Green Bankshares, Inc. Form 11-K for the period ending December 31, 2006
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
11-K
FOR
ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
(Mark
One)
x ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the fiscal year ended December 31, 2006
OR
o TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the
transition period from _____________________ to ________________
Commission
file number 0-14289
GREENE
COUNTY BANCSHARES, INC.
401(K)
PROFIT SHARING PLAN
(Full
Title of Plan)
GREENE
COUNTY BANCSHARES, INC.
(Issuer
of Securities Held Pursuant to Plan)
100
North Main Street
Greeneville,
Tennessee 37743-4992
(Address
of Principal Executive Office of Issuer and of Plan)
GREENE
COUNTY BANCSHARES, INC.
401(K)
PROFIT SHARING PLAN
Financial
Statements and Supplemental Schedule
December
31, 2006 and 2005
(With
Report of Independent Registered Public Accounting Firm Therein)
GREENE
COUNTY BANCSHARES, INC.
401(K)
PROFIT SHARING PLAN
Table
of
Contents
December
31, 2006 and 2005
|
Page(s)
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Report
of Independent Registered Public Accounting
Firm.....................................................................................................................................
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1
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Financial
Statements:
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Statements
of Net
Assets Available for Benefits...............................................................................................................................................
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2
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Statements
of
Changes in Net Assets Available for Benefits.............................................................................................................................
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3
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Notes
to Financial
Statements..........................................................................................................................................................................
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4-7
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Supplemental
Schedule:
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Schedule
of Assets
(Held at End of Year)........................................................................................................................................................
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9
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Report
of Independent Registered Public Accounting Firm
Plan
Administrator
Greene
County Bancshares, Inc. 401(k) Profit Sharing Plan
Greeneville,
Tennessee
We
have
audited the accompanying financial statements of net assets available for
benefits of the Greene County Bancshares, Inc. 401(k) Profit Sharing Plan as
of
December 31, 2006 and 2005, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements
are
the responsibility of the Plan’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in
the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the net assets available for benefits of the Plan as of
December 31, 2006 and 2005, and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Our
audits of the Plan’s financial statements as of and for the years ended December
31, 2006 and 2005 were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedule of assets
held
at end of year is presented for the purpose of additional analysis and is not
a
required part of the basic financial statements, but is supplementary
information required by the Department of Labor’s Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act
of
1974. This supplemental schedule is the responsibility of the Plan’s management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/
Dixon
Hughes PLLC
Asheville,
North Carolina
June
21,
2007
GREENE
COUNTY BANCSHARES, INC.
401(K)
PROFIT SHARING PLAN
Statements
of Net Assets Available for Benefits
December
31, 2006 and 2005
Assets
|
|
2006
|
|
2005
|
|
|
|
|
|
|
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Investments
at fair value:
|
|
|
|
|
|
Investments
|
|
$
|
23,330,576
|
|
$
|
20,279,154
|
|
Participant
loans
|
|
|
461,281
|
|
|
443,354
|
|
|
|
|
23,791,857
|
|
|
20,722,508
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|
Receivables:
|
|
|
|
|
|
|
|
Employer
contributions
|
|
|
1,026,104
|
|
|
855,573
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
41
|
|
|
17
|
|
|
|
|
|
|
|
|
|
Net
assets available for benefits
|
|
$
|
24,818,002
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|
$
|
21,578,098
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|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
GREENE
COUNTY BANCSHARES, INC.
401(K)
PROFIT SHARING PLAN
Statements
of Changes in Net Assets Available for Benefits
For
the
Years Ended December 31, 2006 and 2005
|
|
2006
|
|
2005
|
|
Additions:
|
|
|
|
|
|
Net
appreciation in fair value of investments
|
|
$
|
2,045,720
|
|
$
|
344,668
|
|
Dividends
and interest
|
|
|
1,220,395
|
|
|
860,220
|
|
|
|
|
3,266,115
|
|
|
1,204,888
|
|
Contributions:
|
|
|
|
|
|
|
|
Participants
|
|
|
1,091,121
|
|
|
902,122
|
|
Employer
|
|
|
1,026,104
|
|
|
855,573
|
|
Rollovers
|
|
|
44,575
|
|
|
215,594
|
|
Total
contributions
|
|
|
2,161,800
|
|
|
1,973,289
|
|
|
|
|
|
|
|
|
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Total
additions
|
|
|
5,427,915
|
|
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3,178,177
|
|
|
|
|
|
|
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Deductions:
|
|
|
|
|
|
|
|
Benefits
paid to participants
|
|
|
2,186,123
|
|
|
1,794,336
|
|
Administrative
expenses
|
|
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1,888
|
|
|
1,687
|
|
Total
deductions
|
|
|
2,188,011
|
|
|
1,796,023
|
|
|
|
|
|
|
|
|
|
Net
increase
|
|
|
3,239,904
|
|
|
1,382,154
|
|
|
|
|
|
|
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Net
assets available for benefits:
|
|
|
|
|
|
|
|
Beginning
of year
|
|
|
21,578,098
|
|
|
20,195,944
|
|
|
|
|
|
|
|
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|
End
of year
|
|
$
|
24,818,002
|
|
$
|
21,578,098
|
|
|
|
|
|
|
|
|
|
|
|
|
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The
accompanying notes are an integral part of these financial
statements.
GREENE
COUNTY BANCSHARES, INC.
401(K)
PROFIT SHARING PLAN
Notes
to
Financial Statements
December
31, 2006 and 2005
The
following brief description of the Greene County Bancshares, Inc. 401(k) Profit
Sharing Plan (the”Plan”) provides only general information. Participants should
refer to the plan agreement for a more complete description of the Plan’s
provisions.
General
- The
Plan is a defined contribution plan covering eligible employees, as defined
by
the Plan, of Greene County Bank and other wholly-owned subsidiaries of Greene
County Bancshares, Inc. (“Company”). The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 (“ERISA”).
Contributions
-
Eligible employees are permitted to make elective deferrals in any amount up
to
the maximum percentage allowable not to exceed the limits of Code Sections
401(k), 402(g), 404 and 415. Eligible employees may amend their salary savings
agreements to change the contribution percentage on each payroll period during
the plan year. The employer has adopted the 401(k) safe harbor provision whereby
a non-elective contribution equal to 3% of eligible compensation will be made
on
behalf of all eligible participants. This 3% non-elective contribution is 100%
vested.
In
addition, the employer may make a discretionary employer profit sharing
contribution which shall be allocated to each eligible employee in proportion
to
his or her compensation (as defined by the Plan) as a percentage of their
compensation.
Investment
Options
-
Participants are allowed to direct the investment of their contributions and
to
change their investment mix at their discretion.
Participant
Accounts
- Each
participant’s account is credited with the participant’s contribution and an
allocation of (a) plan earnings, (b) employer non-elective and any employer
discretionary contributions (if eligible), and (c) forfeitures of terminated
participants’ non-vested accounts (if any). Allocations are based on participant
compensation or account balances, as defined. The benefit to which a participant
is entitled is the benefit that can be provided from the participant’s vested
account.
Vesting
-
Participants are immediately vested in their voluntary contributions and safe
harbor contributions plus actual earnings thereon and are 100 percent vested
after two years of service in the profit sharing contributions.
Greene County Bancshares, Inc. |
|
401(K)
Profit Sharing Plan |
Notes
to Financial Statements,
Continued
|
Participant
Loans
-
Participants may borrow from their vested fund accounts with a $1,000 minimum
and a maximum equal to $50,000 or 50 percent of their vested account balance,
whichever is less. The loans are secured by the balance in the participant’s
account and bear interest at rates that currently range from 3.25 percent to
8.25 percent. The interest rate is fixed for the life of the loan and is
generally based on the Prime Rate published in the Wall
Street Journal on
the
first business day of the month in which the loan is originated. Principal
and
interest is paid ratably through semi-monthly payroll deductions.
Payment
of Benefits
- After
termination of service, a participant may elect to receive a lump-sum amount
equal to the value of his or her account, or substantially equal installments
or
annuities over any period not exceeding the life expectancy of the participant
or the life expectancy of the participant and his or her designated
beneficiary.
Forfeitures-
Forfeitures are to be reallocated to participants in the same manner
as employer contributions. At December 31, 2006 and 2005, forfeited non-vested
accounts totaled $1,732 and $606, respectively. During 2006 and 2005,
respectively, forfeitures of $606 and $8,004 were reallocated to
participants.
Administrative
Costs
- The
Plan’s administrative expenses are paid by either the Plan or the Company, as
provided by the plan document.
2. |
Significant
Accounting Policies
|
Basis
of Accounting
- The
financial statements of the Plan are prepared under the accrual method of
accounting.
Investments
Valuation and Income Recognition
- The
Plan’s investments are stated at fair value. Quoted market prices are used to
value investments such as Company stock. Shares of mutual funds are valued
at
quoted market prices which represent the fair value of shares held by the Plan
at year-end. Participants’ loans are valued at their outstanding balances, which
approximate fair value. Purchases and sales of securities are recorded on a
trade-date basis. Interest income is recorded on the accrual basis. Dividends
are recorded on the ex-dividend date.
Payment
of Benefits
- Benefits are recorded when paid.
Estimates-
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions. Those estimates and assumptions
affect certain reported amounts and disclosures. Accordingly, actual results
could vary from those estimates.
Greene County Bancshares, Inc. |
|
401(K)
Profit Sharing Plan |
Notes
to Financial Statements,
Continued
|
The
Plan’s investments are held by a bank administered trust fund. Investments that
represent five percent or more of the Plan’s net assets at December 31 are as
follows:
|
|
2006
|
|
2005
|
|
Investments
at fair value:
|
|
|
|
|
|
Washington
Mutual Investors Fund
|
|
$
|
6,944,767
|
|
$
|
6,490,315
|
|
New
Perspective Fund
|
|
|
3,521,582
|
|
|
3,008,798
|
|
American
Balanced Fund
|
|
|
3,159,307
|
|
|
3,184,203
|
|
The
Growth Fund of America
|
|
|
2,152,889
|
|
|
1,909,928
|
|
Capital
World Growth and Income Fund
|
|
|
1,688,498
|
|
|
1,284,253
|
|
Greene
County Bancshares Common Stock
|
|
|
1,345,784
|
|
|
281,087
|
|
The
Cash Management Trust of America Fund
|
|
|
1,329,249
|
|
|
1,182,720
|
|
|
|
|
|
|
|
|
|
During
2006 and 2005 the Plan’s investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value as
follows:
|
|
2006
|
|
2005
|
|
|
|
|
|
|
|
Mutual
funds
|
|
$
|
1,715,344
|
|
$
|
340,755
|
|
Common
stocks
|
|
|
330,376
|
|
|
3,913
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,045,720
|
|
$
|
344,668
|
|
|
|
|
|
|
|
|
|
The
Plan
obtained its latest determination letter dated December 17, 1996, in which
the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code
(“IRC”). The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the
Internal Revenue Code.
Although
it has not expressed any intent to do so, the Company has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA. In the event of Plan termination,
participants would become 100% vested in their employer contributions.
Greene County Bancshares, Inc. |
|
401(K)
Profit Sharing Plan |
Notes
to Financial Statements,
Continued
|
6. |
Related
Party Transactions
|
Certain
Plan investments are shares of mutual funds managed by American Funds Group.
American Funds Group is the record-keeper as defined by the Plan and, therefore,
these transactions qualify as party-in-interest transactions.
7. |
Risks
and Uncertainties
|
The
Plan
invests in various investment securities. Investment securities are exposed
to
various risks such as interest rate, market, and credit risk. Due to the level
of risk associated with certain investment securities, it is at least reasonably
possible that changes in the values of investments securities will occur in
the
near term and that such changes could materially affect participants’ account
balances and the amounts reported in the statement of net assets available
for
benefits.
8. |
Reconciliation
of Financial Statements to Form
5500
|
The
following is a reconciliation of net assets available for benefits per the
accompanying financial statements to Schedule H of Form 5500.
|
|
December
31, 2006
|
|
December
31, 2005
|
|
|
|
|
|
|
|
Net
assets available for benefits per the financial statements
|
|
$
|
24,818,002
|
|
$
|
21,578,098
|
|
Employer
contributions receivable not reflected on the 5500
|
|
|
(1,026,104
|
)
|
|
(855,573
|
)
|
|
|
|
|
|
|
|
|
Net
assets available for benefits per the Form 5500
|
|
$
|
23,791,898
|
|
$
|
20,722,525
|
|
|
|
|
|
|
|
|
|
The
following is a reconciliation of employer contributions per the financial
statements for the year ended December 31, 2006 to Schedule H of Form
5500.
Employer
contributions per the financial statements |
|
$ |
1,026,104 |
|
Current
year employer contribution receivable |
|
|
(1,026,104) |
) |
Prior
year employer contribution receivable |
|
|
855,573 |
|
Employer
contributions per the Form 5500 |
|
$ |
855,573 |
|
GREENE
COUNTY BANCSHARES, INC.
401(K)
PROFIT SHARING PLAN
Schedule
of Assets (Held at End of Year)
Form
5500, Schedule H, Part IV, Line 4i
December
31, 2006
EIN:
62-1222567
Plan
Number
001
(a)
|
|
(b)
Identity of Issue, Borrower, Lessor or Similar
Party
|
|
(c)
Description of Investment Including Maturity Date, Rate of Interest,
Collateral, Par or Maturity Value
|
|
(d)
Cost**
|
|
(e)
Current
Value
|
|
|
|
|
|
|
|
|
|
*
|
|
American
Funds Group
|
|
American
Balanced Fund, 166,279 shares
|
|
|
|
$ 3,159,307
|
*
|
|
American
Funds Group
|
|
Capital
World Growth and Income Fund,
|
|
|
|
|
|
|
|
|
40,327
shares
|
|
|
|
1,688,498
|
*
|
|
American
Funds Group
|
|
The
Growth Fund of America, 65,918
Shares
|
|
|
|
2,152,889
|
*
|
|
American
Funds Group
|
|
Intermediate
Bond Fund of America,
|
|
|
|
|
|
|
|
|
77,939
shares
|
|
|
|
1,045,935
|
*
|
|
American
Funds Group
|
|
New
Perspective Fund, 111,619 shares
|
|
|
|
3,521,582
|
*
|
|
American
Funds Group
|
|
Washington
Mutual Investors Fund,
|
|
|
|
|
|
|
|
|
199,734
shares
|
|
|
|
6,944,767
|
*
|
|
American
Funds Group
|
|
The
Cash Management Trust of America
|
|
|
|
|
|
|
|
|
Fund,
1,327,516 shares
|
|
|
|
1,329,249
|
|
|
AIM
Advisors
|
|
Mid
Cap Core Equity Fund, 6,618 shares
|
|
|
|
172,609
|
|
|
PIMCO
Funds
|
|
PIMCO
Small Cap Value Fund, 23,264
shares
|
|
|
|
726,287
|
|
|
Templeton
Global Advisors
|
|
Templeton
Foreign Fund, 57,755 shares
|
|
|
|
787,783
|
|
|
PIMCO
Funds
|
|
PIMCO
Total Return, 43,919 shares
|
|
|
|
455,886
|
*
|
|
Greene
County Bancshares
|
|
Common
Stock, 33,873 shares
|
|
|
|
1,345,784
|
*
|
|
Participant
loans
|
|
Loans
with interest rates from 3.25% to
|
|
|
|
|
|
|
|
|
8.25%,
maturing through October 2027
|
|
|
|
461,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 23,791,857
|
|
|
|
|
|
|
|
|
|
*
Party-in-interest
**
Cost
information omitted for participate directed investments.
EXHIBITS
The
following documents are filed as exhibits to this Form 11-K:
23.
Consent of Dixon Hughes PLLC.
SIGNATURES
The
Plan.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the 401(K) Profit
Sharing Plan Committee of Greene County Bancshares, Inc. has duly caused this
annual report to be signed on behalf of the Plan by the undersigned hereunto
duly authorized.
|
GREENE COUNTY BANCSHARES, INC. |
|
401(K) PROFIT SHARING PLAN |
|
|
|
By: The Greene County Bancshares,
Inc. |
|
401(K) Profit Sharing Plan Committee |
|
|
Date:
June 26, 2007 |
By:/s/ Steve
Ottinger |
|
Steve
Ottinger
|
11