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 AND CONTINUED GROWTH
FRANKLIN, Tenn. (January 25, 2005) - Civitas BankGroup (OTC: CVBG) reported a
71.1% increase in net income for 2004 over the year 2003 and continued loan and
deposit growth during the fourth quarter 2004.
For the year 2004, Civitas BankGroup reported net income of $1.9 million
compared to a net income of $1.1 million for 2003. This represents a 71.1%
increase. On a per share basis, the 2004 net income was $.11.
Growth rates continued robust during the fourth quarter 2004, although totals
were distorted by the sale of loans and assumption of deposits from an operating
subsidiary, the Bank of Dyer, during the fourth quarter 2004. Total loans grew
to $574 million at December 31, 2004, a 4.2% increase from 2003 year-end. The
2004 amount does not include loans at the Company's Bank of Dyer subsidiary
which totaled $25 million at the end of 2003. Excluding these loans from the
year end 2003 total, the Company's growth in loans would have been 9.1%. Total
deposits increased to $731 million at year-end 2004, an increase of 8.9% over
the comparable date in 2003. The 2004 amount does not include deposits at the
Company's Bank of Dyer subsidiary which totaled $34 million at the end of 2003.
Excluding these deposits from the year end 2003 total, the Company's growth in
deposits would have been 14.8%. Management believes that the exclusion of the
Bank of Dyer's loans and deposits allows investors to more accurately compare
the Company's 2004 performance with 2003.
Most of the 2004 growth in loans and deposits came from banking offices in
Williamson and Sumner counties.
For the fourth quarter of 2004, Civitas BankGroup earned $264,000, compared to
$736,000 for the same period in 2003. On a per share basis, the fourth quarter
2004 net income was $.02. The company earned $253,000 or $.02 per share in the
third quarter of 2004.
Non-performing assets (non-accrual loans and foreclosed properties) at Civitas
BankGroup decreased to $17.9 million at December 31, 2004. Problem assets peaked
at $26.1 million at September 30, 2002.
"Fourth quarter financial results were negatively impacted by two factors that
we believe will be extremely positive over the long term, but penalized
short-term earnings and growth," explained Richard E. Herrington, President of
Civitas BankGroup. "In December, we completed the sale of the Bank of Dyer and
the subsidiary's loan portfolio. The impact of this transaction on fourth
quarter earnings was a net loss of $246 thousand and a reduction in assets,
loans, and deposits. Secondly, we experienced significant loan growth at
Cumberland Bank (up $26 million in the fourth quarter), resulting in an increase
to our provision for possible loan and lease losses during the fourth quarter."
"The continued increase in growth rates for loans and deposits at Cumberland
Bank was outstanding," said Herrington. "Our loans have increased by over $59
million since June 30, 2004. Deposit growth has been even stronger. We planted
the seeds for this growth earlier in 2004 with a renewed focus on attracting new
customers and the opening of new branches in downtown Franklin and Spring Hill."
"Earnings in 2004, especially for the last two quarters, have been
disappointing," continued Herrington. "Most of the earnings difficulties have
been isolated to West Tennessee and are the product of past problem loans. We
believe sale of the Bank of Dyer, the pending sale of the Bank of Mason, and the
pending spin-off of BankTennessee in Collierville will alleviate much of the
drag on earnings and provide for a stronger Middle Tennessee banking franchise."
"We are beginning the third year of our four-year recovery program," added
Herrington. "Our three short-term objectives continue to be the resolution of
problem assets, the creation of operating economies of scale, and building new,
quality banking relationships in growth-oriented markets. We have taken another
giant step in our development during January 2005 when we began the process of
internalizing our data processing of core banking applications. This will
facilitate the creation of economies of scale and allow our bank to market
higher quality banking products."
In December 2004, Civitas announced an agreement to "spin-off" BankTennessee,
its Collierville subsidiary to a group of existing shareholders, led by Memphis
attorney Joel Porter. The transaction is expected to close during the first
quarter of 2005, pending regulatory approval.
In January 2005, Civitas announced an agreement to sell The Bank of Mason to a
group of West Tennessee investors. Subject to regulatory approval, the sale
should be consummated during the first quarter 2005.
Civitas BankGroup is a multi-bank holding company operating in Middle and West
Tennessee. The company also owns 50% of Nashville's Insurors Bank and the Murray
Bank in Murray, Kentucky.
--30--
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 THE INABILITY TO CONSUMMATE THE PROPOSED SALE OF THE BANK OF
MASON AND THE SPIN-OFF OF BANKTENNESSEE AND 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)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
---- ---- ---- ----
AVERAGE BALANCES
Loans 574,487 550,811 554,835 548,071
Investment Securities 226,754 188,714 211,416 154,713
Earning Assets 839,034 773,507 791,112 724,428
Total Assets 902,239 827,761 848,687 780,066
Demand Deposits 78,476 66,450 71,124 61,935
Interest-Bearing Deposits 656,599 614,520 622,267 583,088
Total Deposits 735,075 680,970 693,390 645,023
Shareholders' Equity 56,866 53,937 55,942 48,910
KEY PERFORMANCE RATIOS (ANNUALIZED)
Return on Average Assets 0.12% 0.36% 0.22% 0.14%
Return on Average Equity 1.86% 5.46% 3.37% 2.25%
Net Interest Margin 3.16% 3.45% 3.30% 3.48%
Efficiency Ratio 86.46% 79.93% 85.03% 83.82%
ASSET QUALITY DATA
Nonperforming Assets 17,935 16,158 17,935 16,158
Allowance for Loan Losses 6,446 8,414 6,446 8,414
Net Charge-Offs 2154 482 4,435 4,227
Nonperforming Assets to Period-
End Loans 3.13% 2.93% 3.13% 2.93%
Allowance for Loan Losses to
Period-End Loans 1.12% 1.53% 1.12% 1.53%
Net Charge-Offs to Average
Loans 1.50% 0.35% 0.80% 0.77%
CIVITAS BANKGROUP
(all dollars in thousands except per share data)
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
2004 2003 % Change 2004 2003 % Change
---- ---- -------- ---- ---- --------
INCOME STATEMENT
Interest Income 11,473 10,694 7.28% 42,918 41,276 3.98%
Interest Expense 4,836 4,027 20.09% 16,841 16,077 4.75%
------------------------------------ -------------------------------------
Net Interest Income 6,637 6,667 -0.45% 26,077 25,199 3.48%
Provision for Loan Losses 821 514 59.73% 2,467 3,579 -31.07%
Non-Interest Income 1,301 1,626 -19.99% 7,315 7,408 -1.26%
Non-Interest Expense 6,863 6,629 3.53% 28,393 27,332 3.88%
------------------------------------ -------------------------------------
Income Before Taxes 254 1,150 -77.91% 2,532 1,696 49.29%
Income Taxes (10) 414 -102.42% 648 595 8.91%
------------------------------------ -------------------------------------
Net Income 264 736 -64.13% 1,884 1,101 71.12%
==================================== =====================================
PER SHARE DATA
Net Income - Basic 0.02 0.04 -50.00% 0.11 0.07 57.14%
Net Income - Diluted 0.02 0.04 -50.00% 0.11 0.07 57.14%
Common Book Value per Share 3.28 3.19 2.82% 3.28 3.19 2.86%
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 17,537,204 17,105,798 2.52% 17,457,487 16,097,403 8.45%
Diluted 17,684,542 17,264,861 2.43% 17,577,256 16,265,348 8.07%
CIVITAS BANKGROUP
(all dollars in thousands)
(unaudited)
December 31, December 31,
2004 2003 % Change
---- ---- --------
BALANCE SHEET SUMMARY
Assets
Cash and Cash Equivalents 32,730 19,977 63.8%
Federal Funds Sold & Interest Bearing Deposits 12,166 19,127 -36.4%
Investment Securities 242,129 203,371 19.1%
Loans 573,503 550,565 4.2%
Allowance for Loan Losses (6,446) (8,414) -23.4%
------------------------------------------
Net Loans 567,057 542,151 4.6%
Fixed Assets 21,794 22,280 -2.2%
Foreclosed Properties 4,446 3,793 17.2%
Other Assets 23,899 22,621 5.6%
------------------------------------------
Total Assets 904,221 833,320 8.5%
Liabilities and Stockholders Equity
Deposits 731,469 671,636 8.9%
Trust Preferred Securities 12,000 12,000 0.0%
Other Borrowings 98,493 90,438 8.9%
Other Liabilities 4,523 4,505 0.4%
Shareholders Equity 57,736 54,741 5.5%
------------------------------------------
Total Liabilities, Equity 904,221 833,320 8.5%