EX-99.1 2 a6081939ex99-1.htm EXHIBIT 99.1 a6081939ex99-1.htm
Exhibit 99.1
 
 
Graphic
 
 
CONTACT:
James E. Adams
 
Executive Vice President and Chief Financial Officer
 
423-278-3050
 
 
GREEN BANKSHARES REPORTS THIRD QUARTER RESULTS


GREENEVILLE, Tenn. (October 23, 2009) – Green Bankshares, Inc. (NASDAQ: GRNB), the holding company for GreenBank, today reported a net loss for the third quarter and nine months ended September 30, 2009.  Key points for the quarter include:

·  
A net loss available to common shareholders of $7.7 million or $0.59 per diluted share, reflecting primarily higher credit costs as the Company continues its efforts to identify and address credit quality issues in the loan portfolio;
 
·  
Net interest income increased 1% from the second quarter of 2009, while the net interest margin stabilized at 3.33%;
 
·  
The quarter's loan loss provision of $18.5 million was down from $24.4 million in the second quarter of 2009 and modestly exceeded net charge-offs; the loan loss reserve increased to 2.39% of outstanding loans from 2.30% at the end of the second quarter of 2009;
 
·  
Non-performing assets (NPAs) totaled $125.0 million at September 30, 2009, declining $4.1 million or 3% from the level at June 30, 2009; this improvement reflected the first decline in NPAs since the second quarter of 2008; the ratio of NPAs to total assets was 4.48% at September 30, 2009, down from 4.91% at June 30, 2009; NPAs were written down 30%, on average, at September 30, 2009;
 
·  
Loans past due 30 to 89 days, excluding non-accrual loans, declined from 0.84% of loans at June 30, 2009 to 0.76% of loans at September 30, 2009;
 
·  
Non-interest income, excluding net securities gains, increased 13% from the second quarter of 2009;
 
·  
Non-interest expense declined 12% from the second quarter of 2009, excluding the pre-tax, non-cash goodwill impairment charge of $143.4 million recorded in the second quarter; and
 
·  
The Company's estimated regulatory capital levels remained strong at September 30, 2009, with Tier 1 Leverage at 10.49%, Tier 1 Risk-Based Capital at 13.17%, and Total Risk-Based Capital at 14.43%; the tangible common equity to tangible assets ratio was 5.42% at September 30, 2009.
 
 
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Green Bankshares, Inc. ▪ 100 North Main Street ▪ Greeneville, TN  37743 ▪ (423) 639-5111
 
 
GRNB Reports Third Quarter Results
Page 2
October 23, 2009
 
 
The Company's net loss available to common shareholders for the third quarter of 2009 totaled $7,748,000 or $0.59 per diluted share, driven principally by higher credit costs, which were partially offset by continued strength in core operating earnings of the Company. This compares with net income in the year-earlier quarter of $1,234,000 or $0.10 per diluted share.

For the nine-month period ended September 30, 2009, the Company reported a net operating loss of $18,186,000 or $1.40 per diluted share, excluding the after-tax, non-recurring, non-cash goodwill impairment charge of $137,414,000 recorded in the second quarter of 2009 (please refer to the non-GAAP reconciliation on page 5).  This compares with net income of $9,874,000 or $0.76 per diluted share for the same period a year ago.  Including the goodwill impairment charge, the 2009 year-to-date net loss available to common shareholders was $155,600,000 or $11.91 per diluted share.

Stan Puckett, Chairman and Chief Executive Officer, commented, "Economic conditions remain challenging with high unemployment and weak real estate activity. We will continue to work aggressively to identify and address problem loans."

The following information graphically displays the Bank only loan portfolio detail, by purpose code, at September 30, 2009:
 
 
Graphic
 
 
 
 
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GRNB Reports Third Quarter Results
Page 3
October 23, 2009
 
 
The following is a breakdown of the Bank's commercial real estate portfolio, by purpose code, between the periods presented:

   
September 30,
2009
    
June 30,
2009
    
Change
    
% Change
  
Commercial Real Estate Portfolio
                        
Acquisition & development
   $ 190,826     $ 228,680     $ (37,854 )     -16.55 %
Lot warehouse
     68,948       75,909       (6,961 )     -9.17 %
Commercial 1-4 family construction
     83,155       109,319       (26,164 )     -23.93 %
Total speculative 1 to 4 family
     342,929       413,908       (70,979 )     -17.15 %
                                 
Commercial vacant land
     102,312       103,219       (907 )     -0.88 %
Commercial construction non-owner-occupied
     174,199       166,486       7,713       4.63 %
Commercial construction owner-occupied
     37,034       56,721       (19,687 )     -34.71 %
Consumer residential construction
     23,833       27,267       (3,434 )     -12.59 %
Total non-speculative
     337,378       353,693       (16,315 )     -4.61 %
Total construction and development
     680,307       767,601       (87,294 )     -11.37 %
Non-owner-occupied commercial real estate
     396,889       394,586       2,303       0.58 %
                                 
Total commercial real estate
   $ 1,077,196     $ 1,162,187     $ (84,991 )     -7.31 %

During the third quarter of 2009, net charge-offs totaled $18,436,000 compared with $23,281,000 during the three-month period ended June 30, 2009.  At September 30, 2009, the loan loss reserve totaled $50,196,000 and represented 2.39% of outstanding loans, up from 2.30% at June 30, 2009, and 1.50% at September 30, 2008. The increase in the reserve coverage ratio between the second and third quarters of 2009 was driven principally by the continued economic weakness in the Company's markets.

NPAs declined $4,086,000 from second quarter 2009 level and represented 4.48% of total assets at September 30, 2009, compared with 4.91% of total assets at June 30, 2009, and 1.76% at September 30, 2008.  This reduction represents the first decline in NPAs since the second quarter of 2008.

The following table reflects the changes in NPA balances from June 30, 2009, through September 30, 2009:

   
Non-Accrual Loans
    
OREO
Balances
    
Past Due
> 90 days
    
Total
  
June 30, 2009
   $ 93,889,000     $ 34,468,000     $ 820,000     $ 129,177,000  
Loan foreclosures
     (36,080,000 )     36,080,000       n/a       n/a  
Gross loan charge-offs
     (19,224,000 )     n/a       n/a       (19,224,000 )
New non-accrual loans
     28,562,000       n/a       n/a       28,562,000  
OREO sales proceeds
     n/a       (10,557,000 )     n/a       (10,557,000 )
OREO write-downs, net
     n/a       (3,578,000 )     n/a       (3,578,000 )
Increase in 90 day past due loans
     n/a       n/a       711,000       711,000  
September 30, 2009
   $ 67,147,000     $ 56,413,000     $ 1,531,000     $ 125,091,000  

After interest reversals of $280,000, net interest income totaled $20,338,000 for the third quarter of 2009, representing an increase of $158,000 from second quarter 2009 level and resulting from lower funding costs incurred.  Despite the increase in net interest income in the third quarter, the net interest margin fell 10 basis points from the second quarter of 2009 and stabilized at 3.33%.  This temporary margin compression resulted from a change in the mix of earning assets as higher-yielding average loan balances declined approximately $52,000,000 and lower-yielding, short-term, temporary investments increased approximately $123,000,000 due to continued average core deposit inflows.
 
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GRNB Reports Third Quarter Results
Page 4
October 23, 2009
 

Non-interest income totaled $9,189,000 for the three months ended September 30, 2009. Excluding securities gains of $933,000 and a security impairment charge of $503,000, non-interest income totaled $8,759,000 compared with $7,541,000 during the second quarter of 2009, an increase of $1,218,000 or 16%.  The ongoing success of GreenBank's High Performance Checking product added 4,619 net new checking account customers during the quarter, for a new account opening ratio of 2.4 new accounts opened for each account closed, resulting in an increase in deposit service charge revenues of $651,000 or 11% from the second quarter of 2009. Wealth management revenues improved almost 22% from the second quarter of 2009, reflecting continuing strength in trust and annuity sales.  Included in the Other Income component of non-interest income for the third quarter were non-recurring items totaling $468,000 related to insurance proceeds received and a gain on the sale of undeveloped land adjacent to a branch location.

Non-interest expense totaled $22,365,000 for the three-month period ended September 30, 2009, compared with $168,914,000 incurred during the second quarter of 2009. Excluding the one-time, non-cash goodwill impairment charge of $143,389,000 recorded in the second quarter, comparable non-interest expense for the second quarter of 2009 was $25,525,000 (please refer to the non-GAAP reconciliation on page 5). The decline in comparable non-interest expenses of $3,160,000 or 12% from the second quarter was principally a result of the $1,731,000 decrease in FDIC insurance costs along with the elimination of the Company's 401(k) employee contribution and all discretionary cash incentive compensation for the 2009 fiscal year.

Puckett concluded, "Although our third quarter results were disappointing, we are encouraged by the positive economic data that has been released recently and look forward to actively participating in the recovery as it occurs."

Greeneville, Tennessee-based Green Bankshares, Inc., with total assets of approximately $2.794 billion, is the holding company for GreenBank.  GreenBank, which traces its origin to 1890, has 63 branches across East and Middle Tennessee, and one branch each in Bristol, Virginia, and Hot Springs, North Carolina.  It also provides wealth management services through its GreenWealth Division and residential mortgage lending through its Mortgage Division.  In addition, GreenBank 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.

Certain matters discussed in this news release are not historical facts but are "forward-looking statements" within the meaning of and are furnished pursuant to the Private Securities Litigation Reform Act of 1995. 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. Risks and uncertainties related to the Company's business are discussed in the Company's SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2008, and include, but are not limited to, (1) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (2) continuation of the historically low short-term interest rate environment; (3) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (4) increased competition with other financial institutions in the markets that GreenBank serves; (5) greater than anticipated deterioration or lack of sustained growth in the national or local economies; (6) rapid fluctuations or unanticipated changes in interest rates; (7) the impact of governmental restrictions on entities participating in the Capital Purchase Program of the United States Department of the Treasury; (8) changes in state and federal legislation, regulations or policies applicable to banks or other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy and (9) the loss of key personnel.  The Company undertakes no obligation to update forward-looking statements.
 
 
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GRNB Reports Third Quarter Results
Page 5
October 23, 2009
 
 
GREEN BANKSHARES, INC.
Reconciliation of Non-GAAP Measures Presented in Earnings Release
(Dollars in thousands)

   
Three Months Ended
    
Nine Months Ended
  
   
Sept. 30,
2009
    
June 30,
2009
    
Sept. 30,
2008
    
Sept. 30,
2009
    
Sept. 30,
2008
  
Total non-interest expense
   $ 22,365     $ 168,914     $ 21,944     $ 209,110     $ 61,645  
Goodwill impairment charge
     --       (143,389 )     --       (143,389 )     --  
  Operating expenses
   $ 22,365     $ 25,525     $ 21,944     $ 65,721     $ 61,645  
                                         
Net income (loss) available
  to common shareholders
   $ (7,748 )   $ (151,400 )   $ 1,234     $ (155,600 )   $ 9,874  
Goodwill impairment charge,
  net of tax
     --       137,414       --       137,414       --  
  Net operating income (loss)
   $ (7,748 )   $ (13,986 )   $ 1,234     $ (18,186 )   $ 9,874  
                                         
Per Diluted Share:
                                        
Net income (loss) available
   to common shareholders
   $ (0.59 )   $ (11.58 )   $ 0.10     $ (11.91 )   $ 0.76  
Goodwill impairment charge,
  net of tax
     --       10.51       --       10.51       --  
  Net operating income (loss)
   $ (0.59 )   $ (1.07 )   $ 0.10     $ (1.40 )   $ 0.76  


Use of Non-GAAP financial measures

The above table presents computations and other financial information excluding the goodwill impairment charge (non-GAAP). The goodwill impairment charge is included in the financial results presented in accordance with generally accepted accounting principles (GAAP). The Company believes that the exclusion of goodwill impairment in expressing net operating income (loss), operating expenses and earnings (loss) per share data provides a more meaningful base for period to period comparisons which will assist investors in analyzing the operating results of the Company and predicting operating performance. The Company utilizes these non-GAAP financial measures to compare the operating performance with comparable periods in prior years and with internally prepared projections. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. To mitigate these limitations, the Company has policies in place to address goodwill impairment from other normal operating expenses to ensure that the Company's operating results are properly reflected for period to period comparisons.
 
 
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GRNB Reports Third Quarter Results
Page 6
October 23, 2009
 
 
GREEN BANKSHARES, INC.
Unaudited Financial Highlights
(In thousands, except per share amounts)
 
 
   
Three Months Ended
    
Nine Months Ended
  
   
Sept. 30,
    
June 30,
    
Sept. 30,
    
Sept. 30,
    
Sept. 30,
  
   
2009
    
2009
    
2008
    
2009
    
2008
  
Interest income
   $ 34,796     $ 34,856     $ 42,566     $ 105,032     $ 131,369  
Interest expense
     14,458       14,676       18,182       45,085       57,469  
Net interest income
     20,338       20,180       24,384       59,947       73,900  
Provision for loan losses
     18,475       24,384       8,620       43,844       20,527  
Net interest income (loss) after
                                        
provision for loan losses
     1,863       (4,204 )      15,764       16,103       53,373  
Non-interest income
     9,189       7,312       8,010       23,444       23,428  
Non-interest expense
     22,365       168,914       21,944       209,110       61,645  
Income (loss) before income taxes
     (11,313 )      (165,806 )      1,830       (169,563 )      15,156  
Provision (benefit) for income taxes
     (4,815 )      (15,656 )      596       (17,695 )      5,282  
Income (loss)
     (6,498 )      (150,150 )      1,234       (151,858 )      9,874  
Preferred stock dividends and
                                        
related costs
     1,250       1,250       --       3,732       --  
Net income (loss) available to
                                        
common shareholders
   $ (7,748 )   $ (151,400 )    $ 1,234     $ (155,600 )   $ 9,874  
Comprehensive income (loss)
   $ (5,073 )   $ (150,557 )   $ 1,547     $ (149,962 )   $ 8,478  
                                         
Earnings (loss) per share:
                                        
Basic
   $ (0.59 )   $ (11.58 )   $ 0.10     $ (11.91 )   $ 0.76  
Diluted
   $ (0.59 )   $ (11.58 )   $ 0.10     $ (11.91 )   $ 0.76  
                                         
Weighted average shares:
                                        
Basic
     13,070       13,070       12,932       13,068       12,932  
Diluted 1
     13,070       13,070       12,948       13,068       12,936  
                                         
Dividends declared per share
   $ 0.00     $ 0.00     $ 0.13     $ 0.13     $ 0.39  
                                         
                   
Sept. 30,
    
Dec. 31,
    
Sept. 30,
  
                     2009      2008      2008  
Total assets
                   $ 2,794,217     $ 2,944,671     $ 3,012,041  
Cash and cash equivalents
                     346,131       198,358       102,919  
Investment securities
                     168,307       217,249       306,857  
Loans, net of unearned interest
                     2,099,267       2,223,390       2,323,076  
Allowance for loan losses
                     (50,196 )      (48,811 )      (34,856 ) 
Deposits
                     2,214,761       2,184,147       2,276,198  
Shareholders' equity
                     227,388       381,231       326,482  
Common shareholders' equity 2
                     161,000       315,885       326,482  
Tangible common shareholders' equity 3
                     151,019       160,411       170,365  
Common book value per share 2
                     12.22       24.09       25.12  
Tangible common book value per share 3
                     11.47       12.23       13.11  
 
 
1
Diluted weighted average shares outstanding for the three- and nine-month periods ended September 30, 2009, exclude 101,636 and 95,526 restricted average shares, respectively, because their impact would be anti-dilutive.
   
2
Common shareholders' equity is shareholders' equity less preferred stock.
   
3
Tangible common shareholders' equity is shareholders' equity less goodwill, intangible assets and preferred stock.
 
 
-END-
 
 
 
GREEN BANKSHARES, INC.
  
Consolidated Balance Sheets
  
September 30, 2009, December 31, 2008 and September 30, 2008
  
(Dollars in thousands)
  
                   
                   
   
(Unaudited)
          
(Unaudited)
  
   
September 30,
    
December 31,
    
September 30,
  
   
2009
      2008*     2008  
ASSETS
  
 
          
   
 
                  
Cash and due from banks
   $ 345,209     $ 193,095     $ 46,168  
Federal funds sold
     922       5,263       56,751  
    Cash and cash equivalents
     346,131       198,358       102,919  
                         
Interest earning deposits in other banks
     1,000       -       -  
Securities available-for-sale ("AFS")
     154,937       203,562       292,897  
Securities held-to-maturity (with a market value of $644, $601 and $700
                  
  on September 30, 2009, December 31, 2008 and September 30, 2008)
     636       657       757  
FHLB and other stock, at cost
     12,734       13,030       13,203  
Loans held for sale
     1,064       442       1,824  
Loans, net of unearned income
     2,099,267       2,223,390       2,323,076  
Allowance for loan losses
     (50,196 )     (48,811 )     (34,856 )
Other real estate owned and repossessed assets
     56,413       45,371       12,215  
Bank premises and equipment, net
     82,551       83,359       83,569  
Cash surrender value of life insurance
     29,997       29,539       29,270  
Goodwill
     -       143,389       143,389  
Core deposit and other intangibles
     9,981       12,085       12,728  
Other assets
     49,702       40,300       31,050  
     Total assets
   $ 2,794,217     $ 2,944,671     $ 3,012,041  
                         
LIABILITIES AND SHAREHOLDERS' EQUITY
                        
                         
Non-interest-bearing deposits
   $ 156,797     $ 176,685     $ 189,262  
Interest-bearing deposits
     1,998,157       1,645,115       1,650,567  
Brokered deposits
     59,807       362,347       436,369  
    Total deposits
     2,214,761       2,184,147       2,276,198  
                         
Federal funds purchased
     -       -       413  
Repurchase agreements
     25,294       35,302       64,929  
FHLB advances and notes payable
     216,578       229,349       229,906  
Subordinated debentures
     88,662       88,662       88,662  
Accrued interest payable and other liabilities
     21,534       25,980       25,451  
    Total liabilities
     2,566,829       2,563,440       2,685,559  
                         
SHAREHOLDERS' EQUITY
                        
                         
Preferred stock: no par value, 1,000,000 shares authorized;
                        
    72,278, 72,278 and -0- shares outstanding
     66,388       65,346       -  
Common stock: $2 par value, 20,000,000 shares authorized;
                        
    13,171,474, 13,112,687 and 12,999,161 shares outstanding
     26,343       26,225       25,998  
Common stock warrants
     6,934       6,934       -  
Additional paid in capital
     188,146       187,742       185,631  
Retained earnings (deficit)
     (61,666 )     95,647       114,742  
Accumulated other comprehensive income (loss)
     1,243       (663 )     111  
    Total shareholders' equity
     227,388       381,231       326,482  
                         
    Total liabilities & shareholders' equity
   $ 2,794,217     $ 2,944,671     $ 3,012,041  
                         
* Derived from Audited Consolidated Financial Statements.
                        
 
 
 
GREEN BANKSHARES, INC.
  
Consolidated Statements of Income and Comprehensive Income
  
Three Months Ended September 30, 2009, June 30, 2009 and September 30, 2008 and Nine Months Ended September 30, 2009 and 2008
  
(Unaudited)
  
                               
(Dollars in thousands except share and per share data)
  
                               
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
June 30,
    
September 30,
    
September 30,
    
September 30,
  
   
2009
    
2009
    
2008
    
2009
    
2008
  
                               
Interest income:
                              
  Interest and fees on loans
   $ 32,559     $ 32,528     $ 38,497     $ 97,732     $ 120,653  
  Taxable securities
     1,669       1,843       3,487       5,732       9,134  
  Nontaxable securities
     315       314       320       949       977  
  FHLB and other stock
     151       135       176       436       493  
  Federal funds sold and other
     102       36       86       183       112  
Total interest income
     34,796       34,856       42,566       105,032       131,369  
                                         
Interest expense:
                                        
  Deposits
     11,480       11,511       14,345       35,644       43,657  
  Federal funds purchased and repurchase agreements
     6       7       262       22       2,054  
  FHLB advances and notes payable
     2,416       2,469       2,525       7,328       8,268  
  Subordinated debentures
     556       689       1,050       2,091       3,490  
Total interest expense
     14,458       14,676       18,182       45,085       57,469  
                                         
Net interest income
     20,338       20,180       24,384       59,947       73,900  
                                         
Provision for loan losses
     18,475       24,384       8,620       43,844       20,527  
                                         
     Net interest income (loss) after provision for loan losses
     1,863       (4,204 )     15,764       16,103       53,373  
                                         
Non-interest income:
                                        
  Service charges on deposit accounts
     6,446       5,795       6,070       17,597       17,525  
  Other charges and fees
     505       505       502       1,459       1,511  
  Trust and investment services income
     595       489       564       1,472       1,398  
  Mortgage banking income
     127       110       139       292       689  
  Security impairment loss recognized
     (503 )     (229 )     -       (732 )     -  
  Net gain on the sale of securities
     933       -       72       933       72  
  Other income
     1,086       642       663       2,423       2,233  
Total non-interest income
     9,189       7,312       8,010       23,444       23,428  
Non-interest expense:
                                        
  Employee compensation
     7,315       8,064       8,961       23,071       25,620  
  Employee benefits
     526       1,229       1,197       3,050       3,643  
  Occupancy expense
     1,762       1,712       1,746       5,261       5,110  
  Equipment expense
     761       895       719       2,398       2,566  
  Computer hardware/software expense
     735       651       715       2,023       2,066  
  Professional services
     457       446       470       1,432       1,428  
  Advertising
     678       679       710       1,421       2,398  
  Loss on OREO and repossessed assets
     3,578       3,346       1,942       7,005       3,022  
  FDIC insurance
     819       2,550       418       4,069       1,181  
  Core deposit and other intangible amortization
     648       652       649       2,104       1,958  
  Goodwill impairment
     -       143,389       -       143,389       -  
  Other expenses
     5,086       5,301       4,417       13,887       12,653  
Total non-interest expense
     22,365       168,914       21,944       209,110       61,645  
     Income (loss) before income taxes
     (11,313 )     (165,806 )     1,830       (169,563 )     15,156  
Income taxes provision (benefit)
     (4,815 )     (15,656 )     596       (17,695 )     5,282  
    Net income (loss)
     (6,498 )     (150,150 )     1,234       (151,868 )     9,874  
Preferred stock dividends and accretion of discount on warrants
     1,250       1,250       -       3,732       -  
                                         
    Net income (loss) available to common shareholders
   $ (7,748 )   $ (151,400 )   $ 1,234     $ (155,600 )   $ 9,874  
                                         
    Comprehensive income (loss)
   $ (5,073 )   $ (150,557 )   $ 1,547     $ (149,962 )   $ 8,478  
                                         
Per share of common stock:
                                        
  Basic earnings (loss)
   $ (0.59 )   $ (11.58 )   $ 0.10     $ (11.91 )   $ 0.76  
  Diluted earnings (loss)
   $ (0.59 )   $ (11.58 )   $ 0.10     $ (11.91 )   $ 0.76  
  Dividends
   $ 0.00     $ 0.00     $ 0.13     $ 0.13     $ 0.39  
                                         
Weighted average shares outstanding:
                                        
  Basic
     13,070,216       13,070,216       12,931,774       13,067,798       12,931,538  
  Diluted (1)
     13,070,216       13,070,216       12,947,618       13,067,798       12,936,084  
                                         
(1) Diluted weighted average shares outstanding for the three and nine months ended September 30, 2009 excludes 101,636 and 95,526 shares, respectively, because they are anti-dilutive.
  
                                         
Non-GAAP Measures Presented in Earnings Release
                                  
  Total non-interest expense
   $ 22,365     $ 168,914     $ 21,944     $ 209,110     $ 61,645  
  Goodwill impairment charge
     -       (143,389 )     -       (143,389 )     -  
    Operating expenses
   $ 22,365     $ 25,525     $ 21,944     $ 65,721     $ 61,645  
                                         
  Net income (loss) available to common shareholders
   $ (7,748 )   $ (151,400 )   $ 1,234     $ (155,600 )   $ 9,874  
  Goodwill impairment charge, net of tax
     -       137,414       -       137,414       -  
    Net operating income (loss)
   $ (7,748 )   $ (13,986 )   $ 1,234     $ (18,186 )   $ 9,874  
 
 
 
GREEN BANKSHARES, INC.
Consolidated Financial Highlights
(UNAUDITED)
 
(Dollars in thousands except share and per share data)
                       
     
September 30,
    
December 31,
    
%
    
     
2009
    
2008
    
Change
    
 
Financial Condition Data:
                    
                       
 
  Assets
   $ 2,794,217     $ 2,944,671       -5.11 %  
 
  Loans, net of unearned interest
     2,099,267       2,223,390       -5.58 %  
 
  Cash and investments
     515,438       415,607       24.02 %  
 
  Federal funds sold
     922       5,263       -82.48 %  
 
  Deposits
     2,214,761       2,184,147       1.40 %  
 
  FHLB advances and notes payable
     216,578       229,349       -5.57 %  
 
  Subordinated debentures
     88,662       88,662       0.00 %  
 
  Repurchase agreements
     25,294       35,302       -28.35 %  
 
  Shareholders' equity
     227,388       381,231       -40.35 %  
 
  Common shareholders' equity (1)
     161,000       315,885       -49.03 %  
 
  Tangible common shareholders' equity (2)
     151,019       160,411       -5.85 %  
 
  Tangible shareholders' equity (3)
     217,407       225,757       -3.70 %  
                             
 
Ratios:
                          
 
    Common book value per share (1)
   $ 12.22     $ 24.09       -49.27 %  
 
    Tangible common book value per share (2)
   $ 11.47     $ 12.23       -6.21 %  
 
    Total tangible equity to tangible assets (3)(4)
     7.81 %     8.09 %     -3.53 %  
 
    Tangible common equity to tangible assets (2)(4)
     5.42 %     5.75 %     -5.69 %  
 
    Average equity to average assets
     11.98 %     11.24 %     6.58 %  
 
(1) Common shareholders' equity is shareholders' equity less preferred stock.
    
 
(2) Tangible common shareholders' equity is shareholders' equity less goodwill, intangible assets and preferred stock.
    
 
(3) Tangible shareholders' equity is shareholders' equity less goodwill and intangible assets.
    
 
(4) Tangible assets is total assets less goodwill and intangible assets.
    
                             
                             
                             
 
                                       
     
Three Months Ended
          
Nine Months Ended
        
     
September 30,
          
September 30,
        
     
2009
    
2008
    
% Change
    
2009
    
2008
    
% Change
  
 
Operating Data:
                                    
                                       
 
  Total interest income
   $ 34,796     $ 42,566       -18.25 %   $ 105,032     $ 131,369       -20.05 %
 
  Total interest expense
     14,458       18,182       -20.48 %     45,085       57,469       -21.55 %
 
    Net interest income
     20,338       24,384       -16.59 %     59,947       73,900       -18.88 %
 
  Provision for loan losses
     18,475       8,620       114.33 %     43,844       20,527       113.59 %
 
    Net interest income after provision for loan losses
     1,863       15,764       -88.18 %     16,103       53,373       -69.83 %
 
  Non-interest income
     9,189       8,010       14.72 %     23,444       23,428       0.07 %
 
  Non-interest expense
     22,365       21,944       1.92 %     209,110       61,645       239.22 %
 
    Income (loss) before income taxes
     (11,313 )     1,830       -718.20 %     (169,563 )     15,156       N/M  
 
  Income tax expense (benefit)
     (4,815 )     596       -907.89 %     (17,695 )     5,282       N/M  
 
    Net income (loss)
     (6,498 )     1,234       -626.58 %     (151,868 )     9,874       N/M  
 
  Preferred stock dividend and accretion of discount on warrants
     1,250       -       100.00 %     3,732       -       100.00 %
 
    Net income (loss) available to common shareholders
   $ (7,748 )   $ 1,234       -727.88 %   $ (155,600 )   $ 9,874       N/M  
                                                   
 
    Comprehensive income (loss)
   $ (5,073 )   $ 1,547       -427.93 %   $ (149,962 )   $ 8,478       N/M  
                                                   
 
Per Share of Common Stock:
                                                
 
  Basic earnings (loss)
   $ (0.59 )   $ 0.10       -690.00 %   $ (11.91 )   $ 0.76       N/M  
 
  Diluted earnings (loss)
   $ (0.59 )   $ 0.10       -690.00 %   $ (11.91 )   $ 0.76       N/M  
 
  Dividends
   $ 0.00     $ 0.13       -100.00 %   $ 0.13     $ 0.39       -66.67 %
                                                   
 
Weighted Average Shares Outstanding:
                                          
 
  Basic
     13,070,216       12,931,774               13,067,798       12,931,538          
 
  Diluted
     13,070,216       12,947,618               13,067,798       12,936,084          
                                                   
 
                                   
     
Three Months Ended
    
Nine Months Ended
    
     
September 30,
    
June 30,
    
September 30,
  
September 30,
    
     
2009
    
2009
    
2008
    
2009
    
2008
    
 
Key Financial Ratios:
                                
                                   
 
  Return on average assets
     -1.12 %     -21.67 %     0.16 %     -7.43 %     0.45 %  
 
  Return on average shareholders' equity
     -12.97 %     -157.41 %     1.49 %     -62.04 %     3.99 %  
 
  Return on average common shareholders' equity (1)
     -18.00 %     -189.79 %     1.49 %     -77.32 %     3.99 %  
 
  Return on average common tangible shareholders'  equity (2)
     -19.16 %     -363.33 %     2.82 %     -127.26 %     7.59 %  
 
  Interest rate spread
     3.22 %     3.26 %     3.53 %     3.16 %     3.61 %  
 
  Net interest margin
     3.33 %     3.43 %     3.72 %     3.33 %     3.83 %  
 
(1) Common shareholders' equity is shareholders' equity less preferred stock.
            
 
(2) Tangible common shareholders' equity is shareholders' equity less goodwill, intangible assets and preferred stock.
    
                                             
 
                       
     
September 30,
  
December 31,
    
September 30,
    
     
2009
    
2008
    
2008
    
 
Asset Quality Ratios:
                    
 
Nonperforming loans as a percentage of total loans,
          
 
      net of unearned income
     3.27 %     1.41 %     1.75 %  
 
    Nonperforming assets as a percentage of total assets
     4.48 %     2.61 %     1.76 %  
 
Allowance for loan losses as a percentage of total loans,
            
 
      net of unearned income
     2.39 %     2.20 %     1.50 %  
 
Allowance for loan losses as a percentage of
                    
 
      nonperforming loans
     73.09 %     155.28 %     85.56 %  
 
Net charge-offs to average total loans, net of
                    
 
      unearned income
     1.93 %     1.63 %     0.84 %  
                             
 
 
 
GREEN BANKSHARES, INC.
Consolidated Financial Highlights
September 30, 2009
(UNAUDITED)
 
Nonperforming Assets and Net Charge-offs
                    
Asset Quality Ratios
                  
                                         
As of and for the three months ended September 30, 2009
  
Bank
    
Other
    
Total
    
As of and for the three months ended September 30, 2009
  
Bank
    
Other
    
Consolidated
  Loans past due 90 days and still accruing
   $ 1,522     $ 9     $ 1,531    
  Nonperforming loans as a percentage of total loans, net of unearned income
     3.24 %     2.70 %     3.27 %
  Nonaccrual loans
     65,984       1,163       67,147    
  Nonperforming assets as a percentage of total assets
     4.43 %     2.89 %     4.48 %
  Other real estate owned and repossessed assets
     56,039       374       56,413    
  Allowance for loan losses as a percentage of total loans, net of unearned income
     2.24 %     8.12 %     2.39 %
      Total nonperforming assets
   $ 123,545     $ 1,546     $ 125,091    
  Allowance for loan losses as a percentage of nonperforming loans
     69.13 %     301.11 %     73.09 %
                           
  YTD net charge-offs to average total loans, net of unearned income
     1.86 %     4.25 %     1.93 %
  YTD net charge-offs
   $ 40,662     $ 1,797     $ 42,459                              
                                                     
As of and for the three months ended September 30, 2008
  
Bank
    
Other
    
Total
    
As of and for the three months ended September 30, 2008
  
Bank
    
Other
    
Consolidated
  Loans past due 90 days and still accruing
   $ 54     $ -     $ 54    
  Nonperforming loans as a percentage of total loans, net of unearned income
     1.74 %     1.57 %     1.75 %
  Nonaccrual loans
     40,062       625       40,687    
  Nonperforming assets as a percentage of total assets
     1.73 %     1.69 %     1.76 %
  Other real estate owned and repossessed assets
     12,017       198       12,215    
  Allowance for loan losses as a percentage of total loans, net of unearned income
     1.37 %     8.01 %     1.50 %
      Total nonperforming assets
   $ 52,133     $ 823     $ 52,956    
  Allowance for loan losses as a percentage of nonperforming loans
     78.93 %     510.88 %     85.56 %
                           
  YTD net charge-offs to average total loans, net of unearned income
     0.77 %     4.64 %     0.84 %
  YTD net charge-offs
   $ 17,950     $ 1,832     $ 19,782                              
                                                     
As of and for the year ended December 31, 2008
  
Bank
    
Other
    
Total
    
As of and for the year ended December 31, 2008
  
Bank
    
Other
    
Consolidated
  Loans past due 90 days and still accruing
   $ 509     $ -     $ 509    
  Nonperforming loans as a percentage of total loans, net of unearned income
     1.38 %     2.48 %     1.41 %
  Nonaccrual loans
     29,956       970       30,926    
  Nonperforming assets as a percentage of total assets
     2.58 %     2.57 %     2.61 %
  Other real estate owned and repossessed assets
     45,054       317       45,371    
  Allowance for loan losses as a percentage of total loans, net of unearned income
     2.06 %     8.27 %     2.20 %
      Total nonperforming assets
   $ 75,519     $ 1,287     $ 76,806    
  Allowance for loan losses as a percentage of nonperforming loans
     149.59 %     333.81 %     155.28 %
                           
  Net charge-offs to average total loans, net of unearned income
     1.53 %     6.42 %     1.63 %
  Net charge-offs
   $ 35,564     $ 2,546     $ 38,110                              
                                                     
 
 
GREEN BANKSHARES, INC.
Condensed Average Balances, Interest Rates and Yields
September 30, 2009
 
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2009
    
2008
    
2009
    
2008
  
                                                                         
   
Average
          
Average
    
Average
          
Average
    
Average
          
Average
    
Average
          
Average
  
   
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
Interest-earning assets:
                                                                        
                                                                         
    Loans (1)(2)
     2,075,096       32,577       6.23 %     2,302,465       38,510       6.65 %     2,125,547       97,771       6.15 %     2,322,510       120,698       6.94 %
    Investment securities (2)
     184,433       2,305       4.96 %     306,616       4,154       5.39 %     198,741       7,628       5.13 %     266,453       11,132       5.58 %
    Other short-term investments
     183,448       102       0.22 %     16,739       87       2.07 %     105,011       183       0.23 %     7,254       111       2.04 %
Total interest-earning assets
     2,442,977       34,984       5.68 %     2,625,820       42,751       6.48 %     2,429,299       105,582       5.81 %     2,596,217       131,941       6.79 %
                                                                                                 
    Non-interest earning assets
     303,665                       373,449                       369,023                       362,035                  
Total assets
     2,746,642                       2,999,269                       2,798,322                       2,958,252                  
                                                                                                 
                                                                                                 
Interest-bearing liabilities:
                                                                                                
  Deposits:
                                                                                                
    Interest checking, money market and savings
     870,091       3,163       1.44 %     617,156       2,146       1.38 %     742,643       7,557       1.36 %     663,195       7,726       1.56 %
    Time deposits
     1,121,349       8,317       2.94 %     1,440,693       12,199       3.37 %     1,190,412       28,087       3.15 %     1,270,940       35,931       3.78 %
Total interest bearing-deposits
     1,991,440       11,480       2.29 %     2,057,849       14,345       2.77 %     1,933,055       35,644       2.47 %     1,934,135       43,657       3.02 %
                                                                                                 
    Securities sold under repurchase and short-term borrowings
     25,454       6       0.09 %     74,385       262       1.40 %     28,872       22       0.10 %     128,057       2,054       2.14 %
    Notes payable
     220,591       2,416       4.35 %     229,928       2,525       4.37 %     226,314       7,328       4.33 %     262,405       8,268       4.21 %
    Subordinated debentures
     88,662       556       2.49 %     88,662       1,050       4.71 %     88,662       2,091       3.15 %     88,662       3,490       5.26 %
Total interest-bearing liabilities
     2,326,147       14,458       2.47 %     2,450,824       18,182       2.95 %     2,276,903       45,085       2.65 %     2,413,259       57,469       3.18 %
                                                                                                 
Non-interest bearing liabilities:
                                                                                                
    Demand Deposits
     160,653                       193,566                       163,713                       188,737                  
    Other Liabilities
     22,872                       24,698                       22,359                       25,480                  
Total non-interest bearing liabilities
     183,525                       218,264                       186,072                       214,217                  
                                                                                                 
Total liabilities
     2,509,672                       2,669,088                       2,462,975                       2,627,476                  
                                                                                                 
    Shareholders' equity
     236,970                       330,181                       335,347                       330,776                  
                                                                                                 
Total liabilities & shareholders' equity
     2,746,642                       2,999,269                       2,798,322                       2,958,252                  
                                                                                                 
Net interest income
             20,526                       24,569                       60,497                       74,472          
                                                                                                 
Interest rate spread
                     3.22 %                     3.53 %                     3.16 %                     3.61 %
                                                                                                 
Net yield on interest-earning assets
   (net interest margin)
               3.33 %                     3.72 %                     3.33 %                     3.83 %
                                                                                                 
(1) Average loan balances exclude nonaccrual loans for the periods presented.
    
                                                                                                 
(2) Fully Taxable Equivalent (“FTE”) at the rate of 35%. The FTE basis adjusts for the tax benefits of income on certain tax-exempt loans and investments using the federal statutory rate of 35% for each period presented. The Company believes this measure to be the preferred industry measurement of net interest income and provides relevant comparison between taxable and non-taxable amounts.
  
 
 
GREEN BANKSHARES, INC.
Consolidated Financial Highlights
September 30, 2009
(UNAUDITED)
 
   
September 30, 2009
    
June 30, 2009
        
Loans
  
Balance
    
%
    
Balance
    
%
    
% Change
  
Commercial
   $ 291,432       13.78 %   $ 300,325       13.66 %     -2.96 %
Commercial real estate
     1,331,367       62.96 %     1,409,007       64.08 %     -5.51 %
Residential real estate
     404,778       19.14 %     400,207       18.20 %     1.14 %
Consumer
     84,614       4.00 %     86,491       3.93 %     -2.17 %
Other
     2,466       0.12 %     2,933       0.13 %     -15.92 %
    Total loans
     2,114,657       100.00 %     2,198,963       100.00 %     -3.83 %
                                         
  Less: Unearned income
     (15,390 )             (15,209 )                
    Loans, net of unearned income
   $ 2,099,267             $ 2,183,754                  
                                         
Loan Balances by Geographical Region and Operating Subsidiaries
                          
                                         
   
September 30, 2009
    
June 30, 2009
          
   
Loan
    
% to
    
Loan
    
% to
          
   
Balance
    
Total Loans
    
Balance
    
Total Loans
    
% Change
  
                                         
Northeastern Tennessee Region (1)
   $ 533,270       25.40 %   $ 529,615       24.25 %     0.69 %
East Tennessee Region
     698,009       33.25 %     745,853       34.15 %     -6.41 %
Middle Tennessee Region
     824,549       39.28 %     865,204       39.63 %     -4.70 %
                                         
GCB Acceptance Corporation
     19,441       0.93 %     19,081       0.87 %     1.89 %
Superior Financial Services, Inc.
     23,998       1.14 %     24,001       1.10 %     -0.01 %
                                         
    Loans, net of unearned income
   $ 2,099,267       100.00 %   $ 2,183,754       100.00 %     -3.87 %
(1) Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina
          
                                         
 
   
September 30, 2009
    
June 30, 2009
          
Deposits
  
Balance
    
%
    
Balance
    
%
    
% Change
  
Non-interest bearing demand
   $ 156,797       7.08 %   $ 165,735       8.18 %     -5.39 %
Interest bearing demand
     609,336       27.51 %     585,149       28.87 %     4.13 %
Money market and savings
     293,867       13.27 %     216,004       10.66 %     36.05 %
Retail time
     659,540       29.78 %     606,192       29.91 %     8.80 %
Jumbo time
     495,221       22.36 %     453,642       22.38 %     9.17 %
  Total
   $ 2,214,761       100.00 %   $ 2,026,722       100.00 %     9.28 %
                                         
Deposit Balances by Geographical Region
                                        
                                         
   
September 30, 2009
    
June 30, 2009
          
   
Balance
    
%
    
Balance
    
%
    
% Change
  
Northeastern Tennessee Region (1)
   $ 791,705       35.75 %   $ 782,706       38.62 %     1.15 %
East Tennessee Region
     352,581       15.92 %     290,683       14.34 %     21.29 %
Middle Tennessee Region
     1,070,475       48.33 %     953,333       47.04 %     12.29 %
                                         
    Total
   $ 2,214,761       100.00 %   $ 2,026,722       100.00 %     9.28 %
(1) Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina