Green Bankshares Inc. (GRNB, Financial) filed Quarterly Report for the period ended 2010-06-30.
Green Bankshares Inc. has a market cap of $126 million; its shares were traded at around $9.55 with and P/S ratio of 0.8. GRNB is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management.
Net charge-offs for the current quarter totaled $4,868 compared with $3,882 during the first quarter of 2010 and $23,281 during the second quarter of 2009 when net charge-off levels peaked as the recession was deepening. During the third quarter of 2009, net charge-offs totaled $18,436 and in the fourth quarter of 2009 net charge-offs amounted to $6,437. Non-performing assets were $141,915 at June 30, 2010 compared with $132,726 at year end 2009 and $129,177 at June 30, 2009. During this time period, the Companys loan loss reserve to outstanding loans increased from 2.30% at June 30, 2009 to 2.60% at June 30, 2010. The Companys provision for loan losses totaled $4,749 for the three months ended June 30, 2010 compared with $3,889 for the first quarter of 2010 and $24,384 during the second quarter of 2009.
At June 30, 2010, the Company had total consolidated assets of $2,529,332, total consolidated deposits of $1,991,839, total consolidated loans, net of unearned income, of $1,928,174 and total consolidated shareholders equity of $233,150 compared to $2,619,139, $2,084,096, $2,043,807, and 226,769, respectively, at December 31, 2009. The Companys annualized return on average common shareholders equity for the three months ended June 30, 2010 was 3.76% and its annualized return on average total assets was 0.25%.
The Company believes its critical accounting policies and estimates include the valuation of the allowance for loan losses and the fair value of financial instruments and other real estate owned. Based on managements calculation, an allowance of $50,049, or 2.60% of total loans, net of unearned income, was an adequate estimate of losses inherent in the loan portfolio as of June 30, 2010. This estimate resulted in a provision for loan losses in the income statement of $4,749 and $8,638, respectively, for the three and six months ended June 30, 2010. If the economic conditions, loan mix and amount of future charge-off percentages differ significantly from those assumptions used by management in making its determination, the allowance for loan losses and provision for loan losses on the income statement could be materially affected.
Net Income. Net operating income for the three and six months ended June 30, 2010 was $1,561 and $3,507, as compared to a net operating loss of $151,400 and $147,852 or $13,986 and $10,438 after adjusting for the non-cash net of tax goodwill charge of $137,414 (see non-GAAP reconciliation table) for the same period in 2009. The increase of $15,547 (see non-GAAP reconciliation table) from the second quarter of 2009 resulted primarily from a reduction in provision for loan losses of $19,635 as the Company experienced a reduction in loan loss charge-offs and a decline in non-interest expense of $3,747 primarily from the reduction in OREO expenses. These were coupled with increases of $1,293 in net interest income and $1,963 in total non-interest income. Second quarter 2010 net interest income totaled $21,473 compared with $20,180 during the prior year period. The increase in net interest income was principally a result of a widening in the net interest margin as the Company re-priced interest-bearing liabilities in a lower market rate environment while also maintaining a disciplined approach to loan pricing. The net interest margin widened from 3.43% in the second quarter of 2009 to 3.86% for the comparable 2010 quarter, which was slightly lower than the 3.90% experienced in the first quarter of 2010. Non-interest income increased by $1,963 from the second quarter of last year and totaled $8,771 for the 2010 second quarter. The increase was principally the result of a $897 improvement in deposit service charge income driven by the continued success of the Companys High Performance Checking product and the increased number of net new checking accounts opened. Further contributing to this increase were lower other-than-temporary impairment charges of $640 and higher revenues associated with annuity sales in the Companys Wealth Management Division along with additional mortgage banking income stimulated by the continuance of the U.S. Governments first-time homeowners buying program. Total non-interest expenses amounted to $21,274 during the quarter compared with $25,021 after adjusting for the non-cash, pre-tax goodwill impairment charge of $143,389 (see non-GAAP reconciliation table) during the same period for the prior year. The principal improvements in non-interest expense driving this decrease, compared to the same period a year ago, were lower OREO expenses of $2,180 and lower FDIC insurance expenses of $1,341.
Net Interest Income. The largest source of earnings for the Company is net interest income, which is the difference between interest income on earning assets and interest expense on deposits and other interest-bearing liabilities. The primary factors which affect net interest income are changes in volume and rates on interest-earning assets and interest-bearing liabilities, which are affected in part by managements responses to changes in interest rates through asset/liability management. During the three and six months ended June 30, 2010, net interest income was $21,473 and $43,132, as compared to $20,180 and $39,609 for the same periods in 2009, representing an increase of 6% and 9%, respectively. This increase of $1,293 in net interest income resulted primarily from the increase of the net interest margin driven primarily by the reduction of interest rates on interest-bearing liabilities.
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Green Bankshares Inc. has a market cap of $126 million; its shares were traded at around $9.55 with and P/S ratio of 0.8. GRNB is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management.
Highlight of Business Operations:
The Companys results of operations for the three and six month periods ended June 30, 2010, before dividend and related costs of $1,250 and $2,500, respectively associated with the issuance of Preferred Stock to the U.S. Treasury, increased $153 million and $151.4 million or $15.5 million and $13.9 million compared to the same periods in 2009 after adjusting for the non-cash, non-recurring, pre-tax goodwill impairment charge of $143.4 million which occurred in the quarter ended June 30, 2009 (See reconciliation of non-GAAP measures table below). The year over year increase was primarily driven by lower loan loss provisioning expense coupled with improving net interest income and non-interest income further bolstered by declining operating expenses.Net charge-offs for the current quarter totaled $4,868 compared with $3,882 during the first quarter of 2010 and $23,281 during the second quarter of 2009 when net charge-off levels peaked as the recession was deepening. During the third quarter of 2009, net charge-offs totaled $18,436 and in the fourth quarter of 2009 net charge-offs amounted to $6,437. Non-performing assets were $141,915 at June 30, 2010 compared with $132,726 at year end 2009 and $129,177 at June 30, 2009. During this time period, the Companys loan loss reserve to outstanding loans increased from 2.30% at June 30, 2009 to 2.60% at June 30, 2010. The Companys provision for loan losses totaled $4,749 for the three months ended June 30, 2010 compared with $3,889 for the first quarter of 2010 and $24,384 during the second quarter of 2009.
At June 30, 2010, the Company had total consolidated assets of $2,529,332, total consolidated deposits of $1,991,839, total consolidated loans, net of unearned income, of $1,928,174 and total consolidated shareholders equity of $233,150 compared to $2,619,139, $2,084,096, $2,043,807, and 226,769, respectively, at December 31, 2009. The Companys annualized return on average common shareholders equity for the three months ended June 30, 2010 was 3.76% and its annualized return on average total assets was 0.25%.
The Company believes its critical accounting policies and estimates include the valuation of the allowance for loan losses and the fair value of financial instruments and other real estate owned. Based on managements calculation, an allowance of $50,049, or 2.60% of total loans, net of unearned income, was an adequate estimate of losses inherent in the loan portfolio as of June 30, 2010. This estimate resulted in a provision for loan losses in the income statement of $4,749 and $8,638, respectively, for the three and six months ended June 30, 2010. If the economic conditions, loan mix and amount of future charge-off percentages differ significantly from those assumptions used by management in making its determination, the allowance for loan losses and provision for loan losses on the income statement could be materially affected.
Net Income. Net operating income for the three and six months ended June 30, 2010 was $1,561 and $3,507, as compared to a net operating loss of $151,400 and $147,852 or $13,986 and $10,438 after adjusting for the non-cash net of tax goodwill charge of $137,414 (see non-GAAP reconciliation table) for the same period in 2009. The increase of $15,547 (see non-GAAP reconciliation table) from the second quarter of 2009 resulted primarily from a reduction in provision for loan losses of $19,635 as the Company experienced a reduction in loan loss charge-offs and a decline in non-interest expense of $3,747 primarily from the reduction in OREO expenses. These were coupled with increases of $1,293 in net interest income and $1,963 in total non-interest income. Second quarter 2010 net interest income totaled $21,473 compared with $20,180 during the prior year period. The increase in net interest income was principally a result of a widening in the net interest margin as the Company re-priced interest-bearing liabilities in a lower market rate environment while also maintaining a disciplined approach to loan pricing. The net interest margin widened from 3.43% in the second quarter of 2009 to 3.86% for the comparable 2010 quarter, which was slightly lower than the 3.90% experienced in the first quarter of 2010. Non-interest income increased by $1,963 from the second quarter of last year and totaled $8,771 for the 2010 second quarter. The increase was principally the result of a $897 improvement in deposit service charge income driven by the continued success of the Companys High Performance Checking product and the increased number of net new checking accounts opened. Further contributing to this increase were lower other-than-temporary impairment charges of $640 and higher revenues associated with annuity sales in the Companys Wealth Management Division along with additional mortgage banking income stimulated by the continuance of the U.S. Governments first-time homeowners buying program. Total non-interest expenses amounted to $21,274 during the quarter compared with $25,021 after adjusting for the non-cash, pre-tax goodwill impairment charge of $143,389 (see non-GAAP reconciliation table) during the same period for the prior year. The principal improvements in non-interest expense driving this decrease, compared to the same period a year ago, were lower OREO expenses of $2,180 and lower FDIC insurance expenses of $1,341.
Net Interest Income. The largest source of earnings for the Company is net interest income, which is the difference between interest income on earning assets and interest expense on deposits and other interest-bearing liabilities. The primary factors which affect net interest income are changes in volume and rates on interest-earning assets and interest-bearing liabilities, which are affected in part by managements responses to changes in interest rates through asset/liability management. During the three and six months ended June 30, 2010, net interest income was $21,473 and $43,132, as compared to $20,180 and $39,609 for the same periods in 2009, representing an increase of 6% and 9%, respectively. This increase of $1,293 in net interest income resulted primarily from the increase of the net interest margin driven primarily by the reduction of interest rates on interest-bearing liabilities.
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