GCBS Greene County Bancshares (MM)

Greene County Bancshares, Inc. (NASDAQ/NM: GCBS) today announced record results for the third quarter and nine-month period ended September 30, 2005. These results continued to reflect the strong momentum seen in the Company's operations during the first half of the year, underscoring ongoing expansion in new Middle Tennessee markets - accomplished through acquisitions and the formation of a new banking unit - as well as the Company's continued growth in attractive markets in Knoxville and Maryville, Tennessee, and surrounding areas. For the third quarter of 2005, net income increased 14% to $3,676,000 compared with $3,213,000 in the year-earlier period. Net income per diluted share for the period increased 12% to $0.47 from $0.42 in the third quarter last year. Net interest income for the third quarter increased 17% to $14,548,000 from $12,412,000 in the year-earlier period. Net interest income after provision for loan losses rose 13% to $12,844,000 in the third quarter of 2005 versus $11,350,000 in the same period last year. Greene County Bancshares' provision for loan losses for the third quarter increased to $1,704,000 from $1,062,000 in the same period last year, commensurate with an underlying increase in loan originations and a 24% year-over-year increase in the Company's loan portfolio. Volume-driven additions to the provision continued to be partially offset by ongoing improvements in the Company's overall asset quality. Commenting on the third quarter results, Stan Puckett, Chairman and Chief Executive Officer, said, "We are very pleased to report the continued progress and profitability of the Company in the third quarter. Annualized loan growth for the third quarter was over 19% and continues to be driven by our recent expansions in Knoxville and Nashville, as well as good performance in Sullivan and Washington Counties - two of our legacy markets. Credit quality trends remained favorable with third quarter net charge-offs of $943,000 (representing an annualized ratio to average total loans of 0.32%) and bank-only net charge-offs of $611,000 (representing an annualized ratio to average total loans of 0.21%). On the other side of the balance sheet, the High Performance Checking program we initiated in February continued to produce good results for us, with 4,075 new accounts opened during the third quarter. "Noninterest income increased 26% in the third quarter of 2005 versus the same period in 2004, led primarily by increases in service charges," Puckett continued. "Net interest margin compressed by three basis points in the third quarter to 4.54%, continuing a trend that reemerged in the fourth quarter of 2004. The third quarter efficiency ratio was 58.28%, which is closer to our historical range." Concluding, Puckett added, "As we approach the end of 2005, the ongoing growth and expansion we are experiencing in newer markets across the state of Tennessee - as well as those we have served for a longer time - encourage us to believe that we can continue to grow profitably in this environment, maintain a strong balance sheet with sound asset quality, and provide attractive returns for our shareholders." Commenting further on other third quarter developments, Puckett noted that the Company's subsidiary, Greene County Bank, recently completed the purchase of five branch offices in Clarksville, Tennessee, from Old National Bank. This transaction further expands the Company's presence in Middle Tennessee and marks its entry into one of Tennessee's fastest-growing cities. The acquired branches had a combined total of approximately $173 million in deposits and $115 million in loans outstanding when the transaction was completed in early October. In a related matter, the Company also completed a public offering of 1,833,043 shares of its common stock in late September, raising approximately $44 million in new capital, net of offering costs. Greene County Bancshares contributed approximately $35 million of the offering's net proceeds to provide capital for the acquisition of the five Clarksville branches. The remainder of the net proceeds will be used for general corporate purposes and to support Greene County Bank's internal growth and capital needs. For the nine months ended September 30, 2005, net income increased 11% to $10,325,000 from $9,340,000 in the first nine months of 2004. Net income per diluted share for the first nine months increased 10% to $1.33 from $1.21 in the comparable 2004 period. Net interest income after provision for loan losses increased 15% to $37,561,000 for the year-to-date period in 2005 compared with $32,528,000 in the same period last year. For the nine months ended September 30, 2005, the Company's provision for loan losses was $4,386,000, up 17% from $3,747,000 in the same quarter last year. At September 30, 2005, the Company's total assets increased 14% to $1,405,580,000 from $1,233,403,000 at December 31, 2004, and were 25% ahead of the $1,120,228,000 in total assets reported as of September 30, 2004. Net loans, including loans held for sale, increased 16% to $1,201,692,000 at September 30, 2005, from $1,032,297,000 at December 31, 2004, and were 24% higher than net loans, including loans held for sale, of $968,521,000 at September 30, 2004. Deposits increased 14% to $1,134,864,000 at September 30, 2005, from $998,022,000 at December 31, 2004, and were 29% ahead of deposits of $878,088,000 as of September 30, 2004. Total shareholders' equity increased 47% to $160,307,000 at September 30, 2005, versus $108,718,000 at December 31, 2004, and was 48% higher than total shareholders' equity of $108,014,000 at September 30, 2004. Annualized return on average shareholders' equity for the third quarter and the nine months ended September 30, 2005, was 12.52% and 12.08%, respectively, versus 11.91% and 11.77%, respectively, for the comparable periods last year. Return on average total assets for the third quarter and nine months ended September 30, 2005, was 1.07% and 1.04%, respectively, compared with 1.15% and 1.11%, respectively, for the same periods in 2004. Greene County Bancshares, Inc., with total assets of approximately $1.4 billion, is the holding company for Greene County Bank, headquartered in Greeneville, Tennessee. Greene County Bank, founded in 1890, now has 46 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 Nine Months Ended September 30, September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Interest income $ 22,115 $ 16,142 $ 61,553 $ 47,941 Interest expense 7,567 3,730 19,606 11,666 ---------- ---------- ---------- ---------- Net interest income 14,548 12,412 41,947 36,275 Provision for loan losses 1,704 1,062 4,386 3,747 ---------- ---------- ---------- ---------- Net interest income after provision for loan losses 12,844 11,350 37,561 32,528 Noninterest income 3,796 3,020 10,435 9,184 Noninterest expense 10,691 9,211 31,388 26,736 ---------- ---------- ---------- ---------- Income before income taxes 5,949 5,159 16,608 14,976 Income taxes 2,273 1,946 6,283 5,636 ---------- ---------- ---------- ---------- Net income $ 3,676 $ 3,213 $ 10,325 $ 9,340 ========== ========== ========== ========== Comprehensive income $ 3,639 $ 3,418 $ 10,193 $ 9,226 ========== ========== ========== ========== Earnings per share: Basic $ 0.48 $ 0.42 $ 1.35 $ 1.22 ========== ========== ========== ========== Diluted $ 0.47 $ 0.42 $ 1.33 $ 1.21 ========== ========== ========== ========== Weighted average shares: Basic 7,711 7,645 7,671 7,657 ========== ========== ========== ========== Diluted 7,805 7,710 7,765 7,725 ========== ========== ========== ========== Dividends declared per share $ 0.12 $ 0.12 $ 0.36 $ 0.36 ========== ========== ========== ========== Sept. 30, Dec. 31, Sept. 30, 2005 2004 2004 ---------- ---------- ---------- Total assets $1,405,580 $1,233,403 $1,120,228 Cash and cash equivalents 46,321 70,648 31,172 Investment securities 63,565 45,910 38,234 Loans, net(1) 1,201,692 1,032,297 968,521 Deposits 1,134,864 998,022 878,088 Shareholders' equity 160,307 108,718 108,014 Tangible shareholders' equity(2) 137,176 85,023 87,506 Book value per share 16.90 14.22 14.13 Tangible book value per share(2) 14.46 11.12 11.45 (1) Includes loans held for sale. (2) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Balance Sheets September 30, 2005 and December 31, 2004 (Dollars in thousands except share and per share data) (Unaudited) Sept. 30, Dec. 31, 2005 2004(1) ----------- ---------- ASSETS ------ Cash and due from banks $ 35,464 $ 30,727 Federal funds sold 10,857 39,921 Securities available-for-sale ("AFS") 53,778 35,318 Securities held-to-maturity (with a market value of $3,394 and $4,506 on September 30, 2005 and December 31, 2004) 3,380 4,381 FHLB, Bankers Bank and other stock, at cost 6,407 6,211 Loans held for sale 4,260 1,151 Loans, net of unearned interest 1,215,072 1,046,867 Less: allowance for loan losses (17,640) (15,721) ----------- ---------- Net Loans 1,197,432 1,031,146 ----------- ---------- Bank premises and equipment, net of accumulated depreciation 36,311 35,591 Goodwill and other intangible assets 23,131 23,695 Other assets 34,560 25,262 ----------- ---------- Total Assets $ 1,405,580 $1,233,403 =========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Deposits $ 1,134,864 $ 998,022 Repurchase agreements 11,393 13,868 FHLB advances and notes payable 70,240 85,222 Subordinated debentures 13,403 10,310 Accrued interest payable and other liabilities 15,373 17,263 ----------- ---------- Total Liabilities 1,245,273 1,124,685 ----------- ---------- SHAREHOLDERS' EQUITY -------------------- Common Stock: $2 par value, 15,000,000 shares authorized; 9,485,949 and 7,647,740 shares outstanding 18,972 15,296 Paid in Capital 64,634 24,160 Retained Earnings 76,860 69,289 Accumulated Other Comprehensive Income (Loss) (159) (27) ----------- ---------- Total Shareholders' Equity 160,307 108,718 ----------- ---------- Total Liabilities & Shareholders' Equity $ 1,405,580 $1,233,403 =========== ========== (1) Derived from Audited Consolidated Financial Statements. GREENE COUNTY BANCSHARES, INC. Condensed Consolidated Statements of Income and Comprehensive Income Three and Nine Months Ended September 30, 2005 and 2004 (Unaudited) (Dollars in thousands except share and per share data) Three Months Ended Nine Months Ended September 30, September 30, ---------------------- ---------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Interest Income: ---------------- Interest and Fees on Loans $ 21,335 $ 15,796 $ 59,265 $ 46,843 Interest on Investment Securities 626 344 1,691 1,069 Interest on Federal Funds Sold and Interest-earning Deposits 154 2 597 29 ---------- ---------- ---------- ---------- Total Interest Income 22,115 16,142 61,553 47,941 ---------- ---------- ---------- ---------- Interest Expense: ----------------- Interest on Deposits 6,285 2,665 16,048 8,857 Interest on Borrowings 1,282 1,065 3,558 2,809 ---------- ---------- ---------- ---------- Total Interest Expense 7,567 3,730 19,606 11,666 ---------- ---------- ---------- ---------- Net Interest Income 14,548 12,412 41,947 36,275 Provision for Loan Losses 1,704 1,062 4,386 3,747 ---------- ---------- ---------- ---------- Net Interest Income after Provision for Loan Losses 12,844 11,350 37,561 32,528 ---------- ---------- ---------- ---------- Noninterest Income: ------------------- Service Charges, Commissions and Fees 3,159 2,436 8,137 7,349 Other Income 637 584 2,298 1,835 ---------- ---------- ---------- ---------- Total Noninterest Income 3,796 3,020 10,435 9,184 ---------- ---------- ---------- ---------- Noninterest Expense: -------------------- Salaries and Benefits 5,366 4,800 15,710 13,971 Occupancy and Furniture and Equipment Expense 1,821 1,494 5,334 4,445 Other Expenses 3,504 2,917 10,344 8,320 ---------- ---------- ---------- ---------- Total Noninterest Expense 10,691 9,211 31,388 26,736 ---------- ---------- ---------- ---------- Income Before Income Taxes 5,949 5,159 16,608 14,976 Income Taxes 2,273 1,946 6,283 5,636 ---------- ---------- ---------- ---------- Net Income $ 3,676 $ 3,213 $ 10,325 $ 9,340 ========== ========== ========== ========== Comprehensive Income $ 3,639 $ 3,418 $ 10,193 $ 9,226 ========== ========== ========== ========== Per Share of Common Stock: -------------------------- Basic Earnings $0.48 $0.42 $1.35 $1.22 ========== ========== ========== ========== Diluted Earnings $0.47 $0.42 $1.33 $1.21 ========== ========== ========== ========== Dividends $0.12 $0.12 $0.36 $0.36 ========== ========== ========== ========== Weighted Average Shares Outstanding: ------------------------------------ Basic 7,710,871 7,644,544 7,670,502 7,657,078 ========== ========== ========== ========== Diluted 7,805,458 7,710,335 7,765,343 7,724,756 ========== ========== ========== ========== GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights (UNAUDITED) (Dollars in thousands except share and per share data) Sept. 30, Dec. 31, % 2005 2004 Change ---------- ---------- -------- Financial Condition Data: ------------------------- Assets $1,405,580 $1,233,403 13.96% Loans, Net(1) 1,201,692 1,032,297 16.41% Cash and Investments 99,029 76,637 29.22% Federal Funds Sold 10,857 39,921 -72.80% Deposits 1,134,864 998,022 13.71% FHLB advances and notes payable 70,240 85,222 -17.58% Subordinated debentures 13,403 10,310 30.00% Federal Funds Purchased and Repurchase Agreements 11,393 13,868 -17.85% Shareholders' Equity 160,307 108,718 47.45% Tangible Shareholders' Equity(2) 137,176 85,023 61.34% Ratios: ------- Book value per share $16.90 $14.22 18.85% Tangible book value per share(2) $14.46 $11.12 30.04% Average equity to average assets 8.58% 9.47% -9.40% Dividend payout ratio 26.67% 38.86%(3) -31.37% (1) Includes loans held for sale. (2) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. (3) Includes special dividend of $.13 per share paid in December 2004. Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2005 2004 %Change 2005 2004 %Change --------- --------- ------- --------- --------- ------- Operating Data: --------------- Total Interest Income $ 22,115 $ 16,142 37.00% $ 61,553 $ 47,941 28.39% Total Interest Expense 7,567 3,730 102.87% 19,606 11,666 68.06% --------- --------- ------- --------- --------- ------- Net Interest Income 14,548 12,412 17.21% 41,947 36,275 15.64% Provision for Loan Losses 1,704 1,062 60.45% 4,386 3,747 17.05% --------- --------- ------- --------- --------- ------- Net Interest Income After Provision for Loan Losses 12,844 11,350 13.16% 37,561 32,528 15.47% Non-Interest Income 3,796 3,020 25.70% 10,435 9,184 13.62% Non-Interest Expense 10,691 9,211 16.07% 31,388 26,736 17.40% --------- --------- ------- --------- --------- ------- Income Before Income Taxes 5,949 5,159 15.31% 16,608 14,976 10.90% --------- --------- ------- --------- --------- ------- Income Tax Expense 2,273 1,946 16.80% 6,283 5,636 11.48% --------- --------- ------- --------- --------- ------- Net Income $ 3,676 $ 3,213 14.41% $ 10,325 $ 9,340 10.55% ========= ========= ======= ========= ========= ======= Comprehensive Income $ 3,639 $ 3,418 6.47% $ 10,193 $ 9,226 10.48% ========= ========= ======= ========= ========= ======= Per Share of Common Stock: ------------- Basic Earnings $ 0.48 $ 0.42 14.29% $ 1.35 $ 1.22 10.66% ========= ========= ======= ========= ========= ======= Diluted Earnings $ 0.47 $ 0.42 11.90% $ 1.33 $ 1.21 9.92% ========= ========= ======= ========= ========= ======= Dividends $ 0.12 $ 0.12 0.00% $ 0.36 $ 0.36 0.00% ========= ========= ======= ========= ========= ======= Weighted Average Shares Outstanding: ------------------- Basic 7,710,871 7,644,544 7,670,502 7,657,078 ========= ========= ========= ========= Diluted 7,805,458 7,710,335 7,765,343 7,724,756 ========= ========= ========= ========= Three Months Nine Months Ended Ended September 30, September 30, ---------------- ---------------- 2005 2004 2005 2004 ------- ------- ------- ------- Key Financial Ratios: --------------------- Return on Average Assets 1.07% 1.15% 1.04% 1.11% Return on Average Shareholders' Equity 12.52% 11.91% 12.08% 11.77% Return on Average Tangible Shareholders' Equity(1) 15.60% 14.72% 15.21% 14.64% Interest Rate Spread 4.23% 4.60% 4.30% 4.52% Net Interest Margin 4.54% 4.82% 4.58% 4.73% Efficiency Ratio 58.28% 59.69% 59.92% 58.81% (1) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets. As of September 30, As of Dec. 31, ------------------- ------------- 2005 2004 2004 -------- -------- ------------- Asset Quality Ratios: --------------------- Nonperforming Loans as a Percentage of Total Loans, net of Unearned Income 0.58% 0.83% 0.66% Nonperforming Assets as a Percentage of Total Assets 0.75% 1.10% 0.69% Allowance for Loan Losses as a Percentage of Total Loans, net of Unearned Income 1.45% 1.51% 1.50% Allowance for Loan Losses as a Percentage of Nonperforming Assets 166.27% 120.52% 185.56% Net Charge-Offs to Average Total Loans, Net of Unearned Income 0.29% 0.47% 0.51% GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights September 30, 2005 (UNAUDITED) Nonperforming Assets and Net Charge-offs ---------------------------------------- As of and for the nine months ended September 30, 2005 Bank Other Total ------------------------ ----------- ---------- --------- Loans past due 90 days and still accruing $ 1,077 $ - $ 1,077 Nonaccrual loans 5,506 517 6,023 Other real estate owned and repossessed assets 3,247 262 3,509 ---------- ---------- --------- Total nonperforming assets $ 9,830 $ 779 $ 10,609 ========== ========== ========= Annualized net charge-offs $ 1,959 $ 1,329 $ 3,288 ========== ========== ========= As of and for the nine months ended September 30, 2004 Bank Other Total ------------------------ ---------- ---------- --------- Loans past due 90 days and still accruing $ 965 $ - $ 965 Nonaccrual loans 6,520 708 7,228 Other real estate owned and repossessed assets 3,789 340 4,129 ---------- ---------- --------- Total nonperforming assets $ 11,274 $ 1,048 $ 12,322 ========== ========== ========= Annualized net charge-offs $ 2,892 $ 1,723 $ 4,615 ========== ========== ========= 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 nine months ended September 30, 2005 Bank Other Consolidated ------------------------ ------- ------- ------------ Nonperforming loans as a percentage of total loans, net of unearned income 0.54% 1.69% 0.58% Nonperforming assets as a percentage of total assets 0.70% 1.85% 0.75% Allowance for loan losses as a percentage of total loans, net of unearned income 1.26% 7.92% 1.45% Allowance for loan losses as a percentage of nonperforming assets 154.79% 311.17% 166.27% Annualized net charge-offs to average total loans, net of unearned income 0.17% 4.21% 0.29% As of and for the nine months ended September 30, 2004 Bank Other Consolidated ------------------------ ------- ------- ------------ Nonperforming loans as a percentage of total loans, net of unearned income 0.77% 2.24% 0.83% Nonperforming assets as a percentage of total assets 1.01% 3.18% 1.10% Allowance for loan losses as a percentage of total loans, net of unearned income 1.25% 8.28% 1.51% Allowance for loan losses as a percentage of nonperforming assets 108.50% 249.81% 120.52% Annualized net charge-offs to average total loans, net of unearned income 0.30% 5.31% 0.47% As of and for the year ended December 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 September 30, 2005 Three Months Ended September 30, ------------------------------------------------------- 2005 2004 --------------------------- --------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ---------- -------- ------- ---------- -------- ------- Interest-earning assets: --------- Loans 1,190,852 21,335 7.11% 986,540 15,796 6.37% Investment securities 62,860 626 3.95% 38,084 344 3.59% Other short-term investments 18,123 154 3.37% 708 2 1.12% --------- -------- ------- ---------- -------- ------- Total interest- earning assets 1,271,835 22,115 6.90% 1,025,332 16,142 6.26% --------- -------- ------- ---------- -------- ------- Non-interest earning assets 104,047 95,583 --------- ---------- Total assets 1,375,882 1,120,915 ========= ========== Interest-bearing liabilities: ---------------------------- Deposits: --------- Now accounts, money market and savings 406,431 1,449 1.41% 323,058 395 0.49% Time deposits 611,800 4,836 3.14% 442,605 2,270 2.04% -------- ------- ------- ---------- -------- ------ Total interest bearing-deposits 1,018,231 6,285 2.45% 765,663 2,665 1.38% --------- ------- ------- ---------- -------- ------ Securities sold under repurchase and short-term borrowings 13,551 98 2.87% 17,050 45 1.05% Notes payable 91,493 1,184 5.13% 111,614 1,020 3.64% --------- ------- ------- --------- -------- ------- Total interest- bearing liabilities 1,123,275 7,567 2.67% 894,327 3,730 1.66% ---------- -------- ------ --------- -------- ------- Non-Interest Bearing Liabilities: --------------------------------- Demand Deposits 120,460 105,343 Other Liabilities 14,686 13,359 ------- ------- Total Non-Interest Bearing Liabilities 135,146 118,702 ------- ------- Total liabilities 1,258,421 1,013,029 --------- --------- Shareholders' equity 117,461 107,886 Total liabilities & shareholders' equity 1,375,882 1,120,915 ========= ========= Net interest income 14,548 12,412 ====== ====== Interest rate spread 4.23% 4.60% ===== ===== Net yield on interest-earning assets 4.54% 4.82% ===== ===== Nine Months Ended September 30, ----------------------------------------------------- 2005 2004 --------------------------- ------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate --------- -------- ------- --------- -------- ------- Interest-earning assets: --------- Loans 1,137,400 59,265 6.97% 979,946 46,843 6.39% Investment securities 58,229 1,691 3.88% 40,118 1,069 3.56% Other short-term investments 28,446 597 2.81% 4,110 29 0.94% --------- -------- ------ ---------- -------- ------- Total interest- earning assets 1,224,075 61,553 6.72% 1,024,174 47,941 6.25% --------- -------- ------ ---------- -------- ------- Non-interest earning assets 103,577 98,509 --------- ---------- Total assets 1,327,652 1,122,683 ========= ========== Interest-bearing liabilities: ----------------------------- Deposits: --------- Now accounts, money market and savings 399,016 3,476 1.16% 334,421 1,200 0.48% Time deposits 578,403 12,572 2.91% 463,710 7,657 2.21% --------- ------- ------- ---------- -------- ------- Total interest bearing-deposits 977,419 16,048 2.20% 798,131 8,857 1.48% --------- ------- ------- ---------- -------- ------- Securities sold under repurchase and short-term borrowings 15,646 282 2.41% 16,901 112 0.89% Notes payable 88,342 3,276 4.96% 85,203 2,697 4.23% --------- ------- ------- ---------- -------- ------- Total interest- bearing liabilities 1,081,407 19,606 2.42% 900,235 11,666 1.73% --------- ------- ------- ---------- -------- ------- Non-Interest Bearing Liabilities: --------------------------------- Demand Deposits 117,930 103,624 Other Liabilities 14,387 12,984 --------- -------- Total Non-Interest Bearing Liabilities 132,317 116,608 ---------- -------- Total liabilities 1,213,724 1,016,843 ---------- ---------- Shareholders' equity 113,928 105,840 Total liabilities & shareholders' equity 1,327,652 1,122,683 ========== ========== Net interest income 41,947 36,275 ====== ====== Interest rate spread 4.30% 4.52% ===== ===== Net yield on interest-earning assets 4.58% 4.73% ===== ===== GREENE COUNTY BANCSHARES, INC. Consolidated Financial Highlights September 30, 2005 (UNAUDITED) ---------------------------------------------------------------------- September 30, 2005 December 31, 2004 ------------------ ------------------ Loans Balance % Balance % %Change ----- ---------- ------- ---------- ------- --------- Commercial $ 224,021 18.29% $ 165,975 15.70% 34.97% Commercial real estate 612,731 50.02% 484,088 45.79% 26.57% Residential real estate 302,693 24.71% 319,713 30.24% -5.32% Consumer 81,747 6.67% 82,532 7.81% -0.95% Other 3,707 0.30% 4,990 0.47% -25.71% ---------- ------- ---------- ------- --------- 1,224,899 100.00% 1,057,298 100.00% 15.85% ======= ======= ========= Less: Unearned interest income (9,827) (10,431) ---------- ---------- Total $1,215,072 $1,046,867 ========== ========== Loan Balances by Banking Units and Operating Subsidiaries ------------------------ September 30, 2005 December 31, 2004 ------------------ ------------------ Loan % to Loan % to Balance Total Balance Total Loans Loans %Change ---------- -------- ---------- -------- -------- Greene County Bank $ 113,899 9.37% $ 119,437 11.40% -4.64% American Fidelity Bank 404,777 33.31% 311,300 29.74% 30.03% Bank of Athens 51,437 4.23% 44,131 4.22% 16.56% Bank of Bulls Gap 5,341 0.44% 5,523 0.53% -3.30% Bank of Niota 10,669 0.88% 14,415 1.38% -25.99% Cocke County Bank 6,228 0.51% 6,341 0.61% -1.78% Community Bank of Loudon County 22,984 1.89% 24,718 2.36% -7.02% Community Trust Bank 10,433 0.86% 15,020 1.43% -30.54% First Bristol Bank 54,057 4.45% 40,322 3.85% 34.06% First Independent Bank 63,930 5.26% 59,786 5.71% 6.93% Hamblen County Bank 50,999 4.20% 56,505 5.40% -9.74% Hawkins County Bank 32,149 2.65% 31,012 2.96% 3.67% Bank of Lawrence County 25,030 2.06% 28,367 2.71% -11.76% Middle Tennessee Bank and Trust 79,172 6.52% 22,708 2.17% 248.65% Rutherford Bank and Trust 78,037 6.42% 77,401 7.39% 0.82% Sullivan County Bank 18,412 1.52% 20,759 1.98% -11.31% Washington County Bank 156,913 12.91% 137,319 13.12% 14.27% GCB Acceptance Corporation 12,212 1.01% 12,548 1.20% -2.68% Superior Financial Services, Inc. 18,393 1.51% 19,255 1.84% -4.48% ---------- ------- ---------- ------- --------- Totals $1,215,072 100.00% $1,046,867 100.00% 16.07% ========== ======= ========== ======= ========= ---------------------------------------------------------------------- September 30, 2005 December 31, 2004 ------------------ ------------------ Deposits Balance % Balance % %Change -------- ---------- ------- ---------- ------- --------- Non-interest bearing demand $ 130,634 11.51% $ 109,956 11.03% 18.81% Interest bearing demand 203,136 17.90% 203,442 20.38% -0.15% Money market and savings 208,696 18.39% 169,081 16.94% 23.43% Retail time 394,000 34.72% 369,318 37.00% 6.68% Jumbo time 198,398 17.48% 146,225 14.65% 35.68% ---------- ------- ---------- ------- --------- Total $1,134,864 100.00% $ 998,022 100.00% 13.71% ========== ======= ========== ======= ========= Deposit Balances by Banking Units and Operating Subsidiaries ------------------------------------------------------------ September 30, 2005 December 31, 2004 ------------------ ------------------ Balance % Balance % %Change ---------- ------- ---------- ------- --------- Greene County Bank $ 315,900 27.84% $ 281,738 28.24% 12.13% American Fidelity Bank 178,046 15.69% 159,860 16.02% 11.38% Bank of Athens 27,624 2.43% 21,737 2.18% 27.08% Bank of Bulls Gap 16,293 1.44% 16,104 1.61% 1.17% Bank of Niota 18,018 1.59% 16,484 1.65% 9.31% Cocke County Bank 28,129 2.48% 19,753 1.98% 42.40% Community Bank of Loudon County 27,584 2.43% 26,309 2.64% 4.85% Community Trust Bank 6,962 0.61% 6,732 0.67% 3.42% First Bristol Bank 47,949 4.23% 24,173 2.42% 98.36% First Independent Bank 113,803 10.03% 120,422 12.07% -5.50% Hamblen County Bank 48,964 4.31% 38,509 3.86% 27.15% Hawkins County Bank 47,302 4.17% 46,088 4.62% 2.63% Bank of Lawrence County 71,735 6.32% 68,713 6.88% 4.40% Middle Tennessee Bank and Trust 34,041 3.00% 7,882 0.79% 331.88% Rutherford Bank and Trust 54,868 4.83% 60,028 6.01% -8.60% Sullivan County Bank 15,371 1.35% 14,196 1.42% 8.28% Washington County Bank 82,275 7.25% 69,294 6.94% 18.73% GCB Acceptance Corporation - 0.00% - 0.00% - Superior Financial Services, Inc. - 0.00% - 0.00% - ---------- ------- ---------- ------- --------- $1,134,864 100.00% $ 998,022 100.00% 13.71% ========== ======= ========== ======= ========= *T