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 PROFIT GROWTH
FRANKLIN, Tenn. (January 19, 2006) -- Civitas BankGroup (OTC: CVBG) reported net
income of $7.1 million for 2005, which included $3.2 million gain and income
from discontinued operations associated with the sale of its BankTennessee and
Bank of Mason subsidiaries during the first half of 2005.
Civitas BankGroup's income from continuing operations was $3.9 million in 2005
compared to $2.3 million for 2004, a 69.4% increase.
For the fourth quarter 2005, Civitas BankGroup earned $1.0 million from
continuing operations. This is a 119.6% increase in net income from continuing
operations of $465,000 for the fourth quarter of 2004.
"We have completed the third year of our rebuilding program, and we are pleased
with the results," commented Richard E. Herrington, President of Civitas
BankGroup. "In 2005, we completed the resolution of most of our problem loans,
we significantly grew loans and deposits in key markets, and we earned
near-record profits from continuing operations for our company. To accomplish
these three objectives at the same time is remarkable."
Non-performing assets continue to show improvement at December 31, 2005. The
total of non-performing assets (non-accrual loans and foreclosed properties)
dropped to $2.5 million at quarter-end, as compared to $2.7 million at September
30, 2005, and $6.2 million at December 31, 2004, from continuing operations.
Non-performing assets, including those from divested banks, peaked at $26.1
million at September 30, 2002.
In late December 2005, Civitas completed the sale of $13 million in new trust
preferred securities to institutional investors. The proceeds were used to
redeem approximately $8 million in previously issued trust preferred securities
that were called to take advantage of lower interest rates and to repay
approximately $4.5 million in existing corporate debt.
"We more than doubled income from continuing operations during the fourth
quarter of 2005, compared to the same quarter in 2004," said Herrington. "This
reflects the strength
and stability of our Middle Tennessee banking franchise, Cumberland Bank. We
have completed the 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 became a Middle Tennessee bank," added Herrington. "We have
experienced moderate growth in loans and deposits over the last twelve months.
Compared to year-end 2004, Cumberland Bank loans are up 9.7% while deposits have
grown 6.0% in the same period. Most of the growth has come from our new banking
centers in Franklin and Spring Hill. Additionally, we recently announced plans
to open a new branch in Hendersonville, which will be our fourth Sumner County
location."
"We feel that our significant problem asset issues are behind us," explained
Herrington. "Our asset quality ratios and trends put us in a leadership position
among banks. For example, our delinquency ratio finished the year below .6% of
loans."
"The strong increase in earnings in the fourth quarter 2005 reflects continued
growth, improved operating efficiencies, and rising interest rates," explained
Herrington.
"In early 2003, we committed to a four year recovery plan to return our company
to a leadership position among community banks," 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.
In 2005, we focused on continued improvement in asset quality and improved
operating efficiencies through upgrading our core application systems. 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.
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.
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CIVITAS BANKGROUP, INC.
(all dollars in thousands)
(unauditied)
December 31,
2005 2004 % Change
---- ---- --------
BALANCE SHEET SUMMARY
Assets
Cash and Cash Equivalents $ 31,361 $ 23,262 34.8%
Federal Funds Sold & Interest Bearing Deposits 3,657 7,185 -49.1%
Investment Securities 205,170 205,138 0.0%
Loans 480,141 437,577 9.7%
Allowance for Loan Losses (4,765) (4,427) 7.6%
--------- --------- ------
Net Loans 475,376 433,150 9.7%
Fixed Assets 14,025 15,043 -6.8%
Foreclosed Properties 346 793 -56.4%
Other Assets 19,133 19,107 0.1%
Assets of Discontinued Operations 0 200,543 -100.0%
--------- --------- ------
Total Assets $ 749,068 $ 904,221 -17.2%
========= ========= ======
Liabilities and Shareholder's Equity
Deposits $ 600,766 $ 566,873 6.0%
Subordinated Debentures 17,000 12,000 41.7%
Other Borrowings 80,452 78,451 2.6%
Other Liabilities 3,492 2,790 25.2%
Liabilities of Discontinued Operations 0 186,371 -100.0%
Shareholders Equity 47,358 57,736 -18.0%
--------- --------- ------
Total Liabilities, Equity $ 749,068 $ 904,221 -17.2%
========= ========= ======
CIVITAS BANKGROUP, INC.
(all dollars in thousands except per share data)
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
2005 2004 % Change 2005 2004 % Change
---- ---- -------- ---- ---- --------
INCOME STATEMENT
Interest Income $ 10,915 $ 8,935 22.2% $ 40,357 $ 32,940 22.5%
Interest Expense 5,498 3,800 44.7% 19,107 13,123 45.6%
----------- ---------- -------- ----------- ---------- -------
Net Interest Income 5,417 5,135 5.5% 21,250 19,817 7.2%
Provision for Loan Losses 130 371 -65.0% 993 1,446 -31.3%
Non-Interest Income 1,636 2,548 -35.8% 7,592 7,793 -2.6%
Non-Interest Expense 5,440 6,728 -19.1% 22,229 22,918 -3.0%
----------- ---------- -------- ----------- ---------- -------
Income Before Taxes 1,483 584 153.9% 5,620 3,246 73.1%
Income Taxes 462 119 288.2% 1,715 941 82.3%
----------- ---------- -------- ----------- ---------- -------
Income from Continuing Operations $ 1,021 $ 465 119.6% $ 3,905 $ 2,305 69.4%
=========== ========== ======== =========== ========== =======
Income (Loss) from Operations of
Discontinued Components 0 (330) -100.0% 129 (715) -118.0%
Gain on Sale of Discontinued Operations 0 0 0.0% 3,434 0 100.0%
Income Tax Expense (Benefit) of
Discontinued Operations (129) 332 (293)
----------- ---------- -------- ----------- ---------- -------
Net Income $ 1,021 $ 264 286.7% $ 7,136 $ 1,883 279.0%
=========== ========== ======== =========== ========== =======
PER SHARE DATA
Income - Basic - Continuing Operations $ 0.06 $ 0.03 100.0% $ 0.24 $ 0.13 84.6%
Income - Diluted - Continuing Operations 0.06 0.03 100.0% 0.24 0.13 84.6%
Income - Basic 0.06 0.02 200.0% 0.44 0.11 300.0%
Income - Diluted 0.06 0.01 500.0% 0.44 0.11 300.0%
Common Book Value per Share $ 2.99 $ 3.28 -8.8%
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 15,804,438 17,537,204 -9.9% 16,041,868 17,684,542 -9.3%
Diluted 15,837,516 17,693,698 -10.5% 16,120,889 17,577,256 -8.3%
CIVITAS BANKGROUP, INC.
(all dollars in thousands)
(unauditied)
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
---- ---- ---- ----
AVERAGE BALANCES
Loans $475,892 $436,110 $456,657 $416,335
Investment Securities 203,586 194,439 200,831 179,602
Earning Assets 682,442 656,086 666,906 614,859
Total Assets of Discontinued Operations 0 197,562 551 190,877
Total Assets 732,799 718,961 732,063 673,093
Demand Deposits $ 62,796 $ 67,247 $ 62,359 $ 60,143
Interest-Bearing Deposits 505,047 505,737 503,635 478,475
Total Deposits of Discontinued Operations 0 162,089 452 154,772
Total Deposits 567,844 735,073 566,446 693,390
Shareholders' Equity 46,750 56,865 47,632 55,942
KEY PERFORMANCE RATIOS - CONTINUING OPERATIONS (ANNUALIZED)
Return on Average Assets 0.56% 0.36% 0.53% 0.48%
Return on Average Equity 8.74% 3.27% 8.20% 4.12%
Net Interest Margin 3.18% 3.13% 3.19% 3.22%
Efficiency Ratio 77.13% 87.57% 77.07% 83.01%
ASSET QUALITY DATA - CONTINUING OPERATIONS
Nonperforming Assets $ 2,514 $ 6,189
Allowance for Loan Losses 4,765 4,427
Net Charge-Offs 596 2,707
Nonperforming Assets to Period-
End Loans 0.52% 1.41%
Allowance for Loan Losses to
Period-End Loans 0.99% 1.01%
Net Charge-Offs to Average
Loans 0.13% 0.65%