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 IMPROVED PROFITS
FRANKLIN, Tenn. (October 20, 2005) - Civitas BankGroup (OTC: CVBG) reported net
income of $6.1 million for the first nine months of 2005 which included a $3.2
million gain and income from discontinued operations associated with the sale of
its west Tennessee subsidiaries.
Civitas BankGroup's income from continuing operations was $2.9 million during
the first nine months of 2005 compared to $1.8 million for the same period in
2004, a 56.8% increase.
For the third quarter 2005, Civitas BankGroup earned $821,000 from continuing
operations. This is a 67.9% increase in net income from continuing operations of
$489,000 for the third quarter of 2004.
"Although non-recurring items have dominated the Civitas income statement this
year, core earnings from continued operations have grown impressively,"
commented Richard E. Herrington, President of Civitas BankGroup.
Non-performing assets continue to show improvement at September 30, 2005. The
total of non-performing assets (non-accrual loans and foreclosed properties)
dropped to $2.7 million at quarter-end, as compared to $3.2 million at June 30,
2005. Non-performing assets, including those from divested banks, peaked at
$26.1 million at September 30, 2002.
"The significant increase in 2005 operating earnings reflects the strength and
stability of our Middle Tennessee banking franchise, Cumberland Bank," explained
Herrington. "We have completed our sale of West Tennessee banks: Bank of Dyer in
the fourth quarter 2004, BankTennessee in the first quarter 2005, and Bank of
Mason in the second quarter 2005. All of these banks had negatively impacted
profits and profitability during the past few years."
"In 2005, we have become a Middle Tennessee bank," added Herrington. "We have
experienced outstanding growth in loans and deposits over the last twelve
months.
Compared to September 30, 2004, Cumberland Bank loans are up 15.9%. In the third
quarter alone, Cumberland Bank loans grew more than $25 million. Much of the
growth has come from our new banking centers in Franklin and Spring Hill."
"The increased profitability in 2005 has been fueled by loan growth, rising
interest margins, and improved operating efficiencies," said Herrington.
"Profitable growth in customer relationships is important to our company, but
maintaining a high level of asset quality is a fundamental objective of our
company. Our non-performing assets are below industry norms and our loan
delinquency ratio is below 1.0%. These are extremely positive trends."
"Two years ago, we implemented a four year recovery plan to return our company
to a leadership position in the banking community," added Herrington. "Our three
primary objectives have been to instill a sound credit culture, create operating
efficiencies, and build a solid foundation for future growth and profitability.
Earlier in the year, we upgraded our core computer application systems, allowing
us to achieve improved economies of scale and to market superior products to our
customers. During the second quarter, we expanded our mortgage banking
activities to include niche products under the HomeStar Solutions banner. We are
proud of the progress we have made toward our four year plan."
Civitas BankGroup is a bank holding company operating in Middle Tennessee
through Cumberland Bank. The company also owns 50% of Nashville's Insurors Bank
and 50% of 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 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, INC.
(all dollars in thousands)
(unauditied)
September 30, December 31,
2005 2004 % Change
---- ---- --------
BALANCE SHEET SUMMARY
Assets
Cash and Cash Equivalents $ 23,728 $ 23,262 2.0%
Federal Funds Sold & Interest Bearing Deposits 1,145 7,185 -84.1%
Investment Securities 195,884 205,138 -4.5%
Loans 474,504 437,577 8.4%
Allowance for Loan Losses (4,687) (4,427) 5.9%
--------- --------- ------
Net Loans 469,817 433,150 8.5%
Fixed Assets 13,819 15,043 -8.1%
Foreclosed Properties 314 793 -60.4%
Other Assets 18,908 19,107 -1.0%
Assets of Discontinued Operations 0 200,543 -100.0%
--------- --------- ------
Total Assets $ 723,615 $ 904,221 -20.0%
========= ========= ======
Liabilities and Shareholders Equity
Deposits $ 558,662 $ 566,873 -1.4%
Trust Preferred Securities 12,000 12,000 0.0%
Other Borrowings 102,351 78,451 30.5%
Other Liabilities 4,044 2,790 44.9%
Liabilities of Discontinued Operations 0 186,371 -100.0%
Shareholders Equity 46,558 57,736 -19.4%
--------- --------- ------
Total Liabilities, Equity $ 723,615 $ 904,221 -20.0%
========= ========= ======
CIVITAS BANKGROUP, INC.
(all dollars in thousands except per share data)
(unaudited)
Three Months Ended September 30, Nine Months Ended Sept 30,
2005 2004 % Change 2005 2004 % Change
---- ---- -------- ---- ---- --------
INCOME STATEMENT
Interest Income $ 10,146 $ 8,328 $ 21.8% $ 29,442 $ 24,005 $ 22.6%
Interest Expense 4,939 3,410 44.8% 13,609 9,323 46.0%
------------ ------------ ------- ----------- ------------ ------
Net Interest Income 5,207 4,918 5.9% 15,833 14,682 7.8%
Provision for Loan Losses 325 209 55.5% 863 1,075 -19.7%
Non-Interest Income 1,614 1,958 -17.6% 5,813 5,246 10.8%
Non-Interest Expense 5,323 6,003 -11.3% 16,644 16,190 2.8%
------------ ------------ ------- ----------- ------------ ------
Income Before Taxes 1,173 664 76.7% 4,139 2,663 55.4%
Income Taxes 352 175 101.1% 1,253 822 52.4%
------------ ------------ ------- ----------- ------------ ------
Income from Continuing Operations $ 821 $ 489 $ 67.9% $ 2,886 $ 1,841 $ 56.8%
============ ============ ======= =========== ============ ======
Income (Loss) from Operations of
Discontinued Components 0 (397) -100.0% 129 (385) -133.5%
Gain on Sale of Discontinued Operations 0 0 0.0% 3,463 0 100.0%
Income Tax Expense (Benefit) of
Discontinued Operations (161) 343 (164)
------------ ------------ ------- ----------- ------------ ------
Net Income $ 821 $ 253 $ 224.5% $ 6,135 $ 1,620 $278.7%
============ ============ ======= =========== ============ ======
PER SHARE DATA
Income - Basic - Continuing Operations $ 0.05 $ 0.03 66.7% $ 0.18 $ 0.11 63.6%
Income - Diluted - Continuing Operations 0.05 0.03 66.7% 0.18 0.10 71.5%
Income - Basic 0.05 (0.01) -600.0% 0.38 0.09 308.9%
Income - Diluted 0.05 (0.01) -600.0% 0.38 0.09 311.5%
Common Book Value per Share $ 2.95 $ 3.24 -9.0%
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 15,752,241 17,503,821 -10.0% 16,121,881 17,430,721 -7.5%
Diluted 15,843,461 17,693,698 -10.5% 16,197,600 17,541,494 -7.7%
CIVITAS BANKGROUP, INC.
(all dollars in thousands)
(unauditied)
Three Months Ended Nine Months Ended
Sept 30, Sept 30,
2005 2004 2005 2004
---- ---- ---- ----
AVERAGE BALANCES
Loans $457,618 $390,589 $450,159 $387,035
Investment Securities 197,140 175,214 201,037 154,130
Earning Assets 660,579 581,658 661,635 554,327
Total Assets of Discontinued Operations 0 190,972 44,673 172,699
Total Assets 715,047 671,732 758,320 641,809
Demand Deposits $ 61,166 $ 57,621 $ 62,211 $ 53,753
Interest-Bearing Deposits 490,494 467,425 503,163 439,087
Total Deposits of Discontinued Operations 0 157,605 36,690 152,316
Total Deposits 551,660 682,650 602,065 645,156
Shareholders' Equity 46,580 54,598 47,930 55,632
KEY PERFORMANCE RATIOS - CONTINUING OPERATIONS
(ANNUALIZED)
Return on Average Assets 0.46% 0.41% 0.54% 0.52%
Return on Average Equity 7.05% 3.58% 8.03% 4.41%
Net Interest Margin 3.15% 3.38% 3.19% 3.53%
Efficiency Ratio 78.04% 87.30% 76.89% 81.24%
ASSET QUALITY DATA - CONTINUING OPERATIONS
Nonperforming Assets $ 2,741 $ 9,101
Allowance for Loan Losses 4,687 5,603
Net Charge-Offs 553 1,457
Nonperforming Assets to Period-
End Loans 0.58% 1.92%
Allowance for Loan Losses to
Period-End Loans 0.99% 1.18%
Net Charge-Offs to Average
Loans 0.16% 0.50%