Greer Bancshares (GRBS) 8-K Results of Operations and Financial Condition

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Annual Shareholders’

Meeting

Greer Bancshares Incorporated

April 24, 2008

Welcome Shareholders!

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Agenda

•

Welcome and Opening Remarks

–

David M. Rogers, Chairman of the Board

•

Invocation

•

Introduction of Special Guests

–

Bill Pitman of Leatherwood Law Firm

–

David Wiggins and Matt Snow of Dixon

Hughes PLLC

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Disclaimer

During this shareholder meeting, I or certain of our executive officers

will make presentations about our past performance and future

plans. I must caution you that these presentations will contain

certain “forward-looking statements”

concerning our future financial

condition, business plans, operations, opportunities and prospects,

including factors which may affect future earnings. Such forward-

looking statements are made pursuant to the safe harbor provisions

of the Private Securities Litigation Reform Act of 1995. They are

based on management’s current knowledge and assumptions about

future events and involve risks and uncertainties that could cause

actual results to differ materially from anticipated results. Additional

information concerning factors that could cause actual results to

materially differ from those in such forward-looking statements is

contained in our Form 10-K for 2007 filed with the Securities and

Exchange Commission, and in our 2007 Annual Report which you

received with your Proxy Statement.

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Election of Directors

•

To elect four directors to hold office until

the 2011 Annual Meeting of Stockholders;

•

Director Nominees

–

Gary M. Griffin

–

Kenneth M. Harper

–

R. Dennis Hennett

–

David M. Rogers

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Proxy Votes

•

2,483,116 total shares outstanding on the record

date of March 14, 2008.

•

1,621,887 shares or 65.3% of outstanding shares

have voted by proxy (more than sufficient for a quorum).

•

Of the shares voted by proxy, no Director received less

than 96.7% affirmative vote.

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Other Business

•

No other business has been presented for

consideration by the shareholders.

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PRESIDENT & CEO

Kenneth Harper

Shareholder Update

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STATE OF THE U.S.

BANKING ECONOMY

•

ISSUES:

–

Recessionary fears

–

Subprime

fall-out

–

Resulting tightening of liquidity markets

–

Credit quality issues

–

Slower loan growth

–

Narrowing spreads (YTD rate cuts of 200 basis points)

–

Increasing regulatory costs

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Banking Market Value

Since December 31, 2006, the banking sector has lost approximately 27% of its total market

value, amounting to a decline of over $413 billion.   

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STOCK PRICE EVALUATION

•

Greer Bancshares

(GRBS.OB)

January 1, 2007

$24.00

April 18, 2008

$14.25

Change in Price

(40.63%)

Current Dividend Yield

4.77%

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AS COMPARED TO:

January 1, 2007

April 18, 2008

Change

U. S. Money Center Banks

Bank of America

$53.33

$38.56

(27.70%)

Wachovia

$56.81

$27.24

(52.05%)

Regional Peers

BB&T

$44.00

$34.53                 (21.52%)

The South Financial Group

$26.86

$12.13

(54.84%)

Community Bank Peers

Southern First    

$21.54

$15.00

(30.36%)

First National of Spartanburg

$16.25

$ 9.10 

(44.00%)

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Outlook for the U.S. Banking Markets

•

Expectation

of

up

to

50

additional

basis

point

cut

in    

Fed Funds Rate

•

Concern

related

to

significant

number

of

ARM

resets

in

May 2008

•

Typically

takes

6

–

9

months

for

liabilities

to

re-price

and

catch

up

with

decreases

in

adjustable

rate

loan

portfolio

•

Close

eye

on

continuing

credit

concerns

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Comments on

Southeastern U.S. Markets

With

exception

of

Florida

and

Atlanta

markets,

the

Southeast

appears

to

be

fairing

better

than

other

areas

of

the

country

in

terms

of

economic

health.

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Domestic Net Migration

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•

Upstate

Market

continues

to

benefit

from

BMW/ICAR

expansion

and

new

industrial

announcements

•

Upstate

unemployment

situation

superior

to

much

of

South

Carolina

•

Housing

supply

and

demand

balance

relatively

stable

Comments on

Upstate S.C. Markets

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•

Greer

population

growth

ranks

as

one

of

South

Carolina’s

fastest

growing

markets

•

Solid

outlook

for

continued

and

significant

industrial

and

retail

expansions

in

our

local

market

•

Significant

growth

and

opportunity

in

the

healthcare

segment

of

our

market,

with

the

new

regional

campuses

of

Greenville

Hospital

System

and

Spartanburg

Regional

Medical

Center

•

Greer

housing

starts

more

than

double

that

of

Greenville,

Simpsonville

or

Mauldin

•

Demographic

shift

to

a

younger,

more

affluent

population

Comments on

Greer Markets

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2007 Income Statement Snapshot

Net Income:

$2,606M

Basic EPS:

$1.05/share

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Greer State Bank

Balance Sheet Trends

12/31/2006

•

Assets =

$359 M

•

Deposits =     $240 M

•

Loans =         $244 M

•

Capital =       $22.5 M

•

Book Value =  $ 9.12          $ 9.85          + 8%

•

Investments = $84 M

•

Borrowings =  $92 M

12/31/2007      Change

•

$390 M =     + 8.6%

•

$244 M =     + 1.7%

•

$261 M =     + 7%

•

$22.4 M =    + 4%

•

•

$99 M =       + 17.9%

•

$116 M =     + 26.1%

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Loan Losses

2007:

$1,298M

1989 –

2007:

$3,142M

Average Per Year:

$165M

Average excluding ABL credits:  $62M/year

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2004

Five Year

Independence Assurance Plan

Total Assets

Target 12/31/09

$425M

Actual 12/31/07

$390M

Actual 3/31/08

$405M

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Retail Banking Highlights

Greg Sisk –

Senior Vice President

•

Development and roll-out of

•

Addition of Manager Carole Stroud to our Retail Team at

the Poinsett Main Office

•

Implementation of phone shops of Greer State Bank and

competition to benchmark and monitor service quality

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•

Implemented 11/07

•

$2.6MM in current deposit balances

•

223 accounts

Client Benefits

•

Preferred interest rate

•

Nationwide ATM access

GSB Benefit

•

Savings associated with monthly statement

preparation and mailing   

•

More permanent accounts by virtue of auto

draft/auto deposit feature

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Commercial Banking Highlights

Manager Vic Grout, EVP

PRODUCTION:

12/31/06

12/31/07

Change

Commercial

Loan Outstandings

$176,809M

$190,761M          $13,952M

Fee Income

$785M

$819M

$34M

•

Addition of seasoned bankers in Tim Lincolnhol

and Jim Boyd

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Mortgage Banking Highlights

Manager Bill Harrill, SVP

PRODUCTION OVERVIEW:

2006

2007

Originations

$24,745M

$32,008M

Fee Income

$281M

$354M

Q1 2007

Q1 2008

Originations

$6,234M

$7,642M

Fee Income

$67M

$94M

•

Addition of a highly experienced construction lender in

Scott Presley

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Greer Financial Services

Manager John Gifford, Vice President

2007

Revenue Contribution

$697M

2008

Revenue Target

$750M

Key Initiatives:

•

Implement advisor-oriented financial services practice

•

Emphasize additional non-interest fee income areas including personal

and business insurance; and corporate and small business retirement

plans

•

Enhance relationships with both Commercial and Retail Banking

operations to further solidify client experience

•

Strengthen existing client relationships by adding value through

comprehensive financial planning

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Batesville Road

Loan Production Office

•

Opened August 2007

•

Staffed by 3 professionals

•

Total Loans Outstanding as of 3/31/08: 

$10,878M

•

Year-to-date Fee Income through 3/31/08:

$42M

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2008 Areas of Focus

•

Measured, quality loan growth

•

Appropriately monitor, maintain and manage

existing credit portfolio

•

Continue to leverage technology and our existing

branch/LPO network

–

VOIP Conversion

–

Server Consolidation

–

New Deposit Platform System

•

Non-Interest Expense Control

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IN MEMORIAM

JOE

COPELAND

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CLOSING COMMENTS

David Rogers

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QUESTIONS

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Thank You For Your Support

GRBS.OB

greerstatebank.com