GVBK Greenville First Bancshares Inc. (MM)

Assets grow to over $500 million GREENVILLE, S.C., Jan. 16 /PRNewswire-FirstCall/ -- Greenville First Bancshares, Inc. (NASDAQ:GVBK), holding company for Greenville First Bank NA, today announced that net income for the year ended December 31, 2006 was $3.9 million, or $1.20 per diluted share, a 55% increase when compared to net income of $2.5 million, or $0.78 per diluted share, for the previous year, 2005. Net income for the fourth quarter of 2006 was $1.1 million. Included in net income for the prior year was a non-operating expense of $930,000, net of taxes, from an impairment charge related to the write-down on our original corporate office building. Excluding the impairment charge, net operating earnings for 2005 was $3.4 million. Based on net income, return on average assets for the year ended December 31, 2006 was 0.85%, compared to 0.70%, for 2005 (based on net operating earnings, which excludes the impairment charge on real estate, return on average assets was 0.96% for 2005). Based on net income, return on average equity in 2006 was 11.94% compared to 8.44% in 2005 (based on net operating earnings, return on average equity was 11.56% in 2005). The company's efficiency ratio (noninterest expense divided by the sum of net interest income and noninterest income) was 49.2% for 2006, which compared favorably to 60.9% in 2005. The company's efficiency ratio for 2006 was unchanged from the efficiency ratio for 2005 excluding the impairment charge on real estate. "2006 has been a momentous year for the Greenville First team. We achieved two significant milestones when we exceeded $500 million in assets and $400 million in loans. We have again achieved over $1 million in net income for the quarter during a challenging interest rate environment," said Art Seaver, Chief Executive Officer. "I am excited about our growth opportunities given our move to a new corporate headquarters building and our announced expansion into the Columbia market." Total assets grew to $509.3 million as of December 31, 2006 compared to $405.3 million at December 31, 2005, or an increase of 25.7%. Loans were $402.2 million at December 31, 2006, an increase of $63.7 million or 18.8% when compared with $338.5 million at December 31, 2005. Deposits grew $91.4 million to $345.5 million at December 31, 2006 compared to $254.1 million at December 31, 2005. The closing stock price on December 31, 2006 was $21.47 per share. EXPLANATION OF USE OF CERTAIN NON-GAAP FINANCIAL MEASURES AND FORWARD-LOOKING STATEMENTS This press release contains financial information determined by methods other than in accordance with Generally Accepted Accounting Principles ("GAAP"). The attached financial highlights provide reconciliations between GAAP net income, operating earnings and noninterest expenses and comparable non-GAAP measures which exclude real estate impairment charges. The company's management believes that such non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare the company's operating results from period to period in a meaningful manner. Non- GAAP measures should not be considered as an alternative to any measure of performance as promulgated under GAAP, and investors should consider the company's real estate impairment charge in 2005 when assessing the performance of the company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the company's results as reported under GAAP. Certain statements in this news release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties, and other factors, such as a downturn in the economy, which could cause actual results to differ materially from future plans and expectations expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to differ from actual results. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our company or any person that future events, plans, or expectations contemplated by our company will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. SUMMARY CONSOLIDATED FINANCIAL DATA Our summary consolidated financial data as of and for the three months and years ended December 31, 2006 and 2005 have not been audited but, in the opinion of our management, contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly our financial position and results of operations for such periods in accordance with generally accepted accounting principles. Three Months Years Ended December 31, Ended December 31, 2006 2005 2006 2005 (In thousands, except per share amounts) Summary Results of Operations Data: Interest income $ 8,670 $ 6,190 $30,929 $21,670 Interest expense 4,937 2,812 16,579 9,585 Net interest income 3,733 3,378 14,350 12,085 Provision for loan losses 450 165 1,650 1,000 Net interest income after provision for loan losses 3,283 3,213 12,700 11,085 Noninterest income 177 193 579 826 Noninterest expense 1,938 3,237 7,351 7,856 Income before taxes 1,522 169 5,928 4,055 Income tax expense 453 64 2,027 1,541 Net income $ 1,069 $ 105 $ 3,901 $ 2,514 Per Share Data: Net income, basic $ 0.36 $ 0.04 $ 1.33 $ 0.86 Net income, diluted $ 0.33 $ 0.04 $ 1.20 $ 0.78 Book value $ 11.79 $ 10.41 $ 11.79 $ 10.41 Weighted Average Number of Shares Outstanding: Basic 2,934 2,926 2,932 2,922 Diluted 3,240 3,240 3,238 3,223 Three Months Years Ended December 31, Ended December 31, 2006 2005 2006 2005 Performance Ratios: Return on average assets (1) GAAP 0.83 % 0.11 % 0.85 % 0.70 % Operating(4) 0.83 % 1.10 % 0.85 % 0.96 % Return on average equity (1) GAAP 12.38 % 1.35 % 11.94 % 8.44 % Operating(4) 12.38 % 13.26 % 11.94 % 11.56 % Net interest margin(1) 3.04 % 3.66 % 3.26 % 3.45 % Efficiency ratio (2) GAAP 49.57 % 90.64 % 49.23 % 60.85 % Operating(4) 49.57 % 48.64 % 49.23 % 49.23 % Growth Ratios and Other Data: Percentage change in net income, (GAAP) 918.08 % 55.15 % Percentage change in diluted net income, (GAAP) per share 725.00 % 53.85 % Reconciliation of GAAP to Non-GAAP Measures Net income, as reported (GAAP) $ 1,069 $ 105 $ 3,901 $ 2,514 Non-operating items: Impairment on real estate, net of income tax - 930 - 930 Operating earnings (net income, excluding non-operating items) $ 1,069 $ 1,035 $ 3,901 $ 3,444 Noninterest expense, as reported (GAAP) $ 1,938 $ 3,237 $ 7,351 $ 7,856 Non-operating items: Impairment on real estate - 1,500 - 1,500 Operating noninterest expense (noninterest expense, excluding non-operating items) $ 1,938 $ 1,737 $ 7,351 $ 6,356 At December 31, 2006 2005 Summary Balance Sheet Data: Assets $509,344 $405,313 Federal funds sold 7,466 19,381 Investment securities 74,304 36,131 Loans(3) 402,183 338,530 Allowance for loan losses 4,949 4,490 Deposits 345,504 254,148 Securities sold under agreement to repurchase and federal funds purchased - 14,680 Other borrowed funds 108,500 79,500 Junior subordinate debentures 13,403 13,403 Shareholders' equity 34,583 30,473 Asset Quality Ratios: Nonperforming assets, past due and restructured loans to total loans(3) 0.62 % 0.14 % Nonperforming assets, past due and restructured loans to total assets 0.49 % 0.12 % Net charge-offs year to date to average total loans(3) 0.27 % 0.07 % Allowance for loan losses to nonperforming loans 332.46 % 962.74 % Allowance for loan losses to total loans(3) 1.23 % 1.33 % Capital Ratios: Average equity to average assets 7.15 % 8.34 % Leverage ratio 9.34 % 10.49 % Tier 1 risk-based capital ratio 12.01 % 12.20 % Total risk-based capital ratio 13.26 % 13.45 % Growth Ratios and Other Data: Percentage change in assets 25.67 % Percentage change in loans(3) 18.80 % Percentage change in deposits 35.95 % Percentage change in equity 13.49 % Loan to deposit ratio(3) 116.40 % (1) Annualized for the three month periods. (2) Computed by dividing noninterest expense by the sum of net interest income on a tax equivalent basis and noninterest income, net of securities gains or losses. (3) Includes nonperforming loans. (4) Return on average assets, return on average equity and the efficiency ratio, on an operating basis, are calculated using operating earnings and operating noninterest expense and are non-GAAP measures. FINANCIAL CONTACT: JIM AUSTIN 864-679-9070 MEDIA CONTACT: EDDIE TERRELL 864-679-9016 WEB SITE: http://www.greenvillefirst.com/ DATASOURCE: Greenville First Bancshares, Inc. CONTACT: Financial, Jim Austin, +1-864-679-9070, or Media, Eddie Terrell, +1-864-679-9016, both of Greenville First Bancshares, Inc. Web site: http://www.greenvillefirst.com/

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