EXHIBIT 99.1
For Immediate Release April 11, 2005
Contact: Richard G. Harwood, President and CEO
Phone: (423) 623-6088
United Tennessee Bankshares, Inc. Announces First Quarter Earnings
United Tennessee Bankshares, Inc. (Nasdaq:UTBI) reported that net income
for the three months ended March 31, 2005 increased $85,000, or 21.7% compared
to the same three month period in the previous year, from $392,000 to $477,000.
The increase in net income is primarily the result of a decrease in compensation
and benefits offset by an increase in interest expense for the quarter.
Compensation and benefits decreased $226,000 primarily as a result of decreases
in expense related to the earnings paid on the directors' long-term incentive
and deferred compensation plans, which correspond to the decrease in the price
of the Company's stock. The price of Company's stock decreased $1.40 per share
from $20.05 as of December 31, 2004 to $18.65 as of March 31, 2005. Interest
expense increased $101,000 from $376,000 for the first quarter of 2004 to
$477,000 for the first quarter of 2005 as a result of an increase in our cost of
funds due to general increases in interest rates.
Total assets at March 31, 2005 were $118.2 million while total assets at
December 31, 2004 were $122.7 million. The decrease in total assets was
primarily the result of a decrease in amounts due from depository institutions
and investment securities which were used to fund a similar decrease in deposit
accounts.
The Company's equity increased primarily due to net income of $477,000,
proceeds from stock options exercised of $68,000 and a decrease in unearned
compensation related to the Company's ESOP of $116,000, offset by adecrease due
to the cost of stock options surrendered of $55,000 and a decrease in
accumulated other comprehensive income of $448,000. The market value of UTBI's
investment portfolio decreased due to changes in the current interest rate
environment.
On April 4, 2005, Harland Financial Solutions ("Harland") announced that it
is acquiring our third-party data processor, Intrieve, Inc. UTBI will continue
its current third-party data processing arrangement with Harland. UTBI owns
4,000 shares of stock in Intrieve, Inc., which is carried at a cost of
approximately $105,000. Proceeds from Harland for UTBI's Intrieve, Inc. stock
are expected to be received in the next few months, but the exact amount of the
proceeds and the amount of our gain on the stock cannot be determined at this
time. For more information regarding the purchase of Intrieve, Inc. by Harland,
visit www.harlandfinancialsolutions.com.
Presented below are condensed statements of income for the three-month
periods ended March 31, 2005 and 2004 and selected financial condition data as
of March 31, 2005 and December 31, 2004.
UNITED TENNESSEE BANKSHARES, INC.
UNAUDITED CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004
(In Thousands)
Three Months Ended
March 31,
2005 2004
------------ ------------
Interest Income $ 1,697 $ 1,682
Interest Expense 479 376
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Net Interest Income 1,218 1,306
Provision for loan losses 18 28
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Net interest income after provision for loan losses 1,200 1,278
Noninterest income 130 130
Noninterest operating expense 626 819
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Income before income taxes 704 589
Income taxes 227 197
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Net Income $ 477 $ 392
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Earnings per Share:
Basic $ 0.40 $ 0.32
Diluted $ 0.40 $ 0.32
UNITED TENNESSEE BANKSHARES, INC.
SELECTED FINANCIAL CONDITION DATA
(In Thousands)
As of
March 31, 2005 As of
(Unaudited) December 31, 2004
-------------- -----------------
Total Assets $118,229 $122,659
Loans Receivable, net 79,294 78,830
Cash and amounts due from depository institutions 623 3,444
Investment Securities, available for sale, at fair value 32,860 35,579
Deposit Accounts 97,752 100,919
Equity 18,564 18,419