EXHIBIT 99.1
(CIVITAS BANKGROUP LOGO)
810 Crescent Centre Drive, Suite 320
Franklin, TN 37067
office 615.263.9500 fax 615.383.8830
FOR IMMEDIATE RELEASE Contact: Mike Alday
Alday Communications
615.791.1535
CIVITAS REPORTS INCREASE IN PROFITS
FRANKLIN, Tenn. (August 5, 2004) - Civitas BankGroup (OTC: CVBG) reported a
significant increase in net income and continued progress in the area of problem
loans during the first six months of 2004.
For the first half of 2004, Civitas BankGroup earned $1,367,000 compared to a
net income of $57,000 for the same period in 2003. On a per share basis, the
2004 net income was $.08.
For the second quarter of 2004, Civitas BankGroup earned $613,000 compared to a
net loss of $345,000 for the same period in 2003. On a per share basis, the
second quarter 2004 net income was $.04. The company earned $754,000 or $.04 per
share in the first quarter of 2004.
Non-performing assets (non-accrual loans and foreclosed properties) at Civitas
BankGroup decreased to $17.7 million at June 30, 2004, a drop of $2.3 million
from March 31, 2004. Problem assets peaked at $26.1 million at September 30,
2002.
"The turnaround in profits is encouraging, but our two primary short-term
objectives continue to be the resolution of problem assets and the creation of
operating economies of scale," explained Richard E. Herrington, President of
Civitas BankGroup. "Non-performing assets peaked in September 2002, and we are
methodically working through the liquidation process. However, progress is slow
in some areas, particularly in West Tennessee."
In addition, growth remained strong at Civitas BankGroup. As of June 30, 2004,
assets totaled $839 million, an increase of 8.4% from June 30, 2003 total
assets. However, loans continued to decline during the second quarter of 2004,
due to the sale of a branch and ongoing initiatives to improve credit quality.
Retail deposit growth was robust.
"Loans have declined over the last several quarters as we have emphasized
improving credit quality," commented Herrington. "We expect this trend to change
soon as our new branch in downtown Franklin and growth initiatives in other
markets will begin to
positively impact loan growth. In the first month that our downtown Franklin
branch was open, more than 500 new depository accounts, totaling nearly $40
million in new deposits, were opened."
"We are in the second year of our four-year rebuilding program," added
Herrington. "Our 2003 focus was to identify problem loans, to develop action
plans for liquidation of these assets, and to execute the plans. The action
plans will continue to be executed in 2004. However, as these issues are
addressed, we are now attacking operating inefficiencies and setting the stage
for future growth."
The company recently announced that regulatory approval had been received to
combine two of its banks. On September 1, 2004, Cumberland Bank (headquartered
in Carthage) and Cumberland Bank South (located in Franklin) will merge. The
assets of the combined bank, to be called Cumberland Bank with its main office
in Franklin, will approach $600 million.
The company recently announced the sale of its Bank of Dyer subsidiary. The
transaction is anticipated to close during the third or fourth quarter 2004.
A quarterly dividend of $.015 per share was declared and paid later in July.
Civitas BankGroup, formerly known as Cumberland Bancorp, is a multi-bank holding
company operating 23 retail offices. It is the parent company of Cumberland Bank
South in Franklin, Cumberland Bank in Carthage, BankTennessee in Collierville,
Bank of Dyer, and Bank of Mason.
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THE STATEMENTS CONTAINED IN THIS RELEASE WHICH ARE NOT HISTORICAL FACTS ARE
FORWARD-LOOKING STATEMENTS MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS
DESCRIBING OUR FUTURE PLANS, PROJECTIONS, STRATEGIES AND EXPECTATIONS, ARE BASED
ON ASSUMPTIONS AND INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES, MANY OF WHICH
ARE BEYOND OUR CONTROL. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTED DUE TO CHANGES IN INTEREST RATES, COMPETITION IN THE INDUSTRY, CHANGES
IN LOCAL AND NATIONAL ECONOMIC CONDITIONS AND VARIOUS OTHER FACTORS. ADDITIONAL
INFORMATION CONCERNING SUCH FACTORS, WHICH COULD AFFECT US, IS CONTAINED IN OUR
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
CIVITAS BANKGROUP
(all dollars in thousands)
(unauditied)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
------- ------- ------- -------
AVERAGE BALANCES
Loans 543,026 547,460 547,473 543,171
Investment Securities 195,187 139,523 195,735 130,625
Earning Assets 757,723 701,488 760,723 690,044
Total Assets 812,819 760,930 814,493 749,076
Demand Deposits 67,826 61,678 66,831 59,160
Interest-Bearing Deposits 590,172 565,963 594,820 560,552
Total Deposits 657,998 627,641 661,651 619,712
Shareholders' Equity 56,850 45,292 56,171 45,420
KEY PERFORMANCE RATIOS (ANNUALIZED)
Return on Average Assets 0.30% -0.18% 0.34% 0.02%
Return on Average Equity 4.31% -3.05% 4.87% 0.25%
Net Interest Margin 3.27% 3.63% 3.40% 3.64%
Efficiency Ratio 83.13% 81.85% 81.69% 84.06%
ASSET QUALITY DATA
Nonperforming Assets 17,689 24,195 17,689 24,195
Allowance for Loan Losses 7,794 8,414 7,794 8,414
Net Charge-Offs 747 1,919 1,690 2,900
Nonperforming Assets to Period-
End Loans 3.32% 4.39% 3.32% 4.39%
Allowance for Loan Losses to
Period-End Loans 1.46% 1.53% 1.46% 1.53%
Net Charge-Offs to Average
Loans 0.55% 1.40% 0.62% 1.07%
CIVITAS BANKGROUP
(all dollars in thousands except per share data)
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2004 2003 % Change 2004 2003 % Change
---------- ---------- -------- ---------- ---------- --------
INCOME STATEMENT
Interest Income 9,984 10,326 -3.31% 20,585 20,640 -0.27%
Interest Expense 3,794 3,953 -4.02% 7,665 8,081 -5.15%
---------- ---------- ------ ---------- ---------- -------
Net Interest Income 6,190 6,373 -2.87% 12,920 12,559 2.87%
Provision for Loan Losses 508 2,058 -75.32% 1,069 2,482 -56.93%
Non-Interest Income 2,111 1,976 6.83% 3,888 3,622 7.34%
Non-Interest Expense 6,901 6,834 0.98% 13,730 13,602 0.94%
---------- ---------- ------ ---------- ---------- -------
Income Before Taxes 892 (543) 264.27% 2,009 97 1971.13%
Income Taxes 279 (198) 240.91% 642 40 1505.00%
---------- ---------- ------ ---------- ---------- -------
Net Income 613 (345) 277.68% 1,367 57 2298.25%
========== ========== ====== ========== ========== -------
PER SHARE DATA
Net Income - Basic 0.04 (0.02) 256.68% 0.08 0.00 100.00%
Net Income - Diluted 0.04 (0.02) 280.86% 0.08 0.00 100.00%
Dividends Declared 0.015 0.015 0.00% 0.03 0.03 0.00%
Common Book Value per Share 3.12 2.92 6.83% 3.12 2.92 6.83%
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 17,478,235 15,411,902 13.41% 17,393,769 15,397,979 12.96%
Diluted 17,571,317 15,599,210 12.64% 17,465,393 15,580,707 12.10%
CIVITAS BANKGROUP
(all dollars in thousands)
(unaudited)
June 30, December 31,
2004 2003 % Change
------- ------------ --------
BALANCE SHEET SUMMARY
Assets
Cash and Cash Equivalents 23,648 19,977 18.4%
Federal Funds Sold & Interest Bearing Deposits 14,301 19,127 -25.2%
Investment Securities 226,646 203,371 11.4%
Loans 532,039 550,565 -3.4%
Allowance for Loan Losses (7,794) (8,414) -7.4%
------- ------- -----
Net Loans 524,245 542,151 -3.3%
Fixed Assets 22,018 22,280 -1.2%
Foreclosed Properties 4,137 3,793 9.1%
Other Assets 23,909 22,621 5.7%
------- ------- -----
Total Assets 838,904 833,320 0.7%
Liabilities and Stockholders Equity
Deposits 688,597 671,636 2.5%
Trust Preferred Securities 12,000 12,000 0.0%
Other Borrowings 79,463 90,438 -12.1%
Other Liabilities 4,310 4,505 -4.3%
Shareholders Equity 54,534 54,741 -0.4%
------- ------- -----
Total Liabilities, Equity 838,904 833,320 0.7%