Community Financial Group, Inc. Reports 35 Percent Increase in 1999 Earnings, 55 Percent Increase in Fourth Quarter Earnings and Increases Dividend.

Business Editors

NASHVILLE, Tenn.--(BUSINESS WIRE)--Jan. 19, 2000

Community Financial Group, Inc., (NASDAQ: CFGI) the parent company of The Bank of Nashville, today announced 1999 net income of $3.5 million, up 35 percent from $2.6 million reported in 1998. Diluted earnings per share were $.85 for the year ended December 31, 1999 and $.78 for the year ended December 31, 1998. Fourth quarter 1999 earnings were $1.1 million, an increase of 55 percent from the $708,000 reported fourth quarter 1998. For the fourth quarter of 1999 both basic and diluted earnings per share were $.27 compared to $.28 and $.17 respectively, for the fourth quarter of 1998.

The Board of Directors announced a 31 percent increase in the quarterly dividend declaring a cash dividend of $.17 per share for shareholders of record on February 4, 2000, payable February 18, 2000. This compares to the prior quarterly dividend of $.13 per share. At this level, the Company's annualized dividend yield is 4.76 percent based upon the average price per share for the month of December 1999.

Return on average assets for the year ended December 31, 1999 was 1.30 percent compared to 1.23 percent a year ago. Return on average equity for the year ended December 31, 1999 was 7.09 percent compared to 9.56 percent for the same period a year ago, reflecting the increase in equity due to the exercise of warrants in late 1998.

In March 1999, the Company's Board of Directors authorized a Stock Repurchase Plan for the acquisition of up to 400,000 shares of CFGI stock as part of a plan to more effectively manage the Company's capital and enhance future earnings per share. As of December 31, 1999, 304,500 shares had been purchased.

"We continue to work to meet the challenge of effectively managing and employing our high level of capital," said Mack S. Linebaugh, Jr., President & CEO. "Being extremely well capitalized, we are positioned to take advantage of market opportunities. We are pleased with the substantial internal growth that we have accomplished thus far and we have already made equity investments in several firms that operate in lines of business that complement our banking activities and provide additional revenue. We will continue to review new equity investments as well as other opportunities for internal growth. The Company has experienced double-digit growth in profitability and continues to seek opportunities to further increase shareholder value," he concluded.

Assets, loans and deposits all reflected substantial increases for the year. Total assets at December 31, 1999 were $308.0 million, an increase of 29 percent from the $238.2 million reported December 31, 1998. At December 31, 1999 total loans, net of unearned income, were $205.5 million, an increase of 35 percent from the $152.7 million reported December 31, 1998. Total deposits were $229.1 million at December 31, 1999 an increase of 41 percent from the $162.6 million reported a year ago.

"In 1999, The Bank continued to expand service and product delivery channels for the convenience of our customers," said Linebaugh. "We added our third branch location, our third mobile branch, and introduced Internet banking for consumers. Our office in Hendersonville, which opened in the Spring of 1999, has been very well received and we are excited about our continued business development prospects in the area. Our Brentwood office has shown steady growth since its opening almost eighteen months ago. We are also proud of the results achieved by our Green Hills office, which is the location of one of our two investment centers managed by LM Financial Partners. Our mobile branch service, Bank-on-Call, is an innovative system that brings basic banking services to our commercial customers' place of business and it continues to flourish. Our consumer customers have been extremely receptive to Internet banking with almost 20 percent of our checking account customers signing up for the service within the first nine months. While we continue to look at key locations for branch expansion we are committed to also continuing the development of alternate methods of service and product delivery to provide both exceptional service and convenience," said Linebaugh.

"During the first quarter of 2000 we will offer Internet banking and cash management services for our business customers," said Linebaugh. "We will be one of a very few banks across the country to offer cash management services via the Internet and we are excited about providing this service for our business customers.

"As we enter the Year 2000, we are enthusiastic about operating a financial services business in this thriving market where we can provide local decisions to customers whom we know and who know us," concluded Linebaugh.

To the extent that statements contained herein relate to the plans, objectives, or future performance of the Company, these statements may be deemed to be forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and the current economic environment while actual strategies and results of future periods may differ materially from these expectations due to various risks and uncertainties.

The Bank of Nashville is a wholly owned subsidiary of Community Financial Group, Inc., (NASDAQ: CFGI) a bank holding company headquartered in Nashville, Tennessee. The Bank of Nashville operates branch offices in Davidson, Williamson and Sumner counties.

                       COMMUNITY FINANCIAL GROUP, INC.

Condensed Consolidated
Statements of Income                 Quarter Ended
                                  ----------------------            %
                                   December 31                 Change
(in thousands except
per share amounts)                   1999           1998
                                  -----------------------------------
Interest income                   $ 6,163        $ 4,251       44.98
Interest expense                    2,782          1,981       40.43
     Net interest income            3,381          2,270       48.94
Provision for loan losses              52             25      108.00
Non-interest income                   752            572       31.47
Non-interest expense                2,366          1,687       40.25
Income before income tax expense    1,715          1,130       51.77
Income tax expense                    640            422       51.66
Net Income                        $ 1,075          $ 708       51.84
Per common share:
     Net Income:
          Basic                      0.27           0.28       (3.57)
          Diluted                    0.27           0.17       58.82
     Cash Dividends                  0.13           0.06      116.67

Average common shares outstanding:
          Basic                     3,930          2,540       54.72
          Diluted                   3,991          4,250       (6.09)

                                    Year Ended
                                 ----------------------             %
                                    December 31                Change
(in thousands except
per share amounts)                   1999           1998
                                 ------------------------------------
Interest income                  $ 20,975       $ 16,591       26.42
Interest expense                    9,053          8,035       12.67
     Net interest income           11,922          8,556       39.34
Provision for loan losses             106            128      (17.19)
Non-interest income                 2,675          1,805       48.20
Non-interest expense                8,845          6,071       45.69
Income before income tax expense    5,646          4,162       35.66
Income tax expense                  2,145          1,581       35.67
Net Income                        $ 3,501        $ 2,581       35.65
Per common share:
     Net Income:
          Basic                      0.86           1.08      (20.37)
          Diluted                    0.85           0.78        8.97
     Cash Dividends                  0.46           0.24       91.67

Average common shares outstanding:
          Basic                     4,068          2,394       69.92
          Diluted                   4,129          3,321       24.33



Condensed Consolidated Balance Sheets

(in thousands)                   December 31
Assets                               1999           1998

                                ------------------------
     Cash and due from banks     $ 11,483       $ 13,243      (13.29)
     Federal funds sold            14,300              -         N/A
     Securities                    74,877         71,662        4.49
     Loans                        205,511        152,675       34.61
     Allowance for loan losses     (4,062)        (3,646)      11.41
     Net loans                    201,449        149,029       35.17
     Other assets                   5,997          4,251       41.07
          Total assets          $ 308,106      $ 238,185       29.36

Liabilities and shareholders' equity

     Deposits                   $ 229,141      $ 162,553       40.96
     Borrowed funds                29,500         22,500       31.11
     Other liabilities              2,150          1,961        9.64
          Total liabilities       260,791        187,014       39.45
     Total shareholders' equity    47,315         51,171       (7.54)
          Total liabilities and
           shareholders' equity $ 308,106      $ 238,185       29.36



     COMMUNITY FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL
HIGHLIGHTS                    Quarter Ended            Year Ended
                          ---------------------   ---------------------
                          December 31             December 31
(in thousands except
 per share data)               1999        1998        1999        1998
                          ---------------------------------------------
Per Common Share
Net income:
     Basic                   $ 0.27      $ 0.28      $ 0.86      $ 1.08
     Diluted                   0.27        0.17        0.85        0.78
Cash dividends                 0.13        0.06        0.46        0.24
Common book value
 (excludes SFAS No.115)       12.31       12.06       12.31       12.06

Average Balances
Loans, net of unearned
 discount and net
 deferred loan fees       $ 196,454   $ 144,343   $ 176,027   $ 133,660
Securities                   74,793      54,838      68,421      59,117
Earning assets              285,631     209,275     256,648     200,245
Total assets                299,633     221,302     269,137     209,501

Demand deposits              21,764      18,512      19,588      16,409
Interest-bearing deposits   210,588     156,476     179,500     150,885
Total core deposits         186,206     141,572     163,556     137,132
Total deposits              232,351     174,988     199,089     167,294
Shareholders' equity         47,095      29,895      49,200      27,313

Ratios:
Return on average assets
 (annualized)                 1.42%       1.27%       1.30%       1.23%
Return on average equity
 (annualized)                 8.92%       9.53%       7.09%       9.56%
Net interest margin           4.74%       4.35%       4.65%       4.28%
Average realized equity to
 average assets              15.95%      13.32%      18.34%      12.88%
Realized equity to assets    15.68%      21.34%      15.68%      21.34%

Credit Quality Data:
Nonperforming loans           $ 291       $ 408       $ 291       $ 408
Foreclosed properties             0          52           0          52
                          ---------------------   ---------------------
     Total nonperforming
       assets                 $ 291       $ 460       $ 291       $ 460
                          ---------------------   ---------------------
Nonperforming assets as
 a percent of loans and
 foreclosed properties        0.14%       0.30%       0.14%       0.30%
Allowance for loan losses   $ 4,062     $ 3,646     $ 4,062     $ 3,646
     Percent of period-end
      loans                   1.98%       2.39%       1.98%       2.39%
Net charge-offs
 (recoveries)                $ (37)      $ (32)     $ (218)     $ (390)
     Percent of
      average loans           -0.02%      -0.02%      -0.12%     -0.29%