##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 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 organization)
    
    (I.R.S. Employer Identification No.)100 North Main Street, Greeneville, Tennessee
    
    37743-4992(Address of principle executive offices)
    
    (Zip Code)
 (423) 639-5111
 N/A  (Former name, former address and former fiscal year, if changed since last report)
 YES þ NO o
 YES o NO o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 YES o NO þ




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##### 



PART I  FINANCIAL INFORMATION
 ITEM 1.
    
    FINANCIAL STATEMENTS
  Condensed Consolidated Balance Sheets  March 31, 2010 and December 31, 2009
    
    
    2Condensed Consolidated Statements of Income  For the three months ended March 31, 2010 and 2009
    
    
    3Condensed Consolidated Statement of Changes in Shareholders Equity  For the three months
ended March 31, 2010
    
    
    4Condensed Consolidated Statements of Cash Flows  For the three months ended March 31, 2010
and 2009
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Exhibit 10.1Exhibit 10.2Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   1




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GREEN BANKSHARES, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31, 2010 and December 31, 2009
 (Amounts in thousands, except share and per share data)
 (Unaudited)March 31,
    
    
    December 31,2010
    
    
    2009*ASSETSCash and due from banks
    
    $
    176,469
    
    
    $
    206,701Federal funds sold
    
    
    1,072
    
    
    
    3,793Cash and cash equivalents
    
    
    177,541
    
    
    
    210,494Interest earning deposits in other banks
    
    
    11,000
    
    
    
    11,000Securities available for sale
    
    
    173,716
    
    
    
    147,724Securities held to maturity (with a market value of $628 and $638)
    
    
    616
    
    
    
    626Loans held for sale
    
    
    590
    
    
    
    1,533Loans, net of unearned interest
    
    
    1,994,039
    
    
    
    2,043,807Allowance for loan losses
    
    
    (50,167
    )
    
    
    (50,161
    )Other real estate owned and repossessed assets
    
    
    71,746
    
    
    
    57,168Premises and equipment, net
    
    
    81,204
    
    
    
    81,818FHLB and other stock, at cost
    
    
    12,734
    
    
    
    12,734Cash surrender value of life insurance
    
    
    30,542
    
    
    
    30,277Core deposit and other intangibles
    
    
    8,684
    
    
    
    9,335Deferred tax asset
    
    
    13,277
    
    
    
    13,600Other assets
    
    
    44,210
    
    
    
    49,184Total assets
    
    $
    2,569,732
    
    
    $
    2,619,139LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesNon-interest bearing deposits
    
    $
    166,369
    
    
    $
    177,602Interest bearing deposits
    
    
    1,870,097
    
    
    
    1,899,910Brokered deposits
    
    
    1,399
    
    
    
    6,584Total deposits
    
    
    2,037,865
    
    
    
    2,084,096Repurchase agreements
    
    
    23,830
    
    
    
    24,449FHLB advances and notes payable
    
    
    171,919
    
    
    
    171,999Subordinated debentures
    
    
    88,662
    
    
    
    88,662Accrued interest payable and other liabilities
    
    
    17,267
    
    
    
    23,164Total liabilities
    
    $
    2,339,543
    
    
    $
    2,392,370Shareholders equityPreferred stock: no par, 1,000,000 shares authorized, 72,278 shares
outstanding
    
    $
    67,081
    
    
    $
    66,735Common stock: $2 par, 20,000,000 shares authorized, 13,192,875 and
13,171,474 shares outstanding
    
    
    26,386
    
    
    
    26,343Common stock warrants
    
    
    6,934
    
    
    
    6,934Additional paid-in capital
    
    
    188,423
    
    
    
    188,310Retained earnings (deficit)
    
    
    (59,794
    )
    
    
    (61,742
    )Accumulated other comprehensive income
    
    
    1,159
    
    
    
    189Total shareholders equity
    
    
    230,189
    
    
    
    226,769Total liabilities and shareholders equity
    
    $
    2,569,732
    
    
    $
    2,619,139
 *
    
    Derived from the audited consolidated balance sheet, as filed in the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2009.   2




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##### Table of Contents



GREEN BANKSHARES, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended March 31, 2010 and 2009
 (Amounts in thousands, except share and per share data)
 Three Months EndedMarch 31,2010
    
    
    2009(Unaudited)Interest incomeInterest and fees on loans
    
    $
    30,060
    
    
    $
    32,645Taxable securities
    
    
    1,288
    
    
    
    2,220Nontaxable securities
    
    
    312
    
    
    
    320FHLB and other stock
    
    
    138
    
    
    
    150Federal funds sold and other
    
    
    94
    
    
    
    45Total interest income
    
    
    31,892
    
    
    
    35,380Interest expenseDeposits
    
    
    8,061
    
    
    
    12,653Federal funds purchased and repurchase agreements
    
    
    6
    
    
    
    9FHLB advances and notes payable
    
    
    1,694
    
    
    
    2,443Subordinated debentures
    
    
    472
    
    
    
    846Total interest expense
    
    
    10,233
    
    
    
    15,951Net interest income
    
    
    21,659
    
    
    
    19,429Provision for loan losses
    
    
    3,889
    
    
    
    985Net interest income after provision for loan losses
    
    
    17,770
    
    
    
    18,444Non-interest incomeService charges on deposit accounts
    
    
    5,940
    
    
    
    5,356Other charges and fees
    
    
    356
    
    
    
    449Trust and investment services income
    
    
    582
    
    
    
    388Mortgage banking income
    
    
    118
    
    
    
    55Other income
    
    
    690
    
    
    
    695Total non-interest income
    
    
    7,686
    
    
    
    6,943Non-interest expenseEmployee compensation
    
    
    7,665
    
    
    
    7,692Employee benefits
    
    
    977
    
    
    
    1,295Occupancy expense
    
    
    1,699
    
    
    
    1,787Equipment expense
    
    
    708
    
    
    
    742Computer hardware/software expense
    
    
    824
    
    
    
    637Professional services
    
    
    607
    
    
    
    529Advertising
    
    
    598
    
    
    
    64OREO maintenance expense
    
    
    445
    
    
    
    143Collection and repossession expense
    
    
    1,287
    
    
    
    298Loss on OREO and repossessed assets
    
    
    509
    
    
    
    81FDIC Insurance
    
    
    851
    
    
    
    700Core deposit and other intangibles amortization
    
    
    651
    
    
    
    804Other expenses
    
    
    3,725
    
    
    
    3,059Total non-interest expenses
    
    
    20,546
    
    
    
    17,831Income before income taxes
    
    
    4,910
    
    
    
    7,556Provision for income taxes
    
    
    1,714
    
    
    
    2,776Net income
    
    $
    3,196
    
    
    $
    4,780Preferred stock dividends and accretion of discount
    
    
    1,250
    
    
    
    1,232Net income available to common shareholders
    
    $
    1,946
    
    
    $
    3,548Per share of common stock:Basic earnings
    
    $
    0.15
    
    
    $
    0.27Diluted earnings
    
    
    0.15
    
    
    
    0.27Dividends
    
    
    
    
    
    
    0.13Weighted average shares outstanding:Basic
    
    
    13,082,347
    
    
    
    13,062,881Diluted
    
    
    13,172,727
    
    
    
    13,141,840
   3




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GREEN BANKSHARES, INC.
 
 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
 For the Three Months Ended March 31, 2010
 (Unaudited)
 (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
    
    
    EquityBalance, December 31, 2009
    
    $
    66,735
    
    
    
    13,171,474
    
    
    $
    26,343
    
    
    $
    6,934
    
    
    $
    188,310
    
    
    $
    (61,742
    )
    
    $
    189
    
    
    $
    226,769Preferred stock transactions:Accretion of preferred stock discount
    
    
    346
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (346
    )
    
    
    
    
    
    
    Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (902
    )
    
    
    
    
    
    
    (902
    )Common stock transactions:Issuance of restricted common shares
    
    
    
    
    
    
    21,401
    
    
    
    43
    
    
    
    
    
    
    
    (43
    )
    
    
    
    
    
    
    
    
    
    
    Compensation expense:Stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    76Restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    80Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,196
    
    
    
    
    
    
    
    3,196Change in unrealized gains,
net of reclassification and taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    970
    
    
    
    970Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,166Balance, March 31, 2010
    
    $
    67,081
    
    
    
    13,192,875
    
    
    $
    26,386
    
    
    $
    6,934
    
    
    $
    188,423
    
    
    $
    (59,794
    )
    
    $
    1,159
    
    
    $
    230,189
   4




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##### Table of Contents



GREEN BANKSHARES, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Three Months Ended March 31, 2010 and 2009
 (Amounts in thousands, except share and per share data)
 March 31,
    
    
    March 31,2010
    
    
    2009(Unaudited)Cash flows from operating activitiesNet income
    
    $
    3,196
    
    
    $
    4,780Adjustments to reconcile net income to net cash provided by operating
ActivitiesProvision for loan losses
    
    
    3,889
    
    
    
    985Depreciation and amortization
    
    
    1,828
    
    
    
    1,893Security amortization and accretion, net
    
    
    59
    
    
    
    16Net gain on sale of mortgage loans
    
    
    (110
    )
    
    
    (36
    )Originations of mortgage loans held for sale
    
    
    (8,741
    )
    
    
    (6,076
    )Proceeds from sales of mortgage loans
    
    
    9,794
    
    
    
    5,959Increase in cash surrender value of life insurance
    
    
    (265
    )
    
    
    (305
    )Net (gains) losses from sales of fixed assets
    
    
    3
    
    
    
    (3
    )Stock-based compensation expense
    
    
    156
    
    
    
    169Net loss on other real estate and repossessed assets
    
    
    509
    
    
    
    81Deferred tax benefit
    
    
    (303
    )
    
    
    (288
    )Net changes:Other assets
    
    
    4,970
    
    
    
    7,147Accrued interest payable and other liabilities
    
    
    (5,895
    )
    
    
    (2,430
    )Net cash provided by operating activities
    
    
    9,090
    
    
    
    11,892Cash flows from investing activitiesPurchase of securities available for sale
    
    
    (51,525
    )
    
    
    (29,813
    )Proceeds from maturities of securities available for sale
    
    
    27,072
    
    
    
    41,550Proceeds from maturities of securities held to maturity
    
    
    10
    
    
    
    10Net change in loans
    
    
    28,763
    
    
    
    (1,686
    )Proceeds from sale of other real estate
    
    
    2,368
    
    
    
    12,126Improvements to other real estate
    
    
    (332
    )
    
    
    Proceeds from sale of fixed assets
    
    
    
    
    
    
    3Premises and equipment expenditures
    
    
    (566
    )
    
    
    (2,370
    )Net cash provided by investing activities
    
    
    5,790
    
    
    
    19,820Cash flows from financing activitiesNet change in core deposits
    
    
    (41,046
    )
    
    
    49,374Net change in brokered deposits
    
    
    (5,185
    )
    
    
    (195,001
    )Net change in repurchase agreements
    
    
    (619
    )
    
    
    (4,284
    )Repayments of FHLB advances and notes payable
    
    
    (80
    )
    
    
    (96
    )Preferred stock dividends paid
    
    
    (903
    )
    
    
    (522
    )Common stock dividends paid
    
    
    
    
    
    
    (1,710
    )Net cash (used) in financing activities
    
    
    (47,833
    )
    
    
    (152,239
    )Net change in cash and cash equivalents
    
    
    (32,953
    )
    
    
    (120,527
    )Cash and cash equivalents, beginning of period
    
    
    210,494
    
    
    
    198,358Cash and cash equivalents, end of period
    
    $
    177,541
    
    
    $
    77,831Supplemental disclosures  cash and noncashInterest paid
    
    $
    10,523
    
    
    $
    18,313Loans converted to other real estate
    
    
    18,540
    
    
    
    16,158Unrealized gain on available for sale securities, net of tax
    
    
    970
    
    
    
    888
   5




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##### Table of Contents



GREEN BANKSHARES, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 1  PRINCIPLES OF CONSOLIDATION
  NOTE 2  SECURITIES
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueAvailable for SaleMarch 31, 2010U.S. government agencies
    
    $
    69,049
    
    
    $
    327
    
    
    $
    (308
    )
    
    $
    69,068States and political subdivisions
    
    
    31,831
    
    
    
    961
    
    
    
    (435
    )
    
    
    32,357Collateralized mortgage obligations
    
    
    52,892
    
    
    
    1,627
    
    
    
    (490
    )
    
    
    54,029Mortgage-backed securities
    
    
    15,949
    
    
    
    398
    
    
    
    (1
    )
    
    
    16,346Trust preferred securities
    
    
    2,088
    
    
    
    
    
    
    
    (172
    )
    
    
    1,916$
    171,809
    
    
    $
    3,313
    
    
    $
    (1,406
    )
    
    $
    173,716December 31, 2009U.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
    )
    
    $
    147,724Held to MaturityMarch 31, 2010States and political subdivisions
    
    $
    251
    
    
    $
    5
    
    
    $
    
    
    
    $
    256Other securities
    
    
    365
    
    
    
    7
    
    
    
    
    
    
    
    372$
    616
    
    
    $
    12
    
    
    $
    
    
    
    $
    628December 31, 2009States and political subdivisions
    
    $
    251
    
    
    $
    4
    
    
    $
    
    
    
    $
    255Other securities
    
    
    375
    
    
    
    8
    
    
    
    
    
    
    
    383$
    626
    
    
    $
    12
    
    
    $
    
    
    
    $
    638
  (Continued)6




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 2  SECURITIES
  Available for Sale
    
    
    Held to MaturityFair
    
    
    Carrying
    
    
    FairValue
    
    
    Amount
    
    
    ValueDue in one year or less
    
    $
    
    
    
    $
    451
    
    
    $
    460Due after one year through five years
    
    
    6,833
    
    
    
    165
    
    
    
    168Due after five years through ten years
    
    
    52,312
    
    
    
    
    
    
    
    Due after ten years
    
    
    44,197
    
    
    
    
    
    
    
    Collateralized mortgage obligations
    
    
    54,028
    
    
    
    
    
    
    
    Mortgage-backed securities
    
    
    16,346
    
    
    
    
    
    
    
    Total maturities
    
    $
    173,716
    
    
    $
    616
    
    
    $
    628
    Less than 12 months
    
    
    12 months or more
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossMarch 31, 2010U. S. government agencies
    
    $
    20,715
    
    
    $
    (308
    )
    
    $
    
    
    
    $
    
    
    
    $
    20,715
    
    
    $
    (308
    )States and political subdivisions
    
    
    2,109
    
    
    
    (13
    )
    
    
    3,417
    
    
    
    (422
    )
    
    
    5,526
    
    
    
    (435
    )Collateralized mortgage obligations
    
    
    7,766
    
    
    
    (13
    )
    
    
    3,263
    
    
    
    (477
    )
    
    
    11,029
    
    
    
    (490
    )Mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    (1
    )
    
    
    10
    
    
    
    (1
    )Trust preferred securities
    
    
    1,781
    
    
    
    (124
    )
    
    
    135
    
    
    
    (48
    )
    
    
    1,916
    
    
    
    (172
    )Total temporarily impaired
    
    $
    32,371
    
    
    $
    (458
    )
    
    $
    6,825
    
    
    $
    (948
    )
    
    $
    39,196
    
    
    $
    (1,406
    )December 31, 2009U. 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
    )
  (Continued)7




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 2  SECURITIES
       (Continued)8




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 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
    
    
    $
    2,381
    
    
    $
    (439
    )
    
    $
    2,867Wells Fargo  2005  5 2A1
    
    94982MAE6
    
    Ba1
    
    
    920
    
    
    
    882
    
    
    
    (38
    )
    
    
    925$
    3,740
    
    
    $
    3,263
    
    
    $
    (477
    )
    
    $
    3,792Trust preferred securitiesPreTSL IV
    
    74040TAD5
    
    Ca
    
    
    183
    
    
    
    135
    
    
    
    (48
    )
    
    
    184West Tennessee Bancshares, Inc.
    
    956192AA6
    
    N/A
    
    
    750
    
    
    
    638
    
    
    
    (112
    )
    
    
    750$
    933
    
    
    $
    773
    
    
    $
    (160
    )
    
    $
    934
  Beginning balance of credit losses at January 1, 2010
    
    $
    1,678Other-than-temporary impairment credit losses
    
    
    Ending balance of cumulative credit losses recognized in earnings
    
    $
    1,678
  (Continued)9




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 3  LOANS
  March 31,
    
    
    December 31,2010
    
    
    2009Commercial real estate
    
    $
    1,271,094
    
    
    $
    1,306,398Residential real estate
    
    
    386,664
    
    
    
    392,365Commercial
    
    
    268,834
    
    
    
    274,346Consumer
    
    
    79,476
    
    
    
    83,382Other
    
    
    2,709
    
    
    
    2,117Unearned income
    
    
    (14,738
    )
    
    
    (14,801
    )Loans, net of unearned income
    
    $
    1,994,039
    
    
    $
    2,043,807Allowance for loan losses
    
    $
    (50,167
    )
    
    $
    (50,161
    )
  March 31,
    
    
    December 31,2010
    
    
    2009Speculative 1-4 family residential real estate:Acquisition and development
    
    $
    182,181
    
    
    $
    185,087Lot warehouse
    
    
    55,499
    
    
    
    66,104Commercial 1-4 family residential
    
    
    69,328
    
    
    
    70,434Sub-total
    
    
    307,008
    
    
    
    321,625Construction:Commercial vacant land
    
    
    101,218
    
    
    
    101,679Commercial construction  non-owner occupied
    
    
    156,970
    
    
    
    164,887Commercial construction  owner occupied
    
    
    27,614
    
    
    
    28,213Consumer residential construction
    
    
    14,701
    
    
    
    19,073Sub-total
    
    
    300,503
    
    
    
    313,852Total speculative and construction
    
    
    607,511
    
    
    
    635,477Non-owner occupied commercial real estate
    
    
    395,638
    
    
    
    397,028Owner occupied commercial real estate
    
    
    249,941
    
    
    
    255,819Commercial and industrial loans
    
    
    272,768
    
    
    
    282,493Home equity lines of credit
    
    
    175,623
    
    
    
    170,818Consumer mortgages
    
    
    184,743
    
    
    
    191,332Farmland
    
    
    24,522
    
    
    
    25,117Agriculture
    
    
    8,844
    
    
    
    8,841Consumer
    
    
    89,187
    
    
    
    91,683Unearned income
    
    
    (14,738
    )
    
    
    (14,801
    )Loans, net of unearned income
    
    $
    1,994,039
    
    
    $
    2,043,807
  (Continued)10




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 3  LOANS
  March 31,
    
    
    December 31,2010
    
    
    2009Balance at beginning of year
    
    $
    50,161
    
    
    $
    48,811Add (deduct):Provision for loan losses
    
    
    3,889
    
    
    
    50,246Loans charged off
    
    
    (4,733
    )
    
    
    (54,890
    )Recoveries of loans charged off
    
    
    850
    
    
    
    5,994Ending balance
    
    $
    50,167
    
    
    $
    50,161
 March 31,
    
    
    December 31,2010
    
    
    2009Impaired loans were as follows:Loans with no allowance allocated
    
    $
    86,208
    
    
    $
    89,292Loans with allowance allocated
    
    
    22,559
    
    
    
    25,946Amount of allowance allocated
    
    
    5,288
    
    
    
    5,737Nonperforming loans were as follows:Loans past due 90 days still on accrual
    
    $
    149
    
    
    $
    147Nonaccrual loans
    
    
    63,471
    
    
    
    75,411Total
    
    $
    63,620
    
    
    $
    75,558
  (Continued)11




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 4  EARNINGS PER SHARE OF COMMON STOCK
   Three Months EndedMarch 31,2010
    
    
    2009Basic Earnings Per ShareNet income
    
    $
    3,196
    
    
    $
    4,780Less: preferred stock dividends and accretion of discount on
warrants
    
    
    1,250
    
    
    
    1,232Net income available to common shareholders
    
    $
    1,946
    
    
    $
    3,548Weighted average common shares outstanding
    
    
    13,082,347
    
    
    
    13,062,881Basic earnings per share available to common shareholders
    
    $
    0.15
    
    
    $
    0.27Diluted Earnings Per ShareNet income
    
    $
    3,196
    
    
    $
    4,780Less: preferred stock dividends and accretion of discount on
warrants
    
    
    1,250
    
    
    
    1,232Net income available to common shareholders
    
    $
    1,946
    
    
    $
    3,548Weighted average common shares outstanding
    
    
    13,082,347
    
    
    
    13,062,881Add: Dilutive effects of assumed conversions of restricted stock
and exercises of stock options and warrants
    
    
    90,380
    
    
    
    78,959Weighted average common and dilutive potential
common shares outstanding
    
    
    13,172,727
    
    
    
    13,141,840Diluted earnings per share available to common shareholders
    
    $
    0.15
    
    
    $
    0.27
  (Continued)12




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 5  SEGMENT INFORMATION
   Other
    
    
    HoldingThree months ended March 31, 2010
    
    Bank
    
    
    Segments
    
    
    Company
    
    
    Eliminations
    
    
    TotalsNet interest income (expense)
    
    $
    20,068
    
    
    $
    2,063
    
    
    $
    (472
    )
    
    $
    
    
    
    $
    21,659Provision for loan losses
    
    
    3,356
    
    
    
    533
    
    
    
    
    
    
    
    
    
    
    
    3,889Noninterest income
    
    
    7,528
    
    
    
    371
    
    
    
    14
    
    
    
    (227
    )
    
    
    7,686Noninterest expense
    
    
    19,469
    
    
    
    1,115
    
    
    
    189
    
    
    
    (227
    )
    
    
    20,546Income tax expense (benefit)
    
    
    1,628
    
    
    
    309
    
    
    
    (223
    )
    
    
    
    
    
    
    1,714Segment profit (loss)
    
    
    3,143
    
    
    $
    477
    
    
    $
    (424
    )
    
    $
    
    
    
    $
    3,196Segment assets at March 31, 2010
    
    $
    2,520,503
    
    
    $
    41,663
    
    
    $
    7,566
    
    
    $
    
    
    
    $
    2,569,732
 Other
    
    
    HoldingThree months ended March 31, 2009
    
    Bank
    
    
    Segments
    
    
    Company
    
    
    Eliminations
    
    
    TotalsNet interest income (expense)
    
    $
    18,210
    
    
    $
    2,066
    
    
    $
    (847
    )
    
    $
    
    
    
    $
    19,429Provision for loan losses
    
    
    341
    
    
    
    644
    
    
    
    
    
    
    
    
    
    
    
    985Noninterest income
    
    
    6,597
    
    
    
    449
    
    
    
    125
    
    
    
    (228
    )
    
    
    6,943Noninterest expense
    
    
    16,242
    
    
    
    1,239
    
    
    
    578
    
    
    
    (228
    )
    
    
    17,831Income tax expense (benefit)
    
    
    3,016
    
    
    
    247
    
    
    
    (487
    )
    
    
    
    
    
    
    2,776Segment profit (loss)
    
    
    5,208
    
    
    $
    385
    
    
    $
    (813
    )
    
    $
    
    
    
    $
    4,780Segment assets at March 31, 2009
    
    $
    2,746,937
    
    
    $
    40,637
    
    
    $
    8,265
    
    
    $
    
    
    
    $
    2,795,839
  (Continued)13




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 5  SEGMENT INFORMATION
 Asset Quality Ratios
 As of and for the period ended March 31, 2010
    
    Bank
    
    
    Other
    
    
    TotalNonperforming loans as percentage of total loans, net of unearned income
    
    
    3.19
    %
    
    
    1.23
    %
    
    
    3.19
    %Nonperforming assets as a percentage of total assets
    
    
    5.25
    %
    
    
    1.37
    %
    
    
    5.27
    %Allowance for loan losses as a percentage of total loans, net of
unearned income
    
    
    2.36
    %
    
    
    8.13
    %
    
    
    2.52
    %Allowance for loan losses as a percentage of nonperforming loans
    
    
    73.98
    %
    
    
    661.74
    %
    
    
    78.85
    %YTD net charge-offs to average total loans, net of unearned income
    
    
    0.17
    %
    
    
    1.25
    %
    
    
    0.19
    %
 As of and for the period ended March 31, 2009
    
    Bank
    
    
    Other
    
    
    TotalNonperforming loans as percentage of total loans, net of unearned income
    
    
    4.83
    %
    
    
    2.05
    %
    
    
    4.84
    %Nonperforming assets as a percentage of total assets
    
    
    4.31
    %
    
    
    1.98
    %
    
    
    4.34
    %Allowance for loan losses as a percentage of total loans, net of
unearned income
    
    
    2.05
    %
    
    
    8.09
    %
    
    
    2.19
    %Allowance for loan losses as a percentage of nonperforming loans
    
    
    42.41
    %
    
    
    393.66
    %
    
    
    45.16
    %YTD net charge-offs to average total loans, net of unearned income
    
    
    0.01
    %
    
    
    1.29
    %
    
    
    0.03
    %
 As of and for the year 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
    %
 Net charge-offs
 Bank
    
    
    Other
    
    
    TotalFor the three month period ended March 31, 2010
    
    $
    3,345
    
    
    $
    537
    
    
    $
    3,882For the three month period ended March 31, 2009
    
    $
    214
    
    
    $
    528
    
    
    $
    742For the year ended December 31, 2009
    
    $
    46,394
    
    
    $
    2,502
    
    
    $
    48,896
  (Continued)14




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 6  FAIR VALUE DISCLOSURES
  Level 1
  Level 2
  Level 3
   Investment Securities Available-for-Sale
  Loans Held for Sale
   (Continued)15




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE
6  FAIR VALUE DISCLOSURES
 Impaired Loans
  Other Real Estate
   (Continued)16




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE
6  FAIR VALUE DISCLOSURES
 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
    
    
    ValueMarch 31, 2010Securities available for saleU.S. government agencies
    
    $
    
    
    
    $
    69,068
    
    
    $
    
    
    
    $
    69,068
    
    
    $
    69,068States and political subdivisions
    
    
    
    
    
    
    32,357
    
    
    
    
    
    
    
    32,357
    
    
    
    32,357Collateralized mortgage obligations
    
    
    
    
    
    
    54,029
    
    
    
    
    
    
    
    54,029
    
    
    
    54,029Mortgage-backed securities
    
    
    
    
    
    
    16,346
    
    
    
    
    
    
    
    16,346
    
    
    
    16,346Trust preferred securities
    
    
    
    
    
    
    1,278
    
    
    
    638
    
    
    
    1,916
    
    
    
    1,916December 31, 2009Securities 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
    
    
    
    1,915
 Level 3 Valuations
    (Continued)17




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE
6  FAIR VALUE DISCLOSURES
  March 31,
    
    
    December 31,2010
    
    
    2009Beginning balance, January 1, 2010
    
    $
    638
    
    
    $
    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, March 31, 2010
    
    $
    638
    
    
    $
    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
    
    
    ValueMarch 31, 2010Other real estate
    
    $
    
    
    
    $
    
    
    
    $
    26,015
    
    
    $
    26,015
    
    
    $
    26,015Impaired loans
    
    
    
    
    
    
    
    
    
    
    60,866
    
    
    
    60,866
    
    
    
    60,866Total assets at fair value
    
    $
    
    
    
    $
    
    
    
    $
    86,881
    
    
    $
    86,881
    
    
    $
    86,881December 31, 2009Other real estate
    
    $
    
    
    
    $
    
    
    
    $
    23,508
    
    
    $
    23,508
    
    
    $
    23,508Impaired loans
    
    
    
    
    
    
    
    
    
    
    57,914
    
    
    
    57,914
    
    
    
    57,914Total assets at fair value
    
    $
    
    
    
    $
    
    
    
    $
    81,422
    
    
    $
    81,422
    
    
    $
    81,422
  (Continued)18




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##### Table of Contents



GREEN BANKSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2010
 Unaudited
 (Amounts in thousands, except share and per share data)
 NOTE 6  FAIR VALUE DISCLOSURES
  March 31,
    
    
    December 31,2010
    
    
    2009Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    188,541
    
    
    $
    188,541
    
    
    $
    221,494
    
    
    $
    221,494Securities available for sale
    
    
    173,716
    
    
    
    173,716
    
    
    
    147,724
    
    
    
    147,724Securities held to maturity
    
    
    616
    
    
    
    628
    
    
    
    626
    
    
    
    638Loans held for sale
    
    
    590
    
    
    
    597
    
    
    
    1,533
    
    
    
    1,552Loans, net
    
    
    1,943,872
    
    
    
    1,903,445
    
    
    
    1,993,646
    
    
    
    1,950,684FHLB and other stock
    
    
    12,734
    
    
    
    12,734
    
    
    
    12,734
    
    
    
    12,734Cash surrender value of life insurance
    
    
    30,542
    
    
    
    30,542
    
    
    
    30,277
    
    
    
    30,277Accrued interest receivable
    
    
    9,248
    
    
    
    9,248
    
    
    
    9,130
    
    
    
    9,130Financial liabilities:Deposit accounts
    
    $
    2,037,865
    
    
    $
    2,046,878
    
    
    $
    2,084,096
    
    
    $
    2,095,611Federal funds purchased and repurchase
agreements
    
    
    23,830
    
    
    
    23,830
    
    
    
    24,449
    
    
    
    24,449FHLB Advances and notes payable
    
    
    171,919
    
    
    
    179,239
    
    
    
    171,999
    
    
    
    176,602Subordinated debentures
    
    
    88,662
    
    
    
    70,725
    
    
    
    88,662
    
    
    
    70,527Accrued interest payable
    
    
    2,271
    
    
    
    2,271
    
    
    
    2,561
    
    
    
    2,561
 NOTE 7  SUBSEQUENT EVENTS
   (Continued)19




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-looking
statements, which are based on assumptions and estimates and describe our future plans, strategies
and expectations, are generally identifiable by the use of forward-looking terminology and words
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 negative or other derivatives of each of these terms) or similar terminology
and expressions.
 Although the Company believes that the assumptions underlying any forward-looking statements
are reasonable, any of the assumptions could be inaccurate, and therefore, actual results may
differ materially from those projected in or implied by the forward-looking statements. Factors and
risks that may result in actual results differing from this forward-looking information include,
but are not limited to, those contained in the 2009 10-K as Part I, Item 1A thereof 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, as well as other factors discussed throughout this document, including,
without limitation the factors described under Critical Accounting Policies and Estimates on page
22 of this Quarterly Report on Form 10-Q , or from time to time, in the Companys filings with the
SEC, press releases and other communications.
 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 Quarterly Report on Form 10-Q are expressly qualified in their entirety
by the cautionary statements in this section and to the more detailed risk factors included in the
Companys 2009 10-K. 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 Quarterly
Report on Form 10-Q , 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 SEC or in its other public disclosures.
   20




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Growth and Business Strategy
      Overview
   21




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Critical Accounting Policies and Estimates
      22




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##### Table of Contents



Changes in Results of Operations
 Net Income.
 Net Interest Income.
    23




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##### Table of Contents



FOMC Meeting
    
    Beginning
    
    
    Increase/
    
    
    EndingDate
    
    Rate
    
    
    Decrease
    
    
    RateJanuary 22, 2008
    
    
    4.25
    %
    
    
    (0.75
    %)
    
    
    3.50
    %January 30, 2008
    
    
    3.50
    %
    
    
    (0.50
    %)
    
    
    3.00
    %March 18, 2008
    
    
    3.00
    %
    
    
    (0.75
    %)
    
    
    2.25
    %April 30, 2008
    
    
    2.25
    %
    
    
    (0.25
    %)
    
    
    2.00
    %June 25, 2008
    
    
    2.00
    %
    
    
    0.00
    %
    
    
    2.00
    %August 6, 2008
    
    
    2.00
    %
    
    
    0.00
    %
    
    
    2.00
    %September 16, 2008
    
    
    2.00
    %
    
    
    0.00
    %
    
    
    2.00
    %September 29, 2008
    
    
    2.00
    %
    
    
    0.00
    %
    
    
    2.00
    %October 7, 2008
    
    
    2.00
    %
    
    
    (0.50
    %)
    
    
    1.50
    %October 29, 2008
    
    
    1.50
    %
    
    
    (0.50
    %)
    
    
    1.00
    %December 16, 2008
    
    
    1.00
    %
    
    
    (0.75%)  (1.00
    %)
    
    
    0.00%  0.25
    %January 28, 2009
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %March 17, 2009
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %April 30, 2009
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %June 25, 2009
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %August 12, 2009
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %September 23, 2009
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %November 4, 2009
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %December 16, 2009
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %January 27, 2010
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %March 16, 2010
    
    
    0.00%  0.25
    %
    
    
    0.00
    %
    
    
    0.00%  0.25
    %
   24




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##### Table of Contents



Three Months EndedMarch 31,2010
    
    
    2009Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateInterest-earning assets:Loans(1) (2)
    
    $
    1,954,136
    
    
    $
    30,080
    
    
    
    6.24
    %
    
    $
    2,175,543
    
    
    $
    32,655
    
    
    
    6.09
    %Investment securities (2)
    
    
    169,020
    
    
    
    1,906
    
    
    
    4.57
    %
    
    
    216,757
    
    
    
    2,862
    
    
    
    5.35
    %Other short-term investments
    
    
    148,394
    
    
    
    94
    
    
    
    0.26
    %
    
    
    70,459
    
    
    
    45
    
    
    
    0.26
    %Total interest-earning assets
    
    $
    2,271,550
    
    
    $
    32,080
    
    
    
    5.73
    %
    
    $
    2,462,759
    
    
    $
    35,562
    
    
    
    5.86
    %Non-interest earning assets
    
    
    306,586
    
    
    
    
    
    
    
    
    
    
    
    384,013Total assets
    
    $
    2,578,136
    
    
    
    
    
    
    
    
    
    
    $
    2,846,772Interest-bearing liabilities:Deposits:Interest checking, savings and money
market
    
    $
    941,888
    
    
    $
    2,398
    
    
    
    1.03
    %
    
    $
    623,708
    
    
    $
    1,852
    
    
    
    1.20
    %Time deposits
    
    
    940,388
    
    
    
    5,663
    
    
    
    2.44
    %
    
    
    1,296,277
    
    
    
    10,799
    
    
    
    3.38
    %Total interest-bearing deposits
    
    $
    1,882,276
    
    
    $
    8,061
    
    
    
    1.74
    %
    
    $
    1,919,985
    
    
    $
    12,651
    
    
    
    2.67
    %Securities sold under repurchase
agreements and short-term borrowings
    
    
    23,615
    
    
    
    6
    
    
    
    0.10
    %
    
    
    33,076
    
    
    
    9
    
    
    
    0.11
    %Notes payable
    
    
    171,946
    
    
    
    1,694
    
    
    
    4.00
    %
    
    
    229,282
    
    
    
    2,445
    
    
    
    4.32
    %Subordinated debentures
    
    
    88,662
    
    
    
    472
    
    
    
    2.16
    %
    
    
    88,662
    
    
    
    846
    
    
    
    3.87
    %Total interest-bearing liabilities
    
    $
    2,166,499
    
    
    $
    10,233
    
    
    
    1.92
    %
    
    $
    2,271,005
    
    
    $
    15,951
    
    
    
    2.85
    %Non-interest bearing liabilities:Demand deposits
    
    
    163,173
    
    
    
    
    
    
    
    
    
    
    
    168,109Other liabilities
    
    
    18,098
    
    
    
    
    
    
    
    
    
    
    
    22,734Total non-interest bearing liabilities
    
    
    181,271
    
    
    
    
    
    
    
    
    
    
    
    190,843Total liabilities
    
    
    2,347,770
    
    
    
    
    
    
    
    
    
    
    
    2,461,848Shareholders equity
    
    
    230,366
    
    
    
    
    
    
    
    
    
    
    
    384,924Total liabilities and shareholders
equity
    
    $
    2,578,136
    
    
    
    
    
    
    
    
    
    
    $
    2,846,772Net interest income
    
    
    
    
    
    $
    21,847
    
    
    
    
    
    
    
    
    
    
    $
    19,611Interest rate spread
    
    
    
    
    
    
    
    
    
    
    3.81
    %
    
    
    
    
    
    
    
    
    
    
    3.01
    %Net yield on interest-earning assets
    
    
    
    
    
    
    
    
    
    
    3.90
    %
    
    
    
    
    
    
    
    
    
    
    3.23
    %
 1
    
    Average loan balances excluded nonaccrual loans for the periods presented.2
    
    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.  25




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##### Table of Contents



Provision for Loan Losses.
    Non-interest Income.
   26




---



##### Table of Contents



Non-interest Expense.
  Income Taxes.
 Changes in Financial Condition
         27




---



##### Table of Contents



Liquidity and Capital Resources
 Liquidity.
    Capital Resources.
   28




---



##### Table of Contents



Required
    
    
    RequiredMinimum
    
    
    to beRatio
    
    
    Well Capitalized
    
    
    Bank
    
    
    CompanyTier 1 risk-based
capital
    
    
    4.00
    %
    
    
    6.00
    %
    
    
    14.06
    %
    
    
    14.15
    %Total risk-based capital
    
    
    8.00
    %
    
    
    10.00
    %
    
    
    15.33
    %
    
    
    15.41
    %Leverage Ratio
    
    
    4.00
    %
    
    
    5.00
    %
    
    
    11.55
    %
    
    
    11.63
    %
 Off-Balance Sheet Arrangements
  Less than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    Years
    
    
    TotalCommitments to make loans  fixed
    
    $
    1,509
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,509Commitments to make loans 
variable
    
    
    14,029
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,029Unused lines of credit
    
    
    125,017
    
    
    
    7,295
    
    
    
    6,620
    
    
    
    86,616
    
    
    
    225,548Letters of credit
    
    
    23,020
    
    
    
    8,118
    
    
    
    
    
    
    
    
    
    
    
    31,138Total
    
    $
    163,575
    
    
    $
    15,413
    
    
    $
    6,620
    
    
    $
    86,616
    
    
    $
    272,224
  29




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##### Table of Contents



Disclosure of Contractual Obligations
  Less than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    Years
    
    
    TotalCertificates of deposits
    
    $
    748,203
    
    
    $
    141,766
    
    
    $
    18,335
    
    
    $
    3,636
    
    
    $
    911,940FHLB advances and notes payable
    
    
    12,358
    
    
    
    80,706
    
    
    
    30,750
    
    
    
    48,105
    
    
    
    171,919Subordinated debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88,662
    
    
    
    88,662Operating lease obligations
    
    
    1,112
    
    
    
    1,890
    
    
    
    1,043
    
    
    
    996
    
    
    
    5,041Deferred compensation
    
    
    1,975
    
    
    
    
    
    
    
    248
    
    
    
    1,912
    
    
    
    4,135Purchase obligations
    
    
    621
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    621Total
    
    $
    764,269
    
    
    $
    224,362
    
    
    $
    50,376
    
    
    $
    143,311
    
    
    $
    1,182,318
  Effect of New Accounting Standards
   ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   30




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##### Table of Contents



ITEM 4.
    
    CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Internal Control Over Financial Reporting
   31




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##### Table of Contents



PART II  OTHER INFORMATION
 Item 1.
    
    Legal Proceedings
  Item 1A.
    
    Risk Factors
  Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3.
    
    Defaults Upon Senior Securities
  Item 4.
    
    Removed and Reserved
  Item 5.
    
    Other Information
  Item 6.
    
    Exhibits
   32




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##### Table of Contents



SIGNATURES
  Green Bankshares, Inc.
RegistrantDate: May 7, 2010
    By:

/s/ James E. AdamsJames E. AdamsExecutive Vice President,
Chief Financial Officer and Secretary  33




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description10.1
    
    
    R. Stan Puckett  First Amendment to the Greene County Bank Executive Deferred Compensation
Agreement.10.2
    
    
    R. Stan Puckett  Second Amendment to the Greene County Bancshares, Inc. Non-Competition
Agreement.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 200232.2
    
    
    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
  34