EXHIBIT 99.1
Greene County Bancshares Posts 27% Increase in Second Quarter
Earnings Per Share
GREENEVILLE, Tenn.--(BUSINESS WIRE)--July 20, 2004--Greene County
Bancshares, Inc. (NASDAQ/NM: GCBS) today announced results for the second
quarter and six-month period ended June 30, 2004. Highlights of the quarter and
year-to-date period included a significant increase in net interest income,
reflecting the contribution of the Company's recent acquisition in Middle
Tennessee as well as growth in other key markets, most notably in Blount County
and Knoxville, Tennessee. This momentum in lending services, coupled with
improving asset quality and efficiency ratios, helped produce a substantial rise
in net income and earnings per share for the quarter versus the same period last
year, along with comparably higher returns on assets and equity.
For the second quarter of 2004, net income increased 42% to $3,275,000 from
$2,301,000 in the same period last year. On a diluted per share basis, earnings
for the second quarter increased 27% to $0.42 on 7.7 million weighted average
shares outstanding compared with $0.33 on 6.9 million weighted average shares
outstanding in the year-earlier period. The year-over-year increase in weighted
average shares outstanding reflected shares issued in connection with the
Company's November 2003 acquisition of Independent Bankshares Corporation.
Net interest income for the second quarter increased 19% to $11,983,000
from $10,053,000 in the year-earlier period. Net interest income after provision
for loan losses rose 30% to $10,821,000 in the second quarter of 2004 versus
$8,324,000 in the same period last year, reflecting a 33% decline in the
provision for loan losses to $1,162,000 in the current quarter from $1,729,000
in the second quarter of last year concurrent with improving asset quality.
Commenting on the announcement, Stan Puckett, Chairman and Chief Executive
Officer, said, "We are delighted to report these notable improvements in our
operations during the second quarter, combined with ongoing solid growth across
our markets. While most of the growth occurred during the first quarter of this
year, we are gratified that our efforts to strengthen our presence in several
fast-growing Middle Tennessee communities and build on the important momentum we
have established elsewhere continue to translate into improved efficiencies,
growing market share and higher earnings."
Puckett noted that one of the most important improvements achieved during
the second quarter could be seen in asset quality. Driving an overall decline,
the Company's Greene County Bank subsidiary - its largest unit - cut
nonperforming assets as a percentage of total assets to 0.74% at the end of the
second quarter of 2004 from 0.95% a year ago; the comparable figure was 0.68% at
December 31, 2003. Likewise, the Bank's annualized net charge-offs to average
total loans (net of unearned interest) fell to 0.29% at June 30, 2004, from
0.44% at the end of June 2003; at December 31, 2003, the figure was 0.33%.
"We are encouraged by the progress we have achieved thus far in 2004,
especially in integrating our seven new branches and expanding the footprint of
our banking network," Puckett continued. "On the other hand, we will continue to
face a somewhat uncertain economic and political outlook in the second half.
Also, although our net interest margin appears to have stabilized in the second
quarter of 2004 versus the first quarter of the year, it remained under pressure
compared with the year-earlier level as we have continued to position the
Company for a rising interest rate environment. We believe these measures will
demonstrate more tangible benefits for us in the second half, and our success in
this and other important areas should work to our advantage as the year
continues."
For the six months ended June 30, 2004, net income increased 25% to
$6,127,000 from $4,919,000 in the first half of 2003. On a diluted per share
basis, earnings for the first six months of 2004 rose 11% to $0.79 from $0.71 in
the year-earlier period. Net interest income after provision for loan losses
increased 25% to $21,178,000 for the first half of 2004 compared with
$17,003,000 in the same period last year.
At June 30, 2004, the Company's total assets increased 1% to $1,125,002,000
from $1,108,522,000 at December 31, 2003, and were 24% ahead of the $909,101,000
in total assets reported as of June 30, 2003. Net loans, including loans held
for sale, increased 3% to $972,956,000 at June 30, 2004, from $941,207,000 at
December 31, 2003, and were 27% higher than net loans, including loans held for
sale, of $765,609,000 a year ago. Deposits declined 3% to $884,014,000 at June
30, 2004, from $907,115,000 at December 31, 2003, as the Company shed some
higher priced deposits, but were 25% higher than the $704,909,000 in deposits
reported at the end of the second quarter of 2003. Total shareholders' equity
increased 4% to $105,509,000 at June 30, 2004, versus $101,935,000 at the end of
2003, and was 35% higher that total shareholders' equity of $77,991,000 at June
30, 2003.
Return on average shareholders' equity for the second quarter and the six
months ended June 30, 2004, was 12.39% and 11.69%, respectively, versus 11.78%
and 12.73%, respectively, for the comparable periods last year. Return on
average total assets for the second quarter and six months ended June 30, 2004,
was 1.17% and 1.09%, respectively, compared with 1.04% and 1.11%, respectively,
for the same periods in 2003.
Greene County Bancshares, Inc., with total assets of approximately $1.1
billion, is the holding company for Greene County Bank headquartered in
Greeneville, Tennessee. Greene County Bank is the largest community bank in East
Tennessee and now has 37 branches throughout East and Middle Tennessee, one
branch in Bristol, Virginia, one branch in western North Carolina, and a trust
services office in Lebanon, Tennessee. Greene County Bank does business in
Washington County, Tennessee as Washington County Bank; in Blount County and
Knox County, Tennessee as American Fidelity Bank; in Sumner County, Tennessee as
First Independent Bank; in Rutherford County, Tennessee as Rutherford Bank and
Trust; in Sullivan County, Tennessee as Sullivan County Bank and First Bristol
Bank; in Hamblen County, Tennessee as Hamblen County Bank; in McMinn County,
Tennessee as Bank of Athens and Bank of Niota; in Hawkins County, Tennessee as
Hawkins County Bank and Bank of Bulls Gap; in Cocke County, Tennessee as Cocke
County Bank; in Loudon County, Tennessee as Community Bank of Loudon County; in
Monroe County, Tennessee as Community Trust Bank; in the City of Bristol,
Virginia as First Bristol Bank; and in Wilson County, Tennessee as President's
Trust. In addition, Greene County Bank also conducts separate businesses through
three wholly owned subsidiaries: Superior Financial Services, Inc., a consumer
finance company; GCB Acceptance Corporation, a consumer finance company
specializing in subprime automobile lending; and Fairway Title Co., a title
company.
Unaudited Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Interest income $ 15,869 $ 14,082 $ 31,799 $ 28,082
Interest expense 3,886 4,029 7,936 8,224
---------- ---------- ---------- ----------
Net interest
income 11,983 10,053 23,863 19,858
Provision for
loan losses 1,162 1,729 2,685 2,855
---------- ---------- ---------- ----------
Net interest
income after
provision for
loan losses 10,821 8,324 21,178 17,003
Noninterest
income 3,070 2,897 6,164 5,621
Noninterest
expense 8,574 7,692 17,525 14,924
---------- ---------- ---------- ----------
Income before
income taxes 5,317 3,529 9,817 7,700
Income taxes 2,042 1,228 3,690 2,781
---------- ---------- ---------- ----------
Net income $ 3,275 $ 2,301 $ 6,127 $ 4,919
========== ========== ========== ==========
Comprehensive
income $ 2,935 $ 2,299 $ 5,808 $ 4,996
========== ========== ========== ==========
Earnings per share:
Basic $ 0.43 $ 0.34 $ 0.80 $ 0.72
========== ========== ========== ==========
Diluted $ 0.42 $ 0.33 $ 0.79 $ 0.71
========== ========== ========== ==========
Weighted average
shares:
Basic 7,657 6,822 7,662 6,821
========== ========== ========== ==========
Diluted 7,714 6,906 7,720 6,905
========== ========== ========== ==========
Dividends declared
per share $ 0.12 $ 0.12 $ 0.24 $ 0.24
========== ========== ========== ==========
June 30, Dec. 31, June 30,
2004 2004 2003
---------- ---------- ----------
Total assets $1,125,002 $1,108,522 $ 909,101
Cash and cash equivalents 34,445 41,341 42,035
Investment securities 38,140 44,823 48,005
Loans, net (1) 972,956 941,207 765,609
Deposits 884,014 907,115 704,909
Shareholders' equity 105,509 101,935 77,991
Tangible shareholders'
equity (2) 84,848 80,965 75,276
Book value per share 13.80 13.31 11.43
Tangible book value
per share (2) 11.10 10.57 11.03
(1) Includes loans held for sale.
(2) Tangible shareholders' equity is shareholders' equity less
goodwill and intangible assets.
For unaudited financial statements for the second quarter and six months
ended June 30, 2004 and 2003, along with related information, click the
following links: http://www.irinfo.com/gcbs/2q04fs.pdf or
http://www.irinfo.com/gcbs/2q03fs.pdf.
This news release may contain forward-looking statements regarding Greene
County Bancshares, Inc., as defined in Section 21E of the Securities Exchange
Act of 1934. All forward-looking statements involve risk and uncertainty and
actual results could differ materially from the anticipated results or other
expectations expressed in the forward-looking statements. A discussion of
factors that could cause actual results to differ materially from those
expressed in the forward-looking statements is included in the Greene County
Bancshares, Inc. filings with the Securities and Exchange Commission.
CONTACT: Greene County Bancshares, Greeneville
William F. Richmond, 423-787-1211