Greene County Bancshares, Inc. (NASDAQ: GCBS) today announced
continued growth in the second quarter and six-month period ended
June 30, 2005. Building on the momentum that characterized the
Company's results earlier this year, the second quarter results
reflected ongoing strong loan demand and deposit growth, as recent
expansion in Middle Tennessee and the greater Knoxville area
continued to augment solid operations across the Company's more
established markets. For the second quarter of 2005, net income
increased 13% to $3,714,000 or $0.48 per diluted share compared
with $3,275,000 or $0.42 per diluted share in the year-earlier
period. Net interest income for the second quarter increased 17% to
$14,072,000 from $11,983,000 in the year-earlier period. Net
interest income after provision for loan losses rose 20% to
$13,012,000 in the second quarter of 2005 versus $10,821,000 in the
same period last year, reflecting a 9% decline in the provision for
loan losses to $1,060,000 in the current quarter from $1,162,000 in
the second quarter of last year. The decline in the provision, even
with loan portfolio growth, reflects continued improvements in the
Company's overall asset quality. Commenting on the second quarter
results, Stan Puckett, Chairman and Chief Executive Officer, said,
"The second quarter results were highlighted by low loan losses,
solid loan growth and improvement in non-interest income.
Annualized net charge-offs to average total loans (net of unearned
interest) fell to 0.27% for the six months ended June 30, 2005,
from 0.48% in the comparable 2004 period; for the year ended
December 31, 2004, the figure was 0.51%. This trend continued the
improvement in credit quality that began in 2001. Annualized loan
growth for the first half of 2005 was 21% and is the result of
recent expansions in Middle Tennessee and Knoxville as well as
solid performances by our existing Washington County Bank, First
Bristol Bank and American Fidelity Bank offices. Non-interest
income grew 13% in the second quarter versus the same period in
2004 and 9% over the first quarter of 2005. In late February of
this year, we kicked off our High Performance Checking program.
During the last four months, customers opened over 5,500 new
personal checking accounts, more than double the pace for the same
period in 2004. We believe that our employees' commitment to this
long-term initiative will continue to grow core deposits and
non-interest income. "Our net interest margin for the second
quarter was a disappointment - down 12 basis points compared with
the year-earlier period and a drop of seven basis points
sequentially when compared with the first quarter of 2005 -
representing the second consecutive quarter of declines in this
area. Despite our asset-sensitive balance sheet, deposit costs have
continued to rise faster than loan yields. Improvements in margin
management are a top priority for the remainder of 2005." For the
six months ended June 30, 2005, net income increased 9% to
$6,649,000 or $0.86 per diluted share from $6,127,000 or $0.79 per
diluted share in the first half of 2004. Net interest income after
provision for loan losses increased 17% to $24,717,000 for the
first half of 2005 compared with $21,178,000 in the same period
last year. At June 30, 2005, the Company's total assets increased
11% to $1,374,194,000 from $1,233,403,000 at December 31, 2004, and
were 22% ahead of the $1,125,002,000 in total assets reported as of
June 30, 2004. Net loans, including loans held for sale, increased
11% to $1,142,821,000 at June 30, 2005, from $1,032,297,000 at
December 31, 2004, and were 17% higher than net loans, including
loans held for sale, of $972,956,000 at June 30, 2004. Deposits
increased 15% to $1,148,434,000 at June 30, 2005, from $998,022,000
at December 31, 2004, and were 30% ahead of deposits of
$884,014,000 as of June 30, 2004. Total shareholders' equity
increased 4% to $113,486,000 at June 30, 2005, versus $108,718,000
at December 31, 2004, and was 8% higher than total shareholders'
equity of $105,509,000 at June 30, 2004. Annualized return on
average shareholders' equity for the second quarter and the six
months ended June 30, 2005, was 13.11% and 11.86%, respectively,
versus 12.39% and 11.69%, respectively, for the comparable periods
last year. Return on average total assets for the second quarter
and six months ended June 30, 2005, was 1.11% and 1.02%,
respectively, compared with 1.17% and 1.09%, respectively, for the
same periods in 2004. Greene County Bancshares, Inc., with total
assets of approximately $1.4 billion, is the holding company for
Greene County Bank, headquartered in Greeneville, Tennessee. Greene
County Bank, founded in 1890, now has 41 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 Lawrence
County, Tennessee as Bank of Lawrence County; 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; in Davidson County and Williamson County, Tennessee
as Middle Tennessee Bank & Trust; 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 insurance company. 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. -0- *T GREENE
COUNTY BANCSHARES, INC. Unaudited Financial Highlights (In
thousands, except per share amounts) Three Months Ended Six Months
Ended June 30, June 30, -----------------------
----------------------- 2005 2004 2005 2004 ---------- ----------
---------- ---------- Interest income $ 20,703 $ 15,869 $ 39,438 $
31,799 Interest expense 6,631 3,886 12,039 7,936 ----------
---------- ---------- ---------- Net interest income 14,072 11,983
27,399 23,863 Provision for loan losses 1,060 1,162 2,682 2,685
---------- ---------- ---------- ---------- Net interest income
after provision for loan losses 13,012 10,821 24,717 21,178
Noninterest income 3,463 3,070 6,639 6,164 Noninterest expense
10,422 8,574 20,697 17,525 ---------- ---------- ----------
---------- Income before income taxes 6,053 5,317 10,659 9,817
Income taxes 2,339 2,042 4,010 3,690 ---------- ----------
---------- ---------- Net income $ 3,714 $ 3,275 $ 6,649 $ 6,127
========== ========== ========== ========== Comprehensive income $
3,732 $ 2,935 $ 6,554 $ 5,808 ========== ========== ==========
========== Earnings per share: Basic $ 0.49 $ 0.43 $ 0.87 $ 0.80
========== ========== ========== ========== Diluted $ 0.48 $ 0.42 $
0.86 $ 0.79 ========== ========== ========== ========== Weighted
average shares: Basic 7,651 7,657 7,650 7,662 ========== ==========
========== ========== Diluted 7,746 7,714 7,745 7,720 ==========
========== ========== ========== Dividends declared per share $
0.12 $ 0.12 $ 0.24 $ 0.24 ========== ========== ==========
========== June 30, Dec. 31, June 30, 2005 2004 2004 ----------
---------- ---------- Total assets $1,374,194 $1,233,403 $1,125,002
Cash and cash equivalents 81,936 70,648 34,445 Investment
securities 61,035 45,910 38,140 Loans, net (1) 1,142,821 1,032,297
972,956 Deposits 1,148,434 998,022 884,014 Shareholders' equity
113,486 108,718 105,509 Tangible shareholders' equity (2) 90,167
85,023 84,848 Book value per share 14.83 14.22 13.80 Tangible book
value per share (2) 11.78 11.12 11.10 (1) Includes loans held for
sale. (2) Tangible shareholders' equity is shareholders' equity
less goodwill and intangible assets. *T For unaudited financial
statements for the second quarter and six months ended June 30,
2005 and 2004, along with related information, click the following
links: http://www.irinfo.com/gcbs/2q05fsp.pdf or
http://www.irinfo.com/gcbs/2q04fs.pdf.
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