." Net interest income for the first quarter increased by almost 10% to $18,821,000 from $17,186,000 in the year-earlier period, driven by a 13% increase in average loans outstanding between the periods. On a linked-quarter basis, the Company's net interest margin improved four basis points to 4.70% in the first quarter of 2007, while, on a year-over-year basis, net interest margin declined 10 basis points from 4.80% in the first quarter of 2006, reflecting a changing and challenging interest rate environment. The Company's provision for loan losses was $974,000 in the first quarter of 2007, down from $1,064,000 in the first quarter of last year as a result of ongoing improvements in asset quality. Non-interest income increased 14% in the first quarter to $5,399,000 from $4,755,000 in the same quarter last year. This advance reflected the ongoing positive impact of the Company's High Performance Checking Account product � a key strategic initiative. First quarter "net" new checking accounts opened totaled 4,025 compared with 2,996 during the same quarter last year, an increase of over 34%. Non-interest expenses totaled $14,042,000 in the first quarter, up $1,336,000 or 11% over $12,706,000 in the same period a year ago. The Company's efficiency ratio improved 75 basis points to 57.98% in the first quarter from 58.73% in the fourth quarter of 2006, and was 43 basis points higher versus 57.55% in the first quarter of 2006 due to continued expansion initiatives throughout 2006. Puckett concluded, "Outside the financial and operational success we registered in the first quarter, the most important event for the Company was the announcement of the proposed acquisition of Civitas BankGroup, through which we will acquire Civitas and its 12 Middle Tennessee branches. We expect that this merger, which should be completed later in the second quarter, will add significant momentum to our expansion efforts in the Nashville Metropolitan Statistical Area and position us for further growth in this fast-growing market." At March 31,�2007, the Company's total assets increased 14% to $1,827,634,000 from $1,608,240,000 at March 31, 2006, and up 3% from $1,772,654,000 at December�31,�2006. Net loans increased 14% to $1,603,281,000 at March�31, 2007, from $1,404,627,000 at March�31,�2006, and up 4% from $1,539,629,000 at December�31,�2006. Deposits rose 8% to $1,390,442,000 at March�31, 2007, from $1,285,738,000 at March�31,�2006, and up 4% from $1,332,505,000 at December 31, 2006. Total shareholders' equity increased 10% to $189,997,000 at March�31,�2007, versus $172,317,000 at March�31,�2006, and up 3% from $184,471,000 at December 31, 2006. Greeneville, Tennessee-based Greene County Bancshares, Inc., with total assets of approximately $1.8 billion, is the holding company for GreenBank. GreenBank, which traces its origin to 1890, has 49 branches throughout East and Middle Tennessee, one branch each in Bristol, Virginia, and Hot Springs, North Carolina, and a wealth management office in Gallatin, Tennessee. In addition, GreenBank 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 automobile lending; and Fairway Title Co., a title insurance company. This communication is not a solicitation of a proxy from any security holder of Greene County Bancshares, Inc. or Civitas BankGroup, Inc. In connection with the proposed acquisition of Civitas BankGroup, Greene County Bancshares has filed with the Securities and Exchange Commission ("SEC") a registration statement on Form S-4 to register the shares of Green County Bancshares common stock to be issued to the shareholders of Civitas BankGroup. The registration statement includes a joint proxy statement/prospectus and other documents for the shareholders� meetings of Civitas BankGroup and Greene County Bancshares at which time the proposed merger will be considered. The registration statement and joint proxy statement/prospectus contain important information about Greene County, Civitas, the proposed merger and related matters. Additional Information and Where to Find It INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT GREENE COUNTY BANCSHARES, CIVITAS BANKGROUP AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents once they are available through the website maintained by the SEC at www.sec.gov. Free copies of the joint proxy statement/prospectus also may be obtained by directing a request by telephone or mail to: Greene County Bancshares, Inc. 100 North Main Street Greeneville, TN 37743-4992 Attention: Chief Financial Officer (423) 639-5111 Civitas BankGroup, Inc. 4 Corporate Centre 810 Crescent Centre Drive, Suite 320 Franklin, TN 37067 Attention: Investor Relations (615) 263-9500 This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Participants in the Solicitation The directors and executive officers of Greene County and Civitas may be deemed to be participants in the solicitation of proxies with respect to the proposed transaction. Information about Greene County's directors and executive officers is contained in the proxy statement filed by Greene County with the SEC on March 27, 2006, which is available on Greene County's web site www.greenbankusa.com and at the address provided above. Information about Civitas' directors and executive officers is contained in the proxy statement filed by Civitas with the SEC on March 29, 2006, which is available on Civitas' website www.civitasbankgroup.com. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests by security holding or otherwise, will be contained in the joint proxy statement/prospectus and other relevant material to be filed with the SEC when they become available. All statements, other than statements of historical fact included in this release, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking including statements about the benefits of the merger to Greene County Bancshares and Civitas BankGroup, future financial and operating results and Greene County Bancshares's plans, objectives and intentions. All forward-looking statements are subject to risks, uncertainties and other facts that may cause the actual results, performance or achievements of Greene County Bancshares to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others, the risk that the cost savings and any revenue synergies from the merger may be realized or take longer than anticipated, disruption from the merger with customers, suppliers or employee relationships, the risk of successful integration of the two businesses, the failure of Civitas BankGroup or Greene County Bancshares shareholders to approve the merger and the ability to obtain required governmental approvals of the proposed terms and anticipated schedule. Additional factors which could affect the forward-looking statements can be found in the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K of both Greene County Bancshares and Civitas BankGroup filed or furnished with the Securities and Exchange Commission and available on the Commission's website set forth above. Greene County Bancshares and Civitas BankGroup disclaim any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise. GREENE COUNTY BANCSHARES, INC. Unaudited Financial Highlights (In thousands, except per share amounts) � Three Months Ended March 31, Dec. 31, March 31, 2007� 2006� 2006� Interest income $ 32,638� $ 31,734� $ 26,767� Interest expense 13,817� 13,266� 9,581� Net interest income 18,821� 18,468� 17,186� Provision for loan losses 974� 1,538� 1,064� Net interest income after provision for loan losses 17,847� 16,930� 16,122� Non-interest income 5,399� 5,804� 4,755� Non-interest expense 14,042� 14,255� 12,706� Income before income taxes 9,204� 8,479� 8,171� Income taxes 3,588� 3,305� 3,075� Net income $ 5,616� $ 5,174� $ 5,096� Comprehensive income $ 5,657� $ 5,244� $ 5,089� � Earnings per share: Basic $ 0.57� $ 0.53� $ 0.52� Diluted $ 0.57� $ 0.52� $ 0.52� � Weighted average shares: Basic 9,815� 9,805� 9,771� Diluted 9,910� 9,942� 9,871� � Dividends declared per share $ 0.13� $ 0.28� $ 0.12� � � � March 31, Dec. 31, March 31, 2007� 2006� 2006� Total assets $ 1,827,634� $1,772,654� $1,608,240� Cash and cash equivalents 54,798� 70,640� 40,530� Investment securities 54,286� 47,340� 54,155� Loans, net of unearned interest 1,603,281� 1,539,629� 1,404,627� Allowance for loan losses 22,932� 22,302� 20,083� Deposits 1,390,442� 1,332,505� 1,285,738� Shareholders' equity 189,997� 184,471� 172,317� Tangible shareholders' equity (1) 151,727� 145,931� 132,965� Book value per share 19.35� 18.80� 17.62� Tangible book value per share (1) 15.45� 14.87� 13.59� � � (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Balance Sheets March 31, 2007, December 31, 2006 and March 31, 2006 (Dollars in thousands except share and per share data) � (Unaudited) (Unaudited) March 31, December 31, March 31, 2007� 2006(1) 2006� ASSETS � Cash and due from banks $34,729� $44,657� $39,189� � Federal funds sold & other 20,069� 25,983� 1,341� � Securities available-for-sale ("AFS") 45,587� 37,740� 44,311� � Securities held-to-maturity (with a market value of $1,640, $2,544 and $3,003 on March 31, 2007, December 31, 2006 and March 31, 2006) 1,644� 2,545� 3,049� � FHLB, Bankers Bank and other stock, at cost 7,055� 7,055� 6,795� � Loans held for sale 2,405� 1,772� 1,957� � Loans, net of unearned interest 1,603,281� 1,539,629� 1,404,627� � Allowance for loan losses (22,932) (22,302) (20,083) � Bank premises and equipment, net of accumulated depreciation 58,722� 57,258� 52,109� � Goodwill and other intangible assets 38,270� 38,540� 39,352� � Other assets 38,804� 39,777� 35,593� � � � Total Assets $1,827,634� $1,772,654� $1,608,240� � LIABILITIES AND SHAREHOLDERS' EQUITY � Deposits $1,390,442� $1,332,505� $1,285,738� Federal funds purchased 17,415� 20,000� 0� Repurchase agreements 24,157� 22,165� 17,966� FHLB advances and notes payable 171,877� 177,571� 97,052� Subordinated debentures 13,403� 13,403� 13,403� Accrued interest payable and other liabilities 20,343� 22,539� 21,764� � Total Liabilities 1,637,637� 1,588,183� 1,435,923� � SHAREHOLDERS' EQUITY � Common Stock: $2 par value, 15,000,000 shares authorized; 9,819,218, 9,810,867 and 9,781,070 shares outstanding 19,638� 19,622� 19,562� Paid in Capital 72,156� 71,828� 71,052� Retained Earnings 98,291� 93,150� 82,080� Accumulated Other Comprehensive Income (Loss) (88) (129) (377) � Total Shareholders' Equity 189,997� 184,471� 172,317� � Total Liabilities & Shareholders' Equity $1,827,634� $1,772,654� $1,608,240� � (1) Derived from Audited Consolidated Financial Statements. GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Statements of Income and Comprehensive Income Three Months Ended March 31, 2007, December 31, 2006 and March 31, 2006 (Unaudited) � (Dollars in thousands except share and per share data) � Three Months Ended March 31, December 31, March 31, 2007� 2006� 2006� � Interest Income: Interest and Fees on Loans $31,915� $31,012� $26,100� Interest on Investment Securities 708� 694� 631� Interest on Federal Funds Sold and Interest-earning Deposits 15� 28� 36� Total Interest Income 32,638� 31,734� 26,767� � Interest Expense: Interest on Deposits 11,153� 10,573� 8,042� Interest on Borrowings 2,664� 2,693� 1,539� Total Interest Expense 13,817� 13,266� 9,581� � Net Interest Income 18,821� 18,468� 17,186� � Provision for Loan Losses 974� 1,538� 1,064� � Net Interest Income after Provision for Loan Losses 17,847� 16,930� 16,122� � Noninterest Income: Service Charges, Commissions and Fees 4,289� 4,805� 3,231� Other Income 1,110� 999� 1,524� Total Noninterest Income 5,399� 5,804� 4,755� Noninterest Expense: Salaries and Benefits 7,458� 6,883� 6,391� Occupancy and Furniture and Equipment Expense 2,096� 2,084� 2,059� Other Expenses 4,488� 5,288� 4,256� Total Noninterest Expense 14,042� 14,255� 12,706� � Income Before Income Taxes 9,204� 8,479� 8,171� � Income Taxes 3,588� 3,305� 3,075� � Net Income $5,616� $5,174� $5,096� � Comprehensive Income $5,657� $5,244� $5,089� � Per Share of Common Stock: Basic Earnings $0.57� $0.53� $0.52� Diluted Earnings $0.57� $0.52� $0.52� Dividends $0.13� $0.28� $0.12� � Weighted Average Shares Outstanding: Basic 9,815,452� 9,805,065� 9,770,555� Diluted 9,910,315� 9,942,078� 9,870,691� GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights (UNAUDITED) � (Dollars in thousands except share and per share data) � March 31, December 31, % 2007� 2006� Change Financial Condition Data: � Assets $ 1,827,634� $ 1,772,654� 3.10% Loans, net of unearned interest 1,603,281� 1,539,629� 4.13% Cash and investments 89,015� 91,997� -3.24% Federal funds sold 20,069� 25,983� -22.76% Deposits 1,390,442� 1,332,505� 4.35% Federal funds purchased 17,415� 20,000� -� FHLB advances and notes payable 171,877� 177,571� -3.21% Subordinated debentures 13,403� 13,403� 0.00% Federal funds purchased and repurchase agreements 24,157� 22,165� 8.99% Shareholders' equity 189,997� 184,471� 3.00% Tangible shareholders' equity (1) 151,727� 145,931� 3.97% � Ratios: Book value per share $19.35� $18.80� 2.93% Tangible book value per share (1) $15.45� $14.87� 3.90% Average equity to average assets 10.58% 10.78% -1.86% Dividend payout ratio 22.81% 29.49%(2) � -22.67% (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. (2) Includes special dividend of $.16 per share paid in December 2006. � � � � � � � � � � � � � � � � � � Three Months Ended March 31, 2007� 2006� % Change� Operating Data: � Total Interest Income $ 32,638� $ 26,767� 21.93% Total Interest Expense 13,817� 9,581� 44.21% Net Interest Income 18,821� 17,186� 9.51% Provision for Loan Losses 974� 1,064� -8.46% Net Interest Income After Provision for Loan Losses 17,847� 16,122� 10.70% Non-Interest Income 5,399� 4,755� 13.54% Non-Interest Expense 14,042� 12,706� 10.51% Income Before Income Taxes 9,204� 8,171� 12.64% Income Tax Expense 3,588� 3,075� 16.68% Net Income $ 5,616� $ 5,096� 10.20% � Comprehensive Income $ 5,657� $ 5,089� 11.16% � Per Share of Common Stock: Basic Earnings $0.57� $0.52� 9.62% Diluted Earnings $0.57� $0.52� 9.62% Dividends $0.13� $0.12� 8.33% � Weighted Average Shares Outstanding: Basic 9,815,452� 9,770,555� Diluted 9,910,315� 9,870,691� � � � � � � � � � � � � � � � � � Three Months Ended March 31, December 31, March 31, 2007� 2006� 2006� Key Financial Ratios: � Return on Average Assets 1.26% 1.20% 1.27% Return on Average Shareholders' Equity 11.93% 11.16% 11.86% Return on Average Tangible Shareholders' Equity (1) 14.99% 14.10% 15.41% Interest Rate Spread 4.21% 4.16% 4.42% Net Interest Margin 4.70% 4.66% 4.80% Efficiency Ratio 57.98% 58.73% 57.55% (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. � � � � � � � � � � � � � � � � � March 31, December 31, March 31, 2007� 2006� 2006� Asset Quality Ratios: Nonperforming Loans as a Percentage of Total Loans, net of Unearned Income 0.21% 0.23% 0.35% Nonperforming Assets as a Percentage of Total Assets 0.28% 0.29% 0.49% Allowance for Loan Losses as a Percentage of Total Loans, net of Unearned Income 1.43% 1.45% 1.43% Allowance for Loan Losses as a Percentage of Nonperforming Loans 690.10% 635.93% 405.23% Net Charge-Offs to Average Total Loans, Net of Unearned Income 0.09% 0.20% 0.21% GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights March 31, 2007 (UNAUDITED) � � � � � Nonperforming Assets and Net Charge-offs � As of and for the three months ended March 31, 2007 Bank Other Total Loans past due 90 days and still accruing $27� $10� $37� Nonaccrual loans 2,794� 492� 3,286� Other real estate owned and repossessed assets 1,585� 250� 1,835� Total nonperforming assets $4,406� $752� $5,158� � YTD annualized net charge-offs $368� $1,004� $1,372� � As of and for the three months ended March 31, 2006 Bank Other Total Loans past due 90 days and still accruing $20� $54� $74� Nonaccrual loans 4,590� 292� 4,882� Other real estate owned and repossessed assets 2,752� 244� 2,996� Total nonperforming assets $7,362� $590� $7,952� � YTD annualized net charge-offs $2,080� $800� $2,880� � As of and for the year ended December 31, 2006 Bank Other Total Loans past due 90 days and still accruing $15� $13� $28� Nonaccrual loans 2,866� 613� 3,479� Other real estate owned and repossessed assets 1,336� 352� 1,688� Total nonperforming assets $4,217� $978� $5,195� � Net charge-offs $2,041� $903� $2,944� Asset Quality Ratios � As of and for the three months ended March 31, 2007 � Bank Other Consolidated Nonperforming loans as a percentage of total loans, net of unearned income 0.18% 1.43% 0.21% Nonperforming assets as a percentage of total assets 0.24% 2.04% 0.28% Allowance for loan losses as a percentage of total loans, net of unearned income 1.26% 8.01% 1.43% Allowance for loan losses as a percentage of nonperforming loans 713.22% 560.16% 690.10% YTD annualized net charge-offs to average total loans, net of unearned income 0.02% 2.93% 0.09% � � As of and for the three months ended March 31, 2006 � Bank Other Consolidated Nonperforming loans as a percentage of total loans, net of unearned income 0.33% 1.11% 0.35% Nonperforming assets as a percentage of total assets 0.46% 1.68% 0.49% Allowance for loan losses as a percentage of total loans, net of unearned income 1.26% 7.94% 1.43% Allowance for loan losses as a percentage of nonperforming loans 381.87% 716.47% 405.23% YTD annualized net charge-offs to average total loans, net of unearned income 0.15% 2.59% 0.21% � � As of and for the year ended December 31, 2006 Bank Other Consolidated Nonperforming loans as a percentage of total loans, net of unearned income 0.19% 1.84% 0.23% Nonperforming assets as a percentage of total assets 0.24% 2.53% 0.29% Allowance for loan losses as a percentage of total loans, net of unearned income 1.28% 7.94% 1.45% Allowance for loan losses as a percentage of nonperforming loans 680.25% 431.95% 635.93% Net charge-offs to average total loans, net of unearned income 0.14% 2.82% 0.20% GREENE COUNTY BANCSHARES, INC. Condensed Average Balances, Interest Rates and Yields March 31, 2007 � Three Months Ended March 31, 2007� 2006� � Average Average Average Average Balance Interest Rate Balance Interest Rate Interest-earning assets: � Loans 1,572,640� 31,915� 8.23% 1,392,401� 26,100� 7.60% Investment securities 51,676� 707� 5.55% 56,446� 631� 4.53% Other short-term investments 1,258� 16� 5.16% 3,374� 36� 4.33% Total interest-earning assets 1,625,574� 32,638� 8.14% 1,452,221� 26,767� 7.48% � Non-interest earning assets 153,345� 147,140� Total assets 1,778,919� 1,599,361� � � Interest-bearing liabilities: Deposits: Now accounts, money market and savings 540,648� 3,546� 2.66% 520,821� 2,576� 2.01% Time deposits 673,242� 7,607� 4.58% 626,047� 5,466� 3.54% Total interest bearing-deposits 1,213,890� 11,153� 3.73% 1,146,868� 8,042� 2.84% � Securities sold under repurchase and short-term borrowings 25,856� 286� 4.49% 21,678� 207� 3.87% Notes payable 185,312� 2,378� 5.20% 101,629� 1,332� 5.32% � � � � � � Total interest-bearing liabilities 1,425,058� 13,817� 3.93% 1,270,175� 9,581� 3.06% � Non-Interest Bearing Liabilities: Demand Deposits 145,185� 140,044� Other Liabilities 20,398� 17,312� Total Non-Interest Bearing Liabilities 165,583� 157,356� � Total liabilities 1,590,641� 1,427,531� � Shareholders' equity 188,278� 171,830� � Total liabilities & shareholders' equity 1,778,919� 1,599,361� � Net interest income 18,821� 17,186� � Interest rate spread 4.21% 4.42% � Net yield on interest-earning assets (net interest margin) 4.70% 4.80% GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights March 31, 2007 (UNAUDITED) � � � � � � � � � � � � � � March 31, 2007 December 31, 2006 Loans Balance % Balance % % Change� Commercial $ 273,198� 16.91% $ 258,998� 16.70% 5.48% Commercial real estate 977,323� 60.49% 921,190� 59.38% 6.09% Residential real estate 274,496� 16.99% 281,629� 18.16% -2.53% Consumer 87,580� 5.42% 87,111� 5.62% 0.54% Other 3,021� 0.19% 2,203� 0.14% 37.13% 1,615,618� 100.00% 1,551,131� 100.00% 4.16% � Less: Unearned interest income (12,337) (11,502) Total $ 1,603,281� $ 1,539,629� � Loan Balances by Geographical Region and Operating Subsidiaries � March 31, 2007 December 31, 2006 Loan Balance % to Loan Balance % to Total Loans Total Loans % Change� � Northeastern Tennessee Region1 $ 472,032� 29.44% $ 465,567� 30.24% 1.39% East Tennessee Region 662,227� 41.31% 625,632� 40.64% 5.85% Middle Tennessee Region 433,900� 27.06% 414,379� 26.91% 4.71% � GCB Acceptance Corporation 14,533� 0.91% 13,444� 0.87% 8.10% Superior Financial Services, Inc. 20,589� 1.28% 20,607� 1.34% -0.09% � � � � � Totals $ 1,603,281� 100.00% $ 1,539,629� 100.00% 4.13% � 1 Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina � � � � � � � � � � � � � � � March 31, 2007 December 31, 2006 Deposits Balance % Balance % % Change� Non-interest bearing demand $ 150,716� 10.84% $ 152,634� 11.45% -1.26% Interest bearing demand 368,312� 26.49% 304,828� 22.88% 20.83% Money market and savings 214,150� 15.40% 194,068� 14.56% 10.35% Retail time 421,595� 30.32% 445,816� 33.46% -5.43% Jumbo time 235,669� 16.95% 235,159� 17.65% 0.22% Total $ 1,390,442� 100.00% $ 1,332,505� 100.00% 4.35% � Deposit Balances by Geographical Region and Operating Subsidiaries � March 31, 2007 December 31, 2006 Balance % Balance % % Change� Northeastern Tennessee Region1 $ 646,601� 46.50% $ 613,257� 46.02% 5.44% East Tennessee Region 283,373� 20.38% 281,094� 21.10% 0.81% Middle Tennessee Region 460,468� 33.12% 438,154� 32.88% 5.09% � GCB Acceptance Corporation -� 0.00% -� 0.00% -� Superior Financial Services, Inc. -� 0.00% -� 0.00% -� � � � � � $ 1,390,442� 100.00% $ 1,332,505� 100.00% 4.35% � 1 Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina