##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-14289
 
 GREEN BANKSHARES, INC.
  Tennessee
    
    62-1222567(State or other jurisdiction of incorporation or
    
    (I.R.S. Employer Identification No.)organization)100 North Main Street, Greeneville, Tennessee
    
    37743-4992(Address of principle executive offices)
    
    (Zip Code)
 (423) 639-5111
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of each Exchange on which RegisteredCommon Stock  $2.00 par value
    
    Nasdaq Global Select Market
 Securities registered pursuant to Section 12(g) of the Act:
 None
 YES o NO þ
 YES o NO þ
 þ o
 YES o NO o
 o
  Large accelerated filer o

    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IITEM 1. BUSINESS.ITEM 1A. RISK FACTORSITEM 1B. UNRESOLVED STAFF COMMENTSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESITEM 6. SELECTED FINANCIAL DATAITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A. CONTROLS AND PROCEDURESITEM 9B. OTHER INFORMATIONPART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEITEM 11. EXECUTIVE COMPENSATIONITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESPART IVITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULESSIGNATURESEXHIBIT INDEXExhibit 10.40Exhibit 10.41Exhibit 10.42Exhibit 10.43Exhibit 10.44Exhibit 10.46Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2Exhibit 99.1Exhibit 99.2    Table of Contents  
 PART I
 Forward-Looking Statements
 The information contained herein contains forward-looking statements that involve a number of risks
and uncertainties. A number of factors, including those discussed herein, could cause results to
differ materially from those anticipated by such forward-looking statements which are within the
meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. In addition, such forward-looking statements are
necessarily dependent upon assumptions, estimates and data that may be incorrect or imprecise.
Accordingly, any forward-looking statements included herein do not purport to be predictions of
future events or circumstances and may not be realized. Forward-looking statements can be
identified by, among other things, the use of forward-looking terminology such as trends,
assumptions, target, guidance, outlook, opportunity, future, plans, goals,
objectives, expectations, near-term, long-term, projection, may, will, would,
could, expect, intend, estimate, anticipate, believe, potential, regular, or
continue or the negatives thereof, or other variations thereon of comparable terminology, or by
discussions of strategy or intentions. Such statements may include, but are not limited to,
projections of revenue, income or loss, expenditures, acquisitions, plans for future operations,
financing needs or plans relating to services of the Company, as well as assumptions relating to
the foregoing. The Companys actual results may differ materially from the results anticipated in
forward-looking statements due to a variety of factors, including, but not limited to those
identified in Item 1A. Risk Factors in this Form 10-K and (1) deterioration in the financial
condition of borrowers resulting in significant increases in loan losses and provisions for those
losses; (2) continuation of the historically low short-term interest rate environment; (3) changes
in loan underwriting, credit review or loss reserve policies associated with economic conditions,
examination conclusions, or regulatory developments; (4) increased competition with other financial
institutions in the markets that the Bank serves; (5) greater than anticipated deterioration or
lack of sustained growth in the national or local economies; (6) rapid fluctuations or
unanticipated changes in interest rates; (7) the impact of governmental restrictions on entities
participating in the Capital Purchase Program of the United States Department of the Treasury; (8)
changes in state and federal legislation, regulations or policies applicable to banks or other
financial service providers, including regulatory or legislative developments arising out of
current unsettled conditions in the economy and (9) the loss of key personnel.
 Readers are cautioned not to place undue reliance on forward-looking statements made in this
document, since the statements speak only as of the documents date. All forward-looking statements
included in this Annual Report on Form 10-K are expressly qualified in their entirety by the
cautionary statements in this section and to the more detailed risk factors included below under
Part I, Item 1A Risk Factors. The Company has no obligation and does not intend to publicly
update or revise any forward-looking statements contained in or incorporated by reference into this
Annual Report on Form 10-K, to reflect events or circumstances occurring after the date of this
document or to reflect the occurrence of unanticipated events. Readers are advised, however, to
consult any further disclosures the Company may make on related subjects in its documents filed
with or furnished to the Securities and Exchange Commission (SEC) or in its other public
disclosures.
 
 ITEM 1. BUSINESS.
 Presentation of Amounts
 All dollar amounts set forth below, other than share and per-share amounts, are in thousands
unless otherwise noted. Unless this Form 10-K indicates otherwise or the context otherwise
requires, the terms we, our, us, the Company or Green Bankshares as used herein refer to
Green Bankshares, Inc. and its subsidiaries, including GreenBank, which we sometimes refer to as
GreenBank, the Bank or our Bank.
 Green Bankshares, Inc.
   1




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##### Table of Contents



Lending Activities:
 General:
 Commercial Real Estate Lending:
 Residential Real Estate Lending:
 Commercial Business Lending:
  Consumer Lending:
  2




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##### Table of Contents



Investment Activities:
  Sources of Funds:
 Deposits:
  Borrowings:
     www.greenbankusa.com
  3




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##### Table of Contents



GreenBank and its Subsidiaries
     Growth and Business Strategy
       4




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##### Table of Contents



Lending Activities
 General
 Loan Composition
 2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Commercial real estate
    
    $
    1,306,398
    
    
    $
    1,430,225
    
    
    $
    1,549,457
    
    
    $
    921,190
    
    
    $
    729,254Residential real estate
    
    
    392,365
    
    
    
    397,922
    
    
    
    398,779
    
    
    
    281,629
    
    
    
    319,797Commercial
    
    
    274,346
    
    
    
    315,099
    
    
    
    320,264
    
    
    
    258,998
    
    
    
    245,285Consumer
    
    
    83,382
    
    
    
    89,733
    
    
    
    97,635
    
    
    
    87,111
    
    
    
    90,682Other
    
    
    2,117
    
    
    
    4,656
    
    
    
    3,871
    
    
    
    2,203
    
    
    
    3,476Unearned interest
    
    
    (14,801
    )
    
    
    (14,245
    )
    
    
    (13,630
    )
    
    
    (11,502
    )
    
    
    (9,852
    )Loans, net of unearned interest
    
    $
    2,043,807
    
    
    $
    2,223,390
    
    
    $
    2,356,376
    
    
    $
    1,539,629
    
    
    $
    1,378,642Allowance for loan losses
    
    $
    (50,161
    )
    
    $
    (48,811
    )
    
    $
    (34,111
    )
    
    $
    (22,302
    )
    
    $
    (19,739
    )
 Loan Maturities
 Due in One
    
    
    Due After One Year
    
    
    Due AfterYear or Less
    
    
    Through Five Years
    
    
    Five Years
    
    
    TotalCommercial real estate
    
    $
    652,945
    
    
    $
    614,115
    
    
    $
    39,338
    
    
    $
    1,306,398Residential real estate (1)
    
    
    59,237
    
    
    
    91,091
    
    
    
    235,548
    
    
    
    385,876Commercial
    
    
    189,316
    
    
    
    76,552
    
    
    
    8,478
    
    
    
    274,346Consumer (1)
    
    
    22,312
    
    
    
    50,161
    
    
    
    2,597
    
    
    
    75,070Other
    
    
    1,754
    
    
    
    278
    
    
    
    85
    
    
    
    2,117Total
    
    $
    925,564
    
    
    $
    832,197
    
    
    $
    286,046
    
    
    $
    2,043,807
 (1)
    
    Net of unearned interest  5




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##### Table of Contents



Fixed Rate
    
    
    Variable Rate
    
    
    TotalCommercial real estate
    
    $
    484,758
    
    
    $
    168,695
    
    
    $
    653,453Residential real estate
    
    
    128,732
    
    
    
    197,907
    
    
    
    326,639Commercial
    
    
    47,638
    
    
    
    37,392
    
    
    
    85,030Consumer
    
    
    52,059
    
    
    
    699
    
    
    
    52,758Other
    
    
    279
    
    
    
    84
    
    
    
    363Total
    
    $
    713,466
    
    
    $
    404,777
    
    
    $
    1,118,243
 Commercial Real Estate Loans
 Residential Real Estate
  Commercial Loans
 Consumer Loans
  6




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##### Table of Contents



Past Due, Special Mention, Classified and Nonaccrual Loans
    At December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Loans accounted for on a non-accrual
basis
    
    $
    75,411
    
    
    $
    30,926
    
    
    $
    32,060
    
    
    $
    3,479
    
    
    $
    5,915Accruing loans which are contractually
past due 90 days or more as to interest
or principal payments
    
    
    147
    
    
    
    509
    
    
    
    18
    
    
    
    28
    
    
    
    809Total non-performing loans
    
    
    75,558
    
    
    
    31,435
    
    
    
    32,078
    
    
    
    3,507
    
    
    
    6,724Real estate owned:Foreclosures
    
    
    56,952
    
    
    
    44,964
    
    
    
    4,401
    
    
    
    1,445
    
    
    
    2,920Other real estate held and
repossessed assets
    
    
    216
    
    
    
    407
    
    
    
    458
    
    
    
    243
    
    
    
    823Total non-performing assets
    
    $
    132,726
    
    
    $
    76,806
    
    
    $
    36,937
    
    
    $
    5,195
    
    
    $
    10,467Restructured loans not included above
    
    $
    11,632
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
   7




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##### Table of Contents



Allowance for Loan Losses
   8




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##### Table of Contents



Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Balance at beginning of year
    
    $
    48,811
    
    
    $
    34,111
    
    
    $
    22,302
    
    
    $
    19,739
    
    
    $
    15,721Reserve acquired in acquisition
    
    
    
    
    
    
    
    
    
    
    9,022
    
    
    
    
    
    
    
    1,467Subtotal
    
    
    48,811
    
    
    
    34,111
    
    
    
    31,324
    
    
    
    19,739
    
    
    
    17,188Charge-offs:Commercial real estate
    
    
    (40,893
    )
    
    
    (28,759
    )
    
    
    (7,516
    )
    
    
    (494
    )
    
    
    (189
    )Commercial
    
    
    (6,941
    )
    
    
    (6,177
    )
    
    
    (2,065
    )
    
    
    (879
    )
    
    
    (1,500
    )Subtotal
    
    
    (47,834
    )
    
    
    (34,936
    )
    
    
    (9,581
    )
    
    
    (1,373
    )
    
    
    (1,689
    )Residential real estate
    
    
    (3,176
    )
    
    
    (2,275
    )
    
    
    (840
    )
    
    
    (947
    )
    
    
    (622
    )Consumer
    
    
    (3,880
    )
    
    
    (4,058
    )
    
    
    (3,050
    )
    
    
    (2,009
    )
    
    
    (3,250
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28
    )
    
    
    (22
    )Total charge-offs
    
    
    (54,890
    )
    
    
    (41,269
    )
    
    
    (13,471
    )
    
    
    (4,357
    )
    
    
    (5,583
    )Recoveries:Commercial real estate
    
    
    3,066
    
    
    
    1,691
    
    
    
    289
    
    
    
    17
    
    
    
    180Commercial
    
    
    1,669
    
    
    
    221
    
    
    
    227
    
    
    
    171
    
    
    
    160Subtotal
    
    
    4,735
    
    
    
    1,912
    
    
    
    516
    
    
    
    188
    
    
    
    340Residential real estate
    
    
    402
    
    
    
    138
    
    
    
    213
    
    
    
    284
    
    
    
    166Consumer
    
    
    853
    
    
    
    1,106
    
    
    
    1,038
    
    
    
    936
    
    
    
    1,246Other
    
    
    4
    
    
    
    3
    
    
    
    8
    
    
    
    5
    
    
    
    17Total recoveries
    
    
    5,994
    
    
    
    3,159
    
    
    
    1,775
    
    
    
    1,413
    
    
    
    1,769Net charge-offs
    
    
    (48,896
    )
    
    
    (38,110
    )
    
    
    (11,696
    )
    
    
    (2,944
    )
    
    
    (3,814
    )Provision for loan losses
    
    
    50,246
    
    
    
    52,810
    
    
    
    14,483
    
    
    
    5,507
    
    
    
    6,365Balance at end of year
    
    $
    50,161
    
    
    $
    48,811
    
    
    $
    34,111
    
    
    $
    22,302
    
    
    $
    19,739Ratio of net charge-offs to average
loans outstanding, net of
unearned discount, during
the period
    
    
    2.25
    %
    
    
    1.63
    %
    
    
    .57
    %
    
    
    .20
    %
    
    
    .32
    %Ratio of allowance for loan losses to
non-performing loans
    
    
    66.39
    %
    
    
    155.28
    %
    
    
    106.34
    %
    
    
    635.93
    %
    
    
    293.56
    %Ratio of allowance for loan losses to
total loans, net of unearned income
    
    
    2.45
    %
    
    
    2.20
    %
    
    
    1.45
    %
    
    
    1.45
    %
    
    
    1.43
    %
 Breakdown of allowance for loan losses by category.
 At December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofloans in
    
    
    
    
    
    
    loans in
    
    
    
    
    
    
    loans in
    
    
    
    
    
    
    loans in
    
    
    
    
    
    
    loans ineach
    
    
    
    
    
    
    each
    
    
    
    
    
    
    each
    
    
    
    
    
    
    each
    
    
    
    
    
    
    eachcategory
    
    
    
    
    
    
    category
    
    
    
    
    
    
    category
    
    
    
    
    
    
    category
    
    
    
    
    
    
    categoryBalance at end of period
    
    
    
    
    
    to total
    
    
    
    
    
    
    to total
    
    
    
    
    
    
    to total
    
    
    
    
    
    
    to total
    
    
    
    
    
    
    to totalapplicable to:
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loansCommercial real estate
    
    $
    36,527
    
    
    
    63.93
    %
    
    $
    35,714
    
    
    
    64.33
    %
    
    $
    20,489
    
    
    
    65.38
    %
    
    $
    10,619
    
    
    
    59.38
    %
    
    $
    8,889
    
    
    
    52.90
    %Residential real estate
    
    
    4,350
    
    
    
    18.88
    %
    
    
    3,669
    
    
    
    17.63
    %
    
    
    2,395
    
    
    
    16.83
    %
    
    
    1,639
    
    
    
    18.16
    %
    
    
    2,035
    
    
    
    22.92
    %Commercial
    
    
    5,840
    
    
    
    13.42
    %
    
    
    6,479
    
    
    
    14.17
    %
    
    
    7,575
    
    
    
    13.51
    %
    
    
    6,645
    
    
    
    16.70
    %
    
    
    4,797
    
    
    
    17.79
    %Consumer
    
    
    3,437
    
    
    
    3.67
    %
    
    
    2,927
    
    
    
    3.66
    %
    
    
    3,635
    
    
    
    4.12
    %
    
    
    3,384
    
    
    
    5.62
    %
    
    
    3,960
    
    
    
    6.14
    %Other
    
    
    7
    
    
    
    0.10
    %
    
    
    22
    
    
    
    0.21
    %
    
    
    17
    
    
    
    0.16
    %
    
    
    15
    
    
    
    0.14
    %
    
    
    58
    
    
    
    0.25
    %Totals
    
    $
    50,161
    
    
    
    100.00
    %
    
    $
    48,811
    
    
    
    100.00
    %
    
    $
    34,111
    
    
    
    100.00
    %
    
    $
    22,302
    
    
    
    100.00
    %
    
    $
    19,739
    
    
    
    100.00
    %
  9




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##### Table of Contents



Investment Activities
 General
 Securities by Category
 At December 31,2009
    
    
    2008
    
    
    2007Securities Held to Maturity:State and political subdivisions
    
    $
    251
    
    
    $
    404
    
    
    $
    1,049Other securities
    
    
    375
    
    
    
    253
    
    
    
    254Total
    
    $
    626
    
    
    $
    657
    
    
    $
    1,303Securities Available for Sale:U.S. government agencies
    
    $
    52,048
    
    
    $
    98,806
    
    
    $
    41,737State and political subdivisions
    
    
    32,192
    
    
    
    31,804
    
    
    
    34,388Collateralized mortgage obligations
    
    
    44,677
    
    
    
    68,373
    
    
    
    16,381Mortgage-backed securities
    
    
    16,892
    
    
    
    2,086
    
    
    
    139,790Trust preferred securities
    
    
    1,915
    
    
    
    2,493
    
    
    
    2,977Total
    
    $
    147,724
    
    
    $
    203,562
    
    
    $
    235,273
 Maturity Distributions of Securities
 Due After OneDue in One
    
    
    Year through
    
    
    Due After Five Years
    
    
    DueYear or Less
    
    
    Five Years
    
    
    through 10 Years
    
    
    After 10 Years
    
    
    TotalSecurities Held to Maturity:State and political subdivisions
    
    $
    
    
    
    $
    251
    
    
    $
    
    
    
    $
    
    
    
    $
    251Other securities
    
    
    100
    
    
    
    275
    
    
    
    
    
    
    
    
    
    
    
    375Securities Available for Sale:U.S. government agencies
    
    
    
    
    
    
    2,998
    
    
    
    12,994
    
    
    
    36,945
    
    
    
    52,937State and political subdivisions
    
    
    
    
    
    
    3,709
    
    
    
    22,344
    
    
    
    5,712
    
    
    
    31,765Collateralized mortgage obligations
    
    
    
    
    
    
    762
    
    
    
    2,458
    
    
    
    40,798
    
    
    
    44,018Mortgage-backed securities
    
    
    
    
    
    
    2,801
    
    
    
    6,357
    
    
    
    7,448
    
    
    
    16,606Trust preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,088
    
    
    
    2,088Subtotal
    
    $
    100
    
    
    $
    10,796
    
    
    $
    44,153
    
    
    $
    92,991
    
    
    $
    148,040Market value adjustment on available
for sale securities
    
    
    2
    
    
    
    176
    
    
    
    795
    
    
    
    (651
    )
    
    
    322Total
    
    $
    102
    
    
    $
    10,972
    
    
    $
    44,948
    
    
    $
    92,340
    
    
    $
    148,362Weighted average yield (a)
    
    
    4.68
    %
    
    
    4.56
    %
    
    
    5.15
    %
    
    
    4.58
    %
    
    
    4.78
    %
 
 (a)
    
    Weighted average yields on tax-exempt obligations have been computed on a fully
taxable-equivalent basis using a tax rate of 35%.   10




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##### Table of Contents



Deposits
   Year Ended December 31,2009
    
    
    2008
    
    
    2007Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    Average
    
    
    AverageBalance
    
    
    Rate Paid
    
    
    Balance
    
    
    Rate Paid
    
    
    Balance
    
    
    Rate PaidTypes of deposits (all in
domestic offices):Noninterest bearing demand deposits
    
    $
    162,765
    
    
    
    
    
    
    $
    187,058
    
    
    
    
    
    
    $
    184,529
    
    
    
    Interest-bearing demand deposits
    
    
    700,586
    
    
    
    1.30
    %
    
    
    577,024
    
    
    
    1.57
    %
    
    
    581,340
    
    
    
    2.78
    %Savings deposits
    
    
    83,549
    
    
    
    1.13
    %
    
    
    68,612
    
    
    
    .77
    %
    
    
    73,355
    
    
    
    .75
    %Time deposits
    
    
    1,166,640
    
    
    
    3.06
    %
    
    
    1,317,362
    
    
    
    3.68
    %
    
    
    951,455
    
    
    
    4.70
    %Total deposits
    
    $
    2,113,540
    
    
    
    
    
    
    $
    2,150,056
    
    
    
    
    
    
    $
    1,790,679
  Certificates ofMaturity Period
    
    DepositsThree months or less
    
    $
    71,027Over three through six months
    
    
    89,071Over six through twelve months
    
    
    166,565Over twelve months
    
    
    68,932Total
    
    $
    395,595
  11




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##### Table of Contents



Competition
   County
    
    Deposit ShareGreene, TN
    
    
    35.16
    %Hawkins, TN
    
    
    17.99
    %Lawrence, TN
    
    
    16.95
    %Smith, TN
    
    
    12.28
    %Sumner, TN
    
    
    11.03
    %Macon, TN
    
    
    9.32
    %Blount, TN
    
    
    8.52
    %Cocke, TN
    
    
    8.49
    %Hamblen, TN
    
    
    8.05
    %Montgomery, TN
    
    
    7.64
    %Madison, NC
    
    
    5.96
    %Washington, TN
    
    
    5.54
    %McMinn, TN
    
    
    5.48
    %Loudon, TN
    
    
    4.96
    %Bristol, VA1
    
    
    4.33
    %Rutherford, TN
    
    
    3.25
    %Williamson, TN
    
    
    2.74
    %Sullivan, TN
    
    
    2.40
    %Monroe, TN
    
    
    1.19
    %Davidson, TN
    
    
    0.68
    %Knox, TN
    
    
    0.65
    %
 1
    
    Bristol, VA is deemed a city. Employees
   12




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##### Table of Contents



Regulation, Supervision and Governmental Policy
  Bank Holding Company Regulation
 Acquisitions and Mergers
 
    
    The bank holding company has registered securities under Section 12 of the Securities
Exchange Act of 1934; or
 
    
    No other person owns a greater percentage of that class of voting securities
immediately after the transaction.
    Capital Requirements
 Dividends
  13




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Support of Banking Subsidiaries
  Transactions with Affiliates
  14




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##### Table of Contents



Bank Regulation
 Extensions of Credit
 Federal Deposit Insurance
  Safety and Soundness Standards
  15




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##### Table of Contents



Participation in the Capital Purchase Program of the Troubled Asset Relief Program
  
    
    Ensure that the incentive compensation programs for its senior executive officers do
not encourage unnecessary and excessive risks that threaten the value of the Company;
 
    
    Implement a required clawback of any bonus or incentive compensation paid to the
Companys senior executive officers and the next twenty most highly compensated employees
based on materially inaccurate financial statements or any other materially inaccurate
performance metric;
 
    
    Not make any bonus, incentive or retention payment to any of the Companys five most
highly compensated employees, except as permitted under the IFR;
 
    
    Not make any golden parachute payment (as defined in the IFR) to any of the Companys
senior executive officers or next five most highly compensated employees; and
 
    
    Agree not to deduct for tax purposes executive compensation in excess of $500,000 in
any one fiscal year for each of the Companys senior executive officers.
 Capital Requirements
  Legislative, Legal and Regulatory Developments
  16




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##### Table of Contents



USA Patriot Act
   Additional Information
  
 ITEM 1A. RISK FACTORS.
 Investing in our common stock involves various risks which are particular to our company,
our industry and our market area. Several risk factors regarding investing in our common stock are
discussed below. This listing should not be considered as all-inclusive. If any of the following
risks were to occur, we may not be able to conduct our business as currently planned and our
financial condition or operating results could be negatively impacted. These matters could cause
the trading price of our common stock to decline in future periods.
 We could sustain losses if our asset quality declines further.
  Our loan portfolio includes an elevated, although shrinking level, of residential construction and
land development loans, which loans have a greater credit risk than residential mortgage loans.
   17




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Negative developments in the U.S. and local economy and in local real estate markets have adversely
impacted our operations and results and may continue to adversely impact our results in the future.
  Negative developments in the financial services industry and U.S. and global credit markets may
adversely impact our operations and results.
  Our business is subject to the success of the local economies where we operate.
    18




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##### Table of Contents



An inadequate allowance for loan losses would reduce our earnings.
   We have increased levels of other real estate, primarily as a result of foreclosures, and we
anticipate higher levels of foreclosed real estate expense.
  Liquidity needs could adversely affect our results of operations and financial condition.
   19




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We rely on dividends from our bank subsidiary as our primary source of liquidity and payment of
these dividends is limited under Tennessee law.
  Changes in interest rates could adversely affect our results of operations and financial condition.
  Legislative and regulatory initiatives that were enacted in response to the recent financial crisis
are beginning to wind down.
  National or state legislation or regulation may increase our expenses and reduce earnings.
   20




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##### Table of Contents



Competition from financial institutions and other financial service providers may adversely affect
our profitability.
    If we continue to experience losses at levels that we experienced during 2008 and 2009 we may need
to raise additional capital in the future, but that capital may not be available when it is needed.
   Our ability to maintain required capital levels and adequate sources of funding and liquidity could
be impacted by changes in the capital markets and deteriorating economic and market conditions.
  We have a significant deferred tax asset and cannot assure you that it will be fully realized.
   21




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We rely heavily on the services of key personnel.
   The limitations on bonuses, retention awards, severance payments and incentive compensation
contained in ARRA may adversely affect our ability to retain our highest performing employees.
  We are subject to extensive regulation that could limit or restrict our activities.
    The amount of common stock owned by, and other compensation arrangements with, our officers and
directors may make it more difficult to obtain shareholder approval of potential takeovers that
they oppose.
  Our long-term business strategy includes the continuation of growth plans, and our financial
condition and results of operations could be affected if our long-term business strategies are not
effectively executed.
  
    
    Maintaining loan quality;
  22




---



##### Table of Contents




    
    Maintaining adequate management personnel and information systems to oversee such
growth; and,
 
    
    Maintaining adequate control and compliance functions.
 Operating Results:
 Development of Offices:
 Expansion into New Markets:
 Regulatory and Economic Factors:
  We may face risks with respect to future expansion.
  
    
    the time and costs associated with identifying and evaluating potential acquisitions
and merger partners;
 
    
    inaccuracies in the estimates and judgments used to evaluate credit, operations,
management and market risks with respect to the target institution;
 
    
    the time and costs of evaluating new markets, hiring experienced local management and
opening new offices, and the time lags between these activities and the generation of
sufficient assets and deposits to support the costs of the expansion;
 
    
    our ability to finance an acquisition and possible dilution to our existing
shareholders;
 
    
    the diversion of our managements attention to the negotiation of a transaction, and
the integration of the operations and personnel of the combining businesses;
 
    
    entry into new markets where we lack experience;
 
    
    the introduction of new products and services into our business;
 
    
    the incurrence and possible impairment of goodwill associated with an acquisition and
possible adverse short-term effects on our results of operations; and
 
    
    the risk of loss of key employees and customers.
   23




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We are subject to Tennessee anti-takeover statutes and certain charter provisions which could
decrease our chances of being acquired even if the acquisition is in our shareholders best
interests.
  The success and growth of our business will depend on our ability to adapt to technological
changes.
  Even though our common stock is currently traded on The Nasdaq Global Select Market, the trading
volume in our common stock has been thin and the sale of substantial amounts of our common stock in
the public market could depress the price of our common stock.
    We may issue additional common stock or other equity securities in the future which could dilute
the ownership interest of existing common shareholders.
  Our ability to declare and pay dividends is limited by law and by the terms of the Series A
preferred stock and we may be unable to pay future dividends.
   24




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##### Table of Contents



Holders of our junior subordinated debentures have rights that are senior to those of our common
and Series A preferred shareholders.
  The Series A preferred stock impacts net income available to our common shareholders and our
earnings per share.
  Holders of the Series A preferred stock have rights that are senior to those of our common
shareholders.
  Holders of the Series A preferred stock may, under certain circumstances, have the right to elect
two directors to our board of directors.
   25




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##### Table of Contents



ITEM 1B. UNRESOLVED STAFF COMMENTS.
  
 ITEM 2. PROPERTIES.
  
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
   26




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##### Table of Contents



PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
   High/Low Sales Price
    
    
    Closing
    
    
    Dividends PaidDuring Quarter
    
    
    Price
    
    
    Per Share2009:First quarter
    
    $
    14.71 / 4.51
    
    
    $
    8.80
    
    
    $
    0.13Second quarter
    
    
    9.73 / 4.14
    
    
    
    4.48
    
    
    
    Third quarter
    
    
    6.83 / 3.25
    
    
    
    5.00
    
    
    
    Fourth quarter
    
    
    5.48 / 3.51
    
    
    
    3.55
    
    
    
    $
    0.132008:First quarter
    
    $
    22.36 / 15.18
    
    
    $
    17.53
    
    
    $
    0.13Second quarter
    
    
    21.98 / 13.89
    
    
    
    13.89
    
    
    
    0.13Third quarter
    
    
    25.17 / 11.85
    
    
    
    23.29
    
    
    
    0.13Fourth quarter
    
    
    24.61 / 13.20
    
    
    
    13.54
    
    
    
    0.13$
    0.52
     27




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##### Table of Contents



ITEM 6. SELECTED FINANCIAL DATA.
 2009
    
    
    2008
    
    
    2007(1)
    
    
    2006
    
    
    2005(in thousands, except per share data, ratios and percentages)Total interest income
    
    $
    138,456
    
    
    $
    170,516
    
    
    $
    176,626
    
    
    $
    117,357
    
    
    $
    87,191Total interest expense
    
    
    57,931
    
    
    
    75,491
    
    
    
    81,973
    
    
    
    45,400
    
    
    
    28,405Net interest income
    
    
    80,525
    
    
    
    95,025
    
    
    
    94,653
    
    
    
    71,957
    
    
    
    58,786Provision for loan losses
    
    
    (50,246
    )
    
    
    (52,810
    )
    
    
    (14,483
    )
    
    
    (5,507
    )
    
    
    (6,365
    )Net interest income after provision for loan losses
    
    
    30,279
    
    
    
    42,215
    
    
    
    80,170
    
    
    
    66,450
    
    
    
    52,421Noninterest income
    
    
    31,578
    
    
    
    33,614
    
    
    
    27,602
    
    
    
    20,710
    
    
    
    14,756Noninterest expense
    
    
    (229,587
    )
    
    
    (85,837
    )
    
    
    (69,252
    )
    
    
    (52,708
    )
    
    
    (44,340
    )Income (loss) before income taxes
    
    
    (167,730
    )
    
    
    (10,008
    )
    
    
    38,520
    
    
    
    34,452
    
    
    
    22,837Income tax (expense) benefit
    
    
    17,036
    
    
    
    4,648
    
    
    
    (14,146
    )
    
    
    (13,190
    )
    
    
    (8,674
    )Net income (loss)
    
    
    (150,694
    )
    
    
    (5,360
    )
    
    
    24,374
    
    
    
    21,262
    
    
    
    14,163Preferred stock dividend and accretion
of discount on warrants
    
    
    (4,982
    )
    
    
    (92
    )
    
    
    
    
    
    
    
    
    
    
    Net income (loss) available to common shareholders
    
    $
    (155,676
    )
    
    $
    (5,452
    )
    
    $
    24,374
    
    
    $
    21,262
    
    
    $
    14,163Per Share Data:Net income (loss), basic
    
    $
    (11.91
    )
    
    $
    (0.42
    )
    
    $
    2.07
    
    
    $
    2.17
    
    
    $
    1.73Net income (loss), assuming dilution
    
    $
    (11.91
    )
    
    $
    (0.42
    )
    
    $
    2.07
    
    
    $
    2.14
    
    
    $
    1.71Net income (loss), assuming dilution adjusted for
goodwill impairment charge(7)
    
    $
    (1.40
    )
    
    $
    (0.42
    )
    
    $
    2.07
    
    
    $
    2.14
    
    
    $
    1.71Dividends declared
    
    $
    0.13
    
    
    $
    0.52
    
    
    $
    0.68
    
    
    $
    0.64
    
    
    $
    0.62Common book value(2)(7)
    
    $
    12.15
    
    
    $
    24.09
    
    
    $
    24.94
    
    
    $
    18.80
    
    
    $
    17.20Tangible common book value(3)(7)
    
    $
    11.44
    
    
    $
    12.23
    
    
    $
    12.73
    
    
    $
    14.87
    
    
    $
    13.15Financial Condition Data:Assets
    
    $
    2,619,139
    
    
    $
    2,944,671
    
    
    $
    2,947,741
    
    
    $
    1,772,654
    
    
    $
    1,619,989Loans, net of unearned interest
    
    $
    2,043,807
    
    
    $
    2,223,390
    
    
    $
    2,356,376
    
    
    $
    1,539,629
    
    
    $
    1,378,642Cash and investments
    
    $
    382,578
    
    
    $
    415,607
    
    
    $
    314,615
    
    
    $
    91,997
    
    
    $
    104,872Federal funds sold
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    25,983
    
    
    $
    28,387Deposits
    
    $
    2,084,096
    
    
    $
    2,184,147
    
    
    $
    1,986,793
    
    
    $
    1,332,505
    
    
    $
    1,295,879FHLB advances and notes payable
    
    $
    171,999
    
    
    $
    229,349
    
    
    $
    318,690
    
    
    $
    177,571
    
    
    $
    105,146Subordinated debentures
    
    $
    88,662
    
    
    $
    88,662
    
    
    $
    88,662
    
    
    $
    13,403
    
    
    $
    13,403Federal funds purchased and repurchase agreements
    
    $
    24,449
    
    
    $
    35,302
    
    
    $
    194,525
    
    
    $
    42,165
    
    
    $
    17,498Shareholders equity
    
    $
    226,769
    
    
    $
    381,231
    
    
    $
    322,477
    
    
    $
    184,471
    
    
    $
    168,021Common shareholders equity(2)(7)
    
    $
    160,034
    
    
    $
    315,885
    
    
    $
    322,477
    
    
    $
    184,471
    
    
    $
    168,021Tangible common shareholders equity(3)(7)
    
    $
    150,699
    
    
    $
    160,411
    
    
    $
    164,650
    
    
    $
    145,931
    
    
    $
    128,399Tangible shareholders equity(4)(7)
    
    $
    217,434
    
    
    $
    225,757
    
    
    $
    164,650
    
    
    $
    145,931
    
    
    $
    128,399Selected Ratios:Interest rate spread
    
    
    3.19
    %
    
    
    3.48
    %
    
    
    3.83
    %
    
    
    4.32
    %
    
    
    4.30
    %Net interest margin(6)
    
    
    3.34
    %
    
    
    3.70
    %
    
    
    4.25
    %
    
    
    4.77
    %
    
    
    4.61
    %Total tangible equity to tangible assets(4)(5)(7)
    
    
    8.33
    %
    
    
    8.09
    %
    
    
    5.90
    %
    
    
    8.42
    %
    
    
    8.12
    %Tangible common equity to tangible assets(3)(5)(7)
    
    
    5.77
    %
    
    
    5.75
    %
    
    
    5.90
    %
    
    
    8.42
    %
    
    
    8.12
    %Return on average assets
    
    
    (5.59
    %)
    
    
    (0.18
    %)
    
    
    0.98
    %
    
    
    1.28
    %
    
    
    1.02
    %Return on average equity
    
    
    (50.44
    %)
    
    
    (1.64
    %)
    
    
    8.96
    %
    
    
    11.91
    %
    
    
    11.09
    %Return on average common equity(2)(7)
    
    
    (64.25
    %)
    
    
    (1.65
    %)
    
    
    8.96
    %
    
    
    11.91
    %
    
    
    11.09
    %Return on average common tangible equity(3)(7)
    
    
    (96.77
    %)
    
    
    (3.14
    %)
    
    
    15.41
    %
    
    
    15.25
    %
    
    
    14.04
    %Average equity to average assets
    
    
    11.09
    %
    
    
    11.24
    %
    
    
    10.91
    %
    
    
    10.78
    %
    
    
    9.20
    %Dividend payout ratio
    
    
    N/M
    
    
    
    N/M
    
    
    
    32.85
    %
    
    
    29.49
    %
    
    
    35.84
    %Ratio of nonperforming assets to total assets assets
    
    
    5.07
    %
    
    
    2.61
    %
    
    
    1.25
    %
    
    
    0.29
    %
    
    
    0.65
    %Ratio of allowance for loan losses to
nonperforming loans
    
    
    66.39
    %
    
    
    155.28
    %
    
    
    106.34
    %
    
    
    635.93
    %
    
    
    293.56
    %Ratio of allowance for loan losses to total loans, net
of unearned income loans
    
    
    2.45
    %
    
    
    2.20
    %
    
    
    1.45
    %
    
    
    1.45
    %
    
    
    1.43
    %
 
 1
    
    Information for the 2007 fiscal year includes the operations of CVBG, with which
the Company merged on May 18, 2007.2
    
    Common shareholders equity is shareholders equity less preferred stock.3
    
    Tangible common shareholders equity is shareholders equity less goodwill, other
intangible assets and preferred stock.4
    
    Tangible shareholders equity is shareholders equity less goodwill and other
intangible assets.5
    
    Tangible assets is total assets less goodwill and other intangible assets.6
    
    Net interest margin is the net yield on interest earning assets and is the difference
between the Fully Taxable Equivalent yield earned on
interest-earning assets less the effective cost of supporting liabilities.7
    
    Please refer to the GAAP Reconciliation and Management Explanation of Non-GAAP
Financial Measures section following Selected
Financial Data for more information, including a reconciliation of this non-GAAP financial
measure.  28




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##### Table of Contents



GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
  
    
    Net income (loss) per share assuming dilution adjusted for goodwill impairment charge is
defined as net income (loss) available to common shareholders reduced by goodwill impairment
charge, net of tax.
    
    Common shareholders equity is shareholders equity less preferred stock.
    
    Tangible assets are total assets less goodwill and other intangible assets.
    
    Tangible shareholders equity is shareholders equity less goodwill and other intangible
assets.
    
    Tangible common book value per share is defined as total equity reduced by recorded
goodwill, other intangible assets and preferred stock divided by total common shares
outstanding. This measure discloses changes from period-to-period in book value per share
exclusive of changes in intangible assets and preferred stock. Goodwill, an intangible asset
that is recorded in a purchase business combination, has the effect of increasing total book
value while not increasing the tangible assets of a company. Companies utilizing purchase
accounting in a business combination, as required by GAAP, must record goodwill related to
such transactions.
    
    Tangible common shareholders equity is shareholders equity less goodwill, other
intangible assets and preferred stock.
    
    Return on average common equity is defined as net income (loss) available to common
shareholders for the period divided by average equity reduced by average preferred stock.
    
    Return on average common tangible equity is defined as net income (loss) available to
common shareholders for the period divided by average equity reduced by average goodwill,
other intangible assets and preferred stock.
  29




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##### Table of Contents



At and for the Fiscal Years Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Total shareholders equity
    
    $
    226,769
    
    
    $
    381,231
    
    
    $
    322,477
    
    
    $
    184,471
    
    
    $
    168,021Less: Preferred stock
    
    
    (66,735
    )
    
    
    (65,346
    )
    
    
    
    
    
    
    
    
    
    
    Common shareholders equity
    
    $
    160,034
    
    
    $
    315,855
    
    
    $
    322,477
    
    
    $
    184,471
    
    
    $
    168,021Total shareholders equity
    
    $
    226,769
    
    
    $
    381,231
    
    
    $
    322,477
    
    
    $
    184,471
    
    
    $
    168,021Less:Goodwill
    
    
    
    
    
    
    (143,389
    )
    
    
    (143,140
    )
    
    
    (31,327
    )
    
    
    (31,327
    )Core Deposit and other intangibles
    
    
    (9,335
    )
    
    
    (12,085
    )
    
    
    (14,687
    )
    
    
    (7,213
    )
    
    
    (8,295
    )Preferred stock
    
    
    (66,735
    )
    
    
    (65,346
    )
    
    
    
    
    
    
    
    
    
    
    Tangible common shareholders equity
    
    $
    150,699
    
    
    $
    160,411
    
    
    $
    164,650
    
    
    $
    145,931
    
    
    $
    128,399Total shareholders equity
    
    $
    226,769
    
    
    $
    381,231
    
    
    $
    322,477
    
    
    $
    184,471
    
    
    $
    168,021Less:Goodwill
    
    
    
    
    
    
    (143,389
    )
    
    
    (143,140
    )
    
    
    (31,327
    )
    
    
    (31,327
    )Core Deposit and other intangibles
    
    
    (9,335
    )
    
    
    (12,085
    )
    
    
    (14,687
    )
    
    
    (7,213
    )
    
    
    (8,295
    )Tangible shareholders equity
    
    $
    217,434
    
    
    $
    225,757
    
    
    $
    164,650
    
    
    $
    145,931
    
    
    $
    128,399Total assets
    
    $
    2,619,139
    
    
    $
    2,944,671
    
    
    $
    2,947,741
    
    
    $
    1,772,654
    
    
    $
    1,619,989Less:Goodwill
    
    
    
    
    
    
    (143,389
    )
    
    
    (143,140
    )
    
    
    (31,327
    )
    
    
    (31,327
    )Core Deposit and other intangibles
    
    
    (9,335
    )
    
    
    (12,085
    )
    
    
    (14,687
    )
    
    
    (7,213
    )
    
    
    (8,295
    )Tangible assets
    
    $
    2,609,804
    
    
    $
    2,789,197
    
    
    $
    2,789,914
    
    
    $
    1,734,114
    
    
    $
    1,580,367Common book value per share
    
    $
    12.15
    
    
    $
    24.09
    
    
    $
    24.94
    
    
    $
    18.80
    
    
    $
    17.20Effect of intangible assets
    
    $
    (0.71
    )
    
    $
    (11.86
    )
    
    $
    (12.21
    )
    
    $
    (3.93
    )
    
    $
    (4.05
    )Tangible common book value per share
    
    $
    11.44
    
    
    $
    12.23
    
    
    $
    12.73
    
    
    $
    14.87
    
    
    $
    13.15Return on average common equity
    
    
    (64.25
    %)
    
    
    (1.65
    %)
    
    
    8.96
    %
    
    
    11.91
    %
    
    
    11.09
    %Effect of intangible assets
    
    
    (32.52
    %)
    
    
    (1.49
    %)
    
    
    6.45
    %
    
    
    3.34
    %
    
    
    2.95
    %Return on average common tangible equity
    
    
    (96.77
    %)
    
    
    (3.14
    %)
    
    
    15.41
    %
    
    
    15.25
    %
    
    
    14.04
    %
  For the Fiscal Years Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Total non-interest expense
    
    $
    229,587
    
    
    $
    85,837
    
    
    $
    69,252
    
    
    $
    52,708
    
    
    $
    44,340Goodwill impairment charge
    
    
    (143,389
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating expenses
    
    $
    86,198
    
    
    $
    85,837
    
    
    $
    69,252
    
    
    $
    52,708
    
    
    $
    44,340Net income (loss) available to common shareholders
    
    $
    (155,676
    )
    
    $
    (5,452
    )
    
    $
    24,374
    
    
    $
    21,262
    
    
    $
    14,163Goodwill impairment charge, net of tax of $5,975
    
    
    137,414
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net operating income (loss)
    
    $
    (18,262
    )
    
    $
    (5,452
    )
    
    $
    24,374
    
    
    $
    21,262
    
    
    $
    14,163Per Diluted Share:Net income (loss) available to common shareholders
    
    $
    (11.91
    )
    
    $
    (0.42
    )
    
    $
    2.07
    
    
    $
    2.14
    
    
    $
    1.71Goodwill impairment charge, net of tax of $5,975
    
    
    10.51
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net operating income (loss)
    
    $
    (1.40
    )
    
    $
    (0.42
    )
    
    $
    2.07
    
    
    $
    2.14
    
    
    $
    1.71
  30




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##### Table of Contents



ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
   Critical Accounting Policies and Estimates
    31




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##### Table of Contents



32




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##### Table of Contents



Changes in Results of Operations
 Net income/loss
  Net Interest Income
  Average Balances, Interest Rates and Yields.
  33




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##### Table of Contents



2009
    
    
    2008
    
    
    2007Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest-earning assets:Loans(1)(4)Real estate loans
    
    $
    1,719,026
    
    
    $
    99,796
    
    
    
    5.81
    %
    
    $
    1,890,209
    
    
    $
    121,168
    
    
    
    6.41
    %
    
    $
    1,661,640
    
    
    $
    127,459
    
    
    
    7.67
    %Commercial loans
    
    
    295,913
    
    
    
    16,284
    
    
    
    5.50
    %
    
    
    319,131
    
    
    
    20,020
    
    
    
    6.27
    %
    
    
    303,799
    
    
    
    24,180
    
    
    
    7.96
    %Consumer and other loans-
net(2)
    
    
    81,242
    
    
    
    9,660
    
    
    
    11.89
    %
    
    
    89,565
    
    
    
    10,516
    
    
    
    11.74
    %
    
    
    94,280
    
    
    
    10,903
    
    
    
    11.56
    %Fees on loans
    
    
    
    
    
    
    3,532
    
    
    
    
    
    
    
    
    
    
    
    3,979
    
    
    
    
    
    
    
    
    
    
    
    4,217Total loans
(including fees)
    
    $
    2,096,181
    
    
    $
    129,272
    
    
    
    6.17
    %
    
    $
    2,298,905
    
    
    $
    155,683
    
    
    
    6.77
    %
    
    $
    2,059,719
    
    
    $
    166,759
    
    
    
    8.10
    %Investment securities(3)Taxable
    
    $
    144,881
    
    
    $
    7,035
    
    
    
    4.86
    %
    
    $
    227,710
    
    
    $
    12,770
    
    
    
    5.61
    %
    
    $
    146,642
    
    
    $
    8,415
    
    
    
    5.76
    %Tax-exempt(4)
    
    
    31,660
    
    
    
    1,938
    
    
    
    6.12
    %
    
    
    32,743
    
    
    
    1,995
    
    
    
    6.09
    %
    
    
    22,227
    
    
    
    1,334
    
    
    
    6.00
    %FHLB and other stock
    
    
    12,836
    
    
    
    573
    
    
    
    4.46
    %
    
    
    12,890
    
    
    
    647
    
    
    
    5.02
    %
    
    
    9,804
    
    
    
    617
    
    
    
    6.29
    %Total investment
securities
    
    $
    189,377
    
    
    $
    9,546
    
    
    
    5.04
    %
    
    $
    273,343
    
    
    $
    15,412
    
    
    
    5.64
    %
    
    $
    178,673
    
    
    $
    10,366
    
    
    
    5.80
    %Other short-term
investments
    
    
    147,918
    
    
    
    376
    
    
    
    0.25
    %
    
    
    17,941
    
    
    
    175
    
    
    
    0.98
    %
    
    
    1,054
    
    
    
    54
    
    
    
    5.12
    %Total interest-
earning assets
    
    $
    2,433,476
    
    
    $
    139,194
    
    
    
    5.72
    %
    
    $
    2,590,189
    
    
    $
    171,270
    
    
    
    6.61
    %
    
    $
    2,239,446
    
    
    $
    177,179
    
    
    
    7.91
    %Noninterest-earning assets:Cash and due from
banks
    
    $
    45,870
    
    
    
    
    
    
    
    
    
    
    $
    51,181
    
    
    
    
    
    
    
    
    
    
    $
    47,436Premises and
equipment
    
    
    83,478
    
    
    
    
    
    
    
    
    
    
    
    83,411
    
    
    
    
    
    
    
    
    
    
    
    73,176Other, less allowance
for loan losses
    
    
    219,831
    
    
    
    
    
    
    
    
    
    
    
    231,499
    
    
    
    
    
    
    
    
    
    
    
    135,296Total noninterest-
earning assets
    
    $
    349,179
    
    
    
    
    
    
    
    
    
    
    $
    366,091
    
    
    
    
    
    
    
    
    
    
    $
    255,908Total assets
    
    $
    2,782,655
    
    
    
    
    
    
    
    
    
    
    $
    2,956,280
    
    
    
    
    
    
    
    
    
    
    $
    2,495,354
 
 1
    
    2009 and 2008 average loan balances exclude nonaccrual loans. 2007 average loan
balances include nonaccrual loans, as they were not material. Interest income collected on
nonaccrual loans has been included.2
    
    Installment loans are stated net of unearned income.3
    
    The average balance of and the related yield associated with securities available for
sale is based on the cost of such securities.4
    
    Fully Taxable Equivalent (FTE) at the rate of 35%. The FTE basis adjusts for the
tax benefits of income on certain tax-exempt loans and investments using the federal statutory rate
of 35% for each period presented. The Company believes this measure to be the preferred industry
measurement of net interest income and provides relevant comparison between taxable and non-taxable
amounts.  34




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##### Table of Contents



2009
    
    
    2008
    
    
    2007Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest-bearing
liabilities:DepositsSavings, interest
checking,
and money market
accounts
    
    $
    784,135
    
    
    $
    10,078
    
    
    
    1.29
    %
    
    $
    645,636
    
    
    $
    9,588
    
    
    
    1.49
    %
    
    $
    654,696
    
    
    $
    16,703
    
    
    
    2.55
    %Time deposits
    
    
    1,166,640
    
    
    
    35,690
    
    
    
    3.06
    %
    
    
    1,317,362
    
    
    
    48,502
    
    
    
    3.68
    %
    
    
    951,455
    
    
    
    44,669
    
    
    
    4.69
    %Total deposits
    
    $
    1,950,775
    
    
    $
    45,768
    
    
    
    2.35
    %
    
    $
    1,962,998
    
    
    $
    58,090
    
    
    
    2.96
    %
    
    $
    1,606,151
    
    
    $
    61,372
    
    
    
    3.82
    %Securities sold under
repurchase agreements
and short-term
borrowings
    
    
    28,049
    
    
    
    29
    
    
    
    0.10
    %
    
    
    106,309
    
    
    
    2,111
    
    
    
    1.99
    %
    
    
    95,715
    
    
    
    4,183
    
    
    
    4.37
    %Subordinated debentures
    
    
    88,662
    
    
    
    2,577
    
    
    
    2.91
    %
    
    
    88,662
    
    
    
    4,555
    
    
    
    5.14
    %
    
    
    60,730
    
    
    
    4,512
    
    
    
    7.43
    %FHLB advances and notes
payable
    
    
    221,282
    
    
    
    9,557
    
    
    
    4.32
    %
    
    
    254,154
    
    
    
    10,735
    
    
    
    4.22
    %
    
    
    247,007
    
    
    
    11,906
    
    
    
    4.82
    %Total interest-bearing
liabilities
    
    $
    2,288,768
    
    
    $
    57,931
    
    
    
    2.53
    %
    
    $
    2,412,123
    
    
    $
    75,491
    
    
    
    3.13
    %
    
    $
    2,009,603
    
    
    $
    81,973
    
    
    
    4.08
    %Noninterest bearing
liabilities:Demand deposits
    
    $
    162,765
    
    
    
    
    
    
    
    
    
    
    $
    187,058
    
    
    
    
    
    
    
    
    
    
    $
    184,529Other liabilities
    
    
    22,477
    
    
    
    
    
    
    
    
    
    
    
    24,832
    
    
    
    
    
    
    
    
    
    
    
    29,067Total non-interest-
bearing liabilities
    
    $
    185,242
    
    
    
    
    
    
    
    
    
    
    $
    211,890
    
    
    
    
    
    
    
    
    
    
    $
    213,596Shareholders equity
    
    
    308,645
    
    
    
    
    
    
    
    
    
    
    
    332,267
    
    
    
    
    
    
    
    
    
    
    
    272,155Total liabilities and
shareholders equity
    
    $
    2,782,655
    
    
    
    
    
    
    
    
    
    
    $
    2,956,280
    
    
    
    
    
    
    
    
    
    
    $
    2,495,354Net interest income
    
    
    
    
    
    $
    81,263
    
    
    
    
    
    
    
    
    
    
    $
    95,799
    
    
    
    
    
    
    
    
    
    
    $
    95,206Margin analysis:Interest rate spread
    
    
    
    
    
    
    
    
    
    
    3.19
    %
    
    
    
    
    
    
    
    
    
    
    3.48
    %
    
    
    
    
    
    
    
    
    
    
    3.83
    %Net yield on interest-
earning assets (net
interest margin)
    
    
    
    
    
    
    
    
    
    
    3.34
    %
    
    
    
    
    
    
    
    
    
    
    3.70
    %
    
    
    
    
    
    
    
    
    
    
    4.25
    %
  35




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##### Table of Contents



Rate/Volume Analysis
 2009 vs. 2008
    
    
    2008 vs. 2007Rate/
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    Rate/
    
    
    TotalVolume
    
    
    Rate
    
    
    Volume
    
    
    Change
    
    
    Volume
    
    
    Rate
    
    
    Volume
    
    
    ChangeInterest income:Loans, net of unearned income
    
    $
    (13,729
    )
    
    $
    (13,909
    )
    
    $
    1,227
    
    
    $
    (26,411
    )
    
    $
    19,449
    
    
    $
    (27,349
    )
    
    $
    (3,176
    )
    
    $
    (11,076
    )Investment securities:Taxable
    
    
    (4,645
    )
    
    
    (1,713
    )
    
    
    623
    
    
    
    (5,735
    )
    
    
    4,709
    
    
    
    (227
    )
    
    
    (127
    )
    
    
    4,355Tax-exempt
    
    
    (66
    )
    
    
    9
    
    
    
    
    
    
    
    (57
    )
    
    
    631
    
    
    
    20
    
    
    
    10
    
    
    
    661FHLB and other stock, at cost
    
    
    13
    
    
    
    (88
    )
    
    
    1
    
    
    
    (74
    )
    
    
    211
    
    
    
    (129
    )
    
    
    (47
    )
    
    
    35Other short-term investments
    
    
    1,272
    
    
    
    (127
    )
    
    
    (944
    )
    
    
    201
    
    
    
    841
    
    
    
    (44
    )
    
    
    (681
    )
    
    
    116Total interest income
    
    
    (17,155
    )
    
    
    (15,828
    )
    
    
    907
    
    
    
    (32,076
    )
    
    
    25,841
    
    
    
    (27,729
    )
    
    
    (4,021
    )
    
    
    (5,909
    )Interest Expense:Savings, interest checking, and
money market accounts
    
    
    2,128
    
    
    
    (1,347
    )
    
    
    (291
    )
    
    
    490
    
    
    
    (651
    )
    
    
    (6,846
    )
    
    
    382
    
    
    
    (7,115
    )Time deposits
    
    
    (5,549
    )
    
    
    (8,201
    )
    
    
    938
    
    
    
    (12,812
    )
    
    
    17,215
    
    
    
    (9,665
    )
    
    
    (3,717
    )
    
    
    3,833Short-term borrowings
    
    
    (1,671
    )
    
    
    (1,379
    )
    
    
    968
    
    
    
    (2,082
    )
    
    
    511
    
    
    
    (2,334
    )
    
    
    (249
    )
    
    
    (2,072
    )Subordinated debentures
    
    
    
    
    
    
    (1,978
    )
    
    
    
    
    
    
    (1,978
    )
    
    
    2,081
    
    
    
    (1,396
    )
    
    
    (642
    )
    
    
    43Notes payable
    
    
    (1,389
    )
    
    
    242
    
    
    
    (31
    )
    
    
    (1,178
    )
    
    
    349
    
    
    
    (1,477
    )
    
    
    (43
    )
    
    
    (1,171
    )Total interest expense
    
    
    (6,481
    )
    
    
    (12,663
    )
    
    
    1,584
    
    
    
    (17,560
    )
    
    
    19,505
    
    
    
    (21,718
    )
    
    
    (4,269
    )
    
    
    (6,482
    )Net interest income
    
    $
    (10,674
    )
    
    $
    (3,165
    )
    
    $
    (677
    )
    
    $
    (14,516
    )
    
    $
    6,336
    
    
    $
    (6,011
    )
    
    $
    248
    
    
    $
    573
    36




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##### Table of Contents



Provision for Loan Losses
       37




---



##### Table of Contents



Non-interest Income
  Non-interest Expense
    38




---



##### Table of Contents



Income Taxes.
  Changes in Financial Condition
     39




---



##### Table of Contents



40




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##### Table of Contents



Liquidity and Capital Resources
 Liquidity
    Capital Resources
    41




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##### Table of Contents




    
    On December 28, 2005, CVBG issued $13,403 of subordinated debentures, as part of
a privately placed pool of trust preferred securities. The securities, due in
2036, bear interest at a floating rate of 1.54% above the three-month LIBOR rate,
reset quarterly, and are callable five years from the date of issuance without
penalty.
    
    On July 31, 2001, CVBG issued $4,124 of subordinated debentures, as part of a
privately placed pool of trust preferred securities. The securities, due in 2031,
bear interest at a floating rate of 3.58% above the three-month LIBOR rate, reset
quarterly, and are currently callable without penalty.
        42




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##### Table of Contents



Minimum Amounts to beMinimum Required
    
    
    Well Capitalized Underfor Capital
    
    
    Prompt CorrectiveActual
    
    
    Adequacy Purposes
    
    
    Action ProvisionsActual
    
    
    Ratio (%)
    
    
    Actual
    
    
    Ratio (%)
    
    
    Actual
    
    
    Ratio (%)2009Total Capital (to Risk Weighted Assets)Consolidated
    
    $
    318.5
    
    
    
    14.9
    
    
    $
    171.0
    
    
    
    8.0
    
    
    $
    213.8
    
    
    
    10.0Bank
    
    
    317.4
    
    
    
    14.9
    
    
    
    170.7
    
    
    
    8.0
    
    
    
    213.4
    
    
    
    10.0Tier 1 Capital (to Risk Weighted
Assets)Consolidated
    
    $
    291.5
    
    
    
    13.6
    
    
    $
    85.5
    
    
    
    4.0
    
    
    $
    128.3
    
    
    
    6.0Bank
    
    
    290.4
    
    
    
    13.6
    
    
    
    85.4
    
    
    
    4.0
    
    
    
    128.0
    
    
    
    6.0Tier 1 Capital (to Average Assets)Consolidated
    
    $
    291.5
    
    
    
    10.7
    
    
    $
    108.6
    
    
    
    4.0
    
    
    $
    135.8
    
    
    
    5.0Bank
    
    
    290.4
    
    
    
    10.7
    
    
    
    108.6
    
    
    
    4.0
    
    
    
    135.7
    
    
    
    5.02008Total Capital (to Risk Weighted Assets)Consolidated
    
    $
    344.0
    
    
    
    14.9
    
    
    $
    184.8
    
    
    
    8.0
    
    
    $
    231.1
    
    
    
    10.0Bank
    
    
    335.8
    
    
    
    14.6
    
    
    
    184.4
    
    
    
    8.0
    
    
    
    230.5
    
    
    
    10.0Tier 1 Capital (to Risk Weighted
Assets)Consolidated
    
    $
    315.0
    
    
    
    13.6
    
    
    $
    92.4
    
    
    
    4.0
    
    
    $
    138.6
    
    
    
    6.0Bank
    
    
    306.8
    
    
    
    13.3
    
    
    
    92.2
    
    
    
    4.0
    
    
    
    138.3
    
    
    
    6.0Tier 1 Capital (to Average Assets)Consolidated
    
    $
    315.0
    
    
    
    11.3
    
    
    $
    111.9
    
    
    
    4.0
    
    
    $
    139.9
    
    
    
    5.0Bank
    
    
    306.8
    
    
    
    11.0
    
    
    
    111.8
    
    
    
    4.0
    
    
    
    137.7
    
    
    
    5.0
 Off-Balance Sheet Arrangements
  Less than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    Years
    
    
    TotalCommitments to make loans  fixed
    
    $
    1,202
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,202Commitments to make loans  variable
    
    
    4,718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,718Unused lines of credit
    
    
    130,101
    
    
    
    18,294
    
    
    
    11,456
    
    
    
    79,523
    
    
    
    239,374Letters of credit
    
    
    21,396
    
    
    
    8,703
    
    
    
    8
    
    
    
    
    
    
    
    30,107Total
    
    $
    157,417
    
    
    $
    26,997
    
    
    $
    11,464
    
    
    $
    79,523
    
    
    $
    275,401
  43




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##### Table of Contents



Asset/Liability Management
          44




---



##### Table of Contents



Disclosure of Contractual Obligations
  Less than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    Years
    
    
    TotalCertificate of deposits
    
    $
    807,132
    
    
    $
    153,481
    
    
    $
    18,888
    
    
    $
    3,559
    
    
    $
    983,060Repurchase agreements
    
    
    24,449
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,449FHLB advances and notes payable
    
    
    12,354
    
    
    
    80,698
    
    
    
    10,745
    
    
    
    68,202
    
    
    
    171,999Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88,662
    
    
    
    88,662Operating lease obligations
    
    
    1,121
    
    
    
    1,918
    
    
    
    1,170
    
    
    
    1,082
    
    
    
    5,291Deferred compensation
    
    
    1,652
    
    
    
    
    
    
    
    240
    
    
    
    745
    
    
    
    2,637Purchase obligations
    
    
    457
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    457Total
    
    $
    847,165
    
    
    $
    236,097
    
    
    $
    31,043
    
    
    $
    162,250
    
    
    $
    1,276,555
  Inflation
    Effect of New Accounting Standards
   45




---



##### Table of Contents



46




---



##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   47




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Managements Annual Report on Internal Control Over Financial Reporting
  Internal Control  Integrated
Framework
    48




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal
ControlIntegrated Framework
    Internal ControlIntegrated Framework
   
  49




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     Internal ControlIntegrated Framework
  
  50




---



##### Table of Contents



GREEN BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS
December 31, 2009 and 2008
(Amounts in thousands, except share and per share data)
 2009
    
    
    2008ASSETSCash and due from banks
    
    $
    206,701
    
    
    $
    193,095Federal funds sold
    
    
    3,793
    
    
    
    5,263Cash and cash equivalents
    
    
    210,494
    
    
    
    198,358Interest earning deposits in other banks
    
    
    11,000
    
    
    
    Securities available for sale
    
    
    147,724
    
    
    
    203,562Securities held to maturity (with a market value of $638 and $601)
    
    
    626
    
    
    
    657Loans held for sale
    
    
    1,533
    
    
    
    442Loans, net of unearned interest
    
    
    2,043,807
    
    
    
    2,223,390Allowance for loan losses
    
    
    (50,161
    )
    
    
    (48,811
    )Other real estate owned and repossessed assets
    
    
    57,168
    
    
    
    45,371Premises and equipment, net
    
    
    81,818
    
    
    
    83,359FHLB and other stock, at cost
    
    
    12,734
    
    
    
    13,030Cash surrender value of life insurance
    
    
    30,277
    
    
    
    29,539Goodwill
    
    
    
    
    
    
    143,389Core deposit and other intangibles
    
    
    9,335
    
    
    
    12,085Deferred tax asset
    
    
    13,600
    
    
    
    12,496Other assets
    
    
    49,184
    
    
    
    27,804Total assets
    
    $
    2,619,139
    
    
    $
    2,944,671LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesNon-interest-bearing deposits
    
    $
    177,602
    
    
    $
    176,685Interest-bearing deposits
    
    
    1,899,910
    
    
    
    1,630,666Brokered deposits
    
    
    6,584
    
    
    
    376,796Total deposits
    
    
    2,084,096
    
    
    
    2,184,147Repurchase agreements
    
    
    24,449
    
    
    
    35,302FHLB advances and notes payable
    
    
    171,999
    
    
    
    229,349Subordinated debentures
    
    
    88,662
    
    
    
    88,662Accrued interest payable and other liabilities
    
    
    23,164
    
    
    
    25,980Total liabilities
    
    $
    2,392,370
    
    
    $
    2,563,440Shareholders equityPreferred stock: no par, 1,000,000 shares authorized, 72,278 shares
outstanding
    
    $
    66,735
    
    
    $
    65,346Common stock: $2 par, 20,000,000 shares authorized, 13,171,474 and
13,112,687 shares outstanding
    
    
    26,343
    
    
    
    26,225Common stock warrants
    
    
    6,934
    
    
    
    6,934Additional paid-in capital
    
    
    188,310
    
    
    
    187,742Retained earnings (deficit)
    
    
    (61,742
    )
    
    
    95,647Accumulated other comprehensive income (loss)
    
    
    189
    
    
    
    (663
    )Total shareholders equity
    
    
    226,769
    
    
    
    381,231Total liabilities and shareholders equity
    
    $
    2,619,139
    
    
    $
    2,944,671
   51




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##### Table of Contents



GREEN BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 2009, 2008 and 2007
(Amounts in thousands, except share and per share data)
 2009
    
    
    2008
    
    
    2007Interest incomeInterest and fees on loans
    
    $
    129,212
    
    
    $
    155,627
    
    
    $
    166,673Taxable securities
    
    
    7,035
    
    
    
    12,770
    
    
    
    8,415Nontaxable securities
    
    
    1,260
    
    
    
    1,297
    
    
    
    867FHLB and other stock
    
    
    573
    
    
    
    647
    
    
    
    617Federal funds sold and other
    
    
    376
    
    
    
    175
    
    
    
    54Total interest income
    
    
    138,456
    
    
    
    170,516
    
    
    
    176,626Interest expenseDeposits
    
    
    45,768
    
    
    
    58,090
    
    
    
    61,372Federal funds purchased and repurchase agreements
    
    
    29
    
    
    
    2,111
    
    
    
    4,183FHLB advances and notes payable
    
    
    9,557
    
    
    
    10,735
    
    
    
    11,905Subordinated debentures
    
    
    2,577
    
    
    
    4,555
    
    
    
    4,513Total interest expense
    
    
    57,931
    
    
    
    75,491
    
    
    
    81,973Net interest income
    
    
    80,525
    
    
    
    95,025
    
    
    
    94,653Provision for loan losses
    
    
    50,246
    
    
    
    52,810
    
    
    
    14,483Net interest income after provision for loan losses
    
    
    30,279
    
    
    
    42,215
    
    
    
    80,170Non-interest incomeService charges on deposit accounts
    
    
    23,738
    
    
    
    23,176
    
    
    
    19,169Other charges and fees
    
    
    1,999
    
    
    
    2,192
    
    
    
    2,012Trust and investment services income
    
    
    1,977
    
    
    
    1,878
    
    
    
    2,019Mortgage banking income
    
    
    383
    
    
    
    804
    
    
    
    1,524Other income
    
    
    3,042
    
    
    
    2,903
    
    
    
    2,919Securities gains (losses), netRealized gains (losses), net
    
    
    1,415
    
    
    
    2,661
    
    
    
    (41
    )Other-than-temporary impairment
    
    
    (1,678
    )
    
    
    
    
    
    
    Less non-credit portion recognized in other comprehensive income
    
    
    702
    
    
    
    
    
    
    
    Total securities gains (loss), net
    
    
    439
    
    
    
    2,661
    
    
    
    (41
    )Total non-interest income
    
    
    31,578
    
    
    
    33,614
    
    
    
    27,602Non-interest expenseEmployee compensation
    
    
    30,611
    
    
    
    33,615
    
    
    
    31,132Employee benefits
    
    
    3,835
    
    
    
    4,788
    
    
    
    4,359Occupancy expense
    
    
    6,956
    
    
    
    6,900
    
    
    
    5,711Equipment expense
    
    
    3,092
    
    
    
    3,555
    
    
    
    2,618Computer hardware/software expense
    
    
    2,816
    
    
    
    2,752
    
    
    
    2,169Professional services
    
    
    2,108
    
    
    
    2,069
    
    
    
    2,184Advertising
    
    
    1,894
    
    
    
    3,538
    
    
    
    2,736Loss (gain) on OREO and repossessed assets
    
    
    8,156
    
    
    
    7,028
    
    
    
    (76
    )FDIC insurance
    
    
    4,960
    
    
    
    1,631
    
    
    
    213Core deposit and other intangibles amortization
    
    
    2,750
    
    
    
    2,602
    
    
    
    2,011Goodwill impairment
    
    
    143,389
    
    
    
    
    
    
    
    Other expenses
    
    
    19,020
    
    
    
    17,359
    
    
    
    16,195Total non-interest expense
    
    
    229,587
    
    
    
    85,837
    
    
    
    69,252Income (loss) before income taxes
    
    
    (167,730
    )
    
    
    (10,008
    )
    
    
    38,520Provision (benefit) for income taxes
    
    
    (17,036
    )
    
    
    (4,648
    )
    
    
    14,146Net income (loss)
    
    
    (150,694
    )
    
    
    (5,360
    )
    
    
    24,374Preferred stock dividends and accretion of discount
    
    
    4,982
    
    
    
    92
    
    
    
    Net income (loss) available to common shareholders
    
    $
    (155,676
    )
    
    $
    (5,452
    )
    
    $
    24,374Earnings per common share:Basic
    
    $
    (11.91
    )
    
    $
    (0.42
    )
    
    $
    2.07Diluted
    
    
    (11.91
    )
    
    
    (0.42
    )
    
    
    2.07
   52




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##### Table of Contents



GREEN BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
Years ended December 31, 2009, 2008 and 2007
(Amounts in thousands, except share and per share data)
 Warrants
    
    
    
    
    
    
    
    
    
    
    AccumulatedFor
    
    
    Additional
    
    
    Retained
    
    
    Other
    
    
    TotalPreferred
    
    
    Common Stock
    
    
    Common
    
    
    Paid-in
    
    
    Earnings
    
    
    Comprehensive
    
    
    ShareholdersStock
    
    
    Shares
    
    
    Amount
    
    
    Stock
    
    
    Capital
    
    
    (Deficit)
    
    
    Income(Loss)
    
    
    EquityBalance, January 1, 2007
    
    $
    
    
    
    
    9,810,867
    
    
    $
    19,622
    
    
    $
    
    
    
    $
    71,828
    
    
    $
    93,150
    
    
    $
    (129
    )
    
    $
    184,471Common stock transactions:Issuance of shares in acquisition
    
    
    
    
    
    
    3,091,495
    
    
    
    6,183
    
    
    
    
    
    
    
    112,292
    
    
    
    
    
    
    
    
    
    
    
    118,475Exercise of shares under stock option plan
    
    
    
    
    
    
    38,529
    
    
    
    77
    
    
    
    
    
    
    
    743
    
    
    
    
    
    
    
    
    
    
    
    820Common stock exchanged for
exercised stock options
    
    
    
    
    
    
    (9,876
    )
    
    
    (20
    )
    
    
    
    
    
    
    (303
    )
    
    
    
    
    
    
    
    
    
    
    (323
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    472
    
    
    
    
    
    
    
    
    
    
    
    472Stock option tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    138
    
    
    
    
    
    
    
    
    
    
    
    138Implementation of FIN 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    800
    
    
    
    
    
    
    
    800Dividends paid ($.68 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,386
    )
    
    
    
    
    
    
    (8,386
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,374
    
    
    
    
    
    
    
    24,374Change in unrealized gains,
net of reclassification and taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,636
    
    
    
    1,636Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,010Balance, December 31, 2007
    
    
    
    
    
    
    12,931,015
    
    
    
    25,862
    
    
    
    
    
    
    
    185,170
    
    
    
    109,938
    
    
    
    1,507
    
    
    
    322,477Preferred stock transactions:Issuance of 72,278 shares of preferred
stock
    
    
    72,278
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,278Discount associated with 635,504 common
stock warrants issued with preferred
stock
    
    
    (6,934
    )
    
    
    
    
    
    
    
    
    
    
    6,934
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accretion of preferred stock discount
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    Preferred stock dividends accrued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (90
    )
    
    
    
    
    
    
    (90
    )Common stock transactions:Exercise of shares under stock option plan
    
    
    
    
    
    
    9,759
    
    
    
    19
    
    
    
    
    
    
    
    201
    
    
    
    
    
    
    
    
    
    
    
    220Common stock exchanged for
exercised stock options
    
    
    
    
    
    
    (7,991
    )
    
    
    (16
    )
    
    
    
    
    
    
    (93
    )
    
    
    
    
    
    
    
    
    
    
    (109
    )Issuance of restricted common shares
    
    
    
    
    
    
    60,907
    
    
    
    122
    
    
    
    
    
    
    
    (122
    )
    
    
    
    
    
    
    
    
    
    
    Stock dividend
    
    
    
    
    
    
    118,997
    
    
    
    238
    
    
    
    
    
    
    
    1,822
    
    
    
    (2,060
    )
    
    
    
    
    
    
    Compensation expense:Stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    456
    
    
    
    
    
    
    
    
    
    
    
    456Restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    303
    
    
    
    
    
    
    
    
    
    
    
    303Stock option tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5Dividends paid ($.52 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,779
    )
    
    
    
    
    
    
    (6,779
    )Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,360
    )
    
    
    
    
    
    
    (5,360
    )Change in unrealized losses,
net of reclassification and taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,170
    )
    
    
    (2,170
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,530
    )Balance, December 31, 2008
    
    
    65,346
    
    
    
    13,112,687
    
    
    
    26,225
    
    
    
    6,934
    
    
    
    187,742
    
    
    
    95,647
    
    
    
    (663
    )
    
    
    381,231Preferred stock transactions:Accretion of preferred stock discount
    
    
    1,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,389
    )
    
    
    
    
    
    
    Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,593
    )
    
    
    
    
    
    
    (3,593
    )Common stock transactions:Issuance of restricted common shares
    
    
    
    
    
    
    58,787
    
    
    
    118
    
    
    
    
    
    
    
    (118
    )
    
    
    
    
    
    
    
    
    
    
    Compensation expense:Stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    387
    
    
    
    
    
    
    
    
    
    
    
    387Restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    299
    
    
    
    
    
    
    
    
    
    
    
    299Dividends paid ($.13 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,713
    )
    
    
    
    
    
    
    (1,713
    )Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150,694
    )
    
    
    
    
    
    
    (150,694
    )Change in unrealized gains,
net of reclassification and taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    852
    
    
    
    852Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (149,842
    )Balance, December 31, 2009
    
    $
    66,735
    
    
    
    13,171,474
    
    
    $
    26,343
    
    
    $
    6,934
    
    
    $
    188,310
    
    
    $
    (61,742
    )
    
    $
    189
    
    
    $
    226,769
   53




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##### Table of Contents



GREEN BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 2009, 2008 and 2007
(Amounts in thousands)
 2009
    
    
    2008
    
    
    2007Cash flows from operating activitiesNet income (loss)
    
    $
    (150,694
    )
    
    $
    (5,360
    )
    
    $
    24,374Adjustments to reconcile net income (loss) to net cash provided by
operating activitiesProvision for loan losses
    
    
    50,246
    
    
    
    52,810
    
    
    
    14,483Impairment of goodwill
    
    
    143,389
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    7,117
    
    
    
    7,030
    
    
    
    5,786Security amortization and accretion, net
    
    
    73
    
    
    
    (983
    )
    
    
    (637
    )Write down of investments and other securities for impairment
    
    
    1,272
    
    
    
    174
    
    
    
    (Gain) loss on sale of securities
    
    
    (1,415
    )
    
    
    (2,661
    )
    
    
    41FHLB stock dividends
    
    
    
    
    
    
    (464
    )
    
    
    Net gain on sale of mortgage loans
    
    
    (264
    )
    
    
    (573
    )
    
    
    (1,205
    )Originations of mortgage loans held for sale
    
    
    (43,879
    )
    
    
    (49,501
    )
    
    
    (74,994
    )Proceeds from sales of mortgage loans
    
    
    43,050
    
    
    
    51,962
    
    
    
    84,282Increase in cash surrender value of life insurance
    
    
    (1,125
    )
    
    
    (1,073
    )
    
    
    (938
    )Gain from settlement of life insurance
    
    
    (305
    )
    
    
    
    
    
    
    Net (gains) losses from sales of fixed assets
    
    
    (85
    )
    
    
    665
    
    
    
    86Stock-based compensation expense
    
    
    686
    
    
    
    759
    
    
    
    472Net (gain) loss on OREO and repossessed assets
    
    
    8,156
    
    
    
    7,028
    
    
    
    (76
    )Deferred tax benefit
    
    
    (1,654
    )
    
    
    (4,374
    )
    
    
    (1,111
    )Net changes:Other assets
    
    
    (21,375
    )
    
    
    78
    
    
    
    (6,834
    )Accrued interest payable and other liabilities
    
    
    (3,177
    )
    
    
    (10,875
    )
    
    
    10,639Net cash provided from operating activities
    
    
    30,016
    
    
    
    44,642
    
    
    
    54,368Cash flows from investing activitiesNet change in interest-earning deposits with banks
    
    
    (11,000
    )
    
    
    
    
    
    
    Purchase of securities available for sale
    
    
    (92,100
    )
    
    
    (180,626
    )
    
    
    (30,160
    )Proceeds from sale of securities available for sale
    
    
    36,266
    
    
    
    123,701
    
    
    
    2,230Proceeds from maturities of securities available for sale
    
    
    113,440
    
    
    
    88,711
    
    
    
    33,762Proceeds from sale of securities held to maturity
    
    
    
    
    
    
    
    
    
    
    496Proceeds from maturities of securities held to maturity
    
    
    30
    
    
    
    645
    
    
    
    745Purchase of FHLB stock
    
    
    
    
    
    
    (417
    )
    
    
    (2,304
    )Net change in loans
    
    
    99,111
    
    
    
    27,754
    
    
    
    (203,894
    )Proceeds from settlement of life insurance
    
    
    691
    
    
    
    
    
    
    
    Net cash paid in acquisitions
    
    
    
    
    
    
    
    
    
    
    (24,611
    )Proceeds from sale of other real estate
    
    
    11,930
    
    
    
    20,654
    
    
    
    4,080Improvements to other real estate
    
    
    (307
    )
    
    
    (1,071
    )
    
    
    (32
    )Proceeds from sale of fixed assets
    
    
    800
    
    
    
    58
    
    
    
    175Premises and equipment expenditures
    
    
    (3,542
    )
    
    
    (5,814
    )
    
    
    (11,143
    )Net cash provided (used) in investing activities
    
    
    155,319
    
    
    
    73,595
    
    
    
    (230,656
    )Cash flows from financing activitiesNet change in core deposits
    
    
    270,162
    
    
    
    48,589
    
    
    
    (205,062
    )Net change in brokered deposits
    
    
    (370,213
    )
    
    
    148,765
    
    
    
    160,256Net change in federal funds purchased and repurchase agreements
    
    
    (10,853
    )
    
    
    (159,223
    )
    
    
    57,070Tax benefit resulting from stock options
    
    
    
    
    
    
    5
    
    
    
    138Proceeds from FHLB advances and notes payable
    
    
    
    
    
    
    20,916
    
    
    
    189,500Proceeds from subordinated debentures
    
    
    
    
    
    
    
    
    
    
    57,732Repayment of FHLB advances and notes payable
    
    
    (57,350
    )
    
    
    (110,258
    )
    
    
    (80,380
    )Preferred stock dividends paid
    
    
    (3,232
    )
    
    
    
    
    
    
    Common stock dividends paid
    
    
    (1,713
    )
    
    
    (6,779
    )
    
    
    (8,386
    )Proceeds from issuance of preferred stock and common stock warrants
    
    
    
    
    
    
    72,278
    
    
    
    Proceeds from issuance of common stock
    
    
    
    
    
    
    111
    
    
    
    497Net cash provided (used) in financing activities
    
    
    (173,199
    )
    
    
    14,404
    
    
    
    171,365Net change in cash and cash equivalents
    
    
    12,136
    
    
    
    132,641
    
    
    
    (4,923
    )Cash and cash equivalents, beginning of year
    
    
    198,358
    
    
    
    65,717
    
    
    
    70,640Cash and cash equivalents, end of year
    
    $
    210,494
    
    
    $
    198,358
    
    
    $
    65,717Supplemental disclosures  cash and noncashInterest paid
    
    $
    62,198
    
    
    $
    77,761
    
    
    $
    76,385Income taxes paid
    
    
    1,675
    
    
    
    5,674
    
    
    
    17,225Loans converted to other real estate
    
    
    75,545
    
    
    
    37,991
    
    
    
    7,955Unrealized gain (loss) on available for sale securities, net of tax
    
    
    852
    
    
    
    (1,905
    )
    
    
    1,636Fair value of assets acquired
    
    
    
    
    
    
    
    
    
    
    1,011,590Fair value of liabilities assumed
    
    
    
    
    
    
    
    
    
    
    847,322
   54




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation
 Nature of Operations
 Use of Estimates
 Cash Flows
 Securities
  Investments in Equity Securities Carried at Cost
 Loans
    55




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Allowance for Loan Losses
  Foreclosed Assets
 Premises and Equipment
 Mortgage Banking Activities
 Bank Owned Life Insurance
   56




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Goodwill, Core Deposit Intangibles and Other Intangible Assets Note 6  Goodwill and Other Intangible Assets
   Long-term Assets
 Repurchase Agreements
 Benefit Plans
 Stock Compensation
 Income Taxes
 Loan Commitments and Related Financial Instruments
   57




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Earnings Per Common Share
 Comprehensive Income
 Recent Accounting Pronouncements
     58




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    Loss Contingencies
 Restrictions on Cash
 Segments
 Fair Value of Financial Instruments
 Reclassifications
   59




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 2  SECURITIES
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueAvailable for Sale2009U.S. government agencies
    
    $
    52,937
    
    
    $
    99
    
    
    $
    (988
    )
    
    $
    52,048States and political subdivisions
    
    
    31,764
    
    
    
    877
    
    
    
    (449
    )
    
    
    32,192Collateralized mortgage obligations
    
    
    44,018
    
    
    
    1,281
    
    
    
    (622
    )
    
    
    44,677Mortgage-backed securities
    
    
    16,607
    
    
    
    291
    
    
    
    (6
    )
    
    
    16,892Trust preferred securities
    
    
    2,088
    
    
    
    
    
    
    
    (173
    )
    
    
    1,915$
    147,414
    
    
    $
    2,548
    
    
    $
    (2,238
    )
    
    $
    147,7242008U.S. government agencies
    
    $
    98,143
    
    
    $
    685
    
    
    $
    (22
    )
    
    $
    98,806States and political subdivisions
    
    
    32,641
    
    
    
    139
    
    
    
    (976
    )
    
    
    31,804Collateralized mortgage obligations
    
    
    68,738
    
    
    
    945
    
    
    
    (1,310
    )
    
    
    68,373Mortgage-backed securities
    
    
    2,177
    
    
    
    
    
    
    
    (91
    )
    
    
    2,086Trust preferred securities
    
    
    2,954
    
    
    
    
    
    
    
    (461
    )
    
    
    2,493$
    204,653
    
    
    $
    1,769
    
    
    $
    (2,860
    )
    
    $
    203,562Held to Maturity2009States and political subdivisions
    
    $
    251
    
    
    $
    4
    
    
    $
    
    
    
    $
    255Other securities
    
    
    375
    
    
    
    8
    
    
    
    
    
    
    
    383$
    626
    
    
    $
    12
    
    
    $
    
    
    
    $
    6382008States and political subdivisions
    
    $
    404
    
    
    $
    7
    
    
    $
    
    
    
    $
    411Other securities
    
    
    253
    
    
    
    
    
    
    
    (63
    )
    
    
    190$
    657
    
    
    $
    7
    
    
    $
    (63
    )
    
    $
    601
   60




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 2  SECURITIES
  Available for Sale
    
    
    Held to MaturityFair
    
    
    Carrying
    
    
    FairValue
    
    
    Amount
    
    
    ValueDue in one year or less
    
    $
    
    
    
    $
    100
    
    
    $
    102Due after one year through five years
    
    
    6,793
    
    
    
    526
    
    
    
    536Due after five years through ten years
    
    
    35,890
    
    
    
    
    
    
    
    Due after ten years
    
    
    43,472
    
    
    
    
    
    
    
    Collateralized mortgage obligations
    
    
    44,677
    
    
    
    
    
    
    
    Mortgage-backed securities
    
    
    16,892
    
    
    
    
    
    
    
    Total maturities
    
    $
    147,724
    
    
    $
    626
    
    
    $
    638
     Less than 12 months
    
    
    12 months or more
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    Loss2009U. S. government agencies
    
    $
    40,959
    
    
    $
    (988
    )
    
    $
    
    
    
    $
    
    
    
    $
    40,959
    
    
    $
    (988
    )States and political subdivisions
    
    
    2,463
    
    
    
    (24
    )
    
    
    3,075
    
    
    
    (425
    )
    
    
    5,538
    
    
    
    (449
    )Collateralized mortgage
obligations
    
    
    4,997
    
    
    
    (32
    )
    
    
    3,222
    
    
    
    (590
    )
    
    
    8,219
    
    
    
    (622
    )Mortgage-backed securities
    
    
    2,028
    
    
    
    (5
    )
    
    
    11
    
    
    
    (1
    )
    
    
    2,039
    
    
    
    (6
    )Trust preferred securities
    
    
    1,783
    
    
    
    (122
    )
    
    
    132
    
    
    
    (51
    )
    
    
    1,915
    
    
    
    (173
    )Total temporarily impaired
    
    $
    52,230
    
    
    $
    (1,171
    )
    
    $
    6,440
    
    
    $
    (1,067
    )
    
    $
    58,670
    
    
    $
    (2,238
    )2008U. S. government agencies
    
    $
    977
    
    
    $
    (22
    )
    
    $
    
    
    
    $
    
    
    
    $
    977
    
    
    $
    (22
    )States and political subdivisions
    
    
    18,445
    
    
    
    (837
    )
    
    
    643
    
    
    
    (139
    )
    
    
    19,088
    
    
    
    (976
    )Collateralized mortgage
obligations
    
    
    8,721
    
    
    
    (1,310
    )
    
    
    
    
    
    
    
    
    
    
    8,721
    
    
    
    (1,310
    )Mortgage-backed securities
    
    
    640
    
    
    
    (24
    )
    
    
    1,446
    
    
    
    (67
    )
    
    
    2,086
    
    
    
    (91
    )Trust preferred securities
    
    
    1,210
    
    
    
    (14
    )
    
    
    1,284
    
    
    
    (447
    )
    
    
    2,494
    
    
    
    (461
    )Other securities
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    (63
    )
    
    
    190
    
    
    
    (63
    )Total temporarily impaired
    
    $
    29,993
    
    
    $
    (2,207
    )
    
    $
    3,563
    
    
    $
    (716
    )
    
    $
    33,556
    
    
    $
    (2,923
    )
   61




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 2  SECURITIES
        62




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 2  SECURITIES
  PresentCurrent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ValueCredit
    
    
    Book
    
    
    Fair
    
    
    Unrealized
    
    
    DiscountedDescription
    
    Cusip#
    
    
    Rating
    
    
    Value
    
    
    Value
    
    
    Loss
    
    
    Cash FlowCollateralized mortgage
obligationsWells Fargo  2007  4 A21
    
    
    94985RAW2
    
    
    B3
    
    
    $
    2,820
    
    
    $
    2,281
    
    
    $
    (539
    )
    
    $
    2,820Wells Fargo  2005  5 2A1
    
    
    94982MAE6
    
    
    Ba1
    
    
    
    991
    
    
    
    940
    
    
    
    (51
    )
    
    
    991$
    3,811
    
    
    $
    3,221
    
    
    $
    (590
    )
    
    $
    3,811Trust preferred securitiesPreTSL IV
    
    
    74040TAD5
    
    
    Ca
    
    
    $
    183
    
    
    $
    132
    
    
    $
    (51
    )
    
    $
    184West Tennessee Bancshares, Inc.
    
    
    956192AA6
    
    
    N/A
    
    
    
    750
    
    
    
    638
    
    
    
    (112
    )
    
    
    750$
    933
    
    
    $
    770
    
    
    $
    (163
    )
    
    $
    934
  Beginning balance of credit losses at January 1, 2009
    
    $
    Other-than-temporary impairment credit losses
    
    
    1,678Ending balance of cumulative credit losses recognized in earnings
    
    $
    1,678
   63




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 3  LOANS
  2009
    
    
    2008Commercial real estate
    
    $
    1,306,398
    
    
    $
    1,430,225Residential real estate
    
    
    392,365
    
    
    
    397,922Commercial
    
    
    274,346
    
    
    
    315,099Consumer
    
    
    83,382
    
    
    
    89,733Other
    
    
    2,117
    
    
    
    4,656Unearned interest
    
    
    (14,801
    )
    
    
    (14,245
    )Loans, net of unearned interest
    
    $
    2,043,807
    
    
    $
    2,223,390Allowance for loan losses
    
    $
    (50,161
    )
    
    $
    (48,811
    )
  2009
    
    
    2008
    
    
    2007Beginning balance
    
    $
    48,811
    
    
    $
    34,111
    
    
    $
    22,302Reserve acquired in acquisition
    
    
    
    
    
    
    
    
    
    
    9,022Provision for loan losses
    
    
    50,246
    
    
    
    52,810
    
    
    
    14,483Loans charged off
    
    
    (54,890
    )
    
    
    (41,269
    )
    
    
    (13,471
    )Recoveries of loans charged off
    
    
    5,994
    
    
    
    3,159
    
    
    
    1,775Balance, end of year
    
    $
    50,161
    
    
    $
    48,811
    
    
    $
    34,111
  2009
    
    
    2008
    
    
    2007Loans with no allowance allocated
    
    $
    89,292
    
    
    $
    29,602
    
    
    $
    Loans with allowance allocated
    
    $
    25,946
    
    
    $
    17,613
    
    
    $
    36,267Amount of allowance allocated
    
    
    5,737
    
    
    
    2,651
    
    
    
    5,440Average impaired loan balance during the year
    
    
    125,280
    
    
    
    48,347
    
    
    
    16,276Interest income not recognized during impairment
    
    
    558
    
    
    
    619
    
    
    
    237
    64




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 3  LOANS
  2009
    
    
    2008Loans past due 90 days still on accrual
    
    $
    147
    
    
    $
    509Nonaccrual loans
    
    
    75,411
    
    
    
    30,926Total
    
    $
    75,558
    
    
    $
    31,435
    NOTE 4  FAIR VALUE DISCLOSURES
  Level 1
  Level 2
    65




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 4  FAIR VALUE DISCLOSURES (continued)
 Level 3
   Investment Securities Available-for-Sale
  Loans Held for Sale
  Impaired Loans
  Other Real Estate
    66




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 4  FAIR VALUE DISCLOSURES (continued)
 Loan Servicing Rights
  Assets and Liabilities Recorded at Fair Value on a Recurring Basis
  Total Carrying
    
    
    Assets/LiabilitiesFair Value Measurement Using
    
    
    Amount in
    
    
    Measured at FairDescription
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Balance Sheet
    
    
    Value2009Securities available for saleU.S. government agencies
    
    $
    
    
    
    $
    52,048
    
    
    $
    
    
    
    $
    52,048
    
    
    $
    52,048States and political subdivisions
    
    
    
    
    
    
    32,192
    
    
    
    
    
    
    
    32,192
    
    
    
    32,192Collateralized mortgage obligations
    
    
    
    
    
    
    44,677
    
    
    
    
    
    
    
    44,677
    
    
    
    44,677Mortgage-backed securities
    
    
    
    
    
    
    16,892
    
    
    
    
    
    
    
    16,892
    
    
    
    16,892Trust preferred securities
    
    
    
    
    
    
    1,277
    
    
    
    638
    
    
    
    1,915
    
    
    
    1,9152008Securities available for saleU.S. government agencies
    
    $
    
    
    
    $
    98,806
    
    
    $
    
    
    
    $
    98,806
    
    
    $
    98,806States and political subdivisions
    
    
    
    
    
    
    31,804
    
    
    
    
    
    
    
    31,804
    
    
    
    31,804Collateralized mortgage obligations
    
    
    
    
    
    
    68,373
    
    
    
    
    
    
    
    68,373
    
    
    
    68,373Mortgage-backed securities
    
    
    
    
    
    
    2,086
    
    
    
    
    
    
    
    2,086
    
    
    
    2,086Trust preferred securities
    
    
    
    
    
    
    2,493
    
    
    
    
    
    
    
    2,493
    
    
    
    2,493
 Level 3 Valuations
     67




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 4  FAIR VALUE DISCLOSURES (continued)
  2009Beginning balance
    
    $
    Total gains or (loss) (realized/unrealized)Included in earnings
    
    
    (778
    )Included in other comprehensive income
    
    
    (112
    )Paydowns and maturities
    
    
    Transfers into Level 3
    
    
    1,528Ending balance
    
    $
    638
 Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis
  Total Carrying
    
    
    Assets/LiabilitiesFair Value Measurement Using
    
    
    Amount in
    
    
    Measured at FairDescription
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Balance Sheet
    
    
    Value2009Other real estate
    
    $
    
    
    
    $
    
    
    
    $
    23,508
    
    
    $
    23,508
    
    
    $
    23,508Impaired loans
    
    
    
    
    
    
    
    
    
    
    57,914
    
    
    
    57,914
    
    
    
    57,914Total assets at fair value
    
    $
    
    
    
    $
    
    
    
    $
    81,422
    
    
    $
    81,422
    
    
    $
    81,4222008Impaired loans
    
    
    
    
    
    
    
    
    
    
    43,364
    
    
    
    43,364
    
    
    
    43,364Total assets at fair value
    
    $
    
    
    
    $
    
    
    
    $
    43,364
    
    
    $
    43,364
    
    
    $
    43,364
   68




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 4  FAIR VALUE DISCLOSURES
  2009
    
    
    2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    221,494
    
    
    $
    221,494
    
    
    $
    198,358
    
    
    $
    198,358Securities available for sale
    
    
    147,724
    
    
    
    147,724
    
    
    
    203,562
    
    
    
    203,562Securities held to maturity
    
    
    626
    
    
    
    638
    
    
    
    657
    
    
    
    601Loans held for sale
    
    
    1,533
    
    
    
    1,552
    
    
    
    442
    
    
    
    445Loans, net
    
    
    1,993,646
    
    
    
    1,950,684
    
    
    
    2,174,579
    
    
    
    2,135,732FHLB and other stock
    
    
    12,734
    
    
    
    12,734
    
    
    
    13,030
    
    
    
    13,030Cash surrender value of life insurance
    
    
    30,277
    
    
    
    30,277
    
    
    
    29,539
    
    
    
    29,539Accrued interest receivable
    
    
    9,130
    
    
    
    9,130
    
    
    
    10,808
    
    
    
    10,808Financial liabilities:Deposit accounts
    
    $
    2,084,896
    
    
    $
    2,095,611
    
    
    $
    2,184,147
    
    
    $
    2,195,459Federal funds purchased and repurchase
agreements
    
    
    24,449
    
    
    
    24,449
    
    
    
    35,302
    
    
    
    35,302FHLB Advances and notes payable
    
    
    171,999
    
    
    
    176,602
    
    
    
    229,349
    
    
    
    232,731Subordinated debentures
    
    
    88,662
    
    
    
    70,527
    
    
    
    88,662
    
    
    
    74,570Accrued interest payable
    
    
    2,561
    
    
    
    2,561
    
    
    
    6,828
    
    
    
    6,828
    69




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 5  PREMISES AND EQUIPMENT
  2009
    
    
    2008Land
    
    $
    18,372
    
    
    $
    18,453Premises
    
    
    61,809
    
    
    
    59,789Leasehold improvements
    
    
    3,061
    
    
    
    3,055Furniture, fixtures and equipment
    
    
    25,222
    
    
    
    24,117Automobiles
    
    
    112
    
    
    
    122Construction in progress
    
    
    2,162
    
    
    
    2,533110,738
    
    
    
    108,069Accumulated depreciation
    
    
    (28,920
    )
    
    
    (24,710
    )$
    81,818
    
    
    $
    83,359
  2010
    
    $
    1,1222011
    
    
    1,0182012
    
    
    9002013
    
    
    7092014
    
    
    462Thereafter
    
    
    1,082Total
    
    $
    5,293
   70




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 6  GOODWILL AND OTHER INTANGIBLE ASSETS
 Goodwill
  2009
    
    
    2008Beginning of year
    
    $
    143,389
    
    
    $
    143,140Impairment
    
    
    (143,389
    )
    
    
    Adjustment to Goodwill1
    
    
    
    
    
    
    249End of year
    
    $
    
    
    
    $
    143,389
 1
    
    Goodwill was adjusted for a correction of a deferred tax asset associated with the CVBG acquisition in 2007.      71




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 6  GOODWILL AND OTHER INTANGIBLE ASSETS
 Core deposit and other intangible
  Core deposit intangibles
    
    2009
    
    
    2008Gross carrying amount
    
    $
    19,796
    
    
    $
    19,796Accumulated amortization, beginning of year
    
    
    (8,304
    )
    
    
    (5,805
    )Amortization
    
    
    (2,499
    )
    
    
    (2,499
    )Accumulated amortization, end of year
    
    
    (10,803
    )
    
    
    (8,304
    )End of year
    
    $
    8,993
    
    
    $
    11,492
 Other intangibles
    
    2009
    
    
    2008Gross carrying amount
    
    $
    745
    
    
    $
    745Accumulated amortization, beginning of year
    
    
    (152
    )
    
    
    (49
    )Amortization
    
    
    (251
    )
    
    
    (103
    )Accumulated amortization, end of year
    
    
    (403
    )
    
    
    (152
    )End of year
    
    $
    342
    
    
    $
    593
  2010
    
    $
    2,5952011
    
    
    2,5412012
    
    
    2,4112013
    
    
    1,6712014
    
    
    117Total
    
    $
    9,335
   72




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 7  DEPOSITS
  2009
    
    
    2008Noninterest-bearing demand deposits
    
    $
    177,602
    
    
    $
    176,685Interest-bearing demand deposits
    
    
    837,268
    
    
    
    531,983Savings deposits
    
    
    86,166
    
    
    
    62,230Brokered deposits
    
    
    6,584
    
    
    
    376,796Time deposits
    
    
    976,476
    
    
    
    1,036,453Total deposits
    
    $
    2,084,096
    
    
    $
    2,184,147
   2010
    
    $
    807,1322011
    
    
    60,9562012
    
    
    92,5252013
    
    
    1,9432014
    
    
    16,945Thereafter
    
    
    3,559
    73




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 8  BORROWINGS
   2009
    
    
    2008
    
    
    2007Average balance during the year
    
    $
    28,008
    
    
    $
    74,881
    
    
    $
    70,601Average interest rate during the year
    
    
    0.10
    %
    
    
    1.57
    %
    
    
    4.06
    %Maximum month-end balance during the year
    
    $
    35,935
    
    
    $
    98,925
    
    
    $
    114,045Weighted average interest rate at year-end
    
    
    0.10
    %
    
    
    0.10
    %
    
    
    3.25
    %
  2009
    
    
    2008Short-term borrowingsFixed rate FHLB advance, 4.04%Maturing December 209
    
    $
    
    
    
    $
    10,000Variable rate FHLB advances at 5.00% to 5.31%Maturing December 2010
    
    
    12,000
    
    
    
    19,500Total short-term borrowings
    
    
    12,000
    
    
    
    29,500Long-term borrowingsFixed rate FHLB advances, from 1.50% to 6.35%,Various maturities through June 2023
    
    
    159,999
    
    
    
    162,849Variable rate FHLB advances, from 5.00% to 5.75%,$25,000 paid-off December 2009 and $12,000 reclassified to short-term borrowings
    
    
    
    
    
    
    37,000Total long-term borrowings
    
    
    159,999
    
    
    
    199,849Total borrowings
    
    $
    171,999
    
    
    $
    229,349
    74




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 8  BORROWINGS
  Total2010
    
    $
    12,3542011
    
    
    15,3422012
    
    
    65,3572013
    
    
    3692014
    
    
    10,377Thereafter
    
    
    68,200$
    171,999
        75




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 8  BORROWINGS
    NOTE 9  BENEFIT PLANS
     76




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 10  INCOME TAXES
  2009
    
    
    2008
    
    
    2007Current  federal
    
    $
    (12,906
    )
    
    $
    (221
    )
    
    $
    13,161Current  state
    
    
    (2,476
    )
    
    
    (53
    )
    
    
    2,096Deferred  federal
    
    
    (1,397
    )
    
    
    (3,649
    )
    
    
    (927
    )Deferred  state
    
    
    (257
    )
    
    
    (725
    )
    
    
    (184
    )$
    (17,036
    )
    
    $
    (4,648
    )
    
    $
    14,146
  2009
    
    
    2008Assets
    
    
    Liabilities
    
    
    Assets
    
    
    LiabilitiesAllowance for loan losses
    
    $
    19,675
    
    
    $
    
    
    
    $
    19,146
    
    
    $
    Deferred compensation
    
    
    1,973
    
    
    
    
    
    
    
    1,962
    
    
    
    Purchase accounting adjustments
    
    
    672
    
    
    
    
    
    
    
    815
    
    
    
    Depreciation
    
    
    
    
    
    
    (2,129
    )
    
    
    
    
    
    
    (2,059
    )FHLB dividends
    
    
    
    
    
    
    (1,658
    )
    
    
    
    
    
    
    (1,717
    )Core deposit intangible
    
    
    
    
    
    
    (4,860
    )
    
    
    
    
    
    
    (5,371
    )Unrealized (gain) loss on securities
    
    
    
    
    
    
    (122
    )
    
    
    428
    
    
    
    Other
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    (708
    )Total deferred income taxes
    
    $
    22,369
    
    
    $
    (8,769
    )
    
    $
    22,351
    
    
    $
    (9,855
    )
   2009
    
    
    2008
    
    
    2007Statutory federal tax rate
    
    
    (35.0
    %)
    
    
    (35.0
    %)
    
    
    35.0
    %State income tax, net of federal benefit
    
    
    (1.1
    )
    
    
    (5.2
    )
    
    
    3.2Tax exempt income
    
    
    (0.5
    )
    
    
    (8.0
    )
    
    
    (2.7
    )Goodwill impairment
    
    
    26.4
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    1.8
    
    
    
    1.2(10.2
    %)
    
    
    (46.4
    %)
    
    
    36.7
    %
   77




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 10  INCOME TAXES
   2007Unrecognized tax benefits at the beginning of the year
    
    $
    475Additional based on tax positions related to current year
    
    
    Additional based on tax positions related to prior years
    
    
    Reduction based on lapse of statute
    
    
    (400
    )Settlements
    
    
    (75
    )Unrecognized tax benefits at the end of the year
    
    $
    
      78




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 11  COMMITMENTS AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
   2009
    
    
    2008Commitments to make loans  fixed
    
    $
    1,202
    
    
    $
    9,221Commitments to make loans  variable
    
    
    4,718
    
    
    
    9,427Unused lines of credit
    
    
    239,374
    
    
    
    356,640Letters of credit
    
    
    30,107
    
    
    
    46,539
  NOTE 12  CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS
     79




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GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 12- CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS
  Minimum Amounts tobe Well CapitalizedMinimum Required
    
    
    Under Promptfor Capital
    
    
    CorrectiveActual
    
    
    Adequacy Purposes
    
    
    Action ProvisionsActual
    
    
    Ratio (%)
    
    
    Actual
    
    
    Ratio (%)
    
    
    Actual
    
    
    Ratio (%)2009Total Capital (to Risk Weighted Assets)Consolidated
    
    $
    318.5
    
    
    
    14.9
    
    
    $
    171.0
    
    
    
    8.0
    
    
    $
    213.8
    
    
    
    10.0Bank
    
    
    317.4
    
    
    
    14.9
    
    
    
    170.7
    
    
    
    8.0
    
    
    
    213.4
    
    
    
    10.0Tier 1 Capital (to Risk Weighted Assets)Consolidated
    
    $
    291.5
    
    
    
    13.6
    
    
    $
    85.5
    
    
    
    4.0
    
    
    $
    128.3
    
    
    
    6.0Bank
    
    
    290.4
    
    
    
    13.6
    
    
    
    85.4
    
    
    
    4.0
    
    
    
    128.0
    
    
    
    6.0Tier 1 Capital (to Average Assets)Consolidated
    
    $
    291.5
    
    
    
    10.7
    
    
    $
    108.6
    
    
    
    4.0
    
    
    $
    135.8
    
    
    
    5.0Bank
    
    
    290.4
    
    
    
    10.7
    
    
    
    108.6
    
    
    
    4.0
    
    
    
    135.7
    
    
    
    5.02008Total Capital (to Risk Weighted Assets)Consolidated
    
    $
    344.0
    
    
    
    14.9
    
    
    $
    184.8
    
    
    
    8.0
    
    
    $
    231.1
    
    
    
    10.0Bank
    
    
    335.8
    
    
    
    14.6
    
    
    
    184.4
    
    
    
    8.0
    
    
    
    230.5
    
    
    
    10.0Tier 1 Capital (to Risk Weighted Assets)Consolidated
    
    $
    315.0
    
    
    
    13.6
    
    
    $
    92.4
    
    
    
    4.0
    
    
    $
    138.6
    
    
    
    6.0Bank
    
    
    306.8
    
    
    
    13.3
    
    
    
    92.2
    
    
    
    4.0
    
    
    
    138.3
    
    
    
    6.0Tier 1 Capital (to Average Assets)Consolidated
    
    $
    315.0
    
    
    
    11.3
    
    
    $
    111.9
    
    
    
    4.0
    
    
    $
    139.9
    
    
    
    5.0Bank
    
    
    306.8
    
    
    
    11.0
    
    
    
    111.8
    
    
    
    4.0
    
    
    
    139.7
    
    
    
    5.0
     80




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 12- CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS
       81




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 13  STOCK-BASED COMPENSATION
  Stock Options
   WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateStock
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at January 1, 2007
    
    
    425,757
    
    
    $
    23.43Granted
    
    
    75,473
    
    
    
    35.89Exercised
    
    
    (38,530
    )
    
    
    19.22Forfeited
    
    
    (10,623
    )
    
    
    29.80Outstanding at December 31, 2007
    
    
    452,077
    
    
    $
    25.72Granted
    
    
    
    
    
    
    Exercised
    
    
    (9,759
    )
    
    
    12.63Forfeited
    
    
    (1,565
    )
    
    
    30.65Expired
    
    
    (16,310
    )
    
    
    23.00Outstanding at December 31, 2008
    
    
    424,443
    
    
    $
    26.10Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (1,374
    )
    
    
    32.05Expired
    
    
    (33,800
    )
    
    
    25.58Outstanding at December 31, 2009
    
    
    389,269
    
    
    $
    26.13
    
    
    4.7 years
    
    $
    Options exercisable at December
31, 2009
    
    
    304,809
    
    
    $
    24.44
    
    
    4.1 years
    
    $
    
   82




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 13  STOCK-BASED COMPENSATION
    Outstanding
    
    
    ExercisableWeighted
    
    
    Weighted
    
    
    
    
    
    
    Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    AverageNumber
    
    
    Remaining
    
    
    Exercise
    
    
    Number
    
    
    Remaining
    
    
    ExerciseRange of Exercise Prices
    
    Outstanding
    
    
    Contractual Life
    
    
    Price
    
    
    Outstanding
    
    
    Contractual Life
    
    
    Price$12.24 - $15.00
    
    
    24,142
    
    
    
    2.8
    
    
    $
    12.95
    
    
    
    24,142
    
    
    
    2.8
    
    
    $
    12.95$15.01 - $20.00
    
    
    77,698
    
    
    
    2.8
    
    
    $
    17.63
    
    
    
    77,698
    
    
    
    2.8
    
    
    $
    17.63$20.01 - $25.00
    
    
    50,635
    
    
    
    4.1
    
    
    $
    23.36
    
    
    
    50,635
    
    
    
    4.1
    
    
    $
    23.36$25.01 - $30.00
    
    
    138,085
    
    
    
    5.7
    
    
    $
    28.02
    
    
    
    96,748
    
    
    
    5.6
    
    
    $
    27.86$30.01 - $36.32
    
    
    98,709
    
    
    
    5.5
    
    
    $
    34.82
    
    
    
    55,586
    
    
    
    4.2
    
    
    $
    34.00Total
    
    
    389,269
    
    
    
    
    
    
    
    
    
    
    
    304,809
   83




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 13  STOCK-BASED COMPENSATION
 Restricted Stock
  WeightedAveragePrice PerShares
    
    
    ShareBalance at January 1, 2008
    
    
    
    
    
    $
    Granted:Non-employee Directors
    
    
    7,852
    
    
    
    16.56Executive officers & management
    
    
    62,015
    
    
    
    19.20Cancelled:Non-employee Directors
    
    
    
    
    
    
    Executive officers & management
    
    
    (8,960
    )
    
    
    19.44Balance at December 31, 2008
    
    
    60,907
    
    
    
    18.83Granted:Non-employee Directors
    
    
    7,060
    
    
    
    7.08Non-executive officers & management
    
    
    56,934
    
    
    
    7.08Vested:Non-employee Directors
    
    
    (7,852
    )
    
    
    16.56Executive officers, non-executive officers & management
    
    
    (10,584
    )
    
    
    19.16Cancelled:Non-employee Directors
    
    
    
    
    
    
    Non-executive officers & management
    
    
    (5,207
    )
    
    
    14.98Balance at December 31, 2009
    
    
    101,258
    
    
    $
    11.74Weighted-average fair value of nonvested stock awards
granted during the year ended December 31,2009
    
    $
    7.082008
    
    $
    18.93
   84




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 13  STOCK-BASED COMPENSATION
 Cash Settled Stock Appreciation Rights
   WeightedAveragePrice PerSARs
    
    
    ShareBalance at January 1, 2007
    
    
    
    
    
    $
    Granted:Executive officers
    
    
    19,000
    
    
    
    34.63Balance at December 31, 2007
    
    
    19,000
    
    
    
    34.63Granted:Non-employee Directors
    
    
    7,852
    
    
    
    16.56Executive officers & management
    
    
    62,015
    
    
    
    19.20Cancelled/Expired:Non-employee Directors
    
    
    
    
    
    
    Executive officers & management
    
    
    (8,960
    )
    
    
    19.44Balance at December 31, 2008
    
    
    79,907
    
    
    $
    22.58Granted:Non-employee Directors
    
    
    7,060
    
    
    
    7.08Non-executive officers & management
    
    
    56,934
    
    
    
    7.08Cancelled/Expired:Non-employee Directors
    
    
    (7,852
    )
    
    
    16.56Non-executive officers & management
    
    
    (15,817
    )
    
    
    17.78Balance at December 31, 2009
    
    
    120,232
    
    
    $
    15.36Weighted-average fair value of cash-settled SARs
granted during the year ended December 31,2009
    
    $
    7.082008
    
    $
    18.932007
    
    $
    34.63
   85




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 13  STOCK-BASED COMPENSATION
  2009
    
    
    2008
    
    
    2007Risk-free interest rate
    
    
    0.67%  1.89
    %
    
    
    3.81%  3.85
    %
    
    
    4.58
    %Volatility
    
    
    40.18
    %
    
    
    29.46% - 32.81
    %
    
    
    26.92
    %Expected life
    
    1 - 5 years
    
    
    1 - 5 years
    
    
    8 yearsDividend yield
    
    
    7.34
    %
    
    
    3.54
    %
    
    
    1.80
    %
     86




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 14  EARNINGS PER SHARE
  2009
    
    
    2008
    
    
    2007Basic Earnings Per ShareNet income (loss)
    
    $
    (150,694
    )
    
    $
    (5,360
    )
    
    $
    24,374Less: preferred stock dividends and accretion of discount on
warrants
    
    
    4,982
    
    
    
    92
    
    
    
    Net income (loss) available to common shareholders
    
    $
    (155,676
    )
    
    $
    (5,452
    )
    
    $
    24,374Weighted average common shares outstanding
    
    
    13,068,407
    
    
    
    12,932,576
    
    
    
    11,756,699Basic earnings (loss) per share
    
    $
    (11.91
    )
    
    $
    (0.42
    )
    
    $
    2.07Diluted Earnings Per ShareNet income (loss)
    
    $
    (150,694
    )
    
    $
    (5,360
    )
    
    $
    24,374Less: preferred stock dividends and accretion of discount on
warrants
    
    
    4,982
    
    
    
    92
    
    
    
    Net income (loss) available to common shareholders
    
    $
    (155,676
    )
    
    $
    (5,452
    )
    
    $
    24,374Weighted average common shares outstanding
    
    
    13,068,407
    
    
    
    12,932,576
    
    
    
    11,756,699Add: Dilutive effects of assumed conversions of restricted stock
and exercises of stock options and warrants
    
    
    
    
    
    
    58,214
    
    
    
    42,443Weighted average common and dilutive potential
common shares outstanding(1) (2)
    
    
    13,068,407
    
    
    
    12,990,790
    
    
    
    11,799,142Diluted earnings (loss) per share(1) (2)
    
    $
    (11.91
    )
    
    $
    (0.42
    )
    
    $
    2.07
 1
    
    Diluted weighted average shares outstanding for 2009 excludes 96,971 shares of unvested
restricted stock because they are anti-dilutive and is equal to weighted average common shares
outstanding.2
    
    Stock options and warrants of 1,058,992, 387,121 and 114,115 were excluded from the
2009, 2008 and 2007 diluted earnings per share because their impact was anti-dilutive.   87




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 15  PARENT COMPANY CONDENSED FINANCIAL STATEMENTS
 BALANCE SHEETS
Years ended December 31, 2009 and 2008
 2009
    
    
    2008ASSETSCash and due from financial institutions
    
    $
    3,081
    
    
    $
    5,511Investment in subsidiary
    
    
    308,831
    
    
    
    459,046Other
    
    
    4,692
    
    
    
    6,560Total assets
    
    $
    316,604
    
    
    $
    471,117LIABILITIESSubordinated debentures
    
    $
    88,662
    
    
    $
    88,662Other liabilities
    
    
    1,173
    
    
    
    1,224Total liabilities
    
    
    89,835
    
    
    
    89,886Shareholders equity
    
    
    226,769
    
    
    
    381,231Total liabilities and shareholders equity
    
    $
    316,604
    
    
    $
    471,117
 STATEMENTS OF INCOME
Years ended December 31, 2009, 2008, and 2007
 2009
    
    
    2008
    
    
    2007Dividends from subsidiary
    
    $
    3,000
    
    
    $
    13,600
    
    
    $
    6,757Other income
    
    
    180
    
    
    
    241
    
    
    
    145Interest expense
    
    
    (2,577
    )
    
    
    (4,555
    )
    
    
    (4,513
    )Other expense
    
    
    (1,718
    )
    
    
    (2,022
    )
    
    
    (921
    )Income before income taxes
    
    
    (1,115
    )
    
    
    7,264
    
    
    
    1,468Income tax benefit
    
    
    (1,488
    )
    
    
    (2,330
    )
    
    
    (2,096
    )Equity in undistributed net income (loss) of subsidiary
    
    
    (151,067
    )
    
    
    (14,954
    )
    
    
    20,810Net income (loss)
    
    
    (150,694
    )
    
    
    (5,360
    )
    
    
    24,374Preferred stock dividends and accretion of discount on
warrants
    
    
    4,982
    
    
    
    92
    
    
    
    Net income (loss) available to common shareholders
    
    $
    (155,676
    )
    
    $
    (5,452
    )
    
    $
    24,374
   88




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 15  PARENT COMPANY CONDENSED FINANCIAL STATEMENTS
 STATEMENTS OF CASH FLOWS
Years ended December 31, 2009, 2008, and 2007
 2009
    
    
    2008
    
    
    2007Operating activitiesNet income (loss)
    
    $
    (150,694
    )
    
    $
    (5,360
    )
    
    $
    24,374Adjustments to reconcile net income to net
cash provided (used) by operating activities:Undistributed (net income) loss of subsidiaries
    
    
    151,067
    
    
    
    14,954
    
    
    
    (20,810
    )Stock compensation expense
    
    
    686
    
    
    
    759
    
    
    
    472Change in other assets
    
    
    1,868
    
    
    
    (1,413
    )
    
    
    (3,871
    )Change in liabilities
    
    
    (412
    )
    
    
    (14
    )
    
    
    (658
    )Net cash provided (used) by operating activities
    
    
    2,515
    
    
    
    8,926
    
    
    
    (493
    )Investing activitiesCapital investment in bank subsidiary
    
    
    
    
    
    
    (77,278
    )
    
    
    (43,141
    )Net cash used in investing activities
    
    
    
    
    
    
    (77,278
    )
    
    
    (43,141
    )Financing activitiesPreferred stock dividends paid
    
    
    (3,232
    )
    
    
    
    
    
    
    Common stock dividends paid
    
    
    (1,713
    )
    
    
    (6,779
    )
    
    
    (8,386
    )Proceeds from issuance of preferred stock
    
    
    
    
    
    
    72,278
    
    
    
    Proceeds from issuance of common stock
    
    
    
    
    
    
    111
    
    
    
    497Proceeds from subordinated debentures
    
    
    
    
    
    
    
    
    
    
    57,732Tax benefit resulting from stock options
    
    
    
    
    
    
    5
    
    
    
    137Net cash provided (used in) financing activities
    
    
    (4,945
    )
    
    
    65,615
    
    
    
    49,980Net change in cash and cash equivalents
    
    
    (2,430
    )
    
    
    (2,737
    )
    
    
    6,346Cash and cash equivalents, beginning of year
    
    
    5,511
    
    
    
    8,248
    
    
    
    1,902Cash and cash equivalents, end of year
    
    $
    3,081
    
    
    $
    5,511
    
    
    $
    8,248
 NOTE 16  OTHER COMPREHENSIVE INCOME
  2009
    
    
    2008
    
    
    2007Unrealized holding gains and (losses) on securities available
for sale, net of tax of $1,105, ($357) and $978, respectively
    
    $
    1,712
    
    
    $
    (553
    )
    
    $
    1,610Reclassification adjustment for losses (gains) realized in net
income, net of tax of ($555), ($1,044) and $16, respectively
    
    
    (860
    )
    
    
    (1,617
    )
    
    
    26Other comprehensive income (loss)
    
    $
    852
    
    
    $
    (2,170
    )
    
    $
    1,636
   89




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 17  SEGMENT INFORMATION
   Other
    
    
    Holding
    
    
    
    
    
    
    Total2009
    
    Banking
    
    
    Segments
    
    
    Company
    
    
    Eliminations
    
    
    SegmentsNet interest income
    
    $
    74,628
    
    
    $
    8,474
    
    
    $
    (2,577
    )
    
    $
    
    
    
    $
    80,525Provision for loan losses
    
    
    47,483
    
    
    
    2,763
    
    
    
    
    
    
    
    
    
    
    
    50,246Noninterest income
    
    
    30,258
    
    
    
    2,127
    
    
    
    180
    
    
    
    (987
    )
    
    
    31,578Noninterest expense
    
    
    223,989
    
    
    
    4,868
    
    
    
    1,717
    
    
    
    (987
    )
    
    
    229,587Income tax expense (benefit)
    
    
    (16,712
    )
    
    
    1,164
    
    
    
    (1,488
    )
    
    
    
    
    
    
    (17,036
    )Segment profit (loss)
    
    $
    (149,874
    )
    
    $
    1,806
    
    
    $
    (2,626
    )
    
    $
    
    
    
    $
    (150,694
    )Segment assets
    
    $
    2,568,926
    
    
    $
    42,251
    
    
    $
    7,962
    
    
    $
    
    
    
    $
    2,619,139
 Other
    
    
    Holding
    
    
    
    
    
    
    Total2008
    
    Banking
    
    
    Segments
    
    
    Company
    
    
    Eliminations
    
    
    SegmentsNet interest income
    
    $
    91,900
    
    
    $
    7,680
    
    
    $
    (4,555
    )
    
    $
    
    
    
    $
    95,025Provision for loan losses
    
    
    50,074
    
    
    
    2,736
    
    
    
    
    
    
    
    
    
    
    
    52,810Noninterest income
    
    
    32,012
    
    
    
    2,231
    
    
    
    241
    
    
    
    (870
    )
    
    
    33,614Noninterest expense
    
    
    79,548
    
    
    
    5,137
    
    
    
    2,022
    
    
    
    (870
    )
    
    
    85,837Income tax expense (benefit)
    
    
    (3,118
    )
    
    
    800
    
    
    
    (2,330
    )
    
    
    
    
    
    
    (4,648
    )Segment profit (loss)
    
    $
    (2,592
    )
    
    $
    1,238
    
    
    $
    (4,006
    )
    
    $
    
    
    
    $
    (5,360
    )Segment assets
    
    $
    2,895,163
    
    
    $
    39,846
    
    
    $
    9,662
    
    
    $
    
    
    
    $
    2,944,671
 Other
    
    
    Holding
    
    
    
    
    
    
    Total2007
    
    Banking
    
    
    Segments
    
    
    Company
    
    
    Eliminations
    
    
    SegmentsNet interest income
    
    $
    92,562
    
    
    $
    6,604
    
    
    $
    (4,513
    )
    
    $
    
    
    
    $
    94,653Provision for loan losses
    
    
    12,636
    
    
    
    1,847
    
    
    
    
    
    
    
    
    
    
    
    14,483Noninterest income
    
    
    26,158
    
    
    
    2,761
    
    
    
    145
    
    
    
    (1,386
    )
    
    
    27,678Noninterest expense
    
    
    64,548
    
    
    
    5,246
    
    
    
    920
    
    
    
    (1,386
    )
    
    
    69,328Income tax expense (benefit)
    
    
    15,350
    
    
    
    890
    
    
    
    (2,094
    )
    
    
    
    
    
    
    14,146Segment profit (loss)
    
    $
    26,186
    
    
    $
    1,382
    
    
    $
    (3,194
    )
    
    $
    
    
    
    $
    24,374Segment assets
    
    $
    2,898,094
    
    
    $
    37,992
    
    
    $
    11,655
    
    
    $
    
    
    
    $
    2,947,741
   90




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 17  SEGMENT INFORMATION
 Asset Quality Ratios
 As of and for the period ended December 31, 2009
    
    Bank
    
    
    Other
    
    
    TotalNonperforming loans as percentage of total loans, net of unearned income
    
    
    3.69
    %
    
    
    1.50
    %
    
    
    3.70
    %Nonperforming assets as a percentage of total assets
    
    
    5.04
    %
    
    
    2.02
    %
    
    
    5.07
    %Allowance for loan losses as a percentage of total loans, net of
unearned income
    
    
    2.30
    %
    
    
    8.05
    %
    
    
    2.45
    %Allowance for loan losses as a percentage of nonperforming loans
    
    
    62.29
    %
    
    
    538.31
    %
    
    
    66.39
    %Net charge-offs to average total loans, net of unearned income
    
    
    2.15
    %
    
    
    5.88
    %
    
    
    2.25
    %
 As of and for the period ended December 31, 2008
    
    Bank
    
    
    Other
    
    
    TotalNonperforming loans as percentage of total loans, net of unearned income
    
    
    1.38
    %
    
    
    2.48
    %
    
    
    1.41
    %Nonperforming assets as a percentage of total assets
    
    
    2.58
    %
    
    
    2.57
    %
    
    
    2.61
    %Allowance for loan losses as a percentage of total loans, net of
unearned income
    
    
    2.06
    %
    
    
    8.27
    %
    
    
    2.20
    %Allowance for loan losses as a percentage of nonperforming loans
    
    
    149.59
    %
    
    
    333.81
    %
    
    
    155.28
    %Net charge-offs to average total loans, net of unearned income
    
    
    1.53
    %
    
    
    6.42
    %
    
    
    1.63
    %
   91




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 18  SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
  For the three months endedSummary of Operations
    
    3/31/09
    
    
    6/30/09
    
    
    9/30/09
    
    
    12/31/09Net interest income
    
    $
    19,429
    
    
    $
    20,180
    
    
    $
    20,338
    
    
    $
    20,578Provision for loan losses
    
    
    985
    
    
    
    24,384
    
    
    
    18,475
    
    
    
    6,402Noninterest income
    
    
    6,943
    
    
    
    7,541
    
    
    
    9,189
    
    
    
    8,134Noninterest expense
    
    
    17,831
    
    
    
    169,143
    
    
    
    22,365
    
    
    
    20,477Income tax expense (benefit)
    
    
    2,776
    
    
    
    (15,656
    )
    
    
    (4,815
    )
    
    
    659Net income (loss)
    
    $
    4,780
    
    
    $
    (150,150
    )
    
    $
    (6,498
    )
    
    $
    1,174Net income (loss) available to common shareholders
    
    $
    3,548
    
    
    $
    (151,400
    )
    
    $
    (7,748
    )
    
    $
    (76
    )Comprehensive income
    
    $
    5,668
    
    
    $
    (150,557
    )
    
    $
    (5,073
    )
    
    $
    120Basic earnings (loss) per share
    
    $
    0.27
    
    
    $
    (11.58
    )
    
    $
    (0.59
    )
    
    
    (0.01
    )Diluted earnings (loss) per share
    
    $
    0.27
    
    
    $
    (11.58
    )
    
    $
    (0.59
    )
    
    
    (0.01
    )Dividends per common share
    
    $
    0.13
    
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.00Average common shares outstanding
    
    
    13,062,881
    
    
    
    13,070,216
    
    
    
    13,070,216
    
    
    
    13,070,216Average common shares outstanding  diluted
    
    
    13,141,840
    
    
    
    13,070,216
    
    
    
    13,070,216
    
    
    
    13,070,216
 For the three months endedSummary of Operations
    
    3/31/08
    
    
    6/30/08
    
    
    9/30/08
    
    
    12/31/08Net interest income
    
    $
    24,472
    
    
    $
    25,044
    
    
    $
    24,384
    
    
    $
    21,125Provision for loan losses
    
    
    888
    
    
    
    11,019
    
    
    
    8,620
    
    
    
    32,283Noninterest income
    
    
    7,306
    
    
    
    8,112
    
    
    
    8,010
    
    
    
    10,186Noninterest expense
    
    
    19,561
    
    
    
    20,140
    
    
    
    21,944
    
    
    
    24,192Income tax expense (benefit)
    
    
    4,151
    
    
    
    535
    
    
    
    596
    
    
    
    (9,930
    )Net income (loss)
    
    $
    7,178
    
    
    $
    1,462
    
    
    $
    1,234
    
    
    $
    (15,234
    )Net income (loss) available to common shareholders
    
    $
    7,178
    
    
    $
    1,462
    
    
    $
    1,234
    
    
    $
    (15,326
    )Comprehensive income
    
    $
    9,186
    
    
    $
    (2,255
    )
    
    $
    1,547
    
    
    $
    (16,008
    )Basic earnings (loss) per share
    
    $
    0.56
    
    
    $
    0.11
    
    
    $
    0.10
    
    
    $
    (1.18
    )Diluted earnings (loss) per share
    
    $
    0.56
    
    
    $
    0.11
    
    
    $
    0.10
    
    
    $
    (1.18
    )Dividends per common share
    
    $
    0.13
    
    
    $
    0.13
    
    
    $
    0.13
    
    
    $
    0.13Average common shares outstanding
    
    
    12,931,169
    
    
    
    12,931,669
    
    
    
    12,931,774
    
    
    
    12,935,665Average common shares outstanding  diluted
    
    
    12,931,169
    
    
    
    12,958,439
    
    
    
    12,947,618
    
    
    
    12,998,685
   92




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GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 19  BUSINESS COMBINATION
    Cash and due from banks
    
    $
    21,182Securities
    
    
    200,081FHLB stock
    
    
    2,863Bankers Bank stock
    
    
    100Loans held for sale
    
    
    8,642Loans, net of unearned income
    
    
    631,496Allowance for loan losses
    
    
    (9,022
    )Premises and equipment
    
    
    18,332Goodwill
    
    
    112,062Core deposit intangible
    
    
    8,740Mortgage servicing rights
    
    
    745Other assets
    
    
    16,369Total assets acquired
    
    
    1,011,590Deposits
    
    
    (699,089
    )Federal funds purchased
    
    
    (52,500
    )Repurchase agreements
    
    
    (42,790
    )FHLB advances
    
    
    (32,000
    )Subordinated debentures
    
    
    (17,527
    )Other liabilities
    
    
    (3,416
    )Total liabilities assumed
    
    
    (847,322
    )Net assets acquired
    
    $
    164,268
    93




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##### Table of Contents



GREEN BANKSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
December 31, 2009, 2008 and 2007
 NOTE 19  BUSINESS COMBINATION
  Year endedDecember 31,2007Net interest income
    
    $
    104,634Net income
    
    $
    27,371Basic earnings per share
    
    $
    2.12Diluted earnings per share
    
    $
    2.11
 NOTE 20  SUBSEQUENT EVENTS
  
   94




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ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES.
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  Management Report on Internal Control Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION.
   95




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
  
 ITEM 11. EXECUTIVE COMPENSATION.
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
 (a)
    
    Security Ownership of Certain Beneficial Owners.Information required by this item is incorporated herein by reference to the section captioned
Security Ownership of Certain Beneficial Owners and Management in the Proxy Statement.(b)
    
    Security Ownership of Management.Information required by this item is incorporated herein by reference to the section captioned
Security Ownership of Certain Beneficial Owners and Management in the Proxy Statement.(c)
    
    Changes in Control.Management of the Company knows of no arrangements, including any pledge by any person of
securities of the Company, the operation of which may at a subsequent date result in a change in
control of the registrant.(d)
    
    Equity Compensation Plan Information.The following table sets forth certain information with respect to securities to be issued under
the Companys equity compensation plans as of December 31, 2009.
 (c)(a)
    
    
    (b)
    
    
    Number of securitiesNumber of securities
    
    
    Weighted-average
    
    
    remaining available forto be issued upon
    
    
    exercise price of
    
    
    future issuance underexercise of
    
    
    outstanding
    
    
    equity compensation plansoutstanding options,
    
    
    options, warrants
    
    
    (excluding securitiesPlan Category
    
    warrants and rights
    
    
    and rights
    
    
    reflected in column (a))Equity compensation plans approved by
security holders
    
    
    353,269
    
    
    $
    27.13
    
    
    
    163,391Equity compensation plans not approved by
security holders
    
    
    36,000
    
    
    $
    16.33
    
    
    
    *Total
    
    
    389,269
    
    
    $
    26.13
    
    
    
    163,391
 *
    
    R. Stan Puckett, was the sole participant under this plan, which was a part of Mr. Pucketts
employment agreement. This employment agreement was amended during 2005 to provide that future
option grants to the key executive would be made at no less than fair market value on the date of
grant in order to comply with Section 409A of the Internal Revenue Code of 1986, as amended. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
   96




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##### Table of Contents



ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  
 PART IV
 
 ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
 (a)(1)
    
    The following consolidated financial statements of the Company included in the
Companys 2009 Annual Report to the Shareholders (the Annual Report) are incorporated herein
by reference from Item 8 of this Form 10-K. The remaining information appearing in the Annual
Report is not deemed to be filed as part of this Form 10-K, except as expressly provided
herein.
 1.
    
    Report of Independent Registered Public Accounting Firm.2.
    
    Consolidated Balance Sheets  December 31, 2009 and 2008.3.
    
    Consolidated Statements of Income for the Years Ended December 31, 2009, 2008
and 2007.4.
    
    Consolidated Statements of Changes in Shareholders Equity for the Years Ended
December 31, 2009, 2008 and 2007.5.
    
    Consolidated Statements of Cash Flows for the Years Ended December 31, 2009,
2008 and 2007.6.
    
    Notes to Consolidated Financial Statements.
 (a)(2)
    
    All schedules for which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission are not required under the related instructions or are
inapplicable and therefore have been omitted.(a)(3)
    
    The following exhibits either are filed as part of this Report or are incorporated herein by
reference:
 2.1
    
    
    Merger Agreement, dated as of January 25, 2007, by and between Greene County
Bancshares, Inc. and Civitas Bankgroup, Inc. (Pursuant to Item 601(b)(2) of
Regulation S-K the schedules and exhibits to this agreement have been omitted from this
filing)  incorporated herein by reference to the Companys Current Report on Form 8-K
filed January 26, 2007.3.1
    
    
    Amended and Restated Charter  incorporated herein by reference to the
Companys Current Report on Form 8-K12G3/A filed on January 22, 2009.3.2
    
    
    Amended and Restated Bylaws  incorporated herein by reference to the
Companys Current Report on Form 8-K filed on November 20, 2007.4.1
    
    
    Form of Certificate for the Series A Preferred Stock  incorporated herein by
reference to the Companys Current Report on Form 8-K filed on December 23, 2008.4.2
    
    
    Warrant for Purchase of Shares of Common Stock dated December 23, 2008 
incorporated herein by reference to the Companys Current Report on Form 8-K filed on
December 23, 2008.10.1
    
    
    Employment Agreement and Amendment to Employment Agreement between the Company
and R. Stan Puckett  incorporated herein by reference to the Companys Current Report
on Form 8-K filed on January 7, 2008.*10.2
    
    
    Employment Agreement between the Company and Kenneth R. Vaught  incorporated
herein by reference to the Companys Current Report on Form 8-K filed on January 7,
2008.*
  97




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10.3
    
    
    Employment Agreement between the Company and Ronald E. Mayberry  incorporated
herein by reference to the Companys Annual Report on Form 10-K for the year ended
December 31, 2003.*10.4
    
    
    Non-competition Agreement between the Company and R. Stan Puckett 
incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2003.*10.5
    
    
    Non-competition Agreement between the Company and Kenneth R. Vaught 
incorporated herein by reference to the Companys Quarterly Report on Form 10-Q for the
quarter ended September 30, 2004.*10.6
    
    
    Green Bankshares, Inc. Amended and Restated 2004 Long-Term Incentive Plan. 
incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2008.*10.7
    
    
    Greene County Bancshares, Inc. Amended and Restated Deferred Compensation Plan
for Non-employee Directors  incorporated herein by reference to the Companys Current
Report on Form 8-K filed on December 17, 2004.*10.8
    
    
    Form of Stock Option Award Agreement  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004.*10.9
    
    
    Deferred Fee Agreement between the Bank and John Tolsma dated December 13, 2004
- incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004.*10.10
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreements dated March 11, 1997, March 1, 1999 and November 15, 2004 between the Bank
and Philip M. Bachman dated March 11, 2005  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004.*10.11
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated March 1, 1999 between the Bank and W.T. Daniels dated March 11, 2005 -
incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004 .*10.12
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated March 1, 1999 between the Bank and Terry Leonard dated March 11, 2005 -
incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004.*10.13
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated May 1, 1999 between the Bank and Charles S. Brooks dated March 11, 2005
- incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004.*10.14
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated May 1, 1999 between the Bank and Jerald K. Jaynes dated March 11, 2005
- incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004.*10.15
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated May 1, 2003 between the Bank and Charles H. Whitfield, Jr. dated March
11, 2005  incorporated herein by reference to the Companys Annual Report on Form 10-K
for the year ended December 31, 2004 .*
  98




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10.16
    
    
    Greene County Bank Executive Deferred Compensation Agreement between the Bank
and R. Stan Puckett dated March 11, 2005  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004.*10.17
    
    
    Greene County Bank Executive Deferred Compensation Agreement between the Bank
and Kenneth R. Vaught dated March 11, 2005  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004 .*10.18
    
    
    Greene County Bank Executive Deferred Compensation Agreement between the Bank
and Ronald E. Mayberry dated March 11, 2005  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004 .*10.19
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan 
incorporated herein by reference to the Companys Current Report on Form 8-K filed on
October 26, 2004.*10.20
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan Participation
Agreement between the Company and Steve L. Droke  incorporated herein by reference to
the Companys Current Report on Form 8-K filed on October 26, 2004.*10.21
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan Participation
Agreement between the Company and Ronald E. Mayberry  incorporated herein by
reference to the Companys Current Report on Form 8-K filed on October 26, 2004.*10.22
    
    
    Summary of Compensation Arrangement for James E. Adams  incorporated herein
by reference to the Companys Current Report on Form 8-K filed on November 15, 2005.*10.23
    
    
    Amended and Restated Deferred Compensation Plan for Nonemployee Directors 
incorporated herein by reference to the Companys Current Report on Form 8-K filed on
December 21, 2005.*10.24
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan Participation
Agreement between the Company and James E. Adams  incorporated by reference to the
Companys Current Report on Form 8-K filed March 12, 2007.*10.25
    
    
    Form of Stock Appreciation Right Award Agreement  incorporated by reference
to the Companys Current Report on Form 8-K filed March 23, 2007.*10.26
    
    
    Amended and Restated Trust Agreement of GreenBank Capital Trust I (GB Trust
I) dated as of May 16, 2007 by and among the Greene County Bancshares, Inc., as
Depositor, Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as
Delaware Trustee and the Administrative Trustees named therein (the GB Capital Trust
Agreement)  incorporated by reference to the Companys Quarterly Report on Form 10-Q
for the quarter ended June 30, 2007.10.27
    
    
    Form of Certificate for Common Securities of GB Trust I included as Exhibit B
to the GB Capital Trust Agreement  incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.10.28
    
    
    Form of Certificate for Preferred Securities of GB Trust I included as Exhibit
C to the GB Capital Trust Agreement  incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.10.29
    
    
    Junior Subordinated Indenture dated as of May 16, 2007 between the Company and
Wilmington Trust Company, as Trustee included as Exhibit D to the GB Capital Trust
Agreement (the Junior Subordinated Indenture)  incorporated by reference to the
Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.
  99




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10.30
    
    
    Form of Certificate for $57,732,000 Note issued pursuant to the Junior
Subordinated Indenture included as Sections 2.1 and 2.2 to the Junior Subordinated
Indenture  incorporated by reference to the Companys Quarterly Report on Form 10-Q
for the quarter ended June 30, 2007.10.31
    
    
    Guarantee Agreement dated as of May 16, 2007 between Greene County Bancshares,
Inc., as Guarantor and Wilmington Trust Company, as Guarantee Trustee  incorporated
by reference to the Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2007.10.32
    
    
    Form of Restricted Stock Agreement  incorporated by reference to the
Companys Current Report on Form 8-K filed January 23, 2008.*10.33
    
    
    Form of Stock Appreciation Right Agreement  incorporated by reference to the
Companys Current Report on Form 8-K filed February 29, 2008.*10.34
    
    
    Letter agreement, dated December 23, 2008, between the Company and the United
States Department of Treasury, including Securities Purchase Agreement  Standard
Terms with respect to the issuance and sale of the Series A preferred shares and the
Warrant  incorporated by reference to the Companys Current Report on Form 8-K filed
December 23, 2008.10.35
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and R. Stan Puckett dated December 23, 2008  incorporated herein by reference to
the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.36
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and Kenneth R. Vaught dated December 23, 2008  incorporated herein by reference
to the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.37
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and James E. Adams dated December 23, 2008  incorporated herein by reference to
the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.38
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and Steve L. Droke dated December 23, 2008  incorporated herein by reference to
the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.39
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and William C. Adams dated December 23, 2008  incorporated herein by reference to
the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.40
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and R. Stan Puckett dated December 3, 2009.*10.41
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and Kenneth R. Vaught dated December 4, 2009.*10.42
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and James E. Adams dated December 1, 2009.*10.43
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and Steve L. Droke December 3, 2009.*10.44
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and William C. Adams dated December 2, 2009.*10.45
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan Participation
Agreement between the Company and William C. Adams  incorporated herein by reference
to the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*
  100




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##### Table of Contents



10.46
    
    
    Director and Named Executive Officer Compensation Summary.*11.1
    
    
    Statement re Computation of Per Share Earnings  incorporated by reference to
Note 14 of the Notes to Consolidated Financial Statements herein.21.1
    
    
    Subsidiaries of the Company.23.1
    
    
    Consent of Dixon Hughes PLLC.31.1
    
    
    Chief Executive Officer Certification Pursuant to Rule 13a-14(a)/15d-14(a).31.2
    
    
    Chief Financial Officer Certification Pursuant to Rule 13a-14(a)/15d-14(a).32.1
    
    
    Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    
    Certification of Chief Executive Officer under the Capital Purchase Program of
the Troubled Assets Relief Program.99.2
    
    
    Certification of Chief Financial Officer under the Capital Purchase Program of
the Troubled Assets Relief Program.
 
 *
    
    Management contract or compensatory plan.  (b)
    
    Exhibits. The exhibits required by Item 601 of Regulation S-K are
either filed as part of this Annual Report on Form 10-K or incorporated herein by
reference.(c)
    
    Financial Statements and Financial Statement Schedules Excluded From Annual
Report. There are no financial statements and financial statement schedules which
were excluded from the Annual Report pursuant to Rule 14a-3(b)(1) which are required to
be included herein.
  101




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##### Table of Contents



SIGNATURES
  GREEN BANKSHARES, INC.Date:  February 25, 2010
    By:
    /s/ R. Stan PuckettR. Stan PuckettChairman of the Board and
Chief Executive Officer

(Duly Authorized Representative)  SIGNATURE AND TITLE:
    
    DATE:/s/ R. Stan Puckett

R. Stan Puckett
    
    February 25, 2010Chairman of the Board and Chief Executive Officer(Principal Executive Officer)/s/ Kenneth R. Vaught

Kenneth R. Vaught
    
    February 25, 2010President, Chief Operating Officer, and Director/s/ James E. Adams

James E. Adams
    
    February 25, 2010Executive Vice President, Chief Financial Officer and Secretary(Principal Financial and Accounting Officer)/s/ Ronald E. Mayberry

Ronald E. Mayberry
    
    February 25, 2010Regional President, Sumner County and Director/s/ Martha M. Bachman

Martha Bachman
    
    February 25, 2010Director/s/ Bruce Campbell

Bruce Campbell
    
    February 25, 2010Director/s/ W. T. Daniels

W.T. Daniels
    
    February 25, 2010Director/s/ Robert K. Leonard

Robert K. Leonard
    
    February 25, 2010Director/s/ Samuel E. Lynch

Samuel E. Lynch
    
    February 25, 2010Director/s/ Bill Mooningham

Bill Mooningham
    
    February 25, 2010Director/s/ John Tolsma

John Tolsma
    
    February 25, 2010Director/s/ Charles H. Whitfield, Jr.

Charles H. Whitfield, Jr.
    
    February 25, 2010Director
  102




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##### Table of Contents



EXHIBIT INDEX
 2.1
    
    
    Merger Agreement, dated as of January 25, 2007, by and between Greene County
Bancshares, Inc. and Civitas Bankgroup, Inc. (Pursuant to Item 601(b)(2) of
Regulation S-K the schedules and exhibits to this agreement have been omitted from this
filing)  incorporated herein by reference to the Companys Current Report on Form 8-K
filed January 26, 2007.3.3
    
    
    Amended and Restated Charter  incorporated herein by reference to the
Companys Current Report on Form 8-K12G3/A filed on January 22, 2009.3.4
    
    
    Amended and Restated Bylaws  incorporated herein by reference to the
Companys Current Report on Form 8-K filed on November 20, 2007.4.1
    
    
    Form of Certificate for the Series A Preferred Stock  incorporated herein by
reference to the Companys Current Report on Form 8-K filed on December 23, 2008.4.2
    
    
    Warrant for Purchase of Shares of Common Stock dated December 23, 2008 
incorporated herein by reference to the Companys Current Report on Form 8-K filed on
December 23, 2008.10.1
    
    
    Employment Agreement and Amendment to Employment Agreement between the Company
and R. Stan Puckett  incorporated herein by reference to the Companys Current Report
on Form 8-K filed on January 7, 2008.*10.2
    
    
    Employment Agreement between the Company and Kenneth R. Vaught  incorporated
herein by reference to the Companys Current Report on Form 8-K filed on January 7,
2008.*10.3
    
    
    Employment Agreement between the Company and Ronald E. Mayberry  incorporated
herein by reference to the Companys Annual Report on Form 10-K for the year ended
December 31, 2003.*10.4
    
    
    Non-competition Agreement between the Company and R. Stan Puckett 
incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2003.*10.5
    
    
    Non-competition Agreement between the Company and Kenneth R. Vaught 
incorporated herein by reference to the Companys Quarterly Report on Form 10-Q for the
quarter ended September 30, 2004.*10.6
    
    
    Green Bankshares, Inc. Amended and Restated 2004 Long-Term Incentive Plan. 
incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2008.*10.7
    
    
    Greene County Bancshares, Inc. Amended and Restated Deferred Compensation Plan
for Non-employee Directors  incorporated herein by reference to the Companys Current
Report on Form 8-K filed on December 17, 2004.*10.8
    
    
    Form of Stock Option Award Agreement  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004.*10.9
    
    
    Deferred Fee Agreement between the Bank and John Tolsma dated December 13, 2004
- incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004.*10.10
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreements dated March 11, 1997, March 1, 1999 and November 15, 2004 between the Bank
and Philip M. Bachman dated March 11, 2005  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004.*
  103




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##### Table of Contents



10.11
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated March 1, 1999 between the Bank and W.T. Daniels dated March 11, 2005 -
incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004 .*10.12
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated March 1, 1999 between the Bank and Terry Leonard dated March 11, 2005 -
incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004.*10.13
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated May 1, 1999 between the Bank and Charles S. Brooks dated March 11, 2005
- incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004.*10.14
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated May 1, 1999 between the Bank and Jerald K. Jaynes dated March 11, 2005
- incorporated herein by reference to the Companys Annual Report on Form 10-K for the
year ended December 31, 2004.*10.15
    
    
    Amendment and Restatement of the Greene County Bank Deferred Compensation
Agreement dated May 1, 2003 between the Bank and Charles H. Whitfield, Jr. dated March
11, 2005  incorporated herein by reference to the Companys Annual Report on Form 10-K
for the year ended December 31, 2004 .*10.16
    
    
    Greene County Bank Executive Deferred Compensation Agreement between the Bank
and R. Stan Puckett dated March 11, 2005  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004.*10.17
    
    
    Greene County Bank Executive Deferred Compensation Agreement between the Bank
and Kenneth R. Vaught dated March 11, 2005  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004 .*10.18
    
    
    Greene County Bank Executive Deferred Compensation Agreement between the Bank
and Ronald E. Mayberry dated March 11, 2005  incorporated herein by reference to the
Companys Annual Report on Form 10-K for the year ended December 31, 2004 .*10.19
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan 
incorporated herein by reference to the Companys Current Report on Form 8-K filed on
October 26, 2004.*10.20
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan Participation
Agreement between the Company and Steve L. Droke  incorporated herein by reference to
the Companys Current Report on Form 8-K filed on October 26, 2004.*10.21
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan Participation
Agreement between the Company and Ronald E. Mayberry  incorporated herein by
reference to the Companys Current Report on Form 8-K filed on October 26, 2004.*10.22
    
    
    Summary of Compensation Arrangement for James E. Adams  incorporated herein
by reference to the Companys Current Report on Form 8-K filed on November 15, 2005.*10.23
    
    
    Amended and Restated Deferred Compensation Plan for Nonemployee Directors 
incorporated herein by reference to the Companys Current Report on Form 8-K filed on
December 21, 2005.*10.24
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan Participation
Agreement between the Company and James E. Adams  incorporated by reference to the
Companys Current Report on Form 8-K filed March 12, 2007.*
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10.25
    
    
    Form of Stock Appreciation Right Award Agreement  incorporated by reference
to the Companys Current Report on Form 8-K filed March 23, 2007.*10.26
    
    
    Amended and Restated Trust Agreement of GreenBank Capital Trust I (GB Trust
I) dated as of May 16, 2007 by and among the Greene County Bancshares, Inc., as
Depositor, Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as
Delaware Trustee and the Administrative Trustees named therein (the GB Capital Trust
Agreement)  incorporated by reference to the Companys Quarterly Report on Form 10-Q
for the quarter ended June 30, 2007.10.27
    
    
    Form of Certificate for Common Securities of GB Trust I included as Exhibit B
to the GB Capital Trust Agreement  incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.10.28
    
    
    Form of Certificate for Preferred Securities of GB Trust I included as Exhibit
C to the GB Capital Trust Agreement  incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.10.29
    
    
    Junior Subordinated Indenture dated as of May 16, 2007 between the Company and
Wilmington Trust Company, as Trustee included as Exhibit D to the GB Capital Trust
Agreement (the Junior Subordinated Indenture)  incorporated by reference to the
Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.10.30
    
    
    Form of Certificate for $57,732,000 Note issued pursuant to the Junior
Subordinated Indenture included as Sections 2.1 and 2.2 to the Junior Subordinated
Indenture  incorporated by reference to the Companys Quarterly Report on Form 10-Q
for the quarter ended June 30, 2007.10.31
    
    
    Guarantee Agreement dated as of May 16, 2007 between Greene County Bancshares,
Inc., as Guarantor and Wilmington Trust Company, as Guarantee Trustee  incorporated
by reference to the Companys Quarterly Report on Form 10-Q for the quarter ended June
30, 2007.10.32
    
    
    Form of Restricted Stock Agreement  incorporated by reference to the
Companys Current Report on Form 8-K filed January 23, 2008.*10.33
    
    
    Form of Stock Appreciation Right Agreement  incorporated by reference to the
Companys Current Report on Form 8-K filed February 29, 2008.*10.34
    
    
    Letter agreement, dated December 23, 2008, between the Company and the United
States Department of Treasury, including Securities Purchase Agreement  Standard
Terms with respect to the issuance and sale of the Series A preferred shares and the
Warrant  incorporated by reference to the Companys Current Report on Form 8-K filed
December 23, 2008.10.35
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and R. Stan Puckett dated December 23, 2008  incorporated herein by reference to
the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.36
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and Kenneth R. Vaught dated December 23, 2008  incorporated herein by reference
to the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.37
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and James E. Adams dated December 23, 2008  incorporated herein by reference to
the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.38
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and Steve L. Droke dated December 23, 2008  incorporated herein by reference to
the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*
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##### Table of Contents



10.39
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and William C. Adams dated December 23, 2008  incorporated herein by reference to
the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.40
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and R. Stan Puckett dated December 3, 2009.*10.41
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and Kenneth R. Vaught dated December 4, 2009.*10.42
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and James E. Adams dated December 1, 2009.*10.43
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and Steve L. Droke December 3, 2009.*10.44
    
    
    Senior Executive Officer Letter Agreement by and between Green Bankshares,
Inc. and William C. Adams dated December 2, 2009.*10.45
    
    
    Greene County Bancshares, Inc. Change in Control Protection Plan Participation
Agreement between the Company and William C. Adams  incorporated herein by reference
to the Companys Annual Report on Form 10-K for the year ended December 31, 2008 .*10.46
    
    
    Director and Named Executive Officer Compensation Summary.*11.1
    
    
    Statement re Computation of Per Share Earnings  incorporated by reference to
Note 14 of the Notes to Consolidated Financial Statements herein.21.1
    
    
    Subsidiaries of the Company.23.1
    
    
    Consent of Dixon Hughes PLLC.31.1
    
    
    Chief Executive Officer Certification Pursuant to Rule 13a-14(a)/15d-14(a).31.2
    
    
    Chief Financial Officer Certification Pursuant to Rule 13a-14(a)/15d-14(a).32.1
    
    
    Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    
    Certification of Chief Executive Officer under the Capital Purchase Program of
the Troubled Assets Relief Program.99.2
    
    
    Certification of Chief Financial Officer under the Capital Purchase Program of
the Troubled Assets Relief Program.
 
 *
    
    Management contract or compensatory plan.  106