Press Release


Capital City Bank Group, Inc. Reports Fourth Quarter and Full Year 2017 Results

Company Release - 1/23/2018 7:00 AM ET

TALLAHASSEE, Fla., Jan. 23, 2018 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (Nasdaq:CCBG) today reported net income of $3,000, or $0.00 per diluted share for the fourth quarter of 2017 which included a $4.0 million, or $0.24 per diluted share, income tax expense related to the tax reform act commonly known as Tax Cuts and Jobs Act (the “Tax Act”) enacted on December 22, 2017, compared to net income of $4.6 million, or $0.27 per diluted share for the third quarter of 2017, and $3.3 million, or $0.20 per diluted share, for the fourth quarter of 2016.

Net income for the fourth quarter, excluding the impact of the Tax Act (“core earnings”) a non-GAAP financial measure, totaled $4.0 million, or $0.24 per diluted share. 

For the full year 2017, net income was 10.9 million, or $0.64 per diluted share, compared to net income of $11.7 million, or $0.69 per diluted share in 2016. Core earnings for 2017 totaled $14.9 million, or $0.88 per diluted share.

Core earnings is presented in this press release to enable investors to better compare period-to-period results due to the effect of the Tax Act on 2017 fourth quarter and full year results of operations.  Reconciliations of this and other non-GAAP financial measures in this press release are included in the financial tables at the end of this press release.      

Full Year 2017 HIGHLIGHTS

  • Core earnings per diluted share of $0.88, 28% increase over 2016
  • Significant improvement in operating leverage driven by margin expansion and expense reduction
    • Net interest income up $5.0 million, or 6.4%
    • Average loan growth of $76 million, or 5.0%
    • Noninterest expense down $3.8 million, or 3.3%
  • NPAs and classified assets down 42% and 33%, respectively  

Fourth Quarter 2017 HIGHLIGHTS

  • Core earnings per diluted share of $0.24, down $0.03 sequentially due to other real estate owned gains in the third quarter of 2017 
  • Continued growth in net interest income, up $0.2 million, or 1.1 % sequentially   
  • NPAs and classified assets, down sequentially by 12% and 18%, respectively

“This year produced marked improvement in our overall performance as core earnings increased 28 percent,” said William G. Smith, Jr., Chairman, President and CEO. “These results were driven by loan growth, a rising rate environment, improving credit costs and a disciplined approach to managing expenses. Our net interest margin has increased 12 basis points year over year, aided by an asset-sensitive balance sheet and strong core deposit base.  Since 2010, we have reduced annual expenses by $24 million and this was our seventh consecutive year of expense reduction.  We are proud of these accomplishments and remain focused on strategies that will produce long-term value for our shareowners.”

Compared to the third quarter of 2017, the decrease in core earnings was primarily attributable to a higher loan loss provision of $0.3 million, a $0.2 million increase in noninterest expense, lower noninterest income of $0.1 million, and higher income taxes of $0.2 million, partially offset by higher net interest income of $0.2 million.

Compared to the fourth quarter of 2016, the increase in core earnings reflected higher net interest income of $1.4 million, a $0.7 million decrease in noninterest expense, and a $0.1 million increase in noninterest income, partially offset by higher income taxes of $1.1 million and a $0.4 million increase in the loan loss provision.

For the full year 2017, the increase in core earnings compared to 2016 was attributable to higher net interest income of $5.0 million and a $3.8 million reduction in noninterest expense, partially offset by lower noninterest income of $1.9 million, a $2.3 million increase in income taxes, and a $1.4 million increase in the loan loss provision.

Our return on average assets (“ROA”) was 0.00% and our return on average equity (“ROE”) was 0.00% for the fourth quarter of 2017.  Our core earnings ROA was 0.57% and our core earnings ROE was 5.56% for the fourth quarter of 2017.  These metrics were 0.65% and 6.33% for the third quarter of 2017, respectively, and 0.48% and 4.70% for the fourth quarter of 2016, respectively.  For the full year 2017, our ROA was 0.39% and our ROE was 3.83%.  Our core earnings ROA was 0.53% and our core earnings ROE was 5.26% for the full year 2017, compared to 0.43% and 4.22%, respectively, for the same period in 2016.

Discussion of Operating Results

Tax equivalent net interest income for the fourth quarter of 2017 was $21.8 million compared to $21.6 million for the third quarter of 2017 and $20.3 million for the fourth quarter of 2016.  During the fourth quarter of 2017, overnight funds increased as a result of the growth in noninterest bearing deposits, and to a lesser degree, seasonal growth in our public funds deposits. A portion of these overnight funds were used to fund growth in the loan and investment portfolios. The increase in tax equivalent net interest income compared to the fourth quarter of 2016 reflected growth in the loan portfolio and higher rates earned on overnight funds, investment securities, and variable rate loans, partially offset by a higher cost on our negotiated rate deposits.  For the full year 2017, tax equivalent net interest income totaled $84.2 million compared to $79.0 million for the prior year.  The year over year increase was driven by growth in the loan and investment portfolios, coupled with higher short-term rates, partially offset by a higher rate paid on negotiated rate deposits and one less calendar day as 2016 was a leap year. 

The overnight funds rate has increased five times since December 2015 to a target rate of 1.50% at the end of 2017, which positively affected our net interest income due to favorable repricing of our variable and adjustable rate earning assets. Although these increases have also resulted in higher rates paid on our negotiated rate products, we continue to prudently manage our overall cost of funds, which was 18 and 16 basis points for the fourth quarter and full year 2017, respectively. Despite highly competitive fixed-rate loan pricing across most markets, we continue to review our loan pricing and make adjustments where appropriate.    

Our net interest margin for the fourth quarter of 2017 was 3.45%, a decrease of three basis points compared to the third quarter of 2017 and an increase of 11 basis points from the fourth quarter of 2016.  For the full year 2017, the net interest margin increased 12 basis points to 3.37% compared to 2016. The decrease in the margin compared to the third quarter of 2017 was due to seasonal growth in our overnight funds, resulting in a slightly less favorable asset mix.  The increase in the margin compared to the fourth quarter of 2016 and the prior full year was primarily attributable to loan growth, and higher yields on overnight funds and the investment portfolio, partially offset by higher rates on our negotiated rate deposits.

The provision for loan losses for the fourth quarter of 2017 was $0.8 million compared to $0.5 million for the third quarter of 2017 and $0.5 million for the fourth quarter of 2016.  The higher provision for the fourth quarter of 2017 reflected higher impaired reserves held for two problem loans.  For the full year 2017, the loan loss provision totaled $2.2 million compared to $0.8 million for 2016 with the increase primarily attributable to a higher level of net charge-offs and growth in the loan portfolio.  Net loan charge-offs for the fourth quarter of 2017 totaled $0.9 million compared to net loan charge-offs of $0.4 million for the third quarter of 2017 and net loan charge-offs of $0.8 million for the fourth quarter of 2016.  For the full year 2017, net loan charge-offs totaled $2.3 million (consisting of gross charge-offs of $4.8 million, less recoveries of $2.5 million), or 0.14% of average loans compared to $1.3 million (consisting of gross charge-offs of $4.7 million, less recoveries of $3.4 million), or 0.09% for 2016.  At December 31, 2017, the allowance for loan losses of $13.3 million was 0.80% of outstanding loans (net of overdrafts) and provided coverage of 186% of nonperforming loans compared to 0.82% and 203%, respectively, at September 30, 2017 and 0.86% and 157%, respectively, at December 31, 2016.

Noninterest income for the fourth quarter of 2017 totaled $12.9 million, a decrease of $0.1 million, or 0.8%, from the third quarter of 2017 and an increase of $0.1 million, or 0.9%, over the fourth quarter of 2016.  The decrease from the third quarter of 2017 was attributable to lower deposit fees and the increase over the fourth quarter of 2016 reflected higher wealth management fees of $0.4 million, partially offset by lower other income of $0.2 million and deposit fees of $0.1 million.  For the full year 2017, noninterest income totaled $51.7 million, a $1.9 million, or 3.6%, decrease from 2016, attributable to lower other income of $2.7 million and deposit fees of $1.0 million, partially offset by higher wealth management fees of $1.2 million and mortgage banking fees of $0.6 million.  The decrease in other income was attributable to a $2.5 million gain from the partial retirement of our trust preferred securities in the second quarter of 2016.  Lower fees related to data processing services provided to third parties also contributed to the decrease and reflected the discontinuance of this line of business over the past two years with our last client discontinuing service in the fourth quarter of 2017.  The reduction in deposit fees reflected lower utilization of our overdraft service product.  Growth in assets under management as well as improved sales efforts have resulted in strong growth in wealth management fees.  Strong home sales in our markets and a growing market share of residential loan production have driven the improvement in mortgage banking fees.       

Noninterest expense for the fourth quarter of 2017 totaled $26.9 million, an increase of $0.2 million, or 0.7%, over the third quarter of 2017, and a $0.7 million, or 2.4%, decrease from the fourth quarter of 2016.  The increase over the third quarter of 2017 reflected higher other real estate owned (“OREO”) expense of $0.5 million and other expense of $0.4 million, partially offset by lower compensation expense of $0.6 million and occupancy expense of $0.1 million.  The decrease from the fourth quarter of 2016 was attributable to lower compensation expense of $1.0 million and occupancy expense of $0.1 million, partially offset by higher other expense of $0.4 million.  For the full year 2017, noninterest expense totaled $109.4 million, a decrease of $3.8 million, or 3.3%, from 2016 attributable to lower OREO expense of $2.5 million, other expense of $0.7 million, occupancy expense of $0.5 million, and compensation expense of $0.1 million.  All OREO expense categories (gain/loss on sale, carrying costs, and valuation adjustments) declined as we continued efforts to liquidate our remaining properties.  Reduction in other cycle related expenses (legal expense and FDIC insurance expense) drove the decline in other expense.  The decrease in occupancy expense reflected our continuing efforts to optimize our banking office structure and operational processes.  The decrease in compensation expense reflected lower salary expense of $1.2 million partially offset by higher associate benefit expense of $1.1 million.  Continued headcount attrition drove the decline in salary expense and the increase in associate benefit expense reflected higher pension plan expense attributable to utilization of a lower discount rate for plan liabilities and to a lesser extent higher associate insurance expense and stock compensation expense.

We realized income tax expense of $6.7 million for the fourth quarter of 2017 which included a $4.0 million discrete tax expense related to the Tax Act.  Excluding the discrete tax expense, income tax totaled $2.7 million (39% effective rate) compared to $2.5 million (35% effective rate) for the third quarter of 2017 and $1.5 million (32% effective rate) for the fourth quarter of 2016.  For the full year 2017, income tax expense totaled $12.2 million, including the aforementioned $4.0 million discrete tax expense related to the Tax Act.  Excluding the discrete tax expense, income tax totaled $8.2 million (36% effective rate) compared to $5.9 million (33% effective rate) for 2016.  Income tax expense for the fourth quarter included a $0.3 million write-off of a deferred tax asset related to a cancelled stock award.  Income tax for the full year 2017 also included income tax benefits realized in the second quarter related to stock based compensation awards.  Absent future discrete events, we anticipate that our effective tax will approximate 24% due to a lower federal tax rate related to the Tax Act.

Discussion of Financial Condition

Average earning assets were $2.512 billion for the fourth quarter of 2017, an increase of $45.7 million, or 1.9%, over the third quarter of 2017, and an increase of $88.6 million, or 3.7%, over the fourth quarter of 2016.  The change in earning assets over both periods reflected a higher level of total deposits.    

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $174.6 million during the fourth quarter of 2017 compared to an average net overnight funds sold position of $140.7 million in the third quarter of 2017 and $145.5 million in the fourth quarter of 2016. The increase in net overnight funds compared to the prior periods reflected increases in noninterest bearing deposits, partially offset by increases in the loan portfolio and/or the investment portfolio.  

Average loans increased $2.2 million, or 0.1% when compared to the third quarter of 2017, and have grown $67.5 million, or 4.3% when compared to the fourth quarter of 2016. The average increase compared to the third quarter of 2017 primarily reflected growth in construction and indirect consumer loans, partially offset by a reduction in the remaining loan types. Average growth over the fourth quarter of 2016 was experienced in all loan products, with the exception of commercial loans, home equity loans, and consumer direct loans. A portion of the increase compared to the fourth quarter 2016 was due to strategic loan purchases of approximately $26.8 million in adjustable residential real estate loans and $16.4 million in fixed and adjustable rate commercial real estate loans.

We continue to make minor modifications on some of our lending programs to try and mitigate the impact that consumer and business deleveraging has had on our portfolio.  These programs, coupled with economic improvements in our anchor markets and strategic loan purchases, have helped to increase overall loan growth.

Nonperforming assets (nonaccrual loans and OREO) totaled $11.1 million at December 31, 2017, a decrease of $1.4 million, or 12%, from September 30, 2017 and $8.1 million, or 42%, from December 31, 2016.  Nonaccrual loans totaled $7.2 million at December 31, 2017, a $0.6 million increase over September 30, 2017 and a $1.4 million decrease from December 31, 2016.  Nonaccrual loan additions totaled $5.6 million in the fourth quarter of 2017 and $14.1 million for the full year 2017, which compares to $3.9 million and $13.1 million, respectively, for the same periods of 2016.  The balance of OREO totaled $3.9 million at December 31, 2017, a decrease of $2.0 million and $6.7 million, respectively, from September 30, 2017 and December 31, 2016.  For the fourth quarter of 2017, we added properties totaling $0.4 million, sold properties totaling $2.2 million, and recorded valuation adjustments totaling $0.2 million.  For the full year 2017, we added properties totaling $2.4 million, sold properties totaling $7.5 million, recorded valuation adjustments totaling $1.3 million, and miscellaneous adjustments totaling $0.3 million.  Nonperforming assets represented 0.38% of total assets at December 31, 2017 compared to 0.45% at September 30, 2017 and 0.67% at December 31, 2016.

Average total deposits were $2.378 billion for the fourth quarter of 2017, an increase of $49.2 million, or 2.1%, over the third quarter of 2017, and an increase of $71.5 million, or 3.1% over the fourth quarter of 2016. The increase in deposits when compared to the prior periods reflected growth in all deposit products except money market accounts and certificates of deposit.  Average total deposits year-over-year reflected strong growth in noninterest bearing deposits and savings accounts.  Deposit levels remain strong, particularly given the increases in the fed funds rate. Average core deposits continue to experience growth. Competitive rates are monitored on an ongoing basis as a prudent pricing discipline remains the key to managing our mix of deposits.

Average borrowings decreased $2.5 million compared to the third quarter of 2017, and decreased $9.4 million compared to the fourth quarter 2016. Declines over both prior periods were primarily due to payoffs of FHLB advances.

Shareowners’ equity was $284.4 million at December 31, 2017, compared to $285.2 million at September 30, 2017 and $275.2 million at December 31, 2016.  Our leverage ratio was 10.26%, 10.48%, and 10.23%, respectively, for these periods.  Further, at December 31, 2017, our risk-adjusted capital ratio was 16.77% compared to 16.96% and 16.28% at September 30, 2017 and December 31, 2016, respectively.  Our common equity tier 1 ratio was 13.09% at December 31, 2017, compared to 13.26% at September 30, 2017 and 12.61% at December 31, 2016.  All of our capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards.  The $4.0 million deferred tax re-measurement adjustment recorded in the fourth quarter of 2017 due to the Tax Act unfavorably impacted our common equity tier 1 and risk-adjusted capital ratio by approximately 26 basis points.

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 $2.9 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 and securities brokerage services. Our bank subsidiary, Capital City Bank, was founded in 1895 and now has 60 banking offices and 74 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, 2016, 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 MEASURES

We present a tangible common equity ratio and a tangible book value per diluted share that removes the effect of goodwill resulting from merger and acquisition activity.  We believe these measures are useful to investors because it allows investors to more easily compare our capital adequacy to other companies in the industry. 

In our discussion of financial performance, we use core earnings for the fourth quarter and full year 2017.  We believe this measure will enhance the understanding of the Company’s core business and performance without the impact of the deferred tax re-measurement that was required with the enactment of  the Tax Act.

The GAAP to non-GAAP reconciliations are provided below.

(Dollars in Thousands, except per share data) Dec 31, 2017Sep 30, 2017Jun 30, 2017Mar 31, 2017Dec 31, 2016
TANGIBLE COMMON EQUITY RATIO           
Shareowners' Equity (GAAP) $284,425 $285,201 $281,513 $278,059 $275,168 
Less: Goodwill (GAAP)  84,811  84,811  84,811  84,811  84,811 
Tangible Shareowners' Equity (non-GAAP)A 199,614  200,390  196,702  193,248  190,357 
Total Assets (GAAP)  2,899,192  2,790,842  2,814,843  2,895,531  2,845,197 
Less: Goodwill (GAAP)  84,811  84,811  84,811  84,811  84,811 
Tangible Assets (non-GAAP)B$2,814,381 $2,706,031 $2,730,032 $2,810,720 $2,760,386 
Tangible Common Equity Ratio (non-GAAP)A/B 7.09% 7.41% 7.21% 6.88% 6.90%
Actual Diluted Shares Outstanding (GAAP)C 17,071  17,045  17,025  16,979  16,949 
Tangible Book Value per Diluted Share (non-GAAP)A/C$11.69 $11.76 $11.55 $11.38 $11.23 


  Three Months Ended Twelve Months Ended
(Dollars in Thousands, except per share data) Dec 31, 2017 Dec 31, 2017
CORE EARNINGS      
Net Income (GAAP)$3 $10,863 
Plus: Deferred Tax Re-Measurement 4,033  4,033 
Net Income Core Earnings (non-GAAP) 4,036  14,896 
       
Earnings Per Diluted Share (GAAP) 0.00  0.64 
Plus: Deferred Tax Re-Measurement 0.24  0.24 
Earnings Per Diluted Share Core Earnings (non-GAAP) 0.24  0.88 
     
Average Assets 2,822,464  2,816,099 
Average Shareowner's Equity$288,051 $283,406 
     
ROA (GAAP) 0.00% 0.39%
Plus: Deferred Tax Re-Measurement 0.57% 0.14%
Core Earnings ROA (non-GAAP) 0.57% 0.53%
     
ROE (GAAP) 0.00% 3.83%
Plus: Deferred Tax Re-Measurement 5.56% 1.43%
Core Earnings ROE (non-GAAP) 5.56% 5.26%


CAPITAL CITY BANK GROUP, INC.          
EARNINGS HIGHLIGHTS          
Unaudited          
           
  Three Months Ended Twelve Months Ended
(Dollars in thousands, except per share data) Dec 31, 2017 Sep 30, 2017 Dec 31, 2016 Dec 31, 2017 Dec 31, 2016
EARNINGS          
Net Income$3 $4,555 $3,296 $10,863 $11,746 
Diluted Net Income Per Share$0.00 $0.27 $0.20 $0.64 $0.69 
PERFORMANCE          
Return on Average Assets 0.00% 0.65% 0.48% 0.39% 0.43%
Return on Average Equity 0.00% 6.33% 4.70% 3.83% 4.22%
Net Interest Margin 3.45% 3.48% 3.34% 3.37% 3.25%
Noninterest Income as % of Operating Revenue 37.51% 37.94% 38.91% 38.41% 40.78%
Efficiency Ratio 77.50% 77.21% 83.23% 80.50% 85.34%
CAPITAL ADEQUACY          
Tier 1 Capital  16.01% 16.19% 15.51% 16.01% 15.51%
Total Capital  16.77% 16.96% 16.28% 16.77% 16.28%
Tangible Common Equity (1) 7.09% 7.41% 6.90% 7.09% 6.90%
Leverage  10.26% 10.48% 10.23% 10.26% 10.23%
Common Equity Tier 1 13.09% 13.26% 12.61% 13.09% 12.61%
Equity to Assets 9.81% 10.22% 9.67% 9.81% 9.67%
ASSET QUALITY          
Allowance as % of Non-Performing Loans 185.87% 203.39% 157.40% 185.87% 157.40%
Allowance as a % of Loans 0.80% 0.82% 0.86% 0.80% 0.86%
Net Charge-Offs as % of Average Loans 0.21% 0.10% 0.20% 0.14% 0.09%
Nonperforming Assets as % of Loans and ORE 0.67% 0.76% 1.21% 0.67% 1.21%
Nonperforming Assets as % of Total Assets 0.38% 0.45% 0.67% 0.38% 0.67%
STOCK PERFORMANCE          
High $26.01 $24.58 $23.15 $26.01 $23.15 
Low 22.21  19.60  14.29  17.68  12.83 
Close$22.94 $24.01 $20.48 $22.94 $20.48 
Average Daily Trading Volume 19,112  29,551  23,371  23,793  21,473 
           
(1)  Tangible common equity ratio is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to
  page 5.          


CAPITAL CITY BANK GROUP, INC.          
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION      
Unaudited          
           
 2017  2016 
(Dollars in thousands) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter
ASSETS          
Cash and Due From Banks$58,419 $50,420 $72,801 $47,650 $48,268 
Funds Sold and Interest Bearing Deposits 227,023  140,694  162,377  290,897  247,779 
Total Cash and Cash Equivalents 285,442  191,114  235,178  338,547  296,047 
           
Investment Securities Available for Sale 480,911  510,846  529,686  541,102  522,734 
Investment Securities Held to Maturity 216,679  184,262  157,074  158,515  177,365 
  Total Investment Securities 697,590  695,108  686,760  699,617  700,099 
           
Loans Held for Sale 4,817  7,800  8,213  7,498  10,886 
           
Loans, Net of Unearned Interest          
Commercial, Financial, & Agricultural 218,166  215,963  213,544  214,595  216,404 
Real Estate - Construction 77,966  67,813  67,331  59,938  58,443 
Real Estate - Commercial 535,707  527,331  519,140  503,868  503,978 
Real Estate - Residential 308,159  306,272  302,072  295,406  272,895 
Real Estate - Home Equity 229,513  228,499  230,995  231,300  236,512 
Consumer 278,622  273,670  269,539  268,921  262,735 
Other Loans 3,747  9,311  17,057  9,586  8,614 
Overdrafts 1,612  1,479  1,518  1,345  1,708 
Total Loans, Net of Unearned Interest 1,653,492  1,630,338  1,621,196  1,584,959  1,561,289 
Allowance for Loan Losses (13,307) (13,339) (13,242) (13,335) (13,431)
Loans, Net 1,640,185  1,616,999  1,607,954  1,571,624  1,547,858 
           
Premises and Equipment, Net 91,698  92,345  92,495  93,755  95,476 
Goodwill 84,811  84,811  84,811  84,811  84,811 
Other Real Estate Owned 3,941  5,987  7,968  9,501  10,638 
Other Assets 90,708  96,678  91,464  90,178  99,382 
Total Other Assets 271,158  279,821  276,738  278,245  290,307 
           
Total Assets$2,899,192 $2,790,842 $2,814,843 $2,895,531 $2,845,197 
           
LIABILITIES          
Deposits:          
Noninterest Bearing Deposits$874,583 $870,644 $842,314 $836,011 $791,182 
NOW Accounts 877,820  749,816  787,090  882,605  904,014 
Money Market Accounts 239,212  249,964  265,032  263,080  252,800 
Regular Savings Accounts 335,140  329,742  327,560  321,160  304,680 
Certificates of Deposit 143,122  147,451  149,937  156,449  159,610 
Total Deposits 2,469,877  2,347,617  2,371,933  2,459,305  2,412,286 
           
Short-Term Borrowings 7,480  6,777  6,105  7,603  12,749 
Subordinated Notes Payable 52,887  52,887  52,887  52,887  52,887 
Other Long-Term Borrowings 13,967  15,047  15,631  16,460  14,881 
Other Liabilities 70,556  83,313  86,774  81,217  77,226 
           
Total Liabilities 2,614,767  2,505,641  2,533,330  2,617,472  2,570,029 
           
SHAREOWNERS' EQUITY          
Common Stock 170  170  170  170  168 
Additional Paid-In Capital 36,674  35,892  35,522  34,859  34,188 
Retained Earnings 273,829  275,013  271,646  268,934  267,037 
Accumulated Other Comprehensive Loss, Net of Tax (26,248) (25,874) (25,825) (25,904) (26,225)
           
Total Shareowners' Equity 284,425  285,201  281,513  278,059  275,168 
           
Total Liabilities and Shareowners' Equity$2,899,192 $2,790,842 $2,814,843 $2,895,531 $2,845,197 
           
OTHER BALANCE SHEET DATA          
Earning Assets$2,582,922 $2,473,940 $2,478,546 $2,582,971 $2,520,053 
Interest Bearing Liabilities 1,669,628  1,551,684  1,604,242  1,700,244  1,701,621 
           
Book Value Per Diluted Share$16.66 $16.73 $16.54 $16.38 $16.23 
Tangible Book Value Per Diluted Share(1) 11.69  11.76  11.55  11.38  11.23 
           
Actual Basic Shares Outstanding 16,989  16,966  16,964  16,954  16,845 
Actual Diluted Shares Outstanding 17,071  17,045  17,025  16,979  16,949 
           
(1)  Tangible book value per diluted share is a non-GAAP financial measure.  For additional information, including a reconciliation to GAAP, refer to page 5.


CAPITAL CITY BANK GROUP, INC.              
CONSOLIDATED STATEMENT OF OPERATIONS           
Unaudited              
               
            Twelve Months Ended
  2017 2016 December 31,
(Dollars in thousands, except per share data) Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
 2017 2016
               
INTEREST INCOME              
Interest and Fees on Loans$19,513$19,479 $18,720$18,005$18,671$75,717$72,867
Investment Securities 2,520 2,416  2,169 2,042 1,949 9,147 7,183
Funds Sold 594 446  533 493 212 2,066 1,104
Total Interest Income 22,627 22,341  21,422 20,540 20,832 86,930 81,154
               
INTEREST EXPENSE              
Deposits 590 530  388 281 224 1,789 879
Short-Term Borrowings 5 15  17 45 57 82 148
Subordinated Notes Payable 431 420  404 379 363 1,634 1,434
Other Long-Term Borrowings 112 115  117 99 129 443 728
Total Interest Expense 1,138 1,080  926 804 773 3,948 3,189
Net Interest Income 21,489 21,261  20,496 19,736 20,059 82,982 77,965
Provision for Loan Losses 826 490  589 310 464 2,215 819
Net Interest Income after Provision for
  Loan Losses
 20,663 20,771  19,907 19,426 19,595 80,767 77,146
               
NONINTEREST INCOME              
Deposit Fees 5,040 5,153  5,052 5,090 5,238 20,335 21,332
Bank Card Fees 2,830 2,688  2,870 2,803 2,754 11,191 11,221
Wealth Management Fees 2,172 2,197  2,073 1,842 1,773 8,284 7,029
Mortgage Banking Fees 1,410 1,480  1,556 1,308 1,392 5,754 5,192
Other  1,445 1,478  1,584 1,675 1,621 6,182 8,907
Total Noninterest Income 12,897 12,996  13,135 12,718 12,778 51,746 53,681
               
NONINTEREST EXPENSE              
Compensation 15,740 16,349  16,292 16,496 16,699 64,877 64,984
Occupancy, Net 4,400 4,501  4,555 4,381 4,519 17,837 18,296
Other Real Estate, Net 355 (118) 315 583 343 1,135 3,649
Other  6,402 5,975  6,759 6,462 5,999 25,598 26,285
Total Noninterest Expense 26,897 26,707  27,921 27,922 27,560 109,447 113,214
               
OPERATING PROFIT 6,663 7,060  5,121 4,222 4,813 23,066 17,613
Income Tax Expense 6,660 2,505  1,560 1,478 1,517 12,203 5,867
NET INCOME$3$4,555 $3,561$2,744$3,296$10,863$11,746
               
PER SHARE DATA              
Basic Net Income$0.00$0.27 $0.21$0.16$0.20$0.64$0.69
Diluted Net Income 0.00 0.27  0.21 0.16 0.20 0.64 0.69
Cash Dividend $0.07$0.07 $0.05$0.05$0.05$0.24$0.17
AVERAGE SHARES              
Basic   16,967 16,965  16,955 16,919 16,809 16,952 16,989
Diluted   17,050 17,044  17,016 16,944 16,913 17,013 17,061


CAPITAL CITY BANK GROUP, INC.              
ALLOWANCE FOR LOAN LOSSES               
AND RISK ELEMENT ASSETS              
Unaudited              
               
            Twelve Months Ended
  2017  2016  December 31,
(Dollars in thousands, except per share data) Fourth
Quarter
 Third
Quarter
 Second
Quarter
 First
Quarter
 Fourth
Quarter
 2017  2016 
               
ALLOWANCE FOR LOAN LOSSES              
Balance at Beginning of Period$13,339 $13,242 $13,335 $13,431 $13,744 $13,431 $13,953 
Provision for Loan Losses 826  490  589  310  464  2,215  819 
Net Charge-Offs 858  393  682  406  777  2,339  1,341 
Balance at End of Period$13,307 $13,339 $13,242 $13,335 $13,431 $13,307 $13,431 
As a % of Loans 0.80% 0.82% 0.81% 0.84% 0.86% 0.80% 0.86%
As a % of Nonperforming Loans 185.87% 203.39% 166.23% 160.70% 157.40% 185.87% 157.40%
               
CHARGE-OFFS              
Commercial, Financial and Agricultural$664 $276 $324 $93 $377 $1,357 $861 
Real Estate - Construction -  -  -  -  -  -  - 
Real Estate - Commercial 42  94  478  71  70  685  349 
Real Estate - Residential 126  125  44  116  120  411  899 
Real Estate - Home Equity 48  50  0  92  38  190  450 
Consumer 577  455  537  624  771  2,193  2,127 
Total Charge-Offs$1,457 $1,000 $1,383 $996 $1,376 $4,836 $4,686 
               
RECOVERIES              
Commercial, Financial and Agricultural$113 $79 $40 $81 $50 $313 $337 
Real Estate - Construction -  50  -  -  -  50  - 
Real Estate - Commercial 24  69  58  23  45  174  408 
Real Estate - Residential 141  60  202  213  277  616  1,231 
Real Estate - Home Equity 67  84  39  29  32  219  409 
Consumer 254  265  362  244  195  1,125  960 
Total Recoveries$599 $607 $701 $590 $599 $2,497 $3,345 
               
NET CHARGE-OFFS$858 $393 $682 $406 $777 $2,339 $1,341 
               
Net Charge-Offs as a % of Average Loans (1) 0.21% 0.10% 0.17% 0.10% 0.20% 0.14% 0.09%
               
RISK ELEMENT ASSETS              
Nonaccruing Loans$7,159 $6,558 $7,966 $8,298 $8,533     
Other Real Estate Owned 3,941  5,987  7,968  9,501  10,638     
Total Nonperforming Assets$11,100 $12,545 $15,934 $17,799 $19,171     
               
Past Due Loans 30-89 Days $4,579 $5,687 $3,789 $3,263 $6,438     
Past Due Loans 90 Days or More -  -  -  -  -     
Classified Loans 31,002  36,545  41,322  40,978  41,507     
Performing Troubled Debt Restructuring's$32,164 $33,427 $35,436 $36,555 $38,233     
               
Nonperforming Loans as a % of Loans 0.43% 0.40% 0.49% 0.52% 0.54%    
Nonperforming Assets as a % of              
  Loans and Other Real Estate 0.67% 0.76% 0.97% 1.11% 1.21%    
Nonperforming Assets as a % of
  Total Assets
 0.38% 0.45% 0.57% 0.61% 0.67%    
               
(1) Annualized              


CAPITAL CITY BANK GROUP, INC.                                           
AVERAGE BALANCE AND INTEREST RATES(1)                                             
Unaudited                                                 
                                                  
  Fourth Quarter 2017  Third Quarter 2017  Second Quarter 2017  First Quarter 2017  Fourth Quarter 2016  Dec 2017 YTD  Dec 2016 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$1,640,738  19,696 4.76%$1,638,578  19,672 4.76%$1,608,629  18,880 4.71%$1,585,561  18,137 4.64%$1,573,264  18,827 4.76%$1,618,583  76,385 4.72%$1,542,232  73,417 4.76%
                                                  
Investment Securities                                                 
Taxable Investment Securities 602,353  2,263 1.50  588,518  2,150 1.45  591,825  1,898 1.28  600,528  1,784 1.20  614,560  1,726 1.12  595,790  8,095 1.36  586,284  6,317 1.08 
Tax-Exempt Investment Securities 94,329  393 1.67  98,463  407 1.65  100,742  414 1.64  97,965  396 1.62  90,046  343 1.52  97,867  1,610 1.65  91,059  1,327 1.46 
                                                  
Total Investment Securities 696,682  2,656 1.52  686,981  2,557 1.48  692,567  2,312 1.34  698,493  2,180 1.26  704,606  2,069 1.17  693,657  9,705 1.40  677,343  7,644 1.13 
                                                  
Funds Sold 174,565  594 1.35  140,728  446 1.26  200,834  533 1.06  245,153  493 0.81  145,518  212 0.58  189,991  2,066 1.09  212,817  1,104 0.52 
                                                  
Total Earning Assets 2,511,985 $22,946 3.63% 2,466,287 $22,675 3.65% 2,502,030 $21,725 3.48% 2,529,207 $20,810 3.33% 2,423,388 $21,108 3.47% 2,502,231 $88,156 3.52% 2,432,392 $82,165 3.38%
                                                  
Cash and Due From Banks 51,235       51,880       52,312       48,906       50,207       51,091       47,447      
Allowance for Loan Losses (13,524)      (13,542)      (13,662)      (13,436)      (14,017)      (13,541)      (14,080)     
Other Assets 272,768       275,335       276,799       280,463       283,885       276,318       286,550      
                                                  
Total Assets$2,822,464      $2,779,960      $2,817,479      $2,845,140      $2,743,463      $2,816,099      $2,752,309      
                                                  
LIABILITIES:                                                 
Interest Bearing Deposits                                                 
NOW Accounts$782,133 $400 0.20%$755,620 $339 0.18%$806,621 $222 0.11%$880,707 $134 0.06%$782,518 $78 0.04%$805,861 $1,094 0.14%$779,764 $292 0.04%
Money Market Accounts 249,953  80 0.13  262,486  80 0.12  261,726  57 0.09  259,106  35 0.06  257,398  31 0.05  258,304  252 0.10  256,265  120 0.05 
Savings Accounts 333,703  41 0.05  327,675  40 0.05  322,833  39 0.05  311,212  38 0.05  303,006  37 0.05  323,928  159 0.05  292,326  144 0.05 
Time Deposits 145,622  69 0.19  148,652  71 0.19  152,811  70 0.18  158,289  74 0.19  161,859  78 0.19  151,301  284 0.19  168,741  323 0.19 
Total Interest Bearing Deposits 1,511,411  590 0.16% 1,494,433  530 0.14% 1,543,991 -388 0.10% 1,609,314 -281 0.07% 1,504,781  224 0.06% 1,539,394  1,789 0.12% 1,497,096  879 0.06%
                                                  
Short-Term Borrowings 8,074  5 0.25% 9,920  15 0.59% 8,957  17 0.75% 12,810  45 1.43% 14,768  57 1.54% 9,927  82 0.82% 36,762  148 0.40%
Subordinated Notes Payable 52,887  431 3.19  52,887  420 3.11  52,887  404 3.02  52,887  379 2.86  52,887  363 2.68  52,887  1,634 3.05  55,729  1,434 2.53 
Other Long-Term Borrowings 14,726  112 3.01  15,427  115 2.95  16,065  117 2.93  14,468  99 2.77  17,473  129 2.93  15,174  443 2.92  23,880  728 3.05 
                                                  
Total Interest Bearing Liabilities 1,587,098 $1,138 0.29% 1,572,667 $1,080 0.28% 1,621,900 $926 0.23% 1,689,479 $804 0.20% 1,589,909 $773 0.20% 1,617,382 $3,948 0.25% 1,613,467 $3,189 0.20%
                                                  
Noninterest Bearing Deposits 867,000       834,729       829,432       797,964       802,136       832,477       785,689      
Other Liabilities 80,315       87,268       84,486       79,208       72,475       82,834       74,818