EX-99.1 2 a6368238ex991.htm EXHIBIT 99.1 a6368238ex991.htm
 
Exhibit 99.1
 
Logo
 
 
CONTACT:
  
James E. Adams
     
Executive Vice President and Chief Financial Officer
     
423-278-3050
 
GREEN BANKSHARES REPORTS SECOND QUARTER NET INCOME
OF $1,561,000 OR $0.12 PER DILUTED SHARE

GREENEVILLE, Tenn. (July 21, 2010) – Green Bankshares, Inc. (NASDAQ:GRNB), the holding company for GreenBank, today reported net income available to common shareholders of $1,561,000 for the second quarter of 2010 compared with net income available to common shareholders of $1,946,000 for the first quarter of 2010 and a net loss available to common shareholders of $151,400,000 for the second quarter of 2009.  The net loss for the second quarter of 2009 primarily reflected a non-cash, one-time goodwill impairment charge totaling $143,389,000; excluding this impairment charge, the net operating loss for the year-earlier quarter was $13,986,000 (please refer to the non-GAAP measurement reconciliation on page 5).  For the six months ended June 30, 2010, net income available to common shareholders totaled $3,507,000 compared with a net loss available to common shareholders of $10,438,000 for the same period a year ago after excluding the onetime, non-cash, after-tax goodwill impairment charge of $137,414,000.

On a diluted per share basis, net income available to common shareholders totaled $0.12 for the second quarter of 2010 and $0.15 for the first quarter of 2010 compared with a net loss available to common shareholders of $1.07 after excluding the impact of the non-cash after-tax goodwill impairment charge of $10.51 for the second quarter of 2009.  On a year-to-date basis, diluted per share net income available to common shareholders totaled $0.27 compared with a net loss available to common shareholders of $0.80 per diluted share for the first six months of 2009 after excluding the impact of the non-cash, after-tax goodwill impairment charge of $10.52.

Excluding preferred stock dividends paid to the U.S. Treasury and the accretion of discount on common stock warrants issued to the U.S. Treasury, the Company reported net income of $2,811,000 for the second quarter of 2010 and $6,007,000 for the six months ended June 30, 2010, compared with a net loss of $150,150,000 and $145,370,000, respectively, for the comparable periods in 2009.

Other highlights of the quarter included improving capital levels, higher year-over-year net interest income and generally stable credit quality conditions.

Improving capital levels:

Consolidated:
   2Q10   1Q10   4Q09   3Q09   2Q09
Tangible common book value per share
   $ 11.95     $ 11.71     $ 11.44     $ 11.47     $ 11.88  
Tangible common equity to assets ratio
     6.25 %     6.03 %     5.77 %     5.42 %     5.98 %
Bank Regulatory Ratios:
                                        
Tier 1 leverage ratio
     11.86 %     11.55 %     10.70 %     10.49 %     10.85 %
Tier 1 risk-based capital ratio
     14.73 %     14.06 %     13.61 %     13.17 %     13.45 %
Total risk-based capital ratio
     15.99 %     15.33 %     14.87 %     14.43 %     14.72 %

·  
All capital ratios continued to improve as profitability of the Company modestly improves given the lingering stress apparent in this phase of the economic cycle (see the non-GAAP measurement reconciliation on page 5 regarding tangible equity and book value per share).
 
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GRNB Reports Second Quarter Results
Page 2
July 21, 2010
 
Net interest income:

(dollars in thousands)
   2Q10   1Q10   4Q09   3Q09   2Q09
Net interest income
   $ 21,473     $ 21,659     $ 20,578     $ 20,338     $ 20,180  
Net interest margin
     3.86 %     3.90 %     3.37 %     3.33 %     3.43 %
Average earning assets
   $ 2,248,240     $ 2,271,550     $ 2,445,872     $ 2,442,977     $ 2,382,377  

·  
Both net interest income and the net interest margin were negatively affected during the second quarter of 2010 by loan interest reversals totaling approximately $610,000 as $22,415,000 of loans were moved to non-accrual status.

Credit quality:

Summary:

(dollars in thousands)
   2Q10   1Q10   4Q09   3Q09   2Q09
Net loan charge-offs
   $ 4,868     $ 3,882     $ 6,437     $ 18,436     $ 23,281  
New non-accrual loans added
   $ 22,415     $ 14,442     $ 31,111     $ 47,931     $ 57,292  
Reserves to total loans
     2.60 %     2.52 %     2.45 %     2.39 %     2.30 %
Non-performing assets
   $ 141,915     $ 135,366     $ 132,726     $ 125,091     $ 129,177  

Changes in non-performing assets:

(dollars in thousands)
  
Non-Accrual
Loans
  
OREO
  
Past Due >
90 days
  
Total (1)
March 31, 2010
   $ 63,471     $ 71,746     $ 149     $ 135,366  
Loan foreclosures
     (12,338 )     12,338       n/a       n/a  
Gross loan charge-offs
     (5,316 )     n/a       n/a       (5,316 )
New non-accrual loans
     22,415       n/a       n/a       22,415  
Reduction of non-accrual loans
     (3,890 )     n/a       n/a       (3,890 )
OREO sales proceeds
     n/a       (6,270 )     n/a       (6,270 )
OREO write-downs, net
     n/a       (882 )     n/a       (882 )
Change in past due > 90 days
     n/a       n/a       492       492  
June 30, 2010
   $ 64,342     $ 76,932     $ 641     $ 141,915  

(1)    On average, all non-performing assets have been written down by 26%.

Loan portfolio migration:

(Dollars in thousands)
   2Q10   1Q10   2Q09
Commercial real estate portfolio:
                        
Acquisition & development
   $ 176,152     $ 182,181     $ 228,680  
Lot warehouse
     52,520       55,499       75,909  
Commercial 1-4 family construction
     49,539       69,328       109,319  
Total speculative 1-4 family
     278,211       307,008       413,908  
Commercial vacant land
     100,163       101,218       103,219  
Commercial construction non-owner occupied
     123,330       156,970       166,486  
Commercial construction owner occupied
     6,519       27,614       56,721  
Consumer residential construction
     13,511       14,701       27,267  
Total construction and development
     243,523       300,503       353,693  
                         
Non-owner occupied commercial real estate
     434,238       395,638       394,586  
                         
Total commercial real estate
   $ 955,972     $ 1,003,149     $ 1,162,187  
 
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GRNB Reports Second Quarter Results
Page 3
July 21, 2010
 
Stephen M. Rownd, Chairman and Chief Executive Officer, commented, "While the outlook for economic recovery remains uncertain, we have taken a number of strategic steps that include the continued reduction in our construction and development portfolios, as indicated in the foregoing loan migration table, coupled with accelerated problem asset resolution through the segregation of staffing in our special assets area and by transferring additional resources into this area.  At June 30, 2010, our loan loss reserves to total loans was 2.60% and our loan loss reserves were approximately 2.8 times annualized net charge-offs.  Our non-performing asset and charge-off levels may remain elevated over the next few quarters based on trends in general economic conditions and as we realize the results of our strategic actions."

The following information graphically displays the consolidated loan portfolio by purpose code as of June 30, 2010:
 
Graph
 
Non-interest income totaled approximately $8.8 million during the second quarter of 2010, rising 14% on a linked quarter basis and up 29% compared with the second quarter of 2009.  During the second quarter of 2010 and 2009, the Company reported net Other-Than-Temporary Impairment (OTTI) charges taken on securities of $93,000 and $733,000, respectively.  For the first six months of 2010, non-interest income, including OTTI charges, totaled almost $16.4 million compared with $13.8 million for the same period a year ago, an increase of 20%.  Excluding year-to-date OTTI charges of $93,000 in 2010 and $733,000 in 2009, non-interest income improved 14% in the first six months of 2010.  The principal contributors to both the quarterly and year-to-date improvements in non-interest income were higher service charge revenues on deposits together with increased annuity sales activity.  The ongoing success of GreenBank's High Performance Checking product added 3,562 net new checking account customers during the second quarter of 2010 for a new account opening ratio of 2.02 new accounts opened for each account closed.
 
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GRNB Reports Second Quarter Results
Page 4
July 21, 2010
 
Non-interest expenses totaled approximately $21.3 million for the second quarter of 2010, increasing less than 4% from the first quarter of 2010.  Excluding the one-time, non-cash, goodwill impairment charge of $143.4 million recorded during the second quarter of 2009, non-interest expenses declined 15% from the year-earlier quarter.  Driving the second quarter 2010 increase in non-interest expenses were normal non-executive compensation increases along with annuity sales commissions; higher advertising costs associated with a proactive program implemented to solicit customers to participate in the "opt-in" provisions of the Bank's overdraft program; higher FDIC insurance expenses and increased losses on the disposition of OREO-related properties.

Greeneville, Tennessee-based Green Bankshares, Inc., with total assets of approximately $2.5 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, 2009, 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 levels of non-performing and repossessed assets and the ability to resolve these may result in future losses; (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 Second Quarter Results
Page 5
July 21, 2010
 
GREEN BANKSHARES, INC.
Reconciliation of Non-GAAP Measures Presented in Earnings Release
(Dollars in thousands)

   
Three Months Ended
  
Six Months Ended
   
June 30,
2010
  
March 31,
2010
  
June 30,
2009
  
June 30,
2010
  
June 30,
2009
Total non-interest expense
   $ 21,274     $ 20,546     $ 168,410     $ 41,820     $ 186,241  
Goodwill impairment charge
     --       --       (143,389 )     --       (143,389 )
Operating expenses
   $ 21,274     $ 20,546     $ 25,021     $ 41,820     $ 42,852  
                                         
Net income (loss) available to common shareholders
   $ 1,561     $ 1,946     $ (151,400 )   $ 3,507     $ (147,852 )
Goodwill impairment charge, net of tax
     --       --       137,414       --       137,414  
Net operating income (loss)
   $ 1,561     $ 1,946     $ (13,986 )   $ 3,507     $ (10,438 )
                                         
Per Diluted Share:
                                        
Net income (loss) available to common shareholders
   $ 0.12     $ 0.15     $ (11.58 )   $ 0.27     $ (11.32 )
Goodwill impairment charge,  net of tax
     --       --       10.51       --       10.52  
Net operating income (loss)
   $ 0.12     $ 0.15     $ (1.07 )   $ 0.27     $ (0.80 )

    2Q10   1Q10   4Q09   3Q09   2Q09
Total shareholders' equity
   $ 233,150     $ 230,189     $ 226,769     $ 227,388     $ 233,192  
Less:
                                        
Core deposit and other intangibles
     (8,044 )     (8,684 )     (9,335 )     (9,981 )     (10,629 )
Preferred stock
     (67,428 )     (67,081 )     (66,735 )     (66,388 )     (66,041 )
Tangible common equity
   $ 157,678     $ 154,424     $ 150,699     $ 151,019     $ 156,522  
                                         
Total assets
   $ 2,529,332     $ 2,569,732     $ 2,619,139     $ 2,794,217     $ 2,629,834  
Less:
                                        
Core deposit and other intangibles
     (8,044 )     (8,684 )     (9,335 )     (9,981 )     (10,629 )
Total tangible assets
   $ 2,521,288     $ 2,561,048     $ 2,609,804     $ 2,784,236     $ 2,619,205  

Use of Non-GAAP financial measures

The above table presents computations and other financial information excluding the goodwill impairment charge incurred by the Company in the second quarter of 2009 (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 Second Quarter Results
Page 6
July 21, 2010
 
GREEN BANKSHARES, INC.
Unaudited Financial Highlights
(In thousands, except per share amounts)

   
Three Months Ended
  
Six Months Ended
   
June 30,
2010
  
March 31,
2010
  
June 30,
2009
  
June 30,
2010
  
June 30,
2009
Interest income
   $ 31,304     $ 31,892     $ 34,856     $ 63,196     $ 70,236  
Interest expense
     9,831       10,233       14,676       20,064       30,627  
Net interest income
     21,473       21,659       20,180       43,132       39,609  
Provision for loan losses
     4,749       3,889       24,384       8,638       25,369  
Net interest income (loss) after provision for loan losses
     16,724       17,770       (4,204 )     34,494       14,240  
Non-interest income
     8,771       7,686       6,808       16,457       13,751  
Non-interest expense
     21,274       20,546       168,410       41,820       186,241  
Income (loss) before income taxes
     4,221       4,910       (165,806 )     9,131       (158,250 )
Income tax provision (benefit)
     1,410       1,714       (15,656 )     3,124       (12,880 )
Income (loss)
     2,811       3,196       (150,150 )     6,007       (145,370 )
Preferred stock dividends and related cost
     1,250       1,250       1,250       2,500       2,482  
Net income (loss) available to common shareholders
   $ 1,561     $ 1,946     $ (151,400 )   $ 3,507     $ (147,852 )
Comprehensive income (loss)
   $ 3,705     $ 4,166     $ (150,557 )   $ 7,871     $ (144,889 )
                                         
Earnings (loss) per common share:
                                        
Basic
   $ 0.12     $ 0.15     $ (11.58 )   $ 0.27     $ (11.32 )
Diluted 1
   $ 0.12     $ 0.15     $ (11.58 )   $ 0.27     $ (11.32 )
                                         
Weighted average common  shares:
                                        
Basic
     13,098       13,082       13,070       13,090       13,067  
Diluted
     13,158       13,173       13,070       13,148       13,067  
                                         
Dividends declared per common share
   $ 0.00     $ 0.00     $ 0.00     $ 0.00     $ 0.13  

   
June 30,
2010
  
March 31,
2010
  
June 30,
2009
Total assets
   $ 2,529,332     $ 2,569,732     $ 2,629,834  
Cash and cash equivalents
     208,155       177,541       107,573  
Investment and other securities
     190,471       198,066       181,234  
Loans, net of unearned interest
     1,928,174       1,994,039       2,183,754  
Allowance for loan losses
     (50,049 )     (50,167 )     (50,157 )
Deposits
     1,991,839       2,037,865       2,026,722  
Shareholders' equity
     233,150       230,189       233,192  
Common shareholders' equity 2
     165,722       163,108       167,151  
Tangible common shareholders' equity 3
     157,678       154,424       156,522  
Common book value per share 2
     12.56       12.36       12.69  
Tangible common book value per share 3
     11.95       11.71       11.88  

1
Diluted weighted average shares outstanding for the three- and six-month periods ended June 30, 2009, exclude 105,734 and 92,420 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
June 30, 2010, December 31, 2009 and June 30, 2009
(Dollars in thousands)
 
   
(Unaudited)
        
(Unaudited)
   
June 30,
  
December 31,
  
June 30,
   
2010
    2009*    2009
ASSETS
  
 
                  
   
 
                  
Cash and due from banks
   $ 206,412     $ 206,701     $ 103,454  
Federal funds sold
     1,743       3,793       4,119  
    Cash and cash equivalents
     208,155       210,494       107,573  
                         
Interest earning deposits in other banks
     1,000       11,000       -  
Securities available-for-sale ("AFS")
     176,121       147,724       167,853  
Securities held-to-maturity (with a market value of $625, $638 and $595
                  
  on June 30, 2010, December 31, 2009 and June 30, 2009)
     616       626       647  
FHLB and other stock, at cost
     12,734       12,734       12,734  
Loans held for sale
     830       1,533       3,634  
Loans, net of unearned income
     1,928,174       2,043,807       2,183,754  
Allowance for loan losses
     (50,049 )     (50,161 )     (50,157 )
Other real estate owned and repossessed assets
     76,932       57,168       34,468  
Bank premises and equipment, net
     80,437       81,818       83,448  
Cash surrender value of life insurance
     30,872       30,277       30,113  
Goodwill
     -       -       -  
Core deposit and other intangibles
     8,044       9,335       10,629  
Other assets
     55,466       62,784       45,138  
     Total assets
   $ 2,529,332     $ 2,619,139     $ 2,629,834  
                         
LIABILITIES AND SHAREHOLDERS' EQUITY
                        
                         
Non-interest-bearing deposits
   $ 170,396     $ 177,602     $ 165,735  
Interest-bearing deposits
     1,820,044       1,899,910       1,746,895  
Brokered deposits
     1,399       6,584       114,092  
    Total deposits
     1,991,839       2,084,096       2,026,722  
                         
Repurchase agreements
     24,240       24,449       25,990  
FHLB advances and notes payable
     171,838       171,999       229,154  
Subordinated debentures
     88,662       88,662       88,662  
Accrued interest payable and other liabilities
     19,603       23,164       26,114  
    Total liabilities
     2,296,182       2,392,370       2,396,642  
                         
SHAREHOLDERS' EQUITY
                        
                         
Preferred stock: no par value, 1,000,000 shares authorized;
                        
    72,278, 72,278 and 72,278 shares outstanding
     67,428       66,735       66,041  
Common stock: $2 par value, 20,000,000 shares authorized;
                        
    13,192,109, 13,171,474 and 13,175,817 shares outstanding
     26,384       26,343       26,351  
Common stock warrants
     6,934       6,934       6,934  
Additional paid in capital
     188,585       188,310       187,966  
Retained earnings (deficit)
     (58,233 )     (61,742 )     (53,918 )
Accumulated other comprehensive income
     2,052       189       (182 )
    Total shareholders' equity
     233,150       226,769       233,192  
                         
    Total liabilities & shareholders' equity
   $ 2,529,332     $ 2,619,139     $ 2,629,834  
                         
* Derived from Audited Consolidated Financial Statements.
                        
 
 
 
 
 
GREEN BANKSHARES, INC.
Consolidated Statements of Income and Comprehensive Income
Three Months Ended June 30, 2010, March 31, 2010 and June 30, 2009 and Six Months Ended June 30, 2010 and 2009
(Unaudited)
 
(Dollars in thousands except share and per share data)
 
   
Three Months Ended
  
Six Months Ended
   
June 30,
  
March 31,
  
June 30,
  
June 30,
  
June 30,
   
2010
  
2010
  
2009
  
2010
  
2009
                               
Interest income:
                              
  Interest and fees on loans
   $ 29,374     $ 30,060     $ 32,528     $ 59,434     $ 65,173  
  Taxable securities
     1,391       1,288       1,843       2,679       4,063  
  Nontaxable securities
     306       312       314       618       634  
  FHLB and other stock
     134       138       135       272       285  
  Federal funds sold and other
     99       94       36       193       81  
Total interest income
     31,304       31,892       34,856       63,196       70,236  
                                         
Interest expense:
                                        
  Deposits
     7,626       8,061       11,511       15,687       24,164  
  Federal funds purchased and repurchase agreements
     5       6       7       11       16  
  FHLB advances and notes payable
     1,712       1,694       2,469       3,406       4,912  
  Subordinated debentures
     488       472       689       960       1,535  
Total interest expense
     9,831       10,233       14,676       20,064       30,627  
                                         
Net interest income
     21,473       21,659       20,180       43,132       39,609  
                                         
Provision for loan losses
     4,749       3,889       24,384       8,638       25,369  
                                         
     Net interest income (loss) after provision for loan losses
     16,724       17,770       (4,204 )     34,494       14,240  
                                         
Non-interest income:
                                        
  Service charges on deposit accounts
     6,692       5,940       5,795       12,632       11,151  
  Other charges and fees
     383       356       505       739       954  
  Trust and investment services income
     757       582       489       1,339       877  
  Mortgage banking income
     123       118       110       241       165  
  Other income
     909       690       642       1,599       1,337  
  Securities gains (losses), net
                                        
      Other-than-temporary impairment
     (553 )     -       (960 )     (553 )     (960 )
      Less non-credit portion recognized in other comprehensive income
     460       -       227       460       227  
          Total securities gains (losses), net
     (93 )     -       (733 )     (93 )     (733 )
Total non-interest income
     8,771       7,686       6,808       16,457       13,751  
Non-interest expense:
                                        
  Employee compensation
     7,972       7,665       8,064       15,637       15,756  
  Employee benefits
     816       977       1,229       1,793       2,524  
  Occupancy expense
     1,684       1,699       1,712       3,383       3,499  
  Equipment expense
     668       708       895       1,376       1,637  
  Computer hardware/software expense
     886       824       651       1,710       1,288  
  Professional services
     576       607       446       1,183       975  
  Advertising
     806       598       679       1,404       743  
  OREO maintenance expense
     554       445       137       999       280  
  Collection and repossession expense
     534       1,287       711       1,821       1,009  
  Loss on OREO and repossessed assets
     926       509       3,346       1,435       3,427  
  FDIC insurance
     1,209       851       2,550       2,060       3,250  
  Core deposit and other intangible amortization
     640       651       652       1,291       1,456  
  Goodwill impairment
     -       -       143,389       -       143,389  
  Other expenses
     4,003       3,725       3,949       7,728       7,008  
Total non-interest expense
     21,274       20,546       168,410       41,820       186,241  
                                         
     Income (loss) before income taxes
     4,221       4,910       (165,806 )     9,131       (158,250 )
                                         
Income taxes provision (benefit)
     1,410       1,714       (15,656 )     3,124       (12,880 )
                                         
    Net income (loss)
     2,811       3,196       (150,150 )     6,007       (145,370 )
                                         
Preferred stock dividends and accretion of discount on warrants
     1,250       1,250       1,250       2,500       2,482  
                                         
    Net income (loss) available to common shareholders
   $ 1,561     $ 1,946     $ (151,400 )   $ 3,507     $ (147,852 )
                                         
    Comprehensive income (loss)
   $ 3,705     $ 4,166     $ (150,557 )   $ 7,871     $ (144,889 )
                                         
Per share of common stock:
                                        
  Basic earnings (loss)
   $ 0.12     $ 0.15     $ (11.58 )   $ 0.27     $ (11.32 )
  Diluted earnings (loss)
   $ 0.12     $ 0.15     $ (11.58 )   $ 0.27     $ (11.32 )
  Dividends
   $ 0.00     $ 0.00     $ 0.00     $ 0.00     $ 0.13  
                                         
Weighted average shares outstanding:
                                        
  Basic
     13,097,611       13,082,347       13,070,216       13,090,021       13,066,569  
  Diluted(1)
     13,158,131       13,172,727       13,070,216       13,148,226       13,066,569  
                                         
(1) Diluted weighted average shares outstanding exclude 105,734 and 92,420 restricted average shares for the three and six month periods ended June 30, 2009 because their impact would be anti-dilutive.
  
 
 
 
 
 
GREEN BANKSHARES, INC.
Consolidated Financial Highlights
(UNAUDITED)
 
(Dollars in thousands except share and per share data)
 
                       
   
June 30,
  
December 31,
  
%
                  
   
2010
  
2009
  
Change
                  
Financial Condition Data:
                                    
                                     
  Assets
   $ 2,529,332     $ 2,619,139       -3.43 %                  
  Loans, net of unearned interest
     1,928,174       2,043,807       -5.66 %                  
  Cash and investments
     398,626       382,578       4.19 %                  
  Federal funds sold
     1,743       3,793       -54.05 %                  
  Deposits
     1,991,839       2,084,096       -4.43 %                  
  FHLB advances and notes payable
     171,838       171,999       -0.09 %                  
  Subordinated debentures
     88,662       88,662       0.00 %                  
  Repurchase agreements
     24,240       24,449       -0.85 %                  
  Shareholders' equity
     233,150       226,769       2.81 %                  
  Common shareholders' equity (1)
     165,722       160,034       3.55 %                  
  Tangible common shareholders' equity (2)
     157,678       150,699       4.63 %                  
  Tangible shareholders' equity (3)
     225,106       217,434       3.53 %                  
                                           
Ratios:
                                          
    Common book value per share (1)
   $ 12.56     $ 12.15       3.37 %                  
    Tangible common book value per share (2)
   $ 11.95     $ 11.44       4.46 %                  
    Total tangible equity to tangible assets (3)(4)
     8.93 %     8.33 %     7.16 %                  
    Tangible common equity to tangible assets (2)(4)
     6.25 %     5.77 %     8.30 %                  
    Average equity to average assets
     9.05 %     11.09 %     -18.39 %                  
                                           
(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
          
Six Months Ended
        
   
June 30,
          
June 30,
        
    2010   2009  
% Change
   2010   2009  
% Change
  
Operating Data:
                                                
                                                 
  Total interest income
   $ 31,304     $ 34,856       -10.19 %   $ 63,196     $ 70,236       -10.02 %  
  Total interest expense
     9,831       14,676       -33.01 %     20,064       30,627       -34.49 %  
    Net interest income
     21,473       20,180       6.41 %     43,132       39,609       8.89 %  
  Provision for loan losses
     4,749       24,384       -80.52 %     8,638       25,369       -65.95 %  
    Net interest income (loss) after provision for loan losses
     16,724       (4,204 )     497.81 %     34,494       14,240       142.23 %  
  Non-interest income
     8,771       6,808       28.83 %     16,457       13,751       19.68 %  
  Non-interest expense
     21,274       168,410       -87.37 %     41,820       186,241       -77.55 %  
    Income (loss) before income taxes
     4,221       (165,806 )     102.55 %     9,131       (158,250 )     105.77 %  
  Income tax expense (benefit)
     1,410       (15,656 )     109.01 %     3,124       (12,880 )     124.25 %  
    Net income (loss)
     2,811       (150,150 )     101.87 %     6,007       (145,370 )     104.13 %  
Preferred stock dividend and accretion of discount on warrants
     1,250       1,250       0.00 %     2,500       2,482       0.73 %  
    Net income (loss) available to common shareholders
   $ 1,561     $ (151,400 )     101.03 %   $ 3,507     $ (147,852 )     102.37 %  
                                                   
    Comprehensive income (loss)
   $ 3,705     $ (150,557 )     102.46 %   $ 7,871     $ (144,889 )     105.43 %  
                                                   
Per Share of Common Stock:
                                                  
  Basic earnings (loss)
   $ 0.12     $ (11.58 )     101.04 %   $ 0.27     $ (11.32 )     102.39 %  
  Diluted earnings (loss)
   $ 0.12     $ (11.58 )     101.04 %   $ 0.27     $ (11.32 )     102.39 %  
  Dividends
   $ 0.00     $ 0.00       0.00 %   $ 0.00     $ 0.13       -100.00 %  
                                                   
Weighted Average Shares Outstanding:
                                            
  Basic
     13,097,611       13,070,216               13,090,021       13,066,569            
  Diluted
     13,158,131       13,070,216               13,148,226       13,066,569            
                                                   
 
                 
   
Three Months Ended
  
Six Months Ended
        
   
June 30,
  
March 31,
  
June 30,
  
June 30,
        
    2010   2010   2009   2010   2009        
Key Financial Ratios:
                                                
                                                 
  Return on average assets
     0.25 %     0.31 %     -21.67 %     0.28 %     -10.56 %        
  Return on average shareholders' equity
     2.68 %     3.43 %     -157.41 %     3.05 %     -77.37 %        
  Return on average common shareholders' equity (1)
     3.76 %     4.83 %     -189.79 %     4.28 %     -93.47 %        
  Return on average common tangible shareholders'  equity (2)
     3.96 %     5.11 %     -363.33 %     4.52 %     -180.70 %        
  Interest rate spread
     3.77 %     3.81 %     3.26 %     3.79 %     3.13 %        
  Net interest margin
     3.86 %     3.90 %     3.43 %     3.88 %     3.33 %        
  Efficiency Ratio
     70.34 %     70.01 %     610.16 %     70.18 %     345.65 %        
                         
(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.
                        
 
                         
   
June 30,
  
December 31,
  
June 30,
                        
    2010   2009   2009                        
Asset Quality Ratios:
                                                
Nonperforming loans as a percentage of total 
                                                
      loans, net of unearned income
     3.37 %     3.70 %     4.34 %                        
    Nonperforming assets as a percentage of total assets
     5.61 %     5.07 %     4.91 %                        
Allowance for loan losses as a percentage of total loans, net of unearned income
     2.60 %     2.45 %     2.30 %                        
Allowance for loan losses as a percentage of
                                        
      nonperforming loans
     77.02 %     66.39 %     52.96 %                        
Net charge-offs to average total loans, net of
                                        
      unearned income
     0.44 %     2.25 %     1.08 %                        
 
 
 
 
GREEN BANKSHARES, INC.
Consolidated Financial Highlights
June 30, 2010
(UNAUDITED)
 
Nonperforming Assets and Net Charge-offs
                  
Asset Quality Ratios
                  
                                           
As of and for the three months ended June 30, 2010
  
Bank
    
Other
    
Total
      
As of and for the three months ended June 30, 2010
  
Bank
    
Other
    
Consolidated
  Loans past due 90 days and still accruing
   $ 641     $ -     $ 641      
  Nonperforming loans as a percentage of total loans, net of unearned income
     3.37 %     1.28 %     3.37 %
  Nonaccrual loans
     63,784       558       64,342      
  Nonperforming assets as a percentage of total assets
     5.59 %     1.38 %     5.61 %
  Other real estate owned and repossessed assets
     76,746       186       76,932      
  Allowance for loan losses as a percentage of total loans, net of unearned income
     2.44 %     7.89 %     2.60 %
      Total nonperforming assets
   $ 141,171     $ 744     $ 141,915      
  Allowance for loan losses as a percentage of nonperforming loans
     72.35 %     616.49 %     77.02 %
                             
  YTD net charge-offs to average total loans, net of unearned income
     0.40 %     2.09 %     0.44 %
  YTD net charge-offs
   $ 7,847     $ 903     $ 8,750                                
                                                       
As of and for the three months ended June 30, 2009
  
Bank
    
Other
    
Total
      
As of and for the three months ended June 30, 2009
  
Bank
    
Other
    
Consolidated
  Loans past due 90 days and still accruing
   $ 809     $ 11     $ 820      
  Nonperforming loans as a percentage of total loans, net of unearned income
     4.33 %     1.89 %     4.34 %
  Nonaccrual loans
     93,086       803       93,889      
  Nonperforming assets as a percentage of total assets
     4.88 %     2.00 %     4.91 %
  Other real estate owned and repossessed assets
     34,248       220       34,468      
  Allowance for loan losses as a percentage of total loans, net of unearned income
     2.15 %     8.11 %     2.30 %
      Total nonperforming assets
   $ 128,143     $ 1,034     $ 129,177      
  Allowance for loan losses as a percentage of nonperforming loans
     49.70 %     428.99 %     52.96 %
                             
  YTD net charge-offs to average total loans, net of unearned income
     1.04 %     2.71 %     1.08 %
  YTD net charge-offs
   $ 22,893     $ 1,130     $ 24,023                                
                                                       
As of and for the year ended December 31, 2009
  
Bank
    
Other
    
Total
      
As of and for the year ended December 31, 2009
  
Bank
    
Other
    
Consolidated
  Loans past due 90 days and still accruing
   $ 147     $ -     $ 147      
  Nonperforming loans as a percentage of total loans, net of unearned income
     3.69 %     1.50 %     3.70 %
  Nonaccrual loans
     74,761       650       75,411      
  Nonperforming assets as a percentage of total assets
     5.04 %     2.02 %     5.07 %
  Other real estate owned and repossessed assets
     56,799       369       57,168      
  Allowance for loan losses as a percentage of total loans, net of unearned income
     2.30 %     8.05 %     2.45 %
      Total nonperforming assets
   $ 131,707     $ 1,019     $ 132,726      
  Allowance for loan losses as a percentage of nonperforming loans
     62.29 %     538.31 %     66.39 %
                             
  Net charge-offs to average total loans, net of unearned income
     2.15 %     5.88 %     2.25 %
  Net charge-offs
   $ 46,394     $ 2,502     $ 48,896                                
                                                       
                                                       
 
 
 
 
 
 
GREEN BANKSHARES, INC.
  
Condensed Average Balances, Interest Rates and Yields
  
June 30, 2010
  
                                                                         
   
Three Months Ended
    
Six Months Ended
  
   
June 30,
    
June 30,
  
   
2010
    
2009
    
2010
    
2009
  
                                                                         
   
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)
     1,896,071       29,390       6.22 %     2,127,104       32,538       6.14 %     1,924,943       59,470       6.23 %     2,151,190       65,193       6.11 %
    Investment securities (2)
     193,961       1,996       4.13 %     195,390       2,461       5.05 %     181,559       3,902       4.33 %     206,015       5,323       5.21 %
    Other short-term investments
     158,208       99       0.25 %     59,883       36       0.24 %     153,328       193       0.25 %     65,141       81       0.25 %
Total interest-earning assets
     2,248,240       31,485       5.62 %     2,382,377       35,035       5.90 %     2,259,830       63,565       5.67 %     2,422,346       70,597       5.88 %
                                                                                                 
    Non-interest earning assets
     305,374                       420,404                       305,977                       402,244                  
Total assets
     2,553,614                       2,802,781                       2,565,807                       2,824,590                  
                                                                                                 
                                                                                                 
Interest-bearing liabilities:
                                                                                                
  Deposits:
                                                                                                
    Interest checking, money market and savings
     970,304       2,487       1.03 %     731,422       2,542       1.39 %     956,174       4,885       1.03 %     677,863       4,394       1.31 %
    Time deposits
     884,038       5,138       2.33 %     1,155,533       8,969       3.11 %     912,057       10,801       2.39 %     1,225,516       19,770       3.25 %
Total interest bearing-deposits
     1,854,342       7,625       1.65 %     1,886,955       11,511       2.45 %     1,868,231       15,686       1.69 %     1,903,379       24,164       2.56 %
                                                                                                 
    Securities sold under repurchase and short-term borrowings
     21,943       5       0.09 %     28,171       7       0.10 %     22,774       11       0.10 %     30,609       16       0.11 %
    Notes payable
     171,847       1,712       4.00 %     229,165       2,469       4.32 %     171,897       3,406       4.00 %     229,223       4,912       4.32 %
    Subordinated debentures
     88,662       489       2.21 %     88,662       689       3.12 %     88,662       961       2.19 %     88,662       1,535       3.49 %
Total interest-bearing liabilities
     2,136,794       9,831       1.85 %     2,232,953       14,676       2.64 %     2,151,564       20,064       1.88 %     2,251,873       30,627       2.74 %
                                                                                                 
Non-interest bearing liabilities:
                                                                                                
    Demand Deposits
     165,554                       162,458                       164,370                       165,268                  
    Other Liabilities
     17,477                       21,597                       17,786                       22,098                  
Total non-interest bearing liabilities
     183,031                       184,055                       182,156                       187,366                  
                                                                                                 
Total liabilities
     2,319,825                       2,417,008                       2,333,720                       2,439,239                  
                                                                                                 
    Shareholders' equity
     233,789                       385,773                       232,087                       385,351                  
                                                                                                 
Total liabilities & shareholders' equity
     2,553,614                       2,802,781                       2,565,807                       2,824,590                  
                                                                                                 
Net interest income
             21,654                       20,359                       43,501                       39,970          
                                                                                                 
Interest rate spread
                     3.77 %                     3.26 %                     3.79 %                     3.13 %
                                                                                                 
Net yield on interest-earning assets (net interest margin)
       3.86 %                     3.43 %                     3.88 %                     3.33 %
                                                                                                 
(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
  
June 30, 2010
  
(UNAUDITED)
  
 
                               
   
June 30, 2010
    
March 31, 2010
        
Loans
  
Balance
    
%
    
Balance
    
%
    
% Change
  
Commercial
   $ 255,223       13.14 %   $ 268,834       13.38 %     -5.06 %
Commercial real estate
     1,222,460       62.92 %     1,271,094       63.28 %     -3.83 %
Residential real estate
     384,227       19.78 %     386,664       19.25 %     -0.63 %
Consumer
     78,421       4.04 %     79,476       3.96 %     -1.33 %
Other
     2,581       0.13 %     2,709       0.13 %     -4.72 %
    Total loans
     1,942,912       100.00 %     2,008,777       100.00 %     -3.28 %
                                         
  Less: Unearned income
     (14,738 )             (14,738 )                
    Loans, net of unearned income
   $ 1,928,174             $ 1,994,039                  
                                         
Loan Balances by Geographical Region and Operating Subsidiaries
                          
                                         
   
June 30, 2010
    
March 31, 2010
          
   
Loan
    
% to
    
Loan
    
% to
          
   
Balance
    
Total Loans
    
Balance
    
Total Loans
    
% Change
  
                                         
Northeastern Tennessee Region(1)
   $ 557,874       28.93 %   $ 517,105       25.93 %     7.88 %
East Tennessee Region
     597,263       30.98 %     685,808       34.39 %     -12.91 %
Middle Tennessee Region
     729,438       37.83 %     748,126       37.52 %     -2.50 %
                                         
GCB Acceptance Corporation
     19,184       1.00 %     19,099       0.96 %     0.45 %
Superior Financial Services, Inc.
     24,415       1.27 %     23,901       1.20 %     2.15 %
                                         
    Loans, net of unearned income
   $ 1,928,174       100.00 %   $ 1,994,039       100.00 %     -3.30 %
                                         
(1) Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina
          
                                         
 
                                         
   
June 30, 2010
    
March 31, 2010
          
Deposits
  
Balance
    
%
    
Balance
    
%
    
% Change
  
Non-interest bearing demand
   $ 170,396       8.56 %   $ 166,369       8.16 %     2.42 %
Interest bearing demand
     667,108       33.49 %     669,243       32.84 %     -0.32 %
Money market and savings
     306,600       15.39 %     290,313       14.25 %     5.61 %
Retail time
     516,918       25.95 %     552,366       27.11 %     -6.42 %
Jumbo time
     330,818       16.61 %     359,574       17.64 %     -8.00 %
  Total
   $ 1,991,840       100.00 %   $ 2,037,865       100.00 %     -2.26 %
                                         
Deposit Balances by Geographical Region
                                        
                                         
   
June 30, 2010
    
March 31, 2010
          
   
Balance
    
%
    
Balance
    
%
    
% Change
  
Northeastern Tennessee Region(1)
   $ 724,809       36.39 %   $ 747,586       36.68 %     -3.05 %
East Tennessee Region
     320,418       16.09 %     322,361       15.82 %     -0.60 %
Middle Tennessee Region
     946,613       47.52 %     967,918       47.50 %     -2.20 %
                                         
    Total
   $ 1,991,840       100.00 %   $ 2,037,865       100.00 %     -2.26 %
                                         
(1) Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina