Green Bankshares (GRNB) 8-K Results of Operations and Financial Condition

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

GREEN BANKSHARES REPORTS RESULTS FOR

FOURTH QUARTER AND FULL YEAR 2010

GREENEVILLE, Tenn. (February 1, 2011) – Green Bankshares, Inc. (NASDAQ:GRNB), the holding company for GreenBank, today reported results for the fourth quarter and year ended December 31, 2010.  These results included a net loss available to common shareholders of $52.8 million or $4.03 per diluted share for the quarter ended December 31, 2010, compared with a net loss available to common shareholders of $76,000 or $0.01 per diluted share for the same quarter a year ago.  The Company also reported a net loss available to common shareholders of $85.7 million or $6.54 per diluted share for the full year 2010 compared with a net loss available to common shareholders of $155.7 million or $11.91 per diluted share for the full year 2009.

The fourth quarter and full year results for 2010 reflected tax expense of $10.7 million or $0.82 per diluted share and $14.9 million or $1.14 per diluted share, respectively, despite the pre-tax loss before income taxes.  These income tax provisions primarily reflected non-cash charges to record a valuation allowance for deferred tax assets under accounting rules.  The year ended December 31, 2009, included a non-recurring, non-cash goodwill impairment charge of $143.4 million recorded in the second quarter of 2009.  In light of these charges, the Company believes that the most meaningful year-to-year performance comparison can be made on the basis of pre-tax income excluding the goodwill impairment charge.  On this basis, the Company's adjusted pre-tax loss for 2010 was $65.8 million versus a pre-tax loss of $24.3 million for 2009 (please refer to the non-GAAP financial measures reconciliation on page 6).

Stephen M. Rownd, Chairman and Chief Executive Officer, commented, "Our fourth quarter and the full year results for 2010 reflected a continuation of elevated credit costs incurred by virtue of higher loan loss provisions, as well as increased expenses associated with the revaluation and disposition of foreclosed properties. We continue to deal aggressively with asset quality issues in this difficult economic environment.  Although we have devoted significant attention to our asset quality issues, including having segregated these assets in our Special Assets Group so that we may diligently work through the resolution of each on an asset-by-asset basis, we are also seeking to improve the core earnings of the Company.

"Although the economic recovery in most of our markets remains uneven and more sluggish than anticipated, we remain committed to returning the Company to profitability as quickly and prudently as possible," Rownd continued.  "We believe our continued actions to segregate and dispose of problem assets will help us achieve that goal.  In our view, core fundamentals of the Company are strong; however, we remain cautious at this time due to the instability of and downward pressure on real estate values in our markets, and we realize that the elevated levels of non-performing assets will affect our ability to experience the full effects of any economic recovery immediately."

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Green Bankshares, Inc. ▪ 100 North Main Street ▪ Greeneville, TN  37743 ▪ (423) 639-5111

GRNB Reports Fourth Quarter Results

Page 2

February 1, 2011

As a result of the fourth quarter loss for 2010, the Bank's capital ratios declined as noted below, remaining above the statutory minimums necessary to be deemed a well-capitalized financial institution, but dropping below the Tier 1 leverage ratio of 10.0% and the Total Risk-based Capital Ratio of 14.0% that the Bank had informally committed to its regulators that it would maintain as discussed further in the Company's Form 10-Q for the third quarter of 2010.

Estimated capital levels: (see the non-GAAP measurement reconciliation on page 6 regarding tangible equity and book value per share)

Consolidated:		4Q10			3Q10			2Q10			1Q10			4Q09
Tangible common book value per share	$	5.23		$	9.30		$	11.95		$	11.71		$	11.44
Tangible common equity to assets ratio		2.88	%		5.09	%		6.25	%		6.03	%		5.77	%
Bank Regulatory Ratios:
Tier 1 leverage ratio		8.88	%		10.78	%		11.86	%		11.55	%		10.70	%
Tier 1 risk-based capital ratio		11.94	%		13.53	%		14.73	%		14.06	%		13.61	%
Total risk-based capital ratio		13.22	%		14.80	%		15.99	%		15.33	%		14.87	%

Net interest income:

(dollars in thousands)		4Q10			3Q10			2Q10			1Q10			4Q09
Net interest income	$	19,714		$	20,747		$	21,473		$	21,659		$	20,578
Net interest margin		3.77	%		3.90	%		3.86	%		3.90	%		3.37	%
Average earning assets	$	2,094,399		$	2,130,339		$	2,248,240		$	2,271,550		$	2,445,872

·   Both net interest income and the net interest margin for the fourth quarter of 2010 were adversely affected by loan interest reversals totaling approximately $734 as $61,867 of loans were moved to non-accrual status.  Excluding interest reversals, net interest margin would have been 3.91% for the fourth quarter of 2010.

Credit quality:

Summary:

(dollars in thousands)		4Q10			3Q10			2Q10			1Q10			4Q09
Net loan charge-offs	$	9,139		$	36,549		$	4,868		$	3,882		$	6,437
New non-accrual loans added	$	61,867		$	111,868		$	22,415		$	14,442		$	31,111
Reserves to total loans		3.83	%		2.74	%		2.60	%		2.52	%		2.45	%
Non-performing assets	$	205,914		$	197,159		$	141,915		$	135,366		$	132,726

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GRNB Reports Fourth Quarter Results

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February 1, 2011

Changes in non-performing assets:

(dollars in thousands)	Non-accrual Loans			OREO			Past Due > 90 days		Total (1)
September 30, 2010	$	122,490		$	73,699		$	970	$	197,159
Loan foreclosures		(15,418	)		15,418			n/a		n/a
Gross loan charge-offs		(10,570	)		n/a			n/a		(10,570	)
New non-accrual loans		61,867			n/a			n/a		61,867
Reduction of non-accrual loans		(14,662	)		n/a			n/a		(14,662	)
Other real estate owned (OREO) sales proceeds		n/a			(7,100	)		n/a		(7,100	)
OREO write-downs, net		n/a			(21,922	)		n/a		(21,922	)
Change in past due > 90 days		n/a			n/a			1,142		1,142
December 31, 2010	$	143,707		$	60,095		$	2,112	$	205,914

(1)           On average, all non-performing assets have been written down almost 34%.

Loan portfolio migration:

							Dec. 31, 2010 from Dec. 31, 2009
(Dollars in thousands)	Dec. 31, 2010		Sept. 30, 2010		Dec. 31, 2009		Change			% Change
Commercial real estate portfolio:
Acquisition & development	$	133,947	$	145,500	$	185,087	$	(51,140	)		(27.6	)%
Lot warehouse		42,796		46,306		66,104		(23,308	)		(35.3	)%
Commercial 1-4 family construction		31,511		41,847		70,434		(38,923	)		(55.3	)%
Total speculative 1-4 family		208,254		233,653		321,625		(113,371	)		(35.3	)%
Commercial vacant land		77,081		84,321		101,679		(24,598	)		(24.2	)%
Commercial construction non-owner occupied		76,568		100,364		164,887		(88,319	)		(53.6	)%
Commercial construction owner occupied		5,407		5,454		28,213		(22,806	)		(80.8	)%
Consumer residential construction		14,161		13,801		19,073		(4,912	)		(25.6	)%
Total construction and development		173,217		203,940		313,852		(140,635	)		(44.8	)%
Non-owner occupied commercial real estate		427,291		439,519		397,028		30,263			7.6	%
Total commercial real estate	$	808,762	$	877,112	$	1,032,505	$	(223,743	)		(21.7	)%

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GRNB Reports Fourth Quarter Results

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February 1, 2011

The following information graphically displays the consolidated loan portfolio by purpose code as of December 31, 2010:

Non-interest income totaled approximately $7.1 million for the fourth quarter of 2010, down from $8.1 million from the fourth quarter of 2009.  This 13% decline primarily reflected a reduced level of service charges on deposit accounts.  During the fourth quarter, the Company refunded approximately $1.4 million of overdraft charges, related to point of sale debit card transactions and ATM transactions, assessed on specific accounts where customers had verbally agreed to "opt-in" to the overdraft protection program, but had not yet signed an "opt-in" agreement.  For the year, non-interest income totaled $32.5 million compared with $31.6 million for the same period last year, representing an increase of 3% due to higher service charges, trust and investment services income, and lower other-than-temporary im pairment charges on investments.  The increased level of service charges for 2010 reflected the ongoing success of GreenBank's High Performance Checking product, which added 14,269 net new checking account customers during 2010, for a new account opening ratio of 2.05 new accounts for each account closed.

Non-interest expense totaled approximately $42.0 million for the fourth quarter of 2010,   compared with $20.5 million for the fourth quarter ended December 31, 2009.  Non-interest expense for 2010 totaled $110.8 million compared with $86.2 million for 2009, excluding a one-time, non-cash goodwill impairment charge of $143.4 million (please refer to the non-GAAP measures reconciliation on page 6).  The principal contributor to both quarterly and yearly non-interest expenses were increased losses incurred on the sale or revaluation of OREO and repossessed assets as the Company remained active in the disposal of these assets.

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GRNB Reports Fourth Quarter Results

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February 1, 2011

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, as updated by the Company's quarterly reports for the quarters ended March 31, 2010, June 30, 2010, and September 30, 2010, 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 (the "CPP") 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 W all Street Reform and Consumer Protection Act, arising out of current unsettled conditions in the economy (9) the results of regulatory examinations; (10) increased competition with other financial institutions in the markets that GreenBank serves; (11) the Company recording a further valuation allowance related to its deferred tax asset; (12) exploring alternatives available for the future repayment or conversion of the preferred stock issued in the CPP; (13) further deterioration in the valuation of OREO; (14) inability to comply with regulatory capital requirements and to secure any required regulatory approvals for capital actions to raise capital if necessary to comply with any regulatory capital requirements; and (15) the loss of key personnel.  The Company undertakes no obligation to update forward-looking statements.

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GRNB Reports Fourth Quarter Results

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February 1, 2011

GREEN BANKSHARES, INC.

Reconciliation of Non-GAAP Measures Presented in Earnings Release

(In thousands)

	Three Months Ended								Year Ended
	Dec. 31, 2010			Sept. 30, 2010			Dec. 31, 2009		Dec. 31, 2010			Dec. 31, 2009
Income (loss) before income taxes	$	(40,860	)	$	(34,056	)	$	1,833	$	(65,785	)	$	(167,730	)
Goodwill impairment charge		--			--			--		--			143,389
Adjusted pre-tax loss	$	(40,860	)	$	(34,056	)	$	1,833	$	(65,785	)	$	(24,341	)
Total non-interest expense	$	41,986		$	27,009		$	20,477	$	110,815		$	229,587
Goodwill impairment charge		--			--			--		--			(143,389	)
Operating expenses	$	41,986		$	27,009		$	20,477	$	110,815		$	86,198

	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			Mar. 31, 2010			Dec. 31, 2009
Total shareholders' equity	$	143,897		$	197,824		$	233,150		$	230,189		$	226,769
Less:
Core deposit and other intangibles		(6,751	)		(7,398	)		(8,044	)		(8,684	)		(9,335	)
Preferred stock		(68,121	)		(67,775	)		(67,428	)		(67,081	)		(66,735	)
Tangible common equity	$	69,025		$	122,651		$	157,678		$	154,424		$	150,699
Tangible common book value per share	$	5.23		$	9.30		$	11.95		$	11.71		$	11.44
Total assets	$	2,406,040		$	2,415,014		$	2,529,332		$	2,569,732		$	2,619,139
Less:
Core deposit and other intangibles		(6,751	)		(7,398	)		(8,044	)		(8,684	)		(9,335	)
Total tangible assets	$	2,399,289		$	2,407,616		$	2,521,288		$	2,561,048		$	2,609,804
Tangible common equity to assets ratio		2.88	%		5.09	%		6.25	%		6.03	%		5.77	%

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 perf ormance 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 normal operating expenses, apart from goodwill impairment, to ensure that the Company's operating results are properly reflected for period to period comparisons.

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GRNB Reports Fourth Quarter Results

Page 7

February 1, 2011

GREEN BANKSHARES, INC.

Unaudited Financial Highlights

(In thousands, except per share amounts)

	Three Months Ended									Year Ended
	Dec. 31, 2010			Sept. 30, 2010			Dec. 31, 2009			Dec. 31, 2010			Dec. 31, 2009
Interest income	$	28,213		$	29,455		$	33,424		$	120,864		$	138,456
Interest expense		8,499			8,708			12,846			37,271			57,931
Net interest income		19,714			20,747			20,578			83,593			80,525
Provision for loan losses		25,646			36,823			6,402			71,107			50,246
Net interest income (loss) after provision for loan losses		(5,932	)		(16,076	)		14,176			12,486			30,279
Non-interest income		7,058			9,029			8,134			32,544			31,578
Non-interest expense		41,986			27,009			20,477			110,815			229,587
Income (loss) before income taxes		(40,860	)		(34,056	)		1,833			(65,785	)		(167,730	)
Income tax provision (benefit)		10,688			1,098			659			14,910			(17,036	)
Income (loss)		(51,548	)		(35,154	)		1,174			(80,695	)		(150,694	)
Preferred stock dividends and related cost		1,250			1,251			1,250			5,001			4,982
Net income (loss) available to common shareholders	$	(52,798	)	$	(36,405	)	$	(76	)	$	(85,696	)	$	(155,676	)
Comprehensive income (loss)	$	(53,173	)	$	(34,583	)	$	120		$	(79,885	)	$	(149,842	)
Earnings (loss) per common share:
Basic	$	(4.03	)	$	(2.78	)	$	(0.01	)	$	(6.54	)	$	(11.91	)
Diluted 1	$	(4.03	)	$	(2.78	)	$	(0.01	)	$	(6.54	)	$	(11.91	)
Weighted average common  shares:
Basic		13,098			13,098			13,070			13,094			13,068
Diluted		13,098			13,098			13,070			13,094			13,068

	Dec. 31, 2010			Sept. 30, 2010			Dec. 31, 2009
Total assets	$	2,406,040		$	2,415,014		$	2,619,139
Cash and cash equivalents		294,214			206,391			210,494
Investment and other securities		215,201			178,307			172,084
Loans, net of unearned interest		1,745,378			1,835,591			2,043,807
Allowance for loan losses		(66,830	)		(50,322	)		(50,161	)
Deposits		1,976,854			1,916,544			2,084,096
Shareholders' equity		143,897			197,824			226,769
Common shareholders' equity 2		75,776			130,049			160,034
Tangible common shareholders' equity 3		69,025			122,651			150,699
Common book value per share 2		5.75			9.86			12.15	��
Tangible common book value per share 3		5.23			9.30			11.44

1 Diluted weighted average shares outstanding exclude 92,674, 94,267 and 101,258 restricted average shares for the three-month periods ended December 31, 2010, September 30, 2010, and December 31, 2009, respectively, and exclude 92,979, 93,242 and 96,971 restricted average shares for the twelve, nine and twelve-month periods ended December 31, 2010, September 30, 2010, and December 31, 2009, 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 intangible assets and preferred stock.

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GREEN BANKSHARES, INC.
Consolidated Balance Sheets
December 31, 2010, September 30, 2010, and December 31, 2009
(Dollars in thousands)
	(Unaudited)			(Unaudited)			(Unaudited)
	December 31,			September 30,			December 31,
	2010			2010				2009*
ASSETS
Cash and due from banks	$	289,358		$	202,709		$	206,701
Federal funds sold		4,856			3,682			3,793
Cash and cash equivalents		294,214			206,391			210,494
Interest earning deposits in other banks		-			1,014			11,000
Securities available-for-sale ("AFS")		202,002			163,964			147,724
Securities held-to-maturity (with a market value of $467, $603, and $638
on December 31, 2010, September 30, 2010, and December 31, 2009)		465			595			626
FHLB and other stock, at cost		12,734			12,734			12,734
Loans held for sale		1,299			2,091			1,533
Loans, net of unearned income		1,745,378			1,835,591			2,043,807
Allowance for loan losses		(66,830	)		(50,322	)		(50,161	)
Other real estate owned and repossessed assets		60,095			73,699			57,168
Bank premises and equipment, net		78,794			79,657			81,818
Cash surrender value of life insurance		31,479			31,171			30,277
Goodwill		-			-			-
Core deposit and other intangibles		6,751			7,398			9,335
Deferred Tax Asset (net of valuation allowance of $43,455, $14,618, and $0
on December 31, 2010, September 30, 2010, and December 31, 2009)		14,848			24,422			13,600
Other assets		24,811			26,609			49,184
Total assets	$	2,406,040		$	2,415,014		$	2,619,139
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest-bearing deposits	$	152,752		$	165,642		$	177,602
Interest-bearing deposits		1,822,703			1,749,503			1,899,910
Brokered deposits		1,399			1,399			6,584
Total deposits		1,976,854			1,916,544			2,084,096
Repurchase agreements		19,413			22,641			24,449
FHLB advances and notes payable		158,653			170,884			171,999
Subordinated debentures		88,662			88,662			88,662
Accrued interest payable and other liabilities		18,561			18,459			23,164
Total liabilities		2,262,143			2,217,190			2,392,370
SHAREHOLDERS' EQUITY
Preferred stock: no par value, 1,000,000 shares authorized;
72,278, 72,278 and 72,278 shares outstanding		68,121			67,775			66,735
Common stock: $2 par value, 20,000,000 shares authorized;
13,188,896, 13,190,300, and 13,171,474 shares outstanding		26,378			26,381			26,343
Common stock warrants		6,934			6,934			6,934
Additional paid in capital		188,901			188,749			188,310
Retained earnings (deficit)		(147,436	)		(94,638	)		(61,742	)
Accumulated other comprehensive income		999			2,623			189
Total shareholders' equity		143,897			197,824			226,769
Total liabilities & shareholders' equity	$	2,406,040		$	2,415,014		$	2,619,139
* Derived from Audited Consolidated Financial Statements.

GREEN BANKSHARES, INC.
Consolidated Statements of Income and Comprehensive Income
Three Months Ended December 31, 2010, September 30, 2010, and December 31, 2009 and Twelve Months Ended December 31, 2010 and 2009
(Unaudited)
(Dollars in thousands except share and per share data)
	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2010			2010			2009			2010			2009
Interest income:
Interest and fees on loans	$	26,543		$	27,744		$	31,480		$	113,721		$	129,212
Taxable securities		1,078			1,181			1,303			4,938			7,035
Nontaxable securities		319			304			311			1,241			1,260
FHLB and other stock		122			136			137			530			573
Federal funds sold and other		151			90			193			434			376
Total interest income		28,213			29,455			33,424			120,864			138,456
Interest expense:
Deposits		6,303			6,444			10,124			28,434			45,768
Federal funds purchased and repurchase agreements		5			6			7			22			29
FHLB advances and notes payable		1,703			1,726			2,229			6,835			9,557
Subordinated debentures		488			532			486			1,980			2,577
Total interest expense		8,499			8,708			12,846			37,271			57,931
Net interest income		19,714			20,747			20,578			83,593			80,525
Provision for loan losses		25,646			36,823			6,402			71,107			50,246
Net interest income (loss) after provision for loan losses		(5,932	)		(16,076	)		14,176			12,486			30,279
Non-interest income:
Service charges on deposit accounts		4,896			6,651			6,141			24,179			23,738
Other charges and fees		635			417			540			1,791			1,999
Trust and investment services income		482			1,021			505			2,842			1,977
Mortgage banking income		250			212			91			703			383
Other income		795			728			619			3,122			3,042
Securities gains (losses), net
Realized gains (losses), net		-			-			482			-			1,415
Other-than-temporary impairment		-			-			(719	)		(553	)		(1,678	)
Less non-credit portion recognized in other comprehensive income		-			-			475			460			702
Total securities gains (losses), net		-			-			238			(93	)		439
Total non-interest income		7,058			9,029			8,134			32,544			31,578
Non-interest expense:
Employee compensation		8,087			8,266			7,540			31,990			30,611
Employee benefits		769			816			785			3,378			3,835
Occupancy expense		1,733			1,792			1,695			6,908			6,956
Equipment expense		728			742			694			2,846			3,092
Computer hardware/software expense		897			916			793			3,523			2,816
Professional services		853			741			676			2,777			2,108
Advertising		327			657			473			2,388			1,894
OREO maintenance expense		613			712			411			2,324			1,222
Collection and repossession expense		899			508			1,347			3,228			3,131
Loss on OREO and repossessed assets		21,922			6,538			1,151			29,895			8,156
FDIC insurance		996			1,099			891			4,155			4,960
Core deposit and other intangible amortization		647			646			646			2,584			2,750
Goodwill impairment		-			-			-			-			143,389
Other expenses		3,515			3,576			3,375			14,819			14,667
Total non-interest expense		41,986			27,009			20,477			110,815			229,587
Income (loss) before income taxes		(40,860	)		(34,056	)		1,833			(65,785	)		(167,730	)
Income taxes provision (benefit)		10,688			1,098			659			14,910			(17,036	)
Net income (loss)		(51,548	)		(35,154	)		1,174			(80,695	)		(150,694	)
Preferred stock dividends and accretion of discount on warrants		1,250			1,251			1,250			5,001			4,982
Net income (loss) available to common shareholders	$	(52,798	)	$	(36,405	)	$	(76	)	$	(85,696	)	$	(155,676	)
Comprehensive income (loss)	$	(53,173	)	$	(34,583	)	$	120		$	(79,885	)	$	(149,842	)
Per share of common stock:
Basic earnings (loss)	$	(4.03	)	$	(2.78	)	$	(0.01	)	$	(6.54	)	$	(11.91	)
Diluted earnings (loss)	$	(4.03	)	$	(2.78	)	$	(0.01	)	$	(6.54	)	$	(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			13,093,847			13,068,407
Diluted(1)		13,097,611			13,097,611			13,070,216			13,093,847			13,068,407
(1)Diluted weighted average shares outstanding exclude 92,674, 94,267 and 101,258 of the restricted average shares for the three month periods ended December 31, 2010, September 30, 2010 and December 31, 2009 and exclude 92,979, 93,242 and 96,971 of the restricted average shares for the twelve and nine month periods ended December 31, 2010, September 30, 2010 and December 31, 2009 because their impact would be anti-dilutive.

GREEN BANKSHARES, INC.

Consolidated Financial Highlights

(UNAUDITED)

(Dollars in thousands except share and per share data)
	December 31,			December 31,			%
	2010			2009			Change
Financial Condition Data:
Assets	$	2,406,040		$	2,619,139			-8.14	%
Loans, net of unearned interest		1,745,378			2,043,807			-14.60	%
Cash and investments		509,415			382,578			33.15	%
Federal funds sold		4,856			3,793			28.03	%
Deposits		1,976,854			2,084,096			-5.15	%
FHLB advances and notes payable		158,653			171,999			-7.76	%
Subordinated debentures		88,662			88,662			0.00	%
Repurchase agreements		19,413			24,449			-20.60	%
Shareholders' equity		143,897			226,769			-36.54	%
Common shareholders' equity (1)		75,776			160,034			-52.65	%
Tangible common shareholders' equity (2)		69,025			150,699			-54.20	%
Tangible shareholders' equity (3)		137,146			217,434			-36.93	%
Ratios:
Common book value per share (1)	$	5.75		$	12.15			-52.67	%
Tangible common book value per share (2)	$	5.23		$	11.44			-54.28	%
Total tangible equity to tangible assets (3)(4)		5.72	%		8.33	%		-31.39	%
Tangible common equity to tangible assets (2)(4)		2.88	%		5.77	%		-50.18	%
Average equity to average assets		8.85	%		11.09	%		-20.20	%
(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									Twelve Months Ended
	December 31,									December 31,
	2010			2009			% Change			2010			2009			% Change
Operating Data:
Total interest income	$	28,213		$	33,424			-15.59	%	$	120,864		$	138,456			-12.71	%
Total interest expense		8,499			12,846			-33.84	%		37,271			57,931			-35.66	%
Net interest income		19,714			20,578			-4.20	%		83,593			80,525			3.81	%
Provision for loan losses		25,646			6,402			300.59	%		71,107			50,246			41.52	%
Net interest income (loss) after provision for loan losses		(5,932	)		14,176			-141.85	%		12,486			30,279			-58.76	%
Non-interest income		7,058			8,134			-13.23	%		32,544			31,578			3.06	%
Non-interest expense		41,986			20,477			105.04	%		110,815			229,587			-51.73	%
Income (loss) before income taxes		(40,860	)		1,833			-2329.13	%		(65,785	)		(167,730	)		60.78	%
Income tax expense (benefit)		10,688			659			1521.85	%		14,910			(17,036	)		187.52	%
Net income (loss)		(51,548	)		1,174			-4490.80	%		(80,695	)		(150,694	)		46.45	%
Preferred stock dividend and accretion of discount on warrants		1,250			1,250			0.00	%		5,001			4,982			0.38	%
Net income (loss) available to common shareholders	$	(52,798	)	$	(76	)		-69371.05	%	$	(85,696	)	$	(155,676	)		44.95	%
Comprehensive income (loss)	$	(53,173	)	$	120			-44410.83	%	$	(79,885	)	$	(149,842	)		46.69	%
Per Share of Common Stock:
Basic earnings (loss)	$	(4.03	)	$	(0.01	)		-40200.00	%	$	(6.54	)	$	(11.91	)		45.09	%
Diluted earnings (loss)	$	(4.03	)	$	(0.01	)		-40200.00	%	$	(6.54	)	$	(11.91	)		45.09	%
Dividends	$	0.00		$	0.00			0.00	%	$	0.00		$	0.13			-100.00	%
Weighted Average Shares Outstanding:
Basic		13,097,611			13,070,216						13,093,847			13,068,407
Diluted		13,097,611			13,070,216						13,093,847			13,068,407

	Three Months Ended			Twelve Months Ended
	December 31,	September 30,	December 31,	December 31,
	2010	2010	2009	2010	2009
Key Financial Ratios:
Return on average assets	-8.54%	-5.86%	-0.01%	-3.41%	-5.59%
Return on average shareholders' equity	-108.58%	-62.23%	-0.13%	-38.56%	-50.44%
Return on average common shareholders' equity (1)	-167.55%	-87.78%	-0.19%	-55.35%	-64.25%
Return on average common tangible shareholders'  equity (2)	-177.12%	-91.91%	-0.20%	-58.32%	-96.77%
Interest rate spread	3.76%	3.83%	3.26%	3.79%	3.19%
Net interest margin	3.77%	3.90%	3.37%	3.86%	3.34%
Efficiency Ratio	156.83%	90.71%	71.32%	95.42%	204.80%
(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.

	December 31,			September 30,			December 31,
	2010			2010			2009
Asset Quality Ratios:
Nonperforming loans as a percentage of total loans,
net of unearned income		8.35	%		6.73	%		3.70	%
Nonperforming assets as a percentage of total assets		8.56	%		8.16	%		5.07	%
Allowance for loan losses as a percentage of total loans,
net of unearned income		3.83	%		2.74	%		2.45	%
Allowance for loan losses as a percentage of
nonperforming loans		45.83	%		40.76	%		66.39	%
Net charge-offs to average total loans, net of
unearned income		2.84	%		2.31	%		2.25	%

GREEN BANKSHARES, INC.

Consolidated Financial Highlights

December 31, 2010

(UNAUDITED)

Nonperforming Assets and Net Charge-offs							Asset Quality Ratios
As of and for the year ended December 31, 2010	Bank		Other		Total		As of and for the year ended December 31, 2010	Bank			Other			Consolidated
Loans past due 90 days and still accruing	$	2,094	$	18	$	2,112	Nonperforming loans as a percentage of total loans, net of unearned income		8.40	%		1.30	%		8.35	%
Nonaccrual loans		143,153		554		143,707	Nonperforming assets as a percentage of total assets		8.34	%		9.84	%		8.56	%
Other real estate owned and repossessed assets		55,164		4,931		60,095	Allowance for loan losses as a percentage of total loans, net of unearned income		3.68	%		7.33	%		3.83	%
Total nonperforming assets	$	200,411	$	5,503	$	205,914	Allowance for loan losses as a percentage of nonperforming loans		43.80	%		562.24	%		45.83	%
							YTD net charge-offs to average total loans, net of unearned income		2.76	%		4.20	%		2.84	%
YTD net charge-offs	$	52,615	$	1,823	$	54,438
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
December 31, 2010
	Three Months Ended														Twelve Months Ended
	December 31,														December 31,
	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)		1,676,376		26,558		6.29	%		2,009,041		31,502		6.22	%		1,833,865		113,788		6.20	%		2,096,181		129,272		6.17	%
Investment securities (2)		180,047		1,690		3.72	%		161,588		1,918		4.71	%		180,681		7,376		4.08	%		189,377		9,546		5.04	%
Other short-term investments		237,976		152		0.25	%		275,243		193		0.28	%		170,952		435		0.25	%		147,918		376		0.25	%
Total interest-earning assets		2,094,399		28,400		5.38	%		2,445,872		33,613		5.45	%		2,185,498		121,599		5.56	%		2,433,476		139,194		5.72	%
Non-interest earning assets		357,387							290,294							325,948							349,179
Total assets		2,451,786							2,736,166							2,511,446							2,782,655
Interest-bearing liabilities:
Deposits:
Interest checking, money market and savings		1,018,134		2,517		0.98	%		907,257		2,521		1.10	%		980,878		9,924		1.01	%		784,135		10,078		1.29	%
Time deposits		778,060		3,786		1.93	%		1,096,099		7,603		2.75	%		841,458		18,510		2.20	%		1,166,640		35,690		3.06	%
Total interest bearing-deposits		1,796,194		6,303		1.39	%		2,003,356		10,124		2.00	%		1,822,336		28,434		1.56	%		1,950,775		45,768		2.35	%
Securities sold under repurchase and short-term borrowings		20,848		5		0.10	%		25,631		7		0.11	%		22,338		22		0.10	%		28,049		29		0.10	%
Notes payable		169,910		1,703		3.98	%		206,324		2,229		4.29	%		171,229		6,835		3.99	%		221,282		9,557		4.32	%
Subordinated debentures		88,662		488		2.18	%		88,662		486		2.17	%		88,662		1,980		2.23	%		88,662		2,577		2.91	%
Total interest-bearing liabilities		2,075,614		8,499		1.62	%		2,323,973		12,846		2.19	%		2,104,565		37,271		1.77	%		2,288,768		57,931		2.53	%
Non-interest bearing liabilities:
Demand Deposits		167,201							159,951							166,814							162,765
Other Liabilities		16,060							22,834							17,854							22,477
Total non-interest bearing liabilities		183,261							182,785							184,668							185,242
Total liabilities		2,258,875							2,506,758							2,289,233							2,474,010
Shareholders' equity		192,911							229,408							222,213							308,645
Total liabilities & shareholders' equity		2,451,786							2,736,166							2,511,446							2,782,655
Net interest income				19,901							20,767							84,328							81,263
Interest rate spread						3.76	%						3.26	%						3.79	%						3.19	%
Net yield on interest- earning assets (net interest margin)						3.77	%						3.37	%						3.86	%						3.34	%
(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

December 31, 2010

(UNAUDITED)

	December 31, 2010						September 30, 2010
Loans	Balance			%			Balance			%			% Change
Commercial	$	222,927			12.67	%	$	240,314			13.14	%		-7.24	%
Commercial real estate		1,080,805			61.41	%		1,143,654			62.92	%		-5.50	%
Residential real estate		378,783			21.52	%		385,950			19.78	%		-1.86	%
Consumer		75,498			4.29	%		76,792			4.04	%		-1.69	%
Other		1,913			0.11	%		3,440			0.13	%		-44.39	%
Total loans		1,759,926			100.00	%		1,850,150			100.00	%		-4.88	%
Less: Unearned income		(14,548	)					(14,559	)
Loans, net of unearned income	$	1,745,378					$	1,835,591
Loan Balances by Geographical Region and Operating Subsidiaries
	December 31, 2010						September 30, 2010
	Loan			% to			Loan			% to
	Balance			Total Loans			Balance			Total Loans			% Change
Northeastern Tennessee Region(1)	$	522,218			29.92	%	$	526,219			28.93	%		-0.76	%
East Tennessee Region		508,269			29.12	%		563,997			30.98	%		-9.88	%
Middle Tennessee Region		671,005			38.45	%		701,925			37.83	%		-4.41	%
GCB Acceptance Corporation		19,062			1.09	%		19,104			1.00	%		-0.22	%
Superior Financial Services, Inc.		24,824			1.42	%		24,346			1.27	%		1.96	%
Loans, net of unearned income	$	1,745,378			100.00	%	$	1,835,591			100.00	%		-4.91	%
(1) Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina

	December 31, 2010					September 30, 2010
Deposits	Balance		%			Balance		%			% Change
Non-interest bearing demand	$	152,752		7.73	%	$	165,642		8.56	%		-7.78	%
Interest bearing demand		695,451		35.18	%		673,904		33.49	%		3.20	%
Money market and savings		345,565		17.47	%		324,161		15.39	%		6.60	%
Retail time		473,386		23.95	%		463,800		25.95	%		2.07	%
Jumbo time		309,700		15.67	%		289,037		16.61	%		7.15	%
Total	$	1,976,854		100.00	%	$	1,916,544		100.00	%		3.15	%
Deposit Balances by Geographical Region
	December 31, 2010					September 30, 2010
	Balance		%			Balance		%			% Change
Northeastern Tennessee Region(1)	$	712,676		36.05	%	$	694,111		36.39	%		2.67	%
East Tennessee Region		323,481		16.36	%		314,773		16.09	%		2.77	%
Middle Tennessee Region		940,697		47.59	%		907,660		47.52	%		3.64	%
Total	$	1,976,854		100.00	%	$	1,916,544		100.00	%		3.15	%
(1) Includes one branch located in Southwestern Virginia and one branch located in Northwestern North Carolina