Press Release


Capital City Bank Group, Inc. Reports Second Quarter 2018 Results

Company Release - 7/24/2018 7:00 AM ET

TALLAHASSEE, Fla., July 24, 2018 (GLOBE NEWSWIRE) -- Capital City Bank Group, Inc. (NASDAQ:CCBG) today reported net income of $6.0 million, or $0.35 per diluted share for the second quarter of 2018 compared to net income of $5.8 million, or $0.34 per diluted share for the first quarter of 2018, and $3.6 million, or $0.21 per diluted share, for the second quarter of 2017.  For the first six months of 2018, net income totaled $11.8 million, or $0.69 per diluted share, compared to net income of $6.3 million, or $0.37 per diluted share for the same period of 2017.

Net income for the first six months of 2018 included tax benefits totaling $2.9 million, or $0.17 per diluted share (1Q - $1.5 million, or $0.09 per diluted share and 2Q - $1.4 million, or $0.08 per diluted share) related to 2017 plan year pension plan contributions.       

HIGHLIGHTS

  • Net interest income up 4.6% sequentially and 10.7% over prior year
  • Net interest margin of 3.58%, up 15 basis points over prior quarter
  • Period-end loan growth of $66 million, or 4.0% over prior quarter
  • Strong year over year growth in average deposit balances of $54 million, or 2.3%
  • Year-to-date net charge-offs at 16 basis points continues to reflect the quality of our loan portfolio
  • Common equity tier 1 ratio of 13.5% and total risk based capital ratio of 17.0%

“I am very encouraged by our results in the first half and particularly pleased with the loan growth and margin expansion achieved in the second quarter,” said William G. Smith, Jr., Chairman, President and CEO. “Rising rates, loan growth and a phenomenal core deposit base are all contributing to higher net interest income. Credit quality continues to improve and the strength of our Florida and Georgia economies is driving continued improvement in our market demographics. Lowering our efficiency ratio is a top priority, and we have multiple strategies in place to grow revenues and manage expenses. There is more to be done, but I am pleased with our progress as we remain focused on strategies that produce long-term value for our shareowners.”

Compared to the first quarter of 2018, the $0.5 million increase in operating profit reflected a $1.0 million increase in net interest income and higher noninterest income of $0.1 million, partially offset by higher noninterest expense of $0.5 million and a $0.1 million increase in the loan loss provision.

Compared to the second quarter of 2017, the $1.0 million increase in operating profit was attributable to higher net interest income of $2.3 million, partially offset by lower noninterest income of $0.6 million, a $ 0.5 million increase in noninterest expense, and a $0.2 million increase in the loan loss provision.

The increase in operating profit for the first six months of 2018 versus the comparable period of 2017 was attributable to higher net interest income of $4.3 million that was partially offset by lower noninterest income of $0.8 million, higher noninterest expense of $0.5 million, and $0.7 million increase in the loan loss provision.

Our return on average assets (“ROA”) was 0.84% and our return on average equity (“ROE”) was 8.25% for the second quarter of 2018.  These metrics were 0.81% and 8.14% for the first quarter of 2018, respectively, and 0.51% and 5.07% for the second quarter of 2017, respectively.  For the first six months of 2018, our ROA was 0.83% and our ROE was 8.20% compared to 0.45% and 4.54%, respectively, for the same period of 2017.

Discussion of Operating Results

Tax-equivalent net interest income for the second quarter of 2018 was $22.9 million compared to $21.9 million for the first quarter of 2018 and $20.8 million for the second quarter of 2017.  The increase in tax-equivalent net interest income compared to both prior periods reflected higher interest rates and a favorable shift in the earning asset mix. Higher rates were earned on overnight funds, investment securities, and variable rate loans, partially offset by a higher cost on our negotiated rate deposits.  For the first six months of 2018, tax-equivalent net interest income totaled $44.9 million compared to $40.8 million for the comparable period in 2017.  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.

The federal funds target rate was increased seven times since December 2015 to 2.00% by the end of the second quarter of 2018, 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 deposit products, we continue to prudently manage our overall cost of funds, which was 26 basis points for the second quarter of 2018, and 23 basis points for the first quarter of 2018. Due to highly competitive fixed-rate loan pricing across most markets, we have continued to review our loan pricing and make adjustments where appropriate and prudent.   

Our net interest margin for the second quarter of 2018 was 3.58%, an increase of 15 basis points compared to the first quarter of 2018 and an increase of 25 basis points from the second quarter of 2017.  For the first six months of 2018, the net interest margin increased 24 basis points to 3.51% compared to the same period of 2017. The increase in the margin as compared to all respective periods reflected rising interest rates and a favorable shift in our earning asset mix, which has produced higher net interest income in each period. 

The provision for loan losses for the second quarter of 2018 was $0.8 million compared to $0.7 million for the first quarter of 2018 and $0.6 million for the second quarter of 2017.  For the six months ended June 30, 2018, the loan loss provision was $1.6 million compared to $0.9 million in 2017.  The higher provision in 2018 reflected growth in the loan portfolio.  At June 30, 2018, the allowance for loan losses of $13.6 million represented 0.78% of outstanding loans (net of overdrafts) and provided coverage of 236% of nonperforming loans compared to 0.80% and 181%, respectively, at March 31, 2018 and 0.80% and 186%, respectively, at December 31, 2017.

Noninterest income for the second quarter of 2018 totaled $12.5 million, an increase of $0.1 million, or 0.5%, over the first quarter of 2018 and a $0.6 million, or 4.5%, decrease from the second quarter of 2017.  For the first six months of 2018, noninterest income totaled $25.0 million, a $0.8 million, or 3.2%, decrease from the same period of 2017, primarily due to lower mortgage banking fees of $0.6 million and deposit fees of $0.4 million, partially offset by higher wealth management fees of $0.3 million.  The decrease from the second quarter of 2017 also reflected lower mortgage banking fees and deposit fees.  The lower level of mortgage banking fees was due to a slowdown in secondary market loan production as adjustable rate loan production has picked up momentum and is being booked into our loan portfolio.  Total (secondary market sales and portfolio) residential loan production during the first two quarters of 2018 was comparable to the prior year.  The decrease in deposit fees was attributable to lower overdraft fees and reflected a reduction in accounts utilizing our overdraft protection product.  The increase in wealth management fees over the first six months of 2017 was primarily due to higher trust fees and reflected growth in assets under management.                 

Noninterest expense for the second quarter of 2018 totaled $28.4 million, an increase of $0.5 million, or 1.7%, over the first quarter of 2018 and second quarter of 2017.  For the first six months of 2018, noninterest expense totaled $56.3 million, a $0.5 million, or 0.8%, increase over the same period of 2017.  The increase over the first quarter of 2018 primarily reflected higher professional fees of $0.2 million and a $0.2 million expense for our VISA Class B share swap contract related to VISA’s funding of their litigation reserve.  Compared to the three and six month periods of 2017, the increase was primarily attributable to higher professional fees.    

We realized an income tax benefit of $0.1 million for the six months ended June 30, 2018 which reflected two discrete tax benefit items totaling $2.9 million resulting from the effect of federal tax reform, enacted in December 2017, on pension plan contributions made in 2018.  The discrete tax item for the first quarter of 2018 totaled $1.5 million and the item for the second quarter of 2018 totaled $1.4 million.  Absent these discrete items, our effective tax rate was approximately 24%. 

Discussion of Financial Condition

Average earning assets were $2.566 billion for the second quarter of 2018, a decrease of $26.5 million, or 1.0%, from the first quarter of 2018, and an increase of $54.0 million, or 2.2%, over the fourth quarter of 2017.  The change in average earning assets compared to the first quarter 2018 was attributable to decreases in our short-term investments, primarily due to a decline in our seasonal public fund balances.  The change in average earning assets over the fourth quarter 2017 was attributable to growth in our loan and investment portfolios primarily funded by increases in our noninterest bearing deposits and savings accounts.

We maintained an average net overnight funds (deposits with banks plus fed funds sold less fed funds purchased) sold position of $158.7 million during the second quarter of 2018 compared to an average net overnight funds sold position of $240.9 million in the first quarter of 2018 and $174.6 million in the fourth quarter of 2017.  The decrease in average net overnight funds compared to all prior periods reflected growth in our loan and investment portfolios.  Additionally, part of the decrease compared to the prior quarter was also attributable to the decline in our public deposits.  

Average loans increased $43.7 million, or 2.7% compared to the first quarter of 2018, and have grown $50.5 million, or 3.1% compared to the fourth quarter of 2017.  The increase compared to the prior quarter reflected growth in all loans types except home equity loans. Growth over the fourth quarter of 2017 was experienced in all loan products except for commercial and home equity loans. During 2018, we have purchased a $4.0 million pool of adjustable rate residential loans (late in first quarter) and an $11.9 million pool of fixed and adjustable rate commercial real estate loans (late in second quarter).

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 loan growth.

Nonperforming assets (nonaccrual loans and OREO) totaled $9.1 million at June 30, 2018, a decrease of $1.5 million, or 14.4%, from March 31, 2018 and $2.0 million, or 17.9%, from December 31, 2017.  Nonaccrual loans totaled $5.7 million at June 30, 2018, a $1.6 million decrease from March 31, 2018 and a $1.4 million decrease from December 31, 2017.  Nonaccrual loan additions totaled $2.5 million for the second quarter of 2018 compared to $3.8 million for the first quarter of 2018 and $5.6 million for the fourth quarter of 2017.  The balance of OREO totaled $3.4 million at June 30, 2018, an increase of $0.1 million over March 31, 2018 and a decrease of $0.6 million from December 31, 2017.  For the second quarter of 2018, we added properties totaling $0.5 million, sold properties totaling $0.3 million, and recorded valuation adjustments totaling $0.1 million. 

Average total deposits were $2.432 billion for the second quarter of 2018, a decrease of $24.1 million, or 1.0%, from the first quarter of 2018, and an increase of $53.5 million, or 2.3% over the fourth quarter of 2017.  The decline in deposits compared to the first quarter of 2018 reflected lower public fund NOW accounts and certificates of deposit balances, partially offset by increases in all other deposit types.  The increase in deposits when compared to the fourth quarter of 2017 reflected growth in all deposit products except certificates of deposit.  Public fund accounts typically peak in the first quarter and trend downwards through the fourth quarter due to the cycle of tax receipts.

Deposit levels remain strong, particularly given the increases in the fed funds rate.  Average core deposits continue to experience growth.  We monitor deposit rates on an ongoing basis as a prudent pricing discipline remains the key to managing our mix of deposits.

Average borrowings for the second quarter 2018 decreased $2.9 million compared to the first quarter 2018, and declined $3.0 million compared to the fourth quarter of 2017. Decreases occurred in both short-term and long-term borrowings as we reduced our repurchase agreements and Federal Home Loan Bank pay-downs of match funded advances. 

Shareowners’ equity was $293.6 million at June 30, 2018, compared to $288.4 million at March 31, 2018 and $284.2 million at December 31, 2017.  Our leverage ratio was 10.69%, 10.36%, and 10.47%, respectively, on these dates.  Further, at June 30, 2018, our risk-adjusted capital ratio was 17.00% compared to 17.05% and 17.10% at March 31, 2018 and December 31, 2017, respectively.  Our common equity tier 1 ratio was 13.46% at June 30, 2018, compared to 13.44% at March 31, 2018 and 13.42% at December 31, 2017.  All of our capital ratios exceeded the threshold to be designated as “well-capitalized” under the Basel III capital standards. 

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 59 banking offices and 73 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 our future results to differ materially.  The following factors, among others, could cause our actual results to differ: the accuracy of the our financial statement estimates and assumptions; legislative or regulatory changes, 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 our computer systems or fraud related to debit card products; changes in consumer spending and savings habits; our growth and profitability; the strength of the U.S. economy and the local economies where we conduct operations; the effects of a non-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 our ability to manage the risks involved in the foregoing.  Additional factors can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and our 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 we assume 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.  The GAAP to non-GAAP reconciliation is provided below.

(Dollars in Thousands) Jun 30, 2018Mar 31, 2018Dec 31, 2017Sep 30, 2017Jun 30, 2017
Shareowners' Equity (GAAP) $293,571 $288,360 $284,210 $285,201 $281,513 
Less: Goodwill (GAAP)  84,811  84,811  84,811  84,811  84,811 
Tangible Shareowners' Equity (non-GAAP)A 208,760  203,549  199,399  200,390  196,702 
Total Assets (GAAP)  2,880,278  2,924,832  2,898,794  2,790,842  2,814,843 
Less: Goodwill (GAAP)  84,811  84,811  84,811  84,811  84,811 
Tangible Assets (non-GAAP)B$2,795,467 $2,840,021 $2,813,983 $2,706,031 $2,730,032 
Tangible Common Equity Ratio (non-GAAP)A/B 7.47% 7.17% 7.09% 7.41% 7.21%
Actual Diluted Shares Outstanding (GAAP)C 17,114,380  17,088,419  17,071,107  17,045,326  17,025,148 
Tangible Book Value per Diluted Share (non-GAAP)A/C$12.20 $11.91 $11.68 $11.76 $11.55 


CAPITAL CITY BANK GROUP, INC.          
EARNINGS HIGHLIGHTS          
Unaudited          
           
  Three Months Ended Six Months Ended
(Dollars in thousands, except per share data) Jun 30, 2018 Mar 31, 2018 Jun 30, 2017 Jun 30, 2018 Jun 30, 2017
           
EARNINGS          
Net Income$6,003 $5,773 $3,561 $11,776 $6,305 
Net Income Per Common Share$0.35 $0.34 $0.21 $0.69 $0.37 
PERFORMANCE          
Return on Average Assets 0.84% 0.81% 0.51% 0.83% 0.45%
Return on Average Equity 8.25% 8.14% 5.07% 8.20% 4.54%
Net Interest Margin 3.58% 3.43% 3.33% 3.51% 3.27%
Noninterest Income as % of Operating Revenue 35.52% 36.44% 39.05% 35.97% 39.12%
Efficiency Ratio 80.07% 81.07% 82.28% 80.57% 83.78%
CAPITAL ADEQUACY          
Tier 1 Capital Ratio 16.25% 16.31% 15.58% 16.25% 15.58%
Total Capital Ratio 17.00% 17.05% 16.32% 17.00% 16.32%
Tangible Common Equity Ratio 7.47% 7.17% 7.21% 7.47% 7.21%
Leverage Ratio 10.69% 10.36% 10.20% 10.69% 10.20%
Common Equity Tier 1 Ratio 13.46% 13.44% 12.72% 13.46% 12.72%
Equity to Assets 10.19% 9.86% 10.00% 10.19% 10.00%
ASSET QUALITY          
Allowance as % of Non-Performing Loans 236.25% 181.26% 166.23% 236.25% 166.23%
Allowance as a % of Loans 0.78% 0.80% 0.81% 0.78% 0.81%
Net Charge-Offs as % of Average Loans 0.12% 0.20% 0.17% 0.16% 0.14%
Nonperforming Assets as % of Loans and ORE 0.52% 0.64% 0.97% 0.52% 0.97%
Nonperforming Assets as % of Total Assets 0.32% 0.36% 0.57% 0.32% 0.57%
STOCK PERFORMANCE          
High$25.99 $26.50 $22.39 $26.50 $22.39 
Low 22.28  22.80  17.68  22.28  17.68 
Close$23.63 $24.75 $20.42 $23.63 $20.42 
Average Daily Trading Volume 25,246  21,061  23,349  23,204  23,251 


CAPITAL CITY BANK GROUP, INC.          
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION      
Unaudited          
           
  2018  2017 
(Dollars in thousands) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter
ASSETS          
Cash and Due From Banks$56,573 $47,804 $58,419 $50,420 $72,801 
Funds Sold and Interest Bearing Deposits 107,066  250,821  227,023  140,694  162,377 
Total Cash and Cash Equivalents 163,639  298,625  285,442  191,114  235,178 
           
Investment Securities Available for Sale 493,662  471,836  480,911  510,846  529,686 
Investment Securities Held to Maturity 236,764  225,552  216,679  184,262  157,074 
Total Investment Securities 730,426  697,388  697,590  695,108  686,760 
           
Loans Held for Sale 8,246  4,845  4,817  7,800  8,213 
           
Loans, Net of Unearned Interest          
Commercial, Financial, & Agricultural 222,406  198,775  218,166  215,963  213,544 
Real Estate - Construction 88,169  80,236  77,966  67,813  67,331 
Real Estate - Commercial 575,993  551,309  535,707  527,331  519,140 
Real Estate - Residential 320,296  307,050  308,159  306,272  302,072 
Real Estate - Home Equity 218,851  223,994  229,513  228,499  230,995 
Consumer 285,599  284,356  278,622  273,670  269,539 
Other Loans 11,648  14,988  3,747  9,311  17,057 
Overdrafts 1,513  1,187  1,612  1,479  1,518 
Total Loans, Net of Unearned Interest 1,724,475  1,661,895  1,653,492  1,630,338  1,621,196 
Allowance for Loan Losses (13,563) (13,258) (13,307) (13,339) (13,242)
Loans, Net 1,710,912  1,648,637  1,640,185  1,616,999  1,607,954 
           
Premises and Equipment, Net 90,000  90,939  91,698  92,345  92,495 
Goodwill 84,811  84,811  84,811  84,811  84,811 
Other Real Estate Owned 3,373  3,330  3,941  5,987  7,968 
Other Assets 88,871  96,257  90,310  96,678  91,464 
Total Other Assets 267,055  275,337  270,760  279,821  276,738 
           
Total Assets$2,880,278 $2,924,832 $2,898,794 $2,790,842 $2,814,843 
           
LIABILITIES          
Deposits:          
Noninterest Bearing Deposits$937,241 $890,482 $874,583 $870,644 $842,314 
NOW Accounts 778,131  859,704  877,820  749,816  787,090 
Money Market Accounts 257,965  257,422  239,212  249,964  265,032 
Regular Savings Accounts 354,156  353,996  335,140  329,742  327,560 
Certificates of Deposit 131,697  137,280  143,122  147,451  149,937 
Total Deposits 2,459,190  2,498,884  2,469,877  2,347,617  2,371,933 
           
Short-Term Borrowings 7,021  4,893  7,480  6,777  6,105 
Subordinated Notes Payable 52,887  52,887  52,887  52,887  52,887 
Other Long-Term Borrowings 12,897  13,333  13,967  15,047  15,631 
Other Liabilities 54,712  66,475  70,373  83,313  86,774 
           
Total Liabilities 2,586,707  2,636,472  2,614,584  2,505,641  2,533,330 
           
SHAREOWNERS' EQUITY          
Common Stock 171  171  170  170  170 
Additional Paid-In Capital 37,932  37,343  36,674  35,892  35,522 
Retained Earnings 288,800  283,990  279,410  275,013  271,646 
Accumulated Other Comprehensive Loss, Net of Tax (33,332) (33,144) (32,044) (25,874) (25,825)
           
Total Shareowners' Equity 293,571  288,360  284,210  285,201  281,513 
           
Total Liabilities and Shareowners' Equity$2,880,278 $2,924,832 $2,898,794 $2,790,842 $2,814,843 
           
OTHER BALANCE SHEET DATA          
Earning Assets$2,570,213 $2,614,949 $2,582,922 $2,473,940 $2,478,546 
Interest Bearing Liabilities 1,594,754  1,679,515  1,669,628  1,551,684  1,604,242 
           
Book Value Per Diluted Share$17.15 $16.87 $16.65 $16.73 $16.54 
Tangible Book Value Per Diluted Share 12.20  11.91  11.68  11.76  11.55 
           
Actual Basic Shares Outstanding 17,056  17,044  16,989  16,966  16,964 
Actual Diluted Shares Outstanding 17,114  17,088  17,071  17,045  17,025 


CAPITAL CITY BANK GROUP, INC.              
CONSOLIDATED STATEMENT OF OPERATIONS           
Unaudited              
               
            Six Months Ended
  2018  2017 June 30,
(Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2018  2017
               
INTEREST INCOME              
Interest and Fees on Loans$20,533$19,535 $19,513$19,479 $18,720$40,068 $36,725
Investment Securities 3,156 2,762  2,520 2,416  2,169 5,918  4,211
Funds Sold 730 917  594 446  533 1,647  1,026
Total Interest Income 24,419 23,214  22,627 22,341  21,422 47,633  41,962
               
INTEREST EXPENSE              
Deposits 995 868  590 530  388 1,863  669
Short-Term Borrowings 8 8  5 15  17 16  62
Subordinated Notes Payable 552 475  431 420  404 1,027  783
Other Long-Term Borrowings 94 100  112 115  117 194  216
Total Interest Expense 1,649 1,451  1,138 1,080  926 3,100  1,730
Net Interest Income 22,770 21,763  21,489 21,261  20,496 44,533  40,232
Provision for Loan Losses 815 745  826 490  589 1,560  899
Net Interest Income after Provision for
  Loan Losses
 21,955 21,018  20,663 20,771  19,907 42,973  39,333
               
NONINTEREST INCOME              
Deposit Fees 4,842 4,872  5,040 5,153  5,052 9,714  10,142
Bank Card Fees 2,909 2,811  2,830 2,688  2,870 5,720  5,673
Wealth Management Fees 2,037 2,173  2,172 2,197  2,073 4,210  3,915
Mortgage Banking Fees 1,206 1,057  1,410 1,480  1,556 2,263  2,864
Other 1,548 1,564  1,445 1,478  1,584 3,112  3,259
Total Noninterest Income 12,542 12,477  12,897 12,996  13,135 25,019  25,853
               
NONINTEREST EXPENSE              
Compensation 15,797 15,911  15,102 15,711  15,641 31,708  31,500
Occupancy, Net 4,503 4,551  4,400 4,501  4,555 9,054  8,936
Other Real Estate, Net 248 626  355 (118) 315 874  898
Other 7,845 6,818  7,040 6,613  7,410 14,663  14,509
Total Noninterest Expense 28,393 27,906  26,897 26,707  27,921 56,299  55,843
               
OPERATING PROFIT 6,104 5,589  6,663 7,060  5,121 11,693  9,343
Income Tax Expense (Benefit) 101 (184) 6,660 2,505  1,560 (83) 3,038
NET INCOME$6,003$5,773 $3$4,555 $3,561$11,776 $6,305
               
PER SHARE DATA              
Basic Net Income$0.35$0.34 $0.00$0.27 $0.21$0.69 $0.37
Diluted Net Income 0.35 0.34  0.00 0.27  0.21 0.69  0.37
Cash Dividend$0.07$0.07 $0.07$0.07 $0.05$0.14 $0.10
AVERAGE SHARES              
Basic 17,045 17,028  16,967 16,965  16,955 17,037  16,937
Diluted 17,104 17,073  17,050 17,044  17,016 17,089  16,993


CAPITAL CITY BANK GROUP, INC.              
ALLOWANCE FOR LOAN LOSSES               
AND RISK ELEMENT ASSETS              
Unaudited              
               
            Six Months Ended
  2018
 2017
 June 30,
(Dollars in thousands, except per share data) Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter 2018  2017 
               
ALLOWANCE FOR LOAN LOSSES              
Balance at Beginning of Period$13,258 $13,307 $13,339 $13,242 $13,335 $13,307 $13,431 
Provision for Loan Losses 815  745  826  490  589  1,560  899 
Net Charge-Offs 510  794  858  393  682  1,304  1,088 
Balance at End of Period$13,563 $13,258 $13,307 $13,339 $13,242 $13,563 $13,242 
As a % of Loans 0.78% 0.80% 0.80% 0.82% 0.81% 0.78% 0.81%
As a % of Nonperforming Loans 236.25% 181.26% 185.87% 203.39% 166.23% 236.25% 166.23%
               
CHARGE-OFFS              
Commercial, Financial and Agricultural$141 $182 $664 $276 $324 $323 $417 
Real Estate - Construction -  7  -  -  -  7  - 
Real Estate - Commercial -  290  42  94  478  290  549 
Real Estate - Residential 456  107  126  125  44  563  160 
Real Estate - Home Equity 157  158  48  50  -  315  92 
Consumer 509  695  577  455  537  1,204  1,161 
Total Charge-Offs$1,263 $1,439 $1,457 $1,000 $1,383 $2,702 $2,379 
               
RECOVERIES              
Commercial, Financial and Agricultural$87 $166 $113 $79 $40 $253 $121 
Real Estate - Construction -  1  -  50  -  1  - 
Real Estate - Commercial 15  123  24  69  58  138  81 
Real Estate - Residential 346  84  141  60  202  430  415 
Real Estate - Home Equity 22  61  67  84  39  83  68 
Consumer 283  210  254  265  362  493  606 
Total Recoveries$753 $645 $599 $607 $701 $1,398 $1,291 
               
NET CHARGE-OFFS$510 $794 $858 $393 $682 $1,304 $1,088 
               
Net Charge-Offs as a % of Average Loans (1) 0.12% 0.20% 0.21% 0.10% 0.17% 0.16% 0.14%
               
RISK ELEMENT ASSETS              
Nonaccruing Loans$5,741 $7,314 $7,159 $6,558 $7,966     
Other Real Estate Owned 3,373  3,330  3,941  5,987  7,968     
Total Nonperforming Assets$9,114 $10,644 $11,100 $12,545 $15,934     
               
Past Due Loans 30-89 Days$3,472 $4,268 $4,543 $5,687 $3,789     
Past Due Loans 90 Days or More -  -  36  -  -     
Classified Loans 29,583  31,709  31,002  36,545  41,322     
Performing Troubled Debt Restructuring's$29,981 $31,472 $32,164 $33,427 $35,436     
               
Nonperforming Loans as a % of Loans 0.33% 0.44% 0.43% 0.40% 0.49%    
Nonperforming Assets as a % of Loans and              
Other Real Estate 0.52% 0.64% 0.67% 0.76% 0.97%    
Nonperforming Assets as a % of Total Assets 0.32% 0.36% 0.38% 0.45% 0.57%    
               
(1) Annualized              


CAPITAL CITY BANK GROUP, INC.                                           
AVERAGE BALANCE AND INTEREST RATES(1)                                             
Unaudited                                                 
                                                  
  Second Quarter 2018  First Quarter 2018  Fourth Quarter 2017  Third Quarter 2017  Second Quarter 2017  Jun 2018 YTD  Jun 2017 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$1,691,287  20,625 4.89%$1,647,612  19,636 4.83%$1,640,738  19,696 4.76%$1,638,578  19,672 4.76%$1,608,629  18,880 4.71%$1,669,571  40,261 4.86%$1,597,159  37,017 4.67%
                                                  
Investment Securities                                                 
Taxable Investment Securities 643,516  2,945 1.83  619,137  2,523 1.64  602,353  2,263 1.50  588,518  2,150 1.45  591,825  1,898 1.28  631,394  5,468 1.74  596,153  3,682 1.24 
Tax-Exempt Investment Securities 72,478  266 1.47  84,800  318 1.50  94,329  393 1.67  98,463  407 1.65  100,742  414 1.64  78,605  584 1.49  99,361  810 1.63 
                                                  
Total Investment Securities 715,994  3,211 1.79  703,937  2,841 1.62  696,682  2,656 1.52  686,981  2,557 1.48  692,567  2,312 1.34  709,999  6,052 1.71  695,514  4,492 1.30 
                                                  
Funds Sold 158,725  730 1.84  240,916  917 1.54  174,565  594 1.35  140,728  446 1.26  200,834  533 1.06  199,593  1,647 1.66  222,871  1,026 0.93 
                                                  
Total Earning Assets 2,566,006 $24,566 3.84% 2,592,465 $23,394 3.66% 2,511,985 $22,946 3.63% 2,466,287 $22,675 3.65% 2,502,030 $21,725 3.48% 2,579,163 $47,960 3.75% 2,515,544 $42,535 3.41%
                                                  
Cash and Due From Banks 50,364       52,711       51,235       51,880       52,312       51,531       50,618      
Allowance for Loan Losses (13,521)      (13,651)      (13,524)      (13,542)      (13,662)      (13,586)      (13,550)     
Other Assets 258,255       260,595       272,755       275,335       276,799       259,418       278,621      
                                                  
Total Assets$2,861,104      $2,892,120      $2,822,451      $2,779,960      $2,817,479      $2,876,526      $2,831,233      
                                                  
LIABILITIES:                                                 
Interest Bearing Deposits                                                 
NOW Accounts$790,335 $725 0.37%$863,175 $659 0.31%$782,133 $400 0.20%$755,620 $339 0.18%$806,621 $222 0.11%$826,554 $1,384 0.34%$843,459 $356 0.09%
Money Market Accounts 255,143  166 0.26  246,576  103 0.17  249,953  80 0.13  262,486  80 0.12  261,726  57 0.09  250,883  269 0.22  260,423  92 0.07 
Savings Accounts 351,664  43 0.05  343,987  42 0.05  333,703  41 0.05  327,675  40 0.05  322,833  39 0.05  347,847  85 0.05  317,055  77 0.05 
Time Deposits 134,171  61 0.18  140,359  64 0.18  145,622  69 0.19  148,652  71 0.19  152,811  70 0.18  137,248  125 0.18  155,535  144 0.19 
Total Interest Bearing Deposits 1,531,313  995 0.27% 1,594,097  868 0.23% 1,511,411  590 0.16% 1,494,433  530 0.14% 1,543,991  388 0.10% 1,562,532  1,863 0.25% 1,576,472  669 0.09%
                                                  
Short-Term Borrowings 6,633  8 0.49% 8,869  8 0.37% 8,074  5 0.25% 9,920  15 0.59% 8,957  17 0.75% 7,745  16 0.42% 10,873  62 1.15%
Subordinated Notes Payable 52,887  552 4.13  52,887  475 3.60  52,887  431 3.19  52,887  420 3.11  52,887  404 3.02  52,887  1,027 3.86  52,887  783 2.94 
Other Long-Term Borrowings 13,151  94 2.88  13,787  100 2.93  14,726  112 3.01  15,427  115 2.95  16,065  117 2.93  13,467  194 2.91  15,271  216 2.85 
                                                  
Total Interest Bearing Liabilities 1,603,984 $1,649 0.43% 1,669,640 $1,451 0.37% 1,587,098 $1,138 0.29% 1,572,667 $1,080 0.28% 1,621,900 $926 0.23% 1,636,631 $3,100 0.40% 1,655,503 $1,730 0.22%
                                                  
Noninterest Bearing Deposits 900,643       862,009       867,000       834,729       829,432       881,433       813,785      
Other Liabilities 64,671       72,969       80,309       87,268       84,486       68,796       81,861      
                                                  
Total Liabilities 2,569,298       2,604,618       2,534,407       2,494,664       2,535,818       2,586,860       2,551,149      
                                                  
SHAREOWNERS' EQUITY: 291,806       287,502       288,044       285,296       281,661       289,666       280,084      
                                                  
Total Liabilities and Shareowners' Equity$2,861,104      $2,892,120      $2,822,451      $2,779,960      $2,817,479      $2,876,526      $2,831,233      
                                                  
Interest Rate Spread  $22,917 3.41%  $21,943 3.29%  $21,808 3.33%  $21,595 3.37%  $20,799 3.25%  $44,860 3.35%  $40,805 3.19%
                                                  
Interest Income and Rate Earned(1)   24,566 3.84    23,394 3.66    22,946 3.63    22,675 3.65    21,725 3.48    47,960 3.75    42,535 3.41 
Interest Expense and Rate Paid(2)   1,649 0.26    1,451 0.23    1,138