----

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**For      the quarterly period ended June 30, 2007**

**0-14289**

**GREEN      BANKSHARES, INC.**

| **Tennessee**                                                                   | **62-1222567**                                      |
|---------------------------------------------------------------------------------|-----------------------------------------------------|
| (State                or other jurisdiction of                                  | (I.R.S.                Employer Identification No.) |
| incorporation                or organization)                                   |                                                |
|                                                                            |                                                |
|                                                                            |                                                |
| **100                North Main Street, Greeneville,                Tennessee** | **37743-4992**                                      |
| (Address                of principal executive offices)                         | (Zip                Code)                           |
|                                                                            |                                                |
|                                                                            |                                                |
|                                                                            |                                                |

**(423)      639-5111**

**GREENE      COUNTY BANCSHARES, INC.**

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**PART      1 – FINANCIAL INFORMATION**

**ITEM      1.    FINANCIAL      STATEMENTS**

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**GREEN      BANKSHARES, INC.**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

**June      30, 2007 and December 31, 2006**

**(Amounts      in thousands, except share and per share data)**

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|                                                                                                                                                                                                                                                                         |   | **(Unaudited)****June                30,****2007** |      |   | **December                31,****2006*** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|-----------|--------|------------------------------------------|--------|
| **ASSETS**                                                                                                                                                                                                                                                                   |   |                                               |      |   |                                     |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |
| Cash                and due from                banks                                                                                                                                                                                                                        |   | $                                                  | 70,807    |   |                                     | $      | 44,657 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Federal                funds sold and other                                                                                                                                                                                                                                  |   |                                               | 1,007     |   |                                     |   | 25,983 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Securities                available for                sale                                                                                                                                                                                                                  |   |                                               | 242,882   |   |                                     |   | 37,740 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Securities                held to maturity (with                a market value of $1,347 and $2,544)                                                                                                                                                                         |   |                                               | 1,358     |   |                                     |   | 2,545 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| FHLB,                Bankers Bank and other                stock, at cost                                                                                                                                                                                                    |   |                                               | 10,837    |   |                                     |   | 7,055 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Loans                held for                sale                                                                                                                                                                                                                            |   |                                               | 10,705    |   |                                     |   | 1,772 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Loans,                net of unearned                interest                                                                                                                                                                                                                |   |                                               | 2,327,149 |   |                                     |   | 1,539,629 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Allowance                for loan                losses                                                                                                                                                                                                                      |   |                                               | (32,935   | )      |                                     |   | (22,302 | ) |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Premises                and equipment,                net                                                                                                                                                                                                                    |   |                                               | 79,957    |   |                                     |   | 57,258 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
|        Goodwill                and other intangible assets                                                                                                                                                                                |   |                                               | 158,158   |   |                                     |   | 38,540 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Other                assets                                                                                                                                                                                                                                                  |   |                                               | 57,373    |   |                                     |   | 39,777 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
|               Total                assets                                                                                                                                                              |   | $                                                  | 2,927,298 |   |                                     | $      | 1,772,654 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| **LIABILITIES                AND SHAREHOLDERS’ EQUITY**                                                                                                                                                                                                                |   |                                               |      |   |                                     |   |   |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Liabilities                                                                                                                                                                                                                                                                  |   |                                               |      |   |                                     |   |   |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Deposits                                                                                                                                                                                                                                                                     |   | $                                                  | 2,069,749 |   |                                     | $      | 1,332,505 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
|        Federal                funds purchased                                                                                                                                                                                             |   |                                               | 41,862    |   |                                     |   | 20,000 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Repurchase                agreements                                                                                                                                                                                                                                         |   |                                               | 83,598    |   |                                     |   | 22,165 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| FHLB                advances and notes                payable                                                                                                                                                                                                                |   |                                               | 287,983   |   |                                     |   | 177,571 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
|        Subordinated                debentures                                                                                                                                                                                             |   |                                               | 88,662    |   |                                     |   | 13,403 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Accrued                interest payable and                other liabilities                                                                                                                                                                                                 |   |                                               | 44,039    |   |                                     |   | 22,539 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Total                liabilities                                                                                                                                                                                                                                             |   |                                               | 2,615,893 |   |                                     |   | 1,588,183 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Shareholders’                equity                                                                                                                                                                                                                                    |   |                                               |      |   |                                     |   |   |   |
| Common                stock: $2 par, 20,000,000                shares authorized,  12,927,407                and                9,810,867 shares outstanding                                                                                                       |   |                                               | 25,855    |   |                                     |   | 19,622 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Additional                paid-in                capital                                                                                                                                                                                                                     |   |                                               | 184,672   |   |                                     |   | 71,828 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Retained                earnings                                                                                                                                                                                                                                             |   |                                               | 103,695   |   |                                     |   | 93,150 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Accumulated                other comprehensive                loss                                                                                                                                                                                                           |   |                                               | (2,817    | )      |                                     |   | (129 | ) |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| Total                shareholders’                equity                                                                                                                                                                                                               |   |                                               | 311,405   |   |                                     |   | 184,471 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
|                  Total                liabilities and shareholders’ equity                                                                                                        |   | $                                                  | 2,927,298 |   |                                     | $      | 1,772,654 |   |
|                                                                                                                                                                                                                                                                         |   |                                               |      |   |                                     |   |   |   |
| *                This condensed consolidated balance sheet has been 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, 2006. |   |

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**GREEN      BANKSHARES, INC.**

**CONDENSED      CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**

**Three      and Six Months Ended June 30, 2007 and 2006**

**(Amounts      in thousands, except share and per share data)**

----

|                                                                             |   | **Three                Months Ended****June                30,** |       |   | **Six                Months Ended****June                30,** |   |
|----------------------------------------------------------------------------------|--------|------------------------------------------------------------------|------------|--------|----------------------------------------------------------------|--------|
|                                                                             |   | **2007**                                                         |       |   | **2006**                                                       |   |   | **2007** |   |   | **2006** |   |
|                                                                             |   | **(Unaudited)**                                                  |       |   | **(Unaudited)**                                                |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |
| Interest                income                                                   |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |
| Interest                and fees on                loans                         |   | $                                                                | 39,681     |   |                                                           | $      | 27,781 |   |   | $ | 71,596 |   |   | $ | 53,881 |   |
| Investment                securities                                             |   |                                                             | 2,090      |   |                                                           |   | 649 |   |   |   | 2,798 |   |   |   | 1,280 |   |
| Federal                funds sold and                other                       |   |                                                             | 12         |   |                                                           |   | 59 |   |   |   | 27 |   |   |   | 95 |   |
|                                                                             |   |                                                             | 41,783     |   |                                                           |   | 28,489 |   |   |   | 74,421 |   |   |   | 55,256 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Interest                expense                                                  |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                         |   |                                                             | 15,012     |   |                                                           |   | 8,647 |   |   |   | 26,165 |   |   |   | 16,689 |   |
| Borrowings                                                                       |   |                                                             | 3,838      |   |                                                           |   | 2,069 |   |   |   | 6,502 |   |   |   | 3,608 |   |
|                                                                             |   |                                                             | 18,850     |   |                                                           |   | 10,716 |   |   |   | 32,667 |   |   |   | 20,297 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income                                               |   |                                                             | 22,933     |   |                                                           |   | 17,773 |   |   |   | 41,754 |   |   |   | 34,959 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for loan losses                                         |   |                                                             | 1,259      |   |                                                           |   | 1,244 |   |   |   | 2,233 |   |   |   | 2,308 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income after provisionfor                loan losses |   |                                                             | 21,674     |   |                                                           |   | 16,529 |   |   |   | 39,521 |   |   |   | 32,651 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest                income                                                |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Service                charges and                fees                           |   |                                                             | 5,395      |   |                                                           |   | 4,001 |   |   |   | 9,684 |   |   |   | 7,232 |   |
| Other                                                                            |   |                                                             | 1,088      |   |                                                           |   | 1,027 |   |   |   | 2,198 |   |   |   | 2,551 |   |
|                                                                             |   |                                                             | 6,483      |   |                                                           |   | 5,028 |   |   |   | 11,882 |   |   |   | 9,783 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest                expense                                               |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Salaries                and employee                benefits                     |   |                                                             | 8,472      |   |                                                           |   | 6,266 |   |   |   | 15,930 |   |   |   | 12,657 |   |
| Occupancy                and furniture and                equipment expense      |   |                                                             | 2,626      |   |                                                           |   | 2,050 |   |   |   | 4,722 |   |   |   | 4,109 |   |
| Other                                                                            |   |                                                             | 5,611      |   |                                                           |   | 4,363 |   |   |   | 10,099 |   |   |   | 8,619 |   |
|                                                                             |   |                                                             | 16,709     |   |                                                           |   | 12,679 |   |   |   | 30,751 |   |   |   | 25,385 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Income                before income taxes                                        |   |                                                             | 11,448     |   |                                                           |   | 8,878 |   |   |   | 20,652 |   |   |   | 17,049 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for income taxes                                        |   |                                                             | 4,362      |   |                                                           |   | 3,395 |   |   |   | 7,950 |   |   |   | 6,470 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                        |   | $                                                                | 7,086      |   |                                                           | $      | 5,483 |   |   | $ | 12,702 |   |   | $ | 10,579 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                Income                                              |   | $                                                                | 4,357      |   |                                                           | $      | 5,498 |   |   | $ | 10,014 |   |   | $ | 10,587 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Per                share of common stock:                                        |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                earnings                                                    |   | $                                                                | 0.63       |   |                                                           | $      | 0.56 |   |   | $ | 1.20 |   |   | $ | 1.08 |   |
| Diluted                earnings                                                  |   |                                                             | 0.62       |   |                                                           |   | 0.55 |   |   |   | 1.19 |   |   |   | 1.07 |   |
| Dividends                                                                        |   |                                                             | 0.13       |   |                                                           |   | 0.12 |   |   |   | 0.26 |   |   |   | 0.24 |   |
|                                                                             |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding:                              |   |                                                             |       |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                            |   |                                                             | 11,321,822 |   |                                                           |   | 9,785,936 |   |   |   | 10,572,798 |   |   |   | 9,778,288 |   |
| Diluted                                                                          |   |                                                             | 11,395,518 |   |                                                           |   | 9,897,987 |   |   |   | 10,647,638 |   |   |   | 9,891,817 |   |

----

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**GREEN      BANKSHARES, INC.**

**CONDENSED      CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY**

**For      the Six Months Ended June 30, 2007**

**(Amounts      in thousands, except share and per share data)**

----

|                                                                                                                                                                                                                 |   |            |   |   |           |   |    |         |   |   | **Accumulated** |   |   |               |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------|--------|--------|----------------|--------|---------|--------------|--------|--------|-----------------|--------|--------|--------------------|--------|
|                                                                                                                                                                                                                 |   |            |   |   |           |   |    |         |   |   | **Other**       |   |   | **Total**          |   |
|                                                                                                                                                                                                                 |   |            |   |   | **Additional** |   |    |         |   |   | **Compre-**     |   |   | **Share-**         |   |
|                                                                                                                                                                                                                 |   | **Common**      |   |   | **Paid-in**    |   |    | **Retained** |   |   | **hensive**     |   |   | **holders’** |   |
|                                                                                                                                                                                                                 |   | **Stock**       |   |   | **Capital**    |   |    | **Earnings** |   |   | **Loss**        |   |   | **Equity**         |   |
|                                                                                                                                                                                                                 |   | **(Unaudited)** |   |
|                                                                                                                                                                                                                 |   |            |   |   |           |   |    |         |   |   |            |   |   |               |   |
| **Balance,                December 31, 2006**                                                                                                                                                                        |   | $               | 19,622 |   |           | $      | 71,828  |         |   | $      | 93,150          |   |   | $                  | (129   | ) |   | $ | 184,471 |   |
|                                                                                                                                                                                                                 |   |            |   |   |           |   |    |         |   |   |            |   |   |               |   |   |   |   |   |   |
| Common                stock transactions:                                                                                                                                                                            |   |            |   |   |           |   |    |         |   |   |            |   |   |               |   |   |   |   |   |   |
|   Issuance                of 3,102,616 shares in     acquisition                                                                                                                  |   |            | 6,205  |   |           |   | 112,270 |         |   |   | -               |   |   |               | -      |   |   |   | 118,475 |   |
|   Exercise                of 14,574 shares under     stock                option plan                                                                                             |   |            | 29     |   |           |   | 317     |         |   |   | -               |   |   |               | -      |   |   |   | 346 |   |
|   Common                stock exchanged for     exercised                stock options, 650     shares                                                   |   |            | (1     | )      |           |   | (21     | )            |   |   | -               |   |   |               | -      |   |   |   | (22 | ) |
| Stock-based                compensation                                                                                                                                                                              |   |            | -      |   |           |   | 235     |         |   |   | -               |   |   |               | -      |   |   |   | 235 |   |
| Tax                benefit from exercise of    Non-qualified                stock options                                                                                                        |   |            | -      |   |           |   | 43      |         |   |   | -               |   |   |               | -      |   |   |   | 43 |   |
| Implementation                of FIN 48                                                                                                                                                                              |   |            | -      |   |           |   | -       |         |   |   | 800             |   |   |               | -      |   |   |   | 800 |   |
| Dividends                paid ($.26 per share)                                                                                                                                                                       |   |            | -      |   |           |   | -       |         |   |   | (2,957          | )      |   |               | -      |   |   |   | (2,957 | ) |
| Comprehensive                income:                                                                                                                                                                                 |   |            |   |   |           |   |    |         |   |   |            |   |   |               |   |   |   |   |   |   |
|   Net                income                                                                                                                                                                                |   |            | -      |   |           |   | -       |         |   |   | 12,702          |   |   |               | -      |   |   |   | 12,702 |   |
|   Change                in unrealized                gains    (losses),                net of reclassification        and                taxes |   |            | -      |   |           |   | -       |         |   |   | -               |   |   |               | (2,688 | ) |   |   | (2,688 | ) |
| Total                comprehensive                income                                                                                                                                                             |   |            |   |   |           |   |    |         |   |   |            |   |   |               |   |   |   |   | 10,014 |   |
|                                                                                                                                                                                                                 |   |            |   |   |           |   |    |         |   |   |            |   |   |               |   |   |   |   |   |   |
| **Balance,                June 30, 2007**                                                                                                                                                                            |   | $               | 25,855 |   |           | $      | 184,672 |         |   | $      | 103,695         |   |   | $                  | (2,817 | ) |   | $ | 311,405 |   |

----

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**GREEN      BANKSHARES, INC.**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**For      the Six Months Ended June 30, 2007 and 2006**

**(Amounts      in thousands, except share and per share data)**

----

|                                                                                                                         |   | **June                30,** |     |   | **June                30,** |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|----------|--------|-----------------------------|--------|
|                                                                                                                         |   | **2007**                    |     |   | **2006**                    |   |
|                                                                                                                         |   | **(Unaudited)**             |     |
|                                                                                                                         |   |                        |     |   |                        |   |
| **Cash                flows from operating activities**                                                                      |   |                        |     |   |                        |   |
| Net                income                                                                                                    |   | $                           | 12,702   |   |                        | $      | 10,579 |   |
| Adjustments                to reconcile net                income to net cash provided byoperating                activities |   |                        |     |   |                        |   |   |   |
| Provision                for loan                losses                                                                      |   |                        | 2,233    |   |                        |   | 2,308 |   |
| Depreciation                and                amortization                                                                  |   |                        | 2,416    |   |                        |   | 2,077 |   |
| Security                amortization and                accretion, net                                                       |   |                        | (77      | )      |                        |   | (9 | ) |
|         Loss                on sale of securities                                    |   |                        | 23       |   |                        |   | 8 |   |
| FHLB                stock                dividends                                                                           |   |                        | -        |   |                        |   | (165 | ) |
| Net                gain on sale of mortgage                loans                                                             |   |                        | (535     | )      |                        |   | (391 | ) |
| Originations                of mortgage loans                held for sale                                                   |   |                        | (33,779  | )      |                        |   | (29,924 | ) |
| Proceeds                from sales of mortgage                loans                                                          |   |                        | 34,022   |   |                        |   | 30,947 |   |
|         Increase                in cash surrender value of life insurance            |   |                        | (413     | )      |                        |   | (391 | ) |
|   Net                losses                [gains?]from sales of fixed assets                                      |   |                        | 78       |   |                        |   | (2 | ) |
|         Stock                compensation expense                                    |   |                        | 235      |   |                        |   | 185 |   |
| Net                gain on other real estate and                repossessed assets                                           |   |                        | (178     | )      |                        |   | (148 | ) |
|         Deferred                tax benefit                                          |   |                        | (2,996   | )      |                        |   | (874 | ) |
| Net                changes:                                                                                                  |   |                        |     |   |                        |   |   |   |
| Other                assets                                                                                                  |   |                        | (642     | )      |                        |   | (492 | ) |
| Accrued                interest payable and                other liabilities                                                 |   |                        | 18,126   |   |                        |   | (2,724 | ) |
| Net                cash provided from operating                activities                                                    |   |                        | 31,215   |   |                        |   | 10,984 |   |
|                                                                                                                         |   |                        |     |   |                        |   |   |   |
| **Cash                flows from investing activities**                                                                      |   |                        |     |   |                        |   |   |   |
| Purchase                of securities available for sale                                                                     |   |                        | (23,682  | )      |                        |   | (5,948 | ) |
| Proceeds                from sale of securities available for sale                                                           |   |                        | 1,262    |   |                        |   | 985 |   |
| Proceeds                from maturities of securities held for sale                                                          |   |                        | 13,106   |   |                        |   | 9,386 |   |
| Proceeds                from sale of securities held to maturity                                                             |   |                        | 496      |   |                        |   | - |   |
| Proceeds                from maturities of securities held to maturity                                                       |   |                        | 690      |   |                        |   | 640 |   |
| Purchase                of  life insurance                                                                         |   |                        | -        |   |                        |   | (41 | ) |
| Purchase                of FHLB stock                                                                                        |   |                        | (819     | )      |                        |   | - |   |
| Net                change in loans                                                                                           |   |                        | (152,845 | )      |                        |   | (62,387 | ) |
| Acquisition,                net of cash received                                                                        |   |                        | (24,548  | )      |                        |   | - |   |
| Proceeds                from sale of other real estate                                                                       |   |                        | 2,622    |   |                        |   | 2,571 |   |
| Improvements                to other real estate                                                                             |   |                        | -        |   |                        |   | (47 | ) |
| Proceeds                from sale of fixed assets                                                                            |   |                        | 13       |   |                        |   | 23 |   |
| Premises                and equipment expenditures                                                                           |   |                        | (6,008   | )      |                        |   | (4,308 | ) |
| Net                cash used in investing                activities                                                          |   |                        | (189,713 | )      |                        |   | (59,126 | ) |
|                                                                                                                         |   |                        |     |   |                        |   |   |   |
| **Cash                flows from financing activities**                                                                      |   |                        |     |   |                        |   |   |   |
| Net                change in deposits                                                                                        |   |                        | 38,157   |   |                        |   | (12,273 | ) |
| Net                change in federal funds purchased and repurchase                agreements                                |   |                        | (11,994  | )      |                        |   | 33,635 |   |
| Proceeds                from FHLB advances and  notes payable                                                      |   |                        | 114,200  |   |                        |   | 195,900 |   |
| Proceeds                from subordinated debentures                                                                         |   |                        | 57,732   |   |                        |   | - |   |
| Repayments                of FHLB advances and  notes payable                                                      |   |                        | (35,790  | )      |                        |   | (177,765 | ) |
| Dividends                paid                                                                                                |   |                        | (2,957   | )      |                        |   | (2,348 | ) |
| Proceeds                from issuance of common stock                                                                        |   |                        | 324      |   |                        |   | 444 |   |
| Net                cash from financing                activities                                                             |   |                        | 159,672  |   |                        |   | 37,593 |   |
|                                                                                                                         |   |                        |     |   |                        |   |   |   |
| **Net                change in cash and cash equivalents**                                                                   |   |                        | 1,174    |   |                        |   | (10,549 | ) |
|                                                                                                                         |   |                        |     |   |                        |   |   |   |
| Cash                and cash equivalents, beginning of year                                                                  |   |                        | 70,640   |   |                        |   | 74,523 |   |
|                                                                                                                         |   |                        |     |   |                        |   |   |   |
| **Cash                and cash equivalents, end of period**                                                                  |   | $                           | 71,814   |   |                        | $      | 63,974 |   |
|                                                                                                                         |   |                        |     |   |                        |   |   |   |
| **Supplemental                disclosures – cash and noncash**                                                         |   |                        |     |   |                        |   |   |   |
| Interest                paid                                                                                                 |   | $                           | 28,866   |   |                        | $      | 20,136 |   |
| Income                taxes                paid                                                                              |   |                        | 9,499    |   |                        |   | 7,162 |   |
| Loans                converted to other real                estate                                                           |   |                        | 1,785    |   |                        |   | 3,121 |   |
| Unrealized                gain (loss) on available for sale securities, net of tax                                           |   |                        | 2,688    |   |                        |   | 8 |   |

----

----

**GREEN        BANKSHARES, INC.**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June        30, 2007**

**Unaudited**

**(Amounts        in thousands, except share and per share data)**

----

**NOTE      1 – PRINCIPLES OF CONSOLIDATION**

**NOTE      2 – LOANS**

|                                           |   | **June                30,** |      |   | **December                31,** |   |
|------------------------------------------------|--------|-----------------------------|-----------|--------|---------------------------------|--------|
|                                           |   | **2007**                    |      |   | **2006**                        |   |
|                                           |   |                        |      |   |                            |   |
| Commercial                                     |   | $                           | 344,470   |   |                            | $      | 258,998 |   |
| Commercial                real estate          |   |                        | 1,486,967 |   |                            |   | 921,190 |   |
| Residential                real estate         |   |                        | 405,494   |   |                            |   | 281,629 |   |
| Consumer                                       |   |                        | 100,441   |   |                            |   | 87,111 |   |
| Other                                          |   |                        | 2,818     |   |                            |   | 2,203 |   |
| Unearned                interest               |   |                        | (13,041   | )      |                            |   | (11,502 | ) |
| Loans,                net of unearned interest |   | $                           | 2,327,149 |   |                            | $      | 1,539,629 |   |
|                                           |   |                        |      |   |                            |   |   |   |
| Allowance                for loan losses       |   | $                           | (32,935   | )      |                            | $      | (22,302 | ) |
|                                           |   |                        |      |   |                            |   |   |   |

----

----

**GREEN        BANKSHARES, INC.**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June        30, 2007**

**Unaudited**

**(Amounts        in thousands, except share and per share data)**

----

**NOTE      2 – LOANS **
** **

|                                                       |   | **June                30,** |   |   | **December                31,** |   |
|------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------------|--------|
|                                                       |   | **2007**                    |   |   | **2006**                        |   |
|                                                       |   |                        |   |   |                            |   |
| Balance                at beginning of year                |   | $                           | 22,302 |   |                            | $      | 19,739 |   |
| Add                (deduct):                               |   |                        |   |   |                            |   |   |   |
|   Reserve                of acquired Bank        |   |                        | 9,022  |   |                            |   | - |   |
|   Provision                for loan losses       |   |                        | 2,233  |   |                            |   | 5,507 |   |
|   Loans                charged off               |   |                        | (1,412 | )      |                            |   | (4,357 | ) |
|   Recoveries                of loans charged off |   |                        | 790    |   |                            |   | 1,413 |   |
| Ending                balance                              |   | $                           | 32,935 |   |                            | $      | 22,302 |   |
|                                                       |   |                        |   |   |                            |   |   |   |

|                                                   |   | **June                30,** |   |   | **December                31,** |   |
|--------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------------|--------|
|                                                   |   | **2007**                    |   |   | **2006**                        |   |
|                                                   |   |                        |   |   |                            |   |
| Loans                past due 90 days still on accrual |   | $                           | 443    |   |                            | $      | 28 |   |
| Nonaccrual                loans                        |   |                        | 4,440  |   |                            |   | 3,479 |   |
| Total                                                  |   | $                           | 4,883  |   |                            | $      | 3,507 |   |
|                                                   |   |                        |   |   |                            |   |   |   |

----

----

**GREEN          BANKSHARES, INC.**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June          30, 2007**

**Unaudited**

**(Amounts          in thousands, except share and per share data)**

----

**NOTE      3 – EARNINGS PER SHARE OF COMMON STOCK**

|                                                                    |   | **                                           Three Months Ended June 30,** |   |   |              |
|-------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------|
|                                                                    |   | **2007**                                                                                                                                                                                                          |   |   | **2006**          |   |
|                                                                    |   | **Income**                                                                                                                                                                                                        |   |   | **Shares**        |   |   | **Income** |   |   | **Shares** |   |
|                                                                    |   | **(Numerator)**                                                                                                                                                                                                   |   |   | **(Denominator)** |   |   | **(Numerator)** |   |   | **(Denominator)** |   |
|                                                                    |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |
| **Basic                EPS**                                            |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |
|   Income                available to common shareholders      |   | $                                                                                                                                                                                                                 | 7,086  |   |              |   | 11,321,822 |   |   | $ | 5,483 |   |   |   | 9,785,936 |   |
|                                                                    |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| **Effect                of dilutive securities**                        |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Stock                options outstanding                    |   |                                                                                                                                                                                                              | -      |   |              |   | 73,696 |   |   |   | - |   |   |   | 112,051 |   |
|                                                                    |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted                EPS**                                          |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Income                available to common shareholders plus |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|     assumed                conversions              |   | $                                                                                                                                                                                                                 | 7,086  |   |              |   | 11,395,518 |   |   | $ | 5,483 |   |   |   | 9,897,987 |   |
|                                                                    |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|                                                                    |   | **Six                Months Ended June 30,**                                                                                                                                                                      |   |
|                                                                    |   | **2007**                                                                                                                                                                                                          |   |   | **2006**          |   |
|                                                                    |   | **Income**                                                                                                                                                                                                        |   |   | **Shares**        |   |   | **Income** |   |   | **Shares** |   |
|                                                                    |   | **(Numerator)**                                                                                                                                                                                                   |   |   | **(Denominator)** |   |   | **(Numerator)** |   |   | **(Denominator)** |   |
|                                                                    |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| **Basic                EPS**                                            |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Income                available to common shareholders      |   | $                                                                                                                                                                                                                 | 12,702 |   |              |   | 10,572,798 |   |   | $ | 10,579 |   |   |   | 9,778,288 |   |
|                                                                    |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| **Effect                of dilutive securities**                        |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Stock                options outstanding                    |   |                                                                                                                                                                                                              | -      |   |              |   | 74,840 |   |   |   | - |   |   |   | 113,529 |   |
|                                                                    |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| **Diluted                EPS**                                          |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|   Income                available to common shareholders plus |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|     assumed                conversions              |   | $                                                                                                                                                                                                                 | 12,702 |   |              |   | 10,647,638 |   |   | $ | 10,579 |   |   |   | 9,891,817 |   |
|                                                                    |   |                                                                                                                                                                                                              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |

----

----

**GREEN            BANKSHARES, INC.**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June            30, 2007**

**Unaudited**

**(Amounts            in thousands, except share and per share data)**

----

**NOTE      4 – SEGMENT INFORMATION**

| **Three                months ended June 30, 2007** |   | **Bank** |      |   | **Other                Segments** |   |   | **Holding                Company** |   |   | **Eliminations** |   |   | **Totals** |   |
|-----------------------------------------------------|--------|----------|-----------|--------|-----------------------------------|--------|--------|------------------------------------|--------|--------|------------------|--------|--------|------------|--------|
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |
| Net                interest income (expense)        |   | $        | 22,002    |   |                              | $      | 1,649  |                               |   | $      | (718             | )      |   | $          | -      |   |   | $ | 22,933 |   |
| Provision                for loan losses            |   |     | 905       |   |                              |   | 354    |                               |   |   | -                |   |   |       | -      |   |   |   | 1,259 |   |
| Noninterest                income                   |   |     | 6,075     |   |                              |   | 674    |                               |   |   | 27               |   |   |       | (293   | ) |   |   | 6,483 |   |
| Noninterest                expense                  |   |     | 15,496    |   |                              |   | 1,282  |                               |   |   | 224              |   |   |       | (293   | ) |   |   | 16,709 |   |
| Income                tax expense (benefit)         |   |     | 4,442     |   |                              |   | 270    |                               |   |   | (350             | )      |   |       | -      |   |   |   | 4,362 |   |
|   **Segment                profit**       |   | $        | 7,234     |   |                              | $      | 417    |                               |   | $      | (565             | )      |   | $          | -      |   |   | $ | 7,086 |   |
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |   |   |   |   |   |
| **Segment                assets at June 30, 2007**  |   | $        | 2,871,987 |   |                              | $      | 39,998 |                               |   | $      | 15,313           |   |   | $          | -      |   |   | $ | 2,927,298 |   |
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |   |   |   |   |   |
| **Three                months ended June 30, 2006** |   | **Bank** |      |   | **Other                Segments** |   |   | **Holding                Company** |   |   | **Eliminations** |   |   | **Totals** |   |
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |   |   |   |   |   |
| Net                interest income (expense)        |   | $        | 16,626    |   |                              | $      | 1,423  |                               |   | $      | (276             | )      |   | $          | -      |   |   | $ | 17,773 |   |
| Provision                for loan losses            |   |     | 999       |   |                              |   | 245    |                               |   |   | -                |   |   |       | -      |   |   |   | 1,244 |   |
| Noninterest                income                   |   |     | 4,583     |   |                              |   | 629    |                               |   |   | 45               |   |   |       | (229   | ) |   |   | 5,028 |   |
| Noninterest                expense                  |   |     | 11,514    |   |                              |   | 1,199  |                               |   |   | 195              |   |   |       | (229   | ) |   |   | 12,679 |   |
| Income                tax expense (benefit)         |   |     | 3,342     |   |                              |   | 238    |                               |   |   | (185             | )      |   |       | -      |   |   |   | 3,395 |   |
|   **Segment                profit**       |   | $        | 5,354     |   |                              | $      | 370    |                               |   | $      | (241             | )      |   | $          | -      |   |   | $ | 5,483 |   |
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |   |   |   |   |   |
| **Segment                assets at June 30, 2006**  |   | $        | 1,629,798 |   |                              | $      | 31,544 |                               |   | $      | 4,288            |   |   | $          | -      |   |   | $ | 1,665,630 |   |
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |   |   |   |   |   |
| **Six                months ended June 30, 2007**   |   | **Bank** |      |   | **Other                Segments** |   |   | **Holding                Company** |   |   | **Eliminations** |   |   | **Totals** |   |
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |   |   |   |   |   |
| Net                interest income (expense)        |   | $        | 39,534    |   |                              | $      | 3,206  |                               |   | $      | (986             | )      |   | $          | -      |   |   | $ | 41,754 |   |
| Provision                for loan losses            |   |     | 1,519     |   |                              |   | 714    |                               |   |   | -                |   |   |       | -      |   |   |   | 2,233 |   |
| Noninterest                income                   |   |     | 11,174    |   |                              |   | 1,262  |                               |   |   | 38               |   |   |       | (592   | ) |   |   | 11,882 |   |
| Noninterest                expense                  |   |     | 28,362    |   |                              |   | 2,512  |                               |   |   | 469              |   |   |       | (592   | ) |   |   | 30,751 |   |
| Income                tax expense (benefit)         |   |     | 8,005     |   |                              |   | 487    |                               |   |   | (542             | )      |   |       | -      |   |   |   | 7,950 |   |
|   **Segment                profit**       |   | $        | 12,822    |   |                              | $      | 755    |                               |   | $      | (875             | )      |   | $          | -      |   |   | $ | 12,702 |   |
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |   |   |   |   |   |
| **Six                months ended June 30, 2006**   |   | **Bank** |      |   | **Other                Segments** |   |   | **Holding                Company** |   |   | **Eliminations** |   |   | **Totals** |   |
|                                                |   |     |      |   |                              |   |   |                               |   |   |             |   |   |       |   |   |   |   |   |   |
| Net                interest income (expense)        |   | $        | 32,642    |   |                              | $      | 2,852  |                               |   | $      | (535             | )      |   | $          | -      |   |   | $ | 34,959 |   |
| Provision                for loan losses            |   |     | 1,841     |   |                              |   | 467    |                               |   |   | -                |   |   |       | -      |   |   |   | 2,308 |   |
| Noninterest                income                   |   |     | 8,913     |   |                              |   | 1,078  |                               |   |   | 242              |   |   |       | (450   | ) |   |   | 9,783 |   |
| Noninterest                expense                  |   |     | 23,213    |   |                              |   | 2,310  |                               |   |   | 312              |   |   |       | (450   | ) |   |   | 25,385 |   |
| Income                tax expense (benefit)         |   |     | 6,334     |   |                              |   | 452    |                               |   |   | (316             | )      |   |       | -      |   |   |   | 6,470 |   |
|   **Segment                profit**       |   | $        | 10,167    |   |                              | $      | 701    |                               |   | $      | (289             | )      |   | $          | -      |   |   | $ | 10,579 |   |

----

----

**GREEN            BANKSHARES, INC.**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June            30, 2007**

**Unaudited**

**(Amounts            in thousands, except share and per share data)**

----

**NOTE      4 – SEGMENT INFORMATION**

| **Asset                Quality Ratios**                                                                        |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                           |   |   |   |   |   |   |   |   |   |
| As                of and for the period ended June 30, 2007                                                    |   | Bank   |   |   | Other  |   |   | Total  |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |
| Nonperforming                loans as percentage of total loans, net of unearned income                        |   |   | 0.19   | %      |   |   | 1.47   | %      |   |   | 0.21 | % |
| Nonperforming                assets as a percentage of total assets                                            |   |   | 0.17   | %      |   |   | 1.62   | %      |   |   | 0.20 | % |
| Allowance                for loan losses as a percentage of total loans, net of unearned                income |   |   | 1.30   | %      |   |   | 8.02   | %      |   |   | 1.42 | % |
| Allowance                for loan losses as a percentage of nonperforming loans                                |   |   | 690.29 | %      |   |   | 545.98 | %      |   |   | 674.48 | % |
| YTD                net charge-offs to average total loans, net of unearned                income               |   |   | 0.01   | %      |   |   | 1.42   | %      |   |   | 0.04 | % |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| As                of and for the period ended June 30, 2006                                                    |   | Bank   |   |   | Other  |   |   | Total  |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonperforming                loans as percentage of total loans, net of unearned income                        |   |   | 0.31   | %      |   |   | 1.32   | %      |   |   | 0.34 | % |
| Nonperforming                assets as a percentage of total assets                                            |   |   | 0.43   | %      |   |   | 1.95   | %      |   |   | 0.47 | % |
| Allowance                for loan losses as a percentage of total loans, net of unearned                income |   |   | 1.28   | %      |   |   | 7.90   | %      |   |   | 1.45 | % |
| Allowance                for loan losses as a percentage of nonperforming loans                                |   |   | 410.68 | %      |   |   | 596.70 | %      |   |   | 426.84 | % |
| YTD                net charge-offs to average total loans, net of unearned                income               |   |   | 0.06   | %      |   |   | 1.26   | %      |   |   | 0.09 | % |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| As                of and for the year ended December 31, 2006                                                  |   | Bank   |   |   | Other  |   |   | Total  |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonperforming                loans as percentage of total loans, net of unearned income                        |   |   | 0.19   | %      |   |   | 1.84   | %      |   |   | 0.23 | % |
| Nonperforming                assets as a percentage of total assets                                            |   |   | 0.24   | %      |   |   | 2.53   | %      |   |   | 0.29 | % |
| Allowance                for loan losses as a percentage of total loans, net of unearned                income |   |   | 1.28   | %      |   |   | 7.94   | %      |   |   | 1.45 | % |
| Allowance                for loan losses as a percentage of nonperforming loans                                |   |   | 680.25 | %      |   |   | 431.95 | %      |   |   | 635.93 | % |
| Net                charge-offs to average total loans, net of unearned income                                  |   |   | 0.14   | %      |   |   | 2.82   | %      |   |   | 0.20 | % |

| **Net                charge-offs**                                    | Bank                                     | Other                                    | Total                                    |
|-----------------------------------------------------------------------|------------------------------------------|------------------------------------------|------------------------------------------|
|                                                                  |                                     |                                     |                                     |
| Actual                for the six month period ending June 30, 2007   | $      124 | $      498 | $      622 |
| Actual                for the six month period ending June 30, 2006   | $      819 | $      394 | $   1,213                 |
| Actual  for                the year ended December 31, 2006 | $   2,041                 | $      903 | $   2,944                 |

**NOTE      5 – REVOLVING CREDIT AGREEMENT**

----

----

**GREEN      BANKSHARES, INC.**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June              30, 2007**

**Unaudited**

**(Amounts              in thousands, except share and per share data)**

----

**NOTE      6 – INCOME TAXES**

**NOTE      7 – BUSINESS COMBINATION**

----

----

**GREEN              BANKSHARES, INC.**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June              30, 2007**

**Unaudited**

**(Amounts              in thousands, except share and per share data)**

----

**NOTE      7 – BUSINESS COMBINATION **

| Cash                and due from banks                     |   | $      | 21,245    |   |
|------------------------------------------------------------|--------|--------|-----------|--------|
| Securities                                                 |   |   | 200,108   |   |
| FHLB                stock                                  |   |   | 2,863     |   |
| Bankers                Bank stock                          |   |   | 100       |   |
| Loans                held for sale                         |   |   | 8,642     |   |
| Loans,                net of unearned interest             |   |   | 636,748   |   |
| Allowance                for loan losses                   |   |   | (9,022    | )      |
| Premises                and equipment                      |   |   | 18,486    |   |
| Goodwill                                                   |   |   | 111,591   |   |
| Core                deposit intangible                     |   |   | 8,740     |   |
| Other                assets                                |   |   | 12,089    |   |
|   Total                assets acquired           |   |   | 1,011,590 |   |
| Deposits                                                   |   |   | (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   |   |
|                                                       |   |   |      |   |

|                                      |   | **Six                Months Ended** |   |
|-------------------------------------------|--------|-------------------------------------|--------|
|                                      |   | **June                30,**         |   |
|                                      |   | **2007**                            |   |   | **2006** |   |
|                                      |   |                                |   |   |   |   |
| Net                interest income        |   | $                                   | 54,348 |   |   | $ | 46,415 |   |
|                                      |   |                                |   |   |   |   |   |   |
| Net                income                 |   | $                                   | 16,694 |   |   | $ | 14,593 |   |
|                                      |   |                                |   |   |   |   |   |   |
| Basic                earnings per share   |   | $                                   | 1.26   |   |   | $ | 1.13 |   |
| Diluted                earnings per share |   | $                                   | 1.25   |   |   | $ | 1.12 |   |

----

----

**GREEN              BANKSHARES, INC.**

**NOTES              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June              30, 2007**

**Unaudited**

**(Amounts              in thousands, except share and per share data)**

** **

----

**NOTE        8 – BORROWINGS**

----

----

**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 2006 10-K in Part I, Item 1A thereof, which is      incorporated herein by this reference, as well as other factors discussed      throughout this document, including, without limitation, in Part II, Item 1A,      the factors described under “Critical Accounting Policies and Estimates” on page      16 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 2006      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.**

----

**General**

**Growth      and Business Strategy**

**Overview**

----

**Critical      Accounting Policies and Estimates**

----

**Changes      in Results of Operations**

**Net      Income.  **

**Net      Interest Income.**

----

| FOMC                Meeting           |   | Beginning |   |   |     |   |   | Ending |   |
|---------------------------------------|--------|-----------|--------|--------|----------|--------|--------|--------|--------|
| Date                                  |   | Rate      |   |   | Increase |   |   | Rate   |   |
| December                13, 2005      |   |      | 4.00   | %      |     |   | 0.25   | %      |   |   | 4.25 | % |
| January                31, 2006       |   |      | 4.25   | %      |     |   | 0.25   | %      |   |   | 4.50 | % |
| March                28, 2006         |   |      | 4.50   | %      |     |   | 0.25   | %      |   |   | 4.75 | % |
| May                10, 2006           |   |      | 4.75   | %      |     |   | 0.25   | %      |   |   | 5.00 | % |
| June                29, 2006          |   |      | 5.00   | %      |     |   | 0.25   | %      |   |   | 5.25 | % |
| August                8, 2006         |   |      | 5.25   | %      |     |   | 0.00   | %      |   |   | 5.25 | % |
| September                20, 2006     |   |      | 5.25   | %      |     |   | 0.00   | %      |   |   | 5.25 | % |
| October                25, 2006       |   |      | 5.25   | %      |     |   | 0.00   | %      |   |   | 5.25 | % |
| December                12, 2006      |   |      | 5.25   | %      |     |   | 0.00   | %      |   |   | 5.25 | % |
| January                31, 2007       |   |      | 5.25   | %      |     |   | 0.00   | %      |   |   | 5.25 | % |
| March                21, 2007         |   |      | 5.25   | %      |     |   | 0.00   | %      |   |   | 5.25 | % |
| May  9,                2007 |   |      | 5.25   | %      |     |   | 0.00   | %      |   |   | 5.25 | % |
| June                28, 2007          |   |      | 5.25   | %      |     |   | 0.00   | %      |   |   | 5.25 | % |

----

|                                                                                                                                                                       |   | **Three                Months Ended** |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|
|                                                                                                                                                                       |   | **June                30,**           |       |
|                                                                                                                                                                       |   | **2007**                              |       |   | **2006** |   |
|                                                                                                                                                                       |   | Average                               |       |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                                                                                                                                                       |   | Balance                               |       |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| **Interest-earning                assets:**                                                                                                                                |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loans(1)                                                                                                                                                       |   | $                                     | 1,962,127  |   |   | $ | 39,681 |   |   |   | 8.11 | % |   | $ | 1,426,984 |   |   | $ | 27,781 |   |   |   | 7.81 | % |
|   Investment                securities                                                                                                                           |   |                                  | 154,110    |   |   |   | 2,090 |   |   |   | 5.44 | % |   |   | 54,571 |   |   |   | 649 |   |   |   | 4.77 | % |
|   Other                short-term investments                                                                                                                    |   |                                  | 1,121      |   |   |   | 12 |   |   |   | 4.29 | % |   |   | 4,476 |   |   |   | 59 |   |   |   | 5.29 | % |
|   Fully                taxable equivalent adjustment (2)                                                                                                         |   |                                  |       |   |   |   | 114 |   |   |   |   |   |   |   |   |   |   |   | 38 |   |   |   |   |   |
|         Total                interest-earning assets                                                                               |   | $                                     | 2,117,358  |   |   | $ | 41,897 |   |   |   | 7.94 | % |   | $ | 1,486,031 |   |   | $ | 28,527 |   |   |   | 7.70 | % |
|   Noninterest                earning assets                                                                                                                      |   |                                  | 230,119    |   |   |   |   |   |   |   |   |   |   |   | 146,520 |   |   |   |   |   |   |   |   |   |
|         Total                assets                                                                                                |   | $                                     | 2,347,477  |   |   |   |   |   |   |   |   |   |   | $ | 1,632,551 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                       |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Interest-bearing                liabilities:**                                                                                                                           |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Deposits:                                                                                                                                                      |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Interest                checking, savings and money      market                                                      |   | $                                     | 693,235    |   |   | $ | 4,865 |   |   |   | 2.81 | % |   | $ | 505,383 |   |   | $ | 2,680 |   |   |   | 2.13 | % |
|     Time                deposits                                                                                                                       |   |                                  | 874,466    |   |   |   | 10,147 |   |   |   | 4.65 | % |   |   | 625,457 |   |   |   | 5,967 |   |   |   | 3.83 | % |
|         Total                interest-bearing deposits                                                                             |   | $                                     | 1,567,701  |   |   | $ | 15,012 |   |   |   | 3.84 | % |   | $ | 1,130,840 |   |   | $ | 8,647 |   |   |   | 3.07 | % |
|   Securities                sold under repurchase   agreements                and short-term borrowings                                           |   |                                  | 67,307     |   |   |   | 768 |   |   |   | 4.58 | % |   |   | 34,783 |   |   |   | 397 |   |   |   | 4.58 | % |
|   Notes                payable                                                                                                                                   |   |                                  | 192,668    |   |   |   | 2,352 |   |   |   | 4.90 | % |   |   | 109,796 |   |   |   | 1,414 |   |   |   | 5.17 | % |
|   Subordinated                debentures(3)                                                                                                                      |   |                                  | 51,061     |   |   |   | 718 |   |   |   | 5.64 | % |   |   | 13,403 |   |   |   | 258 |   |   |   | 7.72 | % |
|         Total                interest-bearing liabilities                                                                          |   | $                                     | 1,878,7.37 |   |   | $ | 18,850 |   |   |   | 4.02 | % |   | $ | 1,288,822 |   |   | $ | 10,716 |   |   |   | 3.34 | % |
| **Noninterest                bearing liabilities:**                                                                                                                        |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Demand                deposits                                                                                                                                 |   |                                  | 180,185    |   |   |   |   |   |   |   |   |   |   |   | 148,937 |   |   |   |   |   |   |   |   |   |
|   Other                liabilities                                                                                                                               |   |                                  | 36,566     |   |   |   |   |   |   |   |   |   |   |   | 18,396 |   |   |   |   |   |   |   |   |   |
|         Total                noninterest bearing liabilities                                                                       |   |                                  | 216,751    |   |   |   |   |   |   |   |   |   |   |   | 167,333 |   |   |   |   |   |   |   |   |   |
|         Total                liabilities                                                                                           |   |                                  | 2,095,488  |   |   |   |   |   |   |   |   |   |   |   | 1,456,155 |   |   |   |   |   |   |   |   |   |
|   Shareholders’                equity                                                                                                                      |   |                                  | 251,989    |   |   |   |   |   |   |   |   |   |   |   | 176,396 |   |   |   |   |   |   |   |   |   |
|         Total                liabilities and shareholders’          equity |   | $                                     | 2,347,477  |   |   |   |   |   |   |   |   |   |   | $ | 1,632,551 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                       |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income                                                                                                                                         |   |                                  |       |   |   | $ | 23,047 |   |   |   |   |   |   |   |   |   |   | $ | 17,811 |   |   |   |   |   |
|                                                                                                                                                                       |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                rate spread                                                                                                                                        |   |                                  |       |   |   |   |   |   |   |   | 3.91 | % |   |   |   |   |   |   |   |   |   |   | 4.36 | % |
|                                                                                                                                                                       |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                yield on interest-earning assets                                                                                                                        |   |                                  |       |   |   |   |   |   |   |   | 4.37 | % |   |   |   |   |   |   |   |   |   |   | 4.81 | % |

----

|                                                                                                                                                                       |   | **Six                Months Ended** |      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-----------|
|                                                                                                                                                                       |   | **June                30,**         |      |
|                                                                                                                                                                       |   | **2007**                            |      |   | **2006** |   |
|                                                                                                                                                                       |   | Average                             |      |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                                                                                                                                                       |   | Balance                             |      |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| **Interest-earning                assets:**                                                                                                                                |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loans(1)                                                                                                                                                       |   | $                                   | 1,768,459 |   |   | $ | 71,596 |   |   |   | 8.16 | % |   | $ | 1,409,788 |   |   | $ | 53,881 |   |   |   | 7.71 | % |
|   Investment                securities                                                                                                                           |   |                                | 103,176   |   |   |   | 2,798 |   |   |   | 5.47 | % |   |   | 55,503 |   |   |   | 1,280 |   |   |   | 4.65 | % |
|   Other                short-term investments                                                                                                                    |   |                                | 1,189     |   |   |   | 27 |   |   |   | 4.58 | % |   |   | 3,928 |   |   |   | 95 |   |   |   | 4.88 | % |
|   Fully                taxable equivalent adjustment (2)                                                                                                         |   |                                |      |   |   |   | 146 |   |   |   |   |   |   |   |   |   |   |   | 77 |   |   |   |   |   |
|         Total                interest-earning assets                                                                               |   | $                                   | 1,872,824 |   |   | $ | 74,567 |   |   |   | 8.03 | % |   | $ | 1,469,219 |   |   | $ | 55,333 |   |   |   | 7.59 | % |
|   Noninterest                earning assets                                                                                                                      |   |                                | 191,240   |   |   |   |   |   |   |   |   |   |   |   | 146,829 |   |   |   |   |   |   |   |   |   |
|         Total                assets                                                                                                |   | $                                   | 2,064,064 |   |   |   |   |   |   |   |   |   |   | $ | 1,616,048 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Interest-bearing                liabilities:**                                                                                                                           |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Deposits:                                                                                                                                                      |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Interest                checking, savings and money          market      |   | $                                   | 617,363   |   |   | $ | 8,411 |   |   |   | 2.75 | % |   | $ | 513,060 |   |   | $ | 5,256 |   |   |   | 2.07 | % |
|     Time                deposits                                                                                                                       |   |                                | 774,411   |   |   |   | 17,754 |   |   |   | 4.62 | % |   |   | 625,750 |   |   |   | 11,433 |   |   |   | 3.68 | % |
|         Total                interest-bearing deposits                                                                             |   | $                                   | 1,391,774 |   |   | $ | 26,165 |   |   |   | 3.79 | % |   | $ | 1,138,810 |   |   | $ | 16,689 |   |   |   | 2.96 | % |
|   Securities                sold under repurchase   agreements                and short-term borrowings                                           |   |                                | 46,696    |   |   |   | 1,054 |   |   |   | 4.55 | % |   |   | 28,267 |   |   |   | 604 |   |   |   | 4.31 | % |
|   Notes                payable                                                                                                                                   |   |                                | 182,346   |   |   |   | 4,462 |   |   |   | 4.94 | % |   |   | 99,071 |   |   |   | 2,504 |   |   |   | 5.10 | % |
|   Subordinated                debentures(3)                                                                                                                      |   |                                | 32,336    |   |   |   | 986 |   |   |   | 6.15 | % |   |   | 13,403 |   |   |   | 500 |   |   |   | 7.52 | % |
|         Total                interest-bearing liabilities                                                                          |   | $                                   | 1,653,152 |   |   | $ | 32,667 |   |   |   | 3.98 | % |   | $ | 1,279,551 |   |   | $ | 20,297 |   |   |   | 3.20 | % |
| **Noninterest                bearing liabilities:**                                                                                                                        |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Demand                deposits                                                                                                                                 |   |                                | 162,782   |   |   |   |   |   |   |   |   |   |   |   | 144,515 |   |   |   |   |   |   |   |   |   |
|   Other                liabilities                                                                                                                               |   |                                | 27,820    |   |   |   |   |   |   |   |   |   |   |   | 17,856 |   |   |   |   |   |   |   |   |   |
|         Total                noninterest bearing liabilities                                                                       |   |                                | 190,602   |   |   |   |   |   |   |   |   |   |   |   | 162,371 |   |   |   |   |   |   |   |   |   |
|         Total                liabilities                                                                                           |   |                                | 1,843,754 |   |   |   |   |   |   |   |   |   |   |   | 1,441,922 |   |   |   |   |   |   |   |   |   |
|   Shareholders’                equity                                                                                                                      |   |                                | 220,310   |   |   |   |   |   |   |   |   |   |   |   | 174,126 |   |   |   |   |   |   |   |   |   |
|         Total                liabilities and shareholders’          equity |   | $                                   | 2,064,064 |   |   |   |   |   |   |   |   |   |   | $ | 1,616,048 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income                                                                                                                                         |   |                                |      |   |   | $ | 41,900 |   |   |   |   |   |   |   |   |   |   | $ | 34,949 |   |   |   |   |   |
|                                                                                                                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                rate spread                                                                                                                                        |   |                                |      |   |   |   |   |   |   |   | 4.04 | % |   |   |   |   |   |   |   |   |   |   | 4.38 | % |
|                                                                                                                                                                       |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                yield on interest-earning assets                                                                                                                        |   |                                |      |   |   |   |   |   |   |   | 4.51 | % |   |   |   |   |   |   |   |   |   |   | 4.80 | % |

----

**Provision      for Loan Losses.  **

**Noninterest      Income.  **

----

**Noninterest      Expense.**

**Income      Taxes.  **

**Changes      in Financial Condition**

----

**Liquidity      and Capital Resources**

**    Liquidity.  **

**Capital      Resources.  **

----

|                                     | RequiredMinimumRatio | Requiredto                beWell                Capitalized |   Bank |   Company |
|------------------------------------------|----------------------|-------------------------------------------------------------|------------------|---------------------|
| Tier                1 risk-based capital | 4.00%                | 6.00%                                                       | 9.61%            | 10.14%              |
| Total                risk-based capital  | 8.00%                | 10.00%                                                      | 10.86%           | 11.39%              |
| Leverage                Ratio            | 4.00%                | 5.00%                                                       | 10.47%           | 11.06%              |

----

**Off-Balance      Sheet Arrangements**

|                                                       |   | Less                than 1 Year |    |   | 1-3                Years |   |    | 3-5                Years |   |   | More                than 5 Years |   |   | Total  |    |
|------------------------------------------------------------|--------|---------------------------------|---------|--------|--------------------------|--------|---------|--------------------------|--------|--------|----------------------------------|--------|--------|--------|---------|
| Commitments                to make loans – fixed     |   | $                               | 30,958  |   |                     | $      | -       |                     |   | $      | -                                |   |   | $      | -       |   |   | $ | 30,958 |   |
| Commitments                to make loans – variable. |   |                            | 90,432  |   |                     |   | -       |                     |   |   | -                                |   |   |   | -       |   |   |   | 90,432 |   |
| Unused                lines of credit                      |   |                            | 450,228 |   |                     |   | 153,988 |                     |   |   | 26,401                           |   |   |   | 113,608 |   |   |   | 744,225 |   |
| Letters                of credit                           |   |                            | 40,916  |   |                     |   | 6,223   |                     |   |   | 1,854                            |   |   |   | -       |   |   |   | 48,993 |   |
| Total                                                      |   | $                               | 612,534 |   |                     | $      | 160,211 |                     |   | $      | 28,255                           |   |   | $      | 113,608 |   |   | $ | 914,608 |   |

**Disclosure      of Contractual Obligations**

|                                                                        |   | Less                than 1 Year |      |   | 1-3                Years |   |    | 3-5                Years |   |   | More                than 5 Years |   |   | Total  |    |
|-----------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|--------------------------|--------|---------|--------------------------|--------|--------|----------------------------------|--------|--------|--------|---------|
| Certificates                of deposits                                     |   | $                               | 951,076   |   |                     | $      | 115,990 |                     |   | $      | 8,489                            |   |   | $      | 4,793   |   |   | $ | 1,080,348 |   |
| Federal                funds purchased and repurchase  agreements |   |                            | 125,460   |   |                     |   | -       |                     |   |   | -                                |   |   |   | -       |   |   |   | 125,460 |   |
| FHLB                advances and notes payable                              |   |                            | 133,923   |   |                     |   | 55,305  |                     |   |   | 37,882                           |   |   |   | 60,873  |   |   |   | 287,983 |   |
| Subordinated                debentures                                      |   |                            | -         |   |                     |   | -       |                     |   |   | -                                |   |   |   | 88,662  |   |   |   | 88,662 |   |
| Operating                lease obligations                                  |   |                            | 1,137     |   |                     |   | 1,064   |                     |   |   | 568                              |   |   |   | 525     |   |   |   | 3,294 |   |
| Deferred                compensation                                        |   |                            | 1,985     |   |                     |   | -       |                     |   |   | -                                |   |   |   | 1,453   |   |   |   | 3,438 |   |
| Unrecognized                tax benefits                                    |   |                            | 475       |   |                     |   | -       |                     |   |   | -                                |   |   |   | -       |   |   |   | 475 |   |
| Purchase                obligations                                         |   |                            | 483       |   |                     |   | -       |                     |   |   | -                                |   |   |   | -       |   |   |   | 483 |   |
| Total                                                                       |   | $                               | 1,214,539 |   |                     | $      | 172,359 |                     |   | $      | 46,939                           |   |   | $      | 156,306 |   |   | $ | 1,590,143 |   |

**Effect      of New Accounting Standards**

----

*.*

| **ITEM 3.** | **QUANTITATIVE                AND QUALITATIVE DISCLOSURES ABOUT MARKET                RISK** |
|-------------|----------------------------------------------------------------------------------------------|

| **ITEM 4.** | **CONTROLS                AND PROCEDURES** |
|-------------|--------------------------------------------|

**Disclosure      Controls and Procedures**

**Internal      Control Over Financial Reporting**

----

**PART      II - OTHER INFORMATION**

**Item      1A.    Risk      Factors**

**The      Combined Company Will Incur Significant Transaction and Merger-Related Costs      in      Connection With the Merger**
**” and “**
**Greene County      May Not Be Able To Successfully Integrate Civitas or To Realize the Anticipated      Benefits of the Merger**
**” **

**Item      4.    Submission of      Matters to a Vote of Security Holders**

| (a) | The                annual meeting of shareholders (the “Annual Meeting”) of the Company was                held on May 16, 2007.  In addition to the election of directors,                the proposals described in section “(c)” below were considered by                shareholders at the Annual Meeting. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Proxies                for the Annual Meeting were solicited in accordance with Regulation                14 of                the Exchange Act; there was no solicitation in opposition to management’s                nominees and all of management’s nominees were elected. Each director is                elected to serve for a 3-year term and until his or her successor                is                elected and qualified.  Accordingly, in section “(c)” below, the                Company has reported the voting results only with respect to those                directors who were voted on at the Annual                Meeting. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | The                following sets forth the results of voting on each matter at the                Annual                Meeting: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| **Votes**       |   | **Votes**    |   |            |   | **Broker**    |
|-----------------|--------|--------------|--------|-----------------|--------|---------------|
| **For**         |   | **Against**  |   | **Abstentions** |   | **Non-Votes** |
|  6,576,527 |   |  49,414 |   |  65,899    |   |  803,613 |

|                             |   | **Votes** |   | **Votes**    |
|----------------------------------|--------|-----------|--------|--------------|
|                             |   | **For**   |   | **Withheld** |
| Phil                M. Bachman   |   | 6,856,741 |   | 634,111      |
| Robert                K. Leonard |   | 7,325,512 |   | 165,340      |
| Terry                Leonard     |   | 7,083,920 |   | 406,932      |
| Ronald                Mayberry   |   | 7,287,857 |   | 202,995      |
| Kenneth                Vaught    |   | 7,289,369 |   | 198,483      |

| **Votes**       |   | **Votes**    |   |            |   | **Broker**    |
|-----------------|--------|--------------|--------|-----------------|--------|---------------|
| **For**         |   | **Against**  |   | **Abstentions** |   | **Non-Votes** |
|  7,385,580 |   |  26,461 |   |  79,412    |   |  4,000   |

----

| **Votes**       |   | **Votes**     |   |            |   | **Broker**    |
|-----------------|--------|---------------|--------|-----------------|--------|---------------|
| **For**         |   | **Against**   |   | **Abstentions** |   | **Non-Votes** |
|  6,454,815 |   |  159,372 |   |  75,048    |   |  806,218 |

| **Votes**       |   | **Votes**     |   |            |   | **Broker**    |
|-----------------|--------|---------------|--------|-----------------|--------|---------------|
| **For**         |   | **Against**   |   | **Abstentions** |   | **Non-Votes** |
|  7,215,595 |   |  203,542 |   |  71,715    |   |  4,601   |

| **Votes**       |   | **Votes**       |   |            |   | **Broker**    |
|-----------------|--------|-----------------|--------|-----------------|--------|---------------|
| **For**         |   | **Against**     |   | **Abstentions** |   | **Non-Votes** |
|  5,826,193 |   |  1,536,285 |   |  130,374   |   |  2,601   |

| **Item 5.** | **Other                Information** |
|-------------|--------------------------------------|

| **Item 6.** | **Exhibits** |
|-------------|--------------|

**    **

----

**SIGNATURES**

| Green              Bankshares, Inc. |
|-------------------------------------|
| Registrant                          |

| By  | /s/James                E. Adams                         |
|----------|----------------------------------------------------------|
|     | James                E. Adams                            |
|     | Executive                Vice President, Chief Financial |
|     | Officer                and Assistant Secretary           |
|     |                                                     |

----

**EXHIBIT      INDEX**

| 3.1 | Charter                (as amended to date) |
|-----|---------------------------------------------|

| 10.1 | 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”) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Form                of Certificate for Common Securities of GB Trust I included as Exhibit                B                to the GB Capital Trust Agreement |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Form                of Certificate for Preferred Securities of GB Trust I included as                Exhibit                C to the GB Capital Trust Agreement |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | 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”) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | 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 |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | Guarantee                Agreement dated as of May 16, 2007 between Greene County Bancshares,                Inc.,                as Guarantor and Wilmington Trust Company, as Guarantee                Trustee |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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 |
|--------|-----------------------------------------------------------------------------------------|

|   |   |
|--------|--------|