As filed with the Securities and Exchange Commission on April 17, 2007

Registration No. 333-141409.

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 2

to

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

GREENE COUNTY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

100 North Main Street

Greeneville, TN 37743-4992

(423) 639-5111

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

 

 

R. Stan Puckett

Chairman and Chief Executive Officer

Greene County Bancshares, Inc.

100 North Main Street

Greeneville, TN 37743-4992

(423) 639-5111

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

With copies to:

 

 

 

Approximate date of commencement of the proposed sale to the public:  As soon as practicable after the merger described in this Registration Statement becomes effective.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

 

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

 

 

PRELIMINARY — SUBJECT TO COMPLETION — DATED APRIL 17, 2007

                        

 

MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT

 

The board of directors of Greene County Bancshares, Inc. and the board of directors of Civitas BankGroup, Inc. have agreed to a strategic combination of the two companies under the terms of an Agreement and Plan of Merger, dated January 25, 2007. If the merger is approved, Greene County shareholders will own approximately 76.2% of the combined company on a fully diluted basis, and Civitas shareholders will own approximately 23.8% of the combined company on a fully diluted basis.

 

If you are a Civitas shareholder:

 

 

Because the market price of Greene County stock may fluctuate between the date of this document and the date that the merger is completed, we cannot predict the number of shares of Greene County stock that you would receive or their value upon election of the all stock or mixed consideration alternatives.

 

 

If you are a Greene County shareholder:

 

 

Whether you are a Civitas or a Greene County shareholder, we need your vote to complete the merger.  Greene County and Civitas officers and directors own, respectively 12% and 20% of the outstanding shares of Greene County and Civitas that are expected to be voted in favor of the merger. Civitas will hold a special shareholders meeting to vote on the merger on May 16, 2007. Greene County will hold its annual shareholders meeting May 16, 2007, and the merger will be one of the matters that Greene County shareholders will be asked to vote on.

 

We look forward to the successful combination of Greene County and Civitas.

 

 

You are encouraged to carefully consider the risks described on pages 9
through 12 of this document.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this joint proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The securities Greene County is offering through this joint proxy statement/prospectus are not savings or deposit accounts or other obligations of any bank or savings association, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

 

This joint proxy statement/prospectus is dated April [     ], 2007, and is first being mailed to the shareholders of Greene County and Civitas on or about April [     ], 2007.

100 North Main Street, Greeneville, TN 37743-4992

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on May 16, 2007

 

To our shareholders:

 

The Annual Meeting of Shareholders of Greene County Bancshares, Inc. (“Greene County”) will be held at the General Morgan Inn, 100 North Main Street, Greeneville, Tennessee 37743, at 10:00 a.m. local time on May 16, 2007, to:

 

 

The Greene County board of directors has fixed the close of business on March 16, 2007 as the record date for determining those Greene County shareholders entitled to receive this notice of and to vote their shares at the annual meeting, including any adjournment or postponement of the annual meeting.

 

The Greene County board of directors recommends that you vote FOR each of the proposals listed above.

 

BY ORDER OF THE BOARD OF DIRECTORS

 

Phil M. Bachman

Secretary

 

Greeneville, Tennessee

April [  ], 2007

 

 

 

 

4 Corporate Centre, 810 Crescent Centre Drive, Suite 320, Franklin, Tennessee 37067

 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on May 16, 2007

 

To our shareholders:

 

A special meeting of shareholders of Civitas BankGroup, Inc. (“Civitas”) will be held at the Embassy Suites Hotel located at 820 Crescent Centre Drive, Franklin, Tennessee 37067, at 3:00 p.m. local time on May 16, 2007, for the following purposes:

 

 

The Civitas board of directors has fixed the close of business on March 16, 2007 as the record date for determining those Civitas shareholders entitled to receive this notice of and to vote their shares at the special meeting, including any adjournment or postponement of the special meeting.

 

The Civitas board of directors, by a majority vote, has approved the merger and recommends that you vote FOR each of the proposals listed above.

 

 

BY ORDER OF THE BOARD OF DIRECTORS

 

Danny Herron

Secretary

 

Franklin, Tennessee

April [  ], 2007

 

 

 

 

 

ADDITIONAL INFORMATION

 

This joint proxy statement/prospectus serves two purposes: it is a proxy statement being used both by the Greene County Bancshares, Inc. board of directors and the Civitas BankGroup, Inc. board of directors to solicit proxies for use at their respective annual or special meetings; it is also the prospectus of Greene County regarding the issuance of Greene County common stock to Civitas shareholders if the merger is completed. This joint proxy statement/prospectus provides you with detailed information about the proposed merger of Civitas into Greene County. We encourage you to read this entire joint proxy statement/prospectus carefully. Greene County has filed with the United States Securities and Exchange Commission a registration statement on Form S-4 under the Securities Act of 1933, as amended, and this joint proxy statement/prospectus is the prospectus filed as part of that registration statement. This joint proxy statement/prospectus does not contain all of the information in the registration statement nor does it include the exhibits to the registration statement. Please see “WHERE YOU CAN FIND MORE INFORMATION” beginning on page 102.

 

When used in this joint proxy statement/prospectus, the terms “Greene County” and “Civitas” refer to Greene County Bancshares, Inc. and Civitas BankGroup, Inc., respectively, and, when the context requires, to Greene County Bancshares, Inc. and Civitas BankGroup, Inc. and their respective predecessors and subsidiaries. “We” or “us,” unless the context requires otherwise, refers to both Greene County and Civitas.

 

This joint proxy statement/prospectus incorporates by reference important business and financial information about Greene County and Civitas that is not included in or delivered with this document. You should refer to “WHERE YOU CAN FIND MORE INFORMATION” beginning on page 102 for a description of the documents incorporated by reference into this joint proxy statement/prospectus. You can obtain documents related to Greene County and Civitas that are incorporated by reference into this document through the SEC’s web site at www.sec.gov. You may also obtain copies of these documents, other than exhibits, unless such exhibits are specifically incorporated by reference into the information that this joint proxy statement/prospectus incorporates, without charge by requesting them in writing or by telephone from the appropriate company:

 

 

Greene County maintains a website at www.mybankconnection.com and Civitas maintains a website at www.civitasbankgroup.com. The information contained on these websites is not incorporated by reference into this joint proxy statement/prospectus, and you should not consider it a part of this joint proxy statement/prospectus.

 

You should rely only on the information incorporated by reference into or provided in or with this joint proxy statement/prospectus to vote at your annual or special meeting. We have not authorized anyone to give you different information. You should not assume that the information in this joint proxy statement/prospectus, or in any documents delivered with this joint proxy statement/prospectus, or any supplement, is accurate as of any date other than the date on the front of such documents, and neither the mailing of the joint proxy statement/prospectus to you nor the issuance of Greene County common stock in connection with the merger shall create any implication to the contrary.

 

This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any state in which or from any person to whom it is not lawful to make any such offer or solicitation.

 

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT VOTING AND THE MERGER

 

The following are some questions that you, as a shareholder of Greene County or Civitas, may have regarding the merger and the other matters being considered at the shareholders’ meetings and the answers to those questions. Greene County and Civitas recommend that you read carefully the remainder of this document because the information in this section does not provide all the information that might be important to you with respect to the merger and the other matters being considered at the shareholders’ meetings. Additional important information is also contained in the appendices to, and the documents incorporated by reference, into this document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	•	0.2674 (subject to adjustment as described below) shares of Greene County common stock;

	•	$10.25 in cash, without interest; or

	•	a combination of cash and Greene County common stock designated by you.

	•	The Greene County common stock component is fixed at 70% of aggregate merger consideration, which likely will result in the form and relative allocation of merger consideration to Civitas shareholders being different from that requested;

	•	The exchange ratio can be adjusted based upon changes in Greene County stock price relative to the NASDAQ Bank Index, which results in the possibility that the number of shares of Greene County shares received by Civitas shareholders could change;

	•	The exchange ratio is subject to a cap of 0.2968 and a floor of 0.2380, which results in the possibility that the implied value to Civitas shareholders, respectively, will decrease or increase if Greene County’s stock trades at a level that would otherwise require an adjustment to the exchange ratio but for the cap and the floor; and

	•	Civitas shareholders will not receive any fractional shares of Greene County common stock. Instead, they will receive cash, without interest, for any fractional share of Greene County common stock they might otherwise have been entitled to receive based on fractional share interest multiplied by $10.25.

	•	it provides accelerated entry in the Davidson County and Williamson County markets;
	•	increased size and scale — the combined company is expected to have pro forma assets of approximately $2.8 billion, a pro forma market capitalization of approximately $288 million and offices in some of the fastest growing areas in the Nashville MSA;
	•	enhanced geographic market;
	•	the board believes that the merger may result in synergies and cost savings through the centralization of operations and corporate functions;
	•	the anticipated effect of the merger on the earnings per share of Greene County following the merger; and
	•	increased float — pro forma shares outstanding of the combined company would increase from approximately 9.8 million shares to approximately 12.9 million shares.

	•	the consideration to be received by Civitas shareholders, as indicated by the opinion of Keefe, Bruyette & Woods, is fair, from a financial point of view;

	•	the per share value of the merger consideration to Civitas shareholders and the fact that up to 30% of the merger consideration can be in cash;

	•	the alternatives to the merger, including Civitas remaining an independent financial institution;

	•	the merger allows Civitas shareholders who elect to become shareholders of Greene County to be part owner of a larger, more diversified financial services institution; and

	•	the anticipated positive impact of the merger on Civitas customers.

	•	Certain officers of Civitas and Cumberland Bank will enter into new employment, consulting or change of control agreements with Greene County or Greene County Bank, which become effective as of the closing of the merger. These agreements provide for the payment of additional payments and benefits to these officers and contain covenants not to compete. The aggregate of all payments associated with these agreements is approximately $1 million.

	•	Greene County has agreed that it will maintain a policy of directors’ and officers’ liability insurance coverage for the benefit of Civitas’ directors and officers serving at the effective time of the merger for three years following completion of the merger.

	•	Greene County shareholders’ approval of the merger agreement and the issuance of shares in the merger;

	•	Civitas shareholders’ approval of the merger agreement;

	•	approval of the merger by the necessary federal and state regulatory authorities;
	•	the absence of any burdensome condition, requirement or restriction imposed in connection with regulatory approval of the merger;
	•	the absence of any order, injunction, decree, law or regulation that would prohibit the merger or make it illegal; and
	•	receipt by Greene County and Civitas of the opinion of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC that, for United States federal income tax purposes, the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

	•	a governmental authority that must grant a regulatory approval denies approval of the merger (although this termination right is not available to a party whose failure to comply with the merger agreement resulted in those actions by a governmental authority);
	•	a governmental entity of competent jurisdiction issues a final nonappealable order enjoining or otherwise prohibiting the merger;
	•	the merger is not completed on or before June 30, 2007 (although this termination right is not available to a party whose failure to comply with the merger agreement resulted in the failure to complete the merger by that date);
	•	the other party’s board of directors adversely changes its recommendation that its shareholders vote “FOR” approval of the merger agreement (in the case of Civitas) or the approval of the merger agreement and the issuance of Greene County common stock in connection with the merger (in the case of Greene County), or the other party breaches its obligation to hold its shareholders’ meeting to approve the transactions contemplated by the merger agreement;
	•	the other party is in breach of its representations, warranties, covenants or agreements set forth in the merger agreement and the breach rises to a level that would excuse the terminating party’s obligation to complete the merger and is either incurable or is not cured within 10 days;
	•	the shareholders of Civitas do not approve the merger agreement at the Civitas shareholders meeting; or
	•	the shareholders of Greene County do not approve the merger agreement and the issuance of Greene County common stock in connection with the merger at the Greene County shareholders’ meeting.

	•	to consider and vote upon a proposal to approve the merger between Greene County and Civitas, and the issuance of Greene County common stock in connection with the merger;
	•	to elect five directors;
	•	to consider and vote upon a proposal to ratify the appointment of Greene County’s independent registered public accounting firm for 2007;
	•	to consider and vote upon a proposal to amend Greene County’s charter to increase the number of authorized shares from 15 million to 20 million shares of common stock;
	•	to consider and vote upon a proposal to amend Greene County’s charter to change the corporate name of Greene County to Green Bankshares, Inc.;
	•	to consider and vote upon a proposal to approve the adjournment of the meeting, if necessary; and
	•	to transact any other business that may properly come before the meeting.

	•	to consider and vote upon a proposal to approve the merger between Greene County and Civitas;
	•	to consider and vote upon a proposal to approve the adjournment of the meeting, if necessary; and
	•	to transact any other business that may properly come before the meeting.

RISK FACTORS RELATING TO THE MERGER

 

In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus, including without limitation, Greene County’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and Civitas’ Annual Report on Form 10-K for the fiscal year ended December 31, 2006, you should carefully consider the following risk factors in deciding whether to vote to approve the merger agreement and, in the case of the Greene County shareholders, the stock issuance in connection with the merger.

 

The Combined Company Will Incur Significant Transaction and Merger-Related Costs in Connection With the Merger

 

Greene County and Civitas expect to incur costs associated with combining the operations of the two companies. Greene County and Civitas have just recently begun collecting information in order to formulate detailed integration plans to deliver planned synergies. Additional unanticipated costs may be incurred in the integration of the businesses of Greene County and Civitas. Although Greene County and Civitas expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses may offset incremental transaction and merger-related costs over time, this net benefit may not be achieved in the near term, or at all. Greene County and Civitas currently expect the pretax costs of combining the companies to be approximately $5 million and the anticipated cost savings associated with expected synergies to be approximately $5.89 million. See “SELECTED FINANCIAL DATA — Selected Consolidated Unaudited Pro Forma Financial Data.”

 

Whether or not the merger is consummated, Greene County and Civitas will incur substantial expenses, such as legal, accounting, printing and financial advisory fees, in pursuing the merger. Completion of the merger is conditioned upon the receipt of all material governmental authorizations, consents, orders and approvals, including approval by federal and state banking regulators. Greene County and Civitas intend to pursue all required approvals in accordance with the merger agreement. See “THE MERGER AGREEMENT — Conditions to the Completion of the Merger” beginning on page 57 for a discussion of the conditions to the completion of the merger and “THE PROPOSED MERGER — Regulatory Approvals” beginning on page 49 for a description of the regulatory approvals necessary in connection with the merger.

 

Greene County May Not Be Able To Successfully Integrate Civitas or To Realize the Anticipated Benefits of the Merger

 

The merger involves the combination of two bank holding companies that previously have operated independently. A successful combination of the operations of the two entities will depend substantially on Greene County’s ability to consolidate operations, systems and procedures and to eliminate redundancies and costs. Greene County may not be able to combine the operations of Civitas and Greene County without encountering difficulties, such as:

 

 

Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit the successful integration of Civitas and Greene County.

 

Further, Greene County and Civitas entered into the merger agreement with the expectation that the merger will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, technology, cost savings and operating efficiencies. Achieving the anticipated benefits of the merger is subject to a number of uncertainties, including whether Greene County integrates Civitas in an efficient and effective manner, and general competitive factors in the marketplace. Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materially impact Greene County’s business, financial condition and operating results. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.

 

Civitas Shareholders Are Not Guaranteed To Receive the Mix of Consideration That They Request On Their Election Form.

 

Although Civitas shareholders will be able to elect to receive either cash, Greene County common stock or the combination of cash and Greene County common stock in exchange for their Civitas common stock, elections will be limited by the requirement that of the total merger consideration, 70% must be in the form of Greene County common stock and 30% must be in cash. As a result, the form and relative mix of consideration that a shareholder receives will depend in part on the elections of other Civitas shareholders. If cash elections representing more than 30% of the outstanding shares of Civitas common stock prior to the merger are made, Greene County will prorate the amount of cash that Civitas shareholders as follows:

 

 

 

See “THE MERGER AGREEMENT — Proration Procedures.”

 

Persons Who Receive All Cash in the Merger Will Not Participate in Future Growth.

 

Civitas shareholders who elect and receive all cash in the merger will not own any interest in Greene County, which will not afford them the opportunity to participate in future growth, if any, in the value of Greene County.

 

The Value of the Consideration Received by Civitas Shareholders in the Merger Will Change Based Upon Changes In the Prices of Greene County Stock And Changes In The Exchange Ratio That Could Be Caused By Changes That Occur After The Shareholders’ Meetings; Accordingly, Civitas Shareholders Cannot be Sure of the Value of the Merger Consideration That They Will Receive.

 

The value of the consideration Civitas shareholders may elect to receive in exchange for their Civitas common stock is dependent on the “exchange ratio.” The exchange ratio initially is set at 0.2674, meaning that, unless adjusted, for every share of Civitas owned by you, you would receive 0.2674 shares of Greene County common stock. Fluctuations in the trading price of Greene County common stock therefore results in the value received by Civitas shareholders changing to the extent it is paid in Greene County stock. Any price fluctuations can result from a number of factors, many of which are beyond the control of either Civitas or Greene County.

 

Also, approval of the merger by the shareholders of Civitas and Greene County is only one condition of several that must occur prior to the closing of the merger. As a result, a significant amount of time could pass between the time of the respective shareholder meetings and the closing of the merger. Also, not until the merger is effective will election forms be sent to Civitas shareholders. During those periods of time, the price of Greene County stock could change, which would result in changes in the value ultimately received by each Civitas shareholder.

 

Finally, the exchange ratio is adjusted if the “average closing price” of Greene County common stock changes by more than 10% of the change in the NASDAQ Bank Index since November 14, 2006. The

“average closing price” means the average of the daily closing sales price of Greene County common stock during the twenty (20) trading day period ending ten (10) trading days prior to the closing date of the merger. As a result, the number of Greene County shares that a Civitas shareholder may elect to receive may fluctuate depending on the average closing price of Greene County common stock. Civitas shareholders should read the section entitled “THE MERGER AGREEMENT — Merger Consideration” on page 54, which shows examples of the consideration a Civitas shareholder could receive in the merger.

 

The delays that could occur between the shareholders’ meeting and closing and between the closing and the time the election forms are sent and received will result in Greene County and Civitas shareholders, at the time of their respective shareholder meetings, not knowing the exact value of the Greene County common stock that will be issued in connection with the merger.

 

We recommend that Greene County and Civitas shareholders obtain current market quotations for Greene County and Civitas common stock, and they may obtain such quotations from a newspaper, the Internet or by calling their broker. The NASDAQ Bank Index, against which the value of Greene County shares are measured to determine whether the exchange ratio is to be adjusted, can be found at www.nasdaq.com. The price of Greene County common stock and Civitas common stock at the effective time of the merger may vary from their prices on the date of this document. The historical prices of Greene County common stock and Civitas common stock included in this document may not be indicative of their prices on the date the merger becomes effective. The future market prices of Greene County common stock and Civitas common stock cannot be guaranteed or predicted. See “COMPARATIVE MARKET PRICES” beginning at page 24.

 

Fluctuations in the Trading Price of Greene County Common Stock That Either Do Not Result in an Adjustment of the Exchange Ratio or That Occur After the Exchange Ratio Has Been Set Will Change the Value of the Shares of Greene County Common Stock You Receive in the Merger.

 

The exchange ratio, absent significant fluctuations in the price of Greene County Stock, will essentially be fixed and, as a result, the market value of Greene County common stock issued in the merger may be higher or lower than the value of such shares on earlier dates. If the price of Greene County common stock declines prior to completion of the merger, the value of the merger consideration to be received by Civitas shareholders will decrease. Once the average closing price of Greene County common stock is determined and the exchange ratio is set, the market value of the Greene County common stock that you receive in the merger will increase or decrease depending on the direction of the price movement of the Greene County common stock. Also, after the merger, the market value of Greene County common stock may decrease and be lower than the Greene County average closing price used in calculating the exchange ratio in the merger.

 

If Fluctuations in the Average Closing Price of Greene County Common Stock Would Otherwise Cause the Exchange Rate to Fall Outside the Agreed Upon Range, Neither Party Has a Right to Terminate the Agreement and, As a Result, the Implied Value of the Merger to Civitas Shareholders Will Either Increase or Decrease, Depending Upon the Trading Price of Greene County’s Stock.

 

The exchange rate is subject to a “cap” of 0.2968 (it can be no higher even if the change in the actual “average closing price” relative to the change in the NASDAQ Bank Index otherwise would result in a higher exchange ratio) and to a “floor” of 0.2380 (it can be no lower even if the change in the actual “average closing price” relative to the change in the NASDAQ Bank Index otherwise would result in a lower exchange ratio). As a result, if the price of Greene County common stock were to decline below that which would cause the exchange ratio but for the cap to exceed 0.2968, the implied offer value to Civitas shareholders will decline. Correspondingly, if the price of Greene County common stock were to increase above that which would cause the exchange ratio but for the floor to decrease below 0.2380, the implied offer value to Civitas shareholders will increase.

 

Civitas Shareholders Will Have Less Influence As a Shareholder of Greene County Than As a Shareholder of Civitas.

 

Civitas shareholders currently have the right to vote in the election of the board of directors of Civitas and on other matters affecting Civitas. Based upon the amount of cash selected to be received by Civitas shareholders in the merger, the shareholders of Civitas as a group will own approximately 23.8% of the combined organization. When the merger occurs, each Civitas shareholder that receives Greene County stock will become a shareholder of Greene County with a percentage ownership of the combined organization much smaller than such shareholder’s percentage ownership of Civitas. Because of this, Civitas shareholders will have less influence on the management and policies of Greene County than they now have on the management and policies of Civitas.

 

Failure To Complete the Merger Could Cause Greene County’s or Civitas’ Stock Price To Decline

 

If the merger is not completed for any reason, Greene County’s or Civitas’ stock price may decline because costs related to the merger, such as legal, accounting and financial advisory fees, must be paid even if the merger is not completed. In addition, if the merger is not completed, Greene County’s or Civitas’ stock price may decline to the extent that the current market price reflects a market assumption that the merger will be completed.

 

Directors and Officers of Civitas Have Interests in the Merger That Differ from the Interests of Non-Directors or Non-Management Shareholders.

 

Some of the directors and officers of Civitas have interests in the merger that differ from, or are in addition to, their interests as shareholders of Civitas generally. These interests exist because of, among other things, employment agreements that the officers entered into with Civitas, rights that Civitas officers and directors have under Civitas’ benefit plans (including the treatment of their stock options following the merger) and rights to indemnification and directors and officers insurance following the merger. Although the members of each of Greene County’s and Civitas’ board of directors knew about these additional interests and considered them when they approved the merger agreement and the merger, you should understand that some of the directors and officers of Civitas will receive benefits in connection with the merger that you will not receive. See “THE PROPOSED MERGER — Interests of Certain Civitas Executive Officers and Directors in the Merger” beginning on page 48.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

 

This document including the Appendices hereto contains “forward-looking statements” about Greene County and Civitas and the combined company following the merger. “Forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are statements that represent our judgment concerning the future and are subject to risks and uncertainties that could cause our actual operating results and financial position to differ materially from the forward-looking statements. Such forward-looking statements can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “believe,” or “continue,” or the negative thereof or other variations thereof or comparable terminology. You should note that the discussion of Greene County’s and Civitas’ reasons for the merger and the description of the opinion of Civitas’ financial advisor contain many forward-looking statements that describe beliefs, assumptions and estimates of the management of each of Civitas and Greene County and public sources as of the indicated dates and those forward-looking expectations may have changed as of the date of this joint proxy statement/prospectus. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Those statements are not guarantees and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from these forward-looking statements.

 

The ability of Greene County and Civitas to predict results or the actual effects of the combined company’s plans and strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results. Some of the factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, but are not limited the risk factors that are described in information that is incorporated by reference into this document, those described in “RISK FACTORS RELATING TO THE MERGER” discussed above as well as the following:

 

 

 

Additional factors are discussed in the reports filed with the Securities and Exchange Commission (“SEC”) by Greene County and Civitas. See “WHERE YOU CAN FIND MORE INFORMATION” beginning on page 102.

 

The above list is not intended to be exhaustive and there may be other factors that would preclude us from realizing the predictions made in the forward-looking statements. Because forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Greene County shareholders and Civitas shareholders are cautioned not to place undue reliance on such statements, which speak only as of the date of this joint proxy statement/prospectus or the date of any document incorporated by reference.

 

All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this document and attributable to Greene County or Civitas or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, Greene County and Civitas undertake no obligation to update such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

INFORMATION ABOUT THE COMPANIES

 

Greene County Bancshares, Inc.

 

Greene County was formed in 1985 and serves as the bank holding company for Greene County Bank (which changed its name to GreenBank effective April 1, 2007), which is a Tennessee-chartered commercial bank that conducts the principal business of Greene County. At December 31, 2006, and based on Federal Reserve Board data as of September 30, 2006, Greene County believes it was the third largest bank holding company headquartered in the state of Tennessee. At December 31, 2006, Greene County maintained a main office in Greeneville, Tennessee and 49 full-service bank branches (of which eleven are in leased operating premises) and nine separate locations operated by Greene County Bank’s subsidiaries.

 

Greene County’s assets consist primarily of its investment in Greene County Bank and liquid investments. Its primary activities are conducted through Greene County Bank, which is a chartered commercial bank established in 1890 that has its principal executive offices in Greeneville, Tennessee. The principal business of Greene County Bank consists of attracting deposits from the general public and investing those funds, together with funds generated from operations and from principal and interest payments on loans, primarily in commercial loans, commercial and residential real estate loans, and installment consumer loans. At December 31, 2006, Greene County Bank had 48 full-service banking offices located in Greene, Washington, Blount, Knox, Hamblen, McMinn, Loudon, Hawkins, Sullivan, Cocke and Monroe Counties in East Tennessee and in Sumner, Rutherford, Davidson, Lawrence, Montgomery and Williamson Counties in Middle Tennessee. Greene County Bank also operates two other full service branches — one located in nearby Madison County, North Carolina and the other in nearby Bristol, Virginia. Further, Greene County Bank operates a wealth management office in Wilson County, Tennessee, and a mortgage banking operation in Knox County, Tennessee.

 

Greene County Bank also offers other financial services through three wholly-owned subsidiaries. Through Superior Financial Services, Inc., Greene County Bank operates eight consumer finance company offices located in Greene, Blount, Hamblen, Washington, Sullivan, Sevier, Knox and Bradley Counties, Tennessee. Through GCB Acceptance Corporation, Greene County Bank operates a sub-prime automobile lending company with a sole office in Johnson City, Tennessee. Through Fairway Title Co., Greene County Bank operates a title company headquartered in Knox County, Tennessee.

 

At December 31, 2006, Greene County’s consolidated total assets were $1.77 billion, its consolidated net loans were $1.54 billion, its total deposits were $1.33 billion and its total shareholders’ equity was $184.47 million.

 

Civitas BankGroup, Inc.

 

Civitas is a Tennessee registered bank holding company headquartered in Franklin, Tennessee. Civitas serves as the bank holding company for Cumberland Bank, which provides banking and other financial services through twelve (12) branches located in five (5) markets throughout Middle Tennessee. Civitas focuses its efforts on the Nashville metropolitan market generally, with particular attention on the Williamson and Sumner County markets. As of June 30, 2006 Cumberland Bank was the fifth largest bank and largest independent bank in Williamson County.

 

In July of 1997, Civitas resulted from a merger of equals between the two parent holding companies of a Tennessee multi-thrift holding company with a Tennessee bank holding company, forming Cumberland Bancorp, Inc. In 2004, Cumberland Bancorp changed its name to Civitas BankGroup, Inc.

 

Cumberland Bank was chartered in 1976 as The Savings & Loan Association of Smith County, Tennessee. Cumberland Bank was later converted to a state commercial bank. Cumberland Bank South was founded as First Southern Savings & Loan in 1975. First Southern was acquired by First Federal in 1992. Cumberland Bank and Cumberland Bank South merged in 2004.

 

Civitas’ principal operations include traditional banking services incorporating commercial and residential real estate lending, commercial business lending, consumer lending, construction lending and other financial services, including depository services. Civitas serves both metropolitan and rural areas, targeting local

consumers, professionals and small businesses. Net interest income, which is the principal source of earnings for Civitas, is the difference between the interest income earned on its loans, investment assets and other interest-earning assets and the interest paid on deposits and other interest-bearing liabilities. To a lesser extent, Civitas’ net income also is affected by its noninterest income derived principally from service charges and fees as well as the level of noninterest expenses such as salaries and employee benefits.

 

At December 31, 2006 Civitas also owned a 50% interest in Insurors Bank of Tennessee (“IBOT”), headquartered in Nashville, Tennessee. IBOT opened in November 2000 and had $83.3 million in assets at December 31, 2006. The remaining 50% interest in IBOT was owned by InsCorp, a Tennessee corporation owned predominately by Tennessee insurance agents. In February 2007, Civitas divested itself of its 50% interest in IBOT by selling it to InsCorp.

 

At December 31, 2006, Civitas’ consolidated total assets were $898.2 million, its consolidated net loans were $607.7 million, its total deposits were $732.5 million and its total shareholders’ equity was $53.9 million.

 

Additional Information about Greene County and Civitas

 

Information concerning:

 

 

is included or incorporated by reference in the companies’ Annual Reports on Form 10-K for the year ended December 31, 2006. Additionally, financial statements and information as well as management’s discussion and analysis of financial condition and results of operation are included in those reports. Each of Greene County’s and Civitas’ Annual Report on Form 10-K for the year ended December 31, 2006 is incorporated by reference into this document. See “WHERE YOU CAN FIND MORE INFORMATION” beginning on page 102.

SELECTED FINANCIAL DATA

 

Greene County Bancshares, Inc. Selected Historical Financial Data

 

Set forth below is selected consolidated financial data for Greene County as of December 31, 2006, 2005, 2004, 2003 and 2002. Except for the data under “Selected Ratios”, the summary historical consolidated financial data as of December 31, 2006, 2005 and 2004 is derived from the audited financial statements, which were audited by Dixon Hughes PLLC, an independent registered public accounting firm. The data for December 31, 2003 and 2002 is derived from the audited financial statements, which were audited by Crowe Chizek and Company LLC, an independent registered public accounting firm. This information should be read together with Greene County’s consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Greene County’s Annual Report on Form 10-K for the year ended December 31, 2006, which is incorporated by reference into this joint proxy statement/prospectus.

 

Selected Historical Condensed Financial Data of Greene County Bancshares, Inc.

 

 

 

Civitas BankGroup, Inc. Selected Historical Financial Data

 

Set forth below is selected consolidated financial data for Civitas as of December 31, 2006, 2005, 2004, 2003 and 2002. Except for the data under “Selected Operating Ratios,” the summary historical consolidated financial data as of December 31, 2006, 2005, 2004, 2003 and 2002 is derived from our audited consolidated financial statements, which were audited by Crowe Chizek and Company LLC, an independent registered public accounting firm. This information should be read together with Civitas’ consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Civitas’ Annual Report on Form 10-K for the year ended December 31, 2006, which is incorporated by reference into this joint proxy statement/prospectus.

 

Selected Historical Condensed Financial Data of Civitas BankGroup, Inc.

 

 

Per share amounts are adjusted to reflect the effect of stock splits and stock dividends.

 

Selected Consolidated Unaudited Pro Forma Financial Data

 

The following unaudited pro forma condensed consolidated statement of financial condition as of December 31, 2006, and the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2006, have been prepared to reflect the proposed merger of Greene County and Civitas. The unaudited pro forma condensed consolidated statement of financial condition and the unaudited pro forma condensed consolidated statements of operations are presented as if the merger occurred on January 1, 2006. The unaudited pro forma acquisition adjustments, including those to adjust Civitas’ net assets to fair value, are preliminary and subject to change as additional analyses are performed and as additional information becomes available.

 

The unaudited pro forma financial data set forth below is not necessarily indicative of results that would have actually been achieved if the merger transaction had been consummated as of the date indicated, or that may be achieved in the future. This information should be read in conjunction with the historical consolidated financial statements of each of Greene County and Civitas (and the notes to them), which are incorporated by reference into this joint proxy statement/prospectus. See “WHERE YOU CAN FIND MORE INFORMATION” beginning on page 102.

 

Selected Consolidated Unaudited Pro Forma Financial Data
December 31, 2006

 

Notes to Selected Consolidated Unaudited Pro Forma Financial Data:

(in thousands except share and per share amounts)

 

Unaudited Pro Forma Condensed Consolidated Statement of

Operations for the Year Ended December 31, 2006

 

 

Unaudited Historical and Pro Forma Comparative Share Data

 

The following table shows comparative per share data about our historical and pro forma net income, cash dividends and book value. The comparative per share data below provides Greene County and Civitas shareholders with information about the value of their shares prior to the merger as opposed to the value of their shares after the merger and once the two companies are combined.

 

You should not rely on the pro forma information as necessarily indicative of historical results we would have experienced had we been combined or of future results we will have after the merger.

 

This information should be read in conjunction with the unaudited pro forma financial data (and the notes thereto) included elsewhere in this joint proxy statement/prospectus, and the historical consolidated financial statements (and the notes thereto), of Greene County and Civitas, which are incorporated by reference into this joint proxy statement/prospectus. See “— Selected Unaudited Pro Forma Financial Data” above, and “WHERE YOU CAN FIND MORE INFORMATION” beginning on page 102.

 

The pro forma data in the tables assume that the merger is accounted for using the purchase method of accounting and represents a current estimate based on available information of the combined company’s results of operations. The pro forma financial adjustments record the assets and liabilities of Civitas at their estimated fair values and are subject to adjustment as additional information becomes available and as additional analyses are performed. The significant pro forma assumptions include (i) that the exchange ratio of Greene County Bancshares common stock for Civitas common stock is 0.2674 (ii) the issuance of 3,075,085 shares of Greene County Bancshares common stock valued at $38.33 per share, and (iii) a nine-year straight-line amortization relating to core deposit intangible of approximately $10.5 million to be recorded in accordance with the purchase method of accounting. Assumptions also include no amortization or impairment of the goodwill resulting from the transaction in the amount of approximately $114.2 million.

 

The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the impact of possible revenue enhancements, expense efficiencies, asset dispositions and share repurchases, among other factors, that may result as a consequence of the merger and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during these periods. Upon completion of the merger, the operating results of Civitas will be reflected in the consolidated financial statements of Greene County on a prospective basis.

 

Unaudited Historical and Pro Forma Per Share Data