8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

————————————————

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  October 20, 2010

GREEN BANKSHARES, INC.

(Exact name of Registrant as specified in its charter)

Tennessee (State or Other Jurisdiction of Incorporation) 0-14289 (Commission File Number) 62-1222567 (I.R.S. Employer Identification No.)

100 North Main Street, Greeneville, Tennessee  37743-4992

(Address of principal executive offices)

(423) 639-5111

Registrant's telephone number, including area code

Not Applicable

(Former Name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On October 20, 2010, Green Bankshares, Inc. (the "Company") announced financial results for the third quarter and nine months ended September 30, 2010.  The full text of the press release is set forth in Exhibit 99.1 hereto.

The information in this Form 8-K and the attached Exhibit is being furnished pursuant to Item 2.02 "Results of Operations and Financial Condition" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d)	Exhibits.
	99.1          Press Release dated October 20, 2010

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GREEN BANKSHARES, INC.
Date:  October 21, 2010	By:	/s/	James E. Adams
			James E. Adams
			Executive Vice President and
			Chief Financial Officer
			(Duly Authorized Representative)

EXHIBIT INDEX

Exhibit
Number	Description of Exhibit(s)
99.1	Copy of press release issued by the Company on October 20, 2010.

EX-99.1

Exhibit 99.1

CONTACT:	James E. Adams
	Executive Vice President and Chief Financial Officer
	423-278-3050

GREEN BANKSHARES REPORTS NET LOSS FOR THE THIRD QUARTER OF 2010

GREENEVILLE, Tenn. (October 20, 2010) – Green Bankshares, Inc. (NASDAQ:GRNB), the holding company for GreenBank, today reported a net loss available to common shareholders of $36.4 million or $2.78 per diluted share for the third quarter of 2010 compared with a net  loss available to common shareholders of $7.7 million or $0.59 per diluted share for the year-earlier quarter.  The third quarter of 2010 reflected higher costs related to loan charge-offs, coupled with losses incurred on Other Real Estate Owned (OREO) resulting from sales completed and updated property appraisals received.  For the first nine months of 2010, net loss available to common shareholders was $32.9 million or $2.51 per diluted share compared with $155.6 million or $11.91 per diluted share for the first nine months of 2009 .

Commenting on the announcement, Stephen M. Rownd, Chairman and Chief Executive Officer, said, "For the most part, the credit and impairment charges incurred during the third quarter resulted principally from a handful of events that occurred in the second half of the quarter.  We continue to aggressively focus on dealing with our problem assets through our Special Assets Group and, depending upon economic conditions, envision the possibility of further credit challenges through the remainder of 2010. While credit quality remains a major obstacle, the core performance of our company is improving. Our net interest margin, excluding interest reversals, continues to expand, and non-interest income is also growing with our increasing core deposit base.  Despite the challenging environment and the losses we incurred this quarter, our regulatory capital ratios remain quite strong."

Capital levels:(see the non-GAAP measurement reconciliation on page 5 regarding tangible equity and book value per share)

Consolidated:		3Q10			2Q10			1Q10			4Q09			3Q09
Tangible common book value per share	$	9.30		$	11.95		$	11.71		$	11.44		$	11.47
Tangible common equity to assets ratio		5.09	%		6.25	%		6.03	%		5.77	%		5.42	%
Bank Regulatory Ratios:
Tier 1 leverage ratio		11.09	%		11.86	%		11.55	%		10.70	%		10.49	%
Tier 1 risk-based capital ratio		13.98	%		14.73	%		14.06	%		13.61	%		13.17	%
Total risk-based capital ratio		15.25	%		15.99	%		15.33	%		14.87	%		14.43	%

Net interest income:

(dollars in thousands)		3Q10			2Q10			1Q10			4Q09			3Q09
Net interest income	$	20,747		$	21,473		$	21,659		$	20,578		$	20,338
Net interest margin		3.90	%		3.86	%		3.90	%		3.37	%		3.33	%
Average earning assets	$	2,130,339		$	2,248,240		$	2,271,550		$	2,445,872		$	2,442,977

· Both net interest income and the net interest margin were negatively affected during the third quarter of 2010 by loan interest reversals totaling approximately $1,398,000 as $111,868,000 of loans were moved to non-accrual status.  Of these new non-accrual loans, nine relationships represented $73,500,000 or two-thirds of the non-accrual loans added.  Excluding interest reversals, net interest margin would have been 4.16% for the 2010 third quarter.

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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 20, 2010

Credit quality:

Summary:

(dollars in thousands)		3Q10			2Q10			1Q10			4Q09			3Q09
Net loan charge-offs	$	36,549		$	4,868		$	3,882		$	6,437		$	18,436
New non-accrual loans added	$	111,868		$	22,415		$	14,442		$	31,111		$	47,931
Reserves to total loans		2.74	%		2.60	%		2.52	%		2.45	%		2.39	%
Non-performing assets	$	197,159		$	141,915		$	135,366		$	132,726		$	125,091

As the economy remained stubbornly sluggish during the third quarter of 2010, highlighted by the lack of meaningful improvement in employment statistics and the residential real estate construction and development environment in the Company's markets, a number of the Bank's borrowers experienced further stress, prompting the Company to engage an independent third-party loan reviewer.  This review contributed to the asset quality-impact reflected in our third quarter results.

Changes in non-performing assets:

(dollars in thousands)	Non-accrual Loans			OREO			Past Due > 90 days		Total (1)
June 30, 2010	$	64,342		$	76,932		$	641	$	141,915
Loan foreclosures		(8,317	)		8,317			n/a		n/a
Gross loan charge-offs		(37,199	)		n/a			n/a		(37,199	)
New non-accrual loans		111,868			n/a			n/a		111,868
Reduction of non-accrual loans		(8,204	)		n/a			n/a		(8,204	)
OREO sales proceeds		n/a			(4,968	)		n/a		(4,968	)
OREO write-downs, net		n/a			(6,582	)		n/a		(6,582	)
Change in past due > 90 days		n/a			n/a			329		329
September 30, 2010	$	122,490		$	73,699		$	970	$	197,159

(1)   On average, all non-performing assets have been written down almost 30%.

Loan portfolio migration:

(Dollars in thousands)		3Q10		2Q10		1Q10		3Q09
Commercial real estate portfolio:
Acquisition & development	$	145,500	$	176,152	$	182,181	$	190,826
Lot warehouse		46,306		52,520		55,499		68,948
Commercial 1-4 family construction		41,847		49,539		69,328		83,155
Total speculative 1-4 family		233,653		278,211		307,008		342,929
Commercial vacant land		84,321		100,163		101,218		102,312
Commercial construction non-owner occupied		100,364		123,330		156,970		174,199
Commercial construction owner occupied		5,454		6,519		27,614		37,034
Consumer residential construction		13,801		13,511		14,701		23,833
Total construction and development		203,940		243,523		300,503		337,378
Non-owner occupied commercial real estate		439,519		434,238		395,638		396,889
Total commercial real estate	$	877,112	$	955,972	$	1,003,149	$	1,077,196

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GRNB Reports Third Quarter Results

Page 3

October 20, 2010

"Efforts to reduce our commercial real estate exposure continued through the third quarter," Rownd continued.  "Since the third quarter of 2009, we have reduced our overall exposure to commercial real estate by more than 18%.  Over the last year, the higher risk concentrations in the speculative 1-4 family residential real estate portfolio have declined almost 32% and construction and development loans have declined by more than 39%, as indicated in the foregoing loan portfolio migration table.  Accelerating our problem asset resolution remains our top priority through the focused efforts of our Special Assets Group. We continue to seek to resolve these issues in the best interests of our shareholders, with a goal of returning to profitability in 2011.  Depending on general economic conditions, our non-performing asset and charge-off levels may remain elevated over the next few quarters as we realize the results of our strategic actions."  Rownd also noted that the Company's loan loss reserve to total loans was 2.74% at September 30, 2010.

The following information graphically displays the consolidated loan portfolio by purpose code as of September 30, 2010:

Non-interest income totaled approximately $9.0 million for the third quarter of 2010, increasing modestly from the second quarter of 2010. Excluding net securities gains taken of $430,000 during the third quarter of 2009, non-interest income for the third quarter of 2010 was up 3% compared with the year-earlier period.  On a year-to-date basis, non-interest income totaled $25.5 million for the first nine months of 2010 compared with $23.4 million for the same period last year, an increase of almost 9%.  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 3,463 net new checking account c ustomers during the third quarter of 2010, for a new account opening ratio of 1.96 new accounts for each account closed.

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GRNB Reports Third Quarter Results

Page 4

October 20, 2010

Non-interest expenses totaled approximately $27.0 million for the third quarter of 2010,   increasing $5.7 million from the second quarter of 2010 primarily as a result of losses incurred on OREO.  Excluding the one-time, non-cash, goodwill impairment charge of $143.4 million recorded during 2009, year-to-date 2010 non-interest expenses increased $3.1 million, or 5%, over the first nine months of 2009.  Driving the year-to-date 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 expense; and increased expenses associated with losses incurr ed on OREO-related properties.

Greeneville, Tennessee-based Green Bankshares, Inc., with total assets of approximately $2.4 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, like the Dodd-Frank Wall Street Reform and Consumer Protection Act,  arising out of current unsettled conditions in the economy and (9) the lo ss 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 20, 2010

GREEN BANKSHARES, INC.

Reconciliation of Non-GAAP Measures Presented in Earnings Release

(Dollars in thousands)

	Three Months Ended								Nine Months Ended
	Sept. 30, 2010			June 30, 2010		Sept. 30, 2009			Sept. 30, 2010			Sept. 30, 2009
Total non-interest expense	$	27,009		$	21,274	$	22,365		$	68,829		$	209,109
Goodwill impairment charge		--			--		--			--			(143,389	)
Operating expenses	$	27,009		$	21,274	$	22,365		$	68,829		$	65,720
Net income (loss) available to common shareholders	$	(36,405	)	$	1,561	$	(7,748	)	$	(32,898	)	$	(155,600	)
Goodwill impairment charge, net of tax		--			--		--			--			137,414
Net operating income (loss)	$	(36,405	)	$	1,561	$	(7,748	)	$	(32,898	)	$	(18,186	)
Per Diluted Share:
Net income (loss) available to common shareholders	$	(2.78	)	$	0.12	$	(0.59	)	$	(2.51	)	$	(11.91	)
Goodwill impairment charge,  net of tax		--			--		--			--			10.52
Net operating income (loss)	$	(2.78	)	$	0.12	$	(0.59	)	$	(2.51	)	$	(1.39	)

	Sept. 30, 2010			June 30, 2010			Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009
Total shareholders' equity	$	197,824		$	233,150		$	230,189		$	226,769		$	227,388
Less:
Core deposit and other intangibles		(7,398	)		(8,044	)		(8,684	)		(9,335	)		(9,981	)
Preferred stock		(67,775	)		(67,428	)		(67,081	)		(66,735	)		(66,388	)
Tangible common equity	$	122,651		$	157,678		$	154,424		$	150,699		$	151,019
Total assets	$	2,415,014		$	2,529,332		$	2,569,732		$	2,619,139		$	2,794,217
Less:
Core deposit and other intangibles		(7,398	)		(8,044	)		(8,684	)		(9,335	)		(9,981	)
Total tangible assets	$	2,407,616		$	2,521,288		$	2,561,048		$	2,609,804		$	2,784,236

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 and excluding the Company's preferred stock and intangible assets (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 per formance 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 20, 2010

GREEN BANKSHARES, INC.

Unaudited Financial Highlights

(In thousands, except per share amounts)

	Three Months Ended								Nine Months Ended
	Sept. 30, 2010			June 30, 2010		Sept. 30, 2009			Sept. 30, 2010			Sept. 30, 2009
Interest income	$	29,455		$	31,304	$	34,796		$	92,651		$	105,032
Interest expense		8,708			9,831		14,458			28,772			45,085
Net interest income		20,747			21,473		20,338			63,879			59,947
Provision for loan losses		36,823			4,749		18,475			45,461			43,844
Net interest income (loss) after provision for loan losses		(16,076	)		16,724		1,863			18,418			16,103
Non-interest income		9,029			8,771		9,189			25,486			23,443
Non-interest expense		27,009			21,274		22,365			68,829			209,109
Income (loss) before income taxes		(34,056	)		4,221		(11,313	)		(24,925	)		(169,563	)
Income tax provision (benefit)		1,098			1,410		(4,815	)		4,222			(17,695	)
Income (loss)		(35,154	)		2,811		(6,498	)		(29,147	)		(151,868	)
Preferred stock dividends and related cost		1,251			1,250		1,250			3,751			3,732
Net income (loss) available to common shareholders	$	(36,405	)	$	1,561	$	(7,748	)	$	(32,898	)	$	(155,600	)
Comprehensive income (loss)	$	(34,583	)	$	3,705	$	(5,073	)	$	(26,712	)	$	(149,962	)
Earnings (loss) per common share:
Basic	$	(2.78	)	$	0.12	$	(0.59	)	$	(2.51	)	$	(11.91	)
Diluted 1	$	(2.78	)	$	0.12	$	(0.59	)	$	(2.51	)	$	(11.91	)
Weighted average common  shares:
Basic		13,098			13,098		13,070			13,093			13,068
Diluted		13,098			13,158		13,070			13,093			13,068
Dividends declared per common share	$	0.00		$	0.00	$	0.00		$	0.00		$	0.13

	Sept. 30, 2010			June 30, 2010			Sept. 30, 2009
Total assets	$	2,415,014		$	2,529,332		$	2,794,217
Cash and cash equivalents		206,391			208,155			346,131
Investment and other securities		178,307			190,471			169,307
Loans, net of unearned interest		1,835,591			1,928,174			2,099,267
Allowance for loan losses		(50,322	)		(50,049	)		(50,196	)
Deposits		1,916,544			1,991,839			2,214,761
Shareholders' equity		197,824			233,150			227,388
Common shareholders' equity 2		130,049			165,722			161,000
Tangible common shareholders' equity 3		122,651			157,678			151,019
Common book value per share 2		9.86			12.56			12.22
Tangible common book value per share 3		9.30			11.95			11.47

1	Diluted weighted average shares outstanding exclude 94,267 and 101,636 restricted average shares for the three-month periods ended September 30, 2010 and 2009, and exclude 93,242 and 95,526 restricted average shares for the nine-month periods ended September 30, 2010 and 2009, 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, 2010, December 31, 2009 and September 30, 2009
(Dollars in thousands)
		(Unaudited)						(Unaudited)
		September 30,			December 31,			September 30,
		2010			2009*			2009
ASSETS
Cash and due from banks	$	202,709		$	206,701		$	345,209
Federal funds sold		3,682			3,793			922
Cash and cash equivalents		206,391			210,494			346,131
Interest earning deposits in other banks		1,014			11,000			1,000
Securities available-for-sale ("AFS")		163,964			147,724			154,937
Securities held-to-maturity (with a market value of $603, $638 and $644
on September 30, 2010, December 31, 2009 and September 30, 2009)		595			626			636
FHLB and other stock, at cost		12,734			12,734			12,734
Loans held for sale		2,091			1,533			1,064
Loans, net of unearned income		1,835,591			2,043,807			2,099,267
Allowance for loan losses		(50,322	)		(50,161	)		(50,196	)
Other real estate owned and repossessed assets		73,699			57,168			56,413
Bank premises and equipment, net		79,657			81,818			82,551
Cash surrender value of life insurance		31,171			30,277			29,997
Goodwill		-			-			-
Core deposit and other intangibles		7,398			9,335			9,981
Other assets		51,031			62,784			49,702
Total assets	$	2,415,014		$	2,619,139		$	2,794,217
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest-bearing deposits	$	165,642		$	177,602		$	156,797
Interest-bearing deposits		1,749,503			1,899,910			1,998,157
Brokered deposits		1,399			6,584			59,807
Total deposits		1,916,544			2,084,096			2,214,761
Repurchase agreements		22,641			24,449			25,294
FHLB advances and notes payable		170,884			171,999			216,578
Subordinated debentures		88,662			88,662			88,662
Accrued interest payable and other liabilities		18,459			23,164			21,534
Total liabilities		2,217,190			2,392,370			2,566,829
SHAREHOLDERS' EQUITY
Preferred stock: no par value, 1,000,000 shares authorized;
72,278, 72,278 and 72,278 shares outstanding		67,775			66,735			66,388
Common stock: $2 par value, 20,000,000 shares authorized;
13,190,300, 13,171,474 and 13,171,474 shares outstanding		26,381			26,343			26,343
Common stock warrants		6,934			6,934			6,934
Additional paid in capital		188,749			188,310			188,146
Retained earnings (deficit)		(94,638	)		(61,742	)		(61,666	)
Accumulated other comprehensive income		2,623			189			1,243
Total shareholders' equity		197,824			226,769			227,388
Total liabilities & shareholders' equity	$	2,415,014		$	2,619,139		$	2,794,217
* Derived from Audited Consolidated Financial Statements.

GREEN BANKSHARES, INC.
Consolidated Statements of Income and Comprehensive Income
Three Months Ended September 30, 2010, June 30, 2010 and September 30, 2009 and Nine Months Ended September 30, 2010 and 2009
(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,
		2010			2010			2009			2010			2009
Interest income:
Interest and fees on loans	$	27,744		$	29,374		$	32,559		$	87,178		$	97,732
Taxable securities		1,181			1,391			1,669			3,860			5,732
Nontaxable securities		304			306			315			922			949
FHLB and other stock		136			134			151			408			436
Federal funds sold and other		90			99			102			283			183
Total interest income		29,455			31,304			34,796			92,651			105,032
Interest expense:
Deposits		6,444			7,626			11,480			22,131			35,644
Federal funds purchased and repurchase agreements		6			5			6			17			22
FHLB advances and notes payable		1,726			1,712			2,416			5,132			7,328
Subordinated debentures		532			488			556			1,492			2,091
Total interest expense		8,708			9,831			14,458			28,772			45,085
Net interest income		20,747			21,473			20,338			63,879			59,947
Provision for loan losses		36,823			4,749			18,475			45,461			43,844
Net interest income (loss) after provision for loan losses		(16,076	)		16,724			1,863			18,418			16,103
Non-interest income:
Service charges on deposit accounts		6,651			6,692			6,446			19,283			17,597
Other charges and fees		417			383			505			1,156			1,459
Trust and investment services income		1,021			757			595			2,360			1,472
Mortgage banking income		212			123			127			453			292
Other income		728			909			1,086			2,327			2,423
Securities gains (losses), net		-			-			-			-
Realized gains (losses), net		-			-			933			-			933
Other-than-temporary impairment		-			(553	)		(503	)		(553	)		(960	)
Less non-credit portion recognized in other comprehensive income		-			460			-			460			227
Total securities gains (losses), net		-			(93	)		430			(93	)		200
Total non-interest income		9,029			8,771			9,189			25,486			23,443
Non-interest expense:
Employee compensation		8,266			7,972			7,315			23,903			23,071
Employee benefits		816			816			526			2,609			3,050
Occupancy expense		1,792			1,684			1,762			5,175			5,261
Equipment expense		742			668			761			2,118			2,398
Computer hardware/software expense		916			886			735			2,626			2,023
Professional services		741			576			457			1,924			1,432
Advertising		657			806			678			2,061			1,421
OREO maintenance expense		712			554			531			1,711			811
Collection and repossession expense		508			534			775			2,329			1,784
Loss on OREO and repossessed assets		6,538			926			3,578			7,973			7,005
FDIC insurance		1,099			1,209			819			3,159			4,069
Core deposit and other intangible amortization		646			640			648			1,937			2,104
Goodwill impairment		-			-			-			-			143,389
Other expenses		3,576			4,003			3,780			11,304			11,291
Total non-interest expense		27,009			21,274			22,365			68,829			209,109
Income (loss) before income taxes		(34,056	)		4,221			(11,313	)		(24,925	)		(169,563	)
Income taxes provision (benefit)		1,098			1,410			(4,815	)		4,222			(17,695	)
Net income (loss)		(35,154	)		2,811			(6,498	)		(29,147	)		(151,868	)
Preferred stock dividends and accretion of discount on warrants		1,251			1,250			1,250			3,751			3,732
Net income (loss) available to common shareholders	$	(36,405	)	$	1,561		$	(7,748	)	$	(32,898	)	$	(155,600	)
Comprehensive income (loss)	$	(34,583	)	$	3,705		$	(5,073	)	$	(26,712	)	$	(149,962	)
Per share of common stock:
Basic earnings (loss)		($2.78	)		$0.12			($0.59	)		($2.51	)		($11.91	)
Diluted earnings (loss)		($2.78	)		$0.12			($0.59	)		($2.51	)		($11.91	)
Dividends		$0.00			$0.00			$0.00			$0.00			$0.13
Weighted average shares outstanding:
Basic		13,097,611			13,097,611			13,070,216			13,092,579			13,067,798
Diluted(1)		13,097,611			13,158,131			13,070,216			13,092,579			13,067,798
(1)Diluted weighted average shares outstanding exclude 94,267 and 101,636 of the restricted average shares for the three month periods ended September 30, 2010 and 2009 and exclude 93,242 and 95,526 of the restricted average shares for the nine month periods ended September 30, 2010 and 2009 because their impact would be anti-dilutive.

GREEN BANKSHARES, INC.

Consolidated Financial Highlights

(UNAUDITED)

(Dollars in thousands except share and per share data)

	September 30,			December 31,			%
	2010			2009			Change
Financial Condition Data:
Assets	$	2,415,014		$	2,619,139			-7.79	%
Loans, net of unearned interest		1,835,591			2,043,807			-10.19	%
Cash and investments		384,698			382,578			0.55	%
Federal funds sold		3,682			3,793			-2.93	%
Deposits		1,916,544			2,084,096			-8.04	%
FHLB advances and notes payable		170,884			171,999			-0.65	%
Subordinated debentures		88,662			88,662			0.00	%
Repurchase agreements		22,641			24,449			-7.39	%
Shareholders' equity		197,824			226,769			-12.76	%
Common shareholders' equity (1)		130,049			160,034			-18.74	%
Tangible common shareholders' equity (2)		122,651			150,699			-18.61	%
Tangible shareholders' equity (3)		190,426			217,434			-12.42	%
Ratios:
Common book value per share (1)		$9.86			$12.15			-18.85	%
Tangible common book value per share (2)		$9.30			$11.44			-18.71	%
Total tangible equity to tangible assets (3)(4)		7.91	%		8.33	%		-5.07	%
Tangible common equity to tangible assets (2)(4)		5.09	%		5.77	%		-11.78	%
Average equity to average assets		9.17	%		11.09	%		-17.31	%
(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,
	2010			2009			% Change			2010			2009			% Change
Operating Data:
Total interest income	$	29,455		$	34,796			-15.35	%	$	92,651		$	105,032			-11.79	%
Total interest expense		8,708			14,458			-39.77	%		28,772			45,085			-36.18	%
Net interest income		20,747			20,338			2.01	%		63,879			59,947			6.56	%
Provision for loan losses		36,823			18,475			99.31	%		45,461			43,844			3.69	%
Net interest income (loss) after provision for loan losses		(16,076	)		1,863			-962.91	%		18,418			16,103			14.38	%
Non-interest income		9,029			9,189			-1.74	%		25,486			23,443			8.71	%
Non-interest expense		27,009			22,365			20.76	%		68,829			209,109			-67.08	%
Income (loss) before income taxes		(34,056	)		(11,313	)		-201.03	%		(24,925	)		(169,563	)		85.30	%
Income tax expense (benefit)		1,098			(4,815	)		122.80	%		4,222			(17,695	)		123.86	%
Net income (loss)		(35,154	)		(6,498	)		-441.00	%		(29,147	)		(151,868	)		80.81	%
Preferred stock dividend and accretion of discount on warrants		1,251			1,250			0.08	%		3,751			3,732			0.51	%
Net income (loss) available to common shareholders	$	(36,405	)	$	(7,748	)		-369.86	%	$	(32,898	)	$	(155,600	)		78.86	%
Comprehensive income (loss)	$	(34,583	)	$	(5,073	)		-581.71	%	$	(26,712	)	$	(149,962	)		82.19	%
Per Share of Common Stock:
Basic earnings (loss)	$	(2.78	)	$	(0.59	)		-371.19	%	$	(2.51	)	$	(11.91	)		78.93	%
Diluted earnings (loss)	$	(2.78	)	$	(0.59	)		-371.19	%	$	(2.51	)	$	(11.91	)		78.93	%
Dividends	$	0.00		$	0.00			0.00	%	$	0.00		$	0.13			-100.00	%
Weighted Average Shares Outstanding:
Basic		13,097,611			13,070,216						13,092,579			13,067,798
Diluted		13,097,611			13,070,216						13,092,579			13,067,798

	Three Months Ended			Nine Months Ended
	September 30,	June 30,	September 30,	September 30,
	2010	2010	2009	2010	2009
Key Financial Ratios:
Return on average assets	-5.86%	0.25%	-1.12%	-1.74%	-7.43%
Return on average shareholders' equity	-62.23%	2.68%	-12.97%	-18.95%	-62.04%
Return on average common shareholders' equity (1)	-87.78%	3.76%	-18.00%	-26.68%	-77.32%
Return on average common tangible shareholders'  equity (2)	-91.91%	3.96%	-19.16%	-28.09%	-127.26%
Interest rate spread	3.83%	3.77%	3.22%	3.80%	3.16%
Net interest margin	3.90%	3.86%	3.33%	3.89%	3.33%
Efficiency Ratio	90.71%	70.34%	75.74%	77.02%	251.68%
(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,
	2010	2009	2009
Asset Quality Ratios:
Nonperforming loans as a percentage of total loans,
net of unearned income	6.73%	3.70%	3.27%
Nonperforming assets as a percentage of total assets	8.16%	5.07%	4.48%
Allowance for loan losses as a percentage of total loans,
net of unearned income	2.74%	2.45%	2.39%
Allowance for loan losses as a percentage of
nonperforming loans	40.76%	66.39%	73.09%
Net charge-offs to average total loans, net of
unearned income	2.31%	2.25%	1.93%

GREEN BANKSHARES, INC.

Consolidated Financial Highlights

September 30, 2010

(UNAUDITED)

Nonperforming Assets and Net Charge-offs								Asset Quality Ratios
As of and for the three months ended September 30, 2010			Bank		Other		Total	As of and for the three months ended September 30, 2010		Bank	Other	Consolidated
	Loans past due 90 days and still accruing	$	970	$	-	$	970		Nonperforming loans as a percentage of total loans, net of unearned income	6.75%	1.50%	6.73%
	Nonaccrual loans		121,837		653		122,490		Nonperforming assets as a percentage of total assets	8.13%	1.54%	8.16%
	Other real estate owned and repossessed assets		73,527		172		73,699		Allowance for loan losses as a percentage of total loans, net of unearned income	2.58%	7.80%	2.74%
	Total nonperforming assets	$	196,334	$	825	$	197,159		Allowance for loan losses as a percentage of nonperforming loans	38.22%	518.99%	40.76%
									YTD net charge-offs to average total loans, net of unearned income	2.26%	3.06%	2.31%
	YTD net charge-offs	$	43,973	$	1,326	$	45,299
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 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
September 30, 2010
	Three Months Ended								Nine Months Ended
	September 30,								September 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)	1,812,154	27,759	6.08	%	2,075,096	32,577	6.23	%	1,886,937	87,230	6.18	%	2,125,547	97,771	6.15	%
Investment securities (2)	179,586	1,785	3.94	%	184,433	2,305	4.96	%	180,894	5,686	4.20	%	198,741	7,628	5.13	%
Other short-term investments	138,599	90	0.26	%	183,448	102	0.22	%	148,365	283	0.26	%	105,011	183	0.23	%
Total interest-earning assets	2,130,339	29,634	5.52	%	2,442,977	34,984	5.68	%	2,216,196	93,199	5.62	%	2,429,299	105,582	5.81	%
Non-interest earning assets	333,199				303,665				315,147				369,023
Total assets	2,463,538				2,746,642				2,531,343				2,798,322
Interest-bearing liabilities:
Deposits:
Interest checking, money market and savings	992,222	2,522	1.01	%	870,091	3,163	1.44	%	968,322	7,407	1.02	%	742,643	7,557	1.36	%
Time deposits	765,960	3,922	2.03	%	1,121,349	8,317	2.94	%	862,823	14,724	2.28	%	1,190,412	28,087	3.15	%
Total interest bearing-deposits	1,758,182	6,444	1.45	%	1,991,440	11,480	2.29	%	1,831,145	22,131	1.62	%	1,933,055	35,644	2.47	%
Securities sold under repurchase and short-term borrowings	22,990	6	0.10	%	25,454	6	0.09	%	22,847	17	0.10	%	28,872	22	0.10	%
Notes payable	171,216	1,726	4.00	%	220,591	2,416	4.35	%	171,673	5,132	4.00	%	226,314	7,328	4.33	%
Subordinated debentures	88,662	532	2.38	%	88,662	556	2.49	%	88,662	1,492	2.25	%	88,662	2,091	3.15	%
Total interest-bearing liabilities	2,041,050	8,708	1.69	%	2,326,147	14,458	2.47	%	2,114,327	28,772	1.82	%	2,276,903	45,085	2.65	%
Non-interest bearing liabilities:
Demand Deposits	171,237				160,653				166,685				163,713
Other Liabilities	19,161				22,872				18,243				22,359
Total non-interest bearing liabilities	190,398				183,525				184,928				186,072
Total liabilities	2,231,448				2,509,672				2,299,255				2,462,975
Shareholders' equity	232,090				236,970				232,088				335,347
Total liabilities & shareholders' equity	2,463,538				2,746,642				2,531,343				2,798,322
Net interest income		20,926				20,526				64,427				60,497
Interest rate spread			3.83	%			3.22	%			3.80	%			3.16	%
Net yield on interest-earning assets (net interest margin)			3.90	%			3.33	%			3.89	%			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

September 30, 2010

(UNAUDITED)

	September 30, 2010						June 30, 2010
Loans	Balance			%			Balance			%			% Change
Commercial	$	240,314			12.99	%	$	255,223			13.14	%		-5.84	%
Commercial real estate		1,143,654			61.81	%		1,222,460			62.92	%		-6.45	%
Residential real estate		385,950			20.86	%		384,227			19.78	%		0.45	%
Consumer		76,792			4.15	%		78,421			4.04	%		-2.08	%
Other		3,440			0.19	%		2,581			0.13	%		33.28	%
Total loans		1,850,150			100.00	%		1,942,912			100.00	%		-4.77	%
Less: Unearned income		(14,559	)					(14,738	)
Loans, net of unearned income	$	1,835,591					$	1,928,174
Loan Balances by Geographical Region and Operating Subsidiaries
	September 30, 2010						June 30, 2010
	Loan			% to			Loan			% to
	Balance			Total Loans			Balance			Total Loans			% Change
Northeastern Tennessee Region(1)	$	526,219			28.67	%	$	557,874			28.93	%		-5.67	%
East Tennessee Region		563,997			30.73	%		597,263			30.98	%		-5.57	%
Middle Tennessee Region		701,925			38.24	%		729,438			37.83	%		-3.77	%
GCB Acceptance Corporation		19,104			1.04	%		19,184			1.00	%		-0.42	%
Superior Financial Services, Inc.		24,346			1.33	%		24,415			1.27	%		-0.28	%
Loans, net of unearned income	$	1,835,591			100.01	%	$	1,928,174			100.00	%		-4.80	%
(1) Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina
	September 30, 2010						June 30, 2010
Deposits	Balance			%			Balance			%			% Change
Non-interest bearing demand	$	165,642			8.64	%	$	170,396			8.56	%		-2.79	%
Interest bearing demand		673,904			35.16	%		667,108			33.49	%		1.02	%
Money market and savings		324,161			16.92	%		306,600			15.39	%		5.73	%
Retail time		463,800			24.20	%		516,918			25.95	%		-10.28	%
Jumbo time		289,037			15.08	%		330,818			16.61	%		-12.63	%
Total	$	1,916,544			100.00	%	$	1,991,840			100.00	%		-3.78	%
Deposit Balances by Geographical Region
	September 30, 2010						June 30, 2010
	Balance			%			Balance			%			% Change
Northeastern Tennessee Region(1)	$	694,111			36.22	%	$	724,809			36.39	%		-4.24	%
East Tennessee Region		314,773			16.42	%		320,418			16.09	%		-1.76	%
Middle Tennessee Region		907,660			47.36	%		946,613			47.52	%		-4.11	%
Total	$	1,916,544			100.00	%	$	1,991,840			100.00	%		-3.78	%
(1) Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina