Press Release


Capital City Bank Group, Inc. Reports Third Quarter 2016 Results

Company Release - 10/25/2016 7:00 AM ET

TALLAHASSEE, Fla., Oct. 25, 2016 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $2.9 million, or $0.17 per diluted share for the third quarter of 2016 compared to net income of $3.9 million, or $0.22 per diluted share for the second quarter of 2016, and $1.7 million, or $0.09 per diluted share, for the third quarter of 2015. For the first nine months of 2016, net income totaled $8.4 million, or $0.49 per diluted share, compared to net income of $6.5 million, or $0.37 per diluted share for the same period in 2015. 

HIGHLIGHTS

  • Average loans grew 1.6% sequentially and 4.3% over prior year
  • No loan loss provision for Q3 reflective of second straight quarter of net loan recoveries
  • Continued progress in reducing noninterest expenses – down 2.4% sequentially and 1.5% from prior year 
  • NPAs and classified assets both down sequentially by 6% and 44%/35%, respectively, from prior year

“I continue to be pleased with our progress; measured and prudent strategies are producing meaningful year-over-year improvement, albeit at a slower than desired pace,” said William G. Smith, Jr., Chairman, President and CEO. “Despite a challenging environment, loan growth, improving credit quality and expense management are all driving better performance. We remain dedicated to reducing our structural expenses and enhancing existing revenues, while identifying new business opportunities. Properly executing these strategies takes time, but can generate outcomes that produce long term value. We continue to value long-term profitability over short-term gains.”

Compared to the second quarter of 2016, performance reflects lower noninterest expense of $0.7 million and income taxes of $0.6 million partially offset by lower noninterest income of $2.2 million and a $0.1 million increase in the loan loss provision.

Compared to the third quarter of 2015, the increase in earnings reflects lower noninterest expense of $1.1 million, higher net interest income of $0.3 million, and a $0.4 million reduction in the loan loss provision, partially offset by a $0.2 million decrease in noninterest income and higher income taxes of $0.4 million.

The increase in earnings for the first nine months of 2016 versus the comparable period of 2015 was attributable to higher net interest income of $1.4 million, lower noninterest expense of $1.3 million, and a $0.7 million reduction in the loan loss provision, partially offset by higher income taxes of $1.5 million.

The Return on Average Assets was 0.42% and the Return on Average Equity was 4.12% for the third quarter of 2016. These metrics were 0.57% and 5.65% for the second quarter of 2016, respectively, and 0.25% and 2.43% for the third quarter of 2015, respectively. For the first nine months of 2016, the Return on Average Assets was 0.41% and the Return on Average Equity was 4.06% compared to 0.33% and 3.17%, respectively, for the same period of 2015.

Discussion of Operating Results

Tax equivalent net interest income for the third quarter of 2016 was $19.6 million compared to $19.6 million for the second quarter of 2016 and $19.3 million for the third quarter of 2015. During the third quarter, overnight funds were used to fund growth in the loan and investment portfolios resulting in a positive shift in our earning asset mix. This positive shift was partially offset by some one-time adjustments to interest income. The increase in tax equivalent net interest income compared to the third quarter of 2015 reflects growth in the investment portfolio and a higher rate paid on overnight funds, partially offset by a decline in loan fees. For the first nine months of 2016, tax equivalent net interest income totaled $58.6 million compared to $57.0 million for the comparable period of 2015. The year over year increase was driven by one additional calendar day, and growth in the loan and investment portfolios.

Although the low interest rate environment continues to put downward pressure on our net interest income, we have been successful in increasing our net interest income year-over-year. Additionally, aggressive lending competition in all markets has impacted the pricing for loans. Low rates and competition, collectively, continue to adversely impact our loan yields. Various loan strategies, which align with our overall risk appetite, continue to be reviewed and implemented to enhance our performance.

Our net interest margin for the third quarter of 2016 was 3.23%, an increase of one basis point over the second quarter of 2016 and a decrease of eight basis points from the third quarter of 2015. The increase in the margin compared to the second quarter of 2016 was primarily attributable to growth in our loan and investment portfolios. The decrease in the margin compared to the third quarter of 2015 was primarily attributable to lower loan yields. For the first nine months of 2016, the net interest margin declined seven basis points to 3.22% compared to the same period of 2015 for reasons mentioned above.

A loan loss provision was not recorded for the third quarter of 2016 reflecting continued reduction in loan charge-offs as well as strong loan recoveries. This compares to a negative provision of $0.1 million for the second quarter of 2016 and a provision of $0.4 million for the third quarter of 2015. For the first nine months of 2016, the loan loss provision totaled $0.4 million compared to $1.1 million for the same period of 2015. The decrease in the year-to-date provision reflects continued favorable problem loan migration and lower net loan charge-offs, partially offset by growth in the loan portfolio. We realized net loan recoveries of $0.1 million (consisting of recoveries of $0.9 million, less gross charge-offs of $0.8 million) for the third quarter of 2016 compared to net loan recoveries of $0.2 million (consisting of recoveries of $1.3 million, less gross charge-offs of $1.1 million) for the second quarter of 2016. Net loan charge-offs for the third quarter of 2015 totaled $0.9 million, or 0.24% (annualized) of average loans. For the first nine months of 2016, net loan charge-offs totaled $0.6 million, or 0.05% (annualized) of average loans compared to $3.9 million, or 0.35% (annualized), for the same period in 2015. At quarter-end, the allowance for loan losses of $13.7 million was 0.88% of outstanding loans (net of overdrafts) and provided coverage of 160% of nonperforming loans compared to 0.89% and 167%, respectively, at June 30, 2016 and 0.93% and 135%, respectively, at December 31, 2015.

Noninterest income for the third quarter of 2016 totaled $13.0 million, a decrease of $2.2 million, or 14.5%, from the second quarter of 2016 and a decrease of $0.2 million, or 1.6%, from the third quarter of 2015. The decrease from the second quarter of 2016 reflects higher other income attributable to a $2.5 million gain from the partial retirement of our trust preferred securities (“TRUPs”) in the second quarter of 2016, partially offset by higher mortgage banking fees of $0.2 million and wealth management fees of $0.1 million. Compared to the third quarter of 2015, noninterest income decreased $0.2 million, or 1.6%, attributable to lower deposit fees of $0.3 million and bank card fees of $0.1 million that was partially offset by higher mortgage banking fees of $0.2 million.  For the first nine months of 2016, noninterest income totaled $40.9 million, unchanged from the prior year. Noninterest income for 2016 reflects a $1.0 million increase in other income and a $0.3 million increase in mortgage banking fees offset by lower deposit fees of $0.9 million and wealth management fees of $0.4 million. The favorable variance in other income primarily reflects the aforementioned $2.5 million TRUPs gain recognized in 2016 partially offset higher BOLI income of $1.7 million in 2015. Continued strong residential home sales activity in our markets drove the improvement in mortgage banking fees. The reduction in deposit fees reflects lower overdraft service fees attributable to a reduction in accounts using this service as well as lower utilization by existing users. The reduction in wealth management fees generally reflects lower trading volume by our retail brokerage clients.

Noninterest expense for the third quarter of 2016 totaled $28.0 million, a decrease of $0.7 million, or 2.4%, from the second quarter of 2016 primarily attributable to lower other real estate owned (“OREO”) expense of $0.2 million and other expense of $0.5 million. A lower level of property valuation adjustments drove the decline in OREO expense. The reduction in other expense reflects lower FDIC insurance fees of $0.2 million, legal expense of $0.2 million, and debit card losses of $0.1 million. Compared to the third quarter of 2015, noninterest expense decreased by $1.1 million or 3.9% attributable to lower compensation of $0.6 million, OREO expense of $0.5 million, and other expense of $0.3 million, partially offset by higher occupancy expense of $0.3 million. For the first nine months of 2016, noninterest expense totaled $85.7 million, a decrease of $1.3 million, or 1.5%, from the same period of 2015 reflective of lower compensation expense of $1.3 million, OREO expense of $0.4 million, and other expense of $0.3 million partially offset by higher occupancy expense of $0.7 million. Compared to the three and nine-month periods of 2015, the reduction in compensation reflects a higher level of deferred loan cost (which reduces salary expense) partially offset by higher pension plan expense. The decrease in OREO expense was driven by a lower level of property valuation adjustments and property carrying costs. Other expense declined primarily due to lower FDIC insurance fees and legal fees. The increase in occupancy expense reflects higher depreciation expense due to technology investments in our banking offices and security infrastructure and to a lesser extent higher maintenance costs for building and furniture/equipment.

We realized income tax expense of $1.4 million (33% effective rate) for the third quarter of 2016 compared to $2.0 million (34% effective rate) for the second quarter of 2016 and $1.0 million (38% effective rate) for the third quarter of 2015.  For the first nine months of 2016, income tax expense totaled $4.3 million (34% effective rate) compared to $2.8 million (30% effective rate) for the comparable period of 2015. The receipt of $1.7 million in BOLI proceeds in the second quarter of 2015 was tax-exempt, therefore income tax expense for the nine-month period of 2015 was favorably impacted.

Discussion of Financial Condition

Average earning assets were $2.418 billion for the third quarter of 2016, a decrease of $29.8 million, or 1.2%, from the second quarter of 2016, and an increase of $64.2 million, or 2.7%, over the fourth quarter of 2015. The reduction in earning assets over the second quarter of 2016 was attributable to a reduction in interest bearing liabilities. The increase compared to the fourth quarter of 2015 reflects increases in noninterest bearing, NOW, and savings accounts which primarily funded the growth in the loan and investment portfolios.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $166.2 million during the third quarter of 2016 compared to an average net overnight funds sold position of $254.6 million in the second quarter of 2016 and $222.8 million in the fourth quarter of 2015. The decrease in net overnight funds compared to the second quarter of 2016 reflects an increase in both the investment and loan portfolios, in conjunction with a decline in repurchase agreements. The decrease in net overnight funds compared to the fourth quarter of 2015 primarily reflects growth in the loan and investment portfolios, and a reduction in short-term borrowings, partially offset by growth in deposit balances.

Average loans increased $24.1 million, or 1.6% when compared to the second quarter of 2016, and have grown $63.4 million, or 4.3% when compared to the fourth quarter of 2015. The increase compared to the second quarter of 2016 reflects growth primarily in institutional, consumer, and construction loans. Growth over the fourth quarter of 2015 was experienced in all loan products, with the exception of commercial mortgages. 

Without compromising our credit standards or taking on inordinate interest rate risk, we continue to make minor modifications on some of our lending programs to try to mitigate the impact that consumer and business deleveraging has had on our portfolio. These programs, coupled with economic improvements in our anchor markets, have helped to increase overall production.

Nonperforming assets (nonaccrual loans and OREO) totaled $21.4 million at the end of the third quarter of 2016, a decrease of $1.4 million, or 6%, from the second quarter of 2016 and $8.2 million, or 28%, from the fourth quarter of 2015. Nonaccrual loans totaled $8.6 million at the end of the third quarter of 2016, an increase of $0.4 million over the second quarter of 2016 and a decrease of $1.7 million from the fourth quarter of 2015. Nonaccrual loan additions totaled $2.8 million in the third quarter of 2016 and $9.1 million for the first nine months of 2016, which compares to $12.1 million for the same nine month period of 2015. The balance of OREO totaled $12.8 million at the end of the third quarter of 2016, a decrease of $1.8 million and $6.5 million, respectively, from the second quarter of 2016 and fourth quarter of 2015. For the third quarter of 2016, we added properties totaling $0.9 million, sold properties totaling $2.3 million, and recorded valuation adjustments totaling $0.4 million. For the first nine months of 2016, we added properties totaling $3.3 million, sold properties totaling $7.9 million, and recorded valuation adjustments totaling $1.9 million. Nonperforming assets represented 0.78% of total assets at September 30, 2016 compared to 0.83% at June 30, 2016 and 1.06% at December 31, 2015.

Average total deposits were $2.289 billion for the third quarter of 2016, an increase of $12.2 million, or 0.5%, over the second quarter of 2016, and an increase of $114.0 million, or 5.2% over the fourth quarter of 2015. The increase in deposits when compared to the second quarter of 2016 reflects growth in all deposit products except noninterest bearing checking accounts (primarily due to one large, non-core client) public NOW deposits, and certificates of deposit. Compared to the fourth quarter of 2015, growth was experienced in all product types except money market accounts and certificates of deposit. Seasonal public funds balances are expected to reach the low point of this cycle mid-way through the fourth quarter, and increase late in the fourth quarter 2016. 

Deposit levels remain strong, as the seasonal decline in public NOW accounts was more than offset by increases in high performance checking accounts and savings accounts. Average core deposits continue to experience growth in this low rate environment. Competitive rates continue to be monitored, as a prudent pricing discipline remains the key to managing our mix of deposits.

Compared to the second quarter of 2016, average borrowings decreased $46.0 million primarily due to a decline in repurchase agreements. Compared to the fourth quarter of 2015, average borrowings decreased by $70.9 million due to a partial redemption of subordinated debt and a decline in repurchase agreements.

Equity capital was $276.6 million as of September 30, 2016, compared to $274.8 million as of June 30, 2016 and $274.4 million as of December 31, 2015.  Our leverage ratio was 10.12%, 9.98%, and 10.65%, respectively, for these periods. Further, as of September 30, 2016, our risk-adjusted capital ratio was 16.28% compared to 16.44% and 17.25% at June 30, 2016 and December 31, 2015, respectively. Our common equity tier 1 ratio was 12.55% as of September 30, 2016, compared to 12.65% as of June 30, 2016 and 12.84% as of December 31, 2015. All of our capital ratios significantly exceed the threshold to be designated as “well-capitalized” under the Basel III capital standards. During the second quarter of 2016 we repurchased 432,000 shares of our common stock at an average price of $14.50 per share and redeemed $10 million of our outstanding TRUPs. These transactions unfavorably impacted our regulatory capital ratios by approximately 38 basis points and approximately 50 basis points, respectively. 

About Capital City Bank Group, Inc.

Capital City Bank Group, Inc. (Nasdaq: CCBG) is one of the largest publicly traded financial holding companies headquartered in Florida and has approximately $2.8 billion in assets. We provide a full range of banking services, including traditional deposit and credit services, mortgage banking, asset management, trust, merchant services, bankcards, data processing and securities brokerage services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 60 banking offices and 71 ATMs in Florida, Georgia and Alabama. For more information about Capital City Bank Group, Inc., visit www.ccbg.com.

FORWARD-LOOKING STATEMENTS

Forward-looking statements in this Press Release are based on current plans and expectations that are subject to uncertainties and risks, which could cause the Company’s future results to differ materially. The following factors, among others, could cause the Company’s actual results to differ: the accuracy of the Company’s financial statement estimates and assumptions; legislative or regulatory changes, including the Dodd-Frank Act, Basel III, and the ability to repay and qualified mortgage standards; fluctuations in inflation, interest rates, or monetary policies; the effects of security breaches and computer viruses that may affect the Company’s computer systems or fraud related to debit card products; changes in consumer spending and savings habits; the Company’s growth and profitability; the strength of the U.S. economy and the local economies where the Company conducts operations; the effects of the Company’s lack of a diversified loan portfolio, including the risks of geographic and industry concentrations; harsh weather conditions and man-made disasters; changes in the stock market and other capital and real estate markets; customer acceptance of third-party products and services; increased competition and its effect on pricing, including the long-term impact on our net interest margin from the repeal of Regulation Q; negative publicity and the impact on our reputation; technological changes, especially changes that allow out of market competitors to compete in our markets; changes in accounting; and the Company’s ability to manage the risks involved in the foregoing. Additional factors can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and the Company’s other filings with the SEC, which are available at the SEC’s internet site (http://www.sec.gov).  Forward-looking statements in this Press Release speak only as of the date of the Press Release, and the Company assumes no obligation to update forward-looking statements or the reasons why actual results could differ.

USE OF NON-GAAP FINANCIAL MEASURE

We present a tangible common equity ratio that removes the effect of goodwill resulting from merger and acquisition activity. We believe this measure is useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry. The GAAP to non-GAAP reconciliation is provided below.

 (Dollars in Thousands) Sep 30, 2016 Jun 30, 2016 Sep 30, 2015
 TANGIBLE COMMON EQUITY RATIO         
 Shareowners' Equity (GAAP) $ 276,624  $ 274,824  $ 273,659 
 Less: Goodwill (GAAP)   84,811    84,811    84,811 
 Tangible Shareowners' Equity (non-GAAP)A  191,813    190,013    188,848 
 Total Assets (GAAP)   2,753,154    2,767,636    2,615,094 
 Less: Goodwill (GAAP)   84,811    84,811    84,811 
 Tangible Assets (non-GAAP)B$ 2,668,343  $ 2,682,825  $ 2,530,283 
 Tangible Common Equity RatioA/B  7.19%   7.08%   7.46%
                 


CAPITAL CITY BANK GROUP, INC.          
EARNINGS HIGHLIGHTS          
Unaudited          
           
  Three Months Ended Nine Months Ended
(Dollars in thousands, except per share data) Sep 30, 2016 Jun 30, 2016 Sep 30, 2015 Sep 30, 2016 Sep 30, 2015
           
EARNINGS          
Net Income$ 2,873 $ 3,930 $ 1,683 $ 8,450 $ 6,514 
Diluted Net Income Per Share$ 0.17 $ 0.22 $ 0.09 $ 0.49 $ 0.37 
PERFORMANCE          
Return on Average Assets  0.42%  0.57%  0.25%  0.41%  0.33%
Return on Average Equity  4.12%  5.65%  2.43%  4.06%  3.17%
Net Interest Margin  3.23%  3.22%  3.31%  3.22%  3.29%
Noninterest Income as % of Operating Revenue  40.24%  43.99%  40.96%  41.40%  41.95%
Efficiency Ratio  85.92%  82.40%  89.79%  86.05%  88.90%
CAPITAL ADEQUACY          
Tier 1 Capital Ratio  15.48%  15.63%  16.36%  15.48%  16.36%
Total Capital Ratio  16.28%  16.44%  17.24%  16.28%  17.24%
Tangible Common Equity Ratio(1)  7.19%  7.08%  7.46%  7.19%  7.46%
Leverage Ratio  10.12%  9.98%  10.71%  10.12%  10.71%
Common Equity Tier 1 Ratio  12.55%  12.65%  12.76%  12.55%  12.76%
Equity to Assets  10.05%  9.93%  10.46%  10.05%  10.46%
ASSET QUALITY          
Allowance as % of Non-Performing Loans  159.56%  166.50%  112.17%  159.56%  112.17%
Allowance as a % of Loans  0.88%  0.89%  0.99%  0.88%  0.99%
Net Charge-Offs as % of Average Loans  (0.02)%  (0.04)%  0.24%  0.05%  0.35%
Nonperforming Assets as % of Loans and ORE  1.35%  1.48%  2.54%  1.35%  2.54%
Nonperforming Assets as % of Total Assets  0.78%  0.83%  1.47%  0.78%  1.47%
STOCK PERFORMANCE          
High$ 15.35 $ 15.96 $ 15.75 $ 15.96 $ 16.33 
Low  13.32   13.16   14.39   12.83   13.16 
Close$ 14.77 $ 13.92 $ 14.92 $ 14.77 $ 14.92 
Average Daily Trading Volume  19,696   20,192   16,134   20,840   21,609 
           
(1)  Tangible common equity ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to
  page 4.          


CAPITAL CITY BANK GROUP, INC.          
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION      
Unaudited          
           
   2016 2015
(Dollars in thousands) Third Quarter Second Quarter First Quarter
 Fourth Quarter Third Quarter
ASSETS          
Cash and Due From Banks$ 79,608 $ 51,766 $ 45,914 $ 51,288 $ 42,917 
Funds Sold and Interest Bearing Deposits  144,576   220,719   304,908   327,617   167,787 
Total Cash and Cash Equivalents  224,184   272,485   350,822   378,905   210,704 
           
Investment Securities Available for Sale  500,139   485,848   462,444   451,028   444,071 
Investment Securities Held to Maturity  189,928   204,474   187,079   187,892   193,964 
Total Investment Securities  690,067   690,322   649,523   638,920   638,035 
           
Loans Held for Sale  10,510   12,046   10,475   11,632   10,960 
           
Loans, Net of Unearned Interest          
Commercial, Financial, & Agricultural  223,278   207,105   183,681   179,816   169,588 
Real Estate - Construction  54,107   46,930   42,538   46,484   49,475 
Real Estate - Commercial  497,775   485,329   503,259   499,813   491,734 
Real Estate - Residential  276,193   280,015   285,772   285,748   280,690 
Real Estate - Home Equity  235,433   235,394   234,128   233,901   232,254 
Consumer  258,173   252,347   245,197   240,434   238,884 
Other Loans  10,875   11,177   10,297   4,837   10,094 
Overdrafts  1,678   2,177   1,963   1,242   2,464 
Total Loans, Net of Unearned Interest  1,557,512   1,520,474   1,506,835   1,492,275   1,475,183 
Allowance for Loan Losses  (13,744)  (13,677)  (13,613)  (13,953)  (14,737)
Loans, Net  1,543,768   1,506,797   1,493,222   1,478,322   1,460,446 
           
Premises and Equipment, Net  96,499   97,313   98,029   98,819   98,218 
Goodwill  84,811   84,811   84,811   84,811   84,811 
Other Real Estate Owned  12,738   14,622   17,450   19,290   25,219 
Other Assets  90,577   89,240   87,854   87,161   86,701 
Total Other Assets  284,625   285,986   288,144   290,081   294,949 
           
Total Assets$ 2,753,154 $ 2,767,636 $ 2,792,186 $ 2,797,860 $ 2,615,094 
           
LIABILITIES          
Deposits:          
Noninterest Bearing Deposits$ 801,671 $ 798,219 $ 790,040 $ 758,283 $ 720,824 
NOW Accounts  793,363   804,263   786,432   848,330   688,491 
Money Market Accounts  257,004   259,813   254,682   248,367   261,050 
Regular Savings Accounts  298,682   294,432   286,807   269,162   262,843 
Certificates of Deposit  164,387   168,079   173,447   178,707   181,775 
Total Deposits  2,315,107   2,324,806   2,291,408   2,302,849   2,114,983 
           
Short-Term Borrowings  12,113   9,609   62,922   61,058   65,355 
Subordinated Notes Payable  52,887   52,887   62,887   62,887   62,887 
Other Long-Term Borrowings  21,368   26,401   27,062   28,265   29,042 
Other Liabilities  75,055   79,109   71,074   68,449   69,168 
           
Total Liabilities  2,476,530   2,492,812   2,515,353   2,523,508   2,341,435 
           
SHAREOWNERS' EQUITY          
Common Stock  168   168   172   172   171 
Additional Paid-In Capital  33,152   32,855   38,671   38,256   37,738 
Retained Earnings  264,581   262,380   259,139   258,181   256,265 
Accumulated Other Comprehensive Loss, Net of Tax  (21,277)  (20,579)  (21,149)  (22,257)  (20,515)
           
Total Shareowners' Equity  276,624   274,824   276,833   274,352   273,659 
           
Total Liabilities and Shareowners' Equity$ 2,753,154 $ 2,767,636 $ 2,792,186 $ 2,797,860 $ 2,615,094 
           
OTHER BALANCE SHEET DATA          
Earning Assets$ 2,402,664 $ 2,443,561 $ 2,471,741 $ 2,470,445 $ 2,291,966 
Interest Bearing Liabilities  1,599,804   1,615,484   1,654,239   1,696,776   1,551,443 
           
Book Value Per Diluted Share$ 16.39 $ 16.31 $ 16.04 $ 15.93 $ 15.91 
Tangible Book Value Per Diluted Share  11.37   11.27   11.13   11.00   10.98 
           
Actual Basic Shares Outstanding  16,807   16,804   17,222   17,157   17,144 
Actual Diluted Shares Outstanding  16,874   16,855   17,254   17,226   17,223 
                     


CAPITAL CITY BANK GROUP, INC. 
CONSOLIDATED STATEMENT OF OPERATIONS        
Unaudited            
               
            Nine Months Ended
  2016 2015 September 30,
(Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter 2016 2015
               
INTEREST INCOME              
Interest and Fees on Loans$18,046$ 18,105 $18,045$18,861$18,214$54,196$54,308
Investment Securities 1,846  1,751  1,637 1,572 1,540 5,234 4,285
Funds Sold 212  318  362 169 123 892 463
Total Interest Income 20,104  20,174  20,044 20,602 19,877 60,322 59,056
               
INTEREST EXPENSE              
Deposits 223  211  221 219 220 655 725
Short-Term Borrowings 43  38  10 9 14 91 50
Subordinated Notes Payable 341  343  387 354 344 1,071 1,014
Other Long-Term Borrowings 177  206  216 226 233 599 710
Total Interest Expense 784  798  834 808 811 2,416 2,499
Net Interest Income 19,320  19,376  19,210 19,794 19,066 57,906 56,557
Provision for Loan Losses -  (97) 452 513 413 355 1,081
Net Interest Income after Provision for Loan Losses 19,320  19,473  18,758 19,281 18,653 57,551 55,476
               
NONINTEREST INCOME              
Deposit Fees 5,373  5,321  5,400 5,664 5,721 16,094 16,944
Bank Card Fees 2,759  2,855  2,853 2,866 2,826 8,467 8,412
Wealth Management Fees 1,774  1,690  1,792 1,893 1,818 5,256 5,640
Mortgage Banking Fees 1,503  1,267  1,030 1,043 1,306 3,800 3,496
Data Processing Fees 360  335  347 335 400 1,042 1,137
Other 1,242  3,747  1,255 1,420 1,157 6,244 5,241
Total Noninterest Income 13,011  15,215  12,677 13,221 13,228 40,903 40,870
               
NONINTEREST EXPENSE              
Compensation 15,993  16,051  16,241 15,833 16,653 48,285 49,581
Occupancy, Net 4,734  4,584  4,459 4,638 4,446 13,777 13,100
Other Real Estate, Net 821  1,060  1,425 1,241 1,302 3,306 3,730
Other 6,474  7,007  6,805 6,568 6,763 20,286 20,582
Total Noninterest Expense 28,022  28,702  28,930 28,280 29,164 85,654 86,993
               
OPERATING PROFIT 4,309  5,986  2,505 4,222 2,717 12,800 9,353
Income Tax Expense 1,436  2,056  858 1,620 1,034 4,350 2,839
NET INCOME$2,873$ 3,930 $1,647$2,602$1,683$8,450$6,514
               
PER SHARE DATA              
Basic Net Income$0.18$ 0.22 $0.10$0.16$0.10$0.50$0.38
Diluted Net Income 0.17  0.22  0.10 0.16 0.09 0.49 0.37
Cash Dividend$0.04$ 0.04 $0.04$0.04$0.03$0.12$0.09
AVERAGE SHARES              
Basic  16,804  17,144  17,202 17,145 17,150 17,049 17,317
Diluted  16,871  17,196  17,235 17,214 17,229 17,100 17,379
                 


CAPITAL CITY BANK GROUP, INC.              
ALLOWANCE FOR LOAN LOSSES               
AND RISK ELEMENT ASSETS              
Unaudited              
               
            Nine Months Ended
   2016   2015  September 30,
(Dollars in thousands, except per share data) Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter  2016   2015 
               
ALLOWANCE FOR LOAN LOSSES              
Balance at Beginning of Period$ 13,677 $ 13,613 $ 13,953 $ 14,737 $ 15,236 $ 13,953 $ 17,539 
Provision for Loan Losses  0   (97)  452   513   413   355   1,081 
Net Charge-Offs (Recoveries)  (67)  (161)  792   1,297   912   564   3,883 
Balance at End of Period$ 13,744 $ 13,677 $ 13,613 $ 13,953 $ 14,737 $ 13,744 $ 14,737 
As a % of Loans  0.88%  0.89%  0.90%  0.93%  0.99%  0.88%  0.99%
As a % of Nonperforming Loans  159.56%  166.50%  150.44%  135.40%  112.17%  159.56%  112.17%
               
CHARGE-OFFS              
Commercial, Financial and Agricultural$ 143 $ 304 $ 37 $ 135 $ 365 $ 484 $ 894 
Real Estate - Construction  -   -   -   -   -   -   - 
Real Estate - Commercial  5   -   274   87   (26)  279   1,163 
Real Estate - Residential  96   205   478   587   476   779   1,265 
Real Estate - Home Equity  51   146   215   397   370   412   1,006 
Consumer  479   438   439   656   318   1,356   1,245 
Total Charge-Offs$ 774 $ 1,093 $ 1,443 $ 1,862 $ 1,503 $ 3,310 $ 5,573 
               
RECOVERIES              
Commercial, Financial and Agricultural$ 199 $ 49 $ 39 $ 57 $ 45 $ 287 $ 182 
Real Estate - Construction  -   -   -   -   -   -   - 
Real Estate - Commercial  45   237   81   13   86   363   170 
Real Estate - Residential  139   579   236   264   193   954   441 
Real Estate - Home Equity  237   81   59   37   42   377   99 
Consumer  221   308   236   194   225   765   798 
Total Recoveries$ 841 $ 1,254 $ 651 $ 565 $ 591 $ 2,746 $ 1,690 
               
NET CHARGE-OFFS (RECOVERIES)$ (67)$ (161)$ 792 $ 1,297 $ 912 $ 564 $ 3,883 
               
Net Charge-Offs as a % of Average Loans (1)  (0.02)%  0.04%  0.21%  0.34%  0.24%  0.05%  0.35%
               
RISK ELEMENT ASSETS              
Nonaccruing Loans$ 8,614 $ 8,214 $ 9,049 $ 10,305 $ 13,138     
Other Real Estate Owned  12,738   14,622   17,450   19,290   25,219     
Total Nonperforming Assets$ 21,352 $ 22,836 $ 26,499 $ 29,595 $ 38,357     
               
Past Due Loans 30-89 Days$ 5,667 $ 3,872 $ 3,599 $ 5,775 $ 4,335     
Past Due Loans 90 Days or More  -   -   -   -   -     
Classified Loans  43,227   45,058   49,780   53,551   61,411     
Performing Troubled Debt Restructuring's$ 35,046 $ 35,526 $ 36,700 $ 35,634 $ 35,961     
               
Nonperforming Loans as a % of Loans  0.55%  0.54%  0.60%  0.69%  0.88%    
Nonperforming Assets as a % of Loans and Other Real Estate  1.35%  1.48%  1.73%  1.94%  2.54%    
Nonperforming Assets as a % of Total Assets  0.78%  0.83%  0.95%  1.06%  1.47%    
               
(1) Annualized              


CAPITAL CITY BANK GROUP, INC. 
AVERAGE BALANCE AND INTEREST RATES(1)  
Unaudited            
                                                  
  Third Quarter 2016  Second Quarter 2016  First Quarter 2016  Fourth Quarter 2015  Third Quarter 2015  Sep 2016 YTD  Sep 2015 YTD 
(Dollars in thousands) Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
  Average
Balance
 Interest Average
Rate
 
ASSETS:                                                 
Loans, Net of Unearned Interest$ 1,555,889  18,216 4.66%$ 1,531,777  18,233 4.79%$ 1,507,508  18,141 4.84%$ 1,492,521  18,952 5.04%$ 1,483,657  18,290 4.89%$ 1,531,813  54,590 4.76%$ 1,468,871  54,484 4.96%
                                                  
Investment Securities                                                 
Taxable Investment Securities  606,606  1,632 1.07   571,343  1,539 1.08   552,092  1,420 1.03   544,542  1,365 0.99   543,550  1,347 0.98   576,790  4,591 1.03   525,498  3,858 0.98 
Tax-Exempt Investment Securities  89,241  327 1.47   90,030  325 1.44   94,951  332 1.40   93,838  328 1.40   92,685  304 1.31   91,399  984 1.44   77,673  677 1.16 
                                                  
Total Investment Securities  695,847  1,959 1.12   661,373  1,864 1.13   647,043  1,752 1.09   638,380  1,693 1.05   636,235  1,651 1.03   668,189  5,575 1.11   603,171  4,535 1.00